2019 Ohio 3953
Ohio Ct. App.2019Background
- Assured Administration, LLC (the developer) recorded a Declaration of Covenants (DOC) and Design Review Guidelines (DRG) for The Greens of Kings Meadows subdivision in 2006, retaining developer control for ten years.
- In December 2016 control passed to homeowners; Thomas Young became HOA president and others took officer roles, with Marc Davis as chair of the Design Review Committee (DRC).
- In March 2017 Assured (owner of Lot 13) submitted building plans for the last lot; the proposed house was smaller than the DRG minimum and had a nonconforming, front-facing garage.
- The HOA/DRC denied the plans under the DOC/DRG; Assured sued for negligence, tortious interference, and asked for a declaratory judgment that, as developer, it retained sole discretion to approve initial construction plans.
- The trial court granted summary judgment to the HOA, held the DOC ambiguous such that the HOA had approval authority, and awarded the HOA attorneys’ fees under DOC/DRG provisions; Assured appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the DOC/DRG unambiguously grant the developer sole authority to approve initial building plans | Assured: DOC/DRG plainly vest exclusive approval authority in the developer for initial construction, so HOA approval is unnecessary | HOA: Provisions are read together to give the Association (and DRC) authority to approve/enforce design standards after turnover | Court: DOC ambiguous; construing provisions harmoniously shows HOA has authority to approve plans |
| Whether Assured could ignore DRG size and garage rules based on developer rights | Assured: developer rights allow deviation from DRG for Lot 13 | HOA: developer rights do not nullify DRG enforcement by HOA/DRC after turnover | Court: Developer cannot simultaneously have sole discretion and cede enforcement to HOA; HOA enforcement stands |
| Whether O'Bannon precedent requires reversal | Assured: O'Bannon mandates reversal because it constrains HOA powers after turnover | HOA: O'Bannon is distinguishable because that declaration did not give enforcement power to the HOA | Court: O'Bannon is factually distinguishable and inapplicable |
| Whether HOA may recover attorney fees | Assured: trial court erred awarding fees | HOA: DOC and DRG expressly allow recovery of damages and attorney fees | Court: Award affirmed because DOC/DRG authorize fee recovery |
Key Cases Cited
- In re All Kelley & Ferraro Asbestos Cases, 104 Ohio St.3d 605 (Ohio 2004) (principle that contract interpretation looks to parties' intent in the chosen language)
- Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51 (Ohio 1989) (clear and unambiguous contract language controls interpretation)
- Roberts v. RMB Enterprises, Inc., 197 Ohio App.3d 435 (12th Dist. 2011) (summary judgment standards and when it terminates litigation)
- BAC Home Loans Servicing, L.P. v. Kolenich, 194 Ohio App.3d 777 (12th Dist. 2011) (application of Civ.R. 56 and summary judgment review)