CAI Law Reporter - January 2008 (Plain Text Version)

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Attic Space: Common Area or Individual Unit Ownership Responsibility?


Carleton v. Edgewood Heights Condominium Owners' Association, No. 2006-404, N.H. Supreme Ct., November 8, 2007


Covenants Enforcement:
An attic space in a condominium association with townhomes was considered to be common area based on the horizontal boundaries outlined in the declaration.


Edgewood
Heights
consists of 120 units, including several townhouse units. Edgewood Heights Condominium Owners' Association ("association") was formed in 1986 to enforce the condominium declaration and to maintain the common area. In 2003, mold was discovered in the attic spaces in several of the townhouse units. At a properly-noticed meeting, the association decided that since the mold was located in an area defined in the condominium declaration as "limited common area", a special assessment would have to be collected from all owners to remedy the situation. Bukk Carleton, who owned several of the garden-style units in the community, refused to pay the special assessment and sued the association to challenge it.
At trial, Carleton argued that attic space above the townhouse units was part of the individual unit and that repairs to that space were the responsibility of individual unit owners. The association maintained that the attic space in the townhouse units was common area and that all unit owners were properly subject to the assessment for the remediation of mold. The trial court ruled that the attic spaces were not common areas and that the assessment was illegal. The case was appealed.

On appeal, the association contended that the attic space was a common area because it was outside the perimeter of an individual unit as defined by the declaration. The declaration defined a unit's boundary as "the unfinished or undecorated interior surfaces of the lower most basement floor and the unfinished or undecorated interior surfaces of the upper most ceiling constituted the boundary." The association also relied on the declaration's definition of common area as "all that portion of the Condominium, other than the Units."

In this case, the association argued, and the state Supreme Court agreed, that since the attic spaces were not considered part of a unit they were common area. The court reasoned that other parts of the declaration supported this assertion as well. Moreover, the court deemed the beams, supports, and roof to be limited common area. The court rejected Carleton's argument that the underside of the roof qualified as a ceiling. As a result, the court reversed the trial court's decision and ruled that attic spaces were a limited common area rather than part of the individual units.

The association asked the court to answer a second question: whether the mold remediation was the responsibility of the unit owners whose units are appurtenant to the (attic) limited common area or the responsibility of all unit owners collectively. Because the trial court had not found the attic spaces to be limited common area, the court declined to answer the association's question and reversed and remanded the case.

In a dissenting opinion, Justice Richard Galway disagreed with the majority's decision about the horizontal boundary of the townhouse units. He stated that the underside of the roof directly above the attic spaces constituted a ceiling.

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Business Judgment Rule Protects Association in its Covenant Enforcement Decision


Forest Close Association, Inc. v. Richards, 845 N.Y.S. 2d 418 (2007)


Architectural Control:
A court upheld an injunction prohibiting an owner from building an extension to his home and ruled that an association's decision to enforce a restriction was protected by the business judgment rule.


Robert Richards owns a home in Forest Close, a subdivision in Queens, N.Y. Forrest Close Association, Inc. is tasked with enforcing the restrictive covenants recorded against the property in the subdivision. When Richards and his wife wanted to construct a brick addition to their home, the association sued the Richards to enjoin them from building the addition because it would encroach upon the community's garden quadrangle. The trial court ruled in favor of the association, and the Richards appealed.

The appeals court affirmed the trial court's decision that the association could enforce a restrictive covenant prohibiting homeowners from erecting any structure on the homeowner's property encroaching on the community's garden quadrangle. The association also established its entitlement to a permanent injunction by demonstrating that construction of the proposed addition to the rear of a home would alter the community's interior garden quadrangle and would be difficult to remove, and the association consequently would suffer irreparable harm without such relief.

Citing Levandusky v. One Fifth Avenue Apartment Corporation, 554 N.Y.S. 2d 807, 75 N.Y. 2d 530, 553 N.E. 2d 1317 (1990) (CALR, April 1991), the court noted that the association also had established the applicability of the business judgment rule. The business judgment rule prohibited the court from disturbing its decision to enforce the restriction. The court noted that the association's decision to enforce was authorized, was made in good faith and furthered the association's interests of maintaining the integrity of the community's garden.

The court pointed out, however, that the association conceded that it sought to enforce the restriction only to the extent of prohibiting the building of any structure without the association's consent. Therefore, the court limited the scope of the permanent injunction and ordered the phrase "without the consent in writing of Forest Close Association, Inc., having been first had and secured" to be added to the provision permanently enjoining the homeowner from constructing the proposed brick addition.

