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Logans' Reserve Homeowners' Association v. McCabe

Commonwealth Court of Pennsylvania

January 4, 2017

Logans' Reserve Homeowners' Association
Jeffrey McCabe and Jennifer McCabe, Appellants Logans' Reserve Homeowners' Association
Jeffrey McCabe and Jennifer McCabe, Appellants

          Argued: December 12, 2016



          ANNE E. COVEY, JUDGE

         Jeffrey McCabe (Mr. McCabe) and Jennifer McCabe (collectively, the McCabes) appeal from the York County Common Pleas Court's (trial court) April 22, 2014, February 17, 2016 and April 15, 2016 orders granting Logans' Reserve Homeowners' Association's (Association) partial summary judgment motion, denying the McCabes' motion for continuance, and denying the McCabes' post-trial relief motion. There are three issues[1] for this Court's review: (1) whether the trial court erred in granting the Association's partial summary judgment motion; (2) whether the trial court erred in denying the McCabes' continuance motion; and, (3) whether the trial court erred in denying the McCabes' post-trial relief motion (Post-Trial Motion). After review, we affirm.

         On August 28, 2006, the McCabes purchased real property at 1118 Silver Maple Circle in Seven Valleys, Pennsylvania (the Property). The Property is located within Logan's Reserve (the Development), a community owned and maintained by the Association, and is subject to the Uniform Planned Community Act (Act)[2] and the Association's Declaration, By-Laws and amendments thereto (Declaration). The Declaration requires property owners, including the McCabes, to pay common expense[3] assessments to the Association. See Declaration § 9.2.1.

         After the McCabes purchased the Property, the Association assessed them monthly dues, which they paid. However, in June 2009, the McCabes ceased paying the dues. On April 8, 2010, the Association instituted an action against the McCabes in Magisterial District Court. On June 23, 2010, the Magisterial District Judge entered judgment in the McCabes' favor. On July 1, 2010, the Association filed a notice of appeal from the June 23, 2010 judgment. On August 10, 2010, the Association filed a complaint in the trial court against the McCabes seeking recovery of their unpaid assessments, as well as late fees and attorneys' fees. On October 22, 2010, the McCabes filed an answer with new matter and counterclaim explaining that they stopped paying the assessed dues because the Association had "failed, and continues to fail to maintain the common area behind [the McCabes'] back lawn (. . .Common Area[])."[4] Reproduced Record (R.R.) at 35a. In their new matter, the McCabes alleged that the Association had not maintained the Common Area since the McCabes moved into the Property in August 2006, and that the Common Area was overgrown with weeds and shrubs, thereby causing their lawn and home to be infested with ticks and other insects, for which they incurred treatment expenses. In their counterclaim, the McCabes claimed that the Association's failure to maintain the Common Area constituted a breach of the Declaration and resulted in the aforementioned expenses. Accordingly, the McCabes sought reimbursement of the expenses, plus reimbursement of dues they paid between August 2006 and June 2009. The Association filed its answer to the new matter and counterclaim on October 22, 2010.

         On November 12, 2013, the Association filed its partial summary judgment motion alleging that there were no genuine issues of material fact, that the McCabes had failed to pay their assessed dues and that, as a matter of law, the McCabes were prohibited from withholding payment of common expense assessments as self-help to address their dissatisfaction with the Association's alleged failure to maintain the Common Area. The Association also sought attorneys' fees and costs. After oral argument, on April 22, 2014, the trial court granted the Association's partial summary judgment motion, entered judgment in the Association's favor, and awarded attorneys' fees and costs. The case continued on the McCabes' counterclaim.

         The McCabes requested that their counterclaim proceed to arbitration. At arbitration, the McCabes were awarded $2, 711.06 (Arbitrators' Award). The McCabes appealed from the Arbitrators' Award to the trial court on the basis that the arbitrators did not award attorneys' fees.

         On August 31, 2015, the parties' counsel signed a Certificate of Trial Readiness (Certificate) declaring to the trial court that the matter was ready for trial. The Certificate also certified "that all witnesses will be on call and available during the entire scheduled trial term." R.R. at 579a. A non-jury trial was scheduled for February 17, 2016 before Judge Stephen P. Linebaugh (Judge Linebaugh). Judge Linebaugh held a pretrial conference on October 1, 2015. Prior to trial, Judge Linebaugh conducted a site visit.

