Madowitz v. Woods at Killington Owners' Ass'n

• Decision Date: 02 July 2010
• Docket Number: No. 08-502.,08-502.
• Citation: 2010 VT 37,6 A.3d 1117
• Parties: Richard MADOWITZ and Douglas Kohl v. THE WOODS AT KILLINGTON OWNERS' ASSOCIATION.
• Court: Vermont Supreme Court

6 A.3d 1117

2010 VT 37

Richard MADOWITZ and Douglas Kohl

v.THE WOODS AT KILLINGTON OWNERS' ASSOCIATION.

No. 08-502.

Supreme Court of Vermont.

July 2, 2010.

Alan P. Biederman of Biederman Law Office, Rutland, and L. Maxwell Taylor, Middlebury, for Plaintiffs-Appellees.

Jon S. Readnour of Readnour Associates, P.C., Rutland, for Defendant-Appellant.

Present: DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ., and JOSEPH, D.J., Specially Assigned.

JOHNSON, J.

¶ 1. This interlocutory appeal arises out of a dispute over development rights at the Woods at Killington condominium complex (the Woods) in Killington, Vermont. An association of condominium unit owners located at the Woods (the Association) appeals from a decision by the Rutland Superior Court granting summary judgment in favor of developers Richard Madowitz and Douglas Kohl, who are seeking to further develop the project without obtaining written consent from each unit owner. The question on appeal is whether developers' rights to develop the Woods have expired because of a durational limitation on development rights contained in most of the deeds and two separately executed powers of attorney. We conclude that because the declaration cannot be altered solely by individual deed or private agreement, developers' rights to develop the Woods have not expired and that the superior court was correct in granting summary judgment in favor of developers.

¶ 2. The Woods is a condominium development created by a declaration of condominium filed on July 25, 1985. By the terms of the declaration, the developer intended at the outset to add more units than existed at the time the declaration was filed. These additional units were to be added in phases. The condominium ownership statute in effect at the time of the 1985 declaration provided that each unit owner be conveyed an "undivided interest in the common areas and facilities" and required that the declaration include "the percentage of undivided interest in the common areas and facilities appertaining to each [unit] and its owner for all purposes, including voting." 27 V.S.A. §§ 1306(a), 1311(6).¹ The original statute provided that, once the percentage of undivided interest was declared in the declaration of condominium, it had a "permanent character and shall not be altered without the consent of all of the apartment owners expressed in an amended declaration." Id. § 1306(b). To meet the requirements of § 1306(b), the 1985 declaration included a limited power of attorney provision as a way for unit owners to give prior consent for the developer to amend the declaration to change the unit owner's percentage of undivided interest (e.g., by adding additional units). The same provision for a limited power of attorney also appears in the amended 1988 declaration.

¶ 3. In 1985, the original developer began conveying condominium units to individual owners and conveyed two units thatyear. Starting in 1986, the condominium deeds included language expressly limiting the extent of the power of attorney given from grantees to grantor, stating that such power shall expire in ten years. A total of 107 units were conveyed by the original developer, of which 105 contained the ten-year limitation on consent to future development. In addition, in 1986, two unit owners executed separate limited powers of attorney consenting to future development. These two powers of attorney each contained a provision similar to the one that appeared in the condominium deeds, limiting the scope of the consent to future development to ten years. Thus, a pronounced conflict arose between the original declaration-granting developers the unit owners' consent to future development that would alter the owners' undivided interest in the common areas-and the latter powers of attorney and two deeds-essentially removing this consent after ten years.

¶ 4. After the original developer was unable to stave off foreclosure, Probos, Ltd. acquired development rights.² Probos subsequently conveyed development rights to developers in June 1994. Shortly thereafter, developers filed for an amendment to an existing Act 250 permit to extend the construction completion date to January 1, 2000. The proposed amendment concerned only the completion date and did not alter any substantive development plans. The amendment was granted in June 1995. The Association did not take part in this proceeding. Just prior to the January 1, 2000 deadline, developers applied for another amendment to the Act 250 permit, seeking to extend the completion of construction by another five years. The Association was not joined as a co-applicant, but during the proceeding the Association argued that developers did not have rights to develop the Woods project because the ten-year limitation in the earlier unit owner deeds had begun to expire.

