Tyler Ridge Estates Condominium Association, Inc. v. Carol Nelson a/k/a et al. (2012)

MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AS TO LIABILITY ONLY

Pursuant to Practice Book § 17–49, the Plaintiff Tyler Ridge Estates Condominium Association, Inc. (hereinafter referred to as “the Plaintiff” or “the Association”) has moved for summary judgment as to liability only against the defendants, Carol Nelson and Herbert P. Libby (hereinafter, collectively, “the defendants”).   For the reasons set forth below, the motion must be denied as to foreclosure of the common charge lien related to the special assessment, and granted as to foreclosure of the lien for unpaid monthly common charges.

I. FACTS AND PROCEDURAL BACKGROUND

Tyler Ridge Estates Condominium is a sixty-two-unit condominium complex located in Bristol which was created by a Declaration dated July 11, 1988 and filed in the Bristol Land Records at Volume 925, Page 227 (“the Declaration”).   The defendants are the record owners of Unit # 38 in Tyler Ridge Estates Condominium.

On January 24, 2007, notice was given to all unit owners that the Annual Meeting of the Association would take place on February 13, 2007.   In addition to voting to approve the 2007 Association budget, unit owners were also notified that they would be “discussing funding for Capital Improvement Projects such as roofing, paving and decks.”  (April 7, 2012 Motion for Summary Judgment, Exhibit H.) On February 13, 2007, the annual meeting took place.   Exactly what transpired at the meeting is the subject of some controversy, but on April 18, 2007, the Association sent a letter to all unit owners stating its position that:  “[a]t the annual meeting on February 13, 2007, the majority of Unit Owners approved a Special Assessment for roof and gutter replacement.   The total cost is $220,000.”  (April 7, 2012 Motion for Summary Judgment, Exhibit I.)

The Association commenced the present action against the defendants on January 21, 2009, alleging a failure to pay common charges and special assessments.

In March of 2009, the defendants commenced an action against the Association and several of its Board members (Libby et al. v. Tyler Ridge Estates Condominium Association, Inc. et al., Superior Court, Judicial District of New Britain, Docket No. 095012412 S) alleging the Association and its officers had borrowed more money than was approved by vote of the unit owners at the February 2007 meeting, and that the defendants had negligently overseen the improper installation of a roof over Unit # 38, that the roof continued to leak, and that the leaking roof was causing damage to their unit and a decrease in value of their unit.¹

On October 6, 2009, a Special Meeting of the Unit Owners was noticed to take place on October 20, 2009.   The business to be transacted at the meeting was described as:  “Ratify Association Loan and Special Assessment in accordance with the attached Resolution.”  (April 7, 2012 Motion for Summary Judgment, Exhibit J.) The Resolution which was referenced in the notice of meeting reads as follows:

RESOLVED, that the Unit Owners at Tyler Ridge Estates Condominium Association, Inc., (the “Association”) hereby ratify the loan and special assessment adopted at the February 13, 2007 annual meeting, which loan was in the original amount of $202,000 and increased to $220,000 and secured by the Association's right to future income to the lender as security for said borrowing to fund costs associated with repair and replacement of the roof and other capital projects.   The Unit Owners further ratify the steps taken by the Board to close this loan in accordance with the terms and conditions set forth by the lender.  (April 7, 2012 Motion for Summary Judgment, Exhibit J.)

A letter explaining the need for the meeting states that “A Unit Owner has sued our Association alleging among other issues that there are procedural errors with the way this loan was approved ․ [w]e do not want to become entangled in a lawsuit focusing on technicalities.”  (April 7, 2012 Motion for Summary Judgment, Exhibit J.)

The Special Meeting was held on October 20, 2009.   According to the official minutes of the meeting, the unit owners present at the meeting voted 27 to 6 in favor of ratifying the loan in the amount of $220,000 and 26 to 6 in favor of ratifying the special assessment.  (April 7, 2012 Motion for Summary Judgment, Exhibit K.)

The operative complaint for purposes of this motion is the Third Amended Complaint, dated January 6, 2012.   It alleges that the defendants have failed to pay common charges, and that the Association has a statutory lien pursuant to Conn. Gen. Stats. § 47–258, which it seeks to foreclose.

The defendants filed an answer to the Third Amended Complaint with special defenses on January 30, 2012.   In their answer, the defendants deny the allegations that the Association had validly adopted and ratified the special assessment at the February 13, 2007 and October 20, 2009 unit owner meetings.   In their special defense, the defendants challenge the Association's Board of Directors' authority to impose a special assessment because the unit owners “never voted” in favor of approval of a loan of any amount, in favor of a special assessment in any amount, or in favor of the right to assign future income during the February 13, 2007 annual meeting.

With respect to the October 20, 2009 special meeting, the defendants “challenge the legality of the vote that was taken for the described purpose.”   The defendants contend that the notice of the special meeting was “misleading” and that representatives of the Association who spoke at the meeting made “false and misleading” statements to “sway the vote.”   They also question the timing of the ratification vote, since the lawsuit between defendants and the Association challenging the validity of the loan and special assessment was pending at the time of the meeting.

