Holiday Haven Members Assn. v. Paulson , 2014 Ohio 3902 ( 2014 )

[Cite as Holiday Haven Members Assn. v. Paulson, 2014-Ohio-3902.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
HOCKING COUNTY
HOLIDAY HAVEN MEMBERS,
ASSOCIATION, INC. :
Plaintiff-Appellant/ :
Cross-Appellee, Case No. 13CA13
:
vs.
:
KENNETH PAULSON, et al., DECISION AND JUDGMENT ENTRY
:
Defendants-Appellees/
Cross-Appellants. :
_________________________________________________________________
APPEARANCES:
COUNSEL FOR APPELLANT/
CROSS-APPELLEE: Raymond R. Michalski,1 222 South Broad Street,
Lancaster, Ohio 43130
COUNSEL FOR APPELLEES/
CROSS-APPELLANTS: James R. Kingsley, 157 West Main Street, Circleville, Ohio
43113
________________________________________________________________
CIVIL APPEAL FROM COMMON PLEAS COURT
DATE JOURNALIZED: 9-8-14
ABELE, P.J.
{¶ 1} This is an appeal and a cross-appeal from a Hocking County Common Pleas Court
judgment in favor of Kenneth Paulson and Emily Paulson (Paulsons), defendants below and
appellees herein, on the claims brought against them by the Holiday Haven Members
Association, Inc. (Holiday Haven), plaintiff below and appellant herein.
1
Attorney for appellant/cross-appellee, Raymond R. Michalski, was granted leave to withdraw as counsel on March
21, 2014, after the filing of appellate briefs.
[Cite as Holiday Haven Members Assn. v. Paulson, 2014-Ohio-3902.]
{¶ 2} Appellant assigns the following errors for review:
FIRST ASSIGNMENT OF ERROR:
“THE TRIAL COURT ERRED IN DECLARING THAT THE
APPELLANT HAS NO STANDING AND IS NOT THE REAL
PARTY IN INTEREST FOR THE ASSESSMENT AND
COLLECTION OF COSTS FOR MAINTAINING THE PRIVATE
ROADS IN THE SUBJECT SUBDIVISION OVER WHICH THE
APPELLEES HAVE AN EASEMENT FOR INGRESS AND
EGRESS.”
SECOND ASSIGNMENT OF ERROR:
“THE TRIAL COURT ERRED IN DECLARING THAT THE
APPELLEES ARE NOT LIABLE FOR THE PAYMENT OF
ASSESSMENTS FOR THE COST OF MAINTAINING THE
PRIVATE ROADS IN THE SUBJECT SUBDIVISION OVER
WHICH THE APPELLEES HAVE AN EASEMENT FOR
INGRESS AND EGRESS.”
THIRD ASSIGNMENT OF ERROR:
“THE TRIAL COURT ERRED IN DECLARING THAT THE
APPELLANT HAS NO STANDING AND IS NOT THE REAL
PARTY IN INTEREST FOR THE PURPOSE OF REVIEWING
AND APPROVING OR DISAPPROVING PLANS AND
SPECIFICATIONS FOR IMPROVEMENTS TO BE
CONSTRUCTED ON LOTS IN THE SUBJECT SUBDIVISION.”
FOURTH ASSIGNMENT OF ERROR:
“THE TRIAL COURT ERRED IN DECLARING THAT THE
APPELLEES ARE PERMITTED TO CONSTRUCT A
RESIDENCE ON THEIR LOTS IN THE SUBJECT
SUBDIVISION WITHOUT FIRST SUBMITTING THE PLANS
AND SPECIFICATIONS FOR SUCH AN IMPROVEMENT TO
APPELLANT FOR APPROVAL.”
The Paulsons also assign the following the cross-assignment of error for consideration:
“DID THE TRIAL COURT COMMIT PREJUDICIAL ERROR
WHEN IT DID NOT QUIET TITLE?”
