SOUTHWIND RESIDENTIAL PROPERTIES ASSOCIATION, INC.
Session February 14, 2017
from the Circuit Court for Shelby County No. CT-003095-13
Jerry Stokes, Judge
association obtained a favorable judgment for unpaid
assessments against property owner of 1.6 lots as well as
attorney's fees in the trial court. Property owner
appeals. We vacate the trial court's attorney's fee
award in favor of the association and remand for
consideration of the reasonableness factors as outlined in
the Tennessee Rules of Professional Responsibility. We affirm
the trial court's judgment in all other respects.
Affirmed in part, vacated in part, and remanded.
R. App. P. 3 Appeal as of Right; Judgment of the Circuit
Court Affirmed in Part; Vacated in Part; and Remanded
B. Bradley, Memphis, Tennessee, for the appellant, Kelvin
D. Baskind, Robin H. Rasmussen, Memphis, Tennessee, for the
appellee, Southwind Residential Properties Association, Inc.
Steven Stafford, P.J., W.S., delivered the opinion of the
court, in which D. Michael Swiney, C.J., and Arnold B.
Goldin, J., joined.
STEVEN STAFFORD, JUDGE
Kelvin Ford ("Mr. Ford") and his wife Tasha Ford
("Dr. Ford" and together with Mr. Ford, "the
Fords") purchased a piece of property by special
warranty deed on July 30, 2010. The property is located in a
portion of the Southwind Planned Development known as
"The Estates." The subdivision plat for The Estates
was filed on May 6, 1991 and reflects twelve large lots.
According to the special warranty deed, the property
purchased by the Fords consists of "Lot 1 and part of
Lot 2, Phase XXVII, . . . as recorded in Plat Book 134, Page
39, in the Register's Office of Shelby County,
Tennessee." Of the twelve original lots in the recorded
subdivision plat, only Lots 1-4 survive to this day; Lots
5-12 were subdivided into smaller plots, referred to as Lots
1-26 of Phase XL, and recorded in the plat book.
the property in the subdivision is subject to the Declaration
of Protective Covenants, Agreements, Easements, Charges and
Liens for Southwind (Residential), referred to as the
"CCRs" by the parties. Under a 1995 amendment to
the CCRs ("1995 Amendment" or "Amended
CCRs"), the properties in the subdivision are subject to
the "Assessment of Annual Charge, " which is to be
determined by the Board of Directors ("the Board")
of the Plaintiff/Appellee Southwind Residential Properties
Association, Inc. ("the
Association"). The assessment is to be calculated taking
into account the "Lot Share" of each parcel, as
discussed in detail, infra. The CCRs do not
specifically address parcels that include partial lots. In
addition to rules regarding the Annual Assessment, the CCRs
provide rules regarding the maintenance of property.
Specifically, Section 1.01 of Article X of the CCRs provides
that: "Each owner shall keep all or thereon, in good
order and repair, including the seeding, watering, and mowing
of all lawns [and] the pruning and cutting of all trees and
shrubbery[.]" Additionally, the Association Bylaws,
adopted in 2009, specifically provide that: "The
membership rights of any Member, including the right to vote,
may be suspended by the [Association] for any period during
which any assessment or charge owed to the Association by any
such Member remains unpaid."
dispute in this case largely stems from the assessment
charged for the Fords' property. According to the Fords,
the Association initially charged them for two full Lot
Shares, despite the fact that he only owned one lot, plus a
partial lot. Mr. Ford paid the full assessment for two years,
but in 2012 brought the issue to the Association's
attention. After 2012, the Association agreed to reduce the
assessment to reflect a 1.6 Lot Share, taking into account
the Fords' full ownership of Lot 1 and partial ownership
of Lot 2; the Fords contended, however, that they properly
owed only a single Lot Share. The Fords then unilaterally
chose to remit only the assessment for a single Lot Share to
Association thereafter filed a general sessions civil warrant
against the Fords on March 25, 2013. The civil warrant
requested $2, 847.74 in unpaid assessments, as well as costs
and attorney's fees for a total judgment of $25, 000.00.