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Association Properly Passed Amendment Allowing Patio Extensions and Properly Enforced Restrictions


Haley
v. Casa del Rey Homeowners Association, 153 Cal. App. 4th 863, 63 Cal. Rptr. 3d 514 (2007)


Association Operations:
A California appeals court ruled in favor of a homeowners association when a disgruntled homeowner sued the association for breach of fiduciary duty, nuisance and slander stemming from the association's failure to enforce restrictions regarding the common area.

This case involves Casa del Ray, a two-story, 18-unit condominium near San Diego, Calif. A dispute arose concerning use of portions of the common area, specifically a few feet of flat ground that extended beyond the lower level units' small concrete patios. Originally the land was covered with ivy, but several years ago owners of the lower floor units removed the ivy and replaced it with tile pavers or concrete to extend their patio areas. Other owners placed items such as railroad ties, trellises, plantings, and flower pots in the common area.

Terri and William Haley purchased a lower level unit at Casa del Rey in early 1998 and moved into the unit in early 2000. When they bought their unit it had pavers and a hedge in the common area beyond the patio. Despite this, the Haleys complained to the association that a resident yelled at both of them and at a fellow resident for walking on a railroad tie near her patio, resulting in Terri Haley slipping on a slope as she attempted to avoid walking in that area.

In 2003, the association circulated a draft amendment to Casa del Rey's covenants, conditions, and restrictions that would give the association discretion to allow patio extensions. The amendment gave the board the right to allow owners to use nominal portions of the common area adjacent to the owners' separate interest, so long as that use did not encroach upon another owner's restricted common area or unreasonably interfere with any other owner's use or enjoyment of the community.

More problems occurred when Pam Bargamian, a member of the board of directors at the time, certified that 16 of the 18 owners voted in favor of the amendment. Bargamian later stated that she did not actually see the ballots but that Signe Osteen, the association's manager, had personally counted the ballots and determined that more than 60 percent of the owners voted for the amendment. According to Osteen, she did not tell Bargamian that 16 owners approved the measure; rather she told her that more than 60 percent had approved it. The ballots were lost and could not be confirmed.

Despite this, most of the owners, including the Haleys, removed their pavers and other encroachments from the common area. In January 2004, the Haleys sued the association and former board members. The Haleys' claims were for declaratory and injunctive relief, breach of fiduciary duty, nuisance and slander.

The declaratory and injunctive relief claim stated that Terri Haley incurred substantial attorney's fees when she protested the policy regarding the common area. The breach of fiduciary duty claim alleged that the association and former directors failed to make reasonable and good faith efforts to enforce the restrictions. The Haleys also claimed that the association had mounted a hate campaign against them, resulting in eggs being left on their doorstep and Terri Haley being called names.

The nuisance claim was two-fold. First, the Haleys alleged that by allowing encroachments in the common area, the association created and maintained a nuisance that substantially interfered with their use and enjoyment of their property. Second, they claimed that after complaining of a sewage problem in August 2003, the association failed adequately to address the problem. Finally, the slander suit was particular to Bargamian, who the Haleys claimed had falsely published that Terri Haley was having sex with Bargamian's son.

The trial court dismissed the slander suit because of a lack of publication. The court also dismissed the negligence and nuisance claims because they lacked causation. The jury found that the association had not breached its fiduciary duty to the Haleys but had, in fact, enforced the restrictions in a fair and consistent manner. In addition, the trial court awarded Bargamian costs of $5,039 and awarded the association attorney's fees of $169,956.26 and costs of $14,800.26.

On appeal, the Haleys raised the issues of breach of contract damages, improper denial of declaratory and injunctive relief, and improper nonsuit on her nuisance and defamation claims. They also maintained that the notice to claim costs was improperly filed. First, with regard to the breach of contract damages, the Haleys stated that the trial court erred by allowing a special verdict that included the word "substantial" and precluded nominal damages. At trial, the court instructed the jury that in order for the Haleys to succeed on a claim for breach of the governing documents they had to prove the following elements: (1) that they did all or substantially all of the significant things that the contract required them to do, (2) that they were excused from doing all of the significant things that the contract required them to do, (3) that the association failed to do something that the contract required it to do, (4) that the association's failure was a substantial factor in causing damage to the Haleys, and (5) the nature and extent of the damages. The appeals court disagreed and stated that the jury instructions were proper and that neither the instructions nor the special verdict form required a finding of "substantial" damages.

