Windemere Homeowners Ass'n Inc. v. McCue
| Decision Date | 30 November 1999 |
| Docket Number | No. 99-328.,99-328. |
| Citation | 297 Mont. 77,990 P.2d 769,1999 MT 292 |
| Parties | WINDEMERE HOMEOWNERS ASSOCIATION, INC., a Montana nonprofit corporation, Plaintiff and Respondent, v. Gregory S. McCUE, Robi L. McCue, Michael R. McCue, Ronald H. Perkins, Kathleen E. Perkins, Walter Perkins, Norma Perkins and Larry C. Manning, Defendants and Appellants. |
| Court | Montana Supreme Court |
Timothy D. Geiszler, Geiszler & Newcomer, PLLP; Missoula, Montana, for Appellants.
Quentin M. Rhoades, Sullivan & Tabaracci; Missoula, Montana, for Respondent.
¶ 1 This is an appeal from a declaratory judgment entered by the Fourth Judicial District Court, Missoula County. The court determined that the Windemere Homeowners Association, Inc., had authority, under a 1997 Amendment to restrictive covenants, to assess against subdivision tract owners the costs of paving a common road. The Appellants are tract owners who neither consented to nor approved the 1997 Amendment. We affirm.
¶ 2 The issues are:
¶ 3 1. Did the District Court err in determining that the clause of the restrictive covenants allowing for amendment authorized the creation of new or unexpected restrictions not contained or contemplated in the original covenants? ¶ 4 2. Does the court's determination that the paving of Windemere Drive was done to address health and safety concerns of the residents represent reversible error?
¶ 5 3. Did the court err in determining that the 1997 Amendment is valid and binding upon the Appellants' parcels even though the amendment did not contain any legal descriptions of the tracts of land owned by the Appellants?
¶ 6 The Windemere Homeowners Association brought this declaratory judgment action seeking enforcement of a 1997 amendment to restrictive covenants on the Appellants' parcels of property near Big Flat Road in Missoula County. For purposes of reciprocal summary judgment motions, the parties stipulated to a written set of agreed facts.
¶ 7 The parties stipulated that all parties to this lawsuit own or have owned, during times pertinent to this action, residential real estate in Missoula County, Montana, and described on Certificate of Survey (COS) 1131. On February 17, 1984, a Declaration of Restrictive Covenants was recorded with the Missoula County Clerk and Recorder affecting lots 1 through 7 and 9 through 15 of COS 1131. Between 1984 and 1991, several transfers of development rights and amendments to the covenants were recorded, the validity of which was not questioned and which are not relevant to our analysis in this case.
¶ 8 On March 1, 1994, another Amendment to Declaration of Restrictive Covenants was recorded with the Missoula County Clerk and Recorder. Holders of over 65 percent of the acreage within lots 1 through 7 and 9 through 15 approved the changes, and thus validly modified the covenants. The 1994 Amendment bifurcated the effect and enforcement of the covenants so that the real property lying west of Big Flat Road in tracts 1 through 5 was separated from the tracts lying east of the road in tracts 6, 7, and 9 through 15.
¶ 9 On March 20, 1997, another Amendment to Declaration of Restrictive Covenants was recorded with the Missoula County Clerk and Recorder. This Amendment was approved by 74 percent of the owners of lots 6, 7, and 9 through 15 of COS 1131, and purports to modify the covenants and restrictions applicable to those lots. The 1997 Amendment created the Windemere Homeowners Association, Inc., and made the Association responsible for necessary maintenance, repair, reconstruction, and snow removal on Windemere Drive. The 1997 Amendment further granted the Association authority to reimburse the parties who had paid for the paving of Windemere Drive in 1996 and to assess tract owners for the costs of such reimbursement. The Association's unsuccessful attempts to collect on its resulting assessments for the paving of Windemere Drive culminated in this action.
¶ 10 Because this case was decided on cross-motions for summary judgment, this Court conducts the same evaluation as did the District Court, based upon Rule 56, M.R.Civ.P. Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. If, as is conceded here, there are no genuine issues of material fact, our standard of review is whether the District Court erred in determining that the successful movant for summary judgment was entitled to judgment as a matter of law. Bruner, 272 Mont. at 265, 900 P.2d at 903.
¶ 11 Did the District Court err in determining that the clause of the restrictive covenants allowing for amendment authorized the creation of new or unexpected restrictions not contained or contemplated in the original covenants?
