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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Craig Wm. Black and Camille R. Brill v. Whitestone Estates Condominium Homeowners' Association, Donald Jurewicz and Mary E. Jurewicz (8/16/2019) sp-7400

Craig Wm. Black and Camille R. Brill v. Whitestone Estates Condominium Homeowners' Association, Donald Jurewicz and Mary E. Jurewicz (8/16/2019) sp-7400

          Notice:   This opinion is subject to correction before publication in the PACIFIC  REPORTER.  

          Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  


          303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  



                     THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  


R.  BRILL,                                                  )    Supreme Court No. S-16986  



                              Appellants,                   )    Superior  Court  No.  3AN-16-05364  CI  



                                                            )    O P I N I O N  




WHITESTONE ESTATES                                          )    No. 7400 - August  16, 2019  


CONDOMINIUM HOMEOWNERS'                                     )  


ASSOCIATION, DONALD                                         )  


JUREWICZ and MARY E.                                        )  

JUREWICZ,                                                   )  


                              Appellees.                    )  




                       ppeal from the Superior Court of the State of Alaska, Third  


                    Judicial District, Anchorage, Gregory Miller, Judge.  


                    Appearances: Craig Wm. Black, Eagle River, for Appellants.  


                    Ralph B. Cushman, LawOfficeofJames H. McCollum, LLC,  


                    Anchorage, for Appellee Whitestone Estates Condominium  


                    Homeowners'  Association.                    No  appearance  by  Appellees  


                    Donald and Mary E. Jurewicz.  


                    Before:  Bolger, Chief Justice, Winfree, Stowers, Maassen,  


                    and Carney, Justices.  


                    BOLGER, Chief Justice.  

----------------------- Page 2-----------------------


                    For several years two condominiumowners withheld aportionoftheir dues  


in protest.   Then beginning in 2014, they sent the condominium association several  


payments, with instructions to apply themto recent debts and current dues. In this appeal  


the owners argue that they accrued no debts within the statute of limitations because their  


payment directives were binding. But we agree with the superior court's conclusion that  


these payment directives were not effective because the governing declaration allowed  


the association to apply any payments to "the oldest balance due."   We affirm the  


superior court on this issue and on the other issues the owners raise in this appeal.  




          A.        Facts  

                    Whitestone  Estates  is  a  ten-unit  condominium,  adjacent  to  Ptarmigan  


Boulevard, a public street, in Eagle River.  The condominiums are single-family homes  


on large parcels of land.  Units 1 and 2 access Ptarmigan Boulevard by a short, paved  


drive; units 3 through 10 access Ptarmigan Boulevard by a longer drive.  


                    Craig Black, a member of the Alaska Bar who has represented himself and  


his wife, CamilleBrill,(collectively theBlacks) throughout thislitigation, purchased unit  


1  in  May  2002.             Whitestone  has  assessed  monthly  dues  of  $100  to  pay  for  the  


maintenance of both drives, mostly snow removal, since before the Blacks purchased  


their unit.  In 2004, relying on a legal opinion he obtained as president of the board of  


the  condominium  association,1                    Black  claimed  that  this  arrangement  violated  the  


condominium's governing declaration. He proposed an alternative approach: that each  


unit owner pay the percentage of the annual snow removal expenses that corresponded  


to the portion of paved area within the association that serviced his or her unit.  The unit  




                    Black was a board member from 2003 to March 2009.  

                                                               -2-                                                             7400  

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owners  voted  to  reject  this  proposal  in  2005.                         But  the  Blacks  nonetheless  began  


withholding a portion of their assessed dues, paying only what their share would have  


been under the rejected formula.  


                    In 2011Whitestonesought an opinionfromasecond attorneyabout its dues  


structure.  This attorney concluded that the main drive was a common element and that  


the association's dues structure was permissible under the declaration.  Nonetheless the  


Blacks continued to withhold a portion of their assessed dues until 2014.  


                    On February 6, 2014, the Blacks sent a letter to all unit owners announcing  


their intent to end their dues protest.  The letter explained that an enclosed check for  


$3,554.56 and an earlier check for $265.44 "equal the sum of all monthly association  


assessments for the 50 months from January 2010 through this month, with our intention  


being to resume regular $100 monthly payments for the foreseeable future." The Blacks  


clarified to the association's treasurer in an email that they intended these payments "to  


cover the $3,800.00 that'[d] been assessed beginning January 2010."  


                    The treasurer then sent an email to all unit owners on March 22, 2014,  


shortly before that year's annual meeting, saying that his "records show everyone is paid  


through 12/31/2013 or further."  At the annual meeting later that month, the owners  


voted to disregard the Blacks' directive and instead apply the lump-sum payment to the  


couple's oldest debts first. The Blacks did not object, either at the meeting or afterwards.  


