Pasco Common Condo. Ass'n, Inc. v. Benson

• Decision Date: 10 September 2019
• Docket Number: AC 39898
• Citation: 218 A.3d 83,192 Conn.App. 479
• Court: Connecticut Court of Appeals
• Parties: PASCO COMMON CONDOMINIUM ASSOCIATION, INC., et al. v. Paul D. BENSON et al.

192 Conn.App. 479

218 A.3d 83

PASCO COMMON CONDOMINIUM ASSOCIATION, INC., et al.

v.Paul D. BENSON et al.

AC 39898

Appellate Court of Connecticut.

Argued March 7, 2019

Officially released September 10, 2019

Edward S. Hill, North Haven, with whom were John F. Harvey, Jr., Wethersfield, and P. Jo Anne Burgh, Glastonbury, for the appellants (defendants).

Walter A. Twachtman, Jr., Glastonbury, for the appellees (plaintiffs).

Prescott, Bright and Cobb, Js.

BRIGHT, J.

The defendants, Benson Enterprises, Inc. (declarant), and Paul D. Benson, appeal from the judgment of the trial court, rendered after a bench trial, in favor of the plaintiffs, Pasco Common Condominium Association, Inc. (association), and eighteen individual members of the association.¹ On appeal, the defendants claim that (1) the court incorrectly concluded that the statute of limitations governing the plaintiffs' claims was tolled until the commencement of the present action because the period of declarant control had not terminated, (2) the plaintiffs' action was time barred pursuant to General Statutes § 52-577, the three year statute of limitations applicable to tort actions,² (3) the court improperly awarded the association damages on the plaintiffs' claim that the defendants improperly assessed common charges, and (4) the court improperly determined that Benson individually was liable.³ We agree with the defendants' first, third, and fourth claims, but we disagree in part with the defendants' second claim. Accordingly, we affirm in part and reverse in part the judgment of the trial court.

The record reveals the following relevant facts, found by the trial court or otherwise undisputed, and procedural history. On August 11, 1993, the declarant created Pasco Common, a common interest community, pursuant to the Common Interest Ownership Act (act), General Statutes § 47-200 et seq., by recording the Declaration of Pasco Common on the land records. Pasco Common is a condominium complex located in East Windsor and is comprised of dozens of residential and commercial units, one of which is occupied by a restaurant.

On August 12, 1998, the declarant recorded the operative, Amended and Restated Declaration of Pasco Common (declaration). The declaration provides for the creation of the association as a Connecticut nonstock corporation. The members of the association are the unit owners at Pasco Common, and the association is governed by an executive board. The executive board has the powers and duties to act on behalf, and manage the affairs, of the association. These powers and duties include, among other things, to adopt and amend bylaws and budgets, to collect common charges from unit owners, and to expend the funds of the association. The declaration also provides the declarant with developmental rights,⁴ special declarant rights,⁵ and the right to control the association.⁶ The declaration provides specific time periods during which the declarant had the authority to exercise these rights. In particular, the special declarant rights expired no later than ten years after the declaration was recorded. Despite these limitations, between October 5, 1998, and March 19, 2013, the declarant recorded twenty-one amendments to the declaration, primarily to add units to Pasco Common.

Since the inception of Pasco Common, Benson was in complete control of the declarant because he was its president and chief operating officer, and he owned almost all of its stock. Between 1993 and 2009, Benson owned a majority of the units at Pasco Common,⁷ and, thus, he was in complete control of the association. Prior to 2009, Benson, on behalf of the declarant, appointed the executive board members, who were his wife, Ann M. Benson, his son, Paul D. Benson, Jr., and himself. Until at least 2009, Benson, on behalf of the executive board, created the annual budgets for the association, determined the monthly common charges, decided what expenses the association would pay, decided who was responsible for repairs to the units, and conducted the business of the association without regard to whether his actions were in conformance with the terms of the declaration or the act.

