Appeal from the Superior Court of the District of Columbia (CA-1058-99) (Hon. Rhonda Reid Winston, Trial Judge)
Before Schwelb, Farrell and Glickman, Associate Judges.
The opinion of the court was delivered by: Glickman, Associate Judge
Argued September 16, 2002
The board of directors of a condominium association directed a unit owner to remove an enclosure he had installed on his balcony without the board's permission. The unit owner sued the association to overturn the board's decision. The trial court eventually held that it had to defer to the board. We vacate the court's order and remand for the court to determine whether the board's directive was a reasonable one under the circumstances.
Appellant Richard A. Bolandz is the owner of Unit 908 in a condominium building located at 1230-1250 Twenty-Third Street, N.W. The building is governed by appellee, the Unit Owners Association, through its Board of Directors. From 1990 when Bolandz purchased Unit 908 until 1997, he experienced a persistent "water ponding" problem on the unit's open-air balcony that was due to defective grading and the consequent inefficient drainage of rain water. The accumulation of standing water interfered with Bolandz's use of the balcony and led to moisture damage in the interior of the unit. On two occasions Bolandz had to replace carpet, wallboards, and baseboards as a consequence of water seepage.
When he purchased Unit 908 Bolandz identified the balcony drainage problem as a defect that needed to be remedied, and over the years he repeatedly but futilely complained about it to building management and to appellee's Board of Directors. In August 1997, with the problem still not remedied, Bolandz undertook to rectify it himself by installing windowed French doors to enclose the balcony at a cost of over twenty thousand dollars. The windows were designed to fall safely inward if they became detached and to be aesthetically consistent with the overall appearance of the building even though no other balconies were enclosed. *fn1
Bolandz enclosed the balcony appurtenant to his unit without requesting or obtaining the approval of appellee's Board of Directors or its Covenants Committee as was required by Association By-laws and Rules and Regulations. In August 1998 the Board of Directors, after *fn2 holding a hearing on the unauthorized construction, decided to require Bolandz to remove it. To enforce its decision, the Board assessed a fine against Bolandz of five dollars a day (retroactive to December 1997) and banned him from the building's recreation facilities until he took down the French doors.
Bolandz responded to the Board's decision by suing the Association in Superior Court for breach of contract and breach of fiduciary duty. His complaint requested declaratory and injunctive relief and damages for the Association's failure to repair his balcony. The Association counterclaimed, seeking not only an injunction and damages but also a judicial foreclosure of Bolandz's condominium unit to enforce the sanctions that the Board of Directors had imposed.
The case was tried to the court. The court ruled that the Association and its Board of Directors had breached a contractual duty to correct the water ponding problem on Bolandz's balcony and awarded Bolandz damages - $1,800 for the cost of repairing water damage inside his unit and $7,000 for loss of enjoyment of the unit. The court further ruled that though "it was reasonable for this Plaintiff, given the inaction of this Board, to take effective measures to remedy the ponding problem" himself, Bolandz nonetheless had breached his contractual duty to obtain Board approval before he resorted to self-help and installed the doors enclosing his balcony. The court awarded the Association nominal damages of $100 for Bolandz's breach.
Next, the court ruled that while the Board had a right to take reasonable actions to enforce Association rules and regulate the internal affairs of the condominium, the Board breached its fiduciary duty to Bolandz by imposing sanctions on him without giving him a fair hearing. The court found the hearing unfair because the Board had failed to consider Bolandz's reasons for installing the French doors on his balcony or whether the installation was aesthetically consistent with the appearance of the building, impaired the structural integrity of the building, or increased the Association's exposure to liability. Rather, the court said, "the Board's primary - if not only -concern was whether [Bolandz's] actions in enclosing his balcony would encourage other owners to request permission to make modifications to their balconies." Although this was not an improper concern, the court stated that "it was not entitled to the weight given it by the Board" to the exclusion of the other "very important issues that reasonably should have affected its decision on sanctions."
As damages for the Board's breach of its fiduciary duty, the court awarded Bolandz $5,000. The court further ordered that Bolandz could keep the doors enclosing his balcony without penalty until the Board provided him a fair hearing and made specific findings on the relevant factors. Those factors, the court stated, included: (1) whether the presence of the windowed doors increased the Association's insurance liability; (2) whether any increased liability could be remedied by Bolandz's agreement to hold the Association harmless for any damage that the windows might cause; (3) whether the doors impaired the structural integrity of the building; (4) whether other unit owners had requested permission from the Board to enclose their balconies; (5) whether the doors affected "the aesthetics of the building"; (6) whether leaving the balcony enclosure in place would affect the interests of unit owners; (7) whether the enclosure adversely affected property values at the building ("especially in light of the fact that the windows here are located on the rear of the building"); and (8) whether other unit owners had complained about Bolandz's balcony enclosure. The court retained jurisdiction and reserved ruling on Bolandz's request for injunctive relief pending the outcome of a new hearing before the Board.
To comply with the court's order, the Board of Directors held another hearing at which it received expert testimony from Bolandz's architect and from its own retained professional engineer in addition to lay testimony. At the conclusion of the hearing, the Board adhered to its previous decision to require Bolandz to remove the doors enclosing his balcony, though it also decided to regrade the balcony floor at Association expense to correct the ponding problem. The Board informed the trial court of its decision in a written report that addressed each of the criteria the court had identified. In support of its decision, the Board cited the risk that the windows could fall out and injure persons or property, the consequent exposure of the Association to liability, the inconsistency *fn3 *fn4 of allowing one unit owner to enclose his balcony when other owners could not do so, and the *fn5 possibility of a negative impact on property values. Ultimately, the Board stated, it based its *fn6 disapproval of Bolandz's balcony enclosure "on the impossibility of crafting a policy for balcony enclosures that is rational and fair to all unit owners, together with the Board's concern over liability and injury."
Bolandz asked the trial court to reject the Board's report and determination. He contended that "the Board's stated concerns and conclusions are wholly unsupported by and inconsistent with the evidence presented for the Board's consideration" and that the Board therefore had failed, as *fn7 before, to give ...