                    From then on the Blacks sent monthly $100 checks to Whitestone with  


instructions that they be applied to their current dues.  Whitestone cashed these checks  


until sometime after litigation began, at which point they started returning them to the  



          B.        Proceedings  


                    1.        Pre-trial motions  


                    Whitestone filed a complaint for lien foreclosure in March 2016, seeking  

                                                               -3-                                                         7400

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to recover $4,714.08 in unpaid assessments and fees from the Blacks, interest on the                                                                                                                                           

unpaid amounts, and "full attorney's fees."                                                                          

                                    In their answer the Blacks asserted a statute of limitations defense, alleging                                                                                                 

that they had fully paid all debts owed to Whitestone for the previous three years and that                                                                                                                                    

                                                                                                                                               2    The Blacks also filed numerous  

recovery on any debt older than that was time-barred.                                                                                                                                                         

counterclaims.   They alleged that Whitestone had amassed surplus funds that it was  


required to distribute to unit owners, that Whitestone had held meetings without giving  


the Blacks proper notice, and that Whitestone had not prepared and approved minutes  


for its board meetings, all in violation of the declaration.  The Blacks requested that the  


court invalidate every action taken at a meeting for which "ample advance notice was not  


first given,"direct Whitestoneto "generateandapprove minutes" for each of its meetings  


since January 1, 2009, and award money damages in the amount of the Blacks' pro rata  


share of the alleged surplus.  The Blacks also requested attorney's fees and punitive  


damages, alleging that Whitestone willfully failed to comply with the requirements of  



Alaska's Common Interest Ownership Act.   


                                    Whitestone filed an amended complaint in which it explicitly addressed  


Black's statute of limitations defense, claiming that the Blacks' payment directives were  


ineffective, that it had applied their payments to their oldest debts first, and that the debts  


on which it sought to recover were thus not older than three years.  


                                    Whitestone also sought declaratory judgment to determine whether the  


owners of units 1 and 2 could legally be required to pay assessments for the upkeep of  


the main drive.  It alleged that the Blacks had "asserted for years" that they were not  


                  2                 Alaska Statute 09.10.053 provides that "[u]nless the action is commenced                                                                                            

within three years, a person may not bring an action upon a contract or liability, express                                                                                                                          

or implied" with limited exceptions.                               

                  3                 See AS 34.08.670.  


                                                                                                                -4-                                                                                                        7400

----------------------- Page 5-----------------------

required to pay for the maintenance of the drive, while also asserting that Whitestone                                                                                                                                                                                                                                                                                                                                                                                                                           

 should be responsible for the maintenance of the smaller drive that served units 1 and 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

 The Blacks moved to dismiss this claim for declaratory relief, arguing that no actual                                                                                                                                                                                                                                                                                                                                                                                                                                                               

 controversy existed over the drives issue because they had abandoned their dues protest                                                                                                                                                                                                                                                                                                                                                                                                                                                         

 in 2014.                                                       The superior court denied this motion.                                                                                                                                                                                                                                      Whitestone then filed a motion for                                                                                                                                                                                           

partial summary judgment on its declaratory judgment claim, which the superior court                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

 eventually granted.                                                                                                              

                                                                                         2.                                           Trial and post-trial orders                                                                                                                                                                  

                                                                                         The case proceeded to a five-day bench trial on the remaining issues in late                                                                                                                                                                                                                                                                                                                                                                                                  

August 2017.                                                                                 Whitestone presented the testimony of multiple unit owners, while the                                                                                                                                                                                                                                                                                                                                                                                                       

Blacks called a former unit owner who had been Whitestone's treasurer when they made                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

their 2014 payment.                                                                                                                     Both Black and Brill also testified.                                                                                                                                                                                                          In their closing argument, the                                                                                                                                                      

Blacks agreed to the dismissal of their counterclaims for an injunction, based on the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

 failure to provide notice of meetings, and for punitive damages, saying that they did not                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

 "believe there's evidence sufficient to award either of those."                                                                                                                                                                                                                                                                                                                                                           

                                                                                         After the parties gave their closing arguments, the court issued a decision                                                                                                                                                                                                                                                                                                                                                          

 on the record.                                                                               The court stated that "[t]his isn't a close call" and resolved all the issues                                                                                                                                                                                                                                                                                                                                                                           

 in Whitestone's favor, awarding it $11,518.20 in damages.                                                                                                                                                                                                                                                                                                                                                      It explained that this was                                                                                                                         

 "largely a credibility case," and found "every one of [Whitestone's] witnesses to be very,                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

very credible." On the other hand, the court said that it did not find Black's explanations                                                                                                                                                                                                                                                                                                                                                                                                               

 of his actions to                                                                                                  be credible and                                                                                                  found  that Black                                                                                                           was "trying                                                                            to sneak                                                        up   on   the  

 association," which the court considered an act of bad faith.                                                                                                                                                                                                                                                                                                                                                  

                                                                                         The court found that Black had "created . . . a decade of animosity and                                                                                                                                                                                                                                                                                                                                                                                                    

mistrust amongst [himself] and [his] neighbors and . . . w[as] simply not willing to abide                                                                                                                                                                                                                                                                                                                                                                                                                                                                

by the declaration" and accept the 2005 vote that rejected his alternative dues structure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

It explained that it concluded from testimony that Black had "bullied everybody with                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                       -5-                                                                                                                                                                                                                                                                     7400

----------------------- Page 6-----------------------


[his]  position  as  a  lawyer"  and  that  this  demeanor  was  evident  in  his  filings  and  


presentation before the court. The court further explained that despite Black's posturing,  


his legal arguments were not as strong as he believed:  "[T]he facts establish that [he  


was] very assertive and self-confident with the association, but under the light of day  


here in this courtroom, [he] had no substance to that assertion."  


