Weber v. P&D Development, Inc., No. 29295-5-II (WA 7/13/2004), No. 29295-5-II

CourtUnited States State Supreme Court of Washington
Writing for the CourtQuinn-Brintnall
PartiesSALLY WEBER and GREGORY WEBER, wife and husband, Respondents & Cross-Appellants, v. P&D DEVELOPMENT, INC., a corporation; PAUL BLAKE, an individual; NORTHWEST ROCK, INC., a corporation; and THE CAPITOL RIDGE HOMEOWNERS ASSOCIATION, a nonprofit corporation, Appellants & Cross-Respondents, GRAYS HARBOR COUNTY, a political subdivision of the State of Washington, Defendant.
Docket NumberNo. 29295-5-II
Decision Date13 July 2004

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Unpublished Opinion

SALLY WEBER and GREGORY WEBER, wife and husband, Respondents & Cross-Appellants,
v.
P&D DEVELOPMENT, INC., a corporation; PAUL BLAKE, an individual; NORTHWEST ROCK, INC., a corporation; and THE CAPITOL RIDGE HOMEOWNERS ASSOCIATION, a nonprofit corporation, Appellants & Cross-Respondents,
GRAYS HARBOR COUNTY, a political subdivision of the State of Washington, Defendant.
No. 29295-5-II
Court of Appeals of Washington, Division Two.
Filed: July 13, 2004

Appeal from Superior Court of Thurston County. Docket No: 01-2-01869-5. Judgment or order under review. Date filed: 11/20/2002. Judge signing: Hon. Paula K Casey.

Counsel for Petitioner(s), Thomas Charles Althauser, Attorney at Law, PO Box 210, Centralia, WA 98531-0210.

Wayne Delos Jr Hagen, Attorney at Law, 110 W Market, PO Box 2016, Aberdeen, WA 98520-0333.

Gregory B. Durr, Attorney at Law, Old World Bldg Ste 103, 100 S I St., Aberdeen, WA 98520-6502.

Counsel for Defendant(s), James Garnet Baker, Grays Harbor Co Pros Ofc, 102 Broadway Ave W Rm 102, Montesano, WA 98563-3621.

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Counsel for Respondent/Cross-Appellant, Paul August Kampmeier, Attorney at Law, 2317 E John St, Seattle, WA 98112-5412.

Eric D. `knoll' Lowney, Attorney at Law, 2317 E John St, Seattle, WA 98112-5412.

QUINN-BRINTNALL, C.J.


A subdivision's developer (P&D Development, Inc.), a mining company (Northwest Rock, Inc.),1 and a subdivision's homeowner's association (Capitol Ridge Homeowners Association), appeal a partial summary judgment2 in favor of property owners (Sally and Gregory Weber) enforcing that subdivision's residential use covenants and declaring amendments to the covenants to be invalid. P&D appeals the trial court's failure to rule on its motion to strike portions of declarations submitted by the Webers, and the Association appeals the trial court's failure to rule on its motion for change of venue and for continuance of the motion hearing so that it could conduct discovery. The Webers cross-appeal the amount of the attorney fees awarded to them, and P&D appeals the trial court's determination that the Association, P&D, and P&D's president and sole shareholder are jointly and severally liable for the fees.

The Webers are entitled to the benefit of their covenants. Section IX of the covenants carries a specific purpose to maintain the subdivision's residential character and it limits the lot owners' right to amend the covenants by requiring 75 percent of the homeowners to vote to approve. The covenants cannot be circumvented by removing the lots from the subdivision. Thus, we affirm the trial court's grant of summary judgment enforcing the covenants and declaring the amendments invalid and hold that,

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as a matter of law, a gravel pit is not consistent with a residential use restriction.

We also hold that any error by the trial court in refusing to rule on the appellants/cross-respondents' venue and continuance motions and motion to strike before ruling on summary judgment was harmless and we uphold the trial court's award of attorney fees to the Webers under the attorney fee provision of the covenants. But we remand to the trial court for findings on its calculation of the attorney fees and the appellants/cross-respondents' respective liability for these fees.

FACTS

P&D is the developer of the Capitol Ridge Subdivision Phase I (`Capitol Ridge'), which consists of Lots 1 through 23, and Lots 57 through 75 of Large Lot Subdivision 90-04, Grays Harbor County, Washington, near Capitol Forest. Paul Blake is the owner and sole shareholder of P&D. P&D owns nine lots in the subdivision, and Blake individually owns two lots.

Blake signed and recorded the subdivision's covenants and restrictions in February 1993.3 In 1994, the covenants were amended, apparently to correct an error in the legal description of the property, and they were re-filed.4 The initial term of the covenants runs until 2013, after which the covenants automatically extend for successive periods of 10 years, unless they are rescinded by a two-thirds vote of the property owners. The covenants contain a residential use restriction and prohibit any noxious or offensive activity on any lot.5 The covenants allow for amendments `by an instrument signed by not less than {75 percent} of the Owners'6 and they provide for reasonable attorney fees and costs for enforcement of the covenants. 1 Clerk's Papers (CP) at 25.

