Westwood Homeowners Ass'n v. Tenhoff , 155 Ariz. 229 ( 1987 )

CONTRERAS, Judge,

dissenting.

I dissent for the reason that in my opinion, the legislature in recognizing potential conflicts between two competing public policies resolved the conflict by affirming the validity of pre-1978 covenants restricting land use. I would therefore affirm the judgment.

The majority properly acknowledges that we are confronted with two competing public policies. At one end of the scale is the public policy of enforcing the private restrictive covenants of landowners. At the other end of the scale is the legislatively declared public policy of assisting the developmentally disabled by promoting their deinstitutionalization by the maintenance of such persons in a residential setting. The majority then decides, and I agree, that the facility in question violates the private restrictive covenant. The majority then proceeds to discuss the legislative intent in enacting the Developmental Disabilities Act and determines: “The legislative history and the language of the statutes demonstrate a strong public policy aimed at facilitating the state-wide integration of residential facilities into neighborhood communities.” Again, I agree. The majority then finds it “... unclear, however, to what extent the legislature intended these statutes and the rights contained therein to control over contrary private covenants.” I disagree. In my opinion the state legislature specifically addressed this question with straight-forward clarity. A.R.S. § 36-582(G) provides:

G. For the purposes of any contract, deed, or covenant for the transfer of real property executed subsequent to the effective date of this section [December 1, 1978], a residential facility which serves six or fewer persons [with developmental disabilities] shall be considered a residential use of property and a use of property by a single family, notwithstanding any disclaimers to the contrary” (emphasis added).

The foregoing statutory language is simple and direct as is its logical interpretation. In essence, post-1978 covenants restricting land use to single-family residences cannot be enforced to exclude residential facilities for the developmentally disabled. By specifically invalidating post-1978 covenants that exclude residential facilities for the developmentally disabled, the statute implicitly affirms the validity of pre-1978 covenants. It may well be that the legislature in enacting A.R.S. § 36-582(G) as an integral part of this comprehensive legislation did so in order to obviate any constitutional challenges based on (1) retroactive impairment of vested rights, (2) impairment of contractual rights under article 1, § 10 of the United States Constitution and article 2, § 25 of the Arizona Constitution, or (3) the taking of property without just compensation under the fifth amendment to the United States Constitution and article 2, § 17 of the Arizona Constitution.

It can reasonably be concluded that, for whatever reason, the legislature clearly addressed the question of competing public policies and formulated an express methodology by which the two public policies were to interface. Otherwise, there would have been no need to include an effective date in A.R.S. § 36-582(G). If the legislature had intended to create a public policy that would prevent the enforcement of pre-1978 covenants as well as post-1978 covenants, it could have easily done so by excising from the statute the phrase “executed subsequent to the effective date of this section.”

For the foregoing reasons, I cannot agree with the majority holding that any interpretation of subsection (G) which validates pre-1978 restrictive covenants is contrary to the public policy set forth by the entire Developmental Disability Act.” Nor can I agree with the majority’s second enunciated holding that “an interpretation of subsection (G) which validates these pre-1978 covenants does not fit into the overall policy enunciated by the legislature and therefore cannot be enforced.” Rather, I conclude that the clearly stated language in subsection (G) demonstrates the legislature’s intention in formulating overall public policy that pre-1978 private restrictive covenants are valid and enforceable. This was and remains a legislative decision which should not be judicially expanded in order to reach a desired result which is repugnant to the plain language of the statute and the intent of the legislature.

The majority cites and relies upon a number of cases from other jurisdictions in support of their position. However, these cases are readily distinguishable and only one of them, Welsch v. Goswick, 130 Cal.App.3d 398, 181 Cal.Rptr. 703 (1982), relies to any extent on a statute substantively identical to A.R.S. § 36-582(G). In Welsch, the deed restrictions limited subdivision use to “single-family residential purposes” and were recorded in 1955. The defendants purchased a lot in the subdivision in 1976 and prepared to use it as a residential care facility. The plaintiff sued to enjoin defendants’ use of the property. The parties later stipulated to a judgment stating that defendants' use of the property violated the deed restriction and that they would be permanently enjoined from continuing such use. In 1978, California enacted article 7 of the Community Care Facilities Act. Section 1566.5 of that Act is substantively identical to A.R.S. § 36-582(G). The defendants in Welsch then instituted proceedings to dissolve the injunction but lost in the trial court which found that the newly enacted legislation did not affect the injunction. On appeal, the California Court of Appeals, Fourth District reversed. The court first noted that the legislation did not apply to pre-1979 covenants but held that it represented a strong public policy favoring residential facilities. The court then concluded, for reasons which are not entirely clear, that the legislature’s specific invalidation of post-1979 covenants should not be viewed by the courts as a limitation upon the public policy articulated. It is implicit from the majority decision in Welsch, that the court was of the opinion that the legislature’s specific invalidation of post-1979 covenants did not imply that it did not also intend to extend the same public policy to invalidate pre-1979 covenants. There is extreme difficulty in attempting to reconcile the inconsistencies in the Welsch decision. The Welsch court appears to ignore the unambiguous language of the statute and then asserts, by judicial interpretation, provisions which were not included in the statute. It then proceeds to give retroactive effect to a statute which, on its face, is limited to prospective application. I therefore conclude that the majority in Welsch ignored clear statutory language in order to reach a desired result.

Although the overall objectives sought to be achieved by the Developmental Disabilities Act are quite commendable, I must conclude that the State Legislature, in view of the clear and unambiguous language set forth in A.R.S. § 36-582(G), intended that pre-1978 private restrictive covenants would be valid and enforceable. I would therefore affirm the decision of the trial court.