Thomas R. McKeon Justice.

ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND GRANTING IN PART AND DENYING IN PART DEFEND ANTS'MOTION FOR PARTIAL SUMMARY JUDGMENT

Thomas R. McKeon Justice.

INTRODUCTION

This matter is before the court on the cross-motions for summary judgment filed by Plaintiff/Counterclaim-Defendant The Village at Ocean's End Condominium Association ("VOEA") and by Defendants/Counterclaimants Southwest Harbor Properties, LLC, Howland Real Estate, LLC, and Jeffrey Howland (collectively, the "Defendants"). Both motions focus on whether certain shoreline property on the ocean-side of Maine State Route 102 in Southwest Harbor, Maine, (1) was lawfully and effectively withdrawn from The Village at Ocean's End Condominium by Southwest Harbor Properties, LLC, and (2) whether, subsequent to that withdrawal and a reconveyance of the withdrawn property, Howland Real Estate, LLC properly leased the property to VOEA. For the reasons discussed below, VOEA's Motion for Partial Summary Judgment is denied, and Defendants' Cross-Motion for Partial Summary Judgment is granted in part and denied in part.

SUMMARY JUDGMENT STANDARD

When parties present cross motions for summary judgment, the court applies the rules for consideration of summary judgment separately to each motion. F.R. Carroll, Inc. v. TD Bank, N.A., 2010 ME 115, ¶ 8, 8 A.3d 646. Summary judgment is appropriate when the parties' statements of material facts and the portions of the record referenced therein "disclose no genuine issues of material fact and reveal that one party is entitled to judgment as a matter of law." Currie v. Indus. Sec., Inc., 2007 ME 12, ¶ 11, 915 A.2d 400 (citing M.R. Civ. P. 56(c)). "A material fact is one that can affect the outcome of the case, and there is a genuine issue when there is sufficient evidence for a fact finder to choose between competing versions of the fact." Lougee Conservancy v. CitiMortgage, Inc., 2012 ME 103, ¶ 11, 48 A.3d 774 (quoting Stewart-Dore v. Webber Hosp. Ass'n, 2011 ME 26, ¶ 8, 13 A.3d 773). The Court must view the record facts in the light most favorable to the non-moving party and must draw all reasonable inferences in favor of the same. Watt v. UniFirst Corp., 2009 ME 47, ¶ 21, 969 A.2d 897 (citations omitted).

The moving party has the burden to show why summary judgment is appropriate. Cote Corp. v. Kelley Earthworks, Inc., 2014 ME 93, ¶ 8, 97 A.3d 127. Thus, when the plaintiff is the moving party, it has the burden to demonstrate that each element of its claim is established in the record without a dispute of material fact. Id. (citation omitted). It then becomes the defendant's burden to demonstrate a genuine dispute of material fact. When the defendant is the moving party, "he must establish that there is no genuine dispute of fact and that the undisputed facts would entitle him to judgment as a matter of law." Levis v. Konitzky, 2016 ME 167, ¶ 20, 151 A.3d 20 (citation and internal quotation marks omitted). It then becomes the plaintiff's burden to "make out a prima facie case and demonstrate that there are disputed facts regarding issues material to the applicable law." Id. (citation and internal quotation marks omitted).

BACKGROUND

For the limited purpose of deciding the cross-motions for summary judgment, the record evidence is sufficient to support the following material facts.

The Village at Ocean's End Condominium (the "Condominium") is located on the upland side of Maine State Route 102 in Southwest Harbor, Maine. (Defs.' S.M.F. ¶ 29.) Across from the Condominium on the ocean-side of State Route 102 is an approximately .68-acre parcel of land (the "Shoreline Parcel"). (Defs.' S.M.F. ¶ 37.) The Condominium was established on May 5, 2009, by Jeffrey Crafts and his limited liability company, The Village at Ocean's End, LLC ("VOE, LLC"), when Crafts, as the initial Declarant, executed and caused to be recorded with the Hancock County Registry of Deeds (the "Registry of Deeds") the Declaration of the Village at Ocean's End Condominium (the "Declaration"). (Pl.'s S.M.F. ¶ 1; Defs.' S.M.F. ¶ 34.) The Declaration's provisions describe the Declarant's development rights. (Defs.' S.M.F. ¶ 36.) It also describes the real estate over which those rights may be exercised. (Defs.' S.M.F. ¶ 37.)

