Millennium Square Residential Ass'n v. Fazlic

• Decision Date: 28 August 2015
• Docket Number: Case No. 2014 CA 005697 B
• Parties: MILLENNIUM SQUARE RESIDENTIAL ASSOCIATION, Plaintiff/Counter-Defendant, v. DAMIR FAZLIC, Defendant/Counter-Plaintiff.
• Court: D.C. Superior Court

MILLENNIUM SQUARE RESIDENTIAL ASSOCIATION, Plaintiff/Counter-Defendant, v. DAMIR FAZLIC, Defendant/Counter-Plaintiff.

Case No. 2014 CA 005697 B

SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Division

August 28, 2015

Judge Herbert B. Dixon, Jr.

ORDER GRANTING DEFENDANT'S EMERGENCY MOTION FOR INJUNCTIVE RELIEF

This matter is before the court upon Defendant Damir Fazlic's Emergency Motion for Temporary Restraining Order, Preliminary Injunction and Other Relief, wherein the defendant requests that the court enjoin Plaintiff Millennium Square Residential Association from attempting to proceed with a nonjudicial foreclosure of the defendant's condominium unit. Upon consideration of the defendant's motion, the plaintiff association's verified opposition, oral argument received from counsel in open court on August 20, 2015, the applicable law, and the entire record herein, the court concludes that the defendant's motion should be granted.

BACKGROUND & PARTIES' ARGUMENTS

On September 10, 2014, Plaintiff Millennium Square Residential Association filed the underlying complaint against Defendant Damir Fazlic related to the defendant's failure to pay condominium assessments and other fees arising from to his ownership of a condominium unit within the Millennium Square condominium. In its complaint, the plaintiff association alleges that since February 8, 2013, the defendant has not made any monthly condominium assessments as required by the condominium bylaws (Count I). In addition to seeking judgment on the defendant's breach of contract, Plaintiff Millennium Square demands a judgment of foreclosure against the defendant's condominium unit (Count II).

In addition to answering the plaintiff association's complaint, Defendant Damir Fazlic also filed counterclaims against the plaintiff association for 1) breach of contract based on the plaintiff association's refusal to provide him (the defendant) with copies of requested documents and improperly assessing him with fees, 2) breach of fiduciary duty based upon the retaliatory and discriminatory conduct of Millennium Square in assessing the defendant with fees, 3) breach of the implied duty of good faith and fair dealing premised on the plaintiff association's bad faith and capricious conduct in how it dealt with the defendant, and 4) slander of title based on the plaintiff association's recordation of false lien documents.

While discovery was occurring in this matter, Plaintiff Millennium Square sent a notice to the defendant in mid-July 2015 concerning the plaintiff association's intent to proceed with a nonjudicial foreclosure on the defendant's condominium unit via a power of sale as authorized by the D.C. Condominium Act. In response to the plaintiff association's declared intention to conduct a nonjudicial foreclosure, the defendant filed the underlying emergency motion seeking injunctive relief.

In his motion, Defendant Damir Fazlic argues that the plaintiff association should be estopped from going forward with its nonjudicial foreclosure on the defendant's unit given that Millennium Square made a binding election to pursue its remedy for the defendant's alleged breach of contract when the plaintiff association filed this civil action for breach of contract seeking remedies in the form of monetary damages and a judicial foreclosure. The defendant contends that given the slow course of discovery in this matter, Plaintiff Millennium Square merely desires to "short-circuit" the defendant's ability to have the underlying claim for a judicial foreclosure decided in a court of law by resorting to a nonjudicial foreclosure proceeding. On a similar note, the defendant asserts that the plaintiff association must be precluded from electing to pursue the different remedy of a nonjudicial foreclosure based on itschanged belief that this remedy is more desirable than its original requested remedy of a judicial foreclosure. Furthermore, at oral arguments, the defendant emphasized that 1) Plaintiff Millennium Square's current action of seeking two simultaneous remedies of a judicial and nonjudicial foreclosure are not allowed by and cannot be read into the D.C. Condominium Act and 2) the defendant cannot by contract grant the plaintiff association an ability to proceed in a manner that it ordinarily could not proceed at law.¹

