[Cite as Heba El Attar v. Marine Towers E. Condominium owner's Assn., 2018-Ohio-3274.]

Court of Appeals of Ohio 

EIGHTH APPELLATE DISTRICT 

COUNTY OF CUYAHOGA 

JOURNAL ENTRY AND OPINION 

No. 106140 

 

HEBA EL ATTAR, ET AL.

PLAINTIFFS-APPELLANTS 

vs. 

MARINE TOWERS EAST CONDOMINIUM 

OWNERS’ ASSOCIATION, ET AL.

 DEFENDANTS-APPELLEES 

JUDGMENT: 

REVERSED AND REMANDED

Civil Appeal from the 

Cuyahoga County Court of Common Pleas 

Case No. CV-16-873728 

BEFORE: Stewart, J., Kilbane, P.J., and Jones, J. 

RELEASED AND JOURNALIZED: August 16, 2018 
ATTORNEYS FOR APPELLANTS

Steven M. Ott 

Lindsey A. Wrubel 

Jacqueline Ann O’Brien 

Ott & Associates, Co., L.P.A. 

1300 East Ninth Street, Suite 1520 

Cleveland, OH 44114 

Jonathan J. Hartman 

Midland Credit Management 

P.O. Box 30968 

Middleburg Heights, OH 44130 

ATTORNEYS FOR APPELLEES 

Katie Lynn Zorc 

Andrew J. Dorman 

Reminger Co., L.P.A. 

101 Prospect Avenue, West, Suite 1400 

Cleveland, OH 44115 
MELODY J. STEWART, J.: 

{¶1} In the winter of 2015, there was unexpected damage to the heating, ventilation, and 

cooling (“HVAC”) system at Marine Towers East Condominiums that rendered the system 

unable to heat and cool some units. Marine Towers temporarily restored heat to the affected 

units by providing space heaters that required installation of a dedicated electrical line. This 

project cost approximately $200,000 and was paid for entirely by a special assessment imposed 

on all unit owners. Defendants-appellees Marine Towers East Condominium Owners’ 

Association, Inc. and its board of managers (the “Association”) subsequently learned that it 

would cost more than $4 million to replace the HVAC system for the building housing its 

condominium units. The Association did not have a reserve fund to pay for extraordinary 

expenses, so it gave notice to its 137 unit owners that they would have to pay a special 

assessment to cover the cost of repair. 

{¶2} Plaintiffs-appellants Heba El Attar, Dennis Grabowski, Dolores Mlachak, Kevin 

McDowell, Claudia Gruchalla, and Robert Monahan, owners and titleholders of units at Marine 

Towers, brought this action against the Association seeking a declaration of their duty to pay the 

assessment, claiming that the Association was liable for breach of contract and claiming also that 

the Association breached its fiduciary duty by failing to establish and maintain a reserve fund as 

required by the terms of the association’s governing documents and R.C. Chapter 5311. The 

owners also sought injunctive relief to prevent the Association from collecting special 

assessments and a declaratory judgment relating to reserve funds. The Association answered the 

complaint and filed a motion for judgment on the pleadings arguing that the declaration did not 

require it to establish a reserve fund and that the statutory duty to establish a reserve fund had 

been waived by a majority of the owners who voted on an annual basis to pay for extraordinary 
expenses by way of special assessment. The trial court granted the motion without opinion, 

stating only that the owners “can prove no set of facts in support of their claims that would entitle 

them to relief.” The court dismissed the complaint in its entirety. The owners’ two assignments 

of error collectively challenge the judgment. The owners claim that the trial court erred 1) by 

granting the Association judgment on the pleadings and 2) in its interpretation of the 

Association’s governing documents and R.C. 5311.081. 

{¶3} This case centers on the issue of whether the Association had the duty to establish a 

reserve fund as alleged by the plaintiff-owners. 

{¶4} R.C. 5311.081(A) provides: 

Unless otherwise provided in the declaration or bylaws, the unit owners 

association, through the board of directors shall do both of the following: 

(1) Adopt and amend budgets for revenues, expenditures, and reserves in an 

amount adequate to repair and replace major capital items in the normal course of 

operations without the necessity of special assessments, provided that the amount 

set aside annually for reserves shall not be less than ten percent of the budget for 

that year unless the reserve requirement is waived annually by the unit owners 

exercising not less than a majority of the voting power of the unit owners 

association; 

(2) Collect assessments for common expenses from unit owners. 

