Winney v. The Hoback Ranches Prop. Owners Improvement & Serv. Dist.

• Decision Date: 24 November 2021
• Docket Number: S-21-0057
• Citation: Winney v. The Hoback Ranches Prop. Owners Improvement & Serv. Dist., 2021 WY 128, S-21-0057 (Wyo. Nov 24, 2021)
• Parties: J. WILLIAM WINNEY, JR. and LOUISE B. WINNEY, Appellants (Plaintiffs), v. THE HOBACK RANCHES PROPERTY OWNERS IMPROVEMENT AND SERVICE DISTRICT a/k/a Hoback Ranches Service and Improvement District and MICHAEL TROY JERUP, Appellees (Defendants).
• Court: Wyoming Supreme Court

2021 WY 128

J. WILLIAM WINNEY, JR. and LOUISE B. WINNEY, Appellants (Plaintiffs),
v.
THE HOBACK RANCHES PROPERTY OWNERS IMPROVEMENT AND SERVICE DISTRICT a/k/a Hoback Ranches Service and Improvement District and MICHAEL TROY JERUP, Appellees (Defendants).

No. S-21-0057

Supreme Court of Wyoming

November 24, 2021

Appeal from the District Court of Sublette County The Honorable Marvin L. Tyler, Judge.

Representing Appellants: Clark Stith, Rock Springs, Wyoming.

Representing Appellee the Hoback Ranches Property Owners Improvement and Service District: Stuart R. Day of Williams, Porter, Day & Neville, P.C., Casper, Wyoming.

Representing Appellee Michael Troy Jerup: Erica R. Day of Williams, Porter, Day & Neville, P.C., Casper, Wyoming.

Before FOX, C.J., and DAVIS, KAUTZ, BOOMGAARDEN, and GRAY, JJ.

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KAUTZ, Justice.

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[¶1] J. William Winney, Jr., and Louise B. Winney (the Winneys) reside in the Hoback Ranches subdivision in Sublette County, Wyoming. They brought suit against the Hoback Ranches Property Owners Improvement and Service District (HRISD) and their neighbor, Michael Troy Jerup, alleging (1) HRISD illegally imposed annual property tax levies on the subdivision's landowners in excess of 8 mills; (2) HRISD violated the subdivision's protective covenants by installing wire fencing around the subdivision's perimeter; and (3) Mr. Jerup violated the covenants by conducting commercial activity on his property. HRISD and Mr. Jerup filed a counterclaim against the Winneys alleging they violated the protective covenants by installing two wood posts set in concrete within a roadway easement. The district court granted summary judgment to HRISD on the Winneys' claims against it; granted summary judgment to HRISD and Mr. Jerup on their counterclaim against the Winneys; and entered judgment in favor of Mr. Jerup on the Winneys' claim against him after a bench trial. We conclude the district court erred in granting summary judgment to HRISD on the perimeter fence issue and reverse and remand with respect to that issue. We affirm the district court's decision in all other respects.

ISSUES

[¶2] The Winneys raise four issues, which we restate as follows:

1. Did the district court err in deciding HRISD's taxing authority was not limited by the 8 mill levy limitation contained in the Petition for Formation?

2. Did the district court err in concluding HRISD was not bound by the protective covenants applicable to the Hoback Ranches subdivision, including their requirement that all fences be of buck and pole construction?

3. Did the district court err in deciding HRISD had the authority to enforce the protective covenants' easement provision against the Winneys?

4. Did the district court clearly err by finding Mr. Jerup had not conducted commercial activity upon his property?

FACTS

Creation of Subdivision and Protective Covenants

[¶3] In 1976, Hoback Ranches, Inc., through its President Doyle F. Child, recorded a subdivision plat creating the Hoback Ranches, a 6, 500-acre rural residential subdivision in Sublette County, Wyoming. The subdivision's plat noted in relevant part: "All road right-of-way widths are 66 feet, 33 feet either side of the shown centerline . . . . Where no roads

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are shown, access to tracts is to be along property lines." (Capitalization omitted). It also stated: "No public maintenance of roads." (Capitalization omitted).

[¶4] On the same day Hoback Ranches, Inc., recorded the subdivision plat, it filed a "Declaration of Protective Covenants" applicable to the subdivision. The stated purposes of the covenants are "to insure the use of the property for attractive residential purposes, to prevent nuisances, to prevent the impairment of the attractiveness of the property, [and] to maintain the natural environment and protect the ecology of the area" thereby "secur[ing] to each tract owner the full benefit and enjoyment of his respective tract." Relevant here, the protective covenants provide:

1. All lands covered by this deed shall be used for residential purposes only, and no commercial activity shall be conducted or permitted thereon.

