Wagner v. Woodward

• Decision Date: 31 January 2012
• Docket Number: No. DA 11–0335.,DA 11–0335.
• Citation: 2012 MT 19,270 P.3d 21,363 Mont. 403
• Parties: Mark D. WAGNER, Plaintiff and Appellant, v. Brian WOODWARD, Defendant, Third Party Plaintiff, Appellee, and Cross–Appellant, v. Taunja L. Wagner, Third Party Defendant and Appellant.
• Court: Montana Supreme Court

2012 MT 19

270 P.3d 21

363 Mont. 403

Mark D. WAGNER, Plaintiff and Appellant,

v.Brian WOODWARD, Defendant, Third Party Plaintiff, Appellee, and Cross–Appellant,

v.Taunja L. Wagner, Third Party Defendant and Appellant.

No. DA 11–0335.

Supreme Court of Montana.

Submitted on Briefs Dec. 21, 2011.Decided Jan. 31, 2012.

For Appellant: John M. Wagner, Wagner Law Firm, P.C., Whitefish, Montana.

For Appellee: Michael A. Ferrington, Attorney at Law, Whitefish, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

[363 Mont. 404] ¶ 1 Mark and Taunja Wagner (Wagners) own property (Lot 2) along Whitefish River in Whitefish, Montana, which is subject to restrictive covenants. Brian Woodward purchased adjacent property (Lot 1) that is subject to the same covenants. Woodward added onto the deck of the home he purchased and built a split-rail fence along his east and west property lines. Wagners sued, claiming Woodward's additions violated the restrictive covenants. The Eleventh Judicial District Court determined that the fences did not violate the covenants but the deck addition did. The court ordered Woodward to remove the deck addition. Wagners appeal the District Court's fence ruling and Woodward cross-appeals the deck ruling. We affirm in part and reverse in part.

ISSUES

¶ 2 A restatement of the dispositive issue on appeal and cross-appeal is whether the District Court erred in its interpretation and application of the restrictive covenants.

¶ 3 Additionally, both parties appeal the District Court's denial of attorney fees and costs.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 4 In 1994, Taunja's parents, Lyle and Judy Phillips, owned property designated as Lot 1 and Lot 2 of Lyle's Addition along the Whitefish River in Whitefish, Montana. On August 29, 1994, with the assistance of their lawyer, the Phillips executed restrictive covenants that ran with these adjacent parcels. These covenants were recorded on September 1, 1994, and contained four restrictions:

(1) The southern most part of any structure or improvement built on Lot 1 must be built or placed within 90 feet south of the north boundary of Lot 1.

(2) Lot 1 is for single-family residential purposes.

(3) The existing trees and shrubs shall be left along the north boundary of that part of Lot 1 which is the driveway leading from Park Avenue into the main part of Lot 1.

(4) No fences or trees and shrubs shall be constructed or planted on either lot so as to interfere with the view to the river by one lot across the other lot as said view now exists, unless such is approved in writing by the owners of both lots.

¶ 5 It is unclear how long the Phillips owned these parcels but at some time between August 1994 and December 2003, the Wagners took ownership of Lot 2. Additionally, the record reveals that in 2000, a single-family residential home was built on Lot 1. The owner of Lot 1 at that time asked Wagner to allow him to build further south on his lot—in other words, outside of the 90–foot building envelope required by covenant # 1 set forth above. Wagner denied permission and the owner assured Wagner that he would construct his home within the 90–foot building allowance. Between 2000 and January 2009 when Woodward purchased Lot 1, ownership of Lot 1 had changed several times.

¶ 6 In December 2003, Wagners subdivided Lot 2 of Lyle's Addition into two lots designating the parcels Lot 1 and Lot 2 of River Bend. Currently, Wagners retain ownership of both Lots 1 and 2 of River Bend. The Wagner and Woodward homes generally face northward and each sits atop a small rise allowing views of Whitefish River from the south side of their homes. The southern part of both lots creates large, open backyards that terminate at the river. Wagners' home is to the east of Woodward's and the homes are separated by a mature stand of spruce trees.

¶ 7 In June 2009, Woodward remodeled the existing deck on the south side of his new home and extended it by two feet, taking the deck addition out to the same extension as the eaves of the house. In July 2009, Woodward constructed a 30–inch tall, two-rail, split cedar fence along the west boundary of his property. The following month, he constructed an identical fence along the east boundary of his property—the boundary line shared with the Wagners. There is nothing in the record indicating that Wagners objected to these construction projects while they were underway.