{¶5} The statute requires a condominium association to include in its annual budget an 

“adequate” amount for reserves — at least ten percent of the total budget — to ensure that major 

capital items can be repaired and replaced without the need of special assessments. The statute, 

however, provides a mechanism to vote around this requirement: so long as a majority of unit 

owners annually vote to do so, they may waive the reserve fund requirement for that particular 

year. 
{¶6} By its own terms, R.C. 5311.081(A) applies only to instances where a 

condominium’s declaration or bylaws do not “otherwise provide[ ]” for reserves. In such cases, 

the statute operates as a gap-filling provision to address reserve requirements when an 

association’s bylaws or other governing documents do not. The statute would also serve to 

establish a statutory baseline for what would constitute a reasonable reserve under the 

circumstances. But where an association’s declaration or bylaws specifically contemplate the 

establishment of a reserve fund, the statute does not apply. 

{¶7} The “Declaration of Condominium Ownership for Marine Towers East 

Condominium” and the “By-Laws of Marine Towers East Condominium Owners’ Association, 

Inc.” are the condominium’s governing documents.1

 Article V, Section 3 of the bylaws, titled 

“Reserve for Contingencies and Replacement,” provides: 

The Association shall build up and maintain a reasonable reserve for 

contingencies and replacement. Extraordinary expenditures not originally 

included in the annual estimate which may be necessary for the year, shall be 

charged first against such reserve. 

{¶8} Further, Article V, Section 2 of the bylaws requires that the Association include 

reserve funding as part of the “estimated cash requirement” to be assessed against each unit 

owner as part of the annual budget: 

[E]ach year * * * the Association shall estimate the total amount necessary to pay 

the cost of wages, materials, insurance, services and supplies which will be 

required during the ensuing calendar year for the rendering of all services, 

together with a reasonable amount considered by the Association to be necessary 

for a reserve for contingencies and replacements * * *. 

 1

 In their arguments, the parties refer to the “declaration” as the governing document that appears to be a 

collective reference to both the declaration and the bylaws. The content to which they refer, however, is located 

entirely in the bylaws. This clarification does not impact our analysis. 
{¶9} “Condominium declarations and bylaws are contracts between the association and 

the purchaser and are subject to the traditional rules of contract interpretation.” Grand Arcade, 

Ltd. v. Grand Arcade Condominium Owners’ Assn., 8th Dist. Cuyahoga No. 104890, 

2017-Ohio-2760, ¶ 16, citing Nottingdale Homeowners’ Assn., Inc. v. Darby, 33 Ohio St.3d 32, 

35-36, 514 N.E.2d 702 (1987). The plain language of the bylaws required the Association to 

establish a reserve to be used for contingencies and replacement. 

{¶10} The Association concedes that it did not establish the reserve, but maintains that it 

was not required to do so. It argues that the term “reserves” as used in the bylaws, does not refer 

to a separate fund, but instead, “simply means money” or “another part of the budget, not a 

mandate for a separate reserve fund or a reserve requirement * * *.” We reject this argument. 

{¶11} The bylaws’ language that the Association “shall build up and maintain a 

reasonable reserve for contingencies and replacement” is clear and unambiguous, requiring no 

interpretation or construction. Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 

51, 55, 544 N.E.2d 920 (1989). Although the bylaws do not use the word “fund,” the language 

requiring the Association to “build up and maintain” permits no other conclusion than that the 

Association create an ongoing reserve fund or account separate from its yearly line-item budget. 

The ordinary meaning of the words “build up” means to establish something; the word 

“maintain” means to cause or enable something to continue. Taken together, these words 

require the establishment and maintenance of what could only be described as a reserve fund or a 

reserve account. Our conclusion is reinforced by language in the bylaws providing that if there 

is a shortfall in collecting “actual expenditures plus reserves” at the end of the budget year, the 

owners are required to make up the shortfall in the next calendar year. See Article V, Section 2. 

