FINANCE & INV. CO., LTD. v. UMA, LLC

Decision Date12 October 2009
Docket Number914,Division No. 4.,963. Released for Publication by Order of the Court of Civil Appeals of Oklahoma,No. 105,105
PartiesFINANCE & INVESTMENT CO., LTD., an Oklahoma limited liability company; Thomas O. Goldsworthy, an individual; Fremont Exploration, Inc., an Oklahoma corporation; and Fremont Investment Company, an Oklahoma corporation, Plaintiffs/Appellants, v. UMA, L.L.C., an Oklahoma limited liability company; Jacob Technologies, Inc., an Oklahoma corporation d/b/a Sabre Technology, Inc., Defendants/Appellees, and Saint Andrews Professional Park, Inc., an Oklahoma corporation, Defendant/Appellee, and The Greens Homeowners Association, Inc., a non-profit corporation, Third-Party Plaintiff.
CourtUnited States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Allen Campbell, David Sturdivant, Kirk & Chaney, Oklahoma City, OK, for Plaintiffs/Appellants.

Robert Lee Rainey, Patricia A. Kirch, Joseph C. Schubert, Rainey Martin, LLP, Oklahoma City, OK, for Defendants/Appellees, UMA, L.L.C. and Jacob Technologies, Inc. d/b/a Sabre Technology.

Stephen L. Olson, Jeffrey I. Crain, Pierce Couch Hendrickson Baysinger & Green, L.L.P., Oklahoma City, OK, for Defendant, Saint Andrews Professional Park, Inc.

JOHN F. FISCHER, Judge.

¶ 1 Finance & Investment Company, Thomas Goldsworthy, Fremont Exploration and Fremont Investment (collectively Finance), appeal from the district court's judgment granting the motions for summary judgment filed by UMA, L.L.C., Jacob Technologies, Inc. (collectively UMA), and Saint Andrews Professional Park, Inc. (Saint Andrews). The appeals have been consolidated and assigned to the accelerated docket pursuant to Oklahoma Supreme Court Rule 1.36(b), 12 O.S. Supp.2008, ch. 15, app. 1, and the matter stands submitted without appellate briefing. Based on our review of the record on appeal and applicable law, we affirm in part, reverse in part and remand for further proceedings.

BACKGROUND FACTS

¶ 2 Finance and UMA are owners of real property located in Saint Andrews Professional Park (Park), and members of Saint Andrews. Property within the Park is subject to the property rights set out in the Amended and Restated Declaration of Conditions, Covenants and Restrictions for the Saint Andrews Professional Park dated September 26, 1996 (Declaration). The restrictive covenants in the Declaration provide that property within the Park "shall be used and occupied only for business, office, or medical purposes," and prohibit non-incidental manufacturing, industrial, warehouse and retail uses, among others. Declaration at ¶ 4. The owners of property within the Park agree that they shall strictly comply with the restrictive covenants. Declaration at ¶ 11. The recitation section of the Declaration provides that the "covenants, conditions, restrictions, use limitations, obligations, and provisions of the Declaration shall be deemed to run with the land" within the Park. Paragraph 26.5 of the Declaration provides that not only do the restrictive covenants "run with the land," but also that they "bind the Park and shall inure to the benefit of and be enforceable by Saint Andrews or any member."

¶ 3 In its amended petition, Finance alleges that UMA is conducting a business within the Park in violation of the restrictive covenants contained in the Declaration. Finance sued UMA and Saint Andrews, the property owners' association charged with enforcing the restrictive covenants in the Park. Finance's amended petition asserts two theories of recovery against UMA. First, Finance alleges that UMA's violations of the restrictive covenants in the Declaration "have created an annoyance and nuisance to the Plaintiffs" which has diminished the value of Finance's property and the value of its use and occupancy. Second, Finance contends that UMA has tortiously interfered with Finance's contracts, business and prospective economic advantage and the use and occupancy of Finance's property. Finance alleges that it has been damaged in excess of $10,000 and seeks a permanent injunction to abate UMA's alleged violations of the Declaration. Finance alleges that Saint Andrews has breached its duty to enforce the restrictive covenants in the Declaration. Finance also seeks damages in excess of $10,000 against Saint Andrews and an order directing Saint Andrews to enforce the restrictive covenants.

