Elam v. Woodhawk Club Condominium

[Cite as Elam v. Woodhawk Club Condominium, 2019-Ohio-457.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 107092
DEBRA ELAM
PLAINTIFF-APPELLANT
vs.
WOODHAWK CLUB CONDOMINIUM
DEFENDANT-APPELLEE
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-17-880085
BEFORE: Boyle, P.J., Celebrezze, J., and Jones, J.
RELEASED AND JOURNALIZED: February 7, 2019
ATTORNEY FOR APPELLANT
Bradley Hull
3681 South Green Road, Suite 208
Beachwood, Ohio 44122
ATTORNEYS FOR APPELLEE
Amanda A. Barreto
Wickens, Herzer, Panza, Cook & Batista
35765 Chester Road
Avon, Ohio 44011
Callie J. Channell
Jacqueline Ann O’Brien
Steven M. Ott
Lindsey A. Wrubel
Ott & Associates Co., L.P.A.
1300 East Ninth Street, Suite 1520
Cleveland, Ohio 44114
MARY J. BOYLE, P.J.:
{¶1} Plaintiff-appellant, Debra Elam, appeals the trial court’s judgment granting
summary judgment in favor of defendant-appellee, Woodhawk Club Condominium II Owners’
Association, Inc. (“Association”). Elam raises one assignment of error for our review:
The trial court erroneously determined that no genuine issue of material fact
exists as to whether appellee Woodhawk’s refusal to maintain the ductwork and
HVAC in question is not in violation of the plain language of the declaration
between the parties, and thus that appellee Woodhawk is entitled to judgment as
a matter of law as to the appellant’s, Debra Elam’s, claims for breach of fiduciary
duty, negligence and wanton misconduct and declaratory judgment.
{¶2} Finding no merit to her appeal, we affirm.
I. Procedural History and Factual Background
{¶3} In January 2016, Elam purchased a condominium unit at Woodhawk Club
Condominium in Mayfield Heights, Ohio. Elam, as the title owner of a unit, is a member of
the Association.
{¶4} In May 2017, Elam filed a complaint against the Association for breach of
contract, breach of fiduciary duty, negligence, and wanton misconduct, and for a declaratory
judgment that the Association’s rules and bylaws were unreasonable. She alleged that when
she took possession of her unit, she “discovered water seepage into the HVAC [heating,
ventilation, and air conditioning] units, which are exterior to her unit.” She asserted that
because the HVAC units are “exterior to, or outside the walls, of her unit,” they are common
elements. She demanded that the Association fix the water seepage issue, but it refused to do
so. She further alleged that because her HVAC unit was faulty, it posed a risk to health and
human safety. The Association answered Elam’s complaint, denying the allegations.
{¶5} In January 2018, the Association moved for summary judgment. According to
the Association, its declaration and bylaws state that the HVAC system serving individual units
is part of the “limited common areas,” which means that unit owners are responsible for
“maintenance and repair of the ductwork and HVAC system servicing his or her individual
unit.” The Association further argued that it did not breach any fiduciary duty or act
negligently or in a wanton manner and that Elam was not entitled to declaratory judgment.
Elam opposed the Association’s motion, supporting her arguments with her affidavit.
{¶6} The trial court subsequently granted the Association’s summary judgment
motion. It is from this judgment that Elam now appeals.
II. Summary Judgment Standard
{¶7} We review a trial court’s decision on summary judgment under a de novo
standard of review. Baiko v. Mays, 140 Ohio App.3d 1, 10, 746 N.E.2d 618 (8th Dist.2000).
Accordingly, we afford no deference to the trial court’s decision and independently review the
record to determine whether summary judgment is appropriate. N.E. Ohio Apt. Assn. v.
Cuyahoga Cty. Bd. of Commrs., 121 Ohio App.3d 188, 192, 699 N.E.2d 534 (8th Dist.1997).
{¶8} Civ.R. 56(C) provides that before summary judgment may be granted, a court
must determine that (1) no genuine issue as to any material fact remains to be litigated, (2) the
moving party is entitled to judgment as a matter of law, and (3) it appears from the evidence that
reasonable minds can come to but one conclusion, and viewing the evidence most strongly in
favor of the nonmoving party, that conclusion is adverse to the nonmoving party. State ex rel.
