Opinion
RE-12-250
11-07-2014
ROBERT G. HARRINGTON and BETH E. MCDERMOTT HARRINGTON, Plaintiffs, v. SEASIDE CONDOMINIUM ASSOCIATION et al., Defendants.
ORDER
John O'Neil, Jr. Justice, Superior Court.
I. Background
A. Procedural Posture
Plaintiffs Robert G. Harrington and Beth E. McDermott Harrington ("the Harringtons") bring this suit against the Seaside Condominium Association ("Seaside" or "the Association") and several of its officers, alleging they violated provisions of the governing documents, improperly accounted for various fees assessed and assessed some in a discriminatory manner, and that use of an easement by other units for utility access damaged the Harringtons' unit. (Compl. 3.) The complaint further seeks injunctive relief ordering Seaside to comply with the governing documents. Seaside answered, counterclaimed for unpaid condominium fees, and moved to dismiss. Before the court is Seaside's motion for summary judgment on its counterclaim.
B. Facts
The parties agree on the following facts. Seaside Condominium is a condo complex in York, Maine. The Declaration of the Seaside Condominium Association is recorded in the York County Registry of Deeds ("the Registry") at Book 4554, Page 198-240. (Def.'s S.M.F. ¶ 1.) The Harringtons purchased Unit #1 ("the Harrington Unit") on March 18, 2008. (Def.'s S.M.F. ¶ 3.) The Harrington Unit deed is recorded at Book 15377, Page 139 and references the Seaside Condominium Declaration. (Def.'s S.M.F. ¶ 4.) On March 22, 2012, Seaside filed a lien on the Harrington Unit for unpaid assessments. (Def.'s S.MF. ¶ 6.)
The parties dispute nearly every other material fact asserted by Seaside in support of its motion for summary judgment. Those facts related to the manner in which the assessments were calculated and administered, which the Harringtons assert was erroneously conducted. (PL's Reply Def.'s S.M.F. ¶7-27.)
Article 3, Section 3.3(c) of the Declaration, which governs maintenance responsibilities states:
Water service to all Units will be included in the Common Expenses. Electric and propane gas service to units 4 through 9 will be charged as a Limited Common Expense to those six Units and such charges will be allocated equally among such Units. Electric service to Unit 1 through 3 and sewer, telephone and cable television service to all Units will be separately metered and each such unit owner shall be responsible for the cost of such services furnished to his Unit.(PL's S. Addt'l M. F. ¶ 22.) Article 5, § 5.2 governing common expenses states:
The liability of each Unit for the Common Expenses of the Condominium shall be the same percentage share as the Percentage Interest set forth on Exhibit B, and as such shall be determined by dividing the approximate square footage of each Unit as of the date of the Declaration (exclusive of Limited Common Elements) by the total square footage of all the Units (exclusive of Limited Common Elements) in the Condominium.(PL's Mem. Opp. Mot. Summ. J., Ex. A). Exhibit B sets forth that Unit 1, the Harrington Unit, is approximately 2, 018 square feet and therefore the percentage governing property interest stake, voting power, and Common Expense liability (excluding Limited Common Elements) is 38.7%. Id.
Exhibit B states "The percentage is derived by dividing the approximate square footage of each Unit (exclusive of Limited Common Elements) by the total square footage of all Units (exclusive of Limited Common Elements) and multiplying the result by 100."
II. Discussion
A. Summary Judgment Standard
Summary judgment is appropriate where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56. "A material fact is one having the potential to affect the outcome of the suit." Burdzel v. Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573. Where there is sufficient evidence to support competing versions of material facts, the outcome must be decided by the factfinder at trial. Id.
B. Validity of the Fees Assessed to the Harrington Unit
The issue in this case is whether Seaside has properly allocated expenses in assessments, specifically with regards to utility costs. In the Harringtons' view, starting in 2011, an amendment was made to the Declaration that improperly allocated utility costs based on certain percentages, rather than separately metering the units. (PL's S. Addt'l M. F. ¶¶ 20-25; PL's Mem. Opp. Summ. J. 6.) The Harringtons point to minutes from a 2007 Association meeting explaining their understanding of Seaside's assessment allocation methodology. The Harringtons contend Tony LaRosa, then President of the Association, represented that this methodology was in effect and the Declaration would be amended to reflect this change. (PL's S. Addt'l M. F. ¶¶ 3-10.)