The Association was initially awarded a default judgment;
however, the default judgment was set aside and a trial was
held. On June 26, 2013, the general sessions court awarded a
judgment in favor of the Association in the amount of $3,
368.39, "plus costs." Mr. Ford filed an appeal to
circuit court on July 3, 2013. Although no notice of appeal
was signed in the name of Dr. Ford, when the case was
docketed in Division III of the Shelby County Circuit Court,
both Mr. Ford and Dr. Ford were named as defendants.
parties subsequently entered into a period of discovery. On
October 28, 2013, the Association filed a petition for civil
contempt against both Mr. Ford and Dr. Ford for their failure
to appear at scheduled depositions. The Fords filed a
response to the contempt petition on January 17, 2014,
contending that they were in the process of obtaining new
counsel at the time the deposition was scheduled. The parties
thereafter agreed to strike the contempt petition and to
reschedule the depositions.
March 27, 2014, the Association filed an amended complaint.
Therein, the Association more specifically outlined its claim
for unpaid assessments, noting that it sought both a full
assessment for Lot 1 and "at least sixty percent of a
yearly assessment for Lot 2, " reflecting the portion of
Lot 2 owned by the Fords. The Association therefore sought a
judgment for the full amount of unpaid assessments due at the
time of trial, as well as pre-judgment interest,
attorney's fees, and costs.
point, the clerk of the circuit court pointed out to the
parties that no notice of appeal was filed on behalf of Dr.
Ford. On June 13, 2014, Mr. Ford and Dr. Ford filed a motion
to "determine parties to appeal from general
sessions[.]" In their motion and accompanying
memorandum, the Fords noted that both Mr. Ford and Dr. Ford
had participated in the circuit court case for over a year
without any confusion. As such, the Fords asked that the
trial court enter an order clarifying that Dr. Ford was a
proper party to the case.
17, 2014, the Fords filed an answer to the Association's
amended complaint and a counter-complaint. Therein, the Fords
denied that the Association was entitled to any damages for
unpaid assessments, as they alleged that the Association had
in fact been overcharging for the assessments due to
ambiguities in the CCRs that should be construed in the
Fords' favor. The Fords also asserted that "some or
all of [the Association's] costs and expenses are
unnecessary and are not reasonably related to the collection
of the assessments alleged due from the Fords." In
addition, the Fords raised claims of negligent and
intentional misrepresentation and breach of contract.
Finally, the Fords asserted that the intentional
misrepresentation by the Association "constitutes
outrageous conduct worthy of punishment through the
assessment of exemplary damages." As such, the Ford
sought an unspecified amount of damages due to the
Association's allegedly tortious conduct.
Association filed a response to the Fords' motion to
determine the proper parties to the appeal on June 19, 2014.
Therein, the Association noted that a notice of appeal was
filed only on behalf of Mr. Ford, not Dr. Ford. Accordingly,
the Association asked the trial court to enter an order
finding that only Mr. Ford was a party to the appeal. On June
27, 2014, the trial court entered an order finding that only
Mr. Ford had effectively appealed the general sessions
judgment and therefore Dr. Ford was not a party to the
appeal. The caption of the case was thereafter changed to
reflect Mr. Ford as the sole defendant.
Association next filed an answer to Mr. Ford's
counter-complaint on July 16, 2014, denying the material
allegations contained therein. The Association's answer
also raised affirmative defenses of, inter alia, the
expiration of the statute of limitations and failure to plead
certain claims with particularity. Shortly, thereafter, the
Association filed a motion for partial summary judgment
against Mr. Ford, arguing that Mr. Ford's counter-claims
were barred by the statute of limitations and that the claims
for intentional misrepresentation and outrageous conduct were
not pled with particularity as required by Rule 9.02 of the
Tennessee Rules of Civil Procedure. Mr. Ford responded in
opposition to the motion for partial summary judgment on
November 24, 2014.
case was continued several times, nearly all of which
occurred at Mr. Ford's request. One such continuance
occurred when Mr. Ford's second attorney withdrew and Mr.
Ford retained substitute counsel. During this time, the case
was transferred to Division IV of Shelby County Circuit
Court. On February 19, 2016, the trial court entered an order
granting Mr. Ford "one (1) final continuance, "
setting trial for April 26, 2016, and ordering the parties to
participate in mediation.
