Winthrop House Ass'n v. Brookside Elm Ltd. Partns.

Decision Date24 June 2005
Docket NumberNo. Civ. 3:00CV328 (AHN).,Civ. 3:00CV328 (AHN).
Citation451 F.Supp.2d 336
CourtU.S. District Court — District of Connecticut

Philip H. Bartels, Holland Kaufmann & Bartels, Greenwich, CT, for Winthrop House Ass'n, Inc.

Jane I. Milas, Raymond A. Garcia, Garcia & Milas, New Haven, CT, Thomas W. Witherington, Cohn, Birnbaum & Shea, Donald W. Doeg, Richard M. Dighello, Jr., Updike, Kelly & Spellacy, P.C., Hartford, CT, for Brookside Elm Limited Partners, et al.


NEVAS, District Judge.

On June 29, 2001, this case was referred to a magistrate judge for a recommendation on a single narrow issue: "Did the Declarant properly exclude the implied warranties and/or express warranties?" On December 29, 2003, the magistrate judge reported that the declarant, Brookside Elm Limited Partners ("Declarant") (1) sufficiently disclaimed implied warranties under the Connecticut Common Interest Ownership Act ("CIOA") and (2) could not disclaim express warranties under the CIOA. She also concluded that the plaintiff, Winthrop House Association ("Association") did not have standing under the New Home Warranty Act ("NHWA") and thus did not consider whether warranties were effectively disclaimed under that statute. The Association objects to the magistrate judge's findings that CIOA implied warranties were effectively dis-claimed and that it does not have standing under the NHWA. For the following reasons, the court sustains the Association's objections to those findings.


This action involves the conversion of Winthrop House, a six-story apartment building located in Greenwich, Connecticut, to a residential condominium complex containing forty-seven units. Winthrop House was built in 1938 and originally contained fifty-three apartments. In 1993, the Declarant purchased Winthrop House to renovate and convert to a condominium. Renovations began on the building in 1994. In 1995, the Declarant converted the building into a common interest community under the CIOA and in connection therewith prepared a Public Offering Statement ("POS"). Every prospective purchaser of a unit was given a copy of the POS. Prospective purchasers who were residents of New York state were also given a copy of the New York Supplement ("N.Y.Supplement") to the POS. Everyone who received a copy of the POS and the N.Y. Supplement signed a document acknowledging that he or she reviewed it and agreed to its terms. Forty-five of the forty-seven units had been sold by the time the original complaint was filed in this action.

The Association, on behalf of the forty-five original purchasers and all subsequent unit owners, instituted this action in May 2000, alleging a civil RICO violation and pendent statutory and common law claims under Connecticut and New York law. In the complaint, the Association alleges, inter alia, that at the time the units and common elements were conveyed, there were numerous defects and structural problems with the building and its components, including the exterior facade, the roof, the HVAC system and the elevator, as well as many building and fire code violations. It claims, inter alia, that those defects and violations breached express and implied warranties under the two Connecticut statutes that govern warranties for condominium conversions, the CIOA, Conn. Gen.Stat. §§ 47-200 et seq., and the NHWA, Corm. Gen.Stat. §§ 46-116 et seq.

After the complaint was filed, the parties agreed to submit the Association's claims to mediation. During the course of the mediation it became apparent that advice on the issue of whether express and/or implied statutory warranties had been excluded would help move the mediation forward. The parties turned to the court for advice on this issue and the court referred the matter to the magistrate judge for consideration of the narrow legal issue of whether the Declarant properly excluded express and/or implied warranties. To determine that question, the parties stipulated that the relevant documents were the POS, the N.Y. Supplement, the Purchase Agreement, and the Limited Warranty Administration Program.


Pursuant to the Federal Magistrates Act, 28 U.S.C. §§ 631-639, the district court is not bound by the opinion or recommendations of a magistrate judge on a dispositive matter referred pursuant to 28 U.S.C. § 636(b). If a party timely objects to all or part of the magistrate -judge's recommendations, the district court makes a de novo determination of those portions of the report. See 28 U.S.C. § 636(b)(1). Regardless of whether objections are made, the district judge may accept, reject, or modify, in whole or in part, the magistrate judge's findings and recommendations. See id.


