August 2006
In This Issue:
Limitations on Determination of Preliminary Injunction
Ambiguous Covenant Prohibits Camper Trailers From Driveways
Letters From Association's Attorney Did Not Defame Owner
Court Cannot Decide Case Based on Theory of Law That Plaintiffs Did Not Raise
Association May Not Drive Vehicles Over Easement
Construction of a Fence Constitutes Trespass
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Limitations on Determination of Preliminary Injunction

Yockey v. Kearns Properties LLC, 326 Mont. 28, 106 P.3d 1185 (2005)

Preliminary Injunction: The Montana Supreme Court determined that a district court exceeded the scope of its duties in determining the merits of a preliminary injunction.

Antigone Acres, in Hamilton, Montana, was platted as a subdivision in June 1974. The plat designated all drives, courts, lanes, and parks for the public use in perpetuity. However, a one-foot "reserve strip" was created by Jack Blahnik, one of the developers, between a road running north and south just within Antigone Acres' western boundary (Thebian Lane) and the boundary itself. The purpose of the strip was specifically to deny the adjacent property owner, Harold Maus, access to his property from Thebian Lane because, at the time, Blahnik harbored animosity toward Maus. Both Maus' property and the one-foot strip were purchased by Kearns Properties LLC ("Kearns"). In February 2003, Kearns submitted a subdivision application that was ultimately approved in May 2003. 
On June 17, 2003, Leland and Judith Yockey, homeowners in Antigone Acres, sued Kearns, alleging that Kearns' proposed use of the one-foot strip violated Antigone Acres' restrictive covenants and that Kearns' use of Thebian Lane for property access exceeded the easement for public use of Thebian Lane. The Yockeys subsequently alleged irreparable harm and asked the court to issue a temporary restraining order. The Yockeys also asked the court to enjoin Kearns from using Thebian Lane to access their property outside Antigone Acres. The trial court issued a temporary restraining order prohibiting use of Thebian Lane to transport vehicles or heavy equipment, pending a hearing.
Following the hearing, the court denied the Yockeys' motion for preliminary injunction and dissolved the temporary restraining order. The court concluded that Thebian Lane was open and available to all reasonable public use that did not interfere with residents' use of the road, that Kearns had the right to use Thebian Lane as a member of the public, and that Antigone Acres' restrictive covenants did not apply to the one-foot strip because the strip was not a "lot" within the subdivision.
The Yockeys appealed, arguing that the trial court acted outside its authority by resolving ultimate issues of fact and law that should have been reserved for trial. Kearns responded that the trial court properly denied the Yockeys' motion because they failed to demonstrate that they had a high probability of prevailing on the merits of their case.
The Montana Supreme Court agreed with the Yockeys, noting that in determining the merits of a preliminary injunction, a court should not anticipate the ultimate determination of the issues involved but should decide merely whether a sufficient case has been made to warrant the preservation of the status quo until trial and minimize and prevent further injury or irreparable harm to all parties pending full trial.  While concluding that the trial court had sufficient evidence to deny the preliminary injunction and affirming such denial, the court agreed with the Yockeys that the trial court had exceeded the scope of its authority by resolving ultimate issues of fact and law. The Supreme Court therefore reversed those particular findings and conclusions and remanded the outstanding issues for trial.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

Ambiguous Covenant Prohibits Camper Trailers From Driveways

Hipsh v. Graham Creek Estates Owners Association Inc., 927 So. 2d 846 (2005)

Covenants Enforcement: A restrictive covenant was cited as ambiguous because the first sentence applied to both "travel trailers" and "recreational vehicles," while the second sentence applied only to "recreational vehicles." Homeowners argued unsuccessfully that their camper should be considered a "travel trailer."

In June 2004, the Graham Creek Estates Owners Association ("association") sued Mike and Christine Hipsh for parking a "camper trailer" in their driveway in violation of a restrictive covenant. The trial court ruled in favor of the association in October 2004, and the Hipshes appealed that decision. The appeals court affirmed the lower court's decision based on a careful analysis of the restrictive covenants. 

