Holter Lakeshores Homeowners Ass'n v. Thurston

April 29 2009
DA 07-0709
IN THE SUPREME COURT OF THE STATE OF MONTANA
2009 MT 146
HOLTER LAKESHORES HOMEOWNERS
ASSOCIATION, INC.,
Plaintiff and Appellant,
v.
STEPHEN L. THURSTON, VICTORIA J.
THURSTON, LONNIE R. THURSTON,
Defendants and Appellees.
APPEAL FROM: District Court of the First Judicial District,
In and For the County of Lewis and Clark, Cause No. CDV 06-776
Honorable Thomas C. Honzel, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
R. J. “Jim” Sewell, Jr., and Bruce M. Spencer, Smith Law Firm, Helena,
Montana
For Appellees:
Cherche Prezeau and Michael F. McMahon, Hughes, Kellner, Sullivan &
Alke, Helena, Montana
William P. Driscoll, Franz & Driscoll, Helena, Montana
Submitted on Briefs: September 24, 2008
Decided: April 29, 2009
Filed:
__________________________________________
Clerk
Justice John Warner delivered the Opinion of the Court.
¶1 Appellant, Holter Lakeshores Homeowners Association (HLHA), brought suit against
Stephen, Victoria, and Lonnie Thurston (Thurstons), to quiet title to an easement for parking
and boat docking on two lots next to Holter Lake in Lewis and Clark County. The District
Court granted summary judgment in favor of Thurstons. HLHA appeals.
¶2 The dispositive issue on appeal is whether the District Court correctly concluded
HLHA did not have an enforceable easement to access the two lots in question for parking
and access to Holter Lake.
¶3 In 1973, Bruce and Betty Nelson (Nelsons) petitioned the Lewis and Clark County
Commission to establish the Holter Lakeshores Subdivision (Subdivision) on the west shore
of the Oxbow Bend on Holter Lake. As the proposed subdivision could not be reached by
road, the Lewis and Clark County City-County Planning Board would only approve it if
Nelsons provided parking and boat docking facilities that were reachable by road, for the use
of those who would own lots in the subdivision.
¶4 To satisfy the condition that they provide parking, Nelsons acquired two adjoining
lots about four miles north of the Subdivision, across the lake on its East side: a 1 acre lot on
the lake and a 1.49 acre lot adjacent to the lakefront lot. These two lots are the property upon
which HLHA seeks to specifically enforce an easement.
¶5 Nelsons placed a number of restrictions on the use of the lots in the Subdivision by
executing a Declaration of Conditions, Covenants and Restrictions (Declaration). The
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Declaration was recorded in the office of the Lewis and Clark County Clerk and Recorder on
June 29, 1973. The Declaration indicated that the Nelsons, as original owners of the lots in
the Subdivision, had acquired property down the lake for parking, but it did not describe this
property other than to say which township and range it was in. The Lewis and Clark County
Commission then approved the Subdivision.
¶6 The Declaration provides, inter alia, that the owners of the lots in the Subdivision
could form a homeowners association. However, the Declaration states that a homeowners
association would only be formed after 75% of the lots in the Subdivision had been sold and
then only if and when an election was held and 75% of the lot owners voted that it be
formed. In the section of the Declaration providing for the possible formation of a
homeowners association, it went on to state:
One of the areas of responsibility of the Home Owners Association will
be in aiding and working with the Original Owners in regards to an area in
Sec. 9, T.14 N. R. 3 W. which area Original Owners have purchased to be able
to assure Lot Owners of future parking spaces under rules and regulations and
assessments to be established by Original Owners. Lot Owners have no
obligation to use this area but will have first rights to do so under the terms
established, which terms shall be in line with other similar facilities within the
area.
¶7 No homeowners association was formed until some 33 years after the Declaration was
filed, just before this litigation commenced. The record does not show the lots in question
have ever been used by those owning lots in the Subdivision.
¶8 About 19 years after forming the Subdivision, in 1992, Nelsons conveyed the lots in
question to Thomas E. Clark by warranty deed (1992 Deed). The 1992 Deed provided:
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This deed is subject to the following conditions, covenants and agreements:
Those certain conditions, covenants and agreements dated June 22, 1973,
wherein Bruce A. Nelson and Betty R. Nelson are called “Original Owners”
and which were recorded in Book 100, Page 704 of the records of Lewis and
Clark County, Montana.
¶9 The 1992 Deed then quotes verbatim the language of the Declaration set out in ¶ 6
above. It further states:
Now therefore, by acceptance of this deed Thomas E. Clark, his heirs
and assigns does hereby accept the said covenants above referred to and does
hereby agree to carry forth in every way the intention of the said covenants
and accepts the fact that the property described as follows:
[Herein is then included a metes and bounds description of the
1.49 acre lot, which does not have lake access.]
is to be used to provide parking spaces.
