America Condominium Association, Inc. v. Mardo

         Newport County Superior Court (NC 11-234), Melanie Wilk Thunberg, Associate Justice.

          For Plaintiffs: Robert C. Shindell, Esq., C. Alexander Chiulli, Esq.

          For Defendants: John A. Tarantino, Esq., Edmund A. Allcock, Esq., Nicole J. Benjamin, Esq., Joseph Avanzato, Esq., Robert D. Wieck, Esq.

          Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

          OPINION

          William P. Robinson III, Justice.

         The plaintiffs, America Condominium Association, Inc. (America) and Capella South Condominium Association, Inc. (Capella), appeal from a February 25, 2014 judgment^[1] issued after a bench trial in Newport County Superior Court; that judgment provided that the defendants, Stefania M. Mardo, as Trustee of the Constellation Trust-2011 (the Trust) and Harbor Houses Condominium Association, Inc. (Harbor Houses), were liable for breach of contract and for committing a common law trespass. The trial justice further concluded that Count Three of the plaintiffs' complaint, which alleged that the defendants breached restrictive covenants contained in the Goat Island South Condominium Second Amended and Restated Declaration of Condominium (GIS SAR), was moot and that the plaintiffs were not entitled to an award of attorneys' fees and costs.

         The plaintiffs contend on appeal that the trial justice committed the following errors: (1) finding a continuing trespass but failing to issue a mandatory permanent injunction requiring the removal of the trespass; (2) finding Count Three of plaintiffs' complaint to be moot; and (3) failing to award attorneys' fees and costs to plaintiffs in accordance with the GIS SAR. The defendants filed a cross-appeal. In support of the cross-appeal, the Trust argues that it was error for the Superior Court to have found that defendants had breached the GIS SAR and to have found that defendants had committed a common law trespass.^[2]

         For the reasons set forth in this opinion, we affirm the judgment of the Superior Court in part and we vacate that judgment in part.

         I

         Facts and Travel

         This is not the first time this Court has addressed controversies at the Goat Island South Condominium (GIS). In fact, it is the fifth time we have been called upon to quell these seemingly unending disagreements. See IDC Properties, Inc. v. Goat Island South Condominium Association, Inc., 128 A.3d 383 (R.I. 2015); Sisto v. America Condominium Association, Inc., 68 A.3d 603 (R.I. 2013); America Condominium Association, Inc. v. IDC, Inc., 870 A.2d 434 (R.I. 2005); America Condominium Association, Inc. v. IDC, Inc., 844 A.2d 117 (R.I. 2004). We deem it important to reiterate once more that "[w]e are more than persuaded that the [parties to this case] have had their day in court-and then some" and that "[t]he time has come for this litigation to end." IDC Properties, Inc., 128 A.3d at 394 (internal quotation marks omitted). In furtherance of that goal, we refer the interested reader to our previous opinions for a full recitation of the facts, and we confine ourselves to only those facts that are relevant to this appeal.

         For the purposes of this appeal, it is necessary to reiterate the basic structure of the GIS condominiums:

"Goat Island South Condominium is comprised of three sub-condominium residential areas-Harbor Houses Condominium, America Condominium, and Capella South Condominium. Of the 154 total units, there are nineteen stand-alone townhouse residence units located in Harbor Houses Condominium, forty-six residence units in America Condominium, and eighty-nine residence units in Capella South Condominium. Each of these sub-condominiums is governed by a separate association and declaration and must also adhere to the provisions of the master declaration. Likewise, these declarations must comply with Rhode Island's Condominium Act, G.L.1956 chapter 36.1 of title 34." Sisto, 68 A.3d at 606.

