Arthur L. Jr. and Jo Carol Conkey v. Sleepy Creek Forest Owners Assoc.

Opinion

No. 17-0141 – Arthur L. Conkey, Jr. et al. v. Sleepy Creek Forest Owners Association, Inc.

FILED April 11, 2018 released at 3:00 p.m. EDYTHE NASH GAISER, CLERK SUPREME COURT OF APPEALS WALKER, J., concurring OF WEST VIRGINIA

While I concur in the outcome reached by the majority, I write separately to

express my concern with the majority’s analysis of the circuit court’s award of attorneys’

fees to Sleepy Creek Forest Owners Association (Association).

Rather than rely on either West Virginia Code § 36B-3-116 (2011) or the

Association’s Amendment to Declaration of Restrictions (Amended Declaration), I would

affirm the attorneys’ fee award to the Association based on West Virginia Code § 36B-4-

117 (2011), which states:

If a declarant or any other person[1] subject to this chapter fails to comply with any of its provisions or any provision of the declaration or bylaws, any person or class of persons adversely affected by the failure to comply has a claim for appropriate relief. Punitive damages may be awarded for a willful failure to comply with this chapter. The court, in an appropriate case, may award reasonable attorney’s fees.

In this case, the Conkeys did not pay their assessments, failed to comply with

the Amended Declaration, and adversely affected the Association and its members. Thus,

1 The Uniform Common Interest Ownership Act, West Virginia Code §§ 36B-1-101 – 36B-4-120, defines “[p]erson” as an “individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or other legal or commercial entity.” W. Va. Code § 36B-1-103 (2011). § 36B-4-117 empowered the circuit court to deviate from our general rule that each litigant

must bear his or her own costs2 and award the Association its reasonable attorneys’ fees, if

appropriate. The circuit court reasoned that if the Conkeys are not made to pay the

Association’s reasonable attorneys’ fees, other Association members would be

incentivized to ignore their assessments and pass the cost of the collection on to their

neighbors. In light of those circumstances, I would find that the circuit court did not abuse

its discretion under § 36B-4-117 by awarding the Association its reasonable attorneys’ fees.

I would not rely on § 36B-3-116 or the Association’s Amended Declaration

because the Association sued the Conkeys to recover the unpaid assessments, and not to

enforce either the statutory lien on the Conkeys’ property created by § 36B-3-116(a) or the

consensual, common law lien on the Conkeys’ property created by the Amended

Declaration. Rather, the Association chose to sue the Conkeys to collect unpaid

assessments, that is, to enforce the Conkeys’ promise to pay their assessments.

This choice matters. Section 36B-3-116(f)3 grants costs and reasonable

attorneys’ fees to the prevailing party in an action brought pursuant to § 36B-3-116, that

is, an action to enforce the statutory lien created by § 36B-3-116(a). Because the

2 See Sally-Mike Prop. v. Yokum, 179 W. Va. 48, 50, 365 S.E.2d 246, 248 (1986). 3 Section 36B-3-116, subsection (f) states: “A judgment or decree in any action brought under this section must include costs and reasonable attorney’s fees for the prevailing party.”

Association sued to recover the Conkeys’ unpaid assessments, and not to enforce the lien

upon their properties created by § 36B-3-116(a), they were not entitled to attorneys’ fees

under § 36B-3-116(f).

One reaches the same conclusion under the Amended Declaration, which

states that “[a]ny assessment made pursuant to this paragraph [10D], including late fee of

Five ($5.00) Dollars, interest at the rate of ten (10%) percent per annum from the date of

delinquency, and reasonable attorney’s fees incurred in the collection thereof, shall

constitute a lien on thie [sic] property . . . .” This language empowers the Association to

recover its reasonable attorneys’ fees incurred in a collection action by enforcing a

consensual, common lien.4 It does not give the Association the contractual right to recover

its fees in the course of the collection action, however.

For those reasons, I would affirm the circuit court’s grant of reasonable

attorneys’ fees to the Association pursuant to West Virginia Code § 36B-4-117, rather than

for the reasons set forth by the majority.

4 See Fleet v. Webber Springs Owners Ass’n, Inc., 235 W. Va. 184, 191, 772 S.E.2d 369, 376 (2015) (affirming circuit court’s summary judgment finding that homeowners association had a valid common law lien against homeowners’ respective properties for unpaid homeowners association assessments). Moreover, it is also an open question as to whether such a fee-shifting provision is permissible under the West Virginia Consumer Credit Protection Act (WVCCPA). See id. at 194, 772 S.E.2d at 379 (declining to decide whether WVCCPA barred collection of attorneys’ fees by homeowners association incurred in action to enforce consensual, common law lien).