Opinion
No. CV 03-0484356 S
October 12, 2004
MEMORANDUM OF DECISION
FACTS
This complaint for a declaratory judgment arises from a dispute among the parties regarding the effect of a 21 to 22 vote to amend specific portions of a condominium association's declaration, when, pursuant to state law, a unanimous vote is required to amend those portions. The question presented to the court is a matter of first impression: namely, that given the facts, how the court may reconcile two seemingly contradictory provisions of the Common Interest Ownership Act (CIOA), General Statutes § 47-200, et seq.
The plaintiff Strathmore Farms Association, Inc., is an association of unit owners of Strathmore Farms, a common interest community located in Madison, Connecticut. The community exists by way of a declaration filed by the Strathmore Farms Development Corporation, pursuant to the CIOA. The declaration was initially filed in the Madison Land Records office on June 27, 1986.
The initial declaration had allotted for 25 free standing units to be built by the developer. Only 23 units were built, however, and the developer recorded an amended declaration on June 28, 1993. The 1993 amendments set forth that there are a total of 23 units located as part of the common interest community, but failed to reallocate the percentage interest of each unit owner in the common elements and common expenses of . . . the association to reflect the removal of two units. Thus, since two units were stricken from the declaration in the 1993 amendment, but the proportional share of expenses allocated to each of the 23 remaining units was not amended to reflect the subtraction of the two units, the total percentage interest ended up equaling 92.711% instead of 100%. This total is in violation of state law, set forth in General Statutes § 47-226(e), which states, in relevant part, that "the sum of the common expense liabilities and . . . the sum of the undivided interests in the common elements . . . must each equal . . . one hundred percent . . . The missing 7.289% from the common interest stated in the 1993 declaration amendment would have been made up had the developer been able to build the two missing units. From July 1993, through 1996, the unit owners negotiated with the developer about extending the development rights, which had expired in June 1993, but due to disagreement among the existing unit owners, the development rights were not extended. The town of Madison, therefore, ordered the plaintiff to tear down the two foundations which had already been laid, and the plaintiff complied.
Despite the fact that the 1993 declaration amendment allocated only 92.711% of common interest and common expenses, the property manager, each year from 1994 to 2002, adjusted each unit owner's allocated interest so that a total of 100% of each year's budget could be assessed and collected. Accordingly, the 23 unit owners were being assessed and billed common charges based upon a 100% allocation, even though the oversight in the 1993 amendment caused a deficiency of 7.289% of allocated interests. Also during this time, the defendant initiated four separate lawsuits against the plaintiff and other individual unit owners, involving a variety of issues, including the improper allocation of common expenses. These lawsuits were ultimately resolved, and the defendant executed and delivered general releases for each.
These cases were Perrelli v. Strathmore Farms Assoc., Inc., Superior Court, judicial district of New Haven at Meriden, Docket No. CV 96-02454335; Perrelli v. Strathmore Farms Assoc., Inc., Superior Court, judicial district of New Haven at Meriden, Docket No. CV 00-0272638; Perrelli v. Grebel, Superior Court, judicial district of New Haven at New Haven, Docket No. CV 02-0460311; Perrelli v. Tibbitts, Superior Court, judicial district of New Haven at New Haven, Docket No. CV 02-0461974.
In an effort to correct the nearly ten-year-old discrepancy found in the 1993 amendment, the Strathmore Farms Association Board brought before the unit owners a proposal to amend the declaration once again. The reallocation of each unit owners' common interest percentage was one of the principal items addressed by the proposed amendments. On December 4, 2002, the unit owners, including the defendants, in person or via proxy, met to vote on the amendments. Of the 23 unit owners, 21 voted to approve the amendments, and two, the defendants, voted against the amendments. Pursuant to General Statutes § 47-236(d), however, based on the 21-2 vote, the amendment still failed. Section 47-236(d) states, in relevant part, that "[e]xcept to the extent expressly permitted or required by other provisions of this chapter, no amendment may . . . change . . . the allocated interests of a unit, in the absence of unanimous consent of the unit owners." On November 26, 2003, the plaintiff filed suit, requesting that this court grant a declaratory judgment which would validate the amendments of 2002, despite the fact of the amendment's not having been given unanimous consent. The defendants argue in opposition that a declaratory judgment is not an appropriate proper remedy in this case, and that the court must give effect to the legislature's requirement that unanimous consent be achieved to change a condominium unit owner's allocated interest.
