N.H. Hous. Fin. Auth. v. Pinewood Estates Condo. Ass'n
| Decision Date | 20 September 2016 |
| Docket Number | No. 2015-0514,2015-0514 |
| Citation | 149 A.3d 282,169 N.H. 378 |
| Parties | NEW HAMPSHIRE HOUSING FINANCE AUTHORITY v. PINEWOOD ESTATES CONDOMINIUM ASSOCIATION |
| Court | New Hampshire Supreme Court |
Law Office of Joshua L. Gordon, of Concord (Joshua L. Gordon on the brief and orally), for the petitioner.
Cronin, Bisson & Zalinsky, P.C., of Manchester (Mark E. Connelly, Daniel D. Muller, Jr. and Ashley B. Scott on the brief, and Mr. Muller orally), for the respondent.
Gallagher, Callahan & Gartrell, P.C., of Concord (W. John Funk and Robert J. Dietel on the brief), for Cooperative Credit Union Association, Inc.; Mortgage Bankers and Brokers Association of New Hampshire, Inc.; and New Hampshire Bankers Association, as amici curiae.
The petitioner, New Hampshire Housing Finance Authority (NHHFA), appeals a decision of the Superior Court (Nicolosi, J.) granting summary judgment in favor of the respondent, Pinewood Estates Condominium Association (Pinewood), and awarding attorney's fees to Pinewood. The trial court ruled that, pursuant to Pinewood's condominium declaration, NHHFA was responsible for paying condominium assessments that were accrued by the previous owner of a unit NHHFA purchased at a foreclosure sale, and that Pinewood was not obligated to provide common services to the unit until all assessments were paid. Because we conclude that the Condominium Act, RSA chapter 356-B (2009 & Supp. 2015), operates to bar Pinewood's claim for unpaid pre-foreclosure condominium assessments, we reverse and remand.
The summary judgment record supports the following facts. In 2005, Patricia Rugg purchased a unit in Pinewood's condominium complex in Manchester. Rugg granted a mortgage for the unit to a local bank, and the bank subsequently assigned the mortgage to NHHFA. Rugg died in May 2011. The assessments on Rugg's condominium went unpaid after her death.
In June 2012, Pinewood sent a letter to Rugg informing her that she owed $1,375 in past-due assessments and attorney's fees. In August, Pinewood notified Rugg's estate and NHHFA, as the first mortgagee, that the unit's common services would be terminated in thirty days unless all the past-due assessments were paid. See RSA 356–B:46, IX (2009). Neither NHHFA nor Rugg's estate paid the past-due assessments. Subsequently, Pinewood terminated the unit's common services, including water and sewer services.
Rugg's mortgage payments also went unpaid after her death. In January 2013, NHHFA filed a Petition for Foreclosure Decree of Sale and to Quiet Title in superior court. The court granted the petition, and, in August, NHHFA purchased the unit at the foreclosure sale. Shortly thereafter, Pinewood notified NHHFA that it owed $4,796.20, including $4,414.75 in assessments accrued prior to the foreclosure, as well as post-foreclosure assessments. NHHFA paid all of the post-foreclosure assessments, but refused to pay the pre-foreclosure assessments.
NHHFA then filed a petition for declaratory judgment in the superior court, arguing that: (1) it took title to the unit free and clear of encumbrances, including Pinewood's claim to the pre-foreclosure assessments; and (2) Pinewood had no authority to terminate common services to the unit because of unpaid assessments accrued prior to the foreclosure. The trial court granted summary judgment in favor of Pinewood on both issues. Relying upon Section 2.3 of the condominium declaration, which provides that "any Owner acquiring a Unit shall be liable ... for any prior and outstanding assessments levied against the Unit," the trial court concluded that NHHFA was responsible for all past-due assessments. The trial court also concluded that, although NHHFA had paid all post-foreclosure assessments, under Section 6.1(c) of the condominium declaration, Pinewood could "terminate services until all assessments are paid, which includes the unpaid pre-foreclosure assessments." Because Pinewood "successfully enforced the provisions of the Declaration," the trial court also awarded Pinewood its attorney's fees and costs pursuant to RSA 356–B:15, II (Supp.2015). This appeal followed.
