Opinion
No. 426 C.D. 2011
06-11-2012
Wigwam Lake Club, Inc., Appellant v. Ivan D. Quintero
BEFORE: HONORABLE DAN PELLEGRINI, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
This case was assigned to the opinion writer before January 7, 2012, when Judge Pellegrini became President Judge.
Wigwam Lake Club, Inc. (the Association) appeals from the February 8, 2011, order of the Court of Common Pleas of Monroe County (trial court) awarding the Association dues and assessments, costs, and legal fees, in the total amount of $4,903.17. We affirm.
The Association brought this action to recover dues and assessments in the amount of $2,113.70 from Ivan D. Quintero, the owner of Lot 116 and a one-half owner of Lot 115 in the Association's residential subdivision. The Association sent Quintero invoices for dues and assessments in accordance with its by-laws and the restrictions and covenants in Quintero's chain of title. After Quintero did not make payment of a special assessment of $260 on October 19, 2007, he received four invoices reflecting finance charges added to his account. On April 1, 2008, Quintero received an invoice for the 2008-09 annual assessment of $200 and another $260 installment payment for a special assessment, bringing his total owed to $752.16. (R.R. at 2.) On May 2, 2008, he was billed $12.80 in finance charges. On May 6, 2008, the Association's attorney sent Quintero a letter stating that a $50 attorney's fee had been added to the balance and that he should explain his reason for non-payment or pay $802.16 immediately in order to avoid incurring additional attorney's fees. (R.R. at 1; N.T. 9-10.) At all relevant times, the Association had a continuing lien on Quintero's property, pursuant to both statute and the Association's by-laws. In relevant part, section 8-02 of the Association's by-laws states: "If dues or assessment are not paid on the date when due, it shall be regarded as delinquent and ... thereupon shall become a continuing lien on the Lot ... which shall bind such property.... If the dues and assessment is not paid within thirty (30) days after the due date, the Association may bring an action at law against the owner personally obligated to pay the same or to foreclose the lien against the property...." (R.R. at 79.) This provision also authorizes the assessment of interest, reasonable attorney's fees and costs. (Id.)
The dissent incorrectly states that this was a reminder letter from the Association's president.
Section 3315 of the Uniform Condominium Act, 68 Pa. C.S. §3315.
Quintero responded by letter dated May 29, 2008, and, in his first response to the Association's attorney, he specifically acknowledged the validity of the debt. (R.R. at 4.) However, Quintero also stated in the letter that he was unable to make payment in full at that time due to his "economic situation as the sole provider for my family of six." (Id.)
In response, the Association's counsel informed Quintero that the Association would agree to a payment plan contingent upon his signing an "Installment Note Agreement" and that failure to sign and return the same would result in added attorney's fees, costs and interest. Quintero entered into an agreement with the Association to pay $762.04 owed for dues and assessments in monthly installments of $135.00, until that amount was paid in full, thereby acknowledging the validity of the debt for a second time on June 18, 2008. (R.R. at 10-12.)
The agreement's attorney's fees clause stated that default would result in the assessment of a reasonable attorney's fee of twenty-five percent, or the amount actually incurred, whichever is higher, added to the amount due under the note. (R.R. at 7.)
Quintero made only two payments. On October 14, 2008, after Quintero defaulted under the terms of the installment note, the Association filed a civil complaint against him with the Magisterial District Court (MDC) for the amount of $1,458.57, representing $958.47 in assessments and interest and $500 in attorney's fees and costs. (R.R. at 16.) When service of that complaint by certified mail was returned as unclaimed, the Association was advised that personal service would be needed in order to proceed. However, the constable was not able to effectuate personal service, and the complaint was dismissed without prejudice. Thereafter, the Association, through its counsel, made Freedom of Information requests for Quintero's address from the Monroe County Tax Assessment Office, the Monroe County Voter Registration Office, and the United States Post Office; the responses confirmed that Quintero's address was unchanged.
On January 26, 2009, the Association filed a complaint with the trial court, (R.R. at 44-87), seeking dues and assessments in the amount of $2,113.70, as well as interest, costs of suit, and attorney's fees. Quintero was served with the complaint by the county sheriff's office. After a ten-day default notice was served upon him, Quintero filed a pro se answer, asserting that he did not owe the Association dues and assessments because the Association did not perform regular maintenance or repairs on the roads or common areas of Wigwam Lake Club. Quintero also asserted in the answer that he did not owe the amount sought because he had paid dues and assessments to the Association that were not credited to his account.
The Association then served Interrogatories and Requests for Production of Documents upon Quintero. When Quintero failed to timely respond, the Association filed a motion to compel, and, on April 28, 2009, the trial court issued a rule returnable order. On May 14, 2009, the trial court granted the Association's motion to make the Rule absolute and entered an order directing Quintero to answer the discovery requests within twenty days or suffer sanctions. Quintero did not comply or otherwise communicate with the Association, which subsequently filed a Motion for Discovery Sanctions. The trial court scheduled a hearing on this motion for July 14, 2009. Quintero appeared, and the Association agreed to a seven-day extension of time for Quintero to respond to the discovery requests.
