Pertzsch v. Upper Oconomowoc Lake Ass'n

• Decision Date: 19 September 2001
• Docket Number: No. 00-2514.,00-2514.
• Parties: Steven PERTZSCH and Doris Pertzsch, Plaintiffs-Respondents, v. UPPER OCONOMOWOC LAKE ASSOCIATION, Thomas L. Wavernek, Damian O. Fennig, Donald Fellows and Kenneth E. Millard, Defendants-Appellants.
• Court: Wisconsin Court of Appeals

248 Wis.2d 219

2001 WI App 232

635 N.W.2d 829

Steven PERTZSCH and Doris Pertzsch, Plaintiffs-Respondents, v. UPPER OCONOMOWOC LAKE ASSOCIATION, Thomas L. Wavernek, Damian O. Fennig, Donald Fellows and Kenneth E. Millard, Defendants-Appellants.

No. 00-2514.

Court of Appeals of Wisconsin.

Oral argument July 24, 2001.

Decided September 19, 2001.

On behalf of the defendants-appellants, the cause was submitted on the briefs of and oral argument by Curtis A. Paulsen of Whyte Hirschboeck Dudek, S.C. of Milwaukee.

On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Kathryn Sawyer Gutenkunst and Daniel J. Habeck of Cramer, Multhauf & Hammes, LLP of Waukesha. There was oral argument by Kathryn Sawyer Gutenkunst.

Before Nettesheim, P.J., Brown and Anderson, JJ.

¶ 1. BROWN, J.

The Upper Oconomowoc Lake Association appeals from an order reversing the decision of the Association's Architectural Control Committee to deny the request of Steven and Doris Pertzsch to build a lakeside boathouse. The court reasoned that the Committee's reliance on the fact that no other lakeside boathouse existed rendered its decision arbitrary and capricious in light of the express terms of the restrictive covenant allowing boathouses. We affirm.

¶ 2. On June 1, 1999, the Pertzsches purchased property on Upper Oconomowoc Lake. As required in the controlling covenants, the Pertzsches provided the Committee with the plans and specifications for the construction of a home and a detached, lakeside boathouse and requested the necessary consent for the construction of both buildings. The Committee approved the Pertzsches' house plan but denied their request for a lakeside boathouse.¹

¶ 3. The covenants controlling the Committee's decision are contained in an agreement executed in 1961. The agreement provided for the creation of the Committee and granted it certain powers, duties and responsibilities relating to the construction of buildings and other structures. These powers and duties stem from the specific requirement that all construction plans and specifications be approved by the Committee. The paragraphs relevant to this dispute state in part:

(1) LAND USE AND BUILDING TYPE: No lot shall be used, except for residential purposes. No building shall be erected, altered, placed, or permitted to remain on any lot other than one detached single family dwelling not to exceed two stories in height and a private garage for not more than three cars, except that a boat house may be permitted with consent of the Architectural Control Committee.

(2) ARCHITECTURAL CONTROL: No building shall be erected, placed, or altered on any lot until the construction plans and specifications and a plan showing the location of the structure have been approved by the Architectural Control Committee as to quality of workmanship and materials, harmony of external design with existing structures, and as to location with respect to topograph and finish grade elevation and setback, front, back and side. No fence or wall shall be erected, placed or altered on any lot nearer to any street than the minimum building setback line unless similarly approved.

....

(5) DWELLING LOCATION: No dwelling shall be located on any lot nearer to the front lot line or nearer to the side street line or nearer to the lakeshore, than the minimum building setback lines shown on the recorded plat and in any event, no dwelling shall be located on any lot nearer than fifty (50) feet to the lakeshore or nearer than fifty (50) feet to the front lot line, or nearer than thirty-five (35) feet to any side street line. No building shall be located nearer than ten (10) feet to an interior lot line. No dwelling shall be located on any interior lot nearer than thirty-five (35) feet to the rear lot line. For the purpose of this covenant, eaves, steps, and open porches shall not be considered as part of a building, provided, however, that this shall not be construed to permit any portion of a building on a lot to encroach upon another lot. That prior to commencement of structures of any kind, the Architectural Control Committee must approve all setback lines and all construction in writing. Said Committee is further granted control over construction of piers and any other structures extending into or on the water and written consent must be approved prior to commencement of construction as to length, width, and location.