In opposition, Plaintiff Millennium Square Residential Association highlights that there is no dispute regarding the defendant owing these past due assessments. Moreover, the plaintiff association cites language from the parties' contract (i.e., its condominium bylaws) that state it retains all rights and remedies in addressing a breach of contract without the pursuit of any remedy being deemed to constitute an election of remedies. The plaintiff association further argues that given the express language, it is authorized and well within its rights to maintain a proceeding for a judicial foreclosure while concurrently proceeding with a nonjudicial foreclosure. Plaintiff Millennium Square claims that since there has been no final judgment entered in this civil action, the plaintiff association cannot be deemed to have made an "election of remedies" as a matter of law. Additionally, at oral arguments, Plaintiff Millennium Square emphasized that 1) when the defendant agreed to be bound by the condominium bylaws, the defendant effectively waived his right to assert an election of remedies defense, 2) it has the statutory right to pursue both a judicial and nonjudicial foreclosure simultaneously as a remedyfor the defendant's breach of contract, and 3) its claims in this civil action would be dismissed once it has obtained the relief it seeks from the nonjudicial foreclosure proceeding.

ANALYSIS²

Pursuant to the D.C. Condominium Act, a condominium unit owners' association has the power to enforce its lien against a unit owner for past due assessments by either (a) filing a civil action for breach of contract seeking the appropriate remedy or (b) effectuating a power of sale (or nonjudicial) foreclosure (akin to the common law right of a mortgagee) with the chief executive officer of the condominium association being empowered to serve as trustee for that sale.³ D.C. Code § 42-1903.13 (a), (c)(1), (g) (2015). Indeed, in Chase Plaza Condominium Association v. JP Morgan Chase Bank, N.A., the Court of Appeals recently held, in essence, that a condominium association's six-month super-priority lien under D.C. Code § 42-1903.13 (a)(2) can supersede and extinguish a first deed of trust should a condominium association decide to foreclose on its lien. 98 A.3d 166, 178 (D.C. 2014).

In contrast to these possible remedies authorized by the D.C. Condominium Act, the District follows "the common law rule that a party who sues on a note [secured by a deed of trust] is not precluded under the doctrine of election of remedies or res judicata from pursuing the security by way of foreclosure" so long as the two remedies sought are both 1) independent of each other and 2) not inconsistent with one another. Szego v. Anyanwutaku, 651 A.2d 315, 317 (D.C. 1994). While the normative goal of the election of remedies doctrine is to prevent the double recovery for a single wrong, the doctrine also provides that a litigant, who proceeds withfull knowledge of facts underpinning the inconsistent claims for relief and "requires his adversary to defend against a version of the facts marshalled [sic] in support of one theory, cannot in good conscience subsequently pursue a claim resting upon repugnant factual or legal bases." Giordano v. Interdonato, 586 A.2d 714, 718 (D.C. 1991) (quoting 1B JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 0.405[7] (2d ed. 1988)); see also 25 AM. JUR. 2D Election of Remedies § 10 (2015) ("The general rule applicable in election-of-remedies cases is that a party is bound or estopped by his or her election when he or she chooses one of two or more appropriate but inconsistent remedies with full knowledge of all the facts of the case and his or her rights.").

Notwithstanding the defendant's assertion that Plaintiff Millennium Square has made a legally binding election to pursue a judicial foreclosure in lieu of a nonjudicial one, the court concludes that the commencement of this civil action seeking judicial foreclosure as a remedy by the plaintiff association does not necessitate the conclusion that Millennium Square has elected to waive its right to ever conduct a nonjudicial foreclosure against the defendant. In fact, pursuant to section 17.2 (e) of the condominium bylaws, Plaintiff Millennium Square reserved the right to choose and pursue any available remedy for the defendant's breach of contract over any other remedy without the chosen course of action being deemed to constitute waiver. Moreover, given that courts are generally disinclined to construe an elected remedy to be binding based on a plaintiff's preliminary selection of that remedy if that selection has not been pursued to fruition (i.e., concluded with the entry of a final judgment), the plaintiff association's decision to file suit by itself cannot be deemed to be binding. See, e.g., Knight Props. v. State Bank & Trust Co., 77 So. 3d 491, 495 (Miss. Ct. App. 2011) (en banc) ("Notification of a contemplated action, such as the filing of a notice of a claim, does not constitute an election that precludes the subsequent prosecution of an action or suit based upon an inconsistent remedial right."); MidfirstBank v. Ranieri, 257 Mont. 312, 319-20, 848 P.2d 1046, 1050 (1993) (holding that since the mortgage creditor decided not to pursue a nonjudicial foreclosure remedy to its final conclusion, its "initiation of nonjudicial foreclosure proceedings, later abandoned, did not constitute an election of remedies that precluded judicial foreclosure proceedings"); Barclaysamerican/Financial, Inc. v. Boone, 96 Or. App. 635, 638, 773 P.2d 1338, 1339 (1989) ("In a non-judicial foreclosure of a trust deed, the...