The trailer that the Hipshes parked in their driveway was a 28-by-8-foot trailer that they used for camping and vacationing. It was noted as having air conditioning, plumbing, sleeping facilities, cooking facilities, and electrical hook-ups. The Hipshes argued that their vehicle was not considered a "camper" because it was equipped with plumbing and air conditioning. Instead, they argued that it was a travel trailer, as it was referenced on the certificate of title.
This detail in finding the proper label for the trailer proved to be a critical component of the court's analysis. The problem arose from a particular covenant that the Hipshes argued was internally inconsistent and ambiguous because the first sentence applied to both "travel trailers" and "recreational vehicles," while the second sentence applied only to "recreational vehicles." "Recreational vehicles" was not defined anywhere in the covenant. The specific covenant is as follows:  

No modular home, manufactured home, mobile home, trailer home, travel trailer, or recreational vehicle will be permitted as a residence. No commercial-type vehicles…larger than three-quarter-ton pick-up trucks, and no recreational vehicles such as motor homes, house trailers, and campers shall be stored or parked on any lot except while parked in a closed garage, nor parked on any residential street in the subdivision….

Additionally, the Hipshes argued that the covenant term "recreational vehicle" also included boats, and because the association never enforced the covenant against owners of boats parked within the community, their trailer should not be enjoined now. The court disagreed and affirmed the lower court's ruling in favor of the association. The court stated that the purpose of the restrictive covenants was to promote a degree of aesthetic uniformity within the subdivision. That said, the court opined that aesthetic uniformity could not be achieved by advancing a distinction between the terms and that the general understanding of a "recreational vehicle" would include a camping trailer. 
The court further stated that boats were not comparable to the other types of vehicles referenced in the covenant because all of the other vehicles were land-based. Regardless, the court noted that no case law was cited by the Hipshes that established the association's failure to enforce the restrictions of the covenant against travel trailers. As a result, the court found that the Hipshes' vehicle was a "recreational vehicle" and was subject to the restrictions of the covenant.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.    

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Letters From Association's Attorney Did Not Defame Owner

Ruiz v. Harbor View Community Association, 134 Cal. App. 4th 1456, 37 Cal. Rptr. 3d 133 (2005)

Association Operations: A California appeals court ruled that letters sent to a homeowner were not defamation but were protected by a statute that encompasses speech in connection with an issue of public interest.

This case originated when Christopher Ruiz sued Harbor View Community Association ("association") for libel after being denied the opportunity to rebuild his house. The house plan that Ruiz proposed for the lot exceeded the maximum square footage permitted by the architectural guidelines by 900 square feet. After months of back-and-forth conversations and correspondence between Ruiz and the association's attorney, Ruiz asserted that two letters authored by the attorney defamed him.
In one letter that Ruiz asserted was libelous, the attorney stated that Ruiz had failed to let the association know that he was an attorney after being asked. In addition, he was accused of violating his duties as an attorney by concealing his superior legal knowledge and education as an attorney while negotiating with the architectural committee. In the second letter, the attorney stated that Ruiz "devoted an inordinate amount of time [to] harassing the association directorship with cockamamie document inspection requests and virtually stalking and staring down the directors at their regularly scheduled meetings."    
In response to the claims of defamation, the association filed an anti-SLAPP motion. SLAPP is an acronym for a "strategic lawsuit against public participation." It provides for a special motion to strike for causes of action against a person arising from any act of that person in furtherance of his or her right of petition or free speech under the U.S. or California constitution in connection with a public issue. The trial court denied the motion, noting that the association "failed to meet its burden of making a prima facie showing that the two letters that form the basis for the plaintiffs' libel claim are covered by the statute." The association appealed, and the appeals court ruled in Ruiz's favor, determining that both letters deserved anti-SLAPP protection because they encouraged public participation in matters of public interest.  
However, the court viewed the libel issue much differently. Ruiz asserted that both letters were libelous on their face. He argued that the first letter falsely accused him of behaving unethically as an attorney and the second falsely accused him of committing the crime of stalking. The court stated that Ruiz failed to meet his burden of proving a probability of succeeding, which is a necessary element of the offense. The primary reason the court cited was that the language was simply "rhetorical hyperbole, epithets, and figurative statements that are nonactionable." Despite the ruling, the court warned the attorney who authored the letters that they were neither tactful nor productive and that it would have been wiser to have waited until more time had passed and he had thought about his words before sending them.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.    

