Hugh P. Mabe III and Seth S. Stoffregen v. Board of Directors of Mahogany Run Condominium Association, Inc.

• Court: Superior Court of The Virgin Islands
• Decided: March 17, 2022
• Docket: ST-22-CV-18
• Status: Unpublished

Opinion

IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST THOMAS AND ST JOHN **«*******

HUGH P MABE III and ) SETH S STOFFREGEN ) CASE NO ST 22 CV 018 ) Plaintiffs ) ACTION FOR DECLARATORY VS ) JUDGMENT TEMPORARY ) PRELIMINARY and PERMANENT ) INJUNCTION BOARD OF DIRECTORS OF ) MAHOGANY RUN CONDOMINIUM ) ASSOCIATION INC ) 2022 VI Super 34U Defendant ) )

HUGH P MABE III Esq MARIA TANKENSON HODGE Esq 9160 Estate Thomas Hodge & Hodge PMB 220 1340 Taameberg St Thomas Virgin Islands 00802 St Thomas Virgin Islands 00802 Self 7 epresem‘ed LItigsz Attomeysfor Defendant

SETH S STOFFREGEN Esq P 0 Box 182 Camit Massachusetts 02635 Selfrepresemed Llligam

CARTY RENEE GUMBS Judge

MEMORANDUM OPINION

1T1 THIS MATTER is before the Court on Plaintiffs Motion for Preliminary Injunction

filed on February 25 2022 seeking preliminary and permanent injunctive relief against the Board

of Directors of Mahogany Run Condominium Association Inc Plaintiffs filed their Petition for

Temporary Remaining Order on January 24 2022, which was denied on January 27 2022

Defendant filed its opposition and the pertinent exhibits on February 10 2022 The Court held a

status conference on January 3 1 2022 and a hearing on the motion for preliminary and permanent Hugh 1’ Mabe Ill 1.! a] v Board oszrectar: of 2022 VI Super 34U Mahogany Run Condominium Anaemia»: Inc Case No ST 22 CV 18 Memorandum Opinion

injunction on March 7 2022 The Coufl heard the sworn testimonies of Plaintiffs Hugh P Mabc

III Esquile and Seth S Stoffregen, Esquire William Quetel past Board member Angela

Callwood Geneial Manager for Mahogany Run Condominium Association Inc and Andrew

Capdeville, Esquire current Board President Plaintiffs exhibits 1 7 and 12 15 were admitted into

evidence For the following reasons the Court will grant the motion for injunctive relief due to a

Clea! showing that such relief is warranted when the factors are considered and weighed

1l2 At the time of the filing, the Mahogany Run Condominium Association was scheduled to

hold their annual condominium ownet 5’ meeting and 6161.th11 for the Board of Diiectors on March

19 2022 The Court postponed the March annual meeting until iesolution 0fthis matter Plaintiffs

seek to permanently enjoin the Board of Directors of the Mahogany Run Condominium

Association Inc ( Defendant or the Board ) from violating the Condominium Assoeidtion 5

By Laws, specifically Article IV Section 4 ( Section 4 ) and ask for declaratoryjudgment 0n the

inteipretation ofSection 4 The Board consists ofapproximately nine (9) members, who serve two

year staggered te1ms and have a term limit of two consecutive teims ' The dispute involves the

language of Section 4 which details the appointment of interim directors when there is a vacancy

on the Board Section 4 states

“Vacancies in the Board of Directors caused by any reason, including the addition of a new Director or Directors, other than the removal of a Director by vote of the Association shall be filled by a vote of the majority of the remaining Directors even though less than a quomm at any meeting of the Board of Directors for the 1emainder of the term of the member being replaced until a successor shall be elected at the next annual meeting of the Association to fill the unexpired portionZ of the tenn

‘ Plaintitts Exhibit 15 at 8 By Law: oflhe Mahogany Rim Candnmm/um Association 2020 Article IV Part A Section 1 7 The wold portion exists in the 1980 Bylaws and 2009 Amended Bylaws In the 2020 Amended Bylaws, the term ‘portion wa: replaced with the term poaitiun The Court concludes this was an error and hold: the original [em ‘ponion av the proper term 2 Hugh P Mabe III e! a] | Board nthreclurt of 2022 VI Super 34H Mahagany Run Condummmm Achia/wn Inc Case No ST 22 CV 18 Memorandum Opinion