Crafts was unsuccessful in his efforts to develop the Condominium and his lender, The First, N.A. ("The First") accepted the Condominium's real estate and the associated development rights from him during December of 2012 via a workout and deed in lieu of foreclosure, which identifies and describes the Shoreline Parcel as "Parcel V." (Pl.'s S.M.F. ¶ 5; Defs.' S.M.F. ¶ 39.) Around that time, Crafts added the Shoreline Parcel to the Condominium as common element land, as requested by The First to enhance the value of the collateral it accepted under the workout. (Pl, 's S.M.F. ¶ 4; Defs.' S.M.F. ¶ 40.) Exercising his development rights under the Declaration, Crafts conveyed the Shoreline Parcel into the Condominium through the Third Amendment to the Declaration, which was duly recorded. (Defs.' S.M.F. ¶ 40.) Apart from Crafts himself, at that time there was only one other unit owner in the Condominium. (Defs.' S.M.F. ¶ 41.)

During August of 2013, The First conveyed the Condominium and associated real estate, including the Shoreline Parcel, to Defendant Southwest Harbor Properties, LLC ("SWHP") by quitclaim deed. (Pl.'s S.M.F. ¶¶ 7-8; Defs.' S.M.F. ¶ 42.) SWHP intended to withdraw the Shoreline Parcel from the Condominium as part of its business plan. (Defs.' S.M.F. ¶ 45.) In an exercise of its development rights as the successor Declarant, on September 20, 2013, SWHP executed and caused to be recorded a Fifth Amendment to the Declaration that withdrew the Shoreline Parcel from the Condominium. (Pl.'s S.M.F. ¶ 9; Defs.' S.M.F. ¶ 47.)

On October 16, 2013, SWHP executed a warranty deed conveying its ownership of the Shoreline Parcel to "Howland Real Estate Properties, LLC," a non-existent entity. (Pl.'s S.M.F. ¶¶ 11, 13; Defs.' S.M.F. ¶ 53.) SWHP intended to convey the Shoreline Parcel to Defendant Howland Real Estate, LLC ("HRE"), and it believed that it had done so as reflected in the Second and Third Amended and Restated Plot Plans for the Condominium. (Defs.' S.M.F. ¶¶ 51-52.) Eventually, SWHP recorded a corrective deed addressing the scrivener's error in the 2013 warranty deed and amending the grantee clause such that it identified HRE as the intended grantee. (Pl.'s S.M.F. ¶ 20; Defs.' S.M.F. ¶ 54.)

The Fifth Amendment was signed by Jeffrey Howland ("Howland") in his capacity as manager for SWHP, however it also contained a scrivener's error incorrectly naming VOE, LLC as the successor Declarant. (Pl.'s S.M.F. ¶¶ 9-10; Defs.' S.M.F. ¶ 49.) On April 16, 2014, SWHP corrected the scrivener's error by executing and recording a Revised Fifth Amendment to the Declaration wherein SWHP was properly identified as the successor Declarant. (Pl.'s S.M.F. ¶¶ 9, 14; Defs.' S.M.F. ¶ 50.) At no time prior to the recordation of the Revised Fifth Amendment did SWHP obtain the written consent of any of the other unit owners to withdraw the Shoreline Parcel from the Condominium. (Pl.'s S.M.F. ¶ 16.) However, the only other unit owners in the Condominium at the time did not object to the withdrawal either after its execution or at any time prior thereto. (Defs.' S.M.F. ¶¶ 46, 55, 57, 59-61.)

