Wasatch County v. Okelberry, Round 2 of __?

You may recall this post from two years ago, where I reported on a trilogy of cases which dealt with the public dedication of private roadways; in the opinions, the Utah Supreme Court held that “An overt act that   is intended by a property owner to interrupt the use of a road as a public thoroughfare, and is reasonably calculated to do so, constitutes an interruption sufficient to restart the required ten-year period under the Dedication Statute.”

The Okelberrys and Wasatch County were the parties to one of those three cases, and when the Supreme Court issued its opinion, it sent them back to the trial court for further proceedings, in light of its clarification.  The Okelberrys sought a new hearing or trial to present evidence on their intent; the trial court denied that request and reviewed prior pleadings, new memoranda and heard new arguments.  The trial court found that there were gates on the roads, and that the gates were intermittently locked.  The court stated that Ray Okelberry had testified that he locked the gates but “he did not testify that he intended to keep the public from accessing the roads at this time.

The appellate court reviewed this history, and ultimately sent the case back, once again, to the trial court to “give the parties an opportunity to present evidence related to the Okelberrys’ intent to interrupt public use and identify with more specificity whether and when the gates were closed and locked and the intent of those actions.”

I think we can anticipate another appeal in a couple of years, at which time the court will review the credibility of Okelberrys’ almost certain testimony that the locks were indeed put there to stop people, (rather than exceptionally intelligent Wasatch County livestock with opposable hooves), and Wasatch County’s contention that that testimony is not credible.  Hopefully, when presented with that evidence, the appellate courts will allow this case to be finally resolved.

South Ridge HOA v. Brown — What’s a "Short-Term" Rental?

In an opinion issued about a month ago, the Utah Court of Appeals decided that “a weekly rental is clearly similar to nightly rentals and timeshares, when considering those terms together.”

The case arose from language contained in the South Ridge Homeowners’ Association’s Declaration of Covenants, Conditions and Restrictions (C, C & Rs) that provided, in relevant part, “No timeshare, nightly rental or similar use will be allowed on any single family lot.”  The court thus considered its task to be to determine “whether Brown’s weekly rentals were uses similar to a nightly rental or timeshare.”  The court concluded that “a weekly rental is clearly similar to nightly rentals and timeshares, when considering those terms together.”  In coming to this conclusion, the court focused on the fact that the “common thread” of these short duration rentals is that “people will be coming and going for short periods of time.”

The court ultimately ruled in favor of the association, and surprisingly affirmed the lower court’s broad injunction, despite the fact that the court found “the breadth of the trial court’s injunction more troubling…”  Under the injunction, Ms. Brown was to notify the association of the identity of her visitors and the duration of their visits.  The association’s counsel argued that the requirement of notification was only to apply to those guests who were not accompanied by Ms. Brown, but that was not in the order.  The dissent agreed with the majority’s interpretation of the C, C & Rs, but would have limited the injunction to prospectively prohibit the disputed short-term rentals, without a requirement of advance disclosure of occupancies.

I’m not certain whether I disagree with the court’s ultimate conclusion in this case, although I’m a bit disappointed as to how they got there.  First of all, in order to interpret the contract as a matter of law, they had to find the contract to be unambiguous.  I’m troubled that they quickly disregarded the provisions which allowed an owner to “rent or lease said owner’s residential building from time to time.” Brown’s counsel asserted, and it was apparently not challenged, that the rentals happened “occasionally” and “fewer than six” times a year.   Thus it appears uncontested that the frequency of the rentals was not in violation of the covenants, leaving only their duration of possible violation.  In that regard, the court relied upon the “timeshare” language to expand the prohibition of “nightly” rentals.

What the court appears to have disregarded is that a “timeshare” is a particular type of ownership, and not directly related to rental periods, or even really related to a rental of a unit by its owner.  Timeshares are specifically defined and regulated by an entire chapter of the Utah Code, (Utah Code Ann 57-19), and that a timeshare unit is intended primarily to be owned among a wide variety (presumably 52) groups of owners, whereas Ms. Brown’s rentals were occurring at about 10% of that frequency.  I think it’s a stretch, at best, to conclude “as a matter of law,” that the uses are similar.  The  conflict between the “time to time” language and the “nightly” prohibition seems to have created an ambiguity which, under traditional jurisprudential rules, must be determined by a jury.  See, e.g. Rubey v. Wood, 15 Utah 2d 312     (1964).    

