Post v. Murphy

• Decision Date: 22 February 1989
• Citation: 873 P.2d 118,125 Idaho 473
• Parties: Edward T. POST, and Constance Hendrick Post, husband and wife; the Joan Preston O'Neil Revocable Trust, dated
• Court: Idaho Supreme Court

Page 118

873 P.2d 118

125 Idaho 473

Edward T. POST, and Constance Hendrick Post, husband and wife; the Joan Preston O'Neil Revocable Trust, dated February 22, 1989, Plaintiffs-Respondents, Cross-Appellants, v. Michael J. MURPHY; Jeray A. Holmes and Carolyn R. Holmes, husband and wife; William C. Higdon and Terry Higdon, husband and wife; Elmar Grabher and Rigmore Grabher, husband and wife, Defendants-Appellants, Cross-Respondents.

No. 20242.

Supreme Court of Idaho.

April 4, 1994.

Luboviski, Wygle, Fallowfield & Williamson, P.A., Ketchum, for defendants-appellants, cross-respondents. Janet Wygle, argued.

Kneeland, Korb, Collier, Legg & Haukaas, Ketchum, for plaintiffs-respondents, cross-appellants. Bruce J. Collier, argued.

TROUT, Justice.

This case involves residential real property located in Ketchum, Idaho and certain recorded restrictions related to it, specifically, whether the restrictions preclude further subdividing of the property and whether, prior to January 1, 1995, these restrictions can be amended by less than unanimous vote of the property owners. Also at issue is whether a non-prevailing party can be awarded costs and fees based on a provision in the recorded restrictions under this Court's holding in Farm Credit Bank of Spokane v. Wissel, 122 Idaho 565, 836 P.2d 511 (1992).

FACTUAL BACKGROUND

The real property involved is comprised of lots 17-20, 24A, 25A, 26A, 27A, 27B and 27C (the "Lots") located in the Sun Valley Subdivision in Ketchum, Idaho. The Lots were subject to a Deed of Restrictions (the "Restrictions") signed and recorded by the record owners on April 14, 1983, which Restrictions are the subject of this case. ¹ Plaintiffs became owners of certain of the Lots (24A and 25A) after the Restrictions were recorded. It is not disputed that the Restrictions apply to the Lots.

In 1991, defendants, owners of lots 17, 18 and 19, applied to the City of Ketchum ("Ketchum") for permission to subdivide their lots. Defendants sought to subdivide these three lots into four lots, identified as the Sunny Bench Subdivision. Plaintiffs notified both defendants and Ketchum that such subdivision would violate the Restrictions. Ketchum, however, believed that the Restrictions were a private contractual matter between the parties and approved the Sunny Bench Subdivision. The subdivision plat was recorded by the defendants in December of 1991. It is undisputed that appellants planned to build single-family residences on each of the subdivided lots.

PROCEDURAL HISTORY

In October of 1991, plaintiffs filed suit, seeking a declaratory judgment that the Restrictions prohibited any further subdivision of the Lots and that under its terms the Deed of Restrictions could only be amended prior to January 1, 1995 by unanimous vote of all owners of the Lots. The plaintiffs also sought a declaration that the Sunny Bench Subdivision Plat filed by the defendants was invalid and of no legal effect and sought injunctive relief enjoining the defendants from commencing, pursuing or completing construction upon any lot in the Sunny Bench Subdivision. In January, 1992, defendants filed an answer and counterclaim, seeking a declaration that the Restrictions did not prohibit further subdivision and that the Sunny Bench Subdivision did not violate the Restrictions.

Both sides sought summary judgment. On August 26, 1992, the trial court entered its Second Summary Judgment ² in which it ordered, inter alia, that the Lots were subject to the Restrictions and that "[t]he restrictive covenants expressly prohibit or by implication do not allow any action which would increase the residential density within the protected property to more than ten single family residences"; that the Sunny Bench Subdivision was invalid and of no legal effect as a result of the Restrictions; and that, pursuant to the terms of the Restrictions, revoking or amending the Restrictions prior to January 1, 1995 required a unanimous vote of all the Lots' owners. The trial court enjoined the defendants and their successors from pursuing any subdivision which would violate the Restrictions unless they validly revoked or amended the Restrictions with the required vote. The court also specifically enjoined the defendants and their successors from pursuing construction at the Sunny Bench Subdivision. The court dismissed the defendants' counterclaim with prejudice. Defendants appealed this decision on October 5, 1992.

