Hi-Country Estates v. Frank

2023 UT 7IN THE
SUPREME COURT OF THE STATE OF UTAH
HI-COUNTRY ESTATES HOMEOWNERS ASSOCIATION, PHASE II,
Appellee,
v.
ROBBIE FRANK, AS TRUSTEE OF HIGH CANYON RD 20 TRUST, DATED
MAY 27, 2009, AND HIGH CANYON RD 15 TRUST, DATED MAY 27,
2009,
Appellant.
No. 20200689
Heard February 9, 2022
Filed May 4, 2023
On Direct Appeal
Third District Court, Salt Lake County
The Honorable Patrick W. Corum
No. 129914525
Attorneys:
Jeffrey L. Silvestrini, Stephen T. Hester, Bradley M. Strassberg,
Salt Lake City, for appellee
Troy L. Booher, Beth E. Kennedy, Taylor P. Webb, Salt Lake City,
Landon A. Allred, South Jordan, Bruce R. Baird, Salt Lake City,
for appellant
JUSTICE PETERSEN authored the opinion of the Court in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE PEARCE, JUDGE
MORTENSEN, and JUDGE TENNEY joined.
Due to their retirements, JUSTICE HIMONAS and JUSTICE LEE did not
participate herein; COURT OF APPEALS JUDGE DAVID N. MORTENSEN
and COURT OF APPEALS JUDGE RYAN D. TENNEY sat.
JUSTICE HAGEN became a member of the Court on May 18, 2022,
after oral argument in this matter, and accordingly did not
participate.
JUSTICE POHLMAN became a member of the Court on August 17,
2022, after oral argument in this matter, and accordingly did not
participate.
HI-COUNTRY ESTATES v. FRANK
Opinion of the Court
JUSTICE PETERSEN, opinion of the Court:
INTRODUCTION
¶1 In this appeal, we must determine whether a
homeowners association has the authority to assess property
within its boundaries, despite alleged defects in the association’s
founding documents. The Hi-Country Estates Homeowners
Association, Phase II (HOA) brought a lawsuit to collect unpaid
assessments against Robbie Frank, the trustee of two trusts that
each own a lot within the HOA’s boundaries (Lots).1 The HOA
was formed in 1973. And since at least 1979, prior owners of the
Lots have paid the HOA’s annual assessments. But when Frank
purchased the Lots on behalf of the trusts in 2009, he refused to
pay the assessments. He argues here that the HOA has no
authority to assess the Lots because the person who signed the
HOA’s founding documents approximately fifty years ago did not
actually own most of the property he included within the HOA’s
boundaries, including the Lots. Frank contends that this renders
the founding documents void and the HOA powerless.
¶2 Both the HOA and Frank moved for summary judgment
in the district court. And the district court sided with the HOA.
Relying in large part on our reasoning in Swan Creek Village
Homeowners Ass’n v. Warne, 2006 UT 22, 134 P.3d 1122, the district
court concluded that the HOA had authority to assess the Lots,
even assuming there were problems with its founding documents,
because the members of the HOA had subsequently ratified the
HOA’s authority over the years. On this basis, the court partially
granted the HOA’s motion, concluding that the HOA was entitled
to collect the past due assessments, but that a bench trial would be
necessary to determine the amount owing.
¶3 Frank appeals. He argues that the district court erred
because the documents establishing the HOA are void as against
public policy, and void documents cannot be ratified. In the
alternative, he argues that the court incorrectly determined that
ratification had occurred here.
¶4 We affirm the district court. We have concluded in
another case involving the same HOA and the same governing
__________________________________________________________
1 When we refer to Frank throughout this opinion, we refer to
him in his capacity as the trustee of the trusts.
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documents that the documents are merely voidable, not
absolutely void. WDIS, LLC v. Hi-Country Ests. Homeowners Ass’n,
Phase II (WDIS II), 2022 UT 33, ¶ 46, 515 P.3d 432. And voidable
documents are subject to ratification. That holding applies here.
And we conclude that the district court correctly determined that
the members of the HOA have collectively ratified the HOA’s
authority. Therefore, we agree that the HOA has authority to
assess the Lots. And we affirm the district court’s determination
of the amount owing.
BACKGROUND2
The HOA and Its Governing Documents
¶5 In 1973, a man named Charles Lewton signed and
recorded protective covenants and a certificate of incorporation
for ―Hi-Country Estates, Phase II.‖ The documents established the
HOA and included within its boundaries approximately 2,000
acres of land near Herriman, Utah. The Lots were included within
the boundaries of the HOA at its inception as lots 170-A and 171.
¶6 The 1973 protective covenants stated that the ―owners of
the herein described property, hereby subject said property to the
following covenants, restrictions and conditions.‖ Among other
things, the covenants provided that each lot owner would be a
member of the HOA and would ―pay annually his pro-rata share
of the cost to maintain the roads, streets and common areas.‖
¶7 The HOA’s governing documents have been revised and
amended over the years. The current governing documents are
the Certificate of Incorporation and Addendum to Certificate of
Incorporation; the Second Revised Protective Covenants,
including subsequent amendments, dated December 10, 1980
(1980 Protective Covenants); and the First Revised—1988 By-
Laws, including subsequent amendments (1988 By-Laws)
(together, governing documents). All of the original and current
governing documents were duly recorded with the Salt Lake
County Recorder.
¶8 The 1980 Protective Covenants were signed by the
President, Vice President, and Director of the HOA, purportedly
―in response to the wishes of the majority of Association Members
__________________________________________________________
2 These facts are drawn primarily from the district court’s
recitation of undisputed material facts in its summary judgment
order.
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HI-COUNTRY ESTATES v. FRANK
Opinion of the Court
during the Annual Membership Meeting on July 6, 1980.‖ Like the
original protective covenants, the 1980 Protective Covenants
stated that a homeowners association would be established, that
each lot owner would be a member of the association, and that
each lot owner would pay a pro-rata share of the assessments.
