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Northlake Manor Condominium Association, Inc. v. Harvest Assets, LLC

Court of Appeals of Georgia, First Division

April 12, 2018

NORTHLAKE MANOR CONDOMINIUM ASSOCIATION, INC.
v.
HARVEST ASSETS, LLC.

          BARNES, P. J., MCMILLIAN and REESE, JJ.

          BARNES, PRESIDING JUDGE.

         This is the second appearance of this case before this Court. See Harvest Assets, LLC v. Northlake Manor Condo. Assn., 340 Ga.App. 237 (796 S.E.2d 319) (2017) ("Harvest Assets I"). On remand from our decision in Harvest Assets I, the trial court ruled that based on the language of a previously entered consent order and general principles of equity, Plaintiff Northlake Manor Condominium Association, Inc. (the "Association") was not entitled to collect unpaid condominium association assessments from Defendant Harvest Assets, LLC that had accrued during the pendency of the litigation. Consequently, the trial court denied the Association's motion for summary judgment on its claim for unpaid condominium association assessments and granted a declaratory judgment in favor of Defendant Harvest Assets on the same issue. Following entry of final judgment, the Association now appeals, challenging the trial court's ruling that it could not collect unpaid condominium association assessments that had continued to accrue during the litigation based on the consent order and general equitable principles.[1]

         For the reasons discussed more fully below, we agree with the Association that it was entitled to collect the unpaid assessments from Harvest Assets. Accordingly, we reverse the trial court's denial of summary judgment to the Association on its claim for the unpaid assessments, reverse the trial court's grant of a declaratory judgment to Harvest Assets on the same issue, and remand with the direction that the trial court grant summary judgment to the Association on its claim for unpaid assessments and for further action consistent with this opinion.

         The factual and procedural history pertinent to the present appeal is not in dispute. On December 3, 2013, the property at issue in this case, a condominium unit that was part of the Association, was sold by the DeKalb County Sheriff for payment of overdue property taxes. Harvest Assets purchased the tax deed for the property on that same date. The Association, which claimed a lien on the property for unpaid condominium assessments, thereafter sought to redeem the property and requested that Harvest Assets provide it with the redemption price. See OCGA § 48-4-40 (addressing right to redeem property after tax sale by delinquent taxpayer or by other party with interest or lien on subject property).[2] The Association also requested that Harvest Assets pay the condominium association assessments that had accrued on the property since the time of the tax sale. See Croft v. Fairfield Plantation Property Owners Assn., 276 Ga.App. 311, 314 (1) (623 S.E.2d 531) (2005) (purchaser of property at tax sale liable for homeowners association assessments that accrue upon property after sale, even during time when property might be redeemed).

         Harvest Assets paid $5, 000 to the Association "to cover the association fees currently due" and "future dues as they come due" on the subject property. Harvest Assets then informed the Association that the redemption price was $15, 120, which included the $5, 000 that Harvest Assets had paid in condominium association assessments.

         The Association disagreed with Harvest Assets that the $5, 000 paid in condominium association assessments should be included in the calculation of the redemption price, and on June 13, 2014, the Association tendered to Harvest Assets a lower amount for redemption that did not include the assessments. After Harvest Assets rejected the tender, the Association commenced the present action in August 2014 in which it sought, among other things, to require Harvest Assets to accept the tendered redemption price and to deliver a deed of redemption to the Association.

         In February 2015, the Association filed a second amended complaint that added a claim seeking payment from Harvest Assets of all unpaid condominium association assessments that had continued to accrue on the property during the litigation above the $5, 000 in assessments that had already been paid by Harvest Assets, plus late fees, interest, and attorney fees relating to those assessments. The Association also filed a motion for a temporary restraining order seeking to prevent Harvest Assets from taking steps to foreclose on the Association's right to redeem the property. See OCGA § 48-4-45 (a) ("After 12 months from the date of a tax sale, the purchaser at the sale or his heirs, successors, or assigns may terminate, foreclose, divest, and forever bar the right to redeem the property from the sale by causing a notice or notices of the foreclosure, as provided for in this article[.]").

         On March 20, 2015, while cross-motions for summary judgment on the issue of the right of redemption were pending, the parties entered into a consent order that enjoined Harvest Assets from taking steps to foreclose on the Association's right to redeem the property until further order of the court or until the case had been resolved (the "Consent Order"). The Consent Order further provided that the Association

until resolution of this case, . . . shall take no action outside the confines of this case to collect or otherwise enforce its claim to condominium assessments or related charges, nor will late charges or interest on Assessments be enforced from the date of [the Association's] attempted tender on June 14, 2014. Additionally no attorney[] fees shall accrue for collection of condominium assessments until resolution of the pending motions for summary judgment, but this provision shall not impair [the Association's] right to present to the Court for consideration, in the ordinary course of the litigation, attorney[] fees related to the issues included in the [complaint]. The routinely mailed notices from [the Association's] management company to [Harvest Assets] of monthly and special assessments levied against all unit owners or charges added to the invoice automatically by the management company sent in the ordinary course of business shall not be in violation of this Order.

         Subsequently, the trial court ruled on summary judgment that the Association's tender to Harvest Assets was proper and that the $5, 000 in condominium association assessments paid by Harvest Assets after the tax sale were not "special assessments" that should be included in the redemption price under OCGA § 48-4-42. Harvest Assets appealed to this Court, which reversed the trial court and remanded for further proceedings. See Harvest Assets I, 340 Ga.App. at 237-238. We held that "special assessments" under OCGA § 48-4-42 include condominium association assessments paid by a tax sale purchaser, and that a tax sale purchaser is entitled to repayment of those assessments as part of the redemption price. See id. Thus, we concluded that Harvest Assets was entitled to the condominium association assessments it had paid to the Association after the tax sale as part of the redemption price. See id. However, we further concluded that the $5, 000 amount sought by Harvest Assets for condominium association assessments was too high because it included attorney fees and interest related to late payments that should not have been included in the redemption price. See id. at 238. Consequently, we remanded the case to the trial court to determine what portion of the $5, 000 should be allocated to attorney fees and interest and thus not be included in the redemption price that had to be paid by the Association. See id.

         Following remittitur, however, counsel for the Association informed counsel for Harvest Assets in March 2017 that based on "the economics of the matter, " the Association's board members had decided "to drop their attempt to redeem the parcel" and only pursue their claim for unpaid condominium association assessments that had continued to accrue during the litigation. The Association thereafter voluntarily dismissed the count of its complaint seeking to redeem the property from Harvest Assets. After the Association indicated that it no longer sought to redeem the property and would only be pursuing its claim for unpaid condominium association assessments, Harvest Assets amended its answer to add a counterclaim for declaratory relief and filed a motion seeking the entry of a declaratory judgment that, among other things, it would be inequitable for it to have to pay the accrued assessments.

         The Association thereafter moved for summary judgment on several issues, including its claim seeking to collect from Harvest Assets the unpaid condominium association assessments that had accrued on the property during the lawsuit above the $5, 000 already paid by Harvest Assets for assessments after the tax sale. The Association also sought interest and late charges on the unpaid assessments and attorney fees. In support of its motion, the Association submitted the affidavit of its current president, former treasurer, and board member detailing the condominium association assessments and other charges that had accrued on the property during the litigation.

         Harvest Assets opposed the Association's motion for summary judgment, contending that the Association should not be permitted to collect the unpaid condominium association assessments and late fees, interest, and attorney fees under the language of the Consent Order. Harvest Assets further argued that it would be inequitable to permit the Association to collect the assessments for the time period when the issue of the redemption price was being litigated and Harvest Assets was ...


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