{ "id": 1893795, "name": "Vernon DAMRON and Betty Damron v. UNIVERSITY ESTATES, PHASE II, INC.", "name_abbreviation": "Damron v. University Estates, Phase II, Inc.", "decision_date": "1988-05-23", "docket_number": "88-43", "first_page": "533", "last_page": "540", "citations": [ { "type": "official", "cite": "295 Ark. 533" }, { "type": "parallel", "cite": "750 S.W.2d 402" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "285 Ark. 434", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1877719 ], "weight": 2, "year": 1985, "opinion_index": 0, "case_paths": [ "/ark/285/0434-01" ] }, { "cite": "281 Ark. 308", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1742381 ], "weight": 2, "year": 1984, "opinion_index": 0, "case_paths": [ "/ark/281/0308-01" ] }, { "cite": "269 Ark. 237", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1712436 ], "weight": 2, "year": 1980, "opinion_index": 0, "case_paths": [ "/ark/269/0237-01" ] }, { "cite": "Ark. Code Ann. \u00a7 16-22-308", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1987, "pin_cites": [ { "parenthetical": "effective April 6, 1987" } ], "opinion_index": 0 }, { "cite": "602 F.2d 826", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1448829 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/f2d/602/0826-01" ] }, { "cite": "245 Ark. 694", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1606954 ], "weight": 2, "year": 1968, "opinion_index": 0, "case_paths": [ "/ark/245/0694-01" ] }, { "cite": "288 Ark. 439", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8721854 ], "weight": 2, "year": 1986, "opinion_index": 0, "case_paths": [ "/ark/288/0439-01" ] }, { "cite": "20 Ark. App. 140", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6647962 ], "weight": 2, "year": 1987, "opinion_index": 0, "case_paths": [ "/ark-app/20/0140-01" ] }, { "cite": "273 Ark. 147", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8717847 ], "weight": 2, "year": 1981, "opinion_index": 0, "case_paths": [ "/ark/273/0147-01" ] }, { "cite": "278 Ark. 27", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1748189 ], "weight": 3, "year": 1982, "opinion_index": 0, "case_paths": [ "/ark/278/0027-01" ] }, { "cite": "Ark. Code Ann. \u00a7 18-13-101", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1987, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 }, { "cite": "Ark. Code Ann. \u00a7 18-13-116", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1987, "pin_cites": [ { "page": "(a)" } ], "opinion_index": 1 }, { "cite": "288 Ark. 439", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8721854 ], "weight": 2, "year": 1986, "opinion_index": 1, "case_paths": [ "/ark/288/0439-01" ] } ], "analysis": { "cardinality": 649, "char_count": 14028, "ocr_confidence": 0.886, "pagerank": { "raw": 4.6081682877876564e-07, "percentile": 0.9261317937841164 }, "sha256": "d29822a912a1007c2c85dd2b4860490488614ecfd5f4c5d4500ff6de8bfa1361", "simhash": "1:252aff1725394552", "word_count": 2215 }, "last_updated": "2023-07-14T18:11:27.354550+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Dudley and Glaze, JJ., dissent." ], "parties": [ "Vernon DAMRON and Betty Damron v. UNIVERSITY ESTATES, PHASE II, INC." ], "opinions": [ { "text": "John I. Purtle, Justice.\nThe chancellor awarded appellee a judgment on its complaint to collect charges from the appellant for services rendered in maintaining the common areas on property within a horizontal property regime. Additionally, the chancellor ordered appellant to pay attorney\u2019s fees. This appeal is from that part of the decree only. We hold that the chancellor was correct in awarding attorney\u2019s fees.\nThe appellee, University Estates, Phase II, Inc., is an Arkansas non-profit corporation with the purpose of, among other things, maintaining common areas in a horizontal property regime. The appellee collects from the individual property owners an amount sufficient to pay the costs of care and maintenance for the common areas in the regime.\nThe appellants own a residence within University Estates, and were assessed the sum of $526.50 for their share of the cost of maintaining the common areas. They denied owing said sum. The appellee brought suit to collect this sum, plus interest at the rate of 10%, and for costs and attorney\u2019s fees. The complaint also sought to have the judgment declared a lien upon the property owned by the appellants and for foreclosure if said judgment was not timely satisfied.