¶9 The 1988 By-Laws were enacted at an annual meeting of
HOA members. ―The By-Laws, like the Covenants, provide[d] for
the obligation of lot owners to pay assessments, [and] the ability
of the HOA to collect such assessments . . . .‖
¶10 From at least 1979 to the present, the HOA has held
regular meetings and elections, disseminated communications
and reports to its members, provided various services for the
members, collected yearly assessments from the members, and
―otherwise acted as a homeowner association‖ with respect to the
property within its boundaries. No competing association has
emerged.
¶11 There are currently hundreds of HOA members. And
most members have paid their assessments to the HOA.
¶12 The HOA has assessed the Lots since 1979. And previous
owners of the Lots have duly paid these assessments.
The Lots
¶13 In 2009, two trusts purchased the Lots.3 Appellant Robbie
Frank is the trustee of both trusts. The governing documents had
long been of record by the time of this purchase, providing notice
that each lot owner within the HOA’s boundaries is a member of
the HOA and must pay annual assessments. However, from the
time the trusts purchased the Lots, Frank has refused to pay the
assessments levied by the HOA.
¶14 Yet, Frank has participated and voted in HOA meetings
on behalf of the trusts. He has also acknowledged that the
property is within the HOA boundaries and that, consequently,
the trusts are members of the HOA.
__________________________________________________________
3 The trusts are High Canyon Rd 15 Trust and High Canyon
Rd 20 Trust.
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The HOA’s Lawsuit to Collect Unpaid Assessments
¶15 In 2012, the HOA sued the trusts to obtain the past-due
assessments. The HOA’s complaint did not progress for reasons
that are not clear from the record.
¶16 Meanwhile, in 2015, other lot owners who were involved
in separate litigation against the HOA claimed that they had
discovered evidence showing that when Charles Lewton
established the HOA and signed the governing documents in
1973, he owned less than 1 percent of the property he included in
the HOA’s boundaries. Frank alleges that the acreage Charles
Lewton owned did not include the Lots.4
¶17 This information led to a lawsuit in 2016, in which a
group of property owners referred to collectively as ―WDIS‖ filed
a quiet title action against the HOA. WDIS moved for a
declaration that the governing documents signed by Charles
Lewton were void ab initio (from the beginning), because it
violated public policy for Lewton to encumber property that he
did not own. WDIS, LLC v. Hi-Country Ests. Homeowners Ass’n,
Phase II (WDIS II), 2022 UT 33, ¶ 9, 515 P.3d 432.
¶18 The same year, the HOA filed a new complaint against
Frank on behalf of the trusts. Frank answered the HOA’s
complaint and included a defense that ―[t]he alleged HOA’s
claims are barred, in whole or in part, because the HOA does not
legally exist as alleged in the [WDIS Litigation] and thus has no
right to make any assessments and never has.‖
Frank’s Motion to Amend
¶19 The district court consolidated the HOA’s 2012 and 2016
complaints against Frank. The following year, the HOA moved
for summary judgment, which Frank opposed. The day after
briefing closed on the summary judgment motion, Frank moved
for leave to amend his answer to the HOA’s 2016 complaint. He
sought to add counterclaims for quiet title and wrongful lien.
¶20 After hearing both motions, the district court denied the
HOA’s motion for summary judgment, concluding that the HOA
had failed to meet its burden of proof. The district court also
__________________________________________________________
4 The district court did not make any findings of fact related to
Charles Lewton’s ownership, or lack thereof, of the property he
included in the HOA.
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Opinion of the Court
denied Frank leave to amend, concluding, among other things,
that the motion was untimely.
Cross Motions for Summary Judgment
¶21 Subsequently, the HOA filed a second motion for
summary judgment. This motion argued that the district court
should determine as a matter of law that Frank owed the HOA
unpaid assessments pursuant to the Utah Community Association
Act and the HOA’s governing documents. It included declarations
from the HOA director and manager regarding the amount due.
¶22 Frank filed a competing motion for summary judgment,
which challenged the HOA’s authority to assess the Lots. Among
other things, he asserted that the HOA’s governing documents
were invalid because Charles Lewton had not owned most of the
property he had included within the HOA’s boundaries, and no
owner of the Lots had signed the governing documents.
¶23 The district court denied Frank’s motion and granted
partial summary judgment in favor of the HOA. The court
determined that, even assuming the HOA’s founding documents
were faulty, the HOA still had authority to assess the Lots because
the members of the HOA had subsequently ratified the HOA’s
authority:
Because the HOA’s Articles of Incorporation and
Covenants were of record when Defendants took
ownership of Lots 170-A and 171, because decades
have passed since the time those documents were
recorded, because the members of the HOA have
since acted as though the HOA was a legitimate
governing entity for decades and because no
competing entity has arisen, the Court rules that the
HOA’s ability to govern and make assessments
against the [L]ots within its purported jurisdiction
has been ratified by its members.
¶24 The district court also noted that Frank himself had
recognized the authority of the HOA. The court found that Frank
had ―on multiple occasions‖ acknowledged that the Lots were
inside the HOA’s boundaries, having ―repeatedly admitted this
fact when voting on [their behalf], and ha[ving] repeatedly
recognized the validity of the HOA and enforceability of its
governing documents.‖ The court further noted that assessments
on the Lots had been dutifully paid to the HOA prior to Frank’s
purchase on behalf of the trusts.
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¶25 Ultimately, the district court relied upon Swan Creek
Village Homeowners Ass’n v. Warne, 2006 UT 22, 134 P.3d 1122, and
its progeny, Osmond Lane Homeowners Ass’n v. Landrith,
2013 UT App 20, 295 P.3d 704, to conclude that the members of
the HOA had ratified the HOA’s authority to assess lots within its
boundaries, even if there were deficiencies with one or more of
the HOA’s governing documents. The court explained,
The fact that the HOA has been existing, living and
breathing as a homeowner association for 40 years,
conducting meetings and elections, governing the
[L]ots at issue, making, collecting and enforcing
assessments for decades, making improvements,
creating committees—all with decades of
cooperation of and participation from its members—
means that the authority to act as such has been
ratified by its members as a matter of law.