HOCKING, 13CA13 3
{¶ 3} Various members of the Hines family owned acreage in Perry Township that they
eventually transferred to Holiday Industries, Inc. (Holiday, Inc.), a corporation whose principal
was Lawrence Hines (Hines). Holiday, Inc. created Holiday Haven, a residential subdivision
platted in separate stages during the 1960s and 1970s. On November 9, 1973, Holiday Inc. filed
a plat map for Holiday Haven No. 8 that contains the properties at the center of this dispute.
That map contained the following deed restrictions for lots within the section:
“ * * *
2. No building shall be erected on any of said lots other than one singe family
dwelling or cottage with garage without permission.
3. No structure of a temporary nature, trailer, basement, tent, shack, garage,
or other out-building shall be used on any lot at any time as a residence
either temporary or permanent except by written permission of the sellers
herein.
* * *
6. No building shall be erected on any lot until the plans and specifications
theretofore have been approved in writing by the sellers herein.”
{¶ 4} On November 23, 1972, the Paulsons acquired lot one-hundred eight (108) from
Holiday, Inc. Subsequently, Appellant Kenneth Paulson conveyed his one-half interest in that
lot to his wife. In 1985, Appellant Kenneth Paulson acquired lots one hundred four and one
hundred five (104 & 105) from Holiday, Inc.
{¶ 5} Although Hines, as principal for Holiday, Inc., initially maintained the properties
including upkeep and the approval of building plans, the work eventually became overwhelming
HOCKING, 13CA13 4
and Hines encouraged the residents to form an association to take over for Holiday, Inc. As a
result, Holiday Haven incorporated in 1994. Its bylaws provided, inter alia, that the Board of
Trustees could (1) “enforce the covenants, conditions and restrictions applicable to the lots . . .,”
(2) “repair, maintain and improve the private roads” of the community,” and (3) “levy and collect
assessments” to pay for maintenance of those roads.
{¶ 6} On December 13, 1994, Holiday, Inc., by and through Hines, its president,
transferred some property to the homeowners association. However, that transfer did not
include Holiday Haven No. 8 where the Paulsons own three lots. Over the years, Holiday Haven
grew to include fifty-five members. Also, at the time of the trial court proceedings some
thirteen additional property owners who, although not actual members of the association, paid
dues for road maintenance. The Paulsons are not members of Holiday Haven and they did not
voluntarily donate to the homeowners association.
{¶ 7} At first, Holiday Haven did not bill the Paulsons for road maintenance under the
belief they had no right to do so. Subsequently, on counsel's advice, they began to send
invoices. The Paulsons, believing that they are not bound by covenants to which they did not
agree, refused to pay Holiday Haven and did not seek approval for plans to build structures on
lots 94 & 95.
{¶ 8} On April 6, 2011, Holiday Haven commenced the instant action and alleged, inter
alia, that the Paulsons (1) are in default of payment of road maintenance fees, and (2) did not
receive approval for construction on lots 94 & 95. Holiday Haven sought an injunction against
further construction, as well as damages for unpaid road maintenance fees. The Paulsons denied
liability and counterclaimed for quiet title to their premises. Holiday Haven denied liability
HOCKING, 13CA13 5
under the counterclaim.
{¶ 9} At the February 11, 2013 trial to the court, the evidence showed that the Paulsons
did not pay any assessments for road maintenance, nor did they seek approval for the
construction of structures. The trial court issued a detailed, twelve page opinion that ruled
against Holiday Haven on its claims, and in favor of the Paulsons on the majority of their
counterclaims. First, the trial court concluded that Holiday Haven is not the real party in interest
and has no standing to bring this action. The court reasoned that no evidence shows that
Holiday, Inc. transferred Holiday Haven No. 8 to the homeowners association. Thus, Holiday,
Inc. still owned the property and Holiday Haven lacked standing to enforce the plat restrictions.
Moreover, even if it did have standing, the trial court found nothing in the plat restrictions to
allow the homeowners association to assess road maintenance fees. Further, the court found that
the placement of a modular home did not violate the plat restrictions. Finally, the court ruled
that it would “quiet” the Paulsons’ title as to “road assessments,” but would not do so as to the
“restrictions.”2 This appeal followed.3
I
{¶ 10} We begin by noting our agreement with the trial court that the “Declaration of
Covenants, Conditions, and Restrictions” of the Holiday Haven Community” (Declaration) has
no bearing on this action. Mike Roth, Holiday Haven president at the time of the trial court
2
The trial court was unclear what it meant by “restrictions,” but we presume it refers to those restrictions included in
the 1973 plat map.
