Czajkowski v. Meyers

• Decision Date: 07 November 2007
• Docket Number: No. DA 06-0401.,DA 06-0401.
• Citation: 172 P.3d 94,2007 MT 292
• Parties: Peter CZAJKOWSKI and Joan Czajkowski, Plaintiffs and Appellants, v. Nicholas MEYERS and Virginia Meyers, Defendants and Appellees.
• Court: Montana Supreme Court

172 P.3d 94

2007 MT 292

Peter CZAJKOWSKI and Joan Czajkowski, Plaintiffs and Appellants, v. Nicholas MEYERS and Virginia Meyers, Defendants and Appellees.

No. DA 06-0401.

Supreme Court of Montana.

Submitted on Briefs February 21, 2007.

Decided November 7, 2007.

For Appellants: Karl Knuchel, Attorney at Law, Livingston, Montana.

For Appellees: Kevin S. Brown, Paoli & Brown, P.C., Livingston, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 The Czajkowskis and Meyers both own property and reside in Yellowstone Gateway Estates, a five-parcel subdivision in Livingston, Montana. The property of all five homeowners in this subdivision is subject to restrictive covenants. The Czajkowskis sued the Meyers for breach of the covenants pertaining to new construction on and improvements to the Meyers' property. The Czajkowskis did not ask for monetary compensation or recovery of attorney's fees; they merely asked the District Court to fashion a fitting remedy if it found that the Meyers breached the covenants. The Meyers counterclaimed alleging the Czajkowskis breached the covenant prohibiting noxious and offensive activities. They sought damages for emotional distress, punitive damages and attorney's fees. The Montana Sixth Judicial District Court ruled in favor of the Meyers on all issues. The Czajkowskis appeal. We affirm.

ISSUES

¶ 2 A restatement of the issues on appeal is:

¶ 3 Did the District Court err when it determined that the Meyers did not violate the protective covenants applicable to the parties?

¶ 4 Did the District Court abuse its discretion by awarding damages to both Nick and Virginia Meyers for intentional infliction of emotional distress?

¶ 5 Did the District Court err by awarding punitive damages to the Meyers?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 Nick and Virginia Meyers bought a twelve-acre parcel in Yellowstone Gateway Estates in 1997. At the time of purchase, the Meyers were aware of the restrictive covenants that ran with the five parcels in the subdivision. When they bought the property, the structures on the land consisted of a berm-style house, a chicken coop and a shed/barn. The property had fallen into disrepair and the Meyers spent thousands of dollars repairing fences, removing old farm equipment, tearing down the chicken coop, undertaking extensive weed control and performing improvements to the property. The Meyers also built a pole barn in 1997 to shelter their tractors and farm equipment. The pole barn was constructed with grey metal sides and a white metal roof. In May 2002 the Meyers began constructing a guesthouse. It was a chalet-style design with cedar wood siding and a dark metal roof. The guesthouse was completed in 2005 or 2006.

¶ 7 Peter and Joan Czajkowski traveled to Montana in 1998 and purchased a two-acre lot adjacent to the Meyers' property. They were notified of the protective covenants at the time of the purchase. Their purchase included both the land and a house that was being built on the property at the time. The house was designed and constructed with wooden sides and a metal roof. At the time the Czajkowskis purchased their land, the Meyers had completed construction of their pole barn but had not yet begun constructing the guesthouse.

¶ 8 Personal tension developed in the neighborhood shortly after the Czajkowskis arrived in Montana in May 1999. When they discovered that construction of their house was not complete, the Czajkowskis sued the original builder who was an owner of one of the five parcels in the subdivision and hired another contractor to complete construction. They maintain that their relationship with their new neighbors suffered as a result of the law suit. They also claim that shortly after moving into their house, Virginia Meyers "threatened" them over the Meyers' rights to water running through a ditch on the Czajkowskis' property, asserting that she could enter their property at any time without their permission in order to maintain the ditch. Virginia Meyers disputes the Czajkowskis' description of the conversation.

¶ 9 Regardless of its genesis, the relationship between the Meyers and the Czajkowskis deteriorated rapidly. The Meyers claim that beginning in 2001 the Czajkowskis began subjecting them, and other neighbors, to a systematic barrage of verbal abuse and surveillance. They testified that the Czajkowskis unrelentingly screamed vulgar epithets and made vulgar gestures at them, as well as photographed them and blatantly watched them through binoculars.

