D & M COUNTRY ESTATES v. Romriell

• Decision Date: 25 November 2002
• Docket Number: No. 27429.,27429.
• Citation: 59 P.3d 965,138 Idaho 160
• Court: Idaho Supreme Court
• Parties: D & M COUNTRY ESTATES HOMEOWNERS ASSOCIATION, a non-profit association, Plaintiff-Respondent, v. Dwight G. ROMRIELL and Denise B. Romriell, husband and wife; Dannis M. Adamson and "Jane Doe" Adamson, husband and wife; Aspen Grove Assisted Living General Partnership, an Idaho general partnership; E-Riter, L.L.C., an Idaho limited liability company, Defendants-Appellants.

59 P.3d 965

138 Idaho 160

D & M COUNTRY ESTATES HOMEOWNERS ASSOCIATION, a non-profit association, Plaintiff-Respondent, v. Dwight G. ROMRIELL and Denise B. Romriell, husband and wife; Dannis M. Adamson and "Jane Doe" Adamson, husband and wife; Aspen Grove Assisted Living General Partnership, an Idaho general partnership; E-Riter, L.L.C., an Idaho limited liability company, Defendants-Appellants.

No. 27429.

Supreme Court of Idaho, Boise, September 2002 Term.

November 25, 2002.

Nick L. Nielson, Pocatello, for appellants.

Racine, Olson, Nye, Budge & Bailey, Pocatello, for respondent. John R. Goodell, Pocatello, argued. TROUT, Chief Justice.

Appellants, various individuals and business entities involved in owning and managing nursing home facilities, appeal from the district judge's order permanently enjoining them from converting a single-family residence and operating a group home for the elderly in violation of the neighborhood subdivision's restrictive covenants. The district judge's order is affirmed.

I.

FACTUAL AND PROCEDURAL BACKGROUND

Sometime prior to September 2000, the Appellants, Dwight G. and Denise B. Romriell, Dannis M. and Ruth N. Adamson, the Aspen Grove Assisted Living General Partnership, and E-Riter, L.L.C. (collectively, "the Romriells"), purchased the real property at issue located in the D & M Subdivision, Chubbuck, Idaho and subject to certain restrictive covenants ("Covenants"). At the time of purchase, a single-family residence was located on the property. Respondent, D & M Estates Home Owner's Association Board ("D & M"), a non-profit association of homeowners, is entitled to enforce these covenants.

The most important Covenant at issue restricts the construction on each lot to only one dwelling to be used by no more than two families. The Covenant states, "[n]o more than one dwelling shall be erected on any one lot and all such dwellings shall be limited to not more than two families." A second Covenant provides a procedure for allowing exceptions to the Covenants: "[e]xceptions to the present restrictive covenants applicable to property in D & M Estates shall be permitted upon written approval by signatures of at least 2/3 of the property owners and by the Architectural Control Committee: provided that such exceptions shall comply with any applicable laws or zoning regulations."

The Romriells planned to use the residential property at issue for operating a group home for the elderly. In order to accommodate the proposed use, the Romriells planned to remodel the single-family home and convert it from a three-bedroom, two-bath residence to an eight-bedroom, eight-bath residence for use by a maximum of eight, unrelated adults.

The Romriells sought approval for their proposed group home through the procedure provided in the Covenants for granting exceptions. As part of this process, the Romriells sent an undated, open letter to the homeowners in the D & M Subdivision both describing the process for granting exceptions to the Covenants and requesting approval from the homeowners for a proposed renovation of the property for the purpose of developing a group home for the elderly. Both the D & M Estates Water and Architectural Board ("Board") and the homeowners rejected the Romriells' proposal.

Nevertheless, in January 2001, the Romriells began remodeling the residence. The Romriells believed they were legally justified in doing so, claiming that D & M had unlawfully refused their proposal and could not enforce the applicable Covenants due to I.C. §§ 67-6530 and 6531. Those statutory provisions set forth the policy in Idaho relating to the use of real property for the care of the elderly.

On January 23, 2001, D & M filed a complaint with the district court alleging violation of the D & M Covenants. On February 8, 2001, a preliminary injunction was granted. On February 9, 2001, the Romriells responded to the complaint with an answer, counterclaim, and third party complaint. The counterclaim sought damages, attorneys fees and costs based on alleged violations of public policy and lost investment costs of $250,000. The third party complaint named each member of D & M and the Board personally alleging claims of breach of contract and unlawful discrimination.

On February 14, 2001, following a two-day evidentiary hearing, the district judge granted D & M a permanent injunction against the Romriells. The court's key rulings held the Covenants (1) are valid, enforceable, and unambiguous; (2) prohibit the Romriells' proposed group home for the elderly; (3) are not invalidated by I.C. §§ 67-6530 and 6531, which only limit zoning regulations; and (4) are not unlawfully discriminatory and have not been enforced in an unlawfully discriminatory manner. Pursuant to I.R.C.P. 54(b), the Judgment was certified final for the purposes of appeal.

