Watson v. Vill. at Northshore I Ass'n, Inc.

Decision Date09 February 2018
Docket NumberNo. 16–316,16–316
Citation184 A.3d 1133
Parties Roy H.A. WATSON III v. The VILLAGE AT NORTHSHORE I ASSOCIATION, INC.
CourtVermont Supreme Court

Brooks G. McArthur and David J. Williams of Jarvis, McArthur & Williams, Burlington, for PlaintiffAppellant.

Christina A. Jensen of Lisman and Leckerling, P.C., Burlington, for DefendantAppellee.

PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

EATON, J.

¶ 1. This appeal from cross-motions for summary judgment involves a long-standing dispute between a condominium unit owner, Roy H.A. Watson III, and the organization that manages his condominium, The Village at Northshore I Association (Association). The legal issues center around the application of two laws, the Condominium Ownership Act (COA) and the Common Interest Ownership Act (CIOA), to the Association's governing documents. The trial court ruled in favor of the Association and granted it declaratory judgment on all thirteen issues that are before this Court on appeal. As to nine of the thirteen issues, we affirm the trial court's judgment in favor of the Association. As to two issues, we reverse and enter declaratory judgment in favor of Watson. As to two other issues, we affirm the trial court's decision in favor of the Association in part and reverse and enter declaratory judgment in Watson's favor in part.

I. Facts

¶ 2. The Association was created in 1986 by an original declaration document, the Declaration of Condominium of The Village at Northshore I (Original Declaration). Physically, Northshore is a collection of 136 condominium units in twenty-five buildings.1 The units are a combination of two-story townhouse units and one-story garden homes. Watson purchased his unit at Northshore in 1987, and his deed specifies that his ownership interest is in "an undivided interest in the Common Areas and facilities including the use of the garage(s) shown on said site plan as No. 132, all as set forth in the Declaration [dated February 21, 1986]." The percentage of undivided interest in the common areas that each unit owns is specified in a "Schedule of Assigned Values, Common Element Ownership and Common Expense Liability" that is attached to the Original and Amended Declarations as Exhibit C. Watson's unit, No. 132, has an assigned value of $90,000, and like the owners of all other units with that assigned value, Watson owns 0.6781% of the common elements and is liable for that percentage of the annual common element expenses; other units with higher assigned values own a correspondingly higher interest in the common elements, which correlates to a higher common expense liability.

¶ 3. The Association itself is a nonprofit, nonstock organization incorporated under the laws of Vermont whose membership is limited to the owners of units at Northshore. The Association is organized "for the purpose of administering and managing [Northshore] in accordance with the Declaration," and its responsibilities include holding, regulating, and managing portions of Northshore for all unit owners in common, setting and collecting annual dues, and providing voting rights for administration of Association affairs. Each owner is automatically entitled to the benefits of membership in the Association, subject to rules adopted by the Board of Directors (Board). Among the benefits of membership is a right to vote in Association affairs, with each unit being allocated one vote. The Board is comprised of members of the Association and is designated to act on behalf of the Association. Its powers include, among other things, proposing amendments to the Declaration, adopting and amending bylaws and rules, making contracts, improving and managing commonly owned property, and imposing and receiving payments and fees from unit owners. The Association, its members, and the Board are all governed by the terms of the Association's Declaration and Bylaws, as well as by overarching statutory provisions, and this appeal involves overlapping disagreements about those sources of law.

¶ 4. The first source of law is statutory. The Legislature enacted the COA, 27 V.S.A. chapter 15, in 1968. By the terms of the Original Declaration that was in place in 1987 when Watson purchased his unit, the Association was subject to the COA: "[T]he [Association] hereby submits the Property to the provisions of Chapter 15 Title 27 of the Vermont Statutes Annotated, known as the Vermont Condominium Ownership Act." See 1967, No. 228 (Adj. Sess.), § 1; 27 V.S.A. § 1301. In 1998, however, Vermont adopted the CIOA, which went into effect on January 1, 1999. 1997, No. 104 (Adj. Sess.), §§ 3, 6. Some, but not all, sections of the CIOA applied retroactively to common interest communities that were created prior to January 1, 1999; other sections of the CIOA applied "only to events and circumstances occurring after December 31, 2011." 27A V.S.A. § 1–204(a)(1)(2) (listing sections that apply to preexisting common interest communities). Accordingly, the sections listed in 27A V.S.A. § 1–204(a)(1) applied to the Association as soon as the CIOA went into effect in 1999, while the sections listed in § 1–204(a)(2) applied starting in January 2012. Any other aspect of the Declaration not covered by § 1–204(a)(2) continued to be subject to the COA. Additionally, the Association fully adopted the CIOA in 2012, so any amendments to the Declaration after 2012 were subject to the CIOA.