Plaintiffs interpretation of this language requires a replacement directur who was duly appointed

by the Board, to serve only until the next annual meeting, at which paint their successor shall be

elected They argue that the Board is limiting the number of vacant Board seats available by

interpreting Section 4 to mean that a replacement director serves until the end of the term the

vacating director was originally scheduled to serve Plaintiffs lequest the Court declares which

reading of Sectitm 4 is the correct interpretation

113 Plaintiffs seek declaratory judgment under Title 5 V I C § 1261 determining that Section

4 requires vacancies filled by vote of the Board ofDirectors serve anly until, and expire at the time

of the next annual meeting election by the owners The Court has discretion to declare [the]

rights status, and othei legal relations whether or not further relief is or could he claimed Pale

\ Government ofthe Virgin Islandx 2014 WL 7188999 *4 (V 1 Super Ct 2014)

114 Plaintiffs fimhei seek injunctive relief to permanently enjoin the Boaid to comply With the

declared meaning of Section 4 and require the Board to place on the ballot as open board seats any

board seats that had been filled pursuant to Section 4 When determining whether to issue a

preliminary injunction the trial court considers the following factors an a sliding scale basis 1)

the probability of success on the merits 2) the threat of irreparable harm if the injunction is denied

3) the balance of the harm between the parties if granted and 4) the public interest 3 The Supreme

Court in Yusefv Hamed 59 V I 841 854 (V I 2013) concluded that the soundest rule for the

Virgin Islands is a sliding scale test wherein a strong showing on one factor may decrease the

weight assessed to other factors allowing an injunction Where the probability of success on the

J JRC & Ca v anes Trucking 3y: 1m 63 VI 544 553 (V1 2015) 3 Hugh P Maize ”I e! (11 v Board QfDIreLlars 12f 2022 VI Super 34U Mahogany Run LundmmmumAssuclanun Inc Case No ST 22 CV 18 Memorandum Opinion

merits is low if the Court determines that the moving patty s likelihood of irreparable harm is great

and the nonmoving party S likelihood ofirrepardble harm is Very low

I Four Factors of Granting Injunctive Relief

A Plaintiffs have shown success on the merits

115 First the Court must analyze the Plaintiffs probability of success on the merits When

addressing a reasonable probability of success on the mods the movant must show that it has a

teasonable chance or probability, of winning not that it will actually prevail on the merits at

trial ”4 The movant must introduce evidence making Out aprima fame case 5 The Supreme Coun

0f the Virgin Islands has held that a condominium association 5 bylaws and governing documents

are to be construed according to the general rules governing the construction of statutes and

contracts gee Weary v Lang ReefCandammiumAnnotation 57 V 1 163 170 (VI 2012) (citing

Smgh v Smgh 9 Cal Rptr 3D 4 27 28 (Cal Ct App 2004)) When the goveming documents of

condominium associations are Clea! and unambiguous, the Court must tollow their plain meaning

She Id at 169 To determine whether a contract is ambiguous we resort to principles of contiact

interpretation keeping in mind that our primary purpose is to ascenain and give effect to the

parties objective intent Phillip v Mart}: Mamamu 66 V1 612 624 (VI 2017) The Court

cannot rewrite [the Bylaws] by looking to evidence outside the four comers 0f the [Bylaws] to

determine the intent of the parties Id at 628

116 In their efforts to enjoin the Defendant from violating Section 4 of the Mahogany Run

Condominium Association 5 bylaws Plaintiffs argue that the last sentence of Section 4 is

41313101ch LLC v Morehmm. Real Extu/e Inv: LLC 62 V 1 168 187 (VI Super Ct 2015) 5 Yusefv Hamed 59V] 841 854 (VI 2013) 4 Hugh P Mabe III e! a] v Board a_fDIrecturs of 2022 VI Super 34U Mahogany Run Condominium Amoclanon Inc Case No ST 22 CV 18 Memorandum Opinion

unambiguous and controls the language preceding it The last sentence in pertinent part reads