The CIOA, which is modeled on the Uniform Common Interest Ownership Act, was enacted in 1984 to provide "prospective unit owners and unit owners' associations with consumer protection rights such as disclosure and warranty rights." Willow Springs Condo. Ass'n, Inc. v. Seventh BRT Dev. Corp., 245 Conn. 1, 4 n. 1, 717 A.2d 77 (1998) (citing Conn. J. Standing Comm. Hearings, Judiciary, Pt. 6, 1983 Sess., pp. 1821-23). The CIOA governs the rights and obligations of parties regarding the financing, construction, organization, sale, and management of common interest communities. See id.

The NHWA governs warranties in connection with the sale of, newly constructed dwellings and "any conversion condominium unit . . . and any fixture or structure which is made a part thereof at the time of . . . conversion." Conn. Gen.Stat. § 47-116.

The CIOA and the NHWA are remedial, consumer protection statutes that must be liberally construed in favor of purchasers and strictly against sellers. See Linden Condo. Ass'n v. McKenna, 247 Conn. 575, 592-93, 726 A.2d 502 (1999). Indeed, with specific regard to the CIOA, the Connecticut Supreme Court has required strict compliance with the Act's technical details. See Hall Manor Owners Ass'n v. City of West Haven, 212 Conn. 147, 153-54, 561 A.2d 1373 (1989). Based on these general principles, the provisions of the NHWA and the CIOA, and case law interpreting these statutes, the court concludes that the Declarant's warranty disclaimers do not satisfy the strict requirements of the CIOA and the NHWA. In addition, the court concludes that the Association has standing under the NHWA to sue in a representative capacity on behalf of at least two or more unit owners.

I. The Association's Standing

Pursuant to the CIOA, a condominium association is given the power to institute litigation "in its own name on behalf of itself or two or more unit owners on matters affecting the common interest community." Conn. Gen.Stat. § 47-244(a)(4). This statutory grant of authority to a condominium association is not limited to actions under the CIOA. Cf. Candlewood Landing Condo. Ass'n v. Town of New Milford, 44 Conn.App. 107, 111, 686 A.2d 1007 (1997) (holding that a condominium association has standing to bring a tax appeal on behalf of unit owners even though the statute governing tax appeals does not expressly so provide because § 47-244(a)(4) authorizes an association to act in a representative capacity without exception or limitation); see Caswell Cove Condo. Ass'n, Inc. v. Milford Partners, Inc., 58 Conn.App. 217, 753 A.2d 361 (2000) (holding that a condominium association has standing to institute an action to quiet title). As the appellate court noted in Candlewood Landing, to hold that an association does not have standing to act in litigation in a representative capacity in matters affecting the condominium community would amount to "judicial legislation" amending § 47-244(a)(4) "by adding a clause to the effect that, except for litigation pertaining to tax appeals, a condominium association may act in litigation and administrative proceedings." Id. Likewise, if the court were to adopt the magistrate judge's conclusion, it too would engage in judicial legislation amending the CIOA to provide that, except for claims under the NHWA, a condominium association may act in litigation on behalf of unit owners. See id.; cf. Willow Springs Condo. Ass'n, 245 Conn. at 1, 717 A.2d 77 (upholding award of damages to condominium association for breach of express and implied warranties under the CIOA and NHWA without questioning the Association's standing under the NHWA).

Accordingly, the Association's objections to the magistrate judge's conclusion that it does not have standing under the NHWA is sustained, and this court will consider de novo whether the warranty disclaimers satisfy the provisions of the NHWA.

II. Warranty Disclaimer Provisions of the NHWA and the CIOA

The NHWA has strict requirements for disclaiming express and implied warranties. Specifically, NHWA warranties cannot be excluded or modified in a contract of sale. They may only be excluded or modified after a contract of sale is executed and must be contained in a separate written instrument that is signed by the purchaser and that (1) sets forth in detail the warranty to be excluded or modified, (2) the purchaser's consent to such exclusion or modification, and (3) the terms of the new agreement. See Conn. Gen.Stat. § 47-117(c) (express warranties);1 Conn. Gen.Stat. § 47-1,18(d) (implied warranties);2 see also Beucler v. Lloyd, 83 Conn.App. 731, 737, 851 A.2d 358 (2004), cert. dismissed, 273 Conn. 475, 870 A.2d 468 (2005); Cafro v. Brophy, 62 Conn. App. 113, 123, 774 A.2d 206 (2001). Indeed, as the Connecticut Appellate Court recently noted, "[t]he plain language of both §§ 47-117 and 47-118 expressly provides that no words in the contract of sale shall work to exclude or to modify any warranties created under the statutes unless there is a separate agreement on the exclusion or modification." Beucler, 83 Conn.App. at 737, 851 A.2d 358 (emphasis in original). Further, a general statement that all...

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