Berish v. Bornstein

437 Mass. 252
CourtMassachusetts Supreme Judicial Court
DecidedJune 28, 2002
StatusPublished
Cited by88 cases

This text of 437 Mass. 252 (Berish v. Bornstein) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berish v. Bornstein, 437 Mass. 252 (Mass. 2002).

Opinion

Cordy, J.

The plaintiff trustees of the Trust of the Cotuit Bay [254]*254Condominium (unit owners’ association)5 commenced an action against the developer of the Cotuit Bay Condominium (condominium development), Stuart Bomstein (Bomstein); the original trustees of the unit owners’ association, including Jamila, Morris, and Paul Bomstein (Bomstein trustees)6; and the general contractor of the condominium development, Cotuit Bay Condominium, Inc. (CBC).7,8 In their complaint, the trustees alleged, inter alla, that Bomstein breached the implied warranty of habitability by improperly constructing the condominium development, and that he and the Bomstein trastees breached various duties by failing properly to manage the unit owners’ association and care for the common areas while they were original trustees.9

After thirteen years of litigation, judgment was entered in the Superior Court in the trustees’ favor on breach of fiduciary duty and breach of contract claims. Both parties have appealed. We granted the trustees’ application for direct appellate review. The principal issue we decide is whether a warranty of habitability is implied in the sale of a newly constructed condominium unit or in the transfer of newly constructed common areas to an organization of unit owners. We conclude that such a warranty is implied in both types of transactions.

1. Factual background. In addition to being an original trustee of the unit owners’ association, Bomstein was the principal beneficiary and trustee of the Cotuit Bay Condominium Trust [255]*255(nominee trust),10 which owned both the land in Mashpee on which he built the condominium development11 and all of the condominium units until they were individually sold. Constructian of the condominium development began in 1981, and as the units were completed and sold between 1981 and 1985, Bomstein amended the master deed to expand the condominium development from the thirty-two original units to a total of sixty-two units.

On October 30, 1981, the unit owners’ association was created. The declaration of trust, which sets out the trustees’ rights and responsibilities, conveyed “[a]ll rights and powers in and with respect to the common areas and facilities of [the condominium development]” to the trustees “to exercise, manage, administer and dispose of the same and to receive the income therefrom for the benefit of the owners of record.” It also required that the trustees set and assess common expenses for the upkeep of the common areas as follows:

“At least thirty days prior to the commencement of each fiscal year of this trust and within thirty days after the execution hereof with respect to the portion of a fiscal year then remaining, the Board of Tmstees shall estimate the common expenses expected to be incurred during such fiscal year together with a reasonable provision for contingencies and reserves, and after taking into account any undistributed common profits from prior years, shall determine the assessment to be made for such fiscal year. The Trustees shall promptly render statements to the Unit Owners for their respective shares of such assessment, according to their percentages of interest in the common areas and facilities (or 25% thereof with respect to unoccupied Units owned by Declarant as above provided), and such statement shall, unless otherwise provided herein, be due and payable within thirty days after the same are rendered.”

[256]*256While Bomstein was a trastee of the unit owners’ association, the nominee trust owned a number of unsold units on which it should have paid $36,223 in annual assessments. It was not billed for, nor did it pay, those assessments to the unit owners’ association. However, during this same period of time, CBC provided all of the landscaping and maintenance at the condominium development and paid a substantial portion of the condominium development’s operating expenses, including the insurance, electric, and telephone bills. In total, CBC expended $69,293 for the benefit of the condominium development, $33,073 more than the nominee trust would have paid for the units that it owned.

Between 1982 and May, 1985, serious problems were identifled in the common areas of the condominium development, including problems with the sliding doors, chimneys, skylights, decks, and roofs. None of the skylights, chimneys, or sliding doors had been installed with flashing, as required by the State building code (code), resulting in water leakage and damage to the sheet rock and other materials on the inside of the individual units. In addition, none of the outside decks was constructed in accordance with the code, causing their supporting columns to deteriorate prematurely and rot. No action was undertaken by Bomstein and the other original trustees of the unit owners’ association to cure these and other problems.12

Pursuant to the declaration of trust, the original trustees of the unit owners’ association had staggered terms that expired between 1982 and 1985.13 As the terms of these trustees expired, the vacancies on the board of the unit owners’ association were presumably filled pursuant to the provisions of the declaration of trust. Bomstein, the last remaining original trustee, completed his term as trustee in luly, 1985.

2. Procedural history. The trustees filed their complaint in the Land Court in February, 1987, naming Bomstein as the sole [257]*257defendant. They set forth claims for misrepresentation, failure properly administer the unit owners’ association, and failure to pay common charges for individual units that the nominee trust owned. The trustees filed an amended complaint adding a claim for violation of G. L. c. 93A, and a second amended complaint adding negligence claims against CBC and various subcontractors who had built the condominiums. In April, 1988, a judge in the Land Court ordered the case transferred to the Superior Court.

In October, 1988, the trustees filed their third amended complaint, which set forth the following claims against Bomstein:

(1) negligence, individually and as a trustee of the unit owners’ association, based on his failure to exercise due care in the design and construction of the condominium (Count I);
(2) misrepresentation, individually, based on statements about the condominium that the unit owners relied on to their detriment (Count IX);
(3) breach of the implied warranty of habitability (Count X);
(4) breach of fiduciary duty, individually, for his failure to ensure that the condominium units were properly constructed, that all known deficiencies were addressed, that “all that had been represented was provided,” and adequately, duly, and competently to administer the condominium (Count XI);
(5) breach of contract and violation of the Massachusetts Condominium Act, individually and as a trustee of the unit owners’ association, for failure to pay the plaintiff trastees the proportionate share of common expenses due on the units (Count XII);
(6) violation of G. L. c. 93A, individually (Count XHI).

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Bluebook (online)
437 Mass. 252, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berish-v-bornstein-mass-2002.