Instead, the jury only had to find that the breach was a substantial factor in "causing" the damage. The appeals court stated that the Haleys did not present evidence of any damages caused by a breach of the restrictions. The court also determined that the jury instructions and the special verdict form did not result in a finding of no damages; rather, the Haleys' failure of proof did.

The Haleys also argued that the trial court had improperly denied their request for declaratory or injunctive relief, but the appeals court disagreed. The Haleys contended that the amendment to the restrictions giving the association authority to allow encroachments beyond the back patios of the lower units was not lawfully passed. They contended that the problem was that the community manager could not verify that the necessary 60 percent of owners had approved the amendment. The amendment required the approval of at least 11 owners, but there was no dispute in the evidence that at least 11 owners voted in favor of the amendment. As a result, no injunction was granted because of lack of additional evidence.

The Haleys also argued that they were entitled to declaratory and injunctive relief because the board should have enforced "removal of the encroachments." The appeals court noted that numerous letters were sent to all of the members, requesting them to remove all personal items from common areas. Deposition transcripts indicated that all but two owners complied. The only additional thing the board could have done was to pursue an expensive and time-consuming lawsuit against those two owners. The trial court stated that the board had done enough by sending the letters and that courts will generally uphold decisions made by a board of directors so long as they "represent good faith efforts to further the purposes of the common interest development, are consistent with the development's governing documents and comply with public policy." In this case, the appeals court stated that the amendment seemed like a reasonable solution to the Haleys' complaints and denied declaratory and injunctive relief.

Next, the Haleys argued that the trial court abused its discretion by granting nonsuit on their nuisance cause of action against the association. Nonsuit is proper when it is determined that there is no substantial evidence to support a judgment in the plaintiff's favor. For the Haleys to recover damages for nuisance, they had to prove that the association's invasion of Terri Haley's interest in the use and enjoyment of the land was "substantial" or that it caused her to suffer "substantial actual damage" and that the interference must also be unreasonable. The test that the court cited was whether the gravity of the harm outweighs the social utility of the defendant's conduct. In this case, Haley offered no evidence that the association's conduct caused her any damage. The nuisance claim also sought injunctive relief to abate the nuisance. The appeals court stated that the association did require owners to remove any encroachments from the common areas when the Haleys complained, and they failed to provide any additional evidence that their use and enjoyment of the property had been interfered with and, as a result, there was no additional nuisance to abate.

The Haleys also argued that the trial court erred by granting nonsuit on the defamation cause of action against a former board member. The court stated that defamation constitutes an injury to reputation and that it can be satisfied by either libel or slander. One of the essential elements of the tort is publication of the statement to a third person who understands its defamatory meaning. In this case, Terri Haley testified that a former board member called her several derogatory names and accused her of having sex with the board member's son and neighbors. The problem was that Haley could not prove that other people had heard the statements, and, as a result, the ruling of nonsuit on the defamation claim was proper.

The Haleys' final argument, regarding costs, appealed the filing of a memorandum of costs as untimely based on the interpretation of two separate statutes mandating deadlines for filing. The dispute was dismissed by the appeals court as being timely filed.

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Court Narrows Permanent Injunction and Affirms Association's Right to Enforce Architectural Control Provision


Park Row Community Association
v. Shirk, No. D048151, Cal. App. Ct., July 2, 2007


Architectural Control:
In an unpublished opinion, a California appeals court affirmed a permanent injunction against an owner who threatened to make improvements without an association's approval but narrowed the extent of the injunction.


Richard Shirk owns a condominium unit in Park Row Community Association ("association"). Park Row is governed by a declaration of covenants, conditions and restrictions. One of the declaration's provisions requires owners to obtain prior written approval to make any improvement to their units other than replacing fixtures or appliances, which would not require structural changes to the common area of the condominium.

In the spring of 2003, Shirk filled out applications for improvements to his unit that included replacing a bathtub; extending a loft; and adding a window, an air conditioner, and electrical outlets. In July 2003, he informed the board of directors that he anticipated beginning the improvements before he submitted the applications to the board when his loan was funded. Additionally, Shirk advised the board that he wanted the board immediately to approve all his improvements that were similar to improvements that had been made to other units.

In August 2003, Shirk articulated his anger at the board for its having returned his requests for immediate approval of the improvements. Shirk claimed that the board had approved similar requests with "a minimum of conditions." In his letter, Shirk notified the board that he was going to make the improvements without waiting for board approval. He again insisted that the board immediately approve an improvement—this time an exhaust fan he wanted to install.

