Opinion
No. 59878-3-I.
May 19, 2008.
Appeal from a judgment of the Superior Court for King County, No. 06-2-06819-0, Charles W Mertel, J., entered March 28, 2007.
Affirmed by unpublished opinion per Lau, J., concurred in by Dwyer, A.C.J., and Cox, J.
This case originated as a dispute between Michael and Cynthia Rasch and Robert and Janet Carlson regarding the enforceability of covenants governing tree height restrictions in the Innis Arden subdivision. The Rasches brought a covenant violation petition against the Carlsons pursuant to the Innis Arden Club's covenant compliance process. The Carlsons unsuccessfully sought a preliminary injunction to stay the process, and an outside arbitrator determined that six of the Carlsons' trees did not comply with the covenants. The Carlsons again filed suit, principally arguing that the Club's compliance process was invalid and that the Rasches could not enforce the tree covenants against the Carlsons. The trial court granted summary judgment to the Club and the Rasches and granted their request for attorney fees. We conclude that the Carlsons' challenge to the cross-enforceability of the covenants is barred by res judicata and that the Club compliance process is valid. Accordingly, we affirm and award attorney fees on appeal to the Club and the Rasches.
Facts
Bill and Bertha Boeing developed the Innis Arden community in northwest King County in the 1940s. Innis Arden affords sweeping views of Puget Sound and the Olympic Mountains. The community was platted in three phases — Innis Arden in 1941, Innis Arden 2 in 1945, and Innis Arden 3 in 1949. Each plat was made subject to separately recorded but nearly identical restrictive mutual easements (covenants). The covenants expressly attach to and pass with each parcel in that plat, binding all Page 3 owners and their respective successors in interest. Boeing, as the original grantor, reserved the authority to enforce specified covenant provisions, including the power to review and approve plans and specifications for all buildings, improvements, and alterations (covenant 4); to grant or deny permission for maintenance of fences or hedges greater than six feet or such lesser height as the grantor may specify (covenant 10); and to make conclusive determinations regarding the removal of "spite or nuisance" walls, hedges, fences, or trees (covenant 11).
These restrictive mutual easements expressly run with the land and restrict its use by imposing vegetation height limits to preserve views and, thus, may be properly characterized as covenants. 20 Am. Jur. 2d Covenants, Conditions and Restrictions § 148.
In 1950, the Innis Arden Club, Inc., was established as a community organization for the entire Innis Arden development. Each lot received one share in the Club. Boeing deeded the Innis Arden reserve tract, including open space and community facilities, to the Club. In 1960, the Boeing family signed and recorded an assignment that transferred the grantor's rights to the Club. This assignment expressly stated that Boeing, as grantor, had "established a general plan for the development, improvement, maintenance and protection of real property described" in the three Innis Arden plats. Since then, the Club has administered the covenants and maintained the reserve tracts and common facilities. The Club is governed by a board composed of and elected by Innis Arden homeowners.
Over the years, some lot owners' trees grew tall enough to obstruct views and disputes arose over enforcement of the covenants. Thus, in 1981 and 1982, each of the three Innis Arden subdivisions adopted by supermajority and recorded a view preservation amendment.
In order to preserve the views of Puget Sound and the Olympic Mountains from lots in said subdivision, all trees, shrubs, brush and landscaping, whether native or planted, on residential lots in said subdivision shall be kept to a height no higher than the highest point of the roof surface nor higher than the height of the house on each lot, whichever is lower. For this purpose, the height of a house shall be measured from the highest point of the roof surface to the lot grade which shall be the average of the highest and lowest ground elevations at exterior walls of the house. This amendment shall apply only to those trees, shrubs and brush which in any way obstruct the view of the sound and Olympics from a neighboring lot or lots.
The operative language of this covenant is identical for each subdivision, with the exception of certain specified lots that cannot affect the views of other homes within Innis Arden.
Disputes immediately arose concerning enforcement of the view preservation amendment. In 1984, a group of Innis Arden homeowners filed a class action lawsuit. The plaintiff class consisted of homeowners seeking a declaration of validity and enforceability of the view preservation amendments, and the defendant class consisted of homeowners challenging the amendments. The case was certified as a class action pursuant to CR 23(b)(1) and (2), and notice was given to all Innis Arden homeowners. The notice provided that Innis Arden homeowners could choose to join either the plaintiffs' class or the defendants' class. It also stated, "You may disregard this matter but you will be bound by the results of this litigation." The notice also stated that if the covenants were upheld, the litigation would proceed to a second stage where the individually affected properties of plaintiffs and defendants would be litigated.
In May 1987, the trial court granted summary judgment for the plaintiffs and ruled that "the Covenants, as amended, are valid and enforceable as to all lots within Innis Arden. . . ." The court explained in its oral ruling that the amendments were reasonable, properly executed, and within the scope of the grantor's intent to preserve and maintain views. The court retained jurisdiction to appoint and oversee a special master to conduct factual inquiries regarding the application of the view preservation amendments to individual parties. The order expressly stated that it was final.
The defendant class appealed the order. In an unpublished opinion,Innis Arden Club, Inc. v. Binns, noted at 50 Wn. App. 1064 (1988), Division One upheld the validity of the view preservation amendments.
Protection of the area's marine and mountain views is eminently reasonable, and such views very obviously are and always have been one of the principal attractions of the Innis Arden development. The grantor's intent, as evidenced by the easements, was to protect homeowner views, and these amendments are clearly within that intent.
On March 8, 1990, the trial court issued an order on review of the special master's findings. The order "approved and affirmed" the special master's findings and conclusions with one exception.
