PUBLISHED OPINION
Case No.: 95-0869
Complete Title
of Case:
NEWPORT CONDOMINIUM ASSOCIATION, INC.,
a nonstock, not for profit corporation,
Plaintiff-Respondent,
v.
CONCORD-WISCONSIN, INC.,
a Wisconsin corporation,
Defendant-Respondent,
MICHELLE TOMERA and
CRAIG TOMERA,
Defendants-Third Party
Plaintiffs-Appellants,
v.
THOMAS C. RICCI, LTD. PROFIT
SHARING PLAN, f/k/a
THOMAS C. RICCI PENSION
AND TRUST
THOMAS C. RICCI and
PHYLLIS J. RICCI,
Third Party
Defendants-Respondents.
Submitted on Briefs: August 12, 1996
Oral Argument:
COURT COURT OF APPEALS OF WISCONSIN
Opinion Released: October 23, 1996
Opinion Filed: October
23, 1996
Source of APPEAL Appeal from a judgment
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Walworth
(If
"Special", JUDGE: JOHN R. RACE
so indicate)
JUDGES: Anderson, P.J., Brown and Snyder, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSOn behalf of the defendants-third party
plaintiffs-appellants, the cause was submitted on the brief of Lisle W.
Blackbourn of Godfrey, Neshek, Worth & Leibsle, S.C. of
Elkhorn.
Respondent
ATTORNEYS On behalf of the defendant-respondent, the
cause was
submitted on the briefs of William
Swindal, Esq. of
Hinshaw & Culbertson of
Chicago. On behalf of
plaintiff-respondent, the cause was
submitted on
the
briefs of Nicholas J. Loniello of Loniello, Johnson & Simonini.
|
COURT OF
APPEALS DECISION DATED AND
RELEASED OCTOBER
23, 1996 |
NOTICE |
|
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 95-0869
STATE OF WISCONSIN IN
COURT OF APPEALS
NEWPORT
CONDOMINIUM ASSOCIATION, INC.,
a
nonstock, not for profit corporation,
Plaintiff-Respondent,
v.
CONCORD-WISCONSIN,
INC.,
a
Wisconsin corporation,
Defendant-Respondent,
MICHELLE
TOMERA and
CRAIG
TOMERA,
Defendants-Third
Party
Plaintiffs-Appellants,
v.
THOMAS
C. RICCI, LTD. PROFIT
SHARING
PLAN, f/k/a
THOMAS
C. RICCI PENSION
AND
TRUST
THOMAS
C. RICCI and
PHYLLIS
J. RICCI,
Third
Party
Defendants-Respondents.
APPEAL
from a judgment of the circuit court for Walworth County: JOHN R. RACE, Judge. Affirmed.
Before
Anderson, P.J., Brown and Snyder, JJ.
ANDERSON,
P.J. Michelle and Craig Tomera (the Tomeras)
appeal from a summary judgment in favor of Newport Condominium Association,
Inc. (Association). The Tomeras argue
that the adoption of a Restated Declaration and Plat (Restated Declaration),
which redefined the veranda as a limited common element appurtenant to
Concord-Wisconsin, Inc.'s (Concord) unit, without the consent of all owners was
improper. The Tomeras also question the
validity of an amendment adopted by the Association in 1980. We conclude that the reallocation of the
veranda from a common element to a limited common element within the Restated
Declaration was proper under § 703.09(2), Stats.,
and that any reduction in condominium value suffered by the Tomeras is
recoverable under § 703.09(3)(a).
Accordingly, we affirm the trial court.[1]
The
Association is an association of owners of Newport Condominium located on Lake
Geneva.[2] The condominium consists of seven units and
was established by an original declaration and plat in 1978.[3] The Tomeras have owned Unit 3N since July
1980. The remaining units are owned or
controlled by Concord-Wisconsin, Inc.(Unit 1RL); Thomas C. Ricci Ltd. Profit
Sharing Plan (Units 2S, 2N, 3S and 3C); and Phyllis J. Ricci (Unit 2C), who
together control over seventy-five percent of all of the voting rights or
interest in the common elements of the Association.