CCAL Seminar — The Case Law Update

One of the many highlights, and always the best-attended events of the CCAL Law Conference, are the two morning sessions of the Case Law Update, which has been presented for the past several years by the team of Wilbert Washington II, Esq., CCAL and George E. Nowack, Jr., Esq., CCAL.  Their always interesting and humerous presentation is based upon a compilation of leading cases of the preceding year; the cases are compiled and summarized by Donald Dyekman, Esq., CCAL.
Here’s my summary of their commentary on the cases; if and when I get Don’s permission, I’ll add a link to his compilation, which includes even more cases, and some slightly different commentary.
Amendment of Covenants and Bylaws
Apple Valley Gardens Association, Inc. v. MacHutta, 763 N.W. 2d 126 (Wisc., 2009) involved a lease restriction adopted through an association’s bylaws; the court upheld the amendment.  The bylaw amendment had not been recorded..
Riverview Heights Homeowners’ Association & Riverview Heights Homeowners, Inc., v. Rislov, 205 P.3d 1035 (Wyo., 2009) involved a challenge to an amendment that had purportedly been adopted, but had not been memorialized as required – the declaration required attestation in the “form of a deed.”   The court invalidated the amendment based upon the improper attestation..
Nikolai v. Deer Run Owners’ Association, 2009 Ohio App. LEXIS 5525 (Ohio App. 2009) held that the shifting of a roof’s status from common area to limited common area, (in order to shift maintenance responsibility),  constituted a change in the “Units” and thus required unanimity.  
In Platt v. Aspenwood Condominium Association, Inc., 214 P.3d 1060 (Colo. App., 2009), the association developed two lots on the common area, and then contracted with members for the purchase of one of the lots.  The association demanded supermajority consent for the sale, and the court affirmed that action.  The court, however, questioned the association’s good faith.
The association’s letter seeking approval, however, indicated that the sales may have been under contract at too low of a price, and pointed out that the association’s failure to approve the sale would have reduced the assessments for all unit owners.
Raphael v. Silverman, 2009 Fla. App. LEXIS 17689 (Fla. App., 2009) involved an association board’s decision to replace balcony dividers with transparent, rather than opague, dividers.  The Raphaels sued the association and the board members individually.  The plaintiffs’ allegations of self-dealing on behalf of the unit owners were dismissed, in the absence of evidence respecting any particular individual benefit to the board members.
Cohn v. The Grand Condominium Association, Inc., 2009 Fla. App. LEXIS 16833 (Fla. App., 2009) involved a mixed use community.  After the formation of the association, Florida law changed, requiring a majority control by residential owners.  Many years later, that statute was further amended, to make it retroactive.
The commercial owners raised a constitutional argument, that asserted that no law could abridge contractual rights.  The court imposed a balancing test, starting with an implied limitation requiring a substantial impairment.  The court found this to be a substantial impairment on the association’s voting structure, and found for the commercial and retail owners.
Wil Washington calls the Village of Doral Place Association, Inc., v. For Sale by Owner Realty, Inc., 2009 Fla. App. LEXIS 15540 (Fla. App., 2009). , the “Nightmare on Doral Place” suit.  Shortly after the transition, the manager received a tax notice on the property on which the association was owned for $2,593.85, which was not paid; another party bought the property and fenced off the pool.  The tax sale was affirmed; ultimately the association had to buy the property back from the subsequent pool owner.
Comcast of Florida, L.P. v. L’Ambiance Beach Condominium Association, Inc., 17 So. 3d 839 (Fla. App., 2009) involved a dispute as to the continued enforcement of a developer’s contract following transition.  The association succeeded in determining that the developer had properly reserved the right to terminate the contract at the time of transition.
Lake Forest Master Community Association, Inc. v. Orlando Lake Forest Joint Venture, 10 So. 3d 1187 (Fla. App., 2009) was a construction defect case; the developer sought to have the suit dismissed based upon an alleged failure to seek association approval of a lawsuit.  In fact, however, the lawsuit had been approved in a third rescheduled meeting; the developer challenged the propriety of notice for the third rescheduled meeting.  The court noted that the association had properly followed the procedure for the meetings; unfortunately, the association’s minutes of the second meeting failed to note the adjournment of the meeting.  Parol evidence was allowed, and the association’s secretary recalled the adjournment and re-notice.  The developer’s last argument, that the majority vote requirement was a requirement for a majority of all, also failed.
Covenant Enforcement
Musgrove v. Westridge Street Partners I, LLC, 2009 Tex. App. LEXIS 2660 (Tex. App., 2009).   Covenants imposed in the 1940s required single-family homes and greenspace; for many years thereafter, they were ignored.  One of the remaining two lot owners offered to sell his lot to the developer; the developer declined, and the would-be seller sued.  The court noted that no one had sought to sue for fifty years; indeed the court found that the seller was unaware of the covenants until after he sued.  The court found that the restriction had been abandoned.  The unit owner tried to argue that the non-waiver clause precluded this result, but the court held the non-waiver clause to have been abandoned.
