Metroclub Condo. Ass'n v. 201–59 N. Eighth St. Assocs., L.P.

• Decision Date: 12 June 2012
• Citation: 47 A.3d 137,2012 PA Super 122
• Parties: METROCLUB CONDOMINIUM ASSOCIATION, Appellant v. 201–59 NORTH EIGHTH STREET ASSOCIATES, L.P., Appellee.
• Court: Pennsylvania Superior Court

47 A.3d 137

2012 PA Super 122

METROCLUB CONDOMINIUM ASSOCIATION, Appellant

v.201–59 NORTH EIGHTH STREET ASSOCIATES, L.P., Appellee.

Superior Court of Pennsylvania.

Argued April 10, 2012.

Filed June 12, 2012.

Steven L. Sugarman, Berwyn, for appellant.

Raymond A. Quaglia, Philadelphia, for appellee.

BEFORE: FORD ELLIOTT, P.J.E., BENDER, J., and COLVILLE, J. ^*

OPINION BY BENDER, J.

MetroClub Condominium Association (“Association”) appeals from the May 3, 2011 order granting the motion for judgment on the pleadings filed by 201–59 North Eighth Street Associates, L.P. (“Declarant”), denying Association's cross motion for summary judgment, and entering judgment in Declarant's favor. The overarching question in this appeal is whether Declarant, the developer of the condominium at issue, can maintain control of a number of unassigned parking spaces, which constitute limited common elements of the condominium, under circumstances where Declarant is no longer in control of the Association's executive board, but still owns 17 units in the condominium. For the following reasons, we affirm.

On July 7, 2010, Association, a condominium association organized as a nonprofit corporation, initiated this case by filing an “Action for Declaratory Judgment” against Declarant, the limited partnership that “constructed and sold residential condominium units in a former hospital which is now known as the MetroClub.” Association's brief at 6. See also Action for Declaratory Judgment (“Dec Action”), 7/7/10, at ¶ 1. The MetroClub contains 130 residential condominium units and includes an adjacent, enclosed parking lot with striped and numbered parking spaces. Dec Action at ¶ 12. As part of its program to market and sell the units, Declarant “offered to assign one or more Parking Spaces to unit purchasers for an additional fee.” Id. at ¶ 13.

Declarant recorded a Declaration of Condominium for MetroClub Condominium (“Declaration”) on May 11, 2005, signed only by Declarant. The purpose of recording a declaration is to create a condominium pursuant to Pennsylvania's Uniform Condominium Act (“PUCA”), 68 Pa.C.S. §§ 3103–3414. See68 Pa.C.S. § 3201 (“Creation of condominium”); Declaration § 1.02 (indicating Declarant submits the condominium development to the provisions of the PUCA and “hereby creates a condominium”).

Certain provisions of the Declaration give Declarant control over the unallocated parking spaces, so that it can assign those spaces to purchasers of units, or lease them to other persons, for as long as Declarant owns any unit. Specifically, Association challenges the following sections of the Declaration:

Section 5.03. Parking Spaces—Limited Common Elements

(a) Assigned Parking Spaces ¹—Allocation by Declarant. All automobile

parking spaces located in the Parking Lot are reserved as Assigned Parking Spaces (including all ADA Accessible Spaces), and are restricted to use by (i) those Unit Owners other than Declarant to which each such Assigned Parking Space is assigned as a Limited Common Element appurtenant to a Unit, and (ii) as to those Assigned Parking Spaces that have not so assigned [sic], Declarant (as long as it owns any Unit). Until such time as each of the Assigned Parking Spaces is allocated as a Limited Common Element [[² appurtenant to particular Unit [sic], Declarant has the absolute right, without or without consideration [sic], to allocate Assigned Parking Spaces as Limited Common Elements appurtenant to specific units, provided that except as otherwise set forth in this Declaration, in no event shall any Unit be allocated more than three (3) Assigned Parking Spaces unless that Unit is owned by Declarant or an affiliate of Declarant. Declarant shall make such assignment either in a written recorded assignment, in the deed conveying the Unit from Declarant to the Unit Owner, or by recording an amendment to this Declaration or the Plats and Plans designating thereon the Unit to which each such Assigned Parking Space is allocated and assigned. Any assignment of an Assigned Parking Space as a Limited Common Element shall be subject to the authority of the Executive Board to reallocate Assigned Parking Spaces as set forth below in this Declaration.³ The specific Assigned Parking Space(s) assigned to a particular Unit in connection with a sale or other conveyance of a Unit by Declarant to any Person other than Declarant shall be determined by Declarant in its sole discretion.

...

