Villa Marina Ass'n of Apartment Owners v. Collins

VILLA MARINA ASSOCIATION OF APARTMENT OWNERS, a Washington Non-Profit Corporation, Respondent, v. JOHN E. COLLINS, JR. a/k/a JAKE E. COLLINS, JR., an individual; and JANE or JOHN DOE COLLINS, an individual, and the marital or quasi-marital community comprised thereof, Appellants.

No. 81865-1-I

Court of Appeals of Washington, Division 1

October 4, 2021

UNPUBLISHED OPINION

BOWMAN, J.

The Villa Marina Association of Apartment Owners (Association) sued John Collins Jr., an Association member, seeking a money judgment for delinquent assessments and a decree of foreclosure. Collins contends the court erred in granting summary judgment in the Association's favor on reconsideration, appointing a receiver over his unit, and awarding the Association its attorney fees and costs. We affirm the order appointing a receiver. But because there remains a genuine issue of material fact as to the amount of Collins' alleged delinquency, we reverse the order granting summary judgment. We also hold that because the trial court based the fee award at least in part on the Association's success in obtaining summary judgment, the court must vacate the award, and remand for further proceedings.

Citations and pin cites are based on the Westlaw online version of the cited material.

FACTS

Collins owns unit 173 of the Villa Marina Condominium.^[1] As a unit owner Collins is subject to Villa Marina's condominium declaration, which authorizes the Association to collect assessments. Collins is also subject to the Association's "Collection Policy," which authorizes the Association to collect late fees and interest.

In December 2016, the Association sued Collins for allegedly delinquent assessments (2016 Lawsuit). Collins made a $12 006.86 payment to the Association to settle the lawsuit (Settlement Payment). The Association claimed in a January 2017 payoff statement that this amount was the outstanding balance on Collins' account through February 2017. But the record contains no signed settlement agreement, no agreement as to how the Association would apply the funds and no mutual releases of liability. On March 2, 2017, the trial court entered the parties' stipulation to dismiss the 2016 Lawsuit with prejudice.

In December 2019, the Association again sued Collins. That lawsuit is the subject of this appeal. The Association alleged that Collins' account had been delinquent since September 2018 and requested a money judgment, a decree of foreclosure, and appointment of a receiver.

In May 2020, the Association moved for summary judgment. In support of its motion, the Association relied on a "summary ledger" prepared by its attorney, Rachel Burkemper, to establish the amount Collins' owed. Burkemper prepared the summary ledger "based on the debits and credits found in the Association's accounting records," which the Association also submitted to the court.

Burkemper declared that the "starting point" for the summary ledger was August 17, 2018, the last time Collins was current on assessments according to the Association's accounting. According to the Association, Collins had a credit balance of $421.20 on that date. Burkemper observed that "it appeared that [the Association's] managing agent had applied the [Settlement P]ayment . . . in a manner that benefitted Mr. Collins by hundreds of dollars." But Burkemper declared that if one were to start with a $0.00 balance as of March 1, 2017 and track only assessments and payments from that date forward without late fees or interest, Collins' account was delinquent by $128.32 on August 17, 2018. Even so, Burkemper used the $421.20 credit balance as the starting point for the summary ledger "to minimize a dispute over how the . . . [S]ettlement [P]ayment was applied." The summary ledger showed that after considering the $421.20 credit balance and adding assessments, late fees, interest, and attorney fees, Collins owed the Association $40, 072.65.

Collins opposed the Association's motion. He declared that when the Association filed the 2016 Lawsuit, he was not behind on assessments, and that the late fees and interest were "unjustified" because the Association imposed them on assessments not yet due. Collins said he "never had any problems with the Association until 2015," when he elected to pay certain special assessments in a lump sum instead of in monthly installments. Despite this election the Association charged his account for monthly installments and then late fees and interest began to accrue. Collins also asserted that the Association's records revealed it did not credit his account for two 2016 payments and provided copies of the cancelled checks. According to Collins, the Association also had a practice of posting payments months after it received checks, leading to more interest and late fees.