Duganitz v. Ohio Adult Parole Auth., 77 Ohio St.3d 190, 191, 672 N.E.2d 654 (1996).
{¶9} The moving party carries an initial burden of setting forth specific facts which
demonstrate his or her entitlement to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280,
292-293, 662 N.E.2d 264 (1996). If the movant fails to meet this burden, summary judgment
is not appropriate, but if the movant does meet this burden, summary judgment will be
appropriate only if the nonmovant fails to establish the existence of a genuine issue of material
fact. Id. at 293.
III. Analysis
{¶10} Elam raises several issues within her sole assignment of error that all relate to her
four causes of action. Elam, however, does not argue these issues separately or in any logical
manner. Thus, we will attempt to decipher her arguments regarding each cause of action and
address them in an orderly fashion.
A. Breach of Contract
{¶11} Elam argues that the Association breached the terms of the rules and regulations
of its declaration and bylaws when it refused to maintain and fix the “defective and unsafe
HVAC system exterior” to her unit.
{¶12} The Association contends that the declaration and bylaws are clear and
unambiguous and plainly state that maintaining the HVAC system is Elam’s responsibility, not
the Association’s.
{¶13} Condominium declarations and bylaws are contracts between the association
and the purchaser and are subject to the traditional rules of contract interpretation. Nottingdale
Homeowners’ Assn., Inc. v. Darby, 33 Ohio St.3d 32, 35-36, 514 N.E.2d 702 (1987). A
contract that is clear and unambiguous requires no real interpretation or construction and will be
given the effect called for by the plain language of the contract. Aultman Hosp. Assn. v.
Community Mut. Ins. Co., 46 Ohio St.3d 51, 55, 544 N.E.2d 920 (1989).
{¶14} Where a contract’s terms are clear and unambiguous, its interpretation is as a
matter of law, not fact, and may be adjudicated by summary judgment. Dutch Maid Logistics,
Inc. v. Acuity, 8th Dist. Cuyahoga Nos. 91932 and 92002, 2009-Ohio-1783, ¶ 19. We,
therefore, interpret the terms of the Association’s declaration and bylaws de novo. Continental
W. Condo. Unit Owners Assn. v. Howard E. Ferguson, Inc., 74 Ohio St.3d 501, 502, 660 N.E.2d
431 (1996).
{¶15} Elam does not point to any part of the declaration or bylaws that support her
position. Indeed, Elam does not cite to the declaration or bylaws anywhere in her brief. The
Association, however, points to the following sections of the declaration in support of its
argument. Article II, Section (B) of the declaration describes “Common Areas and Facilities”
and “Limited Common Areas and Facilities.” It provides:
(B) Common Areas and Facilities
(1) Description of Common Areas and Facilities. The entire balance of the land
and improvements thereon, including but not limited to, all buildings,
foundations, roofs, main and supporting walls, exterior parking spaces,
sidewalks, roadways, drives, storage spaces, if any, community facilities, if any,
pumps, trees, lawns, gardens, pavement, balconies, porches, stoops, wires,
conduits, utility lines and ducts now or hereafter situated on the Condominium
Property, all as here in before more specifically described as “Common Areas
and Facilities” in Article (F) hereof, are hereby declared and established as the
Common Areas and Facilities. Specifically, all electric fixtures, utility pipes
and lines, faucets, shower heads, plugs, connections, or fixtures as defined by the
laws of the State of Ohio and all replacements thereof shall be part of the
Common Areas and Facilities. Unless otherwise provided by the Unit Owners’
Association, however, the care, maintenance, repair and replacement of all or any
portion of such elements or fixtures located within Unit shall be the
responsibility of the owner of such Unit.
(2) Limited Common Areas and Facilities. Each Unit Owner is hereby granted
an exclusive and irrevocable license to use and occupy to the exclusion of all
others the Limited Common Areas and Facilities which area located within the
bounds of his Unit or which serve only his Unit. The Limited Common Areas
and Facilities with respect to each Unit (or group of Units) shall consist of such
of the following as may be constructed to be Common Areas:
***
(c) All ducts and plumbing, electrical and other fixtures, equipment and
appurtenances, including the individual air-conditioning compressor for each
Unit which is located outside of the bounds of the Unit, but which serves only the
particular Unit, all other heating, air conditioning and ventilating equipment and
systems located in Unit, thermostats and control devices, if any, and sanitary and
storm sewer cleanouts located within the bounds of such Unit or located outside
the bounds of Unit but serving particular Unit, and the structure for any of the
foregoing (and space thereof), if any, located outside such Unit containing
equipment serving only such Unit[.]