In September 2003, Shirk's attorney contacted the association to say that Shirk had not made any improvements that involved changes to the common area, that caused any structural changes or that included any construction activity that required the board's approval. The attorney also stated that Shirk had replaced a bathtub in his unit and that Shirk would not install the air conditioning unit or the window without board approval.

The association responded by suing Shirk, seeking a permanent injunction and asking the court to issue a declaration of the various parties' rights under the declaration. Shirk contended that the association was not entitled to summary judgment because he had not begun his proposed improvements and therefore his actions did not constitute any harmful or wrongful conduct that could be enjoined. The association maintained that Shirk's threat to begin the improvements was enough to justify its request for the injunction and submitted a portion of Shirk's deposition of September 2005, in which Shirk admitted that a plumber had replaced his bathtub, which required modification of the pipes located in a common area behind the tub.

The trial court granted summary judgment in favor of the association and issued a permanent injunction that required Shirk to submit plans for proposed improvements and to pay fees as required under the declaration. Under the injunction, Shirk was not permitted to begin, continue, or complete any construction to the inside or outside of his unit, and the association was allowed to inspect any construction that was already complete. Shirk appealed.

Since the association had moved for summary judgment on the trial court level, it was up to the association to persuade the appeals court that there was no triable issue of material fact and therefore the association was entitled to judgment as a matter of law. Relying on Ironwood Owners Association IX v. Solomon, 178 Cal. App. 3d 766, 224 Cal. Rptr. 18 (1986) (CALR, August 1986), Shirk argued that the association did not meet its burden of proof because it had not demonstrated that it exercised its power in a fair and nondiscriminatory manner. In addressing this issue, the court first noted Ironwood was different from this case because the association in this case did not ask the court to require Shirk to remove nonconforming improvements. The court also noted that the association's cause for action was based on Shirk's threat to proceed with the improvements without submitting plans or getting the board's approval. The association maintained that if Shirk was allowed to continue his violation of the declaration, it would be "frustrated in its abilities to fulfill its duties and responsibilities of equal enforcement and maintenance" and claimed that Shirk's improvements might have a negative effect on property values in the community.

The appeals court determined that the association had met its burden of proof thereby demonstrating that it was also entitled to a permanent injunction. The court concluded that the declaration entitled the association to request plans from Shirk for proposed improvements, that Shirk proceeded with making at least one of those improvements and that Shirk threatened to begin his remaining projects without board approval.

The court then addressed Shirk's claim of selective enforcement. At the trial level, Shirk maintained that the nonwaiver clause in the declaration, which allowed the association to enforce the provisions of the declaration even if it previously had not done so, was unconscionable because it required all owners to agree to the clause in order to obtain title to a unit and because the clause was "buried in the voluminous text" of the declaration. The court ruled that the nonwaiver clause does not violate public policy and that it was not unconscionable.

Shirk also contended that the declaration did not give the association authority to inspect his unit because he had not begun any construction that required board approval. The court disagreed, stating the association had submitted evidence from Shirk's deposition that Shirk had, in fact, replaced a bathtub in his unit.

However, the court narrowed the breadth of the injunction against Shirk. Shirk argued that enjoining him "from engaging in any construction and making any unapproved modifications" within his unit violated his rights. The declaration specifically allows "replacement of appliances and fixtures which require no structural changes in the building" without the requirement of obtaining board approval. The court agreed with Shirk that the injunction was overbroad and remanded the case with instructions that the trial court narrow its language in the injunction in keeping with the appeals court's interpretation.

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Units Sold Prior to Association's Incorporation Part of Condominium Regime


Plano Parkway Office Condominiums
v. Bever Properties, LLC, No. 05-05-01533-CV, 2007 Tex. App. Ct., November 26, 2007


State and Local Legislation and Regulations:
The purchaser of a unit is not exempt from membership in a condominium regime merely because the association's articles of incorporation were filed subsequent to the sale.


In April 2003, Jerry Huffman Custom Builders, LLC ("Huffman") purchased property located in Plano, Texas to develop an office condominium. In September 2003, in accordance with Texas law, Huffman filed the condominium declaration. Huffman sold three units: the first in November 2003, the second in January 2004 and the third in April 2004 to Bever Properties, LLC ("Bever"). Bever received a deed that showed the unit was subject to the declaration and then leased the unit to Jesse Taylor.

