IN THE SUPREME COURT OF THE STATE OF WASHINGTON

CAROLYN ROBBS BILANKO, an ) individual, ) No. 91247-5 ) Respondent, ) ) v. ) EnBanc ) BARCLAY COURT OWNERS ) ASSOCIATION, a Washington non-profit ) Corporation, ) Filed 

### APR 28 2016 ) Appellant. )



### ___________________________

### ) GoNZALEz, J.-The Barclay Court Owners Association amended its condominium declaration to restrict the number ofunits that could be leased at one time. Afterthis amendment was passed and recorded, Carolyn Bilanko purchased a condo at Barclay Court. Fouryears later, Bilanko challenged the amendment as improperlypassed. We must decide whether Bilanko's challenge is timelyunderthe Washington Condominium Act (WCA), chapter 64.34 RCW. We hold that it is not timely and reverse.Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5 BACKGROUND Barclay Court is a condominium owners' association for a 28-unit residential condominium development in Seattle, Washington. Barclay Court was organizedunder the WCA, chapter 64.34 RCW, 1 and recorded its residential condominium declaration (Declaration) on May2, 2001. Section 9.2 ofthe 2001 Declaration stated that there was "no restriction on the right ofany [o]wnerto lease or otherwise rent its [u]nit." Clerk's Papers (CP) at 111. Seven years later, Barclay Court amended its Declarationto limit leasing with the stated intent of"preserving and enhancing the value ofthe Condominium and ofthe individual units." Id. at 204, 206. This amendment, "Amendment No. 1,"provided that only sevenunits couldbe leased at any time. Underthe Declaration, the "imposition ofany restrictions on leasing of[u]nits" required only a 67 percent vote to pass. Id. at 194.2 However, any changes to the "uses to which any [u]nit is restricted" required a 90 percent vote to pass. Id. at 194. The Declaration does not define the term "use," and it is not immediately apparent which vote total

1The Washington Condominium Act governs condominium complexes created after July 1, 1990. Filmore LLLPv. Unit OwnersAss 'n of Centre Pointe Condo., 184 Wn.2d 170, 171-72,355 P.3d 1128 (2015) (citing Shorewood W. Condo. Ass'n v. Sadri, 140 Wn.2d 47, 52, 992 P.2d 1008 (2000)). 2 Section 5.5 ofthe Declaration indicates voting is allocated equallyto eachunit, with each unit entitled to one vote. 2Bilanko v. Barclay Court OwnersAss'n, No. 91247-5

was needed to approve the amendment.3 We do know that the amendment received at least 67 percent ofthe vote on October 27, 2008.4 The association treated the amendment as effective. Itwas properly recorded on November 3, 2008. A year later, Bilanko purchased a two-bedroom unit in Barclay Court. Her recorded statutory warranty deed indicated the property was subject to Barclay Court's Declaration and Amendment No. 1. At some point, Bilanko decided she wanted to lease herunit. Unfortunately, sevenunits were alreadybeing leased at the time. In March 2013, Bilanko asked to beput on the leasing waiting list. She was number five on the waiting list. In September 2013, Bilanko requested a hardship waiverunder section 9.2.6.5 ofthe amendment to allow herto lease herunit. BarclayCourt denied Bilanko's request. Bilanko persisted. She notified Barclay Court in October 2013 that she intended to lease herunit beginning in November and would

sue unless Barclay Court revised Amendment No. 1. Counsel for Barclay Court responded that Bilanko would violate the Declaration ifshe leased out

