Taylor v. McCollom

• Decision Date: 29 April 1998
• Docket Number: E-2
• Citation: 958 P.2d 207,153 Or.App. 670
• Parties: Bruce F. TAYLOR and Susan Taylor, husband and wife, Respondents-Cross-Appellants, v. Stewart McCOLLOM and Ann McCollom, husband and wife, Appellants-Cross-Respondents, and Virginia W. Cotton and Peter Cotton, Defendants. 90-2095-; CA A91609.
• Court: Oregon Court of Appeals

Page 207

958 P.2d 207

153 Or.App. 670

Bruce F. TAYLOR and Susan Taylor, husband and wife Respondents-Cross-Appellants, v. Stewart McCOLLOM and Ann McCollom, husband and wife Appellants-Cross-Respondents and Virginia W. Cotton and Peter Cotton, Defendants.

90-2095-E-2; CA A91609.

Court of Appeals of Oregon.

Argued and Submitted Nov. 19, 1997.

Decided April 29, 1998.

Eugene J. Piazza argued the cause and filed the briefs for appellants-cross-respondents.

Carlyle F. Stoutt III argued the cause and filed the briefs for respondents-cross-appellants.

Before De MUNIZ, P.J., and DEITS, C.J., and HASELTON, J.

HASELTON, Judge.

Defendants Stewart and Ann McCollom appeal from a judgment awarding plaintiffs Bruce and Susan Taylor damages for breach of Covenants, Conditions and Restrictions ("CC & Rs"), arising out of defendants' construction of a home that allegedly materially impaired plaintiffs' view from their home. ¹ Plaintiffs cross-appeal, assigning error to the trial court's refusal to enter an injunction requiring defendants to modify their home so as to lower their roof line and alleviate the alleged view impairment. Plaintiffs also assert that the trial court erred in denying attorney fees. We affirm on the appeal and affirm in part and reverse in part on the cross-appeal.

This dispute arises out of the construction of neighboring houses in Ashland's Quailhaven subdivision. That subdivision, which was platted in 1986, was a joint project of the owner, Virginia Cotton, and her son, Peter. Peter, an architect, assisted his mother in selling lots, and, as a condition of purchase, buyers were required to execute "designer agreements," retaining Peter as the designer for their homes. Peter and Virginia were also two of the three members of the Architectural Committee which, under the Quailhaven CC & Rs, was charged with reviewing and approving home designs.

In 1986, defendants purchased Quailhaven Lot 4, which was downhill from Lots 2 and 3, which plaintiffs later purchased. Although defendants executed a "designer agreement" with Peter and paid him the requisite fee, they retained an old friend, Saul Zaik, to do the actual design work for their home. Zaik designed a one-story house, with a vaulted cathedral-style ceiling and a clerestory ² to admit additional light. The projected height of defendants' home was 23 feet.

In January 1989, defendants provided Peter with preliminary drawings of their house, including the roof and clerestory design, as well as elevations from which the house's height could be readily calculated. In responding to defendants' submission, Peter stated, "Plans look great. Aside from rising out of the sight a bit more than I had hoped, the one thing that strikes me is the lack of a guest arrival (entry) connection to the street."

In June 1989, roughly six months after defendants submitted their preliminary plans to Peter, but before defendants started building, plaintiffs began looking into buying property at Quailhaven. On two occasions, Peter met plaintiffs and showed them Lot 2, which was uphill from defendants' lot; on a third occasion, he showed them the adjacent Lot 3, which was also uphill and directly behind defendants' lot. On each occasion, plaintiffs emphasized that view preservation was critical to their decision to buy and build; that was especially so for Susan Taylor, for whom the views to the north toward Mt. Grizzly were reminiscent of the landscape around Yreka where she grew up. On each occasion, Peter represented that under the Quailhaven CC & Rs, plaintiffs' view would be preserved. On one visit, Peter had plaintiffs climb a step ladder to a height approximating the projected level of their first floor and told them that their view would be unimpaired at that level. On the same visit, Peter referred to a downslope power pole, and told plaintiffs that the roofline of defendants' as-yet-unbuilt home on Lot 4 would be no higher than the pole. Peter also represented that defendants' home would be a low-built "berm" house. Ultimately, plaintiffs bought both Lots 2 and 3.