STANDARD OF REVIEW

¶ 4 We review a trial court's grant of summary judgment de novo. Carmichael v. Belter, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053. On review, we examine the pleadings and evidentiary materials submitted by the parties to determine whether there exists a genuine issue of material fact. Id. This Court bears "an affirmative duty to test all evidentiary material tendered in summary process for its legal sufficiency to support the relief sought by the movant." Copeland v. The Lodge Enters., Inc., 2000 OK 36, ¶ 8, 4 P.3d 695, 699. The summary process requires that we determine whether the record reveals only undisputed material facts supporting only a single inference that favors the movant's motion for summary judgment. Id. Further, when considering a motion for summary judgment, the evidence and the inferences to be drawn from the evidence must be viewed in the light most favorable to the party opposing the motion. Hargrove v. Canadian Valley Elec. Co-op., Inc., 1990 OK 43, ¶ 14, 792 P.2d 50. "Only if the court should conclude that there is no material fact in dispute and the law favors the movant's claim or liability-defeating defense is the moving party entitled to summary judgment in its favor." Copeland, 2000 OK 36 at ¶ 8, 4 P.3d at 699.

¶ 5 Finally, in reviewing summary judgment not only must we view all inferences and conclusions to be drawn from the evidentiary materials in the light most favorable to the party opposing the motion, but also once the movant has shown the absence of disputed material facts and entitlement to judgment on that record, the burden shifts to the defending party to show the existence of a triable issue. Reeds v. Walker, 2006 OK 43, ¶ 9, 157 P.3d 100, 106; Hughey v. Grand River Dam Auth., 1995 OK 56, ¶ 8, 897 P.2d 1138, 1143. A party opposing summary judgment may not rely on appeal "on any fact or material that is not referred to or included" in the party's response to a motion for summary judgment. Okla. Dist. Ct. R. 13(b), 12 O.S. Supp.2008, ch. 2, app.

DISCUSSION

¶ 6 The district court granted UMA's motion for summary judgment on three grounds: (1) The restrictive covenants in the Declaration constitute a contract, an action for the breach of which is subject to the five-year statute of limitations applicable to written contracts, and Finance knew or should have known more than five years prior to the filing of its suit about UMA's alleged covenant violations, therefore its claim was time barred; (2) UMA's business activities are lawful and cannot, therefore, create a nuisance; and (3) Finance has failed to establish a tortious interference claim because it has failed to prove any damage from lost profits, loss of contracts or loss of business relationships. As a result, the district court concluded that Finance had failed to show that it was entitled to monetary damages or injunctive relief. With the exception of the tortious interference issue, the grounds on which the district court relied in granting Saint Andrews's motion are the same.

I. The Restrictive Covenant Claim

¶ 7 The facts relevant to the statute of limitations issue include letters written by or on behalf of Finance in late 1998 and mid-1999. These letters complain about truck traffic connected to the business operated by UMA in the Park. On the basis of this undisputed evidence, the district court concluded that the information known to Finance, as disclosed in those letters, was sufficient to start the running of the limitations period. In reliance on Russell v. Williams, 1998 OK CIV APP 135, 964 P.2d 231, the district court concluded that the restrictive covenants Finance sought to enforce constituted a contract subject to the five-year statute of limitations of 12 O.S.2001 § 95(1). Consequently, the court concluded that Finance's suit filed in April 2005 was filed beyond the time permitted by section 95(1) and, therefore, barred.

¶ 8 Russell decided a dispute between adjoining property owners arising from the encroachment of a structure onto the property of other land owners and its location beyond the set-back restrictions in restrictive covenants applicable to the property. The plaintiff sought removal of the structure from his property and attorney fees. It was undisputed that the encroachment had occurred more than five years prior to the filing of plaintiffs suit. The Russell court affirmed summary judgment on the breach of restrictive covenant claim because: "A covenant is in the nature of a contract and when a covenant is breached it confers the same right of action as for any other contract." Russell, 1998 OK CIV APP 135 at ¶ 7, 964 P.2d at 234 (citing Ball v. Coyle, 1925 OK 101, 108 Okla. 30, 233 P. 750).1

¶ 9 Although the Russell court applied a five-year statute of limitations to the breach of covenant claim, the fifteen-year prescription period was held to be the relevant period regarding the encroachment claim. Because the plaintiff was not seeking damages for the encroachment, which the court found would have been barred by the two-year statute of limitations applicable to trespass claims, and because the evidence was not clear with respect to when the encroachment began, summary judgment in this respect was reversed.2

¶ 10 In this case, the district court concluded that Finance's claim for monetary damages resulting from breach of the restrictive covenants was subject to the five-year statute of limitations of 12 O.S.2001 § 95(1), and that the statute of limitations applicable to Finance's tortious interference claims was the...

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