         On February 9, 2016, the Association filed its pre-trial brief wherein it argued the business judgment rule as a defense to the McCabes' action. On the evening of February 12, 2016, the McCabes' witness, former Association President Howard Asche (Asche), informed the McCabes that he could not attend trial due to a scheduling conflict. On February 15, 2016, the McCabes filed a First Motion for a Trial Continuance (Continuance Motion) by first class mail with a certificate of service dated February 15, 2016.[5] Therein, the McCabes explained that Asche was unavailable and that his testimony was directly relevant to the Association's business judgment rule defense.[6] The trial court's Prothonotary's office time-stamped the Continuance Motion on February 17, 2016. Notwithstanding, the trial was held as scheduled on February 17, 2016. On the last day of trial, the McCabes renewed their Continuance Motion, and requested the trial court to keep the record open so they could obtain Asche's testimony before the trial court rendered a decision. The trial court refused the McCabes' request. In a February 17, 2016 written order, the trial court denied the Continuance Motion, explaining:

The [trial court] conducted a pretrial conference in this matter on October 1, 2015. At that time, Counsel selected the date for the trial and had selected the date for today's date and time.
The allegation in the motion is that there's a witness who is unavailable because he has meetings in New Jersey relative to this appointment, and that is not a sufficient justification to continue the trial when a witness could have been made available by the moving party.

R.R. at 345a-346a.

         On March 23, 2016, the trial court found in favor of the Association and against the McCabes on the McCabes' counterclaim (March 23, 2016 Order). The McCabes filed the Post-Trial Motion seeking reconsideration, a new trial or other equitable relief. On April 15, 2016, the trial court denied the McCabe's Post-Trial Motion. The McCabes appealed to the Pennsylvania Superior Court. The Superior Court, sua sponte, transferred the matter to this Court.[7]

         The McCabes first argue that the trial court erred when it granted the Association's partial summary judgment motion. The McCabes contend that a genuine issue of material fact[8] remains regarding whether the Association breached the Declaration, thereby justifying the McCabes' failure to pay their assessments. Section 5314 of the Act provides:

(a) General rule.--Until the association makes a common expense assessment, the declarant shall pay all the expenses of the planned community. After any assessment has been made by the association, assessments shall be made at least annually, based on a budget adopted at least annually by the association. The budgets of the association shall segregate limited common expenses from general common expenses if and to the extent appropriate.
(b) Allocation and interest.--Except for assessments under subsection (c), all common expenses shall be assessed against all the units in accordance with the common expense liability allocated to each unit in the case of general common expenses and in accordance with subsection (c) in the case of special allocation of expenses. Any past[-]due assessment or installment thereof shall bear interest at the rate established by the association at not more than 15% per year.
(c) Special allocations of expenses.--Except as provided by the declaration:
(1) Any common expense associated with the maintenance, repair or replacement of a limited common element shall be assessed in equal shares against the units to which that limited common element was assigned at the time the expense was incurred.
(2) Any common expense benefiting fewer than all of the units shall be assessed exclusively against the units benefited.
(3) The costs of insurance shall be assessed in proportion to risk, and the costs of utilities that are separately metered to each unit shall be assessed in proportion to usage.
(4) If a common expense is caused by the negligence or misconduct of any unit owner, the association may assess that expense exclusively against his unit.

68 Pa.C.S. § 5314 (text emphasis added). Section 5315(a) of the Act states:

The association has a lien on a unit for any assessment levied against that unit or fines imposed against its unit owner from the time the assessment or fine becomes due. The association's lien may be foreclosed in a like manner as a mortgage on real estate. A judicial or other sale of the unit in execution of a common element lien or any other lien shall not affect the lien of a mortgage on the unit, except the mortgage for which the sale is being held, if the mortgage is prior to all other liens upon the same property except those liens identified in [Section 8152(a) of the Judicial Code, ] 42 Pa.C.S. § 8152(a) (relating to judicial sale as affecting lien of mortgage) and liens for planned community assessments created under this section. Unless the declaration otherwise provides, fees, charges, late charges, fines and interest charged under [S]ection 5302(a)(10), (11) and (12) [of the Act] (relating to power of unit owners' association) and reasonable costs and expenses of the association, including legal fees, incurred in connection with collection of any sums due to the association by the unit owner or enforcement of the provisions of the declaration, by[-]laws, rules or regulations against the unit owner are enforceable as assessments under this section. If an assessment is payable in installments and one or more installments are not paid when due, the entire outstanding balance of the assessment becomes effective as a lien from the due date of the delinquent installment.