3
The trial court’s June 4, 2013 judgment contained a "no just reason for delay" determination. However, in light of
the court's determination in the previous sentence that overruled all other claims or counterclaims not already decided, we are
not sure why the court included this language in its judgment.
HOCKING, 13CA13 6
proceedings, conceded that the Paulsons were not a signatory to the Declaration, nor were they
members of the homeowners association.
{¶ 11} A homeowners association agreement is, in essence, a contract. See O'Bannon
Meadows Homeowners Assn., Inc. v. O'Bannon Properties, L.L.C., 12th Dist. Clermont No.
CA2012– 10–073, 2013-Ohio-2395, at ¶19; also see Lisy v. Mayfair Estates Homeowners Assn.,
9th Dist. Summit No. 25392, 2012-Ohio-68, at ¶29 (Dickinson, J., Concurring in Part). Also, a
party must be a party to a contract to be bound by that contract. See, generally, State v. Jackson,
12th Dist. Butler No. CA2011–06–096, 2012-Ohio-4219, at ¶12 (“When a county prosecutor is
not a party to a plea agreement, he or she is not bound by the terms of that agreement.”); N. Park
Retirement Community Ctr., Inc. v. Sovran Cos., Ltd., 8th Dist. No. 96376, 2011-Ohio-5179, at
¶17 (“***agreements to arbitrate are matters of contract, a person who was not a party to an
arbitration agreement cannot be forced to arbitrate.”).
{¶ 12} Because the Paulsons did not sign the Declaration, nor are they members of
Holiday Haven, they cannot be held liable under the terms of the Declaration. Thus, we fully
agree with the trial court that if the Paulsons could be liable to Holiday Haven, it must be under
some actual servitude imposed on their land rather than the Declaration.
II
{¶ 13} We jointly consider Holiday Haven’s first and third assignments of error that
involve standing to bring the action. The homeowners association correctly states that our
standard of review is de novo, but that is not because the remedy is a declaratory judgment (as
Holiday Haven argues in its brief), but rather because a determination of standing is a question of
law. See HSBC Bank USA, Natl. Assn. v. Bailey, 11th Dist. Trumbull No. 2012–T–0086,
HOCKING, 13CA13 7
2014-Ohio-246, at ¶43; Bank of New York Mellon v. Blouse, 12th Dist. Fayette No.
CA2013–02–002, 2013-Ohio-4537, at ¶5; Johnson Invest. Group, L.L.C. v. Marcum, 2nd Dist.
Greene No. 2012CA65, 2013-Ohio-3175, at ¶18. De novo appellate review means that we
afford no deference to a trial court’s decision and, instead, conduct our own, independent review
of the evidence. See Wells Fargo Bank, N.A. v. Odita, 10th Dist. Franklin No. No. 13AP–663,
2014-Ohio- 2540, at ¶8. For the following reasons, we agree with the trial court's conclusion in
this matter.
{¶ 14} In the case at bar, it is clear that Holiday, Inc. platted Holiday Haven No. 8 and
that Holiday, Inc. is the grantor of the Paulsons' three lots. A plat map is one device used to
create use restrictions on real estate. Middle Road Developers, L.C. v. Windmiller Design and
Development Co., 746 N.W.2d 279 (IA.App. 2008). The purpose of a plat is to facilitate the sale
of property in accordance with the terms and conditions of that plat. See C & D Partnership v.
City of Gahanna, 10th Dist. Franklin No. 82AP-919, 1983 WL 3718 (Oct. 6, 1983) (Whiteside, J.
