Court Opinion

ID: 8172488
Source: CourtListenerOpinion
Date Created: 2022-09-09 21:23:49.82499+00
Date Added: 2024-06-11T16:39:48.549953
License: Public Domain

Dooley, J.,
¶ 28. dissenting. The flaw in the majority’s decision and rationale lies in its statement, “we agree with the Association that there is something troubling about the discrepancy between the declaration and the deeds and powers of attorney.” Ante, ¶ 22. Rather than acting on what it finds troubling, the majority enables developers to perpetrate a consumer fraud on the condominium purchasers, ironically all in the guise of implementing the Vermont Condominium Ownership Act, which, at its heart, is a consumer protection statute. Cf. Am. Condo. Ass’n v. IDC, Inc., 844 A.2d 117, 128 (R.I. 2004) (“The Rhode Island Condominium Act is a consumer protection statute.”). The majority does so by treating this case as if it were like the out-of-state decisions upon which it relies — that is, as if this case involved a conflict between condominium unit owners, or between unit owners and the condominium owners’ association, over the use and occupancy of property. Instead, this is a conflict between the condominium owners and developers, part of the “rough and tumble that comes with the territory of . . . development rights.” In re Northwood Props., LLC, 356 B.R. 81, 89 (D. Mass. 2006), rev’d, 509 F.3d 15 (1st Cir. 2007). This awareness should affect the resolution of this case and allow the condominium owners to prevail on their claim that developers cannot dilute their share of the common area *214without their consent. I therefore dissent from the majority’s conclusion to the contrary.
¶ 29. The two determinative provisions are as follows. First, the declaration provision states:
[B]y acceptance of deeds of their Units, Unit Owners shall be deemed to have designated and appointed Declarant as their attorney in fact for the sole, limited and exclusive purpose of amending this Declaration in accordance with this section, so that an Amendment filed by Declarant pursuant hereto shall result in the amendment and reduction of such fractional interest without further action or consent by Unit Owners ....
The second provision is found in the deeds of condominium, as well as in substance in the powers of attorney, and reads:
By acceptance of this deed, the Grantees . . . consent to the amendment of the Declaration of Condominium for the purpose of adding additional units, buildings, lands, Limited Common Areas, Common Areas and Facilities, and the resulting alteration of the percentages of undivided interest in accordance with the Declaration and as set forth in a Limited Power of Attorney from Grantees to Grantor. This consent shall inure to the benefit of and shall burden the Grantees’ heirs and assigns, shall run with the land, and shall expire its terms ten years from the date hereof.
The language in these provisions gives rise to a number of points that should be noted here at the outset. First, the provisions are obviously interrelated because they are triggered by the exact same act — acceptance of the condominium unit deed. Further, the language of the deeds refers specifically to “the Declaration” with respect to the alteration of the undivided interests in the common areas.11 Finally, and most importantly for both the majority and this dissent, only the deed contains a temporal provision with respect to the unit owner’s consent.
¶ 30. Also critical in this case, as stated in the majority’s opening paragraph, is that, unlike the cases that the majority *215relies upon, this is a dispute between all or virtually all of the condominium unit owners and developers.12 It is unrelated to the use and occupancy of the existing condominiums. Instead, it is related solely to the power of developers to build new condominium units without the consent of certain unit owners.
¶ 31. The trial court and the majority both adopt the view that the provision in the declaration is irreconcilably inconsistent with the provisions in the deeds,13 and that the declaration trumps and precludes enforcement of the time limit in the deeds. I accept that the declaration would normally trump the provisions of the deeds, although not necessarily in the context of this case, but would hold that here the deed and declaration provisions must be reconciled to give effect to the time limit.
