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Meadow Run/Mountain Lake Park Association v. Bantell

IN THE COMMONWEALTH COURT OF PENNSYLVANIA


December 4, 2009

MEADOW RUN/MOUNTAIN LAKE PARK ASSOCIATION
v.
ESTHER BANTELL, JOHN BARNAS, AL BATTELO, VINA BATTELO, WILLIAM DOUGHERTY, HELEN DOUGHERTY, GERARD EXTER, ARTHUR EXTER, MICHAEL GOBER, IRENE GOBER, LOLA GREYTOCK, LUCILLE ZAVADA, VICTORIA POPPLE, WILLIAM ROMANOSKI, ANNA SZOSTAK, JOHN A. SZOSTAK, GEORGE H. WEITZ, SHERRY L. WEITZ, JOSEPH ZYSKOWSKI AND KAREN ZYSKOWSKI
APPEAL OF: WILLIAM DOUGHERTY AND HELEN DOUGHERTY, GEORGE EXTER, EXECUTOR OF THE ESTATE OF EXTER AND ARTHUR EXTER, WILLIAM ROMANOSKI, ANNA SZOSTAK AND JOHN A. SZOSTAK, GEORGE H. WEITZ AND SHERRY L. WEITZ, JOSEPH ZYSKOWSKI AND KAREN ZYSKOWSKI

The opinion of the court was delivered by: Senior Judge Friedman

Argued: November 9, 2009

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge, HONORABLE JIM FLAHERTY, Senior Judge.

OPINION

Owners and former owners of lots in the development known as Meadow Run/Mountain Lake Park (Landowners)*fn1 appeal from the January 4, 2008, order of the Court of Common Pleas of Luzerne County (trial court) entering verdicts in favor of the Meadow Run/Mountain Lake Park Association (Association) and against each individual Landowner for the amount of unpaid annual assessments levied by the Association. We affirm.

The Association is a nonprofit corporation that represents the interests of property owners in the development by virtue of covenants and restrictions that are recited in the property owners' deeds.*fn2 Each of the deeds also contains the following language: "In Witness Whereof, said Grantors have set their hands and seal the day and year first above written." (Trial ct.'s Conclusions of Law, No. 5.)

The Association depends upon an annual assessment on the lot owners to pay common expenses, such as insurance, snow plowing, road maintenance, dam maintenance and legal fees. The Association's board of directors sets the annual assessment, and, at the beginning of each year, the Association sends invoices to each lot owner setting forth the amount that is due in June. The invoices include a provision for payment of interest and service charges on assessments not timely paid, although there are no written agreements or resolutions requiring the lot owners to pay interest or service charges on unpaid assessments. If an owner's assessment goes unpaid, the owner is sent reminder notices. (Findings of Fact, Nos. 2, 6, 7, 9; R.R. at 15, 42-43.) There is no dispute as to the Association's right to levy annual assessments against the individual Landowners. Meadow Run and Mountain Lake Park Association v. Berkel, 598 A.2d 1024 (Pa. Super. 1991), appeal denied, 530 Pa. 666, 610 A.2d 46 (1992).*fn3

In 2003, 2004 and 2005, the Association filed separate complaints against the individual Landowners, seeking payment of unpaid annual assessments from 1984 or the date on which each Landowner acquired ownership. The trial court consolidated the actions and held a non-jury trial at which the only disputed issue was the applicable statute of limitations. The Association asserted that its claims fell under section 5529(b)(1) of the Judicial Code, 42 Pa. C.S §5529(b)(1), providing a twenty-year statute of limitations governing actions upon written instruments under seal, or section 5530(a)(2) of the Judicial Code, 42 Pa. C.S. §5530(a)(2), providing a twenty-one year statute of limitations applicable to actions for charges upon real property. Landowners maintained that the matter was subject to the four-year statute of limitations applicable to contracts implied in law, pursuant to section 5525(a)(4) of the Judicial Code, 42 Pa. C.S. §5525(a)(4).*fn4 The Association sought recovery of $7,228.36 to $19,361.45 from each Landowner, while Landowners argued that the maximum amounts owing ranged from $2,900.00 to $5,900.00.

The trial court concluded that the Association's cause of action involves the enforcement of a covenant contained in an instrument in writing under seal, and, therefore, the twenty-year statute of limitations set forth in section 5529(b)(1) applies. Accordingly, on January 4, 2008, the trial court entered verdicts against each Landowner, plus six per cent interest from the date each debt became due and payable. By order dated March 7, 2008, the trial court denied Landowners' motion for post-trial relief, and Landowners now appeal to this court.

Landowners argue that the trial court erred in determining that the twenty-year statute of limitations provided by section 5529(b)(1), rather than the four-year statute of limitations contained in section 5525(a)(8), applies.*fn5 The four-year statute of limitations set forth in section 5525(a)(8) governs "action[s] upon a contract, obligation or liability founded upon a writing not specified in paragraph (7), under seal or otherwise, except an action subject to another limitation specified in this subchapter." 42 Pa. C.S. §5525(a)(8) (emphasis added).

Landowners argue that their obligation to pay the assessments arises from the deeds under a theory of unjust enrichment, based on the relationship between the Association and Landowners. Landowners describe this relationship as "contractual in nature and exactly the type of situation outlined in 42 Pa. C.S. §5525(a)(8)." (Landowners' brief at 11.) However, in Berkel, the court held that the Association has authority to levy assessments by virtue of the deeds' restrictive covenants. Stated otherwise, the authority of the Association does not depend on any contractual agreement. Landowners acknowledge that the deeds are conveyances of land and not contracts; nevertheless, Landowners' arguments depend on various principles of contract law.

Landowners' reasoning can be fairly summarized as follows: 1) the deeds provide authority for the Association to impose assessments; 2) the deeds are not contracts; 3) even if they were contracts, Landowners never signed or accepted a contract under seal; 4) the relationship between the Association and Landowners is based on the contractual theory of unjust enrichment; and, therefore, 5) the four-year statute of limitations governing contracts under seal applies.*fn6

We conclude that the trial court correctly determined that section 5529(b)(1) applies to the Association's claims. Section 5529(b)(1) states that, "Notwithstanding section 5525(7) (relating to four year limitation), an action upon an instrument in writing under seal must be commenced within 20 years." A deed is a "written instrument by which land is conveyed," Black's Law Dictionary 444 (8th ed. 2004), and the deeds are under seal. Landowners' arguments on appeal are without merit.

Accordingly, we affirm.

ORDER

AND NOW, this 4th day of December, 2009, the order of the Court of Common Pleas of Luzerne County, dated January 4, 2008, is hereby affirmed.

ROCHELLE S. FRIEDMAN, Senior Judge


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