Riverview Cmty. Grp. v. Spencer & Livingston

• Decision Date: 14 February 2013
• Docket Number: No. 30681–0–III.,30681–0–III.
• Citation: 173 Wash.App. 568,295 P.3d 258
• Court: Washington Court of Appeals
• Parties: RIVERVIEW COMMUNITY GROUP, a non-profit Washington corporation, Appellant, v. SPENCER & LIVINGSTON, a Washington Partnership, and/or its successors-in-interest; George T. and Sheila Livingston, husband and wife, and the marital community composed thereof; S.O.S. LLC, a Washington Limited Liability Company, and/or its successors-in-interest, Respondents, Deer Meadows, Inc., a defunct Washington Corporation, and/or its successors-in-interest; Deer Meadow Development, Inc., a Washington corporation, and/or its successors-in-interest; Deer Meadows Golf, Inc., an inactive Washington corporation, and/or its successors-in-interest; also all other persons or parties unknown claiming any right, title, estate, lien, or interest in the real estate described in the complaint herein, Defendants.

173 Wash.App. 568

295 P.3d 258

RIVERVIEW COMMUNITY GROUP, a non-profit Washington corporation, Appellant,

v. SPENCER & LIVINGSTON, a Washington Partnership, and/or its successors-in-interest; George T. and Sheila Livingston, husband and wife, and the marital community composed thereof; S.O.S. LLC, a Washington Limited Liability Company, and/or its successors-in-interest, Respondents,Deer Meadows, Inc., a defunct Washington Corporation, and/or its successors-in-interest; Deer Meadow Development, Inc., a Washington corporation, and/or its successors-in-interest; Deer Meadows Golf, Inc., an inactive Washington corporation, and/or its successors-in-interest; also all other persons or parties unknown claiming any right, title, estate, lien, or interest in the real estate described in the complaint herein, Defendants.

No. 30681–0–III.

Court of Appeals of Washington, Division 3.

Feb. 14, 2013.

David P. Boswell, Boswell Law Firm PS, Spokane, WA, for Appellants.

David A. Kulisch, Attorney at Law, Spokane, WA, for Defendants and Respondents.

David Scott Mann, Gendler & Mann LLP, Brendan Wesley Donckers, Breskin Johnson & Townsend, PLLC, Seattle, WA, for Respondents.

KORSMO, C.J.

¶ 1 The Riverview Community Group, a collection of adjoining and neighboring property owners acting as a nonprofit corporation, sued its property's developers for closing the golf course that had been the center of their development and sought to have the golf course reopened. The trial court directed that all of the area's individual landowners be joined as necessary parties to the litigation under CR 19. The court also granted summary judgment and dismissed the action on the basis that equitable servitudes were not available in Washington unless created in writing. We reverse the court's CR 19 ruling, but affirm the summary judgment order.

FACTS ¹

¶ 2 This litigation is centered on a 540–acre development in northern Lincoln County near the confluence of the Spokane River and Lake Roosevelt. The property was developed by two married couples, George and Sheila ² Livingston, and Charles and Gloria Spencer. They created the general partnership of Spencer & Livingston in 1987. The partnership filed Deer Meadows Plat 1 in 1990. Two years later they filed a re-platted Plat 1 in conjunction with Deer Meadows Plat 2.

¶ 3 A 9–hole golf course opened on the development in 1994; four years later the course expanded to 18 holes. The golf course eventually would include a pro shop, bar, lounge, and motel. In September 1994, after the golf course had opened, James Linville purchased a lot from the Spencers and Livingstons across from the course. In December 1994, the Spencers and Livingstons created Deer Meadows, Inc. (DMI). In February 1995 the partnership's assets were transferred to DMI. Nonetheless, the partnership recorded Deer Meadows Plat 3 in July 1995. This plat map was the only one that noted the presence of a golf course. In September 1995, DMI quitclaimed its assets back to the partnership, which promptly quitclaimed the real estate contracts to Charles Spencer individually, DMI dissolved in December 1995.

¶ 4 Charles Spencer created Deer Meadows Golf Inc. (DMG) in November 1995. At some later time DMG obtained ownership of the golf course. In March 1996 Mr. Spencer transferred some real estate contracts to DMG. That same month he created Deer Meadows Development and transferred additional real estate contracts to it the following month.³ In June 1996, Howard Walker purchased from the Livingstons a lot in Deer Meadows Plat 1 overlooking the golf course.

¶ 5 Spencer and Livingston formed S.O.S., LLC. (SOS), in February 1997, to develop the nearby Deer Heights area. SOS recorded Deer Heights Plat 1 in September 1998. SOS would file Deer Heights Plat 2 in 2000 and Deer Heights Plat 3 in 2003. The general layout of the development by this time had the Deer Meadows properties adjoining and nearly surrounding the golf course, with the Deer Heights lots north of the course.

