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Watson v. Village at Northshore I Ass'n, Inc.

Supreme Court of Vermont

May 9, 2014

Roy H.A. Watson III
v.
The Village at Northshore I Association, Inc

Editorial Note:

This decision has been designated as "Supreme Court of Vermont Appeals Disposed of Without Published Opinion or Memorandum Decision." table in the Atlantic Reporter

Appeal from: Superior Court, Chit. Civ. Division. DOCKET NO. 835-8-13 Cncv. Trial Judge: Dennis R. Pearson.

Affirmed in part, reversed in part and remanded.

Reiber, C.J., Skoglund, and Robinson, JJ.

OPINION

ENTRY ORDER

In the above-entitled cause, the Clerk will enter:

Plaintiff, an owner of a unit in a common-interest community, filed a declaratory judgment action against defendant, the governing association. Defendant moved to dismiss on account of plaintiff's failure to exhaust contractual remedies provided for in the association's governing documents. The court granted the motion and dismissed the case without prejudice. On appeal, plaintiff argues that he complied with all of the requirements of the applicable bylaws and rules, and that dismissal on the basis of his failure to do so was unwarranted. We agree that on the basis of this record dismissal was premature or unwarranted, and reverse and remand.

The applicable statutory and contractual framework is not in substantial dispute. Defendant is a common-interest community. Defendant's powers are defined by Vermont's Common Interest Ownership Act. 27A V.S.A. § § 1-101 to 4-120. Under the statute, owners' associations " [m]ay require that disputes between the executive board and unit owners or between two or more unit owners regarding the common interest community must be submitted to nonbinding alternative dispute resolution as a prerequisite to commencement of a judicial proceeding." Id. § 3-102(a)(16). Defendant is governed by association bylaws. Those bylaws were attached as an exhibit to plaintiff's complaint, and include a provision empowering defendant

To require, by Rule, that disputes between the Board of Directors and Unit Owners or between two or more Unit Owners regarding the Common Interest Community must be submitted to nonbinding alternative dispute resolution in the manner described in the regulation as a prerequisite to commencement of a judicial proceeding.

Defendant also has adopted rules. Those rules, which were also attached to the complaint, contain a section on conflict resolution that provides in part:

Written complaints shall be made to the management company and, if not satisfactorily resolved, then in writing to the Board of Directors. Complaints from a unit owner may be directed by the Board to the Conflict Resolution Committee for mediation and resolution. If the Conflict Resolution Committee is unable to mediate said dispute, then upon notice and hearing to the affected parties, the Conflict Resolution Committee shall take evidence from the parties and make a written recommendation of resolution to the Board of Directors.

Plaintiff filed suit in August 2013, alleging that defendant had breached certain covenants and statutes, and seeking a declaratory judgment delineating those breaches. The complaint was fifty-four pages long and contained thirty-five exhibits. In lieu of an answer, defendant moved to dismiss for lack of subject matter jurisdiction, alleging that plaintiff had failed to pursue or exhaust the remedies provided by the governing documents by failing to make a written complaint to the management company or the Board of Directors, and to engage in alternative dispute resolution (ADR). In the alternative, defendant requested that the matter be stayed to permit the parties to engage in mediation.[1]

Plaintiff filed a response framed as both an opposition to defendant's motion to dismiss and as a motion to strike. On the merits of the motion to dismiss, he alleged that he had complied with the contractual remedy by already raising most [2] of the issues in the complaint with the Board -- most recently by submitting a letter to the Board in January 2013 -- and the Board resolved the issues without exercising its authority to refer the questions for ADR pursuant to the rules. He also claimed that although the Board was empowered to create a rule requiring ADR, the enacted rule did not so require, but made the mediation process voluntary. Plaintiff stated that he was not ...


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