Quintero answered the interrogatories, asserting that he owed only $1,034.00 to the Association, and he supplied several documents to the Association's counsel, but none supporting that contention. In August and September 2009, the Association took depositions of Quintero and his wife. During the depositions, both of the Quinteros acknowledged the debt, but both indicated that they were experiencing financial difficulties and were unable to meet all of their financial obligations. On November 11, 2009, after completing the depositions, the Association filed a motion for summary judgment, on the issue of liability only, which the trial court granted on January 4, 2010.
Mrs. Quintero testified that she thought her husband tried his best to adhere to the terms of the installment agreement. She acknowledged that her husband believed that roads were not being properly maintained or repaired by the Association. She also believed that while she and her husband were responsible for assessments, the Association should be responsible for its attorneys" fees and costs; however, she admitted that she was not familiar with the law in this area. Mrs. Quintero added that she and her husband had suffered a financial setback and were currently trying their "very best" to catch up with all of their bills. (R.R. at 199-208.)
In his subsequent deposition, Mr. Quintero testified that he would agree to his wife's testimony concerning payments made by them and by the Association's records concerning the amount they owed. (R.R. at 24546, 253.) He further stated that, aside from his beliefs concerning road maintenance and responsibility for attorneys' fees, the Quinteros "just got into a financial hardship and became basically late on every bill or anything we had to pay." (R.R. at 252.)
After summary judgment was entered, the Association listed the matter for arbitration on the issue of damages. Quintero did not appear at the scheduled arbitration hearing. On March 31, 2010, the arbitration panel issued an award in favor of the Association and against Quintero in the amount of $4,073.00.
The Association next filed an appeal of the arbitration award with the trial court. The trial court held a non-jury trial on October 25, 2010; Quintero did not appear. At the time of the trial, the Association indicated that Quintero owed $2,113.70 in assessment fees and dues, plus 15% interest from January 5, 2009. The Association requested judgment in the total amount of $10,419.19, which included costs and attorney's fees.
In support of its request, the Association presented the testimony of its president, Tony Kojeszewski. Kojeszewski stated that he had known Quintero, who was a neighbor, for about seven years. Kojeszewski related the Association's efforts to recover the amounts owed from Quintero, as outlined above. He explained that the Association appealed the arbitrator's award because it represented only 50% of the amount the Association sought to recoup. (R.R. at 460-61.) Kojeszewski also stated that the Association's bylaws set $150.00 as a reasonable hourly attorney fee rate and that the Association had been billed for attorney's fees at the rate of $95.00. He identified the invoices received by the Association from its counsel for pursuing its claim and stated that each had been paid.
In response to the trial court's questions, Kojeszewski testified that the Association chose not to execute on real estate or personal property after obtaining a judgment against Quintero. He explained that real property is difficult to move and might involve payment of taxes and other costs and that, based on past experience, the Association had reason to believe that executing on personal property would not result in a sufficient financial return. He indicated that Association members did not personally contact Quintero in order to avoid a confrontation. (R.R. at 465-67.)
The Association also offered the testimony of John C. Prevoznik, a local attorney who practices in the area of municipal law and has represented homeowners associations. Prevoznik stated that he reviewed the invoices for the Association's legal fees as well as the pleadings, correspondence, transcripts, and other supporting documents, and he also reviewed the relevant statute and applicable case law. Prevoznik opined that the attorney's hourly rate was reasonable. However, from his review of the file, Prevoznik was not aware that the Association knew Quintero was living at the property. He also testified that the motion for summary judgment should have brought an end to the case. However, he added that there is no good method that allows a community association to perform its fiduciary duty to collect its fees. (R.R. at 472-82.)
Section 3315(f) of the Uniform Planned Community Act, 68 Pa. C.S. §3315(f), provides that "[a] judgment or decree in any action or suit brought under this section shall include costs and reasonable attorney's fees for the prevailing party."
The trial court observed that the Association's attorney apparently represents a number of associations and files motions to compel on a daily basis, adding that they are all the same, and are all boilerplate. (R.R. at 483.) Prevoznik stated that he had represented an association with thousands of lots for approximately four years and filed only three or four motions to compel during that period. (Id.)
The trial court concluded that the assessment for dues and maintenance costs was proper, pursuant to the by-laws and restrictive covenants in Quintero's deed. With respect to the Association's request for attorney's fees and costs, the trial court concluded that the hourly fee of $95 billed was reasonable but that the number of hours spent on this case were unnecessary.