¶ 5. The district commission denied the amendment application, finding that developers had failed to show that they had adequate rights to develop and had not overcome the requirement that they show good cause to waive co-applicancy of the Association. The commission found that "[t]he very heart of the dispute between the Association representing the current condominium owners and the Permittee is whether the Declaration, as it is now in force, permits the Permittee to proceed with the final phase of the Project." Developers subsequently filed a complaint in Rutland Superior Court seeking damages and declaratory judgment. Developers argued that the Association breached its obligations under the declaration and interfered with developers' rights by participating in the Act 250 proceedings. Developers also sought declaratory relief defining the extent of their development rights.

¶ 6. The Association filed a motion for summary judgment, arguing that: (1) developers'rights had expired because of the ten-year limitation found in 105 deeds and two separately executed powers of attorney; (2) the power of attorney and consent provisions contained in the declaration are unenforceable because they violate 27 V.S.A. § 1306 and, alternatively, the provisions are personal to the original developer and are unenforceable by successor developers; and (3) the Association was not liable to developers for damages arising out of its successful challenge to their development rights made during the Act 250 proceeding. Developers filed a cross-motion for summary judgment, arguing that the liability issue should be decided in their favor.

¶ 7. The superior court granted partial summary judgment for developers. The court concluded that the power of attorney and consent provisions of the original and amended declarations were enforceable and that these provisions did not require specific written consent or a power of attorney to be executed by each unit owner at the time of a reduction in fractional interest (e.g., at the time of construction of additional units). With respect to the ten-year limitation on unit owners' consent contained in 105 of the 107 deeds, the court found that this provision was unenforceable as it would conflict with the express and unambiguous provisions of the declaration. The court also rejected the Association's argument that the powers of attorney and consent provisions contained in the declaration were personal to the original developer and could not be transferred to successor developers, concluding that nothing in the declaration indicated this was the case and that to imply an inability to transfer these rights "simply makes no sense from a business and economic standpoint." Finally, the court found in favor of the Association with regard to its cross-motion for summary judgment, concluding that the Association was not liable to developers for its participation in the Act 250 proceeding. ³

¶ 8. The Association moved for interlocutory appeal pursuant to Vermont Rule of Appellate Procedure 5(b). The sole issue before us on appeal is whether the development rights created under the declaration can be cut off by the ten-year durational limitation on development rights created by 105 deeds and two separately executed limited powers of attorney. We conclude that a declaration cannot be amended in this way.

¶ 9. We review a motion for summary judgment de novo under the same standard of review as the trial court. We have held that "summary judgment is appropriate only when the record clearly shows that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law." Bacon v. Lascelles, 165 Vt. 214, 218, 678 A.2d 902, 905 (1996); accord V.R.C.P. 56(c)(3).

¶ 10. The Association advances two arguments in support of its contention that developers' right to develop the Woods without individual consent from each unit owner has expired or is in some way unenforceable. First, the Association maintains that the ten-year limitation found in 105 condominium deeds and two separately executed powers of attorney is enforceable and can be read harmoniously with the declaration. The Association contends that the consent that unit owners gave to the developer to make additions to the Woods that would alter the unit owners' percentage interest in the common areas was limited to ten years. After that ten years, the Association argues, the developer needed to obtain individual consent from each unit owner to proceed with additions that would alter the percentage interest. Second, the Association argues that 27 V.S.A. § 1306(b) prohibits developers from relying on the general consent given in the declaration and requires individual powers of attorney from each unit owner.

¶ 11. The threshold question at the heart of the Association's claims is whether the ten-year limitation contained in 105 deeds and two separately executed powers of attorney altered or amended the original and amended declarations. The Association contends, and the dissent agrees, that the declaration, deeds, and separate powers of attorney can be read harmoniously. The...