Pinnacle Peak v. Ramioulle ( 2015 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
PINNACLE PEAK RANCHOS
PROPERTY OWNERS ASSOCIATION, an Arizona
non-profit corporation, Plaintiff/Appellee,
v.
FREDERIC RAMIOULLE and NATALIE
RAMIOULLE, husband and wife, Defendants/Appellants.
No. 1 CA-CV 14-0409
FILED 12-10-2015
Appeal from the Superior Court in Maricopa County
No. CV2013-052659
The Honorable Michael D. Gordon, Judge
AFFIRMED
COUNSEL
Davidson & Kaffer, PLLC, Scottsdale
By Frederick E. Davidson, Chad R. Kaffer
Counsel for Plaintiff/Appellee
Udall Shumway, PLC, Mesa
By Joel E. Sannes
Counsel for Defendant/Appellant
PINNACLE PEAK v. RAMIOULLE
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge John C. Gemmill and Judge Peter B. Swann joined.
J O H N S E N, Judge:
¶1 Frederic and Natalie Ramioulle appeal from the judgment
granting a permanent injunction against them in favor of Pinnacle Peak
Ranchos Property Owners Association (the "Association"). For the
following reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 In 2010, the Ramioulles purchased a lot in Pinnacle Peak
Ranchos subdivision. Their lot was subject to deed restrictions specified in
the Restated and Amended Declaration of Covenants, Conditions and
Restrictions for Pinnacle Peak Ranchos ("CCRs"). Under section 2.8 of the
CCRs, "[n]o structure located on the Property shall exceed one story in
height (exclusive of basement)." The CCRs also state that "[n]o construction
. . . shall be commenced . . . without the prior written approval of . . . (the
'Architectural Review Committee.')".
¶3 Before beginning construction of their home, the Ramioulles
submitted their design plans to the Architectural Review Committee (the
"ARC"). The plans included an interior staircase and an interior "bridge" at
the same elevation as an exterior roof deck. The ARC rejected the plans
because it found that the "bridge" constituted a "second story element" that
violated section 2.8. In a subsequent plan, the Ramioulles kept the exterior
roof deck at the same elevation but moved the staircase to the exterior of
the home and removed the offending bridge, creating in its place a tall open
area labeled "clerestory area." The ARC approved the new design.
¶4 The home the Ramioulles proceeded to build, however,
deviated from the approved plans. Instead of retaining the "clerestory area"
as an open expanse, the Ramioulles created a new second-story room,
approximately seven feet in height, in the previously designated clerestory
area. After the ARC learned of the deviation a year later, it inspected the
home, then asked the Ramioulles to remove the floor that had not been in
the approved plans. After the Ramioulles refused and subsequent
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PINNACLE PEAK v. RAMIOULLE
Decision of the Court
negotiations failed, the Association filed suit in superior court, seeking an
injunction requiring the Ramioulles to cease construction in violation of the
approved plans.
¶5 The superior court granted the Association's request for a
temporary restraining order. During the preliminary injunction hearing
that followed, the parties agreed to consolidate preliminary and permanent
injunctive proceedings. Following three days of trial, the superior court
granted judgment in favor of the Association and ordered the Ramioulles
to remove the second floor, thereby bringing their project into compliance
with the January 2012 plans.
¶6 The Ramioulles timely appealed. We have jurisdiction
pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(A)(1)
(2015).1
DISCUSSION
¶7 The Ramioulles argue the superior court erred in interpreting
section 2.8 of the CCRs. Restrictive covenants are a contract between the
subdivision's property owners as a whole and the individual lot owners.
Ahwatukee Custom Estates Mgmt. Ass'n, Inc. v. Turner, 196 Ariz. 631, 634, ¶ 5
(App. 2000). Because contract interpretation presents questions of law, we
interpret restrictive covenants de novo. See id.
¶8 In Powell v. Washburn, 211 Ariz. 553, 554, ¶ 1, 556-57, ¶ 13
(2006), the Arizona Supreme Court adopted the Restatement (Third) of
Property approach for interpreting restrictive covenants, which requires
giving "effect to the intention of the parties ascertained from the language
used in the instrument, or the circumstances surrounding creation of the
servitude, and to carry out the purpose for which it was created." See
Restatement (Third) of Prop.: Servitudes § 4.1(1) (2000).
