280 So.3d 826
La. Ct. App.2019Background
- STPOA sued Dr. Charles Williams on Sept. 15, 2014 for unpaid homeowners association assessments under recorded Southern Trace Covenants. Williams answered and filed an exception of prescription asserting La. C.C. art. 781 (two‑year rule for building restrictions) extinguished liability; he also asserted counterclaims.
- The Covenants: make membership appurtenant to lot ownership, deem owners "deemed to covenant" to pay Maintenance and Special Assessments, create a continuing lien/privilege, authorize interest (up to 18%), collection costs and attorney fees, and permit suit against the owner personally.
- Trial court initially applied a two‑year prescriptive period; this court remanded for evidentiary hearing. On remand the trial court again limited STPOA to recovering dues only for the two years before suit and awarded interest per the Covenants; both parties appealed.
- On appeal the court held the assessments are personal obligations under the Covenants and the Louisiana Homeowners Association Act (LHAA), so the 10‑year liberative prescription of La. C.C. art. 3499 applies (reversing the two‑year ruling).
- The court limited recovery to amounts pleaded/proven through Sept. 15, 2014 (STPOA had not properly amended petition to seek later assessments), awarded past‑due principal of $9,336 (assessments portion), 12% interest on each unpaid assessment from its due date (statutory cap), attorney fees of $8,000 and costs $2,225.97; Williams’s damages claims were dismissed (that portion affirmed).
Issues
| Issue | Plaintiff's Argument (STPOA) | Defendant's Argument (Williams) | Held |
|---|---|---|---|
| Prescriptive period for HOA assessments | Assessments are personal obligations under the Covenants/LHAA; 10‑year prescriptive period (La. C.C. art. 3499) applies | Assessments are building restrictions and subject to 2‑year prescription under La. C.C. art. 781 | Court: assessments are personal obligations; 10‑year prescription applies (reversing two‑year ruling) |
| Extinguishment under second sentence of art. 781 (i.e., restriction extinguished if not enforced within 2 years) | Not applicable because art. 781 does not govern these personal assessment obligations | Argued assessments were extinguished as to the lot by operation of art. 781’s second sentence | Court: rejected extinguishment argument because art. 781 inapplicable to these personal obligations |
| Recovery of amounts not pleaded or evidenced (claims beyond petition date) | STPOA sought larger balance as shown in later accounting and asked for assessments to judgment date | Williams: STPOA did not plead or properly file Exhibit A; cannot recover amounts accrued after petition without amendment/proof | Court: limited recovery to assessments pleaded/proven through Sept. 15, 2014 (awarded amounts from Jan. 1, 2005–Sept. 15, 2014) |
| Interest rate on contractual assessments | Covenants provide up to 18% interest on delinquent assessments | Contractual rate may be subject to statutory cap on conventional interest (12%) | Court: contractual interest reduced to 12% (statutory cap); awarded 12% on each unpaid assessment from due date until paid |
Key Cases Cited
- Brier Lake, Inc. v. Jones, 710 So. 2d 1054 (La. 1998) (Supreme Court held assessments characterized as building restrictions and applied two‑year prescription — later legislatively addressed by the LHAA)
- Lakewood Estates Homeowner’s Ass’n, Inc. v. Markle, 847 So. 2d 633 (La. App. 4 Cir. 2003) (court treated assessments as not governed by art. 781; LHAA considerations discussed)
- Eastover Prop. Owner’s Ass’n, Inc. v. Cochrane, 848 So. 2d 710 (La. App. 4 Cir. 2003) (court found assessments to be personal obligations based on community documents)
- Louisiana Bureau of Credit Control, Inc. v. Landeche, 6 So. 3d 935 (La. App. 3 Cir. 2009) (discussed whether assessments were building restrictions or personal obligations; court’s reasoning referenced by majority and dissent)
- English Turn Property Owner’s Ass’n, Inc. v. Short, 204 So. 3d 672 (La. App. 4 Cir. 2016) (exemplifies limitation on recovery to amounts pleaded and the need for clear pleadings regarding assessments and post‑petition accruals)