[The interim Director appointed by the Board serves] for the remainder of the term of the member

being replaced until a successor shall be elected at the next annual meeting of the Association to

fill the unexpired Qortion of the tem1 Plaintiffs interpretation of Section 4 hinges on the words

until shallbe elected and unexpired Plaintiffs argue until as used in the sentence defines

the interim term for the vacancy replacement member to serve only up to [until] the date of the

next annual meeting when their successor shall be elected which further implies the mandate of

an election The term “until” is a subotdinating Lonjunction A subordinating conjunction is a

conjunction that joins a main clause and a clause which does not fonn a complete sentence by

itself 5 Plaintiffs also point to the word unexpiied and argue this demonstrates that the vacant

seat filled under Section 4 shall be vacated and open for election at the next annual meeting, not

at the expiration of the original term, otherwise the term “unexpired" would not be needed

Plaintiffs further argue that under the Board 5 interpretation the last phrase would be meaningless

and the drafter would have ended the sentence after the word replaced it the interim Director

were to serve for the entire unexpired term reading the sentence as [the Di1ect0r would serve]

for the remainder of the term of the member being replaced ”

117 To the contrary Defendant argues Section 4 is ambiguous therefore, extrinsic evidence

in the form of examining the Beard 5 past application is needed to determine how the bylaw

should be interpreted HD V.1 Holding Co Inc V CDP LLC 2018 WL 3213138 *4 (D VI

2018) Attorney Capdeville current Board President, testified that because of the ambiguity of

6 5'22 The Brilannica Dictionary 2022 Encyclopedia Brittanica, Inc (March 17 2022) (For example when in the sentence Thty wen, glad when I amved ) https //www britannica com/dictionary/subordinating Conjunction 5 Hugh P Mabe III 2/ a] v Board afDlreLtam qf 2022 VI Super 34U Mahogany Run Condominium Axsaczatxun Inc Case No ST 22 CV 18 Memorandum Opinion

Section 4, the Board hired outside legal counsel to consult on the interpretation Defendant s

contention that this bylaw is ambiguous stems from the disputed application of Section 4 and

provides that the long standing practice of the Board is to allow for appointed members to seive

the duiation of the term cf the elected candidate they ate taking the place of Notably Angela

Callwoed, Mahogany Run Condominium Association s General Manager stated that this has been

the past practice foi decades that she is aware of however the witness could not provide a single

ballot or any other documentation to support that position

118 Mahogany Run further argues that under Plaintiffs interpretation the phrase fon the

remainder of the temi of the member being replaced is ignmed The Court disagrees Rather

Defendant s interpretation of the bylaw ignores the second clause of the sentence in its entirety

which states until a suecessor shall be elected at the next annual meeting of the Association to

fill the unexpired portion of the term The pluase to fill the unexpired portion of the term

conveys to the Court that the drafters intent was for the appointed member to only serve out the

remainder of the term until the next annual meeting which supports Plaintiffs interpretation

119 Plaintiffs further support their argument with an example from the 2018 annual meeting

election Michael Fitzsimmons (“Fitzsimmons”) filled Michelle Meade‘s (“Meade”) 2017 vacancy

and was placed on the March 2018 ballot although Meade 5 seat would not expire until March

2019 7 Plaintiffs use this example to argue that this is how the Board has applied Section 4 in the

past and that it should be applied in this manner for the upcoming election

1|10 Defendant contends that the long standing practice of the Board contradicts this

interpretation and that for decades the practice has been that the appointed director serves out the

7Plaintiffs Exhibit4 6 Hugh P Mabe III et al v BnardafDirLLtun Of 2022 VI Super 34U Mal'mgany Run Crma'ummzum Association Inc Case No ST 22 CV 18 Memorandum Opinion

remaining term of the member being replaced They further argue Fit7simmons name being

placed on the ballot was an anomaly an oversight of the General Manager Particularly since this

election occurred during the chaotic aflermath 0f the 2017 hurricanes However to support this

contention Defendant relied only on the testimonies of William Quctel Angela Callwood and

