Noche Vista v. Bandera Homeowners Ass'n ( 2020 )

FILED
AUGUST 20, 2020
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
NOCHE VISTA, LLC, a Washington )
limited liability company, ) No. 36677-4-III
)
Appellant, )
)
v. ) UNPUBLISHED OPINION
)
BANDERA AT BEAR MOUNTAIN )
RANCH HOMEOWNERS )
ASSOCIATION, a Washington Nonprofit )
Corporation, )
)
Respondent. )
SIDDOWAY, J. — Noche Vista, LLC appeals the trial court’s summary judgment
determination that property it acquired for development in 2013 was subject to covenants,
conditions and restrictions recorded by a prior owner in 2006. It also challenges the trial
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court’s refusal to consider declarations filed with a motion for reconsideration and its
award of attorney fees and costs to the defendant homeowners association. We affirm.
FACTS AND PROCEDURAL BACKGROUND
In January 2013, John Dwyer “and or assigns” entered into a purchase and sale
agreement with North Cascades National Bank to acquire approximately 31 acres of
undeveloped property in Chelan County. Clerk’s Papers (CP) at 393. The agreement
described the property as “Tract 10 Bandera at Bear Mountain Ranch,” less a portion of
property that had been removed by a boundary line adjustment. CP at 394. The Bank
had acquired the property the year before from Bear Mountain Ranch Holdings, LLC,
through a deed in lieu of foreclosure. Before closing the purchase, Mr. Dwyer formed
Noche Vista, LLC to become the owner of the property.
A preliminary commitment for title insurance from North Meridian Title and
Escrow, LLC listed as special exceptions to title a “Declaration of Covenants, Conditions
& Restrictions & Easements for Bandera at Bear Mountain Ranch” (Declaration) that had
been recorded in January 2006 by Scofield Construction, LLC. CP at 166-203.
“Bandera” and “Bandera at Bear Mountain Ranch” were undefined in the Declaration,
but “Bandera Phases I and II” and “Bandera Phase III” were defined, and the property
being acquired by Noche Vista was referred to as “Bandera Phase III.” CP at 171-74.
Six amendments to the Declaration were identified as additional exceptions to Noche
Vista’s title.
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Mr. Dwyer reviewed the preliminary title commitment before closing and believed
the Declaration encumbered title to the property he was acquiring, which we refer to
hereafter as “Bandera Phase III,” or “Phase III.” He observed that Jerry Scofield, the
principal of Scofield Construction, had identified Scofield Construction and its
successors and assigns (hereafter collectively “Scofield”1) as both “Declarant” and
“Management” in the Declaration, reserving considerable authority over property
improvements. Mr. Dwyer believed that Scofield’s control over development of earlier
Bandera phases had hindered its growth and success and he wanted the Declaration
amended to eliminate Scofield’s control. At the request of Mr. Dwyer and his lawyer, the
Bank’s chief credit officer worked to get Scofield to execute a seventh amendment to the
Declaration that would address Mr. Dwyer’s concerns.
A seventh amendment was prepared that would replace preconstruction review
and construction covenants in the Declaration and recognize Scofield’s agreement to
incorporate a homeowners association to which it would relinquish management control.
In the course of communications about the seventh amendment, Mr. Dwyer stated in an
e-mail to the bank credit officer that “we are on the right track with adding Phase III back
1
Scofield Construction added Bear Mountain, LLC as an additional Declarant in a
2006 amendment to the Declaration. Both corporations later changed their names, with
Scofield Construction becoming B.M.R. Construction and Development, and Bear
Mountain becoming Bear Mountain Ranch Holdings.
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to Addendum 7. As you mentioned I do want to be a good neighbor and fully intend to
adhere to the CC&R.” CP at 415.
