Eastwood Condominium Association, Inc. v. Irene Williams (2013)

MEMORANDUM OF DECISION

The plaintiff Eastwood Condominium Association, Inc. brought this action to foreclose its statutory lien under the Common Interest Ownership Act, Conn. Gen.Stat. § 47–200 through 47–299 (“the act”) on property owned by defendant Irene E. Williams at 102 Virginia Avenue, Bridgeport, Connecticut.   Defendant Williams is a member of the plaintiff association by virtue of her ownership of the above property.

Plaintiff claims that it issued notices of assessments for common charges which the defendant has failed to pay and that the defendant has therefore accrued arrearages, late charges and interest on unpaid common charges.   Defendant denies that she received such notices and that she is in default as alleged.   As noted below, defendant has paid a portion of the common charges, late fees and interest but denies responsibility for any charges prior to July 2011.

Pursuant to General Statute 47–258(a) the association has a statutory lien on any unit for any assessment attributable to that unit or fines imposed against its unit owner.   The statute further provides that the association's lien may be foreclosed in like manner as a mortgage on real property.

Defendant has alleged by special defense that the plaintiff failed to provide notice in accordance with Connecticut General Statutes and plaintiff's own bylaws in that Section 22(a) of the subject bylaw requires plaintiff to send all notices to any unit owner by registered or certified mail to the building in which the unit is situated or to such other address designated by the owner.   Defendant alleges that the first notice she received regarding the common charges increase was in a letter dated June 23, 2011, which was not sent by certified or registered mail.   She states, “Had proper notice of the increase in common charges been provided to me such that I was aware of the increase I would have paid the full amount in a timely manner.”

This case was tried for the court on July 31, 2013.   Thereafter, the plaintiff filed a post-trial memorandum dated August 16, 2013.   Plaintiff claims to have provided notice of the common charge increase by an undated “Newsletter” which several board members distributed after the board meeting.   Board minutes of the meeting indicated that the board directed Bill Abbott to write a letter to owners and occupants, announcing the increase, explaining the reasons for it and including common charge information from other Bridgeport condominium associations.   Plaintiff did not provide any evidence that this occurred.   Defendant asserts that she never received this purported notice and that the form of notice does not comply with Conn. Gen.Stat. 47–80 and section 22(a) of the bylaws.   She further alleges that as a result of plaintiff's failure to properly notify her of the common charge increase, she has been unfairly assessed.   She further alleges that the plaintiff accepted her monthly payments of $145.00 without question until June 23, 2011, and that its acceptance of her monthly payments with knowledge of the deficiency constitutes waiver of any claim for the new amount until June 23, 2011.

A common charge increase is a decision of the association unrelated to any individual action by a member.   Without proper notice of the increase, and indeed the late fees and interest, a member is entitled to continue to pay the amount which by all records and communications she believed to be the proper amount of the common charge.   The plaintiff did not mail annual common charge notices, nor did it provide monthly or other interim statements which would have informed the defendant of the increased common charge obligation and the accruing assessment of late fees and interest on a timely basis.

It is undisputed that the defendant failed to pay the fifty-five-dollar common charge increase but rather continued to pay the prior one hundred forty-five-dollar monthly common charge.   The evidence indicates that she was not aware of the increase through no fault of her own.   This however, does not excuse her from her responsibility for payment of fees which the association has validly imposed according to its bylaws on all members.

The first notice provided to the defendant by any credible records of the plaintiff is the past due notice dated June 23, 2011, which demanded that plaintiff commence payment of the arrearage over a six-month period beginning July 1, 2011.

The testimony of Frank Callahan failed to answer the essential questions regarding initial notice to the plaintiff the delivery of the Newsletter, and the board's failure to follow the board's October 17, 2007 directive to send a letter to members which explained the reason for the increase and provide comparable condominium common charges from other area associations and most baffling why plaintiff continued to accept defendant's payment of the old $145.00 common charge for three and a half years.

The court also finds that the apparent dispute between certain association officers and the defendant regarding the defendant's decision to pay by electronic funds transfer directly rather than by check is not germane to the plaintiff's claims.   There is no doubt that the funds were received, whether the earlier amount of the increase as reflected, by the subject bank records.

Defendant began to pay the correct common charge of $200.00 per month from December 2012 to date.   The association nevertheless continued to assess late fees and interest because the defendant makes her monthly payments by direct deposit to the association's account.   The association has offered no proof to justify the late charges and interest assessments.   On the contrary, defendant's bank statements indicate that all monthly common charge payments were made on or before the tenth of the month as required.

Defendant is liable for payment of the $55.00 increase from the date which the association imposed the increase on all members.   She began to pay $200.00 per month in December 2012.   As indicated above, she paid $1,474.44 on June 21, 2013.   This represents payment of the common charge difference, late fees and interest fees from July 1, 2011 through November 2012.

The only amount remaining is $2,310.00 which is the calculation of $55.00 per month for 42 months during which time the increase was in effect but the defendant did not have notice.   It is inexplicable that the plaintiff would receive payment of the old amount for three and a half years without advising the defendant of the deficit.   The minutes of the association indicated that it had a need for the common charges and the offices have a fiduciary responsibility to the association to manage its financial affairs properly.   This includes, at a minimum, prompt notice of any charges, timely notice of any asserted delinquency and consequential fees and reasonable efforts to collect delinquencies.   By plaintiff's own testimony this did not occur.