After Huffman incorporated Plano Parkway Office Condominiums ("association") in August 2004, multiple disputes arose between Bever and the association. As a result of the disputes, Bever sued the association seeking, among other things, declaratory relief to correct the description of the property contained in the declaration. Bever later amended its petition to seek declarations that the association was not cognizable as a condominium association under Texas law and that Bever's unit was not subject to the condominium regime. Bever argued that because Huffman conveyed three units and later incorporated the association as a nonprofit corporation with no members, the association was not valid under Texas law, and therefore, Bever's unit was not subject to any rules contained in the condominium's declaration and the association's bylaws.

The trial court granted Bever's motion, finding that the association did not legally exist and, therefore, had no standing. The association appealed.

On appeal, the association argued three issues: (1) whether the fact that the association was incorporated after units were conveyed precluded the association's legal existence and excused Bever's unit from the condominium regime; (2) whether the fact that the association's articles of incorporation failed to indicate that it is a membership corporation precluded its legal existence; and (3) whether a violation of the Texas Property Code precluded the association's legal existence when a certificate of incorporation was issued by the Secretary of State. Bever conceded that the association legally existed. Nevertheless, Bever contended that the association did not exist as a condominium association and could not exert authority over the unit owners.

The court reviewed the statute language to determine whether Bever was subject to the condominium regime. It considered that under the Uniform Condominium Act ("Act"), a "condominium" is defined as "a form of real property with portions of the real property designated for separate ownership or occupancy, and the remainder of the real property designated for common ownership or occupancy solely by the owners of those portions." A condominium is created "only by recording a declaration" that contains a description of the property, the number of units, and the name of the owners association. Once the condominium is created, unless the entire property is taken by condemnation or the declaration provides otherwise, a condominium may be terminated "only by the agreement of 100 percent of the votes in the association and each holder of a deed or vendor's lien on a unit." The court found that in this case, the declaration was filed before any unit was conveyed.

Addressing the first issue raised by the association, the appeals court reviewed the following language from the Texas Property Code:

A unit owners' association must be organized as a profit or nonprofit corporation. The declarant may not convey a unit until the Secretary of State has issued a certificate of incorporation . . .

Bever argued that instead of condominium ownership governed by statute, the unit owners' property rights should be governed by common law, addressing matters of joint management like other jointly-owned properties having no owners associations and explaining that owners would have to unanimously agree on how the property would be managed and that the declaration, articles of incorporation and bylaws would have no effect on management.

The statute provides, "the declarant may not convey a unit until the Secretary of State has issued a certificate of incorporation." The appeals court analyzed the plain meaning of the language to determine whether it was mandatory or directory. No consequences are stated for conveying a unit before the certificate of incorporation is issued. Citing Texas case law, the court interpreted that the absence of consequences suggested that the "may not convey" requirement of the statute was directory rather than mandatory.

The preface to the Act states the following reasons that the statute was enacted: to make terminology and details of condominium statutes uniform so lenders could more easily assess the appropriateness of condominium documents and financing; to make unit holders' rights more uniform so that consumers would be more educated; to solve problems concerning termination of condominiums, eminent domain, insurance and rights and obligations of lenders upon foreclosure; and to speak to other issues that were not addressed by existing statutes. Commentary to the Act provides, "the first purchaser of a unit is entitled to have in place the legal structure of the unit owners association to clarify the relationship between the unit owners and the developer/declarant and to allow unit owners a say in governance during the initial period of developer/declarant control."

Bever argued that the provision was mandatory and that ignoring the mandate of the provision enabled the developer to retain control over the legal structure of the condominium association and, thus, Bever's property rights after Bever paid Huffman for the unit. The appeals court found that Bever's argument did not further purposes for the Act by construing the language to mean that if units are conveyed before the certificate of incorporation was issued, the units conveyed are not subject to the regime at all. Rather, the court found that adopting Bever's argument could create uncertainty and undermine the very rights the Act was intended to protect.

The court considered the different consequences that might follow from adopting either mandatory construction of the statute or directory construction. If the statute's language were mandatory, a possible consequence of the developer's conveying a unit before the association was incorporated would be that the developer would not be able to convey title to any units, and the unit owners' titles would be void. However, the court found that the Act and prefatory notes and comments contained in the Act indicate that the purpose of the Act is not to void a conveyance because of a defect in the timing of incorporating the unit owners' association. Interpretation of the Act indicates that the only defect that could affect title is a defect in the declaration because "the declaration is the instrument which creates and defines the units and common elements."

On the other hand, if the statute language were interpreted as directory, a unit owner could still obtain title to a unit but could sue to force incorporation of the association. This interpretation is consistent with the Act, which states that defects in instruments other than the declaration do not affect title but do entitle unit owners to appropriate relief.

