Tsikayi v. Krake

• Decision Date: 28 March 2023
• Docket Number: 56753-9-II
• Parties: AMOS TSIKAYI and CHRIS TSIKAYI, Respondents, v. CHRISTOPHER PAT KRAKE and LESLIE JEANNE KRAKE, Appellants.
• Court: Washington Court of Appeals

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AMOS TSIKAYI and CHRIS TSIKAYI, Respondents, v. CHRISTOPHER PAT KRAKE and LESLIE JEANNE KRAKE, Appellants.

No. 56753-9-II

Court of Appeals of Washington, Division 2

March 28, 2023

UNPUBLISHED OPINION

PRICE J.

Christopher and Leslie Krake (Krakes) and Amos and Chris Tsikayi (Tsikayis) are neighbors in the Summer Hill neighborhood. The Krakes appeal the superior court's order awarding attorney fees to the Tsikayis after the dismissal without prejudice of the Krakes' counterclaim in a lawsuit between them. The Krakes argue the superior court erred because no attorney fees provision applies to their counterclaim. They further argue the dismissal of the counterclaim without prejudice is not a final judgment. We affirm the superior court.

FACTS

I. Background Facts

There is a line of Leyland Cypress trees near the boundary between the Tsikayis and the Krakes. Due to their placement and height, the trees allegedly blocked the Krakes' view of sunsets and downtown Portland and shielded natural light from the home. Since the trees were almost entirely on the Tsikayis' property, the Krakes asked their neighbors to trim their tops. When the Tsikayis did not trim the trees, this dispute began.

A. HOA Governing Provisions.

Both neighbors are members of the Summer Hills Homeowners Association (HOA). The HOA is governed by the Declaration of Mitigation Covenants, Conditions, and Restrictions for Summer Hills (CCRs). As part of the landscaping plan and external improvement provisions incorporated in the CCRs, the HOA also enacted numerous requirements through a document called the Architectural Controls and Guidelines (ACGs). The HOA bylaws also provide for an Architectural Review Committee (ARC) which is tasked with homeowner education and enforcement of the ACGs.

In the event of a dispute between neighbors regarding these requirements, the ACGs impose a process for resolving the dispute. The process starts when an owner makes a complaint to the ARC. The ARC will review any plans on file, visually inspect the site, and collect any relevant data. If the ARC determines there is no violation, the complaint will be closed, and the complainant notified of the decision. If a violation is found, the ARC will contact the offending owner and request compliance. If the owner fails to comply, the ARC or a management company will send a fourteen-day letter requesting immediate compliance and may request a hearing with the HOA Board of Directors (Board).

If any owner disagrees with the ARC's determination, the owner may timely appeal the decision to the Board. To be timely, the appeal must be submitted within two months of the decision. A violating owner who appeals the ARC decision and chooses to hire an attorney may risk paying the HOA's attorney fees if they lose before the Board. Referring back to the CCRs, the ACGs give this notification to owners as follows:

When an owner, who is found in violation by the ARC, appeals the ARC decision to the Board and chooses to retain an attorney to present their appeal, the [HOA] may retain an attorney (as has been the practice) and may engage a court reporter to record the hearing. This is done to protect the [HOA] in the event an owner files a lawsuit thereafter. If the Board, after hearing the appeal, rules against the owner, then the Board may charge the owner for reasonable attorney fees and costs incurred by the [HOA] per Article X Section 3 of the [CCRs].

Clerk's Papers (CP) at 729-30.

Following a decision from the Board, if either the HOA or the owner still do not agree with the decision, the parties are required to engage in good-faith mediation prior to filing a lawsuit.

The CCRs' attorney fees provision in Article X, section 3, referenced in the ACGs, states that "violators" shall be responsible for costs and fees:

The [HOA] or any Owner shall have the right to enforce by proceeding at law or in equity all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration . . . . The violators shall be responsible for all costs incurred in enforcing this Declaration . . . including reasonable attorney's fees, whether or not litigation is commenced, and if so, during any arbitration, trial or appeal, or in any proceeding in federal bankruptcy court or under state receivership or insolvency statutes. The [HOA] may add any such cost due it to the current or next annual assessment of the offending Owners. Whenever the [HOA] anticipates incurring attorney fees or costs to enforce any of its governing provisions, the [HOA] shall notify any Owner involved, giving that Owner notice that the Owner may be responsible for reasonable attorney fees and costs whether or not litigation is commenced. Prior to filing any lawsuit, all Owners and/or the [HOA] will be required to participate in and complete formal Mediation in a good faith effort to resolve the dispute before filing a lawsuit. The parties will agree upon and share equally in the Mediation cost as a condition required before filing any lawsuit.

