Court Opinion

ID: 4321496
Source: CourtListenerOpinion
Date Created: 2018-10-17 07:08:19.576616+00
Date Added: 2024-06-11T14:46:06.859653
License: Public Domain

FOURTH DIVISION
                                DILLARD, C. J.,
                          DOYLE, P. J., and MERCIER, J.

                   NOTICE: Motions for reconsideration m us t be
                   physically re ceived in our clerk’s office within ten days
                   of the date of decision to be deemed timely filed.
                                   http://www.gaappeals.us/rules

                                                                      October 16, 2018

In the Court of Appeals of Georgia
 A18A1359. SALEM CROSSING TOWNHOMES HOMEOWNERS
      ASSOCIATION, INC. v. WAGNER et al.

      MERCIER, Judge.

      Salem    Crossing     Townhomes          Homeowners           Association,   Inc.   (“the

Association”) appeals from the DeKalb County Superior Court’s grant of summary

judgment to Angela M. Wagner and Gerald Peterson on the Association’s claim for

homeowners association assessments. The superior court granted summary judgment

based on the doctrine of res judicata. The trial court concluded, among other things,

that a prior DeKalb County State Court judgment had determined that “Peterson’s

house is not subject to payment of assessments because it is not a unit as defined by

the [Association] Covenants.” “Although we conclude the [superior] court erred in

granting summary judgment based on res judicata, the [superior] court’s rulings
support the grant of summary judgment based on the closely-related doctrine of

collateral estoppel[,]” and we therefore affirm. Body of Christ Overcoming Church

of God, Inc. v. Brinson, 287 Ga. 485, 486 (696 SE2d 667) (2010) (citation omitted).

      Summary judgment is proper when there is no genuine issue of material fact and

the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). On appeal

from the grant or denial of a motion for summary judgment, this Court conducts a de

novo review of the law, viewing the evidence, and all reasonable conclusions and

inferences drawn from it, in the light most favorable to the nonmovant. General

Electric Capital Computer Services v. Gwinnett County Board of Tax Assessors, 240
Ga. App. 629, 630 (1) (523 SE2d 651) (1999). A grant of summary judgment will be

affirmed if it is right for any reason. See Coffee Iron Works v. QORE, Inc., 322 Ga.

App. 137, 139 (1) (744 SE2d 114) (2013).

      Viewed in the light most favorable to the Association, the record shows that the

underlying superior court case was the second of two collection cases between the

Association and Peterson concerning homeowners association assessments allegedly

due on the single-family detached residence owned by Peterson and Wagner. It is

undisputed that the first collection case began in magistrate court on July 31, 2015,

when the Association filed an action against Peterson for failure to pay homeowners

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association assessments for the first, second and third quarters of 2015. The

magistrate court found in favor of the Association. Peterson appealed to the state

court and filed a motion for summary judgment, asserting his home is not subject to

the requirement to pay front lawn landscaping assessments because he does not live

in a “unit” as defined by the Association Covenants. Peterson introduced a copy of

the Association Covenants, which stated that the Association shall maintain “all

landscaped grounds areas within the boundaries of Units, except for landscaping, if

any, contained within patio areas,” and defined a “unit” as “a single-family attached

[town home], the driveway and the lot upon which the house is constructed.” The

Association did not respond to Peterson’s motion for summary judgment. Based on

Peterson’s motion, brief, affidavit, and statement of material facts not in dispute, the

state court granted Peterson’s motion for summary judgment in January 2016. The

Association apparently did not appeal that decision.

      On July 18, 2016, the Association filed a second collection lawsuit in DeKalb

County Superior Court against Wagner and Peterson to collect unpaid homeowners

association assessments, collection costs, late charges, interest, and attorney fees for

the first, second and third quarters of 2016. Wagner and Peterson filed a motion for

summary judgment, asserting the Association’s claim was barred by the doctrine of

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res judicata. The Association responded, claiming res judicata did not apply because

there was no identity of the cause of action or an adjudication on the merits by a court

of competent jurisdiction. The Association further argued that a 1992 amendment to

the Association Covenants precluded Wagner and Peterson’s definition of “unit.” The

Association moved for summary judgment, claiming Wagner and Peterson owed the

unpaid assessments pursuant to the Association Covenants. The trial court granted

Wagner and Peterson’s motion for summary judgment, finding that res judicata

precluded the Association’s claim to unpaid 2016 assessments.

