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Greenwood HOA fight goes back to trial court for damages hearing

April 11, 2019

A long-running fight over homeowner association fees and how they were assessed in a Greenwood housing development will return to a trial court to determine damages the HOA is entitled to from a developer and homebuilder that paid no assessments for several years.

The Indiana Court of Appeals on Thursday affirmed a Johnson Superior Court judgment in favor of The Village Pines at the Pines of Greenwood Homeowners’ Association against the subdivision’s developer and homebuilder. But in a partial reversal, the COA found the trial court had erred by finding the HOA “did not suffer any actual damages because its budget was fully funded every year.”

The appellate panel in The Village Pines at the Pines of Greenwood Homeowners' Association, Inc. v. Pines of Greenwood, LLC, and Arbor Homes, LLC18A-PL-135, reversed that portion of the trial court order and remanded the case for a hearing on damages, finding developer Pines of Greenwood and Arbor Homes “did not properly record the Second Amendment” of the HOA declaration with the Johnson County Recorder’s Office.

That second amendment came after the HOA in 2006 determined future maintenance obligations required increasing future reserve funding. In 2008, Pines and Arbor Homes recorded a second amendment to the declaration that changed procedures for the assessment and collection of annual HOA fees. However, the HOA membership had not agreed to the changes to the declaration as required under the association’s bylaws.

After Pines and Arbor Homes turned the HOA over to homeowners in late 2009, the HOA filed this complaint in 2011 alleging breach of fiduciary duty and breach of contract against Pines and Arbor.

Judge Elaine Brown wrote that Pines and Arbor were in breach, and that under a plain reading of the declaration, they should have been assessed membership dues for the lots they owned at the time.

“After due consideration of the stipulated exhibits, evidence, and testimony presented at trial, and in light of the court’s finding that Pines and Arbor Homes did not pay assessments to the Association from June 2000 to November 2009, we are not persuaded that the HOA did not suffer any damages,” Brown wrote for the panel.

“For these reasons, we affirm the court’s judgment on the breach of fiduciary claim, and because we find that Pines and Arbor Homes did not properly record the Second Amendment, we reverse and remand for a hearing on damages on the breach of contract claim,” the panel concluded.

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