Schwartz v. Banbury Woods Homeowners Association, Inc., 675 S.E. 2d 382 (N.C. App., 2009).   This 14-page opinion, according to George Nowack, answers the question of whether a motor home is a camper.  The owners said that their use of the motor home as an extra bedroom, occasional refrigerator and “granny unit” excluded them from the otherwise applicable screening requirement.  
The owner relied upon the motor vehicle code, suggesting that the distinction between a self-propelled vehicle and a camper in the statute was relevant; the court made a historical inquiry and decided that a motor home was, indeed, a camper.
Fox v. Madsen, 12 So. 3d 1261 (Fla. App., 2009) dealt with the statute of limitations in a challenge to a condominium declaration amendment; the court found the applicable statute to be the 5-year statute respecting contracts.
Westgate v. Laumbach, 966 A. 2d 349 (Del., 2009) involved a Quonset hut installed right on the boundary of a lot.   The court took testimony from neighbors; testimony indicated the hut owner was irritable and the structure was a nuisance.  The owner removed the hut, but left the contract.  The court enjoined future misconduct, and the owner argued that he was being subjected to “selective enforcement.”
Lallo v. Szabo, 911 N.E. 2d 788 (Mass. App., 2009) was a two-unit duplex; the upstairs owner wanted to expand into the attic, which was a common area.   The covenants required arbitration in the event of a dispute; the upstairs owner insisted upon arbitration.  The downstairs owner pointed out that the arbitrator would be unable to provide a remedy, hence making the arbitration clause inapplicable.
Abril Meadows Homeowner’s Association v. Castro, 211 P. 3d 64 (Colo. App., 2009) involved an attempt to impose fines upon an owner who modified without consent; the declaration had been recorded without a signature.  The lack of a signature resulted in a remand to the trial court for imposition of appropriate attorneys’ fees.
Covenant Interpretation
Fawn Lake Maintenance Commission v. Aldons Abers, 202 P. 3d 1019 (Wash. App., 2009) involved a discussion between an association president and an owner; the lots were combined with the governmental agency, but there was no agreement with the association.  The association limited access and rights, but continued to impose assessments on two lots.  52 other lot owners, many of whom owned more than one lot, were treated similarly.
Starlight Ridge South Homeowners Association v. Hunter-Bloor, 99 Cal. Rptr. 3d 20 (Cal. App., 2009) involved a property with various concrete channels to deal with erosion.  An owner with a channel in her lot refused to maintain her lot; the declaration language was in conflict, but the more specific provision, dealing with channel maintenance, controlled.  The owner was required to maintain the lot.
In 1230-1250 Twenty-Third Street Condominium Unit Owners Association, Inc. v. Bolandz, 978 A. 2d 1188 (D.C. App., 2009) an owner made an enclosure surrounding his balcony, in part to protect his unit from water damage.  The court found that the unapproved modification was a violation of the covenants, but that the association’s failure to maintain, despite repeated requests, warranted the continuance of the modifications.  The unit owner was awarded $157,000 in attorneys fees.
Fair Housing
Bloch v. Frischolz, 2009 U.S. App. LEXIS 24917 (7th Cir., 2009) is a continuation of a case involving the installation of a mezuzah in a common area.  The court considered whether the enforcement of the rule, however, was neutral.
Overlook Mutual Homes, Inc., v. Spencer, 2009 U.S. Dist. LEXIS 105100 (S.D. Ohio, 2009) is a companion animal case.  The owner sought an accommodation to keep their daughter’s dog “Scooby.”   The court made a distinction between the ADA regulations and HUD regulations dealing with HUD-administered housing.  Scooby was allowed to stay.
Hawn v. Shoreline Towers Phase I Condominium Association, Inc., 2009 U.S. Dist. LEXIS 24846 (N.D. Fla., 2009) was another pet case; the owner returned from vacation with his dog, “Booster.”  The first letter failed to make any mention of the alleged service nature of the dog; the later letter asserted that Booster was necessary for psychological reasons, and that Booster was now “certified.”  The association sought supporting medical information.  Booster’s owner pursued his claim in the applicable agency and prevailed; the matter then went to court.  The owner’s failure to provide the information relieved the association from liability
Stross v. The Gables Condominium Association, 2009 U.S. Dist. LEXIS 52918 (W.D. Wash., 2009) involved a woman with severe disabilities who wanted 12 rather than the otherwise available 4 keys for her various caregivers and emergency responders.  She agreed to consent to a lockbox, to which the board agreed, but only on the condition that she signed numerous documents.  The court restrained the association and gave her the option of selecting either the 12 keys or the lockbox, and affirmatively released her from the obligation to sign any documents in connection with her choice.  

