Sanborn v. 428 Lafayette, LLC

168 N.H. 582

133 A.3d 602

Kelly SANBORN, Trustee of the 428 Lafayette, LLC Realty Trust & a.

v.428 LAFAYETTE, LLC & a.

Andrew Cotrupi

v.428 Lafayette, LLC & a.

No. 2015–0143

Supreme Court of New Hampshire.

Argued: November 10, 2015

Opinion Issued: February 18, 2016

Keane & Macdonald, P.C., of Portsmouth (Douglas W. Macdonald on the brief and orally), for the plaintiffs.

Shaines & McEachern, PA, of Portsmouth (Paul McEachern and Jacob Marvelley on the brief, and Mr. McEachern orally), for the defendants.

Andrew Cotrupi, for himself, by brief and orally.

CONBOY, J.

This appeal arises out of two consolidated actions brought by the plaintiffs, Kelly Sanborn, Trustee of the 428 Lafayette, LLC Realty Trust, Donald and Rosemarie Folk, Heather Hancock, and Andrew Cotrupi, against the defendants, 428 Lafayette, LLC and John Roberge, relating to their respective ownership of condominium units at Village Square of Hampton Condominium (Condominium). The defendants appeal rulings of the Superior Court (Anderson, J.) that: (1) Village Square of Hampton Condominium Association (Association) is governed by RSA chapter 292 (2010 & Supp.2015), entitled "Voluntary Corporations and Associations" (hereinafter Voluntary Corporations Act), rather than RSA chapter 356–B (2009 & Supp.2015), the "Condominium Act"; and (2) Cotrupi has the right to use certain commercial parking spaces at the Condominium. We affirm in part, vacate in part, and remand.

I. Background

The trial court found, or the record supports, the following facts. The Condominium was created on August 11, 2006, pursuant to a declaration, which was recorded in the Rockingham County Registry of Deeds. The Condominium is a fourteen-unit building consisting of twelve residential units and two commercial units.

The declaration provides that fourteen of the parking spaces on the condominium property shall be commercial parking spaces shared by the owners of the two commercial condominium units. In 2007, Cotrupi purchased one of the commercial units. Cotrupi's warranty deed states that his unit "is conveyed with the benefit of and subject to the Declaration." The deed also conveyed to Cotrupi "the exclusive right to use" six of the commercial parking spaces.

The Condominium's bylaws were recorded on the same date as was the declaration. The bylaws vest "[t]he government of the condominium" in the Association and provide that "[a]ll [o]wners of [u]nits in the condominium shall constitute the Association." The bylaws state that: "Each Unit shall be entitled to one vote." They also state that they "are adopted pursuant to" and "are intended to comply with" the Condominium Act. The bylaws further provide that: "The Association may be incorporated as a New Hampshire voluntary corporation and these By-laws shall serve as the By-laws of said corporation." In February 2007, the Association incorporated as a nonprofit corporation pursuant to the Voluntary Corporations Act.

In 2010, Roberge, through 428 Lafayette, LLC, purchased seven of the condominium units—six residential units and the remaining commercial unit. Almost immediately after Roberge purchased his units, other unit owners began complaining that he was violating the Association's bylaws. Disputes arose concerning his use of his commercial unit, as well as over parking and maintenance issues.

Roberge's mother also owns two of the residential condominium units. She has historically given her voting proxies to Roberge, with the result that he had nine of the fourteen votes at Association meetings. In 2011, Roberge began serving as the Association's president.

In August 2013, the plaintiffs, condominium unit owners, brought this action against the defendants, seeking, among other things, various forms of injunctive relief, including: (1) "the appointment of a custodian or receiver of the Association for the duration of [the] litigation"; (2) the removal of Roberge as the president of the Association; and (3) certain limitations on Roberge's voting rights. Cotrupi also individually filed an action against the defendants relating to, among other things, the use of commercial parking spaces at the Condominium. The trial court consolidated the actions.

On November 18, 2013, following an evidentiary hearing, the Trial Court (McHugh, J.) issued an order granting some of the plaintiffs' requested forms of relief. In its order, the court stated: "If the conditions do not improve then the plaintiffs have the right to petition for further relief from this Court and circumstances at that time might warrant a more severe Court response in terms of the management of the Condominium Association."

