In re Johnson

The Starboard by the Sea (Starboard) condominium had 139 residential units in 33 separate buildings. Starboard was managed by the Starboard Association, Inc. (association) (plaintiff). Jeffrey Johnson and Donna Johnson (defendants) owned one of the three units in Building 33. The Johnsons had a 1.06160 percent interest in Starboard’s common areas. In 2005, the association renovated the common areas in all the buildings except Building 33. In order to recoup the costs of the renovations, the association levied an assessment against the units in all the buildings except Building 33. In 2007, the association levied an assessment of $162,000 to renovate the common areas in Building 33. The 2007 assessment was levied only against the three units in Building 33. Further, the 2007 assessment was divided evenly among the three units in Building 33, such that the Johnsons were responsible for paying $54,000, or 33.33 percent of the assessment. The Johnsons paid $27,000 of the assessment under protest and made no additional payments. Subsequently, the association filed a lien against the Johnsons’ unit and initiated foreclosure proceedings. The Johnsons challenged the foreclosure, contending that the 2007 assessment was invalid. The trial court ruled in favor of the Johnsons. In finding that the 2007 assessment was invalid, the trial court determined that the 2005 and 2007 assessments were two separate assessments. The court of appeals also held that the 2007 assessment was invalid. The association appealed to the North Carolina Supreme Court.