Title: Alpine Haven Property Owners Assn., Inc. v. Deptula

State: vermont

Issuer: Vermont Supreme Court

Document:

Alpine Haven Property Owners Assn., Inc. v. Deptula (2002-035); 175 Vt. 559;
830 A.2d 78

2003 VT 51

[Filed 04-Jun-2003]

                                 ENTRY ORDER

                                 2003 VT 51

                      SUPREME COURT DOCKET NO. 2002-035

                             JANUARY TERM, 2003

  Alpine Haven Property Owners	       }	APPEALED FROM:
  Association, Inc.	               }
                                       }
      v.	                       }	Franklin Superior Court
                                       }
  Edward Deptula, Bertrand and         }        
  Joseph Emmett, David Orrock,         }        DOCKET NO. S 468-97 Fc
  Frederick and Laura Snyder,	       }	
  Deborah Upshall, Esther Verheist,    }
  and Susan White	               }
                                                Trial Judge: Edward J. Cashman

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Defendants Edward Deptula and Bernard and Joseph Emmett,
  homeowners in the Alpine Haven development, appeal a summary judgment order
  to pay three years of overdue fees, plus interest and costs, for road
  maintenance and other services rendered by plaintiff Alpine Haven Property
  Owners Association, Inc. (the Association).  Defendants argue that the
  trial court erred by (1) entering judgment against defendant Deptula in the
  full amount claimed based on the doctrine of collateral estoppel; (2)
  applying the Uniform Common Interest Ownership Act of 1994 (UCIOA), 27A
  V.S.A. §§ 1-101 to 4-120, in resolving the dispute against the other
  defendants; (3) dismissing defendants' accord and satisfaction defense and
  consumer fraud counterclaim; and (4) improperly granting the Association
  summary judgment.  We affirm in part, reverse in part, and remand.

       ¶  2.  This case began as a collection action filed by the
  Association against a small group of homeowners, including defendants on
  appeal, for fees owed for three annual assessment periods (from November 1,
  1996 to October 31, 1999).  The dispute, however, goes back much further
  than that.  The Alpine Haven development was founded in the 1960s and, at
  the time of this dispute, included approximately eighty units, mostly
  chalets.  Pursuant to deed covenants, the original developer, Alpine Haven,
  Inc., provided defendants with garbage removal and street lighting, and
  maintained roads within the development, in return for a "reasonable annual
  fee."  The developer later constructed a swimming pool, tennis courts, and
  other recreational facilities to which individual homeowners could
  subscribe for a separate fee.
   
       ¶  3.  In the late 1970s, fees for deeded services began to
  increase, leading to more than ten lawsuits between the developer and
  certain homeowners over the reasonableness of the fees.  In one of those
  actions, Deptula sought a declaratory judgment in Franklin Superior Court
  that the developer had breached the deed covenants and that the fees
  assessed by Alpine Haven, Inc. over the previous five years were excessive. 
  In its 1992 decision, the court held that a common scheme existed for the
  maintenance of street lighting and rights-of-way, and thus Deptula was
  obligated to contribute rateably to these services, although he was not
  obligated to pay for optional services such as garbage removal and private
  driveway plowing.  The court found the $1,200 per year charged by the
  developer to all lot owners was reasonable.  However, the court allowed
  Deptula to subtract the average costs of driveway plowing and garbage
  removal, since he did not receive those services, and found that the fair
  and equitable fee for the remaining services was $1,050 per year.  For
  future years, the court required that the percentage increase assessed
  against Deptula must be equal to the percentage increase for all other lot
  owners in the community, and warned that Deptula could become liable for
  litigation expenses if he refused to pay.  The litigation continued,
  however, and in 1996, in one of six small claims actions between Deptula
  and Alpine Haven, Inc., the Orleans Superior Court ordered Deptula to pay
  $1,102.50 per year - a five percent increase over the 1992 superior court
  judgment.  This increased amount was also assessed against all other lot
  owners in the community receiving the same services.