       1. The Association first contends that the trial court erred in applying the

doctrine of res judicata in this case. We agree. It is well-established that the doctrine

of res judicata “prevents the re-litigation of all claims which have already been

adjudicated, or which could have been adjudicated, between identical parties or their

privies in identical causes of action.” Fulton County Tax Commissioner v. General

Motors Corp., 234 Ga. App. 459, 465 (1) (507 SE2d 772) (1998) (citation and

punctuation omitted). “Three prerequisites must be satisfied before res judicata applies

-- (1) identity of the cause of action, (2) identity of the parties or their privies, and (3)

previous adjudication on the merits by a court of competent jurisdiction.” Id. “The

fact that the subject matter of different lawsuits may be linked factually does not mean

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that they are the same ‘cause’ within the meaning of OCGA § 9-12-40.1 For [res

judicata] to act as a bar, ‘the cause of action in each suit must be identical.’” Morrison

v. Morrison, 284 Ga. 112, 115 (3) (663 SE2d 714) (2008) (citations omitted).

      The Association does not disagree that the state and superior court cases

involve an identity of the parties or their privies, but instead argues that the cases do

not involve an identity of the cause of action because the final order in the state court

case was entered in January 2016 “and could have only decided the amount of

assessments owed by [Peterson and Wagner] to the Association prior to the date of

the final order.” The superior court action, on the other hand, sought assessments due

after the state court’s final order was entered. Clearly, the subject matter is not

identical between the state court action and the superior court action: the state court

action sought unpaid homeowners association assessments for the first, second, and

third quarter of 2015, while the superior court action sought unpaid homeowners

association assessments for the first, second, and third quarter of 2016. See Oakwood

Acceptance Corp., LLC v. Ahmad, 271 Ga. App. 356, 357 (1) (609 SE2d 700) (2005)

      1
          OCGA § 9-12-40 states as follows: “A judgment of a court of competent
jurisdiction shall be conclusive between the same parties and their privies as to all
matters put in issue or which under the rules of law might have been put in issue in the
cause wherein the judgment was rendered until the judgment is reversed or set aside.”

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(each breach of contract payable in separate installments constitutes a separate cause

of action). Because the cause of action in superior court is not identical to the one in

state court, the doctrine of res judicata does not apply to preclude the superior court

action. Id.

       2. Finding that the doctrine of res judicata does not apply to bar the present

action, we must determine whether the related doctrine of collateral estoppel applies.

“When a question of law is at issue, as here, we owe no deference to the trial court’s

ruling and apply the ‘plain legal error’ standard of review.” Nicholson v. Shafe, 294
Ga. App. 478, 480 (1) (669 SE2d 474) (2008) (citation and punctuation omitted).

Collateral estoppel

       precludes the re-adjudication of an issue that has previously been litigated
       and adjudicated on the merits in another action between the same parties
       or their privies. Like res judicata, collateral estoppel requires the identity
       of the parties or their privies in both actions. However, unlike res
       judicata, collateral estoppel does not require identity of the claim -- so
       long as the issue was determined in the previous action and there is
       identity of the parties, that issue may not be re-litigated, even as part of
       a different claim.

Fulton County Tax Commissioner, supra at 465 (1) (citation omitted). The doctrine

applies to “those issues that actually were litigated and decided in the previous action,

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or that necessarily had to be decided in order for the previous judgment to have been

rendered.” General Electric Capital Computer Services, supra at 631 (1).

       (a) The Association asserts that the state court did not adjudicate the merits of

the underlying superior court case. According to the Association, “[t]he State Court

Judgment made it clear that judgment was granted in favor of [Peterson] due to the

Association’s lack of response, not because it had found that [Peterson] and the

Subject Property were not subject to the Declaration.” The record belies this assertion.

The state court’s order specifically notes:

       The above-styled case, which is an appeal from Magistrate Court, comes
       before the Court on Defendant’s Motion and Brief for Summary
       Judgment, which was filed on November 16, 2015, along with the
       Affidavit of Gerald Peterson and Statement of Material Facts not in
       Dispute. Plaintiff has filed no response to the motion. Defendant’s
       Motion for Summary Judgment is hereby GRANTED.

