in the court of common pleas summit county, ohio …in the court of common pleas summit county, ohio...

IN THE COURT OF COMMON PLEAS

SUMMIT COUNTY, OHIO

WATERFORD POINTE CONDOMINIUM ) CASE NO. CV-2015-01-0624

ASSOCIATION )

) JUDGE THOMAS A. TEODOSIO

PLAINTIFF )

) MAGISTRATE KANDI O’CONNER

-VS.- )

)

RESERVE DOMICILES, LTD., TRUSTEE ) PLAINTIFF’S POST-TRIAL BRIEF

FOR PHOENIX DIVERSIFIED AND )

SHIMODA (A DELAWARE PURE TRUST), )

ET AL. )

)

DEFENDANTS )

Now comes Plaintiff Waterford Pointe Condominium Association (“Association”)

and, pursuant to the Court’s order, submits the following Post-Trial Brief.

KAMAN & CUSIMANO, LLC.

/S/ JOSEPH E. DIBAGGIO

______________________________

JOSEPH E. DIBAGGIO (#0074775)

Attorneys for Plaintiff

50 Public Square, Suite 2000

Cleveland, Ohio 44113

(216)696-0650/Fax (216)771-8478

[email protected]

CV-2015-01-0624 BRIE 12/12/2016 09:05:37 AM TEODOSIO, THOMAS of 24

Sandra Kurt, Summit County Clerk of Courts

mailto:[email protected]

2

DAY KETTERER LTD.

/S/ KIMBERLY K. WYSS

____________________________________

KIMBERLY K. WYSS (#0061887)

Counsel for Plaintiff/Counterclaim

Defendant Waterford Pointe

Condominium Association

Millennium Centre-Suite 300

200 Market Avenue North

Canton, Ohio 44702

(330) 455-0173/Fax (330) 455-2633

[email protected]




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Introduction

Association filed a Complaint for Foreclosure on its lien and Money Damages on

January 30, 2015. Defendant filed an Answer and Counterclaim on or about April 3, 2015.

In September of 2015, Defendant filed an Amended Answer and Counterclaim.

This matter was set for bench trial on October 17, 2016 for a determination of the

validity of the lien and the Association’s Right to Foreclose on said lien. On October 17,

2016, the Parties entered into the record Joint Stipulations of Facts and also admitted

Stipulated Exhibits into the record.

Facts and Argument

A. Binding Contract between Association and Defendant

Association is an existing non-profit corporation organized and doing business under

the laws of the State of Ohio to provide a corporate entity for the operation and

administration of 45 condominium units at the Waterford Pointe Condominium

Association, located within the City of Twinsburg, County of Summit, State of Ohio. (See

Joint Stipulations and Plaintiff’s Stipulated Exhibit 1, p. 4). Association acts on behalf of

its members, in accordance with Ohio Revised Code Chapter 5311 and Association’s

Declaration of Condominium Ownership (“Declaration”) and Bylaws (“Bylaws”), as

amended. (Collectively the “Governing Documents”). The Declaration and Bylaws, as

amended, are filed for record at Volume OR1872, Page 771, et. seq. of the Summit County

records. (Plaintiff’s Stipulated Exhibit 1).

Declaration Article I, Section (G) states:



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Each owner shall comply with Declaration, Bylaws, decisions and resolutions of the Association, as amended from time to time. (Plaintiff’s Stipulated

Exhibit 1, p. 10).

Bylaws Article VII, Section 7 states, in part:

…each unit Owner shall abide by the provisions of the Bylaws, the Declaration, the Association rules and regulations, ORC 5311 and any amendments thereto. (Plaintiff’s Stipulated Exhibit 1, p. 14).

On June 23, 1998, Defendant became an owner of the Unit located within the

Association at 3011 Waterford Drive, Twinsburg, Ohio 44087. (See Plaintiff’s Stipulated

Exhibit 2). Upon taking title to Unit 3011 Waterford Drive, Defendant automatically

became a member of the Association. (See Joint Stipulations No. 2; Plaintiff’s Exhibit 1,

Declaration Section 11(E), p.10 and Bylaws Article I, Section 2, p. 3). As a member of the

Association, Defendant is bound by the covenants, conditions and restrictions contained in

the Declaration and Bylaws, as amended. (See Plaintiff’s Exhibit 1, Declaration Section

11(G), p.10).

