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The Willows Condominium Owners Association, Inc. v. Kraus

Court of Appeals of Missouri, Southern District, First Division

March 23, 2015

THE WILLOWS CONDOMINIUM OWNERS ASSOCIATION, INC., Plaintiff-Respondent,
v.
MICHAEL KRAUS, ROSEMARY LANZONE, SHERYL FIALA, THOMAS LONG, DENNIS BATTERAM, NATHAN SUTTON AND SHANNON SUTTON, PAUL ROBERTS AND MOONBOW PROPERTIES, LLC, Defendants-Appellants, and STANLEY WOLINSKI AND JEAN WOLINSKI, DARREN LOWDER AND BRENDA LOWDER, Defendants

APPEAL FROM THE CIRCUIT COURT OF CAMDEN COUNTY. Honorable G. Stanley Moore, Circuit Judge.

For Appellants: James A. Durbin of Kansas City, MO.

For Respondent: Michael L. McDorman of Lake Ozark, MO; Joseph A. Ellsworth of Lake Ozark, MO; Andrew J. Hardwick of Versailles, MO; Russell F. Watters of St. Louis, MO; Patrick A. Bousquet of St. Louis, MO.

Defendants acting Pro se.

DANIEL E. SCOTT, J. -- CONCUR. WILLIAM W. FRANCIS, JR., C.J./P.J. -- CONCUR.

OPINION

Page 313

JEFFREY W. BATES, J.

The Willows Condominium Owners Association, Inc. (the Association) filed the underlying action to obtain declaratory relief concerning the proper distribution of surplus insurance proceeds that remained after the reconstruction of Building 158, which had been totally destroyed by fire. The defendants in the action were the nine unit owners of Building 158, who wanted the surplus insurance proceeds distributed to them. The Association took the position that the surplus insurance funds should be distributed to all 58 unit owners at The Willows on the Lake (the Willows). Seven of the nine defendants (hereinafter referred to as Counterclaimants) filed a counterclaim against the Association seeking, inter alia, declaratory relief, and damages for breach of trust, breach of fiduciary duty and breach of contract concerning Association dues.[1] The Association and Counterclaimants filed cross-motions for summary judgment.

The material facts are not in dispute. The governing document used by the Association is the " Condominium Declaration for The Willows on the Lake, a Condominium" (Declaration), which was recorded on July 21, 1983. As required by the Declaration, the Association purchased and maintained property insurance to cover the replacement of all the structures on the property. In May 2011, a fire destroyed all nine units in Building 158.[2] The Association received $1,154,300 as insurance proceeds for the destruction of

Page 314

Building 158. After reconstruction was completed, approximately $550,000 of the insurance proceeds remained. During the nearly year-long rebuilding process, the Association assessed quarterly dues to be paid by all unit owners, including the nine unit owners of Building 158. Counterclaimants paid those assessments. The trial court granted the Association's summary judgment motion and denied Counterclaimants' cross-motion. In granting summary judgment in favor of the Association, the trial court concluded that certain provisions in the Declaration were determinative of the issues. The judgment distributed the surplus insurance proceeds to all 58 unit owners and denied relief on all counts of the counterclaim.

Counterclaimants appealed and present three points for decision. Point I contends the trial court erred by distributing the surplus insurance proceeds to all 58 unit owners because that ruling is contrary to the Declaration and Missouri's Uniform Condominium Act (UCA).[3] Point II contends the trial court erred by denying relief on Counterclaimants' breach of trust and fiduciary duty theories because the Association breached both of those duties when it failed to distribute the surplus funds solely to Building 158 unit owners. Point III contends the trial court erred by denying relief on Counterclaimants' breach of contract claim because the Association improperly assessed quarterly dues against Building 158 unit owners after their building burned.

The material facts are undisputed, and only issues of law are presented for our de novo review. See Nevils v. Group Health Plan, Inc., 418 S.W.3d 451, 453 (Mo. banc 2014). We find no merit in Counterclaimants' points and affirm the judgment. Additional facts necessary to the disposition of the case are included below as we address Counterclaimants' three points on appeal.

Point I

Counterclaimants contend the trial court erred by distributing the surplus funds to all 58 unit owners because that ruling does not comply with sections 26(f) and (h) in the Declaration. In determining the meaning of those provisions, we consider the document as a whole and give the words their natural and ordinary meaning. Clampit v. Cambridge Phase II Corp., 884 S.W.2d 340, 345 (Mo. App. 1994). We will find ambiguity in these provisions only if the terms are ...


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