         According to the findings of fact by the trial justice in the instant case, the Trust has owned Unit 18 in Harbor Houses since January of 2011. Harbor Houses' declaration makes it clear that the yard which surrounds Unit 18 is designated as a limited common element, which in the instant case means it is "reserved for the use by one or more but fewer than all [u]nits, and intended for the exclusive use" of Unit 18. Id. (internal quotation marks omitted). On April 19, 2011, before this Court's decision in Sisto, 68 A.3d at 603, plaintiffs filed the instant action seeking injunctive relief to bring a halt to the expansion of Unit 18 onto a limited common element-specifically, the yard surrounding Unit 18 on which a foundation had been built by Unit 18's previous owners. The plaintiffs' complaint alleged breach of the GIS SAR, violation of restrictive covenants, common law trespass, and violation of Rhode Island's Condominium Act, G.L. 1956 chapter 36.1 of title 34 (the Act). A bench trial was held on May 12, 17, 27, and 31, June 14, and September 22, 2011. We relate below the salient aspects of what transpired at that trial.

         A

         The Trial Testimony

         1. The Testimony of Bennie Sisto

         As the trial justice's decision in the instant case reflects, Bennie Sisto is the father of trustee Stefania Mardo, and he entered this case as "an additional trustee" prior to the Superior Court's decision.

         Mr. Sisto testified at trial, during which testimony he acknowledged that Unit 18 was being expanded by the addition of exterior walls. However, he further stated that the "original expansion of Harbor Houses Number 18 was obviously back when [the previous owners] had ownership of the property back in 2000, 2001;" he added that his construction was only on the "existing foundation." Mr. Sisto conceded that his expansion of Unit 18 did expand it past its "1988 footprint, " but he reiterated that the expansion was confined to the existing foundation, which was on the property when he purchased it.

         It was Mr. Sisto's testimony that, at the time he purchased Unit 18, the foundation on which he was building was then being used as a "patio and a deck." However, it was his further testimony that the foundation was not intended to be a patio or a deck but, rather, had been part of a "proposed building expansion" by the previous owners. He added that "a previous Court ordered that th[e] foundation be put into the ground" but the parties then "agreed not to complete construction until the Court case ended." Referring to his affidavit and an attached judgment of the Superior Court (entered as an exhibit at trial), Mr. Sisto also testified that it was his belief that the expansion of Unit 18 had been later "expressly authorized" by the Superior Court judgment attached to his affidavit.

         The Superior Court judgment attached to Mr. Sisto's affidavit is dated December 14, 2009 and reflects a decision by a Superior Court justice to the effect that the defendants in that action (which did not include America or Capella) were enjoined from interfering with the right of the previous owners of Unit 18 to proceed with "renovations;" the judgment allowed the "renovations" as laid out in plans issued and submitted to the Harbor Houses Condominium Board in May of 2001. It is also worth noting that trial exhibit 8 was a decision of the GIS Board, dated February 1, 2011, which stated that there was no objection by any of the unit owners to the "plans for Harbor Houses # 18;" there was no assertion that the "proposed improvements, alterations or changes would significantly diminish the water view of such residence units as viewed from the glass doors/windows/balconies of such residence units." Despite the fact that the decision of the GIS Board was dated after the Trust bought the property, that decision is addressed to the previous owners. It was Mr. Sisto's testimony on cross-examination that the plans he used for the expansion of Unit 18 were actually those that were commissioned by the previous owners, and he added that his expansion was smaller than the expansion intended by the previous owners.

         Mr. Sisto's affidavit also stated that "ten (10) of the nineteen (19) Harbor Houses unit owners have expanded over the years, including most recently in 2008, " and he cited specifically to the expansion of Harbor Houses Unit 10 to support the contention that the Trust was within its rights in expanding Unit 18. However, Mr. Sisto did concede at trial that the area he was expanding on was "owned in undivided percentage interest" by the 154 unit owners at GIS and that he did not have the unanimous approval of all 154 unit owners to expand his condominium.