Check this Out — GoogleLaw

Google, in its continuing quest to take over the World, is entering the field of legal research. At a subpage of Google scholar, you can research cases by name or by citation.

A search for Hermansen v. Tasulis pulled up 39 hits in .05 seconds; unbelievably faster than the alternatives, and presumably more thorough.  The hits include the opinion itself; cases following the opinion and articles and briefs related to the opinion.  A search for “Lincoln W. Hobbs” pulled up 16 reported opinions in which I’ve been involved, several of which I had forgotten.  A rather handy research option for clients and counsel.

The jury’s still out (sorry) on how valuable this will be, but I’ll be looking into it over the next while.

To use the new resource, go to http://www.scholar.google.com, click on the legal opinions and journal option and type your query.

No More Non-Judicial Foreclosures?

Those who know me, and those who follow this blog, are aware that I’ve never been an advocate of non-judicial foreclosures of community association assessment liens. And at the the CCAL Law Conference last month, the pundits were agreeing.

I’ve had a number of reasons to dislike nonjudicial foreclosures; I think they usually take longer than a letter followed (when necessary) by a complaint; I think they are unduly aggressive in a number of situations; I think they unduly impose excessive costs on the association and ultimately the unit owner, and I’ve always questioned their legality under Utah statutes. And now, there’s published evidence that confirms that a Utah trial court has found them problematic, and an appelate court won’t review that decision, at least for now.

The case, McQueen v. Jordan Pines Townhomes Owners Association, Inc., involved challenges on a number of grounds to the legitimacy of a condominium non-judicial foreclosure; the trial court essentially held that ambiguities and omissions in the Utah Condominium Act would not justify the absence of a “trustee” in a nonjudicial foreclosure, and hence the attempted sale by the association’s counsel was set aside. The association’s counsel appealed, but that appeal was very quickly rejected by the Utah Court of Appeals, based upon the absence of a “final ruling” from which the association was appealing. Remaining controversies between the parties preclude consideration of the appeal at this time; I strongly suspect that the costs of further litigation will preclude further litigation and the eventual appeal.

I think it’s a very important case; we’ll be exploring it in more depth in connection with an upcoming CAALRS collection seminar. Keep an eye on this blog, and/or Utahcondolaw.com for information on the date, time and other subjects to be covered.

CAALRS, Utahcondolaw.com and this blog are all sponsored by the law firm of Hobbs & Olson, L.C.

