Opinion
No. 1342 C.D. 2011
07-09-2012
Reserve at Packer Park Homeowners Association, Appellant v. Victor L. Baldi and Linda M. Baldi
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
Reserve at Packer Park Homeowners Association (the Association) appeals from the June 28, 2011, order of the Court of Common Pleas of Philadelphia County (trial court) denying the Association's post-trial motion following entry of judgment in favor of Victor and Linda Baldi (the Baldis) with respect to an equity action commenced by the Association seeking declaratory and injunctive relief. Specifically, the Association sought to prevent the Baldis from installing/maintaining a swimming pool on their property. We now reverse.
The Baldis are owners of a unit within the Reserve at Packer Park known as 3519 South Reserve Drive, Philadelphia, Pennsylvania. The Association was created pursuant to the Uniform Planned Community Act, 68 Pa. C.S. §§5101-5414, and is governed by a document entitled "The Declaration of the Reserve at Packer Park" (the Declaration), which represents a contract between the Association and the individual homeowners. The Association's Executive Board manages the business, operations, and day-to-day affairs of the community. Article XVI of the Declaration sets forth specific use restrictions that apply to all units in the community, and section 16.11 specifically excludes swimming pools. (Findings of Fact Nos. 1-10.)
By letter dated November 1, 2007, the Baldis requested that the Executive Board consider changing the restriction on swimming pools within the community. The Executive Board discussed this request at meetings in November 2007 and January 2008 and agreed that the Baldis could gather additional information regarding applicable City of Philadelphia (City) codes, insurance, and liability and present this information to the Executive Board. The Executive Board directed all correspondence with the Baldis to go through Chris Aversa, community manager and managing agent for the Association. Aversa had the authority to speak on the Executive Board's behalf and to inform the Baldis how to proceed with amending the Declaration to allow swimming pools. (Findings of Fact Nos. 14-17.)
Following an exchange of correspondence and emails between Aversa and the Baldis, Aversa emailed the Baldis a pool petition form approved by the Executive Board. The petition stated as follows:
RESOLUTION: An amendment may be proposed by either the Executive Board or twenty percent (20%) of the Unit Owners. No resolution of the Executive Board adopting a proposed amendment shall be effective unless it has been adopted by the affirmative vote of at least sixty-seven percent (67%) of the Unit Owners. (154 approval votes needed). PLEASE INDICATE YOUR APPROVAL BY SIGNING BELOW FOR AMENDING THE BY-LAWS TO ALLOW FOR THE INSTALLATION OF IN-GROUND POOLS IN INDIVIDUAL HOMEOWNERS' REAR YARDS.(Emphasis in original.) The Baldis thereafter obtained 154 signatures on the petition and forwarded it to the Executive Board. (Findings of Fact Nos. 18-27, 31.)
In the meantime, Aversa had resigned, and the Executive Board began questioning the proper procedure for amending the Declaration. Article XIX, section 1901(f) of the Declaration states that "[a]ny amendment shall be executed, acknowledged and certified by the designated officers of the Executive Board. The amendment shall be effective when the amendment is recorded in the department of records of the City." (Finding of Fact No. 13.) The Executive Board received the signed pool petition form from the Baldis and subsequently proposed a resolution for an amendment, but did not receive the requisite number of signatures. (Findings of Fact Nos. 29-31, 44-51.)
On April 28, 2008, the Baldis received a certificate of approval for construction of an in-ground swimming pool from the City's Department of Licenses and Inspections. The next day, the Baldis sent an email via the "contact the manager" form on the Association's community website noting this approval, informing the Executive Board that they had a dig date of May 9, 2008, and inquiring as to the amendment to the Declaration. Although they had not received a response, on April 30, 2008, the Baldis executed a contract for the installation of an in-ground pool and paid a deposit of $10,000.00. (Findings of Fact Nos. 29-36.)
On May 1, 2008, the Baldis received an email from John Comerford, the Association's new property manager, advising them that they did not have approval to install a pool and that the signed petition did not equate to immediate approval. By letter dated May 2, 2008, Glenn Ross, counsel for the Association, similarly advised the Baldis that they did not have permission to install the swimming pool, that to do so would constitute a violation of section 16.11 of the Declaration, and that he was authorized to initiate legal action in the event of a violation. At a general meeting of the Association on May 22, 2008, the Executive Board indicated that a vote was still necessary in order to approve the pool amendment. Ballots were sent to all 230 homeowners within the community, but only 38 responded in a timely manner, with 22 affirmative votes and 16 negative votes. By this time, the Baldis had already begun digging for the pool. (Findings of Fact Nos. 37-53.)
