Fisher v. Shipyard Village Council of Co-Owners, Inc.

760 S.E.2d 121, 409 S.C. 164
CourtCourt of Appeals of South Carolina
DecidedJune 25, 2014
DocketAppellate Case No. 2012-213634; No. 5241
StatusPublished
Cited by8 cases

This text of 760 S.E.2d 121 (Fisher v. Shipyard Village Council of Co-Owners, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fisher v. Shipyard Village Council of Co-Owners, Inc., 760 S.E.2d 121, 409 S.C. 164 (S.C. Ct. App. 2014).

Opinion

KONDUROS, J.

The Shipyard Village Council of Co-Owners, Inc. (the Council) appeals the circuit court’s grant of partial summary judgment to owners of condominiums within the development in the case involving faulty windows and sliding doors. The Council argues it did not have a duty to investigate, the business judgment rule should have applied, and a jury could have found it did not breach any duty. We affirm in part, reverse in part, and remand.

FACTS/PROCKDURAL HISTORY

The condominium development Shipyard Village Horizontal Property Regime (Shipyard Village) in Pawleys Island was established in 1982 pursuant to the recording of the Master Deed. The Council was incorporated to administer the affairs in accordance with the Bylaws through a Board of Directors (the Board). Shipyard Village was built in two phases. Phase I was approved for final occupancy in 1982 and contained two buildings, A and B. Phase II was submitted to condominium ownership in 1998 and was comprised of Buildings C and D.

Section 3.6(c) of the Master Deed provides that a unit’s balcony doors including its frame and “window glasses, screens, frames, and casings” are part of each unit. Section 6.1 of the Bylaws provides the manager or the Board is responsible for the maintenance, repair, and replacement of the common elements. Section 6.2 of the Bylaws specifies that unit owners (Co-owners) are responsible for the maintenance and repair of their units. Section 5.6 of the Master Deed states maintenance, repair, and replacement of the common elements are the Board’s responsibilities “except in the case of the negligence of a Co-owner ..., and in the event of such negligence, such expenses of a portion thereof may be assessed as an individual assessment.” Additionally, section [171]*17112.1 of the Master Deed indicates that if regime property is damaged due to “neglect, willful act[,] or abuse” of a Co-owner and insurance proceeds are insufficient to cover the cost of the damage, the deficiency amount “shall be charged to such Co-owner as an individual assessment.” The Bylaws state in section 6.4 that all maintenance, repair, and replacement expenses are common expenses except when those expenses are not fully reimbursed by insurance proceeds and are necessitated by the failure of a Co-owner to perform the maintenance required by the Bylaws or by the willful act, neglect, or abuse by a Co-owner, in which case they will be charged to the Co-owner as an individual assessment. The Master Deed does not list window flashing as one of Co-owners’ responsibilities but window frames and casings are included as Co-owners’ responsibilities.

Over the years, Buildings A and B experienced leaks at the windows and balcony doors. In 1993, Procon Waterproofing, Inc., which had waterproofed the buildings in 1990, informed a management company that following its preliminary inspection of the concrete structural slabs of Buildings A and B, it recommended “a structural engineer further evaluate the cracking and spalling [that] is occurring in the pre-cast slabs and beams.” In 1994, Procon found that all the work it completed in 1990 was performing as intended with no problems. It noted that for the ocean-front windows, “the metal end stop bead associated with the stucco system which was installed during the original construction over each floor band are beginning to deteriorate and rust.” The Council had Procon replace the corroded metal casing beads.

At the June 15, 1999 Board meeting, the Board decided to “notify all the [Co-]owners and inform them that they are responsible for their threshold and window frame on their unit.” The property manager sent a letter dated August 11, 1999, to all Co-owners in Buildings A and B stating “the waterproofing of the balcony thresholds and windows are the responsibility of the unit owners.” The letter provided Co-owners could waterproof their balcony thresholds and windows for $737.50. In 1999, Henderson Waterproofing performed some stucco and concrete repairs to Buildings A and B. Bobby Warner, the Council’s maintenance supervisor at that time, observed the work and did not believe the damage [172]*172to the building was as severe as Henderson did and did not think an engineer was needed to assess the buildings.

In 2002, the Council hired McGee Consulting Associates to study the windows for Buildings A and B. It determined some of the windows leaked when sprayed by a hose. However, the hose testing failed to comply with the published standards for window leak testing. The hose test indicated “water channels down both sides of the windows, which starts at the top floor windows and works its way to the ground. The water intrusion had caused some of the wood framing to deteriorate due to wood-rot.” During the investigation, McGee discovered some of the windows had been replaced after Hurricane Hugo, in 1989, and appeared to be residential instead of commercial and prefabricated instead of custom made. Because the windows were prefabricated, they were smaller than the opening and wood framing had been installed to fill the gaps. The replacement windows were also less thick than the original windows. An attorney for the Board noted issues with the statute of limitations in pursuing any action for deficiencies in the replacement windows and the original developer had filed bankruptcy in 1993.

The following year, the Council hired Keystone Construction to examine the leaks at the windows and it determined the water was leaking through the stucco instead of the windows. Keystone informed the Council the lack of window flashing was part of the cause of the leaking. It further found the windows were improperly sized and poorly installed and stucco had been used to fill the gaps around the windows.

In 2004, the owners of a unit in Building B, Ben and Katie Morrow, were having water intrusion problems, and in 2005, they replaced their windows. They continued to experience leaks afterwards and hired an architect and an engineer to investigate the cause of the leaking. The architect found “there is water migration through the exterior wall that is not related to the window sill, jamb[,] or header.” The new site maintenance supervisor, Richard Bennett, looked into the issue and found sealant joint failures at the window-stucco interface along with cracked stucco could have been causing the problems. The Morrows’ engineer reported at a board meeting in 2006 that repairing one window would not solve the [173]*173leak issue and an entire vertical stack of windows needed to be removed, flashed, and replaced at the same time.

Because the Board was concerned about the uniformity of new windows, complying with codes, stucco being damaged during replacement, individual owners’ ability to procure competent contractors, and the need to replace entire stacks at the same time, in 2006, it considered amending the Master Deed to include windows and sliding doors as common elements. The Board received a proposal from Pro-Tec Finishes, Inc. to replace all of the windows in Buildings A and B for a total of $2.48 million. At the annual members’ meeting on April 15, 2006, 71.94% of the Co-owners voted on whether to amend the Master Deed to include the window and sliding doors. To pass the amendment, 66.68% was needed to vote in favor of it, but only 63.59% voted for it. The Board determined ninety units had voted in favor of the amendment, eleven had voted against it, and thirty-nine had not voted. The Council decided to leave voting open for thirty days to allow the Co-owners who did not voted at the meeting or by proxy to vote.1

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Cite This Page — Counsel Stack

Bluebook (online)
760 S.E.2d 121, 409 S.C. 164, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fisher-v-shipyard-village-council-of-co-owners-inc-scctapp-2014.