The trial court stated that the Association "had many available remedies to adequately resolve the problem" but chose not to pursue them. (Trial court op. at 6.) Among other things, the trial court observed that after the Association had problems effectuating service of the complaint filed with the district magistrate, it formally sought information concerning Quintero's address even though the Association's witness acknowledged knowing where Quintero lived and seeing him at his property. Then, instead of using the information it received to have Quintero served at the district magistrate level, the Association filed a complaint in the court of common pleas. According to the trial court, "This is where the costs and fees really began to soar." (Trial court op. at 7.) The trial court cited with disapproval the Association's actions in deposing Quintero's wife, noting that she is not a party to this action; the Association's failure to seek damages in its motion for summary judgment; and, finally, the Association's appeal of the arbitrator's award.
From the fact that Quintero had not moved, the dissent infers that he purposefully evaded service of the district magistrate complaint. How, such factual inferences are beyond the scope of our appellate review. Commonwealth v. Stuber, 822 A.2d 870 (Pa. Cmwlth. 2003) (since the proceeding before the trial court was de novo, the credibility and weight of all of the evidence was for the trial court judge, as fact finder).
Here, the trial court may have considered other possibilities suggested by the evidence, such as whether the Quinteros were at work. Although Mr. Quintero was never asked for information concerning his finances or employment, Mrs. Quintero testified that she worked at a school as a tutor. Moreover, in a proper exercise of its factfinding authority, the trial court apparently inferred from the Association's evidence that there was no reason to suspect that Quintero no longer lived at the property and thus there was no reason to verify his address.
In concluding, the trial court expressed amazement that the Association "doggedly litigated this case to such an extent that [the Association] now requests over $10,000.00 from [Quintero] when the claim was originally valued at $802.16." (Trial court op. at 7-8) (footnote omitted). After determining that the amount of attorney's fees sought were out of proportion to the amount sought in dues and fees, the trial court awarded the Association a total of $4,903.17, with interest, itemized as follows: assessments and dues - $1965.00; cost of suit - $572.67; and attorney's fees - $2365.50.
On appeal to this Court, the Association argues that it is entitled to the total amount of legal fees and costs it incurred as a result of the actions or inactions of Quintero. The Association asserts that the trial court erred in arbitrarily determining the amount of attorney's fees to be awarded where there was expert testimony that the attorney's fees and costs incurred were reasonable and the trial court cited no legal basis for not awarding those fees and costs in full.
While there is no question that the Association is entitled to recover "reasonable attorney's fees," 68 Pa. C.S. §3315(f), it is well settled that the "reasonableness" of attorney fees is a matter committed to the sound discretion of the trial court, and an appellate court will not alter such a decision unless there has been a clear abuse of discretion. LaRocca Estate, 431 Pa. 542, 246 A.2d 337 (1968); Township of South Whitehall v. Karoly, 891 A.2d 780 (Pa. Cmwlth. 2006); Hart v. Arnold, 884 A.2d 316 (Pa. Super. 2005). The trial court's discretion with respect to the reasonableness of attorney's fees includes the authority to reduce the fee claimed and allow only such sum as the court deems reasonable. See McMullen v. Kutz, 603 Pa. 602, 985 A.2d 769 (2009) (holding that where a contractual provision provides for a breaching party to pay the attorney's fees of the prevailing party in a breach of contract case, the trial court may consider whether the fees claimed to be incurred are reasonable and to reduce the fees claimed if appropriate); and The Ridings at Whitpain Homeowners Association v. Schiller, 811 A.2d 1111 (Pa. Cmwlth. 2002) (holding that the trial court did not abuse its discretion in awarding a homeowners association only a portion of the legal expenses it incurred in an enforcement action and noting that appellate review is limited to determining whether the trial court palpably abused its discretion in making a fee award).
In LaRocca Estate, our Supreme Court explained:
The amount of fees to be allowed to counsel, always a subject of delicacy if not difficulty, is one peculiarly within the discretion of the court of first instance. Its opportunities of judging the exact amount of labor, skill and responsibility involved, as well as its knowledge of the rate of professional compensation usual at the time and place, are necessarily greater than ours, and its judgment should not be interfered with except for plain error. The allowance or disallowance of counsel fees rests generally in the judgment of the court of first instance and its decision will not be interfered with except for palpable error.LaRocca, 431 Pa. at 548-549, 246 A.2d at 340.
The court further instructed that, in determining whether attorney's fees are reasonable, a trial court must consider numerous factors, including the following:
the amount of work performed; the character of the services rendered; the difficulty of the problems involved; the importance of the litigation; ... the degree of responsibility incurred; ... the professional skill and standing of the attorney in his profession; the result he was able to obtain; and, very importantly, the amount of money or the value of property in question.Id., at 546, 246 A.2d at 339 (emphasis added). Having reviewed the record, we are satisfied that the trial court gave due consideration to the factors enunciated in LaRocca. Therefore, we are left to decide only whether the record reflects that the trial court's award reflects a palpable abuse of discretion.