On June 19, 2008, the Association filed an emergency petition for injunctive relief, which the trial court denied. That same day, the Association commenced its equity action against the Baldis seeking a declaration that the Baldis were in violation of section 16.11 of the Declaration and an injunction directing that the pool be removed and the property be restored to its prior condition. The Association also sought attorney fees. The Baldis filed an answer with new matter denying that they had violated section 16.11 and alleging, among other things, that the Association's complaint was barred by promissory estoppel/detrimental reliance and unclean hands.
The Baldis also raised a counterclaim against several members of the Executive Board alleging that the Association's emergency petition was initiated in a grossly negligent manner, without probable cause, and in such bad faith as to warrant punitive damages. Additionally, the Baldis raised a counterclaim against property manager Comerford and Wentworth Management, Comerford's direct employer, alleging both intentional and negligent defamation in the form of a June 20, 2008, letter to all residents indicating that the Baldis' installation of their pool was unauthorized. The Association, Comerford, and Wentworth Management filed preliminary objections in response to these counterclaims. By order dated December 3, 2008, the trial court sustained the preliminary objections and dismissed the counterclaims.
A bench trial was held before the trial court from August 31 to September 4, 2009, which included testimony from Linda Baldi, Comerford, Executive Board members Santo Duca and Francis Punzo, and Salvatore Sgambato, a community resident. By order dated December 28, 2010, the trial court entered judgment in favor of the Baldis and against the Association. However, the trial court specifically indicated that its order would not become final until the court issued findings of fact and conclusions of law.
The Association filed a notice of appeal with this Court. However, by order dated March 10, 2011, we dismissed the appeal noting that the trial court's December 28, 2010, order was interlocutory.
On June 7, 2011, the trial court issued a final order and decree denying the Association's request for declaratory relief, based on the trial court's conclusions that the Association had itself violated and/or permitted violations of section 16.11 of the Declaration by knowingly allowing numerous pools in the community and that the Declaration had been properly amended. Thus, the trial court determined that the Association was equitably estopped from asserting a right to enforce the alleged prohibition against the Baldis and denied the Association's request for injunctive relief. The trial court also directed the Association to certify and file the amendment to section 16.11 with the City's Department of Records.
The trial court's conclusion regarding other pools in the community was premised upon the testimony of Linda Baldi and Salvatore Sgambato. However, the record reflects that these other pools were temporary, not permanent, and that many of the pools, including Mr. Sgambato's, were inflatable pools. (R.R. at 322a, 326a-27a, 337a.)
The trial court attached to this final order and decree extensive findings of fact and conclusions of law. In the latter, the trial court explained that: Aversa acted at all times as an agent of the Executive Board with full authority to speak on its behalf; the Executive Board approved the pool petition; the Baldis obtained sufficient signatures justifying an amendment to the Declaration to allow swimming pools; and, the Baldis reasonably relied on the representations of the Executive Board and its agent.
On appeal to this Court, the Association argues that the trial court erred in refusing to award the Association injunctive relief and abused its discretion in finding that the Baldis did not violate the Declaration, that the Declaration was properly amended, and that the Association was equitably estopped from relying on the original language of the Declaration. We agree.
When reviewing the trial court's denial of post-trial motions, our scope of review is limited to determining whether the trial court abused its discretion or committed an error of law. Johnson v. City of Philadelphia, 808 A.2d 978 (Pa. Cmwlth. 2002). An abuse of discretion occurs where the trial court's findings are not supported by substantial evidence. Marquise Investment, Inc. v. City of Pittsburgh, 11 A.3d 607 (Pa. Cmwlth. 2010), appeal denied, ___ Pa. ___, 29 A.3d 799 (2011).
We begin by noting that a declaration of a planned community is equivalent to a contract between a member of a homeowners association and the association itself. Wrenfield Homeowners Association v. DeYoung, 600 A.2d 960 (Pa. Super. 1991). Injunctive relief is appropriate in order to abate a violation of a planned community's governing documents. Big Bass Lake Community Association v. Warren, 950 A.2d 1137 (Pa. Cmwlth. 2008). A party seeking injunctive relief must establish a clear right to relief, that there is an urgent necessity to avoid an injury that cannot be compensated in damages, and that greater injury will result from refusing rather than granting the relief requested. Id.