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Court Cannot Decide Case Based on Theory of Law That Plaintiffs Did Not Raise

Swanson v. Shagbark Development Inc., Nos. 259886, 259908, and 259909, Mich. App. Ct., Oct. 27, 2005

Developer Liability: In an unpublished opinion, a Michigan appeals court ruled that a trial court violated a defendant's due-process rights when it granted injunctive relief based on a theory that was not pleaded by the parties to the suit.

Shagbark Condominium, in Caledonia Township, Michigan, was developed by Lee Van Popering, the owner of both the development company and the building company involved in the project. Between September 2000 and July 2001, Shagbark Condominium's stormwater system failed three times, causing major flooding. Thereafter, as a temporary measure, unit owners and the Shagbark Condominium Association ("association") began pumping the stormwater-detention pond each time it rained. Because the pumping system was not a permanent solution, Charles Swanson, several other unit owners, and Caledonia Township officials sued the developer, the builder, and other entities, seeking remedies for the deficient stormwater system.
The trial court consolidated the cases and determined that the plaintiffs' claims of trespass and nuisance were not actionable. Nevertheless, the court concluded that the flooding was actionable. In stating this, the court relied on Bennett v. Eaton County, 340 Mich. 330 (1954), which states that flooding is not an actionable nuisance or an actionable trespass, but is a derivative of an overlapping of the concepts of trespass and nuisance. Under Bennett, an owner of land must accept all water that naturally flows into that land from other properties; however, the owner of the properties from which the water flows cannot increase the velocity or the quantity of the flow. In this case, the court found that the defective stormwater system increased both the velocity and quantity of the water onto the property of the condominium. Bennett also states that an owner of land may not utilize the land to impair the natural flow of water off an adjoining property. In this case, the inadequate drainage system the developer installed also dams natural drainage off the land where the residents' units are located. Ruling in favor of the plaintiffs, the court ordered Shagbark Development to revamp the stormwater-drainage system and to correct the flooding problems. It also enjoined any construction on the project that was not related to reworking the drainage system and appointed a receiver.
Van Popering appealed the case, arguing that the trial court violated his due-process rights because it granted the plaintiffs injunctive relief based on the law of surface waters, which the plaintiffs had not claimed. The appeals court agreed with Van Popering. It found that the trial court's decision based on the law of surface waters constituted a fundamental due-process violation and reversed the trial court's order.
In its findings, the appeals court noted that Van Popering had no notice that he would have to defend a claim brought under the law of surface waters. Indeed, the claim was never pleaded, and no party involved in the case amended its pleadings to include that claim. Additionally, the parties did not consent to the claim being tried. The court also disagreed with the trial court that it had authority to create a theory under which the plaintiffs could prevail.
Even though the appeals court's decision made it unnecessary to review Van Popering's contention that the trial court should not have appointed a receiver, the court briefly addressed that issue because it suspected that it would arise on remand. The appeals court first noted that the trial court had the discretion to appoint a receiver. Citing Band v. Livonia Associates, 176 Mich. App. 95, the court noted, "The appointment of a receiver may be appropriate when other approaches have failed to bring about compliance with the court's orders." In this case, while no law specifically authorized the court to appoint a receiver, the flooding made the trial court's appointment appropriate. The developer and builder had not fixed the problems, and left the association and its residents to monitor the situation and pump the detention pond to avoid further flooding. 

Although Van Popering, the developer, and the builder all maintained that there was no money to fix the drainage system, there were 100 lots to build on and sell, and Van Popering claimed that he could make money on those lots if he had building permits for them. It was also undisputed that some of the undeveloped property was forfeited and that taxes were not being paid on the property. Thus, the appeals court ruled that the trial court had not abused its discretion when it appointed a receiver. However, because the appeals court vacated the trial court's order, the receiver was not necessary. The appeals court stated that if the trial court deems it necessary, it had the authority to appoint a receiver on remand.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Association May Not Drive Vehicles Over Easement

Hurst v. Three Springs Ranch Homeowners Association, No. H027751, Cal. App. Ct., July 28, 2005

Powers of the Association: A California appeals court ruled that an association must maintain an easement and the common area to which it provides access, but that it must do so without taking vehicles over the easement.