The case now comes before the court on the Association's motion for summary judgment as to liability only.   In support of its motion, the Association has appended an affidavit of debt and various condominium documents, pleadings, and responses to requests for admissions.

The defendants have attached to their opposition papers affidavits of two Tyler Ridge Estates Condominium unit owners (George Marshall and Karla Justo, Exhibits A and B) attesting that both attended the February 13, 2007 annual meeting and that there was no vote of the unit owners taken to approve any loan, special assessment, or the right to assign future income at that meeting.   To support their claim that statements made by the Association before, during and after the October 20, 2009 special meeting were “false and misleading,” the defendants append the Association's responses to requests for admission.  (Exhibits C through G.)

Finally, the defendants argue that the Association has no right to impose a monthly common charge against them because the Association is in violation of its duty under the Declaration and the Condominium Act to repair and maintain the condominium roofs.²  The defendants submit documentary evidence (Exhibits M through T) that the roofs are in violation of the State Building Code and that the roof coverings and roof assemblies have been improperly installed.³

II. ANALYSIS

A. Summary Judgment, Generally

Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   The party moving for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.  Zielinski v. Kotsoris, 279 Conn. 312, 318, 901 A.2d 1207 (2006).  “A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case.”   (Internal quotation marks omitted.)  United Oil Co. v. Urban Development Commission, 158 Conn. 364, 379, 260 A.2d 596 (1969).

Once the moving party has met its burden, the party opposing the motion cannot simply rest on its allegations or denials of the moving party's claims;  it must “provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact.”  Tuccio Development, Inc. v. Neumann, 114 Conn.App. 123, 126, 968 A.2d 956 (2009).   In reviewing the evidence offered, the trial court must “view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Johnson v. Atkinson, 283 Conn. 243, 253, 926 A.2d 656 (2007).   When deciding a summary judgment motion, the trial court may not decide issues of material fact, but only determine whether such genuine issues exist.  Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988).

B. Discussion:  Non-payment of Special Assessment

As a general rule, in actions to foreclose on a common charge condominium lien, equitable special defenses are permitted only to the extent they “attack the making, validity or enforcement of the lien, rather than some act or failure to act of the lien holder.”   National Mortgage v. McMahon, Superior Court, Judicial District of New Haven, Docket No. 349246 (February 18, 1999, Celotto, J.).   The defendants' special defense “challenges[s] the legality of the vote that was taken” for purposes of ratification, thereby attacking the making or validity of the lien.

The defendants conceded at argument that the validity of the ratification vote on the loan and special assessment undertaken at the Special Meeting held on October 20, 2009 is the critical material fact at issue in their case.   Simply put, if those ratification actions are upheld as valid, then the issue of whether the Association action to borrow the $220,000 and impose the assessment was validly taken in February 2007 is rendered moot.   It is a matter of black-letter law that a validly accomplished shareholder ratification relates back to the original action and cures otherwise unauthorized acts of officers.   See, generally, 18B Am.Jur.2d, Corporations, § 1412 (2002).

Ratification is a question of fact.  Community Collaborative of Bridgeport, Inc. v. Ganim, 241 Conn. 546, 562, 698 A.2d 245 (1997).

As a general rule, [r]atification is defined as the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account ․ Ratification requires acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances ․ In order to ratify the unauthorized act of an agent and make it effectual and obligatory upon the principal, the general rule is that the ratification must be made by the principal with a full and complete knowledge of all the material facts connected with the transaction to which it relates;  and this rule applies, of course, to ratification by a corporation of an unauthorized contract or other act by its officers or agents, whether the ratification is by the stockholders or by the directors, or by a subordinate officer having authority to ratify.

(Emphasis added).  Id., 561.

In the present case, the defendants have submitted some evidence which—if one follows the defendants' interpretation of events—would tend to support their claim that, by virtue of “false and misleading statements,” the Tyler Ridge condominium unit owners did not possess “all of the material facts connected with” the loan and special assessment transaction.   The interpretation of those statements and those events presents a question of fact that goes straight to the validity of the ratification vote—a material issue in the case.

The function of a court considering a motion for summary judgment is issue-finding, rather than issue-determination.  “The trial court does not sit as the trier of fact when ruling on a motion for summary judgment ․ [Its] function is not to decide issues of material fact, but rather to determine whether any such issues exist.”  (Internal quotation marks omitted.)  Keller v. Beckenstein, 117 Conn.App. 550, 557–58, 979 A.2d 1055, cert. denied, 294 Conn. 913, 983 A.2d 274 (2009).   There is a genuine issue of material fact as to the information provided to unit owners in connection with their ratification vote that must be decided by the trier of fact, and that precludes the entry of summary judgment as to any action to foreclose the Association's lien based on unpaid common charges for the special assessment.