Concurring). As such, Holiday, Inc., or its successor-in-interest, is the only party that may
enforce the covenant. Here, the 1994 deed from Holiday, Inc. to Holiday Haven, as the trial
court correctly notes, is insufficient to make the homeowner’s association its
successor-in-interest over Holiday Haven No. 8. That deed transferred two tracts of land: the
first in “Section 34" of “Township 13" and “Section 3" of “Township 12,” and the second in
“Section 3" of “Township 12.” The plat map shows that Holiday Haven No. 8 is in “Section 33"
of “Township 13.” In short, the Paulsons' lots are not included in the 1994 deed and Holiday
Haven is not a party with the requisite standing to enforce the plat restrictions.
{¶ 15} Holiday Haven does not contest the fact that the 1994 deed did not cover the lots
HOCKING, 13CA13 8
at issue, but argues that the trial court improperly ignored two other documents. The Paulsons
answered on April 25, 2011 and raised the defense that Holiday Haven did not have standing to
bring this action. The next day, Hines, as the Holiday, Inc. president, executed a “Ratification
And Reaffirmation of Assignment” (Ratification Agreement) that states, inter alia, that the 1994
deed “was intended not only to convey the real estate described therein but also to assign to the
Association all of the rights and responsibilities of the grantor . . .under the subject covenants” of
all eight sections of the subdivision. Two days later, Hines filed an “Affidavit Of Facts” with
the Hocking County Recorder and stated, in essence, the same information.
{¶ 16} In its June 4, 2013 decision and judgment, the trial court stated that it would
“disregard” these two instruments and the case would be decided on the 1994 deed. Holiday
Haven argues that this constitutes error. We, however, readily agree with the trial court.
{¶ 17} R.C. 5301.252(B) states the following with regard to an “affidavit of facts” filed
with a county recorder:
“(B) The affidavits provided for under this section may relate to the following
matters:
(1) Age, sex, birth, death, capacity, relationship, family history, heirship, names,
identity of parties, marriage, residence, or service in the armed forces;
(2) Possession;
(3) The happening of any condition or event that may create or terminate an estate
or interest;
(4) The existence and location of monuments and physical boundaries, such as
fences, streams, roads, and rights of way;
(5) In an affidavit of a registered surveyor, facts reconciling conflicts and
ambiguities in descriptions of land in recorded instruments.”
[Cite as Holiday Haven Members Assn. v. Paulson, 2014-Ohio-3902.]
Here, the “Affidavit of Facts” meets none of these criteria and Holiday Haven cites no authority
to support the proposition that either of these documents should have been afforded any weight.
We emphasize that neither the Ratification Agreement nor the Affidavit of Facts was filed to
resolve some ambiguity in the conveyance. Instead, those filings added provisions to the 1994
deed that were not initially included. Generally, outside evidence cannot be introduced to
contradict or change the meaning of a deed. Robbins v. Cray, 2nd Dist. Miami No. 345, 1935 WL
1930 (May 2, 1935). Moreover, even if that were not the case, this case was tried to the court.
Thus, the trial court served as the trier of fact and issues of evidence weight and credibility are
generally left to the trier of fact to decide. See Grimes v. Grimes, 2012-Ohio-3562, 975 N.E.2d
496, at ¶28 (4th Dist.); Portco v. Eye Specialists, Inc., 177 Ohio App.3d 139, 2008-Ohio- 3154,
894 N.E.2d 84, at ¶17 (4th Dist.). Here, the trial court gave no credence to the self-serving
Ratification Agreement or to the Affidavit of Facts, and we will not second-guess its decision.
{¶ 18} Finally, we note that a half century ago the Ohio Supreme Court spoke to the issue
of standing to enforce a restrictive covenant on land. “If the restrictive covenant was enacted for
the benefit of the one seeking to enforce it, he may do so, but the burden is upon him to show that
such covenant restricting the use of the lands of another was intended to be for his benefit, and
that he has an equitable interest in the other person's adherence to the covenant.” (Emphasis
added.) Berger v. Van Sweringen Co., 6 Ohio St.2d 100, 102, 216 N.E.2d 54 (1966). This
principle continues to be applied today. See e.g. Baker v. Adams, 3rd Dist. Logan No. 8-05-17,
2006-Ohio-3232, at ¶11. In the case sub judice, Holiday Haven has not, and cannot, satisfy this
standard. The plat restrictions for Holiday Haven No. 8 were filed in 1973. Two decades later,
the homeowners’ association was formed. Holiday Haven cannot claim that it was the intended
HOCKING, 13CA13 10
beneficiary of the plat restrictions when it did not exist until twenty years later.
