Is it legal for MI association to apply new payments to old late fee?

Hello all, I'm in a court battle with my condo association in Michigan over a late fee for a payment they claim was not received.

My bank records show it was mailed. As such, I have refused to pay the fee. Every month for 3 years the association has used this late fee to create a perpetual default each month by applying my timely payments to the alleged o/s late fee, then to interest, then to legal. This creates a payment deficit, and then they apply another late fee.

Our bylaws say they can do this, but is this legal? Is there any case law?