* * * *

9. All fences shall be of buck and pole construction made of rough native timber. The buck shall be at least six feet tall and there shall be at least four poles on each span and each span can be no longer than 12 feet in width. The owner of each tract shall be responsible for erecting and maintaining a fence and gates around his respective tract if he desires to prevent the trespass of cattle or other livestock grazing or being ridden in the area.

* * * *

20. There are hereby reserved to grantors for the purpose of having adequate bridle paths, roadways, and utility easements to serve each tract, a perpetual easement 33 feet in width along each edge of the herein described tract[s], for the purpose of erecting, constructing, and maintaining bridle paths, roadways, and public utility facilities, both underground and overhead. Grantor hereby reserves the right to change, layout a new, or discontinue any roadway, bridle path, or utility easement, in its sole discretion, that would be beneficial in serving any tract in Hoback Ranches . . . .

[¶5] The covenants state they "shall be perpetual and shall apply to and be forever binding upon the grantees hereof, [their] heirs, executors, administrators, and assigns, and are imposed upon the realty described herein as an obligation and charge against the same for the benefit of the grantor herein and the owners of each adjoining tract, their successors and assigns, and as a general plan for the benefit of said tract and all tracts in Hoback Ranches." They give Hoback Ranches, Inc., and the subdivision's landowners the authority to enforce the covenants by filing a lawsuit against the violator "either to prevent

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him from doing so, or to recover damages, including costs and reasonable attorney fees, for such violation, or both."

Formation of HRISD

[¶6] For the first nine years of the subdivision's existence, Hoback Ranches, Inc., and/or Mr. Child paid to maintain and improve the subdivision's roads and perimeter fence and to keep hunters out of the subdivision. In early 1985, Mr. Child informed the subdivision's landowners that beginning in 1986, he and Hoback Ranches, Inc., would no longer provide these services and recommended the formation of a property owners' improvement and service district with taxing authority.

[¶7] A petition to form the improvement and service district ("Petition for Formation" or "Petition") was circulated to the subdivision's landowners. The Petition requested the Sublette County Commissioners form and establish the district "for the maintenance of the perimeter fence[] around the boundary of the proposed District, for the protection from hunters within the proposed District and for the maintenance of roads which are located in the proposed District and road(s) leading from U.S. Highway 187 and 189 to the boundary line of the proposed District and from one part of the proposed District to another part of the proposed District." It "proposed" the district be financed as follows:

[Y]our petitioners request that a mill levy be assessed against the land within the proposed District sufficient to fund the improvement and services as hereinbefore proposed, the total amount of the assessment against the land located within the proposed District to be apportioned and assessed against the various lots and tracts of land located in the proposed District based upon the assessed valuation of said land and real property located within the proposed District as valued and used by the County Assessor for Sublette County in making assessment upon said land and real property for other taxes levied against said property by the County Assessor. However, your petitioners request that a limit of eight (8) mills be imposed as the maxi[m]um amount of assessment which may be levied upon said property as aforementioned.

(Emphasis added).

[¶8] After the Petition for Formation was signed by the requisite number of landowners, the Sublette County Commissioners published notice they would be holding a public hearing concerning the Petition on August 20, 1985. The record does not contain the

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complete notice.^[1] From the information available, it provided the following as to the "Proposed Financing Arrangements" of the district:

That a mill levy be assessed against the land within the proposed district sufficient to fund the [proposed] improvements and services . . ., the total amount of the assessment against the land located within the proposed district to be apportioned and assessed against the various lots and tracts of land located in the proposed district.

The notice did not contain any language indicating HRISD's taxing authority would be limited to 8 mills.

[¶9] At the public hearing, the Sublette County Commissioners found "the establishment of the proposed district would serve the public convenience and necessity" in the subdivision. They passed Resolution 86-85J establishing HRISD "for the purpose[s] of maintaining the perimeter fence[] around the boundary of [HRISD], of protecting [HRISD] from hunters, and of maintaining roads located in [HRISD] and road(s) leading from U.S. Highways 187 and 189 to the boundary line of [HRISD]." HRISD's boundaries were the subdivision's boundaries. The resolution called for an election by the subdivision's landowners to be held in August 1986 to decide whether to organize HRISD and to appoint an initial board of directors. Resolution 86-85J did not mention how HRISD would be funded, let alone impose any limitation on its authority to collect revenue.^[2]

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[¶10] The Sublette County Clerk provided notice of the August 1986 election. The notice...