Alpine Haven Prop. Owners' Ass'n, Inc. v. Deptula

• Citation: 245 A.3d 1245
• Decision Date: 02 October 2020
• Docket Number: No. 19-242,19-242
• Court: Vermont Supreme Court
• Parties: ALPINE HAVEN PROPERTY OWNERS’ ASSOCIATION, INC. v. Edward DEPTULA v. Estate of Robert Gensburg and Gensburg & Greaves, PLLC

245 A.3d 1245

ALPINE HAVEN PROPERTY OWNERS’ ASSOCIATION, INC.

v.Edward DEPTULA

v.Estate of Robert Gensburg and Gensburg & Greaves, PLLC

No. 19-242

Supreme Court of Vermont.

March Term, 2020

October 2, 2020

Motion for Reargument Denied November 17, 2020

Robert W. Scharf of Kohn Rath Danon Lynch & Scharf, LLP, Hinesburg, for Plaintiff-Appellee.

Edward Deptula, Pro Se, Montgomery Center, Defendant-Appellant.

David D. Aman of Heilmann, Ekman, Cooley & Gagnon, Inc., Burlington, for Third-Party Defendants-Appellees Estate of Robert Gensburg and Gensburg & Greaves, PLLC.

PRESENT: Reiber, C.J., Robinson, Eaton, Carroll and Cohen, JJ.

REIBER, C.J.

¶ 1. Homeowner Edward Deptula appeals pro se from a judgment in favor of plaintiff Alpine Haven Property Owners’ Association, Inc. (AHPOA) and third-party defendants Estate of Robert Gensburg and Gensburg & Greaves, PLLC (collectively Gensburg) in this long-running dispute over homeowner fees. He raises numerous arguments. We affirm.

¶ 2. This is at least the fourth appeal to this Court involving Alpine Haven, "a sprawling subdivision located along Vermont Route 242 in the Towns of Montgomery and Westfield." Khan v. Alpine Haven Prop. Owners’ Ass'n, 2016 VT 101, ¶ 1, 203 Vt. 251, 153 A.3d 1218 (describing history of Alpine Haven and AHPOA in detail). AHPOA owns and maintains a 4.5-mile road network within Alpine Haven, which almost all owners need to access their properties. Id. ¶ 10. AHPOA is also responsible for the streetlights, snowplowing, and garbage disposal within Alpine Haven. Id. ¶ 22.

¶ 3. AHPOA bills homeowners annually for the services it provides. In 2016, we held that Alpine Haven was not a "preexisting common interest community" (CIC) under 27A V.S.A. § 1-204 and thus it was not subject to the Vermont Common Interest Ownership Act. Khan, 2016 VT 101, ¶ 40, 203 Vt. 251, 153 A.3d 1218. Consequently, AHPOA's billing is now based either on voluntary membership in AHPOA or a homeowner's obligation by deed and/or equity to pay for certain services that AHPOA provides.

¶ 4. Deptula purchased a chalet lot in 1972. He has repeatedly refused to pay AHPOA's annual assessments and those of AHPOA's predecessor-in-interest and assignor, Leisure Properties. This has led to numerous collection actions. In 1992, a trial court ordered Deptula to pay "the fair and equitable maintenance fee for [his] use of the common right-of-way, including the street lights ... plus [a] percentage in increase equal to the percentage of increase for all other chalet owners in the Alpine Haven community." Deptula v. Leisure Props., Inc., No. S274-89 Fc (Vt. Super. Ct. Sept. 22, 1992) (second alteration added). Deptula did not appeal this order.

¶ 5. Following several successful small-claims actions, AHPOA brought another collection action against Deptula and several other homeowners for unpaid annual assessments between 1996 and 1999. The trial court granted summary judgment to AHPOA on its claim against Deptula on collateral-estoppel grounds, finding that earlier judgments against Deptula "precluded him from relitigating the reasonableness of the fee assessments." Alpine Haven Prop. Owners’ Ass'n v. Deptula, 2003 VT 51, ¶¶ 5, 12, 175 Vt. 559, 830 A.2d 78 (mem.). It found that the other homeowners failed to show that AHPOA's rate structure was unreasonable, noting that "repeated judicial determinations [had] reached that conclusion." Id. ¶¶ 1, 6.

¶ 6. We affirmed the trial court's decision as to Deptula and concluded, with respect to the other homeowners, that the undisputed facts showed that AHPOA's fees were reasonable. Id. ¶ 10. As to Deptula, we emphasized that his deed allowed AHPOA to "assess a reasonable fee for its services" and that AHPOA was "not limited to charging only costs." Id. ¶¶ 12, 17.

¶ 7. We also upheld the trial court's rejection of Deptula's accord-and-satisfaction defense, concluding that the undisputed facts showed that Deptula "did not act in good faith" in disputing AHPOA's assessment and "the bill was not subject to a bona fide dispute." Id. ¶ 20. We explained that Deptula "had litigated his arguments that the assessment amounts were excessive and unfair in the 1992 action and lost, and thereafter lost in successive years when the developer was required to sue him to obtain payment of the assessment." Id. ; see also id. ¶ 12 (noting that Deptula "had been unsuccessful in seven previous attempts to legally contest the service fees assessed").

