Pinebrook Homeowners Ass'n v. Owen

• Decision Date: 09 July 1987
• Docket Number: No. 8609-3-II,8609-3-II
• Citation: 48 Wn.App. 424,739 P.2d 110
• Parties: PINEBROOK HOMEOWNERS ASSOCIATION, a Washington corporation, Respondent, v. Marilyn I. OWEN and Curtis H. Owen, husband and wife, Appellants, and Columbia Collectors, Inc., Defendant.
• Court: Washington Court of Appeals

Page 424

48 Wn.App. 424

739 P.2d 110

PINEBROOK HOMEOWNERS ASSOCIATION, a Washington corporation, Respondent, v. Marilyn I. OWEN and Curtis H. Owen, husband and wife, Appellants and Columbia Collectors, Inc., Defendant.

No. 8609-3-II.

Court of Appeals of Washington,

Division 2.

July 9, 1987.

Gregory L. Bass, Joyce C. Brekke, Evergreen Legal Services, Longview, for appellants.

Barbara A. Peterson, Williams, Kastner & Gibbs, Vancouver, for respondent.

PETRICH, Judge.

Marilyn Owen appeals a judgment and decree of foreclosure which incorporates prior partial summary judgments. The judgment allows for the sale of Owen's home to satisfy the lien of Pinebrook Homeowners Association, (Pinebrook), for past due assessments for exterior maintenance work performed on her home.

Owen presents two issues for appeal: (1) whether the maintenance assessment lien of a homeowner's association can be executed against property to which the debtor's homestead rights attach; and (2) whether the trial court abused its discretion in concluding that a stipulation executed by the parties, whereby Pinebrook would not seek the remedy of foreclosure upon Owen's homestead as a method of execution on any judgment, was only binding until the conclusion of trial.

We reverse, holding that property protected by the homestead exemption cannot be sold in satisfaction of a judgment foreclosing an assessment lien of a homeowners association because: the foreclosure and sale amount to an execution within the meaning of RCW 6.12.090; the lien does not qualify as one of the statutory homestead exceptions in RCW 6.12.100; and the lien does not qualify for the nonstatutory exception developed by case law. ¹ Our resolution of the first issue makes it unnecessary to reach the second.

Pinebrook is a planned community development organized pursuant to a "Declaration of Covenants, Conditions and Restrictions," (the Covenants). The Covenants were recorded in the Clark County Auditor's Office in 1973. They authorized the creation of a homeowners' association. One of the Association's functions was to perform regular exterior maintenance on the houses of each Pinebrook homeowner and association member. The Covenants also established monthly assessments to pay for the maintenance charges. The Covenants specified that these monthly assessments would be "a charge on the land [of each Pinebrook homeowner] and ... a continuing lien upon the property against which such assessment is made."

Several years later, in 1977, Owen purchased a home in the Pinebrook subdivision. At that time, she obtained a warranty deed from the previous owners which stated that it was subject to "easements, restrictions, conditions and covenants of record." (Emphasis added.) Owen knew of the Covenants when she purchased her home.

In 1978 or 1979, Owen began to withhold payment of her monthly assessments, jinitially because she was dissatisfied with the upkeep of her home, subsequently because of a limited financial situation.

As a result of her nonpayment, Pinebrook filed in Clark County Superior Court a complaint to foreclose its lien for the unpaid assessments. Pinebrook moved for summary judgment. In its order for partial summary judgment, the court established the total amount of assessments due which is not contested by Owen. The judgment also decreed that the Covenants imposed an equitable lien on Owen's property which was superior to her homestead, and that the lien would be foreclosed to the extent it prevailed over her counterclaim for offset.

Trial was held on Owen's counterclaim. The court entered findings of fact and conclusions of law, and a judgment and decree of foreclosure. The final judgment and decree incorporated the partial summary judgments as well as a judgment with regard to Owen's offset.

The Washington State Constitution provides: "The legislature shall protect by law from forced sale a certain portion of the homestead and other property of all heads of families." Const. article 19, section 1. Pursuant to this section, the Legislature passed laws relating to homesteads, now codified in RCW 6.12.010 et seq. City of Algona v. Sharp, 30 Wash.App. 837, 839, 638 P.2d 627 (1982). The homestead statute implements the policy that each citizen have a home "where his family may be sheltered and live beyond the reach of financial misfortune." Algona, 30 Wash.App. at 841, 638 P.2d 627, quoting Clark v. Davis, 37 Wash.2d 850, 852, 226 P.2d 904 (1951). "Homestead and exemption statutes are favored in the law and should be liberally construed. 'They do not protect the rights of creditors. In fact, they are in derogation of such rights' " (Citation omitted). Lien v. Hoffman, 49 Wash.2d 642, 649, 306 P.2d 240 (1957).

