Maples v. Compass Harbor Village

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STATE OF MAINE BUSINESS & CONSUMER COURT CUMBERLAND, ss. LOCATION: PORTLAND Docket No. BCD-CIV-2021-00002

CHARLES R. MAPLES AND ) KATHY S. BROWN, ) ) Plaintiffs, ) ) v. ) ORDER GRANTING REMAINING ) MOVANTS’ RULE 12(b)(6) MOTION COMPASS HARBOR VILLAGE ) TO DISMISS CONDOMINIUM ASSOCIATION, et ) al., ) ) Defendants. )

Before the Court is the Motion to Dismiss filed by Defendants Orono, LLC and Around the World, LLC (collectively, the “Remaining Movants” or “Remaining Unit Owner Defendants”) pursuant to Maine Rule of Civil Procedure 12(b)(6). The Remaining Movants (and their several predecessors-in-title) did not participate in the previous Motion to Dismiss brought by a group of seven Defendants, and thus the claims against the Remaining Movants were not dismissed as a result of this Court’s Order Granting in Part and Dismissing in Part Movants’ Rule 12(b)(6) Motion to Dismiss dated June 17, 2021 (the “Prior Order”). The Remaining Movants now seek dismissal of all claims against them. For the reasons discussed below, the Court grants their Motion to Dismiss.

BACKGROUND

The factual and procedural background of this case is described in the Prior Order; two Law Court appeals (Maples et. al. v. Compass Harbor Village Condominium Association, et al., *2 2022 ME 26, 273 A.3d 358, and Kathy S. Brown et al. v. Compass Harbor Village Condominium Association, et al., 2020 ME 44, 229 A.3d 158); and the Order Following Bench Trial, Charles R. Maples, et al. v. Evan Contorakes, et al., Docket No. BCDWB-CV-1802, July 22, 2019 (the “Underlying Judgment”). The facts and procedural background are not repeated here, other than to note that several of the units have been sold to the Remaining Movants, and by agreement of all parties Count II (asking to appoint a receiver) was dismissed. Only Counts I, III-V remain for consideration.

LEGAL STANDARD

In reviewing a motion to dismiss, courts “consider the facts in the complaint as if they were admitted.” Bonney v. Stephens Mem. Hosp., 2011 ME 46, ¶ 16, 17 A.3d 123. The complaint is viewed “in the light most favorable to the plaintiff to determine whether it sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory.” Id. (quoting Saunders v. Tisher, 2006 ME 94, ¶ 8, 902 A.2d 830). “Dismissal is warranted when it appears beyond a doubt that the plaintiff is not entitled to relief under any set of facts that he might prove in support of his claim.” Id.

Generally, only facts alleged in the complaint may be considered on a motion to dismiss. Moody v. State Liquor & Lottery Comm’n, 2004 ME 20, ¶ 8, 209 A.3d 116 (citations omitted). However, “official public documents, documents that are central to the plaintiff’s claim, and documents referred to in the complaint may be properly considered on a motion to dismiss without converting the motion to one for summary judgment when the authenticity of such documents is not challenged.” Id. ¶ 11. Further, while the material allegations of the complaint must be taken as admitted, the Court “is not bound to accept the complaint’s legal conclusions.” Seacoast Hangar *3 Condo. II Ass’n. v. Martel, 2001 ME 112, ¶ 16, 775 A.2d 1166 (citations omitted). In this case, the facts are all a matter of record and are undisputed. 1

DISCUSSION

The Court adopts and applies its reasoning from the Prior Order to dismiss Count I and Counts III-V against the Remaining Movants. Plaintiffs, however, argue that in its Prior Order the Court conflated the question of unit assessment with that of a judgment lien, and pursuant to 33 M.R.S. § 1603-117 the Court has no choice but to grant Plaintiffs the relief they seek. The Court disagrees with both arguments. First, the Court did not in its Prior Order confuse assessment with a judgment lien. The Court evaluated Plaintiffs’ Section 1603-117 judgment lien argument in a separate, stand-alone section of the Prior Order. Second, the Court concluded that Section 1603-117 did not apply on the facts of this case, and thus did not dictate that the Court grant Plaintiffs the relief they sought. The Court now takes this opportunity to elaborate on its prior analysis of 33 M.R.S. § 1603-117 as it relates to this case.

