Kruse v. Claar, No. 3-390/02-1233 (Iowa App. 1/14/2004), 3-390/02-1233
| Decision Date | 14 January 2004 |
| Docket Number | No. 3-390/02-1233,3-390/02-1233 |
| Parties | CRAIG A. KRUSE, and ANNETTE M. KRUSE, ALLEN D. WEAVER and JENNIFER L. WEAVER, SCOTT A. HARRIS and DENICE J. HARRIS, RUPERT D. LYON and MARGARET M. LYON, SCOTT A. CHASE and BETSY R. CHASE, ALVIN J. EDMUNDS and SHARON K. EDMUNDS, BRUCE R. BERNHARDS and JACQUELYN L. BERNHARDS, BILLIE L. HARRIOTT, LYNN W. FEHR and MARY ALICE FEHR, JENNIFER L. HANSEN, and CURTIS L. BROWN and JENNIFER D. BROWN, Plaintiffs-Appellees, v. DAN L. CLAAR, d/b/a CLAAR CONSTRUCTION and BRADLEY and SANDRA KNOTT, Defendants-Appellants. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Pottawattamie County, Leo F. Connolly, Judge.
Homeowners appeal from injunction that required the removal of two modular homes from a subdivision.
AFFIRMED IN PART; MODIFIED IN PART; REVERSED IN PART.
Thomp J. Pattermann of Smith Peterson Law Firm, L.L.P., Council Bluffs, for appellants.
Anthony Tauke of Porter, Tauke & Ebke, Council Bluffs, for appellees.
Heard by Sackett, C.J., and Miller and Hecht, JJ.
Defendants Dan L. Claar d/b/a Claar Construction and Bradley and Sandra Knott appeal from an injunction entered by the district court that ordered the removal of two modular homes from the Parkwild Subdivision. While we disagree with the district court's determination that the modular homes erected by Claar constituted "dwellings" within the context of the subdivision's restrictive covenants, we do agree that Dan Claar willfully violated another covenant provision. We nevertheless conclude it was inequitable to order removal of the homes, and reverse that portion of the district court's injunctive order.
Background Facts and Proceedings.
Dan Claar is a contractor who constructs both modular and site-built homes under the name Claar Construction. His wife, KellySue Claar, acts as Claar Construction's business manager. In the late 1990s Claar gained title to Lots 3, 4, 5, and 6 in the Parkwild Subdivision (Parkwild).
The lots in Parkwild are subject to a Declaration of Covenants, Conditions and Restrictions (Declaration), that was executed by Mary A. Favara, trustee of the J.F. Schlott Residual Trust. Paragraph seven of clause two of the Declaration required plans and specifications for proposed buildings be submitted for approval:
No building . . . or other structure shall be commenced, erected or maintained upon any residential lot . . . until the plans and specifications showing the nature, kind, shape, height, material and location of the same have been submitted to and approved in writing as to harmony of design of external design and location in relation to surrounding structures and topography by Mary A. Favara, Trustee, J.F. Schlott Residual Trust . . . . In the event said parties fail to approve or disapprove such design and location within ten days after said plans and specification[s] have been submitted to them, approval will not be required and this clause will be deemed to have been fully complied with.
Paragraph nineteen of clause two prohibited the moving of any "dwelling . . . to any lot within Parkwild development from outside the development."
In the summer of 2001 Claar contracted with Bradley and Sandra Knott for the erection of a modular home on Lot 3. On August 1, 2001 Mrs. Claar sent a letter to Mary Favara's husband Ron Favara of Charter Investments, the subdivision's developer, informing him that Claar Construction would be "constructing a home on site on lot 3." The evidence was in dispute as to whether plans for Lot 3 were attached to or enclosed with the letter. About this same time, early August, certain Parkwild homeowners learned that Claar intended to erect modular homes on his lots. They became concerned about the impact the modular homes would have on the property values of the existing, site-built homes.
On August 17, 2001, attorney A.W. Tauke, counsel for the subdivision, sent Mrs. Claar a letter in response to her August 1 letter to Ron Favara. Attorney Tauke's letter expressed concerns over whether the building being constructed on Lot 3 was in conformance with the Declaration, and advised the Claars to review the Declaration to "avoid property owners in the area asking that you terminate the construction to comply with the covenants." Neither Claar nor his wife responded to the August 17 letter, and Claar proceeded to erect a modular home on Lot 3.
