Grey v. Coastal States Holding Co.

• Decision Date: 18 September 1990
• Docket Number: No. 7963,7963
• Court: Connecticut Court of Appeals
• Parties: Betty H. GREY et al. v. COASTAL STATES HOLDING COMPANY et al.

Page 1080

578 A.2d 1080

22 Conn.App. 497

Betty H. GREY et al. v. COASTAL STATES HOLDING COMPANY et al.

No. 7963.

Appellate Court of Connecticut.

Argued Dec. 8, 1989.

Decided June 22, 1990.

Certification Denied Sept. 18, 1990.

Louis Ciccarello, Norwalk, for appellants (plaintiffs).

Michael W. Lyons, with whom was John J. Bove, Norwalk, and, on the brief, Anthony E. Schwartz, Bridgeport, and Salvatore J. Coppola, Norwalk, for appellees (named defendant et al.).

Before DUPONT, C.J., and EDWARD Y. O'CONNELL and LAVERY, JJ.

DUPONT, Chief Judge.

This appeal arises out of an action for compensatory and punitive damages, injunctive relief and attorney's fees against the owners of three residential condominium units and against Hawkins Landing Association, Inc. (the association), ¹ brought by the owners of the two remaining condominium units. The plaintiffs alleged that the defendants' units were expanded, in violation of article XIII, § 13.4, of the association's declaration and of General Statutes § 47-236(d), when they built an additional story onto each of their units and increased the ground footage of those units. The plaintiffs further alleged that the defendants thereby appropriated to their sole use certain common elements in which all unit owners had an interest. The trial court awarded attorney's fees to the plaintiffs in the amount of $27,000 and ordered the defendants to revise the condominium documents at their own expense to reflect the expansion of the defendants' units and to take the necessary action to reallocate the common expenses in accordance with the current square footage of the living area of each unit. The court refused to grant other damages or to require the restoration of the defendants' units to their original square footage ² or to order the association to take all steps necessary to prevent future violations of the condominium documents. The plaintiffs appeal from that judgment. ³ We affirm.

On appeal, the plaintiffs claim that the court improperly (1) failed to determine that the upward expansion of the defendants' units was an appropriation of air space that was common to all unit owners, (2) failed to award compensatory damages in proportion to the plaintiffs' percentage interests in the wrongfully appropriated common elements and (3) failed to conclude that the defendants were unjustly enriched by the wrongful appropriation of the plaintiffs' interests in the common elements as measured by the value of the improvements to the defendants' units.

The plaintiffs Betty H. Grey and Louis D. Grey own one unit (4E) in a five unit residential condominium, composed of four separate buildings, and known as Hawkins Landing. The plaintiff Peter Kingsbury owns one unit (4D) in the same building as the unit belonging to the other two plaintiffs. The defendants Coastal States Holding Company (Coastal States) and Alvin Farans, a partner in Coastal States, own unit 1A, and the defendant Ronald Kellogg owns units 2B and 3C. Each of the three units owned by the defendants is a separate structure. The defendant association is a non-stock corporation that manages and controls the condominium through its executive board. At the time of this litigation, Betty Grey, Kingsbury, Farans and Kellogg comprised the executive board.

The trial court found that at the time of the condominium declaration in August 1985, units 1A and 2B were one story cottages. Prior to the declaration, Farans, acting for Coastal States, had been issued a building permit to build an addition and add a second story to unit 1A. The permit was issued on December 12, 1984, and required that construction commence within six months. On May 28, 1985, however, Coastal States filed with the town planning and zoning commission a revised set of plans that showed a one story dwelling, and it marked the original plans for two stories void. The trial court found, therefore, that, at the time of the declaration, the only construction plan in effect for unit 1A was for a single story dwelling.

The court further found that, at an executive board meeting held on May 21, 1986, Betty Grey expressed concern about Kellogg's plans to renovate unit 2B to add second and third levels. At the meeting, Farans described his plan for a second floor addition to unit 1A. The plaintiffs were unaware that Coastal States, on February 6, 1986, had been issued a building permit to construct a second story.

