Alpine Haven Prop. Owners Ass'n v. Deptula, 02-035.

• Decision Date: 04 June 2003
• Docket Number: No. 02-035.,02-035.
• Citation: 830 A.2d 78
• Parties: ALPINE HAVEN PROPERTY OWNERS ASSOCIATION, INC. v. Edward DEPTULA, Bertrand and Joseph Emmett, David Orrock, Frederick and Laura Snyder, Deborah Upshall, Esther Verheist, and Susan White.
• Court: Vermont Supreme Court

830 A.2d 78

ALPINE HAVEN PROPERTY OWNERS ASSOCIATION, INC. v. Edward DEPTULA, Bertrand and Joseph Emmett, David Orrock, Frederick and Laura Snyder, Deborah Upshall, Esther Verheist, and Susan White.

No. 02-035.

Supreme Court of Vermont.

June 4, 2003.

Present: AMESTOY, C.J., DOOLEY, JOHNSON, SKOGLUND, JJ., and ERNEST W. GIBSON III, J. (Ret.), Specially Assigned.

ENTRY ORDER

¶ 1. Defendants Edward Deptula and Bertrand and Joseph Emmett, homeowners in the Alpine Haven development, appeal a summary judgment order to pay three years of overdue fees, plus interest and costs, for road maintenance and other services rendered by plaintiff Alpine Haven Property Owners Association, Inc. (the Association). Defendants argue that the trial court erred by (1) entering judgment against defendant Deptula in the full amount claimed based on the doctrine of collateral estoppel; (2) applying the Uniform Common Interest Ownership Act of 1994 (UCIOA), 27A V.S.A. §§ 1-101 to 4-120, in resolving the dispute against the other defendants; (3) dismissing defendants' accord and satisfaction defense and consumer fraud counterclaim; and (4) improperly granting the Association summary judgment. We affirm in part, reverse in part, and remand.

¶ 2. This case began as a collection action filed by the Association against a small group of homeowners, including defendants on appeal, for fees owed for three annual assessment periods (from November 1, 1996 to October 31, 1999). The dispute, however, goes back much further than that. The Alpine Haven development was founded in the 1960s and, at the time of this dispute, included approximately eighty units, mostly chalets. Pursuant to deed covenants, the original developer, Alpine Haven, Inc., provided defendants with garbage removal and street lighting, and maintained roads within the development, in return for a "reasonable annual fee." The developer later constructed a swimming pool, tennis courts, and other recreational facilities to which individual homeowners could subscribe for a separate fee.

¶ 3. In the late 1970s, fees for deeded services began to increase, leading to more than ten lawsuits between the developer and certain homeowners over the reasonableness of the fees. In one of those actions, Deptula sought a declaratory judgment in Franklin Superior Court that the developer had breached the deed covenants and that the fees assessed by Alpine Haven, Inc. over the previous five years were excessive. In its 1992 decision, the court held that a common scheme existed for the maintenance of street lighting and rights-of-way, and thus Deptula was obligated to contribute rateably to these services, although he was not obligated to pay for optional services such as garbage removal and private driveway plowing. The court found the $1,200 per year charged by the developer to all lot owners was reasonable. However, the court allowed Deptula to subtract the average costs of driveway plowing and garbage removal, since he did not receive those services, and found that the fair and equitable fee for the remaining services was $1,050 per year. For future years, the court required that the percentage increase assessed against Deptula must be equal to the percentage increase for all other lot owners in the community, and warned that Deptula could become liable for litigation expenses if he refused to pay. The litigation continued, however, and in 1996, in one of six small claims actions between Deptula and Alpine Haven, Inc., the Orleans Superior Court ordered Deptula to pay $1,102.50 per year — a five percent increase over the 1992 superior court judgment. This increased amount was also assessed against all other lot owners in the community receiving the same services.

¶ 4. That same year a majority of the community's homeowners formed the Alpine Haven Property Owners Association, Inc., and contracted with the soon-to-retire developer to purchase and assume ownership of the development's common lands, roads, and recreational facilities and to provide all deeded and recreational services. Although membership was initially granted to all homeowners in the development, some homeowners, including defendants, opted out of the Association. As a result, during the period in dispute (November 1, 1996 to October 31, 1999), nonmembers were provided deeded services only — garbage removal, street lighting, and road maintenance and snow removal — while members were provided all deeded services plus access to recreational facilities. Nonmembers were billed a base fee as established by the 1992 and 1996 Deptula judgments, plus an annual increase based on the Consumer Price Index, and, since 1998, a pro rata share of payments on a Federal Emergency Management Agency (FEMA) loan to repair flood-damaged community roads. Members were billed a pro rata share of all expenses remaining after the nonmembers' fee assessment was subtracted from the annual budget.