Defendant stipulated that as a member of the Association, it covenanted and agreed

to comply with the Declaration and Bylaws, rules and regulations, ORC 5311, and Board

resolutions, as amended from time to time. (Joint Stipulations No. 3.) Defendant further

stipulated, the Condominium Declaration and Bylaws, and all Amendments form a

binding contract between Association and Defendant (“The Contract”). (Joint Stipulations

No. 1). Defendant further stipulated that the Contract has not been changed, amended,

or modified by language that it placed on the back of checks. (Joint Stipulation No. 22).

As the Contract has not been changed, altered or modified, Defendant is bound to comply



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with the express and unambiguous provisions contained within the existing Association’s

governing documents.

B. Association’s Right to Levy Assessments and Defendant’s Duty to Timely Remit

Assessments Pursuant to the Contract with Association

Pursuant to that binding Contract, Association, through its Board of Directors, has

the right to assess Defendant and all unit owners of record according to the Owner’s

percentage of interest in the Common Areas and Facilities. (Plaintiff’s Stipulated Exhibit

1, Bylaws Article VIII, Section 2, Paragraph 2, p.15)

Defendant stipulated the Assessments, include expenses of administration,

maintenance and repair of the common areas and facilities, and all of the other expenses

provided for in the Declaration and Bylaws. (Joint Stipulation No. 5; see also Bylaws

Article VIII, Section (A)(1), p.15).

As a member and unit owner and pursuant to the Contract Defendant stipulated

that (1) Defendant has a duty to pay its proportionate share of Assessments; and (2) the

monthly assessments shall be in such amount and at such times as may be determined by

the Association’s Board of Directors. (See Joint Stipulations Nos. 4 & 6). Specifically,

Bylaws Article VIII, Section A(1), states, in part:

It shall be the duty of every Unit Owner pay his proportionate share of the expenses of administration, maintenance and repair of the Common Areas and Facilities and of the other expenses provided for herein. Such proportionate share shall be in the same ratio as his percentage of Ownership in the Common Areas and Facilities as set forth in Exhibit "C" of the Declaration. Payment thereof shall be in such amount and at such times as may be determined by the BOARD of the ASSOCIATION, as hereinafter provided. (See Stipulated Exhibit 1, p. 15) (Emphasis Added).



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Defendant stipulated, Association, through its Board of Directors, has the authority

to adopt rules and regulations pursuant to the terms of the existing Contract. (Joint

Stipulation No. 7). Defendant also stipulated that on May 1, 2007, Association, through

its Board of Directors, adopted a revised collection policy that was in effect in 2012 and

remains in effect today. (See Plaintiff’s Stipulated Exhibit 5).

Pursuant to the binding Collections Policy, Defendant stipulated that all

assessments are due on the first (1st) day of the month and are considered late if not

received postmarked by the 15th day of each month. Defendant also stipulated that an

administrative late charge of $25.00 per month shall be incurred for any late payment and

on any unpaid balance of the assessment. Said authority is further set forth in Declaration

Section 20, as amended, which states, in part:

In accordance with Ohio revised code section 5311.081 (B) (12), the Board shall have the authority to impose interest in administrative late fees for the late payment of Assessments. (See Plaintiff’s Stipulated Exhibit 4, p.3)

By stipulating to the existing Collections Policy in effect in 2012, Defendant is

familiar with Association’s collection’s procedures, including when liens are typically filed

for delinquencies and the inevitability of a foreclosure upon failure to pay in full.

C. Defendant Failed to Timely Remit its Assessments in violation of the Contract with

Association

As reflected in the Stipulated Statement of Account, Defendant’s delinquency began

in April, 2012. (See Joint Stipulation No. 18; Plaintiff’s Stipulated Exhibit 6). For calendar

year 2012, the monthly assessment levied by Association for Defendant’s unit 3011

Waterford was $302.79 (Joint Stipulation No. 17; Plaintiff’s Stipulated Exhibit 6). After



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Defendant failed to remit the monthly assessment, administrative late fees in the sum of

$25.00 were assessed on April 16, 2012 and timely reflected on the Stipulated Statement

of Account. (Joint Stipulation No. 17, Plaintiff’s Stipulated Exhibit 6). Defendant

stipulated the late fees assessed by Association were in accordance with the Declaration

and Bylaws, and its existing collection policy. (See Joint Stipulation Nos. 23 & 24;

Plaintiff’s Stipulated Exhibit 5).

