Huskey v. Bd. of Managers of Edelweiss, Inc.

SECOND DIVISION
June 9, 1998

No. 1-97-1930

HERBERT V. HUSKEY, SANDRA L. HUSKEY, ) Appeal from the
VIVIAN T. SIEPAK, EDWARD J. SIEPAK, ) Circuit Court of
RITA C. FOREST, JAMES J. FOREST, ) Cook County.
EVELYN FITZGERALD, JAMES FITZGERALD, )
JAMES P. BUSHELL, LUCILLE BUSHELL, )
SOPHIE M. FLEMING, THOMAS J. SIMS, )
LORRAINE A. SIMS, ALICE E. WITKOWSKY, )
GEORGE P. WILKIN, KATHLEEN M. WILKIN, )
ELMER W. KROCK, RUTH L. KROCK, )
MIKE CULLOTTA, MARIE T. CULLOTTA, )
VIRGINIA M. FIEROH, WALTER W. FIEROH, )
PATRICIA K. SOUTTER and ERNEST A. )
SOUTTER, )
Plaintiffs-Appellees, )
)
v. )
)
BOARD OF MANAGERS OF CONDOMINIUMS OF ) Honorable
EDELWEISS, INC., ) Berman/Boharic,
Defendant-Appellant. ) Judges Presiding.

PRESIDING JUSTICE McNULTY delivered the opinion of the court:

Defendant, the Board of Managers of Condominiums of Edelweiss,
Inc. (the Board), appeals from the trial court order granting
summary judgment in favor of plaintiffs, Herbert and Sandra Huskey
and other condominium owners, based on the trial court's finding
that the Board exceeded its authority in changing the percentage of
plaintiffs' ownership in the condominium's common elements. We
affirm.
On November 18, 1987, the Condominiums of Edelweiss, Inc., was
organized in the State of Illinois as a general not-for-profit
corporation for the purpose of administering and operating a certain
parcel of real estate located in the Village of Palos Park,
Illinois, as a condominium. On February 8, 1988, a "Declaration of
Condominium Ownership and By-Laws, Easements, Restrictions and
Covenants for Condominiums of Edelweiss" (Declaration) was duly
recorded in the offices of the recorder of deeds of Cook County,
Illinois.
Article XX of the Declaration reserved to the developer the
option to add additional property to the development. The developer
exercised this option by filing 14 amendments. In the thirteenth
amendment filed by the developer, the first 40 units have 1.67%
ownership interest in the common elements and the remaining 20 units
have 1.66% ownership interest in the common elements. The
developer s fourteenth amendment, which again added more units,
assigned the first 16 units the same percentage of ownership
interest in the common elements, 1.57%, and assigned the balance of
the units a different percentage, 1.56%.
The Board subsequently filed amendments 15 and 16, which
altered the relative percentage of common element interest to 1.832%
for the larger condominium units located on the second floor, which
are owned by plaintiffs, and 1.472% of common element interest to
the smaller units. This has the effect of increasing the
plaintiffs' percentage of common element interest in the larger,
second-floor units by .272%.
Plaintiffs brought suit alleging that the Board had no
authority under the Illinois Condominium Property Act (Act) (765
ILCS 605/4 (West 1994)) to alter the percentage of common element
ownership without the agreement of all unit owners. The trial court
granted summary judgment in plaintiffs' favor. The Board appeals,
claiming that a genuine issue of material fact remains as to whether
the developer improperly assigned the percentage of ownership
interest in the common elements to the units and whether the Board
properly utilized the procedures set forth in section 27(b)(1) of
the Act (765 ILCS 605/27(b)(1)(West 1994)) to correct the
developer's errors and omissions in the Declaration.
Summary judgment is to be entered if the pleadings,
depositions, and admissions on file, together with the affidavits,
show that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law. Dash
Messenger Service, Inc. v. Hartford Insurance Co., 221 Ill. App. 3d
1007, 582 N.E.2d 1257 (1991). Our review of the provisions of the
Act relied upon by the parties pertaining to amendment of the
Declaration reveals that the trial court properly granted summary
judgment in plaintiffs' favor.
The Illinois Condominium Property Act (765 ILCS 605/4 (West
1994)), provides in pertinent part:
"The Declaration shall set forth following
particulars:
***
(e) The percentage of ownership interest in the
common elements allocated to each unit. Such
percentages shall be computed by taking as a basis the
value of each unit in relation to the value of the
property as a whole, and having once been determined
and set forth as herein provided, such percentages
shall remain constant unless otherwise provided in
this Act or thereafter changed by agreement of all
unit owners." 765 ILCS 605/4(e) (West 1994).
Section 4(e) thus expressly provides that once the percentage of
ownership interest in the common elements has been determined,
that percentage remains constant absent an agreement by all unit
owners. Parrillo v. 1300 Lake Shore Drive Condominium, 103 Ill.
App. 3d 810, 431 N.E.2d 221 (1981).
The Board, however, claims that section 27(b)(1) of the Act
(765 ILCS 605/27(b)(1) (West 1994)) permits the Board to change
the percentage of ownership in the common elements with the
consent of less than all unit owners. That section states in
pertinent part:
"If there is an omission or error in the
declaration, bylaws or other condominium instrument,
the association may correct the error or omission by
an amendment to the declaration, bylaws, or other
condominium instrument, in such respects as may be
required to conform to this Act, and any other
applicable statute or to the declaration by vote of
two-thirds of the members of the Board of Managers or
by a majority vote of the unit owners at a meeting
called for this purpose, unless the Act or the
condominium instruments specifically provide for
greater percentages or different procedures." 765
ILCS 605/27(b)(1) (West 1994).
The Board claims that it filed the fifteenth and sixteenth
amendments to the Declaration to correct errors in the Declaration
caused by the developer's failure to properly assign the units'
percentage of ownership in the common elements. The Board claims
that the trial court improperly granted summary judgment since a
genuine issue of material fact exists as to whether the developer
did indeed err in his determination of each unit's percentage of
common element ownership. The Board claims that the developer
improperly assigned ownership of the common elements by averaging
every unit in the building and provided all the units the same
percentage of ownership interest, rather than assigning ownership
based on the square footage of the units. The Board claims that
section 27(b)(1) of the Act permits it to correct such an error by
a vote of two-thirds of the Board members, as was done here.
The question before this court is whether section 27(b)(1),
the error and omission provision of the Act, can be used to change
the percentage of ownership in the common elements. We find that
section 4(e) and not section 27(b)(1) of the Act controls changes
to percentages of ownership in common elements. Where two
statutory provisions cover the same subject matter, the more
specific statute governs. Wheatley v. Chicago Transit Authority,
289 Ill. App. 3d 60, 682 N.E.2d 418 (1997). Section 4(e) is clearly
more specific than section 27(b)(1). While section 4(e)
specifically addresses changes made to the percentage of common
area ownership, section 27(b)(1) addresses errors or admissions in
the Declaration generally. We interpret section 27(b)(1) to apply
to errors and omissions other than those involving percent of
ownership in common elements. Section 27(b)(1) provides authority
to correct omissions and errors "unless the Act or the condominium
instruments specifically provide for greater percentages or
different procedures." 765 ILCS 605/27(b)(1) (West 1994). Section
4(e) of the Act does indeed provide for a different procedure. 765
ILCS 605/4 (West 1994).
Moreover, according to the rules of statutory construction,
this court is bound to give meaning and effect to all the
provisions of a statute and the court must construe a statute so
that no word, clause or sentence, to the extent that it is possible
to do so, is rendered superfluous or meaningless and that the
court, if possible, is required to give each word, clause or
sentence some reasonable meaning. Walker v. Alton Memorial
Hospital Assn., 91 Ill. App. 3d 310, 414 N.E.2d 850 (1980). If we
were to read section 27(b)(1) to apply to changes in ownership of
common element interest, we would render section 4(e) meaningless.
We find it reasonable to conclude that the legislature deemed
consent of all unit owners necessary when changes are made in the
percentage of common interest ownership in order to avoid
unfairness to minority owners. Common interest ownership goes to
the essence of an owner's property interest in the condominium.
The percentage of common interest ownership impacts the unit's
owner's property taxes, the amount of annual and special
assessments, as well as the resale price of the unit. The
legislature likely recognized the potential for unfairness of
permitting a two-thirds majority of the Board, all of whom have a
financial and personal interest in the outcome, to make a decision
impacting such significant rights of other unit owners.
We therefore find that the Board cannot change plaintiffs'
ownership interest in the common areas without the consent of all
unit owners. Carney v. Donley, 261 Ill. App. 3d 1002, 633 N.E.2d 1015 (1994); Stuewe v. Lauletta, 93 Ill. App. 3d 1029, 418 N.E.2d 138 (1981). To effect an amendment, the Board must follow the
provisions in the Act, and the failure to do so makes the attempted
amendments ineffective. St. Francis Courts Condominium Assn. v.
Investors Real Estate, 104 Ill. App. 3d 663, 432 N.E.2d 1274
(1982). Since the Board did not obtain consent of all unit owners
to change the percentage of ownership in the common areas, the
fifteenth and sixteenth amendments to the Declaration are
ineffective.
We express no opinion as to whether the percentage of
ownership in the common elements may be changed through some legal
proceeding, rather than by Board action under the Act. We limit
our holding to a determination that the Act does not permit the
Board to alter the percentage of ownership in the common elements
by the consent of two-thirds of the members of the Board, but only
when consent of all unit owners has been obtained.
Accordingly, for the reasons set forth above the trial court
order granting summary judgment in plaintiffs' favor is affirmed.
Affirmed.
RAKOWSKI, J., concurs.
TULLY, J., dissents.
JUSTICE TULLY, dissenting:
I respectfully dissent.
Although I agree with the majority's statement of the law on
statutory construction, I disagree with their conclusion that "[i]f
we were to read section 27(b)(1) to apply to changes in ownership
of common element interest, we would render section 4(e)
meaningless."
The historical and practice notes for the Act indicate that
27(b) "provides a summary procedure to correct omissions or errors
in condominium instruments. Omissions or errors included
provisions which conflict with current case and statutory law,
typographical or similar types of mistakes, and provisions in a
declaration or by-laws which mutually conflict with each other."
I agree with defendant in this case and believe that there is a
genuine issue of material fact regarding whether the percentages of
ownership interest were determined in compliance with section 4(e)
in the first place, and whether, according to the developer's
deposition testimony, there might have been in part a typographical
error in recording the percentages. If so, I believe that section
27(b)(1) could have been used without rendering section 4(e)
meaningless by correcting a fundamental error in establishing the
percentages. Section 4(e) sets forth the method of establishing
the percentages and states that "having once been determined and
set forth as herein provided, such percentages shall remain
constant unless otherwise provided in this Act or thereafter
changed by agreement of all unit owners." The majority relies on
Parello to indicate that the only way to correct the percentages is
by agreement of all unit owners. I am not convinced that Parello
provides such an absolute rule. Although that case quotes section
4(e), it is not factually similar and does not address the issue of
a fundamental error in the computed ownership interest percentages.

Also to be considered are the public policy implications of
possibly preventing a board from correcting obvious, fundamental
errors in condominium instruments, by requiring the unanimous
agreement of owners. I believe that summary judgment in this case
was improper.
In light of the foregoing, I would reverse the judgment and
remand this cause for further proceedings consistent with this
view.