{¶16} Article II, Section (C), provides that the Association shall maintain and manage
the common areas and facilities, but each unit owner shall
(a) maintain, repair and replace at his expense all portions of his Unit, and all
internal installations of such Unit such as appliances, plumbing, electrical and air
conditioning fixtures or installations, and any portion of any other utility service
facilities located within the Unit boundaries, other than such utility facilities
serving other Units, and to assume the same responsibility with respect to the
other Limited Common Areas and Facilities belonging to his Unit, including
watering the yard areas adjacent to his Unit or making such water available to the
Association, Management Company or their respective contractors, agents and
employees. Each Unit Owner is responsible for maintenance and repair of the
walks serving his Unit, including snow removal from his walks.
{¶17} After review, we agree with the Association that the relevant portions of the
declaration in this case are unambiguous and plainly state that Elam, as a unit owner, is
responsible for the maintenance and repair of her heating and cooling system — whether they
are outside or inside of her apartment.
{¶18} While Elam cites to several sections of the Ohio Condominium Act, she does not
explain how these statutes support her position. Indeed, these provisions simply define certain
elements of condominium law or set forth general law governing condominium associations and
do not lend support to any of Elam’s arguments.
{¶19} Notably, Elam even acknowledges that these statutes only apply if the declarations
do not provide otherwise. There is no dispute in this case that the declarations here “provide
otherwise.” Elam concedes as much. She states that the “language contained in the 1993
Declarations and 1998 Handbook of Rules and Information, all related to the rights and
responsibilities to condominium units in Woodhawk, would seem to make a unit owner
responsible for any and all systems that serve only and solely their units.”
{¶20} Accordingly, regarding Elam’s breach of contract claim, there are no genuine
issues of material fact remaining, and summary judgment was proper on this issue.
B. Fiduciary Duty
{¶21} Elam argues that genuine issues of material fact remain regarding whether the
Association breached its fiduciary duty to her. She claims the Association breached its
fiduciary duty to her because it failed to maintain and repair her “faulty HVAC ductwork” and
unlawfully shifted “basic and fundamental HVAC maintenance obligations” to her. Elam
relies on Behm v. Victory Lane Unit Owners’ Assn., 133 Ohio App.3d 484, 728 N.E.2d 1093(1st Dist.1999), which stated that “both the declaration and [R.C. 5311.14(A)] impose a
fiduciary duty on the part of the homeowners’ association and the board in particular to act in
the best interests of the property owners.” Id. at 487.
{¶22} R.C. 5311.14(A) provides,
Unless provided otherwise in the declaration, damage to or destruction of all or
any part of the common elements of a condominium property shall be promptly
repaired and restored by the board of directors of the unit owners association.
The cost of the repairs and restoration shall be paid from the proceeds of
insurance, if any, payable because of the damage or destruction, and the balance
of that cost is a common expense.
{¶23} The Behm court noted,
Though there is apparently no Ohio case law stating that a homeowners’
association or its board stands in a fiduciary relationship to the unit owners, the
Supreme Court of Ohio has held that “‘[a] “fiduciary relationship” is one in
which special confidence is reposed in the integrity and fidelity of another and
there is a resulting position of superiority or influence, acquired by virtue of this
special trust.’” Belvedere Condominium Unit Owners’ Association v. R.E.
Roark Cos., Inc. (1993), 67 Ohio St.3d 274, 282, 617 N.E.2d 1075, 1082,
quoting In Re Termination of Employment of Pratt, 40 Ohio St.2d 107, 115, 321
N.E.2d 603, 609 (1974). Clearly, the authority granted the board to maintain
the common areas of the property carries with it the duty to exercise that
authority in the best interests of the homeowners.
Id. at fn. 5.
{¶24} After review, we disagree with Elam that Behm stands for the proposition that
condominium associations have a fiduciary duty to homeowners. Although the Behm court
stated that condominium associations and their board of directors owe a fiduciary duty to act in
the best interests of condominium owners, the court ultimately explained that it was the board of
directors of the associations that have the duty. Id.