¶26 Although the district court determined that the HOA had
authority to assess the Lots and that the trusts owed unpaid
assessments, it did not rely upon the declaration submitted by the
HOA to determine the specific amount owing. Rather, it decided
that ―out of an abundance of caution,‖ it needed further
verification of the amount past due.
Frank’s Motion to Reconsider
¶27 Frank then moved the district court to reconsider its
summary judgment order. Relevant here, he reiterated his claim
that the people who signed the governing documents in 1973 and
1980 did not own all of the land they purported to encumber. And
he argued that this rendered the governing documents absolutely
void as against public policy and, therefore, incapable of
ratification. He argued in the alternative that, even assuming the
covenants were voidable rather than absolutely void, the trusts
did not have ―the necessary knowledge or intent‖ to ratify them
and that ratification could have occurred only through a signed
writing by an owner of the Lots. The court denied that motion as
well.
The Bench Trial to Calculate Unpaid Assessments
¶28 The district court then held a bench trial to determine the
amount of the unpaid assessments. Shortly before trial, the HOA
disclosed two witnesses in its pretrial disclosures: Ryan Bonham,
the HOA manager; and Sheila Adler, the HOA president, whom
the HOA designated as its corporate representative. Frank argued
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Opinion of the Court
that these disclosures were untimely. But the district court denied
Frank’s objection and allowed the witnesses to testify. And the
court awarded the HOA the total of the unpaid assessments the
HOA had proven at the bench trial.
¶29 Frank appeals. He argues that the district court erred in
granting partial summary judgment to the HOA because the
governing documents are absolutely void and therefore incapable
of ratification. He argues in the alternative that even if the
documents are merely voidable, the court incorrectly concluded
that ratification had occurred here because the governing
documents are subject to the Statute of Frauds and can be ratified
only through a signed writing by the owner of the property at
issue. Frank further argues that the court should have excluded
the HOA’s witnesses at the bench trial on damages because they
were not disclosed in a timely manner. And finally, Frank argues
that the court erred in denying his motion for leave to amend his
complaint.
¶30 We exercise jurisdiction under Utah Code section
78A-3-102(3)(j).
STANDARD OF REVIEW
¶31 We review a district court’s ―grant or denial of summary
judgment for correctness,‖ viewing ―the facts and all reasonable
inferences drawn therefrom in the light most favorable to the
nonmoving party.‖ Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600(cleaned up).
¶32 ―We review a district court’s decision on sanctions under
rule 26(d)(4) [of the Utah Rules of Civil Procedure] . . . for an
abuse of discretion.‖ Keystone Ins. Agency, LLC v. Inside Ins., LLC,
2019 UT 20, ¶ 12, 445 P.3d 434.
¶33 And we review a district court’s grant or denial of a
motion to amend for an abuse of discretion. Bresee v. Barton,
2016 UT App 220, ¶ 14, 387 P.3d 536.
ANALYSIS
¶34 We first address Frank’s argument that the HOA has no
authority to assess the Lots because the governing documents that
established the HOA are absolutely void and, therefore, cannot be
ratified. The district court did not make factual findings with
respect to whether Lewton owned the land he included in the
HOA. However, even assuming Frank’s allegations are correct, it
would not make the governing documents absolutely void. In
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another case involving the same HOA, we determined that
Lewton’s lack of ownership would render the governing
documents merely voidable. WDIS, LLC v. Hi-Country Ests.
Homeowners Ass’n, Phase II (WDIS II), 2022 UT 33, ¶ 52,
515 P.3d 432. That holding applies here, and the HOA’s authority
is therefore capable of ratification.
¶35 We then address Frank’s challenges to the district court’s
determination that the members of the HOA ratified the HOA’s
authority. We determine that the principles underlying Swan
Creek Village Homeowners Ass’n v. Warne, 2006 UT 22,
134 P.3d 1122, should be extended to the circumstances here. And
we conclude that the district court correctly applied those
principles to these facts.
¶36 Next, we consider Frank’s argument that the district
court should not have admitted the HOA’s witnesses at the bench
trial to determine the amount of unpaid assessments, and
therefore the HOA has no evidence of the amount it is owed. We
conclude that the court acted within its discretion.
¶37 And finally, we analyze Frank’s argument that the
district court abused its discretion when it denied Frank’s motion
for leave to amend his complaint. While the court could have
chosen to grant Frank leave to amend, we conclude that it did not
abuse its discretion in deciding not to do so.
I. THE GOVERNING DOCUMENTS ARE VOIDABLE, NOT
ABSOLUTELY VOID
¶38 Frank argues that the HOA has no authority to assess the
Lots because its governing documents are absolutely void and
incapable of ratification. The HOA’s main response is that Frank
did not preserve this argument. We conclude the issue was
preserved, but we reject Frank’s argument on the merits.
¶39 The HOA argues that Frank did not preserve his voidness
argument in his motion for summary judgment because he did
not use the terms ―void‖ or ―voidable,‖ or argue that the HOA’s
documents violated public policy. ―In order to preserve an issue
for appeal the issue must be presented to the trial court in such a
way that the trial court has an opportunity to rule on that issue.‖
Salt Lake City v. Josephson, 2019 UT 6, ¶ 12, 435 P.3d 255 (cleaned
up).
