City of Tulsa v. Raintree Estates I, Inc.

¶1 Appellant Raintree Estates I, Inc., d/b/a Silver Ridge Townhomes, a/k/a Raintree Estates I Condominiums Homeowners Association (The Association) seeks review of the trial court's order directing the distribution of proceeds of a Commissioners Report to individual condominium unit owners in a condemnation action filed by Plaintiff City of Tulsa (The City). Appellant also appeals a subsequent order of the trial court permanently enjoining The Association from assessing the individual owners for repairs to the property's common areas in an amount equal to the distribution. In this appeal, The Association complains the trial court erred as a matter of both fact and law in granting relief to five (5) unit owners, Appellee's David A. Birchall, Linda Birchall, Dick A. Blakely, Debrah Ann Blakely and Judith McAfee (The Unit Owners).



¶2 The City initiated condemnation proceedings as part of a road-widening project along Yale Avenue. Portions of Raintree Estates I (Raintree), a unit ownership development community located at 75th Street and Yale Avenue, were included in the affected area. Pursuant to a Commissioners Report, the sum of $383,000 was paid to The Association as just compensation for damage to Raintree's common elements. The report separately awarded $66,250 to the 46 individual owners for unit damage attributed to dust, dirt, noise and inconvenience. City and defendants requested a jury trial, and the condemnation action remained pending in the trial court.



¶3 Appellees objected to the Commissioners' Report and filed a cross-claim challenging The Association's entitlement to the proceeds under The Unit Ownership Act, 60 O.S. § 501 et seq.1 and Raintree's declaration and bylaws. The trial court determined The Association lacked the requisite ownership interest to receive the funds and directed the payment of the Commissioners' award to the individual condominium unit owners, less attorney fees.



¶4 The Association subsequently assessed the individual unit owners an amount equal to the net amount awarded for damage to the common elements. Appellees objected. The trial court issued temporary and permanent injunctions, invalidating the assessment as contrary to The Association's bylaws requiring the approval of 90% of the individual unit owners for property improvements or additions. The Association appeals.2



The Appeal of The Interlocutory Order of January 6, 2005



¶5 Appellant first challenges the January 6, 2005 order directing the payment of proceeds from the Commissioners Report to the individual unit owners rather than to The Association as Raintree's governing board of managers. Appellees contend this aspect of the appeal is improperly before us based upon The Association's failure either to: 1) ask the trial court to certify the order for immediate appeal pursuant to 12 O.S. § 952(b)(3),3 or 2) file a timely interlocutory appeal by right pursuant to 12 O.S. § 993(A)(5).4 The Association claims that the issues addressed in the order directing payment were subsumed into the later-issued permanent injunction and are hence ripe for appellate review.5



¶6 In this respect, we find no authority, and the Appellant cites none, permitting a party to delay timely review of an appealable interlocutory decision until a time determined more advantageous to its interest. While appealable under § 993(A)(5) and eligible for certification as such under § 952(b)(3), The Association failed to commence an appeal within thirty (30) days of the issuance of January 6, 2005 order directing payment as required under 12 O.S. §993(A)(5).6 As such, the order is beyond appellate cognizance at this time.7



The Permanent Injunction is Dissolved as Improperly Issued



¶7 Appellate review of a permanent injunction is a matter of equitable concern. Jackson v. Williams, 1985 OK 103, ¶ 9, 714 P.2d 1017, 1020. The decision to grant or deny injunctive relief is generally within the sound discretion of the trial court and a judgment issuing or refusing to issue an injunction will not be disturbed on appeal unless the lower court has abused its discretion or the decision is clearly against the weight of the evidence. Johnson v. Ward, 1975 OK 129, ¶ 42, 541 P.2d 182, 188; City of Moore v. Central Oklahoma Master Conservancy Dist.,1968 OK 81, ¶ 26, 441 P.2d 452, 459. In reviewing the matter, it is incumbent upon the appellate court to consider, examine and weigh all the evidence. Id at ¶ 26, 441 P.2d at 459.



¶8 Two propositions of error are presented. First, The Association urges us to find the trial court's permanent injunction is procedurally deficient as based upon a temporary injunction granted without bond as required by 12 O.S. § 1392.8 By its own admission, Appellant recognizes § 1392's applicability is limited to the trial court's entry of a temporary injunction. The Oklahoma Supreme Court has determined § 1392 inapplicable to permanent injunctions based upon the trial court's conduct of a full hearing prior to entry. School Bd. of Consol. Dist. No 36 v. Edwards, 1939 OK 126, ¶ 22, 87 P.2d 962, 968.



¶9 By its own inaction, The Association's argument comes too late. Appellant failed either to raise its demand for bond at the time the temporary injunction was issued by the trial court or to file an application to require bond as required by 12 O.S. Section 1391.9 Accordingly, "though there had been error in the making of the temporary order, it was not such error as would justify this court in vacating an order granting a permanent injunction after a trial upon the merits." City of Alva v. Mason, 1931 OK 364, ¶5, 300 P. 784, 786. A party's failure to make objections known at the time of the issuance of the temporary injunction does not rise to the level of reversible error. Id at ¶5, 300 P. 784, 786. Based upon Appellant's failure to preserve the error now alleged, our scope of review is limited to the question of whether the trial court acted properly in entering the permanent injunction. Id at ¶5, 300 P. at 786.



