3 N.W.3d 151
N.D.2024Background
- Fendee Group, LLC and associated entities (Fendee) developed a housing subdivision in Williston, North Dakota, with covenants permitting the homeowners association (HOA) to impose assessments and liens for unpaid fees.
- Carinne Gould purchased a home in the subdivision in 2019, obtaining a mortgage from Guaranteed Rate, Inc., which was recorded on September 5, 2019, and assigned to the North Dakota Industrial Commission/Housing Finance Agency (NDHFA) on September 6, 2019.
- Fendee's first assessment to Gould was made August 31, 2019, but payment was not due until September 10, 2019, after the mortgage recording.
- Gould defaulted on the mortgage, and after her death in January 2023, Fendee filed liens in 2021 and 2023 for unpaid assessments, fines, fees, and legal expenses.
- The district court granted summary judgment for NDHFA, finding its mortgage was superior to Fendee’s liens and denied Fendee’s claims for attorney’s fees.
- Fendee appealed, arguing its HOA declarations created a “super lien” superior to all later-recorded mortgages or liens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Superiority of liens (super lien) | NDHFA: Its mortgage, recorded first, is superior | Fendee: HOA covenants create a super lien with priority | NDHFA's lien is superior; no super lien |
| Constructive/actual notice of lien | NDHFA: Lien arose after mortgage recorded | Fendee: NDHFA had notice via recorded covenants | NDHFA's priority not affected by notice |
| Attorney's fees under declaration | NDHFA: Not entitled as Fendee did not prevail | Fendee: Declaration entitles prevailing party to fees | Fendee not entitled to fees |
| Frivolous appeal (appellate sanctions) | NDHFA: Appeal is frivolous, fees should be awarded | Fendee: Appeal is on a genuine question of first impression | Appeal not frivolous; no sanctions |
Key Cases Cited
- Borsheim Builder Supply, Inc. v. Manger Ins., Inc., 917 N.W.2d 504 (N.D. 2018) (standard for summary judgment and appellate review)
- Forsman v. Blues, Brews & Bar-B-Ques, Inc., 903 N.W.2d 524 (N.D. 2017) (summary judgment procedure and standards)
- Miller v. Nodak Ins. Co., 987 N.W.2d 369 (N.D. 2023) (requirements for opposing summary judgment)
- Bravera Bank v. Craft, 997 N.W.2d 829 (N.D. 2023) (summary judgment standards and burden of proof)
- Dogbe v. Dogbe, 993 N.W.2d 491 (N.D. 2023) (review standard for attorney’s fees awards)
- Schmitz v. N.D. State Bd. of Chiropractic Exam’rs, 971 N.W.2d 892 (N.D. 2022) (abuse of discretion defined)
- Lizakowski v. Lizakowski, 893 N.W.2d 508 (N.D. 2017) (American Rule on attorney's fees)
- Buchholz v. Buchholz, 982 N.W.2d 275 (N.D. 2022) (standard for awarding appellate attorney’s fees for frivolous appeal)
- In re O.F., 773 N.W.2d 206 (N.D. 2009) (identification of non-frivolous appeals on first impression issues)