Burke v. Voicestream Wireless Corp. II

• Decision Date: 30 March 2004
• Docket Number: No. 1 CA-CV 02-0031.,1 CA-CV 02-0031.
• Citation: 207 Ariz. 393,87 P.3d 81
• Parties: James F. BURKE and Margaret A. Burke, husband and wife, Plaintiffs-Appellants Cross Appellees, v. VOICESTREAM WIRELESS CORPORATION II, a Washington corporation; Voicestream PCS III, a Delaware corporation; Scottsdale Worship Center, Defendants-Appellees, Cross Appellants.
• Court: Arizona Court of Appeals

87 P.3d 81

207 Ariz. 393

James F. BURKE and Margaret A. Burke, husband and wife, Plaintiffs-Appellants Cross Appellees, v. VOICESTREAM WIRELESS CORPORATION II, a Washington corporation; Voicestream PCS III, a Delaware corporation; Scottsdale Worship Center, Defendants-Appellees, Cross Appellants.

No. -0031.

Court of Appeals of Arizona, Division 1, Department B.

March 30, 2004.

Cheifetz & Iannitelli, P.C. By Claudio E. Iannitelli, Antonino Abate, Phoenix, Attorneys for Appellants/Cross Appellees.

Snell & Wilmer, L.L.P. By David E. Rauch, Martha E. Gibbs, Phoenix, Attorneys for Appellee/Cross Appellant Voicestream.

Simbro White & Barfield, P.C. By Stephen B. White, Scottsdale, Attorneys for Appellee/Cross Appellant Scottsdale Worship Center.

OPINION

GEMMILL, Judge.

¶ 1 The trial court ruled that the deed restrictions for a residential subdivision did not prohibit the construction and continuing presence of a cellular telephone signal transmission tower on church premises within the subdivision. We reverse. The deed restrictions apply to the tower and are enforceable by appellants James F. and Margaret A. Burke.

BACKGROUND

¶ 2 In 1992, the Burkes purchased the home located on Lot 22 of Desert Estates Unit 4 ("Desert Estates"), a residential subdivision in Scottsdale. The subdivision is subject to a Declaration of Restrictions ("Restrictions").

¶ 3 At the time of the Burkes' purchase, the Scottsdale Worship Center ("SWC") operated on Lots 18 and 19 of the subdivision. In 1995, SWC purchased Lot 17, which is adjacent to the back of the Burkes' lot. SWC built a new sanctuary on Lot 17 in 1996. The Burkes objected to the lighting on Lot 17, and SWC adjusted the lighting. ¶ 4 In September 1999, SWC entered into an agreement with Voicestream¹ to lease a portion of Lot 17 for a fifty-foot high cellular telephone signal transmission tower decorated as a bell tower with four crosses and three hanging bells. The Burkes learned about the planned tower in October 1999 and sent a letter dated November 5, 1999 to SWC objecting to the tower.

¶ 5 In response to neighborhood opposition to the tower, SWC notified Voicestream in writing that it wished to rescind the lease agreement for the tower. Voicestream threatened to sue SWC if it did not honor the agreement and informed SWC that it would seek more than $100,000 that Voicestream claimed it had already spent on the tower project. SWC agreed to honor the lease and allow the tower construction.

¶ 6 The Burkes had previously been informed that SWC had acted to rescind the lease. They claim that neither they nor any of their neighbors were advised that the tower project would continue. SWC, however, claims that the Burkes and other neighbors were told that the tower project would continue.

¶ 7 Voicestream began actual construction of the tower on June 16, 2000. The Burkes filed this action on June 23, 2000, alleging that Voicestream and SWC were breaching the Restrictions by erecting the tower and seeking a temporary restraining order to stop construction. The trial court declined to issue a temporary restraining order because, by the time of the hearing on June 27, 2000, the tower structure was already substantially completed.

¶ 8 The parties filed cross-motions for summary judgment. The trial court denied the Burkes' motion and granted Voicestream's and SWC's motion after finding that section 4 of the Restrictions was ambiguous as to whether the "structure" restriction was limited to habitable structures and resolved the ambiguity in favor of the free use of SWC's property. The court further found that there was undisputed evidence that section 4 had been violated on numerous occasions and that under those circumstances section 4 had been abandoned or waived. The court determined that the non-waiver provision of the Restrictions could not be applied to selectively enforce section 4 against Voicestream and SWC because other non-residential structures had been erected without challenge. The Burkes were precluded, according to the trial court, from obtaining equitable relief because they had not filed their action until the tower was substantially complete, removal of the tower would cause a loss to Voicestream of approximately $300,000, and the harm resulting from enforcement of section 4 would be disproportionate to the potential damages suffered by the Burkes.

¶ 9 The trial court entered judgment in favor of Voicestream and SWC but declined to award them attorneys' fees. The Burkes appeal from the judgment, and Voicestream and SWC cross-appeal from the denial of their applications for awards of attorneys' fees.