\nOn the 10th day of February, 1987, a decree was entered awarding the appellee judgment against the appellants for their pro rata charges for maintenance of the common areas. The court also entered judgment for costs and attorney\u2019s fees in the amount of $919.87. The total judgment was decreed a lien against appellants\u2019 property. The court declared the judgment prior to all liens except the first mortgage.\nThe appellants had purchased property within a horizontal property regime already in existence. The regime had filed a \u201cDeclaration of Covenants, Conditions and Restrictions\u201d in the Office of the Circuit Clerk of Pope County, Arkansas, the county where the property is situated. This document contained a provision which stated:\nThe annual and special assessments, together with interest, costs and reasonable attorney\u2019s fees shall be a continuing lien upon property against which each such assessment is made. Each such assessment, together with reasonable attorney\u2019s fees, shall also be the personal obligation of the person who was the owner of such property at the time assessment fell due.\nThe Horizontal Property Act is codified at Ark. Code Ann. \u00a7 18-13-101 et seq. (1987), and provides for mandatory pro rata contributions from property owners within a horizontal property regime for \u201cthe expenses of administration and of maintenance and repair of the general common elements . . . .\u201d (\u00a7 18-13-116). The act also provides that the administration of every building constituted into horizontal property shall be governed by the bylaws which shall be recorded with the master deed at the county courthouse. (\u00a7 18-13-108(a)). Arkansas Code Ann. \u00a7 18-13-108(b) sets out the minimum provisions of the bylaws, and subsection (b)(4) specifically requires the bylaws to provide for the manner of collecting from the \u201cco-owners\u201d for the costs of the common expenses. The act further provides that the \u201cco-owners\u201d of the apartments are bound to contribute \u201ctoward any other expense lawfully agreed upon.\u201d (\u00a7 18-13-116).\nThe only question to be answered by this opinion is whether the chancellor erred in awarding attorney\u2019s fees to the appellee for the attorney\u2019s services in collecting the charges from the appellants for maintenance of the common areas in the regime.\nOur general rule relating to attorney\u2019s fees is well established and is that attorney\u2019s fees are not allowed except when expressly provided for by statute. Harper v. Wheatley Implement Co., 278 Ark. 27, 643 S.W.2d 537 (1982). Harper cited with approval our holding to the same effect in Brady v. Aiken, Inc., 273 Ark. 147, 617 S.W.2d 358 (1981). This line of cases was followed by the Arkansas Court of Appeals in White v. Associates Commercial Corp., 20 Ark. App. 140, 725 S.W.2d 7 (1987), in which the court stated: \u201cNotwithstanding that the parties have contracted for recovery of attorney\u2019s fees, the Arkansas Supreme Court has consistently held that a party cannot recover attorney\u2019s fees unless such fees are expressly provided for by statute.\u201d See also Millsap v. Lane, 288 Ark. 439, 706 S.W.2d 378 (1986), where we discussed the American rule concerning attorney\u2019s fees and the \u201ccommon fund\u201d exception.\nArkansas Code Ann. \u00a7 4-56-101 (1987) provides that \u201ca provision in a promissory note for the payment of reasonable attorney\u2019s fees... is enforceable as a contract of indemnity.\u201d In Geyer v. First Arkansas Development Finance Corp., 245 Ark. 694, 434 S.W.2d 301 (1968), we held that attorney\u2019s fees were expressly provided for by this statute, where the promissory note incorporated by reference the mortgage, which provided for the payment of reasonable attorney\u2019s fees. See also In Re Morris, 602 F.2d 826 (8th Cir. 1979), applying Arkansas law. Arkansas Code Ann. \u00a7 4-9-504(1)(a) (1987) (a provision of the Uniform Commercial Code), which concerns the disposition of collateral involving secured transactions for the sale of goods, authorizes an award of attorney\u2019s fees \u201cto the extent provided for in the agreement and not prohibited by law.\u201d A very recent statute, Ark. Code Ann. \u00a7 16-22-308 (Supp. 1987) (effective April 6, 1987), which will no doubt have a considerable impact on this area of the law provides:\nIn any civil action to recover on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney fee to be assessed by the court and collected as costs.