2011 Ct. Sup. 23473
No. NNH CV08-4034290 SConnecticut Superior Court Judicial District of New Haven at New Haven
November 10, 2011
MEMORANDUM OF DECISION
WILLIAM L. HADDEN, JR., Judge Trial Referee.
This is a civil action brought by the plaintiff, Patrick Brown, seeking money damages, punitive damages and attorneys fees from the defendant Quinnipiac Village Condominium Association, Inc. The legal dispute arises out of the efforts of the plaintiff to sell his condominium, Unit 603, which is one of twenty-nine condominiums located at the condominium complex operated by the defendant in Meriden, Connecticut.
The original complaint filed by the plaintiff is in three counts. The first count alleges that certain conduct by the defendant prevented the plaintiff from selling his unit, the second count alleges a trespass into his unit by the defendant or its agents, and the third count alleges a claim of violation of the Connecticut Unfair Trade Practices Act, Section 42-110b (CUTPA). The defendant denied the material allegations of the three counts, filed a special defense to counts one and two, and also filed a counterclaim alleging that the defendant has notified the plaintiff of its right of first refusal but the plaintiff refuses to convey title to the unit to the defendant.
On March 29, 2011 this court (Burke, J.) granted the plaintiff’s motion for summary judgment as to liability on the first count [51 Conn. L. Rptr. 619]. The case was reached for trial on April 21, 2011. Before the evidence began the parties stipulated that the court would try the first count as a hearing in damages, and the second count would be tried in full. The third count, the special defenses, and the counterclaim were all withdrawn.
This court heard evidence on April 21, 25, 26, 27 and 28, 2011. The witnesses were the plaintiff Patrick Brown, the president of the defendant corporation Patricia Barnis, the property manager of the defendant Richard Afragola, Stephen Jacobs, who was the attorney for the defendant from December 8, 2008 until approximately April 11, 2011, and Timothy S. Wall, a Connecticut state marshal. CT Page 23474
The court finds the following facts and reaches the following conclusions. The plaintiff purchased condominium unit 603 at the defendant’s condominium complex in 1991 for $95,000.00 or $96,000.00. He financed the purchase with a mortgage which he paid off in 2000 or 2002. In 2001 or 2002 the plaintiff ceased his employment and returned to college. He obtained a bachelors degree in history from Quinnipiac University and then attended Central Connecticut State University to obtain a masters degree. He has completed his course work for the masters degree but his thesis is still pending.
In the spring of 2006 the plaintiff’s mother died and left the plaintiff about $500,000. At the end of 2007 the plaintiff moved to New Hampshire and purchased a dwelling for $276,000 from his inheritance. He has lived in New Hampshire since 2007 and continues to own unit 603, which has been vacant since he moved to New Hampshire. He has been unemployed since 2001 or 2002.
Barnis has been president of the defendant since 2002. In January 2005 APMC, LLC was hired as the property manager, succeeding Robert Ennis. Afragola was the sole owner of APMC, LLC and he handled the defendant’s affairs. Afragola was in effect the property manager and he was in charge of collecting the common charges from the unit owners, paying bills, keeping all of the defendant’s records, dealing with the unit owners and providing advice to the officers and the board of directors concerning the operation of the condominium complex. Barnis, as president, did not make decisions on her own but communicated with other members of the board and with Afragola. Starting in 2005 the plaintiff had a very acrimonious relationship with Afragola and with the members of the board. He threatened to sue the defendant on more than one occasion.
On September 20, 2008 the plaintiff entered into a contract for the sale of his unit to William Hawthorne for $48,000.00 (contract #1). The closing was scheduled for October 4, 2008 and Hawthorne was not obtaining a mortgage. Section 47-270 of the Connecticut General Statutes provided that the seller of a condominium unit must provide the buyer with a resale certificate which the seller would obtain from the condominium association. The plaintiff requested the resale certificate and paid the fee required to the defendant. The statute required the defendant to provide the resale certificate to the plaintiff within 10 days of the receipt of the request.
The defendant did not provide the resale certificate to the plaintiff because it believed that it had a right of first refusal and that the CT Page 23475 price in contract #1 was much lower than the fair market value of the unit, and if it was sold at that price it would affect the value of the other units in the condominium complex. The defendant’s by-laws provided “Right of First Refusal. The Association has the right to review at its next meeting or within 30 days, the sales offer of any of the 29 units here at the complex.” The defendant was advised by its attorney that it had a valid right of first refusal. This claim was made in a special defense to the first count which alleged “The defendant exercised its right of first refusal to purchase the plaintiff’s condominium unit which negated the need to provide the plaintiff with the copy of its Resale Documents since the defendant became the purchaser of the property.” The right of first refusal was also the basis of a counterclaim filed by the defendant seeking a conveyance of the unit.
Based on the advice by its attorney, the defendant continued to believe that it had a valid right of first refusal which was a defense to the claim set forth by the plaintiff in the first count. The court finds that, while the belief was wrong, the belief by the defendant was reasonable until Afragola and Barnis were advised by Attorney Jacobs on August 11, 2010 that the defense based on the alleged right of first refusal was not valid. The basis of the decision by Judge Burke on March 29, 2011 granting the plaintiff’s motion for summary judgment on the first count was that the alleged right of first refusal was a restriction on the alienation of a condominium unit which by statute was required to be in the corporation’s declaration and not only in the by-laws, as was the case here.