¶10 The 1992 Deed also mentioned a “companion property”:
[The] companion property which may be used by Thomas E. Clark, his
heirs and assigns as he may see fit, with these stipulations, that it has been the
intent of the Original Owners that a ramp for docking boats would be
advantageous to the total facility and that a residence for the Owner or
Operator of the total facility would also be located on this parcel along with
other development, which is compatible to the total intent of the covenants
above set forth.
. . .
That said companion property may not be sold separately unless safeguards
and provisions are provided for the future protection of said Home Owners
and the said Thomas E. Clark, for himself, his heirs, and assigns does hereby
attest that he will vigorously protect the rights of the Home Owners who are
mentioned in the said Covenants, that he will attempt to provide them with a
facility which will serve them well and conveniently and fairly and that he will
always honor their right to use the facilities which maybe [sic] created and that
he will and does hereby accept the said property and by doing so does agree to
protect the Original Owners and hold them harmless in relation to this matter
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and to the total parking area obligation as set forth in the said covenants.
¶11 The 1992 Deed from Nelsons to Clark also states it provides the legal description of
the companion property. However, the description of the companion property is the same as
the 1.49 acre lot, which was previously described. The 1 acre lot, which has lake access, is
not described in the 1992 Deed. HLHA argues this is an obvious mistake and it was the
intention of the parties that the companion property was the 1 acre lot in question here.
Thurstons do not disagree it was the intention of Nelsons and Clark that the companion
property mentioned in the 1992 Deed was the 1 acre lot. However, Thurstons argue any
mistake in this regard is meaningless.
¶12 In 1998, Clark conveyed the Subject Property to Thurstons by warranty deed (1998
Deed). The 1998 Deed does not reference the Declaration or the 1992 Deed and does not
restrict Thurstons’ use or sale of either of the lots. After they purchased the two lots in
question, Thurstons improved them at substantial cost to themselves.
¶13 The record shows that, following the execution of the 1998 Deed, no one connected
with the Subdivision indicated any interest in using the lots until around 2004 when it
appeared the parking and lake access they had been using might be curtailed. At that time,
someone who may have been connected to the Subdivision inquired of Thurstons about their
right to use the lots for parking and boat docking. Thurstons denied access. No property
owner in the Subdivision insisted on a right to use these lots until 2006. Thurstons again
denied access to these lots.
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¶14 Property owners in the Subdivision formed HLHA on May 16, 2006. HLHA filed the
complaint in this action to quiet title to its right to use the lots for parking and lake access on
October 26, 2006. After some discovery, Thurstons moved for summary judgment. HLHA
also moved for summary judgment. The District Court granted Thurstons’ motion for
summary judgment and denied HLHA’s motion.
¶15 The District Court reasoned the Declaration did not create an interest in the lots
HLHA could enforce. The District Court concluded the language in both the 1992 Deed and
the Declaration merely expressed the intentions of the Nelsons with regard to the use of the
lots, and use of these lots by owners of property in the Subdivision was conditioned on the
formation of a homeowners association and establishing rules, regulations, and assessments.
The District Court reasoned the conditions precedent for creation of an interest in the lots
had not been performed.
¶16 The District Court went on to hold that, due to the 33-year delay between recording
the Declaration and formation of the homeowners association, HLHA’s claim was barred by
laches. The District Court also stated that, even if it were to consider the 1992 or 1998
deeds, the statute of limitations would bar HLHA from enforcing any interest in the lots.
HLHA appeals.
¶17 We review summary judgment orders de novo. Richman v. Gehring Ranch Corp.,
2001 MT 293, ¶ 14, 307 Mont. 443, 37 P.3d 732. The moving party must establish both the
absence of genuine issues of material fact and entitlement to judgment as a matter of law.
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Richman, ¶ 14 (citing Hadford v. Credit Bureau of Havre, Inc., 1998 MT 179, ¶ 14, 289
Mont. 529, 962 P.2d 1198). Once the moving party has met this burden, the opposing party
must present material and substantial evidence, rather than mere conclusory or speculative
statements, to raise a genuine issue of material fact. Richman, ¶ 14 (citing Hadford, ¶ 14).