Subsequently, on September 15, 2014, Howland, as manager for HRE and for VOEA, which was then under Declarant-control, executed a lease agreement (the "Lease") whereby HRE leased the Shoreline Parcel to VOEA for a term of 99 years, with rent to be paid at a rate of $50 per month per declared unit, increasing at 3% annually. (Pl.'s S.M.F. ¶ 17; Defs.' S.M.F. ¶ 73.) The corrective instrument addressing the scrivener's error in SWHP's 2013 warranty deed was not yet of record. (Pl.'s S.M.F. ¶ 18.) HRE leased the Shoreline Parcel to VOEA so that VOEA's members could use the property recreationally. (Defs.' S.M.F. ¶ 69.) VOEA's Board of Directors (the "Board") voted on the Lease, and approved VOEA's entry into it as "tenant." (Defs.' S.M.F. ¶ 70.) On December 19, 2014, HRE recorded a Memorandum of Lease. (Defs.' S.M.F. ¶ 71.)

During February of 2021, VOEA's unit owners agreed to assume control of VOEA's Board. (Defs.' S.M.F. ¶ 87.) From the time of the Lease's execution, unit owners used and enjoyed the Shoreline Parcel as contemplated by the Lease. (Defs.' S.M.F. ¶ 85.) None objected to the Lease or its terms during this time. (Defs.' S.M.F. ¶ 84.) Payment of rents according to the Lease was included in VOEA's annual budgets, which were repeatedly approved by VOEA through its fiscal year 2021. (Defs.' S.M.F. ¶¶ 86, 90.) Likewise, after VOEA's unit owners unanimously elected Howland, his brothers Jerry and Jay Howland, and individual unit owner Joe Murphy to the VOEA Board during July of 2018, the Board subsequently approved and ratified all of its prior actions - including entrance into the Lease with HRE,. (Defs.' S.M.F. ¶¶ 82-83.)

VOEA paid rent under the Lease to HRE through August of 2021, but stopped then and has not made new payments. (Defs.' S.M.F. ¶ 91.) During the period between September of 2014 and November 4, 2021, HRE billed VOEA for rents under the Lease totaling $41,536.75. (Pl.'s S.M.F. ¶ 27.) The parties dispute the amount VOEA paid to HRE during that period, and the amount of outstanding rents VOEA owes to HRE. (Pl.'s S.M.F. ¶ 28; Defs.' S.M.F. ¶¶ 97-98.) On December 15, 2022, VOEA terminated the Lease on ninety-days' notice, and the Lease terminated on March 15, 2023. (Defs.' S.M.F. ¶¶ 95-96.)

DISCUSSION

In support of its Motion for Partial Summary Judgment, VOEA argues that (1) SWHP could not legally OT effectively withdraw the Shoreline Parcel from the Condominium, and (2) that entering into the lease agreement constituted a breach of SWHP's fiduciary duties as declarant and Howland's fiduciary duties as an officer of VOEA. (Pl.'s Mot. Partial Summ. J. 15.) Defendants disagree, and argue in opposition to VOEA's motion as well in support of their Motion for Partial Summary Judgment that both the withdrawal and subsequent conveyance of the Shoreline Property into HRE were valid and legal. (Defs.' Cross-Mot. Summ. J. 7-13.) Further, they argue that execution of the Lease cannot give rise to any breach of fiduciary duty by Howland, and that VOEA is liable to HRE for unpaid rents under the Lease. (Id at 19.) The Court considers in turn each of the parties' claims contained in the cross-motions for partial summary judgment.

I. Whether Defendant SWHP was authorized to withdraw the Shoreline Parcel from the Condominium.

When considering Defendants' motion, the court views the record evidence in the light most favorable to VOEA. The interpretation of a condominium association's bylaws or declaration, including whether the terms are ambiguous, is a question of law for the court. Scott v. Fall Line Condo. Ass'n, 2019 ME 50, ¶ 6, 206 A.3d 307 (citation omitted). The same rule applies to the interpretation of deeds. See Pettee v. Young, 2001 ME 156, ¶ 8, 783 A.2d 637.

