El Dorado Heights Homeown. Ass'n v. Dewitt

• Decision Date: 10 June 2008
• Docket Number: No. DA 07-0103.,DA 07-0103.
• Citation: 2008 MT 199,344 Mont. 77,186 P.3d 1249
• Parties: EL DORADO HEIGHTS HOMEOWNERS' ASSOCIATION, Plaintiff and Appellee, v. Kevin DEWITT, Defendant, Diane Boles, Appellant.
• Court: Montana Supreme Court

186 P.3d 1249

2008 MT 199

344 Mont. 77

EL DORADO HEIGHTS HOMEOWNERS' ASSOCIATION, Plaintiff and Appellee, v. Kevin DEWITT, Defendant Diane Boles, Appellant.

No. DA 07-0103.

Supreme Court of Montana.

Submitted on Briefs December 19, 2007.

Decided June 10, 2008.

Gregory W. Duncan, Attorney at Law, Helena, MT, for Appellant.

Mona Jamison, Jamison Law Firm, Helena, MT, for Appellee.

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

¶ 1 Appellant Diane Boles (Boles) appeals the District Court's denial of her various motions for an amendment to or revocation of a stipulation into which she entered, and its order granting the El Dorado Heights Homeowners' Association's (HOA) motion to have Boles named as a real party in interest, holding her in contempt of the court's order dated June 5, 2006, and awarding attorney's fees to the HOA. Boles also seeks relief from the court's order requiring her to remove the red metal roof from her barn by April 15, 2007. We affirm in part and reverse in part.

FACTUAL BACKGROUND

¶ 2 This case arises from a violation of the El Dorado Heights subdivision's restrictive covenants, the HOA's attempt to enforce those covenants, and Boles' concerted efforts to avoid compliance with both the covenants and a stipulation into which she entered with the HOA.

¶ 3 The HOA filed a complaint in District Court on May 16, 2006, requesting temporary and permanent injunctive relief, including a temporary restraining order, to prohibit Kevin Dewitt (Dewitt) from continuing construction on Lot # 38 within the El Dorado Heights subdivision. The HOA claimed that Dewitt's construction plans violated the restrictive covenants and Architectural Guidelines of El Dorado Heights, of which Dewitt had notice. Specifically, his plans called for the use of prohibited materials and colors on proposed buildings, and reflected improper setbacks from the road. The HOA also requested an award of costs and attorney's fees. The court signed the temporary restraining order on May 16, 2006, and scheduled a show cause hearing for May 30, 2006.

¶ 4 On May 30, 2006, Dewitt filed his answer and counterclaim. Dewitt denied ownership of Lot # 38, and asserted that Boles was the owner. Dewitt also denied that the roofing materials and other building plans violated the covenants. He made other claims and allegations not relevant here.

¶ 5 Despite having filed an answer, Dewitt never appeared at the show cause hearing. Rather, the HOA representatives and Boles, together with counsel, appeared before the court to state that the parties had reached an agreement regarding the alleged violations of El Dorado Heights' restrictive covenants. The parties acknowledged that Boles was the owner of Lot # 38, not Dewitt, but indicated that in light of their agreement, it would not be necessary to formally amend the complaint to reflect Boles as the proper party defendant.

¶ 6 Counsel for the HOA explained that a new building plan had been submitted by Boles and that, except for the red metal roof on her barn, the new plans satisfied the covenants. The HOA moved to dismiss the temporary restraining order and its request for a preliminary injunction in exchange for Boles' promise to remove the red metal roof within ninety days. The HOA also agreed to make Boles chairperson of the HOA working group that would be reviewing and possibly amending the covenants by way of a vote of the membership.

¶ 7 The parties put their agreement in writing and called it a "stipulation." The stipulation was signed by Paul Jagoda, president of the HOA, and his attorney, and by Boles, record owner of Lot # 38 in the El Dorado Heights subdivision, and her attorney. The stipulation was filed on June 2, 2006. The court entered the stipulation into the record on June 5, 2006, and dissolved the temporary restraining order. Pursuant to the stipulation, Boles would be allowed to continue construction on her land. The stipulation further provided that the president and vice president of the HOA could not guarantee the final content of any revised covenants that might be put to a vote of the HOA membership or that any proposed amendments would pass.

¶ 8 On August 21, 2006, Boles moved to substitute counsel and her motion was granted. Ten days later, on August 31, 2006, Boles filed a motion seeking a stay and amendment or rescission of the stipulation. She then filed a brief and affidavits of various professionals, along with homeowners within El Dorado Heights, to support her contention that her roof did not violate the covenants because it was a naturally occurring color as the covenants required, and it was made of a type of metal and manufacture not prohibited under the covenants.

