Stephen and Cheryl Jacoby v. The Hamptons Community Association, Inc.

In the Missouri Court of Appeals
Eastern District
DIVISION TWO
STEPHEN AND CHERYL JACOBY, ) No. ED107875
)
Respondents, ) Appeal from the Circuit Court
) of St. Charles County
vs. )
) Honorable Ted House
THE HAMPTONS COMMUNITY )
ASSOCIATION, INC., ET AL., )
)
Appellants. ) FILED: June 9, 2020
Introduction
The Hamptons Community Association, Inc. (“the HOA”) and HOA board members
Anne Ritter, Chris Dickhans, and Randy McKinley (collectively “Appellants”) appeal from the
trial court’s declaratory judgment in favor of Stephen and Cheryl Jacoby (“the Jacobys”)
invalidating the HOA’s amended parking restrictions, invalidating fines imposed on the Jacobys,
ordering that the Jacobys’ vote be counted in an HOA board member election, and awarding
attorneys’ fees of $9445.35 to the Jacobys. Appellants first argue that the trial court erred in
invalidating the amended parking restrictions and corresponding fines because the restrictions
were passed by a two-thirds vote as required by the HOA’s covenants and restrictions. In their
second point on appeal, Appellants contend that the trial court abused its discretion in awarding
attorneys’ fees to the Jacobys. For the first time on appeal, Appellants argue that amending the
subdivision parking restrictions required only a two-thirds vote of property owners, regardless of
whether the amendments created a new burden of ownership on property owners of the
Hamptons Subdivision. This argument materially differs from the argument presented to the trial
court—that only a two-thirds vote of property owners was required because the amended parking
restrictions did not create a new burden of ownership. For that reason, Appellants’ argument is
not preserved and may not now be presented on appeal. However, the record does not suggest
the presence of any special circumstances justified an award of attorneys’ fees. Accordingly, we
affirm the trial court’s judgment as to the declaratory judgment action but reverse the trial court’s
award of attorneys’ fees.
Factual and Procedural History
The Jacobys own a home in the Hamptons Subdivision. After the Jacobys purchased
their home, the HOA amended the parking restrictions in the HOA covenants and restrictions by
a two-thirds vote of the property owners. The amendments extended restrictions to the parking
of personal vehicles on subdivision streets that previously had applied only to commercial
vehicles. Pursuant to the amended parking restrictions, the Jacobys were fined $1375.00 for
parking their personal vehicles on the subdivision streets. Because the Jacobys refused to pay
the fines, the HOA disqualified their vote in the next HOA election to select the HOA board
members.
The Jacobys filed a petition for declaratory judgment against Appellants asking the trial
court to invalidate the amended parking restrictions. The Jacobys maintained that unanimous
consent of the property owners was required for the amended parking restrictions to be valid.
The Jacobys also sought attorneys’ fees. The Jacobys later amended the petition also to request
that the parking fines imposed as a result of the invalid amendment be voided and that their vote
be counted in the previously held HOA board member election. Appellants argued to the trial
court that because the amended parking restrictions only modified existing burdens of ownership
2
and did not create any new burdens of ownership, only a two-thirds vote of property owners was
required to amend the parking restrictions. The Jacobys and Appellants agreed to try the case on
stipulated facts.
The trial court found that the amended parking restrictions imposed a new burden of
ownership by extending the parking restrictions to personal vehicles, and, therefore, unanimous
consent of the subdivision property owners was required. The trial court entered judgment in
favor of the Jacobys, invalidated the amended parking restrictions, invalidated the fines imposed
on the Jacobys, and ordered that the Jacobys’ vote be counted in the HOA board member
election. The trial court found special circumstances existed to justify the award of attorneys’
fees to the Jacobys in the sum of $9445.35 because there existed a clear body of applicable
Missouri law contrary to Appellants’ position. The trial court noted that the Jacobys had to
spend their own money to fund the litigation whereas the Appellants were able to utilize funds
received through HOA dues, and that the Jacobys were fined and subsequently had their vote in
the HOA election disqualified. Appellants now appeal.
Points on Appeal
In Point One, Appellants contend the trial court erred in invalidating the amended parking
restrictions and the associated fines. In Point Two, Appellants allege the trial court erred in
finding special circumstances that authorized the award of attorneys’ fees.
Discussion
I. Rule 84.041–Points Relied On
Preliminarily, we note that Appellants’ points relied on are deficient in that neither point
specifies how the trial court erred or why the trial court’s error supports reversal as required by
1
All Rule references are to Mo. R. Civ. P. (2019).
