Anton v. Houze
| Citation | 277 A.3d 695 |
| Decision Date | 01 July 2022 |
| Docket Number | 2020-234-Appeal., No. 2020-247-Appeal.,NC 17-493 |
| Parties | Charles A. ANTON et al. v. Philippe L. HOUZE et al. |
| Court | United States State Supreme Court of Rhode Island |
R. Daniel Prentiss, Esq., for Plaintiffs.
Thomas M. Dickinson, Esq., for Defendants.
Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.
Justice Long, for the Court.
This case came before the Supreme Court on cross-appeals from a final judgment of the Superior Court that granted declaratory and injunctive relief in favor of the plaintiffs, Charles A. Anton and Tami D. Anton, as Trustees of the Victoria Avenue Realty Trust (plaintiffs or the Antons), and denied declaratory and injunctive relief requested in the counterclaim filed by the defendants, Philippe L. Houze and Marie Houze (defendants or the Houzes). In their appeal, the defendants contend that the trial justice erred in (1) deciding that a two-member condominium board consisting of the owners of the condominium's two units is not inconsistent with the Rhode Island Condominium Act, G.L. 1956 chapter 36.1 of title 34 (the act); (2) holding Mr. Houze in civil contempt; and (3) awarding the plaintiffs attorneys’ fees. In their cross-appeal, the plaintiffs assert that the trial justice erred when he decided that § 34-36.1-2.17(b) did not bar the defendants’ counterclaims as untimely.
For the reasons stated herein, we affirm the judgment of the Superior Court.
The acrimony between plaintiffs and defendants centers on the governance of two condominium units located at 9 and 9A Victoria Avenue in Newport, Rhode Island. The facts concerning the events that led to litigation are undisputed.
In 1990 Richard D. Stengel, DMD and JoAnn R. Stengel (the Stengels) built an addition to their single-family home located on Victoria Avenue in Newport for Dr. Stengel's father, Charles D. Stengel (Mr. Stengel). The Stengels, as declarants, then converted the Victoria Avenue property into a two-unit condominium, D & J Condominium (the condominium), managed by D & J Condominium Association (the association). The Stengels designated the addition as Unit 9A and conveyed it to Mr. Stengel, and they continued to live in Unit 9. Units 9 and 9A share one adjoining wall but are otherwise separate units.
As part of the conversion of the property to a condominium, the Stengels’ attorney drafted the D & J Declaration of Condominium, dated August 10, 1990 (the declaration), and By-Laws of the D & J Condominium (the by-laws).
Pertinent to this dispute, the declaration and the by-laws specified the following. Unit 9 and Unit 9A had 67 percent and 33 percent, respectively, of the allocated interest in the condominium common elements, expenses, and profits. A board of directors (the board) consisted of two people who would be elected according to the by-laws. Unit owners would elect the board according to their allocated interests. Importantly, once the board was established, the by-laws provided, "[n]o Unit Owner shall make any structural addition, alteration, or improvement in or to his Unit, or the Common Elements, without the prior written consent thereto of the Board of Directors."
The declaration also required 67 percent of unit-owner consent to amend the declaration; however, any amendment contrary to the act was prohibited. The declaration further provided that all disputes regarding the operation of the condominium that could not be resolved by agreement of the unit owners would be submitted to arbitration. Any unit owner or person who violated the declaration or by-laws would be liable for all court costs and reasonable attorneys’ fees incurred by the association, the board, the managing agent, and other unit owner, according to the declaration.
After living in Unit 9A for several years, Mr. Stengel transferred ownership of Unit 9A back to the Stengels. In 2005 the Stengels rented Unit 9A to the Antons, who soon thereafter expressed an interest in purchasing Unit 9A. However, before purchasing Unit 9A, the Antons discussed with the Stengels their concerns regarding governance of the condominium. The Antons wanted to ensure that, if they became owners of Unit 9A, they would have the same decision-making authority as Mrs. Stengel, who was at that time the sole owner of Unit 9, and any future owners of Unit 9. The Stengels and the Antons came to an agreement: As a condition of the Antons’ purchase of Unit 9A, the Stengels would amend the declaration to give the Antons, as owners of Unit 9A, authority in managing the condominium equal to that of the owner of Unit 9.