¶ 10 In March 2003 the Czajkowskis filed suit against the Meyers alleging that they violated several covenants, including but not limited to, the requirement that secondary structures constructed on the property must match the external design and external materials of the primary structure. The Czajkowskis did not present evidence that any alleged covenant violation by the Meyers diminished the value of their property or the subdivision as a whole, nor did they seek monetary compensation or recovery of attorney's fees. Rather they asked the court, in the event it found that the Meyers had violated the covenants, to fashion a remedy it saw fit.

¶ 11 The Meyers counterclaimed that the Czajkowskis violated the covenant that prohibited noxious or offensive activities that were annoying or constituted a nuisance to other owners. They assert that the Czajkowskis' continuous verbal abuse and surveillance constituted such prohibited offensive activity. The Meyers sought damages for intentional emotional distress, punitive damages, and attorney's fees. A bench trial was held on February 2 and 3, 2005. Subsequently, the District Court ruled in favor of the Meyers and awarded $25,000.00 each to Nick and Virginia Meyers as compensation for emotional distress. The court also imposed a $10,000.00 punitive damages award against the Czajkowskis. After a subsequent hearing, the District Court granted the Meyers attorney's fees in the amount of $10,840.45. The Czajkowskis filed a timely appeal.

STANDARDS OF REVIEW

¶ 12 A district court's interpretation of a restrictive covenant is a conclusion of law which we review to determine whether the court's conclusion is correct. Creveling v. Ingold, 2006 MT 57, ¶ 5, 331 Mont. 322, ¶ 5, 132 P.3d 531, ¶ 5 (citation omitted).

¶ 13 When reviewing an award of damages, the standard of review is whether the trial court abused its discretion. Sartori v. S & S Trucking, Inc., 2006 MT 164, ¶ 12, 332 Mont. 503, ¶ 12, 139 P.3d 806, ¶ 12.

¶ 14 We review a district court's punitive damages findings made pursuant to § 27-1-221, MCA, under the three-part test set forth in Interstate Production Credit v. DeSaye, 250 Mont. 320, 323, 820 P.2d 1285, 1287 (1991), to determine whether they are clearly erroneous. Marie Deonier v. Paul Revere Life Ins. Co., 2004 MT 297, ¶ 39, 323 Mont. 387, ¶ 39, 101 P.3d 742, ¶ 39. To determine whether the court's findings are clearly erroneous, we will first review the record to see if the findings are supported by substantial evidence. Second, if the findings are supported by substantial evidence we will determine if the trial court has misapprehended the effect of the evidence. Third, if substantial evidence exists and the effect of the evidence has not been misapprehended, this Court may still find that a finding is clearly erroneous when, although there is evidence to support it, a review of the record leaves us with the definite and firm conviction that a mistake has been committed. Deonier, ¶ 39.

¶ 15 It is not this Court's function, on appeal, to reweigh conflicting evidence or substitute our evaluation of the evidence for that of the district court. We defer to the district court in cases involving conflicting testimony because we recognize that the court had the benefit of observing the demeanor of witnesses and rendering a determination of the credibility of those witnesses. State v. Wetzel, 2005 MT 154, ¶ 11, 327 Mont. 413, ¶ 11, 114 P.3d 269, ¶ 11 (citations omitted).

DISCUSSION

¶ 16 Issue One: Did the District Court err when it determined that the Meyers did not violate the protective covenants applicable to the parties?

¶ 17 The Czajkowskis contend that the District Court erred in its interpretation and application of the following protective covenants:

Article 1.3 Restoration of Lot. Upon completion of the construction on any improvement on any portion of the Property, the owner shall, to the greatest extent possible, restore the lot to the conditions which existed prior to such construction (taking into account such construction) so that the lot and improvements shall be in harmony with the surrounding property.

Article 2.1(k) Building Restrictions. Any secondary structure on a site will match the external design and be made of the same basic external material as the primary structure.

¶ 18 The District Court found that, as applied to the facts of this case, these two covenants conflicted. Noting that the Meyers' berm house was the only berm house in the subdivision and surrounding properties the court found that the Meyers faced a dilemma when constructing their guesthouse—they could either construct it in accordance with Article 2.1(k) to match the external design of the berm house, or they could construct it in accordance with Article 1.3 which instructs that "the lot and improvements shall be in harmony with the surrounding property." As a result of these conflicting covenants, the court found that the Meyers did not violate the covenants by building a guesthouse that harmonized with the surrounding properties, or, if they did, it was a harmless and de minimis violation. The District Court also found that the Meyers' pole barn, which was built before the Czajkowskis purchased their property, was identical to another pole barn in the subdivision and to other pole barns on surrounding properties; therefore, it too was in harmony and not a violation of the covenants.

¶ 19 The...