Attorney Capdeville Ms Callwood testified that she was the General Manager in 2018 and

prepared the documents fox the annual meeting including the ballots and biographies for the

candidates She stated that the ballots and biographies were sent to the members of the Board and

the candidates for approval, prior to distribution Michael Fitzsimmons was on the 2018 ballot

despite the Board 5 current stance that he should not have been Ms Callwood testified that this

was a clerical error on her part and should not have happened However, Plaintiffs argue that this

is the most recent election where a similar election occurred and the only election for which there

is documentation to support that this happened therefore the 2018 election should not only be the

standaxd pxactice for vacancy appointments 0n the Board but is also the most plausible course of

action which fosters an open democratic voting process Assuming urguenda, this was in fact the

historic practice, it does not mean such practice was in compliance with the bylaw In fact, it was

not Section 4 although equivocal and perhaps inaltfully drafted is not so ambiguous as to adopt

Defendant s interpretation Since Defendant could not provide any evidence to shew otherwise

with the exception (1er Quetel s uncorroborated testimony the Court agrees with Plaintiffs

1111 Here Plaintiffs have set forth a plausible interpretation of the plain meaning of Section 4

and have provided a well documented example of the previous application of Sectitm 4 by the

Board which supports their interpretation Conversely, Mahogany Run could not adequately

demonstrate that the historical practice of the Board negates this interpretation Yet, even if there

7 Hugh P Maize III 21 (II V Board othrectars of 2022 VI Super 34U Mahogany Run Condmnmmm Assncmlian Inc Case No ST 22 CV 18 Memorandum Opinion

were a plethora of examples set forth by the Board such practice would still be a violation of

Section 4 Accoidingly the Court finds that Plaintiffs have shown success on the merits

B Plaintiffs have shown the likelihood ofirreparable harm

1112 Plaintiffs argue that ifthe Board is not enjoined Plaintiffs will suffer irreparable harm as a

resu1t of being denied their electoral rights for the next annual meeting They argue that candidates

for the election are limited in the opportunity to serve on the Board and that owners are

disenfranchised by the denial of their electoral rights by the Board 5 incorrect interpretation of

Section 4 Plaintiffs are conect

1113 Under Anicle 1, Section 4 of the Mahogany Run Condominium Association bylaws each

unit is entitled to a vote in the Board election 8 The bylaw states in pertinent pan

Each unit shall be enlllled to a vote, which shall be the percentage assigned in the Declaration, which may be cast by the owner the owner 5 spouse or by a lawful proxy as provided below

As a guaranteed tight in the bylaws of the Association owners also have the duty to ensure the

Board abides by the bylaws Regardless of past application of the bylaws owneis ought to have

confidence in a properly conducted open and fair electoral process Virgin Islands courts have held

that a violation of the bylaws by the condominium board of directors is more serious than a

Violation by an individual owner because there is greater potential for harm Sm Board aszrectors

ofthbuh McGuire 16VI 300 309 (Terr Ct 1979) In fact the underlying assumption of

[t]he entire Condominium Act is that the board will comply with the declarations and bylaws of

the condominium association Frank v Enrietta 2013 WL 5888503 *4 (D VI 2013) qualmg

McGuzre at 309 Further all apartment owners purchase units relying on the covenants and

3 Plaintiffs Exhibit 15 at 4 8 Hugh P Mabe III at a/ v Board ofDIrectnrt of 2022 VI Super 34U Mahogany Run Condominium A s socially" Inc Case No ST 22 CV 18 Memorandum Opinion

conditions contained in the declaration and bylaws of record and on the assumption that they will

be enforced [d

1114 Here the Court agrees with Plaintiffs that unit owners are entitled to the rights guaranteed

to them in the bylaws of the Association and the bylaws must be followed according to theii plain

meaning There is no question as to the meaning of Article 1, Section 4 which provides owners the

right to vote in Board elections “[V]0ting is of the most fundamental significance under our

constitutional structure ” Illinon Rd 0/ Electlans v Socialist Workers Party, 440 U S 173, 184

(1979) The right to vote is the right to participate it is also the right to speak but more

impeltantly the right to be heard We must tread carefully on that right or we risk the unnecessary

and unjustified muting ofthe public voice Boardman \ hsteva 323 So 2d 259 263 (Fla 1975)

