Eden Harbour Condominium Association, Inc. et al.
v. Eden Harbour, LLC et al.
SUPERIOR COURT OF CONNECTICUT, JUDICIAL DISTRICT OF MIDDLESEX AT MIDDLETOWN
MMXCV094010447S
2010 Conn. Super. LEXIS 785
April 1, 2010, Decided
April 1, 2010, Filed
MEMORANDUM OF DECISION
The plaintiff, Eden Harbour Condominium Association, Inc. (Association), is the owner of the common elements within the Eden Harbour Condominium complex located at 175 Ferry Road, Old Saybrook, Connecticut. The defendant, Eden Harbour, LLC (LLC), is the declarant of the condominium complex in Old Saybrook known as Eden Harbour created under the Common Interest Ownership Act (CIOA), General Statutes § 47-200 et seq. The limited issue before the court is to determine which of these parties is authorized to make repairs to the decks of certain condominium units.
By way of background, the condominium complex will have up to thirty-two units when completed. The LLC owns one of the units. Some of the units contain second floor decks which are limited common elements as defined in General Statutes § 47-221(4) and article V of the declaration. The defendant, MDC Corporation (MDC), was hired by the LLC to demolish and rebuild the decks. The Association and some of the individual owners informed the LLC that they did not approve of the LLC’s demolition plan. MDC removed the decks from units 5 and 6 by cutting into the cantilevered beams supporting the decks. The LLC and MDC later applied for building permits without approval of the Association or the individual unit owners. Water began leaking into several units and several complaints were made by owners of those units. The LLC and MDC, the general contractor, attempted to resolve the leaks using conventional methods such as caulking and weather stripping. The repair was successful on unit 1, owned by Patrick Dillon, and that unit continues to be leak free. The LLC and the Association disagree on how to repair the subject units.
The LLC hired an independent architectural firm, Fred Marzec & Associates, Inc. (Marzec), to examine the units and suggest possible solutions. Marzec determined that the leaks were caused by a design defect that resulted in water penetrating the units through the cantilevered beams supporting the decks. Marzec proposed two solutions to correct the problem: The first proposal entails a combination of reflashing, sheathing and modifying the air space. The second calls for removal of the cantilevered beams and reconstruction of the decks using posts as a ground support system. Marzec recommended the second option as a more permanent solution.
The LLC has accepted responsibility for repairing the units affected by the design problem and notified the Association of its intent to make the repairs. Pursuant to the authority contained in the Second Amended and Restated Declaration of Eden Harbour (declaration) and by virtue of its right to repair, it hired MDC, its original general contractor, to perform the repair work. MDC then obtained building permits for the intended work.
The LLC obtained an architect’s report which claimed that the cantilevered decks, a limited common element, caused the leaks. The Association, however, submits that there are leaks on some units without decks and that some leaks are not near the cantilevered decks.
MDC then commenced work on units 5 and 6. It removed the cantilevers by cutting them back to the wall of the unit. During the course of the repairs, the Association applied for a temporary injunction against the LLC and MDC to stop the demolition, repair and reconstruction of the decks by the LLC, its contractor, MDC, and the town of Old Saybrook on May 22, 2009. The Association and unit owners objected to the installation of the columns. They intended to use their own contractor and leave the decks as cantilevered. The court, Clifford, J., granted the injunction through an ex parte order on May 22, 2009, and the parties agreed that the preliminary injunction would remain in effect until a full trial on the injunction in November 2009.
Subsequent to the issuance of the temporary injunctions, the Association proceeded to have its contractor do further work on top of the work performed by MDC on units 5 and 6. It also commenced a repair that was not consistent with the LLC’s plan or Marzec’s recommendations.
