Westwood Homeowners Ass'n v. Tenhoff

• Decision Date: 03 September 1987
• Docket Number: No. 1,CA-CIV,1
• Citation: 745 P.2d 976,155 Ariz. 229
• Parties: WESTWOOD HOMEOWNERS ASSOCIATION, an Arizona non-profit corporation, Plaintiff-Appellee, v. Charles and Sylvia TENHOFF, husband and wife, Jeff and Alice Gierhan, husband and wife; the Mesa Association for Retarded Citizens, an Arizona corporation, Defendants-Appellants. 8957.
• Court: Arizona Court of Appeals

Page 976

745 P.2d 976

155 Ariz. 229

WESTWOOD HOMEOWNERS ASSOCIATION, an Arizona non-profit corporation, Plaintiff-Appellee, v. Charles and Sylvia TENHOFF, husband and wife, Jeff and Alice Gierhan, husband and wife; the Mesa Association for Retarded Citizens, an Arizona corporation, Defendants-Appellants.

No. 1 CA-CIV 8957.

Court of Appeals of Arizona,

Division 1, Department A.

Sept. 3, 1987.

Review Granted Dec. 15, 1987.

Review Denied July 14, 1989.

[155 Ariz. 230] Wright & Decker by Roger C. Decker, Ryan P. Dyches, Mesa, for plaintiff-appellee.

Reynolds, Rhodes & Golston by Rodger A. Golston, Mesa, and Lewis and Roca by John P. Frank, Steve Bender, Janet Napolitano, Phoenix, for defendants-appellants.

OPINION

GRANT, Presiding Judge.

This is an action for declaratory and injunctive relief to compel the closing of a Mesa home in which six developmentally disabled persons live. The plaintiff, Westwood Homeowners Association, an Arizona non-profit corporation (Westwood), contends that this use of the home violates a restrictive covenant. Westwood was granted summary judgment by the trial court.

FACTS

The facts are not in conflict. The appellants own a home in Mesa. Six or fewer developmentally disabled children and young adults live in the home with an employee who provides them with "parental" care. The house has been financed by appellant Mesa Association for Retarded Citizens (MARC), which in turn is under contract with the Arizona Department of Economic Security (DES). Westwood is an Arizona nonprofit corporation formed by homeowners in the area to challenge the legality of the appellant's housing arrangement.

In its motion for summary judgment, Westwood argued that the home violated several of the declarations of restrictions filed with the Maricopa County Recorder in 1959. MARC disputed this claim in its cross motion for summary judgment. MARC also argued in its supplemental objection to the form of judgment that any restrictive covenants precluding the home should be held void as against public policy and the equal protection clauses of the United States and Arizona Constitutions. The trial court awarded summary judgment for Westwood and MARC appealed.

ISSUES

(1) Does the residential facility violate the plain language of the restrictive covenants? (2) What is the public policy regarding residential facilities and how does it interact with the restrictive covenants at issue here? (3) What impact does A.R.S. § 36-582(G) have on that public policy? (4) Are the covenants invalid under the equal protection clauses of the United States and Arizona Constitutions? (5) Did the trial court properly exclude the Holsclaw Report, the Talent Report and defendant's supplementary affidavits from the record below? (6) Did the trial court err in awarding plaintiff attorney's fees?

THE RESIDENTIAL FACILITY AND THE RESTRICTIVE COVENANTS

The declaration of restrictions on the property, filed with the Maricopa County Recorder in 1959, contains the following paragraph:

8. No livestock or poultry shall be kept on any of said lots and no store, office, or other place of business of any kind and no hospital, sanitarium, or other place for the care or treatment of the sick or disabled, physically or mentally, nor any theater, saloon or other place of entertainment shall ever be erected or permitted upon any of said lots, or any part thereof, and no business of any kind or character whatsoever shall be conducted in or from any residence on said lots.

The trial court found that the appellants' operation of the residential facility for the developmentally disabled violated this restriction. The facility is admittedly a place for the care of individuals who are physically or mentally disabled. The appellants admit throughout their briefs that the facility provides care for such persons and in fact states that these persons live in the facility with an employee who provides them with "parental" care. The words used in the restrictive covenant must be given their plain ordinary meaning. Duffy v. Sunburst Farms East Mut. Water & Agric. Co., 124 Ariz. 413, 416, 604 P.2d 1124, 1127 (1979); Divizio v. Kewin Enter., 136 Ariz. 476, 481, 666 P.2d 1085, 1090 (App.1983). Therefore, the trial court correctly found that the facility used to care for mentally disabled individuals violated the plain words of the deed restriction.

