Trustees Of The Cambridge Point Condominium Trust v. Cambridge Point LLC

88 N.E.3d 1142 (2018)

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Nature of the Case

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Facts

Trustees (P) have filed suit against LLC (D) for damages arising from various design and construction defects in the condominium's common areas and facilities. D created P in 2007. P's board of trustees is responsible for administering the affairs of the trust. They have the authority under § 1(o) of the bylaws to “conduct litigation as to any course of action involving the common areas and facilities.” This authority is limited by a condition precedent that requires the trustees, before initiating any litigation against anyone who is not a unit owner, (1) to deliver a copy of the proposed complaint to all unit owners; (2) to specify a monetary limit of the amount to be paid as legal fees and costs in the proposed litigation; (3) to inform all unit owners that, if they consent to the initiation of the litigation, they will forthwith be separately assessed this amount of legal fees and costs as a special assessment; and (4) within sixty days after a copy of the proposed complaint has been delivered to the unit owners, to receive the written consent of not less than eighty percent of all unit owners to bring the litigation. Unit owners were complaining about pervasive water leaks, which were infiltrating and damaging the building envelope, eventually causing a mold infestation both on the exterior sheathing of the building envelope and within individual units. An engineering firm identified myriad design and construction defects with the condominium. P demanded that D repair the defective construction. D said no. P got a contractor who estimated that the costs of repair would exceed $2 million. P tried to follow the bylaws but did not get 80% approval from unit owners. P filed a verified complaint against D for negligence, breach of the implied warranty of habitability, negligent misrepresentation, fraudulent misrepresentation and concealment, and breach of fiduciary duty. P also sought a judgment declaring that § 1(o) of the bylaws is void. It turns out that D and their affiliates had “reserved for themselves, and continue to own, enough units to prevent an [eighty percent] supermajority from authorizing P to institute a lawsuit.” P moved for partial summary judgment on their claim seeking a judgment declaring that § 1(o) of the bylaws is void. Two motion judges granted D's motion to dismiss. P appealed, and the court granted their application for direct appellate review.