¶ 5. The central disagreement between the parties involves the Declaration and how it allocates ownership interest in the physical structures that make up Northshore, including privately owned areas and commonly owned areas, and the Declaration's amendment process. Between 1986 and 2012, the Association amended the Original Declaration multiple times, and in 2012, it adopted and recorded a new declaration, the Amended Declaration, that completely replaced the Original Declaration. Both the Original and the Amended Declarations distinguish between units, common elements, and limited common elements, all of which have specific definitions. First, the Original Declaration defines "Common Area" or "Common Element" as "parts of the property as defined in the [COA]"2 and "parts of the property other than the Units." Article III of the Declaration provides an exhaustive list of common elements: the property on which the units sit and shared property; all rights, easements, restrictions and agreements associated with that property; all portions of buildings in Northshore, except for units; and all improvements other than the units.

¶ 6. Second, the Original Declaration defines "Limited Common Elements" as "those portions of the Common Elements reserved for the exclusive use of one or more, but less than all, of the Units." Article III clarifies that limited common elements include "[a]ny doorsteps, stoops, porches, decks, patios and all exterior doors and windows, equipment storage areas, closets or other fixtures or improvements designated to serve, attached to, or adjacent to a single Unit," as well as "garage spaces" depicted on a map that forms part of the Declaration. Finally, "Unit Estate" and "Unit" encompass "all the components of ownership held by an Owner, including the rights and interest of the Owner in and to the Unit and the rights of use and undivided interest in the Common Area." Additionally, the Declaration defines the boundaries of each unit as the bottom surface of the ceilings of the highest floor and the top surface of the subflooring on the first floor, plus the innermost surface of the walls. No unit sits above any other unit, meaning that the attic space over each unit is accessible only to that unit.

¶ 7. Finally, in addition to statutory law and the Declaration, the Association and its members are subject to internal Bylaws and Rules. The original Bylaws were in place until 2012, when the Association voted to adopt a new Declaration and a new set of Bylaws. The Rules that were in effect when this litigation began were adopted on April 29, 2013, and were subsequently amended on September 25, 2013. The Bylaws and Rules that are the most relevant to the present appeal provide as follows. First, the Board is composed of five volunteer members elected by the Association and has always had the authority to establish rules and regulations regarding the use of common elements. Specifically, the original Bylaws place in the Board the responsibility for maintaining, repairing, and replacing the common elements. The Amended Declaration and Bylaws further clarify that the Board has the authority to adopt rules "that affect the use of or behavior in Units to ... implement a provision of the Declaration." Rule 2.5.7 of the most recently amended rules requires that unit owners maintain a temperature monitor that is capable of alerting the Board or another designee of the Association any time the temperature in a unit drops below forty-five degrees.

¶ 8. Rule 6.1 provides that, for each violation found by the Board after notice and hearing of any Association rule or bylaw, the violator shall be fined fifty dollars, plus ten dollars per day if the violation is "of a continuing nature." Article VII of the amended Rules applies to over-the-air-reception devices and permits unit owners to install satellite dishes in accordance with the restrictions outlined in the rules. Rule 8.1 prohibits any "modification or addition to any unit" without prior written approval from the Board.

¶ 9. Additionally, the Declaration and Bylaws regulate the voting and amendment procedures applicable to the Board. Section 4.02 of the amended Bylaws outlines the requirements for Board meetings. The Board is required to hold an annual meeting at which: the president and treasurer must report on "the activities and financial condition of the Association"; the members must elect "one or more Directors in accordance with the requirements of these Bylaws"; and members must vote on other...

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1 books & journal articles
  • Ruminations
    • United States
    • Vermont Bar Association Vermont Bar Journal No. 46-4, December 2020
    • January 1, 2021
    ...21 v. H.P. Cummings Const. Co., 143 Vt. 416, 469 A.2d 742 (1983). [110] Watson v. Village at Northshore I Association, Inc., 207 Vt. 154, 184 A.3d 1133 (2018). [111] Deveneau v. Wielt, 201 Vt. 396, 144 A.3d 324 (2016). [112] May v. Breer Brothers, Inc., 144 Vt. 266, 475 A.2d 1082 (1984). [1......

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