¶40 Frank partially presented the issue to the district court
when he argued in his motion for summary judgment that the
HOA’s governing documents were unenforceable. Frank concedes
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HI-COUNTRY ESTATES v. FRANK
Opinion of the Court
that he did not specifically argue that the documents were ―void.‖
However, the factual premise of his argument that the documents
were unenforceable is similar to the factual premise of his
voidness argument on appeal: the signers of the governing
documents in 1973 and 1980 did not own the property they
purported to encumber, including the Lots. But rather than
arguing in his motion for summary judgment that this made the
documents void as a matter of public policy, he argued that it
rendered them unenforceable under the Statute of Frauds, the
Wrongful Lien Act, and ―standard principles of contract law.‖
¶41 Although Frank did not make a fully formed voidness
argument in his motion for summary judgment, he did make such
an argument in his motion for reconsideration. And the district
court chose to address the argument, stating, ―the fact remains
that I [already] found ratification based on what was in front of
me and I . . . stand by that. So the Motion to Reconsider is
denied.‖
¶42 Where a party includes an issue in a motion to reconsider
and the district court chooses to address it, the issue is preserved.
Burdick v. Horner Townsend & Kent, Inc., 2015 UT 8, ¶ 50,
345 P.3d 531 (―[T]rial courts are under no obligation to consider
motions for reconsideration. That being said, if a trial court
decides, in its discretion, to address the merits of a claim raised
for the first time in a motion to reconsider, that claim is
preserved.‖ (cleaned up)). Accordingly, we reject the HOA’s
assertion that Frank did not preserve his voidness argument.
¶43 However, we have rejected the same argument on the
merits in another case involving the same HOA, the same
governing documents, and substantially the same argument. See
WDIS, LLC v. Hi-Country Ests. Homeowners Ass’n, Phase II (WDIS
II), 2022 UT 33, 515 P.3d 432. And that case is controlling here.
¶44 In WDIS II, we held with respect to the same governing
documents that ―restrictive covenants that are recorded without
the signature of the affected landowner are voidable, not
absolutely void, and they are therefore ratifiable.‖ Id. ¶ 52. In that
case, the plaintiffs were various persons and entities that owned
property within the HOA. Id. ¶ 3 n.2. They made the same claim
that Frank makes here—that although Charles Lewton signed the
governing documents, he did not own most of the land he
included in the HOA’s boundaries. Id. ¶ 5. They sought to quiet
title to their properties, and moved for a declaration that the
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HOA’s governing documents were absolutely void. Id. ¶ 9. We
explained,
[T]he distinction between void and voidable is
important because a contract or a deed that is void
cannot be ratified or accepted, and anyone can attack
its validity in court. In contrast, a contract or deed
that is voidable may be ratified at the election of the
injured party. Once ratified, the voidable contract or
deed is deemed valid.
Id. ¶ 14 (cleaned up) (quoting Ockey v. Lehmer, 2008 UT 37, ¶¶ 15,
18, 189 P.3d 51).
¶45 We observed that we ―start with the presumption that
contracts are voidable unless they clearly violate public policy.‖
Id. ¶ 15 (cleaned up) (quoting Ockey, 2008 UT 37, ¶ 21). And to
overcome this presumption, a party’s showing that the documents
violate public policy must be ―free from doubt.‖ Id. To make such
a determination, we ask ―(1) whether the law or legal precedent
has declared that the type of contract at issue is unlawful and
absolutely void, and (2) whether the contract harmed the public as
a whole—not just an individual.‖ Id. ¶ 21 (cleaned up) (quoting
Wittingham, LLC v. TNE Ltd. P’ship, 2020 UT 49, ¶ 24,
469 P.3d 1035)).
¶46 Like Frank, the landowners in WDIS II argued that the
governing documents were void because they violate public
policy as expressed in the Statute of Frauds, the Wrongful Lien
Act, and appellate caselaw. See id. ¶ 23. But we rejected this
argument and concluded that the landowners had not overcome
the presumption that the governing documents were merely
voidable. Id. ¶¶ 2, 13. Accordingly, we held that ―restrictive
covenants that are recorded without the signature of the affected
landowner are voidable, not absolutely void, and they are
therefore ratifiable.‖ Id. ¶ 52. And this holding applies here.
¶47 As we noted in WDIS II, the result of this holding is
judicial deference to the HOA members’ collective decision to
either reject or ratify the HOA’s authority, rather than a judicial
determination that the members cannot ratify the HOA’s
authority as a matter of law. Id. ¶¶ 16–22. And under these
circumstances, where covenants have existed for decades, the
reliance interests of the hundreds of other owners in the HOA
―may be especially substantial.‖ Id. ¶ 19.
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Opinion of the Court
¶48 Since we have determined that the governing documents
are only voidable, we proceed to analyze whether the district
court correctly concluded that the HOA’s members have
collectively ratified the HOA’s authority to assess property within
its boundaries.
II. THE HOA MEMBERS HAVE RATIFIED THE HOA’S
AUTHORITY
¶49 The district court concluded that the residents within the
HOA had collectively ratified the HOA’s authority over time,
including the HOA’s authority to assess the Lots. Frank argues
that this was error because the collective conduct the court relied
upon does not constitute ratification under the circumstances
here. Frank contends that because the governing documents
encumber real property, the Statute of Frauds requires that any
ratification must be in a writing, signed by the affected property
owners, who must have known of the defect, and had an intent to
subject the property to the governing documents despite the
defect. And he argues that because there is no such writing in the
record, the governing documents necessarily have not been
ratified. We disagree.
¶50 As an initial matter, we clarify that the question in this
case is whether the HOA’s members have ratified the HOA’s
authority in general, and its authority to assess the property within
its boundaries in particular. Frank’s analysis focuses on whether
the members have ratified the governing documents. It is correct
that the HOA was originally established and empowered by those
documents. But here, the question before us is whether the HOA
had authority to levy annual assessments. Accordingly, the focus
of our analysis is whether the HOA members have ratified the
HOA’s authority. We do not address whether the documents as a
whole have been ratified, as that question is not presented here.
