Court Opinion

ID: 4561890
Source: CourtListenerOpinion
Date Created: 2020-09-01 13:06:39.125596+00
Date Added: 2024-06-11T11:51:47.831567
License: Public Domain

MISSOURI COURT OF APPEALS
                       WESTERN DISTRICT

ARROWHEAD LAKE ESTATES                 )
HOMEOWNERS ASSOCIATION,                )   WD83019 Consolidated with
INC.,                                  )   WD83049
                                       )
              Appellant-Respondent,    )   OPINION FILED:
    v.                                 )
                                       )   September 1, 2020
AJAY AGGARWAL AND MEGHA                )
GARG,                                  )
                                       )
              Respondent-Appellants.   )
                                       )

           Appeal from the Circuit Court of Boone County, Missouri
                    Honorable Kimberly Jane Shaw, Judge

                         Before Division One:
 Thomas H. Newton, P.J., Mark D. Pfeiffer and Edward R. Ardini, Jr., JJ.

         Arrowhead Lake Estates Homeowners Association, Inc. (HOA) appeals a

Boone County Circuit Court judgment that did not award the HOA attorney ’s

fees as mandated by the Arrowhead Lake Estates Declaration of Covenants,

Easements and Restrictions (Declaration) in a dispute over the construction of

an unapproved pool-equipment building (building) on property owned by Drs.

Ajay Aggarwal and Megha Garg (Lot Owners). We reverse and remand.
      The Lot Owners submitted plans to the HOA in April 2017, seeking its

approval to add a pool, hot tub, fire pit, decking, and a fence to their lakeside

property in Boone County, Missouri. The next day, the HOA’s architectural

control committee approved the plans, and the Lot Owners responded by

agreeing that any potential changes in the project would be communicated to the

HOA. The HOA was not informed that changes would be made to the approved

plan, but it became aware in August 2017 that the Lot Owners were constructing

near the pool a building that was not part of the submitted plan. The HOA sent

a cease-and-desist letter to the Lot Owners demanding that they cease

construction of the building and remove it from the property.

      The Lot Owners refused to do so, and the HOA filed a two-count petition

for injunctive relief (1) to have the building removed and (2) for attorney’s fees

and costs associated with the litigation to be awarded, with the judgment

constituting a lien on the Lot Owners’ property. The Lot Owners filed a counter-

claim, seeking a declaration as to the meaning of terms used in the HOA

Declaration, under which the HOA could not prevail on a demand to remove the

building. Following extensive discovery, a summary judgment motion filed by

the Lot Owners, and an eight-day bench trial, the trial court ruled in the HOA’s

favor on both counts, ordering the removal of the unapproved building and court

costs to be taxed to the Lot Owners, but refusing to award attorney’s fees to the

prevailing party, the HOA. The HOA appealed and the Lot Owners filed a cross-

appeal, which has been consolidated with the HOA appeal. The Lot Owners have

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abandoned the cross-appeal. 1 The HOA has also filed a motion for attorney’s

fees, costs and expenses associated with proceedings before this Court; we have

taken it with the case.

                                         Legal Analysis

        The HOA argues that the trial court abused its discretion by not awarding

it prevailing-party attorney’s fees and litigation expenses because the

Declaration that binds the parties requires such an award to be made.

       An action seeking injunctive relief is an action in equity. In a court-
       tried equity case, the trial court’s judgment will be upheld unless no
       substantial evidence supports it, it is against the weight of the
       evidence, or it erroneously declares or applies the law. To the extent
       that the trial court’s grant of injunctive relief involves weighing the
       evidence, determining the credibility of witnesses, and formulating
       an injunction of the appropriate scope, the appellate court reviews
       for abuse of discretion. However, questions of law are reviewed de
       novo.

Lake at Twelve Oaks Home Ass'n v. Hausman, 488 S.W.3d 190, 195 (Mo. App.

W.D. 2016). As the only remaining issue on appeal is the interpretation of the

Declaration, our review is de novo. See Kelly v. State Farm Mut. Auto. Ins. Co.,

218 S.W.3d 517, 522 (Mo. App. W.D. 2007) (interpretation of a contract is a

question of law that we review de novo on appeal).

       According to the Missouri Supreme Court, a declaration “is simply a

contract” and “[i]n an unambiguous contract, the intent of the parties is to be

1
 The notice of appeal indicated that the Lot Owners intended to challenge the injunctive relief granted
by the trial court.

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discerned from the contract alone.” DeBaliviere Place Ass'n v. Veal, 337 S.W.3d
670, 676 (Mo. banc 2011).

        The Declaration allows the recovery of attorney’s fees when the HOA

brings an action at law or in equity to enforce the covenants and conditions.

Specifically, subparagraph 18d(2) of the Declaration, which the HOA cited in the

petition, states,

        Each Party shall bear all of its own costs (including the fees of its
        attorney or other representative) incurred after the Termination of
        Mediation under subparagraph (c), (3), and shall share equally in the
        costs of conducting any voluntary arbitration proceeding
        (collectively “Post Mediation Costs”), except as otherwise provided
        in this Declaration; provided, however, if the Claim is litigated in
        whole or in part, the prevailing party shall be entitled to receive
        an aware [sic] of attorney’s fees and court costs as deemed
        appropriate by a court of competent jurisdiction.