                    The Blacks filed a motion for reconsideration, which the superior court  


denied with a written order.   In it the court explained the basis for its decision that  


Whitestone's  claims  were  not  time-barred.                         It  concluded  that  the  Blacks'  payment  


directives were not binding on the association for two reasons:  first that they could not  


override a provision of the declaration that gave "Whitestone . . . the right to apply  


payments received to the oldest debts first," and second that Black had breached a  


fiduciary duty to the association by not "warn[ing] his fellow board members and unit  


owners what the effect of ignoring his payment directives might be" while he was a  


board member from 2005 to 2009.   For these reasons, the superior court found that  


"while the Blacks may have made payment directives, they made no effective payment  


directives."  (Emphasis in original.)  


                    The superior court issued its final judgment and a decree of foreclosure in  


October 2017 and granted Whitestone full attorney's fees in January 2018.  In all, it  


granted Whitestone a total monetary judgment of $132,670.16:  $11,518.20 for unpaid  


assessments, associated late fees, and interest (less $4,382, which the Blacks had already  


paid into the court registry) and $125,533.96 in attorney's fees and costs.  The court  


placed a foreclosure lien in that amount on the Blacks' property.  


                    The Blacks appeal.  



                    The Blacks argue that the superior court erred when it determined that their  


payment directives were ineffective, found that they were not entitled to recover alleged  

                                                               -6-                                                         7400

----------------------- Page 7-----------------------

 surplus   funds   from   the   association,   denied   their   motion   to   dismiss   the   declaratory  

judgment claim, included a disputed special assessment in Whitestone's award, and                                                                                                                                                                                                                                                                            

 determined   that   Whitestone's   attorney's   fees   were   reasonable.     We   address   these  

 arguments in turn.                                       

                             A.	                          The Superior Court Did Not Err When It Concluded That The Blacks'  

                                                         Payment Directives Were Not Binding On Whitestone.                                                                                                                                              

                                                         The   superior   court   concluded  that   the   Blacks'   payment   directives   to  

 Whitestone were ineffective.                                                                                                  It concluded that Whitestone thus had the authority to                                                                                                                                                                               

 apply the couple's payments to their earliest accrued debts, meaning that its claims were                                                                                                                                                                                                                                                                

 not time-barred by the statute of limitations.                                                                                                                                                 The court explained that the declaration                                                                                      

 gave Whitestone "the right to apply payments received to the oldest debts first" and that                                                                                                                                                                                                                                                                    

 the Blacks "did not have the right to override that provision with payment directives."                                                                                                                                                                                                                                                                                           

 The superior court also found, in the alternative, that Black had breached a fiduciary duty                                                                                                                                                                                                                                                                

 to Whitestone while a board member, from 2005 to 2009, by not warning it about the                                                                                                                                                                                                                                                                              

 effect of disregarding his payment directives.                                                                                                                                                         We conclude that Whitestone had the                                                                                                                     

 authority to disregard the Blacks' payment directives under the express terms of the                                                                                                                                                                                                                                                                           

 declaration. We affirm the superior court's order on this basis and thus need not address                                                                                                                                                                                                                                                    

 its finding that Black breached a fiduciary duty.                                                                                                                                   

                                                         The superior court's order relies on the terms of the declaration. We review                                                                                                                                                                                                             

                                                                                                                                                                                                                     4   Under this standard of review, we  

 the "interpretation of contract language de novo."                                                                                                                                                                                                                                                                                                              

 assess the expectations of the parties to the contract by "examining the language used in  


 the contract, case law interpreting similar language, and relevant extrinsic evidence,  




                                                         Miller v. Fowler, 424 P.3d 306, 311 (Alaska 2018). Both parties agree that  


 the declaration is a contract.  

                                                                                                                                                                                  -7-	                                                                                                                                                                                       7400  

----------------------- Page 8-----------------------

including the subsequent conduct of the parties."                                   5  


                       The superior court's analysis of the effectiveness of the Blacks' payment  


directives is based on  258 of the Restatement (Second) of Contracts.  In particular it  


relied  on  comment  a  to    258,  which  states  that  "[t]he  obligor  cannot,  however,  


effectively direct an application in breach of a contract with the obligee as to how  


performances should be applied if the contract is specifically enforceable."  The Blacks  


argue in their briefing that the declaration is not specifically enforceable, and thus the  


Restatement's rule does not apply.  


                       We find it unnecessary, however, to decide whether the declaration is a  


specifically enforceable contract such that the comment applies.   Although we have  

                                                                                                    6  it provides only the default  


favored the Restatement's approach to payment directives, 

rule;  where  an  express  term  of  the  contract  conflicts  with  the  general  rule  of  the  


Restatement,thecontract controls.7  And here the express termsofthedeclaration control  


how payments may be directed.  


            5          Norville v. Carr-Gottstein Foods Co.                             , 84 P.3d 996, 1004 (Alaska 2004)                  

(quoting  Municipality of Anchorage v. Gentile                                  , 922 P.2d 248, 256 (Alaska 1996)).               

