Creekside Homeowners Assn. v. Creekside Golf Course , 316 Or. App. 646 ( 2021 )

646
Argued and submitted September 5, 2019, general and supplemental judgments
affirmed December 29, 2021
CREEKSIDE HOMEOWNERS ASSOCIATION, INC.,
an Oregon nonprofit corporation,
Plaintiff-Appellant,
v.
CREEKSIDE GOLF COURSE, LLC,
an Oregon limited liability company,
dba Creekside Golf Club; and
Creekside Golf Operations, LLC,
also dba Creekside Golf Club,
Defendants-Respondents.
Marion County Circuit Court
16CV13722; A165800
505 P3d 15
Plaintiff Creekside Homeowners Association brought this action pursuant
to ORS 28.020, seeking a declaration that defendant Creekside Golf Course,
LLC, the owner of Creekside Golf Course, and the golf club’s operator, defendant
Creekside Golf Club Operations, LLC (collectively, “defendants”), are prohibited
by a Declaration of Covenants, Conditions and Restrictions (CC&Rs) and the
doctrines of equitable servitude and waste from eliminating the course. After a
trial to the court, plaintiff appeals a general judgment entering a declaration for
defendants and a supplemental judgment awarding defendants $422,788.71 in
attorney fees and costs. Held: The CC&Rs give defendant Creekside Golf Course,
LLC exclusive power to determine the use of the property, and the trial court
therefore did not err in declaring that the CC&Rs do not prohibit defendants from
ceasing to operate a golf course and that plaintiff cannot prevent defendants from
developing the golf course real property for residential use. Thus, the trial court
did not err in awarding attorney fees to defendants as provided in the CC&Rs.
The trial court also did not err in rejecting plaintiff’s request for declarations
that defendants committed waste or were equitably estopped from ceasing to
maintain a golf course on the property.
General and supplemental judgments affirmed.
Karsten H. Rasmussen, Judge. (General Judgment)
R. Curtis Conover, Judge. (Supplemental Judgment)
Brad S. Daniels argued the cause for appellant. Also on
the briefs were James N. Westwood and Stoel Rives LLP.
C. Robert Steringer argued the cause for respondents.
Also on the brief were James E. Mountain, Erica R. Tatoian
and Harrang Long Gary Rudnick P. C.
Cite as 316 Or App 646 (2021) 647
Before DeHoog, Presiding Judge, and Mooney, Judge,
and Kamins, Judge.*
MOONEY, J.
General and supplemental judgments affirmed.
DeHoog, P. J., dissenting.
______________
* Kamins, J., vice Hadlock, J. pro tempore.
648 Creekside Homeowners Assn. v. Creekside Golf Course
MOONEY, J.
Plaintiff Creekside Homeowners Association brought
this action pursuant to ORS 28.020, seeking a declaration
that defendant Creekside Golf Course, LLC, the owner of
Creekside Golf Course, and the golf club’s operator, defendant
Creekside Golf Operations, LLC (collectively, “defendants”),
are prohibited by a Declaration of Covenants, Conditions
and Restrictions (CC&Rs) and the doctrines of equitable
servitude and waste from eliminating the course. After
a trial to the court, plaintiff appeals a general judgment
entering a declaration for defendants and a supplemental
judgment awarding defendants $422,788.71 in attorney fees
and costs. We have reviewed the CC&Rs and agree with the
trial court that they do not require defendants to maintain
a golf course in perpetuity; nor do the doctrines of equitable
servitude or waste apply. The trial court therefore did not
err in rejecting plaintiff’s contentions and entering a decla-
ration for defendants.
We draw our summary of the facts from the trial
court’s extensive findings and the undisputed facts in
the record. Defendant Creekside Golf Course, LLC is the
successor-in-interest to Hawaii Northwest Ventures Limited
Partnership (Hawaii Northwest), which, in 1991, purchased
approximately 328 acres in Marion County to develop as a
residential subdivision and an 18-hole golf course.
In 1992, Hawaii Northwest executed and recorded
CC&Rs for the planned development. The legal descrip-
tion for the entire development, including the golf course,
is stated in Exhibit A to the CC&Rs; Exhibit B to CC&Rs
states the legal description of only the real property to be
developed as residential. As parcels were subdivided and
platted for development, they became part of “Golf Course
Estates At Creekside” and subject to the CC&Rs. Plaintiff
is an association of homeowners of Golf Course Estates At
Creekside.
We set forth those portions of the CC&Rs that bear
on the issues on appeal, with the key provisions highlighted
in italics. The CC&Rs’ recitals state:
Cite as 316 Or App 646 (2021) 649
“Declarant intends to create a residential development
* * * together with a golf course and other improvements
upon the property described in Exhibit A. Neither the asso-
ciation nor any service association shall have any interest
in or control over the golf course and related facilities. The
residential development shall be created on those portions
of the property described in Exhibit B, attached hereto and
by this reference made a part hereof (which portions are
hereinafter referred to as ‘the Residential Development’ or
‘the Community’); and shall be created under the name of
‘Golf Course Estates At Creekside.’ ”1
From the outset, the CC&Rs declare that the associ-
ation will have “no interest in” the golf course. We recognize
that recitals do not govern a contract’s meaning, but they
can help to determine a party’s intent. Erickson Hardwood
Co. v. North Pacific Lumber, 70 Or App 557, 565, 690 P2d
1071 (1984), rev den, 298 Or 705 (1985).
