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Parker v. Brunswick Forest Homeowners Association, Inc.

Court of Appeals of Tennessee, Jackson

June 13, 2019

STEVEN H. PARKER
v.
BRUNSWICK FOREST HOMEOWNERS ASSOCIATION, INC.

          Session April 10, 2019

          Appeal from the Chancery Court for Shelby County No. CH-16-1541 JoeDae L. Jenkins, Chancellor

         Following a bench trial, the trial court awarded the Defendant/Appellee $28, 372.06 in attorney's fees based upon an attorney's fees provision in the parties' written agreement. Plaintiff/Appellant appeals the award of attorney's fees on the basis that the relevant provision is inapplicable under the circumstances. Because we conclude that the trial court did not err in awarding the Appellee its attorney's fees, we affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

          John R. Candy, Collierville, Tennessee, for the appellant, Steven H. Parker.

          Brandon F. McNary and Peter D. Baskind, Memphis, Tennessee, for the appellee, Brunswick Forest Homeowners Association, Inc.

          J. Steven Stafford, P. J., W.S., delivered the opinion of the court, in which Arnold B. Goldin and Kenny Armstrong, JJ., joined.

          OPINION

          J. STEVEN STAFFORD, JUDGE

         Background

         This case is about fees assessed by the Brunswick Forest Homeowners Association ("the Association") against Steven H. Parker ("Homeowner") related to Homeowner's residence in Shelby County, Tennessee. Homeowner purchased his home in 2014 subject to various provisions enshrined in the Declaration of Covenants, Conditions and Restrictions for Brunswick Forest ("CCRs" or "the Declaration"). One such provision states that the homeowners in Brunswick Forest "shall be deemed to covenant and agree to pay to [the Association] . . . annual assessments or charges." As such, the Association assessed charges against Homeowner for the years 2015 and 2016. Homeowner, however, did not tender payment, and the Association mailed a letter to the Homeowner indicating that Homeowner was delinquent. The Association requested that Homeowner tender $280.00 to cover the late assessments, as well as $100.00 in related attorney's fees.

         Homeowner again refused to pay the assessments. On July 18, 2016, the Association sent a second letter to Homeowner, advising him that due to the delinquency of the assessments, a lien on Homeowner's property was to be recorded in the Shelby County Register's Office. In response, Homeowner, acting pro se, filed a complaint against the Association on September 29, 2016, in the Chancery Court for Shelby County ("the trial court"). Appellant also named two directors of the Association, Paul T. Ryan and Garrett Temple, individually, in the complaint, however, both Mr. Ryan and Mr. Temple were dismissed from the case early in the litigation and are not parties to this appeal. In his complaint, Homeowner alleged that the Association did not follow the relevant bylaws of the CCRs in calculating the assessments and because of that, the assessments and the lien placed on Homeowner's home were invalid. According to Homeowner, the Association was liable for breach of fiduciary duty, a conflict of interest, and for intentional harm inflicted upon the Homeowner. Homeowner sought the removal of the lien from his property, and a declaration that "the amount of the assessment for which the lien was filed was not set in accordance with the [CCRs] and the Tennessee Code Annotated regarding Non-profit corporations."

         On November 7, 2016, the Association filed an answer denying the material allegations contained in Homeowner's complaint. The Association also filed a counterclaim against Homeowner, asserting a cause of action for breach of contract on the basis that Homeowner failed to fulfill his obligations under the CCRs, namely, payment of the annual assessments for 2015 and 2016. The Association further asserted that it was entitled to costs and attorney's fees pursuant to the CCRs.

         Contentious litigation ensued. The first trial judge assigned to the case recused himself due to a conflict of interest; the case was thereafter transferred to a different division of the Shelby County Chancery Court. In the meantime, Homeowner sought to amend his complaint, and eventually filed an amended complaint wherein he also alleged a breach of contract action; specifically, Homeowner averred that he was unlawfully denied access to the "books and records" of the Association, in violation of the CCRs. Eventually, on August 24, 2017, the Association filed a motion for partial summary judgment asking the trial court to find Homeowner liable for breach of contract "for his failure to pay assessments." The motion was heard September 27, 2017, and on September 29, 2017, the trial court entered an order granting the Association summary judgment on its breach of contract claim.[1]

         Also on September 29, 2017, conflict with the second trial judge came to a head after allegations from the Homeowner that the judge had been harassing Homeowner and attempting to force him to retain counsel. While the trial judge denied these allegations, he ultimately decided to recuse himself from the case. Accordingly, a second order of recusal was entered September 29, 2017, and the case was again transferred to a different division of the chancery court.

