Woodglen Estates Ass'n v. Dulaney

• Decision Date: 27 March 2012
• Docket Number: No. WD 73123.,WD 73123.
• Citation: 359 S.W.3d 508
• Parties: WOODGLEN ESTATES ASSOCIATION, Respondent, v. Della Joan DULANEY, Co–Trustee Of The Della Joan Dulaney Trust, et al., Appellant.
• Court: Missouri Court of Appeals

359 S.W.3d 508

WOODGLEN ESTATES ASSOCIATION, Respondent,

v.Della Joan DULANEY, Co–Trustee Of The Della Joan Dulaney Trust, et al., Appellant.

No. WD 73123.

Missouri Court of Appeals, Western District.

Feb. 14, 2012.Rehearing Denied March 27, 2012.

Dennis J.C. Owens and Jonathan Sternberg, Kansas City, MO, for appellant.

Russel M. Nasteff, Kansas City, MO, for respondent.

Before: VICTOR C. HOWARD, P.J., and ALOK AHUJA and KAREN KING MITCHELL, JJ.

ALOK AHUJA, Judge.

Woodglen Estates Association sued Della Joan Dulaney and Everett Dulaney, as co-trustees of the Della Joan Dulaney Trust (collectively “the Dulaneys”), in the Circuit Court of Jackson County, to recover unpaid assessments allegedly owed by the Dulaneys on seventeen undeveloped parcels of land within the Woodglen Estates subdivision. The claims were tried to a jury. After the close of the evidence, the trial court directed a verdict for the Association concerning the Dulaney's liability for the assessments. The jury then awarded the Association damages of $54,500.00 for unpaid assessments and interest. The Dulaneys appeal, arguing that the circuit court erred in granting a directed verdict because their unimproved lots are not subject to assessments, and because the Association failed to follow the procedures specified in the subdivision covenants in imposing and seeking to collect the assessments. We affirm.

Factual Background

Woodglen is an association of owners of property in Woodglen Estates, a subdivision in Kansas City. Woodglen Estates consists of thirty-three improved parcels, as well as seventeen undeveloped lots, all owned by the Dulaneys. The subdivision is subject to a Declaration originally executed by developer Braeman Development Company in July 1973, and amended thereafter.

Braeman transferred title to the seventeen undeveloped properties to a company called Lifestyle Development, which in turn transferred them to Crest Financial. The Federal Deposit Insurance Corporation took title to the properties after Crest Financial failed, and sold the properties by quitclaim deed to Everett Dulaney in March 1999. In 2005, he transferred the parcels to the Della Joan Dulaney Trust, of which he and his wife Della Joan Dulaney are co-trustees.

Prior to June 2006, the Dulaneys received no assessment statements from Woodglen, and it appears that no assessments were billed for the seventeen lots prior to the Dulaneys' ownership. In 2006, however, Home Owners Association Services (“HOAS”), a contractor performing administrative services for the Association, conducted an audit and discovered that that the Dulaneys had never paid subdivision assessments. HOAS informed Woodglen of the situation. On June 2, 2006, Woodglen notified the Dulaneys that they owed $69,190 in assessment arrearages from March 1999 through April 2006. HOAS also sent the Dulaneys a coupon book invoicing them for assessments, and followed up with delinquency notices. The Dulaneys never paid, and the Association placed liens on each of their properties.

On July 25, 2008, the Association filed seventeen separate petitions in the Circuit Court of Jackson County against Della Joan Dulaney as trustee of the Della Joan Dulaney Trust, seeking a judgment for the unpaid assessments, and foreclosure of its liens. After the court consolidated the petitions into one case, the Association amended the petition to name both Dulaneys as co-trustees and beneficiaries of the Trust.¹ The Association sought $192,774.56, calculated as $142,785 in principal, and $49,989.56 in interest at 9%. The Dulaneys answered that their parcels could not be assessed under the Declaration, and asserted a counterclaim against the Association, and a third-party claim against HOAS, for slander of title.

The Dulaneys' motions for summary judgment and for judgment on the pleadings were denied. The case proceeded to a jury trial. After the close of the evidence, the circuit court granted the Association's motion for a directed verdict as to the Dulaneys' liability.² The jury awarded the Association $54,500 in damages, representing $50,000 for unpaid assessments, and $4,500 in interest. After the Dulaneys' motion for a new trial and remittitur were denied, they appealed to this Court; however, we held that the judgment was not final because the Association's motion for attorneys fees was unresolved. The trial court subsequently awarded the Association $23,071.74 in attorney's fees and $3,269.31 in costs. The Dulaneys again appealed.