Because the Association’s actions disturbed the status quo, the LLC and MDC filed a counterclaim on June 9, 2009, and filed an application for a temporary injunction against the Association on June 12, 2009, to prevent repairs from being done by anyone other than the LLC. The court, Gordon, J., denied the application on June 12, 2009. The LLC then submitted an amended ex parte application for a temporary injunction that this court, Burgdorff, J., granted on June 16, 2009. The LLC is not seeking a hearing on its temporary injunction, and the injunction as to the town of Old Saybrook is moot as the building permits have expired. On July 20, 2009, the Association [*5] filed a Corrected Amended Complaint (complaint). The nine-count complaint seeks a temporary and permanent injunction against the LLC and MDC, alleges negligence on the part of the LLC and MDC in the construction, CUTPA violations on behalf of the LLC and MDC, breach of warranty on behalf of the LLC, failure of the LLC to maintain its property, failure by the LLC to set a budget, appeal of the administrative determination by the town of Old Saybrook in issuing the building permits and negligence on the part of the town of Old Saybrook.
The LLC subsequently hired a structural engineer and a water penetration consultant to review Marzec’s recommendations and the Association’s plan of repair. Pursuant to the information received from its experts, the LLC continues to assert the necessity for removal of the cantilevers, sealing the units and reconstructing the decks with ground support.
The Association now seeks, by way of a hearing on the continuation of its temporary injunction, a determination of which party has the authority to make the repairs under the statute and the declaration. The parties have agreed on certain issues as stated in a memorandum of understanding dated September 29, [*6] 2009, but do not agree on the extent of the repairs for which the LLC and MDC are responsible, nor do they agree that the LLC and MDC have the right to perform any repair work. For the reasons discussed below, the court finds that the LLC and MDC have the right to perform the repair work at issue.
DISCUSSION
The Association contends that it has the right to repair the common elements. The Association relies on the CIOA in support of its position. Specifically, General Statutes § 47-249(a) provides:
Except to the extent provided by the declaration, subsection (b) of this section or subsection (h) of § 47-255, the association is responsible for maintenance, repair and replacement of the common elements, and each unit owner is responsible for maintenance, repair and replacement of his unit. Each unit owner shall afford to the association and the other unit owners, and to their agents or employees, access through his unit reasonably necessary for those purposes. If damage is inflicted on the common elements or on any unit through which access is taken, the unit owner responsible for the damage, or the association if it is responsible, is liable for the prompt repair thereof.
The Association also relies on the language of the § 6.1 of the declaration, which provides:
The Association shall maintain, repair and replace all of the Common Elements including the Limited Common Elements, and shall not require or be entitled to contribution, indemnity or reimbursement from any Unit Owner except under circumstances set forth in Section 6.4 hereof . . .
The Association also submits that the LLC and MDC lack any right to demolish common elements. It contends that General Statutes § 47-280(b) provides that the LLC’s obligation to complete and restore is limited because that section provides that “[t]he declarant is subject to liability for the prompt repair and restoration to a condition compatible with the remainder of the common interest community, of any portion of the common interest community affected by the exercise of rights reserved pursuant to or created by section 47-229, 47-230, 47-231, 47-232, 47-234- or 47-235.” The Association argues that this means that the declarant must repair damage the declarant has done while exercising its rights and that it does not provide the declarant unlimited right to demolish and redesign common elements.
The Association acknowledges that General Statutes § 47-235(a) grants the declarant certain easement rights: “Subject to the provisions of the declaration, a declarant has such an easement through the common elements as may be reasonably necessary for the purpose of discharging the declarant’s obligations or exercising special declarant rights, whether arising under this chapter or reserved in the declaration.” The Association contends, however, that granting an easement does mean the declarant has general authority to demolish the decks. Further, this statute does not support an inference that the LLC is the only entity that can make repairs, especially after a unit has been sold.
In the declaration, dated March 14, 2006, the LLC reserved the right to perform repairs as a special right. Section 8.7 provides:
Construction: Declarant’s Easement. The Declarant reserves the right to perform repairs and construction work and to store materials in the Common Elements, and the further right to control all such work and repairs and the right of access thereto until its completion. All work may be performed by the Declarant without the consent or approval of the Executive Board. The Declarant has such an easement through the [*9] Common Elements as may be reasonably necessary for the purpose of discharging the Declarant’s obligations or exercising Special Declarant’s Rights, whether arising under the Act or reserved in this Declaration, in addition to all easements and rights granted or reserved in the aforementioned Easement Agreement.