            6          See Jalasko Assocs., Inc. v. Newbery Energy Corp., 663 P.2d 946, 948  


(Alaska 1983) (citing  259 of the Restatement for the general rule that "permits a  


creditor to apply a debtor's payment to any of the debtor's obligations, absent direction  


by the debtor").  


            7          Cf., e.g., In re Grigsby, 127 B.R. 759, 766 (E.D. Pa. 1991) ("This provision  


[of  the  contract  providing  for  repayment  of  interest  before  principal]  need  not  


'overcome' the general rule, because the general rule applies only in the absence of such  


a provision."); United Orient Bank v. Lee, 504 A.2d 1215, 1217 n.1 (N.J. Super. App.  


Div.  1986)  ("An  exception  arises  [to  the  general  rule  reflected  in    258  of  the  


Restatement] where there is a preexisting agreement with the obligee or a third party  


directing the application.").  


                                                                        -8-                                                                 7400

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                                             The Whitestone declaration provides that "[a]ny payments received by the                                                                                                                                                                

Association in the discharge of a Unit Owner's obligation may be applied first to interest,                                                                                                                                                                          

 late charges, collection costs, fines, and fees, and then to the oldest balance due from the                                                                                                                                                                                        

Unit Owner for Common Expense assessments." The Blacks argue that the declaration's                                                                                                                                                                  

use of the word "may" means that the ability to apply payments received to a debtor's                                                                           

 earliest   obligation   is   discretionary,   not   mandatory.     They   thus   contend   that   the  

 declaration does not allow Whitestone to disregard payment directives, but rather gives                                                                                                                                                                                     

 it flexibility only when the debtor has provided no instructions.                                                                                                                                                           We disagree.                                      The  

 declaration's use of the word "any" indicates that Whitestone's authority extends over                                                                                                                             

 all payments, even those accompanied by payment directives.                                                                                                                                                     This grant of authority               

would be meaningless under the Blacks' construction; the declaration would merely                                                                                                                                                                                      

restate the default rule that creditors may apply a payment as it wishes absent direction                                                                                                                                                                        


 from the debtor.                                         

                                             Extrinsic  evidence,  in  the  form  of  the  parties'  conduct,  supports  this  


                                               9         Multiple  unit  owners  testified  that  Whitestone  had  always  applied  


payments  to  the  oldest  debts  first.                                                                                       And  in  a  2011  email,  Black  himself  said  that  


                       8                    See  RESTATEMENT  (SECOND) OF  CONTRACTS   259                                                                                                                         (AM.L                  AW  INST .1981).   


 Cf. All. of Concerned Taxpayers, Inc. v. Kenai Peninsula Borough, 273 P.3d 1128, 1139  


 (Alaska 2012) ("We will construe a statute 'so that effect is given to all its provisions,  


 so that no part will be inoperative or superfluous, void or insignificant.' " (quoting 2A  

NORMAN  J. S                                INGER  & J.D. S                                  HAMBIE  SINGER, S                                           UTHERLAND  STATUTES AND                                                                      STATUTORY  

 CONSTRUCTION  46:6 (7th ed. 2007))).                                                                                                


                       9                     "[E]xtrinsic evidence may always be received on the question of meaning."                                                                                                                                       

Mahan   v.   Mahan,   347   P.3d   91,   94-95  (Alaska   2015)   (quoting   Alaska   Diversified  

 Contractors, Inc. v. Lower Kuskokwim Sch. Dist., 778 P.3d 581, 584 (Alaska 1989)); see  


also Casey v. Semco Energy, Inc.                                                                                , 92 P.3d 379, 384 (Alaska 2004) ("The intent of the                                                                                                                 

parties is the primary issue, and their intent can be drawn from extrinsic evidence,  


 especially their express attempts to comply with the contract as they understood it.").  


                                                                                                                                           -9-                                                                                                                                 7400

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Whitestone's   policy   was   to   always  apply   payments   to   the   oldest   debt   first.                                                                                                                                                                                                                                                                                                                                                              We  

 conclude, therefore, that the declaration granted Whitestone the authority to disregard                                                                                                                                                                                                                                                                                                                                           

the Blacks' directives and apply their payments to their earliest accrued debts first. And                                                                                                                                                                                                                                                                                                                                                                   

because the Blacks' payment directives were not binding, their debts were not beyond                                                                                                                                                                                                                                          

the statute of limitations.                                             

                                     B.	                                 The Superior Court Did Not Err When It Concluded That Leftover                                                                                                                                                                                                                                                                                             

                                                                         Funds In Whitestone's Account From 2005 To 2014 Were Reserves.                                                                                                                                                                                                                                                                                     

                                                                         Alaska Statute 34.08.450 states:                                                                                                           

                                                                         Unless otherwise provided in the declaration, surplus funds                                                                                                                                                                                                                                           

                                                                         of the association remaining after payment of or provision for                                                                                                                                                                                                                                                        

                                                                         common expenses and prepayment of reserves must be paid                                                                                                                                                                                                                                                       

                                                                         to   the   unit   owners   in   proportion   to   common   expense  

                                                                         liabilities  or   credited   to   them   to   reduce   future   common  

                                                                         expense assessments.   