After being advised that the defendant was concerned about the effect of the $48,000.00 price in Contract #1 on the value of the other units in the complex, on October 8, 2008 the plaintiff and Hawthorne entered into a second contract for the same unit under the same terms as in contract #1, except the price was $125,000.00. However, the plaintiff and Hawthorne had agreed that only $48,000.00 would be paid for the unit. This would be accomplished by having the deed reflect that the plaintiff was taking back a mortgage for the difference between $125,000.00 and $48,000.00, and the plaintiff then making a gift to Hawthorne of the mortgage after the closing. Despite the new contract price, which the defendant conceded was reasonable, the defendant continued to exercise its right of first refusal and did not deliver the resale certificate.
In late October 2008 the defendant had been out of Unit 603 and had been living in New Hampshire for almost a year. The unit was vacant and members of the board were concerned about whether there was a window open and whether the heat was on in view of the onset of cold weather. CT Page 23476 The plaintiff’s attorney was notified by e-mail of the intention by representatives of the defendant to enter the unit. This notification did not satisfy the requirements of the condominium by-laws. On October 31, 2008, Afragola, Barnis, a couple of board members and a locksmith entered unit 603. They discovered that the heat was on and that there were no problems with the unit and then they left. The second count of the complaint alleges that there were damages caused to the unit by the improper entry but no evidence was offered as to any damages.
The entry of the plaintiff’s unit by the defendant without first notifying him in the manner prescribed in the by-laws made the entry unlawful. However, Afragola, Barnis and the others who entered the unit did so out of a valid concern that there might be conditions in the unit which could eventually cause damage to that unit and other nearby units. While the entry was improper because of the defective notice given to the plaintiff, there was nothing improper about the actual entry and the viewing of the unit.
The plaintiff brought suit in December 2008. Thereafter there were efforts by the parties to resolve the matter. Offers and counteroffers were made but the case was not settled. The case was scheduled for trial on August 11, 2010. Judge Jonathan Silbert conducted a final pre-trial discussion of this case and as a result the parties agreed on a settlement of the entire case.
The substance of the agreement reached on the record on August 11, 2010 was that within 75 days, the defendant would pay the plaintiff $78,000.00 and unit 603 would be conveyed to the defendant. The price of $78,000.00 included $48,000.00 for the unit and $30,000.00 for the plaintiff’s attorneys fees and damages. The defendant was also required to pay off the outstanding charges for real estate taxes, water and sewer charges, and unpaid common charges. In the event that the defendant did not close on the unit within 75 days, a judgment would enter in favor of the plaintiff in the amount of $90,000.00 and the plaintiff would keep unit 603.
In view of the penalty provision in the event the closing did not occur within 75 days it was in the defendant’s best interests to close within 75 days. The defendant had been engaged in discussions with a bank concerning a loan before the settlement was reached on August 11, 2010, and these discussions continued. A membership meeting of the association was held on September 15, 2011, the settlement and loan was approved, and documents reflecting the association’s approval were sent to the bank a few days later. The CT Page 23477 plaintiff claims that Afragola did not tell the truth when he testified before Judge Silbert on November 10, 2010 that the association met on August 25, 2010 and sent documents to the bank a few days later. The court finds that Afragola made an honest mistake in his testimony concerning the date of the association’s meeting, of which the plaintiff would have received notice. The plaintiff stood to profit if the closing did not take place within 75 days of August 11, 2010 in that he would be entitled to a judgment for $90,000.00 against the defendant and continue to own the condominium unit. On August 17, 2010 the plaintiff wrote a letter to all of the unit owners listing the details of the settlement, the tenor of which letter was likely to cause the unit owners to be upset with the board, and which might have caused the unit owners not to approve the settlement at the meeting on September 15, 2010. In addition, on October 5, 2010, the plaintiff’s counsel raised an issue about who would pay his fee of $600.00 for reviewing a simple two-page real estate sales contract required by the bank. The settlement agreement did not include anything about a contract between the parties but the bank insisted that the parties have such a contract, which seems to the court to be reasonable, and the plaintiff should have agreed to pay his own attorney a reasonable fee for reviewing the contract. The defendant refused to pay the plaintiff’s attorney his fee and the contract was never executed. Since the defendant did not have the contract required by the bank, the closing did not take place. Had the issue of an attorneys fee for reviewing the contract not arisen, and if the signed contract had been delivered to the bank, the court is of the opinion that the closing would have occurred within the 75 days. The plaintiff filed a motion for judgment of $90,000.00 on the 76th day. The motion was heard by Judge Silbert on November 10, 2010, and denied by him based on a finding that the sale did not occur due to bad faith by the plaintiff and the case was then restored to the docket for trial. Based on all the evidence presented to this court, including the evidence presented before Judge Silbert on November 10, 2010, this court finds that the plaintiff was responsible for the case not being settled in October 2010. Had the closing occurred in October 2010, and the case settled in accordance with the agreement reached on August 11, 2010, all of the subsequent legal proceedings, including a 5-day trial, would have been unnecessary. The court will not award the plaintiff any losses or expenses claimed by him as occurring after October 5, 2010.
