BEACH, J.
The defendant, Stonybrook Gardens Cooperative, Inc., appeals from the judgment of the trial court rendered in favor of
The record discloses the following facts as stipulated to by the parties and as found by the trial court. The defendant owned and managed a residential cooperative complex in Stratford, comprising 200 two-story town house style duplex structures and 200 one-story ranch style duplex structures. All the town houses had wood siding. In 1965, the plaintiff, who, with her husband, was an original member of the defendant, entered into an "Occupancy Agreement"
Although the 1965 occupancy agreement provided that it was subject to the rules and regulations of the defendant as thereafter amended, the defendant had not adopted any rules and regulations at that time.
The exterior of the plaintiff's unit was painted at times before and after 1983 with labor supplied by her. In 2007, the defendant replaced sections of the exterior siding of the plaintiff's unit and painted the replaced siding a different color than that used on the rest of the unit. Since 2007, the plaintiff requested that the defendant
The plaintiff brought this action in the small claims session of the Superior Court, seeking $5000 in damages for the cost of painting the exterior of her unit. The defendant transferred the claim to the regular docket of the Superior Court, where the plaintiff filed a two count complaint alleging: (1) that the defendant breached the 1965 occupancy agreement by refusing to perform the painting and attempting to impose on the plaintiff the cost of repair and maintenance of her unit, when such costs were part of the defendant's obligation under the 1965 occupancy agreement; and (2) that in so doing, the defendant acted with reckless indifference and breached the implied covenant of good faith and fair dealing. The defendant filed an answer and two special defenses, alleging estoppel and waiver.
The court found that the 1965 occupancy agreement was created as a bylaw of the defendant and that the 1965 occupancy agreement was never amended pursuant to the procedure required to amend bylaws. The court further found that the 1965 occupancy agreement omitted, although it did reference, rules and regulations concerning the use of common areas; "it [was] the opinion of the court that the intent of reference to the rules and regulations in the initial documents and, in fact in the first establishment of rules and regulations was limited to rules and regulations concerning the common areas used by the entire membership and not the individual obligations between the [defendant] and the unit owners."
In finding in favor of the plaintiff on her breach of contract claim, the court, citing General Statutes §§ 47-211 and 47-210(b),
The defendant first claims that the court erred in concluding that the defendant had breached the 1965 occupancy agreement by relying on a subsequent regulation to alter the terms of the agreement. We agree.
The court's finding of a breach of contract was based on its determination that the defendant did not have the authority "unilaterally" to alter the 1965 occupancy agreement by adopting the regulation regarding the allocation of painting costs. Our analysis is informed by an examination of the relevant provisions of the organizing documents of the defendant and its regulations; the inquiry involves a question of law that we review de novo. See Weldy v. Northbrook Condominium Assn., Inc., 279 Conn. 728, 736, 904 A.2d 188 (2006).
We begin with the court's analysis. The court classified the 1965 occupancy agreement as a bylaw pursuant to General Statutes § 47-202(5).
The defendant is a cooperative corporation organized in 1965 under the auspices of the Federal Housing Administration. The certificate of incorporation, filed with the state of Connecticut, declared the defendant to be a nonstock corporation. The defendant enacted an initial set of bylaws, which governed its operating procedures, and entered into a regulatory agreement with the Federal Housing Administration. The bylaws defined "members" as the original board of directors and such subsequent subscribers who gained the approval of the board; the members were to be offered occupancy agreements, "which Occupancy Agreements shall all be of one class." A standard occupancy agreement also was promulgated at the inception of the cooperative venture; this is the agreement referenced in this opinion as the "1965 occupancy agreement." The affairs of the defendant were to be administered by the board of directors, which in turn was elected by the members.
The defendant has contested on appeal the trial court's characterization of the occupancy agreement as a "bylaw." We agree that the agreement does not fit within standard definitions of bylaws; cf. General Statutes § 47-202(5); and the original form for occupancy agreements was referred to, but not included in, the original set of bylaws.