DISCUSSION
Practice Book § 17-55 provides: "A declaratory judgment action may be maintained if all of the following conditions have been met: (1) The party seeking the declaratory judgment has an interest, legal or equitable, by reason of danger of loss or of uncertainty as to the party's rights or other jural relations; (2) There is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement between the parties; and (3) In the event that there is another form of proceeding that can provide the party seeking the declaratory judgment immediate redress, the court is of the opinion that such party should be allowed to proceed with the claim for declaratory judgment despite the existence of such alternate procedure." "The purpose of a declaratory judgment action . . . is to secure an adjudication of rights where there is a substantial question in dispute or a substantial uncertainty of legal relations between the parties." (Internal quotation marks omitted.) Interlude, Inc. v. Skurat, 253 Conn. 531, 536, 754 A.2d 153 (2000). "Section 17-55(3) of the Practice Book allows the trial court wide discretion to render a declaratory judgment unless another form of action clearly affords a speedy remedy as effective, convenient, appropriate and complete." England v. Coventry, 183 Conn. 362, 365, 439 A.2d 372 (1981). Because the plaintiff will continue to find itself in violation of the law unless the condominium declaration is amended the court may render a declaratory judgment in the circumstances provided. The plaintiff argues in their Post-Trial Brief "Similarly" there is nothing in the Common Interest Ownership Act that specifically addresses how to `fix' an amendment which already violates the Common Interest Ownership Act.
The defendants have taken the position that it would be improper for the court to ignore the proscription of § 47-236(d)'s requirement of unanimous consent for a change in a unit owner's common interest allocation. The court has the opportunity to rely on other statutes, as well as principles of equity, relative to the plaintiff's request for a declaratory judgment. Two provisions are found in the CIOA: The first is found in the language of § 47-236(d) itself. As quoted above, the provision sets out that it is to be enforced "[e]xcept to the extent expressly permitted or required by other provisions of this chapter . . ." (Emphasis added.) § 47-236(d). Thus, § 47-226(e)'s requirement that the sum of the common interests allocated to the unit owners must equal 100% outweighs § 47-236(d)'s requisite that an amendment to change the allocated interest must be passed unanimously. The language of § 47-226(e) compels the condominium association to amend its declaration, since the CIOA requires that the common interests allocated to the unit owners equals 100%.
Next, General Statutes § 47-207 also provides instructive language. Section 47-207 provides, in relevant part, that "[t]he principles of . . . equity . . . supplement the provisions of this chapter, except to the extent inconsistent with this chapter." "The governing motive of equity in the administration of its remedial system is to grant full relief and to adjust in the one suit the rights and duties of all the parties, which really grow out of or are connected with the subject matter of that suit . . . Equity regards as done what ought to be done . . . or which ought to have been done. Equity always looks to the substance of a transaction and not to mere form and seeks to prevent injustice. The principles of equity evolved as a necessity in order to obtain justice because the law by reason of its universality was deficient. Equity in its true and genuine meaning is the soul and spirit of all law, and positive law is construed by it and rational law is made by it. In this, equity is synonymous with justice." (Citations omitted; internal quotation marks omitted.) Natural Harmony, Inc. v. Normand, 211 Conn. 145, 149-50, 558 A.2d 231 (1989).
Moreover, it is necessary to keep in mind, particularly in this case, that equity looks to substance and not mere form. Bender v. Bender, 258 Conn. 733, 751, 785 A.2d 197 (2001); Connecticut National Bank v. Chapman, 153 Conn. 393, 397, 216 A.2d 814 (1966). "[E]quitable remedies are not bound by formula but are molded to the needs of justice . . . Our Supreme Court has endorsed the principle that `[a] court of equity does full and equal justice to all having an interest in the subject-matter' by tersely expressing that `[e]quity never does anything by halves.' Stolman v. Boston Furniture Co., 120 Conn. 235, 240, 180 A. 507 (1935) . . . It has been appropriately noted that the significance of equity `not doing by halves' means that `it is the aim of equity to have all interested parties in court and to render a complete decree adjusting all rights and protecting the parties against future litigation . . . The principle of [this] maxim embraces the well-established doctrine . . . that when equity once acquires jurisdiction it will retain it so as to afford complete relief . . . All the interested parties in court are jurisdictionally available such as to enable equity to tender complete relief." (Citations omitted; internal quotation marks omitted.) Morgera v. Chiappardi, 74 Conn.App. 442, 457-58, 813 A.2d 89 (2003).
It is evident that by not amending those provisions of the condominium association's declaration, the plaintiff would continue to be in violation of the CIOA and would be amenable to continuing lawsuits. Indeed, the defendant has already sued the plaintiff four times, including in his suits counts relating to the improper common interest allocation currently in force in the condominium declaration. What the developer ought to have done in 1993, when it filed the amended declaration, was to have amended the common interest allocation values at the same time. The plaintiff, by way of its attempt to conclusively amend the declaration in 2002 to comply with state law, seeks to correct the apparent oversight or mistake on the part of the developer, which dated back to 1993. The unit owners' vote of 21-2 to amend the declaration demonstrates a clear consensus on the part of the owners to comply with state law, and equitable principles allows this overwhelming majority to have the condominium declaration amended accordingly.
Thus, the court concludes that § 47-226(e) mandates that a condominium association's common interest allocation to each unit automatically equal 100%, and that § 47-236(d)'s requirement that any change to the allocation values be made by unanimous consent of all unit owners does not act as a bar to this provision. The plaintiff will continue to be in violation of state law unless it comes into compliance with § 47-226(e), and the court, in accordance with § 47-207 and principles of equity, grants the plaintiff's request for a declaratory judgment that the condominium declaration be amended to evince compliance with § 47-226(e) of the CIOA.
Frank S. Meadow Judge Trial Referee CT Page 15455