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
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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)
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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)
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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‘
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’