The trial court began its analysis of this issue by citing Quintero's May 2008 letter to the Association's counsel stating that he could not afford to pay the amount owed in full. (Trial court op. at 6.) In addition, the trial court's observation that the Association did not have to limit its motion for summary judgment to the issue of liability because damages could have been established at that time, (Finding of Fact No. 21), is supported by the Association's motion and its supporting brief, which specifically states that "[t]he issue of damages will need to be heard given that Defendant is responsible for Plaintiffs' attorneys fees and costs under the Uniformed Planned Community Act." (R.R. at 402 (emphasis added).) Indeed, in both its motion for summary judgment and supporting brief, the Association asserted that the amounts owed had been conceded by the Quinteros and were not in dispute.
The record indicates that approximately $2400 in attorney's fees and costs, or roughly one third of the total sought, was incurred after the motion for summary judgment was filed. (R.R. at 494-503.)
The trial court apparently concluded that the hours spent litigating this matter did not bring the Association any closer to collecting its debt, but merely increased the amount it was owed. The trial court cited its question to the Association president as to how it planned to collect over $10,000.00 from Quintero when it was unable to collect $802.16 that Quintero owed before this action, to which the Association president had no response. (Trial court op. at 8.) Finally, the trial court concluded that "[t]he attorney's fees sought in this matter are out of proportion to the amount [the Association] seeks to collect in dues and fees from [Quintero]." (Id.) In summary, the trial court stated that, "[i]n reality, the entire homeowner's association will foot the bill for these costs and attorney's fees, for a judgment it may not even be able to collect from [Quintero]. [The Association] may lose the war, but it is intent on winning this battle." (Id.)
The Association asserts that the trial court erred and that the present matter is analogous to the facts presented in Mountain View Condominium Association v. Bomersbach, 734 A.2d 468 (Pa. Cmwlth. 1999). In that case, we affirmed a trial court's award of $46,548.64 in legal fees to an association that initially sought to collect a past due assessment of $1,200 and $500 in legal fees from a property owner. In Mountain View, the property owner not only refused to pay the assessment owed, but she also filed a counter claim against the association and its officers and "[greeted the association's complaint] with a veritable pleadings onslaught which ... would have rendered any competent 'collection attorney' shell-shocked." Id. at 470. Although the Association contends that Quintero's conduct was akin to the legal "trench warfare" tactics described in Mountain View, the record does not reflect that any action or inaction on Quintero's part was similarly outrageous. Here, there is no evidence that Quintero similarly refused to pay a debt that he was able to pay, and no evidence to suggest that Quintero "flaunted the Association's effort to collect at every turn" after he acknowledged the debt in 2008. In affirming the trial court's award of attorney's fees, in Mountain View we stressed that we did not opine whether it was reasonable, generally, for a party to expend a greater amount in attorney's fees than the amount it is attempting to collect and that our holding is to be limited to the specific facts of that case. Id. at 470 n.5. For these reasons, our holding in Mountain View does not compel the conclusion that the trial court abused its discretion in the present case.
In Mountain View, a condominium owner stopped paying her monthly assessment in 1988 due to a dispute with the condominium association. When her delinquency reached $1,200 the association filed suit to collect the past due assessment. The owner subsequently agreed to pay the $1,200 but refused to pay the association's attorney's fees, which then totaled $500. The association did not accept the owner's offer, instead choosing to enforce its right to collect the full $500 in attorney's fees it had incurred. The owner then raised her offer to $1,400, but the association again declined because it did not provide for the full amount of attorney's fees. In November 1990, the owner paid her delinquent assessment of $3,831.49 in full. However, she still refused to pay the association's attorney's fees, which by then were over $3,000. Ten years later, the amount of the association's attorney's fees was $46,548.64. The trial court ordered the owner to pay that amount to the association, with interest and costs.
The trial court in Mountain View rejected the owner's argument that the attorney's fee was unreasonable where the original assessment was only $1200. The trial court recognized that the owner's argument made sense, but rejected it based "on the facts of this case." Id. at 470. Specifically, the trial court noted that the owner responded to the association's claim by filing a counterclaim seeking to join individual directors of the association, "a claim that took on a life of its own." Id. at 471. The trial court further noted that the owner had numerous opportunities to reevaluate her position and end the litigation. In this regard, the trial court pointedly criticized the six pages of docket entries that followed an arbitrators' award in favor of the association.
The dissent believes that there is little difference between Quintero's conduct and the conduct at issue in Mountain Home. However, as previously indicated, the credibility and weight of the evidence are within the sole prerogative of the trial judge as factfinder in this case. Stuber.
Accordingly, this case is governed by the holding set forth in LaRocca, wherein our Supreme Court affirmed the Orphan Court's award of $7,000.00 in attorney's fees, rather than the $10,600.00 requested, stating that, "[b]y now it is hornbook law that the reasonableness of the fee is a matter for the sound discretion of the lower Court and will be changed by an appellate Court only when there is a clear abuse of discretion." Id., 431 Pa. at 547, 246 A.2d at 337. The court pointedly added that, "while the services of the attorneys consumed a tremendous amount of time and produced a very beneficial result for their client ... the small amount of money must be taken into consideration in fixing their fee; and, we repeat, we find no clear or palpable error in [the] award." Id. at 549, 246 A.2d at 340 (emphasis added). Here, the trial court expressed amazement that the Association pursued this case to such an extent that it now requests over $10,000.00 expended to recover an original claim for $802.16. Because the record does not reflect that the trial court's order constitutes a clear abuse of discretion, we must affirm.