Once Defendant failed to meet its obligations under the Declaration and Bylaws to

timely remit its assessments and became delinquent, the provisions of the binding

Contract which governs the method and order of application of subsequent payments

became applicable to Defendant’s account. (See Plaintiff’s Stipulated Exhibit 5).

As is often the case in community associations, the Declaration and Bylaws are

amended from time to time after they are originally recorded. On May 21, 2005, the Board

of Directors for Association approved certain amendments to the Declaration and Bylaws

in order to bring the Declaration and Bylaws into compliance with Ohio Revised Code

Chapter 5311 (the “2005 Amendments”). The 2005 Amendments were filed for record in

the Summit County Records on June 10, 2005.

The 2005 Amendments stated, in pertinent part, as follows:

(8) INSERT a new 2nd PARAGRAPH to the end of BYLAWS ARTICLE VIII,

SECTION 1, entitled “Obligation of Owners to Pay Assessments.” Said new

addition, to be added on Page 15 of Declaration, as recorded at Summit

County Records Volume OR-1872, 71 et seq., is as follows:

In accordance with Ohio Revised Code Section 5311.18(A)(2), the Association

shall credit payments made by a Unit Owner in the following order of priority:

(1) First, to interest owed to the Association;

(2) Second, to administrative late fees owed to the Association;

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(3) Third, to collection costs, attorney’s fees, and paralegal fees incurred

by the Association; and

(4) Fourth, to principal amounts the Unit Owner owes to the Association

for common expenses or enforcement Assessments chargeable against

the Unit.

The stipulated Association collection policy specifically includes the above-

mandated order of application which was in effect in 2012 when Defendant’s delinquency

began, and remains in effect today. (See Joint Stipulations Exhibit 8; Plaintiff’s Exhibit

5).

Pursuant to R.C. 5311.18(A)(2), the Declaration, Bylaws and collection’s policy,

Association was required to credit payments in a specific order of priority. Based upon the

application of payment provision contained in the Bylaws and in the Ohio Revised Code,

any amount paid toward the past due account satisfied the debt due for interest, late fees

and attorney fees prior to the fees owed for assessments. Thus, any balance due and owing

on the past due account is for assessments.

On May 4, 2012, Association credited a partial payment. Pursuant to the statute

and the Bylaws, the partial payment was applied against the administrative late fee, the

outstanding April assessment and the balance was then applied to the portion of principal

due for the May, 2012 assessment.

In turn, this left a $25.00 unpaid principal balance due for the May, 2012

Assessment. (See Plaintiff’s Stipulated Exhibit 6). Defendant did not remit a payment for

this carry over May Assessment. (Id.) On June 1, 2016, Association then levied the June

assessment on the account in the sum of $302.79. (Id.) The total balance due then as of



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June 1, 2016 was $327.79 (i.e. carry over unpaid principle from May and June’s

assessment).

After Defendant realized a late fee was assessed on his account for failing to timely

remit payment in April, 2012, Defendant willfully interfered with Association’s ability to

credit payments in a specific order of priority by admittedly placing restrictive language

on its check submitted in June, 2012. Specifically, in June, 2012, Defendant stipulated

that he presented a check no. 201 in sum of $302.79 that contained the following language:

“Tendered for June 2012 maintenance fee only, not for late fees or any other

purpose, for 3011 Waterford.” (See Joint Stipulation No. 19).

Per the language used, Defendant was clearly attempting to avoid either paying for

the carry-over May, 2012 balance, or the administrative late fee, by conveniently adding

language “not for late fees.” One could only surmise, the additional language was included

by Defendant to circumvent the order of application and the collections policy that is part

of Contract with Association that Defendant stipulated it is bound by. The amount

tendered on the check was not for the full amount due in the sum of $327.79. Despite

stipulating that it is bound by the Contract with Association and that the terms have not

been changed, modified, or amended by any language that Defendant placed on checks

tendered to Association, Defendant inexplicably maintains that it does not owe Association

the balance on its account. The language used by Defendant is nothing more than a

misguided and desperate attempt to forgive its clear obligation and duty to pay all

assessments, late fees and costs properly levied by Association on the account.



