A. Kantor v. Wrenfield Homeowners' Assoc., Inc., et al. (Majority Opinion)

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IN THE COMMONWEALTH COURT OF PENNSYLVANIA Andrea Kantor, Appellant v. Wrenfield Homeowners Association, Inc. and Conwell Limited Partnership BEFORE: : : : : : : : No. 1718 C.D. 2007 Argued: March 11, 2008 HONORABLE DAN PELLEGRINI, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE JIM FLAHERTY, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE PELLEGRINI FILED: April 8, 2008 Andrea Kantor (Homeowner) appeals from an order of the Court of Common Pleas of Montgomery County (trial court) granting a Motion for Summary Judgment by the Wrenfield Homeowners Association, Inc. (Association) and finding that Homeowner did not have the absolute right to approve or disapprove of any change to Common Area within her planned residential community.1 1 Homeowner initially appealed from the trial court s orders, dated May 9, 2007, which denied her Motion for Summary Judgment and granted the Association s Motion for Summary Judgment. By order dated September 13, 2007, this Court found that the trial court s order denying Homeowner s Motion for Summary Judgment was not a final order or otherwise appealable as of right pursuant to Pa. R.A.P. 311, 313, and 341(b) and quashed that appeal (No. 1717 C.D. 2007). By per curiam order dated August 9, 2007, the appeals were transferred from the Superior Court under 42 Pa. C.S. §762(a)(5)(i),(ii), which provides that the Commonwealth Court shall have exclusive jurisdiction over appeals involving all actions or proceedings relating to not-for-profit corporations. Homeowner s parcel of land is part of Wrenfield, a planned residential community located in Lower Merion Township, Pennsylvania. In 1985, Wrenfield was created through the merger of two properties: the Reichel parcel and Wrenfield parcel. The Reichel parcel was owned by Frank and Beatrice Reichel (Reichels) and adjoined the Wrenfield parcel, which was owned by a straw party (First Springmill Corporation) for Wrenfield Associates (Developer). Developer intended to establish sixty-two living units on the Wrenfield Parcel and the Reichels had the option to develop their parcel with not more than four newly constructed units or, in the alternative, by the division of the existing Manor House on the property into not more than five units, all to be done within seven years from the recording of the Declaration of Covenants, Easements, and Restrictions (Declaration) at which point the option expired. The Reichels joined with Developer in connection with its application to Lower Merion Township (Township) for approval of a planned residential development consisting of not more than sixty-seven units. The Reichels also agreed to subject their parcel (including the Manor House) and any potential units constructed on the parcel to the terms and conditions of the Declaration. The Declaration was made by Developer, the Reichels, and First Springmill Corporation with the stated intent of setting forth the rights and obligations of the Reichels, Developer, future owners of the units, and certain rights of the governing body of the Township. In order to carry out the parties intentions, Developer agreed to establish the Association. Wrenfield is administered, managed, and operated by the Association, which is organized as a nonprofit corporation under the Pennsylvania Nonprofit Corporation Law of 1988 (Nonprofit Law), 15 Pa. C.S. §§ 5101-6162. Under the Declaration, the Association owns the Common Area2 at Wrenfield. 2 Common Area is defined in the Declaration under Article I, Section 1.16, as all open space as shown on the final Title Plan of Wrenfield excluding however the following: (a) all (Footnote continued on next page ¦) 2 On March 15, 1993, Homeowner acquired title from the Reichels to the Reichel parcel, which is identified in the Declaration as the Manor House. On October 25, 2001, Homeowner effected a reverse subdivision, in which she consolidated the tax parcels that constituted the Reichel parcel into a single lot. On or about May 17, 2005, the Association sent a letter3 to all Wrenfield property owners, including Homeowner, providing notice that the (continued ¦) open space within the fee simple area of any Living Unit to other parcel of ground which has been or is intended to be conveyed, (b) all space within any Area A Limited Common Area so designated either in this Declaration, or such plan, and (c) all space within Area B, or, if Area C is removed from Area B, within Area E. 3 The letter to Wrenfield Homeowners, provides in relevant part: Dear Homeowners: Our Wrenfield Homeowners Association holds title to the Common Area within the community. When the developer deeded the Common Area over to the Association, the Association received title to a slightly greater area of land than was anticipated. This occurred because the developer of Wrenfield had originally planned for the community to contain sixty-seven homes. But the developer