The dissent opines that the Association's conduct in litigating this action was in all respects reasonable. However, this evaluation of the Association's conduct is irrelevant; our standard of review of the trial court's award does not encompass the question of whether we agree with the trial court's decision, but is limited to determining whether the trial court's decision reflects a palpable abuse of its discretion. LaRocca. In making that determination, we rely on the Supreme Court's directive to consider the amount of work performed, the character of the services rendered, the result obtained, and, "very importantly, the amount of money or the value of the property in question." LaRocca. 431 Pa. at 546, 246 A.2d at 339 (emphasis added). See also Hensley v. Eckerhart, 461 U.S. 424 (1983) (the district court has discretion in determining the amount of a fee award and should exclude from its calculation hours that were not reasonably expended.) The trial court did not deviate from that analysis.
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 11th day of June, 2012, the order of the Court of Common Pleas of Monroe County, dated February 8, 2011, is affirmed.
/s/_________
PATRICIA A. McCULLOUGH, Judge BEFORE: HONORABLE DAN PELLEGRINI, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge OPINION NOT REPORTED DISSENTING OPINION BY JUDGE BROBSON
I respectfully dissent. Though the Court of Common Pleas of Monroe County (trial court) under these circumstances is vested with a great deal of discretion in determining the reasonableness of attorneys' fees, I would reverse and remand this matter for a new calculation of the attorneys' fees and costs award.
On appeal, Appellee Wigwam Lake Club, Inc. (Owners' Association) contends that it acted reasonably in pursuing collection efforts against Appellee Ivan D. Quintero (Quintero), and that the fees and costs that it incurred were based, in large part, on the action (or inaction) of Quintero. The Owners' Association also contends that the trial court's assertion that Owners' Association failed to prove the amount of fees and costs incurred is not supported by the record. On both counts, I would agree. Thus, unlike the majority, I believe that this Court's decision in Mountain View Condominium Association v. Bomersbach, 734 A.2d 468 (Pa. Cmwlth. 1999), should control.
Service of Original Process
As the trial court found, Quintero has an ownership interest in two (2) lots. (Finding of Fact (F.F.) # 2.) The Owners' Association sent Quintero "several" invoices for dues and assessments related to those lots, along with copies of the Owners' Association's bylaws and restrictions and covenants in the chain of title for Quintero's properties. (Id. #3.) Quintero, however, did not pay. (Id. #4.)
The trial court's Findings of Fact, Conclusions of Law, and Verdict (collectively, the Decision) are included in the Reproduced Record (R.R.) at pages 544 through 548.
When Quintero did not pay, according to Tony Kojeszewski (Kojeszewski), president of the Owners' Association, the Owners' Association sent a May 6, 2008 letter, reminding Quintero to pay. (Notes of Testimony (N.T.) at 9-10.) Quintero responded to the letter, requesting a payment plan. The Owners' Association agreed. Quintero signed an Installment Note, agreeing to make monthly payments until his balance with the Owners' Association was paid in full. He made only one payment of $135.00 under the Installment Note. (F.F. #5.)
The Notes of Testimony are included in the Reproduced Record at pages 427 through 485.
After Quintero failed to honor the terms of the Installment Note, the Owners' Association filed a complaint with a magisterial district justice (MDJ) to collect the amount owed. (Id. #6.) Though it appears in the record that everyone knew where Quintero resided, efforts to serve Quintero with the MDJ complaint at his residence, both by the MDJ and then by a constable, were unsuccessful. Accordingly, the MDJ complaint was dismissed without prejudice. (Id. #7.)
In light of the failure to effect service at what was believed to be Quintero's residence, the Owners' Association took steps to verify Quintero's residency through the United States Postal Service and the county tax assessment office. (Id. #8.) Thereafter, the Owners' Association commenced a new action in the trial court to collect the unpaid amounts, including interest, costs of suit, and attorneys' fees. (Id. #9.)
At this point in the nonjury trial, the trial court interrupted questioning of Kojeszewski by the Owners' Association counsel, leading to the following exchange between the trial court judge and Kojeszewski:
THE COURT: . . . Excuse me, did anybody go down and knock on the door, and ask if they were still there?(N.T. at 20-21.) This exchange, coupled with the information the Owners' Association received from government sources, strongly suggests that Quintero purposefully evaded service of the MDJ complaint.
THE WITNESS: Are we talking about from the association?
THE COURT: Yes.
THE WITNESS: I see their car in and out. I know their kids, as far as who goes to the bus stop, that kind of thing.
THE COURT: But my question is, did anybody go down and knock on the door? Obviously, you knew they were still there, right?
THE WITNESS: Right.
THE COURT: Okay.
