Jordan v. Elizabethan Manor

• Court: Montana Supreme Court
• Writing for the Court: SHEEHY; HASWELL
• Citation: Jordan v. Elizabethan Manor, 593 P.2d 1049, 181 Mont. 424 (Mont. 1979)
• Decision Date: 25 April 1979
• Docket Number: No. 14435,14435
• Parties: Idabel McLeish JORDAN et al., Plaintiffs and Appellants, v. ELIZABETHAN MANOR et al., Defendants and Respondents.

Page 1049

593 P.2d 1049

181 Mont. 424

Idabel McLeish JORDAN et al., Plaintiffs and Appellants, v. ELIZABETHAN MANOR et al., Defendants and Respondents.

No. 14435.

Supreme Court of Montana.

Submitted Feb. 6, 1979.

Decided April 25, 1979.

Towe, Ball, Enright & Mackey, Gerald J. Neely (argued), Billings, for plaintiffs and appellants.

Crowley, Haughey, Hanson, Toole & Dietrich, Ronald Lodders (argued), Billings, for defendants and respondents.

SHEEHY, Justice.

Plaintiffs appeal from an order of the District Court, Yellowstone County, granting partial summary judgment in favor of defendant Elizabethan Manor in an action against it and one other party.

Elizabethan Manor is a condominium project conceived by three Billings developers. Desiring to obtain financing for their project, the developers entered into subscription and purchase agreements with interested individuals in which the individuals agreed to purchase certain units of the condominium to be constructed. In these agreements the prospective unit owners acknowledged receipt of copies and subscribed to the condominium declaration and bylaws. Plaintiff Jordan signed her agreement on September 21, 1971 as indicated by the record before this Court.

On November 21, 1971, the developers purchased the land upon which the condominium units were eventually constructed. On June 1, 1972, pursuant to section 67-2315, R.C.M.1947, now section 70-23-302 MCA, the developers filed as a preliminary declaration and bylaws, the documents represented by the copies attached to the subscription and purchase agreements. These documents indicated how the condominium would be operated once it was completed and had formal existence, and were virtually identical to the final documents later certified and filed. Between June 15, 1972 and November 9, 1972 the developers executed warranty deeds to the separate units to individuals who had signed the purchase agreements.

The developers on March 22, 1973 filed the final signed declaration, and a certificate that the bylaws had been adopted and signed by two of the developers, one as chairman of the board of directors of the association of unit owners and one as secretary of the association. This action was pursuant to section 67-2303, R.C.M.1947, now section 70-23-103 MCA, and section 67-2320, R.C.M.1947, now section 70-23-307 MCA. As indicated above, these documents were virtually identical to the copies of documents attached to the subscription and purchase agreements which were acknowledged and subscribed to by each individual subscriber and future owner. On December 11, 1973, at the annual meeting of the defendant association a majority of the association approved the bylaws filed on March 22, 1973, and further ratified all acts of the directors to December 11, 1973.

After the condominium had been functioning for sometime in a communal living arrangement involving plaintiff and the other apartment owners, plaintiff Idabel Jordan became dissatisfied with certain aspects of the situation and stopped paying her assessed share of the common expenses as provided for in the bylaws. A series of unpleasant encounters between plaintiff and other members of the association followed.

On August 20, 1974, plaintiff filed a two-count complaint in the District Court for Yellowstone County. Count one named Elizabethan Manor Association as defendant and alleged the statutory procedure for establishing a condominium had not been correctly followed. The first count sought a declaratory judgment as to the rights, status and legal relation between plaintiffs and the association, a complete financial accounting from the association to plaintiff, and an injunction enjoining the association from "acting in a manner contrary to the law and to the rights of plaintiffs with respect to the operation and maintenance of said condominium." Count two named as defendant a property management firm which was administering the affairs of the condominium. The partial summary judgment entered by the District Court does not address the second count and that count is therefore not involved in this appeal.

Elizabethan Manor filed an answer and counterclaim denying any failure to comply with the condominium laws and claiming damages for arrearages in the assessment of common expenses. The counterclaim prayed for judgment for the arrearages and foreclosure and sale of plaintiff's interest in the condominium unit pursuant to sections 67-2326 and 2327, R.C.M.1947, now sections 70-23-607 and 70-23-608 MCA.