April 4, 2016, Mr. Ford filed a motion regarding the proper
interpretation of the CCRs as applied to Mr. Ford's
property. The Association responded in opposition on April
19, 2016, asserting that the specific question presented by
the motion "has no bearing upon the case." Both
parties thereafter filed pre-trial briefs.
occurred as scheduled on April 26, 2016. Robert Cox, the
vice-president of the Association, first testified about the
dispute between the Association and the Fords.
acknowledged that Mr. Ford approached him in 2012 concerning
what Mr. Ford considered an overcharge of assessments as to
his property. Ultimately the parties were unable to amicably
resolve the dispute, leading to this litigation. According to
Mr. Cox, the litigation expenses in this case stemmed from
the Association's need to respond to Mr. Ford's
motions, the multiple continuances granted to Mr. Ford, and
"Mr. Ford's lack of cooperation [throughout the
litigation, which] has driven up the attorney's fees in
this case[.]" Mr. Cox denied that he ever gave any
assurances to the Fords that their property would be assessed
as a single lot; according to Mr. Cox, he lacked the
authority to make such an assurance. Mr. Cox admitted,
however, that he could not know whether another Association
board member or employee made such an assurance to the Fords.
Mr. Cox further admitted that Mr. Ford had made some payments
since 2012 on the assessment, but not the entirety of what
the Association contended was owed.
Moss, an employee of the Association's management company
testified regarding both the assessment allegedly owed by Mr.
Ford and the costs associated with the litigation. According
to Ms. Moss, the Fords were initially assessed for two lots,
but it was later determined that he should be assessed on
only 1.6 lots. At that time, Ms. Moss testified that the
Association "went back and calculated, verified
everything, and . . . did all the adjustments." Ms. Moss
testified that Mr. Ford paid the assessment in full the first
two years after the purchase of the property, but even after
the assessment was reduced to reflect only a 1.6 Lot Share,
Mr. Ford failed to make a full payment to the assessment
after 2012. Instead, Mr. Ford only paid for one Lot Share.
According to Ms. Moss, using the 1.6 Lot Share to calculate
Mr. Ford's assessment, Mr. Ford owed unpaid assessments
on Lot 1 in the amounts of $3, 401.74 and $4, 939.32. Ms.
Moss admitted, however, that Mr. Ford made a payment of $1,
175.00 on the Lot 1 assessment for which he had yet to be
Moss also testified that the Association incurred costs of
$2, 500.00 from her management company relative to the
litigation, which had apparently been included in Ms.
Moss's prior $4, 939.32 figure concerning the unpaid
assessment on Lot 2. Ms. Moss explained that she "put in
considerable over-time which [her] boss had to pay [her] for,
" as the dispute between the Association and the Fords
"hijacked [her] work life." Ms. Moss testified that
the Association was required to reimburse the management
company for these costs, as the costs were related to the
Association's effort to collect outstanding assessments.
Ms. Moss admitted, however, that this was not a typical cost
assessed to a homeowner, but was merely a result of the
Moss next testified that the Association incurred legal fees
of $68, 018.75, which had been paid by the Association at the
time of trial. Through Ms. Moss, counsel for the Association
presented billed and paid invoices for legal fees totaling
$68, 018.75 and asked that the invoices be admitted into
evidence. Counsel for Mr. Ford initially objected to the
admission of the invoices on the basis that he had not been
given the bills in discovery. The trial court thereafter
granted Mr. Ford a short recess to allow his counsel time to
review the bills. At the resumption of trial, Mr. Ford's
counsel stated that he had been able to superficially review
the invoices. Mr. Ford's counsel did not renew his
objection to the bills or offer any additional objections as
to their admissibility. The invoices were therefore admitted
contrast to the testimony of Mr. Cox and Ms. Moss, Mr. Ford
testified that he should be assessed only a single Lot Share
for his property. Specifically, Mr. Ford testified that
although he was initially aware that his property "would
be assessed two lot fees, " Ms. Moss informed him prior
to the closing on the property that he could easily obtain
permission from the Association to only pay a single lot fee.
Mr. Ford testified that based upon this assurance, he and Dr.
Ford decided to purchase the property and address the proper
calculation of the assessment "down the road."
According to Mr. Ford, he and Dr. Ford paid fees on "two
full lots" at the time of closing on the property and
for a period of two years thereafter. Mr. Ford testified that
he later sent a letter to the Association formally asking
that he only be charged an assessment for a single lot. Mr.
Ford testified that the Association admitted that it had made
a mistake in assessing the Fords for two full lots, but
refused to reduce the assessment to a single lot. Instead,
the Association indicated that the Fords pay a full
assessment on Lot 1 and a pro-rated assessment for Lot 2,
reflecting the amount of Lot 2 actually owned by the Fords.
Mr. Ford testified that even after the Association conceded
that the Fords only owed an assessment on 1.6 lots, they
received a letter from the Association requesting payment for
two full Lot Shares.