Three Springs Ranch is a subdivision near San Jose, California. The subdivision includes 33 residential lots and a 75-acre parcel (Lot 34) that is common area reserved for use by the homeowners. Omniprise Inc. ("Omniprise"), the developer of Three Springs Ranch, recorded a subdivision plat on March 19, 1980, and recorded a declaration of covenants, conditions, and restrictions for the subdivision on June 9, 1980. Access to the common area occurs at three locations: 1) from the end of one of the subdivision's streets, Springknoll Court; 2) across a 60-foot-wide easement from another subdivision street, Three Springs Road, along the rear of Lots 16 and 21; and 3) across a 20-foot-wide easement from the end of Three Springs Court, between Lots 13 and 14.
The recorded plat dedicated the 60-foot-wide easement and the 20-foot-wide easement exclusively to the lot owners for equestrian and pedestrian use of the common area. The recorded declaration created the Three Springs Ranch Homeowners Association ("association") and stated that Omniprise would convey the common area to the association together with the easements. In 1981, Gary Hurst and Lauren Moll bought Lot 3; and later they transferred it to Hurst as trustee of the Orchard Trust III.  Lot 3 was located on the opposite side of the subdivision from the common area. In 1982, Paul Meyer and Catherine O'Neill bought Lot 13. In 1987, Michael and Sandra Rude purchased Lot 14. Lots 13 and 14 are adjacent to each other, and the 20-foot-wide easement runs between the two lots.
In 1999, Hurst sued the association, alleging that it had not discharged its duties because it had not maintained the 20-foot-wide easement. Hurst maintained that because Meyer, the O'Neills, and the Rudes had built a fence across the easement and landscaped it, the easement was unusable. The case settled in June 2000, with the association agreeing to clear a six-foot path in the easement and to have an engineer determine the best way to allow pedestrian, equestrian, and vehicular access through the easement so the association could maintain it. In November, the O'Neills and the Rudes intervened in the case, asking the court to rule that the easement was limited to pedestrian and equestrian access to the common area and that the easement ran in favor of the lot owners but not the association. This aligned the association and Hurst against Meyer, the O'Neills, and the Rudes.
The trial court ruled that the subdivision map created the easement that burdened Lots 13 and 14, that the easement was for equestrian and pedestrian access only, that the association did not have the right to use the easement, and that vehicular access was not allowed. Hurst appealed.
The appeals court noted that it had to address two questions: 1) whether vehicles could use the easement, and 2) whether the association was entitled to use the easement to fulfill its maintenance duties. Regarding whether vehicles could use the easement, the court found nothing in the evidence indicating that the allowable use of the easement would ever be enlarged to allow vehicles to use the easement. Hurst contended that the association must be allowed vehicular access across the easement to maintain the common area and the easement itself. The court disagreed. The language in the grant of the easement clearly restricts use to pedestrian and equestrian access, and the declaration reiterates that restriction. Therefore, the court affirmed the trial court's decision that the easement was limited to equestrian and pedestrian traffic only.
As to whether the association had a right to use the easement, the court first looked at the subdivision map. Granting language on the map dedicated the easement "exclusively to the owners of lots 1 through 33, inclusive...." The association and the Rudes argued that "exclusively" meant that although lot owners had the right to use the easement, the association, which was made up of those same owners, did not. Hurst contended that "exclusively," in the context of the subdivision map and the declaration, meant merely that members of the public could not use the easement. He also maintained that the declaration clearly provided that the association had a right to use the easement to reach the common area in order to maintain it -- and that the association clearly had a duty to maintain the common area.
The court agreed with Hurst, pointing out that Section 2.9 of the declaration states:

[T]hose areas designated as ingress and egress easements on the recorded plat are exclusive easements for the use and benefit of all lot owners in the project and for the Association. The Association shall have the right of ingress and egress over said ingress and egress easements for maintenance of said ingress and egress easements and the common area, and for other purposes necessary to the performance of its duties.

The court noted that the references to ingress and egress in the declaration had to be construed to include and refer to the 20-foot-wide and 60-foot-wide easements because those easement were the only easements that allowed access to the common area. The court further noted that such an interpretation was consistent with the granting language in the subdivision map.
Regarding Hurst's argument that if the association has a right to ingress and egress over the easement area then it must be allowed to use vehicles on the easement, the court disagreed. The court said that the association had other access to the common area and did not need vehicular access over the easement. The court ordered that the trial court's judgment be modified to provide that the 20-foot-wide easement does not include any right of vehicular access.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Construction of a Fence Constitutes Trespass

Freeman v. Mostafavi, No. B176541, Cal. App. Ct., Nov. 8, 2005

Architectural Control: A California appeals court ruled that construction of a fence by one neighbor on the property of another constituted trespass even though the fence was constructed in the same location as the previous fence.

