Kadar-Kallen v. Old Iron Estates Homeowners Ass'n
| Decision Date | 03 December 2020 |
| Docket Number | No. 1671 C.D. 2019,1671 C.D. 2019 |
| Citation | 243 A.3d 1001 |
| Parties | Michael A. KADAR-KALLEN and Kimberlee Kadar-Kallen v. OLD IRON ESTATES HOMEOWNERS ASSOCIATION, Appellant |
| Court | Pennsylvania Commonwealth Court |
George A. Bibikos, Harrisburg, for Appellant.
Amy L. Owen, Lemoyne, for Appellees.
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE J. ANDREW CROMPTON, Judge, HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION BY JUDGE McCULLOUGH
Old Iron Estates Homeowners Association (Association)1 appeals from the October 17, 2019 order of the Dauphin County Court of Common Pleas granting summary judgment in favor of Plaintiffs Michael and Kimberlee Kadar-Kallen (the Kadar-Kallens), and denying the Association's cross-motion for summary judgment. The trial court concluded that the Kadar-Kallens’ property is not subject to the Association's restrictions, covenants, and conditions, that the Kadar-Kallens are not members of the Association, and that they are not obligated to pay fees to the Association. We affirm in part, reverse in part, and remand for further proceedings.
Michael Kevin Ricker (Ricker) sought to develop the land that would come to be known as Old Iron Estates in four phases. On April 14, 2003, Ricker recorded the Phase I Final Subdivision Plan for Old Iron Estates (Phase I Plan) with the Dauphin County Recorder of Deeds. (Kadar-Kallens’ Motion for Summary Judgment, Exhibit B; Association's Br. at Tab A; Reproduced Record (R.R.) at 47a-51a (Phase I Plan).) The Phase I Plan is recorded at Plan Book O, Volume 8, Pages 22-26. The Phase I Plan refers to a "Total Tract Area" of 91.027 acres, but details only the "Phase I Area," which is composed of 29.0781 acres, and states that the "Total Number of Proposed Lots" would be 31. (Phase I Plan at 1.) The ensuing pages of the Phase I Plan provide detailed images of the boundaries of each lot that would be included within Phase I, but provide neither an illustration nor legal description of any property that would be included within subsequent phases of the development. The Phase I Plan did not purport to create a planned community or to establish a homeowners’ association, but the general notes on its first page state that "Lot 58 shall be owned and maintained by a Homeowners’ Association" and similarly provide that "[t]he proposed medians shall be maintained by a Homeowners’ Association." Id. The Phase I Plan does not include any additional information about the Association.
Intending to establish a planned community that would be governed by a homeowners’ association, on May 12, 2003, Ricker recorded the Old Iron Estates, A Planned Community, Restrictions, Covenants and Conditions. (Kadar-Kallens’ Motion for Summary Judgment, Exhibit C; Association's Br. at Tab A; R.R. at 53a-61a (Phase I Covenants).) On its face, this document applies to "P/O Parcels 35-066-008 & 35-066-013," and provides as follows:
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS that Michael Kevin Ricker (the "Declarant") does hereby covenant and declare that it shall hold and stand seized and shall convey the lands composing the Planned Community subject to the following Restrictions, Covenants and Conditions which shall run with the land composing the Planned Community and shall be binding upon Declarant, its successors and assigns and upon all land included within the Planned Community as described on the Final Subdivision Plan for Old Iron Estates, Lower Paxton Township, Dauphin County, dated March 20, 2002, revised February 18, 2003 and recorded with the Office of the Recorder of Deeds of Dauphin County in Plan Book "O", Volume 8, Pages 22-26, inclusive, for Phase I, which Restrictions, Covenants and Conditions are hereby imposed for equal benefit of each owner of each and every Unit ... situate in the Planned Community.
Ricker recorded Final Subdivision Plans for Phase IV, Phase III, and Phase II on May 4, 2004, August 6, 2004, and June 17, 2008, respectively. (Trial Court Opinion, 10/21/2019 (Tr. Ct. Op.), at 3.) He later recorded additional restrictions, covenants, and conditions for each phase, which are materially similar to the Phase I Covenants, but facially apply to their respective phases of the development. Relevant here, Ricker recorded the Old Iron Estates, A Planned Community, Restrictions, Covenants and Conditions Phase III (Phase III Covenants) on January 31, 2012. Id. at 4. The Phase III Covenants provide a list of parcels to which they apply, including Parcel No. 35-066-317.
