Opinion
No. FST CV 05-4004288 S
February 11, 2009
MEMORANDUM OF DECISION
The only issue remaining for this court's decision, after trial, is whether or not the May 25, 2004 condominium parking rule approved by the Board of Directors of Vantage Point Association, Inc., a residential condominium, is valid and enforceable. The plaintiff seeks a court determination that the parking rule is invalid and unenforceable. The defendant, Vantage Point Association, Inc., in a Counterclaim, seeks an injunction requiring that the plaintiff, Alan P. Fishman, comply with that very parking rule.
The operative pleading is the plaintiff's December 13, 2006 Revised Complaint (#144.10) in four counts; the First Count, injunctive relief; the Second Count, intentional infliction of emotional distress; the Third Count, negligent infliction of emotional distress; and the Fourth Count, declaratory judgment. In the Fourth Count, paragraph 24, the plaintiff alleges: "That under Connecticut Law the rules and fines imposed by The Board of Directors against the Plaintiff are illegal and unreasonable." The plaintiff's Claim for Relief in the Fourth Count states as follows; "That this Court issue a Declaratory Judgment declaring that the rule and fines imposed upon the Plaintiff are invalid." To this pleading the defendants have filed an October 22, 2007 Amended Answer (#166.10) containing three Special Defenses and a one-count Counterclaim. The Special Defenses are not related to the declaratory judgment claim and thus have not been argued at trial. The Counterclaim alleges in paragraph 5; "In 2004 the Board implemented a rule stating: `Each unit has been assigned one space under the building to accommodate only a single motorized vehicle. Only unit owners may park underneath the building. Additional parking, along the perimeter of the property, except where designated as No Parking areas, may be used for second cars or residents and guests.'" The defendant seeks in its Counterclaim: "A permanent injunction prohibiting the plaintiff/counterclaim defendant from parking anything but a single motorized vehicle in his assigned parking space."
The plaintiff filed two Special Defenses to this Counterclaim on January 7, 2008 (#183.10). The First Special Defense stated: "There have been no amendments that are of any legal effect recorded in the Land Records of the Norwalk Town Clerk's office." The Second Special defense claims, that the parking rule is of no legal effect because "the board of directors was not legally convened when it passed the parking rule." The Declaration "does not give the board the authority to pass restrictions in the limited common areas without amending the Declaration"; the Board is not the proper entity to create parking restrictions; and the Vantage Point Taxing District is the proper entity to administer the parking areas.
The pleadings were closed and the matter proceeded to a court trial on October 10, 2008. On the fourth day of trial, October 17, 2008, both parties rested and placed an oral stipulation on the record concerning the outstanding issues remaining for the court to decide. In that oral stipulation the parties agreed that all claims for damages, collection of fines, costs and attorneys fees made by each party in the underlying pleadings were waived. The plaintiff withdrew the Second and Third Counts. The plaintiff withdrew all claims in the First and Fourth Counts except as to the validity of the parking rule. The parties stipulated that the court will determine the validity of the May 25, 2004 parking rule. The defendant's October 22, 2007 Counterclaim remains since it relates to the validity of the May 25, 2004 parking rule. The stipulation further states that the trial court will consider all the evidence and exhibits offered at trial. The parties were canvassed by the undersigned and agreed to this stipulation. Simultaneous briefs were filed. Oral arguments were waived.
The court makes the following findings of fact and legal conclusions.
In 1975 a condominium was created known as Vantage Point. It was developed as a residential condominium on land bounded by the waters of Norwalk Harbor, First Street, Second Street and New Street all in Norwalk, Connecticut. A Declaration of Condominium was executed by Vantage Point Properties, Inc., the condominium developer, dated November 13, 1975 and the Declaration was recorded in the Norwalk Land Records at volume 971 page 152 on November 17, 1975. Ex. 12. The defendant corporation, Vantage Point Association, Inc., was then created as a Connecticut corporation not organized for profit. Vantage Point Association, Inc., is the condominium association and is a defendant. The By-laws of Vantage Point Association, Inc. were approved and were recorded in the Norwalk Land Records at volume 971 at page 178 on November 17, 1975 immediately after the recorded Declaration of Condominium. Ex. 13. The latest amended By-laws of Vantage Point Association, Inc., were marked Exhibit 16. Pursuant to the By-laws and the Declaration of Condominiums, the Vantage Point Association, Inc. adopted Rules and Regulations. The only amendment to the Declaration approved by the unit owners was recorded in the Norwalk Land Records in volume 3868 page 46 on March 6, 2000. This amendment to the Declaration enacted a new Article 9(m) relating to fines and conditions for unit occupancy. Ex. 17. Other than the typo stating that the original Declaration was recorded on November 17, 1999, Ex. 17 is not relevant to the present issues.
In June 1984, the plaintiff purchased condominium Unit 2K at Vantage Point. Consistent with the By-laws, the plaintiff was assigned an under the building parking space. At all times from 1984 to date, the plaintiff has been assigned the same parking space. That assigned parking space is at issue in this trial. Neither the Rules and Regulations in effect in 1975 when the condominium was declared nor the June 1984 Rules and Regulations were offered in evidence. The parking rule portion of the Rules and Regulations in effect in 1996 immediately prior to its May 25, 2004 amendment was offered as Exhibit 25. The parking portion of the 1996 Rules and Regulations is printed in all capital letters and states in its entirety:
"PARKING"
1. PARK IN YOUR ASSIGNED SPACE. DO NOT PARK, EVEN MOMENTARILY, IN SOMEONE ELSE'S SPACE. INFORM GUESTS THAT GUEST PARKING IS LOCATED ALONG THE FENCE.