3
Rule 84.04(d)(1). In particular, Appellants merely state in both points that the trial court erred in
its judgment. Point One reads:
The trial court committed error in invalidating Amendment 4 to the covenant and
restrictions, the fines for violation of the amendment and the reinstatement of the
election vote[.]
Similarly, Point Two reads:
The trial court committed error in finding special circumstances that authorized
the award of respondents attorney’s fees.
Neither point relied on identifies the legal basis or reasoning for reversal nor the standard under
which we should conduct our review. See Rule 84.04(d)(1). Nevertheless, we have discretion to
review non-compliant points relied on when the arguments are readily ascertainable. Scott v.
King, 510 S.W.3d 887, 892 (Mo. App. E.D. 2017) (internal citation omitted). Because we
understand Appellants’ arguments as elaborated in the argument portions of their brief, we
exercise our discretion to proceed in our review. See id.
II. Point One—Validity of the Amended Parking Restrictions
In Point One, Appellants challenge the trial court’s judgment finding that the HOA’s
amendments to the parking restrictions are invalid.
Subsequent to the trial court’s judgment in this case and Appellants filing their notice of
appeal but prior to the filing of their brief, the Supreme Court of Missouri addressed HOA voting
procedures in Trs. of Clayton Terrace Subdivision v. 6 Clayton Terrace, LLC, 585 S.W.3d 269
(Mo. banc 2019). Particularly relevant to this appeal, Clayton Terrace clarified that an HOA
could validly amend subdivision restrictions without unanimous consent of the property owners
in a broader range of circumstances than suggested by some judicial authorities. The Supreme
Court noted that prior appellate opinions had misinterpreted and misapplied the Supreme Court’s
holding in Van Deusen v. Ruth, 125 S.W.2d 1 (Mo. 1938) when requiring unanimous consent.
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Id. at 279–82. Understandably, Appellants now offer Clayton Terrace to maintain that the trial
court erred when it invalidated the amended parking restrictions for lack of a unanimous
approval because only a two-thirds approval vote was required to impose the amended parking
restrictions even if the amendments created a new burden of ownership on the property
owners. Unfortunately for Appellants, their current argument is both different from and
substantially broader than what Appellants presented to the trial court—that the amended parking
restrictions did not create a new burden of ownership.
“It is well recognized that a party should not be entitled on appeal to claim error on the
part of the trial court when the party did not call attention to the error at trial and did not give the
court the opportunity to rule on the question.” Brown v. Brown, 423 S.W.3d 784, 787 (Mo. banc
2014) (per curiam) (internal quotation omitted). “We will not consider arguments not raised
below and made for the first time on appeal.” Osage Mobile Home Park, LLC v. Jones, 571
S.W.3d 623, 624 (Mo. App. W.D. 2019) (internal quotation omitted). The foundation of this
principle rests upon our firmly held position that “we will not convict a trial court of error for an
issue not presented for its determination.” Dotson v. Dillard’s, Inc., 472 S.W.3d 599, 603 n.2
(Mo. App. W.D. 2015) (internal quotation omitted). Accordingly, issues not presented to the
trial court are waived for the purposes of appellate review.2 See State v. Fassero, 256 S.W.3d
109, 117 (Mo. banc 2008) (internal citation omitted).
The record clearly shows that Appellants raise a new argument on appeal that simply was
not presented to the trial court. We recognize that the holding in Clayton Terrace relates to the
core issues of this case. And while it is reasonable and understandable that Appellants want to
2
The primary exception to this general rule of waiver is jurisdiction. See AMG Franchises, Inc. v. Crack Team
USA, Inc., 289 S.W.3d 655, 659 (Mo. App. E.D. 2009) (“However, subject matter jurisdiction may be raised at any
time during the proceedings, including for the first time on appeal.”).
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present their new argument in light of the Supreme Court holding in Clayton Terrace, we find no
cases allowing an exception to the overarching rule of waiver based upon the facts before us.
Indeed, Appellants could have made the argument they now present on appeal to the trial court,
as did the litigants in Clayton Terrace. But Appellants chose not to do so.3 Because Appellants
did not present their argument in Point One to the trial court, it was not preserved for our review
and is therefore waived. See Fassero, 256 S.W.3d at 117; Brown, 423 S.W.3d at 787. Point One
is denied.
III. Point Two—Attorneys’ Fees
In Point Two, Appellants contend the trial court erred in awarding attorneys’ fees.
