Ratner v. Vill. Square at Pico Condo. Owners Ass’n, Inc., No. 91-2-11 Rdcv (Teachout, J., Aug. 28, 2012) 

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STATE OF VERMONT 

SUPERIOR COURT CIVIL DIVISION 

Rutland Unit Docket No. 91-2-11 Rdcv 

MARCIA RATNER, 

 Plaintiff 

 v. 

VILLAGE SQUARE AT PICO CONDOMINIUM OWNERS ASS’N, INC., et al., 

 Defendants 

 

DECISION 

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

 This matter is before the Court on Defendants’ Motion for Summary Judgment, 

filed May 1, 2012. Oral argument was held on the motion on July 19, 2012. Defendants 

were represented by Robert R. McKearin, Esq. Plaintiff Marcia Ratner represented 

herself. 

Facts 

As Plaintiff Marcia Ratner is the nonmoving party, these facts are presented in the 

light most favorable to her. Plaintiff’s suit is based on the alleged failure of Defendants, 

including the Village Square at Pico Condominium Owners Association, Inc. 

(“Association”) and three members of the Association’s Board of Directors (“Board”), to 

maintain adequate reserve funds for the maintenance of the buildings comprising the 

Village Square at Pico (“Village Square”) condominium development. The failure to 

maintain these reserve funds allegedly resulted in the need for special assessments. 

Plaintiff asserts that this failure supports claims under a variety of legal theories including 

negligence, fraud, breach of fiduciary duty, and bad faith. 

Plaintiff owns a unit in the Village Square condominium development. Plaintiff 

purchased her unit on November 21, 2001. As part of the sale process, Plaintiff received a 

Certificate of Resale, a copy of the Condominium Declaration (“Declaration”), a copy of 

the Association’s bylaws, and a balance sheet addressing the Association’s finances on 

November 17, 2001. The Declaration expressly provides authority for the Board to levy 

special assessments if there are inadequate funds available to cover the repair of common 

areas. Under the Declaration, unit owners are obligated to pay these special assessments, 

and the Association has the authority to initiate a foreclosure action if they are not paid. 
2

 On December 7, 2004, the Board notified the unit owners including Plaintiff that 

a special assessment was to be levied for roof repair work, and would be in effect from 

January of 2005 through June of 2007. The need for special assessments continued, 

however, and they did not end in 2007. 

In 2007, several unit owners including Plaintiff were without hot water for an 

extended period of time. Due to this hot water shortage as well as her opposition to the 

special assessments, Plaintiff stopped paying all of her condominium assessments in 

October 2007. In response, the Association brought a foreclosure action against Plaintiff. 

On December 28, 2010, this Court awarded the Association $38,061.08 in damages Ms. 

Ratner and awarded Ms. Ratner a setoff in the amount of $3000 to compensate for the 

deprivation of hot water over a 10 month period. 

Plaintiff initiated the present action by filing a Complaint on February 14, 2011. 

The Complaint asserts that the Association as well as two current and one former member 

of the Association’s Board had harmed her by failing to fund the reserve account in an 

adequate manner so as to prevent the need for special assessments to pay for 

condominium repairs. 

 

Analysis 

Defendants now move for summary judgment. They present two major lines of 

argument. First, they argue that because Ms. Ratner’s claims are undifferentiated from 

the claims of other unit owners, she does not have standing to bring this suit. Second, 

they argue that her claims are time barred by the statute of limitations. 

Standing 

 Ms. Ratner brings this suit as an individual unit owner in the Village Square 

condominium developments against its Association and multiple Association Board 

members. To have standing to pursue such a direct action, Ms. Ratner must allege a harm 

that is separate and distinct from other unit owners or a wrong involving a contractual 

right of hers that exists independently of any right of the corporation. See Bovee v. 

Lyndonville Sav. Bank & Trust Co., 174 Vt. 507, 508 (2002) (mem.). 

Ms. Ratner alleges that the Association failed to maintain adequate reserve funds 

and that this failure necessitated the levying of special assessments. These claims 

necessarily involve all of the unit owners at Village Square. The special assessments, 

which Ms. Ratner argues were unnecessary, were imposed equally on all unit owners. 

Thus, the alleged injury stemming from the failure to maintain proper reserves is not 

unique to Ms. Ratner. As such, Ms. Ratner lacks standing to bring this direct action. 

Ms. Ratner attempts to avoid this conclusion by arguing that the failure to 

maintain adequate reserves “uniquely benefited or harmed each homeowner.” The basis 

for this argument appears to be that longstanding unit owner derived a greater benefit 
3

from the lower Association fees before the imposition of the special assessments in 

January 2005 and that unit owners, such as Ms. Ratner, who purchased their units at a 

later date were harmed by the pre-existing policy of low Association fees that led to 

inadequate reserve funds and the corresponding imposition of special assessments. This 

argument ignores that the fact that Ms. Ratner, at a minimum, is similarly situation to any 

unit owners who purchased their units after she purchased hers. According to the 

undisputed evidence, at least 60 units have been sold since 2004, and additional units 

were likely sold between 2001 and 2004. These new unit owners all stand in the same 

shoes as Ms. Ratner with regard to bearing the burden of the special assessments without 

receiving the benefit of the years of ownership with low Association fees. 

The theoretical uniqueness of the precise moment in time when Ms. Ratner 

purchased her unit cannot give her standing to bring this suit. In Bovee, the Vermont 

Supreme Court considered and rejected the argument that different shareholders in a 

corporation suffered unique injuries because of the differing lengths of time that they 

held their shares. See Bovee v. Lyndonville Sav. Bank & Trust Co., 174 Vt. 507, 509 

(2002) (mem.) As in Bovee, the individual unit owners here all suffered the same general 

injury if the Association failed to maintain adequate reserves. The fact that the individual 

dollar amount of the injury may have varied from owner to owner is not sufficient to 

allow Ms. Ratner to bring this direct action. 