The Whitestone declaration provides that the association "shall establish a reserve fund                                                                                                                                                                                                                                                                                                                                                                     

in an amount at least equal to the projected assessments for a two-month period for each                                                                                                                                                                                                                                                                                                                                                                      

Unit in the Common Interest Community."                                                                                                                                                                                                    It further provides:                                                                                         "The Association shall                                                                              

maintain the reserve funds in a segregated account to meet unforeseen expenditures or                                                                                                                                                                                                                                                                                                                                                                                      

to acquire additional equipment or services for the benefit of the Unit Owners.                                                                                                                                                                                                                                                                                                                                                                           Any  

                                     10	                                 The email reads:                                        


                                                                         My head's spinning.                                         

                                                                          Since we've always first applied new payments towards past arrearages, I                                                                                                                                                                                                                                                                                                                                

                                                                         don't see the difference:                                                                                                           a person can't be up to date on December 31 and                                                                                                                                                                                                       

                                                                         at the same time have an arrearage from a prior year.                                                                                                                                                                                                                                             It's impossible.   


                                                                                                                                                                                                                                 -10-	                                                                                                                                                                                                                       7400

----------------------- Page 11-----------------------

payments to this fund shall not be . . . refundable." Neither the declaration nor the statute                                          


defines surplus or reserve funds.                          

                      Whitestone closed the separate account it maintained for reserves in 2005,  


and from that year to 2015, it had only one bank account.   After being served with  


Whitestone's complaint, the Blacks filed a counterclaim alleging that the association  


maintained  no  reserves during  those years,  and that it should have distributed  any  


leftover funds to the owners as surplus. The superior court found that any funds left over  


at the end of budget years 2005 through 2014 were reserve funds, even though they were  


in a commingled account, and that the Blacks were not entitled to their distribution.  


                      The Blacks argue that this finding was erroneous.  This issue turns on the  


definition of "reserves" as used in the declaration.   We "review the superior court's  


                                                                         12  The declaration specifies that the purpose  

interpretation of contract language de novo."                                                                                        


of reserve funds is to "meet unforeseen expenditures or to acquire additional equipment  


or services for the benefit of the Unit Owners."  Any funds set aside for that purpose are  


therefore reserves under its terms.   This is the case regardless of whether they were  


segregated in a separate account.13  


           11         See  AS  34.08.990.  

           12         Miller  v.  Fowler,  424  P.3d  306,  311  (Alaska  2018).  

           13         The  Blacks  argued  at  trial  that  since  the  declaration  required  reserves  to  be  

kept i  n  a  segregated account,  any  funds  not k                         ept i  n  a  segregated  account  could  not  be  

reserves.   But  Black  agreed,  when  questioned  by  the  superior  court,  that  this  argument  

was  circular.  The structure of the declaration undercuts this argument  as well.  It first  

commands   that   the   association   "shall   establish   a  reserve   fund,"   and then   in   the  next  

paragraph   instructs   it   to   "maintain   the   reserve   funds   in   a   segregated   account."    This  

indicates  that the reserve fund has some  defining characteristic  other than the fact that  

it  is  kept  in  a  separate  account.  

                                                                     -11-                                                               7400

----------------------- Page 12-----------------------

                           We must next ask, then, whether the excess funds in Whitestone's single  

account from 2005 to 2014 were set aside to pay for unforseen expenditures or to buy  


equipment or services to benefit the owners. The superior court found that they were set  


aside to pay for road maintenance, a service to benefit the owners.   We review this  


factual finding for clear error.14  


                           Thesuperior court's finding is supported in therecord. The court explained  


that "[e]very single witness testified about how the purpose of the extra funds . . . in the  


bank account" was to pay for "future road maintenance, heavy duty road maintenance."  


Whitestone's witnessesconsistently testifiedthat theleftover funds wereforroad repairs.  


The superior court found "each and every one of [Whitestone's] witness[es] to be very,  


very credible," and did not credit Black's testimony about the challenged funds.15  


                           The Blacks argue that five resale certificates introduced at trial prove that  


Whitestone had no reserve funds during the relevant period, and contend that it was clear  


error  to  disregard  them.                           Only  two  of  these  resale  certificates  support  the  Blacks'  


argument.                The  remainder  merely  say,  "For  the  Associations  reserves  for  capital  


expenditures, see the attached financial statement," which lists the association's sole  




                           Under "Capital Reserves," a 2010 resale certificate says:  "At present, the  


balance of the Association's bank account is not reserved or designated for any particular  


purpose  or  specified  project,  including  capital  expenditures."                                                                And  a  2014  resale  


             14            See Nautilus Marine Enters. v. Exxon Mobil                                               , 305 P.3d 309, 315 (Alaska         

2013) ("Where the superior court considers extrinsic evidence in interpreting contract                                                                       

terms . . . we will review the superior court's factual determinations for clear error . . . ."                                                                          

(quoting   Villars v. Villars                      , 277 P.3d 763, 768 (Alaska 2012))).                      

             15            "[I]t is the function of the trial court, not of this court, to judge witnesses'  


credibility . . . ." Burton v. Fountainhead Dev., Inc., 393 P.3d 387, 392 (Alaska 2017)  


(quoting Lentine v. State, 282 P.3d 369, 375-76 (Alaska 2012)).  


