United States District Court, D. Oregon
JANICE LOTT, on behalf of herself and all others similarly situated; KANIKA CHEA, on behalf of herself and all others similarly situated, Plaintiffs,
VIAL FOTHERINGHAM, LLP, Defendant.
Knewston Bret Knewston, Esq. Mark. G. Passannante Boer &
Passannante, P.S. Attorneys for Plaintiff
Jonathan M. Radmacher McGowen Grisvold, LLP Attorney for
OPINION & ORDER
A. HERNÁNDEZ United States District Judge
Janice Lott and Kanika Chea (collectively
“Plaintiffs”) bring claims under the Fair Debt
Collection Practices Act (“FDCPA”) against
Defendant Vial Fotheringham, LLP. Plaintiffs allege that
Defendant engaged in abusive, deceptive, and unfair debt
collection efforts when attempting to collect overdue
homeowners' association (“HOA”) assessments.
the Court are the parties' cross-motions for partial
summary judgment regarding Defendant's right, or lack
thereof, to impose or collect certain charges and interest.
If the disputed charges and interest were not authorized by
contract or by statute, then Defendant's collection of
them qualifies as an unfair debt collection practice under
the FDCPA. Plaintiffs argue that Defendant was not authorized
to: (1) charge pre-suit attorneys' fees for collection
work and for other management fees; and (2) impose
contractual interest rates on prevailing-party attorneys'
fees in excess of 9%. Defendant moves for summary judgment
that both the charges and interest identified above are
lawful. Defendant also generally moves for summary judgment
that the following may be collected: unpaid assessments, late
charges at a rate of 30% per unpaid assessment, costs,
attorney fees, and interest on those items at rates set in
the relevant HOA documents. Lastly, Defendant argues that
summary judgment should be granted in its favor on all of
Chea's claims against it because she signed a covenant to
release any claims arising from the parties' disputes.
The Court grants in part both parties' motions.
description of Lott and Chea's allegations against
Defendant can be found in the Court's prior Opinion &
Order regarding Defendant's motion to dismiss.
See Op. & Order, Aug. 23, 2016, ECF 10. In sum,
Plaintiffs fell behind on paying assessments to their HOAs
for the maintenance of common areas. Plaintiffs' HOAs
employed Defendant as their debt collector. Defendant
initiated collection lawsuits against Plaintiffs and
prevailed. Defendant charged Plaintiffs for attorneys'
fees associated with its collection work conducted prior to
filing suit and it collected other management fees arising
from Plaintiffs' communications with Defendant regarding
their delinquencies. Additionally, Defendant imposed interest
on attorneys' fees it was awarded as the prevailing-party
in its collection lawsuits at rates of 18% against Lott and
12% against Chea respectively, which were higher than the
standard statutory 9% rate. Plaintiffs contend that the
charges and interest rates described above were not
authorized by Plaintiffs' agreements with their HOAs or
purposes of the motions currently before the Court, the
relevant facts include the texts of the HOAs':
declarations of covenants, conditions & restrictions;
bylaws; and collection resolutions.
property is subject to the rules of the Autumn Meadows
Owner's Association (“AM HOA”). Zimmerman
Decl. Ex. 1, ECF 31. AM HOA's declaration (“AM
Declaration”) provides that the AM HOA's Board of
Directors (“AM Board”) “may adopt, modify
or revoke Rules and Regulations governing the conduct of
persons and the operation or use of Lots and Common
Areas” and it may levy special assessments for the
maintenance of common areas. Id. at §§
4.22, 5.4, 10.5. Further, the AM Board may also levy special
assessments against an owner “[t]o collect amounts due
to the Association from an Owner for breach of the
Owner's obligation under the Declaration, the Bylaws, or
the Rules and Regulations by vote of a majority of the
Board.” Id. at § 10.6. When an owner
becomes delinquent on payment of its assessments, the AM HOA,
through the AM Board “or any management agent, ”
may file a lien on the owner's deed. Id. at
§ 10.8(b). “Once filed, such lien shall accumulate
all future assessments or installments, interest, late fees,
penalties, fines, attorneys' fees (whether or not suitor
action is instituted) and other appropriate costs properly
chargeable to an Owner by the Association, until such amounts
are fully paid.” Id.