By differentiating reserves from “actual expenditures,” the bylaws make it clear that the reserve 
is more than just an item of the budget and is a collection of money separate and apart from 

money allocated to pay for routine services and expenditures. 

{¶12} The Association’s bylaws specifically state that the reserve fund is to be used for 

“extraordinary expenditures”; that is, expenses not included in the annual budget estimate. It is 

for this reason that the Association’s argument that it could maintain reserves as “another part of 

the budget” fails. By definition, extraordinary expenditures — and no one disputes that the 

HVAC replacement is an extraordinary expenditure — are items for which there is no budget. 

And even if we were to accept the Association’s argument that it was not required to establish a 

reserve fund, but instead merely maintain reserves as “just * * * another part of the budget,” the 

fact remains that the Association offered no evidence to show that the budget contained any 

amount of money in reserve to pay for extraordinary expenditures. 

{¶13} The Association also argues that the bylaws permit it to impose special assessments 

as a means of addressing extraordinary expenditures without having to resort to the use of cash 

reserves. While it is true that Article V, Section 3 of the bylaws provides “[i]f said ‘estimated 

cash requirement’ proves inadequate for any reason * * * the same shall be assessed to the 

owners according to each owner’s percentage of ownership,” that provision does not supersede 

the reserve requirement. In fact, the bylaws strictly prohibit special assessments as an 

alternative to using reserve funds. Article V, Section 3 of the bylaws states that 

“[e]xtraordinary expenditures * * * shall be charged first against such reserve.” This language is 

consistent with the requirement that a reserve fund be established for use in paying for 

extraordinary expenditures. 

{¶14} The Association’s alternate or additional claim that it waived the reserve 

requirement by holding an annual vote to do so pursuant to R.C. 5311.081(A) is also unavailing. 
As previously discussed, R.C. 5311.081(A) does not apply to this case because the bylaws 

otherwise provide for establishing a reserve fund. And even if we were to find R.C. 

5311.081(A) applicable, there is an inconsistency between the bylaws and the statute, and the 

bylaws specifically state that “all inconsistencies between or among permissive provisions of any 

statute and any provision of the Declaration and these By-Laws, shall be resolved in favor of the 

Declaration and those By-Laws[.]” By-Laws, Article IV, Section 8. The Association has not 

directed us to any language in either the declaration or the bylaws that would allow it to waive 

the mandatory reserve requirement. In order to waive the reserve requirement, the Association 

would have to formally amend its bylaws. See Declaration of Condominium Ownership for 

Marine Towers East Condominium, Section 9. There is no indication that the Association 

sought to amend its bylaws accordingly. 

{¶15} When reviewing a Civ.R. 12(C) judgment on the pleadings issued in a declaratory 

judgment action, we look to see whether a “justiciable issue” exists on a legal interest or a right, 

and whether there is a genuine “controversy” between parties who have adverse legal interests. 

Woodson v. Ohio Adult Parole Auth., 10th Dist. Franklin No. 02AP-393, 2002-Ohio-6630, ¶ 7. 

These are questions of law. Peterson v. Teodosio, 34 Ohio St.2d 161, 166, 297 N.E.2d 113 

(1973). 

{¶16} We find as a matter of law that the Association’s governing documents required it 

to “ build up and maintain a reasonable reserve” to pay for extraordinary expenditures that are 

not included in the Association’s annual budget. We also find that because the Association’s 

governing documents provided for a reserve fund, R.C. 5311.081(A), which applies only in the 

event an association’s declarations or bylaws are silent on the issue, is inapplicable. The court 

therefore erred by granting judgment on the pleadings and dismissing the owners’ complaint. 
{¶17} Judgment reversed and case remanded to the trial court for further proceedings 

consistent with this opinion. 

It is ordered that appellants recover of appellees costs herein taxed. 

The court finds there were reasonable grounds for this appeal. 

It is ordered that a special mandate issue out of this court directing the common pleas 

court to carry this judgment into execution. 

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the 

Rules of Appellate Procedure. 

______________________________________________ 

MELODY J. STEWART, JUDGE 

MARY EILEEN KILBANE, P.J., CONCURS; 

LARRY A. JONES, SR., J., CONCURS IN JUDGMENT ONLY