Jensen v. Lake Jane Estates, No. 36094-2-II (Wash. App. 5/13/2008), 36094-2-II.
| Decision Date | 13 May 2008 |
| Docket Number | No. 36094-2-II.,36094-2-II. |
| Court | Washington Court of Appeals |
| Parties | RANDY S. JENSEN, a single man, Respondent, v. LAKE JANE ESTATES, a Washington non-profit corporation, Appellant. |
Appeal from Pierce County Superior Court. Docket No. 06-2-09944-9. Judgment or order under review. Date filed: 03/02/2007. Judge signing: Honorable Vicki Hogan.
Counsel for Appellant(s), Dianne Kathleen Conway, Attorney at Law, Po Box 1157, Tacoma, WA, 98401-1157.
John T Cooke, Gordon Thomas Honeywell, 1201 Pacific Ave Ste 2100, Po Box 1157, Tacoma, WA, 98401-1157.
Counsel for Respondent(s), James Victor Handmacher, Morton McGoldrick PS, 820 A St Ste 600, Po Box 1533, Tacoma, WA, 98401-1533.
The Lake Jane Estates Homeowners Association (LJE) appeals the trial court's grant of judgment on the pleadings in favor of Randy S. Jensen, arguing that (1) judgment on the pleadings was improper because there are disputed issues of fact, (2) the trial court's order undermines the homeowners' reasonable expectations, and (3) it is the de facto successor of the Lake Tapps Development Co. (the developer). Because whether LJE is the de facto successor to the developer is a disputed material fact that may prove LJE's case, judgment on the pleadings was improper. We reverse and remand for proceedings consistent with this opinion.
LJE is the homeowners association for residents of the Debra Jane Lake Plat in the City of Bonney Lake. The plat, which the developer created in 1959, is a subdivision made up of approximately 440 large residential lots.1 On the face of the plat, under the heading "restrictions," are several covenants regarding the use of the lots. The restrictions state in relevant part:
The following restrictions are hereby declared to be covenants running with the land and binding upon future owners, their heirs, successors or assigns on the following described real property: and said restrictions are as follows:
. . . .
6. No lot in this plat shall be subdivided without the written consent of [the developer].
. . . .
14. The breach of any of the foregoing conditions shall constitute a cause of action against the persons committing the breach by the T & J Maintenance Co. or the Lake Tapps Development Co., Inc. . . .
15. If any of the foregoing restrictions are declared to be legally unenforcible [sic] with respect to all or any portion of said property, the applicabi[l]ity and enforcement of the remaining restrictions shall not otherwise be affected.
In 1959, the developer filed articles of incorporation and bylaws for the T & J Maintenance Company. In 1970, T & J Maintenance Company changed its name to LJE. The articles of incorporation, in addition to the restrictions themselves, gave LJE, through its board of trustees, authority to enforce the restrictive covenants. According to the articles of incorporation, LJE's purposes include improving and maintaining common areas, collecting annual assessments from the membership, and engaging in "any and all acts" necessary or proper for, or incidental to, the exercise of any of its powers. CP at 267. In 2003, the developer filed articles of dissolution and no longer exists.
For the past 18 years, even while the developer was in existence, LJE, not the developer has accepted applications from homeowners in the Debra Lake Jane Plat who wished to subdivide their property and subsequently approved or denied those requests without first consulting the developer. And in 2000, LJE, not the developer, successfully filed two suits to uphold its right to enforce restrictive covenant number 6.2
Jensen owns two lots containing single family homes within Debra Jane Lake Plat. In August 2005, Jensen submitted an application to LJE seeking approval to subdivide these two lots into six lots, through a boundary line adjustment and two short plats. In May 2006, LJE rejected his request. On July 28, 2006, Jensen filed the present lawsuit.
On January 24, 2007, Jensen filed a motion for judgment on the pleadings, claiming that restrictive covenant number 6 gave only the developer the authority to approve or deny subdivision requests and, since the developer dissolved in 2003, the covenant was invalid and unenforceable. Specifically, Jensen argued that, because it agreed that the developer was no longer in existence, LJE had admitted "all facts . . . material to [his] motion." CP at 8. In response to Jensen's motion for judgment on the pleadings, LJE argued that Washington courts liberally construe restrictive covenants and give effect to the purposes intended by the covenants and, as a result, LJE contended that it should be allowed to approve or deny homeowners' subdivision requests. The trial court refused to consider documents presented by LJE to support its argument that it was the de facto successor of the developer and granted Jensen's motion for judgment on the pleadings. LJE filed a motion for reconsideration 10 days later, asking the trial court to reconsider its decision in light of Green v. Normandy Park Riviera Community Club, Inc., 137 Wn. App. 665, 151 P.3d 1038 (2007), which had just been released. The trial court denied the motion. LJE timely appeals.