Saving Beaver County

The Utah Supreme Court issued an opinion yesterday in the case of Save Beaver County v. Beaver County, which confirmed the rights of the citizens of Beaver County to challenge, by referendum, the County’s approval of the proposed Mount Holly Club.

The Supreme Court opinion succinctly described the proposed Mount Holly Club:

As planned, Mt. Holly is a gated club with an 18-hole golf course, a private ski resort, and up to 1,204 residential units.

A private ski resort ?!?!?!

The proposed plan met with some opposition, but Beaver County proceeded to adopt an ordinance to the land code, and published its “Notice of Adoption of Ordinance” on May 12, 2007. That same day, twelve residents requested applications for referendum petitions. These petitions were filed, seeking a vote by the residents in the November 2008 election. 845 signatures were obtained; more than enough to support the referendum.

The opinion sets forth a lengthy analysis as to whether the County was acting administratively or legislatively, but ultimately held that the County’s action was legislative, thereby triggering the citizens’ right to a referendum, which the Court appears to consider rather important:

Because the power of the people to legislate directly through referenda is a constitutionally guaranteed right, it is the responsibility of this court to “defend it against encroachment and maintain it inviolate”.

Hence the voters will get to decide, in the end, whether Mount Holly Club will be allowed. (Although my strong suspicion is that the current economic conditions may have already doomed Mount Holly Club.)

CCAL Case Review — Part 2.

Back to the case review:

The first case of the morning’s discussion is Pacific Hills Homeowners Association v. Prun, a case involving an association’s five-year long pursuit for the removal of a fence. The lawsuit came five years after the first letter; the unit owner defended based upon laches, and waiver.

Park Ridge Condominium Association, Inc. v. Callais involved an association that refused to produce records based upon a contention that the request was designed to harass; the production was required, and fees were awarded.

Ritter & Ritter, Inc. Pention and Profit Plan v. The Churchill Condominium Association, involved a dispute between a unit owner and an association, relating to required repairs to slab penetrations between units. The court reaffirmed the board’s fiduciary duty, but then analyzed the decision on the business judgment rule. Judicial deference applied to the board, but not the association; the association owed a duty to the members, and the association had to repair the problem. In other words, the board was not liable for deciding not to make the safety repairs, but the association had a duty to make them.

Thompson v.Toll Dublin, LLC involved a builder’s effort to force an association into arbitration in connection with its construction defect; the developer knew of the defects, resulting in fraud claims against the developer. The Court rejected the effort to force non-statutory claims into arbitration; the court also found the arbitration provisions to be unconscionable.

A California case, Treo @ Kettner Homeowners Association v. The Superior Court of San Diego County involved a condominium provision which purported to take away the unit owners’ right to a jury trial in a construction defect case. The Court denied the enforceability of the provision, based upon the absence of meaningful negotiation in connection with the declaration’s provisions.

An Arizona case, The Lofts at Fillmore Condominium Association v. Reliance Commercial Construction, Inc. held that a builder was liable rof breach of the implied warranty of habitability, even where the seller was not the builder. The implied warranty arose between the builder and the ultimate buyer, even in the absence of contractual privity.

Lake Buckhorn Property Owners Association, Inc. v. Townsend involved architectural restrictions in a declaration which were supplemented by a more restrictive regulation respecting the size of a septic tank. The court restated the black letter law that an association’s regulations which are inconsistent with a declaration are invalid.

Miller v. Savana Maintenance Association, Inc. is a fair housing case which affirms an association’s right to insist upon medical records to substantiate a claimed handicap under the Fair Housing Act.

Chesler v. Conroy involved outrageous behavior among the residents of a three unit condominium; the parties clearly treated each other inappropriately; nonetheless, the court held that this particular case did not rise to a federal fair housing claim, based upon disability. The Court did reaffirm the potential, in appropriate cases, of a hostile environment fair housing claim.

Bloch v. Frischholz was a religious discrimination case; it involved a woman who challenged an association rule based upon its interference with her right to mount a mezuzah (a religious symbol) on her door, in a common hallway. The Court held that the religious discrimination prohibitions in the fair housing act does not require a religious accomodation, and facially neutral restrictions were permissible.