Morgan v. The Stotesbury Cmty. Ass'n

• Docket Number: 1093 C.D. 2022,1125 C.D. 2022
• Decision Date: 19 January 2024
• Parties: Kimberly D. Morgan, Appellant v. The Stotesbury Community Association, Inc. Kimberly D. Morgan v. The Stotesbury Community Association, Inc., Appellant
• Court: Pennsylvania Commonwealth Court

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Kimberly D. Morgan, Appellant
v.
The Stotesbury Community Association, Inc.

Kimberly D. Morgan
v.
The Stotesbury Community Association, Inc., Appellant

Nos. 1093 C.D. 2022, 1125 C.D. 2022

Commonwealth Court of Pennsylvania

January 19, 2024

OPINION NOT REPORTED

Submitted: December 4, 2023

BEFORE: HONORABLE ANNE E. COVEY, Judge HONORABLE STACY WALLACE, Judge HONORABLE MARY HANNAH LEAVITT, Senior Judge

MEMORANDUM OPINION

STACY WALLACE, Judge

In these consolidated appeals, Kimberly D. Morgan (Morgan) and the Stotesbury Community Association, Inc. (Association) appeal the Court of Common Pleas of Montgomery County's (trial court) order dated August 31, 2022 (Order), which granted in part and denied in part Morgan's motion for an award of attorney

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fees and costs and denied the Association's motion for an award of attorney fees and costs. After review, we affirm.

The trial court aptly set forth the factual background underlying this dispute in its Rule 1925(a) Opinion,^[1] dated Dec. 6, 2022 (Trial Court Opinion), as follows:

The planned community, known as Stotesbury, is located in Springfield Township. Stotesbury was created pursuant to a Declaration of Community Covenants, Restrictions and Easements dated September 26, 1979, and recorded with the Recorder of Deeds ("the Declaration"). [The Association] is the unit owners' association for Stotesbury. It is governed by a Board of Directors ("the Board"), subject to the Declaration and the Bylaws of the Association. [Morgan] is the owner of a residential townhouse unit in Stotesbury

At the time that [Morgan] purchased her unit in November 1990, a retaining wall ("the Old Wall") had been installed. The length of the Old Wall was located approximately 50% in [Morgan's] backyard, within the boundaries and near the rear border of her unit, and approximately 50% on adjacent property that was common area owned by the Association. Beginning in 2004 and continuing thereafter, [Morgan] notified the Association, through its property management company and the Board, that the Old Wall was deteriorating and falling apart. The Association was not responsive

In 2014, [Morgan] engaged Max L. Lieberman, Esquire [(Morgan's Counsel)] to press her concerns to the Association. By letter to the property manager dated December 14, 2015, [Morgan's Counsel] reiterated [Morgan's] concerns about the Old Wall and the need to replace it. Enclosed with the letter was the report of an engineering firm engaged by [Morgan], recommending replacement of the Old Wall. At a meeting of the Board on March 24, 2016, the Board discussed that the Old Wall needed to be replaced.

The Old Wall functioned as a single structure and could only be replaced in toto. The Board engaged a contractor for removal and replacement of the Old Wall for the sum of $7,685. The Board did not consult with or collaborate with [Morgan] in the selection of the contractor or of the design for the replacement wall.

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By letter dated September 29, 2016, Stefan Richter, Esquire, [(the Association's Counsel)] . . . notified [Morgan's Counsel] that [Morgan] would be responsible for one-half of the cost of the work and that if she refused to pay, the Association would sue her to recover this amount together with costs and attorney fees. By a responsive letter dated October 6, 2016, [Morgan's Counsel] informed [the Association's Counsel] that [Morgan] objected to paying half the cost and also that she considered the proposed design of the replacement wall to be inadequate. Enclosed with the letter were a report from another engineering firm engaged by [Morgan] and estimates from two contractors for the more extensive work that [Morgan] was demanding.

On or about October 24, 2016, the Association's contractor removed the Old Wall and installed a replacement wall ("the New Wall"). The New Wall was erected in substantially the same location as the Old Wall, with the design to which [Morgan] had objected. Like the Old Wall, the New Wall functions as a single structure and can only be replaced in toto.