Peterson’s state court motion and brief for summary judgment, as well as his affidavit,

argue and introduce evidence that Peterson’s home is not subject to the Association

Covenants because the residence does not meet the Association Covenants’ definition

of a “unit.” Thus, contrary to the Association’s argument, the state court order does

not indicate that the court granted summary judgment based on the Association’s

failure to respond.

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      Furthermore, the state court was not authorized to grant summary judgment

based solely on the Association’s failure to respond to Peterson’s motion. “Because

there is no such thing as a default summary judgment,” the Association’s failure to

respond to Peterson’s motion for summary judgment did not automatically entitle

Peterson to judgment in his favor. Rapps v. Cooke, 234 Ga. App. 131, 131 (1) (505

SE2d 566) (1998); see Tselios v. Sarsour, 341 Ga. App. 471, 473 (800 SE2d 636)

(2017). Although the Association waived its right to present evidence in opposition to

Peterson’s motion for summary judgment by failing to respond, Peterson was still

obligated to demonstrate from the pleadings and the evidence that summary judgment

was appropriate. See Rapps, supra at 131-132 (1). By submitting a statement of

material facts not in dispute, a supporting affidavit that complied with OCGA § 9-11-

56 (e), and relevant portions of the Association Covenants with his motion for

summary judgment, Peterson met his burden of demonstrating that summary judgment

was appropriate because his house is not a “unit” as defined by the Association

Covenants. See OCGA § 9-11-56 (e) (“When a motion for summary judgment is made

and supported as provided in this Code section, an adverse party may not rest upon

the mere allegations or denials of his pleading, but his response, by affidavits or as

otherwise provided in this Code section, must set forth specific facts showing that

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there is a genuine issue for trial. If he does not so respond, summary judgment, if

appropriate, shall be entered against him.”).

      Moreover, contrary to the Association’s argument, the state court necessarily

adjudicated the merits of the issue raised in the superior court case. As the Association

admits, the issue adjudicated by the state court was Peterson’s liability for unpaid

homeowners association assessments that accrued in the first three quarters of 2015.

Given Peterson’s basis for summary judgment and the trial court’s ruling that Peterson

was not liable for the unpaid 2015 homeowners assessments, the state court

necessarily determined that Peterson’s home does not constitute a “unit” within the

meaning of the Association Covenants. Although the Association is now seeking

unpaid 2016 homeowners association assessments, the issue of Peterson’s liability for

these assessments once again depends on whether his home qualifies as a “unit” under

the Association Covenants, and resolution of the issue in superior court would require

reconsideration of the state court’s implicit ruling that Peterson’s home is not a “unit”

as defined by the Association Covenants. “This litigation therefore involves an issue

that had been resolved on the merits in prior litigation, satisfying one aspect of

collateral estoppel.” Body of Christ Overcoming Church of God, supra at 487. As

stated previously, “[c]ollateral estoppel does not require identity of the claim — so

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long as the issue was determined in the previous action and there is identity of the

parties, that issue may not be re-litigated, even as part of a different claim.” Rogers v.

Estate of Harris, 276 Ga. App. 898, 900 (625 SE2d 65) (2005) (citation and

punctuation omitted).

      (b) The Association next argues that the state court was not a court of

competent jurisdiction to render a declaratory judgment about the future applicability

of the Association Covenants to Peterson’s home. According to the Association,

      neither the State nor Magistrate Courts in the first lawsuit had jurisdiction
      to make an adjudicatory declaration regarding whether or not the
      Appellees would be liable to the Association for future assessments or
      whether they were subject to the Salem Crossing Declaration of
      Covenants in the first place. The authority to issue declaratory judgments
      is a power reserved for the Superior Courts.

The Association’s argument misses the mark.

      It is true that superior courts have exclusive jurisdiction to hear and determine

declaratory judgment actions. See OCGA § 9-4-2 (a); Mitchell v. Southern General

Ins. Co., 185 Ga. App. 870, 871 (1) (366 SE2d 179) (1988). However, this case was

not brought as a declaratory judgment action, and the state court did not issue a

declaratory judgment ruling. Whether Peterson’s home is a “unit” under the

Association Covenants so as to preclude the Association from collecting assessments

                                           10
against Peterson was a germane issue in the state court case, and the state court had

competent jurisdiction to determine that Peterson’s home is not a “unit” under the

Association Covenants. See OCGA § 15-7-4 (a) (2) (each state court shall have

jurisdiction over the trial of civil actions without regard to the amount in controversy).