According to the trial court, "[t]his is where the costs and fees really began to soar." (Decision at 7.) True, but why? In its Decision, the trial court attributes the escalating legal fees and costs on overzealous action by the Owners' Association. Specifically, the trial court observed:
Plaintiff incurred the costs of filing and service by the Monroe County Sheriff's Department, when from the beginning, Mr. Kojeszewski, Plaintiff's President, was a neighbor of Defendant and was aware of Defendant's address.(Decision at 7 (emphasis added).) A review of the transcript shows that the trial court was very skeptical of Owners' Association's decision to do so.
During the trial, as the Owners' Association's counsel attempted to lay out each step it took in litigation and why for purposes of supporting the reasonableness of the fee request, the trial court and counsel for the Owners' Association engaged in the following exchange:
THE COURT: I will be very happy to take judicial notice of all the pleadings that were already filed in this matter, which I signed.
MR. HARDY: Very good, Your Honor.
THE COURT: Again, the bottom line is reasonableness.
MR. HARDY: I understand, Your Honor.
THE COURT: Good.
MR. HARDY: I understand that is going to be your determination that you are going to be making, and that's why I believe it's clear, we need a clear record to establish what was done and then it becomes a question of whether or not it was reasonable.
THE COURT: Correct, I have already been told by your witness that they knew where [Quintero] was living, they knew he was living there, but in spite of that, they created a lot of fees. I don't know if that's reasonable.
MR. HARDY: Well, Your Honor, I guess that begs the question of what is a lot of fees and when
we get to the question of what I charge and what was done.(R.R. at 452-53 (emphasis added).)
THE COURT: Any fees.
The trial court's Decision, read in conjunction with the notes of testimony, shows that the trial court believed it unreasonable for the Owners' Association to serve the trial court complaint by sheriff when, in fact, the Owners' Association knew where Quintero lived. This act of unreasonableness was, apparently, one of the reasons why the trial court limited the Owners' Association fee award. This ground, however, is not grounded in the law. Indeed, it is contrary to Rules 400(a) and 410 of the Pennsylvania Rules of Civil Procedure, which require service of original process in this type of action by sheriff. Thus, I believe it was an error of law, or an abuse of discretion, by the trial court to base its fee decision (in part, if not in whole) on the Owners' Association's use of the Monroe County Sheriff to serve original process. This Court should correct the trial court's error in this appeal.
Discovery
After service of the complaint by sheriff, Quintero failed to file a responsive pleading within twenty (20) days, as required under Rule 1026(a) of the Pennsylvania Rules of Civil Procedure. The Owners' Association thus provided notice of intent to enter a judgment by default, pursuant to Rule 237.1(a)(2) of the Pennsylvania Rules of Civil Procedure. (R.R. at 89.) Only after that notice did Quintero appear, pro se, and file an answer to the complaint. (R.R. at 92-93.) In his answer, Quintero alleged the following additional facts: (1) that the Owners' Association failed to perform required maintenance and repairs; (2) that the Owners' Association did not properly invoice Quintero for dues and assessments and failed to take into account payments made; and (3) that the total amount claimed due ($2,113.70) is disputed. (R.R. at 93).
A review of the answer shows that it is clearly deficient under Rules 1029 and 1030 of the Pennsylvania Rules of Civil Procedure. Specifically, Quintero failed in his answer to admit or deny each statement of fact in the Owners' Association complaint. Pa. R.C.P. No. 1029(a). Quintero also fails to plead his defenses, including additional facts, under the heading "New Matter." Pa. R.C.P. No. 1030(a). The Owners' Association, nonetheless, did not file preliminary objections. Instead, it proceeded as if Quintero's answer was sufficient under the rules, when it clearly was not. It thus appears to me that the Owners' Association wisely exercised restraint.
Faced with new and disputed issues of fact relevant to the Owners' Association's collection efforts, the Owners' Association served written discovery on Quintero pursuant to Rules 4005 and 4009.1 of the Pennsylvania Rules of Civil Procedure. (F.F. #12.) In its interrogatories, of which there were only five (5), the Owners' Association sought information about Quintero's asserted defenses. (R.R. at 94-104.) In its document requests (of which there were only eight (8)), the Owners' Association sought documents related to its claims and Quintero's asserted defenses. (R.R. at 105-10.) Quintero did not respond to the discovery requests. (F.F. #13.)
The Owners' Association then filed a motion to compel, pursuant to Rule 4019 of the Pennsylvania Rules of Civil Procedure. (R.R. at 111-32; F.F. #14.) Counsel for the Owners' Association included a cover letter with its motion to compel, in which it wrote to Quintero:
Please review the Motion and thereafter either pay the Association the amount due and owing in full or supply the information sought in the Interrogatories and Request for production of Documents promptly.(Id. at 111 (emphasis added).) The trial court issued a Rule Returnable Order on the Motion to Compel. (Id. at 133; F.F. #15.) Quintero, however, did not respond to the Court's Order, directing a response to the motion to compel. (F.F. #16.)
