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Villas at Poplar Brook Condominium Association, Inc. v. Ustun


July 30, 2009


On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. F-24199-06.

Per curiam.


Submitted December 8, 2008

Before Judges R. B. Coleman and Simonelli.

Plaintiff, Villas at Poplar Brook Condominium Association, Inc., (the Association), appeals from an order of the Chancery Division, Monmouth County, dated March 24, 2008, to the extent that order denied the Association's motion for an award of counsel fees. The order granted other affirmative relief sought by the Association in that it directed defendant to pay moneys to the Association, calculated in accordance with a formula set forth on the record on March 19, 2008. That included maintenance fees, special assessments and late fees from June 2005 through April 2008, all of which defendant agreed to pay. The Association, nevertheless, appeals from the denial of its request for reimbursement of counsel fees, contending that it is entitled to such counsel fees as a matter of law. Defendant has not cross-appealed.

Having carefully considered the arguments raised by the Association and the applicable law, we affirm the order, substantially for the reasons given by Judge Thomas W. Cavanagh, Jr., in his oral opinion of March 19, 2008, and in his supplemental letter of June 12, 2008, filed pursuant to Rule 2:5-1(b).

The facts which gave rise to the cross-motions of the parties are not in dispute. Defendant Aydin Ustun, a resident of Turkey, owns a condominium unit in the Villas at Poplar Brook in Ocean Township, where the Association is responsible for maintenance. Pursuant to Section G of the Master Deed, the Association is:

[V]ested with the rights, powers, privileges and duties necessary to or incidental to the proper administration and management of the CONDOMINIUM including but not limited to the conduct of all activities of common interest to the Unit owners, the same being more particularly set forth in the Bylaws of the ASSOCIATION.

The initial Master Deed, further provides in Section A, Paragraph 12, that "all charges, expenses and assessments chargeable to any Unit shall constitute a lien against said Unit in favor of the ASSOCIATION . . . ." Paragraph 12 further provides, in pertinent part, as follows:

In the event that the assessment, charge or other expense giving rise to said lien remains unpaid for more than ten (10) days after the same shall become due and payable, a $10.00 late charge shall be levied against the Unit, and in the event that the assessment, charge or other expenses giving rise to said lien remains unpaid for more than thirty (30) days after the same shall become due and payable, the lien may be foreclosed by the ASSOCIATION in the manner provided for the foreclosure and sale of real estate mortgages, and, in the event of foreclosure, the ASSOCIATION shall, in addition to the amount due, be entitled to recover reasonable expenses of the action, including costs and attorneys' fees.

In December 2004, water damage occurred in defendant's unit, which was unoccupied at the time. In January 2005, the Association contracted to have the unit repaired, and in March 2005, the Association assessed defendant's account in the amount of $3,346.73 for the cost of repair. Defendant paid the full amount. Following such payment, defendant's account reflected a positive balance of $101.11 though June 2005. Nevertheless, in May 2005, the Association assessed defendant an additional $1,088.25 for legal fees allegedly incurred in connection with its efforts to collect the costs and expenses incurred in the repair of the water damage to defendant's unit.

Defendant disputed the amount sought for legal fees and in response to the assessment, he stopped paying his monthly maintenance fees as of June 2005. Prior to that time, defendant had paid his monthly maintenance fees and all other Association assessments in a timely manner, sometimes up to six months or a year in advance.

Defendant's non-payment of the monthly maintenance fees prompted the Association to file a foreclosure complaint, which defendant contested. On October 26, 2007, the Association filed its motion for summary judgment and thereafter, defendant, acting pro se, filed his notice of cross-motion for summary judgment. The cross-motions were argued before Judge Cavanaugh on March 19, 2008.*fn1 At the oral argument, defendant acknowledged that he was responsible for the monthly maintenance fees, for delinquent fees and for late fees, and he confirmed that he was willing to pay those items immediately. On the other hand, he continued to contest any responsibility for reimbursement of legal fees related to the collection of the cost of repairing water damage in his unit.

The court agreed with defendant's position, observing at one point that the owner ha[d] a bill posted to his account in March of '05, and by April of '05, he's cleared up that balance, and he's actually ahead of the game, according to the occupant ledger document. So, from what he understands, he's back -- he's pretty much done what he should do, according to your records, he's $870.00 ahead, according to your records.