We review awards of attorneys’ fees for whether the trial court abused its discretion.
Ellis v. Hehner, 448 S.W.3d 320, 326 (Mo. App. E.D. 2014). The trial court abuses its discretion
when its decision is “against the logic of the circumstances and so arbitrary or unreasonable as to
shock one’s sense of justice.” Cupit v. Dry Basement, Inc., 592 S.W.3d 417, 425 (Mo. App.
W.D. 2020) (quoting Berry v. Volkswagen Grp. of Am., Inc., 397 S.W.3d 425, 431 (Mo. banc
2013)).
Missouri courts, with few exceptions, apply the American Rule that each party must pay
its own attorneys’ fees. Incline Vill. Bd. of Trs. v. Edler, 592 S.W.3d 334, 341 (Mo. banc 2019)
(internal citation omitted). Section 527.1004 authorizes an award of costs in declaratory
judgment actions as may be “equitable and just.” Courts have interpreted costs to include
3
Given Appellants’ waiver, we do not address the substance of Appellants' argument and whether Clayton Terrace
provides them the lifeline they now seek on appeal. However, as stated above, the Supreme Court addressed what it
characterized as the appellate courts’ unduly narrow application of Van Duesen, and held that when a contract
unambiguously permits amendment or alteration, there is nothing to construe; the contract may be altered or
amended. Clayton Terrace, 585 S.W.3d at 282. The Clayton Terrace Court applied fundamental principles of
contract construction when interpreting the subdivision’s restrictive covenants in concluding that, under the
language used in said covenants, the covenants could be amended or extended without the unanimous consent of the
property owners. Id.
4
All Section references are to RSMo (2016), unless otherwise indicated.
6
attorneys’ fees. KC Air Cargo Servs., Inc. v. City of Kan. City, 581 S.W.3d 685, 691 (Mo. App.
W.D. 2019). However, such attorneys’ fees may be awarded only if the case involves special
circumstances, which are rare and confined to limited factual situations. Id. (internal citations
omitted). “Special circumstances contemplates something more than advocating a position a
court finds wrong.” Incline Vill. Bd. of Trs., 592 S.W.3d at 343 (internal quotation marks
omitted). Special circumstances may be present where a party’s position is frivolous or offered
out of spite, malice, or with the knowledge that the position has no sound basis. See id. at 342.
The trial court’s justifications for awarding attorneys’ fees do not meet the requirements
of special circumstances. See KC Air Cargo Servs., Inc., 581 S.W.3d at 691. The trial court first
reasoned that there existed a clear body of law contrary to the Appellants’ position. It is well
established that advocating a position the trial court found to be wrong does not constitute
special circumstances. Incline Vill. Bd. of Trs., 592 S.W.3d at 343. Indeed, the Supreme Court
holding in Clayton Terrace lends support to the Appellants’ posture in advocating a vote of 2/3
of the subdivision property owners was binding on the Jacobys. The trial court’s second reason
for awarding fees related to alleged disparities in the resources between the parties. We note that
neither the stipulated facts nor the record before us evidences such disparities. Lastly, the trial
court found that, in addition to amending the parking restrictions, Appellants also fined the
Jacobys and then disqualified their vote in the HOA board member election due to the unpaid
fines. Again, it is clear from the record that the fines and vote disqualification were natural
consequences of the Appellants’ contention that the amended parking restrictions were valid.
The fact that Appellants advanced and litigated a position the trial court found to be incorrect
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simply does not constitute special circumstances.5 See id. Additionally, we note the imposition
of fines and the disqualification of the Jacobys’ vote were capable of being remedied by voiding
the fines and ordering the Jacobys’ vote be counted, both of which the trial court ordered
separately.
Because there were no special circumstances justifying an award of attorneys’ fees, the
trial court abused its discretion in awarding attorneys’ fees to the Jacobys. See Ellis, 448 S.W.3d
at 326; KC Air Cargo Servs., Inc., 581 S.W.3d at 691. Accordingly, we reverse the award of
attorneys’ fees. Point Two is granted.
Conclusion
The judgment of the trial court is affirmed in part and reversed in part.
_______________________________
KURT S. ODENWALD, Judge
Philip M. Hess, P.J., concurs.
Lisa P. Page, J., concurs.
5
The Jacobys contend that the imposition of fines and subsequent disqualification of their vote were retaliatory
because they followed the Jacobys filing their original petition for declaratory judgment. The chronology alone is
insufficient to establish any sort of retaliation.
8