Court Opinion

ID: 4384151
Source: CourtListenerOpinion
Date Created: 2019-04-04 15:06:18.163422+00
Date Added: 2024-06-11T14:50:15.587648
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                       Reporter	of	Decisions	
Decision:	 2019	ME	50	
Docket:	   BCD-18-245	
Argued:	   February	5,	2019	
Decided:	  April	4,	2019	
	          	
Panel:	    SAUFLEY,	C.J.,	and	ALEXANDER,	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                           KIMBERLY	B.	SCOTT	et	al.	
                                     	
                                    v.	
                                     	
                    FALL	LINE	CONDOMINIUM	ASSOCIATION	
	
	
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	
2	

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	
                                                                                                           3	

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	

   1		The	Scotts	simultaneously	filed	a	motion	to	consolidate	the	Association’s	small	claims	action	

with	their	complaint.			

   2		The	court	also	granted	a	summary	judgment	in	favor	of	the	Scotts	with	respect	to	count	IV	of	

their	amended	complaint—a	request	for	a	declaratory	judgment	that	the	Scotts	have	permission	to	
access	the	Association’s	email	list—and	granted	a	summary	judgment	in	favor	of	the	Association	on	
two	 counts	 in	 the	 Scotts’	 amended	 complaint	 alleging	 that	 the	 Association	 and	 named	 directors	
violated	 the	 Maine	 Consumer	 Credit	 Code,	 9-A	M.R.S.	 §	8-509	 (2018),	 and	 the	 Federal	 Fair	 Debt	
Collection	Practices	Act,	15	U.S.C.S.	§§	1692	to	1692(p)	(LEXIS	through	Pub.	L.	No.	115-442).		With	
respect	 to	 the	 Association’s	 counterclaim,	 the	 court	 granted	 a	 summary	 judgment	 in	 favor	 of	 the	
Scotts	on	all	counts.		The	present	appeal	concerns	only	the	court’s	grant	of	a	summary	judgment	for	
the	declaratory	judgment	invalidating	all	rules	and	regulations	of	the	Association.			
4	

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	
                                                                                              5	

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,	¶	10,	878	A.2d	504	(quotation	marks	omitted).		“The	

language	employed	by	the	parties	is	to	be	construed	to	give	effect	to	the	plain	
6	

meaning	 of	 the	 words	 used.”	 	 City	 of	 Augusta	 v.	 Quirion,	 436	 A.2d	 388,	 392	

(Me.	1981).			

	     [¶8]	 	 The	 language	 at	 issue	 in	 this	 case	 is	 section	 5.17	 of	 the	 bylaws,	

entitled	“Rules	of	Conduct.”		It	states,		

     Rules	 and	 regulations	 concerning	 the	 use	 of	 the	 Units	 and	 the	
     Common	Areas	and	facilities	may	be	promulgated	and	amended	by	
     the	Board	of	Directors	with	the	approval	of	a	majority	in	interest	of	
     the	Unit	Owners.	
     	
(emphasis	 added).	 	 The	 Scotts	 assert	 that	 the	 word	 “may”	 indicates	 that	 the	

Board	is	permitted	to	promulgate	and	amend	rules	and	regulations	concerning	

the	use	of	the	units,	common	areas,	and	facilities,	but	that,	when	the	Board	does	

so,	it	must	be	with	the	approval	of	a	majority	in	interest	of	the	unit	owners.		The	

Association,	 on	 the	 other	 hand,	 argues	 that	 the	 Board	 has	 the	 unfettered	

authority	 to	 promulgate	 and	 amend	 such	 rules	 and	 regulations	 regardless	 of	

whether	 the	 unit	 owners	 approve,	 but	 that	 the	 Board	 may	 seek	 to	 have	 its	

actions	approved	by	a	majority	in	interest	of	the	unit	owners.		