Ms. Ratner’s claims of breach of fiduciary duty are also insufficient to give her 

standing to sue. She asserts that because each director owes a duty of undivided loyalty 

that any breach of this duty creates an individual injury as to each homeowner. This is an 

incorrect understanding of Vermont law. 

The fiduciary duty imposed on directors of a corporation, which is the same duty 

imposed on the Association Board members, requires that they act “in good faith, with the 

care an ordinarily prudent person in a like position would exercise under similar circumstances, 

and in manner that they reasonably believe[] to be in the best interest of the corporation.” 

11B V.S.A. § 8.30. The best interest of the corporation (i.e. the Association) may not 

always be synonymous with the best interest of all the shareholders (i.e. each individual 

unit owner). When these interests conflict, it is clear that a director owes the fiduciary 

duty to the corporation as a whole and not the individual shareholder. See, e.g., Poliquin 

v. Sapp, 390 N.E.2d 974, 977 (Ill. App. Ct. 1979) (holding that any breach of a fiduciary 

duty by directors would result in injury to the corporation and shareholders as a whole). 

Therefore, any breach of fiduciary duty by the Board members here injured the entire 

Association as opposed to an individual unit owner such as Ms. Ratner. The alleged 

injury is thus collective and does not provide a basis for Ms. Ratner, as one of many 

Village Square unit owners, to bring her suit. 

 Statute of Limitations 

 Defendants argue that even if Ms. Ratner had standing to pursue her suit, it is 

barred by the statute of limitations. This suit is governed by the general six-year statute of 

limitations applicable to civil actions. 12 V.S.A. § 511. Ms. Ratner filed her Complaint 

on February 14, 2011. Therefore, if her claims accrued anytime before February 14, 
4

2005, her suit is time barred. The Vermont Supreme Court has set out the general 

principles regarding the accrual of claims as follows: 

 [A] cause of action is generally said to accrue upon the discovery 

of facts constituting the basis of the cause of action or the existence of 

facts sufficient to put a person of ordinary intelligence and prudence on 

inquiry which, if pursued, would lead to the discovery. Thus, the statute of 

limitation begins to run when the plaintiff has notice of information that 

would put a reasonable person on inquiry, and the plaintiff is ultimately 

chargeable with notice of all the facts that could have been obtained by the 

exercise of reasonable diligence in prosecuting the inquiry. 

Kaplan v. Morgan Stanley & Co., 2009 VT 78, ¶ 7, 186 Vt. 605, citing Agency of 

Natural Resources v. Towns, 168 Vt. 449, 452 (1998).. As the quotation makes 

clear, the time when the claim accrued is not judged by Ms. Ratner’s subjective 

discovery of the facts but rather by an objective standard based on when a 

reasonable person would have discovered the relevant facts. 

 Defendants argue that the latest possible date that Ms. Ratner would have 

been put on inquiry notice was in December 2004. At that point, Ms. Ratner had 

actual notice that a special assessment would be levied to cover roof repairs. This 

is precisely the injury that she claims that she has suffered: the Association’s 

reserve funds were inadequate to pay for the roof repairs, so a special assessment 

needed to be levied. Although it is more than conceivable that Ms. Ratner’s claim 

actually accrued earlier, such as when she received the financial documentation 

accompanying the purchase of her unit in November 2001, showing the amount of 

available reserves, the Court concludes that the present claims accrued no later 

than December 2004 when Ms. Ratner received actual notice of the particulars of 

the special assessment for roof repairs. 

 Nevertheless, Ms. Ratner argues that a single special assessment was not 

sufficient to put her on notice that the reserves may have been inadequate. She 

notes that the special assessment was originally scheduled to end in 2007, yet the 

special assessments have continued beyond that date. She contends that it was not 

until the 2007 combination of this failure of the special assessments to end and 

her hot water outage that she should have been aware of her potential claims 

against Defendants. Ms. Ratner’s argument misapprehends the nature of her 

claims. The crux of her suit is not that she was unfairly charged for any one 

needed repair, but that the Association failed to maintain adequate reserves to 

cover all necessary repairs. The accrual of the suit thus turns on when a 

reasonable person would be put on notice that the reserves were potentially 

insufficient to cover the necessary repairs. 

At the latest, a reasonable person would be on notice of this problem at the 

latest at the point when the first special assessment was actually assessed in 

December of 2004, because this is the point when the potential injury became a 
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reality for owners. Although Ms. Ratner could not know the full extent of all 

possible future special assessments at this time, the inability to calculate all 

damages does not stop the statute of limitations from running. See Fritzeen v. 

Gravel, 2003 VT 54, ¶ 14, 175 Vt. 537 (mem.) (holding that the statute of 

limitations began running when plaintiffs had sufficient information to be aware 

of defendant’s negligence even though all potential damages could not yet be 

calculated at that point). Even if Ms. Ratner had standing to bring this direct 

action against Defendants, her suit is time barred because it was not filed within 

six years of December 2004, when, at the latest, her claims accrued.1

 

 

ORDER

 

Defendant’s Motion for Summary Judgment is granted

 

 Dated at Rutland this 27th day of August, 2012. 

 ____________________________ 

 Hon. Mary Miles Teachout 

 Superior Judge 

 

1

 Based on the Court’s disposition of the standing and statute of limitations issues, the Court need not reach 

Defendants’ contention that this suit must be dismissed as to Defendant Richard Fowler because of his 

death during the pendency of this litigation.