Plaintiffs began building their home in September 1989. Construction on defendants' home started several months later, in early 1990. In March 1990, shortly before plaintiffs moved into their home, they first became aware of a possible view impairment when a header on defendants' home was put into place. Plaintiffs' concerns heightened a few days later, when the trusses for defendants' cathedral-style roof were put in place. Plaintiffs met with defendants and asserted that defendants' construction and design violated various provisions of the CC & Rs, including, particularly, Section 8.1. That provision reads:

"It is important that Quailhaven owners restrict the height of improvements on their lots and the height of trees and vegetation growing thereon in order that the view of other Quailhaven residents shall be preserved to the greatest extent reasonably possible[.]" (Emphasis added.)

Plaintiffs suggested, as a possible compromise, that defendants eliminate the clerestory. ³ Defendants met with their architect, Zaik, and ultimately refused to delete the clerestory--a modification that would have cost approximately $10,000.

Plaintiffs then initiated a complaint to the Quailhaven Architectural Committee, asserting that defendants' home violated several provisions of the CC & Rs, including the "view preservation" covenant, Section 8.1. Under Section 7.1 of the CC & Rs, the Architectural Committee was authorized "to regulate the external design, appearance, location and maintenance of any and all improvements on the Property and any and all landscaping thereon in accordance with provisions of this Declaration and the [Design Review] Manual." ⁴ On April 26, 1990, Virginia Cotton wrote to plaintiffs, stating, "The full Architectural Committee has met. We regret that you feel so strongly about the matter, but we do not believe that a violation of the Covenants, Conditions and Restrictions exists." ⁵ Defendants completed their house, and this litigation ensued.

Plaintiffs' complaint asserted claims against the Cottons, based on Peter's misrepresentations. In addition, plaintiffs asserted two alternative claims against defendants: (1) an equitable claim, alleging that defendants' home violated the CC & Rs, including Section 8.1, and seeking an injunction ordering defendants to "remove and lower the roof to preserve plaintiffs' view"; and (2) if equitable relief was denied, a claim for breach of the CC & Rs, seeking damages for depreciation of property value resulting from that breach. Plaintiffs also pleaded that, under Section 14.3 of the CC & Rs, they were entitled to recover attorney fees from defendants on either alternative claim.

At trial, at the close of evidence, the court invited argument on plaintiffs' equitable/injunctive claim. Defendants' counsel argued that the evidence established that the Architectural Committee had approved defendants' home design and, particularly, had determined that that design did not violate Section 8.1 of the CC & Rs. Defendants further argued that that determination precluded the trial court from granting equitable relief and asked that the court, in equity, render findings concerning the nature and effect of the Architectural Committee's determination.

Without ruling on defendants' request, the court submitted plaintiffs' fraud claim against the Cottons and their claim against defendants for breach of the CC & Rs to the jury. The jury ultimately returned a verdict against the Cottons, awarding compensatory damages of $15,000 and punitive damages of $38,000. The jury also rendered a verdict against defendants for breach of the CC & Rs, giving the following responses to special interrogatories:

"Question 1. Do you find, based upon a preponderance of the evidence, that defendants McColloms' home as built did not preserve the view from the Taylors' residence to the greatest extent reasonably possible?

"ANSWER: Yes.

"Question 2. Do you find, based upon a preponderance of the evidence presented by the parties, that the Taylors' home and/or property has suffered depreciation as a result of the violation?

"ANSWER: Yes.

"Question 3. What are the total damages incurred by plaintiffs resulting from the depreciation of their property value based upon McColloms' violation?

"ANSWER: $16, 500."

Thereafter, the trial court, which had reserved ruling on plaintiffs' equitable/injunctive claim against defendants, rendered findings and conclusions. The court determined that the defendants' home violated Section 8.1 of the CC & Rs; that the value of plaintiffs' property had been decreased by $16,500 because of the view impairment; that, when the dispute first arose in March 1990, defendants' roof could have been lowered, and the clerestory removed, for $10,300; and that the present costs of modifying defendants' home to lower the roof height to 16 feet would be between $50,000 and $70,000. The court rendered no findings about whether the Architectural Committee had, in fact, approved defendants' design, much less findings concerning the nature and effect of the Architectural Committee's alleged action. The court denied injunctive relief, concluding, "Requiring these defendants to lower the pitch of their roof is unfeasible and inequitable in that the damages associated with so doing are disproportionate to the injury caused by the loss of view." Consequently, the court entered judgment against defendants for $16,500, based on the jury's award on the alternative claim for breach of the CC & Rs. The court also denied plaintiffs' petition for attorney fees.

Defendants appeal the judgment for breach of the CC & Rs. Plaintiffs cross-appeal, assigning error to the denial of injunctive relief and the denial of attorney fees. Defendants' sole argument on appeal is that, under Valenti v. Hopkins, 324 Or. 324, 926 P.2d 813 (1996), the trial court erred in failing to...