¶9 Section 2.8 of the CCRs states, "No structure located on the
Property shall exceed one story in height (exclusive of basement)." The
Ramioulles argue the phrase "one story in height" denotes a height
limitation, not a limit on the number of stories a structure may have; the
Association argues section 2.8 bars any home of more than one story
(exclusive of basement).
1 Absent material revision after the relevant date, we cite a statute's
current version.
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PINNACLE PEAK v. RAMIOULLE
Decision of the Court
¶10 Looking first to the text of the provision, words in a restrictive
covenant "must be given their ordinary meaning, and the use of the words
within a restrictive covenant gives strong evidence of the intended
meaning." Burke v. Voicestream Wireless Corp. II, 207 Ariz. 393, 396, ¶ 13
(App. 2004).2
¶11 Use of the term "one story" in section 2.8 is strong evidence
that the drafter intended the restriction to limit the number of stories in a
home. In determining the ordinary meaning of words, we rely on
dictionary definitions. See Horton v. Mitchell, 200 Ariz. 523, 527, ¶¶ 17-18
(App. 2001) (citing dictionary definition of "structure" in interpreting a
restrictive covenant); Tucson-North Town Home Apartments Homeowners'
Ass'n v. Robb, 123 Ariz. 4, 6 (App. 1979). The dictionary defines "story" as
"a section or horizontal division of a building extending from the floor to
the ceiling or roof lying directly above it." Webster's Dictionary 1796 (2d
ed. 1983). It defines height as "the distance from the bottom to the top." Id.
at 841. Accordingly, applying the ordinary meaning of the words to the
provision, section 2.8 restricts the height of a building to one story,
exclusive of basement.
2 Powell declined to follow the principle recited in Burke and other
cases that when language in a restrictive covenant is ambiguous, a court
should construe the language strictly in favor of free use of land. 211 Ariz.
at 557, ¶¶ 14-15. Under Restatement § 4.1 and Powell, "the expressed
intention of the parties is of primary importance. Their intention is
ascertained from the servitude's language interpreted in light of all the
circumstances. Relevant circumstances include the location and character
of the properties burdened and benefited by the servitude, the use made of
the properties before and after creation of the servitude, the character of the
surrounding area, the existence and contours of any general plan of
development for the area, and the consideration paid for the servitude."
Restatement (Third) of Prop.: Servitudes § 4.1, cmt. d. Arizona courts
therefore no longer default to a free-use construction upon discovery of an
ambiguity. Instead, we apply traditional methods of contract interpretation
to determine and enforce the actual intent of the restriction. We note,
however, that Restatement § 4.9 provides: "Except as limited by the terms
of the servitude determined under § 4.1, the holder of the servient estate is
entitled to make any use of the servient estate that does not unreasonably
interfere with enjoyment of the servitude." Accordingly, while we discern
an intent contrary to the Ramioulles' proposed use in this case, we recognize
the continuing vitality of the rule that free use of land is permitted absent
an agreement to the contrary.
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PINNACLE PEAK v. RAMIOULLE
Decision of the Court
¶12 The Ramioulles argue that the subheading of section 2.8,
"Height Limitation," along with the phrase "in height," mean that the
provision is intended to be a height limit. But they offered no evidence at
trial and no argument on appeal that would give any objective meaning to
that purported construction. In other words, accepting the Ramioulles'
argument that section 2.8 sets out a "height limitation" for structures in the
subdivision, the CCRs contain no articulable height limit at all (in terms of
inches and feet) other than that a structure may be no more than one story. The
provision's use of "story" as a term that defines a structure's permitted
height is reinforced by the provision's reference to "basement." In
specifying that a basement is not a "story" for purposes of the height
limitation, section 2.8 makes clear that the relevant term of height
measurement is a "story" (exclusive of a basement).
¶13 The Ramioulles contend that in interpreting section 2.8, Powell
requires us to look to the developer's intent in 1959, when the covenants
were first created and recorded. As the Association correctly points out,
however, the CCRs were substantially revised in 1989 before the
Ramioulles purchased their lot. In the end, the distinction makes no
difference because neither side offers any writings or statements
contemporaneous to either time period that are particularly relevant to our
inquiry. The current CCRs' stated purpose is "for enhancing and perfecting
the value, desirability and attractiveness of the Property." We are unable to
conclude that broad language gives greater support to either side's
interpretation of the provision at issue.