In August 2014, the plaintiffs sought further relief from the court, including a finding that "the Association, as a corporation, is to operate in accordance with corporate princip[les] whereby each Director is afforded one vote on issues before the Board of Directors." After a hearing, the trial court ruled that the Association "is governed as a nonprofit corporation [pursuant to the Voluntary Corporations Act], rather than a condominium [under the Condominium Act], for the relatively straightforward reason that it chose" to incorporate. The court ordered the unit owners to "elect five directors" and that "[e]ach member shall have one vote—not one vote per unit." The defendants moved for reconsideration, arguing that the court erred in ruling that the Association is governed by the Voluntary Corporations Act rather than the Condominium Act. The defendants also raised an issue, not addressed in the court's order, concerning Cotrupi's right to use eight of the Condominium's commercial parking spaces not subject to his exclusive use. The court denied the defendants' motion, and this appeal followed.

II. Governance of the Association

The defendants argue that the trial court erred in ruling that governance of the Association is exclusively controlled by the Voluntary Corporations Act rather than the Condominium Act. They contend that: (1) application of the Condominium Act is mandatory; (2) the Association's bylaws prohibit the application of the Voluntary Corporations Act; and (3) application of the Voluntary Corporations Act, to the exclusion of the Condominium Act, will "result in the fundamental destabilization of countless condominiums." The plaintiffs counter that, as an incorporated entity, governance of the Association is exclusively controlled by the Voluntary Corporations Act and the Association's bylaws do not negate the Act's application.

Resolution of this issue requires us to engage in statutory interpretation. "The interpretation of a statute is a question of law, which we review de novo. " Autofair 1477, L.P. v. American Honda Motor Co., 166 N.H. 599, 602, 103 A.3d 1164 (2014) (quotation omitted). "In matters of statutory interpretation, we are the final arbiter of the intent of the legislature as expressed in the words of the statute considered as a whole." Id. at 603, 103 A.3d 1164 (quotation omitted). "We first examine the language of the statute and ascribe the plain and ordinary meanings to the words used." In the Matter of Conant & Faller, 167 N.H. 577, 580, 116 A.3d 561 (2015). "Absent an ambiguity we will not look beyond the language of the statute to discern legislative intent." State v. Mayo, 167 N.H. 443, 450, 113 A.3d 250 (2015) (quotation omitted). "We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add language that the legislature did not see fit to include." Id. (quotation omitted). We interpret statutory provisions "in the context of the overall statutory scheme and not in isolation." Id. (quotation omitted).

The Condominium Act applies "to all condominiums and to all condominium projects." RSA 356–B:2, I (2009). Under the Condominium Act, all condominiums must record "a set of bylaws providing for the self-government of the condominium by an association of all the unit owners." RSA 356–B:35, I (2009). It further provides: "The unit owners' association may be incorporated." Id. The Voluntary Corporations Act governs voluntary corporations and associations, see RSA 292:1 (2010), :4 (2010), and provides that "[t]he bylaws [of a voluntary corporation] may contain any provisions for the regulation and management of the affairs of the corporation not inconsistent with the laws of the state or the articles of agreement," RSA 292:6 (2010).

Neither the Condominium Act nor the Voluntary Corporations Act, however, contains language making it the exclusive Act governing condominium associations that incorporate. Because neither Act contains exclusivity language, we conclude that condominium associations that voluntarily incorporate, as in the present case, are subject to both Acts, including on matters of governance. Although not addressing the precise issue presented in this case, we note that other jurisdictions have utilized both the state's nonprofit corporation act and condominium act in addressing issues that arise with condominium associations incorporated as nonprofit corporations. Cf. Tuscany Grove Ass'n v. Peraino, 311 Mich.App. 389, 875 N.W.2d 234, 237–38 (2015) (per curiam) (concluding that a bylaw provision of a condominium association incorporated as a nonprofit corporation, requiring approval of a supermajority of condominium owners before incurring legal expenses, was not void because, among other reasons, it did not conflict with Michigan's Nonprofit Corporation Act or Condominium Act); Carolina Marlin Club Marina v. Preddy, ––– N.C.App. ––––, 767 S.E.2d 604, 613 (2014) ("In order to determine whether [the] notice [of a meeting given by a condominium association created as a nonprofit corporation] was proper, [the court] look[ed] to both the Condominium Act and the North Carolina Nonprofit Corporation Act."); Shioleno v. Sandpiper Condominiums Council of Owners, Inc., No. 13–07–00312–CV, 2008 WL 2764530, at *3–7 (Tex.Ct.App. July 17, 2008) (determining...