stopped construction and left the project after completing and selling only sixty-three homes. The Association s Board concluded the developer s decision to stop selling homes on the last building lot may have created a significant business opportunity for the Association, which the Board could not ignore. Therefore, over the past months the Board first began to explore, and then pursue, a plan to determine whether the Association might be able to sell the last building lot upon economic terms which would be beneficial to the interests of our Association. (Reproduced Record at 171a.) 3 Association had entered into an agreement to convey a portion of the Common Area to Conwell Limited Partnership (Conwell) for $1,200,000.00 and making a request for the owners to sign and return assents to the sale of the building lot. Fifty-eight of the sixty-three owners of units located in Wrenfield returned the owners assent forms.4 Homeowner was one of four Wrenfield property owners that did not return the form, and one homeowner returned the form, declining to assent. On September 15, 2005, Homeowner filed an action for Declaratory Judgment and a Permanent Injunction against the Association and Conwell which sought to prevent the Association from selling a portion of the Common Area.5 The 4 The assent form states, in relevant part: We, being the Members of the Wrenfield Homeowner s Association, and the owners of a Living Unit located within the Wrenfield planned residential community, hereby give and grant our Assent and Agreement pursuant to Article III, Section 3.3(b) of the recorded Declaration of Covenants, Easements and Restrictions of Wrenfield to the Association, acting by and through the Board of Directors, to convey and sell an undeveloped building lot on the Common Area located on the North side of Canterbury Lane, along the North edge of the Common Area, near to the Spring Mill Lane entrance gates of the community. The building lot on the Common Area may be sold for the purpose of constructing one (1) building to contain not more than three (3) Living Units, to be built in a style which will be substantially similar in appearance and style to the appearance and style of the Living Units, other than the Mansion House, which currently exists in Phase III at Wrenfield. It is acknowledged and agreed that all of the net proceeds of the sale of all three (3) lots shall be added to the Association s reserve funds. (Reproduced Record at 471a.) 5 Homeowner originally filed a Petition for Preliminary Injunction against the Association and Conwell. However, by stipulation of October 27, 2005, the Association and Conwell agreed to refrain from conveying or developing the Common Area at issue until a judicial determination (Footnote continued on next page ¦) 4 Association answered with new matter and cross claims. After the pleadings were closed, both the Association and Homeowner filed Motions for Summary Judgment together with a Joint Stipulation of Facts. Homeowner s Motion for Summary Judgment was based on Article XII, Section 12.6 of the Declaration that provides: 12.6 Flexibility of Development. Nothing contained herein shall be construed to require the Developer to develop the Wrenfield Parcel, or any part thereof or to convey any part of Wrenfield. Developer and/or the Association shall have the right to change the location, size or permitted use of any part of the Common Areas or any easement or part thereof over any part of Area A at any time, provided that no change shall interfere with access to any Area A Limited Common Area or the reasonable use of the Common Areas by the Owners of the Living Units. No such change, however, shall occur without prior approval by the Township and the owner(s) of the Manor House. According to Homeowner, Article XII, Section 12.6 required her approval before the Association could change the location, size or permitted use of the Common Area. In its Motion for Summary Judgment, the Association argued that Homeowner s reliance on Article XII, Section 12.6 was misplaced because this section was intended to provide Developer with the flexibility to change the (continued ¦) of the parties respective Motions for Summary Judgment if Homeowner withdrew her petition for injunctive relief. 