¶10 The Association's second proposition of error challenges the validity of the permanent injunction as: (1) contrary to Article XIX of the declaration which obligates The Association to promptly repair or restore damage to Raintree's common elements and assess the individual unit owners as needed for any deficiency, (2) entered in violation of Article XII(1)(b) of the bylaws which excludes expenses for repair and maintenance from the class of expenditures requiring approval from the individual unit owner, and (3) against the clear weight of the evidence, particularly based upon the undisputed testimony of the only witness offered at trial that the assessment was issued for the limited purpose of repairing condemnation-related damage to the common elements. The Unit Owners urge us to affirm, arguing that Article XII of Raintree's bylaws prohibit The Association from incurring a capital expenditure for additions or improvements absent the prior approval of 90% of the individual unit owners.



¶11 Resolution of this issues requires an analysis of pertinent provisions of the Unit Ownership Act,10 as well as the duties imposed under Raintree's declaration and bylaws.



¶12 As permitted under § 503 of the Act, Article XIX of the Declaration imposes an additional burden of common expense upon the individual unit owners for expenses incurred when protecting and maintaining the property:



1. Except as hereinafter provided[,] any damage to or destruction of any building and/or common elements shall be promptly repaired and restored by the Association acting by and through its Board of Administrators, using the proceeds of insurance, if any, for that purpose and the unit owners shall be liable for assessment as hereinafter provided for any deficiency ...



4. Any deficiency assessments provided for in this Article or by Section 527 of the Act, shall be a common expense and made pro-rata according to each owners percentage interest in the general common elements and shall be due and payable within thirty (30) days after written notice thereof. The deficiency assessments, provided for herein shall be a debt of each unit owner ...



¶13 As set forth in The Act, Raintree's bylaws provide an administrative structure necessary in a community environment. The bylaws set forth The Association's powers and duties in maintaining, protecting and defending the property. In turn, the bylaws limit The Association's power under Article XII for expenditures which will become an obligation of the individual unit owners as follows:



1. General Common Elements



(a). No additions to the general common elements may be made by the Board of Administrators unless such additions have been authorized at an annual meeting of all of the unit owners or at a special meeting of all the unit owners called for that express purpose in the manner and time provided in these By-Laws. Ninety-percent (90%) of the unit owners ... may agree that an addition to the general common elements is necessary or desirable ... and assessments for the cost of the same levied. ...



(b) Any improvement, other than ordinary maintenance and repairs, made to the existing common elements requiring capital expenditures must be authorized and made in the same manner as hereinabove set forth in the preceding paragraph for additions to the common elements.



¶14 Where possible, interpretation and deference is yielded under the bylaws to The Act and the Declaration.11



¶15 The Oklahoma Supreme Court has not addressed the issue of whether an alteration in the common elements required because of damage is a property repair versus an addition or improvement to the property. Accordingly, we turn to decisions from other states when faced with a similar question.



¶16 In Ralph v. Envoy Point Condominium Association, Inc., 455 So.2d 454 (Fla. 1984), the Florida Court of Appeals affirmed a lower court decision sanctioning a homeowners association's authority to construct and extend a vertical seawall absent unit owner approval required for improvements or alterations to the common elements. The homeowner association defended its action as necessary maintenance and repair required to protect the condominium's common elements from storm damage and erosion. In construing together the language of the Florida statute, the condominium's declaration and bylaws as a whole, the appellate court determined that language requiring a vote of the unit owners in cases of property improvement and alteration could not be "intended to relieve an objecting unit owner of the pro rata assessment for the costs of an alteration or improvement when it is reasonably necessary for the maintenance, repair or replacement of a common element." Id at 455, citing Tiffany Plaza v. Spencer, 416 So.2d 823, 826(Fla. 1982). The court went further in stating, "(s)imply because necessary work for maintenance may also constitute alterations or improvements does not nullify a condominium board's authority and duty to maintain the condominium common elements." Ralph 455 So.2d at 455.



¶17 Such are the facts before us today. Language in Article XII of Raintreebylaws cannot be construed to permit aggrieved owners to avoid assessments necessary to repair and protect the property's common elements. This is so especially in light of Article XIX which specifically directs The Association, as the governing board, to repair damage to the property's common elements and restore it to good order.



¶18 In further determining whether the intended purpose of the assessment is to repair property, we look to the testimony of Steve Myer, The Association's President, to discern whether the projects contemplated are property additions or improvements requiring a vote of the individual owners or rather property repair and restoration falling outside of the voting process. Myer testified that a special assessment was needed to pay for reconstruction of the driveway entrance, as well as to repair the common elements in the easements, replace lost trees, control erosion, replace the entry gate, replace the front entrance wall and to provide security and sound mitigation. And while the restoration would not call for the property to be restored to the same specifications of the element repaired (including additional sound barriers need to replace the natural barrier destroyed by The City and a new entry way configuration) Myer testified that each project was directly related to the condemnation proceeding and addressed by the assessing Commissioners. No evidence was offered to contradict Myer's testimony that the proceeds would be used for any purpose other than to address property damage attributable to The City's road-widening project.12 As uncontroverted, Myer's testimony regarding the assessment's purpose must be accepted as true.



¶19 Based upon a finding that the assessment is required to repair condemnation-related damage and protect the property, we find the trial court erred in entering the permanent injunction. The trial court's permanent injunction of October 28, 2005 is vacated.



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See: http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=449191

VACATED AND REMANDED