Horodenski v. Lyndale Green Townhome Ass'n Inc., A11–289.

• Decision Date: 19 September 2011
• Docket Number: No. A11–289.,A11–289.
• Citation: 804 N.W.2d 366
• Parties: Kenneth HORODENSKI, et al., Appellants,v.LYNDALE GREEN TOWNHOME ASSOCIATION, INC., Respondent.
• Court: Minnesota Court of Appeals

804 N.W.2d 366

Kenneth HORODENSKI, et al., Appellants,

v.LYNDALE GREEN TOWNHOME ASSOCIATION, INC., Respondent.

No. A11–289.

Court of Appeals of Minnesota.

Sept. 19, 2011.

Syllabus by the Court

Under Minn.Stat. § 515B.3–115(e)(4) (2010), attorney fees that a unit-owners' association may recover “in connection with” the collection of assessments and enforcement of a common interest community's declaration instrument are not limited to fees incurred in a collection action or other action to enforce the declaration.

Dean Vescera, Justin L. Seurer, Seurer Law Firm, Minnetonka, MN, for appellant.David H. Oskie, Oskie, Reuter, Hamilton & Sofio, P.A., St. Paul, Minnesota; and Phaedra Howard, Hellmuth & Johnson, Edina, MN, for respondent.Considered and decided by SCHELLHAS, Presiding Judge; PETERSON, Judge; and MINGE, Judge.

OPINION

PETERSON, Judge.

This appeal from a summary judgment arises out of a dispute about the terms of a common interest community's declaration instrument. Appellant-unit owners assert that the district court erred by dismissing their declaratory-judgment claim and granting summary judgment for respondent-association on its claim for assessed attorney fees and by denying their motion to compel discovery. We affirm.

FACTS

Respondent Lyndale Green Townhome Association, Inc. is the unit-owners' association responsible for the maintenance, upkeep, and management of a group of townhomes. Respondent was formed under the Minnesota Common Interest Ownership Act (MCIOA), now codified as Minn.Stat. §§ 515B.1–101 to .4–118 (2010), and is governed by a declaration, articles, bylaws, and other rules and regulations. Under the terms of the declaration, respondent is responsible for maintenance, repair, and replacement of common elements, which includes all of respondent's real and personal property; landscaping, watering, and maintenance of plantings, trees, and shrubs; paving, surfacing, and striping entrance roadways and driveways; and snowplowing and removing ice from common elements. Respondent is also responsible for exterior maintenance of townhomes, which includes painting and replacing roofs, gutters, downspouts, decks, garage doors (except hardware), and exterior siding and other building surfaces; and lawn, shrub, and tree maintenance for all townhomes. Townhome owners are otherwise responsible for maintenance of individual units.

Appellants Kenneth and Mary Ellen Horodenski own a townhome for which respondent is responsible, and their son lives in the townhome. The declaration provides that townhome owners are required to pay assessments for a share of common expenses. Under the declaration, the obligation to pay assessments is “absolute and unconditional,” and an owner is not exempt from liability for payment by reason of any claim against respondent, and “no Owner may withhold any assessments payable to the Association ... as a measure to enforce such Owner's position.” The declaration permits the assessment of fees, charges, late charges, fines, and interest under Minn.Stat. § 515B.2–116 (2010). The declaration also allows respondent to assess unit owners for attorney fees and costs incurred in connection with collecting assessments and enforcing the declaration.

For one to one and one-half years before October 2009, appellants and their son tried addressing repair and maintenance issues and other concerns with respondent and its property manager. On June 29, 2009, two members of respondent's board of directors met with appellants' son at appellants' townhome to discuss concerns about the townhome. On October 21, 2009, Kenneth Horodenski wrote respondent a letter listing three problems that needed to be fixed by respondent—a leaky mailbox, water runoff from the garage roof, and a depression at the end of the driveway. The letter also demanded reimbursement for two repairs paid for by appellants—a frozen heater vent pipe on the roof and damaged exterior lighting. The letter stated:

This letter contains a list of items which need immediate repair. To the exterior of our townhome in Lyndale Green. These items are [respondent's] responsibility for which some we have paid for since they were a hazard & had to be corrected immediately. We demand immediate reimbursement for repairs paid by us!!