Plaintiff claims that case law permits condominium associations to send notice by means other than as provided in their bylaws.   This is true, however, as noted by the Appellate Court in Twenty–Four Merrill Street Condominium Association, Inc. v. Murray, 96 Conn.App. 616, 902 A.2d 24 (2006), there is a difference between notice which is late or provided by a method other than stated in the bylaws and, as in this case, the absence of notice.   In order to prevail on its right to enforce a lien on defendant's property, plaintiff must satisfy its burden of providing that notice was given.   Mr. Cullahan did not hand deliver the newsletter and could not verify that any other board member did so.   There was, thus, insufficient proof that the newsletter, even if the court were to consider it adequate, was provided to and received by the defendant.   Her timely payment of the old charges for three and a half years placed the plaintiff on notice that she was not aware of the January 2008 increase in common charges.   Yet, it took no action until June 23, 2011, forty-two months later, when it sent a letter demanding payment of the past due amount of $2,130.00 over the next six months.

Viewing the testimony and evidence presented the court finds that the defendant's testimony that she did not receive the subject newsletter, which the plaintiff concedes was the only form of notice, to be credible.   The plaintiff failed to satisfy its burden that it provided notice as required by its bylaws and the statute.

This case is distinguishable from both Oronoque Shores Condominium Assn. No. 1, Inc. v. Smulley et al., 114 Conn.App. 233 (2009), and Twenty–Four Merrill Street Condominium Assn., Inc. v. Murray, 96 Conn.App. 616, 622 902 A.2d 24 (2006).   In the former case, defendant unsuccessfully challenged the form of notice and validity of the assessment.   In contrast to Ms. Williams, the defendant Smulley attended the meeting, knew its purpose and acknowledged that she owed both the snow and litigation assessments.   The Smulley court's reliance on Twenty–Four Merrill Street Condominium Assn., Inc. v. Murray, supra, for its analysis of notice applicable to the instant case.

Notice is a concept of fundamental fairness and not a rigid concept.   Twenty–Four Merrill Street Condominium Ass'n., Inc. v. Murray.   In that case, the court found that the statutory lien at issue was not invalid because no prejudice attached to the defendant by receiving late notice of the plaintiff's assessment.  “The concept of notice concerns notions of fundamental fairness, affording parties the opportunity to be apprised when their interests are implicated in a given matter ․ Notice is not a rigid concept.   Section two of the Restatement (Second) of Judgments, entitled ‘Adequate Notice,’ states in relevant part that [a]n action may proceed without notice to a person interested therein when ․ (c) person is afforded an adequate subsequent opportunity to protect his interest' 1 Restatement (Second), Judgments § 2, (4)(c), p. 34 (1982) ․ the modern approach to notice-giving attaches primary importance to actual notice and treats technical compliance with notice procedures as a secondary consideration ․” Id., 622–23.   The court further finds that the defendant did not withhold the common charge increase prior to June 23, 2011.   Subsequent to that date, the defendant made payments of the correct common charge fee as well as interest and certain late fees.   Nevertheless she refused to pay the $2,130.00 arrearage.   Defendant has acted in good faith making payments as noted.   She is, however, wrong in her assertion that she is not responsible for the $2,130.00.   A unit owner may not withhold common charges because the owner believes that the Board of Directors did not act properly.  Hudson House Condominium Ass'n. v. Brooks, 223 Conn. 610, 617 (1992).

The reasoning of Stamford Landing Condominium Assn., Inc. v. Lerman is applicable to the present case.   In that case, the Appellate Court explained:  “[T]he concept of notice concerns notions of fundamental fairness, affording parties the opportunity to be apprised when their interests are implicated in a given matter ․ Notice is not a rigid concept.   Section 2 of the Restatement (Second) of Judgments, entitled “Adequate Notice” ․ explains that [t]he modern approach to notice-giving attaches primary importance to actual notice and treats technical compliance with notice procedures as a secondary consideration.”  Stamford Landing Condominium Assn., Inc. v. Lerman, supra, 109 Conn.App. 267, quoting Twenty–Four Merrill Street Condominium Assn., Inc. v. Murray, 96 Conn.App. 616, 622–23, 902 A.2d 24 (2006).   In Stamford Landing Condominium Assn., Inc. v. Lerman, the defendant argued that the notice was inadequate because it failed to state the precise date, time and place of the November 3, 2003 board meeting.  Id., 268.   The Appellate Court reasoned that “[i]n light of the fact that the defendant was familiar with the location, layout and procedures of the village, the letters' omission of the exact time and location of the meeting was not problematic.”  Id. In contrast to cases where the issue is one of sufficiency of notice, in this case the plaintiff failed to prove that it provided notice to the defendant of the increase in the monthly common charges.   By continuing to accept the former amount as payment without notifying the defendant of her error it reinforced her reliance.   Defendant had no reason to doubt that she was paying the correct amount until she received the June 23, 2011 letter.

For this reason, the plaintiff is not entitled to collect late charges and interest on the increase which the court finds it failed to provide any form of notice to defendant.   This is not a case where the defendant argues adequacy of notice, but rather it is a case of complete absence of notice, for over three and a half years.   While the plaintiff is not barred from collecting outstanding common charges by the doctrine of waiver or estoppel, it nevertheless is not entitled to charge interest or late fees on amounts which it never properly billed.   Judgment shall therefore enter for the plaintiff in the amount of $2,130.00

SOMMER, J.

Sommer, Mary E., J.