Ford admitted that he and Dr. Ford own 1.6 lots. Mr. Ford
asserted, however, that consideration of the lots was
improper and that the assessment should instead be calculated
by tract, of which the Fords only own one. After paying two
full Lot Shares in 2010 and 2011, Mr. Ford testified that he
asked that his 2012 assessment be calculated using only one
Lot Share and also that he be credited in the amount of his
prior overpayment. As a result, Mr. Ford testified that in
2012 and 2013 he only paid the amount owed for a single Lot
Share after deducting the purported credit. Thereafter, in
2014, 2015, and 2016, Mr. Ford testified that he paid the
assessment on one full Lot Share.
regard to his counter-claim for breach of contract, Mr. Ford
testified that he and Dr. Ford were initially informed that
they were not required to mow the lawn on a portion of their
property because it was wooded and shielded from view. After
several years, however, Mr. Ford testified that the
Association objected to the condition of the property and
required the Fords to mow the area, leading to instances of
trespass by children. In addition, Mr. Ford testified that
after this dispute arose, the magnetic stickers that allowed
the Fords to reach their property through The Estates'
back gate were deactivated. Instead of using the back gate
like other homeowners, the Fords were thereafter required to
go through the front gate of The Estates. Mr. Ford further
admitted that the underlying matter was not the only
litigation in which he and the Association were involved.
First, Mr. Ford testified that the Association had filed
another complaint against Mr. Ford in circuit court involving
Mr. Ford's failure to maintain his property. It appears
from the testimony at trial that this matter was resolved.
Mr. Ford also testified that he had filed a complaint in
chancery court against the Association alleging that the
Association had racially discriminated against him. The
record is unclear of the resolution of this lawsuit.
conclusion of Mr. Ford's testimony, Ms. Moss was
recalled. Ms. Moss unequivocally denied that she had ever
informed Mr. Ford that his property could be assessed as a
single lot. According to Ms. Moss, that is not the
Association's typical practice, having never allowed such
a consolidation in the past, and she has no authority to
determine the property assessment for a parcel of property.
Ms. Moss also testified that the Fords' property was
"consistently overgrown, " which required the
Association to file a separate lawsuit to force Mr. Ford to
mow the lawn. Ms. Moss explained that the Association has a
written delinquency policy indicating that the Association
may suspend privileges to owners who have failed to pay their
assessments. According to Ms. Moss, the suspension of
privileges occurs frequently throughout the neighborhood and
the Association has previously gone to great lengths to
collect unpaid assessments from other owners.
trial court issued an oral ruling at the conclusion of the
proof, which ruling was incorporated into the trial
court's May 9, 2016 final judgment. Therein, the trial
court noted that the case had "a very lengthy
history" and that there was no dispute that the Fords
own one lot and sixty percent of a second contiguous lot or
that all property in the Southwind neighborhood is subject to
the CCRs including Annual Assessments. The trial court found
that the CCRS provide that Annual Assessments were to
"be assessed by lot, " as defined by the
"recorded subdivision plat." Because the trial
court concluded that Mr. Ford owned 1.6 lots based upon the
recorded subdivision plat, the trial court determined that
Mr. Ford was responsible for Annual Assessments on 1.6 Lot
Shares. As such, the trial court entered a total judgment
against Mr. Ford for $7, 166.06 for unpaid assessments. In
reaching this award, the trial court deducted Mr. Ford's
uncredited payment of $1, 175.00 from the unpaid assessment
on Lot 1, resulting in a net unpaid assessment on Lot 1 of
$2, 226.74 In addition, the trial court ruled that Mr. Ford
owed $4, 939.32 in unpaid assessments for Lot 2, which award
included expenses charged by the Association's management
company "for overtime hours associated with this case, a
cost of collection to the Association[.]"
trial court also dismissed Mr. Ford's counter-claims,
finding that he failed to meet his burden of proof. In the
trial court's ruling, it noted that the parties were
"fairly sophisticated and knowledgeable" and that
the parties had "full knowledge of what was being
purchased." In addition, the trial court noted that the
property purchased was "fairly expensive" leading
the trial court to believe that Mr. Ford "had the
wherewithal to get counsel . . . if he had wanted to  spell
out what he felt his rights were and what his obligations
would be." The trial court also mentioned the
long-standing nature of the dispute and the fact that the
dispute could have been resolved on multiple occasions as
early as 2010 at the property closing. Finally, the trial
court awarded the Association $66, 892.25 in attorney's
fees, which represented the Association's entire fee
request less the fees accrued when the Association filed an
objection to a discovery request. The trial ...