We review a trial court's order for judgment on the pleadings de novo. N. Coast Enters., Inc. v. Factoria P'shp, 94 Wn. App. 855, 858, 974 P.2d 1257, review denied, 138 Wn.2d 1022 (1999). For a court to render judgment on the pleadings, the allegations in the pleadings must be construed strictly against the moving party, and only where it appears that there are no factual issues requiring trial and the issues can be determined as a matter of law can a motion for judgment on the pleadings be granted. Hodgson v. Bicknell, 49 Wn.2d 130, 136, 298 P.2d 844 (1956). In a motion for judgment on the pleadings, the moving party admits all facts well pleaded by the non-moving party, but not the truth of the opponent's conclusions or construction of the subject matter. Pearson v. Vandermay, 67 Wn.2d 222, 230, 407 P.2d 143 (1965); Hodgson, 49 Wn.2d at 136. A judgment on the pleadings is appropriate only if it is clear beyond doubt that the non-moving party can prove no set of facts that entitle him to relief. Bravo v. Dolsen Cos., 125 Wn.2d 745, 750, 888 P.2d 147 (1995).
First, LJE argues that Jensen's complaint is insufficient to support a motion on the pleadings because it did not admit "all facts material to [Jensen's] motion." Br. of Appellant at 10. Specifically, LJE argues that, although it admitted that the developer no longer exists, it denied that this fact renders restrictive covenant number 6 unenforceable. Although a party who moves for a judgment on the pleadings admits the truth of every fact well pleaded by his opponent, that party need not admit the truth of the opponent's conclusions or construction of the subject matter. Pearson, 67 Wn.2d at 230. And the validity and enforceability of restrictive covenant number 6 is a question of law.
Next, LJE argues that there was a disputed issue of material fact because it presented evidence that it is the de facto successor of the developer. Specifically, LJE points out that it has historically exercised the authority to approve or deny subdivision requests without objection from the homeowners or the developer, even though it exercised this authority while the developer was still viable. Whether LJE is a successor to the developer is a disputed issue of fact under which LJE could prove its case and, thus, judgment on the pleadings was inappropriate.
In Green, Division One reasoned that "successor" is a term of art that may refer to successors of "corporate control," or simply to an entity that "has in fact succeeded." 137 Wn. App. at 686 (quoting Battery Homeowners Ass'n v. Lincoln Fin. Res., Inc., 309 S.C. 247, 250, 422 S.E.2d 93 (1992)). Here, LJE presented evidence that it was the de facto successor to the developer. The developer expressly granted LJE the authority to enforce all of its restrictive covenants, both in the plat restrictions themselves and in LJE's articles of incorporation. In addition, for at least the last 18 years, LJE has approved or denied subdivision requests without objection from the homeowners or the developer, even though LJE exercised this authority while the developer was still viable. Indeed, Jensen himself submitted his proposed subdivision to LJE as the approving authority before filing the instant suit after it denied his request.
Here, LJE's admission that the developer dissolved does not affect its right to prove that having exercised the authority to review and approve proposed subdivision requests with the developer's consent, LJE was the legitimate de facto successor. Because LJE presented evidence of a disputed issue of material fact under which it could be granted relief, judgment on the pleadings was improper. But by ruling that judgment on the pleadings is inappropriate in this case, we do not intend to suggest that LJE is, in fact, the de facto successor to the developer. We hold only that because LJE presented evidence that it is the de facto successor, there is an issue of fact requiring a trial sufficient to defeat a motion for judgment on the pleadings. It will be for the finder of fact to decide whether LJE is the developer's successor.
Furthermore, if, on a motion for judgment on the pleadings, the parties present matters outside the pleadings to the trial court and the trial court does not exclude them, the trial court should treat the motion as one for summary judgment. CR 12(c). Where the matters outside of the pleadings are not material to the issue presented in the motion on the pleadings, the trial court should not consider them. Cary v. Mason County, 132 Wn. App. 495, 498-99, 132 P.3d 157 (2006), ...
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