	     [¶9]	 	 As	 always,	 we	 start	 with	 the	 language	 of	 the	 contract	 itself	 to	

determine	the	contract’s	meaning.		See	Farrington’s	Owners’	Ass’n,	2005	ME	93,	

¶	10,	878	A.2d	504;	Am.	Prot.	Ins.	Co.,	2003	ME	6,	¶	11,	814	A.2d	989.		Here,	the	

placement	of	the	word	“may”	and	the	context	in	which	it	is	used	determines	the	

plain	meaning	of	the	word	and	the	contract.		See	City	of	Augusta,	436	A.2d	at	
                                                                                    7	

392.		Because	“may”	appears	before	the	phrase	“be	promulgated	and	amended	

by	the	Board	of	Directors	with	the	approval	of	a	majority	in	interest	of	the	Unit	

Owners,”	we	would	read	the	word	as	modifying	that	entire	phrase,	unless	doing	

so	creates	an	absurd	result.		See	id.		As	written,	the	section	limits	the	Board’s	

authority	 to	 promulgate	 or	 amend	 “[r]ules	 of	 [c]onduct,”	 i.e.	 “[r]ules	 and	

regulations	 concerning	 the	 use	 of	 the	 [u]nits	 and	 the	 [c]ommon	 [a]reas	 and	

facilities	.	.	.	.”				

         [¶10]		The	Association,	however,	asserts	that	“may”	should	not	be	read	as	

modifying	the	language	it	precedes	and	argues	that	“may”	imposes	no	limitation	

on	the	Board’s	authority	to	promulgate	or	amend	rules	of	conduct.		In	support	

of	its	argument,	the	Association	points	to	section	2.03(e)	of	the	bylaws,	entitled	

“Powers	and	Duties	[of	the	Board	of	Directors].”		Section	2.03	states,	

         The	Board	of	Directors	shall	have	the	powers	and	duties	necessary	
         for	 the	 administration	 of	 the	 affairs	 of	 the	 Condominium	
         Association	and	shall	do	all	such	acts	and	things	except	as	by	law	or	
         by	the	Declaration	or	by	these	Bylaws	may	not	be	delegated	to	the	
         Board	of	Directors	by	the	Unit	Owners.		Such	powers	and	duties	of	
         the	Board	of	Directors	shall	include,	but	shall	not	be	limited	to,	the	
         following:	
         	
         	     .	.	.	.	
         	
               (e)	 Adoption	 and	 amendment	 of	 rules	 and	 regulations	
               covering	the	details	of	the	operation	and	use	of	the	Property.	
         	
8	

(emphasis	added).		Although	we	agree	that	section	2.03	does	grant	the	Board	

the	“powers	and	duties”	to	adopt	and	amend	“rules	and	regulations	covering	

the	details	of	the	operation	and	use	of	the	[p]roperty,”	we	note	that	section	2.03	

includes	 a	 limiting	 clause.	 	 That	 clause—italicized	 above—explains	 that	 the	

Board’s	 authority	 may	 be	 curtailed	 or	 held	 in	 check	 by,	 among	 other	 things,	

provisions	 in	 the	 bylaws.	 	 Section	 5.17	 is	 just	 such	 a	 check.	 	 Because	 we	 are	

careful	not	to	render	any	language	in	a	contract	superfluous,	we	read	section	

5.17	to	unambiguously	limit	the	Board’s	broad	authority	under	section	2.03(e)	

to	adopt	and	amend	rules	and	regulations,	at	least	those	rules	and	regulations	

of	conduct	concerning	the	use	of	the	units,	common	areas,	 and	facilities.		See	

Farrington’s	Owners’	Ass’n,	2005	ME	93,	¶	10,	878	A.2d	504;	Am.	Prot.	Ins.	Co.,	

2003	ME	6,	¶	11,	814	A.2d	989.		

	      [¶11]		The	Business	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.”		Because	section	5.17	

deals	exclusively	with	“rules	of	conduct,”	i.e.,	rules	and	regulations	concerning	

the	use	of	the	units,	common	areas	and	facilities,	and	because	section	2.03(e)	

gives	the	Board	broad	authority	to	enact	rules	covering	the	general	“operation	

and	 use”	 of	 the	 property,	 the	 Business	 Court’s	 declaratory	 judgment	
                                                                                                     9	

