Ventana Partners, LLC v. Lanoue Dev., LLC

• Jurisdiction: Oregon
• Court: Oregon Court of Appeals
• Citation: 267 Or.App. 15,340 P.3d 107
• Docket Number: 080507701.,A148839
• Parties: VENTANA PARTNERS, LLC, fka Montara Partners, LLC, and Studio 1235, LLC, an Oregon limited liability company, Plaintiffs–Appellants, v. LANOUE DEVELOPMENT, LLC, an Oregon limited liability company; Chicago Title Insurance Company Of Oregon, an Oregon corporation; Harper Houf Peterson Righellis, Inc., an Oregon corporation; Lodestar Surveying, Inc., an Oregon corporation, fka G & L Land Surveying, Inc., an Oregon corporation; Lawyers Title Insurance Corporation, dba Land America Lawyers Title Insurance Corporation, fka Oregon Title Insurance Company, a Nebraska corporation; Stoel Rives, LLP, an Oregon Limited Liability Partnership; Howard M. Feuerstein, an individual, and Rene G. Gonzalez, an individual, Defendants–Respondents.
• Decision Date: 19 November 2014

267 Or.App. 15

340 P.3d 107

VENTANA PARTNERS, LLC, fka Montara Partners, LLC, and Studio 1235, LLC, an Oregon limited liability company, Plaintiffs–Appellants

v.LANOUE DEVELOPMENT, LLC, an Oregon limited liability company; Chicago Title Insurance Company Of Oregon, an Oregon corporation; Harper Houf Peterson Righellis, Inc., an Oregon corporation; Lodestar Surveying, Inc., an Oregon corporation, fka G & L Land Surveying, Inc., an Oregon corporation; Lawyers Title Insurance Corporation, dba Land America Lawyers Title Insurance Corporation, fka Oregon Title Insurance Company, a Nebraska corporation; Stoel Rives, LLP, an Oregon Limited Liability Partnership; Howard M. Feuerstein, an individual, and Rene G. Gonzalez, an individual, Defendants–Respondents.

A148839

080507701.

Court of Appeals of Oregon.

Argued and Submitted Oct. 17, 2013.

Decided Nov. 19, 2014.

Gordon T. Carey, Jr., argued the cause and filed the briefs for appellants.

Jonathan M. Radmacher argued the cause for respondents Chicago Title Insurance Company of Oregon and Lawyers Title Insurance Corporation. With him on the brief was McEwen Gisvold LLP.

Michael T. Garone argued the cause for respondent Harper Houf Peterson Righellis, Inc. With him on the brief were William J. Ohle and Schwabe, Williamson & Wyatt, P.C.

Graham M. Sweitzer argued the cause for respondents Stoel Rives, LLP, Howard M. Feuerstein, and Rene G. Gonzalez. With him on the brief were Stephen C. Voorhees and Kilmer, Voorhees & Laurick, P.C.

No appearance for respondents LaNoue Development, LLC, and Lodestar Surveying, Inc.

Before Duncan, Presiding Judge, and Haselton, Chief Judge, and Wollheim, Senior Judge.^*

Opinion

DUNCAN, P.J.

Plaintiffs purchased a piece of real property, which we refer to as Lot 1, from LaNoue Development, LLC (LaNoue),¹ intending to build condominiums on it and sell them.² The Oregon Real Estate Agency (OREA) and Multnomah County surveyor delayed plaintiffs' condominium sales by withholding approval of their certificate of condominium, and, ultimately, plaintiffs' project failed. Plaintiffs contended that problems with their title to Lot 1 caused the failure of the project, and they sought to recover their losses from defendants, who are surveyors, title companies, and attorneys involved in the creation and sale of Lot 1. Plaintiffs originally asserted claims against LaNoue as well; however, plaintiffs and LaNoue settled and LaNoue assigned its claims against defendants to plaintiffs. Plaintiffs then asserted those assigned claims as well as their own direct claims against defendants. The trial court granted all defendants' motions for summary judgment on all of plaintiff s' claims and entered a general judgment of dismissal. Plaintiffs appeal. For the reasons explained below, we affirm in part, reverse in part, and remand.

I. FACTS

On appeal of a grant of summary judgment, we review the facts in the light most favorable to the nonmoving party to determine whether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law. ORCP 47 C; Jones v. General Motors Corp., 325 Or. 404, 408, 939 P.2d 608 (1997). We set out the facts in accordance with that standard.

In 1998, LaNoue retained defendant Howard Feuerstein, an attorney at defendant Stoel Rives, LLP, to prepare the governing documents for a planned community in Portland known as Montara Estates.³ Feuerstein prepared the Declaration of Protective Covenants, Conditions, Restrictions and Easements for Montara (declaration), which identified LaNoue as the declarant.See ORS 94.550(9) (defining “declarant” as “any person who creates a planned community under ORS 94.550 to 94.785 ”).