{¶25} Indeed, under R.C. 1702.30(B), board of directors of nonprofit corporations,
which the Association is, owe a fiduciary duty to the corporation to act in good faith in a manner
the directors believe “to be in or not opposed to the best interests of the corporation.” Kleeman
v. Carriage Trace, Inc., 2d Dist. Montgomery No. 21873, 2007-Ohio-4209, ¶ 45, citing R.C.
1702.30(B). Here, however, Elam sued the Association, not its board.
{¶26} Nonetheless, the Association agreed in its summary judgment motion that it must
act in the best interest of the members as a whole.
{¶27} Article II, Section (C)(1), of the declaration in this case states in relevant part,
The Association shall manage the Common Areas and Facilities and shall
maintain and keep the same in a state of good working order, condition, and
repair, in a clean, neat, safe, and sanitary condition, and in conformity with all
laws, ordinances, and regulations applicable to the Common Areas and Facilities,
by promptly, properly and in a good and workmanlike manner, making all
repairs, replacements, alterations and other improvements necessary to comply
with the foregoing.
{¶28} The Association argues, however, that it acted in compliance with its declaration
and bylaws, which provide that unit owners must maintain the ductwork and HVAC system
servicing his or her individual unit. The Association contends that if it were to expend
Association funds for an individual’s HVAC maintenance responsibility, it would not be acting
in the best interest of the Association as a whole. The Association asserts that without a duty
under the declaration to maintain Elam’s ductwork and HVAC system servicing her unit, it did
not breach any fiduciary duty to Elam.
{¶29} After considering the record before us in this case, we conclude that Elam has
failed to point to any evidence that creates genuine issues of material fact as to whether the
Association breached its statutory duty, duty under the declaration, or any fiduciary duty. As
we stated in the previous section, the Association does not have a duty to repair an individual
owner’s HVAC system under the Declaration. Accordingly, without a duty to do so, the
Association could not have breached any duty, let alone a fiduciary duty.
C. Negligent and Wanton Misconduct
{¶30} Elam argues that genuine issues of material fact remain regarding whether the
Association acted negligently or in a wanton manner (1) when it maintained “an HVAC system
that is of such poor quality and poor design that it literally crumbles,” (2) for allowing this
“condition to fester and get worse, while shirking its own responsibilities of maintenance and
repair,” and (3) for knowingly “taking no remedial action whatsoever” to repair Elam’s HVAC
system.
{¶31} It is black letter law that actionable negligence requires a duty, a breach of the
duty and resultant proximate damages. Menifee v. Ohio Welding Prods., Inc., 15 Ohio St.3d
75, 77, 472 N.E.2d 707 (1984). “Like a finding of negligence, a finding of wanton or reckless
conduct requires a showing of duty.” Estate of Graves v. Circleville, 179 Ohio App.3d 479,
2008-Ohio-6052, 902 N.E.2d 535, ¶ 25 (4th Dist.). Without any duty to maintain or repair
Elam’s HVAC system, there are no genuine issues of material fact as to whether the Association
acted negligently or with wanton misconduct.
D. Declaratory Judgment
{¶32} Elam further argues that genuine issues of material fact exist as to whether she is
entitled to a declaratory judgment because issues of fact remain regarding the reasonableness of
the declaration. She claims that she is entitled to a declaratory judgment that the Association’s
declaration is unreasonable. We disagree.
{¶33} A declaratory judgment action is a creature of statute. See R.C. 2721.01 through
2721.15. “The Declaratory Judgments Act was fashioned to provide remedies where none
exists, in the situation where a particular controversy has not advanced to the point where a
conventional remedy is reasonably available.” D.H. Overmyer Telecasting Co. v. Am. Home
Assur. Co., 29 Ohio App.3d 31, 32, 502 N.E.2d 694 (8th Dist.1986). “The entertainment of a
declaratory judgment action rests within the sound discretion of the trial court.” Id.{¶34} A declaratory judgment may be commenced as set forth in R.C. 2721.03:
[A]ny person whose rights, status, or other legal relations are affected by a
constitutional provision, statute, rule as defined in section 119.01 of the Revised
Code, municipal ordinance, township resolution, contract, or franchise may have
determined any question of construction or validity arising under the instrument,
constitutional provision, statute, rule, ordinance, resolution, contract, or franchise
and obtain a declaration of rights, status, or other legal relations under it.