II.

STANDARD OF REVIEW

The district court's decision to grant a permanent injunction against the Romriells preventing them from constructing and operating a group home for the elderly combines questions of law and fact. On appeal, this Court will not set aside findings of fact, unless they are clearly erroneous. Marshall v. Blair, 130 Idaho 675, 679, 946 P.2d 975, 979 (1997) (citing I.R.C.P. Rule 52(a)). Thus, if a district court's findings of fact are supported by substantial and competent, though conflicting, evidence, this Court will not disturb the findings. Marshall v. Blair, 130 Idaho at 679, 946 P.2d at 979. Furthermore, this Court gives due regard to the district court's special opportunity to judge the credibility of the witnesses who personally appear before the court. Id. (citing I.R.C.P. Rule 52(a)). In contrast to the appellate review of findings of fact, this Court exercises free review over the district court's conclusions of law. Marshall v. Blair, 130 Idaho at 679, 946 P.2d at 979. Therefore, this Court may substitute its view for that of the district court on a legal issue. Id.

III.

DISCUSSION

The district judge did not err in concluding (1) as a matter of law, the Covenants are unambiguous and clearly prohibit the construction and maintenance of a group home for up to eight elderly individuals; (2) Idaho Code §§ 67-6530 and 6531 do not render the Covenants unenforceable as a matter of public policy; and (3) the Romriells effectively waived their argument of discrimination for failure to present adequate argument and cite appropriate legal authority before the trial court. In addition, D & M is not entitled to attorney's fees on appeal, since Romriells had a reasonable legal argument based on Idaho Code §§ 67-6530 and 6531 and case law from other jurisdictions to support their appeal.

A. The D & M Covenants Unambiguously Prohibit the Construction of a Group Home.

The district judge did not err in determining, as a matter of law, the Covenants unambiguously prohibit the construction and operation of a group home for eight, unrelated adults. A plain reading of the Covenants shows they clearly prohibit use of residential structures by more than two families.

Idaho recognizes the validity of covenants that restrict the use of private property. Nordstrom v. Guindon, 135 Idaho 343, 345, 17 P.3d 287, 290 (2000)(citing Brown v. Perkins, 129 Idaho 189, 192, 923 P.2d 434, 437 (1996)). When interpreting such covenants, the Court generally applies the same rules of construction as are applied to any contract or covenant. Id. However, because restrictive covenants are in derogation of the common law right to use land for all lawful purposes, the Court will not extend by implication any restriction not clearly expressed. Post v. Murphy, 125 Idaho 473, 475, 873 P.2d 118, 120 (citing Thomas v. Campbell, 107 Idaho 398, 404, 690 P.2d 333, 339 (1984)). Further, all doubts are to be resolved in favor of the free use of land. Id.

Beginning with the plain language of the covenant, the first step is to determine whether or not there is an ambiguity. Brown v. Perkins, 129 Idaho at 193, 923 P.2d at 437 (citing City of Chubbuck v. City of Pocatello, 127 Idaho 198, 201, 899 P.2d 411, 414 (1995)). "Words or phrases that have established definitions in common use or settled legal meanings are not rendered ambiguous merely because they are not defined in the document where they are used." City of Chubbuck v. City of Pocatello, 127 Idaho at 201, 899 P.2d at 414. Rather, a covenant is ambiguous when it is capable of more than one reasonable interpretation on a given issue. Post v. Murphy, 125 Idaho at 475, 873 P.2d at 120 (citing Rutter v. McLaughlin, 101 Idaho 292, 612 P.2d 135 (1980)). To determine whether or not a covenant is ambiguous, the court must view the agreement as a whole. Brown v. Perkins, 129 Idaho at 193, 923 P.2d at 438.

The second step in contract or covenant construction depends on whether or not an ambiguity has been found. If the covenants are unambiguous, then the court must apply them as a matter of law. City of Chubbuck v. City of Pocatello, 127 Idaho at 201, 899 P.2d at 414. "Where there is no ambiguity, there is no room for construction; the plain meaning governs." Post v. Murphy, 125 Idaho at 475, 873 P.2d at 120. Conversely, if there is an ambiguity in the covenants, then interpretation is a question of fact, and the Court must determine the intent of the parties at the time the instrument was drafted. Brown v. Perkins, 129 Idaho at 193, 923 P.2d at 438.

The Covenants at issue clearly provide for only one dwelling unit per lot to be used by no more than two families. Article IV of the Covenants states, "[n]o more than one dwelling shall be erected on any one lot and all such dwellings shall be limited to not more than two families." The Romriells' proposed use of their lot violates this prohibition because housing up to eight unrelated adults in an institutionalized setting violates the restriction against use by more than two families. For this reason, this Court determines the district judge was not in error, and the...