(d) Allocation to Declarant. As long as Declarant owns any Units, Declarant may assign and allocate to Units it owns Assigned Parking Spaces not allocated to other Units, regardless of (and without Declarant being subject to) any otherwise applicable limit [sic] herein on the maximum or minimum number of Assigned Parking Spaces that may be allocated to a particular Unit.

...

(h) Leasing Assigned Parking Spaces. Declarant (for so long as it owns any Unit) may lease any Assigned Parking Space not assigned as Limited Common Element appurtenant to a particular Unit to any Person, for such term and upon such conditions as Declarant, in its sole discretion, determines.

Declaration § 5.03(a), (d), & (h). As the trial court noted, these provisions “clearly contemplate[ ] the Declarant's control, and leasing, of unallocated parking spaces for so long as the Declarant owns any Unit.” T.C.O., 6/1/11, at 3.

Indeed, Declarant continues to own 17 units in the MetroClub, and maintains control over 41 parking spaces that have not been assigned or allocated to the use of a particular unit. Association's Cross Motion for Summary Judgment, 11/16/10, at ¶ 4(i-j). Declarant also leases 34 of these spaces and retains the income. Id. at ¶ 4(n).

Also, in accordance with section 3303 of the PUCA, the Declaration also provided for Declarant to maintain control of Association's executive board, through the appointment of a majority of its members, from the time it recorded the Declaration until it succeeded in selling over 75% of the condominium units, which occurred on or about June 5, 2007. Dec Action at ¶¶ 9–10. At that point, Declarant's “representatives on the Executive Board resigned in accordance with Section 3303 of the Act.” Id. The time frame within which Declarant controlled the board is known as the “Declarant Control Period.” Id. at ¶ 9. See also Defendant's Answer and New Matter to Plaintiff's Action for Declaratory Judgment (“Answer”), 9/9/10, at ¶¶ 9–12 (admitting Declarant Control Period ended on June 5, 2007). Since the termination of the Declarant Control Period, “the business and affairs of the Association have been conducted exclusively by an Executive Board elected by owners of units within the MetroClub.” Dec Action at ¶ 12. See also Answer at ¶¶ 12–17 (admitting this averment).

Association argued that Declarant “breached its obligation to the Association and owners of Units within the MetroClub to act in good faith” in its refusal to “cede control of the unallocated Parking Spaces to the Association notwithstanding expiration of the Declarant Control Period and written demand therefore.” Dec Action at ¶ 38. Specifically, Association argued that Declarant's continued control of the unallocated parking spaces after the expiration of the Declarant Control Period violated section 3303 of the PUCA, which relates to control of the executive board. Id. at ¶¶ 39–40. On this basis, Association sought declaratory relief from the trial court, requesting that the court enter an order stating that Declarant's rights to the unassigned spaces expired upon the termination of the Declarant Control Period and vesting control of these spaces with the Association's executive board. Id. at p. 10.

Declarant filed an answer and new matter on September 9, 2010. In that pleading, Declarant asserted, inter alia, its continued right to allocate parking spaces, as per the Declaration, despite the fact it no longer controlled Association's board. Declarant also argued that PUCA section 3303, which Association relied upon in its complaint in support of its argument that Declarant should cede control of the parking spaces, only applied to voting and control of the Association's executive board, and had nothing to do with Declarant's rights under the Declaration to assign parking spaces to units it sells or to lease unassigned parking spaces. Answer at ¶¶ 7–9. On September 15, 2010, Association filed a reply refuting these arguments.

Thereafter, on October 22, 2010, Declarant filed a motion for judgment on the pleadings, asserting that provisions of the Declaration relied upon by Association actually support Declarant's position that it continues to maintain control of the unassigned parking spaces despite the termination of its control of the board, an unrelated issue. Association filed an answer and a cross motion for summary judgment on November 16, 2010. In reliance on various provisions of the Declaration, Association's bylaws, and the PUCA, Associationrequested, inter alia, that the court enter an order declaring that Declarant's control of the parking spaces terminated with the conclusion of the Declarant Control Period, and asked the court to vest, in the Association's executive board, “exclusive authority to lease or make all further allocations of Parking Spaces[.]” Motion for Summary Judgment at 7. Of course, on December 15, 2010, Declarant filed a response to Association's motion for summary judgment, once again asserting that its control over the unallocated parking spaces did not end with the conclusion of the Declarant Control Period.

The trial court agreed with Declarant. On May 3, 2011, the court entered an order granting Declarant's motion for judgment on the pleadings, denying Association's cross motion for summary judgment, and entering judgment in Declarant's favor. The court concluded that sections 5.03(a), (d), and (h) of the Declaration “clearly contemplate[ ] the Declarant's continued control, and leasing, of unallocated parking...