This case involved a dispute between a condominium owner (Owner), and her homeowners association (Association) over who was responsible for the cost of maintaining and repairing the heating, ventilation, and air conditioning system (HVAC System) that serviced Owners unit. Owner contended that, because the HVAC units and associated ductwork were located on the exterior, outside the walls of her unit, they were common area components that Association was responsible for repairing and maintaining. When Association refused to make necessary repairs to the HVAC System that serviced Owners unit, Owner filed suit against Association alleging claims for breach of contract (the governing documents), breach of fiduciary duty, negligence and wanton misconduct, and declaratory relief.
Associations defense to Owners action was that its declaration and bylaws state that the HVAC System that services the individual condominium units, including Owners unit, state that the HVAC System is part of the limited common areas, and as such, the unit owners are responsible for the maintenance and repair of the HVAC System. The trial court agreed with Association and granted Association summary judgment. Owner then appeal the trial courts judgment.
On review, the appellate court found the following with regard to Owners contentions:
Breach of Contract The declarations and bylaws for a condominium association are contracts between the association and owners of the units and, as such, they are subject to the traditional rules of contract interpretation. Where a contracts terms are clear and unambiguous, its interpretation is as a matter of law and may be adjudicated by summary judgment. Because the relevant portions of the declaration were unambiguous and plainly stated that owners are responsible for the maintenance and repair of the HVAC System, the appellate court found in favor of Association and affirmed the trial courts summary judgment.
Breach of Fiduciary Duty– Owner contended Association breached its fiduciary duty owed to her by failing to maintain and repair the HVAC System and acting in the best interests of the property owners. The appellate court found that it is the directors, and not the Association, that owe a fiduciary duty to owners. The court further found that under the governing documents Association did not have a duty to maintain and repair the HVAC System, thus it could not have breached a duty, or a fiduciary duty,
Negligence and Wanton Misconduct– Owner contended that Association acted negligently or in a wanton manner by maintaining an HVAC System that was of poor quality and design. The appellate court found that actionable negligence and claims of wanton or reckless conduct require a showing of duty. Without a duty to maintain or repair the HVAC System, Association could not have acted negligently or with wanton misconduct.
Declaratory Judgment– Owners final argument to the appellate court was that she was entitled to a declaratory judgment finding that Associations declaration was unreasonable because it required her to maintain and repair the HVAC System that was located outside of her condominium unit, and that imposed a great hardship on her. She also contended that when she purchased her unit, there was no meeting of the minds regarding the terms contained in Associations declaration. The appellate court found that there was no evidence that the provision in the declaration which required owners to be responsible for the HVAC System was unreasonable. The court also found that, irrespective of whether Owner read and understood the language in the declaration, under the law, parties who enter into contracts have a responsibility to learn the terms of the contract prior to agreeing to it. Further, a party to a contract is presumed to have read and understood the terms and is bound by the signed contract.
Based on the foregoing, the appellate court affirmed the summary judgment granted by the trial court.
Ohio Appellate Court decision (February 7, 2019)
See case decision: Elam_v._Woodhawk_Club_Condo._2019