CP at 565 (emphasis added).

Among the provisions of the CCRs is a view blockage restriction in Article IV, which requires members to trim or remove vegetation that blocks a neighbor's view.

B. Neighbor Dispute.

In 2015, the Krakes asked the Tsikayis to trim the tops of the several Leyland Cyprus trees on the Tsikayis' property so that the trees would not block the Krakes' view. In an effort to resolve the issue, the Krakes requested that the ARC review whether the Tsikayis' trees were impacting their view in violation of the CCRs. The ARC issued a determination that the Tsikayis' trees did not violate the view blockage restriction. The Krakes did not appeal this decision to the Board in accordance with the required process.

In 2016, the Krakes believed the Tsikayis' trees had encroached over the boundary line and onto their property. Apparently believing either they had permission from the Tsikayis or permission was not needed because the trees had grown onto their property, the Krakes hired a contractor, who trimmed the tops of the Tsikayis' trees.

II. Resulting Litigation

A. Tsikayis' Lawsuit and Krakes' Counterclaim

In 2017, the Tsikayis filed a complaint against the Krakes for timber trespass for trimming the trees without permission and sought a permanent injunction to prohibit the Krakes from trespassing on the Tsikayi property or cutting the trees.^[1] The Krakes responded with two counterclaims. The first counterclaim sought damages for the Tsikayis' breach of the HOA restrictions for the trees and an injunction to require the Tsikayis maintain the height of the trees at less than 24 feet.^[2] The first counterclaim referenced the ARC's 2015 decision, alleging,

It was not until August 2015 that plaintiffs objected to cutting the trees and, in bad faith, encouraged the ARC to find that their trees did not impact defendants' view. The ARC did not consider the impact on light for the defendants . . . .

. . . .

Plaintiffs['] bad[-]faith involvement with the ARC, which elevated defendants['] view rights without regard to the CCRs and beyond the limit of their authority in addressing non-native trees, has demonstrated that the HOA won't enforce defendants['] to [sic] view easement rights and to be free from light obstruction. Plaintiffs['] previous refusal to pay for the agreed cutting is likely to continue without injunctive relief.

CP at 29-30.

B. Motions for Partial Summary Judgment and Partial Final Judgment

The litigation progressed over the course of several years. In 2019, following extensive discovery, the Tsikayis moved for partial summary judgment to dismiss the Krakes' first counterclaim. The Tsikayis alleged that the Krakes could not challenge the ARC's 2015 decision about the trees because they failed to adhere to the appeals process mandated by the CCRs and ACGs.

The superior court agreed with the Tsikayis. In its March 2019 "Ruling and Order on Plaintiffs' Motion for Partial Summary Judgment on Liability," the superior court granted the Tsikayis' partial summary judgment motion specific to the Krakes' first counterclaim. The ruling stated the Krakes were "precluded from enforcing any HOA restrictions for failure to exhaust their contractual remedies . . . ." CP at 394. The Krakes filed a motion for reconsideration, which the superior court denied. The Krakes did not attempt to seek review of the decision.

Several months later, pursuant to CR 54(b), the Tsikayis moved for entry of partial final judgment based on the March 2019 ruling, seeking a dismissal of the Krakes' counterclaim with prejudice so potential evidentiary issues would not affect the upcoming trial. The Krakes objected, arguing the March partial summary judgment ruling was not a final judgment. The Krakes contended the superior court's ruling failed to include an express direction for entry of judgment and, if anything, their counterclaim should be dismissed without prejudice since the ruling was based on a failure to follow the appeals process and was not a decision on the merits. The Krakes also objected to any entitlement of attorney fees, as the judgment was not final.

The superior court denied the Tsikayis' motion for entry of the judgment, stating a desire to avoid multiple appeals and preserve judicial resources. The superior court also explained there were other avenues available for the Tsikayis to prevent introduction of certain evidence at an upcoming trial.

The trial was delayed for more than two years. Then, in October 2021, as the rescheduled trial date neared, the Krakes sought further delay of the trial. In response to the potential continuance, the Tsikayis moved again for entry of partial...