On April 9, 2013, a lawyer representing the soon-to-be-incorporated Bandera at
Bear Mountain Ranch Homeowners Association (the HOA) notified Mr. Dwyer’s lawyer:
I have confirmation from his attorney that Scofield has signed the 7th
Amendment. However, it is unlikely that the Amendment will be recorded
before the currently scheduled closing date. It seems that either an
extension to the closing date, or an addendum acknowledging the pending
“encumbrance” of the 7th Amendment should occur.
I look forward to your thoughts.
CP at 425. Mr. Dwyer’s lawyer responded, “My client would like to proceed with the
closing on Friday. He would be satisfied with a copy of the signed agreement, plus
confirmation that it has been submitted for recording.” Id. The seventh amendment was
recorded on April 12, 2013. Noche Vista acquired title by a deed recorded on April 15.
The HOA was incorporated on April 18.
A couple of years into Noche Vista’s ownership of Phase III, after Mr. Dwyer says
he saw “how things worked (or, rather, didn’t work) under the HOA’s control,” he
consulted a second lawyer, asking that he “take a look at the Covenants to see if there
was any relief from their Draconian requirements.” CP at 644. In May 2015, the lawyer
expressed his opinion that the original Declaration never encumbered the Phase III
property. The lawyer also opined that the seventh amendment could not apply to Phase
III because it was amended long after Scofield transferred all of its right, title and interest
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in Phase III. According to Mr. Dwyer, it was only on consulting with this second lawyer
that he learned that North Meridian Title’s exceptions for the Declaration and its
amendments was not a legal opinion, but only reflected a decision about the insurance
risk it was willing to take on. In November 2015, Mr. Dwyer informed the HOA of his
lawyer’s conclusion that Phase III was not bound by the Declaration, forwarding a
memorandum his lawyer prepared for that purpose. The HOA was not persuaded.
In April 2016, Noche Vista’s new lawyer contacted a title officer for North
Meridian with a request that it delete the special exception for the Declaration and its
amendments from Noche Vista’s final title report. After contacting its underwriter, the
title officer declined the request. Mr. Dwyer also approached the HOA in 2016 about
possible modifications to the covenants, conditions, and restrictions. Although
representatives of the HOA met with Mr. Dwyer several times in 2016 and 2017 about
proposed modifications, none were agreed.
In February 2018, Noche Vista brought this action against the HOA, seeking a
declaratory judgment that Phase III is not subject to the Declaration and its amendments.
In answering the complaint, the HOA not only disputed Noche Vista’s construction of the
Declaration but also contended that Noche Vista’s request for a declaratory judgment was
barred by estoppel, waiver, and laches. It sought its own declaratory judgment that Phase
III was subject to the Declaration.
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Several months later, Noche Vista and the HOA filed cross motions for summary
judgment.
Noche Vista’s construction of the Declaration and amendments
Noche Vista argued to the trial court that in the “Recitals” section of the
Declaration it is “each Owner” who, by purchasing a lot, “agrees to commit to the vision
of the Declarant and to abide by the intent and purpose of this Declaration.” CP at 171.
The defined term “Owner” means:
one or more persons or entities who are, alone or collectively, the record
owner of fee simple title to a Landholding, including Declarant, but does
not include a person who only holds a Mortgage on a Landholding. Owner
means the vendee, not the vendor, of a Landholding under a real estate
contract.
CP at 179.
The defined term “Landholding” means:
one of the individual numbered lots, each approximately one-third acre in
size, designated by Declarant to be a Landholding in Bandera as shown on
the Plat. “Landholding” is not intended to include any lot or tract which is
solely Common Use Area. The number of Landholdings may be increased
through annexation of Bandera Phase III.
CP at 178-79.
“Plat” is defined to mean “Chelan County Plat No. P-2004-005,” an eight-sheet
plat filed for record on January 9, 2006. As shown by the simplified portion of sheet 2 of
the plat that was included as the last page of the Declaration, and as borne out by sheets 3
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and 4 of the plat, the only “individual numbered lots” designated in the plat were in
Bandera Phase I:
CP at 204 (partial).