       ¶  4.  That same year a majority of the community's homeowners
  formed the Alpine Haven Property Owners Association, Inc., and contracted
  with the soon-to-retire developer to purchase and assume ownership of the
  development's common lands, roads, and recreational facilities and to
  provide all deeded and recreational services.  Although membership was
  initially granted to all homeowners in the development, some homeowners,
  including defendants, opted out of the Association.  As a result, during
  the period in dispute (November 1, 1996 to October 31, 1999), nonmembers
  were provided deeded services only - garbage removal, street lighting, and
  road maintenance and snow removal - while members were provided all deeded
  services plus access to recreational facilities.  Nonmembers were billed a
  base fee as established by the 1992 and 1996 Deptula judgments, plus an
  annual increase based on the Consumer Price Index, and, since 1998, a pro
  rata share of payments on a Federal Emergency Management Agency (FEMA) loan
  to repair flood-damaged community roads.  Members were billed a pro rata
  share of all expenses remaining after the nonmembers' fee assessment was
  subtracted from the annual budget.
   
       ¶  5.  Since the Association took over on November 1, 1996,
  defendants have refused to pay the full assessment.  In 1997, the
  Association sued to collect, initiating this case.  Defendants
  counterclaimed and moved for summary judgment, alleging, inter alia,
  unreasonably high fees, accord and satisfaction, and violation of the
  Vermont Consumer Fraud Act, 9 V.S.A. §§ 2451-2480g.  The Association then
  cross-moved for summary judgment to dismiss all counterclaims.  The trial
  court issued two decisions.  In its first decision, the court dismissed all
  of Deptula's counterclaims and granted summary judgment against Deptula for
  the full amount claimed, plus costs and interest, on the grounds that the
  1992 and 1996 judgments precluded him from relitigating the reasonableness
  of the fee assessments.  The court also dismissed all counterclaims raised
  by the remaining defendants, but held that triable issues remained with
  respect to the affirmative defense of accord and satisfaction.  The court
  ordered an evidentiary hearing on two questions: (1) the defense of accord
  and satisfaction for defendants other than Deptula, and (2) the
  Association's compliance with the UCIOA's requirements for common
  assessments as provided in 27A V.S.A. § 3-115.  The court specifically held
  that the Association did not have to prove the reasonableness of its fees
  at the hearing.

       ¶  6.  After the hearing, the court issued a second decision,
  determining that there was no genuine issue of material fact that the
  Association had not substantially complied with the UCIOA, and that the
  fees were therefore valid.  The court did state, however, that

    [t]he defendants' underlying defenses attack the reasonableness of
    the rate structure for the fees claimed.  Nothing in the factual
    presentation infers that the rate structure is not reasonable.  To
    the contrary, repeated judicial determinations have reached that
    conclusion.  In addition [to] the Uniform Common Ownership Act of
    1994, the plaintiff may rely upon those decisions to support a
    finding of reasonableness.  The defendants' response claims that
    if given time and enough records they could fashion a more
    reasonable rate structure.  As noted in the prior finding of
    December 7, 2000, they seek veto over the rate structure.  They
    have [not] (FN1) demonstrated the existence of any genuine issue
    of material fact on this issue.
         
       ¶  7.  The court issued judgment for the Association without
  directly mentioning the accord and satisfaction defense and granted
  judgment, labeled "summary judgment," in favor of the Association.  Shortly
  thereafter, the court issued judgment against all defendants in the full
  amount claimed, plus costs and interest, and, in Deptula's case, attorney
  fees.  Defendants Deptula and the Emmetts subsequently filed the instant
  appeal.

       ¶  8.  In reviewing a grant of summary judgment, (FN2) we use the same
  standard as the trial court, and affirm the granting of a motion for
  summary judgment if there are no genuine issues of material fact and the
  moving party is entitled to judgment as a matter of law.  Springfield
  Hydroelectric Co. v. Copp, 172 Vt. 311, 313,