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The only issue of material fact identified by the Court in overruling Association’s

motion for summary judgment was whether Association assented to modifying the terms

of the amended Bylaws; however, this is no longer an issue because Defendant stipulated

that the “language [it] placed on the back of its checks did not change, amend or modify

the contract between the parties.” (Joint Stipulation No. 22). As such, Association is

entitled to judgment in its favor.

Defendant cannot unilaterally determine the balance due and owing in

contravention of the Declaration, Bylaws and Association’s collection policy by including a

restrictive language directing Association on how it must apply payments after it becomes

delinquent. The unmodified existing and binding Contract with Association establishes

the order of application of payments on the past due account, not Defendant. In essence,

Defendant has taken the position that the Contract, the collection policy and procedures

should not apply to it; however, Defendant has not, and cannot, offer any support for this

position.

In response to Defendant’s June, 2012 check with restrictive language, Larry Cedar,

then existing Property Manager for Association, returned the check on behalf of the Board

of Directors and outlined its position. (See Plaintiff’s stipulated Exhibit 8). Within the

letter, Association specifically advised Defendant that in light of the delinquency, it could

not accept payments that contain qualifying endorsements, restrictions or caveats that are

in conflict with Association’s Collection Policy, Declaration and Bylaws. In addition,

Defendant was specifically advised to send funds to Association to bring the account

current and in a timely manner in order to avoid additional administrative late fees. (Id.)



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The Board in no way discharged Defendant’s obligation to satisfy its account. Defendant

was further informed Association would continue to return any future checks that contain

the qualifying endorsements restrictions or caveats.

As of June 19, 2012, the outstanding delinquent balance was $352.79. The amount

due included the carry over principle balance from May, 2012 ($25.00), June’s monthly

assessment ($302.79) and a June Administrative late fee ($25.00). (See Plaintiff’s

Stipulated Account Exhibit 6). Per the stipulated Collection Policy in effect, the

administrative late fee was charged per the mandate of the policy (i.e. “on any unpaid

balance of the assessment’). (See Joint Stipulations No. 23 & 24; Plaintiff’s Stipulated

Exhibit 5). In response, Defendant did not tender a replacement check in June, 2012 in

the sum of $352.79. Accordingly, the delinquency continued and Association followed its

policy that Defendant stipulated was in effect and he was bound to follow.

As of July 1, 2012, Defendant’s delinquency continued to increase as the balance

was now $655.58. (See Plaintiff’s Stipulated Account Exhibit 6). More specifically, the

amount due included the carry over principle balance from May, 2012 ($25.00), June’s

monthly assessment ($302.79), June’s Administrative late fee ($25.00) and July’s monthly

assessment ($302.79). Despite Defendant’s obligations under the existing Contract,

Defendant in July 2012 continued to tender checks with qualifying language in direct

conflict with its Contract with Association.

In response, on July 17, 2012, Mr. Cedar sent a second letter to Defendant and

returned the checks that continued to be in violation of Association’s collections policy,

enclosed a copy of the existing Collections Policy, and outlined the Order of Application of



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Payments mandated in Association’s Contract (See Plaintiff’s Exhibit 10; Plaintiff’s

Exhibit 4). Defendant was specifically advised again to send funds to Association to bring

the account current and in a timely manner in order to avoid additional administrative

late fees. (Id.) Again, Defendant was further informed that Association will continue to

return any future checks that contain the qualifying endorsements restrictions and are

caveats. (Id.)

As of August 1, 2012, Defendant’s delinquency continued to increase as the balance

was now $983.37. (See Plaintiff’s Stipulated Account Exhibit 6). More specifically, the



assessment ($302.79), July’s Administrative late fee ($25.00) and August’s monthly

assessment ($302.79). (Id.) Despite Defendant’s obligations under the existing Contract,

in August, Defendant tendered one check no. 205 in the sum of $302.79. The check now

included the following language:

“Tendered for August 2012 Maintenance Fee only, not for any other purpose,”

(Defendant’s Stipulated Exhibit E)

On August 14, 2012, Mr. Cedar sent a third letter to Defendant to return the sole

check submitted Defendant. (See Plaintiff’s Stipulated Account Exhibit 6). Once again,

Association informed Defendant that it continued to be in violation of Association’s

collections policy, enclosed another copy of the existing Collections Policy, and outlined the

Order of Application of Payments mandated in Association’s Contract (See Plaintiff’s

Exhibit 11; Plaintiff’s Exhibit 4). Defendant was specifically advised again to send funds

to Association to bring the account current and in a timely manner in order to avoid



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additional administrative late fees. (Id.) Again, Defendant was further informed

Association will continue to return any future checks that contain any qualifying language.