{¶ 19} Thus, for these reasons, we agree with the trial court that Holiday Haven lacked
standing to enforce the plat restrictions. Accordingly, we find no merit to the first and third
assignments of error and they are hereby overruled.
III
{¶ 20} In its second and fourth assignments of error, Holiday Haven aruges that the trial
court erred by ruling that it could not (1) collect assessments from the Paulsons for road
maintenance, and (2) require the Paulsons to submit building plans before they erect a structure
on the properties. We realize that the trial court issued these rulings in the alternative, assuming
that the homeowners association actually had standing. However, having ruled that the trial
court correctly concluded that the homeowners association did not have standing to bring this
action, any decision on these issues would amount to an advisory opinion. See, generally,
Tewksbury v. Tewksbury, 194 Ohio App.3d 603, 2011-Ohio-3358, 957 N.E.2d 362, at ¶13;
Dolan v. Glouster, 4th Dist. Athens Nos. 11CA18, 12CA1, 11CA19, 12CA6 & 11CA33,
2014-Ohio-2017, at ¶75. Therefore, we decline to pass on these questions and overrule the
assignments of error as moot. See App.R. 12(A)(1)(c).
IV
{¶ 21} The Paulsons’ cross-assignment of error asserts that although the trial court
correctly granted the remedy of quiet title with regard to the road assessment bills, the court erred
by not also granting quiet title with regard to the requirement that they seek approval for building
plans.
{¶ 22} Quiet title rulings are reviewed under a manifest weight of the evidence standard.
HOCKING, 13CA13 11
See e.g. Spurlock v. Pemberton, 4th Dist. Lawrence No. 13CA1, 2013-Ohio-4002, at ¶27;
Cartwright v. Allen, 12th Dist. Fayette No. CA2011–10–025, 2012-3631, at ¶10. Thus, an
appellate court will not reverse a trial court’s decision if some competent, credible evidence
supports the decision. Hubbard Family Trust v. TNT Land Holdings, LLC, 2014-Ohio-772, 9
N.E.3d 411, at ¶62 (4th Dist.) Hamilton v. Ball, 2014-Ohio-1118, 7 N.E.3d 1241, at ¶15 (4th
Dist.).
{¶ 23} Here, the trial court’s ruling is based almost entirely on the wording of the
Holiday Haven No. 8 plat map. Because that map made no mention of assessing fees to
maintain the subdivision roadways, sufficient evidence exists to rule against Holiday Haven on
that issue. In short, no provision allows for the Paulsons to be assessed road maintenance fees.
{¶ 24} On the other hand, the plat map includes a provision to require the approval of
structures before construction. Again, we decline to pass on the specifics of that provision
because it would constitute an advisory opinion. However, the declarations in the plat map are
sufficient to establish that someone has the authority to approve buildings constructed on the
Paulsons' lots. Thus, the trial court correctly opted not to quiet title on that issue as it appears
that either Holiday or any future successor-in-interest may assert that right.
{¶ 25} Therefore, because we believe that sufficient evidence exists to support the trial
court’s finding, we hereby overrule the cross-assignment of error. Accordingly, having found no
merit in the assignments of error or the cross-assignments of error, we hereby affirm the trial
court's judgment.
JUDGMENT AFFIRMED.
[Cite as Holiday Haven Members Assn. v. Paulson, 2014-Ohio-3902.]
JUDGMENT ENTRY
It is ordered the judgment be affirmed and that all parties split the costs herein taxed.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Hocking County
Common Pleas Court to carry this judgment into execution.
A certified copy of this entry shall constitute that mandate pursuant to Rule 27 of the
Rules of Appellate Procedure.
McFarland, J. & Hoover, J.: Concur in Judgment & Opinion
For the Court
BY:
Peter B. Abele
Presiding Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the
time period for further appeal commences from the date of filing with the clerk.