Opinion
No. 32845-3-II.
June 14, 2006.
Appeal from a judgment of the Superior Court for Pierce County, No. 04-2-06181-0, John A. McCarthy, J., entered February 2, 2005.
Counsel for Appellant(s), Paul Edward Brain, Ater Wynne LLP, 601 Union St Ste 5450, Seattle, WA 98101-2327.
Counsel for Respondent/Cross-Appellant, Douglas N. Kiger, Blado Stratton Kiger PS, 3408 S 23rd St, Tacoma, WA 98405-1609.
Reversed by unpublished opinion per Houghton, J., concurred in by Quinn-Brintnall, C.J., and Van Deren, J.
Alan and Theda Fowler appeal from a summary judgment order, arguing that the trial court erred in finding valid amendments made to the Declaration of Restrictions, Easements, Covenants, and Conditions (CCRs) affecting their subdivision, Braecrest. We reverse and
FACTS
Nine different couples or individuals, including the Fowlers, Gregory and Heather Davidson, and James and Aimee Loucks, own parcels in an 11-lot subdivision known as Braecrest. The developer recorded the subdivision's CCRs in January 1971.
The original CCRs provided that the properties 'shall be used solely and exclusively for private one-family and two-family residences' (Article II, section a) and that trucks shall be 'housed within a garage or suitably screened from view from the street' (Article II, section e). Clerk's Papers (CP) at 9. Article V, section 1 provided that 'any lot or plot owner in Braecrest shall have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens, and charges now or hereafter imposed by the provisions of this Declaration.' CP at 10. Finally, Article V, section 3 stated: 'These covenants and restrictions may be amended by an instrument signed by not less than 75% of the lot or plot owners. Such amendment must be properly recorded.' CP at 10-11.
In August 2003, the Louckses moved into Braecrest. James Loucks works for Robison Construction, Inc. (RCI). In connection with his employment, James would drive an RCI tool truck home and park it on the street in front of his house. Additionally, the Louckses had snowmobiles and a camper on the lot, in view of the neighborhood.
After the Fowlers told the Louckses about the residential use restrictions and the parking restrictions contained in the original CCRs, the Louckses moved the snowmobiles. But they did not move the camper and RCI truck that remained in the neighbors' view.
The Fowlers tried unsuccessfully to resolve the issue with the Louckses. When those efforts failed, the Fowlers contacted Loucks's employer, RCI, in an attempt to prevent Loucks from taking the truck to Braecrest. In response to this contact and a copy of an unfiled complaint naming both the Louckses and RCI, RCI ordered Loucks not to take the truck home. Later, the Fowlers continued to ask the Louckses to comply with the provisions relating to the camper.
During February and March 2004, the Louckses began a process to amend the original CCRs without providing notice to the Fowlers and the Davidsons. Seven of the nine lot owners, comprising 78 percent of the lot owners, executed the document containing the amendments. The amendments were recorded in the Pierce County Auditor's office in early March (New CCRs).
Both the Fowlers and the Davidsons appeal. For convenience, we refer to them as the Fowlers.
Article II, section j of the New CCRs provides that 'recreational vehicles and equipment, and commercial vehicles used by owners and occupants in their employment must be housed within the owner/occupant's garage, or parked in that lot's additional on-site, off-street parking.' CP at 26. Article IV, section 1 changes the enforcement provision to require 75 percent of the lot or plot owners to execute a written document before enforcing any of the CCRs.
After amending and recording the New CCRs, the Louckses sent a copy to the Fowlers. In response, the Fowlers filed this lawsuit in which they sought a permanent injunction enjoining the Louckses from parking the RCI truck in violation of the original CCRs and a declaratory judgment that the New CCRs were null and void, that the original CCRs were valid and binding, and that the Louckses were in violation of the original CCRs. In response, the Louckses moved for summary judgment arguing the amendments' validity and requesting attorney fees.
The trial court entered an order granting the Louckses' motion for summary judgment. The Fowlers appeal.
ANALYSIS
The Fowlers challenge the amendment on two grounds. First, they argue that they had a right to receive notice of the amendment under Shafer v. Bd. of Trustees of Sandy Hook Yacht Club Estates, Inc., 76 Wn. App. 267, 273-74, 883 P.2d 1387 (1994), review denied, 127 Wn.2d 1003 (1995). And second, they argue that two of the amended provisions in the New CCRs are substantively inconsistent with the residential use restriction and the general plan of the development.