¶18 The construction of a deed granting an interest in real property is governed by the
rules of contract interpretation. Nelson v. Barlow, 2008 MT 68, ¶ 13, 342 Mont. 93, 179
P.3d 529; Mary J. Baker Revoc. Trust v. Cenex Harvest, 2007 MT 159, ¶ 18, 338 Mont. 41,
164 P.3d 851 (citing § 70-1-513, MCA).
¶19 HLHA argues the District Court erred in concluding HLHA’s members may not
specifically enforce their right to use the lots for parking and boat docking because the
doctrine of laches does not apply, the eight year period of limitations has not expired, and the
interest is not subject to unmet conditions precedent. Thurstons respond that there is no
recorded right to use the property, performance of conditions precedent necessary to create
an easement had not occurred, and the District Court did not err in concluding laches bars
any rights HLHA may have.
¶20 We conclude the District Court was correct in holding that the Declaration recorded in
1973 and the language in the 1992 Deed did not result in an enforceable easement to use the
two lots in question. Thus, we need not consider laches and the statute of limitations.
¶21 The two lots upon which HLHA seeks to specifically enforce an easement in this
action, now owned by Thurstons, were not described with particularity in the Declaration.
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The Declaration did not establish an easement on the lots in question. See Nelson, ¶ 16. The
1992 Deed from Nelsons to Clark did refer to the Declaration, and is an instrument that
attempts to create an easement based on an express reservation. An easement is a right
which one person has that is attached as a burden to the land of another, which allows the
easement holder to use the other’s land for a specific purpose. Section 70-17-101(4), MCA;
Blazer v. Wall, 2008 MT 145, ¶ 24, 343 Mont. 173, 183 P.3d 84.
¶22 A grant of an easement may be subject to conditions precedent. A condition
precedent is one which is to be performed before some right or obligation dependent thereon
accrues. However, if the uncertain event upon which the obligation hinges does not take
place, the obligation does not materialize. See Richman, ¶¶ 18-19; Thompson v. Lithia
Chrysler Jeep Dodge, 2008 MT 175, ¶ 21, 343 Mont. 392, 185 P.3d 332.
¶23 An agreement, the terms of which are not sufficiently certain to make the act which is
to be done clearly ascertainable, cannot be specifically enforced. Quirin v. Weinberg, 252
Mont. 386, 393-94, 830 P.2d 537, 541 (1992) (citing § 27-1-412(5), MCA). A contract that
necessitates specific performance must be complete and certain in all essential matters
included within its scope. An agreement that requires the parties to agree to material terms
in the future is not an enforceable agreement. GRB Farm v. Christman Ranch, Inc., 2005
MT 59, ¶ 11, 326 Mont. 236, 108 P.3d 507 (citing Steen v. Rustad, 132 Mont. 96, 106, 313
P.2d 1014, 1020 (1957)).
¶24 Here, considering the Declaration and the 1992 Deed, there were several things that
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had to occur before the two lots now owned by Thurstons could be burdened by any
easement in favor of HLHA. First, 75% of the lots in the Subdivision had to be sold. Next,
it was necessary that the owners of Subdivision lots hold an election and that 75% of them
vote to form a homeowners association. Then, if and when these two conditions were
performed, the homeowners association was to “work with” the owner of the lots.
¶25 Relating to the 1.49 acre lot that has no access to the lake, it appears that Nelsons
desired to reserve an easement for some parking spaces for the members of a homeowners
association, if one was formed. However, there is no indication of how many parking spaces
were to be in the easement, where they were to be located, or how much of the lot would be
used for parking.
¶26 In regard to the 1 acre lot with lake access, even if it had been described in the 1992
Deed, the purported easement reservation states the lot could be used by Clark and his heirs
and assigns as they may see fit. The language in the deed goes on to vaguely describe some
other facility and a residence that might be built.
¶27 The 1992 Deed, in essence, attempts to reserve an easement in favor of an association
that might never be formed, by requiring that the possible association and Clark work
together to reach an agreement. It is left for future negotiations how many parking spaces
there would be, where the parking spaces would be located, how much of the lots could be
used, where any boat ramp would be located, how much the association would have to pay to
construct any facilities, what assessments the owners of the lots could levy for use of parking
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and boat launch facilities, and what rules and regulations would govern parking and use of
the boat ramp. The easement reservation language in the 1992 Deed is merely a statement
that, if in the future a homeowners association is formed, the association and the owners of
the lots will negotiate to see if they can reach an agreement on the terms of an easement.
Material terms of the easement are not agreed upon. The scope and terms of the easement
which Nelsons attempted to reserve are too vague to be specifically enforced. The 1992
Deed is insufficient to constitute an easement by reservation.
¶28 The District Court did not err in granting Thurstons’ motion for summary judgment.
Affirmed.
/S/ JOHN WARNER
We Concur:
/S/ W. WILLIAM LEAPHART
/S/ PATRICIA COTTER
/S/ JAMES C. NELSON
/S/ JIM RICE
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