¶51 We addressed ratification of a homeowners association’s
authority in Swan Creek Village Homeowners Ass’n v. Warne,
2006 UT 22, 134 P.3d 1122. There, we held that ―the HOA
possesse[d] the authority to levy assessments on property in the
Swan Creek subdivision because the lot owners collectively ratified
its authority to act as the association contemplated by the
Declaration.‖ Id. ¶ 55 (emphasis added).
¶52 In Swan Creek, a developer incorporated a homeowners
association to manage a development in Rich County and
recorded with the county a ―Declaration of Reservations,
Restrictions and Covenants of Swan Creek Village (the
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―Declaration‖).‖ Id. ¶ 2. But before the development was
complete, the developer declared bankruptcy and abandoned the
project. Id. ¶ 3. The homeowners association did not file the
requisite annual report or pay its filing fee, and it was
involuntarily dissolved. Id. To fill the void, an owner of a lot
within the subdivision incorporated a new homeowners
association ―using the identical name and articles of incorporation
used by the Original Association.‖ Id. ¶ 4. He called a meeting of
all lot owners. Id. ―More than 100 people, representing almost half
of the lot owners, attended the meeting and elected a board of
directors for the [homeowners association].‖ Id.
¶53 Years later, a person bought a lot within the subdivision
and refused to pay an assessment that the homeowners
association had levied on the property. Id. ¶¶ 8–10. The
homeowners association sued the owner. Id. ¶ 11. And the owner
argued that the homeowners association had no right to levy the
assessment ―because [it was] not the association contemplated
under the Declaration and because an insufficient number of lot
owners voted to ratify its authority.‖ Id. ¶ 30.
¶54 We rejected this argument and held that the homeowners
association was valid and authorized to impose assessments
pursuant to the Declaration. Id. ¶ 31. We explained that even
though there appeared to be no record evidence that the
Declaration had been formally amended to recognize the new
homeowners association, and there were ―disputed issues of fact
with respect to whether a majority of the lot owners formally
approved the substitution of the [new homeowners association],‖
those facts were immaterial in light of the lot owners’ ratification.
Id. ¶ 31. We reaffirmed that ―[w]here property owners have
treated an association as one with authority to govern and impose
assessments contemplated under the terms of a duly recorded
governing declaration, they ratify its authority to act.” Id. ¶ 32.
¶55 In reaching that conclusion, we found relevant that the
homeowners association ―ha[d] acted as a valid association for
almost twenty years, during which time the lot owners ha[d]
collectively accepted its management‖; the ―lot owners ha[d] paid
their dues to the [homeowners association]‖; only 24 of the 538 lot
owners had not paid the assessment at issue in the case; the
[homeowners association] had managed the property within
Swan Creek; the articles of incorporation and the Declaration had
been on file for years before the defendant acquired the property;
the [homeowners association] had been recognized as valid in
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Opinion of the Court
another court case, which imparted additional notice of the
[homeowners association’s] validity; there had been a ―pattern of
acquiescence by the lot owners‖; and no competing association
had emerged. Id. ¶¶ 38–39.
¶56 Here, in granting partial summary judgment to the HOA,
the district court relied on our analysis in Swan Creek and its
progeny. The district court noted that ―the HOA’s Articles of
Incorporation and Covenants were of record when [the owner]
took ownership of Lots 170-A and 171,‖ ―decades have passed
since the time those documents were recorded,‖ ―the members of
the HOA have since acted as though the HOA was a legitimate
governing entity for decades,‖ and ―no competing entity has
arisen.‖
¶57 The district court also found that Frank himself had
acknowledged the authority of the HOA. It found that Frank had
―on multiple occasions‖ acknowledged that the Lots were inside
the HOA, having ―repeatedly admitted this fact when voting on
[their behalf], and ha[ving] repeatedly recognized the validity of
the HOA and enforceability of its governing documents.‖
¶58 The court ultimately concluded,
Utah law is clear that even if there was some
technical deficiency with the HOA’s governing
documents, the fact that the HOA has been existing,
living and breathing as a homeowner association for
40 years, conducting meetings and elections,
governing the [L]ots at issue, making, collecting and
enforcing assessments for decades, making
improvements, creating committees—all with
decades of cooperation of and participation from its
members—means that the authority to act as such
has been ratified by its members as a matter of law.
(Citing Swan Creek, 2006 UT 22, ¶¶ 30–39; Osmond Lane
Homeowners Ass’n v. Landrith, 2013 UT App 20, ¶ 17, 295 P.3d 704.)
¶59 Frank challenges the district court’s decision. He argues
that because the governing documents ―convey an interest in real
property,‖ the Statute of Frauds applies and therefore any
ratification must be in a writing signed by an owner of the
property. And he asserts that for ratification to occur, the writing
must demonstrate an intent to ratify the defect. So he argues that
any conduct on the part of any lot owner prior to 2015, when the
discovery was made that Charles Lewton had not owned the
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majority of the land within the HOA’s boundaries, is insufficient
as a matter of law to constitute ratification.
¶60 For these propositions, Frank relies upon Bradshaw v.
McBride, 649 P.2d 74 (Utah 1982). But that case involved a
different scenario and does not control here.
¶61 In McBride, a mother deeded a one-eighth undivided
interest in the family farm to each of her eight adult children as
tenants in common. Id. at 76. One daughter visited the owner of a
neighboring property and discussed selling the farm to the
neighbor. Id. The parties disputed whether the daughter had said
that she was authorized to act on behalf of her siblings, with the
neighbor claiming that the daughter assured her she had such
authority, and the daughter claiming she had made clear that the
sale was contingent on the subsequent approval of the other co-
owners, her siblings. Id. The daughter and the neighbor orally
agreed on a selling price, and the neighbor gave the daughter a
$5,000 check. Id. The daughter did not inform all of her siblings
about the agreement until after it was made. Id. And when the
daughter had a real estate agent prepare warranty deeds for her
siblings to sign, some of them refused to do so. Id. at 77.