First, based on the court's interpretation of the relevant instruments, it is undisputed that SWHP had all of the rights, including development rights, of the Declarant contemplated by the Declaration. The deed in lieu of foreclosure by which The First took title to the Condominium described the Shoreline Parcel's real estate as the "Parcel V" subject to the conveyance. (Jeffrey Howland Aff, Ex. 2.) That deed also provided that the subject property was conveyed "TOGETHER WITH and SUBJECT TO the matters set forth in" the Declaration. (Id.) The provision of the Declaration entitled "Development Rights" expressly includes the right "to withdraw land from the Condominium." (Jeffrey Howland Aff, Ex. 1, § 4.1.) This conforms with the Maine Condominium Act. See 33 M.R.S. § 1602-105(a)(8) (2022). Also, by statute, the development rights prescribed by the Declaration include the right to withdraw land from the Condominium. 33 M.R.S. § 1601-103(11) (2022). The Declaration specifically identifies the Shoreline Parcel in its description of the real estate over which these development rights may be exercised. (Jeffrey Howland Aff, Ex. 1, § 4.1, Schedule B.)

Second, SWHP exercised its right to withdraw the Shoreline Parcel from the Condominium within the period reserved in the Declaration for the exercise of its development rights. SWHP exercised its development rights to execute the withdrawal on September 20, 2013, when it recorded the Fifth Amendment to the Declaration. That date is well within the period for the exercise of development rights provided by the Declaration. 33 M.R.S. § 1603- 103(d) (2022).

Third, SWPH's withdrawal of the Shoreline Parcel form the Condominium conformed with the Declaration's requirements. The Declaration requires that the Declarant's exercise of development rights be done by amendment to the Declaration. (Jeffrey Howland Aff, Ex. 1, § 4.1.) This is also consistent with the Maine Condominium Act. 33 M.R.S. § 1602-110(a) (2022).

Fourth, SWHP's amendment to the Declaration withdrawing the Shoreline Parcel did not require unit-owner approval. Withdrawal of a condominium's real estate is one development right enumerated in 33 M.R.S, § 1602-105. Exercise of those development rights may be undertaken by the declarant's recordation of a properly executed amendment to the declaration. 33 M.R.S. § 1602-110(a). Those amendments are excepted from the requirement that an amendment to a condominium's declaration be approved by a "vote or agreement of the unit owners of units to which at least 67% of the votes in the association are allocated." 33 M.R.S. § 1602-117(a) (2022). Hence, the lack of unit-owner approval does not render the withdrawal invalid or defective.

Nor was the withdrawal of the Shoreline Parcel a transfer of the Condominium's real estate that was required to be subjected to a vote of unit owners. See 33 M.R.S. § 1603-112 (2022) (governing process for approval of conveyance of common elements "by the association," as opposed to the Declarant); see also 33 M.R.S. § 1602-107, (e) (2022) (governing allocation of undivided interests in the common elements to the condominium association, and deeming void any conveyance of that interest "made without the unit to which that interest is allocated"). If these provisions requiring unit owners' vote and approval did apply to a declarant's decision to withdraw real property from a condominium, that would render superfluous sections 1602-110 and 1602-117. "Words in a statute must be given meaning and not treated as meaningless and superfluous." Blue Yonder, LLC v. State Tax Assessor, 2011 ME 49, ¶ 10, 17 A.3d 667 (internal quotation marks omitted).

Finally, the scrivener's error in the Fifth Amendment to the Declaration does not invalidate the withdrawal of the Shoreline Parcel that the amendment effected. Where reliance interests will not be affected, a corrective deed is deemed to relate back to the corrected deed and gives effect to its conveyance. See Dumais v. Gagnon, 433 A.2d 730,737 (Me. 1981). Here, the Revised Fifth Amendment to the Declaration, which correctly identified SWHP as the successor Declarant, relates back and gives effect to the Fifth Amendment.