¶14 The Ramioulles, however, contend the purpose of section 2.8
is to protect views in the community. They note that the elevation (height)
of the home they are building does not exceed the height specified in the
set of plans the ARC approved, and argue that, as built, their home does
not impermissibly obstruct their neighbors' views. The Association
responds that the purpose of section 2.8 is to protect the privacy of owners
in the community, not (or not solely) to protect their views. The Association
argues that even though the addition of what the ARC concluded was a
second story did not change the height of the Ramioulles' home, the change
would allow the Ramioulles to look out through the second-floor windows
upon nearby yards without their neighbors' knowledge. The Association
concedes that under the approved plans, the Ramioulles could look out on
their neighbors from the approved elevated open deck, but points out that
neighbors will know when they are in plain view of persons on the deck
but will not know when they are being observed by persons looking
through the second-story windows.
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PINNACLE PEAK v. RAMIOULLE
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¶15 Although section 2.8 may both promote homeowners' views
and protect their privacy, neither the Ramioulles nor the Association offers
any real evidence for the proposition that the original grantor or the
members of the association who revised the CCRs in 1989 intended that the
provision be construed to promote either principle over the other.
¶16 Construction patterns in the subdivision, however, support
the conclusion that, over time, parties to the CCRs have understood that no
home in the subdivision may have more than one story. The ARC
chairperson testified that since 1959, no two-story homes have been allowed
in the community, and the superior court found that the ARC has never
approved a two-story home.3 We therefore infer from the language of the
provision and from the circumstances surrounding the creation of both
versions of the CCRs that the parties intended section 2.8 to restrict homes
to only one story. See Restatement (Third) of Prop.: Servitudes § 4.1 cmt.
d.
¶17 The Ramioulles argue case law supports their contention that
section 2.8 does not prevent construction of a two-story home. But in each
of the cases they cite, by contrast to this situation, the court had direct
evidence supporting a party's proffered interpretation of the restriction. See
Jones v. Brown, 748 P.2d 747, 748, n.1 (Alaska 1988) (homes could be only
"one story or split-level in design and of a height no more than is usual for
houses of similar design"; witnesses testified home was no taller than a
typical split-level house); Smith v. North, 53 Cal. Rptr. 94, 95 (App. 1966)
(covenants specified giving "special import to the view angle"); Drulard v.
LeTourneau, 593 P.2d 1118, 1123 (Or. 1979) (home complied with overall 24-
foot height limit); Foster v. Nehls, 551 P.2d 768, 771 (Wash. App. 1976)
3 The Ramioulles argue that two homes in the subdivision exceed one
story in height. The ARC chairperson, however, testified the ARC
approved plans for one of the homes after concluding its bottom floor,
which was below grade, was a basement, not a first story. As for the second
home, the ARC chairperson testified that there was no dispute regarding
the height of the home. While the initial design of the home contained a
split-level, the lot owners removed the split-level, eliminating the ARC's
concern that the house would exceed one story. As noted, based on the
evidence at trial, the superior court found that the ARC has never approved
the building of a two-story home.
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PINNACLE PEAK v. RAMIOULLE
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(original developer testified parties did not intend to reduce height
restriction to "inches and feet" but to protect views).4
¶18 Given the plain language of section 2.8, which seems to
measure a height limitation in terms of a "story," and the fact that the ARC
has never approved a home exceeding one story in height, we conclude that
a home exceeding one story (exclusive of basement) violates the restriction.
The superior court found that the feature the Ramioulles were building in
what their plans had shown as an open clerestory constituted a habitable
story. In support of its finding, the court noted that it had "vents for air-
conditioning . . . wiring installed for internet and TV hookup," and in plans
and correspondence by the Ramioulles, the area was referred to as "Mr.
Ramioulle's office." Substantial evidence supports the superior court's
finding that the space in question constituted a story in violation of section
2.8 of the CCRs.