¶62 The neighbor sued for specific performance of the oral
agreement. Id at 76. The neighbor acknowledged ―the general rule
. . . that one who deals with an agent has the responsibility to
ascertain the agent’s authority despite the agent’s
representations.‖ Id. at 78. But the neighbor argued that this
should not be dispositive because the other co-owners had ratified
the oral contract. Id. The district court agreed and ―found
ratification in the [siblings’] failure to come forward and repudiate
or disaffirm [their sister’s] agreement to sell the property or her
authority to act for them.‖ Id.¶63 This court reversed. In doing so, we analyzed what
constitutes a principal’s ratification of an agreement made by an
unauthorized agent. Id. We explained that ―[a] principal may
impliedly or expressly ratify an agreement made by an
unauthorized agent.‖ Id. Such a ratification ―requires the principal
to have knowledge of all material facts and an intent to ratify.‖ Id.We explained that ratification ―need not be express,‖ and ―[a]ny
conduct which indicates assent by the purported principal to
become a party to the transaction or which is justifiable only if
there is ratification is sufficient.‖ Id. However, we noted that
under the circumstances, ―there was no ratification as a matter of
law because the Utah statute of frauds requires that any agent
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Opinion of the Court
executing an agreement conveying an interest in land on behalf of
his principal must be authorized in writing.‖ Id. (cleaned up).
¶64 It is this language that Frank relies upon to argue that any
ratification here must have been in writing, and that those
ratifying had to have known about all material facts (specifically,
the alleged defect) and an intent to ratify despite the defect. But
this is an expansion of McBride outside of its relevant context.
¶65 First, the analysis in McBride about the requirement of a
writing was specific to the issue of agency presented in that case—
specifically, whether the siblings (the principals) had ratified the
act of their sister (the unauthorized agent). Because the agreement
involved the sale of land and was subject to the Statute of Frauds,
the agent was required to be ―thereunto authorized in writing.‖ Id.at 79 n.3 (quoting UTAH CODE § 25-5-3 (1953)) (―Every contract for
. . . the sale[] of any lands . . . shall be void unless the contract . . .
is in writing subscribed by the party by whom the . . . sale is to be
made, or by his lawful agent thereunto authorized in writing.‖
(emphasis added)). And we concluded that because the agent’s
authority had to be documented in a writing, any ratification of
the agent’s unauthorized act also had to be in writing. We
explained,
In order to enforce an oral agreement, the same kind
of authorization that is required to clothe an agent
initially with authority to contract must be given by
the principal to constitute a ratification of an
unauthorized act. Where the law requires the
authority to be given in writing, the ratification must
also generally be in writing.
Id. at 79 (emphasis added). Accordingly, we concluded that no
ratification of the sister’s oral agreement had occurred as a matter
of law, because her siblings had not ratified their sister’s
unauthorized act in writing. Id. at 78–79.
¶66 Accordingly, McBride does not stand for the general
proposition, as Frank contends, that ―where the statute of frauds
applies, ratification may occur only in [a] writing‖ that
demonstrates an intent to ratify the defect. Rather, in that case we
were analyzing a specific provision of the Statute of Frauds
dealing with the authority of an agent, Utah Code section 25-5-3,
which is not implicated here.
¶67 Swan Creek exemplifies that, even where real property is
involved, we do not always require that ratification be evidenced
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in a writing, or that the writing demonstrate an intent to ratify the
relevant defect. In that case, we did not require a writing to show
that the affected landowners had ratified the authority of the
homeowners association. Swan Creek, 2006 UT 22, ¶¶ 30–39. And
we did not ask whether the homeowners association members
were aware of the defect in that case—specifically, that the HOA
was not the one established in the Declaration, but a substitute
homeowners association with the same name, which one lot
owner had formed. Instead, we concluded that it was immaterial
whether the Declaration had been formally amended to recognize
the new homeowners association, or whether a majority of the lot
owners formally approved the substitution of the new
homeowners association for the original one. Id. ¶ 31. Rather, we
concluded that ratification had occurred based on the repeated
conduct of the homeowners association members over a period of
time, which included treating the association as one with
authority to govern and impose assessments, accepting its
management, paying dues, and the overall ―pattern of
acquiescence by the lot owners.‖ Id. ¶¶ 32, 38–39.
¶68 Frank argues that Swan Creek does not apply here. He
notes that Swan Creek involved the ratification of a homeowners
association that was operating pursuant to a ―duly recorded‖
declaration. And he interprets this to mean that in that case, we
held only that ―once the land was already properly encumbered,
the property owners’ conduct could ratify a subsequent defect—
the fact that a new HOA had replaced the originally authorized
HOA to govern the duly encumbered lots.‖
¶69 We disagree with part of the distinction that Frank
draws. ―Duly recorded‖ means only that a document has been
filed with an entity pursuant to law in a manner that gives notice
of its contents and legal effect.5 In the present context, it means
__________________________________________________________
5 While Black’s Law Dictionary does not define the phrase ―duly
recorded,‖ the definitions it provides for the constituent terms
provide guidance. Black’s defines ―duly‖ as: ―In a proper manner;
in accordance with legal requirements.‖ Duly, BLACK’S LAW
DICTIONARY (11th ed. 2019). And it defines the verb ―record‖ as:
―To deposit (an original or authentic official copy of a document)
with an authority.‖ Record, BLACK’S LAW DICTIONARY (11th ed.
2019). Further, it is implicit in our case law dating back to at least
the early half of the twentieth century that ―duly recorded‖
simply means that a document has been properly filed with an
(continued . . .)
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Opinion of the Court
only that the governing documents were properly recorded with
the county recorder. And we found this fact relevant in Swan
Creek because the recorded documents imparted notice to the
defendant. 2006 UT 22, ¶ 38 (―[T]he HOA’s articles of
incorporation and the Declaration were on file and had been on
file for years before [the defendant] acquired her lots.‖).