(Id.) Defendant’s account continued to remain delinquent and in violation of its contract

with Association. The Board in no way discharged Defendant’s obligation to satisfy its

account.

As of August 30, 2012, Defendant’s delinquency continued to increase as the balance

was now $1,008.37. (See Plaintiff’s Stipulated Account Exhibit 6). More specifically, the



assessment ($302.79), July’s Administrative late fee ($25.00), August’s monthly

assessment ($302.79) and August’s Administrative late fee ($25.00).

After six months, Defendant continued to refuse to comply with the terms of the

Contract. In turn, Association turned the matter to it counsel to initiate collection action

pursuant to its Collection’s Policy. On August 30, 2012, Defendant was served with a

collection letter which specifically identified delinquent amount due and owing on the

account. In addition, the letter further stated that a $75 legal fee was charged to

Defendant’s account pursuant to the governing documents for Association and Ohio law

which provide for the recovery of court costs, reasonable attorney’s fees and costs of

collection. (Plaintiff’s Stipulated Exhibit 13). In response, Defendant did not tender

payment, and the account balance continued to increase due to Defendant’s delinquency

and failure to comply with binding terms of the contract.



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D. After Defendant Became Delinquent, Association did not Discharge Debts by

Returning the Checks that Continued to Include Qualifying Language.

Defendant’s debt has not been discharged. Defendant breached his contract with

Association and has willfully interfered with Association’s ability to credit payments in a

specific order of priority, as mandated by R.C. 5311.18(A)(2) and the Contract between

Association and Defendant. Defendant has not properly tendered payment, and

Association has never shown an intention to discharge Defendant’s obligations.

Association communicated its position to Defendant on numerous occasions as noted above

and in future correspondence; however, Defendant continued the practice of placing

conditions, restrictions, and similar language on its checks.

Plaintiff anticipates that Defendant will make an argument the debt was discharged

pursuant to R.C. 1303.68. Said provision is not applicable in this case. Indeed, the

provision discusses discharge “of the obligation of an indorser or accommodation party….”

(Emphasis added) Here, Defendant was the “drawer” of the checks, not an “indorser” or

“accommodation party,” and, therefore, R.C. 1303.68(B) does not apply. R.C. 1303.01(A)(3)

(defining “drawer”); R.C. 1303.01(B)(10) (defining “indorsement” and “indorser”); R.C.

1303.24(A)-(B) (defining “indorsement” and “indorser”); R.C. 1303.01(B)(2) (defining

“accommodation party”); R.C. 1303.59 (defining “accommodation party”); see also Mosley

v. CitiMortgage, Inc., 85 UCC Rep. Serv. 2d 882, 2015 WL 728655 (W.D. Wash. 2015)

(holding that an identical statute in another state was inapplicable because the “statute

relates to the rights of indorsers or accommodation parties as these rights relate to the

party making the tender. Plaintiff, as the party making the tender, can have no right of



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recourse against himself. As such, plaintiff is not an indorser or accommodation party

within the statute’s meaning. Accordingly, the statute has no bearing on this case.”).

Regardless, even if R.C. 1303.68(B) was arguably applicable, neither that code

section nor R.C. 1303.69 support Defendant’s position that Association discharged his

debts because there was never any intent to discharge. See Huntington National Bank v.

Mark, 2004-Ohio-3856, ¶¶ 16, 33, 2004 WL 1627029 (4th Dist. 2004) (holding that in order

for a valid discharge to occur, an “intent to discharge is required”). Such an intent was

never present in this case, and, quite to the contrary, Association expressed on countless

occasions that it in fact was not discharging Defendant’s obligations.

On November 19, 2012, Association’s counsel sent a letter to Defendant (the Fifth

letter overall) in response to the dispute between the parties. (Plaintiff’s Exhibit 13). The

letter specifically provided an itemized account history detailing the ongoing delinquency

and restated Association’s position that it would not accept checks with qualifying

language and specifically directed Defendant to make every attempt to get the account

current (as the debt was not discharged) to avoid additional collection action. (Id.)