Please note homeowners fees will no longer be paid by us (effective with Nov. 09 dues) until all repairs contained in this letter are completed to our satisfaction. We will forward back dues when repairs are completed & have no intent, nor will we pay any late penalty fees.

If [respondent] does not make referenced repairs in a timely manner we will have no choice but to proceed with a civil law suit.

Appellants withheld payment of their November and December 2009 dues.

In November 2009, respondent's attorney sent appellants a letter addressing the problems and repairs identified in appellants' letter. The letter stated that the post office had not noticed any leak or other condition that would account for the mailbox interior getting wet but that respondent would caulk around the mailbox to seal any possible cracks or holes. Regarding water running off the garage roof, the letter stated that respondent was responsible only for gutters and downspouts that were part of the original construction, that the builder had inspected the gutters on appellants' unit and found no deficiencies, and that respondent would have someone check the gutters and clear them of any debris that might be preventing proper drainage. The letter stated that appellants were responsible for driveway maintenance and repair but that respondent was willing to arrange for an inspection at appellants' expense. The letter stated that maintenance and repair of the heater vent pipe and exterior lighting were appellants' responsibility and, therefore, respondent would not reimburse appellants for those expenses.

The letter also stated:

Finally, I understand that you have threatened to withhold payment of your assessments unless or until the demanded repairs have been completed. Please be advised that pursuant to Section 6.5 of the Declaration, the obligation of an Owner to pay assessments is “absolute and unconditional.” That section further sets forth that “No Owner is exempt from liability for payment of his or her share of common Expenses by right of set-off, by waiver of use or enjoyment of any part of the Property, by absence from or abandonment of the Unit ... or by reason of any claim against the Association or its officers, directors or agents, or for their failure to fulfill any duties under the Governing Documents or the Act.” Declaration, Section 6.5 (emphasis added). Therefore, you are not entitled to withhold payment of assessments for any reason. If you fail to pay your assessments in a timely manner, you will be subject to late fees and other collection action in accordance with [respondent's] governing documents just as any other delinquent Owner.

Pursuant to state law and Section 6.1(d) of the Declaration, [respondent] is entitled to assess against you and/or your Unit any expenses, including reasonable attorneys' fees and costs, incurred by [respondent] in connection with the enforcement of [respondent's] governing documents. Therefore, the cost to consult with [respondent] on this matter and to prepare this letter may be assessed by [respondent] against you and [your unit].

In a December 23, 2009, letter, respondent informed appellants that “[s]eeking legal counsel in connection with enforcing the Association's governing documents has created a cost to the Association that would not have occurred if it were not for your letter sent to the Board,” and that $2,471, the amount of legal fees incurred, had been billed to appellants' account. The letter also described the late fees and other consequences that could follow a failure to pay monthly association dues. Appellants paid their November and December dues at the end of December 2009, together with their January 2010 dues.

In April 2010, appellants brought this action against respondent, seeking a declaratory judgment that the declaration did not allow respondent to collect attorney fees for preparation of the November 2009 letter or, alternatively, that an award of attorney fees against appellants would be unconscionable. Appellants also sought damages for breach of the duty of good faith, plus attorney fees under Minn.Stat. § 515B.4–116 (2010). Respondent counterclaimed against appellants, seeking a money judgment and a lien on appellants' townhome.

The parties filed cross-motions for summary judgment. Appellants also moved to compel discovery, if their motion for summary judgment was not granted. The district court dismissed appellants' complaint and denied their motion to compel discovery. The district court granted summary judgment for respondent on its counterclaim, concluding that, as a matter of law, appellants breached their contract with respondent by failing to pay dues and late charges on time and that respondent was entitled to recover those damages, plus attorney fees and costs. The district court directed respondent to submit an application for reasonable attorney fees and costs and allowed appellants the opportunity to respond. Respondent submitted a request for attorney fees in the amount of $15,247.50 and costs of $890.33. Appellants did not respond. The district court granted respondent the full amount of requested attorney fees and costs, and judgment was entered. This appeal followed.

ISSUES

I. Did the district court err in dismissing appellants' complaint and granting respondent summary judgment for its attorney-fee assessment?

II. Did the district court err in denying appellants' motion to compel discovery?

ANALYSIS

I.

On appeal from a summary judgment, appellate courts review de novo whether a genuine issue of material fact exists and whether the district court erred in applying the law; in doing so, appellate courts view the evidence in...