         Homeowner eventually retained counsel, and this matter proceeded to trial on August 23, 2018. At the hearing, the court first heard testimony from the Homeowner, who conceded that he purchased his home in 2014 and that he signed the CCRs at issue at that time. Homeowner testified in support of his affirmative claims, generally testifying that the Association did not provide access to information needed to support the assessments, such as how the assessments were calculated, and that the assessments, along with the lien to secure them, were invalid as a result.

         The trial court also heard testimony from Mr. Ryan and Mr. Temple. Mr. Ryan testified that he was one of the partners in the Brunswick Forest development and that he was serving as a director of the Brunswick Homeowner's Association when the dispute with the Homeowner began.[2] With regard to the assessments, Mr. Ryan testified that the assessment amount had been the same for many years because the Association "had a history with the expenses and knew what the expenses were." He also testified that the Association followed all provisions in the CCRs when assessing the various fees for each lot, including estimating the annual amounts thirty days before each assessment period and sending a notice of assessment to each homeowner. Mr. Ryan also confirmed that the Homeowner refused to pay his assessments for 2015 and 2016.

         Mr. Temple's[3] testimony regarding how the assessments were calculated largely reiterated that of Mr. Ryan. Mr. Temple also recalled a meeting with the Homeowner during December of 2016, at which time the Homeowner's delinquent assessments totaled $280.00. Mr. Temple testified that in the meeting, Homeowner agreed to pay assessments going forward if the Association would waive the outstanding $280.00 and remove the lien from Homeowner's property. Mr. Temple testified that when the Association would not agree to those terms, Homeowner abruptly left the meeting. Finally, Mr. Temple stated that because of the protracted litigation caused by this case, the Association had been forced to raise the yearly assessment amount to $650.00.

         The trial court issued an oral ruling in which it concluded that the Homeowner failed to carry his burden of proof in showing that the Association breached its contract with the Homeowner, or that Homeowner had suffered any damage as a result of the Association's actions. The trial court determined that Homeowner's complaint should be dismissed in its entirety; the issue of attorney's fees, however, was reserved for a later date.

         The trial court held a final hearing on September 5, 2018 in order to determine the issue of attorney's fees, which both parties had requested they be awarded. At the hearing, counsel for the Association testified about the fees incurred throughout the case, stating that much of the Association's work was done in response to the multitude of motions and pleadings that were filed by the Homeowner while he was proceeding pro se. Counsel's overall testimony was that the fees incurred were reasonable under the circumstances, and that the total amount including costs came to $32, 371.06.

         The dispute at this hearing, however, largely centered on the language of the CCRs and whether, pursuant to that language, the Association could collect attorney's fees related to its defense of Homeowner's claims. One provision of the CCRs, found in Article VI, section five, provides that "[t]he Association may bring an action at law against" a homeowner in the event that the assessments are unpaid, and that "the Association may collect from the said [m]ember interest, costs and reasonable attorneys' fees." Further, Article XII, section 3 expressly discusses enforcement of the CCRs and states that "[t]he expense of enforcement by the Association shall be chargeable to the Owner of the Lot violating these covenants and restrictions and shall constitute a lien on of the Lot, collectible in the same manner as assessments hereunder."

         Based upon the language in the CCRs, particularly the Article VI provision, the Homeowner argued that most of the fees incurred by the Association arose in defense of Homeowner's actions, rather than from prosecuting its own breach of contract claim. As such, the Homeowner argued that the Association's attorney's fees did not accrue as a result of the Association "bring[ing] an action at law[.]" In support, the Homeowner alleged that he had examined the bills submitted by the Association, and that the fees accrued in prosecuting the Association's counterclaim only amounted to approximately $1, 500.00. Based upon the language of the contract, Homeowner asserted that the Association was not entitled to any award of attorney's fees over and above what was accrued in bringing the counterclaim. Essentially, Homeowner argued that the Association should only be awarded, if anything, $1, 500.00 in attorney's fees.

         At the conclusion of the hearing, the trial court ruled that it would award attorney's fees to the Association. In addressing the Homeowner's argument that the Association was entitled only to fees accrued in furtherance of its counterclaim, the trial court noted the following:

It appears that this litigation rolls out of the Association's right to collect Association dues through annual assessments. [Homeowner] disputed the Association's right to collect the annual assessments and refused to pay them, which gave rise to his lawsuit, which initiated this litigation.
The gravamen of his lawsuit was to avoid the payment of annual assessments, two years' worth, plus an [sic] attorney fees of $100.00. The litigation was protracted; although not overly complicated, it was protracted based upon the numerous pleadings filed by [Homeowner] who did a pretty decent job being a non-lawyer requiring the ...

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