CRAIG WM. BLACK and CAMILLE R. BRILL, Appellants,
WHITESTONE ESTATES CONDOMINIUM HOMEOWNERS' ASSOCIATION, DONALD JUREWICZ and MARY E. JUREWICZ, Appellees.
from the Superior Court No. 3 AN-16-053 64 CI of the State of
Alaska, Third Judicial District, Anchorage, Gregory Miller,
Wm. Black, Eagle River, for Appellants.
B. Cushman, Law Office of James H. McCollum, LLC, Anchorage,
for Appellee Whitestone Estates Condominium Homeowners'
appearance by Appellees Donald and Mary E. Jurewicz.
Before: Bolger, Chief Justice, Winfree, Stowers, Maassen, and
BOLGER, CHIEF JUSTICE.
several years two condominium owners withheld a portion of
their dues in protest. Then beginning in 2014, they sent the
condominium association several payments, with instructions
to apply them to recent debts and current dues. In this
appeal the owners argue that they accrued no debts within the
statute of limitations because their payment directives were
binding. But we agree with the superior court's
conclusion that these payment directives were not effective
because the governing declaration allowed the association to
apply any payments to "the oldest balance due." We
affirm the superior court on this issue and on the other
issues the owners raise in this appeal.
FACTS AND PROCEEDINGS
Estates is a ten-unit condominium, adjacent to Ptarmigan
Boulevard, a public street, in Eagle River. The condominiums
are single-family homes on large parcels of land. Units 1 and
2 access Ptarmigan Boulevard by a short, paved drive; units 3
through 10 access Ptarmigan Boulevard by a longer drive.
Black, a member of the Alaska Bar who has represented himself
and his wife, Camille Brill, (collectively the Blacks)
throughout this litigation, purchased unit 1 in May 2002.
Whitestone has assessed monthly dues of $100 to pay for the
maintenance of both drives, mostly snow removal, since before
the Blacks purchased their unit. In 2004, relying on a legal
opinion he obtained as president of the board of the
condominium association,  Black claimed that this arrangement
violated the condominium's governing declaration. He
proposed an alternative approach: that each unit owner pay
the percentage of the annual snow removal expenses that
corresponded to the portion of paved area within the
association that serviced his or her unit. The unit owners
voted to reject this proposal in 2005. But the Blacks
nonetheless began withholding a portion of their assessed
dues, paying only what their share would have been under the
Whitestone sought an opinion from a second attorney about its
dues structure. This attorney concluded that the main drive
was a common element and that the association's dues
structure was permissible under the declaration. Nonetheless
the Blacks continued to withhold a portion of their assessed
dues until 2014.
February 6, 2014, the Blacks sent a letter to all unit owners
announcing their intent to end their dues protest. The letter
explained that an enclosed check for $3, 554.56 and an
earlier check for $265.44 "equal the sum of all monthly
association assessments for the 50 months from January 2010
through this month, with our intention being to resume
regular $ 100 monthly payments for the foreseeable
future." The Blacks clarified to the association's
treasurer in an email that they intended these payments
"to cover the $3, 800.00 that'[d] been assessed
beginning January 2010."
treasurer then sent an email to all unit owners on March 22,
2014, shortly before that year's annual meeting, saying
that his "records show everyone is paid through
12/31/2013 or further." At the annual meeting later that
month, the owners voted to disregard the Blacks'
directive and instead apply the lump-sum payment to the
couple's oldest debts first. The Blacks did not object,
either at the meeting or afterwards.
then on the Blacks sent monthly $100 checks to Whitestone
with instructions that they be applied to their current dues.
Whitestone cashed these checks until sometime after
litigation began, at which point they started returning them
to the Blacks.
filed a complaint for lien foreclosure in March 2016, seeking
to recover $4, 714.08 in unpaid assessments and fees from the
Blacks, interest on the unpaid amounts, and "full
their answer the Blacks asserted a statute of limitations
defense, alleging that they had fully paid all debts owed to
Whitestone for the previous three years and that recovery on
any debt older than that was time-barred. The Blacks also
filed numerous counterclaims. They alleged that Whitestone
had amassed surplus funds that it was required to distribute
to unit owners, that Whitestone had held meetings without
giving the Blacks proper notice, and that Whitestone had not
prepared and approved minutes for its board meetings, all in
violation of the declaration. The Blacks requested that the
court invalidate every action taken at a meeting for which
"ample advance notice was not first given," direct
Whitestone to "generate and approve minutes" for
each of its meetings since January 1, 2009, and award money
damages in the amount of the Blacks' pro rata share of
the alleged surplus. The Blacks also requested attorney's
fees and punitive damages, alleging that Whitestone willfully
failed to comply with the requirements of Alaska's Common
Interest Ownership Act.