The Association argues that this language is “boilerplate” and has to be read in context with the right to perform construction work. The Association language relies on Cantonbury Heights Condominium Ass’n., Inc. v. LocalLand Development, LLC, 273 Conn. 724, 734-35, 873 A.2d 898 (2005). In that case, the court explained that with regard to ambiguities of the declaration, the general rule is that “any ambiguity must be construed against the developer who authored the declaration.” Id. The Association argues, however, that even if the parties present different interpretations of the language, that does not mean that the provision is ambiguous. It contends that the language was intended to apply only to repairs that were necessitated by the declarant’s construction activities and that the declarant cannot decide unilaterally what repairs are necessary let alone to demolish and redesign [*10] limited common elements.
The Association contends that the special reservation of rights of § 8.7 of the declaration does not grant the LLC the sole right and authority to repair the defective limited common elements. It concedes that General Statutes § 47-280(b) provides that the declarant is liable for the prompt repair and restoration of the defective workmanship in the limited common elements and that General Statutes § 47-235 provides that the declarant has an easement for exercising its special rights. However, it contends that the legal protection to exercise special rights does not create a right for the declarant to impose its chosen construction services on the Association. To do so would eliminate the Association’s freedoms of association and freedom of contract. Moreover, it maintains that this would violate General Statutes § 47-244(b), which provides:
The declaration may not impose limitations on the power of the Association to deal with the declarant which are more restrictive than the limitations imposed on the power of the association to deal with other persons.
The Association argues that when considered with the good faith requirements of General Statutes § 47-211, 1 [*11] the LLC simply cannot have such broad power. The Association does not want the contractor who made the original mistakes to have an opportunity to make additional or cover up existing mistakes during the repair. Thus, it contends that although the statute employs language stating that the declarant is liable for repairs, it does not specifically authorize the declarant to perform such repairs. It maintains that the LLC does not have the exclusive unilateral right to repair faulty workmanship by virtue of the easement to exercise special declarant rights.
1 General Statutes § 47-211 provides: “Every contract or duty governed by [the Common Interest Ownership Act] imposes an obligation of good faith in its performance or enforcement.”
In response to the LLC’s claim that allowing repairs by others would void its warranties, the Association argues that such warranties would not be voided by repair work by others because the LLC will remain liable for defects caused by itself for the duration of the warranty period. The Association concedes that it can only recover damages for the leaks at issue in this lawsuit once, but argues that the LLC would remain liable for its own faulty work regardless [*12] of whether certain repairs had been made by others. In other words, the LLC would be relieved of its responsibility for damages that it paid for even if subsequent repair work by others also resulted in defects, but would remain liable for the duration of the warranty period for defects for which the Association had not yet been compensated. The Association notes that defects due to unsound engineering are covered by the CIOA warranty provision in General Statutes § 47-275(b)(2), which provides that a declarant impliedly warrants to a purchaser that a unit, and the common elements and improvements “will be: (1) Free from defective materials; and (2) constructed in accordance with applicable law, according to sound engineering and construction standards, and in a workmanlike manner.”
