204 So. 3d 672
La. Ct. App.2016Background
- Donald and Karen Short purchased two adjacent lots in English Turn (23 and 25 Cypress Point); they built on 23 and retained 25 (vacant) after selling the house and moving out of state.
- ETPOA sued (filed 2013) for unpaid annual assessments (2009–2015) and grass-cutting fees (2008–2012), plus late charges, interest, attorney’s fees, and recognition of a lien.
- Trial court entered judgment for ETPOA; amended judgment awarded $14,190 in past-due assessments through Jan. 2015, grass-cutting fees, 10% late charges, attorney’s fees (35% capped at $8,000), judicial interest, and recognized a lien.
- Both parties appealed; appellate court reviewed for manifest error on facts and issues of law de novo where appropriate.
- Key contract language: Covenants require annual assessments “divided among the Lots and Dwellings equally,” and allow late charges and interest “as may be determined by the Board” up to 18% per annum (but not to exceed the maximum authorized by Louisiana law).
Issues
| Issue | Plaintiff's Argument (ETPOA) | Defendant's Argument (Shorts) | Held |
|---|---|---|---|
| Scope of recovery / amendment of petition | ETPOA argued petition sought unpaid assessments accruing after filing and trial testimony could establish amounts through judgment date | Shorts argued ETPOA improperly amended petition at trial to include post-filing assessments | Held: Petition expressly sought post-filing assessments; no verbal amendment occurred; testimony admissible and recovery through Jan 2015 affirmed |
| Whether vacant lot owners owe same assessments as dwellings | ETPOA: Covenants unambiguously require equal annual assessments for each Lot or Dwelling | Shorts: Covenants ambiguous; vacant lot should be assessed less than a Dwelling; board conflicted/self-dealing | Held: Covenants clearly define Lot vs. Dwelling and mandate equal assessments; Shorts bound to pay full assessments; manifest-error review supports award |
| Applicable interest (conventional vs. legal) | ETPOA: Covenants allow interest up to max authorized, so conventional interest (12%) should apply | Shorts: Interest limited to legal interest; covenants not sufficiently specific to fix conventional interest | Held: Covenants do not fix a certain conventional rate as required by La. R.S. 9:3500; under HOA statute ETPOA entitled only to legal (judicial) interest; judgment amended to run interest from each assessment’s due date |
| Late charges/penalties (10%) | ETPOA: Board set late charge at 10% per resolution/practice | Shorts: 10% plus interest is excessive; late fee not allowed under statute | Held: Record lacked written resolution or fixed method establishing a 10% late charge; covenants permit Board to set amount but not shown in evidence; 10% award vacated |
| Attorney’s fees (35% of recovery) | ETPOA: Contractual contingency fee of 35% governs; requests fees including appeal fees | Shorts: Fees unwarranted or unreasonable because ETPOA invoiced unfairly | Held: Fees recoverable under contract; trial court’s 35% application considered reasonable, but must be reduced proportionally after vacating late fees; appellate counsel fees denied here |
| Recognition and scope of lien/privilege | ETPOA: Filed affidavit for privilege and sought court recognition of lien securing unpaid assessments | Shorts: Trial court lacked jurisdiction to recognize lien beyond judgment and used lien to deprive property | Held: Trial court erred in adding lien language without evidence at trial and without proper adjudication; appellate court vacated recognition of lien in the judgment |
Key Cases Cited
- Lakewood Estates Homeowner’s Ass’n, Inc. v. Markle, 847 So.2d 633 (La. App. 4 Cir.) (standard for manifest-error factual review and abandonment analysis)
- Norfleet v. Lifeguard Tramp. Serv., Inc., 934 So.2d 846 (La. App. 4 Cir.) (factors for reasonableness of attorney’s fees and treatment of contingency contracts)
- Landis Constr. Co. v. St. Bernard Parish, 151 So.3d 959 (La. App. 4 Cir.) (contract interpretation—clear unambiguous terms control)
- C & B Sales & Serv., Inc. v. McDonald, 95 F.3d 1308 (5th Cir.) (fiduciary/self-dealing context cited by Shorts but distinguished by court)