We do not, however, view the question of whether the occupancy agreement was a bylaw to be material. If the appropriate question was whether a regulation, adopted by the board of directors, effectively could alter a bylaw, which could be amended only by a two-thirds vote of the membership, then such characterization of the occupancy agreement as a bylaw may well make a difference. Whether we view
We are guided by Weldy v. Northbrook Condominium Assn., Inc., supra, 279 Conn. 728, 904 A.2d 188. In Weldy, the plaintiff condominium owners sought to enjoin the defendant condominium association and its board of directors from enforcing a new regulation, adopted by the board rather than by a two-thirds vote of the membership, regarding maximum allowable leash length for household pets, on the ground that the board had exceeded its authority in adopting the regulation. Id., at 731, 904 A.2d 188. The condominium's declaration provided, as a use restriction, that household pets were to be restrained by leash or other comparable means. Id., at 730-31, 904 A.2d 188. The declaration also provided that the board of directors had the power to make regulations as were necessary to carry out the intent of the use restrictions. Id., at 731, 904 A.2d 188. The bylaws provided that regulations included in the declaration could be amended only in the manner provided for amending the declaration, for which a two-thirds vote of the unit owners and mortgagees was required. Id. The trial court granted the defendant's motion for summary judgment, reasoning that because the leash length requirement was a clarification of an existing rule in the declaration rather than an amendment, the board had not exceeded its authority in adopting the clarification. Id., at 732, 904 A.2d 188. This court disagreed, viewing the subsequent regulation to be an amendment to a provision in the declaration. Id. Because the subsequent regulation had not been approved by a two-thirds vote of the owners and mortgagees, this court held the regulation to be unenforceable. Weldy v. Northbrook Condominium Assn., Inc., 89 Conn.App. 581, 589, 874 A.2d 296 (2005), rev'd, 279 Conn. 728, 904 A.2d 188 (2006).
Holding that the subsequent regulation was valid and enforceable, our Supreme Court reversed the judgment of this court. Weldy v. Northbrook Condominium Assn., Inc., supra, 279 Conn. at 744, 904 A.2d 188. It began its analysis with a discussion of the Common Interest Ownership Act, General Statutes § 47-200 et seq., which "is a comprehensive legislative scheme regulating all forms of common interest ownership," and which was passed in 1983 "to remedy problems arising from unconscionable lease agreements in condominiums and other residential common interest communities created prior to 1984."(Internal quotation marks omitted.) Id., at 735 and n. 3, 904 A.2d 188. The court further noted that "[a] condominium association also is empowered, subject to the declaration provisions, to `[a]dopt and amend bylaws and rules and regulations'; General Statutes § 47-244(1); and to `[r]egulate the use . . . of common elements . . . .' General Statutes § 47-244(6)." Weldy v.
The Supreme Court concluded: "Because an association's power should be interpreted broadly, the association, through its appropriate governing body, is entitled to exercise all powers of the community except those reserved to the members. . . . This broad view of the powers delegated to the . . . board of directors is consistent with the principle inherent in the condominium
The court's conclusion in Weldy that a board enacted rule that does not contravene the declaration, or a right reasonably inferable therefrom, is valid and within the scope of the board's authority informs the result in the present case.
More specifically, the occupancy agreement itself specifically anticipated future regulations. Article 14 of the 1965 occupancy agreement provided that members were to abide by "the Charter, Regulatory Agreement between the Corporation and the Federal Housing Commissioner, By-Laws, rules and regulations of the Corporation and any amendments thereto . . . . The Member hereby ratifies all agreements executed by the Cooperative Corporation on or before the date hereof." (Emphasis added.)
The literal language of the occupancy agreement, then, required the plaintiff to abide by future regulations. A limitation must be placed upon the obligation: in order to compel obedience, the regulation must be reasonable and not materially inconsistent. See Weldy v. Northbrook Condominium Assn., Inc., supra, 279 Conn. at 741-42, 904 A.2d 188 (regulation consistent with condominium declaration). We examine the language of the contractual documents in their entirety to determine whether the regulation regarding payment for the labor involved in painting the exterior of units was consistent with the underlying documents, and thus an appropriate exercise of regulatory authority, or inconsistent, thus requiring ratification by two thirds of the defendant's membership. We apply traditional standards for the interpretation of contracts. "In ascertaining the contractual rights and obligations of the parties, we seek to effectuate their intent, which is derived from the language employed in the contract, taking into consideration the circumstances of the parties and the transaction. . . . We accord the language employed in the contract a rational construction based on its common, natural and ordinary meaning and usage as applied to the subject matter of the contract. . . .
