American Holidays, Inc. v. Foxtail Owners Ass'n
Decision Date | 09 December 1991 |
Docket Number | No. 91-41,91-41 |
Citation | 821 P.2d 577 |
Parties | AMERICAN HOLIDAYS, INC., a Missouri Corporation, Appellant (Defendant), v. FOXTAIL OWNERS ASSOCIATION, a Wyoming Nonprofit Corporation, Appellee (Plaintiff). |
Court | Wyoming Supreme Court |
Frank Hess, Jackson, for appellant.
Phelps H. Swift, Jr. of Mullikin, Larson & Swift, Jackson, for appellee.
Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.
Appellant, mortgagee of a shared interest in a time-share condominium, challenges the trial court's decree of foreclosure which subordinated its mortgage to appellee's lien for unpaid condominium assessments. We affirm the decision of the trial court.
Appellant states the issue to be resolved as follows:
"Did the court err in holding as a matter of law that the homeowner's assessment lien had priority over a previously filed mortgage?"
Condoshare Jackson Limited Partnership recorded a Declaration of Condominium for the Foxtail Condominium Project on January 6, 1981. This Declaration created appellee, the Foxtail Owners Association (Association). The Association was given numerous responsibilities for maintenance and upkeep of the Foxtail condominium units and common areas. It was empowered to levy assessments against the shared interest of each of the Foxtail condominium owners in order to pay its expenses. These assessments were to be secured by a lien on each shared interest and would bear interest and court costs if not paid.
On September 16, 1984, Edward L. Meier and Clara Zo Meier (Meiers) executed a note and mortgage deed secured by a shared interest in one of the Foxtail units in favor of The Time Store, Inc., a Colorado corporation (Time Store). This mortgage deed was recorded on March 8, 1985. The mortgage deed contained a legal description which made the shared interest "subject to the terms, covenants, conditions, and restrictions contained in the Declaration." The Time Store's mortgagee interest passed by assignment and is now held by appellant American Holidays, Inc. (American Holidays).
The Meiers defaulted on the mortgage with American Holidays on December 1, 1985. They also failed to pay Association dues as required by the Declaration. On October 10, 1989, the Association filed two Notices of Lien for unpaid dues with the Teton County Clerk. Then, on January 30, 1990, the Association filed this complaint for foreclosure, which named the Meiers and American Holidays as defendants.
The trial court entered a Summary Judgment and Decree of Foreclosure on January 3, 1991. Both the Association and American Holidays were given judgment against the Meiers. The court further found that American Holidays' interest was subordinate to the Association's lien for unpaid assessments, interest, costs and attorney fees, "even if the mortgage [had been] filed [for record] prior to the time the lien mature[d]." The decree of foreclosure provided that upon foreclosure sale the proceeds would be applied: First, to the costs of the sale; second, toward satisfaction of the Association's assessment lien; and third, toward satisfaction of the mortgage held by American Holidays. Any surplus would be paid to the Meiers. American Holidays filed a timely notice of appeal from this decision.
All issues in this case were resolved by summary judgment.
Zmijewski v. Wright, 809 P.2d 280, 282 (Wyo.1991).
There is no real dispute about the facts here, only about the legal conclusions the trial court reached.
Wyoming Statute 34-1-121(a) (July 1990 Repl.) provides in part that "[e]ach and every deed, mortgage, instrument or conveyance touching any interest in lands, made and recorded, according to the provisions of this chapter, shall be notice to and take precedence of any subsequent purchaser or purchasers from the time of delivery of any instrument at the office of the register of deeds (county clerk), for record."
Appellant's mortgage was recorded prior to the recordation of appellee's lien statement, but subsequent to the recordation of the Declaration of Condominium for the Foxtail Condominium Project. The question to be resolved is that of appellant's priority status relative to that of appellee, considering the recording dates and the subordination clauses contained in the Declaration and in the Meiers' mortgage.
It is undisputed that American Holidays' interest is subject to the provisions of the Declaration, which by its terms are made covenants running with the land binding on "any person acquiring, leasing, or owning an interest in the real property and improvements comprising the Project, and to their respective administrators, personal representatives, heirs, successors, and assigns." The mortgage, whose mortgagee interest was assigned to American Holidays, also describes the property as being subject to the terms of the Declaration.
Our review of authority connected with this issue shows no previous Wyoming cases on point. Cases from other jurisdictions show that the issue of priority has been resolved, generally, in either one of two ways. First, many jurisdictions have applied a statutory scheme governing condominium assessment priority. See e.g., Towne Realty, Inc. v. Edwards, 156 Wis.2d 344, 456 N.W.2d 651 (1990); First Federal Savings Bank v. Eaglewood Court Condominium Ass'n, Inc., 186 Ga.App. 605, 367 S.E.2d 876 (1988); Brask v. Bank of St. Louis, 533 S.W.2d 223 (Mo.Ct.App.1975). Wyoming has no such statute, and so we do not find these cases to be helpful.
Second, some jurisdictions have held, in the context of homestead exemption priority, that an association's lien for assessments is a contractual lien which relates back to the time of filing the declaration. See Bessemer v. Gersten, 381 So.2d 1344 (Fla.1980); Accord, Inwood North Homeowners' Ass'n, Inc. v. Harris, 736 S.W.2d 632, 636 n. 1 (Tx.1987); In re Lincoln, 30 B.R. 905 (Bankr.D.Colo.1983). For reasons stated below, we think that the Bessemer rule properly applies to this case, and that the lien for assessments which attached when the mortgagee's interest was created relates back to the time of filing of the Declaration.
The Bessemer case gives no rationale for its holding that an association's lien relates back to the time of recording. We follow it in this case because we believe it reflects the intent of the original covenantor as revealed in the terms of the Declaration.
We consider first the language of the Declaration itself to determine its effect on the interests of the parties. In interpreting the covenants contained in a condominium declaration, we will follow our general rule that we seek to discern the intent of the parties, and especially that of the grantor. Cf. Dawson v. Meike, 508 P.2d 15, 18 (Wyo.1973) ( ). See also 20 Am.Jur.2d Covenants, Conditions, and Restrictions § 5 (1965):
Where the plain terms of a covenant are sufficiently clear, we construe it without reference to attendant facts and circumstances or extrinsic evidence. Revelle v. Schultz, 759 P.2d 1255, 1258 (Wyo.1988).
The Declaration contained a provision, quoted in part above, subjecting the property to its terms and creating a covenant running with the land ...
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