2. VEHICLES OR BOATS IMPROPERLY PARKED OR BLOCKING RIGHTS OF WAY WILL BE TOWED AT THE OWNER'S EXPENSE.
3. NO COMMERCIAL VEHICLE OF A SIZE LARGER THAN A PANEL TRUCK MAY BE PARKED ON ANY PART OF THE PROPERTY, EXCEPT FOR VEHICLES TEMPORARILY ON THE PROPERTY FOR SERVICE. NO UNREGISTERED CARS TO BE PARKED ON PROPERTY.
4. NO DOUBLE PARKING — CARS SHOULD BE PARKED SO TRUNKS OR HOODS CANNOT BE USED AS STEP LADDERS TO BALCONIES.
The 1975 By-laws stated the following as to the Board of Directors: "Section 4. Board of Directors. (a) Number and Qualifications. The affairs of the association shall be governed by a Board of Directors . . . Thereafter the Board of Directors shall be composed of five persons, all of whom shall be owners of units who shall be elected from among the unit owners by the unit owners." Since the original developer had already sold more than twenty units, the above quoted section of the By-laws was the operative provision. In May 2004, a modification to the Rules and Regulations was presented to the Board of Directors of Vantage Point Association, Inc. At a May 25, 2004 meeting of the Board of Directors, Rules and Regulations were amended and approved unanimously by all seven members of the Board of Directors. The minutes of the May 25, 2004 Board meeting were in evidence. Ex. 18. The exact wording of the parking rule adopted by the Board on May 25, 2004 is contained in the document titled: "Vantage Point Association and Vantage Point Special Services District, Rules and Regulations, Revised August 2004" on page twelve of seventeen unnumbered pages. Ex. 15. The May 25, 2004 contested parking rule states in its entirety:
"PARKING"
1. Each unit has been assigned one space under the building to accommodate only a single motorized vehicle. Only unit owners may park underneath the building. Additional parking, along the perimeter of the property, except where designated as No Parking areas, may be used for second cars or residents and guests.
2. Vehicles or boats improperly parked or blocking rights of way will be towed at the owner's expense.
3. No commercial vehicle may be parked on any part of the property, except for vehicles temporarily on the property for service. These vehicles should be parked, if possible at the back of the parking lot, near the dumpsters.
4. No unregistered cars shall be parked on the property.
5. There shall be a limit of two vehicles parked on the property for each unit.
Sometime after May 25, 2004 a special meeting of all unit owners was called for June 27, 2005 to vote and approve on changes in the By-laws. Except for two changes, not relevant to this case, the By-laws were amended as proposed at the owner's June 27, 2005 meeting. Exhibit 20 are the minutes of that special meeting. There were seven sections of the By-laws that were amended. The amendments to Sections 4b 12, 5a, 5b, 5d, 7a and 13 are not related to the issues before this court. Ex. 14 states that "Section 4a" of the By-laws was amended by adding: "The Board of Directors shall consist of seven (7) persons . . ." Ex. 14. From its inception in 1975 until the June 27, 2005 vote of the unit owners, the Board of Directors of Vantage Point Association, Inc., consisted of five members.
At the June 27, 2005 meeting the reference in the original By-laws to the original developer in Section 4(a) were deleted. There was a slight change in the remaining wording. Ex. 14 incorrectly set forth the Section number in an apparent typographical error. The Section to be amended was "Section 4." subsection "(a)" and this was referred to in the recorded Amendment as "Section 4a." Ex. 14. The plaintiff points that this typo is a further example of the defendant being careless and not following proper procedures. In any event, the essential change in this section of the By-laws was to change the number of board members from the original five persons to seven persons. That all board members "shall be resident owners of units who shall be elected by the unit owners" did not change. From July 27, 2005 to date the entire portion of the By-laws relating to the number and qualifications of the Board of Directors was as follows: "Section 4: Board of Directors. (a) Number and Qualifications. The affairs of the association shall be governed by a Board of Directors. The Board of Directors shall consist of seven (7) persons, all of whom shall be resident owners of units who shall be elected by the unit owners." The entire Bylaws were republished after July 2005 in a seventeen-page document with pages numbered 16-33. Ex. 16.
One of the legal issues is whether the May 25, 2004 vote of a seven-member Board of Directors was valid when the Board of Directors was limited to five members.
When a court is called upon to assess the validity of an action taken by a board of directors, it first determines whether the board acted within its scope of authority and, second whether the action reflects reasoned or arbitrary and capricious decision marking . . . Because the plaintiffs do not contend that the leash restriction itself is unreasonable, the only issue before the court is whether the board exceeded the scope of its authority in adopting the restriction. We therefore turn to an examination of the relevant statutory provisions.