¶ 12 The parties agree that the question of whether restrictive covenants may be amended to oblige a nonconsenting landowner to new or different use restrictions is a question of first impression in Montana. The District Court concluded that such a result could be accomplished here, based upon the language of the particular covenants in effect in this case. ¶ 13 Restrictive covenants are construed under the same rules as are other contracts: courts read declarations of covenants on their four corners as a whole and terms are construed in their ordinary or popular sense. Newman v. Wittmer (1996), 277 Mont. 1, 6, 917 P.2d 926, 929. While restrictive covenants are strictly construed and ambiguities are to be construed to allow free use of the property, free use of the property must be balanced against the rights of other purchasers in the subdivision. Newman, 277 Mont. at 6,917 P.2d at 929.
¶ 14 Appellants point out that restrictive covenants should not be extended by implication or enlarged by construction. Higdem v. Whitham (1975), 167 Mont. 201, 208-09, 536 P.2d 1185, 1189-90. In Jarrett v. Valley Park, Inc. (1996), 277 Mont. 333, 341, 922 P.2d 485, 489, we clarified that "our meaning was that the district court could not `broaden' the covenant by adding a limitation not contained therein."
¶ 15 The Appellants rely upon Lakeland Property Owners Association v. Larson (1984), 121 Ill.App.3d 805, 77 Ill.Dec. 68, 459 N.E.2d 1164, 1169; Caughlin Ranch Homeowners Association v. Caughlin Club (1993), 109 Nev. 264, 849 P.2d 310; and Boyles v. Hausmann (1994), 246 Neb. 181, 517 N.W.2d 610, for their holdings that the power to amend restrictive covenants could not bind nonconsenting landowners to restrictions on use not contained in the original covenants. The Appellants urge this Court to adopt a similar holding here.
¶ 16 In both Lakeland and Caughlin, the clauses allowing amendment to the original restrictive covenants were quite limited. In Lakeland, the provision permitting the change of covenants:
[C]learly directs itself to changes of existing covenants, not the adding of new covenants which have no relation to existing ones. This provision precedes the covenants, states that it permits changes to "the following covenants," and permits a majority of the lot owners to change "the said covenants."
Lakeland, 77 Ill.Dec. 68, 459 N.E.2d at 1169. In Caughlin, the amendment provisions in the original covenants allowed for the amendment of assessment obligations imposed upon owners of single-family residences or a living unit in multi-family residences. The amendment which was challenged in Caughlin, however, provided for assessments on new classifications of commercial or recreational property. Caughlin, 849 P.2d at 312.
¶ 17 In Boyles, the original covenants allowed for changes to "[t]hese covenants, water use regulations, restrictions and conditions" if a majority of the then owners agreed to "change same in whole or in part." Boyles, 517 N.W.2d at 616. The court held that this grant of amendatory power did not give the majority authority to adopt a new covenant prohibiting building within 120 feet of the county road which ran through the subdivision-a use not previously restricted. Boyles, 517 N.W.2d at 616.
¶ 18 In the present case, the original February 1984 declaration of restrictive covenants included the following provision allowing for amendment of the covenants:
The covenants, conditions, restrictions and uses created and established herein may be waived, abandoned, terminated, modified, altered or changed as to the whole of the said real property or any portion thereof with the written consent of the owners of sixty-five percent (65%) of the votes from the real property described herein above. Each acre shall be entitled to one (1) vote in any election to decide any issues involving waiver, abandonment, termination, modification, alteration or change of the restrictive covenants as to a whole of the real property or any portion thereof.
Appellants rely on the above reference to covenants "created and established herein," contending that this language limits the amendatory power to covenants already present in the 1984 covenants. They further maintain that the 1997 Amendment seeks to create new and substantially different covenants rather than to amend existing covenants.
¶ 19 Appellants' observations are correct, to a point. However, the remaining language of the 1984 covenant printed above is broad. The drafters used universal language to describe the kinds of changes a super-majority of at least 65 percent of the tenants may make: "waive[], abandon[], terminate[], modify[], alter[] or change[]." Further, the original covenants clearly provide that every aspect of the "covenants, conditions, restrictions and uses" is subject to such amendment by a super-majority.
¶ 20 In Sunday Canyon Property Owners Association v. Annett (Tex.App.1998), 978 S.W.2d 654, a Texas court of appeals considered restrictive covenant language remarkably similar to the language in the present case. The Sunday Canyon covenants provided:
The covenants, conditions[,]...
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