In response to the LLC and MDC’s claim that the leaks result from design defects and, therefore, it is obliged to fix the leaks, the Association argues that the cost of repairs is the appropriate measure for damages. See Willow Springs Condominium Ass’n., Inc. v. Seventh BRT Development Corp., 245 Conn. 1, 59, 717 A.2d 77 (1998) (“The basic measure of damages for injury to real property is the resultant [*13] diminution in its value . . . There is, however, a well established exception to this formula; such diminution in value may be determined by the cost of repairing the damage, provided, of course, that that cost does not exceed the former value of the property and provided also that the repairs do not enhance the value of the property over what it was before it was damaged.” [Citations omitted; internal quotation marks omitted.]). The Association contends that under Willow Springs, it does not need to give the LLC a second bite of the apple because the severity of the defects prove that the LLC is incapable of fixing the problems. Thus, it argues, the appropriate remedy here is an award of damages, not granting the LLC the right to make repairs. If it were to allow the LLC to make the repairs, the Association argues, the declarant would be able to hide other workmanship defects that another contractor might uncover and seek to reduce its liability for defective workmanship. As such, it contends, the court should not allow the LLC to hide behind its own errors. The Association further contends that facts set forth in previous court decisions show that builders or sellers who violate [*14] these warranties are not the ones who end up fixing the workmanship or design defects that their original negligence created. Thus, the LLC should not be given the opportunity to fix its faulty workmanship. The Association contends that the CIOA is modeled on this logic, that the LLC is liable for the cost of the repair but should not be given the chance to fix the problems that it created in the first place. In response, the LLC and MDC argue that the LLC has a duty under the declaration to make the repairs to the decks at its expense. They also maintain that the LLC has the exclusive right to determine the manner of repair. They contend that the recommendation of the Association is an improvement as opposed to a repair and that, as such, the LLC has no duty under the declaration or statute to perform or pay for improvements to the premises. In support of these assertions, the LLC and MDC rely on many of the same provisions of the declaration and the CIOA on which the plaintiffs rely.
First, noting that the Association was established pursuant to the CIOA and that the CIOA regulates all forms of common interest ownership and governs the creation, organization and management of common [*15] interest communities, the LLC and MDC argue that § 47-235(a) grants a declarant the right to reserve a construction easement to carry out its responsibilities until all of its obligations are complete. As noted previously, § 47-235(a) provides: “Subject to the provisions of the declaration, a declarant has such an easement through the common elements as may be reasonably necessary for the purpose of discharging the declarant’s obligations or exercising special declarant rights, whether arising under this chapter or reserved in the declaration.” They maintain that this section of the CIOA grants the LLC an easement to allow it to make repairs to the decks because the declaration reserves to the LLC the right to make repairs to the units that arise under the LLC’s warranty obligations. It is the LLC’s position that the decks be repaired in the manner it has chosen and as recommended by its experts. For the reasons discussed below, the court agrees with the LLC and MDC.
As noted by the LLC, the issue of whether a developer has the right to perform, at its own expense, repairs necessitated by its own defective workmanship is one of first impression in Connecticut. Under similar circumstances [*16] in other jurisdictions, the developer was given an opportunity to make repairs covered by a warranty. For example, in Deckard v. Ratcliff, 553 N.E.2d 523 (Ind.App. 1990), a decision of the Court of Appeals of Indiana, First District, the court held that before seeking damages against a builder, “the purchaser must, as condition precedent to recovery, give notice of the defect and alleged breach of warranty to the building-vendor thus affording the building-vendor an opportunity to remedy the defect.” (Internal quotation marks omitted.) Id., 523-24, quoting Wagner Constr. Co. v. Noonan, 403 N.E.2d 1144, 1150 (Ind.App. 1980). Here, the LLC has not been afforded such an opportunity. Due to the temporary injunction, the LLC’s work on the units was forced to cease. Research reveals no case law in this jurisdiction addressing the issue of whether such an opportunity must be afforded to a declarant/developer in Connecticut. Accordingly, the court must construe the applicable statutes and provisions of the declaration to resolve this issue.
Section 8.7 of the declaration reserves the declarant’s right to perform construction and repair work without the approval of the Association or its executive [*17] board. Section 8.7 provides in relevant part:
Construction; Declarant’s Easement. The Declarant reserves the right to perform repairs and construction work and to store materials in the Common Elements and the further right to control all such work and repairs and the right of access thereto until its completion. All work may be performed by the Declarant without the consent or approval of the Executive Board. The Declarant has such an easement through the Common Elements as may be reasonably necessary for the purpose of discharging the Declarant’s obligations or exercising Special Declarant Rights, whether arising under the Act or reserved in this Declaration, in addition to all easements and rights granted or reserved in the aforementioned Easement Agreement. (Emphasis added.)