The Harringtons assert evidence of an amendment precludes summary judgment. (PL's Mem. Opp. Summ. J. 5.) ("[B]ased on the Association's admission to Plaintiffs that it had amended the Declaration, a factfinder could determine that the Association did in fact modify the Declaration to incorporate the established methodology in use through 2011.")
This methodology accounted for the fact the complex is composed of two buildings: "the House" (units 1, 2, and 3) and "the Motel Building" (units 4 through 9). Rather than calculating the square footage and percentage allocation of Seaside as a single space, it appears the methodology conducted separate calculations for each building. (PL's S. Addt'l M. F. ¶ 5.)
Seaside denies that any amendments were made, all meetings and budgets were legal, and all business was conducted in accordance with the Declaration and Bylaws of the Association. (See Def.'s S.M.F. ¶¶ 8-28.) In moving for summary judgment on its counterclaim, Seaside seeks the full amounts assessed by the Association to date. The Harringtons have refused to pay more than the 2011 assessment amount, and Seaside seeks the difference. (Def.'s Reply PL's Opp. Summ. J. 3-4.)
Seaside also presses in its Reply that (1) a civil complaint filed by the Harringtons in a separate case against the Realty Company, and (2) a complaint filed with the Maine Department of Professional and Financial Regulation Real Estate Commission contain facts that contradict the Harringtons' positions in this litigation. (Def.'s Reply PL's Opp. Summ. J. 1-2.) This argument lacks merit. According to Seaside, the Harringtons cannot simultaneously argue the fees were invalid and improperly assessed in this case, while also asserting in these other matters that the Realty Company failed to disclose the fees the Harringtons would incur as owners of their unit. The civil complaint alleges York Realty Co. and other named parties breached obligations to provide various documents, including the Association's budget calculation, and failed to fully and truthfully advise them in their purchase of the Condominium. (Def.'s Reply PL's Opp. Summ. J., Ex. A. at 3.) In neither document is there an admission, express or implied, that the specific fee amounts sought by Seaside in this case are valid. Instead, the complaints generally allege York Realty Co. failed to provide information or provided false information. If the Harringtons are ultimately found responsible for the difference in the fees here, that could be relevant to those proceedings, but at the present stage in this case, the court need not speculate. The Harringtons are entitled to pursue their rights against the Realty Company.
1. The Purported Amendment to the Declaration
Whether a condominium's declaration of rights is ambiguous is a question of law. Farrington 's Owners'Ass 'n v. Conway Lake Resorts, Inc., 2005 ME 93, ¶ 10, 878 A.2d 504 (citations omitted). "Language is considered to be ambiguous if it is reasonably susceptible to different interpretations." Acadia Ins. Co. v. Buck Const. Co., 2000 ME 154, ¶ 9, 756 A.2d 515. If ambiguous, interpreting that language is a question of fact. Farrington s Owners'Ass 'n, 2005 ME 93, ¶ 10, 878 A.2d 504.
The Harringtons' allegations largely rely on the theory the Declaration was "amended" based on oral representations by Tony LaRosa, and the apparent methodology for calculating budgets and assessments prior to 2012. (PL's S. Addt'l M. F. ¶¶ 3-10.; PL's Mem. Opp. Mot. Summ. J. 4.) It is undisputed that an amended Declaration was never filed or recorded at the Registry of Deeds. (PL's Resp. Def.'s S.M.F. f 2.) The Harringtons do not contend that the assessments were contrary to the recorded Declaration, but rather that the assessments are "contrary to the methodology used prior to that time." (PL's Mem. Opp. Mot. Summ. J. 4.)
Even assuming that Tony LaRosa made these representations and these representations can be imputed to the Association, the Harringtons' argument fails as a matter of law. The Condominium Act explicitly provides "Every amendment to the declaration must be recorded and is effective only upon recordation." 33 M.R.S. § 1602-117(c). While the Harringtons argue the Declaration is a contract, and thus could conceivably be amended without a writing, PL's Mem. Opp. Mot. Summ. J. 5, the express language of the Condominium Act controls.