Motion for partial summary judgment as to the matters concerning them was made by Elizabethan Manor Association on October 28, 1976. After briefs had been submitted by both parties, the District Court entered an order of partial summary judgment in favor of the association to the extent the final declaration and bylaws of the condominium were valid and enforceable and the association was entitled to judgment against Mrs. Jordan for arrearages in the assessment for admitted common expenses. The court reserved judgment on expenditures not admitted by plaintiff. Foreclosure was granted but stayed on the condition the amount of admitted common expenses due be made current forthwith and thereafter paid regularly when due. The order of partial summary judgment was made final by certification pursuant to Rule 54(b), Mont.R.Civ.P. on April 24, 1978. This appeal followed.

Elizabethan Manor cross-appealed from that portion of the partial summary judgment entered by the District Court which denied respondent its attorney fees as claimed in its motion for summary judgment.

Before proceeding with a discussion of the merits in this appeal it is necessary to indicate the scope of our consideration of this case. This matter is before this Court on an appeal from a partial summary judgment, properly certified as final, declaring only that the final declaration and bylaws were valid and thus the condominium had proper existence, defendant Elizabethan Manor was entitled to a judgment for plaintiffs' share of admitted expenditures, and that defendant Elizabethan Manor was entitled to a foreclosure of its lien for such expenditures. Such foreclosure was stayed upon the condition the plaintiff pay her share of expenses determined as due and owing and thereafter regularly pay the assessed share of common expenses. These are the Only matters which have been finally determined by the District Court. It has reserved issues on the remaining challenged expenses and thus still has jurisdiction over these two parties. We therefore decline plaintiff Jordan's invitation to rule on issues not addressed by the District Court, preferring to wait until a final judgment on those issues has been presented to us. See Rule 1, Mont.R.App.Civ.P.

In reviewing an appeal from a summary judgment this Court's concern is whether the moving party is entitled to judgment on the law applicable to the facts established by the pleadings, depositions, answers to interrogatories and admissions on file together with affidavits appearing in the record. Audit Services, Inc. v. Haugen (1979), Mont., 591 P.2d 1105, 36 St.Rep. 451; State v. Jennings (Alaska 1976), 555 P.2d 248; Cherry v. Vanlahi, Inc. (1975), 216 Kan. 195, 531 P.2d 66; Rule 56(c), Mont.R.Civ.P. Reviewing the record it is apparent the only issue in this appeal between these parties is the validity of the procedure establishing the condominium project. Plaintiff has admitted expenditures forming the basis of the judgment, questioning only their validity as to the authority of the condominium to make the assessment, alleging it was not properly formed. Thus, we are able to frame the issues presented by this appeal in the following manner. First, was the District Court correct in ruling the final declaration and bylaws were valid? Second, was it proper for the District Court to stay the foreclosure of the lien upon the condition plaintiff Idabel Jordan regularly pay the future charges not yet assessed? Third, was the amount of the judgment here correctly computed? Finally, is defendant Elizabethan Manor entitled to attorney fees in this action?

The initial issue presents a question of first impression to this Court which involves the statutory construction of provisions of the Montana Unit Ownership Act, section 67-2301, et seq., R.C.M.1947, now sections 70-23-101, et seq., MCA. Section 67-2303, R.C.M.1947, as it read at the times pertinent hereto stated that in order to submit any property to the provisions of the act a "declaration" must be recorded by the Owner of the property. Section 67-2304, R.C.M.1947, now section 70-23-401 MCA, indicates that once the property is submitted to the act the individual units may be conveyed, encumbered or subjected to other "Juridic acts". Section 67-2302, now section 70-23-102 MCA, defines "unit" as a part of the property intended for independent use; "unit owner" as a person owning a unit in fee simple; and "association" as all the unit owners acting in accordance with the declaration and bylaws.

Plaintiff argues the statutory requirements for establishment of a condominium project have not been complied with and therefore the assessments made against her unit are without legal authority. This argument is based on the contention that when the final declaration, which was signed by the developers, was filed in March 1973 the developers were not "owners" and thus not capable of executing that document. The developers had previously executed subscription agreements and warranty deeds to the units to the prospective grantees and thus, contends plaintiffs were not Owners of the property entitled to file the declaration. Plaintiffs also contend the bylaws were improperly adopted and certified. These bylaws were signed and certified by the developers as owners and officers of the association and were filed simultaneously with the final declaration on March 22, 1973. Because the developers were not owners as pla...