¶ 8 In October 2009, Mark Wagner, individually, filed a complaint against Woodward seeking declaratory judgment and a future injunction. Wagner asked the court to declare that the above-listed covenants applied to Woodward's property and that Woodward had violated covenants # 1 and # 4. Wagner claimed that the fences interfered with his view of the river in violation of covenant # 4 and that Woodward's deck addition extended outside the 90–foot building allowance in violation of covenant # 1 ¹ as well. He based this claim upon his belief that the foundation footprint of Woodward's house was within 90 feet of the northern property boundary and the deck extended out beyond the house's foundation footprint. Wagner asked that the fences and the deck addition be removed and that Woodward be enjoined from additional and future violations of the covenants. Wagner sought attorney fees and costs as well.

¶ 9 Woodward answered the Complaint and filed a counterclaim and a third-party complaint against Taunja, bringing her into the lawsuit. Woodward counterclaimed, arguing that his fences did not obstruct the Wagners' view of the river, and therefore written authorization or Wagners' approval under the covenants was not required. He further counterclaimed that the covenants restricting Lot 1 were more onerous than those restricting Wagners' Lot 2 and were therefore unfair and unenforceable. He also claimed that Wagners' subdivision of Lot 2 “violate[d] the purpose and intent of the restrictive covenants.” He requested dismissal of the action and his attorney fees and costs.

¶ 10 Both parties filed motions for summary judgment and Woodward also filed a cross-motion for partial summary judgment. Woodward argued the material facts were not in dispute, and therefore the court need only decide the legal issues pertaining to whether the covenants were violated. He asserted that the extended deck did not extend beyond the eaves of house, and that if the eaves of his house violated the covenants, such a violation occurred 10 years before he purchased the property. He argued that Wagners were estopped under the equitable theory of laches from claiming that either the eaves of his house or the deck addition violated the covenants. Woodward also submitted that because there were no river views on the west side of his west fence, the west fence could not be in violation of the covenants. He further asserted that his east fence did not obstruct Wagners' views of the river.

¶ 11 Wagners countered that Woodward knew of the restrictive covenants when he purchased his property and that the photographic evidence presented to the court illustrated that Woodward had violated those covenants. Wagners demanded that both fences be removed. Wagners also submitted that if the eaves of Woodward's house extended beyond the 90–foot restriction they “must be removed” as must the matching deck extension. They claimed Woodward's laches defense was inapplicable for lack of notice.

¶ 12 Wagners hired a surveyor in June 2010 who swore by affidavit that the eaves of Woodward's house extended beyond and outside of the 90–foot building allowance established by the covenants. As a result, Woodward's deck extension was outside the allowance as well.

¶ 13 After conducting an oral argument, the court issued its Order and Rationale on Pending Motions on October 28, 2010. The District Court dismissed Woodward's counterclaim and ruled Woodward's deck addition violated the covenants, and ordered it removed. The District Court granted Woodward's motion for summary judgment as to his fences, allowing them to remain. The court further ruled that the equitable concept of laches prohibited Wagners from seeking enforcement of the restrictive covenants as they pertained to the eaves of Woodward's home. Lastly, the court determined there was no basis for an award of attorney fees to either party.

¶ 14 The District Court issued it Final Judgment on May 17, 2011, wherein it ordered Woodward to reduce his deck to within 90 feet of the north property line within 180 days of the Final Judgment. Woodward claims in his brief on appeal that the District Court granted a post-notice-of-appeal stay on the removal of his deck addition until this Court issues its ruling.

¶ 15 Wagners appeal and Woodward cross-appeals.

STANDARD OF REVIEW

¶ 16 This Court reviews a district court's decision on summary judgment using the same standards as the district court under M.R. Civ. P. 56. Where there are cross-motions for summary judgment and the district court is not called upon to resolve factual issues, but only to draw conclusions of law, we review to determine whether those conclusions are correct. Accordingly, a moving party is entitled to summary judgment when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Western Tradition P'ship v. AG, 2011 MT 328, ¶ 3, 363 Mont. 220, ––– P.3d ––––, 2011 WL 6888567.

¶ 17 A district court's interpretation of a restrictive covenant is a conclusion of law which we review for correctness. Czajkowski v. Meyers, 2007 MT 292, ¶ 12, 339 Mont. 503, 172 P.3d 94.

¶ 18 We review for correctness a district court's decision as to whether legal authority exists to award attorney fees. We review for an abuse of discretion a district court's order granting or denying attorney fees if legal authority exists for the fees. Hughes v. Ahlgren, 2011 MT 189, ¶ 10, 361 Mont. 319, 258 P.3d 439. We also review a district court's denial of costs for an abuse of...