Franklin Freeman and Amir Mostafavi owned adjoining lots, which were divided by a fence. Mostafavi decided to replace the existing fence with a glass fence. The association bylaws required Mostafavi to obtain Freeman's approval prior to commencing the fence project in order to ensure that the property lines are honored. Over an extended negotiation period, Freeman and Mostafavi agreed 1) to replace the wooden fence, according to an e-mail message from Mostafavi, "along our shared property line"; 2) that Mostafavi would ensure that the glass fence would have certain modifications including plantings to guarantee Freeman's privacy; and 3) that Freeman could not contribute financially to replacing the fence.
In November 2001, Mostafavi began construction of the new fence at the same location as the previous fence. During construction, the roots of some of Freeman's trees as well as chain-link fence running perpendicular to the Mostafavi property boundary line were cut and some sprinkler-system pipes were damaged. According to surveys commissioned by both parties, the new fence was constructed approximately 1.6 feet inside Freeman's property boundary. Freeman requested compensation for the damaged trees and broken sprinkler pipe. Mostafavi refused, challenging the amount of one of Freeman's receipts. 
Freeman sued Mostafavi for willful trespass, among other things. Freeman also sought damages for the cost to replace the trees and the broken sprinkler pipes, as well as an injunction to compel Mostafavi to remove the new fence and return the property to its original condition. Freeman moved for summary judgment based on the undisputed fact that the new fence was on his property and that he never gave Mostafavi permission to build the fence there. 

The trial court found indisputable evidence that the fence was located on Freeman's property, that Mostafavi did not provide evidence that Freeman gave him permission to build the fence on the location of the previous fence, and that Mostafavi did not produce evidence that he took a survey to determine the property boundary line. The trial court also found that Mostafavi acted intentionally or with gross recklessness and had no permission to do so. The trial court granted Freeman's motion for summary judgment on the willful-trespass claim and ordered Mostafavi to take down the glass fence and restore Freeman's property to its original condition. 
Mostafavi appealed, contending among other things that no trespass occurred because Freeman consented to the encroachment. Citing case law, the appeals court defined "trespass" as unauthorized entry onto someone else's land. Such invasions are characterized as intentional torts, regardless of the actor's motivation. The only intent required is that of the person to enter the property. Because the fact that Mostafavi entered on to Freeman's property and had the fence constructed is uncontroverted, Mostafavi was required to provide a defense to the trespass claim, or his appeal would fail. Mostafavi argued that he had Freeman's consent to construct the fence.
Again citing case law, the court noted that where there is a consensual entry, there is no trespass.  The evidence submitted to the trial court did not demonstrate that Freeman gave Mostafavi permission to construct the new fence on his property. To the contrary, the e-mail submitted to the trial court as evidence indicates an agreement to construct the fence along their "shared property line" or between their two properties, and Mostafavi took no action to ascertain the location of the property line prior to commencing construction of the fence. The appeals court found that Mostafavi failed to demonstrate that there was a triable issue. Because the appeals court was constrained from reviewing evidence not presented at trial, a number of Mostafavi's arguments and pieces of evidence could not be considered.
In determining whether to grant injunctive relief in ordering the removal of an encroachment from another's property, the court cited Christensen v. Tucker, 114 Cal. App. 2d 554 (1952), for the proper judicial approach. The underling premise in Christensen is that the trespasser is the wrongdoer. Three factors must be present to deny the relief: 1) The encroachment must not be willful or negligent; 2) plaintiffs should be granted an injunction if they "will suffer irreparable injury...regardless of the injury to defendant"; and 3) the hardship the injunction causes the defendant "must be greatly disproportionate to the hardship caused the plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant." 
The appeals court found that Mostafavi acted negligently and was therefore not innocent under the first prong of the Christensen test by 1) failing to have the property surveyed to determine accurately the property boundary line in contravention to the homeowner association requirement that they ensure that property lines be respected; 2) continuing to build the fence despite cutting Freeman's sprinkler lines, adjoining fence, and tree roots; and 3) failing to obtain express written consent from Freeman to build the new fence on Freeman's property. Based on these findings, the appeals court affirmed the trial court's decision.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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