Standard of Review
On review of an order for summary judgment, we engage in the same inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004). We review questions of law de novo. Dep't of Labor Indus. v. Fankhauser, 121 Wn.2d 304, 308, 849 P.2d 1209 (1993). We uphold a summary judgment order only if 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' CR 56(c). We consider all facts in the light most favorable to the nonmoving party. Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P.3d 805 (2005).
Notice Requirement
The Fowlers first contend that Shafer's reference to a 'reasonable manner' establishes a procedural component to the amendment process, requiring notice and an opportunity to participate in the amendment. Thus, the question is whether the amendment of the original CCR procedurally complied with Meresse v. Stelma, 100 Wn. App. 857, 865-67, 999 P.2d 1267 (2000) and Shafer, 76 Wn. App. 267. That is, we must determine if the lack of notice to the Fowlers' of the new amendment rendered the amendment unreasonable.
In Shafer, Division One held that 'an express reservation of power authorizing less than 100 percent of property owners within a subdivision to adopt new restrictions respecting the use of privately owned property is valid, provided that such power is exercised in a reasonable manner consistent with the general plan of the development.' 76 Wn. App. at 273-74. In addition, Meresse held that "the law will not subject a minority of landowners to unlimited and unexpected restrictions on the use of their land merely because the covenant agreement permitted a majority to make changes to existing covenants." 100 Wn. App at 866 (quoting Boyles v. Hausmann, 246 Neb. 181, 517 N.W.2d 610, 617 (1994)). Thus, we invalidated the amendment because the homeowners in Meresse did not act in "a reasonable manner consistent with the general plan of the development." 100 Wn. App. at 865 (emphasis omitted) (quoting Shafer, 76 Wn. App. at 274).
Here, the Fowlers argue that a process that denies 23 percent of the lot or plot owners notice and an opportunity to participate constitutes an unreasonable manner under Shafer. They also argue, by analogy, that because Braecrest does not have a homeowners' association, they should have received notice as RCW 64.38.035(1) requires homeowners' associations to give notice of amendment proposals. Finally, they assert that restrictive covenants are akin to zoning regulations changes that require compliance with procedural and substantive due process.
The Fowlers' arguments do not persuade us. The release of a CCR is a real alienation and, therefore, in the usual course, all lot owners of lots subject to the CCRs must give consent to modify the provisions. But courts interpret covenants like contracts. See Hollis v. Garwall, Inc., 137 Wn.2d 683, 696, 974 P.2d 836 (1999). Article V(3) of the CCRs provided a different method for amendment; the covenants and restrictions may be amended by an instrument signed by not less than 75 percent of the lot or plot owners and be properly recorded. Essentially, the Fowlers ask us to revise the original CCRs to add a notice requirement to the amendment procedure. Reading a notice requirement into the CCRs that specifically provides for a different amendment procedure would impermissibly 'vary, contradict, or modify the written word.' Hollis, 137 Wn.2d at 695.
Shafer and Meresse do not establish a requirement of giving notice to all property owners in amending CCRs when the CCRs are silent. Article V(3) of the original CCRs set out a specific provision authorizing amendment by not less than 75 percent of the of the lot or plot owners. There is no mention of notifying all lot owners. In purchasing their home, therefore, the Fowlers must be deemed to have had actual or constructive notice that the CCRs could be changed through majority vote and that there were no specific notice requirements in order for the restrictions to be amended. See Wilchester West Concerned Homeowners v. Wilchester West Fund, Inc., 177 S.W.3d 552, 565 (Tex.App. 2005). Because the CCRs do not contain any specific notice requirement in the provision outlining the amendment procedure, the Fowlers' notice argument fails.
The Fowlers' arguments by analogy are equally unpersuasive. RCW 64.38.035 applies to homeowners' associations and is not at issue here. The Braecrest lot owners are not obligated to maintain common areas and do not have a homeowners' association. The distinction between a homeowners' association and a loosely-affiliated subdivision like Braecrest is that the legislature established a statutory notice requirement for the former but not for the latter. RCW 64.38.035(1). Contrary to the Fowlers' assertion, this is not a distinction without meaning. Finally, due process notice given during zoning amendments by governmental and quasi-governmental agencies does not create a notice requirement for a subdivision amendment. Accordingly, the trial court properly granted summary judgment on this issue.
RCW 64.38.010(1) states in pertinent part:
'Homeowners' association' or 'association' means a corporation, unincorporated association, or other legal entity, each member of which is an owner of residential real property located within the association's jurisdiction, as described in the governing documents, and by virtue of membership or ownership of property is obligated to pay real property taxes, insurance premiums, maintenance costs, or for improvement of real property other than that which is owned by the member.