¶ 8. That brings us to the instant case, a collection action that AHPOA filed against Deptula in 2012. After we ruled in Khan that Alpine Haven was not a CIC, AHPOA filed a second amended complaint seeking $19,010.11 for deeded services provided between May 1, 2009 and May 1, 2017. Deptula filed amended answers and counterclaims. Deptula had also earlier filed third-party claims against AHPOA's now-deceased former counsel Robert Gensburg and his law firm, alleging a variety of violations arising from Gensburg's representation of AHPOA.

¶ 9. In April 2018, the court ordered AHPOA to file an "accounting," setting forth the amount that Deptula owed with any narrative necessary to explain the fee. AHPOA did so in June 2018, submitting a 2017 Fee Structure Analysis conducted by Nicholas Barletta as well as a Summary of Audited Profit and Loss Statements Reviewed (2011-2016) for the Fee Analysis, Billing Statement Summaries for Deptula, and copies of the deeds for three properties owned by Deptula.¹

¶ 10. The court allowed additional discovery at Deptula's request and the parties then filed cross-motions for summary judgment. The court granted summary judgment to Gensburg in November 2018 and to AHPOA in April 2019, awarding AHPOA judgment for $17,680.91 plus prejudgment interest from July 1, 2018, interest going forward at the legal rate, and costs. Deptula challenges both rulings on appeal, as well as the court's rulings on various motions.

I. Summary Judgment to AHPOA

A. Trial Court Decision

¶ 11. The court's decision in AHPOA's favor rests on the following undisputed facts. As indicated above, Deptula owns a chalet lot in Alpine Haven. His deed includes a right-of-way over an existing access road from Vermont Route 242 for ingress and egress. The deed states:

The Grantor, LEISURE PROPERTIES, INC., hereby agrees to keep and maintain said right-of-way in a good, reasonable state of repair, and to provide the prompt removal of snow on said right-of-way, and ... it agrees to supply garbage removal for said premises and to maintain the street lights in the area of said premises as now in existence. For these services, the grantees, their heirs and assigns shall pay to the said Grantor, LEISURE PROPERTIES, INC., its successors or assigns, a reasonable annual fee therefore.

¶ 12. Between 2009 and 2013, AHPOA provided road maintenance, garbage removal, and driveway snowplowing services to Deptula and charged him an average of $1836.56 annually. Deptula stopped garbage removal in 2013 and was accordingly charged $1753.23 for the following two years. In 2015, Deptula stopped driveway plowing and was billed $1678.53 thereafter for road maintenance. The court found that the roads in Alpine Haven were well maintained and that the cost of that effort was reasonable overall.

¶ 13. Following our ruling in Khan, AHPOA analyzed its costs between 2011 and 2016 as the foundation for a new billing structure. The "audit" concluded with a "tiered fee structure": Tier 1 for full-service members; Tier 2 for "deeded services only," meaning road maintenance, street lights, and garbage removal; and Tier 3 for "road services only," meaning road maintenance and streetlight fees. The tiers were based on an allocation for direct costs, an allocation of overhead/indirect costs based on the relative direct costs, and a 15% surcharge for nonmembers.

¶ 14. The "audit" was conducted by Nicholas Barletta, a businessman and former certified public accountant (CPA) who was AHPOA's president between August 2011 and at least November 2018. His work was reviewed in part by another CPA. Deptula did not depose either person. A formal affidavit from Mr. Barletta attesting to the audit was submitted at oral argument on the parties’ pending motions. The court did not discern any harm in accepting the affidavit, noting that the affidavit was not opening the door to anything new but simply attesting to materials that had been submitted at the court's direction nearly a year earlier.

¶ 15. AHPOA ultimately sought a slightly lower amount than it did initially: $17,680.91 plus interest accruing as of June 30, 2018.² Deptula disputed some of the specific cost allocations and argued that the cost analysis understated the direct costs of the recreation facilities and driveway plowing and thereby overstated the direct costs of the deeded services. He argued that the fee structure was unreasonable because it effectively subsidized AHPOA members who received full services and benefits.

¶ 16. While the court found the line-item details of the audit somewhat opaque, it found the "big-picture" methodology clear. The audit allocated direct expenses to the various cost categories (recreational facilities, driveway plowing, garbage collection, and road maintenance), it allocated overhead costs based on the relative percentages of direct costs, and it added a 15% surcharge for nonmembers. The court found this methodology entirely reasonable. It noted that the fees charged to Deptula between 2009 and 2018 were comparable to the fees approved in the 1992 Deptula decision, adjusted for inflation, and they were less than the fees deemed reasonable as a matter of law in Alpine Haven Prop. Owners’ Ass'n v. Brewin, 2018 VT 88, 208 Vt. 462, 198 A.3d 533.

¶ 17. The court discussed Brewin, where we construed a similar deed that required AHPOA to provide certain services to the homeowners "at a fee to be determined by [AHPOA]." Id. ¶ 6. We held that AHPOA's fee must be reasonable, and we deemed AHPOA's approach—"an annual fee...