\nOur decisions concerning attorney\u2019s fees under the UCC appear somewhat conflicting. See Svestka v. First National Bank in Stuttgart, 269 Ark. 237, 602 S.W.2d 604 (1980); and Harper v. Wheatley, supra. These two opinions seem to take opposite positions on the question whether a secured creditor is entitled to recover reasonable attorney\u2019s fees for services rendered in obtaining possession of collateral after default and in disposing of the collateral.\nThis court has recognized the right of parties under certain circumstances to contract for the collection of attorney\u2019s fees. In Abrego v. United Peoples Federal Savings and Loan, 281 Ark. 308, 664 S. W.2d 858 (1984), we held that indemnity agreements, which included a promise to indemnify for reasonable attorney\u2019s fees, were enforceable. In Abrego I, we remanded the case to the trial court with instructions to award attorney\u2019s fees and other costs \u201cwhich were reasonable, proper, necessary, and incurred in good faith and with due diligence.\u201d The same case was again before us in Warner Holdings, Ltd. v. Mary Ann Abrego, et al., 285 Ark. 434, 688 S.W.2d 724 (1985). In Abrego II we stated that Arkansas still follows the general rule that when a party agrees to indemnify another against losses, attorney\u2019s fees incurred in the enforcement of the indemnity agreement are not recoverable. We noted, however, that the rule developed in cases in which the indemnity agreement contained no specific promise to pay attorney\u2019s fees. The agreement between the parties in that case contained a specific promise to pay attorney\u2019s fees which might be incurred in enforcing the indemnity agreement. The Abrego II opinion concluded:\nWe cannot end this opinion without noting we have not been asked ,to address instances in which attorney\u2019s fees may be allowed as a general proposition. The appellant has not argued that attorney\u2019s fees may not be awarded unless specifically authorized by statute, or that an agreement permitting recovery of such fees constitutes an unlawful penalty. [Citation omitted.] We recognized that our decisions in this area are not clear, and, when presented with a case raising the issue properly, we will address squarely the question whether a clause permitting recovery of reasonable attorney\u2019s fees incurred in enforcement of the agreement containing the clause is enforceable.\nAlthough that precise question is not before us, we must answer the question whether attorney\u2019s fees, although not specifically authorized by statute, are nevertheless recoverable under the circumstances of this case. The Horizontal Property Act does not specifically mention attorney\u2019s fees. However, it does clearly authorize the collection of common expenses and any other expense lawfully agreed upon.\u201d (Emphasis added.) The act further requires that the bylaws, which are binding upon the purchasers of property within the regime, be filed of record. The \u201cDeclaration of Covenants, Conditions and Restrictions\u201d was recorded on the property records of Pope County at the time the appellants purchased property in the regime. These bylaws provide for the collection of reasonable attorney\u2019s fees. By the act of purchasing property in the regime, the appellants agreed to abide by the terms of these bylaws. This agreement was clearly authorized by the legislature in the Horizontal Property Act.\nContrary to the assertion of the dissent, we do not categorize the attorney\u2019s fees authorized by the statute as \u201cexpenses\u201d or \u201ccosts\u201d as those terms are generally recognized in the context of the expenses of litigation. Rather, under the circumstances of this case, we think the appellants clearly agreed to be obligated to pay reasonable attorney\u2019s fees incurred in collecting the common expenses of the regime. Although not. doing so expressly, the legislature authorized horizontal property regimes to collect attorney\u2019s fees under the circumstances by authorizing the collection of \u201cany other expense lawfully agreed upon.\u201d Certainly the recovery of attorney\u2019s fees in this case was an \u201cexpense lawfully agreed upon.\u201d Therefore we hold that the chancellor was correct in entering judgment for the attorney\u2019s fees.\nAffirmed.