Lake at Twelve Oaks Home Ass'n, Inc. v. Hausman

• Decision Date: 19 April 2016
• Docket Number: WD 78516
• Parties: The Lake at Twelve Oaks Home Association, Inc., A Missouri Not–For–Profit Corporation, Respondent, v. Matthew Scott Hausman, Individually and Stacey D. Hausman, Trustee of the Hausman Revocable Trust Dated 5–5–1999, Appellants.
• Court: Missouri Court of Appeals

488 S.W.3d 190

The Lake at Twelve Oaks Home Association, Inc., A Missouri Not–For–Profit Corporation, Respondent,
v.
Matthew Scott Hausman, Individually and Stacey D. Hausman, Trustee of the Hausman Revocable Trust Dated 5–5–1999, Appellants.

WD 78516

Missouri Court of Appeals, Western District.

Opinion filed: April 19, 2016

John F. Burns, St. Joseph, for Respondent.

Stephen G. Jeffery, Ellisville, for Appellants.

Before Division One: Victor C. Howard, Presiding Judge, Gary D. Witt, Judge and Zel Fischer, Special Judge

VICTOR C. HOWARD, JUDGE

Matthew S. Hausman and Stacey D. Hausman, Trustee of the Hausman Revocable Trust dated 5–5–1999, appeal the judgment of the trial court in favor of The Lake at Twelve Oaks Homes Association, Inc. ordering the removal of part of the solar energy system erected on their premises. They raise five points on appeal contending that the judgment is not supported by substantial evidence, is against the weight of the evidence, and erroneously declares and applies the law. They also assert that the trial court erred in excluding additional evidence offered as part of their motion for new trial. The judgment is affirmed. The Association's motion for attorney fees on appeal is sustained, and the case is remanded.

Factual and Procedural Background

The Lake at Twelve Oaks Homes Association, Inc. (the Association) consists of homeowners subject to the Declaration of Covenants, Conditions and Restrictions for The Lake of Twelve Oaks, a subdivision in St. Joseph, Missouri. One provision of the Declarations requires homeowners to submit written plans and specifications and obtain written permission from the Association's Design Review Committee (DRC) prior to construction or alteration of a structure that materially changes the exterior appearance of the property.

In July 2012, the Hausmans installed a photovoltaic solar array system on various roofs and on the ground of their property located within the subdivision at 3216 Harbor View Drive. Prior to installation of the system, the Hausmans did not submit any written plans or specifications to or obtain permission from the DRC for the system. At the time the system was installed, Matthew Hausman was a member of the DRC. The City issued building and electrical permits for the solar array system on August 2, 2012. On August 17, 2012, the Association sent a demand letter to the Hausmans, which specified that installation of the solar arrays violated the Declarations and demanded that the system be removed within thirty days. The Hausmans did not remove the system.

488 S.W.3d 194

On September 16, 2012, at the request of the Association's board, the DRC adopted guidelines for the installation of solar systems within the subdivision (Solar Guidelines). Thereafter, the Association brought an action against the Hausmans seeking permanent injunction and attorney fees. Their petition alleged that the Hausmans violated the Declarations when they installed the solar arrays without submitting plans and specification or obtaining written permission of the DRC.

A trial was conducted on the Association's petition and the Hausmans' counterclaim for declaratory judgment. Following trial, the trial court, to prevent economic waste, issued an interlocutory judgment ordering the Hausmans to present their plans for the solar array system to the DRC on or before June 15, 2013, and the DRC to review the plans and determine whether they are approved in total, in part, or not at all.

After the trial court's interlocutory judgment, the St. Joseph City Council enacted an amendment to its zoning ordinances on July 8, 2013, that addressed the issue of installation of solar energy systems within the city limits. Section 31–366(a) of the ordinances provides, “No homeowners' agreement, covenant, common interest community, or other contract between multiple property owners within a subdivision shall restrict or limit solar energy systems to a greater extent than these regulations.” The Association's Solar Guidelines are more restrictive than the City's solar ordinances.