5 location, size or permitted use of Common Areas during the seven-year development period in which the Reichel units could be constructed, and once the development phase of seven years expired, the flexibility and rights afforded to Developer and Homeowner were no longer applicable. The applicable provisions of the Declaration, it contended, were Article III, Sections 3.2 and 3.3 which afforded the Association the right to convey, dedicate, or transfer all or any part of the Common Area if certain requirements were met. Those sections are as follows: 3.2 Members Easements and Title to Common Area. Subject to the provisions of Section 3.3 of this Article, every Member shall have a right and easement of enjoyment in and to the Common Areas and any facilities erected upon such Common Areas (including, without limitation, all paved roadways and street, whether dedicated or not, for the purposes of pedestrian or vehicular ingress, egress, and regress to and from the property) and such easement shall be appurtenant to and shall pass with the title to every Living Unit, the Manor House, and the Manor House Units. The Developer may retain the legal title to the Common Area until seventyfive percent of all the proposed Living Units (excluding the Reichel Units and Manor Units) are sold or until 7 years after this Declaration is filed of record, whichever shall first occur, at which time Developer shall transfer legal title to the Common Area to the Association, but regardless of actual title to such Common Areas, the provisions of this Article shall apply. 3.3 Extent of Members Easements. The Members easement of enjoyment created hereby shall be subject to the following: (a) The right of the Association to establish reasonable admission and other fees for the use of the facilities within the Common Areas. 6 (b) The right of the Association to convey, dedicate or transfer all or any part of the Common Area, subject to the prior approval of the Class F member[6], if any, the assent of seventy-five percent of the Members and the prior approval of Lower Merion Township. During that period when the Class F Member controls a majority of votes in the Association, the Developer may not convey the Common Area to any individual or entity other than the Association itself or Lower Merion Township, except such conveyances as are necessary to correct or clarify title line based on an as built survey. (c) The right of the Association to regulate the use of portions of the Common Area and the Area A Limited Common Areas for the benefit of the Members. Because under those provisions it owned the Common Area, had the right to convey, and had approval of over ninety percent of the Wrenfield property owners, it had the right to convey a small portion of the Common Area. Agreeing with the Association, the trial court found that Article XII, Section 12.6 of the Declaration was intended to provide Developer and/or the Association with flexibility during the development phase of Wrenfield and granted the Manor House owner(s) the right to approve changes in the Common Area during the time of development. In its opinion filed after Homeowner was directed to file a Pa. R.A.P. 1925(b) Statement,7 the trial court held that the Association was vested 6 In Article II, Section 2.2(c), the Declaration indicates that the Class F member was Developer and that upon the sale of 75% of the proposed Living Units on December 20, 1992, the voting rights of the Class F member shall be reduced to one vote for each proposed Living Unit. 7 Rule 1925(b), Direction to file statement of errors complained of on appeal; instructions to the appellant and the trial court, provides, in pertinent part, If the judge entering the order giving rise to the notice of appeal ( judge ) desires clarification of the errors complained of on (Footnote continued on next page ¦) 7 with both the rights, and the obligations, to make decisions regarding the sale and use of the Wrenfield property - including the Common Areas - with the approval of 75% of the homeowners and Lower Merion Township, as those rights and obligations are detailed in Articles II and III of the Declaration. On appeal,8 Homeowner contends that the Association under the Declaration did not have the right to (i) develop additional living units at the Wrenfield Community; (ii) amend the plats and plans to add extra units; or (iii) rely upon the Owner s Assent through which ninety-two (92%) percent of the owners at Wrenfield voted in favor the conveyance. Taken together, what Homeowner is alleging is that the Association did not have the authority to construct more than sixty-two living units in Wrenfield, a planned unit development, except for the possibility of somehow altering the use of the only available land in Wrenfield: the Common Area. The Association, however, argues that none of those issues were raised before the trial court or asserted in Homeowner s Concise Statement of Matters Complained of on Appeal in violation of Pa. R.A.P. 302(a)9 and 1925(b).10 (continued ¦) appeal, the judge may enter an order directing the appellant to file of record in the trial court and serve on the judge a concise statement of the errors complain of on appeal ( Statement ). 8 This Court s scope of review of a trial court's grant of summary judgment is limited to determining whether the court made an error of law or abused its discretion. East Lampeter Township v. County of Lancaster, 744 A.2d 359 (Pa. Cmwlth. 2000). A trial court may grant summary judgment only where the pleadings, depositions, answers to interrogatories, admissions and affidavits demonstrate that there is no genuine issue as to any material fact, and that the moving party is entitled to summary judgment as a matter of law. Id. 9 Pa. R.A.P. 302(a) provides: (Footnote continued on next page ¦) 8 (continued ¦) Issues not raised in the lower court are waived and cannot be raised for the first time on appeal. 