\nDudley and Glaze, JJ., dissent.", "type": "majority", "author": "John I. Purtle, Justice." }, { "text": "Tom Glaze, Justice,\ndissenting. The majority opinion contradicts this court\u2019s long-settled rule that attorneys\u2019 fees are not charged as costs in litigation unless specifically permitted by statute. See Millsap v. Lane, 288 Ark. 439, 706 S.W.2d 378 (1986). Here, the majority uses \u201cbootstrap logic\u201d in holding that Arkansas\u2019s Horizontal Property Act authorizes attorneys\u2019 fees. In its opinion, the majority says that, although the Act does not mention attorneys\u2019 fees, the Act does authorize the collection of \u201cthe expenses of administration and of maintenance and repair of the common elements,\u201d and further binds co-owners to contribute toward \u201cany other expense lawfully agreed upon.\u201d The majority surmises from this language in the Act that since the parties, in their bylaws, agreed that the association\u2019s annual and special assessments should include attorneys\u2019 fees, the trial court was authorized by law to award appellee such fees in this litigation wherein it sued appellants for their share of common-area expenses.\nClearly, the Act makes no mention whatsoever of attorneys\u2019 fees, and for that reason alone, the majority should have ended its inquiry and held the trial court was wrong in awarding fees to the appellee. Instead, the majority took the private bylaws that controlled the parties\u2019 horizontal property regime, and construed those bylaws as being part of the Act. In doing so, the majority concludes that attorneys\u2019 fees are \u201cother expense(s) lawfully agreed upon.\u201d By this engrafting process, the majority claims the language of the Act \u201cexpressly\u201d authorizes the award of attorneys\u2019 fees. If this logic controls, I see nothing to prevent parties from entering private agreements under which they agree attorneys\u2019 fees are \u201ccosts\u201d or \u201cexpenses\u201d and awardable as such. However, such a practice would appear contrary to the rule that the term \u201ccosts\u201d or \u201cexpenses\u201d as used in a statute is not understood ordinarily to include attorneys\u2019 fees. See 20 Am. Jur. 2d Costs \u00a7 72 (1965). In view of the position now taken by the majority, I would expect written contracts, leases and similar documents to provide that attorneys\u2019 fees be allowable as costs or expenses even though no statute specifically mentions attorneys\u2019 fees, but does contain language that costs (or expenses) are recoverable.\nAnother reason I part with the majority\u2019s logic is that the terminology \u201cother expense,\u201d as employed in the Act, in no way indicates the General Assembly intended that term to include attorneys\u2019 fees. As pointed out in the majority opinion, Ark. Code Ann. \u00a7 18-13-116(a) (1987) \u2014 where the \u201cother expense\u201d language appears \u2014 concerns itself with an owner\u2019s obligation to share in the expenses of the administration, maintenance and repair of the general common elements. That provision makes no reference as to costs or expenses incurred in collecting such common-area expenses.\nThe appellee, in the present case, brought suit against the appellants for their pro-rata unpaid share of expenses actually incurred in maintaining the common areas. The statutory language in issue here offers no suggestion that it was intended to include attorneys\u2019 fees incurred in the event action is required to collect common-area expenses from a horizontal-property owner.\nIf this court now adheres to the rule that parties, by agreement or bylaws, may authorize attorneys\u2019 fees as costs or expenses, we should plainly adopt that view. If not, the court should continue to deny attorneys\u2019 fees as costs or expenses unless a statute exists that expressly or specifically provides such fees are recoverable.", "type": "dissent", "author": "Tom Glaze, Justice," } ], "attorneys": [ "Bullock & McCormick, by: David H. McCormick, for appellant.", "Sanford, Pate & Gunn, by: Jon R. Sanford, for appellee." ], "corrections": "", "head_matter": "Vernon DAMRON and Betty Damron v. UNIVERSITY ESTATES, PHASE II, INC.\n88-43\n750 S.W.2d 402\nSupreme Court of Arkansas\nOpinion delivered May 23, 1988\n[Rehearing denied June 20, 1988.]\nBullock & McCormick, by: David H. McCormick, for appellant.\nSanford, Pate & Gunn, by: Jon R. Sanford, for appellee.\nGlaze, J., would grant rehearing." }, "file_name": "0533-01", "first_page_order": 561, "last_page_order": 568 }