In the event you fail to undertake either endeavor, our office will be left with no alternative but to proceed. Thus, please be guided accordingly.
The Owners' Association filed a motion to make the rule absolute, as provided for in the trial court's Rule Returnable Order. (R.R. at 133.) Counsel for the Owners' Association served the motion to make the rule absolute on Quintero with a cover letter, which provided, in part: "Should you have any questions concerning the same, please do not hesitate to contact us. Thank you." (Id. at 135.)
In this regard, the trial court's Order provided: "If no Answer is filed on or before the return date, the moving party may file a Motion to Make the Rule Absolute. A Motion to Make Rule Absolute shall evidence compliance with the service requirements of 43 J.D.R.C.P. 206 (4,5)."
The trial court granted the motion to make rule absolute and, by Order dated May 14, 2009, compelled Quintero to answer, without objection, the discovery requests within twenty (20) days "or suffer appropriate sanctions." (R.R. at 141; F.F. #15.) Again, Quintero did not respond. (F.F. #16.)
The Owners' Association then filed a motion for sanctions. (Id.) The Owners' Association served the motion for sanctions on Quintero and in the accompanying cover letter wrote, inter alia: "Please either issue payment in full to our office immediately or handle this Motion accordingly. Thank you." (R.R. at 143.) The trial court scheduled a hearing on the motion to compel and directed the Owners' Association to make personal service of the order on Quintero, which the Owners' Association did by process server. (R.R. at 150-52.)
Quintero actually appeared at the hearing on the motion to compel. (F.F. #18.) At the hearing, the Owners' Association agreed to provide Quintero an additional seven (7) days to supply the discovery being sought, and the Court issued an Order to that effect. (R.R. at 154; F.F. #18.)
Quintero served his discovery responses on the Owners' Association. Specifically, in his Answers' to Interrogatories (R.R. at 155-56), Quintero alleged that his best estimate of the sum for which he believed he was indebted to the Owners' Association was $1,034.00, an amount less than what the Owners' Association sought. Importantly, Quintero also identified his wife, Yvette A. Quintero (Mrs. Quintero), as a person with knowledge of facts relevant to Quintero's claims and defenses. At this point, Owners' Association deposed Quintero and his wife.
In its Decision, the trial court appears to take issue with this entire process—from discovery requests to deposition, citing it as an example of where the trial court believes the Owners' Association unreasonably ran up the costs of litigation:
[A]fter having filed in Common Pleas Court, [the Owners' Association] sought discovery and, in due course, sanctions for Defendant's failure to respond to such discovery requests. After moving for sanctions against Defendant, Plaintiff's counsel not only deposed Defendant but also deposed Defendant's wife, who is not a party to this action. Plaintiff's counsel was well aware that Defendant was proceeding pro se and was unfamiliar with these legal maneuvers.(Decision at 7.) I must respectfully take issue with the trial court's reasoning.
I see the Owners' Association's decision to conduct discovery as not only reasonable, but necessary, where the pleadings on their face show genuine issues of material fact relative to the matter before the trial court for disposition. I also see no error in a litigant pursuing relief from the trial court where the party opponent fails to respond, and in this case completely ignores, discovery requests and orders of the court related to those requests. Indeed, if the trial court felt such a tack was folly, I am compelled to wonder why the trial court granted the Owners' Association's discovery motions in the first place. I also see no error in the Owners' Association's decision to depose Mrs. Quintero, because Quintero identified her as a person with knowledge in his discovery responses. That she is not a named party is simply irrelevant.
Finally, there is nothing in the record to support the trial court's finding that Quintero, because of his pro se status, was unfamiliar with "these legal maneuvers." As noted above, the Owners' Association at all times acted consistently with the governing rules of procedure. I also note above instances in the record where the Owners' Association's counsel, in cover letters, laid Quintero's options out for him in very clear language, even inviting Quintero to call him if Quintero had any questions. As our Supreme Court has noted:
The right of self-representation is not, as the appellant would have it, an absolute right for a defendant to proceed as he sees fit. A defendant appearing pro se is subject to the same rules of procedure as is a counseled defendant; he has no greater right to be heard than he would have if he were represented by an attorney.Commonwealth v. Abu-Jamal, 521 Pa. 188, 200, 555 A.2d 846, 852 (1989); see also Green v. Harmony House N. 15th St. Housing Ass'n, Inc., 684 A.2d 1112, 1114 (Pa. Cmwlth. 1996) ("The fact that [the appellant] decided to be her own lawyer does not excuse her from failing to follow the rules of civil and/or appellate procedure.") The trial court's analysis runs contrary to this precedent.
For these reasons, I believe it was an error of law, or an abuse of discretion, by the trial court to base its fee decision (in part, if not in whole) on the Owners' Association's decision to pursue discovery and discovery sanctions when Quintero ignored the initial discovery requests. I also believe it was an error of law, or an abuse of discretion, to limit the Owners' Association fee recovery based on a presume ignorance of the rules by Quintero premised only on his pro se status. This Court should correct the trial court's error in this appeal.