The CC&Rs then describe generally the compo-
nents of the development and set forth the restrictions
applicable to the residential community. Article I consists
of definitions of terms. The “declarant” is Hawaii Northwest
1
The recitals further state:
“Declarant wishes to ensure that the residential development which
occurs on the property described in Exhibit B is of high quality and is har-
monious with and complementary to the golf course and other improvements
to be constructed on the property described in Exhibit A. Declarant further
desires to enhance and preserve the value and desirability of the property
described in Exhibit A and its component parts. Declarant also wishes to
provide a mechanism to govern the development, improvement, use, main-
tenance and repair of certain common areas to be established within the
property described in Exhibit A.
“To accomplish the foregoing ends, the Declarant desires to submit the
residential development described in Exhibit B to the force and effect of this
declaration.
“NOW, THEREFORE, the Declarant declares that each parcel of real
property which is situated within the community, as and when it is platted as
a part of Golf Course Estates at Creekside, shall thereafter be sold, conveyed,
developed, owned, occupied and used subject to the provisions of this declara-
tion. Each person and entity acquiring any interest in any such parcel, or in
all or any portion of any improvement situated upon any such parcel, by and
upon acceptance of the land sale contract, deed or other instrument creating
or conveying said interest, thereby covenants and agrees to abide by and
comply with all of the covenants, conditions and restrictions contained in this
declaration.”
(Emphasis added.)
650 Creekside Homeowners Assn. v. Creekside Golf Course
“and any successor or assign thereof specified as a succes-
sor Declarant in a written agreement between the parties.”
“Property” is defined as the platted residential development,
improvements and common areas, excluding the golf course
and its facilities.2 Thus, as residential subdivisions are plat-
ted, they become “Property” subject to the CC&Rs.
Article III describes the phased development of
the platted property, the types of living units, the forma-
tion of service associations for any condominiums or group
of related living units, common property, and, in general
terms, the golf course.
Article III, section 4, states the declarant’s or suc-
cessor golf course owner’s rights to develop a golf course and
related facilities, and to modify, expand, contract, discon-
tinue, convert, transfer, or sell the golf course and related
facilities:
“A portion of the real property described in Exhibit A
may be developed as a golf course and related facilities. The
golf course and related facilities may be modified, expanded
or contracted, discontinued or converted to other uses, or
sold or transferred by the owner thereof, and the use of the
golf course and related facilities may be restricted to pri-
vate members, all as more fully described in Article VII.”
(Emphases added.)
Article VII, section 1, in turn, declares that “[a] por-
tion of the real property described in Exhibit A shall consist
of the golf course * * *.” Article VII then describes in more
detail the rights and obligations of the golf course owner,
and also declares the unit owners’ assumption of the risk of
2
Article I defines “Property”:
“ ‘Property’ means each parcel of real property on which Declarant
records a plat and declares all or portions thereof to be part of Golf Course
Estates at Creekside. ‘Property’ also means all improvements and fixtures
located on the property. ‘Property’ includes tracts of common property identi-
fied as such on the recorded plat, whether or not such tract has been conveyed
to the association. ‘Property’ does not include any portion of the real property
described in Exhibit A unless and until the plat and declaration for such por-
tion are recorded by Declarant. ‘Property’ does not include the golf course and
facilities related thereto even though a portion of the course or related facility
may be depicted on a recorded plat.”
(Emphasis added.)
Cite as 316 Or App 646 (2021) 651
the hazards of living near a golf course, as well as the risk
that changes in the course’s layout may adversely affect the
“view from or value of their respective lot.”3
Article VIII describes the declarant’s easements for
purposes of the residential development, the unit owners’
3
Article VII provides:
“Section 1: Golf Course. A portion of the real property described in
Exhibit A shall consist of the golf course and related facilities. * * *
“Section 2: Golf Course Owner Bound by Declaration. Although the golf
course and related facilities will not be platted as part of the property and the
owner thereof will not be a member of the association, the Declarant and all
successive owners of the golf course and related facilities shall be bound by and
benefited by the provisions of this declaration appertaining to the golf course
and related facilities.
“Section 3: Rights Regarding Layout of Golf course and Related Facilities.
The Declarant shall have the right to design, layout and construct the golf
course and related facilities upon those portions of the property described
in Exhibit A which are not within the Property in such manner as may be
elected by the Declarant and any successor in interest thereto; and there-
after, the owner of the golf course and related facilities shall have the right to
modify, expand or contract the layout of the golf course and to modify, expand,
contract, eliminate, construct or move the location of any related facility, from
time to time; provided, however, that no such modification or change shall
alter the boundary lines of any portion of the property. The owner of the golf
course and related facilities shall have the further right to restrict the use
of the golf course, the related facilities or both to private members on such
terms and conditions as the owner desires.
“Section 4: Golf Course Owner’s Obligations. The owner of the golf course
shall be obligated to reasonably maintain the appearance of the golf course and
related facilities, and to reasonably maintain any streams, ponds or lakes
on the golf course so as to deter the reproduction of mosquitoes and other
noxious insects.