Unit owners have the preiogative to have their voices heard and to elect the candidate which best

represents them and their interests analogous with the tights to vote in any republic The Board

has a duty to guarantee fair elections to piotect this right

1115 Yet, Defendant s interpretation ofAttiCle IV Section 4 although Well intended, infringes

on this right Under Defendant s inteipretation the Board appointed member could serve almost

two years on the boaxd if the vacancy opens shonly after the election This harms the owners

ability to be able to vote for the candidates which they believe represent them best instead, the

owners could be forced to have an unelected board member for almost two years which the

majority may disapprove of completely undermining the democratic process set out in the bylaws

Defendant argues under the bylaws, owners can vote out board members which they disapprove

of However Defendant also argues that their interpretation of Section 4 should be upheld because

the annual meeting ofien lacks a quorum and thus a new interpretation which changes the standard

9 Hugh P Mal". III LI al v Board ofDnectars 0f 2022 VI Super 34U Mahagany Run Cundammmm Assaclalmn Inc Case No ST 22 CV 18 Memorandum Opinion

practice could atfect the management of the Association The Conn disagrees because while it

may be convenient and practical to adopt the Board 5 practices of allowing an interim appointee

to fill the unexpired term of a director such practice does not eomport with the bylaw

1116 If an appointment occurs even with a lack of quorum the Association is lefl with no choice

but to accept the appointment of the interim member The Coutt is not lost on the confidence that

condominium owners may have within the Board 3 ability to appoint interim members who would

have the best interest of the Association However this interim appointment should not usurp the

owners’ rights to duly elect their representatives at the annual meetings Ifthere is continuously a

lack et a quotum at the meetings then Defendant s pioposal that owners can simply vote out a

board member they disapprove of is an inadequate altemative to applying Section 4 pdttieularly

when the appropriate solution would be to give owners the right to vote in the candidates they

choose to represent them lather than undergoing the burdensome task of Lalling a special meeting

to unseat a member Thus, Plaintiffs have shown ineparable harm

C Balancing of harm to between both parties

1117 As to the third factor the balancing ofharms between the parties the Court looks at

whether the nonmoving patty will suffer irreparable harm ifthis injunction is issued, and if so to

what extent 9 The Court also considers whether the injunction would destroy the status quo as one

of the goals of a preliminary injunction is to maintain the status quo 1° Defendant argues the Board

will struggle to manage the affairs of the Association under Plaintiffs interpretation due to a lack

of continuity However even under this interpretation where there will be as many as six (6) open

" S'BRMCUA LLC 62 VI at 188 m Id 10 Hugh P Mabe III at a! v Baard ofDirecturv of 2022 V] Super 34U Mahogany Run CnndammmmAnnotation Inc Case No ST 22 CV 18 Memorandum Opinion

seats fin election at the 2022 election, there will still be three (3) continuing directors including

the Board President Further, the experienced General Managei who has worked with the

Association since May of 2010 and through multiple Board changes adds to the continuity and

stability of the Board Additionally the structure 0fthe Board which staggers the seats so as many

as five or four seats can be filled every year and only allows for two consecutive terms dictates

that transformation of the Board at every annual meeting is certain

1118 Defendant further contends they will be banned under Plaintiffs interpretation of Section

4 because this interpietation would [equiie more people to Volunteer to be on the Board Serving

on the Board is a voluntary sewice, and as such asking the appointed interim director t0 only sews

a short term until the next annual meeting Cleates a burden on the volunteer and the1ef01e

disincentivizes members from serving in the future The Court recognizes the hardship on the

intciim diiectors but this haidship does not supersede the condominium owners right to Vote

guaranteed under the bylaws Neither is there any evidence to suggest that vacating a seat is a

regular occurrence or to suggest that allowing the seat to remain empty for a short period of time

is unduly burdensome (e g a director vacating the position after 20 months into his or her 2 year

tenn and the Board not being able to fill the interim position) Additionally, nothing suggests the

interim director is piecluded from their name being on the ballot to continue his or her voluntary

service Considering the de rmmrmv costs associated with revising ballots or the tabulation thereof

the Board will have continuity and minimal to no disruptions given the Board President and two

other members would remain on the Board Moreover, the fact that the Board has implemented