Moreover, in order for equitable estoppel to apply, a party must prove: (1) intentional or negligent misrepresentation of some material fact; (2) made with knowledge or reason to know that the other party would rely upon it; and (3) inducement of the other party to act to its detriment because of justifiable reliance on the misrepresentation. Boyd v. Rockwood Area School District, 907 A.2d 1157 (Pa. Cmwlth. 2006), appeal denied, 591 Pa. 717, 919 A.2d 959 (2007).
As noted above, Article XVI of the Declaration sets forth the use restrictions applicable to all unit owners in the community. Section 16.11 provides that "[n]o Unit Owner may erect or install any swimming pool." During her testimony before the trial court, Linda Baldi acknowledged that the Declaration prohibited swimming pools, including in-ground pools. (R.R. at 245a.) After the Baldis initiated discussions with the Executive Board about eliminating this restriction, the Board discussed the matter at two meetings, on November 26, 2007, and January 17, 2008, and directed Aversa, then-community manager, to continue discussions with the Baldis and to speak on its behalf. However, the record reflects neither the Executive Board nor Aversa ever informed the Baldis that they had permission to install an in-ground pool.
While Aversa provided the Baldis with a pool petition form approved by the Executive Board, this form merely set forth the requirements for amending the Declaration and provided a means of gauging the interest of other residents in the community with respect to the proposed amendment. There was no indication from Aversa, and no language in the pool petition form, that the form itself constituted an amendment to the Declaration. Rather, the form explains that the Executive Board may propose an amendment and that any proposed amendment would require the affirmative vote of at least 67% of unit owners to become effective.
Moreover, Article XIX of the Declaration sets forth the specific procedure for amending the Declaration. Section 19.01(b) requires the Executive Board, in its general meeting notice, to provide all unit owners in the community with notice of the subject matter of a proposed amendment. Section 19.01(c) states the requirements as described in the pool petition form. Following a general meeting of the Association on May 22, 2008, the Executive Board forwarded ballots to all 230 homeowners within the community. However, the Executive Board only received 38 timely responses, including 22 affirmative votes and 16 negative votes, well short of the required 154 affirmative votes. Thus, the record provides no support for the trial court's findings that the Baldis did not violate the Declaration or that the Declaration was properly amended.
Further, we agree with the Association that the record lacks support for the Baldis' claim that equitable estoppel applies in this case. The trial court found that the Baldis had detrimentally relied upon the representations and actions by and on behalf of the Executive Board in installing a swimming pool in their rear yard. (Finding of Fact No. 52.) The trial court later explained that the Baldis reasonably relied, to their detriment, on the Association's "advice, direction, encouragement, permission and solicitation to suffer with their personal sweat equity and cash expenditures of $10,000.00, along with other financial commitments, in order to install an in-ground pool in their rear yard based on [the Association's] representations and actions." (Conclusion of Law No. 14.) Again, we note that nothing in the record indicates that either the Executive Board or Aversa ever granted the Baldis permission to install a pool. Similarly, neither Aversa nor the pool petition form itself represented that the form constituted an amendment to the Declaration.
Indeed, the record before the trial court, including the testimony of Linda Baldi, belies the trial court's findings and conclusions. The pool petition form, Declaration, and correspondence provided notice regarding the prohibition against swimming pools and the appropriate procedures for amendments.
Moreover, in an email sent on April 29, 2008, via the the Association's website, Linda Baldi indicated that she had not heard anything from the Executive Board regarding her signed pool petition form and the requested amendment to the Declaration. Two days later, on May 1, 2008, Comerford emailed the Baldis and specifically informed them that they did not have approval for a pool installation, that the signed pool petition form did not grant any such approval, and that an amendment was still required. The very next day, Glenn Ross, counsel for the Association, similarly advised the Baldis by letter that they did not have permission to install the swimming pool and that such action would constitute a violation of section 16.11 of the Declaration. Despite receipt of this correspondence and their prior acknowledgment that they had not received approval, the Baldis nonetheless proceeded to install the in-ground pool. In light of the foregoing, the record indicates that the trial court abused its discretion in finding that the Association was equitably estopped from enforcing the Declaration's prohibition on swimming pools.
Accordingly, the order of the trial court is reversed.
Based upon our conclusions above, we need not reach the Association's additional arguments with respect to the authority of Aversa to bind the Association, Linda Baldi's use of notes during her testimony, the admission of a voicemail message from Aversa, and the admission of numerous photographs of swimming pools within the community. --------
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 9th day of July, 2012, the order of the Court of Common Pleas of Philadelphia County, dated June 28, 2011, is hereby reversed.
/s/_________
PATRICIA A. McCULLOUGH, Judge