invalidating	 all	 rules	 and	 regulations	 established	 by	 the	 Association	 is	

overbroad.3		See	Am.	Prot.	Ins.	Co.,	2003	ME	6,	¶	11,	814	A.2d	989	(affirming	the	

general	principle	that	contract	language	must	be	construed	in	accordance	with	

the	 intention	 of	 the	 parties	 and	 that	 all	 clauses	 of	 a	 contract	 “must	 be	

considered	 together	 that	 it	 may	 be	 seen	 if	 and	 how	 one	 clause	 is	 explained,	

modified,	limited	or	controlled	by	the	others”).		The	limitations	found	in	section	

5.17	are	applicable	exclusively	to	the	rules	and	regulations	concerning	the	use	

of	the	units,	common	areas,	and	facilities,	and,	therefore,	the	only	existing	rules	

and	 regulations	 that	 are	 “void”	 are	 those	 concerning	 the	 use	 of	 the	 units,	

common	areas,	and	facilities.	

	       [¶12]		If	the	parties	cannot	agree	on	which	rules	and	regulations	concern	

the	general	“operation	and	use”	of	the	property	and	which	concern	the	“use”	of	

the	 units,	 common	 areas,	 and	 facilities,	 or	 cannot	 undertake	 successfully	 the	

process	required	to	approve	any	previously	adopted	rules	or	regulations,	they	

may	 have	 to	 ask	 the	 court	 to	 determine	 which	 of	 the	 rules	 and	 regulations	

previously	 promulgated	 or	 amended	 by	 the	 Board	 are	 rules	 and	 regulations	

concerning	the	use	of	the	units,	common	areas,	and	facilities.		We	sincerely	hope	

    3		The	Scotts	conceded	at	oral	argument	that	section	5.17	applies	only	to	rules	of	conduct	and	that	

the	Business	Court	overshot	the	mark	by	invalidating	all	Association	rules.			
10	

that	 such	 a	 use	 of	 judicial	 resources	 will	 not	 be	 necessary	 to	 make	 common	

sense	determinations	that	should	be	within	the	parties’	own	capabilities.	

	     [¶13]		To	summarize,	we	declare	that	section	5.17	unambiguously	states	

that	the	Board,	in	order	to	promulgate	or	amend	rules	of	conduct	concerning	

the	use	of	the	units,	common	areas,	and	facilities,	must	seek	approval	from	a	

majority	in	interest	of	unit	owners.		There	is	no	such	limitation	on	other	types	

of	rules	or	regulations	governing	the	general	operation	and	use	of	the	property.		

We	do	not	pass	judgment	on	what	constitutes	a	rule	of	conduct	that	dictates	the	

use	of	the	units,	common	areas,	or	facilities.		If	the	parties	insist	on	prolonging	

this	litigation,	the	question	of	what	is	or	is	not	a	rule	of	conduct	regarding	the	

use	of	a	unit,	common	area,	or	facility	would	be	a	question	of	fact	appropriate	

for	a	factfinder.	

      The	entry	is:	
                  Judgment	 affirmed	 in	 part	 and	 vacated	 in	 part.		
                  Declaratory	 judgment	 voiding	 rules	 and	
                  regulations—not	 approved	 by	 a	 majority	 in	
                  interest	of	unit	owners—that	concern	the	use	of	
                  units,	 common	 areas,	 and	 facilities	 is	 affirmed.		
                  Declaratory	 judgment	 as	 to	 all	 other	 rules	 and	
                  regulations	vacated.		Remanded,	if	necessary,	for	
                  further	 consideration	 of	 which	 rules	 and	
                  regulations	are	rules	and	regulations	of	conduct	
                  that	 govern	 the	 use	 of	 units,	 common	 areas,	 or	
                  facilities.	
                                                                                     11	

	
	     	       	    	      	       	
	
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	
	
	
Business	and	Consumer	Docket	docket	number	CV-2017-26	
FOR	CLERK	REFERENCE	ONLY