Condominium developments are of a relatively recent origin and provide a unique type of shelter that affords some of the benefits of property ownership without the corresponding burdens . . . The statutory scheme in Connecticut governing the ownership governing condominium developments in Common Interest Ownership Act (act). See generally General Statutes § 47-200 et seq. The act is a comprehensive legislative scheme regulating all forms of common interest ownership and that is largely modeled on the Uniform Common Interest Ownership Act . . . The act addresses the creation, organization and management of common interest communities and contemplates the voluntary participation of the owners. It entails the drafting and filing of a declaration describing the location and configuration of the real property, development rights, and restrictions on its use, occupancy and alienation . . . It anticipates group decision-making relating to the development of a budget, the maintenance and repair of the common elements, the placement of insurance and the provision for common expenses and common liabilities.
Weldy v. Northbrook Condominium Association, Inc., 279 Conn. 728, 734-35 (2006).
"Because an association's power should be interpreted broadly, the association, through its appropriate governing body, is entitled to exercise all powers of the community except those reserved to its members." Id., 738. "Accordingly, the standard of view most commonly employed in reviewing a board's authority to adopt rules or regulations is that provided . . . a board-enacted rule does not contravene either an express provision of the declaration or a right reasonably inferred therefrom it will be found valid, within the scope of the board's authority. The test . . . is fair and functional; it safeguards the rights of unit owners and preserves unfettered the concept of delegated board management." Id., 738.
Therefore, the court must conduct a four-step analysis in order to determine the validity of the May 25, 2004 parking rule. Those steps are as follows:
1. Did the parking rule contravene an express provision of the Declaration of Condominium?
2. Did the parking rule contravene a right reasonably inferred from the Declaration of Condominium?
3. Was the vote of seven members of the Board of Directors on May 25, 2004 a valid ame ndment of the Rules and Regulations when the Board of Directors was only duly constituted as five members?
4. Did the May 25, 2004 Board action reflect reasoned or arbitrary and capricious decision making?
The first three questions invoke the first rule of Weldy that the court "first determines whether the board acted within its scope of authority."
The court will now turn to each of the above four issues discussing them in numerical order.
1. Did the parking rule contravene an express provision of the Declaration of Condominium?
Article 2(g) of the Declaration of Condominium states: "Association means Vantage Point Association, Inc., which is an association of the Unit owners as hereinabove defined, acting as a group and in accordance with the by-laws and this declaration." In Article 2(c) a unit owner is defined as: "The person or persons owning a unit in fee simple absolute and an undivided interest in the fee simple estate of the common areas and facilities in the percentage specified and established in this declaration." The Declaration contains Schedule A with each unit listed. Unit 1E, purchased by Alan P. Fishman, is listed on page 17 of Ex. 12 as a "2 Bedroom" with "APPROX GROSS SQ. FT. AREA 1206," "% INTEREST IN UNDIVIDED COMMON 2.313" and "LIMITED COMMON AREA: Terrace, Veranda, Entry Court, Storage Area as assigned." In Article 2(d), Common Areas and Facilities are defined as: "the land on which the building is located. The foundations, columns, girders, beams, supports, main walls, roofs, halls, corridors, lobbies, stairs, and stairways, entrances and exits of the building." In Article 2(h) Limited Common Areas and Facilities are defined as: "includes those common areas and facilities designated in this declaration as reserved for the use of a certain unit or units to the exclusion of other units, and as more particularly set forth in Schedule `A' annexed hereto, as well as assigned parking areas and garages which shall be assigned from time to time to a unit owner by Vantage Point Association, Inc. Parking garages are limited common areas and the use of each parking garage is limited to the unit purchased under a contract and deed which grants such unit the right to the use of such garage . . . Storage spaces are limited common areas." The defendants' Post-Trial Brief dated November 6, 2008 on page 3 footnote 6 varies from the above language. The court finds that the language of Exhibit 12 controls.
There are no actual garages in the condominium development. There are two different types of parking on the property: (1) open and unassigned parking spaces and (2) open space under the building divided into assigned separate parking spaces similar to car ports with no doors or partitions dividing those under the building parking spaces. Sometimes those under the building parking spaces are referred to as "garages." The plaintiff's deed was not offered into evidence. No party disputes that the plaintiff's under the building assigned parking area is a limited common area.
Article 7 of the Declaration titled "Designation of Limited Common Areas and Facilities" states: "Limited common areas and facilities consist of . . . assigned storage area where applicable . . . the assigned parking areas . . . and which shall be assigned to various unit owners by the Board of Directors, in accordance with Rules, Regulations and Procedures promulgated by said Board of Directors . . . The use of the assigned parking area is limited to the unit owner who receives the right to the use such parking area. The ownership of the limited common areas, however, is vested in all the unit owners." The defendants' Post-Trial Brief dated November 6, 2008 on page 3 footnote 3 varies from the above language. The court finds that the language of Exhibit 12 controls. The plaintiff was assigned his under the building parking space by the Board of Directors in 1984 and he has continued to use the same parking ever since.
The under the building parking spaces are limited common areas and the use of each parking space in the under the building area is limited for use by the owner of the unit purchased under a contract and deed which grants each unit the right to the use of such garages. Balconies and terraces are limited common areas, limited to the use of the apartments to which they are pertinent. Storage areas are limited common areas. All limited common areas including the assigned under the building parking spaces are owned by the defendant Vantage Point Association, Inc.