For these reasons, the court concludes that SWHP was authorized to withdraw the Shoreline Parcel by amendment to the Declaration. The court grants a summary judgment for Defendants with respect to the withdrawal of the Shoreland parcel denies VOEA's Motion for Partial Summary Judgment.

II. Whether Defendants breached their fiduciary duty to VOEA.

Each party seeks a summary judgment on the questions of whether HRE's lease of the Shoreline Parcel to VOEA constituted a breach of Defendants' fiduciary duties. "Under Maine common law, the elements of a breach of fiduciary claim are (1) a fiduciary relationship between the plaintiff and another person, (2) a breach of the other person's fiduciary duty toward the plaintiff, and (3) damages incurred by the plaintiff proximately caused by the breach." Meridian Med. Sys., LLC v. Epix Therapeutics, Inc., 2021 ME 24, ¶ 12, 250 A.3d 122 (citations omitted). Whether a party breaches their fiduciary duty is primarily a question of fact. See Northeast Harbor Golf Club, Inc. v. Harris, 1999 ME 38, ¶ 24, 725 A.2d 1018. The court agrees that Jeffrey Howland and SWHP owed VOEA fiduciary duties. A "declarant is a fiduciary for the unit owners with respect to actions taken or omitted at his direction by officers and members of the executive board." 33 M.R.S. § 1603-103(a) (2022), Declarants are also generally duty bound to perform and enforce the provisions of a condominium's declaration in good faith. 33 M.R.S. § 1601-113 (2022). Similarly, Howland, as an officer owed VOEA a duty to act in good faith. 13-B M.R.S. § 717 (2022).

a. Whether VOEA is entitled to a summary judgment on its claims that the Defendants breached their fiduciary duties.

VOEA's Motion for Partial Summary Judgment is denied on the question of whether Defendants breached their fiduciary duties. Viewing the record in the light most favorable to the Defendants, there is a fact dispute as to whether committing the Association to the lease agreement constituted a breach of its fiduciary duties. The Defendants have provided evidence that the lease may have been a fair deal for VOEA. They have also generated facts by which a factfinder could find that VOEA either ratified the Lease or waived any ability to object. As long as there is a genuine dispute of fact, the court cannot grant summary judgment.

b. Whether Defendants are entitled to a summary judgment on their claim that no breach of fiduciary duty occurred when HRE leased the Shoreline Parcel to VOEA during a period of Declarant-control.

Defendants' Motion for Partial Summary Judgment is also denied on the question of whether the Lease gives rise to a breach of their fiduciary duties. HRE entered into the Lease during a period of Declarant-control. Then, Howland was manager for HRE as lessor, and for VOEA as lessee (then controlled by successor Declarant SWHP, for which Howland was also manager). Viewing the record in the light most favorable to VOEA, there are fact disputes as to whether Defendants breached their duty by executing the Lease, and whether the Lease was properly ratified by VOEA's Board during the period of Declarant-control and afterwards when the association members took over the Board. See 33 M.R.S. §§ 1603-103(a), -105.

Because neither party is entitled to a summary judgment on the question of whether Defendants breached their fiduciary duties by executing the Lease, the court need not address HRE's alleged entitlement to unpaid rent, late fees, and interest under the Declaration. Nor does the court reach the question of Howland's alleged entitlement to indemnity against expenses. See 13-B M.R.S. § 714(2) (2022).

CONCLUSION

Based on the foregoing, the entry will be: Plaintiff/Counterclaim-Defendant VOEA's Motion for Partial Summary Judgment is DENIED, whereas Defendants/Counterclaim-Plaintiffs Southwest Harbor Properties, LLC's, Howland Real Estate, LLC's, and Jeffrey Howland's Motion for Partial Summary Judgment is GRANTED IN PART concerning Southwest Harbor Property, LLC's withdrawal of the Shoreline Parcel from the Village at Ocean's End Condominium, and is otherwise DENIED.

The Clerk is requested to enter this Order on the Docket, incorporating it by reference pursuant to Maine Rule of Civil Procedure 79(a).