The plaintiff has proven that the defendant is liable for damages on both counts 1 and 2. The plaintiff seeks an award of punitive damages on each count alleging that the refusal to provide the resale certificate with respect to the first count, and the failure to provide proper notice of an intent to enter the plaintiff’s unit on the second count, were willful, spiteful and with malice. The court does not agree. CT Page 23478
On the first count the defendant and its agents honestly believed that the defendant had a right of first refusal which negated the obligation to provide the plaintiff with a resale certificate as provided in Connecticut General Statutes Section 47-270. That this honest belief was wrong does not mean that the belief was willful, spiteful and with malice. The court finds that the conduct of the defendant in connection with the allegations of the first count was not willful.
On the second count the defendant and its agents believed that the plaintiff had been notified of the intent to enter his unit and believed that the notice satisfied the association’s rules and regulations. In addition, there was no improper motive in entering the unit. The defendant and its representatives had a valid concern about the condition of the unit in view of the oncoming winter season, and it was this concern about the heating in the unit that precipitated the entry. There was no evidence of any damage caused by the entry and it was not done willfully.
The plaintiff is entitled to recover on the first count for a portion of his claim for damages and attorneys fees. He has filed a detailed affidavit of attorneys fees listing the time spent at a rate of $300.00 per hour. The court finds that the time allegedly spent and the rate of $300.00 per hour to be reasonable. The court awards attorneys fees based on the affidavit from November 8, 2008 through October 5, 2010, when plaintiff’s counsel advised the defendant’s counsel that he would not review the proposed real estate contract unless the defendant paid his fee of $600.00, and the settlement agreement collapsed. The court awards an attorneys fee of $20,196.00 and court costs of $1,281.77.
The court awards common charges paid and owed by the plaintiff from October 1, 2008 to September 30, 2010, pursuant to exhibit 36, totaling $3,775.00.
The court awards real estate taxes paid and owing to the City of Meriden from October 1, 2008 to September 30, 2010, pursuant to exhibit 9, totaling $5,993.64.
The court awards the plaintiff $1,384.22 as reimbursement for utility expenses by agreement of the parties.
The plaintiff claims that improper refusal of the defendant to deliver the resale certificate prevented him from selling his condominium unit. CT Page 23479 He further claims that because he could not sell his unit he had insufficient funds to pay his real estate taxes in Meriden, which resulted in a tax foreclosure action by the City costing the plaintiff $1,680.71 for the City’s attorneys fees and costs. He also claims that because of his insufficient funds he could not pay his real estate taxes on his home in New Hampshire and has accrued interest in the amount of $1,583.16. The court finds that these expenses are too remote to be reasonably foreseeable as damages caused by the defendant’s conduct.
The final claim related to his alleged inability to pay his bills is that, because he has not paid his common charges, the defendant has filed a foreclosure action against him which is still pending. The plaintiff requests that the court order the defendant to withdraw the pending foreclosure action with prejudice and that no costs or fees be taxed or charged against the plaintiff or his unit. The foreclosure complaint filed by the defendant is exhibit 15. It was served on the plaintiff on March 16, 2011 and alleges that the plaintiff has not paid his condominium charges since July 1, 2011 (Emphasis added) totaling $1,575.00. The court assumes that the date of July 1, 2011 is a typographical error. The monthly condominium fees are $175.00, with a total of $1,575.00, which would indicate that the defendant was allegedly in arrears for 9 months from July 1, 2010 through March 2011. The court has allowed damages to the plaintiff for common charges from October 1, 2008 to September 30, 2010. Most of the period claimed in the foreclosure action for non-payment of the common charges is after September 30, 2010. The plaintiff can be credited in the foreclosure action for the common charges for the period from July 1, 2010 to September 30, 2010. The court denies the plaintiff’s request to order the tax foreclosure filed by the defendant to be withdrawn without payment of fees and costs and with prejudice.
The last request by the plaintiff concerns the fact that any judgment obtained against the defendant and any expenses incurred by the defendant in this case will have to be paid by the unit owners. The plaintiff refers to Connecticut General Statutes Section 47-212 which provides that the remedies provided in the Common Interest Ownership Act are to be “liberally administered to the end that the aggrieved party is put in as good a position as if the other party had fully performed . . .” Anticipating that the defendant will either assess the unit owners or increase the common charges to pay the judgment and the expenses incidental to this case the plaintiff requests that the court order that such assessment or increase in common charges not be allowed against the Brown unit.
CT Page 23480 The court orders that any assessment or increase in the common charges that the defendant levies in order to pay the judgment or the expenses incurred in this litigation shall not be allowed as against the plaintiff’s unit for so long as the plaintiff is the owner of said unit.
A judgment may enter on the first count in favor of the plaintiff and against the defendant in the amount of $32,630.63.
A judgment may enter on the second count in favor of the plaintiff and against the defendant in the nominal sum of $100.00.
CT Page 23481