The judgment lien provisions of the Maine Condominium Act, 33 M.R.S. § 1603-117, provides in relevant part as follows:

(a) A judgment for money against the association, if a lien order is filed with the Register of Deeds of the county where the condominium is located, as provided in Title 14, section 3123, as it or its equivalent may be amended or modified from time to time, is not a lien on the common elements, but is a lien in favor of the judgment lienholder against all of the units in the condominium at the time the judgment was entered. . . .

(c) Whether perfected before or after the creation of the condominium, if a lien other than a mortgage, including a judgment lien or lien attributable to work performed or materials supplied before creation of the condominium, becomes

1 The Court notes that, where the Law Court decided an issue on appeal and on remand the facts of the case remain unchanged, the law of the case doctrine will require the trial court to follow the Law Court’s decision. Balance v. Alley, 404 A.2d 587, 589 (Me. 1978). In both of its decisions in this matter, the Law Court affirmed this Court’s decision that the Declarant or LLC, not the Unit Owner Defendants, is liable to the Association for any costs incurred by the Association as the result of the judgment against it.” Brown, 2020 ME 44, ¶ 26 n.6, 229 A.3d 158; Maples, 2022 ME 26, ¶ 5 n.2, 273 A.3d 358.

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effective against 2 or more units, the unit owner of an affected unit may pay to the lienholder the amount of the lien attributable to his unit, and the lienholder, upon receipt of payment, promptly shall deliver a release of the lien covering the unit. The amount of the payment must be proportionate to the ratio which that unit owner’s common expense liability bears to the common expense liabilities of all unit owners whose units are subject to the lien. . . .

33 M.R.S. § 1603-117(a), (c) (2022). The Enforcement of Money Judgments statute, explicitly referenced in the above language, provides in relevant part: “The Court is given equitable power to make all appropriate orders, including, but not limited to, turnover orders, to assist the judgment creditor in perfecting a lien under this section and to effectuate or compel obedience to any orders issued pursuant to this section.” 14 M.R.S. § 3132 (2022). Similarly, this Court is empowered to fashion “appropriate equitable relief” in reach and apply actions, 14 M.R.S. § 6051(11) (2022), and the Court has “full equity jurisdiction, according to the usage and practice of courts of equity, in all other cases where there is not a plain, adequate and complete remedy at law.” 14 M.R.S. § 6051(13) (2022).

Plaintiffs have not brought to this Court’s attention any reported decisions interpreting 33 M.R.S. § 1603-117. 2 Nevertheless, according to Plaintiffs the judgment lien provisions of the Maine Condominium Act have a purely mechanical operation, and lead to an unavoidable, mechanical result. Once there is a judgment for money against the association: “That is it.” Nothing else matters, and failure of the unit owners to make payment automatically leads to turnover and foreclosure. However, Plaintiffs overlook the Court’s express equitable authority to apply the judgment lien provisions in an equitable manner. Here, despite the circumstances that have led to the predicament faced by Plaintiffs and their legal counsel, the Court determines that a plain

2 Plaintiffs do cite cases decided in other jurisdictions wherein the court considered a statute analogous to 33 M.R.S. § 1603-117. Of these cases, those actually applying the statutes (as opposed to merely discussing them in dicta) did so in circumstances when the judgment creditor was a service provider or other third-party, and not a unit owner within the condominium. See Interlaken Serv. Corp. v. Interlaken Condo. Ass’n, 588 N.W.2d 262, 265-67 (Wis. Ct. App. 1998); Woodley v. Style Corp., 453 P.3d 739, 747-48 (Wash. Ct. App. 2019).

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reading of the statute, coupled with application of the Court’s equity powers, militates against providing Plaintiffs with the relief they seek against the Remaining Movants (or the original Movants).