This provision of the declaration unambiguously provides the LLC, as the declarant, the right to perform both repair work and construction work that are reasonably necessary for the purpose of discharging the LLC’s obligations or Special Declarant Rights arising under the declaration or the CIOA.
While the LLC’s construction and repair rights are not unlimited, the broad language in the declaration encompasses [*18] the repair of defective limited common elements that are covered by a warranty. First, regardless of whether the work ultimately performed to resolve the water intrusion problem would be more accurately characterized as an improvement or a repair, the declaration provides the declarant with the right to make improvements and repairs. In article VIII of the declaration, captioned “Development Rights and Other Special Declarant Rights,” § 8.4 reserves to the declarant, inter alia, the right “(d) [t]o use easements through the Common Elements for the purpose of making improvements within the Common Interest Community.” Although § 8.5 of the declaration places certain time limitations on the exercise of Special Declarant Rights, these limitations do not apply. Section 8.5 provides: “Unless sooner terminated by a recorded instrument executed by the Declarant, any Special Declarant Right may be exercised by the Declarant until the earlier of the following: (a) So long as the Declarant is obligated under any warranty or obligation, holds a Development Right to create additional Units or Common Elements, owns any Unit or Security Interest in any Units; or (b) For ten (10) years after recording [*19] this Declaration, whichever is earliest. Earlier termination of certain rights may occur by statute.” (Emphasis added.)
As noted above, an implied warranty covering defective workmanship in the construction of the decks is still in effect. See General Statutes §§ 47-274 and 47-275(b). Specifically, § 47-275(b) requires that “[a] declarent impliedly warrants to a purchaser that a unit and the common elements in the common interest community are . . . (1) Free from defective materials; and (2) constructed in accordance with applicable law, according to sound engineering and construction standards, and in a workmanlike manner.” Further, the declaration was recorded on March 14, 2006, less than ten years ago. Consequently, the LLC’s Special Declarant Rights have not expired. These provisions in the declaration unambiguously grant the LLC the right to repair limited common elements that are necessary for the fulfillment of the LLC’s warranty obligations.
The Association’s reliance on General Statutes § 47-244(b), which provides that the “declaration may not impose limitations on the power of the Association to deal with the declarant which are more restrictive than the limitations imposed [*20] on the power of the association to deal with other persons,” is misplaced. Notwithstanding the broad language of that section, the CIOA expressly allows the declarant to reserve to itself certain rights pertaining to its dealings with the Association. Specifically, the definition in General Statutes § 47-202(29) 2 of special declarant rights is consistent with the rights described in § 8.4 of the declaration. Like § 8.7 of the declaration, General Statutes § 47-235(a) confers up the declarant an easement to allow it to exercise special declarant rights. That section provides: “Subject to the provisions of the declaration, a declarant has such an easement through the common elements as may be reasonably necessary for the purpose of discharging the declarant’s obligations or exercising special declarant rights, whether arising under this chapter or reserved in the declaration.” Section 8.6 of the declaration further provides: “Neither the Association nor any Unit Owner may take any action or adopt any rule that will interfere with or diminish any Special Declarant Right without the prior written consent of the Declarant.” This restriction is similar to that set forth in General Statutes § 47-236(h), [*21] part of the CIOA, which provides: “Provisions in the declaration creating special declarant rights may not be amended without the consent of the declarant.”
2 General Statutes § 47-202(29) provides: ” ‘Special declarant rights’ means rights reserved for the benefit of a declarant to (A) complete improvements indicated on surveys and plans filed with the declaration or, in a cooperative, to complete improvements described in the public offering statement pursuant to subdivision (2) of subsection (a) of section 47-264; (B) exercise any development right; (C) maintain sales offices, management offices, signs advertising the common interest community, and models; (D) use easements through the common elements for the purpose of making improvements within the common interest community or within real property which may be added to the common interest community; (E) make the common interest community subject to a master association; (F) merge or consolidate a common interest community with another common interest community of the same form of ownership; or (G) appoint or remove any officer of the association or any master association or any executive board member during any period of declarant [*22] control.”
