Jakab v. Gran Villa Townhouses Homeowners Association Inc.

A party cannot be a prevailing party if it has already been fully compensated for any losses incurred prior to the commencement of litigation. The court holds, therefore, that the Homeowners Association is not the prevailing party and thus is not entitled to attorney's fees.

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Click here for the full text of this decision FACTS:Leonard Jakab was the owner of five units from January of 1991 through July of 2001, and the owner of one unit from May of 1995 through July of 2001. In 1990, the Homeowners Association voted to increase its monthly dues to $75. The Declarations of Covenants and Restrictions, however, provided the following: “The Association shall have the right, by and through its Board of Directors, to uniformly assess each Owner of a Lot any sum up to Fifty Dollars ($50.00) per month, which assessment is to be used by the Association for the care, maintenance, preservation, and architectural control of the common facilities, including the swimming pool and clubhouse and common spaces. However, the annual assessment may be increased effective January 1 of each year without a vote of the membership in conformance with the rise, if any, of the Consumer Price Index (published by the Department of Labor, Washington, D.C.) for the preceding month of July.” The trial court interpreted the Declarations of Covenants and Restrictions to mean that the Homeowners Association could not assess dues over $50 per month. The court held that the difference between the amount actually paid by Jakab and the $50 lawfully authorized by the Homeowners Association was an overpayment for which Jakab should be reimbursed. The trial court also found that Jakab made some payments late and failed to make some assessment payments. The trial court made two different calculations � one for Jakab’s missed payments and late fees, and one for Jakab’s overpayments � and rendered judgment accordingly. HOLDING:The court vacates the award of attorney’s fees, reforms the judgment to reflect an award of $9,125 in favor of Jakab, and affirms the judgment of the trial court as reformed. It is within the realm of reasonable disagreement that only $25 of the $75 monthly dues was not authorized by the Declaration of Covenants and Restrictions. The court holds, therefore, that the trial court did not abuse its discretion in making that determination. The court holds that the evidence is both legally and factually sufficient to support the finding that Jakab missed assessment payments of $1,875 and late fees of $375 from 1999 through 2002. The evidence is also legally and factually sufficient to support the finding that Jakab paid $11,375 more than he was legally obligated to pay to the Homeowners Association from the time the assessments were increased in 1990. The court notes that the main issue is the interpretation of the Homeowners Association’s Declaration of Covenants and Restrictions, and how that interpretation affects the financial positions of the parties. The trial court found in favor of Jakab on that issue and Jakab was vindicated by the trial court’s judgment. Further, from a review of the record, it is clear that Jakab’s missed assessment payments and late fees were satisfied by the overpayments he made which were created by the illegal assessment of dues long before the Homeowners Association brought its lawsuit. It is axiomatic that a party cannot be a prevailing party if it has already been fully compensated for any losses incurred prior to the commencement of litigation. The court holds that the Homeowners Association is not the prevailing party, and thus is not entitled to attorney’s fees. The Homeowners Association did not file a notice of appeal. The Homeowners Association’s only explanation for failing to file an appeal, which it argues shows “just cause,” is that it chose not to appeal because it believed the issue of attorney’s fees had been waived. But Jakab filed a timely motion for new trial complaining of the trial court’s award of attorney’s fees, thus preserving the issue for appeal. Consequently, the Homeowners Association knew or should have known that if Jakab prevailed on appeal, the award of attorney’s fees could be vacated. The Homeowners Association’s explanation is not sufficient to show “just cause.” The court holds that it has waived error as to any complaints it might have had on appeal. OPINION:Lang-Miers, J.; Moseley, Bridges and Lang-Miers, JJ.

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