Article 9(b) states: "There shall be no obstruction of the common areas nor shall anything be stored in the common areas without the prior consent of the Board of Directors, except as hereinafter expressly provided. Each unit owner shall be obligated to maintain his own unit and keep it in good order and repair." Article 9 of the Declaration contains further limits of the use by unit owners: (c) no waste, (c) nothing kept that will increase the rate of insurance; (d) nothing placed or displayed outside, (e) limitations on animals and pets; (g) nothing done to impair the structural integrity of the building; (h) no articles shall be exposed or hung out on any part of the common areas. In addition, Article 7(f) states; "No noxious or offensive activities shall be carried on in any unit or in the common areas nor shall anything be done therein either willfully or negligently which may be or become an annoyance or nuisance to the other unit owners or occupants." Article 7(h) states: "The common areas, terraces and balconies, if any, shall be kept (sic) free and clear of rubbish, debris and other unsightly materials and items." Article 7(j) states: "The Board of Directors shall have the power to make such regulations as may be necessary to carry out the intent of these use regulations. The use of the common areas of all unit owners and all other persons authorized to use the same and the use of the limited common areas by the unit owners and all other persons authorized to use the same, shall be at all times subject to the by-laws and such rules and regulations as may be prescribed and established governing such use, or which may be hereinafter prescribed and established by the Board of Directors." Article 7 authorizes the Board of Directors to impose fines. Article 7(k) prevents residential units from being used for industrial and commercial use. Article 7(k) further states: "No commercial vehicles of a size larger than a panel truck may be parked on any part of the property, except those vehicles temporarily on the property for purposes of servicing the property itself or one of the units. No use or practice shall be permitted on the property which is a source of annoyance to residents or which interferes with the peaceful possession and proper use of the property by its residents."
The Declaration of Condominium Schedule A-2, Part 1 is a plot plan of the entire condominium premises showing parking spaces located under each of the buildings. It is titled "HOUSE NUMBERING PLAN AND BOAT DECK UNITS." Ex. 12, page 21. The first floor of each building is devoted essentially to walkways, passageways under the building, individual enclosed storage areas and the assigned under the building parking spaces. The residential units start on the second floor. These under the building parking spaces qualify as a "parking garage" under the Declaration. Schedule A-2, Part 2 is a diagram of only the buildings and is titled "HOUSE NUMBERING PLAN."
The parties agree that Schedule A-2, Parts 1 and 2 have been poorly photocopied so that the numbers assigned to each residential unit and to each assigned parking space cannot be read. It is clear from the diagram; that the upper portion of the diagram to the west contains boat docks adjacent to a swimming pool and Norwalk harbor; the numbered residential units are in a large concave building with one side facing the water and the other side facing the unassigned parking areas; that each unit is assigned one numbered under the building parking space; the under the building assigned parking spaces on the non-water side are larger than the unassigned parking spaces and the water-side assigned parking spaces both in length and width; there are passageways and walkways under the building that lead to the pool, boat docks, waters of Norwalk harbor and/or the unassigned parking spaces; there appears to be seven such under the building passageways; and that one of these under the building passageways or walkways is immediately adjacent to the under building parking space assigned to the plaintiff.
The court finds that the May 25, 2004 parking rule applies to both the assigned under the building parking spaces and the unassigned parking spaces located elsewhere on the property.
The court finds that the plaintiff's assigned under the building parking area is a Limited Common Area.
The court finds that Mr. Fishman has the obligation to maintain his parking space as a limited common area in such a fashion as to not impede any pedestrian traffic that uses the passageway and walkway adjacent to his assigned under the building parking space.
The court finds that there is no express provision of the Declaration of Condominium that contravenes the right of the Board of Directors to approve the May 25, 2004 parking rule. To the contrary, Article 7(j) of the Declaration grants to the Board of Directors the right to propose, approve and enforce such rules and regulations. The answer to Question 1. is No.
2. Did the parking rule contravene a right reasonably inferred from the Declaration of Condominium?
The plaintiff claims that the Board of Directors was not the proper entity to approve the May 25, 2004 parking rule; it was the unit owners either by amending the Declaration of Condominium or the By-laws or the Vantage Point Special Services District. In support of that proposition the plaintiff cites one trial court decision: Townhouse III Condominium v. Mulligan, Superior Court judicial district of Tolland at Rockville, Docket Number CV 92-50183 S (March 13, 1995, Klaczak, J.) [14 Conn. L. Rptr. 112]. In 1984 Mr. Mulligan bought a condominium unit with a washer and dryer. In 1989 the Board of Directors of the condominium association passed a regulation prohibiting the use of washers and dryers in individual condominium units. After the defendant did not remove the washer and dryer, the association fined him and filed this suit seeking to foreclose for nonpayment of fines. The trial court declared the 1989 regulation void since it was not contained in the By-laws as required by Gen. Stat. § 47-80(c)(8). The trial court used a two-prong reasonableness test: (1) whether the board acted within its scope of its authority and (2) whether the rule reflected reasoned or arbitrary and capricious decision making. The court found that the first prong was not met since the By-laws did not contain the use restriction and thus violated Gen. Stat. § 47-80(c)(8) and further found: "such restrictions and requirements respecting the use and maintenance of the units and the use of the common elements as are set forth in the declaration, designed to prevent unreasonable interference with the use of the respective units and of the common elements by the several unit owners." The court found that this new use restriction banning washers and dryers deprived owners of rights that they previously had.