“Section 5: Assumption of Risk. All owners and occupants of a lot or liv-
ing unit on the property assume the risk of injury to persons or of damage to
property caused by the errant golf balls of users of the golf course, and by the
incidental trespass of such persons in retrieving golf balls; and shall hold the
Declarant, the owner of the golf course and users of the golf course harmless
from any claims for such injury or damage to persons or property. All owners
and occupants of a lot or living unit further assume the risk that the view from
or value of their respective lot or living unit may be adversely affected by the
modifications, changes and restrictions which the owner of the golf course is
permitted to make, from time to time, pursuant to Section 3 of this article; and
agree to assert no claim against the Declarant or owner of the golf course by
reason thereof.
“Section 6: No Right of Access. No owner or occupant of a lot or living
unit shall have a right of access to or right of use of the golf course or any
portion thereof or facility related thereto except those rights, if any, granted
from time to time by the owner of the golf course to such persons as users or
members of the golf course.”
(Emphases added.)
652 Creekside Homeowners Assn. v. Creekside Golf Course
easements for use of common areas and their own residen-
tial properties, and the golf club owner’s easement.
In 1995, Hawaii Northwest sold the golf course to
National Golf Operating Partnership, L.P. (NGP), defen-
dants’ immediate predecessor-in-interest. Hawaii Northwest
retained the property described in Exhibit B subject to
residential development and granted to NGP a “Golf Play
Easement,” for limited access over the residential property
for: (1) the retrieval of golf balls; (2) the flight of golf balls;
(3) acts necessary to the playing of golf, such as operation of
lighting facilities; (4) the creation of noise related to normal
maintenance and operation; (5) the overspray of pesticides;
(6) operation of golf carts and related vehicles; (7) ingress/
egress over and across rights-of-way within the residential
development; and (8) signage. The Golf Play Easement pro-
vides that the residential property owners assume the risk
of damage and injury from errant golf balls and agree to
indemnify the course owner from related liability. The ease-
ment states:
“NGP SHALL HAVE NO OBLIGATION TO PROVIDE, OR
TO CONTINUE THE OPERATION OF, ANY IMPROVE-
MENTS ON THE GOLF COURSE PROPERTY, INCLUD-
ING, BUT NOT LIMITED TO, A GOLF CLUB.”
(Uppercase in original.)4 Unit owners’ lots are subject to the
easement, but plaintiff is not a party to the easement.
4
The easement includes a provision bearing on the relationship of the unit
owners and the golf course:
“Notice to Property owners Within The Development. NO OWNER
OF PROPERTY OR A LOT WITHIN THE DEVELOPMENT SHALL
HAVE ANY RIGHTS IN OR TO THE GOLF COURSE OR OTHER
AMENITIES LOCATED ON THE GOLF COURSE PROPERTY, OR ANY
RECREATIONAL ACTIVITIES OCCURRING THEREON, INCLUDING,
BUT NOT LIMITED TO, A VISUAL OR SIGHT EASEMENT OVER AND
ACROSS ANY PORTION FOR THE GOLF COURSE PROPERTY, RIGHTS
OF MEMBERSHIP IN OR TO THE GOLF COURSE, OR RIGHT OF
ACCESS TO OR ACROSS THE GOLF COURSE PROPERTY, UNLESS
SUCH RIGHT OR RIGHTS HAVE BEEN GRANTED OR CONVEYED
IN WRITING BY NGP OR ITS SUCCESSORS AND ASSIGNS. NGP
SHALL HAVE NO OBLIGATION TO PROVIDE, OR TO CONTINUE TO
PROVIDE THE OPERATION OF, ANY IMPROVEMENTS ON THE GOLF
COURSE PROPERTY, INCLUDING, BUT NOT LIMITED TO, A GOLF
CLUB.”
(Uppercase and underscoring in original.)
Cite as 316 Or App 646 (2021) 653
Hawaii Northwest began construction of the golf
course in 1993 and completed it 1994. The course occupies
154 acres and consists of 18 holes and related facilities,
including a clubhouse, swimming pool, maintenance sheds,
and training facility. Defendant, doing business as Creekside
Golf Operations, LLC, leases and operates the course.
Hawaii Northwest recorded the first plat for resi-
dential development in September 1992. In 1993, Hawaii
Northwest began developing and selling residential lots
interspersed within and around the perimeter of the golf
course. Marketing efforts emphasized the enhanced quality
and value of the lots because of the presence of the course.
Approximately 20 percent of the units in the subdivisions
have golf course frontage. The golf course is not included on
any subdivision plat.
The golf course struggled financially and, in 2015,
defendants proposed that plaintiff purchase the course or,
in the alternative, that plaintiff’s members be assessed a
monthly fee to help support the course. When plaintiff
declined to provide its members’ financial support, defen-
dants announced plans to subdivide the entire course for
residential development. Plaintiff brought this action, seek-
ing a declaration that the CC&Rs require that defendants
maintain a golf course in perpetuity or that, as a result of
defendants’ marketing of the lots as part of a “golf course
community” and unit owners’ reasonable expectations,
plaintiff is the beneficiary of an equitable servitude by
estoppel or implication on the golf course that prevents its
development. After trial, the trial court dismissed plaintiff’s
claims. It issued a declaration that the CC&Rs do not pro-
hibit defendants from ceasing to operate a golf course and
that plaintiff may not prevent defendants from developing
the golf course real property for residential use.
On appeal, plaintiff assigns error to the court’s dec-
laration that the CC&Rs do not prohibit defendants from
converting the golf course to a residential development.