For instance, Benson, on behalf of the executive board, assessed common charges to the unit owners on the basis of the square footage of each unit; these assessments, however, were improper because, inter alia, many of the square footage figures conflicted with the East Windsor land records. Further, unbeknownst to the residential unit owners, Benson and the unit owner of the restaurant, located at Pasco Common, made a special arrangement in which they agreed that the restaurant was exempt from paying common charges. Benson also improperly expended the association's funds to finance repairs he made to units, for management fees, for vehicle expenses, and for paving expenses.

In 2009, shortly after the period of declarant control provided for in the declaration ended, control of the association transitioned from the executive board that included Benson, his wife, and his son to an executive board that consisted of three directors: Benson, Steven Fowler, and Rene Dupuis. Fowler and Dupuis are unit owners and plaintiffs. At the same time, management of the association transitioned from the declarant to Advance Property Management and then, in 2011, to Elite Property Management. Nevertheless, Benson directed the new management of the association to continue to assess common charges pursuant to his own methodology, as opposed to the method prescribed by the declaration. Furthermore, the declarant continued to amend the declaration and exercise development rights through 2013.

In July, 2013, the plaintiffs commenced the present action against the defendants. The plaintiffs' operative, amended complaint contains ten counts. In counts one through eight, the plaintiffs allege that the declarant violated the declaration as well as certain provisions of the act⁸ by assessing common charges against unit owners on the basis of a formula that deviated from the terms of the declaration; issuing an inadequate, incorrect, and misleading public offering statement; failing to keep adequate records of the association's finances; modifying and creating units without the approval or notice to the executive board; failing to pay its correct proportion of the common charges; misrepresenting the true nature and composition of Pasco Common by failing to disclose that the restaurant was a unit and that the declarant would maintain total control over the association; amending the declaration without notice or approval by the executive board; and creating a garage unit. In count nine, the plaintiffs allege that the declarant violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. In count ten, the plaintiffs allege a piercing of the corporate veil count against Benson. In response, the defendants filed their operative answer and special defenses in which they allege, inter alia, that all of the plaintiffs' claims were time barred pursuant to § 52-577, the three year statute of limitations applicable to tort actions, and/or General Statutes § 52-576, the six year statute of limitations applicable to contract actions.⁹

On October 25, 2016, after a ten day bench trial, the court issued a memorandum of decision in which it rendered judgment for the plaintiffs against the declarant on counts one through eight, for the declarant on count nine, and for the plaintiffs against Benson individually on count ten.¹⁰

With respect to the defendants' statute of limitations special defense, the court held that the statute of limitations had been tolled, pursuant to General Statutes § 47-253 (d),¹¹ until 2013, because the period of declarant control, as defined by General Statutes § 47-245 (d),¹² had not terminated as result of the defendants' continued misconduct. As a result, the court held that the plaintiffs' action was not time barred, except for count nine, the CUTPA claim, which the court determined was time barred by the three year statute of limitations because the plaintiffs had not raised their tolling claim as to that count until after trial.¹³ As to the plaintiffs' other claims, the court, in light of its conclusion that any statute of limitations was tolled, did not make a determination as to whether the tort, contract, or some other statute of limitations was applicable. Consequently, the court awarded the association compensatory damages and ordered the defendants to take certain remedial actions. This appeal followed. Additional facts will be set forth as necessary.

On appeal, the defendants claim that (1) the court incorrectly concluded that the statute of limitations governing the plaintiffs' claims was tolled until the commencement of the present action because the period of declarant control had not terminated, (2) the plaintiffs' action was time barred pursuant to § 52-577, (3) the court improperly awarded the association damages on the plaintiffs' claim that the defendants improperly assessed common charges, and (4) the court improperly determined that Benson individually was liable.

I

The defendants first claim that the court incorrectly concluded that the statute of limitations governing the plaintiffs' claims was tolled until the commencement of the present action because the period of declarant control had not terminated. The defendants argue that the declaration set a ten year limit on the period of declarant control, and, thus, the statute of limitations was tolled only until 2008. They also argue that the tolling provision, § 47-253 (d), applies only to toll claims against the declarant, not Benson individually. The plaintiffs counter that the court properly determined that, notwithstanding the period provided by the declaration, the period of declarant control, in fact, continued until 2013 because the declarant continued to exercise special declarant rights through 2013. We agree with the...