On October 5, 2001, a group of Parkwild residents (plaintiffs) filed an equitable action against Claar, seeking removal of the home from Lot 3, and a prohibition on future modular home construction on Lots 4, 5, and 6. Claar filed a counterclaim for a declaratory judgment on the issue of whether the modular home constructed by Claar constituted a "dwelling" within the context of the Declaration. Bradley and Sandra Knotts, who took possession of the home on Lot 3 on October 9, 2001, were later added as party defendants.
After the suit was filed Claar prepared to erect a home on Lot 4.1 Attorney Tauke sent a letter to Claar's attorney, expressing the expectation that any construction on Lots 4, 5, and 6 would comply with the Declaration, including the requirement to submit plans and specifications. Claar erected another modular home on Lot 4, and the evidence was once again in dispute as to whether Claar provided the trust with the plans and specifications for the building, or even notified the trust that a building was to be erected on Lot 4.
In its June 3, 2002 ruling, the district court concluded that Claar had failed to submit plans for the home on Lot 3 as required by paragraph seven, had violated paragraph nineteen by moving a dwelling onto Lot 3, and could not "credibly state [he] did so without knowledge of the covenants and restrictions imposed . . . ." The court decreed the home on Lot 3 was in violation of paragraph nineteen and "must be removed as violative of the Declaration." It further decreed that no other dwelling could be moved onto any of the lots owned by Claar without "compliance with the requirements as set forth in the Declaration." Granting a post-ruling motion filed by the plaintiffs, the court further decreed that the home on Lot 4 was also in violation of the Declaration, and must be removed.
Claar and the Knotts appeal. They contend the court erred in concluding that the homes on lots 3 and 4 were "dwellings," and in finding Claar had not submitted plans to the trust and had knowingly violated the Declaration. They also argue that ordering removal of the homes was an inequitable remedy.
Scope of Review.
Our review of this equitable proceeding is de novo. Iowa R. App. P. 6.4. Although not bound by the district court's factual findings, we give them weight, especially when assessing witness credibility. Iowa R. App. P. 6.14(6)(g).
Dwelling.
The primary issue in this case was whether the modular homes on Lots 3 and 4 violated paragraph nineteen of clause two, because they constituted "dwelling[s that] shall [not] be moved to any lot within Parkwild development from outside the development." Since paragraph nineteen requires us to look to the time the homes were moved into Parkwild, it is necessary to have an understanding of the modular home construction process. The modular homes in this case were prefabricated in two sections, and then moved into the subdivision, where they were permanently affixed to their foundations. Once on site the two halves of each home were "married," which required additional drywall, siding, trim, paint, and other finishing work. Thus we focus, not on the completed structures, but on their prefabricated segments.
The term "dwelling" is not defined within the Declaration, and we have no direct testimony or evidence as to what the signers of the Declaration intended by the term. We therefore turn to the language of the Declaration itself, giving words their obvious and ordinary meaning. See First Sec. Co. v. Dahl, 560 N.W.2d 327, 332 (Iowa 1997). The plain and ordinary meaning of the term "dwelling" contemplates a building or structure where people live or reside. See Webster's Third New International Dictionary Unabridged 706 (2002); Black's Law Dictionary 524 (7th ed. 1999). Accordingly, we find instructive two cases where courts of other jurisdictions, interpreting restrictive covenants similar to paragraph nineteen, determined that a modular home was not a building or structure within the context of the covenant.
In Ussery Investments v. Canon & Carpenter, Inc., 663 S.W.2d 591, 592 (Tex. Ct. App. 1983), the first district of the Texas Court of Appeals was asked to interpret a restrictive covenant that provided "no `structure' shall be moved onto any lot, but all buildings erected on said lots shall be of new construction." In concluding the covenant did not prohibit a modular home construction technique, the court determined:
The term "structure," as used in the restrictions, clearly means a whole, pre-existing, and habitable building, and its clear purpose is to require that only newly-erected, permanent buildings be placed on the subdivision lots. . . . The restrictions did not require that the structure be "built in place" or otherwise indicate a prohibition against modular construction . . . . Here the separate elements were never joined together to form a structure until they were permanently anchored to the foundation at the building site. Until all of the component elements comprising the basic structure were actually assembled, the unit could not be considered a "structure" within the meaning of the restrictive covenant.
Ussery Inv., 663 S.W.2d at 594-95.
A similar result was reached in Kennedy v. Classic Designs, Inc., 722 P.2d 504 (Kan. 1986). Relying on Ussery, the Kansas Supreme Court determined a covenant requiring that "no building shall be moved into the Addition" did not prohibit modular home construction:
[U]se of the word "building" clearly imports some sort of assembled or completed structure, rather...
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