The court continued, stating:

He's still in the black. So I agree with him that this has gotten to the point where the legal fees are driving the bill because you sent him a bill, he paid the bill in full, and, in fact, overpaid the bill, according to your records. And even if I add in the April counsel fees, he's still ahead, or you're ahead of him, I should say.

So reasoning, the court concluded that defendant should be responsible for late fees as a result of his subsequent non-payment of the maintenance fees, but that he should not be responsible for the asserted legal fees. As the court explains in its June 10, 2008, written supplementation of its opinion,

I concluded that the water infiltration issue had been resolved and that the defendant should not have been charged additional legal fees in connection therewith after his payment of April 2005. The legal fee charge in May 2005 triggered his resistance to further payment and resulted in him discontinuing the regular and consistent payment of maintenance fees beginning in July of 2005, although other checks were received by the Association after that date.

The court summarized its position by stating that it felt that "it was inappropriate to allow counsel fees regarding an issue which had been generated essentially by the Association."

On appeal, the Association argues the legal fees that were posted had been incurred by the Association during the period from December 2004 through May 2005, but that it could not have charged the defendant for those legal fees earlier because they had not been invoiced by the law firm up to that date. The Association's emphasis on the timing of the billing cycle is misplaced. It was not so much the timing of the presentation of the invoice or statement that moved the court to its decision. Rather, it was the perceived inequity of imposing counsel fees upon a unit owner whose account was not only current but "in the black" at the time the legal fees were asserted.

The Association also contends that the trial court erred as a matter of law by not awarding counsel fees to plaintiff. It points out that the obligation to pay assessments [including reasonable attorney's fees] in a timely manner is statutory in origin. It notes that pursuant to N.J.S.A. 46:8B-15(e), the Association may levy and collect moneys duly owed to the Association upon proper notice to the unit owner, together with interest thereon, late fees and reasonable attorneys' fees, if authorized by the Master Deed or bylaws. The Association adds that the Master Deed also expressly authorizes and empowers the Association, in the event of the foreclosure of a lien, to recover reasonable expenses of the action, including costs and attorneys' fees. Citing Holbert v. Great Gorge Village South Condominium Council, Inc., 281 N.J. Super. 222, 228 (Ch. Div. 1994), the Association also urges that the "amount of the lien against the unit may lawfully include the unpaid common expenses, interest on the common expenses calculated at the legal rate and, if authorized by the Master Deed or bylaws, reasonable attorneys' fees." The Association argues further that the Legislature did not intend that the necessary stream of income of the condominium Association be reduced by payment of reasonable attorneys' fees incurred in the process of collection of charges properly imposed.

Again, these arguments miss the point of the decision by the trial court. We recognize that under the New Jersey Condominium Act, N.J.S.A. 46:8B-1 to -38, "[t]he association shall have a lien on each unit for any unpaid assessment duly made by the association for a share of the common expenses or otherwise, including any other moneys duly owed the Association . . . together with interest thereon, and if authorized by the Master Deed or bylaws, reasonable attorneys' fees[.]" Glen v. June, 344 N.J. Super. 371, 381 (App. Div. 2001) (quoting N.J.S.A. 46:8B-21(a)). Judge Cavanagh clearly understood that he had authority to require the payment of reasonable counsel fees. What he concluded, however, was that, under the undisputed circumstances of the case, it would be inequitable and inappropriate to require the payment of counsel fees by the unit owner. We regard that determination as an exercise of sound judicial discretion.

Our Supreme Court has noted that "fee determinations by trial courts will be disturbed only on the rarest of occasions, and then only because of a clear abuse of discretion." Packard-Bamberger and Co., Inc. v. Collier, 167 N.J. 427, 444 (2001) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). In this instance, we find no flaw in the trial court's analysis of the factual circumstances presented. The issue presented was not one of authority but rather one of propriety.

At the heart of the matter, the judge found that the legal fees sought by the Association were triggered by a pipe bursting in the defendant's unit, and that the defendant promptly made the necessary payment to address his responsibility in April 2005. According to the Association's own ledger, defendant continued to maintain a credit balance even after the initial legal fees were deducted. As the Chancery Division judge perceived the situation, the parties' reactions to the ensuing dispute over the counsel fees "spun out of control," and "it was inappropriate to allow counsel fees regarding an issue which had been generated essentially by the Association." We find no reason to disturb the trial court's discretionary disposition of this claim.


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