The trial court also found that the state licensed and funded residential care facility violated the prohibition that "no business of any kind or character whatsoever shall be conducted in or from any residence on said lots," relying on Seaton v. Clifford, 24 Cal.App.3d 46, 100 Cal.Rptr. 779 (1972). Because the home violates the previously stated portion of the deed restriction by being a place for care of mentally disabled individuals, we need not decide whether the facility is a business within the meaning of the deed restriction. Likewise we need not reach the question of whether it violates the "single family dwelling house" restriction.

PUBLIC POLICY

This case concerns two conflicting public policies. On one hand, Arizona recognizes a public policy of enforcing the private restrictive covenants of land owners. E.g., Tucson-North Town Home Apartments Homeowners' Ass'n v. Robb, 123 Ariz. 4, 6, 596 P.2d 1176, 1178 (App.1979). On the other hand, Arizona has adopted the public policy of assisting the developmentally disabled by promoting their deinstitutionalization. This public policy is codified in part in the Developmental Disabilities Act of 1978. See Laws 1978, Ch. 198. Having decided that the facility violates the covenant, we must now decide if the policy in favor of the development of residential facilities for the mentally disabled should take precedence over the countervailing policy of freedom of contract.

The trend toward deinstitutionalization, the maintenance of disabled persons in a residential setting, began in the late 1960's. It has since spread throughout the United States. ¹ At least thirty states, including Arizona, have adopted statutes in aid of this movement. ²

Judicial interpretations of these statutes have followed this trend, bolstering the public policy in favor of deinstitutionalization. For example, in the early case of Seaton v. Clifford, 24 Cal.App.3d 46, 100 Cal.Rptr. 779 (1972), the court held that restrictive covenants should be strictly enforced to exclude residential facilities, notwithstanding statutes prohibiting local governments from excluding these facilities. This result, in effect, allowed private homeowners to do what was forbidden to government. Ten years later, another division of the California Court of Appeals came to the opposite result in Welsch v. Goswick, 130 Cal.App.3d 398, 181 Cal.Rptr. 703 (1982). It found that in light of the statutory enactments, private homeowners could not exclude residential facilities without showing the facility would somehow harm or alter the neighborhood. The statute in dispute was the same in both cases. However, the later court was far more willing to construe it to promote establishment of residential facilities. It found the 10-year-old Seaton decision of "limited persuasive value" because the issue of deinstitutionalization "is one of changed circumstances in a rapidly developing area of social concern...." Id. at 407, n. 7, 181 Cal.Rptr. at 708, n. 7. The court, citing recent case law from several jurisdictions, concluded the restrictive covenant "should no longer be interpreted to preclude" the operation of a residential facility. Id.

MARC contends that the Developmental Disabilities Act evidences a public policy in favor of residential facilities, such as this home, which is stronger than the public policy in favor of enforcing a contrary private covenant. To evaluate MARC's claim, "the court must look to legislative intent to determine whether a contract contrary to law is void as against policy." E & S Insulation Co. v. E.L. Jones Constr. Co., 121 Ariz. 468, 470, 591 P.2d 560, 562 (1979). The legislature specified its intent concerning residential facilities in the Act. It declared:

Section 1. Legislative intent

It is the public policy of this state that the state:

1. Provide, subject to available funds, a wide variety of services to mentally retarded persons admitted to state-operated services or programs which respond to the differing needs and abilities of such persons.

....

Section 40. Legislative findings and intent

A. The legislature finds and declares that the health and welfare of the state requires that community-based housing programs for mentally retarded persons should be expanded and should be the foundation of the state's mental retardation residential program. The legislature finds that because of the extreme difficulties in locating such housing programs in residential communities in other states, because of the necessity that this type of housing program be established in Arizona on a state-wide basis, and because of the diversities in Arizona's municipal zoning ordinances, that minimum statewide standards are required to permit this type of housing to be established in residential communities in this state.

The expansive language of the Act carries forth this intent. For example, A.R.S. § 36-551.01 provides:

A. No developmentally disabled person in this state shall be denied as the result of such developmental disability the rights, benefits, and privileges guaranteed by the Constitution and the laws of the United States and the Constitution and laws of the state of Arizona. The rights of developmentally disabled persons which are specifically enumerated in this chapter are in addition to all other rights enjoyed by such persons.

....

C. Every developmental [sic] disabled person who is provided residential care by the state shall have the right to live in the least restrictive alternative....

....

F. No owner, lessee, sublessee, assignee, or managing agent of, or other person having the...