¶ 32. The majority cites a number of cases for the proposition that the declaration trumps the deed provisions, but does not specify the source of the law underlying these cases. Indeed, none of the cited cases involve conflicts between unit deeds and condominium declarations. I acknowledge, however, that the trumping rule proposition is generally provided for in the Vermont Condominium Ownership Act and that here we are enforcing that Act. See generally 27 V.S.A. §§ 1301-1329.14 Specifically, the Act references the various documents that control condominium ownership: “Each apartment owner shall comply strictly with the bylaws and with the administrative rules adopted under them, as either may be lawfully amended from time to time, and with the covenants, conditions and restrictions set forth in the declaration or in the deed to his apartment.” Id. § 1307. The Act specifies the required content of the declaration, id. § 1311, and provisions on phasing and development of additional units, or powers of attorney are not included among that required content. The statute does, *216however, allow the developer to put in the declaration “[a]ny further details in connection with the property which the person executing the declaration may consider desirable to set forth consistent with this chapter.” Id. § 1311(10). One could argue that a provision on phasing and the development of additional units could be viewed as one of these “details.”15 Similarly, the Act specifies the required content of the unit deeds, without mentioning any provisions with respect to further development of new condominium units, and also allows “further details which the grantor and grantee may consider desirable to set forth consistent with the declaration and [the Act].” Id. § 1312(5) (emphasis added). If the majority’s conclusion that the terms of the declaration trump the deed is correct, it is because of the consistency requirement in this latter statutory provision.
¶ 33. While I acknowledge the statutory consistency requirement, I want to be clear that the absence of consistency in this case would not “diminish the effectiveness of the declaration in creating a common interest community,” as the majority fears. Ante, ¶ 23. Creating a common interest community may be the general purpose of a consistency requirement, but it is not applicable to this dispute. If this litigation sought to enforce use and occupancy provisions contained in a deed and different from those in a declaration, the consequence specified by the majority would occur. But this is a dispute between the owners, aligned with the owners’ association, and developers. The condominium declaration is being used as a weapon against the common interest community, not in support of it.
¶ 34. The majority argues that the difference between the parties in this case and those in others where condominium owners are in litigation with each other or where the association is litigating against an owner, is irrelevant — that we must be consistent about whether a declaration provision is trumped by a deed provision, even when the declaration is being used as a weapon against a common interest community. This point is apparently why the majority recognizes that its result is “troubling,” but it inflicts that trouble nonetheless. The majority is wrong in this case.
*217¶ 35. Plaintiffs seek declaratory relief to prevent the Association and condominium owners from interfering with plaintiffs’ development plans. A party who seeks equitable relief “must come to the court with clean hands,” Savage v. Walker, 2009 VT 8, ¶ 10, 185 Vt. 603, 969 A.2d 121 (mem.), and must do equity to seek equity, Blanchard v. Knights, 121 Vt. 29, 37, 146 A.2d 173, 178 (1958). “The very purpose of equity is to exalt the individual circumstances of a case over law’s hard and fast rules.” In re Southland Corp., 160 F.3d 1054, 1060 (5th Cir. 1998); accord Dring v. McDonnell Douglas Corp., 58 F.3d 1323, 1330 (8th Cir. 1995) (“The application of equitable principles is, in essence, relief from the harshness of mechanical rules.”); In re Enlarging, Extending, & Defining Corp. Limits of Brookhaven, 957 So. 2d 382, 385 (Miss. 2007) (en banc) (“The glory of equity does not rest on bright-line tests but rather on a Solomon-like dedication to fairness.”). We must refrain from applying a hard-and-fast rule that leads to inequitable consequences and instead contemplate the equities underlying this case. The balance here clearly weighs in favor of enforcement of the deed provisions. Developer has come into equity with unclean hands and should be denied relief on that basis. The majority’s position that there is “no principled way to allow the deeds to trump the declaration in this case without allowing it in all cases,” ante ¶ 21, ignores the basic principles on which equity jurisdiction is built.