The interpretation of CC&Rs is a question of law that we
review for legal error. Eagle-Air Estates Homeowners Assn.
v. Haphey, 272 Or App 651, 656, 354 P3d 766 (2015), rev den,
359 Or 166 (2016).
654 Creekside Homeowners Assn. v. Creekside Golf Course
We interpret the CC&Rs under the template estab-
lished in Yogman v. Parrott, 325 Or 358, 361-64, 937 P2d
1019 (1997). We examine first the text of the disputed provi-
sions in the context of the document as a whole. Id. at 361.5
If the document’s meaning is clear, our analysis ends. Our
examination of the CC&Rs leads us to conclude that the
document unambiguously expresses that plaintiff has no
role in the oversight of the golf course or ability to restrict
defendants’ conversion of the golf course into a residential
subdivision.
Plaintiff’s primary argument is that Article VII,
section 1, stating that “[a] portion of the real property
described in Exhibit A shall consist of the golf course,” is
an unambiguous permanent dedication of a golf course in
perpetuity on a portion of the real property described in
Exhibit A. (Emphasis added.) Plaintiff cites Article VII,
section 3, which describes the golf course owner’s rights
regarding the layout the golf course, as supportive of its
interpretation of Article VII, section 1. As plaintiff points
out, Article VII, section 3, permits the owner to eliminate
golf-course-related facilities but does not explicitly authorize
elimination of the layout or the course itself. In plaintiff’s
view, the inference must be made that the declarant did
not intend to give itself the power to eliminate the course.
Plaintiff further cites the statement at Article VII, section 2,
that “the Declarant and all successive owners of the golf
course and related facilities shall be bound by and benefited
by the provisions of this declaration appertaining to the golf
course and related facilities,” in support of its view that the
declarant and its successors and assigns are bound by the
requirement in Article VII, section 1, that a golf course shall
exist on real property described in Exhibit A. Plaintiff also
cites the declarant’s/golf course owner’s upkeep and main-
tenance obligations described in Article VII, section 4, in
particular, its obligation to maintain the appearance of the
5
In determining whether a contract term is ambiguous, a court must also
consider evidence of the circumstances of contract formation, if that evidence is
provided by the parties. Batzer Construction, Inc. v. Boyer, 204 Or App 309, 317,
129 P3d 773, rev den, 341 Or 366 (2006). Here, as in Yogman, the parties do not
rely on evidence of the circumstances of contract formation to argue that the con-
tract is or is not ambiguous. See id. at 315-16 (explaining that Yogman omitted
that step of the analysis because no such evidence was presented in Yogman).
Cite as 316 Or App 646 (2021) 655
golf course, as a further support for plaintiff’s view that
Hawaii Northwest intended unambiguously to bind itself
and its assigns to maintain a golf course on a portion of
the property described in Exhibit A, in perpetuity. The golf
course’s continued existence, in plaintiff’s view, is for the
duration of the CC&Rs—that is, until plaintiff’s members
vote to amend or rescind them.6 Thus, in plaintiff’s view,
under the CC&Rs, only plaintiff’s members may eliminate
the golf course. Until such time, in plaintiff’s view, defen-
dant is bound to maintain a golf course.
The difficulty with plaintiff’s interpretation is that
it is directly contradicted by the only provision that speaks
directly to the issue. Article III, section 4, states:
“A portion of the real property described in Exhibit A
may be developed as a golf course and related facilities. The
golf course and related facilities may be modified, expanded
or contracted, discontinued or converted to other uses or sold
or transferred by the owner thereof, and the use of the golf
course and related facilities may be restricted to private
members, all as more fully described in Article VII.”
(Emphases added.) Plaintiff notes the cross-reference in
Article III, section 4, to Article VII, and explains that the
two sections must be construed together to the end that, to
the extent they are inconsistent, Article VII, as the “more
specific” provision, controls.
Plaintiff is correct that the provisions of the CC&Rs
must be examined together in the context of the document
as a whole. Yogman, 325 Or at 361. But, contrary to plain-
tiff’s view, when Article III, section 4, and Article VII, sec-
tion 1, are read together, in the context of the CC&Rs as a
whole, they are not inconsistent; further, Article VII is not
more specific than Article III, section 4.
6
The CC&Rs state their duration:
“The covenants and restrictions of this declaration shall run with and
bind the land for a term of 20 years from the date of this declaration being
recorded, after which time they shall be automatically extended for succes-
sive periods of ten years each, unless rescinded by a vote of at least 75 percent
of each class of members and approved by 75 percent of the holders of first
mortgages and first trust deeds on lots and living units.”
656 Creekside Homeowners Assn. v. Creekside Golf Course
Article III, section 4, gives to the declarant general
power to develop a golf course on real property described
in Exhibit A (“A portion of the real property described in
Exhibit A may be developed as a golf course and related
facilities.” (Emphasis added.)). Article III, section 4, further
assigns to the declarant the power to restrict use of the golf
course facilities to members only, and to modify, expand or
contract, discontinue, or convert the golf course or its facil-
ities to other uses, or to sell or transfer the golf course. The
CC&Rs in essence give to the declarant/golf course owner
plenum power over the real property described in Exhibit A,
including the power to “discontinue[ ] or convert[ ]” the golf
course to other uses, or to sell it.