Collins declared that "[b]ecause of the Association's confusing accounting, and rather than pay attorneys' fees, [he] made the business decision to settle" the 2016 Lawsuit by paying the Association "what it demanded," the $12, 006.86 Settlement Payment. According to Collins, if one did not count the unjustified late fees, interest, and attorney fees, his account had a credit balance of $11, 310 after applying the Settlement Payment. In support, Collins submitted his own accounting of assessments levied and payments made from July 1, 2014 through the February 2017 Settlement Payment. Collins argued that summary judgment was improper and that the court should order an accounting to "correctly identif[y] the credit Mr. Collins had after the [2016 L]awsuit[, ] as this number is directly relevant to how much Mr. Collins owes now."

In its reply in support of summary judgment, the Association did not address the merits of Collins' assertions about its accounting before settlement of the 2016 Lawsuit. Instead, it argued that res judicata barred any argument about amounts incurred and paid before the parties agreed to dismiss the 2016 Lawsuit. Accordingly, Collins had "the ability to dispute only the credits tracked on the Association's ledger from March 1, 2017 to present."

The Association asserted that after making the Settlement Payment, Collins did not make another payment until May 2017, by which time another $1, 648.02 of assessments ($824.01 for April 2017 and $824.01 for May 2017) had accrued. The Association pointed out that despite the foregoing, as of April 14, 2017, "the Association's accounting generously only showed [Collins] as owing $154.55; which is hundreds of dollars less than what he actually owed." Thus, any inaccuracy in the Association's accounting created a "windfall" to Collins.

In response to Collins' assertion that the Association improperly delayed depositing checks, it explained that rather than having a trial "over a possible error that might have resulted in $1-200 of interest, the Association would rather save the legal and expert fees by removing the interest that would have accrued if we accept [Collins'] assertions as true." So it submitted an updated summary ledger that removed interest it charged from March 1, 2017 through August 31, 2018. The updated ledger also purported to post payments on the dates the Association's management company originally stamped them as received, "further reducing the interest by several dollars." The Association asserted that "[t]hese adjustments fully resolve the accounting discrepancy" and that even after the adjustments, Collins owed the Association $44, 092.27, including attorney fees, costs, late fees, and interest.

The trial court held the summary judgment hearing on July 8, 2020. It denied the motion, stating that "the accountings are just too confusing for me to be able to clearly determine that you have granted . . . every possible credit that Mr. Collins . . . may be entitled to," and "that means . . . there's a genuine issue of material fact as to how this accounting has to be done." But the trial court later granted the Association's motion to appoint a custodial receiver over Collins' unit.

On July 16, 2020, the Association moved for reconsideration of the trial court's order denying summary judgment. The Association again argued that there was "no lawful way for a party or trier of fact to analyze events that transpired prior to March 1, 2017" because "[t]he parties agreed to a sum-certain amount to bring [Collins'] assessment account current through the end of February 2017, which resulted in dismissal of the [2016 L]awsuit." It submitted another summary ledger that began with a $0.00 balance as of March 1, 2017; calculated the assessments, late fees, and interest accrued since then; and applied Collins' payments on the dates "most favorable" to him. According to that ledger, Collins owed the Association $49, 425.79, $5, 333.52 more than the $44, 092.27 the Association requested in its earlier reply in support of summary judgment. The Association urged the court to grant summary judgment in its favor for $44, 092.27, arguing that any inaccuracies in the Association's earlier ledgers amounted to "a windfall to [Collins] totaling more than $5, 000."

The trial court granted the Association's motion for reconsideration, citing CR 59(a)(1)(7) and (9).^[2] It ruled:

There is no genuine issue of material fact presented in the case as framed by [the Association]'s motion. All of the uncertainties created by the multiple ledgers in this case are removed by [the] motion because the motion takes the facts most favorably to Mr. Collins on every disputed point. Consequently, the resulting judgment is the best that Collins could do if the case went to trial.

The trial court entered judgment for the Association for $44 092.27, the amount the Association requested at summary judgment. The trial court also entered findings of fact...