Summary Judgment
After taking the depositions of Quintero and his wife, wherein they (a) admitted owing the Owners' Association the unpaid fees and assessments and that all amounts he paid had been duly credited by the Owners' Association, but (b) disputed the amount owed in interest and attorneys' fees claimed by the Association (R.R. 396-97), the Owners' Association moved for summary judgment. (R.R. at 392-403.) In its motion, the Owners' Association asked for summary judgment on liability, but noted that damages could only be determined after a hearing. (Id. at 402.) The trial court heard oral argument on the motion for summary judgment. Quintero did not appear, nor does it appear he ever filed an answer to the motion. The trial court granted summary judgment by Order dated January 4, 2010.
In its Decision now on appeal, the trial court notes that it only granted summary judgment on the issue of liability "even though damages could have been established at that time." (F.F. #21.) After the trial court granted summary judgment on liability, the Owners' Association listed the issue of damages for arbitration. (F.F. #22.) Quintero failed to appear for the scheduled arbitration hearing. (F.F. #23.)
On March 31, 2010, an arbitration panel awarded the Owners' Association $4,073.00 (F.F. #24), which the Owners' Association contends is less than fifty percent (50%) of the total amount of damages it was due. (R.R. at 409.) The Owners' Association appealed to the trial court. (F.F. #25.) The trial court scheduled the matter for a nonjury trial on October 25, 2010. Again, Quintero failed to appear. (F.F. #27.) At trial, the Owners' Association sought unpaid fees and dues from Quintero of $2,113.70, plus fifteen percent (15%) interest from January 5, 2009. The Owners' Association also sought attorneys' fees and costs, which, if approved, would bring the total judgment amount to $10,419.19. (F.F. #28.) In its Decision, the trial court awarded $1,965 in assessments and dues, $572.67 in costs of suit, and $2,365.50 in attorneys' fees, for a total damages award of $4,903.17. The trial court also awarded interest.
This brings me to the next instance where the trial court suggests that the Owners' Association needlessly ran up the legal expenses in this case. The trial court suggests that the Owners' Association should have also moved for summary judgment on damages, rather than on liability only, because damages "were easily ascertainable at the time." (Decision at 7.) Although I question the trial court's reasoning, I see no place in the Owners' Association brief on appeal where the Owners' Association attempts to refute the trial court's factual finding (F.F. #21) in this regard. I am thus compelled to accept it and affirm the trial court, to the extent it concluded that any legal fees and costs incurred by the Owners' Association after it obtained summary judgment in its favor were unreasonable.
The only discovery of record in this case at the point of the motion for summary judgment was Quintero's answers to written discovery and the depositions of Quintero and his wife. After the depositions, the Owners' Association believed that Quintero still disputed the amount of attorneys' fees and interest due the Owners' Association. (R.R. at 396-97.) Accordingly, although the amount of unpaid fees and assessments may have been ascertainable, the total amount of damages still appeared to be in dispute. It is not clear to me how the Owners' Association could have made an evidentiary presentation on this disputed question at the summary judgment phase. Indeed, the only way I see that the Owners' Association could have enhanced the record for summary judgment would be through the submission of testimonial affidavits, which are generally insufficient to show the absence of a genuine issue of material fact. See Pa. R.C.P. No. 1035.2 (citing Nanty-Glo v. American Surety Co., 309 Pa. 236, 163 A. 523 (1932)).
Mountain View
The majority refuses to apply Mountain View, holding that "the record does not reflect that any action or inaction on Quintero's part was similarly outrageous." (Maj. Op. at 9.) I disagree. The only difference between the type of legal "trench warfare" this Court found offensive in Mountain View and Quintero's conduct in this matter is that the latter's version of trench warfare was based on acts of omission, rather than commission. Quintero flaunted the Owners' Associations effort to collect at every turn—formal and informal. In its conduct prior to commencing the action and in its correspondence to Quintero throughout the litigation, the Owners' Association consistently opened the door to reasonable compromise. Quintero slammed it shut by reneging on the deals he made, by ignoring the rules governing practice before the trial court, and by ignoring court orders.
I would also note that, not surprisingly, Quintero chose not to appear before this Court on appeal.
Amount
The Owners' Association appeals the portion of the trial court order awarding costs of suit of $572.67 and attorneys' fees of $2,365.50. The trial court fails, however, to explain in its Decision how it arrived at these figures. Because I believe that the trial court erred as a matter of law or abused its discretion, for the reasons set forth above, I would remand this matter to the trial court for a recalculation of these amounts in light of my opinion above. Specifically, the Owners' Association should be entitled to an award of its actual attorneys' fees and costs up to the date of the trial court's January 4, 2010 Order, granting summary judgment.
The trial court expressly found the hourly rate of $95.00 for legal fees reasonable in this case. (F.F. #29.) --------
/s/_________
P. KEVIN BROBSON, Judge