68 Pa.C.S. § 5315(a) (emphasis added).

         The Pennsylvania Superior Court in Rivers Edge Condominium Association v. Rere, Inc., 568 A.2d 261 (Pa. Super. 1990), was the first appellate court to address the issue of whether a condominium unit owner can withhold assessment payments based on an association's failure to maintain the common areas. In Rivers Edge, a condominium owner refused to pay assessments to the association because the owner believed that the association had failed to maintain and repair the common elements. The owner also claimed that he suffered property damage caused by water leaks.[9] The Superior Court held that the owner's "action in withholding his condominium assessments, even assuming that he has suffered the property damage he alleges, is not justified by the language of the . . . [c]ondominium [b]y-laws, the statutes of this Commonwealth, or general public policy considerations." Id. at 263.

         The Rivers Edge Court expounded:

The [c]ondominium [b]y-[l]aws explicitly require that a unit owner continue to pay the condominium assessment even if the owner is not receiving services owed to him, i.e., repairs to the common elements. When an individual purchases a condominium unit . . ., he necessarily accepts this provision allowing for no exemption from payment of the assessments. Such a provision benefits all of the unit owners because if all unit owners continue to pay the assessments, maintenance and repairs to the common elements will continue to be possible. A condominium form of ownership in real estate succeeds, because unit owners agree to cooperate in the maintenance of common elements. When the [property owner] purchased his [condominium] units . . ., he chose to accept the benefits and obligations which accompany this form of real estate ownership. Although no appellate court in Pennsylvania has addressed the issue of whether the owner of a condominium unit may withhold condominium assessments based upon the alleged failure of the condominium association to maintain common elements, this issue was addressed by the Court of Common Pleas of Philadelphia in Society Hill Towers Owners' Association v. Matthew, 32 Pa. D. & C.3d 244 (1982). There, a judgment by confession had been entered in favor of a condominium association against unit owners who had failed to pay assessments. The unit owners claimed that they failed to pay the assessments due to the failure of the [a]ssociation to provide required maintenance services. The trial court aptly responded to this contention:
Regarding petitioners' contention that their obligation to pay was dependent upon the provision of services, nothing in their deed, the Condominium Declaration or Code of Regulations supports it. Under the Code of Regulations, unit owners are required to pay all assessments and have no right to withhold payment for alleged nonprovision of services. Petitioners should have directed their dispute over maintenance services to the condominium council rather than unilaterally withholding assessments.

Id. at 247-[]48.

We find it significant that nothing in [the Act] supports the type of self-help action undertaken by the [condominium owner]. Had the Legislature intended to allow owners of condominium units to withhold assessments where owners believe that their condominium association is not performing its obligations properly, we believe the Legislature would have explicitly so provided.

Rivers Edge, 568 A.2d at 263 (bold emphasis added).[10] Accordingly:

[N]othing in the [Act] supports the type of self-help action undertaken by [the McCabes]. Had the Legislature intended to allow owners of [homes subject to homeowners' associations] to withhold assessments where owners believe that their . . . association is not performing its obligations properly, we believe the Legislature would have explicitly so provided.

Id. at 263.[11]

         As a matter of law, the McCabes were required to pay the Association's assessments regardless of any alleged inadequacies in the Association's performance. Therefore, since any such breach of the Association's Declaration would not relieve the McCabes of their obligation to pay their assessments, the question of whether the Association breached them does not involve a material fact. Thus, the trial court properly granted the Association's partial summary judgment motion.[12]

         The McCabes next argue that the trial court erred when it denied their Continuance Motion. Although the McCabes acknowledge that "[t]he decision to grant or deny a continuance is exclusively within the discretion of the trial court, and this Court will not disturb the trial court's determination in the absence of an apparent abuse of discretion[, ]" they contend that the trial court abused its discretion because the trial court's judgment was manifestly unreasonable. McCabes' Br. at 23 (quoting Gillespie v. Dep't of Transp., Bureau of Driver Licensing, 886 A.2d 317 (Pa. Cmwlth 2005)). Specifically, the McCabes assert that the trial court acted ...

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