In re the Proposed Foreclosure of Claim of Lien
741 S.E.2d 308
N.C.2012Background
- Starboard Association administers Starboard By The Sea Condominium, a 139-unit complex governed by the Unit Ownership Act and its Declaration and By-Laws.
- The 1982 Phase V amendment added Building 33 and allocated Building 33 units a 1.06160% undivided interest in common areas.
- In 2004-2007, the Board levied a special assessment for renovations, with a 2005 assessment for buildings 1-32 and a 2007 assessment for Building 33 at $54,000 per unit (later ratified at $54,000).
- Respondents owned Unit B in Building 33 and challenged the assessments as not uniform and not properly budgeted or ratified.
- The trial court found the 2007 Building 33 assessment invalid for not being uniform or pro rata, dismissing the foreclosure and awarding respondents fees.
- The Court of Appeals vacated and remanded for further proceedings, and the Supreme Court affirmed in part, remanding for proceedings not inconsistent with the opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Building 33 2007 assessment was uniform and pro rata | Starboard argues assessments were a single pro rata plan for all units. | Johnson/Proffit contend the 2007 charge was not uniform or pro rata. | The 2007 assessment was invalid; foreclosure based on it was improper. |
| Whether the alleged implied contract theory was properly raised | Starboard could recover on an implied contract for assessments. | Implied contract theory was not pleaded or raised below and cannot be considered on appeal. | Implied contract theory not decided; not considered on appeal. |
Key Cases Cited
- Dunes S. Homeowners Ass’n v. First Flight Builders, Inc., 341 N.C. 125 (1995) (statutory framework to ensure fair shared expenses in condo projects)
- Oronoque Shores Condo. Ass’n No. 1 v. Smulley, 114 Conn. App. 233 (2009) (miscalculation of a valid assessment does not excuse payment)
- James River Equip., Inc. v. Tharpe’s Excavating, Inc., 179 N.C. App. 336 (2006) (implied contract theory defined but not decided on appeal)
