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Scott v. Fall Line Condominium Association

Supreme Court of Maine

April 4, 2019

KIMBERLY B. SCOTT et al.
v.
FALL LINE CONDOMINIUM ASSOCIATION

          Argued: February 5, 2019

          Adam S. Taylor, Esq. (orally), and Andre G. Duchette, Esq., Taylor, McCormack & Frame, LLC, Portland, for appellant Fall Line Condominium Association

          Daniel L. Rosenthal, Esq., and David C. Johnson, Esq. (orally), Marcus Clegg, Portland, for appellees Kimberly B. Scott and Thomas H. Scott

          Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

          GORMAN, J.

         [¶1] Fall Line Condominium Association appeals from a declaratory judgment entered by the Business and Consumer Docket [Mulhern, J.) invalidating all rules and regulations previously promulgated by Fall Line's Board of Directors but not approved by a majority in interest of Fall Line unit owners. The court determined that, as a matter of law, none of the Association's rules and regulations had been adopted properly pursuant to the Association's bylaws, specifically section 5.17. The Association argues that the court erred in granting summary judgment in favor of Kimberly S. Scott and Thomas H. Scott and asserts that (1) the bylaws unambiguously give the Board of Directors the authority to adopt and amend rules and regulations concerning the use and operation of the property and (2) the court's interpretation of section 5.17 of the bylaws would render the bylaws ambiguous, resulting in a genuine issue of material fact. We affirm the court's judgment in part, but vacate the judgment in other respects and remand.

         I. BACKGROUND

         [¶2] The parties agreed to the following facts in a joint statement of material facts. Fall Line comprises 128 condominium units adjacent to Sunday River ski resort in Newry. The Association is a nonprofit organization whose membership consists of all record owners of Fall Line's condominium units. A board of directors is responsible for the day-to-day operations of the Association. Fall Line was organized under the Maine Condominium Act, 33 M.R.S. §§ 1601-101 to 1604-118 (2018), and the Fall Line Declaration of Condominium was adopted on November 19, 1985. Fall Line is governed by its declaration, its bylaws, and certain promulgated rules and regulations. The Board first established "Rules and Regulations Applicable to All Unit Owners" in 1985 and most recently amended the rules in 2017.

         [¶3] The Scotts own a unit at Fall Line and therefore are members of the Association. On February 28, 2017, the Association filed a small claims action against the Scotts in the District Court (Rumford) seeking $38.29 in outstanding interest on the Scotts' account and $500 in attorney fees. In response, the Scotts filed a complaint against the Association and certain members of the Board seeking, inter alia, a declaratory judgment that "all rules, regulations, and limitations affecting Unit Owners and their use of their units and of any common element at Fall Line not approved by a majority in interest by the Unit Owners" are void.[1] The Association and certain members of the Board counterclaimed against the Scotts; the District Court [Carlson, J.) consolidated all causes of action and later transferred the case to the Business and Consumer Docket.

         [¶4] After discovery, both parties moved for partial summary judgment. On June 8, 2018, the court [Mulhern, J.) granted summary judgment in favor of the Scotts on two of their counts, including the count seeking the declaratory judgment invalidating all rules and regulations promulgated by the Board without the approval of a majority in interest of the unit owners.[2] In its judgment, the court declared "all rules and regulations putatively established by the Association are void, pending a vote to garner the approval of a majority in interest of the unit owners at Fall Line" after determining, as a matter of law, that "none of the extant rules and regulations were properly adopted under the Bylaws." After the court issued its combined order on the cross-motions for summary judgment, the Association timely appealed. See 14 M.R.S. § 1851; M.R. App. P. 2B(c)(1).

         II. DISCUSSION

         [¶5] We review a ruling on cross-motions for summary judgment de novo, reviewing the trial court's decision for errors of law and considering the evidence in the light most favorable to the party against whom the judgment has been granted in order to determine whether there is a genuine issue of material fact. See Estate of Frost, 2016 ME 132, ¶ 15, 146 A.3d 118. Summary judgment is appropriate only when "the record reflects that there is no genuine issue of material fact and the movant is entitled to a judgment as a matter of law." Burdzel v. Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573. "A material fact is one that could potentially affect the outcome of the suit," and "[a] genuine issue of material fact exists when the evidence requires a fact-finder to choose between competing versions of the truth." Farrington's Owners' Ass'n v. Conway Lake Resorts, Inc., 2005 ME 93, ¶ 9, 878 A.2d 504.

         [¶6] A condominium association's bylaws and declaration are contracts, cf. id. ¶ 10, and "[t]he interpretation of a contract, including whether or not its terms are ambiguous, is a question of law that we review de novo." Id. If, however, we determine that language in the contract is ambiguous, then the interpretation of that language becomes a question of fact for the factfinder. Id. "Language is considered to be ambiguous if it is reasonably susceptible to different interpretations." Id. (quotation marks omitted).

         [¶7] Bylaws must be "construed in accordance with the intention of the parties, which is to be ascertained from an examination of the whole instrument. All parts and clauses must be considered together that it may be seen if and how one clause is explained, modified, limited or controlled by the others." Am. Prot. Ins. Co. v. Acadia Ins. Co.,2003 ME 6, ¶ 11, 814 A.2d 989 (quotation marks omitted). Generally, "we will avoid an interpretation that renders meaningless any particular provision in the contract." Farrington's Owners'Ass'n,2005 ME 93, ΒΆ 10, 878 A.2d 504 (quotation marks omitted). "The language employed by ...


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