¶ 36. While I disagree with the majority’s holding, assuming an irreconcilable conflict between the declarations and the deeds, my main point is that there is no irreconcilable conflict and we do not have to decide the case as if there were. With that point in mind, I return to how this Court should interpret provisions in two related documents that are allegedly inconsistent. As the majority recognizes, ante, ¶ 12, our overriding goal is to implement the intent of the contracting parties. See R&G Props., Inc. v. Column Fin., Inc., 2008 VT 113, ¶ 17, 184 Vt. 494, 968 A.2d 286. When multiple related documents are entered into as part of the same transaction, as is the case here, they should be harmonized. See Perlbinder v. Bd. of Managers, 886 N.Y.S.2d 378, 381 (App. Div. 2009) (“[Ajgreements executed at substantially the same time and related to the same subject matter are regarded as contemporaneous writings and must be read together as one.” (quotation omitted)); Harrington v. Blackston, 459 S.E.2d 309, 311 (S.C. Ct. App. 1995) (“[The condominium] master deed and allied docu*218ments . . . must be read together, in relation to each other and harmonized, if possible”), vacated due to settlement, 473 S.E.2d 47 (S.C. 1996); see generally Restatement (Second) of Contracts § 202(2) (1981) (“[A]ll writings that are part of the same transaction are interpreted together.”). In harmonizing the documents, we must construe terms, if necessary, against the drafter — in this case, developers. See, e.g., RLS Assocs. v. United Bank of Kuwait PLC, 380 F.3d 704, 712 (2d Cir. 2004) (“Ambiguities are generally interpreted against the drafter.”); Walker v. 90 Fairlie Condo. Ass’n, 659 S.E.2d 412, 416 (Ga. Ct. App. 2008) (“Ambiguities in the declaration must be construed against the drafter”). Further, if the term in the deed is inconsistent with the condominium declaration, the term in the deed is unlawful, as it violates 27 V.S.A. § 1312(5), which provides that “[a]ny further details” set forth in the deed must be “consistent with the declaration.”
¶ 37. The latter point is the critical one here. Under the majority’s rationale, developers had one of two possible intents in drafting the condominium declaration and the deeds. The first is that the ten-year limitation in the deeds was intended to control. The second is that the declaration was intended to control over the deed language. The difficulty with the second possibility is that insertion of contrary, legally ineffective, language in a deed — language that ostensibly creates an important right in the grantee — can be viewed as nothing other than consumer fraud in this context. See 9 V.S.A. § 2453(a) (prohibiting “unfair or deceptive acts or practices in commerce” under Vermont’s Consumer Fraud Act). If developers intended the declaration to control, then the deed language does not in any sense implement the intent of developers. Its only purpose could be to mislead the grantee into believing that he or she had acquired a right, when the right was nullified at the exact moment that it was created. It only adds to the sense of injustice that the unit owner relies upon an explicit, specific, and short statement in the owner’s deed, while developers rely upon a general statement buried in a sixteen-page, single-spaced declaration document. See Berman v. Gurwicz, 429 A.2d 1084, 1088-89 (N.J. Super. Ct. Ch. Div. 1981) (questioning whether plaintiff condominium purchasers can be bound by provisions in “complex and voluminous” documents that conflicted with other representations made by sellers). We should therefore be very reluctant to interpret the documents as implementing an intent that expressly negates the deed language.
*219¶ 38. As noted above, however, we must first attempt to construe the declaration and deed together harmoniously, if possible. If the documents can be read together, then the task of determining which document trumps the other is unnecessary. I believe the condominium documents can be harmonized. The deed provision contains a time limit. The declaration language lacks an explicit time limit, but it does not provide that the grantee’s power of attorney is effective indefinitely — the majority’s construction of the language. If the two provisions were contained in the same document, I think we would all agree that the plain meaning would indicate that a time limit exists despite the ambiguous open-ended statement that did not contain a time limit. This would be a straight-forward application of the maxim that specific language is intended to control over any implication that can be drawn from more broad and general language. See Fairchild Square Co. v. Green Mountain Bagel Bakery, Inc., 163 Vt. 433, 439, 658 A.2d 31, 35 (1995) (“As a matter of contract construction, the specific controls the general.”). The issue, then, is how we treat language contained in interconnected documents that must be read harmoniously.
¶ 39. I think that in the context of this case our approach to the contract construction question is fundamentally the same. The documents here are not only interrelated, but they came into legal force at exactly the same time, involved the same parties, and were part of the same transaction. In such an instance, they should be “treated as one instrument and construed together.” Wing v. Cooper, 37 Vt. 169, 178 (1864); accord Gallagher v. Lenart, 874 N.E.2d 43, 58 (Ill. 2007) (noting the “long-standing principle that instruments executed at the same time, by the same parties, for the same purpose, and in the course of the same transaction are regarded as one contract and will be construed together”); Hilltop Cmty. Sports Ctr., Inc. v. Hoffman, 2000 ME 130, ¶ 16, 755 A.2d 1058 (same). Treating the two documents as part of one contract, I would harmonize them by giving effect to the specific time-limit in the deed over the general implication from the declaration that no time limit exists.
