Goglio v. Star Valley Ranch Ass'n

• Decision Date: 21 June 2002
• Docket Number: No. 00-257., No. 00-256
• Citation: 2002 WY 94,48 P.3d 1072
• Parties: Frank GOGLIO, Cora Goglio, Kent Harker, Fred Cobb, Richard Asay, Dorothy Asay, Alfred Boschetto, Robert Barngrover, Jean Barngrover, Robert Carmine, Warren Webb, Gerald Kittleson, and Roy Holloway, Appellants (Plaintiffs), v. STAR VALLEY RANCH ASSOCIATION, a Wyoming mutual benefit, non-profit corporation, Appellee (Defendant). Frank Goglio, Cora Goglio, Kent Harker, Fred Cobb, Richard Asay, Dorothy Asay, Alfred Boschetto, Robert Barngrover, Jean Barngrover, Robert Carmine, Warren Webb, Gerald Kittleson, and Roy Holloway, Appellants (Plaintiffs), v. Star Valley Ranch Association, a Wyoming mutual benefit, non-profit corporation, Appellee (Defendant).
• Court: Wyoming Supreme Court

48 P.3d 1072

2002 WY 94

Frank GOGLIO, Cora Goglio, Kent Harker, Fred Cobb, Richard Asay, Dorothy Asay, Alfred Boschetto, Robert Barngrover, Jean Barngrover, Robert Carmine, Warren Webb, Gerald Kittleson, and Roy Holloway, Appellants (Plaintiffs), v. STAR VALLEY RANCH ASSOCIATION, a Wyoming mutual benefit, non-profit corporation, Appellee (Defendant).

Frank Goglio, Cora Goglio, Kent Harker, Fred Cobb, Richard Asay, Dorothy Asay, Alfred Boschetto, Robert Barngrover, Jean Barngrover, Robert Carmine, Warren Webb, Gerald Kittleson, and Roy Holloway, Appellants (Plaintiffs), v. Star Valley Ranch Association, a Wyoming mutual benefit, non-profit corporation, Appellee (Defendant).

Nos. 00-256, 00-257.

Supreme Court of Wyoming.

June 21, 2002.

Robert J. Logan of Law Offices of Robert J. Logan, San Jose, CA, Representing Appellants. Argument by Mr. Logan.

Sean P. Durrant of Palmerlee & Durrant LLC, Buffalo, WY, Representing Appellee. Argument by Mr. Durrant.

Before LEHMAN, C.J., and GOLDEN, HILL, KITE, and VOIGT, JJ.

LEHMAN, Chief Justice.

[¶ 1] Appellant homeowners Goglio et al. (homeowners) are residential lot owners in Star Valley Ranch, a recreational subdivision in Lincoln County, and members of the Star Valley Ranch Association. The consolidated appeal they present to this court is comprised of two cases. In case number 00-256, appellant homeowners sought a declaratory judgment that the culinary water use fee imposed upon them by appellee Star Valley Ranch Association (Association), a non-profit corporation, was a violation of the recorded Declaration of Covenants, Conditions and Restrictions (DCCRs) that govern the relationship between these parties. The district court granted summary judgment for the Association determining that the DCCRs, articles of incorporation, by-laws, and applicable Wyoming statutes authorize the imposition of the fee in question. Having herein determined that the governing documents do not authorize the imposition of such a fee absent an affirmative vote by two-thirds of the members of the Association, we reverse the judgment of the district court.

[¶ 2] In case no. 00-257, appellant homeowners seek reversal of the district court's order purportedly granting W.R.C.P. 11 sanctions to appellants. While we agree that the district court's order is unusual, we construe it essentially as a denial of requested sanctions and, as such, not an abuse of discretion and thus affirm.

[¶ 3] Affirmed in part, reversed in part, and remanded.

ISSUES

[¶ 4] Case number 00-256 presents the following issues for review:

1. Whether Star Valley Ranch Association, a Wyoming mutual benefit non-profit corporation (the "Association") should have been barred by res judicata or collateral estoppel from levying the culinary water use fee.

2. Whether Appellee corporation had the authority to impose a culinary water use fee upon those Appellant lot owners whose homes were hooked into and using the corporation's water system.

Case number 00-257 presents these issues:

1. Whether the district court abused its discretion in issuing the W.R.C.P. 11 sanction order.

2. Whether Appellant Logan's due process rights were violated when sanctions were ordered against him.

FACTS AND PROCEDURAL HISTORY

[¶ 5] In the early 1970s, the developer Leisure Valley began selling lots in Star Valley Ranch, a rural recreational subdivision in Lincoln County. Star Valley Ranch consists of 2,050 residential lots plus amenities such as swimming pools, golf courses, tennis courts, hiking trails, a bar, and a restaurant. The DCCRs were adopted to make the lots more attractive to potential buyers and to maintain property values. Leisure Valley organized the Association as a nonprofit corporation for the benefit of the lot owners to enforce the DCCRs and to own, manage, and maintain the common area, which consists of the property acquired by the Association for the common use and enjoyment of the members. All lot owners in Star Valley Ranch are automatically members of the Association.