It is true, as plaintiff contends, that Article III, sec-
tion 4, states that the authority granted under that section
is “more fully described in Article VII.” Under plaintiff’s
interpretation of Article VII, the full authority over the real
property granted in Article III is subject to a restriction in
Article VII that the golf course’s use can never change. That
interpretation eviscerates the power reserved to the declar-
ant under Article III, section 4, and, for that reason, it is not
plausible. Article VII must be understood to be subject to
the declarant’s general authority stated in Article III, sec-
tion 4, and not the converse. That is the only reading of the
document that gives both sections meaning. See ORS 42.230
(requiring courts to interpret an instrument, if at all pos-
sible, so as to give effect to all of its provisions); Slocum v.
Lang, 132 Or App 571, 576, 889 P2d 379 (1995) (“We must
construe a contract as a whole, so that no part of it is ignored
and effect can be given to every word and phrase.”).
Understood in that light, the reference in Article VII,
section 1, to the golf course refers back to the golf course
that Article III, section 4, says the declarant may develop
and may also eliminate or convert on a portion of the prop-
erty described in Exhibit A. See State v. Lykins, 357 Or 145,
159, 348 P3d 231 (2015) (“As a grammatical matter, the
definite article, ‘the,’ indicates something specific, either
known to the reader or listener or uniquely specified.”).
Article VII, section 1, is, simply, a reiteration of the state-
ment in Article III, section 4, that the golf course that is
permitted to be developed must be located on a portion of
Cite as 316 Or App 646 (2021) 657
the property described in Exhibit A. Article VII, section 1,
does not impose an obligation on the declarant or golf course
owner to build or operate a course in perpetuity. Nor does
Article VII, section 1, override the declarant’s prerogative,
stated in Article III, section 4, to discontinue or convert the
golf course to other uses.
Contrary to plaintiff’s argument, Article VII, sec-
tion 3 (“Rights Regarding Layout of Golf Course and Related
Facilities”), relates to the layout of course; it has no bearing on
whether the declarant is permitted to convert the golf course
to a residential development. Other sections of the CC&Rs
are consistent with the declarant’s/golf course owner’s
exclusive right to determine the use of the real property on
which the golf course is situated. For example, as noted, the
recitals state that “[n]either the [homeowners] association
nor any service association shall have any interest in or con-
trol over the golf course and related facilities.” Article VII,
section 5, states that unit owners assume the risk of loss
of views or property values associated with any modifica-
tions of the golf course. In short, under the CC&Rs, the
declarant’s power to determine the use of the property is
exclusive.
Plaintiff notes that the Golf Play Easement, between
defendant’s predecessors, states in its recitals that “Hawaii
and NGP desire to provide for creation of certain easements,
covenants and restrictions, on the Development, in order to
ensure the continued operation of the Golf Course.” (Emphasis
added.) In plaintiff’s view, that recital, in an easement doc-
ument binding defendant’s predecessors, demonstrates an
intention to maintain a golf course in perpetuity. Contrary
to plaintiff’s contention, the Golf Play Easement, executed
several years after the CC&Rs, has no bearing on our inter-
pretation of the CC&Rs. If anything, the easement, to which
the unit owners’ lots are subject, and which provides that
“NGP SHALL HAVE NO OBLIGATION TO PROVIDE, OR
TO CONTINUE THE OPERATION OF, ANY IMPROVE-
MENTS ON THE GOLF COURSE PROPERTY, INCLUD-
ING, BUT NOT LIMITED TO, A GOLF CLUB,” reinforces
our conclusion that plaintiff has no right to require the con-
tinued maintenance of the golf course property as a golf
course. (Uppercase in original.) We conclude that the trial
658 Creekside Homeowners Assn. v. Creekside Golf Course
court did not err in declaring that the CC&Rs do not pro-
hibit defendants from ceasing to operate a golf course and
that plaintiff may not prevent defendants from developing
the golf course real property for residential use.
In light of our conclusion, we reject plaintiff’s sec-
ond assignment of error, challenging the trial court’s award
of attorney fees to defendants as provided in the CC&Rs.
In its third assignment of error, plaintiff contends
that the trial court erred in concluding that plaintiff had
not established an equitable servitude, either express or
implied, that requires the maintenance of a golf course in
perpetuity. Because we have concluded that the CC&Rs do
not restrict defendants’ ability to convert the golf course to a
residential subdivision, we also reject plaintiff’s contention
that the CC&Rs themselves create an equitable servitude.
The remaining question is whether plaintiff has established
a servitude resulting from representations of the golf course,
both express and implied, made by Hawaii Northwest and
its agents in documents and in the marketing of the residen-
tial lots.
In Mountain High Homeowners Assn. v. J. L. Ward
Co., 228 Or App 424, 438, 209 P3d 347 (2009), we described
the elements of an equitable servitude:
“(1) [E]ither an express or implied representation made
under circumstance where (2) it is reasonably foreseeable
that the person to whom the representation is made will
rely on it, (3) that person does so rely, (4) such reliance is
reasonable, and (5) the establishment of a servitude is nec-
essary to avoid injustice.”
