B. Inv. LC v. Anderson
| Decision Date | 26 January 2012 |
| Docket Number | No. 20100071–CA.,20100071–CA. |
| Citation | 700 Utah Adv. Rep. 51,270 P.3d 548,2012 UT App 24 |
| Parties | B. INVESTMENT LC, a Utah limited liability company; and Michelle Whitt Ortega, Trustee of the Michelle Whitt Ortega Family Trust, Plaintiffs, Appellants, and Cross-appellees, v. Cathy O. ANDERSON, Trustee of the Cathy O. Anderson Living Trust; Longfellow Holdings, LLC, a Utah limited liability company; Joan M. Dallof, Trustee of the Joan M. Dallof Revocable Trust; Henry S. Hemmingway, Trustee of the Henry S. Hemmingway Revocable Trust; and Spinnaker Point Condominium Owners Association, Defendants, Appellees, and Cross-appellants. |
| Court | Utah Court of Appeals |
OPINION TEXT STARTS HERE
Ronald G. Russell, Salt Lake City, for Appellants.
Vincent C. Rampton, Salt Lake City, for Appellees.
Before Judges VOROS, THORNE, and ROTH.
¶ 1 This quiet title action involves a stretch of beach at Bear Lake. The beachfront property is part of a hybrid condominium project known as Spinnaker Point. The project includes both traditional condominium units and lots intended for single family dwellings. Owners of the traditional condominium units (the Condo Owners) brought suit against the condominium declarant, the Spinnaker Point Condominium Owners Association, and the owners of the single family lots (collectively, the Lot Owners).
¶ 2 This appeal requires us to interpret the provisions of Spinnaker Point's Amended Plat and Amended Declaration in light of the Utah Condominium Ownership Act (the Act), see Utah Code Ann. §§ 57–8–1 to –54 (2010 & Supp.2011). 1 Each set of owners contends that the documents support its position. Because the documents are internally inconsistent, neither side's reading is wholly satisfactory. The trial court entered summary judgment in favor of the Lot Owners, ruling that the Lot Owners as well as the Condo Owners own a share of the beachfront property. For reasons stated below, we agree with the trial court and therefore affirm.
¶ 3 Spinnaker Point was created in 1984; the original record of survey map showed six condominium units in a first phase, with a possible expansion area. After three condominium units were constructed on what is now Lot 2, Spinnaker Point was conveyed to Donald and Cathy Anderson. In 2001, the Andersons filed an Amended Plat and an Amended Declaration, dividing the property into five lots and designating Lots 1, 3, 4, and 5 for single family dwellings. The Amended Plat also designated, and marked with a cross-hatch pattern, a Limited Common Area consisting of a corridor between Lots 2 and 3 and a beachfront area abutting Lots 2 and 3.
¶ 4 The Limited Common Area is the subject of this dispute. The Condo Owners contend that they own the Limited Common Area, subject only to the Lot Owners' right of access to and from the beach. The Lot Owners contend that they and the Condo Owners own the Limited Common Area in equal shares. The trial court entered summary judgment in favor of the Lot Owners.
¶ 5 On appeal, the Condo Owners contend that “the Amended Declaration and Amended Plat require” that they are the sole owners of the Limited Common Area. The Condo Owners also contend that the Condominium Ownership Act “precludes the Lot Owners from owning a portion of the [Limited] Common Area and requires that the Condo Owners own the [Limited] Common Area.” Summary judgment is appropriate when “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” Utah R. Civ. P. 56(c). We “review[ ] a trial court's legal conclusions and ultimate grant or denial of summary judgment for correctness and view[ ] the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party.” Bingham v. Roosevelt City Corp., 2010 UT 37, ¶ 10, 235 P.3d 730 (citation and internal quotation marks omitted).
¶ 6 On cross-appeal, the Lot Owners contend that the trial court erred in refusing to award attorney fees to which they were entitled under the Amended Declaration. Generally, “[w]hether attorney fees should be awarded is a legal issue that we review for correctness.” Gardiner v. York, 2006 UT App 496, ¶ 5, 153 P.3d 791 (citing Valcarce v. Fitzgerald, 961 P.2d 305, 315 (Utah 1998)).