By letter to [the Association's Counsel] dated November 28, 2016, [Morgan's Counsel] stated that the New Wall was inadequate and needed to be replaced. Enclosed with the letter was a supplemental engineering report regarding the New Wall. Also enclosed was an "invoice" rendered by [Morgan] to the Association for fees from the two engineering firms she had engaged and for [Morgan's Counsel's] fees. By letters to [Morgan's Counsel] dated January 5, 2017, and March 24, 2017, respectively, [the Association's Counsel] reiterated the Association's demand for payment by [Morgan] of one-half of the $7,685 cost of the New Wall - i.e., $3,842.50. The March 24 letter again threatened suit if payment was not made.

[Morgan] commenced this action against the Association by Writ of Summons on October 2, 2018. Her Complaint, filed January 22, 2019, asserted five counts. Count I sought a declaratory judgment that, inter alia, [Morgan] is not responsible for one-half of the cost of replacing the Old Wall and that the Association bears sole responsibility for the maintenance, repair, and replacement of the New Wall as necessary. Count I also sought unspecified damages, punitive damages, and attorney fees. Counts II (injunctive relief), III (nuisance) and IV (breach of contract) sought injunctive relief and monetary damages, including attorney fees, on the ground that the New Wall was inadequate and needed to be replaced. Count V, for implied contract,

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quasi-contract, and unjust enrichment, sought recovery of the engineering fees that [Morgan] had incurred.

[A n]onjury trial was held on June 15 and 16, 2022. At the outset of trial, it was agreed that any award of attorney fees incurred in connection with the litigation would be reserved and would be raised by motion after issuance of the Court's decision. That procedure was reconfirmed at the close of the trial.

Trial Court Opinion, 12/6/22, at 1-4 (footnotes, headnotes and internal citations omitted).

On June 23, 2022, the trial court issued its decision on the underlying dispute. The trial court determined under the Uniform Planned Community Act (Act),^[2] the Association bore the sole responsibility for replacing the Old Wall and maintaining the New Wall. Id. at 4. Therefore, it found in favor of Morgan on Count I, but did not award compensatory damages because the Association had paid its contractor in full for the replacement of the Old Wall, and it did not award punitive damages because it found the Association had not acted willfully. Id. at 6. On Counts II through IV, the trial court found the New Wall was structurally sound and in good condition and did not need to be replaced. Id. Therefore, the trial court found in favor of the Association. Id. Similarly, as to Count V, for unjust enrichment, the trial court found in favor of the Association. Id. Neither party challenged the trial court's decision.

On July 5, 2022, both Morgan and the Association filed motions seeking an award of attorney fees and costs. Morgan sought an award of $280,066.13. The Association sought an award of approximately $81,860.80.

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In its Order, the trial court granted Morgan's request, in part, by awarding her attorney fees in the amount of $50,000. The trial court denied the Association's request for attorney fees entirely. The trial court explained its reasoning as follows:

In determining the parties' respective requests for fees and costs under [S]ection 5412 of the [Act], the [trial court] has considered primarily the following factors . . . .

• This dispute arose from the Association's repeated insistence that [Morgan] bear one-half the expense of replacing the Old Wall and its threats to sue her to recover that amount. As the [trial court's d]ecision explains, while this position was apparently asserted by the Association in good faith, it did not represent a reasonable interpretation of the Act. But for the Association's position, it is possible that litigation would have been avoided.

• At the same time, the [trial court] found [Morgan's] challenges to the adequacy of the New Wall to be without sufficient supporting evidence. These issues accounted for the great majority of time spent on discovery and trial. [Morgan's] persistence in seeking to require the Association to remove and rebuild the New Wall made settlement of this matter especially difficult. Unlike the Association's position on the cost of replacing the Old Wall, however, [Morgan's] challenges to the adequacy of the New Wall were not unreasonable.

• In the attorney invoices submitted by [Morgan], the descriptions of the subject matter of work performed are heavily redacted. As a result, the allocation of time spent between the issues on which [Morgan] prevailed and those on which she did not prevail is problematic.

• Section 5412 [of the Act] authorizes the [trial court], in a suit for violation of the Act

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