On November 12, 1992, the court entered its Order and Judgment Re: Attorneys' Fees and Costs. The court determined the plaintiffs to be the prevailing party and awarded costs but not attorney fees. In addition, the court awarded attorney fees and costs to the defendants, based on a provision (paragraph 24) in the Restrictions which provides for recovery of costs and fees by a grantor who employs counsel in connection with the Restrictions, and on this Court's decision in Farm Credit Bank of Spokane v. Wissel, 122 Idaho 565, 836 P.2d 511 (1992). On December 4, 1992, plaintiffs cross-appealed the award of fees to the defendants.

I. THE TRIAL COURT DID NOT ERR IN HOLDING THAT THE RESTRICTIONS PROHIBITED THE SUNNY BENCH SUBDIVISION

In construing a restrictive covenant, which is in derogation of the common law right to use land, restrictions are not to be extended by implication to include any restriction not expressed clearly and doubts are to be resolved in favor of the free use of land. Thomas v. Campbell, 107 Idaho 398, 404, 690 P.2d 333, 339 (1984). Here, there is no specific prohibition in the Restrictions regarding subdividing. Without such an express prohibition, subdivision of the Lots, per se, is not prohibited. However, we find, for the reasons set out below, that the Restrictions explicitly prohibit an increase in density on the Lots beyond one residence per lot, effectively precluding subdivision.

The Restrictions provide:

1. No lot shall be used for any purpose including any retail or wholesale or commercial activity, other than for the residents of one family and its domestic servants, except that the Grantors, for the purpose of selling lots, may use any lot owned by them for a model home.

11. No structure may be erected or maintained on any lot except one (1) single family dwelling house with an interior living floor area ... of at least 1200 square feet, together with no more than two (2) detached outbuildings for use as garages, servants' quarters or guest houses....

25. The lots of the subdivision subject to these restrictions are the following: 17, 18, 19, 20, 24A, 25A, 26A, 27A, 27B, 27C.

(Emphasis added). The question of whether a restrictive covenant is ambiguous is one of law, subject to plenary review by this Court. Clark v. Saint Paul Property & Liab. Ins. Cos., 102 Idaho 756, 639 P.2d 454 (1981). A restrictive covenant is ambiguous when it is capable of more than one reasonable interpretation on a given issue. Rutter v. McLaughlin, 101 Idaho 292, 612 P.2d 135 (1980). It is only if an ambiguity is found that any "construction" is necessary. Where there is no ambiguity, there is no room for construction; the plain meaning of the language governs. Sun Valley Center for Arts & Humanities, Inc. v. Sun Valley Co., 107 Idaho 411, 413, 690 P.2d 346, 348 (1984).

Applying these standards, the provisions of the Restrictions are not ambiguous. These provisions clearly limit the ten lots specifically identified in the Restrictions to one single family residence per lot. Any building on subdivided lots which would result in more than one single family residence on a particular lot (and, therefore, more than ten residences on the Lots) is prohibited. Accordingly although subdivision of lots is not prohibited, per se, no dwelling may be erected on a subdivided portion if there is a dwelling on the remainder of the original lot. Effectively, therefore, appellants are prohibited from building additional houses on any subdivided lots. We find no error in the trial court's determination that the subdivision contemplated by appellants is prohibited, because the Restrictions prohibit any action which would increase the residential density within the protected property to more than one single family residence per existing lot. See also Cadbury v. Bradshaw, 43 Or.App. 33, 602 P.2d 289 (1979) (where a restrictive covenant similar to that in the Restriction did not specifically permit or prohibit subdivision, the court found the covenant prohibited subdivision because the covenant explicitly required that only one dwelling could be erected on any parcel. Thus, even if subdivision itself were allowed, buildings on subdivided lots...