Annexation was addressed by article 10 of the Declaration, which provides:
10.1 Annexation Approval. During the Development Period
additional real property may become annexed to and become subject to this
Declaration by the recording of a supplemental (or amended) declaration
executed by, or on its face approved by, the Declarant.
10.2 Effect of Annexation. The recording of a supplemental
declaration with the Chelan County Auditor will effectuate the annexation
of the described real property. The annexed property will be subject to this
Declaration and the other Governing Documents. The annexed property
will be part of Bandera. The supplemental declaration should incorporate
by reference all of the covenants, conditions, restrictions, easements and
other provisions of this Declaration, and may contain such complimentary
additions or modifications of the covenants, conditions and restrictions in
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this Declaration as may be reasonably necessary to reflect the different
character, if any, of the annexed property as are not inconsistent with the
plan of this Declaration.
CP at 198.
Noche Vista argued that the Declaration plainly provides that Phase III was not
intended to be subject to the Declaration unless annexed, and it was never annexed.
The HOA’s construction of the Declaration and amendments
The HOA advanced a different construction of the Declaration, but it led by
arguing at the summary judgment hearing that “if the seventh amendment is a good
amendment that Mr. Scofield had the ability to sign . . . the case is . . . over for Noche
Vista.” Report of Proceedings (RP) at 24. The seventh amendment contained a new
article 2 that recognized Scofield was concurrently incorporating a homeowner’s
association to assume management of Bandera. Its first section, captioned “Purpose,”
states:
The Association shall be incorporated by the Declarant, or the Declarant’s
agent, for the purpose of managing the Common Use Areas located within
Bandera Phases I, II, and III only, and common amenities such as common
area landscaping, private road, curbs, entrance gates and other components
shared by all Landholdings within Bandera Phases I, II and III, and
enforcing the Declaration. The Association’s management and
enforcement authority shall be confined to Bandera Phases I, II and III.
CP at 308-09 (underlining omitted).
The amendment states that it modifies the Declaration “only as to that property
described on the attached Exhibit ‘A,’” and exhibit A includes Phases I, II and III
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without qualification. CP at 307 (underlining omitted). Its section 7, captioned
“Inconsistencies,” states, “To the extent any other provision in the Declaration is
inconsistent with the above provisions, the Declaration is hereby amended to eliminate
such inconsistencies so as to be consistent with this Amendment.” CP at 317 (under-
lining omitted).
The HOA argued that Scofield’s 2012 transfer of its right, title and interest in
Phase III did not divest it of its right to amend the Declaration because the right to amend
was not predicated on ownership of Phase III. It was predicated instead on the fact that
Scofield was authorized by the 2006 Declaration to make the amendment, and Phase III
was encumbered by the Declaration.
Turning to the Declaration, the HOA emphasized the need to construe it as a
whole, and in favor of protecting Scofield’s intent and the homeowners’ collective
interests, citing Wilkinson v. Chiwawa Communities Ass’n, 180 Wn.2d 241, 250, 327
P.3d 614 (2014). It pointed out that the Declaration includes the legal description for the
92.9 acres comprising all three phases of Bandera. The Declaration begins by noting that
it is being made by the owner and developer “of certain real property . . . commonly
known as Bandera at Bear Mountain Ranch, which property is more specifically
described herein.” CP at 171.
The Declaration recites:
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Declarant’s intent and vision is to impose covenants, conditions,
restrictions and easements on Bandera which will create a planned
community development and provide for its overall maintenance and
preservation. This Declaration is intended to provide a set of standards
consistent with the vision of the Declarant, which is to maintain Bandera in
its natural state as much as reasonably possible.
CP at 171.
The HOA also pointed to section 12.4, captioned “Binding,” which speaks of
“persons,” not Owners, “bind[ing] themselves and their heirs, personal representatives,
successors, transferees and assigns to all of the provisions now or hereafter imposed by
this Declaration or other Governing Documents and any amendments thereto.” CP at 200
(underlining omitted).
