Marino v. Clary Lakes Homeowners Ass'n, Inc.

• Decision Date: 16 March 2015
• Docket Number: No. A14A2236.,A14A2236.
• Citation: Marino v. Clary Lakes Homeowners Ass'n, Inc., 331 Ga.App. 204, 770 S.E.2d 289 (Ga. App. 2015)
• Parties: MARINO et al. v. CLARY LAKES HOMEOWNERS ASSOCIATION, INC.
• Court: Georgia Court of Appeals

331 Ga.App. 204

770 S.E.2d 289

MARINO et al.

v.CLARY LAKES HOMEOWNERS ASSOCIATION, INC.

No. A14A2236.

Court of Appeals of Georgia.

March 16, 2015.

Julie Ann Liberman, for Appellants.

Cynthia Carson Hodge, Lueder, Larkin & Hunter, John T. Lueder, for Appellee.

Opinion

DILLARD, Judge.

Clary Lakes Homeowners Association, Inc. (the “Association”) sued homeowners Joseph and Patricia Marino, seeking damages and enforcement of a restrictive covenant that required garages to be used for parking vehicles and not for storage. The Marinos filed an answer and counterclaim, contending that the restrictive covenant was invalid. The trial court granted partial summary judgment to the Association, but in Marino v. Clary Lakes Homeowners Association, Inc.¹ (Marino I ), we ruled that the restrictive covenant was unenforceable against the Marinos. Consequently, we reversed the trial court's grant of summary judgment to the Association on its claims predicated on the breach of the restrictive covenant and remanded the case with direction for the trial court to enter summary judgment in favor of the Marinos as to those claims.² In addition, we reversed the trial court's grant of summary judgment to the Association on its claim for attorney fees under a “prevailing party” provision in the covenants, but we affirmed the denial of summary judgment to the Marinos on this issue because an award of such fees was potentially dependent upon the resolution of the Association's claim for breach of a settlement agreement, which remained pending.³

Following remand, the Marinos filed a motion to dismiss the Association's breach-of-settlement-agreement claim, which the trial court denied. Nevertheless, the Association ultimately dismissed this claim and then moved to dismiss the Marinos' attorney fees claim. Finding that neither party prevailed in the litigation, the trial court granted the Association's motion. On appeal, the Marinos contend that the trial court erred in (1) dismissing their claim for attorney fees under the “prevailing party” provision, (2) denying their motion to dismiss the claim for breach of the settlement agreement, (3) denying their motion for attorney fees pursuant to OCGA § 9–15–14(b), (4) dismissing their counterclaims, and (5) failing to enter final judgment in their favor. For the reasons set forth infra, we affirm in part, reverse in part, and remand the case for further proceedings consistent with this opinion.

A detailed recitation of the background facts can be found in Marino I.⁴ Nevertheless, by way of summary, the undisputed record shows that in 2003, a majority of the homeowners in the Clary Lakes subdivision and the Association approved an Amended and Restated Declaration of Protective Covenants for Clary Lakes (the “Amended Declaration”) and Amended and Restated Bylaws of Clary Lakes Homeowners Association, Inc. (the “Bylaws”).⁵ Importantly, the Amended Declaration included a provision stating that the Association and the Clary Lakes subdivision were submitting to application of the Property Owners' Association Act (“POA Act”) (OCGA § 44–3–220 et seq. ).⁶ And under the Amended Declaration, use of garages was governed by Section 11(i), which provided:

Garage Parking. All vehicles owned or used on a regular basis by Owners or Occupants shall be parked in garages to the extent that garage space is available and vehicles fit in the garage. Garages shall not be used for storage on a regular basis so that they become unavailable for parking cars therein. The Covenant Committee shall have the power to grant a variance to any Owner or Occupant who demonstrates special circumstances why he cannot comply with this requirement. Application for this variance must be made in writing to the Covenant Committee. The variance to the Owner or Occupant must be in writing and specify the term of the required variance.⁷

The Marinos purchased their home in the Clary Lakes subdivision nearly ten years prior to the approval of the Amended Declaration, and they did not vote in favor of the declaration or give their written consent to it.⁸ And because their home did not have a basement, the Marinos used their garage for storage and parked their vehicles on their driveway, which had been permitted prior to the 2003 approval of the Amended Declaration.⁹ Consequently, in January 2009, the Association informed the Marinos that they were in violation of the Garage Use Covenant.¹⁰ Initially, the Association attempted to resolve the dispute by issuing a temporary variance to allow the Marinos time to comply with the covenant.¹¹ But when the Marinos requested a permanent variance, the Association refused and, pursuant to the Amended Declaration, began to levy daily fines, which the Marinos refused to pay.¹²