¶70 The facts here are similar. While Frank disputes the
validity of the governing documents, there is no dispute that they
were ―duly recorded.‖ And the district court properly found this
relevant, observing that the articles of incorporation and
protective covenants were on file when the trusts purchased the
Lots—and had been for decades.
¶71 But we take Frank’s point that the allegations here differ
substantively from the facts in Swan Creek. There, the defendant
alleged that the replacement homeowners association was invalid.
Id. ¶ 30. No one, however, alleged what Frank does here—that the
HOA was never validly established. For this reason, Swan Creek is
not directly controlling. But we conclude that the principles
underlying Swan Creek apply to the circumstances here, and
therefore we extend the rationale of that case to the facts before
us.
¶72 Although an encumbrance on real property was involved
in Swan Creek, we were willing to excuse rigid adherence to the
Statute of Frauds’ general writing requirement because, among
other things, there was notice of the encumbrance (because it was
entity in a manner that provides notice of its contents and legal
effect. See, e.g., McCready v. Fredericksen, 126 P. 316, 316 (Utah 1912)
(―[S]aid certificate was duly recorded in the office of the county
recorder of Salt Lake county, Utah, on the 22d day of March, 1897,
in a book therein provided by law to be kept for that purpose, to
wit, Book A of Tax Sales, page 27, line 18, of the records of said
county.‖ (emphasis added)); Nat’l Realty Sales Co. v. Ewing,
186 P. 1103, 1104 (Utah 1920) (―After the period of redemption
had expired, to wit, on January 20, 1917, said sheriff made and
executed a sheriff’s deed to H. J. Ewing for the said lands which
deed was duly recorded in the office of the county recorder for Utah
county on said day.‖ (emphasis added)); Ferguson v. Mathis,
85 P.2d 827, 828 (Utah 1938) (―The mortgage was duly recorded the
following day in the office of the County Recorder of Carbon
County.‖ (emphasis added)).
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duly recorded), the encumbrance had been in place for a
significant period before the defendant challenged its validity,
and during that time the affected landowners’ conduct
demonstrated acceptance of the encumbrance and acquiescence to
the homeowners association’s authority. Id. ¶ 38–39. These
guiding principles mirror the foundational concepts at work in
other real property contexts where we have been willing to excuse
the writing requirement, including the doctrines of boundary by
acquiescence, adverse possession, and prescriptive easement. See
Q-2 L.L.C. v. Hughes, 2016 UT 8, ¶ 10 n.15, 368 P.3d 86 (explaining
that boundary by acquiescence requires, among other things,
―occupation‖ and ―mutual acquiescence‖ for ―at least 20 years‖
(cleaned up)); Anderson v. Fautin, 2016 UT 22, ¶ 25, 379 P.3d 1186(―[O]ne who claims property by adverse possession must show
that his use and possession of the property has been actual, open
and notorious, and continuous for the statutory period.‖ (cleaned
up)); Kiernan Fam. Draper, LLC v. Hidden Valley Health Ctrs., LC,
2021 UT 54, ¶ 41, 497 P.3d 330 (―To obtain a prescriptive
easement, a party must establish a [property] use that is (1) open,
(2) notorious, (3) adverse, and (4) continuous for at least 20 years.‖
(cleaned up)).
¶73 And here, an application of those principles leads us to
conclude that the conduct of the HOA members over an extended
period of time—generally, the members’ acquiescence to and
acknowledgment of the authority of the HOA, payment of
assessments to the HOA, and acceptance of benefits provided by
the HOA—constitutes ratification of the HOA’s authority to levy
assessments against its members. Fundamentally, Frank’s
objection to the HOA comes too late. Frank has provided no
evidence that any prior owner of the Lots objected to the HOA’s
authority or to the Lots’ inclusion in the HOA. And all the while,
the governing documents were in the public record for anyone to
review.6
__________________________________________________________
6 We also note that here, as in Swan Creek, we are not presented
with anything close to a contemporaneous objection to Charles
Lewton’s alleged actions. In Swan Creek, at the time of the
homeowners association’s formation, no questions were raised as
to its authority and ―the new [homeowners association]
immediately began to act under the terms of the Declaration.‖
Swan Creek Vill. Homeowners Ass’n v. Warne, 2006 UT 22, ¶ 5,
134 P.3d 1122. Similarly, Frank has not argued nor made any
(continued . . .)
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Opinion of the Court
¶74 Finally, we note that the distinction Frank draws between
the facts in Swan Creek and the circumstances here might be
dispositive if we had concluded that the flaw Frank alleges
rendered the governing documents absolutely void. But as we
explained above, supra ¶¶ 43–48, the documents here are only
voidable and therefore ratifiable. The only question here is
whether ratification has taken place. And we conclude that the
district court properly applied the principles undergirding Swan
Creek to determine that the HOA members have collectively
ratified the HOA’s authority.
III. THE DISTRICT COURT DID NOT EXCEED ITS DISCRETION
IN ADMITTING THE HOA’S WITNESSES
¶75 Frank next argues that the district court erred in allowing
the HOA’s two witnesses to testify at the bench trial in which the
court determined the amount of unpaid assessments. Frank
argues that the court should have excluded the HOA’s witnesses
under rule 26(d)(4) of the Utah Rules of Civil Procedure because
the HOA did not timely disclose them. And Frank contends that if
they had been excluded, the HOA would have no evidence
establishing the amount of the assessments owed, resulting in a
failure of the HOA’s claim.
¶76 Rule 26 requires parties to make discovery disclosures
―based on the information then known or reasonably available to
the party.‖ UTAH R. CIV. P. 26(d)(1). If a party fails to timely
disclose a witness or other material, ―that party may not use the
undisclosed witness, document, or material at any hearing or trial
unless the failure is harmless or the party shows good cause for
the failure.‖ Id. R. 26(d)(4).