Mountain High also involved a golf course in a
development and a claim that the developer had promised
to maintain the golf course indefinitely. There, we reviewed
the record de novo and found that the plaintiff homeowners’
association had established that the developer had repre-
sented to prospective purchasers that the development
would “continue to be a golf course community,” that it was
reasonably foreseeable for prospective buyers to rely on that
representation and change their position as a result, and
that the lot owners did, in fact, rely on the developer’s repre-
sentations in purchasing lots. Id. We held that “it would be
Cite as 316 Or App 646 (2021) 659
unjust for defendant to benefit from the successful market-
ing of Mountain High as a ‘golf course community’ without
the imposition of the servitude.” Id.Plaintiff asserts that Mountain High is “spot on”
with this case and requires the imposition of an equitable
servitude here. Plaintiff has asked us to review the record
de novo, make new findings, and so conclude. However, we
decline to review the record de novo. See ORAP 5.40(8)(c)
(stating that this court exercises its discretion to review
de novo “only in exceptional cases”). Thus, we are bound
by the trial court’s findings if there is any evidence in the
record to support them. Eagles Five, LLC v. Lawton, 250 Or
App 413, 415 n 2, 280 P3d 1017 (2012).
A key factual finding distinguishes this case from
Mountain High: In Mountain High we found that the devel-
oper “represented to buyers that Mountain High was and
would continue to be a golf course community. That repre-
sentation was made both expressly and impliedly.” 228 Or
App at 438. The trial court here found that plaintiff “has not
established by clear and convincing evidence that an express
or implied representation was made to any lot owner that
the course would be maintained by the course owner into
the future.” That finding is fatal to plaintiff’s claim.
The court here also found that plaintiff “did not
prove by clear and convincing evidence that its members
relied on any express or implied representation that the golf
course would exist in perpetuity or for some future dura-
tion.” Additionally, the court concluded that the evidence
was insufficient to permit a finding that subsequent own-
ers of the course—NGP and defendants—had actual or con-
structive knowledge of any equitable servitude at the time of
the transfers. See Ebbe v. Senior Estates Golf, 61 Or App 398,
405, 657 P2d 696 (1983) (promise is binding as an equitable
servitude if, among other things, “the subsequent grantee
[has] notice of the covenant, either actual or constructive”
(brackets in original)).
Under our standard of review, we examine the record
to determine whether any evidence supports the trial court’s
findings. Eagles Five, LLC, 250 Or App at 415 n 2. Plaintiff
does not make specific challenges to the trial court’s findings
660 Creekside Homeowners Assn. v. Creekside Golf Course
but raises only the general contention that the court’s find-
ings depart from the evidence.7 However, we have reviewed
the record and conclude that trial court’s specific findings
are supported by the record and support the trial court’s
determination that plaintiff has not met its burden to estab-
lish by clear and convincing evidence that the golf course is
subject to an equitable servitude either expressed or implied
from the circumstances.
In light of our conclusion that the trial court did not
err in declaring that the CC&Rs do not prohibit defendants
from ceasing to operate a golf course and that plaintiff may
not prevent defendants from developing the golf course real
property for residential use, we affirm without discussion
plaintiff’s assignment that the trial court erred in rejecting
its claim of waste based on defendants’ planned conversion
of the golf course to a residential subdivision.
General and supplemental judgments affirmed.
DeHOOG, P. J., dissenting.
In this case, both sides to the litigation have con-
sistently contended that the Declaration of Covenants,
Conditions and Restrictions (CC&Rs) at the heart of this
case unambiguously support their respective views of their
rights under that document. The trial court, agreeing that
the CC&Rs are unambiguous, adopted defendants’ view as
to what those rights unambiguously are. The majority opin-
ion, resorting to the familiar contract-interpretation tem-
plate set forth by the Supreme Court in Yogman v. Parrott,
325 Or 358, 937 P2d 1019 (1997), similarly agrees that the
CC&Rs are unambiguous, and likewise adopts defendants’
view as to what they mean. 316 Or App at 654; see Eagle-Air
Estates Homeowners Assn. v. Haphey, 272 Or App 651, 656,
354 P3d 766 (2015), rev den, 359 Or 166 (2016) (stating that
7
We have not previously considered the standard of proof applicable to a
claim to establish an equitable servitude by implication, and the standard of
proof does not appear to be at issue or disputed on appeal. But we agree with
defendants and with the trial court that, in view of the equitable interests at
stake in imposing an equitable servitude on the property of another by impli-
cation, the standard of proof should be the same as the clear and convincing
standard applicable to implying other forms of burdens on real property, such as
a prescriptive easement. See Wels v. Hippe, 360 Or 569, 581, 385 P3d 1028 (2016),
modified on recons, 360 Or 807, 388 P3d 1103 (2017) (applying clear and convinc-
ing standard to establish a prescriptive easement).
Cite as 316 Or App 646 (2021) 661
the interpretation of CC&Rs is a question of law that we
review for legal error); see also Valenti v. Hopkins, 324 Or
324, 926 P2d 813 (1996) (acknowledging Supreme Court’s
treatment of restrictive covenants as contractual obligations
of homeowners and applying generally applicable rules of
contract interpretation to them).
As a general matter, I agree with the majority’s
approach to this case. Where I part ways, however, is in the
majority’s assessment of the various terms of the CC&Rs
and its ultimate assessment that they unambiguously sup-
port defendants’ view and the trial court’s ruling. I would
instead conclude that those terms, viewed together and
in the context of the CC&Rs as a whole, can plausibly be
read to support either side’s view—that is, the CC&Rs are
ambiguous regarding the central issue in this dispute. See
Batzer Construction, Inc. v. Boyer, 204 Or App 309, 313, 129
P3d 773, rev den, 341 Or 366 (2006) (“A contract provision is
ambiguous if it has no definite significance or if it is capable
of more than one sensible and reasonable interpretation[.]”).
