Alessi v. BOWEN COURT CONDOMINIUM
2012 R.I. LEXIS 70
| R.I. | 2012Background
- Bowen Court Associates created a condominium in East Providence in 1989 and reserved a ten-year withdrawable real estate right under the declaration.
- The withdrawable parcel at 735 Willett Avenue/Scott Drive was later mortgaged to RICCU, which foreclosed in 1992 and transferred the property to DEPCO in 1992.
- DEPCO purchased the parcel in 1994; neither RICCU, DEPCO, nor plaintiff asserted the withdrawal right during the period it remained withdrawable.
- The ten-year withdrawal period expired on January 11, 1999; plaintiff later requested exclusion of the parcel in 2001 and 2002, which the association denied.
- Plaintiff sued for declaratory relief and unjust enrichment; the trial court granted summary judgment for defendants, ruling the withdrawal right expired and title passed to the unit owners' association.
- Rhode Island law, including DEPCO's role and the Condominium Act, frames the dispute over whether foreclosure can extend or revive a time-limited development right.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 34-36.1-2.18(i) creates a perpetual exclusion right after foreclosure. | Alessi argues the mortgagee's right to require exclusion survives foreclosure independent of the declarant's time limit. | Bowen Court contends the right is time-limited and constrained by the declarant’s expiration. | Not perpetual; right terminates with the ten-year limit. |
| Does foreclosure transmute withdrawable real estate into title in fee simple for the successor? | Foreclosure transfers greater rights to the mortgagee, including exclusion rights beyond the declarant’s term. | Rights do not exceed what the declarant could transfer and the ten-year limit remains controlling. | Foreclosure does not convert withdrawable real estate into unfettered ownership; limited right expires by date. |
| Did DEPCO or plaintiff acquire any rights to exclude after foreclosure absent timely action by the mortgagee? | DEPCO could retain or acquire the right to require exclusion, despite foreclosure. | No one exercised the right to exclude within the time limit, so rights lapsed. | Rights expired no later than January 11, 1999; title passed to the unit owners' association. |
| Should the court interpret § 34-36.1-2.18(i) in harmony with the statutory scheme and legislative purpose? | Statute grants a separate mortgagee right to require exclusion regardless of the declarant's term. | Legislature intended time limits on development rights; unlimited exclusion would undermine unit owners. | Interpretation consistent with legislative purpose; ten-year limit controls. |
Key Cases Cited
- Greensleeves, Inc. v. Lee's Wharf Marina Association, 711 A.2d 1140 (R.I.1998) (third-party rights require recording to transfer special declarant rights)
- America Condominium Association, Inc. v. IDC, Inc., 870 A.2d 434 (R.I.2005) (Condominium Act aims to balance declarant rights with unit owners' expectations)
- America Condominium Association, Inc. v. IDC, Inc., 844 A.2d 117 (R.I.2004) (development rights expire if not exercised by date in declaration)
- St. Jean Place Condominium Association v. DeLeo, 745 A.2d 738 (R.I.2000) (cannot convey what it does not own; expired rights cannot be revived)
- Rhode Island Depositors Economic Protection Corp. v. Bowen Court Associates, 763 A.2d 1005 (R.I.2001) (DEPCO's authority and role in asset disposition during credit union crisis)
- Rhode Island Depositors Economic Protection Corp. v. Mapleroot Development Corp., 710 A.2d 167 (R.I.1998) (DEPCO powers broadly protect depositors and assets; supports flexible acquisition rights)