In Mulligan, the trial court did find that the second prong of reasonableness was met since: the regulation applied to all unit owners; it was designed to reduce flooding of individual units, which flooding had already occurred; the individual washer/dryers caused noise that was extremely annoying to other residents; and the building's plumbing system was not built to accommodate the additional load.
In the instant case the By-laws contains provisions for its amendment by a vote of "50% of the unit owners" provided that the rule would not contravene Gen. Stat. § 47-80 as amended and further provided that the vote take place at a meeting duly held for such purpose. Ex. 13, Section 22, page 50. The Declaration contains provisions for its amendment by a vote of "at least 75% of all unit owners cast in person or by proxy at a meeting duly held in accordance with the provisions of the by-laws." Ex. 12, Article 17, pages 12-13. The By-laws permit the Board of Directors to adopt and amend the "rules and regulations covering the details of the operation and use of the property." Ex. 13, Section 4. (b) 5. "The Board of Directors shall have the powers . . . to do anything and everything else necessary and proper for the sound management of the association." Ex. 13, Section 4(b)12. As already stated in this Memorandum of Decision the Declaration contained numerous use restrictions for the limited common areas assigned parking and its immediate surrounding areas. Articles 2(d)2: 2(d)3, 2(h), 5, 7, 9(b), 9(c), 9(d), 9(f), 9(h), 9(j), 9(k) and Schedule A-2. Article 7 of the Declaration granted the Board of Directors the power to promulgate parking "Rules, Regulations and Procedures." The use restrictions of Article 9 of the Declaration were extensive and covered three full pages. Ex. 12, Pages 7, 8, 9 and 10.
The court finds that Townhouse III Condominium v. Mulligan does not support the plaintiff's position. The May 25, 2004 parking rule did not terminate the right to park as the Mulligan 1989 regulation did for washers and dryers. The language of both the Declaration and By-laws gave advance notice to all Vantage Point condominium purchasers that the Board of Directors possessed the right to pass reasonable parking restrictions. Nothing in Gen. Stat. § 47-80 is authority for the plaintiff's claim that the Board's May 25, 2004 actions were not proper according to the Declaration and By-laws. The Board acted within its authority in approving the parking rules. The disputed parking rule was consistent with the Declaration. The May 25, 2004 parking rule was a means of implementing a policy expressed in the Declaration and By-laws. Weldy v. Northbrook Condominium Association, supra, 279 Conn. 739. The Board did not attempt to amend the Declaration by the enactment of the May 25, 2004 parking rule in violation of Gen. Stat. § 47-245(b) or Gen. Stat. § 47-244(c)(1).
The Declaration gives the Board of Directors the right to approve rules and regulations. It contains parking management provisions. The May 25, 2004 parking rule does not conflict with any of the provisions of the Declaration. The court finds that the May 25, 2004 parking rule did not contravene a right reasonably inferred from the Declaration of Condominium. The answer to Question 2. is No.
3. Was the vote of seven members of the Board of Directors on May 25, 2004 a valid amendment to the Rules and Regulations when the Board of Directors was only duly constituted as five members?The minutes of the May 25, 2004 Board of Directors meeting indicate that all seven members of the Board of Directors were present and all seven voted in favor of the amended parking rule. Ex. 18. Therefore, no matter who the five official Board members were, those five official members of the Board did vote in favor of the parking rule. The question is which of those five were the duly constituted members of the Board of Directors? It is clear from the June 27, 2005 amendment to the By-laws that a mistake had been made by Vantage Point Association, Inc. in that they had been operating as a seven-member Board of Directors for many years even though the By-laws only permitted a five-member Board of Directors.
This issue was discussed in a trial court decision in 1996. Watch Hill Condominium, Inc. v. Van Eck, Superior Court, judicial district of New Haven at New Haven, Docket No. CV 93-0344796 (June 14, 1996, Barnett, J.) [17 Conn. L. Rptr. 198]. In Watch Hill a five-person condominium Board of Directors continued to act in contravention of Article II, § 1(a) of the By-laws which limited the number of directors to three. The doctrine of de facto officers was applied in Watch Hill and the actions of the numerically deficient Board of Directors were upheld.
No Connecticut case precisely in point was found. In Fairfield County Turnpike Co. v. Thorp, 13 Conn. 173, 183 (1839), however, our Supreme Court said that where a majority of the directors were legally in their posts, it became incumbent upon those who claimed the vote of the directors was illegal to prove this fact. And in McCall v. Byran Mfg. Co., 6 Conn. 427, 435-35a (1827), the language was to make someone a de facto officer there must be, at least, the form of an election although upon legal objections, the validity of the election could be overturned.
Decisions from other states, however, when read with these old Connecticut cases have convinced the court that too many directors, as distinguished from too few, do not invalidate a board's doings. In Smith v. Bayou Rentals, Inc., 345 So.2d 1229, 1231 (La.App. 1977), five persons were elected directors although the corporation's charter specified a board of three. The five persons were considered to be de facto officers who would remain in that category until removed by proper corporate action. An election of an excessive number of directors is irregular and voidable and will be set aside and a new election ordered upon the complaint of a shareholder duly made. In re Multifade Corporation of America, 97 N.Y.S.2d 609, 612 (1950).
Watch Hill Condominium, Inc. v. Van Eck, 4861.