¶ 40. A very similar contract construction issue arose in Morrison v. Marsh & McLennan Cos., 439 F.3d 295, 301-02 (6th Cir. 2006), when the plaintiffs husband applied for life insurance benefits through his employer and died before a dispute over his eligibility was resolved. The two relevant documents describing *220the life insurance plan were the plan certificate that contained no time limit in which to contest an eligibility denial and the employer’s handbook that contained a three-year limitation period. The court applied the limitation period, noting that it had to construe the documents together when there was no conflict between them. Id. It reasoned that there was no conflict because “the Plan documents are merely silent on the limitations issue.” Id. at 302; see also Kearney v. Kirkland, 117 N.E. 100, 103-04 (Ill. 1917) (enforcing time limitation contained in deed even though plat did not indicate a limitation). For the exact same reason, there is no conflict here, and the documents can be harmonized.
¶ 41. The majority’s answer here is that the sky would fall if the provisions were harmonized, essentially the same answer as to the difference in circumstances between this case and the decisions to which it compares. This reaction is premised on the view that the conflicts are “obvious and irreconcilable” and that harmonizing the documents would “open[] up the possibility that every declaration can be unilaterally amended by deed.” Ante, ¶ 18. As Morrison holds, there is no obvious and irreconcilable conflict merely because the meaning ascribed to the declaration is implied and not explicit. The fear that every declaration would be at risk of being trumped by deed language if this dissent’s position were adopted is a gross exaggeration.
¶42. In addition, another part of the condominium declaration language supports this construction. Developers attempted to create the right to dilute the unit owners’ common-area interest in two ways. One way was to create the involuntary powers of attorney at the center of this case. The second way was to create the explicit power to dilute the unit owner’s common-area interest, irrespective of the power of attorney, via the declaration: “[d]eclarant expressly reserves to itself, its successors and assigns, the right to amend this Declaration from time to time so that the Interim and/or Final Percentage Interest of a Unit Owner may be adjusted to reflect the additional Units.” Developers do not rely on this language in this case because the unilateral power to adjust the unit owners’ percentage interest in the common area is plainly unlawful under 27 V.S.A. § 1306(a)-(b). Indeed, the power-of-attorney method for diluting the owners’ common-area interest was clearly intended as a work-around to evade the prohibition of § 1306(b).
¶ 43. What is important to the contract construction issue before us is that developers added a clause applicable only to the direct *221method of adjusting the common-area interests — “which reservation is an express condition of ownership of Units in the condominium and is senior to the conveyance and/or mortgage of such units.” (Emphasis added.) That language immediately precedes the language upon which the majority relies, but is applicable only to the direct amendment method for adjusting the percentage interests in the common area. It does not apply to the power-of-attorney method. Thus, in context, and especially due to its placement in relation to the power-of-attorney language, this statement is an indication that developers did not intend the same effect for the power-of-attorney language in the declaration and that the declaration’s power-of-attorney language could be harmonized with the deed language.
¶ 44. The majority has argued that two additional reasons support its conclusion that the ten-year limit on the power of attorney is ineffective. The first is that the declaration explicitly provides for the phasing of the development. Ante, ¶ 15. The phasing of the development is, of course, the circumstance that required the provision for the powers of attorney in the first instance. The issue before us is not whether the condominium development could be phased, however, but whether the powers of attorney that allow for additions to the condominium that dilute common-area-ownership rights without consent of the owners have a durational limit. A holding that the powers of attorney have durational limits is perfectly consistent with the phasing rights of developers.
¶ 45. I have a similar response to the 1988 amendments to the declaration.16 They provide for a final date of June 30, 2005, after which “no additional land, Buildings, Units or Common Areas and Facilities” could be made subject to the declaration. The majority argues that this overall development cutoff shows that the powers of attorney were intended to last to that date.