{¶35} In this case, Elam argues that the declaration is unreasonable because it requires
her to maintain and repair her HVAC system when parts of the system are underground and
outside of her condominium. Because the ductwork for her HVAC system is underground and
outside of the walls of her condominium, she asserts that she would suffer great hardship if she
had to repair her HVAC system. She further argues that there was no meeting of the minds
regarding the declaration.
{¶36} Essentially, Elam is arguing that the declaration is both procedurally and
substantively unconscionable. A party bears the burden of proving that an agreement is both
substantively and procedurally unconscionable. Taylor Bldg. Corp. of Am. v. Benfield, 117
Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 33. In this case, Elam does not provide any
evidence of her claims whatsoever besides her self-serving affidavit. Indeed, there is nothing
in the record — besides Elam’s affidavit — to support her argument that the declaration’s
provision requiring unit owners be responsible for their own HVAC system is unreasonable.
See Davis v. Cleveland, 8th Dist. Cuyahoga No. 83665, 2004-Ohio-6621, ¶ 23 (“Generally, a
party’s unsupported and self-serving assertions, * * * standing alone and without corroborating
materials under Civ.R. 56, will not be sufficient to demonstrate material issues of fact.
Otherwise, a party could avoid summary judgment under all circumstances solely by simply
submitting such a self-serving affidavit containing nothing more than bare contradictions of the
evidence offered by the moving party.”).
{¶37} There is also no evidence of procedural unconscionability. Procedural
unconscionability involves factors bearing on the relative bargaining position of the contracting
parties, including “age, education, intelligence, business acumen and experience, relative
bargaining power, who drafted the contract, whether the terms were explained to the weaker
party, whether alterations in the printed terms were possible[.]” Collins v. Click Camera &
Video, 86 Ohio App.3d 826, 834, 621 N.E.2d 1294 (2d Dist.1993), citing Johnson v. Mobil Oil
Corp., 415 F.Supp. 264 (E.D.Mich.1976). The crucial question is whether a party, considering
his or her education or lack of it, had a reasonable opportunity to understand the terms of the
contract, or were the important terms hidden in a maze of fine print. Lake Ridge Academy v.
Carney, 66 Ohio St.3d 376, 383, 613 N.E.2d 183 (1993). There is no evidence in this case that
Elam was not able to read and understand the declaration before she purchased her
condominium.
{¶38} Finally, regarding Elam’s claim that there was not a meeting of the minds because
the Association never explained the terms of the declaration to her, we disagree. “A party
entering a contract has a responsibility to learn the terms of the contract prior to agreeing to its
terms.” Cheap Escape Co. Inc. v. Crystal Windows & Doors Corp., 8th Dist. Cuyahoga No.
93739, 2010-Ohio-5002, ¶ 17. It is well established that one party to a contract is not required
to explain each contract provision to the other party before signing the document. Id., citing
ABM Farms, Inc. v. Woods, 81 Ohio St.3d 498, 503, 692 N.E.2d 574 (1998). Moreover, a
party to a contract is presumed to have read and understood the terms and is bound by a contract
that he willingly signed. Id., citing Preferred Capital, Inc. v. Power Eng. Group Inc., 112
Ohio St.3d 429, 2007-Ohio-257, 860 N.E.2d 741.
{¶39} Accordingly, we agree with the trial court that no genuine issues of material fact
exist on Elam’s declaratory judgment claim.
IV. Conclusion
{¶40} After reviewing the parties’ arguments, the pertinent law, and the record before us,
we find no error on the part of the trial court in granting summary judgment to the Association.
Elam did not meet her reciprocal burden of pointing to evidence in the record that established
that genuine issues of material fact remain regarding on each of her claims. Accordingly, we
find that the trial court’s judgment in favor of the Association on its summary judgment motion
was proper. Elam’s sole assignment of error is overruled.
{¶41} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the
Rules of Appellate Procedure.
MARY J. BOYLE, PRESIDING JUDGE
FRANK D. CELEBREZZE, JR., J., and
LARRY A. JONES, SR., J., CONCUR