2019 Ohio 691
Ohio Ct. App.2019Background
- Reserve Domiciles (unit owner) purchased a condominium unit in 1998 and was bound by Waterford Pointe Condominium Association’s declaration, bylaws, and collection policy requiring monthly assessments and authorizing a $25 monthly late fee and a specified payment allocation order.
- From 2009–June 2012, Reserve sometimes paid late but Waterford generally cashed Reserve’s checks that included restrictive endorsement language (e.g., “tendered for [month] maintenance fee only”).
- In April 2012 Reserve became delinquent; a partial May payment was applied pursuant to the bylaws’ allocation order, leaving a $25 unpaid principal for May. In June Reserve tendered a check for only the monthly amount with restrictive language. Waterford began returning Reserve’s restrictive checks and demanded full cure.
- Reserve continued to tender monthly checks with the same restrictive language; communications and offers to waive fees if the delinquency was paid failed. Waterford recorded a lien in September 2014 and filed foreclosure in January 2015.
- The magistrate found for Waterford, the trial court adopted the magistrate’s decision (Reserve failed to provide transcript/affidavit required to contest factual findings), entered a foreclosure decree, and this appeal followed.
Issues
| Issue | Waterford (Plaintiff) Argument | Reserve (Defendant/Appellant) Argument | Held |
|---|---|---|---|
| Whether trial court could refuse to revisit magistrate’s factual findings without transcript/affidavit | Civ.R. 53 requires objecting party to supply transcript or affidavit; absent that, court must accept magistrate’s facts | Trial court should consider objections despite no transcript because parties submitted joint stipulations/exhibits | Court upheld refusal: Reserve failed to comply with Civ.R. 53(D)(3)(b)(iii), so factual findings stand |
| Validity of condominium lien for unpaid assessments | Reserve was delinquent (April 2012); bylaws authorized allocation order and lien foreclosure for unpaid assessments | Reserve argued Waterford improperly refused to accept its monthly checks and thus manufactured default; Reserve never really defaulted because it kept tendering monthly checks | Court held lien valid: Reserve breached by tendering restricted payments contrary to bylaws; foreclosure appropriate |
| Course of dealing: acceptance of restrictive checks altered contractual obligations | Bylaws/control of allocations remained intact; prior acceptance did not amend contract | Prior practice of accepting restrictive checks created an enforceable course of dealing modifying terms | Court rejected course of dealing: parties stipulated restrictive endorsements did not modify contract; acceptance did not change legal obligations |
| Breach of contract / equitable relief (foreclosure appropriateness and mitigation) | Waterford acted within bylaws, attempted to resolve delinquency, offered waivers; foreclosure was equitable after prolonged noncompliance | Reserve argued Waterford could have mitigated by cashing checks and foreclosure was inequitable because Reserve continued tendering monthly payments | Court held no breach by Waterford and no abuse of discretion in granting foreclosure after efforts to resolve unpaid balance |
Key Cases Cited
- Nottingdale Homeowners’ Assn., Inc. v. Darby, 33 Ohio St.3d 32 (Ohio 1987) (association bylaws and declaration form the contract between unit owners and the association)