RCW 6.12.090 provides that a homestead is exempt from attachment, and from execution or forced sale except as provided in RCW 6.12. RCW 6.12.100 lists the statutory exceptions to the homestead exemption. It provides:

6.12.100. Homestead subject to execution, when. The homestead is subject to execution or forced sale in satisfaction of judgments obtained:

(1) On debts secured by mechanic's, laborer's, materialmen's or vendor's liens upon the premises;

(2) On debts secured by purchase money security agreements describing as collateral a mobile home located on the premises or mortgages on the premises, executed and acknowledged by the husband and wife or by any unmarried claimant;

(3) On one spouse's or the community's debts existing at the time of that spouse's bankruptcy filing where (a) bankruptcy is filed by both spouses within a six-month period, including as a joint case under 11 U.S.C. Sec. 302, and (b) the other spouse exempts property from property of the estate under the federal exemption provisions of 11 U.S.C. Sec. 522(b)(1);

(4) On debts arising from a lawful court order or decree or administrative order establishing a child support obligation or obligation to pay spousal maintenance.

Interpretation of a statute is a matter of law. Glacier Springs Property Owners Ass'n v. Glacier Springs Enterprises, Inc., 41 Wash.App. 829, 832, 706 P.2d 652, review denied, 105 Wash.2d 1002 (1985).

The function of the court in statutory interpretation is to discover the intent of the Legislature and give effect to that intent. If a statute is unambiguous, the meaning of the statute must be derived from the actual language of the statute. If a statute is amenable to more than one interpretation, the court should adopt the interpretation most consistent with the Legislature's intent. The intent of the Legislature must be derived from the language of the act as a whole, together with the constructions placed on the statute by this court.

(Citations omitted.) Stewart Carpet Service, Inc. v. Contractors Bonding & Ins. Co., 105 Wash.2d 353, 357-58, 715 P.2d 115 (1986).

"In construing the language in a statute, words are to be given their plain and ordinary meaning unless a contrary intent appears." Hewson Construction, Inc. v. Reintree Corp., 101 Wash.2d 819, 826, 685 P.2d 1062 (1984).

The only statutory exceptions which could conceivably include Pinebrook's lien are those listed in RCW 6.12.100(1) for "debts secured by mechanic's, laborer's, materialmen's or vendor's liens upon the premises," and that listed in RCW 6.12.100(2) for "mortgages on the premises."

Mechanic's, laborer's, and materialmen's liens are creatures of statute in derogation of the common law; thus, their terms must be strictly construed so as not to extend their benefits to those who do not clearly come within their terms. Wells v. Scott, 75 Wash.2d 922, 925, 454 P.2d 378 (1969); Irwin Concrete Inc. v. Sun Coast Properties, Inc., 33 Wash.App. 190, 653 P.2d 1331 (1982); and Dean v. McFarland, 81 Wash.2d 215, 500 P.2d 1244 (1972).

Here, the record fails to show that Pinebrook's lien falls within any of the various lien statutes. There is nothing to indicate that the required notices or claims of lien were given or filed as required by RCW 60.04. Its lien cannot be construed as a mechanic's, a laborer's, or a materialmen's lien for the purpose of the homestead statute, RCW 6.12.100(1).

Similarly, Pinebrook's assessment lien does not constitute a vendor's lien within RCW 6.12.100(1). In In re Washburn, 98 Wash.2d 311, 654 P.2d 700 (1982), the court stated that a judgment based on the purchase price of realty is in the nature of a vendor's lien within the meaning of RCW 6.12.100(1). Here, Pinebrook's judgment for past due maintenance assessments was not a judgment based on the purchase price of Owen's home; thus, the resulting lien cannot be a vendor's lien within RCW 6.12.100(1).

Pinebrook's lien also does not constitute a mortgage on the premises. As described above, Owen agreed to subject her home to Pinebrook's lien when she purchased her home and accepted the deed subject to "covenants of record." We concede that Owen's knowing acceptance of the deed may have been sufficient to create an "equitable mortgage" between herself and Pinebrook. See Pacific National Bank of Wash. v. Richmond, 12 Wash.App. 592, 530 P.2d 718, review denied, 85 Wash.2d 1011 (1975). However, we find that such a "mortgage" cannot constitute a "mortgage" for the purpose of RCW 6.12.100(2), since Owen never "executed and acknowledged" a deed to mortgage her home to Pinebrook as required by the statute's express terms. Our result is consistent with the rule that the homestead laws are to be liberally construed in the debtor's favor.

In its brief, Pinebrook recognizes that there may be some difficulty in qualifying its lien within the scheme of the statutory exceptions of RCW 6.12.100. Nevertheless, it argues that its lien should escape homestead protection.

First, Pinebrook argues that its lien is prior to Owen's homestead because: the lien arose when the covenants were filed in 1973, and Owen did not obtain homestead protection until after she purchased her home in 1977; and the lien is of an...