¶ 5. Since the Association took over on November 1, 1996, defendants have refused to pay the full assessment. In 1997, the Association sued to collect, initiating this case. Defendants counterclaimed and moved for summary judgment, alleging, inter alia, unreasonably high fees, accord and satisfaction, and violation of the Vermont Consumer Fraud Act, 9 V.S.A. §§ 2451-2480g. The Association then cross-moved for summary judgment to dismiss all counterclaims. The trial court issued two decisions. In its first decision, the court dismissed all of Deptula's counterclaims and granted summary judgment against Deptula for the full amount claimed, plus costs and interest, on the grounds that the 1992 and 1996 judgments precluded him from relitigating the reasonableness of the fee assessments. The court also dismissed all counterclaims raised by the remaining defendants, but held that triable issues remained with respect to the affirmative defense of accord and satisfaction. The court ordered an evidentiary hearing on two questions: (1) the defense of accord and satisfaction for defendants other than Deptula, and (2) the Association's compliance with the UCIOA's requirements for common assessments as provided in 27A V.S.A. § 3-115. The court specifically held that the Association did not have to prove the reasonableness of its fees at the hearing.

¶ 6. After the hearing, the court issued a second decision, determining that there was no genuine issue of material fact that the Association had not substantially complied with the UCIOA, and that the fees were therefore valid. The court did state, however, that

[t]he defendants' underlying defenses attack the reasonableness of the rate structure for the fees claimed. Nothing in the factual presentation infers that the rate structure is not reasonable. To the contrary, repeated judicial determinations have reached that conclusion. In addition [to] the Uniform Common Ownership Act of 1994, the plaintiff may rely upon those decisions to support a finding of reasonableness. The defendants' response claims that if given time and enough records they could fashion a more reasonable rate structure. As noted in the prior finding of December 7, 2000, they seek veto over the rate structure. They have [not]¹ demonstrated the existence of any genuine issue of material fact on this issue.

¶ 7. The court issued judgment for the Association without directly mentioning the accord and satisfaction defense and granted judgment, labeled "summary judgment," in favor of the Association. Shortly thereafter, the court issued judgment against all defendants in the full amount claimed, plus costs and interest, and, in Deptula's case, attorney fees. Defendants Deptula and the Emmetts subsequently filed the instant appeal.

¶ 8. In reviewing a grant of summary judgment,² we use the same standard as the trial court, and affirm the granting of a motion for summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Springfield Hydroelectric Co. v. Copp, 172 Vt. 311, 313, 779 A.2d 67, 70 (2001); V.R.C.P. 56(c). When both parties move for summary judgment, each is entitled to the benefit of all reasonable doubts and inferences when the opposing party's motion is being judged. Bixler v. Bullard, 172 Vt. 53, 57, 769 A.2d 690, 694 (2001).

¶ 9. Before we address the issues specific to each defendant, we must first address defendants' common challenge to the application of the Uniform Common Interest Ownership Act to this dispute. This action deals with fees assessed in 1996, 1997, and 1998 for assessment years than each run from November 1 of the relevant year through October 31 of the following year. The UCIOA was enacted in 1998 to become effective on January 1, 1999, after the last assessment in this case on November 1, 1998. 1997, No. 104 (Adj. Sess.), § 3 (codified as amended at 27A V.S.A. §§ 1-101-1-208). Under § 1-204(a) of the UCIOA, preexisting common interest communities are subject to the Act in part, but "only with respect to events and circumstances occurring after the effective date of this law." Because none of the events and circumstances in this case occurred after the effective date of the Act, we agree with defendants that the UCIOA does not apply.

¶ 10. Although much of the briefing has been dominated by the issue of the applicability of the UCIOA, the Act has only limited significance to the issues on appeal. The trial court relied upon it solely to determine that the fees assessed against the Emmetts were reasonable. Because we conclude, however, that the record clearly shows that there is no genuine issue of material fact that the fees assessed by the Association were not unreasonable, and the trial court so found, we affirm the grant of summary judgment on alternate grounds. See Dicks v. Jensen, 172 Vt. 43, 49, 768 A.2d 1279, 1284 (2001) (affirming summary judgment on alternate grounds); Sorge v. State, 171 Vt. 171, 174 n. *, 762 A.2d 816, 818 n. * (2000) (C...