Country Club S. Homeowners Assn., Inc. v. Warren Country Club Villas Condo Unit Owners Assn., Inc.Country Club S. Homeowners Assn., Inc. v. Warren Country Club Villas Condo Unit Owners Assn., Inc.
O P I N I O N
Michael D. Rossi, Guarnieri & Secrest, P.L.L., 151 East Market Street, P.O. Box 4270, Warren, OH 44482 (For Plaintiff-Appellant).
Daniel P. Thomas, DelBene, LaPolla & Thomas, 155 Pine Avenue, N.E., P.O. Box 353, Warren, OH 44482 (For Defendant-Appellee).
THOMAS R. WRIGHT, J.
{¶1} This is an accelerated-calendar appeal, taken from a final judgment of the Trumbull County Court of Common Pleas. Appellant, Country Club South Homeowners Association, Inc., challenges the merits of the trial court‘s legal determination regarding the continuing enforceability of an agreement governing the costs of maintaining certain real property. Specifically, appellant submits that the trial court erred in concluding that
{¶2} Country Club South is a residential development which is located near a private country club in Warren, Ohio. Started originally at some point in the late 1990‘s, the development contains traditional homes and condominium units. Access to both the homes and condominiums is obtained through an entrance roadway which enters the development from a major city thoroughfare.
{¶3} At the outset of the project, when only a few of the homes had been sold, the developers and the existing homeowners took the required steps to form appellant, the homeowners association. Similarly, when the condominium units began to sell, the developers and the unit owners formed appellee, the condominium association. Since the majority of the proposed homes and condominium units remained unsold during the early phase of the development, the developers had control over some of the positions on the respective boards of the two associations.
{¶4} In November 2000, the homeowners association and the condominium association executed a written agreement concerning the maintenance of the property adjacent to the entrance roadway. In addition to providing for the formation of certain committees regarding maintenance issues, the agreement had a specific term as to the payment of the various costs. That term stated that the homeowners association would be responsible for 40 percent of the related expenses, while the condominium association had to pay the remaining 60 percent.
{¶5} The two associations complied with the maintenance agreement over the ensuing nine years. During that time frame, the developers continued to exert control
{¶6} In November 2010, the homeowners association instituted the underlying case against the condominium association. In its amended complaint, the homeowners association asserted two claims for relief. First, the homeowners sought a declaratory judgment as to the continuing enforceability of the maintenance agreement. Second, the complaint alleged that the condominium association had breached the agreement by refusing to pay for 60 percent of the maintenance costs; therefore, the homeowners sought compensatory damages covering the amount of the unpaid costs.
{¶7} After the condominium association had answered the amended complaint, the parties were able to stipulate as to all pertinent facts in the case, including the total amount the condominium association would have owed if it had continued to follow the terms of the maintenance agreement. Hence, the case was submitted to the trial court for determination of the legal question of whether the condominium association had the ability under
{¶8} In its final judgment, the trial court basically ruled against the homeowners association regarding the continuing enforceability of the maintenance agreement; i.e., it was held that
{¶9} In appealing the foregoing determination, the homeowners association, as the appellant in this matter, has raised one assignment of error for review:
{¶10} “The trial court erred in finding that
{¶11} Under this assignment, appellant essentially submits that the trial court‘s interpretation of
{¶12}
{¶13} Before the trial court, the parties in this action stipulated that the disputed maintenance agreement was executed in November 2000. Based upon this, the parties also agreed that the 1978 version of
{¶14} “Neither the unit owners association nor the unit owners will be subject to any management contract or agreement executed prior to the assumption of control required by division (C) of this section for more than one year subsequent to that assumption of control unless such a contract or agreement is renewed by a vote of the unit owners pursuant to the bylaws required by section 5311.08 of the Revised Code.”
{¶15} In attempting to interpret the foregoing provision, appellant asserts that the term “management” must be construed to modify both the word “contract” and the word “agreement.” Building upon this, appellant argues that the provision was only meant to apply to a contract or agreement relating to the actual management of the condominium
{¶16} In Belvedere Condo., the primary issue before the Supreme Court of Ohio concerned whether the developer of a condominium complex owed a fiduciary duty to the individual unit owners. Id. at 279. Prior to addressing that particular issue, though, the Court gave a detailed explanation of the problems the General Assembly attempted to resolve in enacting the 1978 amendments to the “condominium” statutory scheme. Id. at 280-282. At the start of this discussion, the Court noted that the developer has an inherent conflict of interest during the infancy phase of a development, in that the developer can exert total control over the condominium association while still trying to sell new units to the public. Id. at 280. The Court then emphasized that
{¶17} In relation to division (D) of
{¶18} “We believe, and the parties appear to agree, that this provision entitles the board of the owners’ association, once fully elected by the individual unit owners, to cancel contracts entered into by the developer-controlled board. This provision protects
{¶19} In the last sentence of the foregoing quote, the Belvedere court expressly stated that the “non-renewal” provision of
{¶20} Although appellant‘s brief cites the opinion in Belvedere Condo., the brief does not attempt to distinguish the case or otherwise explain why its legal analysis of
{¶21} In regard to the precedential value of Belvedere Condo., this court would note that the Supreme Court‘s analysis of
{¶22} More importantly, this court concludes that, even if we were to hold that the precedential value of the Belvedere analysis was limited due to its status as dicta in the opinion, that analysis should still be followed because it is persuasive. That is, we conclude that the 1978 version of
{¶23} Given the persuasiveness of the Supreme Court‘s analysis in Belvedere,
{¶24} As a separate argument regarding the correct interpretation of the original version of
{¶25} As enacted in October 2004, the present version of
{¶26} “(D) Unless a contract or other agreement is renewed by a vote of the unit owners exercising a majority of the voting power of the unit owners association, neither the unit owners association nor the unit owners shall be subject to either of the following:
{¶27} “(1) For more than ninety days subsequent to the date that the unit owners other than the developer assume control of the unit owners association, any management contract executed prior to that assumption of control;
{¶28} “(2) For more than one year subsequent to an assumption of control, any other contract executed prior to that assumption of control, except for contracts for necessary utility services.”
{¶30} As the trial court correctly held that the 1978 version of
{¶31} Pursuant to the foregoing discussion, appellant‘s sole assignment of error lacks merit. It is the order and judgment of this court that the judgment of the Trumbull County Court of Common pleas is affirmed.
TIMOTHY P. CANNON, P.J.
DIANE V. GRENDELL, J.,
concur.