¶77 The HOA disclosed two witnesses the month before the
bench trial as part of its pretrial disclosures: Ryan Bonham, the
HOA manager; and Sheila Adler, the HOA president, whom the
HOA designated as its corporate representative. Frank argues that
this was prejudicial because it left him unable to depose the
witnesses and prepare for trial.
showing that any previous owner of the Lots objected to the Lots’
inclusion in the HOA or the formation of the HOA. While Frank
asserts that Charles Lewton encumbered land that he did not
own, there is no record evidence that any prior owner of the Lots
did anything other than acquiesce to Charles Lewton’s actions.
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¶78 But the district court concluded that any failure to
disclose was harmless. It noted that Bonham ―had been in play for
many years,‖ as the HOA had filed several declarations from him
as manager and registered agent of the HOA. On this basis, the
court ―struggle[d] to find . . . prejudice.‖
¶79 And the district court noted that although the HOA
disclosed Adler for the first time in its pretrial disclosures, the
HOA had disclosed the previous HOA president as its corporate
designee. When Adler replaced the prior president, the HOA
failed to update its corporate designation to show that Adler was
now in the position. The district court concluded that this failure
to update was harmless under the specific circumstances of the
case, noting ―I do not think that . . . a violation, if there was one,
under Rule 26, would be harmful in any way. . . . We’re talking
about the . . . foundation to admit the documents that everybody
heretofore in hundreds and hundreds of pages of briefing have all
acknowledged as the controlling documents. So it does not appear
to be an issue that’s generally in dispute.‖
¶80 ―We review a district court’s decision on sanctions under
rule 26(d)(4) [of the Utah Rules of Civil Procedure] . . . for an
abuse of discretion.‖ Keystone Ins. Agency, LLC v. Inside Ins., LLC,
2019 UT 20, ¶ 12, 445 P.3d 434. Here, the district court concluded
that the HOA’s failure to disclose the two witnesses prior to its
pretrial disclosures was harmless, and it explained its reasons for
reaching that determination. Given the court’s familiarity with the
case and the evidence, we cannot conclude that it abused its
discretion on this record.
IV. THE DISTRICT COURT DID NOT EXCEED ITS DISCRETION
WHEN IT DENIED FRANK’S MOTION TO AMEND
¶81 Frank next argues that the district court erred in denying
his motion to amend his answer to add counterclaims against the
HOA. ―Trial courts should liberally allow amendments unless the
amendments include untimely, unjustified, and prejudicial
factors.‖ Daniels v. Gamma W. Brachytherapy, LLC, 2009 UT 66, ¶ 58,
221 P.3d 256. However, ―[t]he granting or denial of leave to
amend a pleading is within the broad discretion of the district
court, and we will not disturb the district court’s decision absent a
showing of an abuse of that discretion.‖ Bresee v. Barton,
2016 UT App 220, ¶ 14, 387 P.3d 536 (cleaned up).
¶82 Frank argues that the district court abused its discretion
because, although the case was already five years old when he
moved to amend, the delay was not his fault. And although the
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Opinion of the Court
discovery deadline had passed, discovery had not yet actually
begun and no trial date had been set.
¶83 However, although the district court could have chosen
to allow Frank to amend his answer, we cannot say that it abused
its discretion in denying his motion. The case had been pending
for five years, and the court had before it a fully briefed summary
judgment motion. Among other reasons the court gave for its
decision, it explained that ―part of this case is five years old, and
these are all claims that . . . Frank has known about for years and
that could have been brought at the beginning of this case.‖ The
court thus concluded that ―bringing them now . . . would be
unnecessary, prejudicial and would unduly delay the litigation
that has already been delayed substantially.‖ (Cleaned up.) On
this basis alone, we do not find the court’s decision to be an abuse
of the court’s discretion. Accordingly, we do not disturb the
court’s ruling.
V. WE MAKE NO AWARD OF APPELLATE ATTORNEY FEES
¶84 Finally, Frank argues that ―if this court reverses for any of
the reasons discussed above, the HOA will no longer be the
prevailing party,‖ so we should reverse the district court’s award
of attorney fees to the HOA. Because we affirm the court’s rulings,
we do not disturb the award of attorney fees below.
¶85 Frank also points out that the HOA did not ask for
attorney fees on appeal and contends that, even if the HOA
prevails on appeal, we should not award appellate attorney fees
because rule 24(a)(9) of the Utah Rules of Appellate Procedure
requires a party to make that request explicitly. ―Typically, when
a party who received attorney fees below prevails on appeal, the
party is also entitled to fees reasonably incurred on appeal.‖
Beckman v. Cybertary Franchising LLC, 2018 UT App 47, ¶ 93,
424 P.3d 1016 (cleaned up). However, rule 24(a)(9) states, ―[a]
party seeking attorney fees for work performed on appeal must
state the request explicitly and set forth the legal basis for an
award.‖ UTAH R. APP. P. 24(a)(9). We agree with Frank that
because the HOA did not make such a request, it is not entitled to
an award of the attorney fees it incurred in this appeal.
CONCLUSION
¶86 As we determined in WDIS II, which involved the same
HOA and the same governing documents, the HOA’s governing
documents are voidable rather than absolutely void. Accordingly,
the HOA’s authority is subject to ratification. We conclude that
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the principles underlying our analysis in Swan Creek should be
extended to the circumstances here. And under those principles,
we agree with the district court that the HOA’s members have
ratified its authority, including its authority to assess lot owners.
Finally, we conclude that the district court did not abuse its
discretion in admitting the HOA’s witnesses at the bench trial or
in denying Frank’s motion for leave to amend his answer, and the
HOA is not entitled to appellate attorney fees.
¶87 Accordingly, we affirm.
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