This is not very clear, as the Harringtons do not explain when, where, or how the representation was made.
The Declaration as recorded and in effect is therefore the proper measure for the validity of the assessments in this case.
2. Whether the Assessments Were Proper
Having concluded that an oral representation could not have amended the Declaration, there remains whether the methodology used to calculate the budget and make assessments was proper under Maine law and the Declaration. Under the Maine Condominium Act,
The declaration shall allocate a fraction or percentage of undivided interests in the common elements and in the common expenses of the association and a portion of the votes in the association to each unit and state the formulas used to establish those allocations.33 M.R.S. § 1602-107.
The manner in which the Association interpreted and implemented the Declaration and Bylaws on budgeting and assessment calculations is a factual question. Viewing the summary judgment record before the court, it remains unclear why the Harrington assessment more than doubled after 2011, how the assessments were calculated pre- and post-2011, and whether those calculations remained consistent with the Declaration and Bylaws. The court has no obligation to search the record outside the statements of material facts. Levine v. RB.K. Caly Corp., 2001 ME 77, ¶9, 770 A.2d 653. Seaside principally relies on the affidavits of Sean Nolan, Treasurer of the Association Board, and Nancy Tewksbury, President of the Board. These affidavits declare without any further explanation that the budgets and assessments were accurate and in accordance with the governing documents. (Def.'s S.M.F. ¶18: "The budgets from 2011 through 2014 were passed in accordance with the Declaration and Bylaws.") Conclusory assertions do not entitle Seaside to summary judgment: "Conclusions of fact and law do not properly belong in an affidavit filed in support of a motion for summary judgment. Nor should a movant rely upon statements purporting to . . . interpret the contents of documents." Town of Orient v. Dwyer, 490 A.2d 660, 662 (Me. 1985) (citations omitted). It is undisputed that the Harrington Unit was responsible for a 38.7% assessment of common expenses (excluding limited common elements), Def.'s S.M.F. ¶5, but the parties' affidavits dispute how this percentage was to be applied to what utilities. Abbott v. LaCourse, 2005 ME 103, ¶10, 882 A.2d 253 ("Trial by affidavit when there are issues of fact in dispute is inappropriate.").
At a minimum, the Association has not followed Article 3, Section 3.3(c) of the Declaration, which requires electric, sewer, telephone, and cable services be separately metered. Seaside points out "there are no separate meters, which makes it impossible completely [sic] separate the utilities." (Def.'s Resp. PL's Addt'l S.M.F. ¶ 23.) While perhaps a valid practical explanation, failing to separately meter these utilities contravenes the express terms of the Declaration and raises questions as to whether costs were allocated equitably. In lieu of separate metering, Seaside has divided utilities "by square footage of ownership in accordance with the spirit of 5.3(a) of the Bylaws." It is not clear the methodology used to calculate those allocations comports with the "spirit" of that provision. If the Association's allocation methods changed without amending the Declaration, and the allocation method remained consistent the Declaration, the Declaration is reasonably susceptible to more than one interpretation and thus ambiguous. An ambiguous condominium declaration provision presents a question of fact-adequate grounds to deny summary judgment. Farrington 's Owners' Ass 'n, 2005 ME 93, ¶ 10, 14, 878 A.2d 504.
In sum, disputed issues of material fact remain that preclude the entry of summary judgment on Seaside's counterclaim. While the Harringtons raise a number of allegations in their suit, the narrow issue remaining in this case is whether the assessments are valid under the Declaration, the Bylaws, and the Maine Condominium Act. If Seaside ultimately prevails, the Harringtons may be liable for attorney's fees pursuant to the Act. 33 M.R.S. § 1603-116(g) ("A judgment or decree in any action or suit brought under this section shall include costs and reasonable attorney's fees for the prevailing party."); see also Stage Neck Owners Ass'n v. Poboisk, 1999 ME 52, ¶¶ 9-10, 726 A.2d 1261.
The clerk will make the following entry, by reference, on the docket: The Defendants' Motion for Summary Judgment on the counterclaim for outstanding assessments is hereby DENIED.
SO ORDERED.