On January 30, 2013, Association’s counsel sent another letter to Defendant (the

Sixth letter). The letter restated Association’s position that it would not accept checks

with qualifying language and specifically directed the defendant to make every attempt to

get the account current (as the debt was not discharged) to avoid additional collection

action. (Plaintiff’s Exhibit 14).

Over a year later, the delinquency remained ongoing, and Defendant continued to

refuse to comply with the binding terms of its Contract. In an effort to attempt to resolve



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the dispute and not proceed with further legal action, Association authorized its counsel

to send a letter (Seventh letter overall) to Defendant on March 12, 2013. (Plaintiff’s

Stipulated Exhibit 16).

After discussing the binding terms of the Collections policy, Contract and order of

application of payments due to ongoing delinquency, Defendant was specifically re-

informed why Association would continue to return checks with qualifying endorsements

and conditions, and Association reaffirmed the fact that it had no intention to discharge

Defendant’s obligations to satisfy its account:

“Since the Association does not and cannot agree to such restriction, it is

compelled to return the checks to you and your account consequently becomes

and remains delinquent.” (Id.)

Despite the foregoing, Association was willing to resolve the matter and specifically

offered to waive all late fees that that had accrued on the account as of March 12, 2013 and

the one legal fee in the amount of $75 in exchange for Defendant remitting payment for

the actual assessments that were still due and owing on the account. (Id.). Unfortunately,

Defendant refused and the delinquency continued.

On April 17, 2013, Association’s counsel sent another letter Defendant (Eighth letter

overall) to once again relay Association’s prior settlement offer in the letter dated March

12, 2013. (Plaintiff’s Exhibit 17) Once again, Defendant refused to remit payment for the

outstanding assessments owed and the delinquency continued.

On June 26, 2013, Association’s counsel sent another letter to Defendant (Ninth

letter overall) in response to this dispute. Defendant was specifically advised of its binding

obligations under the Bylaws and Ohio law, and further was informed that “your



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maintenance fees have not been discharged by the Association’s refusal to accept check

because of the restrictive endorsements contained therein” (Plaintiff’s Exhibit 18.

Emphasis added).

Defendant was once again offered the same settlement detailed in the March 12,

2013. Specifically, Association offered to waive all administrative late and legal fees in

exchange for payment in full for all past due delinquent assessments. Defendant was

further advised that if it refused to pay the outstanding assessments, Association would

be left with no choice but to file a lien against the unit for all fees owed. Once again,

Defendant refused to remit payment for the outstanding assessments owed and the

delinquency continued.

On March 17, 2014 (two years after Defendant’s delinquency began), Association

sent another letter to Defendant. (Plaintiff’s Exhibit 19). Association provided an itemized

account history detailing the full amount owed on the account and reminded Defendant

his debt had not been discharged. Specifically, Defendant was informed of the following:

“the Association is resolute and its position that it is not required to accept checks the contain any restrictions or notations that purport to limit the manner in which payments may be applied or in any way obligate the Association’s rights pursuant to its governing documents or applicable law. Further your obligation to pay fees has not been discharged by the Association for refusal to accept prior checks that contain restrictive endorsements therein. The Association has not negotiate a new terms with you.” (Emphasis added).

In this case, Defendant has stipulated the governing documents are a binding

Contract and that the terms of said contract have not been changed, altered or modified

by any language that Defendant had placed on any checks. (See Joint Stipulations Nos. 1

& 22). Despite the increasing account balance and its clear authority to pursue further



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collection action (i.e. Lien, foreclosure, claim money judgment), Association continued to

exercise restraint and attempted to resolve the delinquency with Defendant amicably. To

that end, Association for the third time, restated its prior settlement offers dated March

12, 2013 and June 26, 2013 offering to waive all administrative late fees and legal fees in

exchange for payment in full of all delinquent assessments. At this point, the delinquent

assessments only as of April 15, 2014 were $6,570.78. Association also provided the

Defendant opportunity to submit a proposed written payment plan for the Board’s

consideration. Defendant refused to remit payment for the outstanding assessments owed

and the account balance continued to increase. Accordingly, Association was left with no

choice but to take further collection action per the express authority and in conformity

with its governing documents.

E. Association’s Authority to Record a lien on Defendant’s Unit for any unpaid

assessments

Defendant stipulated the Declaration, Bylaws and Association’s collection’s policy

allow Association to file a lien on a delinquent member’s unit. (See Joint Stipulation No.

