Hillside Villas Condominium Association, Inc. v. Bottaro Development Company

177 A.3d 456
CourtCommonwealth Court of Pennsylvania
DecidedJanuary 16, 2018
Docket615 C.D. 2017; 616 C.D. 2017
StatusPublished
Cited by3 cases

This text of 177 A.3d 456 (Hillside Villas Condominium Association, Inc. v. Bottaro Development Company) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hillside Villas Condominium Association, Inc. v. Bottaro Development Company, 177 A.3d 456 (Pa. Ct. App. 2018).

Opinion

OPINION BY

JUDGE SIMPSON

In these consolidated cases, both parties appeal from a final judgment of the Court of Common Pleas of Dauphin County 1 (tri■al court). The trial court held that the Mervin E.S. Resnick and Joyce K. Resnick Irrevocable Trust (Trust) was a declarant as that term is defined by the Pennsylvania Uniform Condominium Act (PUCA). 2 The trial court thus found the Trust jointly and severally liable, along with the condominium developer, to Hillside Villas Condominium Association, Inc. (Association) for the cost of repairs and completion of the common elements of the condominium property. The trial court awarded damages to the Association, but in an amount less than the damages to which the parties stipulated.

The Trust appealed the determination of its declarant status. The Association cross-appealed the trial court’s reduction of the stipulated damages amount. Upon review, we affirm in part, and vacate and remand in part.

I. Background

The Association is a non-profit condominium association comprised of the unit owners of Hillside Villas Condominium. The Trust owned a tract of real property in Susquehanna Township, Dauphin County (Township). In 2001, the Trust entered into an Agreement of Sale (Agreement) to convey part of the land to Bottaro Development Company (Developer).

The Agreement contemplated development of the purchased land into a condominium. Developer did not pay the purchase price at the time of executing the Agreement, and the Trust did not transfer title to the property at that time. Instead, the parties agreed that the Trust would receive payment in a series of settlements as units were built. The Agreement entitled the Trust to receive an additional payment of $25,000 beyond the original purchase price for each unit Developer constructed above 24 units. The Agreement also gave the Trust the unilateral option to void the Agreement if Developer failed to sell at least four units per year or if the Township did not approve the parties’ land development plan. Nothing in the Agreement stated that the Trust was retaining only a security interest in the contemplated condominium development.

Developer and the Trust together submitted a Preliminary/Final Land Development Plan (the Plan) to the Township. The Township approved the Plan, and it was recorded in the office of the Recorder of Deeds of Dauphin County. The Plan' identified the Trust as the owner of the property and Developer as the equitable owner.

The Trust and Developer jointly executed and recorded the Declaration for Hillside Villas, a Condominium (Declaration) identifying both the Trust and Developer as the declarant. The associated Declaration Plat (Plat) and a series of nine' subsequent recorded amendments to the Declaration all identified the Trust and Developer as the declarant. Importantly, nothing in the Declaration, Plat, or amendments stated that the Trust held only a security interest. To the contrary, the Declaration specifically represented to the public that Developer and the Trust ■ were building and creating the condominium.

The Public Offering Statement for Hillside Villas likewise identified the Trust and Developer as the declarant. Significantly, in the Public Offering Statement, the declarant (Developer and the Trust) provided express warranties relating to construction of the units. Again, nothing in the Public Offering Statement stated that the Trust held only a security interest in the property or that the Trust was" not a declarant for purposes of the express warranties.

As the units were constructed, the Trust and Developer exeéúted a deed for each unit and an Assignment of Special Declar-ant Rights (Assignment) for each group of units. Each deed named the Trust as a grantor and co-declarant. Each deed also referred to the relevant Assignment. Each Assignment related to a group of units and the limited common elements associated with those units. Also, each Assignment identified the Trust as the assigning de-clarant and Developer as the successor declarant. In each, the Trust expressly retained all declarant rights not assigned.

Notably, the Trust never executed an Assignment regarding the last units, Building H, Units 3 and 4, or the limited common elements associated with those units. Further, the record contains no indication that the Trust ever assigned its declarant rights regarding the general common elements such as the street, sidewalks, curbing, and stormwater management system, many of which were the subject of claims for completion and repairs.

Developer never completed construction of many of the common elements. Others were defective and required extensive repair. The Association sued Developer and the Trust, seeking to recover the cost of the needed completion and repairs.

' The Trust asserted a cross-claim against Developer for indemnification. Developer stipulated to: (1) entry of judgment against it and in favor of the Association on the complaint; (2) entry of judgment against it and in favor of the Trust on the cross-claim; and, (3) damages in an amount to be proven at trial, as to which Developer agreed to offer no defense.

The main focus of the parties’ dispute at trial was whether the Trust was a declar-ant as that term is defined by PUCA, 68 Pa. C.S. § 3103. The Association relied' on evidence identifying the Trust as a declar-ant in recorded documents including the Declaration, Plat, Public Offering Statement, and deeds. The Association also asserted that the Assignments did not divest the Trust- of ah its interest in the common elements. T?he Trust countered that its retention of legal title and its attendant identification as a declarant in recorded documents merely reflected its security interest in the property, supporting its right to payment of the purchase price by Developer.

The Association offered evidence that it had already expended $42,700 on stormwa-ter issues and the common street. The Association presented expert evidence that the additional cost to complete the necessary construction and repairs would be $863,285. Thus, the Association presented evidence of total damages in the amount of $905,985, The Trust stipulated to the damages amount as presented in the Association’s evidence. See Reproduced Record (R.R.) at 340a.

After a bench trial, the trial court found the Trust was a declarant under PUCA. The trial court entered judgment in favor of the Association and jointly and severally against the Trust and Developer in the amount of $669,865. Both parties appealed to the Superior Court, which transferred the appeals to this Court. The Association opposed, the transfer, arguing that the Superior Court previously issued rulings on issues involving similar subject matter. We defer to the Superior Court’s determination of the appropriate court for these appeals.

II. Issues

The appeal and cross-appeal present several issues for this Court’s review, 3 which we paraphrase as follows:

1.

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Cite This Page — Counsel Stack

Bluebook (online)
177 A.3d 456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hillside-villas-condominium-association-inc-v-bottaro-development-pacommwct-2018.