C. Discussion:  Non-payment of Monthly Common Charges

To the extent that the defendants argue that they should be relieved of their responsibility for payment of monthly common charges (as opposed to special assessments) because roofs have been repaired improperly, any such defense is legally insufficient.   Under Connecticut law, validly levied common charges constitute independent obligations that are not subject to any claims of set-off, counterclaim, or special defense.   As the Appellate Court recently noted “[a]lmost all of the judges of the Superior Court who have addressed this issue have held that special defenses and counterclaims will not lie in an action brought by a condominium association to foreclose a lien based upon a unit owner's failure to pay common charges.”  Coach Run Condominium, Inc. v. Deborah L. Furniss, 136 Conn.App. 698, 705 (released July 10, 2012), citing Congress Street Condominium Ass'n, Inc. v. Anderson, 132 Conn.App. 536, 541–43, 33 A.3d 274 (2011).  “General Statutes § 47–257 makes it clear that common charges must be paid by the unit owners, with no excuses, evidencing a clear legislative intent favoring collectibility of a condominium association's lien.”   The Oaks Condominium Association v. Lemay, Superior Court, Judicial District of New Britain, Docket No. 95–0466793 (August 7, 1997, Holzberg, J.) [20 Conn. L. Rptr. 359].   The claim that roofs have been installed improperly simply does not relate to the plaintiff's statutory right to collect common charges and foreclose upon them, and is therefore a legally insufficient defense.

Pursuant to Practice Book § 17–51, the court may grant summary judgment as to any defense that “applies to only part of the claim,” and the action may proceed with respect to the remainder of the claim.   The court finds that there is no genuine issue of material fact as to the defendants' liability for monthly common charges, and as to the fact that those charges are unpaid.   The plaintiff has also demonstrated that all conditions precedent to foreclosure of the statutory lien for monthly common charges have been satisfied.   There is no genuine issue of material fact as to liability for unpaid monthly common charges, but there is a genuine issue as to the amount of the debt.   Partial summary judgment as to liability only is therefore appropriate as to the plaintiff's action to foreclose its statutory lien for unpaid monthly common charges.

III. CONCLUSION

Viewing the evidence in a light most favorable to the party opposing summary judgment, as the court must do at this stage of the proceedings, the court concludes that the defendants have presented sufficient proof of a genuine issue of material fact as to the validity of the unit owner ratification which must be resolved by the fact-finder.⁴  Therefore, the plaintiff's motion for summary judgment as to liability only is denied with respect to foreclosure of the lien for unpaid special assessments.   Partial summary judgment as to liability only is granted as foreclosure of the lien for unpaid monthly common charges.

BY THE COURT,

David M. Sheridan

FOOTNOTES

FN1. The case was eventually withdrawn prior to trial on June 30, 2011..  FN1. The case was eventually withdrawn prior to trial on June 30, 2011.

FN2. The court notes that the written “Special Defences” filed by the defendants do not specifically set forth the violation of the duty to repair and maintain the common elements as an affirmative defense.   Nonetheless, the issue is raised in the opposition papers and was argued before the court.   The court will grant the defendants the latitude typically given to self-represented parties due to their lack of familiarity with court procedures and filings, and consider this defense despite its inadequate presentation..  FN2. The court notes that the written “Special Defences” filed by the defendants do not specifically set forth the violation of the duty to repair and maintain the common elements as an affirmative defense.   Nonetheless, the issue is raised in the opposition papers and was argued before the court.   The court will grant the defendants the latitude typically given to self-represented parties due to their lack of familiarity with court procedures and filings, and consider this defense despite its inadequate presentation.

FN3. The defendants also attached to their motion several documents (Exhibits H through L), all various recitations of the amount of the debt, which they claim “suggest a reckless disregard by the plaintiff's counsel with regards to accurate and factual accounting when submitting statements and evidence to the court.”   As was explained at the argument of this motion, since the motion seeks summary judgment as to liability only, any disputes or discrepancies as to the amount of the debt are immaterial.   The entire premise underlying a motion for summary judgment as to liability only is that there is no genuine issue of material fact as to liability, but there is a genuine issue as to damages..  FN3. The defendants also attached to their motion several documents (Exhibits H through L), all various recitations of the amount of the debt, which they claim “suggest a reckless disregard by the plaintiff's counsel with regards to accurate and factual accounting when submitting statements and evidence to the court.”   As was explained at the argument of this motion, since the motion seeks summary judgment as to liability only, any disputes or discrepancies as to the amount of the debt are immaterial.   The entire premise underlying a motion for summary judgment as to liability only is that there is no genuine issue of material fact as to liability, but there is a genuine issue as to damages.

FN4. Lest the self-represented defendants misunderstand, the court stresses that this ruling is not a decision on the merits of any party's claims in this litigation, and should not be construed or referenced as such.   The weighing of evidence and application of proven facts to controlling law that would be required for such a decision has not taken place in this procedural setting, and must necessarily take place at a trial..  FN4. Lest the self-represented defendants misunderstand, the court stresses that this ruling is not a decision on the merits of any party's claims in this litigation, and should not be construed or referenced as such.   The weighing of evidence and application of proven facts to controlling law that would be required for such a decision has not taken place in this procedural setting, and must necessarily take place at a trial.

Sheridan, David M., J.