Brown v. Brent

138 Hawai'i 140

377 P.3d 1058 (Table)

Ronald BROWN, Administrator of the Estate of Don Brown, Plaintiff–Appellee

v.Ken BRENT, Individually and in his Capacity as the President and Member of the Board of Directors of the Association of Apartment Owners of Kuhio Shores at Poipu; Association of Apartment Owners of Kuhio Shores at Poipu, by and through its Board of Directors, Defendants–AppellantsandJohn Does 1–10; Jane Does 1–10; Doe Partnerships 1–10; Doe Corporations 1–10; Doe “Non–Profit” Corporations 1–10; and Doe Governmental Entities 1–10, Defendants

Ronald Brown, Administrator of the Estate of Don Brown, Plaintiff–Appellee

v.Ken Brent, Individually and in his Capacity as the President and Member of the Board of Directors of the Association of Apartment Owners of Kuhio Shores at Poipu; Association of Apartment Owners of Kuhio Shores at Poipu, by and through its Board of Directors, Defendants–AppellantsandJohn Does 1–10; Jane Does 1–10; Doe Partnerships 1–10; Doe Corporations 1–10; Doe “Non–Profit” Corporations 1–10; and Doe Governmental Entities 1–10, Defendants

Ronald Brown, Administrator of the Estate of Don Brown, Plaintiff–Appellant

v.Ken Brent, Individually and in his Capacity as the President and Member of the Board of Directors of the Association of Apartment Owners of Kuhio Shores at Poipu; Association of Apartment Owners of Kuhio Shores at Poipu, by and through its Board of Directors, Defendants–AppelleesandJohn Does 1–10; Jane Does 1–10; Doe Partnerships 1–10; Doe Corporations 1–10; Doe “Non–Profit” Corporations 1–10; and Doe Governmental Entities 1–10, Defendants.

Nos. CAAP–14–0001379

CAAP–14–0001381

CAAP–14–0001384.

Intermediate Court of Appeals of Hawai‘i.

June 17, 2016.

R. Laree McGuire, Linda E. Ichiyama, Jennifer M. Porter, (Porter McGuire Kiakona & Chow, LLP), on the briefs, for Defendants–Appellants/ Cross–Appellees.

Terrance M. Revere, Leina‘ala L. Ley, (Revere & Associates A Limited Liability Law Company), on the briefs, for Plaintiff–Appellee/ Cross–Appellant.

NAKAMURA, C.J., and FOLEY and FUJISE, JJ.

SUMMARY DISPOSITION ORDER

These consolidated appeals¹ arise out of a dispute between Plaintiff Don Brown (Brown),² the owner of an apartment unit in the Kuhio Shores at Poipu (Kuhio Shores) condominium project, and Defendants Association of Apartment Owners of Kuhio Shores (AOAO) and Ken Brent (Brent), the former president of the AOAO's Board of Directors. Brent and the AOAO will be referred to collectively as the “Board.” In the underlying lawsuit, Brown challenges the decisions of the Board: (1) to repaint the exterior walls of the Kuhio Shores condominium project a different color without owner approval; (2) to paint or replace exterior louvered doors, including two exterior doors installed in front of the main doors to Brown's apartment, without the approval of Brown and the other affected owners; and (3) not to purchase teak doors from Bali that a majority of owners had approved.

Brown filled a complaint against the Board,³ alleging various claims relating to the foregoing decisions of the Board. The Board filed its answer and also a counterclaim seeking, among other things, declaratory relief that it had acted properly in making the decisions challenged by Brown.

Brown filed a motion for summary judgment on certain claims in his complaint and on the Board's counterclaim. The Circuit Court of the Fifth Circuit (Circuit Court)⁴ partially granted Brown's motion “as to any issues in connection with the painting of the exterior louvered doors[,]” and it denied Brown's motion as to all other issues.⁵

The Board filed three motions for partial summary judgment. The Circuit Court partially granted the Board's motions as to any issues in connection with the Board's non-purchase of the Bali teak doors. The Circuit Court denied the Board's motions with respect to all other issues.⁶

I.

In its appeals, the Board contends that the Circuit Court erred in: (1) denying its motion for summary judgment on its counterclaim for declaratory relief regarding its decision to repaint the exterior walls of the Kuhio Shores condominium project a different color without owner approval; and (2) granting summary judgment in favor of Brown regarding the Board's decision to paint or replace the exterior louvered doors without obtaining owner approval.⁷ In his appeal, Brown contends that the Circuit Court erred in granting the Board's motion for summary judgment on the claims relating to the Board's decision not to purchase the Bali teak doors .⁸ As explained below, we affirm Circuit Court's denial of summary judgment with respect to the issue concerning the repainting of the exterior walls of the condominium project. We vacate the Circuit Court's grant of summary judgment on the issues connected with the painting of the exterior louvered doors and the non-purchase of the Bali teak doors.