On March 24, 2006, the Stengels, who at that time comprised 100 percent of the votes of the association, the board, and unit owners, executed the First Amendment to D & J Condominium Declaration of Condominium (the first amendment) and recorded it four days later in the City of Newport Land Evidence Records. The Antons then completed their purchase of Unit 9A. The first amendment revised multiple sections of the declaration, including the definition of "Board of Directors" and provisions relating to the rights of unit owners concerning various condominium governance matters.
More specifically, the first amendment modified the language of the definition of "Board of Directors" in Section 1.5 of the declaration to provide as follows:
The first amendment also revised the language of the provision requiring consent from unit owners to alter various aspects of the condominium. The relevant portion of the modified Section 8.1 of the declaration states:
It is the Antons’ contention that these revisions designated that the two-member board comprises one person from each unit, each with equal voting rights, and that many condominium governance and approval issues require 100 percent of the board's consent.
Ultimately, the Stengels listed Unit 9 for sale, and in December 2016 the Stengels and the Houzes entered into a purchase and sale agreement for Unit 9; the parties closed on the sale in May 2017.
Prior to the closing, on December 30, 2016, the Antons had contacted the Stengels’ broker to verify that the Houzes, as potential buyers of Unit 9, were familiar with the various condominium documents and understood that unanimous unit-owner approval was required to alter aspects of the common elements and the exterior of any unit of the condominium. Thereafter, but also prior to the closing, the Antons met with the Houzes in February 2017 to discuss the Houzes’ plans to renovate the interior and exterior of Unit 9. During that meeting, Mr. Anton explained to the Houzes that the renovations would require the Antons’ approval because the Houzes wanted to modify structural elements, the exterior, and common elements of the condominium. Further, Mr. Anton instructed his attorney to contact Mr. Houze's attorney to bring this issue to Mr. Houze's attention.
After the closing, Mr. Anton again directed his attorney to send the Houzes’ attorney a letter regarding the management of the condominium. Mrs. Anton also personally reached out to Mr. Houze regarding his planned renovation. Throughout these communications and the pendency of this litigation, Mr. Houze maintained that he had unilateral decision-making power because, he later testified, based on his "line by line" reading of the declaration and the by-laws, he believed that he had a majority of the board votes accorded by his 67 percent of the allocated interest.
Thereafter, Mr. Houze began interior renovations to Unit 9. To do so, he received a permit from the City of Newport by representing that he was renovating a single-family home. However, the building inspector required Mr. Houze to receive consent from the board for modifications to the external elements. Mr. Houze then presented the Antons with a list of renovations for approval, which the Antons refused to authorize without first viewing blueprint plans of the proposed modifications. Despite the Antons’ failure to provide the requested approval, Mr. Houze implied in his communications with a clerk of the office of the city building inspector that he had consent for the renovations as the majority vote of the board. Consequently, Mr. Houze received permitting for the construction. The building inspector later voided the permit, however, explaining that the clerk had issued it after receiving misleading information. As a result of Mr. Houze's actions, the Antons initiated the instant action in Newport County Superior Court.
The Antons alleged in their verified complaint that the Houzes had commenced construction without unanimous approval by the board, in violation of the condominium's governing documents; towed a vehicle belonging to the Antons’ guest that was mistakenly parked on the Houzes’ driveway; applied tape to the Antons’ window to obstruct the view of a security camera inside the Antons’ unit; and erected a nine-foot-high "spite fence" in front of the Antons’ window, which the Houzes refused to move. The Antons sought declaratory relief as to the rights and responsibilities of the...
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