Opinion
No. CV06 5003774S
October 31, 2008
MEMORANDUM OF DECISION
The plaintiff Nizar Sidi has commenced this action against the City of New Haven and the defendant Juan Diaz, LLC, dba C-Town Supermarket relative to the sale of property known as 156-158 Dixwell Avenue. The first count alleges New Haven sold the property November 17, 2005 to the defendant corporate entity Juan Diaz, LLC in violation of the provisions of the Dixwell Plaza Merchants Association, Inc. (DPMA) bylaws and declarations.
The second count alleges the defendant Juan Diaz, LLC, in purchasing the property, that it also violated the bylaws and declarations because the plaintiff was denied the first right of refusal to purchase that property.
The defendant City of New Haven has denied the plaintiff's claim, and has alleged special defenses of the doctrine of laches and also the statutes of fraud claiming the declaration and bylaws were not signed by this defendant.
The defendant Juan Diaz, LLC has also denied the claims of the plaintiff and has alleged six special defenses alleging the plaintiff's claim was legally improper because the declaration and bylaws were not effective at the time of the sale, and also that the plaintiff's claim was barred by the doctrine of laches. This defendant also filed a counterclaim seeking a determination of its right to title to the property.
The evidence has established the plaintiff Nizar Sidi purchased the unit designated as 206 DixweIl Avenue, New Haven, Connecticut in 2003. The plaintiff's son regularly attended the monthly meetings of DPMA and in the spring of 2005, he heard that New Haven was going to sell the unit known as 156-158 Dixwell Avenue. At that time New Haven was the owner as a result of a foreclosure action which conveyed title to it prior to that date. The plaintiff's son Karim Sidi, acting for his father when he learned in May 2005 that Diaz, LLC was the purchaser, objected to the proposed sale, In May 2005 the plaintiff's son claimed the plaintiff had a first right of refusal to purchase the property, and again at the meeting August 29, 2005, the plaintiff's claim of his first right of refusal was made at that meeting as well as at subsequent meetings.
The property involved in this matter is located on Dixwell Avenue which was an area which fell within the Dixwell Redevelopment and Renewal Plan of the City of New Haven. July 31, 1968 the City created a Land Disposition Agreement with the purpose of creating a shopping center to be developed by Metwin Realty Corporation (Plaintiff's Exhibit 15). The developer was to build and develop the shopping center in conformity of the Redevelopment Plan for the area. Various businesses were not successful in the subsequent development of that shopping area.
In 2003 the Economic Development of New Haven was engaged to improve and upgrade the area and to form the DPMA with the assistance of the Yale Law Clinic and other city agencies to create the incorporation of condo structures for the Plaza area. Thereafter the meetings were held to formulate the Condo Declaration and Bylaws. The purpose of the meetings was to ultimately comply with the Common Interest Ownership Act, C.G.S. 47-200 et seq. (CIOA). At the meetings various provisions of the proposed declaration were discussed and accepted as inclusions within the final declaration. At the meeting of June 5, 2005 the minutes discussed the proposed adoption of Article X of the final Condo Declaration. The minutes of meetings after that date continually refer to the final draft package for submission to the Secretary of State as required by the state statutes. The final Condo Declaration was signed and executed January 9, 2006 (Plaintiff's Exhibit 18). On June 5, 2007 the Declarations were filed in compliance with Chapter 828 of the Connecticut General Statutes.
The plaintiff alleges in his complaint that on June 8, 2005 the revised bylaws and declarations of DPMA were approved by its board members. The evidence introduced at the trial that Article X as revised and proposed was only approved as a provision to be included in the Declaration which was executed January 9, 2006, and then recorded as required by the state statute. Article X was not legally effectual on November 17, 2005 when New Haven conveyed title to the unit to defendant Juan Diaz, LLC.
The Common Interest Ownership Act (CIOA), codified at General Statutes § 47-200 et seq., is applicable to most types of common interest communities created in the State of Connecticut on or after January 1, 1984. General Statutes § 47-214. The CIOA also replaces the Condominium Act of 1976. General Statutes § 47-214. "CIOA was enacted by the Connecticut legislature in 1984 in order to provide developers, lenders and title insurers with flexibility and certainty in establishing common interest communities, as well as providing prospective unit owners and unit owners associations with consumer protection rights such as disclosure and warranty guidelines . . . CIOA was modeled upon the Uniform Common Interest Ownership Act, 101, 7 U.L.A. 231 (Rev., 1992)." (Citations omitted; internal quotation marks omitted.) Ward v. TRC Realty Corp., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV89 0357578 (July 14, 1992, Schaller, J.) ( 1 Conn. L. Rptr. 28); R. Burke, Connecticut Real Property Law, 51 ("[CIOA] is based almost entirely on the Uniform Common Interest Ownership Act").