The
lawsuit was originally commenced by the Association against Concord in November
1992. The Association sought a
declaration of interest that the second amendment, which attempted to
reclassify a grassed area of the exterior grounds, referred to as the
“veranda,” from a common area to a limited common area appurtenant only to Unit
1RL, was invalid. However, in November
1993, Concord and Ricci reached a settlement whereby Ricci agreed to the
amendment of the condominium declaration and directed the Association to
dismiss the complaint. Consequently,
the Tomeras intervened and adopted the Association's complaint as part of their
cross-claim, counterclaim and third-party complaint.
In
1994, the owners of the condominium, except the intervening defendants and
Phyllis Ricci, adopted a Restated Declaration by greater than three-fourths
vote. This decision included defining
the veranda as a limited common element appurtenant to Unit 1RL. Additionally, a part of the roof was
classified as a limited common element, as well as a part of the basement and
various other areas on the condominium grounds. Also in 1994, the board of directors adopted resolutions relating
to the Restated Declaration. The
Tomeras objected to and refused to consent to the Restated Declaration and the
board's resolutions.
Competing
motions for summary judgment were made in order to determine the validity of
the Restated Declaration. The trial
court issued a final judgment, concluding:
“I hold the Restated Declaration to be valid, the reallocation of the
use of the veranda to be within the Board’s powers to restate with a
three-fourths vote. It follows then
that other common areas reallocated were done so validly. Tomeras' remedy lies in §
703.09(3)(a).” The Tomeras appeal.
The
Tomeras argue that the trial court erred by granting Concord's motion for
summary judgment. We review summary
judgment decisions using the same methodology as the trial court. M & I First Nat’l Bank v.
Episcopal Homes Management, Inc., 195 Wis.2d 485, 496, 536 N.W.2d 175,
182 (Ct. App. 1995); § 802.08(2), Stats. We observe that summary judgment is
appropriate when there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. See M & I First Nat’l Bank, 195 Wis.2d at
496-97, 536 N.W.2d at 182; see also § 802.08(2). Because no dispute exists among the material
facts here, issues of law are all that remain.
The
Tomeras contend that the reallocation of the veranda as a limited common
element by less than all of the unit owners constituted a change in their
percentage ownership in the common element and was improper. This argument requires us to construe
provisions within Wisconsin’s Condominium Ownership Act, codified in ch. 703, Stats., and then apply the facts of
this case to them.[4] The “application of a statute and
interpretation of an unambiguous written agreement involve questions of law,
which we independently review.” Aluminum
Indus. v. Camelot Trails Condominium Corp., 194 Wis.2d 574, 581, 535
N.W.2d 74, 77 (Ct. App. 1995). In
construing a statute, we are to give effect to the intent of the legislature. Castle Corp. v. DOR, 142
Wis.2d 716, 720, 419 N.W.2d 709, 710 (Ct. App. 1987). To ascertain legislative intent, we first look to the language of
the statute. If it is not ambiguous,
then we are not permitted to use interpretation and construction techniques
because the words of the statute must be given their obvious and ordinary
meaning. See Town of
Seymour v. City of Eau Claire, 112 Wis.2d 313, 319, 332 N.W.2d 821,
823-24 (Ct. App. 1983).
We
note some additional tenets of statutory construction which are relevant to
this case. The entire section of a
statute and related sections are to be considered in its construction or
interpretation; we do not read statutes out of context. See State v. Barnes,
127 Wis.2d 34, 37, 377 N.W.2d 624, 625 (Ct. App. 1985). Statutes relating to the same subject matter
are to be construed together and harmonized.