3We are aware ofthe recurring, unsettled question ofwhether the definition of"use"in the WCA includes the leasing or renting ofa unit. The legislature maywell wish to clarifythe WCA onthis point. 4While the exact vote count is not in the record beforeus, the amendment, as signed by the President ofBarclay Court, states itpassed with at least 67 percent ofthe vote. 3Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5 her unit and that Barclay Court had the right to evict any unauthorized tenants. Bilanko sued Barclay Court on July 14, 2014, alleging that the leasing amendment was invalid because it had not received sufficient votes to change the "uses to which any [u]nit is restricted" under RCW 64.34.264 and the Declaration. CP at 1-7. Barclay Court moved for partial summary judgment, arguing that Bilanko's action was barredbythe one-year statute oflimitations under RCW 64.34.264(2) and an identical one-year limit in the Declaration. Bilanko moved for declaratory relief, arguing that the amendment was not correctly adopted, that it was void ab initio, and that her challenge was notbarredbythe statute oflimitations. The trial courtjudge initially granted Barclay Court's motion and denied Bilanko's. It found that although Bilanko wouldhave prevailed on the merits had she filed a timely challenge, the statute oflimitations under RCW 64.34.264(2) barred her claim. Shortly afterward, the trialjudge stayed its order and certified the

case for interlocutory review under RAP 2.3(b)(4). Meanwhile, Division Three ofthe Court ofAppeals held that a challenge to an amendment that was not properlypassedunderthe WCA is not barred bythe one-year limitation in RCW 64.34.264(2). Club Envy of Spokane, LLCv. Ridpath Tower Condo. Ass 'n, 184 Wn. App. 593, 601, 337

4Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5 P.3d 1131 (2014). Afterthe Club Envy decision, Bilanko moved the trial court to vacate its previous orders and enterjudgment for her. Based on Club Envy, the trial court granted her motion, declared Barclay Court's amendment invalid, and entered summaryjudgment for Bilanko. The parties stipulated to dismissal ofthe remaining claims withoutprejudice under CR41(a)(l)(A) to facilitate review. Barclay Court timely sought direct review in this courtunder RAP 4.2(a)(4) as a fundamental and urgent issue ofbroadpublic importance. We granted review. ANALYSIS Barclay Court argues that Bilanko's challenge to Amendment No. 1is time barred under RCW 64.34.264(2). We agree. Under a plain reading of the statute, a challenge to an allegedly invalid amendment cannot be brought

more than one year after the amendment is recorded. Unlike in Club Envy, equity does not demand the time limit for this challenge betolled. Whether a claim is time barred is a legal question we review de novo. Goodman v. Goodman, 128 Wn.2d 366, 373, 907 P.2d 290 (1995). RCW 64.34.264(2) provides that "[n]o action to challenge the validity ofan amendment adopted bythe association pursuant to this section maybe brought more than one year after the amendment is recorded." Section 25.1

5Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5 ofthe Declaration contains nearly identical language as the WCAbarring challenges more than one year after the recording ofan amendment. The plain language ofRCW 64.34.264(2) bars challenges to the validity ofan amendment brought more than one year after recording the amendment. 5 Since the statute does not define "validity," we look to a dictionary to determine its ordinary meaning. State v. Gonzalez, 168 Wn.2d 256, 263, 226 P.3d 131 (20 1 0) (citing Estate of Haselwood v. BremertonIce Arena, Inc., 166 Wn.2d 489, 498, 210 P.3d 308 (2009)). "Valid" is defined

as "[l]egally sufficient; binding." BLACK'S LAWDICTIONARY 1784 (10th ed. 2009). This time bar, then, is intended to prevent challenges to whether an amendment is legally sufficient orbinding that are brought more than a year after recording the amendment. Here, Bilanko is challenging the legal sufficiency ofthe amendment. She argues that the amendment is "invalidbecause it did not receive the level ofowner approval required under the WCA." Resp't Bilanko's Appellate Br. at 10. Under RCW 64.34.264(2), Bilanko had one year from