In 2011, the Association sued the Marinos for damages, injunctive relief, and attorney fees, alleging that they were in violation of the Garage Use Covenant, breached a settlement agreement, and owed fines.¹³ The Marinos filed an answer and counterclaims, arguing, inter alia, that the Garage Use Covenant was unenforceable against them because they had not consented to it pursuant to OCGA § 44–5–60(d)(4)¹⁴ and because it had not been approved by at least two-thirds of the votes in the Association as required by the POA Act.¹⁵ The Marinos also sought attorney fees.¹⁶

After the parties filed cross motions for summary judgment, the trial court ruled that the Garage Use Covenant was not subject to either the written-consent requirement imposed by OCGA § 44–5–60(d)(4) or the two-thirds voting requirement imposed by the POA Act.¹⁷ Thus, the trial court denied summary judgment to the Marinos and granted summary judgment to the Association on its claims for damages for the nonpayment of fines, injunctive relief, and attorney fees.¹⁸ However, the court also ruled that genuine issues of material fact precluded a grant of summary judgment in favor of the Association as to its breach-of-settlement-agreement claim.¹⁹

Thereafter, the Marinos filed an appeal with this Court. And in Marino I, we concluded

that for the restrictive covenant at issue to be enforceable against the Marinos, they had to agree to the covenant in writing pursuant to OCGA § 44–5–60(d)(4), or the covenant had to be approved by at least two-thirds of the votes in the Association pursuant to OCGA § 44–3–226(a) of the POA Act. Because the uncontroverted evidence shows that neither condition was met in this case, the restrictive covenant was unenforceable against the Marinos, and the trial court erred in concluding otherwise.²⁰

Accordingly, we reversed the grant of summary judgment to the Association, and the denial of summary judgment to the Marinos, on the Association's claims for damages and injunctive relief based on the violation of the restrictive covenant, and we remanded the case with direction for the trial court to enter summary judgment for the Marinos on those claims.²¹ We also reversed the grant of summary judgment to the Association on its claim for attorney fees under the “prevailing party” provision of the Amended Declaration.²² But we held that an award of attorney fees to either party would be premature because the Association's claim for the alleged breach of the settlement agreement remained pending, “and the outcome with regard to that claim may affect who is deemed the ‘prevailing party’ in this litigation.”²³

On remand, the Marinos moved to dismiss the Association's breach-of-settlement-agreement claim, arguing that it violated public policy. The Marinos also sought to be declared the “prevailing party” and awarded attorney fees. The Association responded and, while the motions were pending, it amended its complaint to request both damages and injunctive relief for the Marinos' alleged breach of the settlement agreement. In addition, the Association moved to dismiss the Marinos' counterclaims for attorney fees.

Despite its recent amendment, on April 29, 2014, the Association voluntarily dismissed its claim for breach of the settlement agreement. And shortly thereafter, the trial court scheduled a hearing for arguments on the Association's motion to dismiss the Marinos' counterclaims for attorney fees, as well as their motion seeking an award of attorney fees as the “prevailing party.” On May 30, 2014, the day of the hearing, the Marinos filed a supplemental motion, seeking attorney fees pursuant to OCGA § 9–15–14(b). At the conclusion of the hearing, the trial court found that because the Association's claim for breach of the settlement agreement was not adjudicated on the merits, neither party had prevailed. Consequently, the trial court issued an order ruling that the Marinos were not entitled to attorney fees as the “prevailing party” and further ruled that they were not entitled to attorney fees under OCGA § 9–15–14(b). This appeal follows.

1. The Marinos contend that the trial court erred in ruling that they were not the “prevailing party” to the litigation and, therefore, were not entitled to attorney fees under the Amended Declaration. We agree.

At the outset, we note that the declaration of a homeowner's association is “considered a contract, and we therefore apply the normal rules of contract construction to determine the meaning of the terms therein.”²⁴ First, the construction of a contract is “a question of law for the court.”²⁵ That being said, it is well established that the cardinal rule of construction is “to ascertain the intent of the parties[ and w]here the contract terms are clear and unambiguous, the court will look to that alone to find the true intent of the parties.”²⁶ In determining the parties' intent, “all the contract terms must be considered together in arriving at the construction of any part, and a construction upholding the contract in whole and every part is preferred.”²⁷ And when the language employed by the parties in their contract is plain, unambiguous, and capable of only one reasonable interpretation, the language used “must be...