                                                                                  -12-                                                                            7400

----------------------- Page 13-----------------------

certificate says that "[i]n the past, the Association members have opted to keep any                                                                                              

reserve account(s) at a minimum."                                             While these two certificates support the Blacks'                                            

argument,   they   are   not   so   overwhelming   as   to   leave   us   with   a   definite   and  firm  

                                                                                                          16   We thus conclude that the superior  

conviction that the superior court made a mistake.                                                                                                                       

court did not err when it found that the funds in question were reserves.  


               C.	           The Superior Court Did Not Err When It Denied The Blacks' Motion  


                             To Dismiss Whitestone's Claim For Declaratory Relief.  


                             In addition to its contract damages, Whitestone sought declaratory relief,  

asking the superior court to determine whether the drives were common elements or  


limited common elements under the declaration.  Whitestone alleged that a controversy  


existed as to this question because the Blacks had premised their dues protest on their  


belief that the drives were limited common elements.  The Blacks moved to dismiss this  


claim,  asserting  that  Whitestone  had  failed  to  plead  the  existence  of  an  actual  




                             The superior court denied this motion and eventually granted Whitestone  


declaratory relief.  And in its fee-award order, the superior court stated that it "has no  


doubt that, as Whitestone argues, absent that successful [declaratory judgment claim]  


Black would have continued avoiding paying his Association obligations."  The Blacks  


argue that no controversy existed and that it was legal error to deny their motion to  


               16            See Nautilus Marine Enters                                ., 305 P.3d at 315 ("A                        clearly erroneous finding             

is one which leaves us with a 'definite and firm conviction on the entire record that a                                                                                                 

mistake has been made.' " (quoting                                          Municipality of Anchorage v. Gentile                                          , 922 P.2d 248,        

256 (Alaska 1996))).        

               17            Alaska Statute 22.10.020(g) grants the superior court jurisdiction over  


declaratory judgment claims only "[i]n [the] case of an actual controversy."  See also  


Jacko v. State, 353 P.3d 337, 340 (Alaska 2015).  


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dismiss.   We review the denial of a motion to dismiss de novo.                                                                         "Under our case law,                

the 'actual case or controversy' language [in the statute providing for declaratory relief]                                                                             

encompasses a number of more specific reasons for not deciding cases, including lack                                                     


of standing, mootness, and lack of ripeness."                                                       

                            The Blacks argue that because they abandoned their dues protest in 2014,  


Whitestone's claim for declaratory judgment was both moot and unripe.   But they  


continued to dispute Whitestone's position on the drives even after they made the 2014  


payment.  Whitestone introduced evidence that Brill stated at a 2016 owners' meeting  


that she thought a special assessment  to  pay  for repairs of the main drive was "in  


contradiction to the Declaration and will probably be a matter of litigation."  


                            Whitestone also introduced two 2016 letters sent to its attorney by Black.  


In the first, Black said that the "common element/limited common element distinction  


becomes an issue when it comes to the maintenance of the[] drives."  Referring to the  


main drive, Black said:  "We object to being assessed to pay for non-common features  


of  other  owners'  units.                             As  a  result,  the  declaration,  state  law,  prior  history,  and  


fundamental fairness should, at a minimum, excuse . . . us . . . from having to contribute  


toward that work."  In the second letter, Black, again referring to a special assessment  

to pay for maintenance of the main drive, said:  "[Whitestone] should not expect us to  


pay [for] an assessment like the one it imposed last month.  If work needs to be done, it  


should be paid for by the homes that will benefit from that work, and that's not us."  


                            These statements by Black and Brill show that they were threatening action  


over the drives issue even after the onset of litigation in this case.  If a defendant had the  


power to moot a case by simply disavowing the challenged conduct in the course of  


              18            CatholicBishop                    of N.Alaska v. Does 1-6                         , 141 P.3d 719,                722 (Alaska2006).   



                            Ruckle v. Anchorage Sch. Dist., 85 P.3d 1030, 1034 (Alaska 2004).  

                                                                                      -14-                                                                                       7400  

----------------------- Page 15-----------------------

litigation, "the courts would be compelled to leave the defendant free to return to [their]                                                        


old ways."                                                                                                                                        

                         Given this, we conclude that the superior court did not err when it denied  


the Blacks' motion to dismiss and proceeded to the merits of Whitestone's claim for  


declaratory relief.  


            D.	         The  Superior  Court  Did  Not  Err  By  Including  In  Whitestone's  


                        Judgment A $1,100 Special Assessment Not Listed In A Statement  


                        Provided To The Blacks.  


                        AlaskaStatute34.08.470(h)provides that acondominiumassociation"shall  


furnish to a unit owner a statement setting out the amount of unpaid assessments against  


the unit" upon written request. It also provides that "[t]he statement . . . is binding on the  



association, the executive board, and each unit owner."                                                  On October 31, 2016, Black  


requested  such  a  statement  from  Whitestone.                                          Whitestone  levied  a  $1,100  special  


assessment from each owner on November 1, to be due on November 19.  Whitestone  


supplied Black with a statement on November 7, which did not include the special  




                        TheBlacks argued in their motion for partial summary judgment and at trial  


that Whitestone could not collect this assessment because it was not included in the  


November 7 statement.  The superior court included the $1,100 special assessment and  


associated late fees in Whitestone's judgment.  The Blacks argue that its inclusion was  


erroneous under the clear language of AS 34.08.470(h).  