         It was further Mr. Sisto's testimony that, prior to his commencing the expansion of Unit 18, Natalie Volpe, the President of the GIS Board, communicated with him by email regarding his expansion. Her email was entered as an exhibit at trial. The email cited as authority the Newport County Superior Court rulings which this Court eventually reviewed in Sisto, 68 A.3d at 603. (The appeal was still pending before this Court at the time when Ms. Volpe sent the email.) The email contained the following pertinent language:

" * * * [I]f a portion of the limited common element is to be permanently occupied, thereby necessitating a reallocation, than [sic] the unanimous consent of 154 unit owners must be present in order to amend the declaration. Additionally, in accordance with basic property law, it is prohibited to permanently occupy a limited common element to the absolute exclusion of the other 154 property owners without their consent.

" * * * A recent ruling in Newport * * * has resulted in an order for the construction of an addition to an existing house be taken down. The precedent has been established. Please do not take further action on [Unit] 18 * * * at this time as GIS will enforce the [GIS SAR and the Act]."

         Mr. Sisto testified that he understood that email to be the personal opinion of Ms. Volpe, not the opinion of the GIS Board, since "[t]hey did not vote on [it]."

         2. The Remaining Pertinent Testimony at Trial

         Sandra Conca testified at trial that she was the President of America's Board. It was her further testimony that she did not consent to the expansion of Unit 18, and she expressed her belief that a building could not be constructed on Unit 18's yard since it was a limited common element; she added that such expansions would decrease the overall ownership percentage of the common elements of each unit owner. She further stated that at least one owner of a different Harbor Houses condominium had been allowed to expand in the past.

         Edmond McKeown testified that he owned an America condominium and that he did not consent to the expansion of Harbor Houses Unit 18 onto a limited common element; he added that the expansion of Unit 18 greatly increased the size of that unit.

         B

         The Superior Court Decision

         In her August 22, 2012 decision, the trial justice began by noting that plaintiffs' motion for a preliminary injunction had been "advanced to a trial on the merits." The trial justice then proceeded to make findings of fact and credibility determinations. She found Mr. Sisto to be a "very genial, respectful and forbearing gentlem[a]n [who] provided the [c]ourt with considerable information concerning * * * the construction history of unit 18." She noted that he acknowledged that the unanimous consent of 154 unit owners had not been obtained, but she also noted that he had testified that he was not expanding Unit 18 beyond the existing foundation, which had been installed by the previous owners in connection with a planned expansion. The trial justice also noted that Mr. Sisto testified that the expansion consisted of placing exterior walls "'where there were no walls before'" and that he acknowledged that the expansion was altering the boundaries of his unit.

         The trial justice proceeded to find that defendants were acting in violation of § 34-36.1-2.17(d) and § 34-36-7(b) of the Act, which statutory provisions require unanimous consent of all unit owners with respect to an amendment of the GIS SAR allowing for expansion by changing of the boundaries of any unit or the allocated interests of a unit; she added that the GIS SAR provided that it was subject to the Act and that, therefore, the provisions of the GIS SAR must be interpreted to conform with the requirements of the Act. Accordingly, she found that defendants had violated the GIS SAR as well as the above-cited statutory provisions.

         At that juncture, the trial justice proceeded to state: "If the [c]ourt was permitted to view this controversy through a purely equitable lens, a different outcome could be considered." She noted that the expansion of Unit 18 did not result in any view obstruction for any of the America or Capella condominiums. She added that nine other Harbor Houses condominiums had been expanded "without objection or challenge from America or Capella." (Internal quotation marks omitted.) She then granted plaintiffs' request for injunctive relief precluding further expansion of Unit 18 but declined to grant plaintiffs' request that the court issue a mandatory injunction ordering the Trust to remove all construction on Unit 18 that expanded it beyond its "'pre-expansion footprint.'" She further declined to award plaintiffs attorneys' fees or court costs.

         On February 25, 2014, a final judgment was entered. That judgment held: (1) that the expansion provisions of § 2.3 of the GIS SAR violated the Act and could not be enforced; (2) that defendants had breached §§ 2.3(a)(i)(A) & (M) and § 11.1(b) of the GIS SAR; (3) that no judgment need enter on Count Three of plaintiffs' complaint, which alleged a violation of restrictive covenants, since the trial justice deemed that issue to be moot; and (4) that defendants had committed a common ...