Cantonbury Heights Condominium Assn., Inc. v. Local Land Development, LLC

Cantonbury Development Limited Partnership was the original developer of the Cantonbury Heights condominium complex in Connecticut. Cantonbury Development established declarations providing for the construction of nine condominium units with an opportunity to add 132 more. Cantonbury Development’s rights as developer were later transferred to Cantonbury Heights Condominium Association, Inc. (Cantonbury Heights) (plaintiff). Following the transfer, an additional 67 condominium units were built. Following a series of conveyances, Cantonbury Heights’ rights were transferred to Local Land Development, LLC (Local) (defendant). However, as construction of the additional units was underway, the city and state halted construction because of environmental concerns. The state’s department of environmental protection issued a notice of violation to Cantonbury Heights. Cantonbury Heights filed for a temporary injunction to prevent Local from exercising any of its special declarant rights under the declarations. The declarations for the condominium complex contained a provision placing a special limitation on development rights, stating that “unless sooner terminated by a recorded instrument executed by the Declarant, any Special Declarant Right may be exercised by the Declarant so long as the Declarant is obligated under any warranty or obligation, owns any units or any Security Interest on any units, or for 21 years after the recording of the Declaration, whichever is sooner.” Cantonbury Heights asserted that each enumerated item in this provision was required and therefore to exercise a special declarant right, the declarant must be obligated under a warranty or an obligation, and the declarant must own a unit and have a security interest in the unit, and less than 21 years must have elapsed. Local argued that as long as less than 21 years had passed, the declarant only needed to be obligated under either a warranty or an obligation or it had to own a security interest. In addition to their disagreement over the meaning of the special limitation provision, Cantonbury Heights and Local also disagreed as to the meaning of the term obligation within the context of the provision. Specifically, Cantonbury Heights asserted that only obligations to unit owners qualified to satisfy the provision’s requirement that the declarant be under an obligation or have its own security interest. In contrast, Local asserted that the term obligation also included any tax, expense, and liability obligation associated with its position as declarant. Cantonbury Heights filed an eight-count complaint. The trial court granted summary judgment on seven of the eight counts in favor of Local. Cantonbury Heights appealed.