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McNeill v. Evergreen Court Condominium Association


August 11, 2009


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, SC 2586-08.

Per curiam.


Submitted April 28, 2009

Before Judges Yannotti and LeWinn.

Plaintiff Kevin J. McNeill appeals from the August 14, 2008 judgment of the Special Civil Part dismissing his complaint against defendant Evergreen Court Condominium Association, Inc. (Evergreen). For the reasons that follow, we affirm.

On May 19, 2008, plaintiff purchased an Evergreen condominium unit from a prior owner. At closing, plaintiff was charged the amount of $513.72 to be paid to Evergreen as his capital contribution. Evergreen's master deed provides, in pertinent part: "Each initial unit purchaser shall pay to the association a non-refundable contribution towards the working capital reserve equal to three months common expense installments."

Plaintiff claimed that, because his purchase was a "'subsequent resale'" and not an "'initial'" purchase, he was not subject to the capital contribution provision in the master deed. When Evergreen declined to refund the $513.72 contribution, plaintiff filed suit in the Special Civil Part. Plaintiff contended that under the Condominium Act, N.J.S.A. 46:8B-1 to -38, Evergreen was not entitled to collect this contribution. Specifically, plaintiff relied upon N.J.S.A. 46:8B-15(e), which provides in pertinent part:

The [condominium] association may levy and collect assessments duly made by the association for a share of common expenses or otherwise, including any other moneys duly owed the association, upon proper notice to the appropriate unit owner . . . if authorized by the master deed or bylaws.

If authorized by the master deed or bylaws, the association may levy and collect a capital contribution, membership fee or other charge upon the initial sale or subsequent resale of a unit, which collection shall be earmarked for the purpose of maintenance of or improvements to common elements to defray common expenses or otherwise . . . .

At trial, plaintiff argued that Evergreen's master deed referred only to "'initial unit purchaser[s]'" and, therefore, as a purchaser pursuant to a "subsequent resale" of a unit, he was not liable for the contribution fee.

Defendant presented the testimony of Phyllis Pasqualetto, a representative of Evergreen's management company responsible for "collect[ing] maintenance fees, pay[ing] their bills and do[ing] all the up front letters to the attorneys for the collections." Pasqualetto stated her understanding of the working capital contribution as follows:

[W]e have been there since, I believe[,] '97 or previous to that, and everybody since then has paid it, and it was interpreted that everybody should pay it by us, as well as the Board of Directors, who[m] we take our direction from.

Pasqualetto stated that Evergreen consists of twenty units, adding: "It's a very small complex and . . . [we] need the money to be able to run the [a]ssociation without . . . hav[ing] to raise maintenance fees all the time."

At the conclusion of the testimony, Judge Menelaos W. Toskos rendered a decision from the bench dismissing plaintiff's complaint. The judge stated:

This is a breach of contract case in which the plaintiff . . . alleges that the defendant breached the contractual documents as they're espoused in the condominium master deed . . . because the defendant collected a capital contribution fee of $513.7[2] at the time the plaintiff purchased his unit. And plaintiff has to prove by a preponderance of the evidence that there was a breach of contract, meaning that there was an agreement. The agreement did not include the right of the defendant to obtain this capital improvement.

And, in construing documents and contracts, the court is guided by various legal principles. . . . [The] process of interpretation and construction requires the court to look at all relevant evidence and that the meaning that w[as] usually given to expressions used in contractual transaction[s] is the meaning that one of the parties in good faith gives to them.

Here, there was testimony from the defendant's witness that the term "initial unit purchaser" has always been interpreted to mean any purchaser of the property, that this is a reasonable interpretation because it's a 20[-]unit condominium and if there was only an initial capital contribution by the first 20 purchasers there wouldn't be sufficient funds to pay any subsequent capital expenses that might be required, that they have always been interpreting it this way and that . . . they're not in contradiction with the statute because their condominium document[] does have a provision which they have interpreted as meaning any sale that requires them to collect this as an improvement fee.

The court agrees that that's a reasonable interpretation of the terminology used in the master deed, "initial unit purchaser," and that plaintiff has failed to satisfy the burden of showing by a preponderance of the evidence that the term "initial unit purchaser" refers only to the first purchaser and that consequently there was a breach of the contract. So, for those reasons, I'll dismiss the complaint without cause.

On appeal, plaintiff argues that he "is not the initial unit purchaser [and,] therefore[,] is not subject to pay the condominium capital contribution fee." Having reviewed the record in light of this argument, however, we are satisfied that the trial judge's findings of fact and conclusions of law are amply supported by the record. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). Evergreen's master deed requires "[e]ach initial unit purchaser" to pay a working capital contribution to the association. This language does not, in and of itself, restrict this obligation exclusively to initial unit purchasers.

Moreover, the trial judge had before him uncontroverted evidence that Evergreen "has always . . . interpreted" the term "initial unit purchaser" to mean "any purchaser of the property . . . ." The judge found this to be "a reasonable interpretation" in light of the limited number of units in the association and the significant financial burden that would be placed upon the association's members if plaintiff's interpretation prevailed.

Plaintiff presented no evidence to dispute defendant's claim that notwithstanding the language of the master deed, "everybody[,]" including subsequent unit purchasers, paid the capital contribution fee because, otherwise, the association could not afford to operate. Under these circumstances, we are satisfied that the trial judge properly dismissed plaintiff's complaint. Accordingly, we affirm the judgment entered on August 14, 2008, for the reasons stated by Judge Toskos in his bench decision of that date.



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