On May 27, 1986, Betty Grey and Kingsbury wrote a letter to Kellogg stating that they had no objection to the addition of second stories to units 1A and 2B if the condominium documents were revised to avoid title problems. The court concluded, therefore, that Kellogg and Coastal States could reasonably have assumed that there would be eventual consent to the addition of two stories when the legal technicalities were resolved.

The court concluded that at another meeting on June 18, 1986, the parties had reached a consensus on a means of determining compensation for the air expansion into common elements and that the agreement could be reduced to writing. An agreement was drafted by the plaintiffs' attorney and signed by them. Kellogg and Coastal States refused to sign it, however, because, in addition to the agreed upon items, it provided for the payment by the defendants of the plaintiffs' attorney's fees. ⁴

The court found that on June 26, 1986, the date the agreement was delivered to Kellogg, Coastal States began construction, "acting under the belief that an agreement had been reached." The court further found that Farans believed he had the right, pursuant to article VIII, § 8.1, of the declaration, to add a second story. The plaintiffs began their action against Coastal States in July, 1986.

Kellogg obtained a building permit for a small addition and a second floor to be added to unit 2B on July 8, 1986, and began construction in September, 1987. The court found that he believed that a September, 1987 dismissal of the plaintiffs' action against him was based on its merits, and therefore left him free to begin construction of a second story.

The court made a number of other relevant factual findings and drew conclusions from those findings. As a result of the additions, unit 1A was increased by 986 square feet of living space, representing an increase in appraised value of $182,410, and unit 2B was increased by 751 square feet of living space, for an increase in value of $138,935. The expanded footprint of unit 1A took fifty square feet of common area, an overall increase of thirty square feet and that of 2B took twenty eight square feet of common area, an overall increase of fifteen square feet. ⁵

The defendants' expansions resulted in a benefit to them and a loss to the plaintiffs of their property interests. The expansion of the units took square footage of common areas and represented changes in the boundaries of those units requiring unanimous consent of the unit owners pursuant to the declaration. Because the expansions were not done with unanimous consent of the unit owners, the condominium agreement was violated. The expansions, however, were accomplished in the belief that an agreement among the unit owners had been reached, and the court, therefore, concluded that the defendants had not wilfully failed to comply with the Common Interest Ownership Act or the declaration and that the requested remedy of restoration was too harsh. On the basis of these findings and conclusions, the court denied the relief of restoring 1A and 2B to their original condition, and declined to award punitive damages under General Statutes § 47-278.

The plaintiffs had requested compensatory damages. They sought 40 percent ⁶ of the increase in the value of units 1A and 2B. Evidence had been presented from which the court could assess the increase in the value of those units because of the additions to them. The court refused to grant damages on that basis because it found such an award was not supported by statute or case law and because § 47-212(a) barred the award of consequential, special or punitive damages unless specifically provided for by law. The court further refused to grant compensatory damages on any other basis because the plaintiffs had not produced evidence of their actual monetary loss, of the value of any reduction in their unit ownership interest in Hawkins Landing or of the value of the common elements of which they were deprived as a result of the expansion.

The trial court was correct in finding that the defendants had violated the condominium declaration by expanding their units. It did not, however, determine whether air space was a common element. The court's memorandum of decision can be construed to imply that air space is a common element, but, in response to a motion for articulation, the court specifically refused to find that the air space above and surrounding the physical structures of units 1A and 2B constituted a common element. ⁷

Because the plaintiffs, by the terms of the condominium documents, have an interest in any common elements, we must determine whether the land and air space taken were common elements. Common elements are defined as "all portions of the common interest community other than the units." General Statutes § 47-202(4)(A); Declaration of Hawkins Landing, art. I, § 1.5. It is elementary to say that what is not a unit is a common element, if it is within the real estate owned by the condominium association. General Statutes § 47-202(4)(A). "Real property" under the act includes spaces that may be filled with...