5Theparties dispute whetherthis timebar operates as a statute oflimitations or a statute ofrepose. A statute oflimitationbars a plaintifffrom bringing an already accmed claim after a specificperiod oftime has passed; a statute ofrepose, however, terminates a right ofaction after a specified time, even ifan injuryhas not yet occurred. 1000 Virginia Ltd. P'ship v. Vertecs Corp., 158 Wn.2d 566, 574-75, 146 P.3d 423 (2006) (quotingRice v. Dow Chern. Co., 124 Wn.2d 205, 211-12, 875 P.2d 1213 (1994)). We need not decide between the two as theresult is the same in this case. 6Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5 November 3, 2008, when Barclay Court recorded the amendment, to bring her challenge. Bilanko did not challenge the validity ofthe amendment until 2014. Bilanko's challenge is time barredunder the plain language ofRCW 64.34.264(2). Relying on Club Envy, Bilanko argues that the time bar only applies to amendments that were passed "pursuant to," or "in compliance with" the requirements ofRCW 64.34.264. Resp't Bilanko's Appellate Br. at 31 (citing Club Envy, 184 Wn. App. at 593). Adopting her approach would require us to considerthe merits ofa challenge before determining whether the time bar applies-an approach we are reluctant to adopt in this case. In contrast, it is easy to see whythe court took that approach in Club Envy. There, the unit owners alleged the condo association president, who had been convicted offraud inunrelated cases at the time ofsummaryjudgment, had fraudulently filed amendments decreasing the allocated interests ofeach unit owner. Club Envy, 184 Wn. App. at 597-98. Nothing in the opinion suggests that any vote was held, and the unit owners were not aware ofthe amendment until after the amendment was recorded. 

### !d. at 602. While not specificallyreaching (but hinting strongly) whether in fact the amendments had been fraudulently filed, the Court ofAppeals held that a challenge to the "validity ofthe amendment as not being properlypassed bythe association

7Bilanko v. Barclay Court OwnersAss'n, No. 91247-5 pursuant to the WCA is not barredbyRCW 64.34.264(2)'s one-year limitation." Id. at 601. Club Envy dealt with a strikingly different issue than what is present in this case. There, it appears the condo association president committed fraud byrecording an amendment that he did not have the legal authorityto record without the consent ofany ofthe otherunit owners. The court concluded the amendment was void ab initio,6 or "void from its inception." Club Envy, 184 Wn. App. at 600-01. Actions that exceed the decision maker's authority are generally void. See, e.g., S. Tacoma Way, LLCv. State, 169 Wn.2d 118, 123, 233 P.3d 871 (2010) (indicating that a government contract is void only where the government entity "hadno authority to enterthe contract in the first place"); seeIn rePers. Restraint of Thompson, 141 Wn.2d 712,719-23, 10 P.3d 380 (2000) (holdingjudgment and sentence invalid where court had no authority to convict defendant ofa nonexistent crime); cfIn re DisciplinaryProceedingAgainst Hammermaster, 139 Wn.2d 211, 219, 985 P.2d 924 (1999) (discussing municipaljudge's lack ofauthorityto impose unauthorized sentences). These types ofchallenges can generallybemade outside ofa statutorytime

6 An agreement or contract is "void ab initio" ifit "seriously offends law orpublicpolicy, in contrast to a contract that is merely voidable at the election ofone partyto the contract." BLACK'S, supra, 1805 (lOth ed. 2009). 8Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5 bar. Club Envy, 184 Wn. App. at 601; accordS. Tacoma Way, 169 Wn.2d at 124 ("Ifthe transaction was truly void, as our cases recognize, it would be subject to challenge and invalidation at any time, perhaps years later."); see alsoAllstateIns. Co. v. Khani, 75 Wn. App. 317, 323-24, 877 P.2d 724 (1994) ("Voidjudgments maybe vacated regardless ofthe lapse oftime." (citingIn reMarriage of Leslie, 112 Wn.2d 612, 618-19, 772 P.2d 1013 (1989))). In essence, Bilanko asks us to hold that any legal error committed by a condominium association that changes a declaration renders the change void and challenges exempt from the WCA time bar. Itis true that condominium associations are organized as corporations, and corporations must act in accordance with any formalities "prescribedbyits charter, orbythe general law." Twisp Mining & Smelting Co. v. Chelan Mining Co., 16 Wn.2d 264, 294, 133 P.2d 300 (1943); RCW 64.34.300. Itis also true that when a corporation acts beyond its corporatepowers or its actions offend public policy, those actions are void. Twisp, 16 Wn.2d at 293-94. But ifa corporation fails to observe some statutoryrequirement while acting within its corporate powers, the act is "voidable only, and is valid until avoided, not void until validated." Id. at 294 (quoting 19 C.J.S. Corporations§ 968 (1940)). Actions that fail to comply with statutoryrequirements are

9Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5 generallynot void unless the legislature has authorized such a penalty. See Way v. Pac. Lumber & Timber Co., 74 Wash. 332, 333, 133 P. 595 (1913) (articulating rule that "acontract which violates a statutoryregulation of business is not voidunless made so bythe terms ofthe act"); see also Yakima LodgeNo. 53 v. Schnieder, 173 Wash. 639, 642-43,24 P.2d 103 (1933) ("The ordinance did not provide that contracts made in violation thereofshouldbe void."); accordAllison v. Medicab Int'l, Inc., 92 Wn.2d 199, 203, 597 P.2d 380 (1979) (noting failure to comply with statutory requirements to register franchise did not render franchise agreement void). In this case, however, there is nothing in the record to suggest that Barclay Court committed fraud, seriously offended public policy, or exceeded its legal authority in passing the amendment. Accordingly, the amendment is not void ab initio. Barclay Court followed the procedures set out in article 25 ofits Declaration: a majority oftheboard ofdirectors voted to submit the amendment for owner approval, all owners were notified ofthe proposed amendment in writing, and at least 67 percent ofthe owners approved the amendment. Barclay Court acted within the statutory authority it has under RCW 64.34.264(5) to prepare, execute, record, and certifythe amendment. Nothing in RCW 64.34.264 suggests that the legislature intended to make amendments not passed with the required supermajority

10Bilanko v. Barclay Court OwnersAss'n,No. 91247-5 void and subject to challenge at any time. It strains credulityto believe that it would not make such a draconian consequence explicit in the statute. We need not decide what vote threshold was necessary to enact Amendment No. 1. Regardless ofthe percent required to pass the amendment, it was, at most, voidable. Challenges to voidable amendments must be made within the one-yeartime bar set out in RCW 64.34.264(2). To hold otherwise would render the time barmeaningless, for unit owners could challenge amendments years afterpassage. A statutorytime baris a "'legislative declaration ofpublic policy whichthe courts can do no less than respect,"' with rare equitable exceptions. CostMgmt. Servs., Inc. v. City of Lakewood, 178 Wn.2d 635, 651, 310 P.3d 804 (2013) (quoting J.M Arthur & Co. v. Burke, 83 Wn. 690, 693, 145 P. 974 (1915)); Millay v. Cam,

135 Wn.2d 193,206,955 P.2d 791 (1998) (discussing predicates for equitable tolling ofstatutory time limits). Unlike in Club Envy, where it appears the amendments were fraudulently filed, no grounds for equitable tolling appear here. Bilanko purchasedher condo with Barclay Court over a year afterthe amendment had been voted on bythe unit owners, passed, and recorded. She was on constructive, ifnot actual, notice at the time ofpurchase that her condo unit

11Bilanko v. Barclay Court OwnersAss 'n, No. 91247-5

was subject to a leasing restriction. 7 Bilanko did not have to purchase a condo subject to a leasing restriction. As the Declaration does not impose any restraints on alienation, Bilanko is free to sell herunit at any time. Accordingly, we hold that Bilanko's challenge to the amendment is time barred under RCW 64.34.264(2). 8
CONCLUSION We hold that Bilanko's challenge to the declaration amendment is barredbythe one-year limitationunder RCW 64.34.264(2). We reverse the trial court's summaryjudgmentruling in favor ofBilanko and remand the

case back to the trial court for further proceedings consistent with our opmwn.

7 Washington Practice is instmctive onthis point: "Obviouslythe purchaser ofa condominium unit should review in detail the existinguse restrictions

.... The investigation is an important one for the purchaser, butitis mainly a practical and personal, and not a legal, problem." 18 WILLIAM B. STOEBUCK.AND JOHN W. WEAVER, WASHINGTON PRACTICE: REAL ESTATE§ 12.10, at 53 (2d ed. 2004). 8 RCW 64.34.455 grants courts the discretion to award attorney fees to the "prevailing party." Barclay Court is theprevailingparty, and we therefore award them reasonable attorney fees under RAP 18.1. 12Bilanko v. Barclay Court OwnersAss'n, No. 91247-5

WE CONCUR:

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