Real Property – Homeowners’ Association – Directed Verdict – Attorney’s Fees

Bodine v. Harris Village Property Owners Association. (Lawyers Weekly No. 10-07-0857, 22 pp.) (Robert N. Hunter Jr., J.). Appealed from Iredell County Superior Court (Edwin G. Wilson Jr., J. and Mark E. Klass, J.) N.C. App.

Holdings: Because homeowners could produce no set of facts or inferences from facts under which they could show that the larger structure built on their property had been approved or authorized by an appropriate agency of their homeowner’s association, directed verdict in favor of the association is affirmed. Because the homeowner’s association complied with procedures set forth in G.S. § 47F-3-107.1, an award of attorney’s fees under Article 29A of Chapter 1 of the General Statutes was appropriate.

Facts

A homeowners association (HOA) gave homeowners permission to build a 10 x 14 pool house. Homeowners built a larger pool house.

Litigation ensued. A directed verdict was entered against the homeowners, in which the trial court awarded $96,000 in attorney’s fees to the HOA’s counsel and liens and fines totaling $39,700 to the association.

The homeowners appealed.

Analysis

The standard of review for a directed verdict is whether the evidence, taken in the light most favorable to the nonmoving party, is sufficient as a matter of law to be submitted to the jury.

The first question is whether the trial court erred by granting defendant HOA’s motion for directed verdict at the close of all evidence.

After reviewing the transcript and record, we find no set of facts or inferences from facts under which the homeowners can show that the larger structure built on their property had been approved or authorized by an appropriate agency of the association.

The answers to the factual questions for which the homeowners seek a jury resolution would not produce such a document.

Lacking such proof or the possibility of a jury providing an answer which would result in providing the proof legally necessary for the homeowners to prevail, we affirm the decision of the trial court in directing a verdict for defendant association.

The second issue on appeal is whether the trial judge had the statutory authority to impose attorney’s fees pursuant to G. S. §§ 47F-3-107.1 and -120. Statutory interpretation is a question of law, which is reviewed de novo by the appellate court.

Under the statute, the trial court’s ability to award attorney’s fees is subject to provisions in the declaration or bylaws adopted by a homeowners association to assess attorney’s fees.

The only provision in the restrictions pertaining to the assessment of attorney’s fees appears in Article VI, and the only provision of the HOA’s bylaws pertaining to attorney’s fees appears in Article X, “Assessments.”

Both provisions only concern the collection of annual and special assessments. The fines and liens at issue on appeal do not involve the imposition of any assessment. Therefore, we must agree with the homeowners that the attorney’s fees in this case may not be awarded under G.S. § 47F-3-120.

However, imposition of “fees, charges, late charges and other charges imposed pursuant to G.S. §§ 47F-3-102, 47F-3-107, 47F-3-107.1 and 47F-3-115” would be enforceable as “assessments,” unless the restrictive covenants or bylaws provided to the contrary.

Charges imposed under these statutes would be subject to attorney’s fees, which could be collected along with the underlying debt in a “judicial foreclosure as provided in Article 29A of Chapter 1 of the General Statutes.”

G.S. § 47F-3-102(12) permits, after reasonable notice and an opportunity to be heard, the imposition of reasonable fines “for violations of the declaration, bylaws, and rules and regulations of the association.” G.S. § 47F-3-107.1 provides a detailed procedure for imposing such fines. It appears that the HOA complied with the procedures set forth in G.S. § 47F-3-107.1.

The HOA sent a notice of hearing which contained the statutorily required warnings. The HOA’s board of directors imposed a $100 a day fine, notified the homeowners by letter, sent a letter demanding compliance and notifying them of the possibility of an added obligation of attorney’s fees, filed a claim of lien on the property, and later began a judicial foreclosure to enforce the lien.

As such, we conclude that the HOA complied with the statute.

Affirmed.