Parcel No. 35-066-317 is described as Lot 41 in Phase III of the development, and is numbered as 6439 McCormick Lane, Harrisburg (Property). The central difficulty in this dispute arises from the fact that Ricker did not own the Property at the time that he recorded the Phase III Covenants. Ricker had deeded his entire interest in the Property to John Fox on October 27, 2005. (Tr. Ct. Op. at 3.) Fox then deeded his entire interest in the Property to the Kadar-Kallens on February 28, 2007. Id. Neither deed references the Association nor suggests that the Property is subject to the Association's covenants. Additionally, neither deed expressly conveys a right to the owner of the Property to use common areas in the development.
The Kadar-Kallens initiated the instant litigation on December 21, 2017, by filing a complaint seeking a declaratory judgment that they are not members of the Association and that the Property is not subject to the Association's covenants. Following discovery, both parties moved for summary judgment. The Kadar-Kallens contended that Ricker's various filings failed to satisfy the requirements of the Uniform Planned Community Act2 (UPCA) with respect to the Property, and that Ricker had no authority to bind the Property to the Phase III Covenants in 2012 when he no longer held its title.3 The Association, by contrast, asserted that Ricker created a planned community under the UPCA via the Phase I Covenants, that the Phase I Covenants apply to all four phases of the development, and that the Kadar-Kallens had both actual and constructive notice of the Association's existence when they purchased the Property. In support of its assertion of notice, the Association highlighted the Kadar-Kallens’ payment of an initiation fee and dues to the Association when they purchased the Property, the inclusion of a notice in their agreement of sale that the Property is part of a planned community, their completion of a Planned United Development (PUD) rider when they obtained their mortgage and another PUD rider when they refinanced that mortgage, and a reference to the Association in their title insurance commitment and policy. The Association further contended that the Phase III Covenants were a mere amendment to the Phase I Covenants, rather than an attempt to impose new obligations upon property that Ricker no longer owned.
After hearing oral argument on April 15, 2019, the trial court granted summary judgment in favor of the Kadar-Kallens based upon the undisputed timeline of the pertinent factual events. The trial court emphasized that, under the UPCA, a "planned community may be created ... only by recording a declaration executed in the same manner as a deed by all persons whose interests in the real estate will be conveyed." (Tr. Ct. Op. at 5 (quoting 68 Pa.C.S. § 5201 ).) The court further emphasized the portions of the Uniform Law Comment accompanying the UPCA, which state that "[a] planned community is created ... only by recording a declaration" and "[u]ntil the recordation of the document ... the planned community has not been created." Id. . When the Kadar-Kallens purchased the Property from Fox in 2007, only the Phase I Covenants appeared of record, but the Property is located in Phase III. Id. at 5-6. Ricker did not record the Phase III Covenants until 2012—five years after the Kadar-Kallens purchased the Property. Because only an individual holding a present interest in real estate can convey that real estate to a planned community under the UPCA, the trial court concluded that Ricker had no authority to encumber the Property when he recorded the Phase III Covenants.
The trial court rejected the Association's argument that the Phase III Covenants were merely an amendment to the Phase I Covenants, noting that the UPCA provides a procedure for amendment of declarations, and that there was no evidence suggesting compliance with that provision. Id. at 6 (citing 68 Pa.C.S. § 5219(d) ). The court declined to excuse the asserted procedural defects in light of the Kadar-Kallens’ notice of the existence of a planned community when they purchased the Property. Citing Deep Meadows Civic Association v. Trusello , 140 A.3d 60 (Pa. Cmwlth. 2016), the trial court opined that it would not impute notice where the Kadar-Kallens’ deed does not reference the existence of a homeowners’ association or any obligation to pay assessments. (Tr. Ct. Op. at 6.)4 Accordingly, the trial court granted the Kadar-Kallens’ motion for summary judgment and entered an order stating that the Property is subject to neither the Phase III Covenants nor any of the other restrictions, covenants, or conditions for any phase within the development.
The Association filed a motion for reconsideration limited to the issue of fees. The Association noted that, in denying it summary judgment, the trial court did not address the Association's argument that, notwithstanding the enforceability of any restrictive covenants, the Kadar-Kallens remain liable for the fees that the Association assesses for the management and maintenance of common areas in the development. The Kadar-Kallens opposed the Association's motion, contending that their deed grants them no right to use common areas and, thus, that they are not obligated to pay for any share of the maintenance costs for those areas. The trial court denied the Association's motion for...
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