                        Theminutes oftheNovember 1meeting at whichtheassessment was levied  


show that Black was present, and the owner who chaired the meeting sent an email  

            20          Slade v. State, Dep't of Transp. & Pub. Facilities                                             ,  336 P.3d 699, 700            

(Alaska 2014) (quoting                      Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.                                                 ,  

528 U.S. 167, 189 (2000)).         

            21          AS 34.08.470(h).  


                                                                           -15-	                                                                    7400

----------------------- Page 16-----------------------

afterwards to all the owners announcing the new assessment.                                                                                     Black testified that he                      

received this email.                         We must determine, then, whether AS 34.08.470(h) relieves a unit                                                                             

owner of the obligation to pay an assessment that is omitted from a statement provided                                                                                         

by the association even when that owner has actual knowledge of the assessment.                                                                                                         This  


is a question of statutory interpretation, to which we apply our independent judgment.                                                                                                               

"We construe statutes according to reason, practicality, and common sense, considering  


the meaning of the statute's language, its legislative history, and its purpose."23  


                              Generally,  AS  34.08.470  governs  the  authority  of  a  condominium  


association to attach liens to and recover against units with unpaid assessments.  Under  


AS 34.08.470(a) the association automatically has a lien on a unit when an assessment  


becomes overdue.  The legislative history shows that this section was intended to grant  


condominiumassociations greater power and streamlinetheprocess by whichthey could  


collect  unpaid  assessments  from  unit  owners.24                                                                    Given  this  streamlined  process,  


AS 34.08.470(h) ensures that unit owners have the ability to obtain reliable information  


                                                                 25     That subsection's assurance that the statement given to  

about their potential liability.                                                                                                                                                               


               22             See State v. Groppel                          , 433 P.3d 1113, 1116 (Alaska 2018).                                   

               23             Id.  (quoting  Alaska Airlines, Inc. v. Darrow                                                   , 403 P.3d 1116, 1121 (Alaska                      


               24             Testimony of Gurdon H. Buck, Cmty. Ass'n Inst., Am. Bar Ass'n at 54:35- 


56:34, Hearing on S.B. 44 Before the Sen. Judiciary Comm., 14th Leg., 1st Sess. (Feb. 5,  


 1985).   For example, AS 34.08.470(d) provides, "The recording of the declaration  


constitutes record notice and perfection of the lien.  Further recording of a claim of lien  


for assessment under this section is not required."  


               25             A witness who testified before the Senate Judiciary Committee on behalf  


of the bill that enacted this section expressed particular concern about the need to inform  


prospective purchasers about liability associated with units for sale.  See Testimony of  


William L. McNall, Cmty. Ass'n Inst. at 59:09-59:52, Hearing on S.B. 44 Before the  



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----------------------- Page 17-----------------------

 an owner is "binding on the association" prevents the association from surprising that                                                                                                                                                                                                                                                                                                           

 owner by collecting on an assessment of which he or she had no knowledge.                                                                                                                                                                                                                                                                                             Taken as   

 a whole, this statutory scheme serves the dual purpose of empowering the condominium                                                                                                                                                                                                                                                              

 association   to   easily  collect   on   its   debts   and   protecting   the   unit   owner   by   making  

 accurate information about his or her unit available on demand.                                                                                                                                                                                                                                             

                                                               However,   when   a   unit   owner   already   has   actual   knowledge   of   an  

 assessment, this protection is unnecessary.                                                                                                                                                                      It would be contrary to the purpose of                                                                                                                                                 

AS 34.08.470 to allow a unit owner who already knows about an assessment to use its                                                                                                                                                                                                                                                                                                                      

 omission from a statement provided by the association as a means to relieve himself or                                                                                                                                                                                                                                                                                                                   

herself of the obligation to pay it.                                                                                                                        The Blacks do not argue that the November 1 special                                                                                                                                                               

 assessment   was   improperly   levied.     And   the   record   shows   that   Black   had  actual  

knowledge of that assessment when Whitestone sent him a statement omitting it on                                                                                                                                                                                                                                                                                                                       

November 7, and conceded at oral argument that its omission did not prejudice him and                                                                                                                                                                                                                                                                                                               

Brill.   Under these circumstances we conclude that the association's failure to list the                                                                                                                                                                                                                                                                                                            

 assessment in the statement did not void the Blacks' obligation to pay it, and hold that                                                                                                                                                                                                                                                             

the   superior   court   did   not   err   when   it   included   the   $1,100   special   assessment   and  

 associated late fees in Whitestone's judgment.                                                                                                                         

                                E.	                            The Superior Court Did Not Abuse Its Discretion When It Determined                                                                                                                                                                                                                         

                                                               That Whitestone's Attorney's Fees Were Reasonable.                                                                                                                                                            

                                                               The superior court awarded Whitestone full attorney's fees in the amount                                                                                                                                                                                                                                          

 of $124,043.                                                 It found that a full fee award was warranted both under the declaration,                                                                                                                                                                                                                       

which entitles the prevailing party to "recover . . . actual attorneys' fees," and as an                                                                                                                                                                                                                                                                                                                

                               25                              (...continued)  


 Sen. Judiciary Comm., 14th Leg., 1st Sess. (Feb. 5, 1985). Although AS 34.08.590(a)(2)  


more directly addresses this concern by requiring the seller of a unit to produce a resale  


 certificate disclosing any debts associated with the property, this testimony underscores  


the importance of making accurate information available.  