25). The Contract also authorizes Association to include any unpaid interest,

administrative late fees, enforcement Assessments, and collection costs, attorney’s fees,

and paralegal fees. (See Plaintiff’s Stipulated Exhibit 4, p.3). Specifically, the binding

authority is set forth in Declaration Section 14 entitled Lien of the Association, provides:

All sums assessed by the Association for common charges applicable to any

Condominium Unit remaining unpaid for more than ten (10) days after same

have become due and payable shall constitute a Lien on such Condominium

Unit (See Joint Stipulation No. 1; Plaintiff’s Stipulated Exhibit 1, Declaration

p.12)



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***

INSERT a new 4th PARAGRAPH to the end of DECLARATION SECTION

14, entitled “Lien of Association.” Said new addition, to be added on Page 12 of the Declaration, as recorded at Summit County Records Volume OR-1872, Page 771 et seq., is as follows: In accordance with Ohio Revised Code Section 5311.18(A)(1)(b), the Association has a lien upon each Unit’s ownership interest for any unpaid interest, administrative late fees, enforcement Assessments, and collection costs, attorney’s fees, and paralegal fees.1

The Association’s authority to lien and to bill back the cost of collection,

administrative late fees and attorney fees is also clearly set forth in Association’s collection

policy, which was in effect in 2012 when Defendant’s delinquency began and remains in

effect today. (See Joint Stipulation No. 8; Plaintiff’s Stipulated Exhibit 5).

Due to Defendant’s breach and self-induced, continued delinquency as reflected on

the Stipulated Account, Association was left with no choice but to file a lien on the unit as

specifically authorized under the Contract. (See Plaintiff’s Stipulated Exhibits 6 & 7).

As noted above, Association had the authority to file lien after 10 days after

Defendant’s assessment remained unpaid. However, Association withheld filing a lien for

over two in half years and instead diligently attempted to exhaust all reasonable efforts to

resolve the ongoing and increasing delinquency with Defendant. After all efforts were

exhausted and were ultimately unsuccessful, Association was left with no options but to

continue to exercise its rights under the governing documents. In doing so, Association

1 On June 10, 2005, Association recorded the amendments to the Declaration and Bylaws in order to

bring the Declaration and Bylaws into compliance with Ohio Revised Code Chapter 5311 (the “2005

Amendments”).



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filed a lien on Defendant’s unit on September 19, 2014. Based on the foregoing,

Association’s lien was duly filed, enforceable and valid.

F. Association Is Entitled to a Decree of Foreclosure and for Money Damages

1. Association’s Right to Foreclose on its Valid Lien

Defendant stipulated the Declaration, Bylaws and Association’s collection’s policy

allow Association to foreclose on a lien filed on a delinquent member’s property. (See Joint

Stipulations No. 25). Declaration Section 14 specifically provides “Such lien may be

foreclosed in the same manner as a mortgage on real Property on behalf of all Unit Owners”

(See Plaintiff’s Stipulated Exhibit 1, p.12). Pursuant to O.R.C. 5311.18(B), Association is

also entitled to foreclose on the liens filed against Defendant for non-payment of

maintenance fees and assessments.

When Defendant failed to pay the outstanding arrearage on the account, Association

filed liens to protect its interest in collecting the past due amounts. Association undertook

collection action pursuant to Association’s Collection Policy that Defendant stipulated was

binding and fully enforceable against it.

In light of the delinquency as established in the stipulated accounts (Plaintiff’s

Stipulated Exhibits 6 & 7), the account is in default and, by statute, Association is entitled

to have Association’s valid lien foreclosed, and the property at issue sold in the manner

prescribed by law.

2. Association’s Right to a Money Judgment for Unpaid Assessments

In the present case, Association also seeks and is entitled to a money judgment

against Defendant, irrespective of any determination on the validity of the lien.



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Declaration Section 14, provides a “Suit to recover a money judgment for unpaid common

expenses may also be maintained without foreclosure or waiving the lien securing the

payment of such expenses” (See Plaintiff’s Stipulated Exhibit 1, p.12).

In accordance with O.R.C. 5311.18 and the Declaration and Bylaws, Association is

authorized to seek personal judgment on the total amount due, including but not limited

to, common expenses, assessments, interest, administrative late fees, enforcement

assessments, collection costs, attorney’s fees, paralegal fees, and court costs as itemized in

the stipulated accounts (See Plaintiff’s Stipulated Exhibits 6 & 7).