¶ 4. While the record shows that the Committee has previously approved many boat storage structures attached to a garage or home, it has never before been presented with a plan to construct a detached, lakeside boathouse.

¶ 5. At a hearing on the parties' cross-motions for summary judgment, the Association argued that paragraph one of the agreement, by its express terms, bars detached boathouses, allowing only structures that are affixed to a garage. The trial court rejected this interpretation of paragraph one, observing that it clearly carves out an exception which permits a boathouse and that the Committee's refusal to allow the Pertzsches to build a boathouse simply because it would be the first one was arbitrary and capricious.

¶ 6. On appeal, the Association has set aside its assertion that the agreement prohibits construction of all detached boathouses. In its brief-in-chief, the Association now argues that the Committee's denial of the boathouse was based upon, and in conformance with, the standards set forth in paragraph two of the agreement. During oral argument before this court, the Association took yet another position on the issue, arguing that pursuant to paragraph one, the Committee can exercise its discretion to approve or deny requests for a boathouse without regard to the specific standards set forth in paragraph two. In other words, the Association argues that paragraph one is a "stand alone" provision that authorizes the Committee to make determinations regarding boathouses without regard to quality of workmanship and materials, harmony of external design with existing structures, and location with respect to topography, elevation, setback and the like.

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¶ 7. We begin by identifying the standard of review. In their complaint, the Pertzsches sought a declaration that their request to construct a boathouse be granted for the reason that it was in keeping with the agreement. They also sought a declaration limiting the Committee's exercise of authority as it is contained in the agreement. The parties filed cross-motions for summary judgment on the basis that no disputed issues of material fact exist. We review a motion for summary judgment using the same methodology as the trial court. M & I First Nat'l Bank v. Episcopal Homes Mgmt., Inc., 195 Wis. 2d 485, 496, 536 N.W.2d 175 (Ct. App. 1995). Although summary judgment presents a question of law which we review de novo, we nonetheless value a trial court's decision on such a question. Id. at 497. Furthermore, this case requires us to construe the covenants in the agreement to determine whether the Committee had authority to deny the boathouse for the reasons stated in its letter. The interpretation of restrictive covenants is a question of law. Bubholz v. Dane County, 159 Wis. 2d 284, 291-92, 464 N.W.2d 67 (Ct. App. 1990).

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¶ 8. We are mindful that Wisconsin public policy favors the free and unrestricted use of property. Dodge v. Carauna, 127 Wis. 2d 62, 65, 377 N.W.2d 208 (Ct. App. 1985). Consequently, restrictions contained in deeds must be strictly construed to favor the free use of property; such restrictions therefore must be expressed in clear and unambiguous language. Id.

¶ 9. As an initial matter, we accept the concession of the Association that the agreement allows detached, lakeside boathouses subject to the consent of the Committee. We agree with the trial court that the plain language of paragraph one clearly carves out an exception to allow for such structures: "No building shall be erected, altered, placed, or permitted to remain on any lot other than one detached single family dwelling ... and a private garage for not more than three cars, except that a boat house may be permitted with consent of the Architectural Control Committee." (Emphasis added.) The Association's original argument that this language created an exception only for attached or integrated boathouses is without merit, especially in light of paragraph four which explicitly requires garages to be attached to the home but makes no reference to a boathouse.²

¶ 10. We now address the Association's argument that paragraph one is a "stand alone" provision that contains a standardless consent-to-construction covenant. We also find this argument to be completely without merit. If the Association were correct, then paragraph two would be superfluous. Alternatively, the Association posits that the criteria in paragraph two apply only to residences and garages, but not to boathouses. Again, this contravenes the plain language of the agreement that establishes in the first paragraph which buildings may be erected (single family dwellings, garages and boathouses) and establishes in the second paragraph the standards that the Committee shall adhere to in approving plans brought before it. There is no indication whatsoever in the agreement that the Committee's discretion with respect to residences and garages is limited to the specific standards in paragraph two, but its discretion with respect to boathouses is unfettered. Instead, paragraph two refers generally to a "building," and requires that all plans for a "building" be submitted to the Committee for approval "as to quality of workmanship and materials, harmony of external design with existing structures, and as to location with respect to topograph and finish grade elevation and setback, front, back and side." Therefore, we conclude that under the explicit terms of the covenants, the Committee is authorized to approve or deny a request for a...