Substantive Amendments
As we hold the amendment procedure valid, we next determine whether the two substantive amendments are 'consistent with the general plan of the development.' Shafer, 76 Wn. App. at 274. The Fowlers maintain that the amendment relating to commercial vehicle parking in the plat is inconsistent with the residential use restriction. They also challenge the amendment of the enforcement provision, which transferred the enforcement rights from one lot or plot owner to 75 percent of the owners.
The Fowlers do not assign error to the section of the amendment that now allows the parking of recreational vehicles and equipment in on-site, off-street parking.
Commercial Vehicle Parking
The Fowlers argue that the new provision on commercial vehicle parking is inconsistent with the residential use restrictions in both the original and New CCRs. The primary goal in interpreting covenants is to determine the intent or purpose of the covenants. Hollis, 137 Wn.2d at 696. In its first decision on incidental use, our Supreme Court held that the use of a residence as a convent did not violate a residential purpose restriction. Hunter Tract Improvement Co. v. Corp. of Catholic Bishop, 98 Wash. 112, 117-18, 167 P. 100 (1917). According to Hunter, the use of the residence was mainly residential and other uses, including daily religious services for the sisters and the occasional training of new members, were incidental to that residential use. 98 Wn. at 113, 115. Our Supreme Court also distinguished an incidental use from the main purpose and use and concluded that an adult family home inside a residence had a main purpose and use as a business. Mains Farm Homeowners Ass'n v. Worthington, 121 Wn.2d 810, 820-21, 854 P.2d 1072 (1993).
In Article II, section a, the original and New CCRs provide: 'All property in Braecrest shall be used solely and exclusively for private one-family and two-family residences.' CP at 9, 24.
Here, article II, section j of the New CCRs provides that 'commercial vehicles used by owners and occupants in their employment must be housed within the owner/occupant's garage, or parked in that lot's additional on-site, off-street parking.' CP at 26. According to our Supreme Court's distinction on incidental use, the parking of a commercial work vehicle at one's residence does not violate a residential use restriction because it lacks any element of commercialism. Unlike the use in Mains, the Louckses' main purpose and use is solely and exclusively as a single family residence, not as a commercial parking lot. The business use for the truck occurs at other locations, not at Braecrest. And as in Hunter, the mere parking of a work vehicle readily identifiable as belonging to a business does not, in and of itself, change the main purpose and use of the residence. That is, parking a work vehicle at a residence does not violate the residential use restriction because it is merely incidental to the use as a residence. Accordingly, the trial court properly granted summary judgment on this issue.
Enforcement Provision
The Fowlers also argue that the amended enforcement provision is inconsistent with the general plan of the development. Instead of enforcement by 'any lot or plot owner' under the original CCRs (article V, section 1), 75 percent of the lot or plot owners need to sign a written authorization to enforce the New CCRs (article IV, section 1). The Fowlers argue that this amendment destroys the general plan of the development by taking the right to enforce the CCRs away from individual lot owners and placing it in the hands of the neighborhood, defined as 75 percent of the lot or plot owners. They argue that without an effective enforcement mechanism, the protection of the covenants is rendered meaningless.
Like the amendment in Meresse, the amendment to the enforcement mechanism here creates a restriction on each individual lot owner that was not present in the original CCRs. Although the Louckses correctly point out that the amendment creates changes to the existing enforcement mechanism and did not create an entirely new restrictive covenant, this does not mean that the provision can be amended out of practical use. Unlike in Shafer, the new enforcement provision is not similar to the prior method of enforcement. The original CCRs' enforcement provision allowed for each individual lot owner to protect his or her property rights through individualized enforcement. But now the owners are restricted by the necessity to gather signatures from 75 percent of the owners. Thus, the new enforcement provision is a major change that creates a supermajority hurdle and restricts the rights of the individual lot or plot owners to enforce the CCRs.
Without defining the acceptable level of change that would be consistent with general plans of development, we hold that the amendment here is not consistent with the general plan of development at issue. Taking away an individual lot owner's power to enforce the covenants and requiring 75 percent of the lot or plot owners to join in writing before any enforcement is inconsistent with the protections under the general plan of the development. Consequently, the amendment to the enforcement provision is invalid, and the trial court erred in granting summary judgment to the Louckses.
Attorney Fees
Finally, the Louckses cross-appeal the denial of their request for attorney fees under RCW 4.84.185 (frivolousness) and request attorney fees on appeal under RAP 18.9(a). As we reverse and remand, the matter is not frivolous. The trial court did not err in declining to award fees. For the same reasons, we decline to award attorney fees and costs on appeal.
Reversed and remanded.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
QUINN-BRINTNALL, C.J. and VAN DEREN, J., concur.