Welch v. Stonybrook Gardens Cooperative, Inc.
118 A.3d 675
Conn. App. Ct.2015Background
- Stonybrook Gardens Cooperative, Inc. operated a 400-unit residential cooperative and the plaintiff Joan E. Welch was an original member with a 1965 Occupancy Agreement.
- Article 11 allocated most repairs to the corporation but allowed certain painting/decoration costs to be borne by the member; Article 14 required compliance with governing rules and amendments.
- In 1983 the board adopted a regulation requiring the corporation to supply paint while members perform labor for exterior painting; no formal amendment to the 1965 agreement occurred.
- From 2007 Welch’s exterior siding was repainted by the defendant with labor by Welch; since 2007 Welch demanded the defendant pay for painting, while the defendant relied on the regulatory rule.
- Welch sued for breach of contract and for bad faith/implied covenant, initially obtaining a judgment for damages; the defendant appealed.
- The trial court found the 1965 agreement amended by collateral regulation and awarded Welch $5,000 plus costs; the appellate court reverses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the regulation alter the 1965 occupancy agreement? | Welch relied on the 1965 agreement; regulation collaterally amended terms. | Regulation reasonably interpreted and consistent with the agreement; no amendment required. | No breach; regulation valid and consistent with contract. |
| Did defendant breach the implied covenant of good faith and fair dealing? | Defendant acted in bad faith by unilaterally altering contractual rights and seeking penalties. | Regulation was reasonable, not a breach; no bad faith. | No breach; bad-faith finding rejected. |
Key Cases Cited
- Weldy v. Northbrook Condominium Assn., Inc., 279 Conn. 728 (2006) (board authority to adopt regulations must align with declaration and act within its powers)
- Harbour Pointe, LLC v. Harbour Landing Condominium Assn., Inc., 300 Conn. 254 (2011) (contractual documents read as whole; avoid bizarre results; broad-board authority)
- Cantonbury Heights Condominium Assn., Inc. v. Local Land Development, LLC, 273 Conn. 724 (2005) (declaration as contract; unit owners surrender some rights for common good)