The trial court rejected the HOA’s arguments based on the seventh amendment,
finding that it presented issues of disputed fact. It was persuaded that the plain language
of the Declaration supported the HOA’s position and granted its cross motion for
summary judgment, denying Noche Vista’s motion.
Noche Vista filed a timely motion for reconsideration supported by the
declarations of two individuals who had worked on aspects of the Bandera development
for Jerry Schofield prior to 2006. (Mr. Scofield had died in 2014.) According to the
declarations, Scofield had been exploring development options for Phase III that would
not have complied with restrictions contained in the Declaration. Noche Vista argued
that this explained why Phase III was excluded from the operation of the covenants,
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conditions, and restrictions unless and until it was annexed. The trial court entertained
argument of the motion but denied it, stating it was electing not to consider the new
declarations.
Noche Vista appealed. After the trial court awarded attorney fees to the HOA,
Noche Vista filed a motion for reconsideration of the fee award. It too was denied.
Noche Vista amended its notice of appeal to challenge that reconsideration decision as
well.
ANALYSIS
Noche Vista appeals the trial court’s order granting and denying summary
judgment, its refusal to consider the declarations filed in support of its motion for
reconsideration, and the trial court’s award of the HOA’s attorney fees. We address the
issues in the order presented.
I. SUMMARY JUDGMENT WAS PROPER, ALBEIT ON A GROUND REJECTED BY THE TRIAL
COURT BUT SUPPORTED BY THE RECORD
We review an order on cross motions for summary judgment de novo, engaging in
the same inquiry as the trial court. Wilkinson, 180 Wn.2d at 249. Summary judgment is
appropriate when there is “no genuine issue as to any material fact” and “the moving
party is entitled to a judgment as a matter of law.” CR 56(c). We may affirm a trial
court’s disposition of a motion for summary judgment on any ground supported by the
record. Washburn v. City of Fed. Way, 178 Wn.2d 732, 753 n.9, 310 P.3d 1275 (2013)
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(citing Mountain Park Homeowners Ass’n v. Tydings, 125 Wn.2d 337, 344, 883 P.2d
1383 (1994); Rawlins v. Nelson, 38 Wn.2d 570, 578, 231 P.2d 281 (1951)).
The court’s primary objective in interpreting restrictive covenants is to determine
the intent of the parties. Riss v. Angel, 131 Wn.2d 612, 621, 934 P.2d 669 (1997). The
relevant intent, or purposes, is that of those establishing the covenants. Id. (citing
ROBERT G. NATELSON, LAW OF PROPERTY OWNERS ASSOCIATIONS § 2.5, at 61 (1989)).
The drafter’s intent is a question of fact. Wilkinson, 180 Wn.2d at 250. We apply the
rules of contract interpretation. Id. at 249.
We examine the language of the restrictive covenant and consider the instrument
in its entirety. Id. at 250 (citing Hollis v. Garwell, Inc., 137 Wn.2d 683, 694, 974 P.2d
836 (1999)). “‘An interpretation which gives effect to all of the words in a contract
provision is favored over one which renders some of the language meaningless or
ineffective.’” GMAC v. Everett Chevrolet, Inc., 179 Wn. App. 126, 135, 317 P.3d 1074(2014) (quoting Seattle-First Nat’l Bank v. Westlake Park Assocs., 42 Wn. App. 269,
274, 711 P.2d 361 (1985)).
Extrinsic evidence will be used to illuminate what was written, but not if it would
vary, contradict, or modify the written word or show an intention independent of the
instrument. Wilkinson, 180 Wn.2d at 251 (citing Hollis, 137 Wn.2d at 697). Such
evidence “includes ‘the circumstances leading to the execution of the contract, the
subsequent conduct of the parties and the reasonableness of the parties’ respective
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interpretations.’” Id. at 269 (Madsen, C.J., dissenting) (quoting Shafer v. Bd. of Trs. of
Sandy Hook Yacht Club Estates, Inc., 76 Wn. App. 267, 275, 883 P.2d 1387 (1994)).