In the meantime, the Hausmans submitted their plans and specifications for their constructed solar energy system to the DRC for its approval. The plans requested acceptance of the system as built, proposed additional screening on neighboring property, and included neighbors' statements indicating their approval of the system. On July 10, 2013, the DRC met with Mr. Hausman, reviewed the plans and specifications submitted, and rejected those plans in part. The DRC met again on August 28, 2013, to clarify its July 10 decision, approving part of the Hausmans' solar array system consisting of the panels installed on the rear roof of the main dwelling but rejecting the part of the system that included the panels installed on the side roof of the garage and the ground-mounted panels located on the south side of the garage. The DRC's decision was based on a provision of the Solar Guidelines that requires panels be constructed within a fenced yard or patio to the rear of the main structure and also on consideration of the character of the subdivision, individual homeowner complaints and lack of complaints, the authority granted to the DRC to make decisions based upon aesthetics, incompatibility with surrounding properties, and the impact on the value of surrounding properties.

Thereafter, the Hausmans amended their counter-petition for declaratory judgment requesting declarations that the Association's Solar Guidelines are more restrictive than the City's new ordinances on solar energy systems and thus unenforceable and that their solar array system is permitted under the City ordinances. The Association also amended its petition alleging that pursuant to the court's interlocutory order, the Hausmans had submitted their plans and specifications for the solar array system and the DRC had reviewed them and disapproved some of the arrays. The amended petition further alleged that the Hausmans had not removed the non-approved arrays as demanded and requested permanent injunction and attorney fees.

Following a second trial, the trial court entered judgment on December 17, 2013, ordering the Hausmans to remove the part

488 S.W.3d 195

of their solar array system consisting of the panels erected on the garage and the ground-mounted panels on the south side of the garage. It found that the DRC did not act arbitrarily and that the City's solar ordinances did not invalidate or render unenforceable the Association's Solar Guidelines.

The trial court set aside the judgment on March 28, 2014, for failure to add the City as an indispensable party and to notice the Missouri Attorney General. The City was joined as a party, and the Attorney General elected not to participate. In its answer, the City pleaded that the ordinance enacted on July 8, 2013 was not intended to be applied retroactively, was intended to affect homeowners associations from the date of passage forward, and was not intended to deprive homeowners' associations of any contractual rights that might exist under the covenants of the association.

Following a third trial on the matter, the trial court entered judgment on October 28, 2014, in favor of the Association and again ordered the Hausmans to remove those solar arrays not approved by the DRC. It found that the City's solar ordinances cannot be applied retroactively to the Association's Solar Guidelines or to the Hausmans' solar energy system and that the DRC's decision was reasonable and not arbitrary or capricious. Finally, it awarded the Association attorney fees in the amount of $38,500. This appeal by the Hausmans followed.

Standard of Review

An action seeking injunctive relief is an action in equity. City v. Greenwood v. Martin Marietta Materials, Inc., 311 S.W.3d 258, 263 (Mo.App.W.D.2010). In a court-tried equity case, the trial court's judgment will be upheld unless no substantial evidence supports it, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. To the extent that the trial court's grant of injunctive relief involves weighing the evidence, determining the credibility of witnesses, and formulating an injunction of the appropriate scope, the appellate court reviews for abuse of discretion. Id. However, questions of law are reviewed de novo. Id.

Analysis

In the first points addressed in this appeal, the Hausmans challenge the trial court's judgment that the DRC's decision disapproving part of their solar energy system was reasonable and was not arbitrary and capricious. They argue that the judgment is not supported by substantial evidence, is against the weight of the evidence, and erroneously declares and applies the law. They also assert that the trial court erred in excluding additional evidence offered as part of their motion for new trial.

The law favors the free and untrammeled use of real property. Country Club Dist. Homes Ass'n v. Country Club Christian Church, 118 S.W.3d 185, 189 (Mo.App.W.D.2003) (internal quotes and citation omitted); Proetz v. Central Dist. of Christian & Missionary All., 191 S.W.2d 273, 277 (Mo.App.1945). But the right of one property owner to the protection of a restrictive covenant is...