"[A] contract is unambiguous when its language is clear and conveys a definite and precise intent. . . . The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity. . . . Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous. . . . In contrast, a contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself. . . . [A]ny ambiguity in a contract must emanate from the language used by the parties. . . . The contract must be viewed in its entirety, with each provision read in light of the other provisions . . . and every provision must be given effect if it is possible to do so." (Citation omitted; emphasis added; internal quotation marks omitted.) Harbour Pointe, LLC v. Harbour Landing Condominium Assn., Inc., 300 Conn. 254, 260-61, 14 A.3d 284 (2011). We will not construe a contract's language in such a way that it would lead to an absurd result. See Waesche v. Redevelopment Agency, 155 Conn. 44, 51, 229 A.2d 352 (1967).
We conclude that, in the context of the entire contractual structure, the regulation regarding payment for the labor involved in painting the exterior of the units was reasonable and foreseeable. The structure
Recognizing the validity of the regulation avoids an unworkable or absurd result as well. The standard occupancy agreements were amended from time to time. The parties stipulated that since 1983, the occupancy agreements have expressly provided that each member was responsible for the labor costs for painting the exterior of the units. If the plaintiff's view was adopted, then other members would bear the cost of providing for her unit, while she would not be contributing toward the cost of their units. The certificate of incorporation states that there "shall be but one class of members." The contractual documents are to be read as a whole and bizarre results are to be avoided. See Harbour Pointe, LLC v. Harbour Landing Condominium Assn., Inc., supra, 300 Conn. at 261, 14 A.3d 284.
We conclude that because (1) applying the regulation to the plaintiff complies with the literal language of the occupancy agreement, (2) the regulation is not necessarily fundamentally inconsistent with the occupancy agreement and provides a reasonable method of allocating the relevant costs, and (3) application of the regulation to the occupancy agreement avoids a bizarre and unworkable result, the trial court's conclusion that the defendant breached its contract with the plaintiff must be reversed.
The court also based its finding of a breach of contract on unconscionability under General Statutes § 47-210.
The defendant next claims that the court erred in concluding that the defendant breached the implied covenant of good faith and fair dealing. We agree.
The court concluded that the defendant breached the implied covenant of good faith and fair dealing "in . . . ignoring the rights of the plaintiff by attempting to nullify or unilaterally amend her contract rights and seeking retribution for her claims by threatening monetary penalties. . . ."
"The duty of good faith under. . . § 47-211 requires that [e]very contract or duty governed by [the Common Interest Ownership Act] imposes an obligation of good faith in its performance or enforcement. The common-law duty of good faith and fair dealing implicit in every contract requires that neither party [will] do anything that will injure the right of the other to receive the benefits of the agreement. . . . Essentially it is a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended. . . . To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith. . . . Whether a party has acted in bad faith is a question of fact, subject to the clearly erroneous standard of review." (Citations omitted; internal quotation marks omitted.) Harley v. Indian Spring Land Co., 123 Conn.App. 800, 837, 3 A.3d 992 (2010).
The court based its finding of bad faith on the same conduct that it found to be a breach of contract. For the reasons set forth in part I of this opinion, the defendant did not breach the 1965 occupancy agreement or "ignore the rights of the plaintiff" by adopting the regulation regarding the painting of the exterior of the units and applying it to the plaintiff. Rather, the regulation was reasonable and was not inconsistent with the 1965 occupancy agreement. Because the court's finding of a breach of the covenant of good faith and fair dealing was premised on its conclusion that the defendant breached the 1965 occupancy agreement by applying the regulation to the plaintiff, its finding of a breach of the implied covenant of good faith and fair dealing cannot stand.
The judgment is reversed and the case is remanded with direction to render judgment for the defendant.
In this opinion the other judges concurred.
General Statutes § 47-202(5) provides that "`[b]ylaws'" means the instruments, however denominated, that contain the procedures for conduct of the affairs of the association regardless of the form in which the association is organized, including any amendments to the instruments."