Restrictive covenants are enforceable promises relating to the use of land. Viking
Props., Inc. v. Holm, 155 Wn.2d 112, 119, 118 P.3d 322 (2005). As pointed out by the
Restatement (Third) of Property:
There is a wide diversity in the types of land-use arrangements that can be
implemented by servitudes. Depending on the nature and object of the
arrangement, the parties may create servitudes whose benefits will be held
personally, in gross, or appurtenant to another interest in land. . . . In
determining what the parties intended, the full range of possibilities should
be kept in mind.
RESTATEMENT (THIRD) OF PROPERTY (SERVITUDES) § 2.6, cmt. c (AM. LAW INST. 2000).
Applying these principles to the Declaration
We agree with Noche Vista that we cannot treat as meaningless the statement in
section 1.15’s definition of “Landholding” that “The number of Landholdings may be
increased through annexation of Bandera Phase III.” CP at 179. The definition of
Landholding is critical to the definition of “Owner,” and a number of provisions of the
Declaration apply only to Owners. It is clear from that statement in section 1.15 and
from the separately defined terms “Bandera Phases I and II” and “Bandera Phase III” that
lots in Phase III could only become fully subject to the Declaration—subject to provisions
applicable only to Owners—following annexation.
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By the same token, we cannot treat as meaningless Scofield’s inclusion of Phase
III in the Declaration, particularly where the statement that Landholdings “may be
increased through annexation of Bandera Phase III” (emphasis added) is most reasonably
understood as binding future owners of and within Phase III to being annexed in the
manner provided by the Declaration. Black’s Law Dictionary at 1172-73 (11th ed. 2019)
provides the following definition of “may”:
1. To be permitted to . 2. To be a possibility . Cf. CAN. 3. Loosely, is required to; shall; must .
There would be no point in including Bandera Phase III in the Declaration if only to say
that there was a “possibility” it could be annexed.
Noche Vista argues that including Phase III in the Declaration
creat[ed] a placeholder for Phase III to potentially become part of the
community with an annexation process . . . creat[ing] a pre-existing
framework that would apply to Phase III without the need for future
negotiations.
Br. of Appellant at 19. But article 10, dealing with annexation, suffices for that purpose.
Including Phase III in the Declaration and binding it to the Declaration’s terms2 is
meaningful only because it binds Phase III to a method of annexation.
2
The Declaration clearly binds Phase III to something. Among other provisions, it
states in section 12.4:
Declarant, for itself, its successors and assigns hereby declares that all of
Bandera must be held, used and occupied subject to the conditions,
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The Declaration provides that annexation is accomplished by an amendment
executed by the declarant. Decl., Section 10.1; CP at 198. The “Declarant” is Scofield.
Decl., Section 1.9; CP at 178. Until the end of the development period (defined as 35
years from the date of recording the Declaration, unless earlier terminated by the
declarant in writing) the declarant was granted “the absolute right and sole discretion” to
amend the Declaration, subject to its express limitations and a requirement to exercise the
discretion reasonably, in a manner that would not impair marketability of title or the
security of any mortgage. Decl., Section 9.2; CP at 198. Elsewhere, the Declaration
provides that
[f]or the purpose of this Declaration and the easements, dedications, rights,
privileges and reservations set forth herein, a successor and assign of
Declarant is deemed a successor Declarant and assign only to the extent
specifically designated by Declarant and only with respect to the particular
rights and interests specifically designated.
Section 12.13; CP at 202.
Jerry Scofield presumably expected his vision to succeed and might not have
foreseen losing a portion of Bandera to foreclosure—although perhaps he did. Surely,
however, he could have foreseen a possible future need to sell equity in Scofield in order
to raise capital for his ambitious development plan. By binding Phase III in the
covenants and restrictions of this Declaration and the other Governing
Documents, and that all such provisions will run with the land and be
binding upon all persons who hereafter become the owner of any interest in
Bandera.