Section 4 in alignment with Plaintiffs reading of Section 4 in the recent past, the Court finds there

ll Hugh P MMIIL [[1 L! a] v Board afDIrectms Hf 2022 VI Super 34U Mahogany Run Condummmm Assuciation Inc Case No ST 22 CV 18 Memorandum Opinion

is no likelihood of immediate and irreparable harm to Defendant when weighing the balance of

the harms

D The public has a significant interest in the Board abiding by the bylaws of the Association

1|l9 Plaintiffs argue that the public has a significant intelest in enjoining the Board because an

incorrect interpretation of Section 4 would be out of compliance with the Virgin Islands

Condominium Act Title 28 V I C § 906 explicitly authorizes a suit by any apartment owner to

enfowe the bylaws and administrative rules in addition to the covenants conditions and restrictions

in the declaration or deed to an owner’s apartment " McGuire at 309 This Court has previously

held that there is a compelling public policy argument for allowing condominium owners to

enforce the Board of Directors to abide by the declarations or bylaws of the Association Id Here,

Plaintiffs have adequately shown that unit owners am entitled to the right to Vote” at every annual

meeting and that the Board 5 interpretation of Section 4 inflinges on that right Accordingly the

Court finds them is a significant public interest in enjoining the Board and that all foul factors

weigh in favor of granting injunctive relief to the Plaintiffs

II Declaratory Judgment

1|20 While Section 4 may be perceived as ambiguous or inanfully drafted it is not so vague

that the Court needs to supplant its own interpretation and overlaok the plain meaning Section 4

in relevant part states that a vacancy

shall be filled by a vote of the majority of the remaining Directors even though less than a quorum at any meeting of the Board of Directors for remainder of the term of the member being replaced until a tuccetwr Aha” be elected at the next annual meeting of the Association Io fill the unexpiredportian of the term

'1 Plaintiffs Exhibit 15 at4 12 Hugh P Mabe III 2! al v Board quIrecfars 0/ 2022 VI Super 34U Mahogany Run Candummium ASSDCIOIIDM Inc Case No ST 22 CV 18 Memorandum Opmion

The drafter included two clauses adequately describing that the interim director serves until the

next annual meeting Where the successor shall be elected to fill the unexpired portion of the original

director 5 term For these reasons Article IV Section 4 must be declared sufficiently warded to

determine that those vacancies filled by vote of the Board of Directors are Open for the next annual

meeting election and the Board of Directors shall place such seats on the haunt fol the next election

as a matter of law An appropriate Order shall f0

(

Dated March I 2022 W7 II _‘l A o Renee u ‘ I s Carty Judge 0 the ‘ -erior Conn ofthe Vir Islands ATTEST Tamara Charles Cler ofthe Con .

By WK ( W Donna D Donovan Court Clerk Supervise ‘3 / )6/ 3099‘

13 IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST THOMAS AND ST JOHN

HUGH P MABE Ill and SETH S STOFFREGEN ) CASE NO ST 22 CV 018 ) Plaintiffs ) ACTION FOR DECLARATORY VS ) JUDGMENT TEMPORARY ) PRELIMINARY and PERMANENT BOARD OF DIRECTORS OF ) INJUNCTION MAHOGANY RUN CONDOMINIUM ) ASSOCIATION INC ) 2022 VI Super 34U Defendant

ORDER

The Couit having issued a Memorandum Opinion on this date it is hereby ORDERED that Plaintiffs’ motion for injunctive relief is GRANTED; and it is further ORDERED that the Board of Directors of the Mahogany Run Condominium Association, Inc is PERMANENTLY ENJOINED from excluding Board appointed Vacancy replacement board members from the subsequent annual meeting election, and it is further ORDERED that those vacancies filled by vote of the Board of Directors are open for the 2022 annual meeting election and that the Board of Directors shall place such seats on the ballot for this election and it is fuither ORDERED that copies of this Order shall be distributed to Hugh P Mabe III Seth S Stoffregen Maria T Hodge Esquire and the Board of Directors of Mahogany Run Condominium Association, Inc (Andrew Capdeville, Esquire) / Dated March/7 2022 W W Renee u bs Carty Judge the uperior Court ATTFST of the Viv Islands Ta ra Charics Cier f the Courtk: W

By M Do m D Donovan Court Clerk Sunenisor 43 / ’8 IQOQJ’