                                                                                                                                                                                                 -17-	                                                                                                                                                                                        7400

----------------------- Page 18-----------------------

enhanced fee award under Alaska Civil Rule 82(b)(3).  The Blacks do not dispute that                                                                                          

the declaration entitles the prevailing party to full fees, but they argue on appeal that                                                                     

                                                                               26    "We review an attorney's fee award for abuse  

Whitestone's fees were unreasonable.                                                                                                                                     

of  discretion,  reversing  the  award  only  if  it  is  'arbitrary,  capricious,  manifestly  


unreasonable, or the result of an improper motive.' "27  


                            The Blacks argue that Whitestone's fees were not reasonable because they  


were much higher than the amount in dispute.28                                                        Whitestone's fee award is many times  


larger than the judgment it received, but the amount in dispute does not impose an upper  


limit on the amount the prevailing party may recover in fees.29   The superior court made  


an express finding that the Blacks' litigation conduct was the cause of Whitestone's high  


fees.  It explained that "Black . . . seemed to be taking affirmative, repeated, consistent  


steps to maximize the fees Whitestone was having to incur." (Emphasis in original.) For  


example,  it  noted  that  the  Blacks  had  rejected  two  pretrial  settlement  offers  from  


Whitestone, explaining that "it appears to this court that Black seemed intent on litigating  


regardless  of  any  offer,  almost  as  if  he  was  getting  enjoyment  from raising  every  


              26            The Blacks also request that we remand to the superior court to reconsider                                                          

which   party   prevailed   at   trial.     It   is   not   necessary   to   reevaluate   the   designation   of  

Whitestone as the prevailing party because we affirm the superior court's judgment on                                                                                           


              27            State, Dep't of Health & Soc. Servs. v. Okuley, 214 P.3d 247, 251 (Alaska  


2009) (quoting Hughes v. Foster Wheeler Co., 932 P.2d 784, 793 (Alaska 1997)).  


              28            See  Alaska Bar R. 35(a)(4) (identifying "the amount involved and the  


results obtained" as a factor "to be considered in determining the reasonableness of a  


fee"); see also Okuley, 214 P.3d at 251 n.13.  


              29            See Valdez Fisheries Dev. Ass'n, Inc. v. Froines, 217 P.3d 830, 833 n.19  


(Alaska 2009) (explaining that "[w]e have never adopted . . . a bright-line rule" that fees  


in excess of the amount in dispute were unreasonable).  


                                                                                      -18-                                                                                 7400

----------------------- Page 19-----------------------

possible issue and every argument, no matter how strained, no matter how unworthy of                                                                                                                                                                                                    

litigation." (Emphasis in original.) The superior court eventually found that "the Blacks                                                                                                                                                                                

engaged in non-stop vexatious and bad faith litigation."                                                                                                                                   

                                             The   superior   court's   characterization   of   the   Blacks'   approach   to   the  

litigation is supported by the record. For                                                                                          example, the couple filed various counterclaims  

in response to Whitestone's complaint. Among these were claims that Whitestone failed                                                                                                                                                                                        

to provide proper notice of its board meetings and that the Blacks were entitled to                                                                                                                                                                                                    

punitive damages for Whitestone's "willful failure to comply"                                                                                                                                              with the statute governing                         

condominiumassociations. But                                                                             theBlacks                          produced no evidence to supporttheseclaims                                                                                    

and eventually abandoned them in their closing argument at trial.                                                                                                                                                          

                                            We have previously upheld an award of full fees where the superior court                                                                                                                                                          

found that "the action was 'frivolous and brought to harass the defendants' " because the                                                                                                                                                                                             

                                                                                                                                                                                    30       Moreover, we have explained  

plaintiffs produced no evidence to support their claim.                                                                                                                                                                                                        

that "the superior court [is] in the best position to evaluate the defendants' demeanor and  


                                                                                                                               31          Finally, because the Blacks  maintained the  

credibility" in the fee-award context.                                                                                                                                                                                                                                              


punitive  damages  claim until  the  close  of  trial,  it  would  have  been  reasonable  for  


Whitestone to assume that there was more at stake than its contract claims. The superior  


court's discussion of the Blacks' litigation conduct provides an adequate basis for its  


determination that Whitestone's fees were reasonable; we conclude that it did not abuse  


its discretion.  


IV.                   CONCLUSION  

                                            We AFFIRM the superior court's decision in all respects.  


                      30                     Garrison  v.  Dixon,   19  P.3d   1229,   1235  (Alaska  2001).  

                      31                     Crook  v.  Mortenson-Neal,  727  P.2d  297,  306  (Alaska   1986).  

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