CP at 200-01 (emphasis added).
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Declaration to the annexation provision, he could ensure for himself (and for the Owners
of lots in Phases I and II) that annexing Phase III was within his control. This is
consistent with Noche Vista’s evidence and argument that Scofield wanted maximum
flexibility. Including Phase III in the Declaration was not merely a “placeholder” for
future annexation as argued by Noche Vista; it ensured that whatever happened to
ownership of Phase III, Scofield would have the power to annex it.
To summarize, the Declaration is reasonably understood to create one set of
servitudes for “Owners,” as defined, and a different servitude for Phase III: permission
for the Declarant to annex it by amending the Declaration.
Annexation of Phase III was accomplished by the execution and recording of the
seventh amendment. Annexation could be by an amended declaration, and the seventh
amendment was “made by the Declarant . . . pursuant to Article 9, Section 9.2 of the
Declaration,” its “Amendment” provision. CP at 306. The amendment was made “prior
to the end of the Development Period.” CP at 317. It modified the Declaration “as to
that property described on the attached Exhibit ‘A,’” which included Phase III. CP at
307. It provided that the HOA, which was being incorporated simultaneously, would
manage the common areas and amenities and enforce the Declaration as to “Bandera
Phases I, II and III.” CP at 308-09. It amended the Declaration to “eliminate [any]
inconsistencies.” CP at 317.
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Noche Vista argues on appeal that the seventh amendment failed to modify the
definition of Landholdings or the annexation procedure. But it did not need to. It
effected annexation. The definition of Landholdings recognized that Landholdings were
“increased through annexation.” Decl., Section 1.15; CP at 31-32.
In the trial court, Noche Vista argued that the seventh amendment was ineffective
because “a person may only encumber real property which he or she owns or in which he
or she has rights,” and “when Scofield executed the Seventh Amendment neither he nor
any of his entities had an ownership interest” in Phase III. CP at 526. But when Scofield
signed the seventh amendment, it was not encumbering Phase III. Phase III was
encumbered in 2006, with the execution and recording of the Declaration. Scofield
owned Phase III then. With the seventh amendment, Scofield merely exercised its
authority under the Declaration to annex it by amendment.
Noche Vista made a related argument in the trial court that Scofield conveyed
away its right as declarant to annex Phase III in its deed in lieu of foreclosure. But the
deed conveyed Scofield’s “right, title, and interest in and to the following described real
estate,” CP at 381, and Noche Vista cites no authority for the proposition that a
declarant’s right to annex real estate is itself part of that real estate. “The general rule” in
jurisdictions addressing the issue is that “the developer’s rights are personal rights and do
not run with the land.” Scott v. Ranch Roy-L, Inc., 182 S.W.3d 627, 633 (Mo. Ct. App.
2005); accord Fairways of Country Lakes Townhouse Ass’n v. Shenandoah Dev. Corp.,
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113 Ill. App. 3d 932, 447 N.E.2d 1367, 69 Ill. Dec. 680 (1983); Peoples Fed. Sav. &
Loan Ass’n of S.C. v. Res. Planning Corp., 358 S.C. 460, 596 S.E.2d 51, 60-61 (2004);
Larkin v. City of Burlington, 172 Vt. 566, 772 A.2d 553 (2001); Diamondhead Country
Club & Prop. Owners Ass’n, Inc. v. Peoples Bank, No. 2018-CA-00978-SCT, 2020 WL
948324, at *4 (Miss. Feb. 27, 2020).
Viewed differently but with the same result, by virtue of the Declaration, the
owners of property in Phases I and II also had an interest in Scofield’s authority to annex
Phase III—as evidenced by the HOA’s position in this action. The Declaration did not
provide that Scofield’s authority to annex would be lost if it executed a property
conveyance.