In Watch Hill no unit owner attacked the validity of the Board until the Board's actions was being enforced. Watch Hill held that such a collateral attack was too late. The Connecticut rule is action by an excessive number of directors does not render that action void but voidable and only subject to attack by a complaint of a shareholder duly made. See cases for the proposition cited in In re Multifade Corporation of America, supra, 97 N.Y.S.2d 609, 611 (1950).
"The general rule is that the acts of a de facto officer are valid as to third persons and the public until his title to office is judged insufficient and such officer's authority may not be collaterally attacked or inquired into by third persons affected. The practical effect of the rule is that there is no difference between the acts of de facto and de jure officers so far as the public and third persons are concerned. The principle is placed on the high ground of public policy, and for the protection of those having official business to transact, and to prevent a failure of justice. 63 Am.Jur.2d 605." Masayda v. Pedroncelli, Superior Court, judicial district of Waterbury, Docket Number 120878 (June 1, 1995, West, J.); Picard v. Department of Public Health, Superior Court judicial district of New Britain, Docket Number CV 99 0498477 S (December 7, 2000, Cohn, J.) [28 Conn. L. Rptr. 337]; State v. Carroll, 38 Conn. 449, 471 (1871); Furtney v. Zoning Commissioner, 159 Conn. 585, 597 (1970).
Connecticut has long since applied this public policy in recognizing de facto corporation where reports were not timely filed or certain technical procedures were not followed. "The corporation is a de facto corporation where there is a law authorizing such a corporation and where the company has made an effort to organize under the law and is transacting business in a corporate name . . . A de facto corporation is an apparent corporate organization asserted to be a corporation by its members and actually existing as such, but lacking the creative fiat of the State . . . A de facto corporation . . . is association which actually exists for all practical purposes as a corporate body, but which, because of failure to comply with some provision of the law, has no legal right to corporate existence as against a direct attack by the State . . . A corporation de facto is in plain English a corporation in fact. It can incur obligations as a corporation which do not bind those who associated to constitute it in their individual capacities." Clark-Franklin-Kingston Press v. Romano, 12 Conn.App. 121, cert. denied, 205 Conn. 803 (1987). D. Francesco v. Kennedy, 114 Conn. 681, 687-88 (1932).
Apparently, after 1975 and before May 25, 2004, Vantage Point decided to become a Special Taxing District (Special Service District). The formation of this Special District permitted certain of the condominium common charges to be deducted for state and federal income tax purposes. Apparently one of the requirements of this Special District is that there be a Board of Directors of seven members. Since the Special District was approved, the Board of Directors of Vantage Point Association, Inc. assumed that their By-laws had been amended by the approval of the Special District and they no longer had a five-member Board of Directors but a seven-member Board of Directors. Unfortunately, the defendant failed to amend the By-laws properly and officially change the Board of Directors from five members to seven. They corrected that deficiency at the July 27, 2005 meeting of the unit owners. Exhibit 20. That amendment was later recorded in the Norwalk Land Records.
The court finds that in all regards the defendant association functioned as a proper corporation from its creation in 1975 through and including June 27, 2005. The defendant considered that all its acts were done by a properly constituted Board of Directors. Unfortunately, the defendant erred in not formally increasing the number of Board members from five to seven. No one directly challenged the Board's configuration. This lawsuit is a collateral attack only designed to deter the plaintiff from collecting the Board's imposition of fines after those fines were imposed.
The court finds that as to the Board of Directors that approved the May 25, 2004 parking rule all seven members were de facto members of the Board of Directors. The court finds that the unanimous vote of the seven on May 25, 2004 was a valid vote of the Board and bound the Board and all unit owners. This finding is made even though this court cannot determine which of the seven members of the Board of Directors on May 25, 2004 were the actual five official members. Caserta v. Zoning Board of Appeals, 23 Conn.App. 232, 239 (1990). The court finds that under the rule of de facto officer doctrine, the acts of the Board of Directors on May 25, 2004 were valid and the parking rule is a valid enforceable rule and regulation of the defendant condominium association. The answer to Question 3. is No.
4. Did the May 25, 2004 Board action reflect reasoned or arbitrary and capricious decision making?
Although the court does not have the Rules and Regulations that existed prior to 1996, apparently there were such Rules and Regulations. The parking spaces were laid out in Schedule A-2 in the Declaration of Condominium. The parking was divided into two types of parking: (1) under the building, known as limited common areas and assigned one parking space to each unit owner and (2) the unassigned parking spaces located near the public streets. In addition, the Board of Directors had the right to assign from time to time those parking spaces under the Declaration. The Declaration contained all of that information. The Declaration further restricted the nature of the parking, the restriction of commercial vehicles and the disallowance of anything that would obstruct the common areas or limited common areas. Exhibit 25.
The 1996 Rules and Regulations contained restrictions. It limited the assigned parking spaces for owners use only. Guests should not park in assigned parking spaces and were only permitted to park along the fence area. There were provisions preventing the blocking the rights of way. The size and nature of vehicles were limited. In addition, double parking, that is two vehicles parking either side by side or in tandem, front to back, were prohibited. The location of the automobile within an assigned parking space was also regulated so the cars could not be parked in order that the trunks or hoods could be used as a step-ladder to access a second-floor balcony. The 1996 Rules and Regulations applied to both the assigned and unassigned parking spaces.
