London Towne Homeowners Ass'n v. Karr

• Decision Date: 15 December 2004
• Citation: 866 A.2d 447
• Parties: LONDON TOWNE HOMEOWNERS ASSOCIATION v. William H. KARR, Appellant.
• Court: Pennsylvania Commonwealth Court

866 A.2d 447

LONDON TOWNE HOMEOWNERS ASSOCIATION v. William H. KARR, Appellant.

Commonwealth Court of Pennsylvania.

Submitted on Briefs October 29, 2004.

Decided December 15, 2004.

Clarification and Reconsideration Denied February 17, 2005.

Timothy G. Wojton, Pittsburgh, for appellant.

Christina E. McKaveney, Pittsburgh, for appellee.

BEFORE: COLINS, President Judge, and LEAVITT, Judge, and KELLEY, Senior Judge.

OPINION BY Judge LEAVITT.

William H. Karr (Karr) appeals from an order of the Court of Common Pleas of Allegheny County (trial court) that denied Karr's petition to strike an assessment lien on his property. In this appeal we consider whether a planned community, which has a recorded and perfected lien against all units in the community for unpaid assessments, must file a second lien in order to enforce its assessment against one of those unit owners.

Karr resides at 239 London Towne Drive, Pittsburgh, which is a unit in a planned community,¹ known as "London Towne," created under the Uniform Planned Community Act, 68 Pa.C.S. §§ 5101-5114(Act). When Karr purchased his home, he automatically became a member of the London Towne Homeowners Association (Association).² The Association has broad responsibility for maintaining and administering the planned community. Bylaws of London Towne Homeowners Association, Article II, Section 2.2, Reproduced Record at 28a-29a (R.R. ___). Accordingly, the Association enforces certain covenants, conditions, and restrictions that are contained in a Declaration of Covenants, Conditions, and Restrictions (Declaration) established on June 14, 1979. These covenants require owners to maintain certain architectural standards with respect to the appearance and condition of their homes, to pay assessments for the maintenance of common areas and to pay special assessments, i.e., fines, for deviating from London Towne's architectural standards. On October 4, 1999, the Association's Judicial Committee convened a hearing to consider a complaint filed by the Association's Architectural Committee. The complaint alleged that Karr made changes to the pediment and front door of his home without the prior approval of the Board of Directors or of the Architectural Committee. Karr did not appear at this hearing. Accordingly, the Judicial Committee deemed the allegations uncontested, and it assessed Karr a fine of $25 for each day the violation continued, i.e., until remedied. Karr did not arbitrate the Judicial Committee's decision, as was his right under the Declaration.³

On July 24, 2003, the Judicial Committee convened another hearing to consider a new complaint filed against Karr. This complaint alleged that Karr had erected two impermissible fences. The first was located in the front corner of his property, and the second, a wrought iron fence, was erected in Karr's backyard. In advance of this hearing, the Association sent a letter to Karr warning that his failure to attend the hearing "will be interpreted as your guilt in the matter." R.R. 66a. Karr did not appear, and the Judicial Committee found him "guilty," assessing a fine for each day of the continuing violating. Karr did not appeal the Judicial Committee's decision by seeking arbitration.

On October 10, 2003, Karr instituted a declaratory judgment action "to determine the validity of the assessments and fines imposed by the Association." Complaint at ¶ 10. Karr's Complaint challenges the Association's fines as lacking any basis in law or in fact. It asserts that a unit's front door and pediment are beyond the Association's governance and that the changes to his door improved "the aesthetic look of the unit." Complaint at ¶ 25. In any case, the change was approved because the Association failed to act within 30 days of his request for approval of the change, as set forth in Article VII of the Declaration. The Complaint also avers that the complained-of front yard "fence" is a rose arbor and not "a fence in any common sense definition of the word;" further, flower bed maintenance is the responsibility of the unit owner. Complaint at ¶ 12. Finally, the Complaint avers that Karr never erected, or placed in the ground, a wrought iron fence at the rear of his unit. A wrought iron railing had been removed from the interior of Karr's home and was simply leaning against the wooden fence at the rear of his unit. Complaint at ¶ 21. The railing was removed once Karr learned that it was considered offensive. The Complaint describes the Association as a "repressive" organization that has subjected Karr to harassment on matters of de minimis importance, leaving him quite desirous to leave London Towne. To do so, the Association's claim for $34,900 in fines must be resolved in order for Karr to sell his home.