Extrinsic evidence in the form of the conduct of the parties strongly supports
construing the Declaration as permitting annexation of Phase III in the manner
effectuated by the seventh amendment. Mr. Dwyer knew he took title subject to a
servitude and that the seventh amendment would accomplish annexation. In order to
avoid other control he believed Scofield had over preconstruction review and
construction in Phase III, he actively sought an amendment to the Declaration that would
substitute an HOA and other design review and building covenants. He understood that it
would “add[ ] Phase III back” and require Noche Vista to “adhere to the CC&R.”
CP at 415.
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Noche Vista’s remaining arguments do not undercut this plain meaning of the
Declaration. It points out that while the abbreviated legal description and assessor’s tax
parcel identification on the first page of the Declaration include all three phases of
Bandera, the citation to the “Additional legal” is to only “pages 1, 2 and 3”: the legal
description of Phases I and II. CP at 166, 171-73. Under RCW 65.04.045(1)(f), which
governs the form of recorded instrument that county auditors must require, the first page
or a cover page is to include a “reference to the document page number where the full
legal description [of the property] is included, if applicable.” An erroneous reference in
the first page’s summary information cannot alter the meaning of the Declaration. But
the page number reference is arguably evidence of the property the recording party
intends to subject to the recorded document. The problem for Noche Vista, however, is
that the summary information on the first page of every amendment to the Declaration
referred to an exhibit that contained the legal description of Phases I, II and III. If we
treat the lawyers’ preparation of summary information on recorded documents as
evidence of intent, there is seven times more evidence of an intent to include Phase III
than there is evidence to exclude it.
Finally, Noche Vista argues that its construction of the Declaration is supported by
its “Future Development” provision, which warns purchasers that “areas of Bear
Mountain Ranch will continue to be developed for residential use, for higher density
occupation or for any other purpose permitted by law.” CP at 192 (underline omitted). It
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argues that this conveyed to purchasers that Phase III was not subject to the Declaration’s
restrictions. What the provision conveys, however, is that the entire 1,500 acre planned
development district “Bear Mountain Ranch” (a defined term), within which Bandera is
located, is not subject to the Declaration’s restrictions. It would have been a simple
matter for the Declaration to say that “areas of Phase III will continue to be developed for
residential use, for higher density occupation or for any other purpose permitted by law,”
if that was what was intended. The Future Development provision does not say that.
Since the Declaration plainly authorized the annexation effectuated by the seventh
amendment, it was proper to grant summary judgment in the HOA’s favor.
II. REFUSAL TO CONSIDER THE DECLARATIONS SUPPORTING THE MOTION FOR
RECONSIDERATION WAS HARMLESS
Noche Vista argues the trial court erred when it declined to consider the two
declarations it submitted with its motion for reconsideration. “The decision to consider
new or additional evidence presented with a motion for reconsideration is squarely within
the trial court’s discretion.” Martini v. Post, 178 Wn. App. 153, 162, 313 P.3d 473(2013). The trial court’s discretion extends to refusing to consider an argument raised for
the first time on reconsideration absent a good excuse. River House Dev. Inc. v. Integrus
Architecture, P.S., 167 Wn. App. 221, 231, 272 P.3d 289 (2012). We review a trial
court’s denial of a motion for reconsideration for abuse of discretion, that is, discretion
manifestly unreasonable, or exercised on untenable grounds, or for untenable reasons. Id.20
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Assuming without deciding that the trial court abused its discretion, given the
basis of our decision, the refusal to consider the declarations was harmless. The
declarations and Noche Vista’s argument from the declarations that Scofield wanted
flexibility for Phase III are consistent with the basis on which we affirm the summary
judgment decision.
III. THE ATTORNEY FEE PROVISION APPLIED
Finally, Noche Vista argues that the trial court erred in awarding the HOA its
reasonable attorney fees and costs because the Declaration’s fee provision does not apply
to this type of dispute and alternatively, because the HOA was not a substantially
prevailing party.