The CIOA provides that, "`Condominium' means a common interest community in which portions of the real property are designated for separate ownership and the remainder of the real property is designated for common ownership solely by the owners of those portions. A common interest community is not a condominium unless the common elements are vested in the unit owners." General Statutes § 47-202(8). "A common interest community may be created pursuant to this chapter only by recording a declaration executed in the same manner as a deed . . . The declaration shall be recorded in every town in which any portion of the common interest community is located and shall be indexed in the grantee's index in the name of the common interest community and the association and in the grantor's index in the name of each person executing the declaration." General Statutes § 47-220(a). "`Declarant' means any person or group of persons acting in concert who (A) as part of a common promotional plan, offers to dispose of his interest in a unit not previously disposed of or (B) reserves or succeeds to any special declarant right." General Statutes § 47-202(12). "`Declaration' means any instruments, however denominated, that create a common interest community, including any amendments to those instruments." General Statutes § 47-202(13). O'Neill Camp. Inc. et al. v. Brett Stuart, 2005 Ct.Sup. 12167 (September 1, 2005).
In March 2005 after the defendant City of New Haven acquired title to a unit by foreclosure, it received from the defendant Juan Diaz an offer to purchase the unit for $250,000.00. On November 17, 2005 title to the property was conveyed to Juan Diaz, LLC (Plaintiff's Exhibit 22) for use as a supermarket. At the time of the sale the City had not signed the proposed Declaration which had not been filed on the City's land records as required by C.G.S. 47-220. The charter of the City at that time required approval of the Board of Aldermen, and the signature of the Mayor to bind the municipality. These actions had never been taken by the City to impose any legal obligations at the time of the sale.
The course of events prior to the sale of the unit to the defendant Juan Diaz, LLC established that title to the unit had been acquired by the City by a foreclosure. After the unit remained vacant for a time the City created an extensive selection process by the redevelopment agencies to find a suitable tenant for that area. Defendant Diaz was approved by a Selection Committee because it would provide a needed supermarket to meet the needs of the surrounding area. The proposed offer of $250,000.00 by the defendant was approved by the Board of Aldermen, and the Mayor signed a Land Disposition Agreement and a quitclaim deed for the unit. The proposed Declaration at that time was not legally in effect and it had not been approved by the Board of Aldermen or the Mayor.
The claim of the plaintiff on May 16, 2005 was that the Land Disposition Agreement of 1969 was a created common interest community, and therefore a discussed proposal to include a provision for first right of refusal in the declaration was in effec totally wrong and in conflict with the evidence. The DPMA in May 2005 was still in the process of forming a condominium complex to comply with the statutory requirements, and such a Declaration was not finalized until January 9, 2006. The Land Disposition Agreement of 1969 relied upon by the plaintiff did not create a nonresidential common interest condominium association under the law existing at that time. There was no evidence to prove the Declaration or the proposals for its adoption were amendments or had any relationship to the Land Disposition Agreement of 1969. C.G.S. 47-216 did not apply to the 1969 Agreement as claimed by the plaintiff.
The plaintiff erroneously claims that he was denied the right of first refusal by the sale of the unit to the defendant Juan Diaz, LLC. This claim has no merit not only because the Declaration was not in effect at the time of the sale, but also because that right only applied to the DPMA and not the plaintiff. The Association and not the plaintiff had the first right of refusal, it had the right to provide an alternate purchaser in the order of priority in the Declaration ultimately adopted by the Association. This conclusion supports the claim that the plaintiff doesn't even have any standing to bring this action.
This court finds that the defendant Diaz purchased the property in good faith and without notice of the first right of refusal. There was nothing on the land records that would have put Diaz on notice of the existence of the first right of refusal. Furthermore when Juan Diaz, LLC, dba C-Town Supermarket acquired title to the unit there was no breach of any covenants of Section X of the DPMA Declaration because the Declaration was not legally adopted until after the sale. The DPMA did not have the right to compel compliance with Section X of the Declaration when the unit was conveyed by the City of New Haven to the defendant purchaser.
The plaintiff has failed to sustain the burden of proving that he had a legal right in the subject matter of this controversy. At the time of sale Article X Section 10.6 of the DPMA Declaration was not in effect and it did not apply to the sale by the City of New Haven to the defendant Juan Diaz, LLC. Furthermore even that section after the final adoption of June 2006 only applied to a modified right of first refusal by the Association and not by individual members of DPMA. It was then the right of the Association to approve the alternative purchaser.
For the aforesaid reasons, judgment shall enter for the defendants City of New Haven, and Juan Diaz, LLC dba C-Town Market on the complaint. On the counterclaim of the defendant Juan Diaz, LLC dba C-Town Market is found to be the record owner of the unit known as 156-158 Dixwell Avenue free and clear of any claim by the plaintiff.