Standard of Review

The trial court generally may not direct a verdict in favor of the party who carries the burden of proof. However, there are exceptions to the rule where the opponent admits the truth of the basic facts upon which the claim of the proponent rests or the proof of the facts is altogether of a documentary nature. If the facts are shown by documents, the documents' correctness and authenticity are not questioned, impeached, or contradicted, and the documents establish facts beyond all doubt showing the proponent is entitled to relief as a matter of law, then the trial court may direct a verdict in favor of the proponent. This is upon the theory that there is no question of fact left in the case and that upon the questions of law involved the jury has no right to pass. When the grant of a directed verdict is based upon a conclusion of law, we review the trial court's decision de novo.Mitchell v. Residential Funding Corp., 334 S.W.3d 477, 495–96 (Mo.App. W.D.2010) (citations and internal quotation marks omitted).

Analysis

The Dulaneys challenge the entry of a directed verdict on two grounds. First, they contend that the circuit court erred in finding that their properties are subject to assessments because they are the succesors-in-interest to the subdivision's developer, and property held by the developer is not subject to assessments. Second, the Dulaneys claim that the circuit court erred in finding them liable for assessments because the Association failed to follow the procedures specified in the Declaration for establishing and collecting assessments. According to the Dulaneys, the Association: failed to include the Dulaneys' parcels in their annual budgets when proposing assessment increases; failed to give them notice of, and an opportunity to vote at, the meetings at which assessment increases were adopted; and failed to have a court determine the amount of unpaid assessments before seeking to foreclose upon its liens. We find no merit in these arguments, and accordingly affirm.

I.

The Dulaneys first argue that they are successors-in-interest to the developer, Braeman Development Company, and that (among other things) they succeeded to the developer's immunity from subdivision assessments. Like all property owners in the subdivision, the Dulaneys have come to own property previously owned by Braeman. The mere fact that the Dulaneys succeeded to title formerly held by Braeman does not mean, however, that they acquired all of the developer's rights, including any exemption from assessments. As a general proposition, “the developer's rights of a platted subdivision are personal rights that do not run with the land.” Scott v. Ranch Roy–L, Inc., 182 S.W.3d 627, 633 (Mo.App. E.D.2005) (“ Scott I ”). While those rights may be assignable, “[i]t is essential to an assignment of a right that the obligee manifest an intention to transfer the right to another person without further action or manifestation of intention by the obligee.” Id. at 634 (quoting Restatement (2d) of Contracts § 324 (1981)); see also Scott v. Ranch Roy–L, Inc., 242 S.W.3d 401, 406 (Mo.App. E.D.2007) ( “ Scott II ”).

Here, the seventeen parcels of undeveloped land the Dulaneys acquired passed through multiple intervening owners prior to the Dulaneys' acquisition: Lifestyle Development, Crest Financial, and the Federal Deposit Insurance Corporation. While the quitclaim deed by which the FDIC transferred the property to Everett Dulaney was admitted into evidence, the Dulaneys cite to no evidence in the record concerning the terms of the transactions by which the property was transferred to the owners intervening between them and the subdivision's initial developer. The only evidence in the record concerning these intervening transactions is Everett Dulaney's trial testimony, in which he merely listed the entities which had previously owned the property. This testimony was insufficient to establish that the original developer, and each successive owner of the property, manifested an intention to transfer, not just title to the land, but the developer's rights set forth in the Declaration.

Even assuming that the Dulaneys did succeed to Braeman's rights as developer under the Declaration, however, the Declaration did not exempt the developer from the assessments generally applicable to all property within the subdivision.

“The Declaration regulates the relationship of the real estate developer to its subdivision, as well as the purchasers of property.” Marshall v. Pyramid Dev. Corp., 855 S.W.2d 403, 406 (Mo.App. W.D.1993). “The Declaration is a restrictive covenant between the Developer, the Association, and its members. A restrictive covenant is a private contractual obligation generally governed by the same rules of construction applicable to any covenant or contract.” Wildflower Cmty. Ass'n v. Rinderknecht, 25 S.W.3d 530, 534 (Mo.App. W.D.2000) (citations and internal quotation marks omitted). That said, “[r]estrictive covenants are not favorites of Missouri law. ‘[W]hen interpreting such covenants, courts should give effect to the intent of the parties as expressed in the plain language of the covenant; but, when there is any ambiguity or substantial doubt as to the meaning, restrictive covenants will be read narrowly in favor of the free use of property.’ ” Mullin v. Silvercreek Condo. Owner's Ass'n, Inc., 195 S.W.3d 484, 490 (Mo.App. S.D.2006) (citing and quoting Blevins v. Barry–Lawrence...