Although § 47-244(b) prohibits the imposition of “limitations on the power of the Association to deal with the declarant which are more restrictive than the limitations imposed on the power of the association to deal with other persons,” that statutory provision must be read within the context of the CIOA, which, in effect, allows certain limitations on the power of the Association to deal with the declarant to be imposed.
When read together, these provisions must be construed to allow certain types of limitations to be placed while prohibiting others. This interpretation is consistent with well established principles of statutory construction. The Supreme Court has stated that “[w]e are mindful that ‘statutes should be construed, where possible, so as to create a rational, coherent and consistent body of law. See, e.g., Doe v. Doe, 244 Conn. 403, 428, 710 A.2d 1297 (1998) (we read related statutes to form a consistent, rational whole, rather than to create irrational distinctions); In re Valerie D., 223 Conn. 492, 524, 613 A.2d 748 (1992) ([s]tatutes are to be interpreted with regard to other relevant statutes because the legislature is presumed to have created a consistent [*23] body of law).’ . . . Waterbury v. Washington, 260 Conn. 506, 557, 800 A.2d 1102 (2002).” Aspetuck Valley Country Club, Inc. v. Weston, 292 Conn. 817, 829, 975 A.2d 1241 (2009). Under these principles, the Association’s argument that construing the declaration to confer upon the LLC the right to perform the repairs at issue would violate § 47-244(b) is without merit because such an interpretation would require the court to ignore other relevant statutory provisions which allow certain restrictions.
The LLC correctly notes that a condominium declaration is in the nature of a contract and, therefore, the rules of contract construction must apply to the interpretation of its terms. See Cantonbury Heights Condominium Ass’n., Inc. v. LocalLandDevelopment, LLC, supra, 273 Conn. 734; Heyse v. Case, Superior Court, judicial district of Litchfield, Docket No. CV 06 5001028, (September 9, 2009, Pickard, J.) (48 Conn. L. Rptr. 455, 2009 Conn. Super. LEXIS 2412) (2009 WL 3285979, 4). In addition, the CIOA provides in relevant part: “The principals of law and equity, including law of corporations and incorporated association, the law of real property . . . or other validation or invalidating cause supplement the provisions of [*24] this chapter, except to the extent inconsistent with this chapter.” General Statutes § 47-207. Declarations are to be strictly construed and the language employed given a rational construction based on its common, natural and ordinary meaning and usage as applied to the subject matter of the contract. Alstom Power, Inc. v. Balcke-Durr, Inc., 269 Conn. 599, 610, 849 A.2d 804 (2004). Where the language is unambiguous, the contract must be given effect according to its terms. Id. As the Association correctly notes, even if the parties present different interpretations of the language, that does not mean that the provision is ambiguous. Jo-Ann Stores, Inc. v. Property Operating Co., LLC, 91 Conn.App. 179, 190, 880 A.2d 945 (2005). The language of the declaration is clear, specific and unambiguous. Therefore, the repair work that needs to be done is the responsibility of the LLC, and the declaration makes clear that the repair “may be performed by the Declarant without the consent or approval of the Executive Board . . .”
The LLC has accepted responsibility for repairing the decks and contends that it is fundamentally the result of a design flaw. The solution proposed by the LLC involves [*25] substantial repair work, including removal of the existing decks and installation of a redesigned deck. It should be noted that the Association’s experts agree that the declarant’s proposed solution is sound from an engineering standpoint, but object to it for other reasons. For the reasons discussed above, the LLC has the right to undertake and complete repairs. This finding is required by the plain meaning of the relevant provisions of the declaration and the CIOA. Nevertheless, as agreed by counsel at the hearing that began on November 24, 2009, the issue of the exact nature and extent of the repair work to be done will be determined separately after a hearing on that issue is held.
CONCLUSION
For the foregoing reasons, the court finds that the LLC has the right to repair the water intrusion problem relating to the second floor decks at issue. Nevertheless, as noted above, the issue of the exact nature and extent of the repair work to be done will be determined separately after a hearing on that issue is held.
Burgdorff, J.