State v. Burkman, 96 Wis.2d 630, 642, 292 N.W.2d 641, 647
(1980). The cardinal rule in
interpreting statutes is that the purpose of the whole act is to be sought and
is favored over a construction which will defeat the manifest object of the
act. Milwaukee County v. DILHR,
80 Wis.2d 445, 453, 259 N.W.2d 118, 122 (1977).
With
these principles in mind, we conclude that §§ 703.09 and 703.13, Stats., are clear and unambiguous. Section 703.13(4) states that the percentage
interest a condominium owner possesses in a common element “may not be changed
without the written consent of all unit owners ....” In contrast, § 703.09(2) provides that an association may amend
its declaration with “the written consent of at least two-thirds of the unit
owners ....” These statutes clearly
permit the Association to amend the entire declaration and plat without the
Tomeras' agreement, unless the amendments alter the percentage of ownership
interest in any of the owners' common elements.
The
Association's declaration allocated the percentage of ownership interest in
common elements based on the square footage of the condominium unit owned. Essentially this establishes three means of
changing an owner’s interest in the common elements. First, if additional units were added, then any percentage share
in the common elements would decrease accordingly. Second, if the total square footage of an owner’s condominium
changed, then that owner’s percentage of total living space would change,
thereby altering the percentage of ownership in the common elements. The difference would either be added to or
subtracted from another unit owner’s interest, or in the case where a change in
the total living space of all the condominiums occurred, the percentage
interest of all the owners would be reallocated. Third, if the Association elected to allocate the percentage in
the common elements by assigning each condominium an equal share, each unit
would own one-seventh of the common elements or 14.29%.
The
Tomeras contend that the Restated Declaration is invalid because it changed the
common element status of the veranda to a limited common element, thereby
restricting their use and reducing their interest in the common elements. The Tomeras have confused the concepts of
percentage ownership with the value of their unit.
By
changing the veranda from a common element to a limited common element, the
Restated Declaration did not reduce the Tomeras' percentage of ownership
interest in the veranda. The amendments
merely reduced the value of the Tomeras’ individual unit, while
increasing the value of Unit 1RL. The
Tomeras still own 10.61% of all the common elements, but they have lost their
unlimited use of the veranda. If a sale
of the entire building occurred, then the Tomeras would still receive 10.61% of
the proceeds. If, however, the Tomeras
sold their individual unit, then presumably it would bring a lower price
because of the reduced use of the veranda.[5]
The
legislature has provided a remedy for the Tomeras' loss of value in their
condominium under § 703.09(3)(a), Stats. Section 703.09(3)(a) provides:
If an
amendment to a condominium declaration has the effect of reducing the value of
any unit owner's interest in any common element, including any limited common
element, and increases the value ... of any other unit owner's interest in the
common element or limited common element, then the ... other unit owner shall
compensate the unit owner the value of whose interest is reduced in the amount
of the reduction in value, either in cash or by other consideration acceptable
to the unit owner.
Because the reallocation of the veranda’s use reduced
the Tomeras' condominium value, while increasing Unit 1RL's value, the Tomeras'
remedy lies with the owners of Unit 1RL.
We
conclude that the reallocation of the veranda from a common element to a
limited common element by the Restated Declaration was proper under §
703.09(2), Stats. We further conclude that the reduction in
condominium value suffered by the Tomeras is recoverable under § 703.09(3)(a), Stats.
By
the Court.—Judgment affirmed.
[1] Due to our decision regarding the Restated Declaration, we find it unnecessary to address the validity of the 1980 amendment. City of Waukesha v. Town Bd., 198 Wis.2d 592, 601, 543 N.W.2d 515, 518 (Ct. App. 1995) (if a decision on one point disposes of an appeal, this court need not decide other issues raised).
[3] The property at issue in this appeal was the subject of a federal lawsuit in which Judge Reynolds of the United States District Court for the Eastern District of Wisconsin held that the property was an expandable condominium with the seven declared units possessing 100% of the undivided percentage interests in the common elements of the condominium.