10 In her 1925(b) Statement, Homeowner stated that the issues on appeal were whether the trial court erred and abused its discretion in granting the Association s Motion for Summary Judgment and denying Homeowner s Motion for Summary Judgment: 1. When it found the Declaration was unambiguous yet found that Plaintiff Kantor s right of approval set forth in Article 12.6 had been extinguished upon completion of the development phase when there is no development phase defined in the Declaration, there is no such limitation in Article 12.6, and when the Association intends to further develop the Common Area with new units. 2. When it found the Declaration was unambiguous and could not be determined to provide approval rights, as well as voting rights, to Kantor, even though the document on its face and in plain language clearly provides approval rights separate from voting rights to Kantor. 3. When it determined the contract has a meaning that has taken into consideration the object which the parties intended to accomplish without finding the contract ambiguous and without being presented with or soliciting any evidence to demonstrate the intent of the parties, and when the intent of the parties was not, in any event, a question posed to the trial court in either parties summary judgment motion. 4. When it found that Plaintiff Kantor is entitled to one vote, but failed to give any meaning to the provision in Article 12.6 that the Association may only change the location, size or permitted use of the Common Areas with the prior written approval of Plaintiff Kantor. 5. When it found that the Association acted within its rights and obligations in Article II and III of the (Footnote continued on next page ¦) 9 A new and different theory of recovery may not be successfully advanced for the first time on appeal. Janosko v. Pittsburgh National Corp., 478 A.2d 160 (Pa. Cmwlth. 1984). For the purposes of Pa. R.A.P. 302(a), an issue has been defined as a disputed point or question on which the parties to an action desire the court to decide. Pennsylvania Liquor Control Board v. Willow Grove Veterans Home Association, 509 A.2d 958 (Pa. Cmwlth. 1986), (disapproved on other grounds by Appeal of Borough of Churchill, 525 Pa. 80, 575 A.2d 550 (1990)). Moreover, even if an issue has been raised at an earlier phase of the proceeding, [i]n order to preserve their claims for appellate review, appellants must comply whenever the trial court orders them to file a Statement of Matters Complained of on appeal pursuant to Rule 1925. Any issues not raised in a 1925(b) statement will be deemed waived. Commonwealth v. Lord, 553 Pa. 415, 420, 719 A.2d 306, 309 (1998). In Commonwealth v. Castillo, 585 Pa. 395, 888 A.2d 775 (2005), the Supreme Court reaffirmed the bright-line rule first set forth in Lord and held that issues which are raised in an untimely 1925(b) statement will be deemed waived even if the trial court addresses the issues in its opinion. See also Caln Nether Company, L.P. v. Board of Supervisors of Thornbury Township, 840 A.2d 484 (Pa. Cmwlth. 2004). (continued ¦) Declaration, even though the Association is not granted a right in those Articles to change the location, size or use of the Common Area, as it proposes to do, and is only granted that right in Article XII, Section 12.6. (Reproduced Record at 311-312a.) 10 Our review of the Cross-Motions for Summary Judgment filed in the trial court, Homeowner s Brief in Support of her Motion for Summary Judgment, and her 1925(b) Statement shows that none of those issues were properly raised/preserved. Having not been properly raised/preserved, we will not consider those issues on appeal. As to the issue preserved, Homeowner contends that the trial court erred when it refused to give effect to the clear language in Section 12.6 of the Declaration by finding that the entire section was extinguished following completion of Wrenfield s development phase. We have carefully considered the positions set forth by each party in their respective briefs. Those issues were fully and ably analyzed by the trial court, and rather than repeat them here, we adopt the wellreasoned opinion of the Honorable William J. Furber, Jr. of the Court of Common Pleas of Montgomery County in Andrea Kantor v. Wrenfield Homeowners Association, Inc. and Conwell Limited Partnership, No. 5-22908, filed October 5, 2007. Accordingly, the trial court order is affirmed. DAN PELLEGRINI, Judge 11 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Andrea Kantor, Appellant v. Wrenfield Homeowners Association, Inc. and Conwell Limited Partnership : : : : : : : No. 1718 C.D. 2007 ORDER AND NOW, this 8th day of April, 2008, the order of the Court of Common Pleas of Montgomery County, dated May 9, 2007, is affirmed. DAN PELLEGRINI, Judge

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