¶ 9 Boles asserted many alternative arguments in her motion for relief from the stipulation. She asserted that even if her roof was a violation of the covenants, the covenants were void for vagueness, arbitrarily enforced, and a violation of the state's public policy regarding prevention of wildland-urban interface fires. She also argued that because HOA failed to name her as a defendant and serve her with a summons and complaint, the HOA could not hold her responsible for any violation of the covenants or provisions of the stipulation. In addition, she maintained that her failure to raise these points at the time of the show cause hearing was due to inadequate assistance of counsel. Finally, she argued that the affidavits of several other homeowners in El Dorado Heights illustrated that the covenants would be changing soon and that it would cause her significant financial loss to remove the roof only to have the covenants allow such a roof at a later date. Therefore, she reasoned, she should not have to comply with the stipulation into which she entered on June 2, 2006.

¶ 10 The HOA responded with a motion seeking to hold Boles in civil contempt for her violation of the court order issued June 5, 2006, and seeking costs and attorney's fees for being compelled to seek judicial enforcement of the court's order. HOA maintained that the August 31, 2006 deadline for removal of the red roof had passed and Boles' failure to remove the roof was a violation of the court order incorporating the stipulation of the parties.

¶ 11 Subsequently, Boles submitted petitions signed by various homeowners in the subdivision requesting that Boles not be required to remove her roof, and reflecting their agreement to amend the covenants. Boles also submitted proposed signed Amendments to the Declaration of Restrictions, covenants, and conditions, and more affidavits stating that the covenants would likely be amended, though no amendment had taken place yet. Boles blamed the fact that the amended covenants had not been approved yet on the HOA president and vice president.

¶ 12 On September 28, 2006, Boles filed a document entitled "Statement of Limited Appearance." In it, she challenged the District Court's exercise of jurisdiction over her as she was still not a named party in the action. The next day, the HOA filed a motion to substitute Boles as the real party in interest for Dewitt.

¶ 13 The court held a hearing on the various motions on November 21 and 27, 2006. The court narrowed Boles' arguments for vacating the stipulation down to eight: (1) inadequate representation by prior counsel; (2) the roof material complied with the covenants; (3) deception by HOA and its counsel to the effect that a change in the covenants would mean she would not be required to remove her roof; (4) no meeting of minds in the stipulation; (5) removal of the roof would result in significant, inequitable loss to Boles; (6) enforcement would not further the purpose of the covenants; (7) the court lacked personal jurisdiction over Boles; and (8) safety and welfare concerns justified the court's intervention in favor of amending the stipulation. The court proceeded to reject all of Boles' arguments and motions. In an order dated January 3, 2007, the court denied Boles' motion to rescind the stipulation and ruled in favor of the HOA on its motion for civil contempt and its motion to substitute. Subsequently, on February 14, 2007, the court entered an order awarding attorney's fees to the HOA as a sanction against Boles under § 3-1-501(3), MCA, and pursuant to its equitable powers, stating it would be "incredibly unfair" to force the plaintiff to incur substantial attorney's fees under these circumstances, and that the court's equitable powers "are designed to prevent just such a situation as this." The court also ordered that the roof be removed, and that Boles suffer a fine of $300 per day for each day past the court's deadline that Boles fails to remove the roof. Boles now appeals.

DISCUSSION

¶ 14 Our standard of reviewing a district court's order denying relief from a previous court order depends on the nature of the final judgment, order, or proceeding from which relief is sought and the specific basis of the M.R. Civ. P. 60(b) (Rule 60(b)) motion. Essex Ins. Co. v. Moose's Saloon, Inc., 2007 MT 202, ¶ 16, 338 Mont. 423, ¶ 16, 166 P.3d 451, ¶ 16. Generally we review a district court's Rule 60(b) ruling for an abuse of discretion. Essex, ¶ 16. Where the specific basis of the motion is a conclusion of law, such as a district court's determination that it had personal jurisdiction, we review the denial of the motion de novo, like any other conclusion of law. Essex, ¶ 16.

¶ 15 With exceptions not applicable here, the order of a district court made in cases of contempt is final and conclusive, and there is generally no appeal therefrom. Section 3-1-523(1), MCA; Schaefer v. Egeland, 2004 MT 199, ¶ 10, 322 Mont. 274, ¶ 10, 95 P.3d 724, ¶ 10. However, we will review a contempt sanction to determine if it is legally complicit with the statutes authorizing a contempt sanction. We review a district court's decision to award attorney's fees pursuant to its equitable powers for an abuse of discretion. Goodover v....