¶ 7 This dispute arises from a conflict between the language in the Amended Declaration and the language in the Amended Plat. The Lot Owners rely principally on Exhibit C of the Amended Declaration. It features a columnar chart defining the “Percentage of Ownership of Limited Common Ownership Areas as indicated on the Plat Map.” According to this chart, the Lot Owners and the Condo Owners each own an undivided 14.286% interest in the Limited Common Area.
¶ 8 The Condo Owners rely principally on a note appearing on the Amended Plat. This note states, Lot 2 belongs to the Condo Owners. They thus claim full ownership of the Limited Common Area and argue that the Lot Owners hold only a right of access over it.
¶ 9 “We interpret the provisions of the Declaration as we would a contract.” View Condo. Owners Ass'n v. MSICO, LLC, 2005 UT 91, ¶ 21, 127 P.3d 697. “If the Declaration is not ambiguous, we interpret it according to its plain language.” Id. “We may resort to extrinsic evidence as an aid to construction only where there is an ambiguity.” 2 Id. In addition, the declaration and the plat must be construed together. See id. ¶ 24.
¶ 10 We also read the Amended Declaration and Amended Plat in light of the Act. See Country Oaks Condo. Mgmt. Comm. v. Jones, 851 P.2d 640, 641–42 (Utah 1993). Condominium declarations and the condominium plats are governed by separate sections of the Act. Condominium declarations are governed by section 57–8–10. That section requires the declaration to “include the percentage or fraction of undivided interest in the common areas.” See Utah Code Ann. § 57–8–10(2)(d)(i) (Supp.2011). This must be done “in accordance with Section 57–8–7(2).” Id. Significantly, section 57–8–7(2) provides that “[e]ach unit owner shall be entitled to an undivided interest in the common areas and facilities in the percentages or fractions expressed in the declaration.” Id. § 57–8–7(2) (2010) (emphasis added). This interest may be “reflected by ... an exhibit or schedule accompanying the declaration and recorded simultaneously with it, containing columns.” Id. ¶ 11 Plats are governed by section 57–8–13. Unsurprisingly, this section focuses on boundaries, encroachments, locations, dimensions, floorplans, and the like. See id. § 57–8–13 (2010). It does not mention the proportional ownership of common areas.
¶ 12 As required by section 57–8–7(2), Exhibit C to the Amended Declaration “allocate[s] to each unit an equal undivided interest in the common areas,” see id. § 57–8–7(2). In addition, Exhibit C features a columnar chart defining the percentage of ownership of the Limited Common Area:
This chart complies with the requirements of section 57–8–10. See Utah Code Ann. § 57–8–10(2)(d)(i). Exhibit C's chart specifies that the Lot Owners and the Condo Owners each own an undivided 14.286% interest in the Limited Common Area.
¶ 13 Other provisions of the Amended Declaration reinforce the conclusion that the Lot Owners and the Condo Owners own equal undivided interests in the Limited Common Area. According to the Amended Declaration, the Common Areas—which by definition include the Limited Common Area—are “owned by the Unit Owners as tenants in common.” The Amended Declaration defines “Unit Owners” to include both Condo Owners and Lot Owners. Accordingly, both Condo Owners and Lot Owners own the Limited Common Area as tenants in common. Because “tenants in common are presumed to hold equal, undivided shares in the commonly owned property,” see Shiba v. Shiba, 2008 UT 33, ¶ 15, 186 P.3d 329, the language in the Amended Declaration supports Exhibit C's statement that the Lot and Condo Owners own the same proportional share of the Limited Common Area.
¶ 14 The Amended Plat, recorded concurrently with the Amended Declaration but dated seven weeks before the Amended Declaration was signed, suggests a different result. The Amended Plat contains a note with five statements. The fourth of these describes ownership of the Limited Common Area as belonging to the Condo Owners, whose units are on Lot 2:
LIMITED COMMON OWNERSHIP ON THIS PLAT DENOTES ACCESS TO AND USE OF COMMON AREA AT BEACH. OWNERSHIP OF THIS LIMITED COMMON AREA REMAINS WITH LOT 2.
¶ 15 The core question in this case is whether the parties' relative interests in the Limited Common Area should be governed by Exhibit C to the Amended Declaration or by the note on the Amended Plat. We conclude that the Act has resolved the conflict by designating the declaration as the document that defines unit owners' relative interests in the common area: “Each unit owner shall be entitled to an undivided interest in the common areas and...
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