LaNoue intended to develop Montara in three phases. The declaration identified “common areas” in all three phases of the development and provided that the townhouse lot owners would have easements in the common areas. It also provided that, after certain conditions were met, LaNoue would transfer ownership of the common areas to the homeowners association for the community, the Montara Owners Association (MOA). The declaration also contained two provisions relating to the MOA's ability to convey the common areas. Section 3.4(c) of the declaration provided:

“The Association shall not by act or omission seek to abandon, partition, subdivide, encumber, sell or transfer the Common Areas owned directly or indirectly by the Association for the benefit of the Lots unless the holders of at least eighty percent (80%) of the Class A Association voting rights [ (the lot owners) ] and the [declarant] have given their prior written approval, and the City of Portland has given its written approval.”

Section 6.5(h) provided:

“Except as otherwise provided in Section 3.4(c) above, the Association may sell, transfer or encumber all or any portion of the Common Area to a person, firm or entity, whether public or private, and dedicate or transfer all or any portion of the Common Area to any public agency, authority, or utility for public purposes.”

In 1999, defendants Harper Houf Peterson Righellis, Inc., (Harper Houf) and Lodestar Surveying, Inc., civil engineering firms, prepared the plat for Montara. The plat provided that the common areas would be “commonly owned and maintained” by the lot owners.

The plat and declaration were recorded, and LaNoue began building and selling townhouses in Montara. Defendant Lawyers Title Insurance Corporation was the escrow company and LaNoue's title insurer for the townhouse sales. Before the sales began, LaNoue signed 35 blank deeds, and Lawyers Title filled in the required information and appended the legal description of the property when each townhouse sold. The legal description that Lawyers Title appended to each deed stated the specific townhouse lot number

“together with an undivided interest in Tracts ‘A’ through ‘I’ and Tracts ‘N’ through ‘AA’ [ (the common areas) ], according to the duly filed plat of [Montara], in the City of Portland * * *.”

(Emphasis added.) After the sale of each townhouse, Lawyers Title recorded the deed.

Because the three documents described above gave rise to the dispute underlying this case, we reiterate their relevant provisions: (1) The declaration provided that each townhouse owner would have an easement in the common areas and that LaNoue would eventually turn over the common areas to the MOA. By contrast, (2) the plat provided that Montara's common areas would be “commonly owned” by the townhouse owners, and (3) the deeds granted each townhouse owner “an undivided interest” in the common areas.

By 2002, LaNoue had built and sold 35 townhouses in the first and third phases of Montara. LaNoue had originally planned to build additional townhouses in phase two; however, due to market conditions, he decided that it would be better to build condominiums. That change of plan required both amending the declaration and removing from the plat the land designated for phase two, which included some of the common areas designated on the plat. The land designated for phase two of Montara subsequently became known as Lot 1.

In June 2002, LaNoue submitted to the City of Portland an application to build condominiums on Lot 1. It also sent a letter to the townhouse owners asking them to approve a modification of the documents governing Montara to allow the change of plan. In response, the townhouse owners retained an attorney to fight the permit application and object to the condominium plan. Counsel for the townhouse owners contended that, because the land on which LaNoue wanted to build condominiums included some of the areas designated as common areas on the plat, all of the townhouse owners had to consent to the change of plan.⁴

LaNoue engaged Feuerstein to negotiate with the townhouse owners and redraft the Montara documents to allow condominiums to be built. Feuerstein advised LaNoue that, pursuant to a provision of the Oregon Planned Community Act (OPCA), ORS 94.550 to 94.783, the MOA could transfer common areas with the consent of 80 percent of the townhouse owners. See ORS 94.665(1) (set out and discussed below, 267 Or.App. at 26, 340 P.3d at 113).

Feuerstein provided LaNoue with a draft of an amendment to the declaration and a consent form for LaNoue to distribute to the townhouse owners. The amendment to the declaration defined the former phase two property—Lot 1—as “the condominium property” and provided, in part:

“The Condominium Property is hereby withdrawn from Montara and shall no longer be subject to the Declaration or any of the provisions thereof. Association hereby conveys any right, title or interest the Association may have in the former Common Areas within the Condominium Property to Declarant.”

The amendment to the declaration also provided that, after the amendment was approved and recorded, LaNoue would convey new common areas—designated tracts A, B, C, and D—to the MOA.

After extended negotiations with the townhouse owners, during which LaNoue was represented by counsel not involved in this case, counsel for the townhouse owners began sending completed consent forms to LaNoue and to Feuerstein. LaNoue forwarded those consents to the City of Portland's Office of Planning and Development, which was waiting for 80 percent of the townhouse owners to consent before approving LaNoue's building application.

By December 2003, the city had concluded that LaNoue had received consent from 80 percent of the townhouse owners. It held a hearing on LaNoue's building application, at which LaNoue was represented by Harper Houf, and approved the application in a hearing-officer decision. In February 2003, LaNoue, acting on behalf of the MOA, of which he retained control at that point, signed the amendment to the declaration. The amendment to the declaration was recorded in October 2003 without a legal description of the property and then rerecorded in October 2004 with a legal description.

Harper Houf began replatting Montara in early 2004. After the replat...