On appeal, NHHFA argues that the trial court erred when it concluded that NHHFA is liable for the pre-foreclosure assessments. NHHFA contends that, pursuant to the Condominium Act and the foreclosure statute, Pinewood's encumbrance on the unit arising out of unpaid pre-foreclosure assessments was extinguished by the foreclosure. See RSA 356–B:46 (Supp.2015) ; RSA ch. 479 (2013 & Supp. 2015). NHHFA further contends that, because it paid all post-foreclosure assessments, Pinewood cannot lawfully withhold common services from the unit. Pinewood counters that the trial court correctly relied upon the provisions of the declaration to conclude that Pinewood's claim for the pre-foreclosure assessments was not affected by the foreclosure sale. Pinewood also argues that, because assessments are levied against units rather than against individual owners, Pinewood need not restore common services until all assessments—both pre- and post-foreclosure—are paid. Pinewood also filed a cross-appeal.
As a threshold matter, Pinewood argues that NHHFA lacks standing to appeal the trial court's decision regarding the termination of services. "In evaluating whether a party has standing to sue, we focus on whether the party suffered a legal injury against which the law was designed to protect." Libertarian Party of N.H. v. Sec'y of State, 158 N.H. 194, 195, 965 A.2d 1078 (2008) (quotation omitted). Here, NHHFA has suffered a cognizable legal injury: it cannot maintain or use the unit it purchased in foreclosure because Pinewood has terminated basic services to the unit—including water and sewer services—and refuses to restore them until all past-due assessments are paid. Accordingly, we conclude that NHHFA has standing.
We next address whether, pursuant to RSA 356–B:46, I(a) and RSA 479:26 (2013), NHHFA is obligated to pay condominium assessments that accrued prior to the foreclosure. Resolving this issue requires us to engage in statutory interpretation, and, therefore, our review is de novo. Prof. Fire Fighters of N.H. v. N.H. Local Gov't Ctr., 163 N.H. 613, 614, 44 A.3d 542 (2012). In matters of statutory interpretation, we are the final arbiter of the intent of the legislature as expressed in the words of the statute considered as a whole. Olson v. Town of Grafton, 168 N.H. 563, 566, 133 A.3d 270 (2016). We first look to the language of the statute itself, and, if possible, construe that language according to its plain and ordinary meaning. Id. "We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add language that the legislature did not see fit to include." Sanborn v. 428 Lafayette, LLC, 168 N.H. 582, 585, 133 A.3d 602 (2016) (quotation omitted). "We interpret statutory provisions in the context of the overall statutory scheme and not in isolation." Id. (quotation omitted).
The Condominium Act "governs all condominiums and all condominium projects." Neumann v. Village of Winnipesaukee Timeshare Owners' Assoc., 147 N.H. 111, 112–13, 784 A.2d 699 (2001). It is the enabling statutory authority for the condominium form of property ownership in New Hampshire. Cf. Bennett, Condominium Homeownership in the United States: A Selected Annotated Bibliography of Legal Sources, 103 Law Libr. J. 249, 263 (2011) . We recently reaffirmed the principle that the terms of a condominium declaration must be interpreted to be consistent with the Condominium Act, and, if the terms of a declaration conflict with the Act, the Act controls. See Sanborn, 168 N.H. at 586, 133 A.3d 602 (); cf. 18 Am. Jur. 2d Corporations § 16 (2004) ().
The Act enumerates the powers of condominium associations, which include the ability to impose and collect assessments from each unit. See RSA 356–B:45 (2009). Condominium associations rely upon these assessments to pay for the operation, maintenance, repair, renovation, and replacement of elements of the common areas of the condominium. See Boyack & Foster, Muddying the Waterfall: How Ambiguous Liability Statutes Distort Creditor Priority in Condominium Foreclosures, 67 Ark. L. Rev. 225, 240 (2014) (). The Act empowers associations to collect unpaid assessments, and establishes the priority of an association's claim for unpaid assessments. The Act also authorizes a condominium association to terminate common services to a unit if assessments go unpaid. RSA 356–B:46, IX provides:
Notwithstanding any law, rule, or provision of the condominium declaration, bylaws, or rules to the contrary, the unit owners' association may authorize, pursuant to RSA 356–B, its board of directors to, after 30 days' prior written notice to the unit owner and unit owner's first mortgagee of nonpayment of common assessments, terminate the delinquent unit's common privileges and cease supplying a delinquent unit with any and all services normally supplied or paid for by the unit owners' association. Any terminated services and privileges shall be restored upon payment of all assessments.
The Act provides that a lien for condominium assessments is generally junior to a first mortgage:
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