Opinion
No. C4-96-839.
Filed December 10, 1996.
Appeal from the District Court, Hennepin County, File No. DC LN 13011.
Thomas J. White, (for appellant)
Todd R. Iliff, Blake R. Nelson, (for respondent)
Considered and decided by Amundson, Presiding Judge, Huspeni, Judge, and Randall, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. sec. 480A.08, subd. 3 (1994).
UNPUBLISHED OPINION
Appellants challenge summary judgment granting respondent foreclosure of $13,583.13 lien on appellants' townhouse. We affirm.
FACTS
Appellants Richard and Joyce Borden owned a townhome (Property) in respondent Nine Mile Village Townhouse Association (Association). The Bordens stopped paying the assessments due on the Property and on May 10, 1993, filed a petition for bankruptcy. Under the Association's Declaration of Covenants, Conditions, and Restrictions (Declaration), the unpaid assessments became a continuing lien on the Property.
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.
DECISION
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.
I
The Bordens argue that the district court erred by permitting the Association to proceed in district court because the Association's governing documents require the Association to collect overdue assessments in conciliation court. "[G]enerally there is no statute governing townhome developments." Chapman Place Ass'n, Inc. v. Prokasky , 507 N.W.2d 858, 863 (Minn.App. 1993), review denied (Minn. Jan. 24, 1994). As a result, courts generally require an association to abide by its governing documents. See, e.g. , Southview Greens Condominium Ass'n v. Finley , 413 N.W.2d 554 (Minn.App. 1987) (denying condominium association recovery of assessments for failure to comply with declaration and bylaws).
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.
II Statutory and Corporate Authority to Recover Attorney Fees
The Bordens concede that respondent has statutory authority to request attorney fees related to the foreclosure action. The Bordens argue, however, that the Association lacks statutory and corporate authority to request an award for attorney fees incurred by respondent before filing its foreclosure action. "[L]itigants are bound on appeal by the theory or theories * * * upon which the case was actually tried." Johnson v. Jensen , 446 N.W.2d 664, 665 (Minn. 1989) (citations omitted). A reviewing court must therefore consider only those issues presented to, and considered by, the trial court. Thiele v. Stich , 425 N.W.2d 580, 582-83 (Minn. 1988). Here, the Bordens failed to raise the statutory authority argument before the district court, and the district court did not consider this issue. Thus, we decline to address the Bordens' statutory authority argument on appeal.
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.
Reasonableness Findings
The Bordens argue the district court erred in awarding attorney fees without explicitly considering, and making findings on, the factors relevant to an award of attorney fees. The decision to grant or deny reasonable attorney fees in an action to foreclose on a mechanic's lien rests with the discretion of the district court. Obraske v. Woody , 294 Minn. 105, 109, 199 N.W.2d 429, 432 (1972); Lyman Lumber Co. v. Cornerstone Constr., Inc. , 487 N.W.2d 251, 255 (Minn.App. 1992), review denied (Minn. Aug. 4, 1992). A court should base a fee award on a number of factors, including the: time and effort required for the case; novelty or difficulty of the issues; skill and standing of the attorney; value of the interest involved; results secured at trial; loss of the opportunity for other employment; taxed party's ability to pay; customary charges for similar services; and certainty of payment. Jadwin v. Kasal , 318 N.W.2d 844, 848 (Minn. 1982). Under Minnesota law, however, "[f]indings of fact and conclusions of law are unnecessary on decisions on motions pursuant to Rules 12 or 56 * * *." Minn.R.Civ.P. 52.01.
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.
Reasonableness
The Bordens urge this court to reverse the district court award of attorney fees on the ground that it was unreasonable. The reasonableness of an attorney fee award depends on an assessment of the Jadwin factors. Jadwin , 318 N.W.2d at 848. A reviewing court will not reverse an award of fees absent an abuse of discretion. Automated Bldg. Components, Inc. v. New Horizen Homes, Inc. , 514 N.W.2d 826, 831 (Minn.App. 1994), review denied (Minn. June 15, 1994).
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.
III
The Association requests an additional award for attorney fees it has incurred in defending this appeal. The Association cites Bucko v. First Minnesota Savings Bank, F.B.S. , 471 N.W.2d 95, 99 (Minn. 1991), for the proposition that "where a prevailing plaintiff is entitled to recover attorneys' fees at trial, it is also entitled to attorneys' fees on appeal." The Bucko court stated only that "[w]here a prevailing plaintiff is entitled by statute to recover attorney fees at trial, that plaintiff may also be entitled to attorney fees on appeal." Id. (emphasis added). The supreme court has held that a court may not award attorney fees on appeal in an action under Minnesota Statutes section 514.10. Standard Constr. Co. v. National Tea Co. , 240 Minn. 422, 431, 62 N.W.2d 201, 207 (1953); see, e.g. , Gardner v. Hatch , 408 N.W.2d 879, 883 (Minn.App. 1987) (denying attorney fees on appeal in mechanic's lien case). Because the Association admittedly brought this action "in the manner provided for" under section 514, we decline to award the Association further attorney fees for defending this appeal.
Affirmed.