may not be cited except as provided by
Minn. Stat. sec. 480A.08, subd. 3 (1994).
STATE OF MINNESOTA
IN COURT OF APPEALS
Nine Mile Village Townhouse Association,
Richard C. Borden, et al.,
Resolution Trust Corporation, et al.,
Richard C. Borden, et al.,
Van House & Iliff, P.A.,
Filed December 10, 1996
Hennepin County District Court
File No. DC LN 13011
Todd R. Iliff, Blake R. Nelson, Iliff & Associates, P.A., 5050 France Avenue South, Suite 240, Edina, MN 55410 (for respondent)
Considered and decided by Amundson, Presiding Judge, Huspeni, Judge, and Randall, Judge.
Appellants challenge summary judgment granting respondent foreclosure of $13,583.13 lien on appellants' townhouse. We affirm.
On March 10, 1995, the Association obtained relief from the automatic stay imposed under 11 United States Code section 362 on actions to collect debt arising before the filing of a bankruptcy petition. On August 17, 1995, the Association sued the Bordens in district court, seeking foreclosure of the Association's lien on the Bordens' townhome and an award of attorney fees. The Association moved for a judgment as a matter of law or summary judgment on October 26, 1995. The district court granted summary judgment for the Association on December 4, 1995. The court's order declared a $13,583.13 lien on the Property in favor of the Association, representing overdue assessments and late fees of $3,716.75 and attorney fees and costs of $9,866.38. The Association purchased the Property at a foreclosure sale on April 11, 1996.
The Bordens filed this appeal on April 24, 1996, seeking review of the district court judgment entered on January 27, 1996, and the amended judgment entered on April 8, 1996. The Bordens assert that the district court erred as a matter of law by permitting the Association to proceed in district court, rather than in conciliation court, and by awarding the Association attorney fees. The Association now requests an award of attorney fees incurred in defending this appeal.
On an appeal from summary judgment, the reviewing court must ask whether any genuine issues of material fact exist and whether the lower court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). Where the material facts are not in dispute, a reviewing court need not defer to the district court's application of the law. Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn. 1989). This case involves no genuine issue of material fact. Accordingly, this court reviews the district court's decision de novo.
Here, the Declaration provides that a member's overdue assessments constitute a continuing lien on that member's townhouse. The Declaration permits the Association to sue the member personally or foreclose the lien under the mechanic's lien statutes and recover the costs of preparing and filing the complaint in such an action, including a reasonable attorney fee. The holder of a mechanic's lien forecloses that lien in a district court, Minn. Stat. § 514.10 (1994), and cannot proceed to foreclose a mechanic's lien in a conciliation court. See Minn. Stat. § 491A.01, subd. 4(1) (excluding action involving title to real estate from conciliation court jurisdiction). We note that the Association's Delinquent Homeowner Collection Policy (Collection Policy) does direct the Association to pursue recovery of all late fees, collections, court, and legal costs in conciliation court. Thus, on the surface, the Declaration language permitting recovery in district court appears to conflict with the Collection Policy language requiring recovery in conciliation court; or so the Bordens argue. We disagree for two reasons, the first legal and the second practical.
To resolve a conflict among the governing documents of an association, the court looks to the association's documents themselves. See Chapman Place, 507 N.W.2d at 863 (stating that association members' rights depend on an association's declaration and bylaws and the common law of property). The Association's Bylaws contain the only supremacy provision adopted by the Association. That provision states that where the Declaration and Bylaws conflict, the Declaration controls.
The Bordens concede that the Declaration prevails in the case of a conflict with the Bylaws and that the Collections Policy "is most likely adopted pursuant to * * * the Bylaws." The Bordens argue, however, that absent a provision establishing the supremacy of the Declaration over policies adopted pursuant to the Bylaws, this court should not find that such a relationship exists. The Bordens contend, in effect, that although the Bylaws themselves are subordinate to the Declaration, the policies adopted under the Bylaws supersede the Declaration. The Bordens cite no authority for this proposition. Nor do they explain how, as a matter of logic, a policy adopted under the limited authority of the Bylaws could supersede conflicting language in the Declaration, which trumps the Bylaws. A more reasonable interpretation is that the Declaration stands over the Bylaws and any rules, regulations, or policies adopted pursuant to the Bylaws. As a practical matter, we conclude there is no real conflict. The Association's Collections Policy mentioning conciliation court must to have been intended to give the Association a quick and speedy means of obtaining modest judgments for past due amounts from homeowner members. We cannot agree that the Association intended their Collections Policy to deprive itself of the needed option to sue in district court when either the overdue amounts exceeded conciliation court jurisdictional limits or the possibility of having to eventually foreclose on a mechanic's lien existed.
Lastly, we note in passing that the Association did proceed to conciliation court initially. There, pursuant to a request by the Bordens, who were contemplating bankruptcy, the Association withdrew its conciliation court action. Then the Bordens filed their bankruptcy petition. For all these reasons, we conclude the Association properly proceeded against the Bordens in a Minnesota district court.
Statutory and Corporate Authority to Recover Attorney Fees
If we considered the Bordens' argument that respondent lacks statutory authority to assess and recover the attorney fees in question, we would not find it persuasive. Our review of the relevant statutes and case law indicates the Association has the statutory authority to assess attorney fees against its members.
Although the court did not support its award with specific findings on the Jadwin factors, the court made its award in a rule 56 summary judgment, and thus did not err in failing to make specific findings.
Here, the Association incurred attorney fees over the course of 18 months in connection with filings and proceedings in United States Bankruptcy Court, conciliation court, and district court. The Association's counsel showed expertise in handling the difficult legal issues in this case and obtaining a judgment in favor of his client. That the court's attorney fee award totaled more than the amount of the Association's claim does not render the award unreasonable given that hourly fees, unlike a straight contingency, are not computed based solely on the recovery obtained. On these facts, the district court did not abuse its discretion in its award of attorney fees.