¶19 The Ramioulles also argue, however, that under section 7.1 of
the CCRs, the ARC lacks the power to review a feature (here, the second
floor) that is not visible from the neighboring property. Section 7.1 states:
7.1 Obligation to Submit Exterior Plans for Approval. No
construction, landscaping, painting, installation or
refurbishment of any Improvement (including without
limitation, buildings, fences, walls, windows, storage
facilities, landscaping, excavation, grading, entryways,
vestibules, stairways, awnings, patio covers, window
coverings or treatments, antennas, balconies or patios) shall
be commenced, erected or maintained upon the Property or
any portion of a Lot, visible from neighboring property
without the prior written approval of a committee (the
"Architectural Review Committee"). . . .
The Ramioulles argue that applying the rule of ejusdem generis to section 7.1
leads to the conclusion the ARC's review is limited to the exterior of the
home.
4 The Ramioulles also cite Hiner v. Hoffman, 977 P.2d 878 (Haw. 1999),
but that case is not relevant. The parties there agreed that a restriction of
not more than "two stories" was intended to limit the height of homes, but
the court held the limit was too ambiguous to be enforceable because it did
not establish a measureable height limit. Hiner, 977 P.2d at 885. The
Ramioulles do not argue that section 2.8 is too ambiguous to have meaning.
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PINNACLE PEAK v. RAMIOULLE
Decision of the Court
¶20 We disagree. Under the rule of ejusdem generis, the meaning
of a term is presumed to be limited to "the enumerated specific terms and
to include only those things of the same nature as those specifically
enumerated unless a clear manifestation of a contrary intent is apparent."
United Cal. Bank v. Prudential Ins. Co. of Am., 140 Ariz. 238, 273 (App. 1983).
Here, it is clear from the CCRs as a whole that the ARC's authority extends
beyond approval of the exterior of a home. Under section 7.3, lot owners
must submit plans to the ARC allowing the committee to "understand the
nature, kind, size, areas, height . . . of the proposed . . . structure." Whether
a proposed design has more than one story is an inquiry into the "nature
[and] kind" of the home. Additionally, the ARC's authority under section
7.4 includes withholding approval of proposed construction if it "is not
suitable or desirable . . . taking into consideration the requirements of this
Declaration."
¶21 Reading these provisions together, we conclude section 7.1
does not preclude the ARC from inspecting interior elements of a building
design when it must do so to ensure compliance with the CCRs. Because
the CCRs contain a one-story restriction, the ARC must be able to determine
whether a home complies with that restriction. Accordingly, its approval
authority extends to the interior of a home as necessary to make that
determination.
¶22 At oral argument before this court, counsel for the Ramioulles
argued that the ARC's jurisdiction stops at the exterior window treatments.
But a window is both an exterior and an interior feature of a home. Thus,
the inclusion of "windows" in section 7.1 suggests that the ARC's authority
extends to some degree within the interior of a home. Additionally, the
record shows that the Ramioulles and the ARC reached a compromise by
which the windows in the clerestory area would be relocated and reduced
in size. That agreement fell apart, Mr. Ramioulle testified, because
structural issues prevented the windows from being raised to the stipulated
level.
¶23 Finally, the Association argues the Ramioulles deviated from
the approved plans not only by including a second story but also by
deleting parapet walls, including external second-story doors, and exterior
cable fencing. It asks us to construe the superior court's injunction to
require the Ramioulles not only to remove the second-story floor, but also
to remedy any other variation from the approved plans. In response, the
Ramioulles argue the second-story floor was the only alleged deviation
tried to the court, and argue the injunction is not broad enough to
encompass any issue other than the second story.
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PINNACLE PEAK v. RAMIOULLE
Decision of the Court
¶24 The record reveals that the focus at trial was on whether the
Ramioulles' home violated the story limitation of section 2.8. Although the
superior court found the second story violated the CCRs, its judgment
stated, "The only adequate remedy under the circumstances is to order
Defendants to remove the second story floor and bring the project into
compliance with the Approved Plans or in any other manner that is
approved by the ARC." Because the superior court is in the best position to
address the scope of its injunction, we will not modify or address the extent
of judgment. To the extent the scope of the injunction is not clear, the
parties may take up that issue with the superior court.
¶25 In our discretion, we deny both parties' requests for attorney's
fees. The Association may recover its costs upon compliance with Arizona
Rule of Civil Appellate Procedure 21(b).
CONCLUSION
¶26 We affirm the judgment.
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