The Webers purchased Lot 65 in 1996. One reason the Webers decided to purchase the lot was that they were seeking an area without industrial development (they felt their previous home's property value had been diminished by nearby development). The Webers had seen a Capitol Ridge brochure at their realtor's office promising, `{C}ovenants assure that this area will remain a pleasant, rural, attractive area.' 1 CP at 108.

Northwest Rock operates a quarry on property adjacent to the subdivision.7 In early 2001, Northwest Rock decided it wanted to expand into four lots on the subdivision owned by P&D: Lots 57, 58, 59, and part of Lot 63. The proposed expansion would have brought the quarry within 300 feet of the Webers' property. Northwest Rock sent a letter to lot owners on July 17, 2001, and on July 24 met with them to discuss the planned expansion. On August 10, 2001, Northwest Rock and P&D filed an application for a conditional use permit to expand the quarry.

In late August and early September 2001, Northwest Rock representatives met with the Webers, who informed the Northwest Rock representatives of the covenants and gave them copies. On September 4, 2001, the Webers called the first meeting of the Association8 to inform the other homeowners of Northwest Rock's plans.9 The Association collected the property owners' concerns about the expansion and submitted them in writing to Northwest Rock.

On September 24, 2001, Northwest Rock submitted a proposal to the Association offering to provide various benefits to the property owners: to provide crushed rock for road maintenance; pay the Association three cents for every ton of rock removed from the quarry; limit hours of operation; keep all crushing, washing, and stockpiling in the present location; and maintain and enhance buffers. The recently elected Association Board of Directors (which did not include the Webers, but did include Blake) voted to propose to the property owners the release of Lots 57, 58, 59, and 63 from the subdivision.

On October 8, 2001, the Board of Directors sent a letter to the lot owners requesting their vote on whether to accept the Northwest Rock proposal. Of the 29 letters received from identifiable lot owners, 21

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voted to accept the proposal. The Association then circulated for signature a written amendment to the covenants releasing the four lots. More than 75 percent of the homeowners signed the amendment, with P&D/Blake signing for 11 parcels. P&D filed and recorded the amendment in January 2002. Meanwhile, Northwest Rock, wary that the Association had `not finalized its position,' decided to withdraw its conditional use permit application in late October 2001. 4 CP at 707. The Association went on with its plan to amend the covenants, `still want{ing} the benefits from the expansion' of the quarry. Br. of Appellant Association at 8.

In the meantime, the Webers had consulted an attorney, and on October 5, 2001, sued Northwest Rock, Blake, and P&D to enforce the covenants. The Webers also sought relief against Grays Harbor County, seeking to enjoin the County from issuing a conditional use permit they claimed the County continued to process the permit application despite being on notice of the covenants. The Webers filed a motion for partial summary judgment on December 24, 2001.

Following the covenant amendment, the Webers added the Association as a defendant on February 28, 2002. On April 2, the Association filed its motions to change venue and to strike the Webers' summary judgment hearing date. On the same date, P&D/Blake filed a motion to strike portions of the Webers' declarations in support of their summary judgment motion.

On April 19, 2002, the trial court granted the Webers partial summary judgment, ruling that the amendments to the covenants that removed the four lots were invalid. The court did not rule on the Association's motion for change of venue before granting the motion for summary judgment because apparently it was unaware that the Association had only recently joined as a defendant, and therefore the court did not believe that the motion was properly before it. The court did not rule on the Association's motion to continue the hearing to give it more time to conduct discovery, nor did it rule on P&D/Blake's motion to strike evidence.

The Webers moved for an award of attorney fees and costs. Following oral arguments on the issue of attorney fees on August 9, 2002, the trial court awarded the Webers $12,000, significantly less than the $46,798.37 they had requested. But the trial court found P&D, Blake, and the Association `jointly and severally' liable for the fees.

P&D/Blake, the Association, and Northwest Rock appeal the trial court's partial summary judgment in favor of the Webers and the court's order making the Association, P&D, and Blake jointly and severally liable for the Webers' attorney fees. The Webers cross-appeal the amount of their attorney fee award.

ANALYSIS
Summary Judgment

P&D/Blake, the Association, and Northwest Rock contend that the trial court erred in granting the Webers' summary judgment motion because there were genuine issues of material fact as to whether adoption of the covenant amendments was reasonable.

The trial court held:

B) The covenants at issue in this case . . . provide that no lot in the Capitol Ridge subdivision shall be used for non-residential development. . . . The intention and purpose of these covenants is to limit the use of the lots in the subdivision to residential purposes.

C) An...

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