The plaintiff claims that this parking regulation was proposed, drafted and approved solely for the purpose of eliminating the parking of an automobile and a motorcycle on the same under the building assigned parking area. He notes that only two of the unit owners have consistently parked motorcycles in the assigned spaces; the plaintiff, a long standing vocal critic of Board actions and procedures, and a second owner, an equally vocal Board critic.
The court finds that other unit owners besides the plaintiff had been the subject of parking complaints. One of those unit owners, the other Board critic, Henry K. May, testified. The first request for removal of a motorcycle from an assigned parking space was addressed to Mr. May when a Board member could not move a shopping cart through the area next to Mr. May's assigned parking space in order to access one of the under the building passageways. A third owner also parked a scooter in his assigned parking space in addition to an automobile. The plaintiff also stored a laser sailboat and a trailer in his assigned parking space. There was testimony that personal property removal requests had been made of other unit owners in order to provide full access to and through the passageway and walkways under the buildings adjacent to the assigned parking areas, to maintain an aesthetic appearance and for safety considerations. The personal property that was requested to be removed were kayaks, boats, inflatables, ladders, washing machine, bicycles and other stored non-motor vehicle personal property. Each unit owner was requested to store such personal property in their own self-contained storage area. Ex. 26.
The plaintiff testified that he was using his large wide assigned parking space to park a motor vehicle and a motorcycle. It was large and wide enough to accommodate these vehicles. A number of witnesses verified that the plaintiff parked both a motor vehicle and a motorcycle at the same time.
The court finds that the May 25, 2004 rule was not specifically passed in order to prevent the plaintiff from parking a motorcycle immediately adjacent to his automobile. The May 25, 2004 rule was broad enough to address the other concerns mentioned above. The rule is not directed only to motorcycles, but anything other than one motorized vehicle.
The May 25, 2004 Board of Directors meeting was not called for this one parking rule. There were a number of other subjects that were discussed in great detail at the May 25, 2004 Board Meeting. Ex. 18. The new parking rule dealt with the use of assigned and unassigned parking spaces and affected all unit owners. The changes in the parking rules were made not just limited to "a single motorized vehicle."
The assignment of individual storage areas is a clear indication that assigned parking is to be used for parking and not storage.
The May 25, 2004 parking rule is consistent with Exhibit 25, the 1996 Rules and Regulations, and is further consistent with the assignment of parking spaces under the 1975 Declaration of Condominium. The 1996 rule permitted no double parking.
The court finds that the May 25, 2004 parking rule was reasonable. It was not addressed only to the plaintiff. It was approved by the Board of Directors to solve a general parking and storage problem that existed within the condominium complex. The court finds that the May 25, 2004 parking rule is valid and enforceable against not only the plaintiff but all unit owners of Vantage Point Association, Inc.
The court answers Question 4 by finding that the May 25, 2004 parking rule reflects reasoned decision making by the Board and was not arbitrary or capricious decision making.
The issues on plaintiff's First Count and the Fourth Count are found for the defendant, Vantage Point Association, Inc.
The plaintiff's December 13, 2006 Revised Complaint also names six individual defendants who are or were members of the Board of Directors of Vantage Point Association, Inc.; Richard Akin, Patty Pond, Mari Freeman, Salloma Gross, Adeline Lesk, and Jeffrey Spier. The defendant's Post-Trial Brief dated November 6, 2008 notes in footnote no. 1; "The defendants, Richard Akin, Mari Freeman, Adeline Lesk and Jeffrey Spier are no longer Board members." Although there was no evidence concerning that fact, this statement in the trial brief has not been rebutted by the plaintiff. The court also granted a Motion in Limine on the first day of trial to that effect. Since these four defendants are no longer Board members the issues on the First Count and Fourth Count must be found in favor of the defendants, Richard Akin, Mari Freeman, Adeline Lesk and Jeffrey Spier.
It would appear that Patty Pond and Salloma Gross are still current Board members. Since there was no evidence against Patty Pond and Salloma Gross. Since the issues found in the First Count and the Fourth Count have been found for the defendant, Vantage Point Association, Inc., the issues on the First Count and Fourth Count are found in favor of the defendants, Patty Pond and Salloma Gross.
There is no evidence that Salloma Gross and Patty Pond have any interest in the Counterclaim other than as individual members of the Board of Directors. The other four named defendants are no longer Board members. The individual interests of Patty Pond and Salloma Gross are protected by the claims made in the Counterclaim by the defendant, Vantage Point Association, Inc. Those two current members of the Board do not have appeared to have joined in or filed the Counterclaim. There is no mention of any of the six defendants in the Counterclaim. The only defendant mentioned in the Counterclaim is Vantage Point Association, Inc. Therefore, the issues on the Counterclaim must be addressed only from the point of view of the defendant, Vantage Point Association, Inc., not of any of the individual current or former members of the Board of Directors.
The plaintiff made five arguments against the injunction Counterclaim. The plaintiff did not offer evidence, testimony or documentary support nor brief the following two issues, raised in the Special Defenses and they are deemed abandoned; the amendments are of no legal effect since they were not recorded in the Norwalk Land Records and; the Vantage Point Taxing District is the only entity that can enact and/or enforce parking rules and regulations.
It is not necessary to rule on any of the three remaining arguments raised in paragraphs 1., 2. and 3. of the plaintiff's January 7, 2008 First Special Defense to Counterclaim #5 (#183.10) since they have already been found in the defendant's favor elsewhere in this Memorandum of Decision.