interest, fines, late fees, and penalties, the AM Board has
discretion to “adopt resolutions to set the rate of
interest, and to impose late fees, fines and penalties on
delinquent assessments or for violations of the provisions of
this Declaration, the Bylaws, any Rules and Regulation . . .
.” Id. at § 10.8(c). The AM HOA is
required to communicate any such imposition to all owners in
writing at least thirty days before the effective date and
“[s]uch impositions shall be considered assessments
which are lienable and collectible in the same manner as any
other assessment.” Id.
HOA's bylaws (“AM Bylaws”) give the AM Board
the authority to adopt “rules and regulations governing
the use and maintenance” of common areas and to
“establish fines and penalties for the violation
thereof.” Zimmerman Decl. Ex. 2, at § 7.1. The AM
Bylaws state that owners are obligated to pay 18% interest on
late assessments per annum, as well as a “one-time per
assessment late charge not to exceed 30% of the delinquent
amount.” Id. at § 10.
Board passed a collection resolution (“AM
Resolution”), stating that under the AM Declaration and
AM Bylaws, owners “shall be obligated to pay reasonable
fees and costs including, but not limited to, attorney fees
incurred in connection with efforts to collect delinquent and
unpaid assessments, regardless of whether suit or action is
commences, and/or to enforce the provision of the
Declaration, Bylaws, rules and regulations of the Act.”
Zimmerman Decl. Ex. 3, at 1-2. The AM Resolution also
provides that the “lien amount shall include all
collection costs to date, including attorney's fees and
the cost of preparing and/or recording the lien.”
Id. at 2-3.
property is subject to the rules of the Waterford Park
Homeowners' Association (“WP HOA”). The WP
HOA's declaration (“WP Declaration”) states
that upon a majority vote of the owners, the board of
directors (“WP Board”) may levy additional
special assessments. Zimmerman Decl. Ex. 4, at Art. IV(3).
The WP Declaration gives the WP Board discretion to charge
fees for the maintenance of common areas including “the
right to levy liens on any Townhomes and charge interest for
any fees not paid by the Owner(s) in accordance with the
provisions hereof.” Zimmerman Decl. Ex. 4, at Art.
II(B). Such liens include annual and special assessments
“together with such interest thereon and costs of
collection thereof.” Id. at Art. IV(B)(2). If
an owner becomes delinquent on their assessments, then the
assessment will bear interest at 1% per month until paid.
Id. at Art. IV(B)(3)(A). Additionally, a delinquent
owner must pay a late charge of 30% of the portion of the
delinquent assessment. Id. If the WP HOA obtains a
lien judgment or decree in its favor, the WP Declaration
provides that the owner shall be liable for “the
Association's court costs and disbursements and
reasonable attorneys' fees to be fixed by the court, such
costs, disbursements and attorneys'' fees to be
further secured by such lien.” Id. at Art.
HOA's bylaws (“WP Bylaws”) provides that the
WP Declaration “shall establish a basis to assess and
collect a prorate share of the annual budget from each Lot
and Member and to enforce collection thereof, including lien
rights against a Lot and Member.” Zimmerman Decl. Ex.
5, at Art. IX(B).
HOA passed a collection resolution (“WP
Resolution”) stating that the “lien amount shall
include all collection costs to date, including
attorney's fees and the cost of preparing and/or
recording the lien, any notice of lien required by
law.” Zimmerman Decl. Ex. 6, at 2-3. The WP Resolution
also provided “that all legal fees and costs incurred
in the collection of a delinquent account shall be assessed
against the ...