[¶ 6] On October 4, 1995, the district court in the third judicial district issued an order resolving a case captioned Goglio et al. v. Star Valley Ranch Ass'n, case number 9367 (Goglio I). Goglio I involved the imposition of a "homeowner's fee" by the Association on some of its members. The court determined that the imposition of the "homeowner's fee" by the Association was unenforceable as beyond the authority granted to it by the recorded DCCRs. The court reached its conclusion by finding that the fee at issue was an assessment in excess of the maximum annual assessment allowed under the DCCRs and that the Association had not obtained the requisite membership approval before the imposition of the fee. The Association did not appeal the district court's order in Goglio I.

[¶ 7] On June 28, 1997, the Association held a special election seeking membership approval for a special assessment to fund, among other things, the acquisition of water lines and the replacement of water lines pursuant to an agreement with the developer, Leisure Valley.¹ The membership did not approve the special assessment. On November 14, 1998, the Association held a second special election seeking membership approval for a special assessment, the purpose of which included funds for the acquisition of water lines and the replacement of water lines. Again, the membership did not approve the special assessment.

[¶ 8] Thereafter, on April 29, 1999, the Association Board adopted Resolution No. 2 which levied a $180 annual fee on all property owners who used the culinary water system.² The Resolution was sent to homeowners with an attached cover letter dated May 3, 1999. The letter read that the board had been studying the issue for some time and "[u]pon completion of this thorough study, which included favorable opinions from two different law firms, the use fees were enacted and are effective immediately." The letter further read that funds collected "will be used to help provide and maintain these services." The Resolution provided that homeowners who did not pay the culinary water fee would be disconnected from the system.

[¶ 9] Subsequently, some of the appellant homeowners sent letters to the Association Board of Directors seeking information regarding the culinary water use fee. Generally, they requested information on the Board's authority for imposition of the fee, asked how this fee differed from the fee found unenforceable in Goglio I, asked for more specificity regarding the purpose and use of the fee, and requested information regarding the legal opinions referred to in the Board's letter of May 3, 1999. According to their affidavits and attachments, many of the homeowners never received a response from the Board, others received responses which declined to discuss the legal opinions given to the Board or to further answer the homeowners' queries.

[¶ 10] On June 30, 1999, the homeowners filed a petition for declaratory judgment seeking a determination by the district court that the imposition of the culinary water use fee was beyond the authority granted to the Association Board under the DCCRs or barred under the doctrine of res judicata pursuant to the holding of Goglio I. On August 24, 1999, the Association moved to dismiss the petition alleging that Goglio I was wrongly decided because it relied in part on a repealed statute. It is the allegations in this motion that gave rise to the district court's sanction order of July 19, 2000, and form the grounds for case number 00-257 in this consolidated appeal.

[¶ 11] On September 21, 1999, appellants moved for summary judgment. On June 22, 2000, after supplemental briefing by the parties, the district court treated appellee's motion to dismiss as a converted motion for summary judgment pursuant to W.R.C.P. 12(c) and granted summary judgment to the Association and denied summary judgment to the homeowners. The court decided that the culinary water use fee was different from the fee at issue in Goglio I and thus not barred by the doctrine of res judicata. It also concluded that the DCCRs, articles of incorporation, and Wyoming statutes authorized the Association Board to impose the culinary water use fee. This timely appeal followed.

STANDARD OF REVIEW

[¶ 12] When this court reviews a grant of summary judgment entered in response to a petition for declaratory judgment, we invoke our usual standard for review of summary judgments. Fontaine v. Board of County Comm'rs, 4 P.3d 890, 892 (Wyo.2000); Board of County Comm'rs v. Geringer, 941 P.2d 742, 745 (Wyo.1997); Kunard v. Enron Oil & Gas Co., 869 P.2d 132, 134 (Wyo.1994). The summary judgment can be sustained only when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c); Fontaine, 4 P.3d at 892; Kirby v. NMC/Continue Care, 993 P.2d 951, 952 (Wyo.1999); Selby v. Conquistador Apartments, Ltd., 990 P.2d 491, 494 (Wyo.1999); Roberts v. Klinkosh, 986 P.2d 153, 155 (Wyo.1999). In this instance, there is no contention that any genuine issue of material fact exists, and our concern is strictly with the application of the law. The interpretation and construction of contracts is a matter of law for the courts. Reed v. Miles Land and Livestock Co., 2001 WY 16, ¶ 10, 18 P.3d 1161, ¶ 10 (Wyo.2001); Mathis v. Wendling, 962 P.2d 160, 163-64 (Wyo.1998). We review a grant of summary judgment deciding a question of law de novo and afford no deference to the district court's ruling. Hirschfield v. Board of County Comm'rs, 944 P.2d 1139, 1141 (Wyo.1997).

DISCUSSION

Case number 00-256

[¶ 13] The district court determined that the Board's actions were not barred by the doctrines of res judicata or collateral estoppel premised upon its earlier holding in Goglio I. The district court reasoned that the culinary water use fee at issue in the instant case is a "use" fee and was thus different from the homeowner's "servi...