The Board of Directors has imposed fines on the plaintiff for violations of the May 25, 2004 parking rules. At trial the plaintiff waived collection of these fines. Those parking rules were in substantial dispute up until the time of this Memorandum of Decision. This Memorandum of Decision has, for the first time, declared the May 25, 2004 parking rules to be valid.
A condominium association is permitted to obtain a court injunction to enforce its rules and regulations including against unit owners. Gen. Stat. § 47-75 and Gen. Stat. § 47-278. Vantage Point Association, Inc. argues that they need not prove two elements of an injunction, to wit, an inadequate remedy at law and irreparable damage. It cites Manley v. Pfeiffer, 176 Conn. 540, 544 (1979), for this proposition. Manley is a suit between two neighbors over a restrictive covenant. It is not a condominium case. Neither Gen. Stat. § 47-75 nor Gen. Stat. § 47-278 contains language that the association is exempt from its obligation to prove the standard elements for an injunction. For example, a municipality in a zoning regulation case is relieved of that burden. Bauer v. Waste Management of Connecticut, Inc., 239 Conn. 515, 532-33 (1996), Driska v. Pierce, 110 Conn.App. 727, 734 (2008). Trial courts have found irreparable injury and/or inadequate remedy of law issues in condominium injunction cases. Bretton Arms Condominium Association, Inc. v. Giancarli, Superior Court, judicial district of Fairfield at Bridgeport, Docket Number CV 07 4018647 S (August 29, 2007, Gilardi, J.); Hyland v. Buddington Park Condominium Association, Inc., Superior Court, judicial district of Ansonia-Milford at Derby, Docket Number CV 02 0079305 S and CV 02 0079305 S (July 28, 2003, Ripley, J.T.R.). There is no appellate case or statute that relieves a condominium association from its burden of proof on these two issues.
This court sits as a court of equity in matters of injunctions. The court must exercise its discretion in actions for injunctive relief. Host America Corp. v. Ramsey, 107 Conn.App. 849, 854 (2008).
The defendants argue that the statutory notice and hearing rights prior to a unit owners association imposition of fines are not applicable to condominiums created before 1984. Gen. Stat. § 47-216. The Common Interest Ownership Act was effective January 1, 1984. P.A. 83-474. Vantage Point was formed as a condominium in 1975.
The defendants note that neither the Declaration nor the By-laws provide for notice and hearing before the imposition of fines. Ex. 12, Declaration Article 9(j); Ex. 13, By-laws, Section 4.12. In contrast P.A. 95-187 added certain procedural obligations to the powers of unit owners association. "The association . . . may (11) impose charges or interest or both for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, by laws, rules and regulations of the association." Gen. Stat. § 47-244(a)(11): "If a tenant of a unit owner violates the declaration, by-laws or rules and regulations . . . the association may . . . after giving notice to the tenant and the unit owner and an opportunity to be heard, levy reasonable fines against the tenant or unit owner, or both, for the violation." Gen. Stat. § 47-244(d)(2). The defendant states that those two sections regarding notice and hearing do not have to be complied with since the defendant is a 1975 condominium. A recent case has enforced the notice and hearing provisions of Gen. Stat. § 47-244. Granted this was a 1987 condominium but the decision turned on the concept of "fundamental fairness." Stamford Landing Condominium Association v. Lerman, 109 Conn.App. 261, 266-68 (2008). The Vice President and Board members testified that the Vantage Point Board fined the plaintiff, Alan P. Fishman, every day even if no one checked to see if the plaintiff was in violation of the one motorized vehicle rule that day.
The defendant has requested that the Superior Court enforce the parking rule against the plaintiff by entering an order in the nature of an injunction. By doing so the defendant is willing to abide by the court's rules and procedures, which grant plaintiffs due process rights including adequate advance notice of a claimed violation, adequate advance notice of a hearing, time and place and the opportunity to fully participate in the hearing including the right to be represented by counsel, call witnesses, cross-examine witnesses and offer documents and evidence in their defense. Since the defendant is willing to abide by these notice and hearing due process rights in a court setting, this court cannot envision harm to the defendant for it to now follow the internal condominium notice and hearing procedures set forth in Gen. Stat. § 47-244(a)(11) and 47-244(d)(2). Sullivan v. State, 189 Conn. 550, 559 (1983).
It appears to be reasonable for this court to allow in the first instance the Board of Directors and the unit owners to utilize its own internal process before the court interferes.
The court finds that the defendant acting by its Board of Directors has a reasonable opportunity to remedy any claimed future violation by the plaintiff of the parking rule by furnishing the plaintiff with notice of that violation, notice of the date and place of hearing and the opportunity to be heard and present evidence and witnesses on his behalf. The Board of Directors then, after conducting that hearing, has the right to find or not find a violation and if after having found a violation to fine or not to fine. Fairfield House Condominium Association, Inc. v. Chang, Superior Court, judicial district of Stamford-Norwalk of Stamford, Docket Number CV 99 0172200 (July 13, 2000, Lewis, J.).
In the interest of judicial economy, and in the exercise of this court's equitable discretion, the injunction requested in the Counterclaim filed by Vantage Point Association, Inc. is hereby denied. The issues on the Counterclaim are found for the plaintiff.