Michigan Court Of Appeals Confirms Need To Pay Condo Dues

Frye v. Golfpointe Village Condominium Association

The condominium and homeowner association attorneys at Makower Abbate Guerra Wegner Vollmer recently successfully defended a challenge by a co-owner relating to her unpaid condominium association assessments.

In Frye v. Golfpointe Village Condominium Association, ____ Mich. App _____, No. 355864 (2022), the Michigan Court of Appeals affirmed a trial court’s decision granting the Association summary disposition in a case where a Co-owner challenged the Association’s foreclosure action. The Association’s foreclosure was based upon a default in the payment of Association assessments that began a decade earlier and had lasted through two bankruptcies. The Co-owner alleged that the Association had failed to properly foreclose upon her Condominium Unit in violation of Michigan’s foreclosure by advertisement statute, had not provided adequate notice as required in its Bylaws, and had violated the Michigan Consumer Protection Act. The trial court determined that the Co-owner had not provided evidence to support any of these allegations sufficient to create a genuine issue of material fact. In determining that the decision in favor of the Association was justified, the Court of Appeals focused its analysis on the fact that the Co-owner was unable to provide any evidence of a payment that she had made that was not accounted for in the Association’s records.

The Co-owner’s initial argument was that there was a genuine issue of material fact regarding the amount she owed to the Association and thus whether there was a valid default that would allow the Association to foreclose under the Michigan Foreclosure by Advertisement statute. The Court identified that the Co-owner failed to provide any evidence that she had made a payment to the Association that wasn’t reflected on the Association’s own accounting. Nor did she provide evidence that any of the charges or fees that appeared on her account with the Association were somehow improper or inaccurate. The Co-owner’s mere allegations regarding the amount of her debt and apparent confusion as how it accumulated, did not in and of itself, create a genuine issue of material fact. As there was no evidence to contradict the accuracy of the Association’s accounting, the Court affirmed the trial court’s finding that there was a valid default and thus, there was no violation of the Foreclosure by Advertisement statute.

Another argument raised by the Co-owner was that the trial court erred in granting the Association summary judgment on her Breach of Contract claim. The Co-owner alleged that the Association did not provide the notice of the foreclosure that was required per the very language in the Association’s Bylaws. However, the Court pointed out that the Co-owner was misinterpreting the Bylaws in terms of what notice was actually required. Despite the Co-owner’s claim, the Bylaws didn’t require 10 days advance notice of the foreclosure to the Co-owner prior to the publication of a notice of foreclosure. Instead, the plain language of the Bylaws required written notice that 1 or more installments of the annual assessment levied against the pertinent Unit was delinquent and that the Association may invoke its remedies if the default was not cured within 10 days after the date of mailing. The Court found clear evidence that such notice as required under the Bylaws was provided to the Co-owner and therefore, there was no Breach of Contract. The Co-owner’s mere allegations that the Association breached its Bylaws without any evidence or explanation as to how the notice requirement wasn’t satisfied did not create a question of fact for the trial court. The Court of Appeals affirmed the trial court’s ruling on that particular argument as a consequence.

The Co-owner’s final claim was that the Association violated the Michigan Consumer Protection Act (“MCPA”) both before and during the foreclosure process and that the trial court erred when it granted the Association summary judgment on this issue. In analyzing the Co-owner’s argument, the Court of Appeals did not even reach the valid question of whether the Association was involved in trade or commerce for purposes of the MCPA in the first place. Instead, the Court determined that based upon its review with respect to the first two arguments raised by the Co-owner, the record was void of any evidence that the Association had engaged in any conduct that caused any confusion to the Co-owner, nor had there been any misrepresentation of material fact or the failure to reveal a material fact. Therefore, even if the MCPA applied to the Association, it had already been established that there was no evidence to support the Co-owner’s allegations of any wrongdoing on the Association’s part, so there could be no finding in favor of the Co-owner on that claim. Thus, the Court affirmed the trial court’s decision in the Association’s favor.

The Frye case is informative for Michigan condominium and homeowners associations. The trial court and subsequently the Court of Appeals examined the challenges raised by this Co-owner to determine if there was any evidence of missing payments or improper accounting. The Co-owner in this instance failed to provide such evidence, and her mere allegations were not enough to create a genuine issue of material fact. As there were no irregularities with respect to the Association’s foreclosure sale upon her Unit, the Co-owner’s failure to provide evidence that there were any payments made to the Association that weren’t also reflected on the Association’s own accounting proved fatal to her appeal.

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