First, the Underlying Judgment does not provide the kind of “judgment for money against the association” that triggers 33 M.R.S. § 1603-117. The Underlying Judgment contains an express provision protecting the non-party unit owners from becoming the source of payment for Plaintiffs’ judgment against the Declarant and the Association. Although the Underlying Judgment speaks in terms of prohibiting a “special assessment,” the intent of the Underlying Judgment is clear: to restrict liability for payment to the Declarant and the Association, and to shield the non-party unit owners from liability for payment. As a consequence, the Underlying Judgment is a limited or restricted money judgment and cannot serve as a judgment lien on the non-party units of the condominium pursuant to 33 M.R.S. § 1603-117.

Second, the judgment lien statute does not appear on its face to apply to the circumstances of this case. Here, two unit owners seek to invoke Section 1603-117, but by operation of the statute a judgment lien is created “against all of the units in the condominium,” 33 M.R.S. § 1603-117(a), including those of Plaintiffs’. In other words, Plaintiffs are in part seeking to enforce a judgment lien against themselves. Courts should avoid interpreting a statute in a manner that leads to absurd or illogical results. Dickau v. Vermont Mut. Ins. Co., 2014 ME 158, ¶ 21, 107 A.3d 621; Wong v. Hawk, 2012 ME 125, ¶ 8, 55 A.3d 425; Mullen v. Liberty Mut. Ins. Co., 589 A.2d 1275, 1277 (Me. 1991); see Ocean Trail Owners Ass’n, Inc. v. Mead, 650 So.2d 4, at *8-9 (Fla. 1994) (Kohn, J., concurring) (“I cannot agree with the majority that [Florida’s] Condominium Act sanctions an assessment that would have the effect of forcing unit owners who prevail in an action against the condominium association for unauthorized acts to pay their own judgments.”). Section 1603-117 *6 appears to be designed to give third-party contractors and others a mechanism for enforcing payment for services rendered. See Custom Built Homes v. Hampton Mgmt. Corp., 689 F. Supp. 28, 31 (D. Me. 1988); see Unif. Condominium Act § 3-117, cmt. 2 (“[I]f an association which is without sufficient assets to satisfy a judgment refuses to make assessments from which the creditor can have his claim satisfied, it is very likely that a court, in a supplemental proceeding on the judgment, would direct the association to make the necessary assessments against the unit owners.). As a result, 33 M.R.S. § 1603-117 is not available to Plaintiffs on the unique facts of this case.

Third, the Court declines as a matter of equity to apply 33 M.R.S. § 1603-117 to the facts of this case. The basic problem in this case is that Plaintiffs did not anticipate that there was no equity at all in the fifteen units owned by the Declarant. That is an unfortunate situation, but it is not the fault of the other unit owners. The other unit owners were not joined to the original litigation, and there was never any evidence introduced that the other unit owners bore any responsibility for the conduct of the original Defendants. In its Underlying Judgment, the Court clearly indicated an intent to shield the other unit owners from the responsibility of underwriting the conduct of the Declarant and the Association. Notwithstanding the death of Evan Contorakes and the subsequent discovery that there was no equity in the Declarant’s assets, it would be inequitable to now allow Plaintiffs to pursue payment from those unit owners by operation of 33 M.R.S. § 1603-117.

CONCLUSION

For the foregoing reasons, the Remaining Movants’ Motion to Dismiss Counts I and III-V is Granted and Counts I and III-V are dismissed.

SO ORDERED.

The Clerk is instructed to enter this Order on the docket for this case by incorporating it by reference. M.R. Civ. P. 79(a).

0913012022 Dated: Judge, Business & Consumer Cﬁrt

BCD-CIV-2021-02

CHARLES MAPLES, et al.

Plaintiff(s) v. COMPASS HARBOR VILLAGE CONDO ASSOCIATION, et al.

Defendant(s) Party Name: Attorney Name:

Kathy Brown and Charles Maples Brendan Rielly, Esq. Jensen Baird Gardner Henry 10 Free Street PO Box 4510 Portland, ME 04112

Compass Harbor Village Condo Assn. Richard Silver, Esq. Timothy Culbetrson. Lanham Blackwell, Baber, PA Orono, LLC 133 Broadway Bangor, ME 04401