The court summarized that the Act and its commentary establish that the defining event in the creation of a condominium is the filing of a declaration, not the incorporation of the association. Bever was not excused from the condominium regime because the association was not incorporated before the units were conveyed.

As to the second issue, Bever argued that the association's articles violate the Act because the Act provides that, "the membership of the association at all times consists exclusively of all unit owners." The association contends that the failure to designate the corporation as a membership corporation was a "technical error," and the error does not excuse Bever from the regime. The appeals court agreed with the association and explained that the articles provide that the purpose of the corporation is for the "benefit and betterment of the property Owners of Plano Parkway Office Condominiums. . ." The form used to incorporate the association contained two boxes, one stating that the corporation was to have members, the other that it was not. In the court's opinion, whoever filled out the form checked the wrong box.

Bever argued that the statute's language denotes a membership mandate that creates a seal between ownership rights and membership rights. It contended that failure to incorporate an association in accordance with the Act served to invalidate the condominium regime. However, the court found that adopting this conclusion would mean that the declaration and the condominium rights of all the other unit owners would also be terminated, and the court had already ruled that would be contrary to the language and purposes of the Act.

Instead, the appeals court concluded that the legislature's intent was that the consequences of a defect in the articles of incorporation are to allow the owner to pursue "appropriate relief," not to defeat the entire condominium regime. The court also noted that the Texas Nonprofit Corporation Act provides that a corporation may amend its charter to reflect that the association is a nonprofit corporation with members. Because Bever conceded that the association status as a corporation is not disputed, the court did not address the association's third issue.

The appeals court found in favor of the association. It reversed the trial court's order for summary judgment and remanded the case for further proceedings consistent with its opinion.

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Owners Can Be Held in Contempt of Court for Refusing to Comply with Restrictive Covenants


Rice
v. Lost Mountain Homeowners Association, Inc., No. A07A1391, Ga. App., November 1, 2007


Covenants Enforcement:
Owners can be held in contempt of court for acting in bad faith, in failing to pay court costs and refusing to comply with the court's order to remove a fence that offended restrictive covenants.

On April 15, 2003, Lost Mountain Homeowners Association, Inc. ("association") and its architectural control committee obtained a permanent injunction against Andrew and Kathryn Rice, in the association's action against the Rices for constructing and maintaining a fence in violation of the restrictive covenants to which the Rices' lot in Lost Mountain was subject. The trial court ordered the Rices to bring the offending fence into compliance with the restrictive covenants and to pay attorney's fees, expenses, and court costs to the association because they acted in bad faith. The trial court made its finding of "bad faith" based on a hearing held on June 7, 2006. Both parties were given notice of the hearing, but the Rices elected not to attend, stating in their response pleading that they "must not give Judge Grubbs' actions the appearance of legitimacy by attending said hearing."

At the hearing, the trial court found that the Rices' fence continued to be in violation of the injunction, that the Rices had the means and ability to comply with the injunction and that the Rices had deliberately and willfully refused to comply with the injunction. Following the hearing, the trial court found them in contempt of court and ordered them incarcerated until they purged their contempt by complying with the injunction, that is, by bringing the offending fence into compliance and paying attorney's fees, expenses, and costs.

The Rices, appearing pro se, appealed the contempt order. They argued that they could not be held in contempt of court for failure to pay attorney's fees, expenses, and court costs and cited cases in which contempt citations were given for failure to pay a simple money judgment. The appeals court distinguished the Rices' case from the cases they cited, stating that the Rices were not held in contempt solely for failure to pay court costs but also for their deliberate refusal, maintained over several years, to bring their fence into compliance with the restrictive covenants, as the trial court required. Summarily dismissing this line of argument, the court addressed whether the trial court abused its discretion by holding the Rices in contempt.

The appeals court noted that a trial court has wide discretion in determining whether its orders have been violated, and such determination is not disturbed by an appeals court unless there is a gross abuse of discretion. If there is any evidence in the record to support a trial judge's determination that a party willfully disobeyed the trial court's order, the appeals court will affirm the trial court's decision.

In this case, the appeals court stated (1) that the Rices failed to sustain their burden of proof because no transcript of the June 2006 hearing was provided in the appellate record; and (2) in the absence of a transcript, the appeals court must assume that the trial court properly exercised its discretion to find the Rices in contempt. Since the Rices did not support their assertions with evidence from the trial record or with appropriate citations to authority for their propositions, the court upheld the trial court's decision to hold the Rices in contempt of court.

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