Hallmark v. Westland Meadows Owners Ass'n

• Decision Date: 29 April 1999
• Docket Number: No. 97CA2191.,97CA2191.
• Citation: 983 P.2d 170
• Parties: HALLMARK BUILDING COMPANY, Plaintiff-Appellant, v. WESTLAND MEADOWS OWNERS ASSOCIATION, INC., Defendant-Appellee.
• Court: Colorado Court of Appeals

983 P.2d 170

HALLMARK BUILDING COMPANY, Plaintiff-Appellant, v. WESTLAND MEADOWS OWNERS ASSOCIATION, INC., Defendant-Appellee.

No. 97CA2191.

Colorado Court of Appeals, Div. IV.

April 29, 1999.

Certiorari Denied August 30, 1999.

Jeffrey L. Weeks, Colorado Springs, Colorado, for Plaintiff-Appellant

Hall & Evans, L.L.C., Alan Epstein, Denver, Colorado; Anderson, Dude, Pifher & Lebel, P.C., Lenard Rioth, Lynn Billings, Colorado Springs, Colorado, for Defendant-Appellee

Opinion by Judge ROTHENBERG.

Plaintiff, Hallmark Building Co. (Hallmark), appeals the summary judgment entered in favor of defendant, Westland Meadows Owners Association, Inc., (Association) on the issue of liability for back assessment fees and the order awarding attorney's fees and costs to the Association. Hallmark further appeals the court's failure to invalidate an assessment lien and failure to award statutory damages, attorney's fees, and costs to Hallmark. We reverse and remand for further proceedings.

In the 1980's, North American Homes (North American) developed the Westland Meadows subdivision with approximately 100 lots. North American filed a declaration of covenants, conditions, and restrictions for the subdivision with the county clerk.

The covenants provided that all lot owners would be charged a monthly assessment of $38.50 per lot with an exception for North American. As the developer, it was assessed at 25% of the normal fee.

North American went bankrupt after developing approximately twenty-five lots. Thereafter, one of the homeowners assumed the responsibilities of running the Association.

After Hallmark began purchasing vacant lots in October 1993, it entered into an agreement with the Association. Under the agreement, Hallmark was to pay only $9.75 per month per lot instead of $38.50. Hallmark built homes on the lots it purchased and then sold them. Each time Hallmark sold a house in the Westland Meadows subdivision, it requested the monthly assessment bill from the Association. Approximately seventy four bills were sent to Hallmark, all of which indicated that Hallmark owed $9.75 per month per lot.

In November 1995, the Association filed an assessment lien for $15,000 on Hallmark's last piece of property based on fines allegedly owed for property damage in the subdivision. Hallmark responded by filing this declaratory judgment action against the Association, and the Association counterclaimed for $14,920 in back monthly assessments. In its counterclaim, the Association alleged that the agreement lowering the monthly assessment fee for Hallmark was invalid. Hallmark and the Association filed cross-motions for summary judgment. The trial court granted Hallmark's motion for summary judgment and thereby dismissed the Association's claim for alleged property damages to the subdivision. However, the court neither invalidated the assessment lien nor granted Hallmarks's motion for attorney's fees and costs.

The trial court then granted the Association's motion for summary judgment and motion for attorney's fees for the back assessment fees claim. The court denied Hallmark's motion for summary judgment regarding the same claim.

I.

Hallmark contends summary judgment was improper as to the Association's claim for back assessment fees because there exists a genuine issue of material fact whether fees were owed. According to Hallmark, it had equitable defenses against the Association and should not have been precluded from raising them. We agree.

Summary judgment should be granted only if there is no genuine issue as to any material fact, and the burden to so demonstrate is on the movant. Appellate review of a judgment granting a motion for summary judgment is de novo. Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Board, 901 P.2d 1251 (Colo.1995)

.

A court must consider the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, in determining whether to grant a motion for summary judgment. C.R.C.P. 56(c). The nonmoving party is entitled to the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts. Moffat County State Bank v. Told, 800 P.2d 1320 (Colo.1990).

Protective covenants that are clear on their face should be enforced as written. Woodmoor Improvement Ass'n v. Brenner, 919 P.2d 928 (Colo.App.1996). In determining whether provisions of a document are ambiguous, its language must be construed in harmony with the plain, ordinary and commonly accepted meaning of the words employed and reference must be made to all provisions of the document. Radiology Professional Corp. v. Trinidad Area Health Ass'n, 195 Colo. 253, 577 P.2d 748 (1978). These rules of construction are applicable to protective covenants. See Tri-State Generation & Transmission Co. v. City of Thornton, 647 P.2d 670 (Colo.1982)

; Wilson v. Goldman, 699 P.2d 420 (Colo.App.1985).

Here, the declaration allocated the maintenance costs for the common areas by charging assessments at a uniform rate to each lot and provided methods to alter or amend the method for calculating the assessments. Article VI, Section 1 of the Association's declaration states that:

No Owner may waive or otherwise escape personal liability for the payment of the assessments ... by asserting any claims against the Association, the Declarant or any other person or entity. (emphasis added)

Hallmark maintains, and we agree, that the assertion of equitable defenses does not raise a "claim." Black's Law Dictionary 247 (6th ed.1990) defines a "claim" as "[t]o demand as one's own or as one's right; to assert; to urge; to insist. A cause of action." Also, a "defense" is defined as "[t]hat which is offered and alleged by the party proceeded against in an action or suit, as a reason in law or fact why the plaintiff should not recover or establish what he seeks. That which is put forward to diminish plaintiff's cause of action or defeat recovery." Black's Law Dictionary 419 (6th ed.1990).

C.R.C.P. 8 distinguishes between claims and defenses. Claims for relief include original claims, counterclaims, cross-claims, or third-party claims. Defenses are raised in response to claims asserted. C.R.C.P. 8(a) and (b). Additionally, estoppel, laches, and any other matter constituting avoidance are affirmative defenses. C.R.C.P. 8(c) states that "[w]hen a party has mistakenly designated a defense as a counterclaim or a counterclaim as a defense," then the pleading shall be treated as a proper designation if justice requires.

Because Hallmark did not bring an action against the Association, but simply defended against the Association's claim for the back assessments, we conclude that its equitable defenses do not fall within the definition of a "claim" in Article IV, Section 1 of the declaration. Therefore, Hallmark is not precluded from raising those defenses against the Association's claim for back assessments.

The record reflects that Hallmark presented evidence that: (1) Hallmark and the president of the Association entered into an agreement changing the rate of assessment for Hallmark's lots; (2) Hallmark was billed on seventy four different lots at a rate of $9.75 per month per lot over a two and one half year period; and (3) the Association failed to raise the back assessment claim prior to the filing of a lien on Hallmark's last parcel in Westland Meadows subdivision.

We therefore conclude that a genuine issue of material...