III.

We resolve the issues raised by the parties on appeal as follows:

A.

The Board argues that the Circuit Court erred in denying its motion for summary judgment with respect to its decision to repaint the exterior walls of the condominium project a different color without owner approval. In support of its motion for summary judgment, the Board argued that pursuant to Hawaii Revised Statutes (HRS) § 514B–140(c) (2006), only Board approval, and not owner approval, was required for nonmaterial alterations to the common elements.

HRS § 514B–140(c) provides, in relevant part:

Subject to the provisions of the declaration, nonmaterial additions to or alterations of the common elements or units, including, without limitation, additions to or alterations of a unit made within the unit or within a limited common element appurtenant to and for the exclusive use of the unit, shall require approval only by the board, which shall not unreasonably withhold the approval, and such percentage, number or group of unit owners as may be required by the declaration or bylaws ....

(Emphases added.) For purposes of HRS § 514B–140(c), a “nonmaterial” addition or alteration means:

an addition to or alteration of the common elements or a unit that does not jeopardize the soundness or safety of the property, reduce the value thereof, impair any easement, detract from the appearance of the project, interfere with or deprive any nonconsenting owner of the use or enjoyment of any part of property, or directly affect any nonconsenting owner.

HRS § 514B–140(c).

The Board presented evidence from a real estate broker that the change in the exterior paint color had no adverse effect on the value of the Kuhio Shores condominium project or Brown's unit. Based on this evidence, which the Board asserts was uncontroverted, the Board argued to the Circuit Court that repainting the exterior walls of the condominium project a different color was a nonmaterial alteration for which only Board approval was required under HRS § 514B–140(c). The Circuit Court ruled that whether the change in the exterior paint color was a “material” or “nonmaterial” alteration presented a genuine issue of fact and therefore denied the Board's motion for summary judgment.

On appeal, the Board argues that the Circuit Court erred in concluding that whether the change in the paint color was a material or nonmaterial alteration presented a genuine issue of fact in denying the Board's motion for summary judgment. We disagree with the Board's argument.

Although the Board presented evidence that the change in the exterior paint color did not adversely affect the value of the condominium project, the definition of a “nonmaterial” alteration under HRS § 514B–140(c) encompasses factors that go beyond valuation. The Board did not present evidence on other aspects of the definition of a “nonmaterial” alteration, such as whether the change in paint color detracted from the appearance of the project or directly affected any nonconsenting owner, that was sufficient to show the absence of any genuine issue of fact on whether the change in paint color was a nonmaterial alteration. We therefore reject the Board's contention that the Circuit Court erred in concluding that whether the change in paint color was a material or nonmaterial alteration presented a genuine issue of fact.⁹

B.

The Board argues that the Circuit Court erred in granting summary judgment in favor of Brown regarding the issue of the painting or replacement of the exterior louvered doors. Critical to the Circuit Court's ruling was its plain-language interpretation of Section A.1.(1) of the Kuhio Shores' Declaration of Horizontal Property Regime (Declaration) to mean that the exterior doors were part of an owner's apartment. The Board indicates that it does not dispute that if the exterior doors were part of the apartment, then owner approval (which it did not obtain) was necessary to paint or replace the exterior doors. However, the Board contends that the exterior doors were not part of the apartment.

Section A.1.(1) of the Declaration provides:

The respective apartments shall not be deemed to include the undecorated or unfinished surfaces of the perimeter or party walls or interior load-bearing walls, the floor and ceiling surrounding each apartment, or any pipes, wires, conduits, or other utility or service lines running through such apartments which are utilized for or serve more than one apartment, the same being deemed common elements as hereinafter provided. Each apartment shall be deemed to include all fixtures originally installed therein, the lanai air space, all the walls and partitions which are not load bearing within its perimeter or party walls, the inner decorated or finished surfaces of all walls, floors and ceilings, doors and door frames, windows and window frames and lanais.

(Emphases added).¹⁰ /

The Board argues that the phrase “the inner decorated or finished surfaces” as used in Section A.1.(1) modifies “doors and door frames,” and therefore, the exterior doors which were installed outside of the main doors to an apartment were not part of the...