“Whether a contract or statute authorizes an award of attorney fees is . . . a
question of law reviewed de novo.” Torgerson v. One Lincoln Tower, LLC, 166 Wn.2d
510, 517, 210 P.3d 318 (2009). The Declaration’s fee provision appears in section 12.16,
and provides:
In the event any party employs legal counsel to enforce any covenant of
this lease, [sic] or to pursue any other remedy on default as provided herein,
or by law, the substantially prevailing party shall be entitled to recover all
reasonable attorneys’ fees, appraisal fees, title search fees, other necessary
expert witness fees and all other costs and expenses not limited to court
action. Such sum shall be included in any judgment or decree entered.
CP at 202. Noche Vista asserts “[t]he covenants govern only the design, construction,
and maintenance of improvements an Owner makes to a Landholding.” Br. of Appellant
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at 44. It does not explain why it perceives this limitation on the meaning of “any
covenant.”
Black’s Law Dictionary, at 457 (11th ed. 2019), defines “covenant” as “[a] formal
agreement or promise, usu. in a contract or deed, to do or not do a particular act; a
compact or stipulation.” This court has described “covenant” as “‘[a]n agreement or
promise of two or more parties that something is done, will be done, or will not be done.
In modern usage, the term covenant generally describes promises relating to real property
that are created in conveyances or other instruments.’” Shafer, 76 Wn. App. at 274(quoting 9 MICHAEL ALLAN WOLF, POWELL ON REAL PROPERTY § 60.01[2]). Noche
Vista’s complaint sought “a Declaratory Judgment that Plaintiff’s Property is not subject
to the Covenants.” CP at 8. The HOA counterclaimed for a declaratory judgment “that
Plaintiff’s property is subject to the Covenants.” CP at 126.
In Roats v. Blakely Island Maintenance Commission, Inc., 169 Wn. App. 263, 285,
279 P.3d 943 (2012), this court construed a much narrower attorney fee provision in the
bylaws of a homeowner’s association, which provided for payments of assessments to the
association and that “the amount of each assessment and the amount of any other
delinquent assessments, together with all expenses, attorney’s fees and costs reasonably
incurred in enforcing same shall be paid by the member.” The Roatses, members of the
homeowner’s association, refused to pay a portion of an assessment and, after the
association threatened to file a lien against their property, they filed litigation seeking
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Noche Vista v. Bandera Homeowners Ass’n
injunctive relief and an order quieting title. When they lost, they objected to an award of
attorney fees to the homeowners’ association because it had not brought a collection
action to enforce an assessment. This court recognized that there was more than one way
to “enforce” delinquent assessments, and one way was by threatening the lien that caused
the Roatses to file a lawsuit.
Similarly here, seeking a declaration that Noche Vista was subject to the
covenants contained in the Declaration was a means of enforcing the covenants. The trial
court did not err by granting a fee award.
Noche Vista also argues that the HOA was not a substantially prevailing party
because “[b]oth the HOA and Noche Vista prevailed on key aspects of the case.” Br. of
Appellant at 47. In the trial court, it based this argument on a contention that the validity
of the seventh amendment was a “major component” of the HOA’s defense theory on
which the HOA failed to prevail. Our conclusion that the seventh amendment is critical
to the HOA’s entitlement to summary judgment guts this alternative challenge to the fee
award.
IV. FEES ON APPEAL
Both parties argue that if they prevail, they are entitled to an award of attorney
fees on appeal under RAP 18.1 and section 12.16 of the Declaration. Noche Vista
challenges the HOA’s right to recover fees on appeal based on its argument that this was
not an action to enforce a covenant, but we have rejected that argument. We award the
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HOA its reasonable attorney fees and costs on appeal subject to its timely compliance
with RAP 18.1(d).
Affirmed.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
_____________________________
Siddoway, J.
I CONCUR:
_____________________________
Pennell, C.J.
Korsmo, J.
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