¶46. As the majority points out, there were deeds granted between the adoption of the original declaration and the amended declaration, see ante, ¶ 17, and they cannot be construed with respect to a later amendment. Thus, we must confront the contract construction question under the 1985 declaration. Even if the 1988 declaration controls, and of course it does with respect *222to deeds granted after its effective date, the addition of the final development date does not control the contract construction issue. The dispute in this case is not over whether developers can add to the condominium project, but instead whether the powers of attorney have a durational limit and developers must obtain consent under § 1306(b) to dilute the common-area interests after the limit expires. It is possible that the durational limit could expire for some owners and that developers could obtain consent from those owners to proceed. In such a circumstance, it is appropriate to set an overall limit on developers’ development rights, beyond which developers cannot proceed, even under the powers of attorney and the additional consents. For this purpose, many condominium statutes require that condominium declarations contain overall time limits for development. See generally 1A P. Rohan & M. Reskin, Condominium Law and Practice ¶ 54.04[5], at 54-21 (2008).
¶ 47. For the above reasons, I would hold that the language of the condominium declaration and the deeds can be harmonized. I would hold that when they are harmonized the ten-year limit on the power of attorney applies.
¶ 48. There is one final reason to reach the result that the deed provisions control. The owners’ most compelling argument is that the intent of the parties should not be thwarted by a technical error in drafting the documents. This argument starts with the premise that we should assume a benign developer’s intent — that is, to allow a ten-year limit on the deemed powers of attorney — and that the deficiency was in drafting the relevant documents to implement that intent. These circumstances describe a classic case of a waiver. Waiver is an intentional relinquishment of a known right, and it can arise from conduct as well as from expressed words. Lynda Lee Fashions, Inc. v. Sharp Offset Printing, Inc., 134 Vt. 167, 170, 352 A.2d 676, 677 (1976). The record demonstrates that developers were aware of their rights as implemented through the declaration to build the condominium units in phases, but chose to limit those rights to proceed without consent to the time limit expressed in the deed. Waivers of condominium declaration rights have been enforced in other condominium litigation, and there is no reason they should not be enforced here. See, e.g., Hoover & Morris Dev. Co. v. Mayfield, 212 S.E.2d 778, 781 (Ga. 1975) (“The requirements of declarations . . . , although requiring strict compliance, may nevertheless be waived.”); Janasik v. Fair*223way Oaks Villas Horizontal Prop. Regime, 415 S.E.2d 384, 388 (S.C. 1992) (concluding that condominium and management company waived rights under declaration and bylaws).
¶ 49. If we are unwilling to enforce a waiver in this case, we are endorsing conduct that is outside the “spirit of fairness, justness, and right dealing.” Starr Farm Beach Campowners Ass’n v. Boylan, 174 Vt. 503, 507, 811 A.2d 155, 160 (2002) (mem.) (quotation omitted). In this respect, I concur with Justice Mahady’s sentiment, expressed roughly twenty years ago, that “[t]he law should be more solicitous of . . . innocent consumers than of the tortfeasor-developer.” Meadowbrook Condo. Ass’n v. S. Burlington Realty Corp., 152 Vt. 16, 29, 565 A.2d 238, 245 (1989) (Mahady, J., concurring and dissenting). For the foregoing reasons, I respectfully dissent.
¶ 50. I am authorized to state that Judge Joseph joins this dissent.

 The deeds contain further reference to the declaration, stating that “the premises are also subject to and benefited by certain rights of way, easements, covenants, exceptions and reservations specified in the Declaration.”

 The promises were initially made by the original developer, developers’ predecessor in interest. Under Vermont law, a predecessor’s covenants generally run with the land provided that certain requirements are satisfied, as is the case here. See Gardner v. Jefferys, 2005 VT 56, ¶ 6, 178 Vt. 594, 878 A.2d 259 (mem.) (describing necessary conditions for restrictive covenant to run with land). Developers, therefore, stand in the shoes of the original developer and are responsible for covenants made by the original developer at the time of the purchase.

 I use the term “deed” to mean both the deeds provided to unit owners and the powers of attorney given by the first two purchasers. The circumstances with respect to each are the same.

 Like the majority, I refer throughout this opinion to the statutes in effect at the time the 1985 declaration was filed.

 It is a stretch to describe the phasing and power of attorney provisions on which developers rely as “details” or as provisions consistent with the Act, but I will assume that developers could put these provisions in the declaration because there is no prohibition on adding additional provisions.

 The amendment, which is a restatement of the declaration, contains the same language as the original declaration with respect to powers of attorney.