(emphasis added). 2

        “Missouri follows the ‘American Rule,’ meaning that each party generally

pays for its own attorney fees. However, [a]ttorney fees are recoverable in two

situations:      when      a    statute specifically authorizes           recovery       and      when

the contract provides for attorney fees.” Scheck Indus. Corp. v. Tarlton Corp.,

435 S.W.3d 705, 732 (Mo. App. E.D. 2014) (citations omitted). The request for

attorney’s fees must include the basis for the award under the relevant statute or

2
  The HOA also references paragraph 20 of the Declaration as another provision authorizing the
recovery of attorney’s fees. That provision is not relevant to this proceeding, however, as that
provision relates to the recovery of attorney’s fees by a party in its capacity as a lot owner. Here, the
allegations of the petition and every step the HOA took in the trial proceeding were always in the
capacity as the HOA (enforcing the Declaration’s provisions) and not as a lot owner. Hence, the only
attorney’s fees provision applicable to the current proceeding is paragraph 18d(2) of the Declaration.

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contract. Ruby v. Troupe, 580 S.W.3d 112, 115 (Mo. App. W.D. 2019) (noting

that pleading must allege facts that would support fee award under applicable

statute or contract). Here, the HOA argues that because the Declaration states

that a prevailing party “shall” be entitled to attorney’s fees and because it

prevailed, reasonable attorney’s fees must be awarded. In this regard, the HOA

cites Desu v. Lewis, 427 S.W.3d 843, 844-45 (Mo. App. E.D. 2014), to support

its claim that a trial court commits error when not awarding attorney’s fees where

a contract provides for their payment. Id. at 845 (“The Agreement contains

language that states: ‘In the event of litigation between the parties, the prevailing

party shall recover, in addition to damages or equitable relief, the cost of

litigation including reasonable attorney’s fees’.”); see also Brown v. Brown-Thill,

437 S.W.3d 344, 346 (Mo. App. W.D. 2014) (finding award mandatory where

agreement between the parties stated, “If either party pursues any claim, dispute,

or controversy against the other in a proceeding other than the arbitration

provided herein, the responding party shall be entitled to dismissal or injunctive

relief regarding such action and recovery of all costs, losses, and attorneys ’ fees

relating to such action.”); Midland Prop. Partners, LLC v. Watkins, 416 S.W.3d
805, 819 (Mo. App. W.D. 2013) (holding that contract must provide expressly

for attorney’s fees to justify departure from the American Rule, and, with

agreement allowing the recovery of “costs” only, lower court erred in awarding

attorney’s fees). As set forth above, the relevant contractual provision of the

Declaration, paragraph 18d(2), expressly states that the prevailing party “shall

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be entitled to an awar[d] of attorney’s fees and court costs as deemed appropriate

by a court of competent jurisdiction.”

       Adhering to the Declaration language and giving paragraph 18d(2) its plain

and unambiguous meaning, we conclude that the Declaration includes both a

mandatory requirement and a discretionary component to that requirement. The

mandatory and non-discretionary phrase is that “the prevailing party shall be

entitled to receive an awar[d] of attorney’s fees and court costs.” (emphasis

added). Thus, the trial court had no discretion and was required to make an award

of attorney’s fees and court costs to the prevailing party; here, the HOA. As to

the amount of that mandatory award, however, paragraph 18d(2) obligates the

trial court to award only such sum of attorney’s fees as it deems “appropriate.”

Accordingly, as the trial court has no discretion but to make an attorney’s fees

award under the Declaration’s terms, the judgment must be reversed and

remanded. This point is granted and, upon remand, the trial court is directed to

make an award of attorney’s fees to the HOA “as deemed appropriate” by the

trial court. 3

3
  The HOA submitted an affidavit to the trial court requesting $83,677.60 for attorney’s fees, costs,
and litigation expenses incurred during the trial stage of this proceeding and has submitted an
additional request for attorney’s fees incurred on appeal. In our remand order, we make no state ment
as to what amount of attorney’s fees at trial or on appeal is “appropriate” as considered by the trial
court, only that the trial court is obligated to make an award of attorney’s fees to the HOA as the
prevailing party.

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                                   Conclusion

      Finding that the trial court did not adhere to the plain and unambiguous

contractual terms of the Declaration, we reverse and remand for the trial court to

make an award of attorney’s fees to the HOA. In so doing, the trial court is

required to award only such sum of attorney’s fees “as deemed appropriate.” We

also grant the HOA’s motion for attorney’s fees and court costs incurred on

appeal, but remand for the trial court to determine under the Declaration the

amount of fees on appeal it deems appropriate.

                                            /s/ Thomas H. Newton
                                            Thomas H. Newton, Presiding Judge

Mark D. Pfeiffer and Edward R. Ardini, JJ. concur.

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