The fact that the state court’s legal conclusion is binding on the issue of whether

Peterson’s home meets the definition of a “unit” under the Association Covenants

does not make it a declaratory judgment.

      Because the issue was properly presented in the state court, and the state court

appropriately handled the case, the state court order presented an adjudication on the

merits in a court of competent jurisdiction. See Fulton County Tax Commissioner,
234 Ga. App. at 465 (1) (“it is only where the merits were not and could not have been

determined under a proper presentation and management of the case that res judicata

is not applicable”) (citation and punctuation omitted). In the absence of significant

factual change, and here no significant factual change has been shown, collateral

estoppel on the issue of whether Peterson’s home constitutes a “unit” under the

Association Covenants was made applicable to the Association on all future collection

suits relying on the definition of a “unit.” See General Electric Capital Computer

Services, 240 Ga. App. at 630 (1).

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      3. The Association argues that despite the state court’s order, Peterson is liable

for 2016 assessments under the Association Covenants. According to the Association,

Peterson presented the state court with incomplete and misleading evidence by failing

to mention or introduce a 1992 amendment to the Association Covenants. The

Association notes that detached single family residences did not exist in the Salem

Crossing community when the original Association Covenants were recorded.

However, in June 1992, the Association Covenants were amended to include these

detached homes as “units.” Hovis Homes, Inc., the developer, owned the subject

property at the time and agreed to the amendment. In 1993, Hovis Homes deeded the

property to Michael and Laura Thomas, and the Thomases deeded the property to

Peterson and Wagner in 2004. Thus, according to the Association, Peterson and

Wagner’s home is a “unit” as defined by the Association Covenants.

      However, the record is clear that the state court’s order was entered in January

2016, well after any amendment to the Association Covenants’ definitions. Thus,

evidence of the 1992 amendment to the Association Covenants does not qualify as a

significant factual change occurring after the state court’s final order. See generally

General Electric Capital Computer Services, supra. If the Association wanted to

introduce evidence disputing Peterson’s claim in state court, it was required to

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respond to Peterson’s motion for summary judgment, see OCGA § 9-11-56 (e),

appeal the state court’s judgment, see OCGA § 5-6-38 (a), or move to set aside the

judgment under OCGA § 9-11-60 (d). The Association failed to take any of these

actions, and it cannot attack the validity of the state court’s judgment by filing a new

action and arguing that the state court’s judgment was based on incomplete or

misleading evidence. See OCGA §§ 5-6-38 (a) (in general, adverse ruling must be

appealed within 30 days), 9-12-40 (judgment of court of competent jurisdiction

conclusive between parties as to all matters put in issue unless reversed or set aside).

      The Association’s failure to appeal the state court’s final order precludes any

argument challenging the merits of that judgment, and any portion of this appeal

challenging the state court’s judgment is not properly before us. See Bienert v.

Dickerson, 276 Ga. App. 621, 622-623 (1) (624 SE2d 245) (2005); see generally

Hooper v. Harris, 236 Ga. App. 651, 652 (1) (512 SE2d 312) (1999) (unappealed

ruling is res judicata and appellate court cannot review merits of unappealed ruling).

Thus, the state court’s ruling that the Association is not entitled to recover

homeowners association assessments because Peterson’s home is not a “unit” as

defined by the Association Covenants is binding upon the Association. See generally

Rogers, supra at 899-900; Bienert, supra.

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      Inasmuch as the Association was a proper party in the state court action, the

state court action properly and necessarily determined that Peterson’s home is not

subject to the payment of homeowners association assessments because it is not a

“unit” as defined by the Association Covenants, the state court’s order became a final

judgment unappealed by the Association, and there has been no significant factual

change since the state court’s ruling, collateral estoppel on the issue of Peterson’s

liability for assessments based on the Association Covenants is applicable to the

homeowners assessments currently sought in the superior court action. Thus, the

DeKalb County Superior Court properly granted summary judgment to Wagner and

Peterson. Body of Christ Overcoming Church of God, supra at 486; Coffee Iron

Works, supra.

      Judgment affirmed. Dillard, C. J., and Doyle, P. J., concur.

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