¶ 6 Ken Sweeney purchased a lot in Deer Heights from SOS in May 1999. The following year he would swap the lot with Charles Spencer for a lot on the 13th hole of the golf course. In August 1999, James Kerlee purchased a lot abutting the golf course from the Livingstons.

¶ 7 Charles Spencer passed away January 22, 2005. Mr. Livingston took control of DMG later that year. In May 2006 Mr. Livingston sold a lot on the 8th hole to Mark Jensen.

¶ 8 The golf course closed in 2009 and its equipment was sold the following year. DMG became inactive in March 2010. The Riverview Community Group was formed in September 2010 as a nonprofit corporation. As many as 100 of the nearly 500 area property owners joined Riverview, including the five property owners noted previously: James Linville, Howard Walker, Ken Sweeney, James Kerlee, and Mark Jensen. Each of the five alleged that the property had been marketed to them as a “golf course community” and presented promotional materials to that effect which they had received.⁴ Some of them reported representations by various real estate agents, including Gloria Spencer that the golf course land would not be further developed and would remain an 18–hole golf course. They also asserted that they could not afford to litigate the claims individually, but desired to do so through Riverview.

¶ 9 Riverview filed suit in its own name in March 2011, seeking declaratory and injunctive relief, as well as equitable relief in the form of recognition of equitable servitudes that required restoration of the golf course. The named defendants included George and Sheila Livingston, the Spencer & Livingston partnership, and SOS, along with some of the defunct earlier corporations. The Livingstons and the partnership (Livingstons) were represented by different counsel than SOS.

¶ 10 The Livingstons moved for dismissal pursuant to CR 12(b)(7), arguing that Riverview had not joined necessary parties under CR 19 and that Riverview itself had no interest in the litigation since it was formed after the golf course had been shuttered. The trial court agreed with the motion and ruled that the individual Deer Meadows property owners were necessary parties. It ordered Riverview to join the owners as parties or receive assignments from them within a reasonable period of time. Clerk's Papers (CP) at 246.

¶ 11 SOS moved for summary judgment and the Livingstons subsequently joined the motion. SOS argued that equitable servitudes were not available in Washington unless they had been created in a written document. Remarking that existing case law supported the argument that implied equitable servitudes did not exist in Washington, the court granted the motion. A written order dismissing the case as to all defendants was entered.

¶ 12 Riverview promptly appealed to this court,

ANALYSIS

¶ 13 Riverview argues in this appeal that it has standing, there is no need to add the individual property owners as additional parties, and that implied equitable servitudes can be imposed in Washington. We will treat the first two arguments as one issue before addressing the equitable servitudes argument.

Organizational Standing and Real Party in Interest

¶ 14 Although the issue was not argued below, Riverview initially argues that it has organizational standing to pursue this action in accordance with International Association of Firefighters, Local 1789 v. Spokane Airports, 146 Wash.2d 207, 45 P.3d 186 (2002). It also argues in rebuttal that the trial court erred in ordering the addition of individual landowners as parties. Respondents contend that Riverview lacks standing, is not a real party in interest, and that the landowners were CR 19 indispensable parties who were not joined. These issues, although analytically distinct, are intertwined; we will address the CR 17 and standing issues together before addressing the CR 19 argument.

¶ 15 CR 17(a) provides in part:

Every action shall be prosecuted in the name of the real party in interest.... No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest.

¶ 16 The concepts of standing and CR 17(a) real party in interest are often interchanged by our courts. Philip A. Trautman, Joinder of Claims and Parties in Washington, 14 Gonz. L.Rev.. 103, 109 (1978). Standing refers to the demonstrated existence of “an injury to a legally protected right.” ⁵Sprague v. Sysco Corp., 97 Wash.App. 169, 176 n. 2, 982 P.2d 1202 (1999). “The real party in interest is the person who possesses the right sought to be enforced.” Id.

¶ 17 The essence of this case is promissory estoppel—the alleged breaking of a promise, made via promotional brochures and express statements by the developers, to maintain a golf course. The persons who purchased land in the development in reliance upon that promise are the ones who have been injured.⁶ The existence of an injury is the dispositive factor driving the analysis of these related issues. With that focus in mind, we agree that Riverview is a real party in interest with standing.

¶ 18 Riverview argues that it is an appropriately incorporated nonprofit organization in accordance with chapter 24.03 RCW interested in the continuation of the golf course at Deer Meadows. One of the powers of a nonprofit organization is the ability to sue and be sued. RCW 24.03.035(2). Because some of its individual members have claims against the defendants and desire to litigate those claims through Riverview, the group claims organizational standing under the decision in Firefighters. We agree.

¶ 19 In Firefighters, a union embroiled in a dispute over return of social security payments made on behalf of its members sought to have the employer refund to each union member the matching payments made on the member's behalf. This...