ANALYSIS

Interpretation of Section 4 of the Restrictions

¶ 10 The Burkes argue that the trial court erred as a matter of law when it found that section 4 of the Restrictions was ambiguous and should be interpreted to apply only to habitable structures.

¶ 11 Restrictive covenants in deeds "constitute a contract between the subdivision's property owners as a whole and individual lot owners." Ahwatukee Custom Estates Mgmt. Ass'n, Inc. v. Turner, 196 Ariz. 631, 634, ¶ 5, 2 P.3d 1276, 1279 (App.2000). The interpretation of a contract is generally a matter of law, and we are not bound by the trial court's conclusions of law. Scholten v. Blackhawk Partners, 184 Ariz. 326, 328, 909 P.2d 393, 395 (App.1995). Likewise, whether a contract is ambiguous is a question of law that we review de novo. Hartford v. Indus. Comm'n, 178 Ariz. 106, 111, 870 P.2d 1202, 1207 (App.1994).

¶ 12 Section 4 of the Restrictions provides as follows:

No structure shall be erected, altered, placed or permitted to remain on any of said lots other than one detached single-family dwelling not to exceed one story in height and a private garage not to exceed one story in height for not more than Three (3) cars, and a guest or servant quarters for the sole use of actual non-paying guests or actual servants of the occupants of the main residential building.

The Burkes argue that the phrase "no structure" is intended to prevent structures such as the fifty-foot tower from being constructed and maintained within the subdivision. Voicestream and SWC respond that the use of the word "structure" in section 4 is intended to govern only the primary or principal buildings constructed on the lots, including a garage and any guest house, and to preclude construction of a commercial building as the primary structure. They further argue that section 4 was not intended to govern complementary or auxiliary structures such as a dog house, children's playhouse, garden or tool shed, radio tower, above-ground swimming pool, or a basketball hoop attached to a freestanding pole, and that the tower complements the church as a tree house might complement a residence. Alternatively, they assert that if the meaning of section 4 is unclear, its ambiguity requires interpretation in favor of the free use and enjoyment of property in the subdivision.

¶ 13 Words in a restrictive covenant must be given their ordinary meaning, and the use of the words within a restrictive covenant gives strong evidence of the intended meaning. Duffy v. Sunburst Farms E. Mut. Water & Agric. Co., 124 Ariz. 413, 416, 604 P.2d 1124, 1127 (1979). Unambiguous restrictive covenants are generally enforced according to their terms. Id. at 417, 604 P.2d at 1128. Restrictions that are not absolutely clear should "be interpreted in the ordinary and popular sense, related to circumstances under which they were used, having in mind their purpose and general situation." Riley v. Stoves, 22 Ariz.App. 223, 226, 526 P.2d 747, 750 (1974). If the language of a restrictive covenant is judged to be ambiguous, it should be construed in favor of the free use of the land. Duffy, 124 Ariz. at 417, 604 P.2d at 1128.

¶ 14 A restrictive provision much like section 4 was considered by this court in Horton v. Mitchell, 200 Ariz. 523, 29 P.3d 870 (App.2001). The restriction at issue in Horton stated:

No structure shall be erected, altered, placed or permitted to remain on any of said lots other than one detached single[-]family dwelling not to exceed two (2) stories in height, or tri-level single[-]family dwelling and a private garage not to exceed one (1) story in height for not more than three (3) cars.

Id. at 526, ¶ 12, 29 P.3d at 873. The Horton court considered whether this provision prevented the construction of a roadway across a subdivision lot governed by the restrictions. Id. at 525, ¶ 6, 29 P.3d at 872.

¶ 15 The court stated that the inquiry was whether the proposed roadway was the equivalent of a "structure." Id. at 527, ¶ 16, 29 P.3d at 874. It first determined that nothing in the restrictions revealed "an intent to limit the term `structure' to anything other than its ordinary meaning." Id. at ¶ 17, 29 P.3d 870. As an example, the court noted that paragraph 2 of the restrictions stated that "[a]ll structures of said Lots shall be of new construction and no building shall be moved from any other location onto any of said lots." Id. (emphasis added). From this provision, the court concluded that buildings were not the only structures that were anticipated on the lots. Id. The Horton court also decided that another provision of the restrictions indicated that "structure" was meant to be given its ordinary meaning because it stated that "[n]o structure of any kind or nature shall be erected on the easements for public utilities shown on the said plat of [the subdivision]." Id.

¶ 16 In reaching its decision, the Horton court used the dictionary definition of a "structure" as "[s]omething constructed." Id. at ¶ 18, 29 P.3d 870 (quoting The American Heritage Dictionary of the English Language 1782 (3d ed.1992)). "Clearly," stated the court, "a roadway is a structure—that is, `something constructed'—within the ordinary meaning of the term and within the meaning of the Restrictions." Id. It thus held that the restrictions specifically precluded the...