I would further conclude that the trial court—and
this court—are required to consider that possibility not-
withstanding the parties’ shared view that the CC&Rs are
unambiguous. See Couch Investments, LLC v. Peverieri, 359
Or 125, 132-34, 371 P3d 1202 (2016) (finding parties’ arbitra-
tion agreement to be ambiguous notwithstanding position
of both parties that agreement was unambiguous). Finally,
upon properly recognizing the CC&Rs to be ambiguous, the
trial court should have proceeded to resolve that ambiguity
as required by Yogman and its progeny. Because the trial
court did not recognize that ambiguity, it skipped that step,
adopted defendants’ view of the document’s meaning, and
dismissed plaintiff’s declaratory judgment action. That, in
my view, was error. I will briefly explain my reasoning.1
1
In earlier summary-judgment proceedings, another trial judge, in a thor-
ough written opinion, ruled that the CC&Rs unambiguously supported plaintiff’s
view that the golf course could not be eliminated in its entirety. However, that
judge later ruled that her decision would not be binding on the parties without
their consent, and the matter was decided anew at trial. That ruling is not at
issue on appeal. Although the first judge (like the judge who heard the trial)
determined that the CC&Rs were unambiguous, whereas I conclude that they are
ambiguous, I agree with much of the first court’s reasoning and analysis of the
various provisions of the CC&Rs.
662 Creekside Homeowners Assn. v. Creekside Golf Course
The majority correctly examines the text of the dis-
puted provisions in the context of the CC&Rs as a whole. See
Yogman, 325 Or at 361; see generally, Portland Fire Fighters’
Assn. v. City of Portland, 181 Or App 85, 91, 45 P3d 162, rev den,
334 Or 491 (2002) (setting forth Supreme Court’s contract-
interpretation methodology). As the majority notes, 316 Or
App at 654-55, plaintiff’s focus is on Article VII, section 1,
of the CC&Rs, which provides, in part: “Golf Course. A por-
tion of the real property described in Exhibit A shall consist
of the golf course and related facilities.” (Emphasis added.)
Defendants, on the other hand, emphasize Article III, sec-
tion 4, which states:
“A portion of the real property described in Exhibit A
may be developed as a golf course and related facilities.
The golf course and related facilities may be modified,
expanded, or contracted, discontinued or converted to
other uses, or sold or transferred by the owner thereof,
and the use of the golf course and related facilities may be
restricted to private members, all as more fully described
in Article VII.”
(Emphases added.) For reasons set out in the majority opin-
ion, plaintiff contends that the language of Article VII,
section 1, in light of other specific text in the CC&Rs and
the document taken as a whole, unambiguously requires
defendants to maintain in perpetuity a golf course in some
form. Defendants, taking the same approach, contend that
Article III, section 4, can only be understood to give the
CC&Rs’ declarant and its successors discretion to maintain
or not maintain a golf course.2 Defendants emphasize the
language in Article III, section 4, seemingly authorizing the
golf course and related facilities to be “discontinued or con-
verted to other uses,” uses defendants contend include fur-
ther residential development. Neither view, in my opinion, is
wholly correct.
2
The CC&Rs appear to contemplate that the declarant will initially develop
a golf course, after which it may transfer ownership of the course. Although many
of the provisions of the CC&Rs refer to the rights and obligations of the owner
of the golf course rather than those of the declarant, for ease of reference this
opinion uses the term “declarant” to describe both the initial developer of the
Golf Course Estates at Creekside and its associated golf course as well as any
subsequent owner of the golf course.
Cite as 316 Or App 646 (2021) 663
In adopting defendants’ interpretation of the CC&Rs,
the majority likewise starts with the text of Article III, sec-
tion 4. 316 Or App at 656. In so doing, however, the major-
ity quickly reads more into that section—and thus into
the CC&Rs as a whole—than that text readily supports.
Characterizing that section, the majority opinion concludes
that, in providing the declarant the right to modify, expand,
contract, discontinue, or convert to other uses the golf
course and related facilities, the “CC&Rs in essence gives
the declarant/golf course owner plenum power over the real
property,” including the power to discontinue the golf course.
Id.
The problem with that characterization of Article III,
section 4, is that it precedes meaningful consideration of
the last clause of the section, which expressly qualifies the
powers it extends, stating “all as more fully described in
Article VII.” (Emphasis added.) Article VII of the CC&Rs—
entitled “THE GOLF COURSE”3 —sets out in some detail
the nature of the declarant’s rights and obligations regard-
ing “the golf course.” And as plaintiff points out, in addi-
tion to providing in its first section that “[a] portion of the
real property described in Exhibit A shall consist of the golf
course and related facilities[,]” Article VII elaborates in
its third section that the declarant’s rights with regard to
the “related facilities” differ from those it has as to the golf
course itself.
Specifically, Article VII, section 3, gives the declar-
ant the “right * * * to modify, expand, contract, eliminate, con-
struct or move the location of any related facility[.]” (Emphasis
added.) As to the golf course itself, however, section 3 extends
fewer rights. Echoing, in part, the declarant’s rights as to
the related facilities, section 3 authorizes the declarant to
“modify, expand or contract the layout of the golf course[.]”
Conspicuously absent, however, is any extension of the right
to “eliminate” the golf course or its layout. In plaintiff’s view,
that provision’s omission of an explicit right to eliminate the
golf course unambiguously reflects the declarant’s intent to
prohibit the removal of the golf course, at least short of an
amendment to the CC&Rs by plaintiff’s members.
