Pinetop Lakes Ass'n v. Hatch

• Court: Arizona Court of Appeals
• Writing for the Court: JACOBSON; GRANT, J., and RICHARD M. DAVIS
• Citation: Pinetop Lakes Ass'n v. Hatch, 659 P.2d 1341, 135 Ariz. 196 (Ariz. App. 1983)
• Decision Date: 10 February 1983
• Docket Number: No. 1,CA-CIV,1
• Parties: PINETOP LAKES ASSOCIATION, an Arizona corporation, Plaintiff-Appellant, v. Phil W. HATCH and Jane Doe Hatch, his wife; John Does I through X, and XYZ Corporations or Entities I through X, Defendants-Appellees. 5417.

Page 1341

659 P.2d 1341

135 Ariz. 196

PINETOP LAKES ASSOCIATION, an Arizona corporation, Plaintiff-Appellant, v. Phil W. HATCH and Jane Doe Hatch, his wife; John Does I through X, and XYZ Corporations or Entities I through X, Defendants-Appellees.

No. 1 CA-CIV 5417.

Court of Appeals of Arizona Division 1, Department B.

Feb. 10, 1983.

Review Denied March 8, 1983.

Donald Maxwell, William G. Poach, Jr., Scottsdale, for plaintiff-appellant.

Paul W. Colarich, Jr., Pinetop, for defendants-appellees.

OPINION

JACOBSON, Presiding Judge.

This opinion is in response to a statement of costs filed in this appeal which included a request for attorney's fees. Normally, such requests are disposed of by non-published orders of this court. However, in the opinion of the court, the issue raised under A.R.S. § 12-341.01, allowing the assessment of attorney's fees in "any contested action arising out of contract" is sufficiently novel to justify an opinion.

Since our prior disposition on the merits of the appeal was by a memorandum decision, a brief factual history is included.

Pinetop Lakes consists of several residential subdivisions located in Navajo County, Arizona. These subdivisions are covered by various restrictions which are recorded and run with the land. The subdivision involved in this appeal is Pinetop Lakes Country Club Unit Four. The improvement or conveyance of lots in this subdivision was controlled by a Declaration of Establishment of Conditions, Reservations and Reciprocal Covenants and Liens Running with the Land. These deed restrictions were designed to regulate the subdivision and control the appearance of the neighborhood by establishing a general plan for the improvement and development of the property.

Paragraph A(8) of the restrictions states:

No temporary house trailer, travel trailer, mobile type home, mobile home, or any temporary housing shall be placed or erected on any lot in said subdivision.

Appellant Pinetop Lakes Association ("Association") was responsible for enforcing the restrictions. Appellee Phil Hatch owns lot 389 in the Country Club Unit Four Subdivision. In September of 1979, a residential structure was transported onto that lot and anchored to a concrete foundation. Shortly thereafter, the Association filed a complaint alleging that Hatch was erecting a structure in violation of the above quoted restriction. ¹ Judgment was entered in favor of Hatch and the Association appealed following the denial of its motion for new trial.

On appeal, the Association argued that the language of the restriction is clear and that Hatch's structure was within the meaning of "mobile home" or "mobile type home," and was therefore prohibited from being erected on lot 389. This court disagreed and affirmed the trial court in a memorandum decision issued on August 19, 1982. This court found that the trial court properly determined that the structure in question did not violate the terms of the restrictive covenant. ²

Shortly after the memorandum decision was issued in this case, Hatch filed a statement of costs which requested $15.00 for appellee's filing fee, $50.00 for brief preparation expenses, and $2,500.00 for attorney's fees incurred in preparing the answering brief and attending oral argument.

The Association objected only to the amount of attorney's fees, maintaining that attorney's fees may be awarded only if provided by contract or statute and contends that no statute or contract permits the award of attorney's fees in this case. Hatch, in his response to the objection, argues that this action arises out of contract and therefore, A.R.S. § 12-341.01 applies. A.R.S. § 12-341.01(A) states, in pertinent part, that:

In any contested action arising out of contract, express or implied, the court may award the successful party reasonable attorney's fees.

Hatch is the successful party in this appeal and the Association does not dispute the reasonableness of the amount requested by Hatch for attorney's fees. Rather, the issue is whether an action brought to enforce a restrictive covenant arises out of contract pursuant to A.R.S. § 12-341.01.

We start with an analysis of the basis upon which a grantee of land is bound by restrictive covenants affecting the land purchased. It is the general rule that the grantee, with notice of restrictive covenants, who accepts a deed referring to those restrictions is deemed to assent to be contractually bound by the...