The Association responded promptly to Karr's declaratory judgment action. On October 22, 2003, it filed a "Homeowners Association Lien" on Karr's property with the Allegheny County Prothonotary in the amount of $34,900. The lien covered unpaid fines as of July 30, 2003, plus counsel fees. Karr responded by filing a Petition to Strike the Homeowners Association Lien and Stay Proceedings.

Following oral argument on Karr's petition, the trial court granted a stay of the proceeding but denied the request to strike the lien. The trial court concluded that the Association was authorized by the Declaration and by the Act to file the October 22, 2003, lien and, further, Karr had failed to provide any legal basis for striking it.⁴ Because the substantive validity of the Association's assessment was still at issue in Karr's declaratory judgment action, the trial court granted Karr's stay of the proceedings on execution of the lien. The trial court explained that if "the court grants the relief requested by Karr in the declaratory judgment action, the Homeowners Association Lien will accordingly be stricken." Trial Court Opinion at 2.

Karr appealed to this Court, presenting ten questions for our review.⁵ They include, inter alia, whether the Association's lien is defective on its face; whether the lien has been extinguished by the Association's failure to collect the fine within three years of its imposition; whether the Association had authority under the Act to file its October 22, 2003, lien; and whether the assessment, or fine, lacks substantive merit thereby rendering the lien a nullity. We consider here only the dispositive question, and that is whether the Association's lien of October 22, 2003, was authorized by the Act.

The substantive validity of the Association's assessments and fines against Karr will be adjudicated, in due course, in the pending declaratory judgment action. Karr explains that if the trial court had simply stayed the lien proceedings without denying his petition to strike, he would not have appealed to this Court. However, by denying his petition to strike, the trial court made conclusions of law that Karr fears may render the declaratory judgment action an exercise in futility. This fear is not well grounded. By holding open the possibility of striking the lien if the declaratory judgment action is decided in Karr's favor, the trial court has expressed a commitment to decide the merits of the declaratory judgment action without reference to its decision on the petition to strike. This is appropriate inasmuch as a factual record has never been made on the substantive question of whether Karr has ever, in fact, violated the covenants.⁶

We turn, then, to the merits of Karr's argument that the Association's lien of October 22, 2003, was not authorized by the Act. The Act plainly provides for assessment liens, stating, in relevant part, as follows:

[t]he association has a lien on a unit for any assessment levied against that unit or fines imposed against its unit owner from the time the assessment or fine becomes due.

68 Pa.C.S. § 5315(a)(emphasis added). Thus, by operation of Section 5315(a), the Association had a lien on Karr's unit as of the day its fine became due. However, it was not necessary for the Association to make its October 22, 2003, filing with the Prothonotary in order to perfect that assessment lien. The Act provides that an association's lien is perfected simply by recording its declaration; such recording "constitutes record notice and perfection of the lien." 68 Pa.C.S. § 5315(d). In this case, the Declaration was recorded at "Deed Book Vol. 6125, p. 513" with the Recorder of Deeds of Allegheny County. R.R. 47a. Thus, the Association's lien against Karr's property for unpaid assessments was perfected long before October 22, 2003.

Nevertheless, the Association filed a second lien on October 22, 2003, for Karr's unpaid assessments in the amount of $34,900, representing unpaid fines as of July 30, 2003, and for costs. As a result, the Association has perfected two liens against Karr in two different filings made with two different offices, one with the Recorder of Deeds and the other with the Prothonotary. Karr contends that the Association's second lien is not authorized, wastes judicial resources and is contrary to the Act. The Association counters that the second lien was implicitly authorized because it has been granted broad authority under the Act to enforce its assessments.⁷

A lien is a charge on property, either real or personal, for the payment or discharge of a particular debt or duty in priority to the general debts or duties of the owner. It encumbers property to secure payment or performance of a debt, duty or other obligation. 51 Am.Jur.2d, Liens § 1. Liens fall into three categories: common law liens,⁸ equitable liens⁹ and statutory liens. Summary of Pennsylvania Jurisprudence 2d, Property, § 19.2 (2000). In the case sub judice, we consider a statutory lien. The "character, operation and extent of the [statutory] lien must be ascertained from the terms of the statute which creates and defines it, and the lien will extend only to persons or conditions provided for by ...