Association is entitled to recover all costs pursuant to O.R.C. 5311.18(A)(1)(b), which

permits the recovery of “Interest, administrative late fees, enforcement assessments, and

collection costs, attorney's fees, and paralegal fees the association incurs if authorized by

the declaration, the bylaws, or the rules of the unit owners association and if chargeable

against the unit.” Bylaws Article VIII, Section 10, provides:

…the ASSOCIATION may bring suit to enforce collection thereof, or to foreclose the lien therefore, as provided in the Declaration, and there shall be added to the amount due the cost of said suit, together with legal interest, reasonable attorney's fees and other costs of collection. To the extent permitted by the Declaration, any decision or any statute or law now or hereafter effective, the amount of any delinquent or unpaid charges or assessments, and interest, costs and fees as above provided shall be and become a lien or charge against the Unit Ownership of the Owner involved when payable and may be foreclosed by an action brought in the name of the ASSOCIATION as in-the case of foreclosure of liens against real estate, as provided in the Declaration. (See Plaintiff’s

Stipulated Exhibit 1, p. 17)

As demonstrated by the stipulated statement of account, there is no dispute

Defendant is in default in the total amount due of $33,224.71 as of July 17, 2016 with



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interest at the maximum rate allowable by law per annum. (Plaintiff’s Stipulated Exhibits

6 & 7).

Defendant’s Trustee and his spouse have and continued to reside in the unit and

have been unjustly benefited from continuing to receive services from Association despite

failing to meet is duty to adhere to the Contract and timely remit Assessments. As a

member and unit owner, Defendant stipulated the binding Contract states (1) Defendant

has a duty to pay its proportionate share of Assessments. That said, Defendant could have

easily resolved this matter back in 2012, 2013 and 2014. Instead, Defendant unilaterally

chose to drag its own delinquency out for well over four years to the detriment of

Association and all other 47 unit owners within the Association.

Despite the increasing account balance and its clear authority to pursue further

collection action (i.e. Lien, foreclosure, claim money judgment), Association continued to

exercise restraint and pro-actively attempted to resolve the delinquency with the Owner

amicably for well over two years before it filed a lien and even longer before it filed this

lawsuit.

The account is in default and subject to adjustments due to additional common

expenses, assessments, interest, administrative late fees, enforcement assessment,

collection costs, attorney’s fees and court costs, as may be further incurred pending final

disposition of this case. Association is entitled to recover the total amount due pursuant

to O.R.C. 5311.18, and the Declaration and Bylaws. (Bylaws Article VIII, Section 10) As

a result, there remains no dispute as to the delinquency of the account and as such,

Association is also entitled to a separate money judgment in its favor



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CONCLUSION

Based on Ohio law, the Declaration and Bylaws (“ Contract), the pleadings, and the

undisputed evidence, Association submits that it is entitled to judgment on its lien is valid,

entitled to a decree of foreclosure on the subject unit and a money judgment against

Defendant for the unpaid assessments.

Accordingly, Association should be granted with a decree of foreclosure and

judgment in the total amount due, plus any additional assessments, charges, costs, and

attorney fees as may be further incurred pending final disposition of this case. The Court

should render a finding Association is entitled to an award of attorneys but hold a

determination on the amount for further order.

KAMAN & CUSIMANO, LLC.



Attorneys for Plaintiff


Cleveland, Ohio 44113

(216)696-0650/Fax (216)771-8478

[email protected]

DAY KETTERER LTD.



Counsel for Plaintiff/Counterclaim

Defendant Waterford Pointe

Condominium Association

Millennium Centre-Suite 300

200 Market Avenue North

Canton, Ohio 44702

(330) 455-0173/Fax (330) 455-2633

[email protected]





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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Plaintiff’s Post-Trial Brief was served,

this 9th day of December, 2016, via the Court’s electronic service system and electronic

and/or regular U.S. Mail upon the following:

A. Clifford Thornton

3659 Green Road #305

Beachwood, OH 44122

[email protected]

Attorney for Defendant Reserves Domiciles, Ltd. Trustee for Phoenix Diversified & Shimoda

Arthur Tassi


Cleveland, OH 44113

[email protected]

Attorney for Third Federal Savings & Loan Association of Cleveland


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