3
Article III of the CC&Rs is entitled “GENERAL DEVELOPMENT PLAN.”
664 Creekside Homeowners Assn. v. Creekside Golf Course
The majority opinion acknowledges that Article VII,
section 1, provides that a portion of the property “shall
consist of the golf course,” but it rejects plaintiff’s argu-
ment as to the significance of that clause. 316 Or App at
654. The majority reasons that, to the extent that plaintiff
contends that that text, considered in light of the CC&Rs
as a whole, requires the declarant to retain in perpetuity
the golf course it chose to develop, that “interpretation * * *
is directly contradicted by the only provision that speaks
directly to the issue,” namely, Article III, section 4. Id. at
655 (emphasizing that Article III, section 4, states that a
portion of the property “may” be developed as a golf course
and related facilities, which, among other things, the declar-
ant may modify, expand, contract, or discontinue). Thus,
the majority concludes, Article VII, section 1, must be read
together—and consistently—with Article III, section 4’s
unlimited grant of power over the golf course’s existence.
Id.
I agree that the various parts of the CC&Rs should
be read as consistent where possible, but I do not agree with
the conclusions that the majority draws from that principle.
In rejecting plaintiff’s interpretation out of hand, the major-
ity opinion states that subjecting Article III, section 4, to a
requirement found in Article VII, section 1, that the declar-
ant maintain the golf course in perpetuity would “eviscer-
ate[ ] the power reserved to the declarant under Article III,
section 4.” Id. at 656. But that reasoning presupposes that
Article III, section 4, can only be read to support defendants’
interpretation that the declarant may eliminate the golf
course at will.
Respectfully, that approach is not simply reading
potentially conflicting provisions as consistent; it is improp-
erly reading one of those provisions completely out of the
document. See id. (reasoning that “Article VII, section 1, is,
simply, a reiteration of the statement in Article III, section 4,”
regarding the declarant’s right to develop a golf course on
the property); see also ORS 42.230 (instructing courts that,
in construing legal documents having “several provisions or
particulars, such construction is, if possible, to be adopted
as will give effect to all”).
Cite as 316 Or App 646 (2021) 665
Moreover, it curtails the analysis by not fully con-
sidering the significance of the cross-reference between
Article III and Article VII of the CC&Rs. As the majority
expressly recognizes, Article III, section 4, which is part of
a broad description of the declarant’s general development
plans, “states that the authority granted under that section
is ‘more fully described in Article VII.’ ” Id. at 656. Logically,
then, the provisions found in Article VII should not be read
as mere reiterations of those found in Article III; they should
be read to determine how they “more fully describe[ ]” those
provisions.
As noted, all of Article VII is devoted to the golf
course. However, Article VII, section 3, contains the lan-
guage that can most readily be understood as “more fully
describ[ing]” aspects of Article III, section 4. On its own,
Article III, section 4, appears to give the declarant broad
authority over the golf course and related facilities—the
right to modify, expand, contract, discontinue, convert
to other uses, sell or transfer them. But as set out above,
Article VII, section 3, explicitly lists what powers the declar-
ant has as to the “related facilities,” and, in a distinct and
only partial repeating of that list, sets out what the declar-
ant may do with the golf course. Giving due regard to that
distinct treatment of the two uses of the property—as a golf
course or as a related facility—it is, in my view, quite rea-
sonable to understand the CC&Rs as giving the declarant
more limited rights to remove the golf course once installed,
notwithstanding the seemingly broad grant of authority set
out in Article III, section 4.
The majority never entertains that possibility. Rather,
it dismisses the provisions of Article VII, section 3, stating
that it “relates to the layout of the course; it has no bear-
ing on whether the declarant is permitted to convert the
golf course to a residential development.” 316 Or App at 657
(majority’s emphasis). But that is not completely accurate.
True, that section is entitled “Rights Regarding Layout
of Golf Course and Related Facilities,” but its text begins
by stating “The Declarant shall have the right to design,
layout [sic] and construct the golf course[.]” (Emphasis
added.) So, while that same section later gives the declarant
666 Creekside Homeowners Assn. v. Creekside Golf Course
the right to modify the layout of any golf course it constructs,
those provisions presuppose that a golf course has been con-
structed and, notably, unlike the section’s provisions regard-
ing “related facilities,” they do not authorize the declarant to
eliminate or “deconstruct” a golf course once it has been con-
structed; rather, they provide that “thereafter,” the declar-
ant may modify its layout.
None of this is to suggest that plaintiff’s interpre-
tation is the only plausible understanding of the CC&Rs.
Ultimately, defendants’ interpretation may prevail. My point
is that, in my view, defendants’ interpretation of the CC&Rs
is not the only sensible and reasonable interpretation of
them. As a result, that document is ambiguous. See Batzer,
204 Or App at 313 (a contract that is capable of more than
one sensible and reasonable interpretation is ambiguous).
Rather than recognize that plaintiff’s interpreta-
tion, like defendants’, is plausible and that the CC&Rs are
therefore ambiguous, the majority opinion upholds the trial
court’s conclusion that they are unambiguous and, ulti-
mately, its dismissal of plaintiff’s claims. I would not uphold
that conclusion and would, instead, reverse and remand for
the trial court to resolve the ambiguity described above in
accordance with Yogman before issuing a declaration of the
parties’ rights under the CC&Rs. Accordingly, I respectfully
dissent.