filed an amended complaint in which it explicitly addressed
Black's statute of limitations defense, claiming that the
Blacks' payment directives were ineffective, that it had
applied their payments to their oldest debts first, and that
the debts on which it sought to recover were thus not older
than three years.
also sought declaratory judgment to determine whether the
owners of units 1 and 2 could legally be required to pay
assessments for the upkeep of the main drive. It alleged that
the Blacks had "asserted for years" that they were
not required to pay for the maintenance of the drive, while
also asserting that Whitestone should be responsible for the
maintenance of the smaller drive that served units 1 and 2.
The Blacks moved to dismiss this claim for declaratory
relief, arguing that no actual controversy existed over the
drives issue because they had abandoned their dues protest in
2014. The superior court denied this motion. Whitestone then
filed a motion for partial summary judgment on its
declaratory judgment claim, which the superior court
Trial and post-trial orders
case proceeded to a five-day bench trial on the remaining
issues in late August 2017. Whitestone presented the
testimony of multiple unit owners, while the Blacks called a
former unit owner who had been Whitestone's treasurer
when they made their 2014 payment. Both Black and Brill also
testified. In their closing argument, the Blacks agreed to
the dismissal of their counterclaims for an injunction, based
on the failure to provide notice of meetings, and for
punitive damages, saying that they did not "believe
there's evidence sufficient to award either of
the parties gave their closing arguments, the court issued a
decision on the record. The court stated that "[t]his
isn't a close call" and resolved all the issues in
Whitestone's favor, awarding it $11, 518.20 in damages.
It explained that this was "largely a credibility
case," and found "every one of [Whitestone's]
witnesses to be very, very credible." On the other hand,
the court said that it did not find Black's explanations
of his actions to be credible and found that Black was
"trying to sneak up on the association," which the
court considered an act of bad faith.
court found that Black had "created ... a decade of
animosity and mistrust amongst [himself] and [his] neighbors
and... w[as] simply not willing to abide by the
declaration" and accept the 2005 vote that rejected his
alternative dues structure. It explained that it concluded
from testimony that Black had "bullied everybody with
[his] position as a lawyer" and that this demeanor was
evident in his filings and presentation before the court. The
court further explained that despite Black's posturing,
his legal arguments were not as strong as he believed:
"[T]he facts establish that [he was] very assertive and
self-confident with the association, but under the light of
day here in this courtroom, [he] had no substance to that
Blacks filed a motion for reconsideration, which the superior
court denied with a written order. In it the court explained
the basis for its decision that Whitestone's claims were
not time-barred. It concluded that the Blacks' payment
directives were not binding on the association for two
reasons: first that they could not override a provision of
the declaration that gave "Whitestone ... the right to
apply payments received to the oldest debts first," and
second that Black had breached a fiduciary duty to the
association by not "warn[ing] his fellow board members
and unit owners what the effect of ignoring his payment
directives might be" while he was a board member from
2005 to 2009. For these reasons, the superior court found
that "while the Blacks may have made payment directives,
they made no effective payment directives."
(Emphasis in original.)
superior court issued its final judgment and a decree of
foreclosure in October 2017 and granted Whitestone full
attorney's fees in January 2018. In all, it granted
Whitestone a total monetary judgment of $ 132, 670.16: $ 11,
518.20 for unpaid assessments, associated late fees, and
interest (less $4, 382, which the Blacks had already paid
into the court registry) and $125, 533.96 in attorney's
fees and costs. The court placed a foreclosure lien in that
amount on the Blacks' property.
Blacks argue that the superior court erred when it determined
that their payment directives were ineffective, found that
they were not entitled to recover alleged surplus funds from
the association, denied their motion to dismiss the
declaratory judgment claim, included a disputed special
assessment in Whitestone's award, and determined ...