The reference to "neighboring lot or lots" in the Restrictive Mutual Easements was not intended by its drafters, nor by the adopting community members, to be restricted to contiguous or adjacent lots. Due to the geography of Innis Arden, including plat layout and slope, trees several lots distant may entirely block views. The intent of the covenant is to restore such views. However, "neighboring" lots must be such as to have an actual — and not de minimus — view obstruction. . . .
Defendant class counsel was permitted to withdraw on the same date, "based upon the belief of the parties that no class issues remained for the Court's determination and that all remaining issues were individual enforcement matters for the Special Master."
The litigation then proceeded into the second stage, with the individual plaintiffs and defendants adjudicating their disputes concerning applicability of the view preservation amendments before the special master. During those proceedings, the parties raised the issue of cross-enforceability between Innis Arden subdivisions, and the special master transferred the matter to the trial court.
On July 9, 1990, the trial court issued written notice to all Innis Arden residents regarding cross-subdivision enforcement of the covenants. The notice stated that defendant class counsel had previously been permitted to withdraw, but it listed nine individual defendants who were either represented by counsel or were attorneys proceeding pro se. The notice stated, "This pending issue may affect all residents and therefore the Court has published this notice."
On December 5, 1990, the trial court issued an order granting summary judgment to the plaintiff class and reiterating that the view preservation amendments are enforceable across Innis Arden subdivision boundaries. The court's order specified that this conclusion
is implicit in the court's initial Order Granting Class Action Summary Judgment dated May 4, 1987, the issue of cross enforceability was raised before the court in that initial proceeding, and the doctrine of collateral estoppel bars raising the issue of cross enforceability in the second phase of the proceeding. The time to raise the issue of cross enforceability was in the initial phase, as that issue relates directly to the facial validity of the View Preservation Amendments.
. . . .
5. The court explicitly reaffirms its earlier ruling regarding the enforceability of the View Preservation Amendments across subdivision boundaries. The intent of the View Preservation Amendments, in light of the surrounding circumstances made clear by undisputed facts in the record, requires the court to reach the conclusion that the View Preservation Amendments are enforceable across Innis Arden subdivision boundaries.
Although the trial court's ruling was based on collateral estoppel, its oral ruling also addressed the merits.
With respect to the merits, however, it is my view that intent is the central question. It is not discernible from the face of any single amendment what intent there was to cross subdivision enforcement.
The ambiguity is created not in the language of the amendment itself, but rather in the fact that there are three identical amendments which must be construed together because of the style and fashion of their adoption. They were essentially simultaneously adopted, they are essentially identical, and unless there is enforcement available across subdivision lines, there is neither sense nor fairness to the result.
. . . . Looking at the circumstances of the adoption of the amendments . . . the surrounding circumstances, the topography of the property of all three subdivisions, and the fact that it is a single community[,] I conclude that the amendments are enforceable across subdivision lines.
In June 1992, the class action was terminated after more than 600 special master petitions had been decided. The Binns trial court judge suggested in a letter that a "community process must eventually be substituted" that "permit[s] recourse to the Court, but only after informal efforts among the parties and a community-based process for preliminary decision. . . ."
In 1999, a supermajority of residents in each Innis Arden subdivision adopted covenant amendments providing for payment of mandatory dues to the Club. The Carlsons purchased a home in Innis Arden in June 2001. To close on the purchase, they had to sign an acknowledgement confirming that their property was subject to the covenants.
In 2002, faced with continuing covenant enforcement disputes, the Club Board drafted a bylaw amendment to create a formal mechanism for resolution of covenant compliance disputes. In 2004, the Board held an advisory vote of Innis Arden residents, and the proposal was rejected by a vote of 227 to 247.
But disputes continued regarding the Board's authority to resolve covenant violations. Thus, on April 12, 2005, the Board adopted bylaw IV.6, a modified version of the previous covenant compliance proposal. Under this procedure, initial compliance petitions are screened by a committee which, after giving the homeowner an opportunity to respond, makes a recommendation to the Board. If the petition has a sufficient basis to move forward, there is notice and a hearing before the Board on the merits. If the Board upholds the petition after a hearing, it sets a date for compliance and can impose fines if the homeowner does not comply. The bylaw provides, "Board members whose participation would genuinely compromise the fairness of the complaint resolution process shall not participate in it."
If a homeowner does not wish to have the determination made by the Board, the bylaw provides that he or she may select a qualified outside arbitrator from a list provided by the Club, who "shall function as the Board's representative in the compliance matter and render a decision for the Board." The party requesting arbitration is responsible for costs and fees of arbitration or the fees may be evenly split if both parties consent to arbitration. Once the Board or arbitrator renders a decision, the Board has authority to set a compliance deadline after which fines shall accrue. The bylaw further provides, "The Board or arbitrator's decision after an open hearing shall be binding and final. The accrual of fines and the compliance deadline established by the Board shall remain in effect unless a court with jurisdiction issues an injunction staying the fines and/or compliance pending review."
In November 2005, the Rasches wrote a letter advising the Carlsons that their trees blocked the Rasches' view and requesting that the Carlsons bring their trees into compliance with the covenants. The Rasches' home is located in Innis Arden 1, and the Carlsons' home is in Innis Arden 2. The Carlsons did not comply. The Rasches then submitted a covenant violation petition to the Board. In February 2006, the Carlsons filed in superior court a complaint and motion to stay arbitration, seeking to invalidate the Club's compliance procedure.
On March 6, 2006, even as they challenged the Club's compliance process, the Carlsons agreed to take the next step in that process by exercising their right to bypass a hearing before the Board and bring the dispute before a professional arbitrator. The Carlsons then filed a motion for preliminary injunction and to stay arbitration, which the trial court denied. The arbitrator, after hearing the dispute and visiting the site, determined that the Board had the power to decide the dispute and that six of the Carlsons' trees violated the covenants. The Board set a compliance deadline of June 16, 2006, and notified the Carlsons that daily fines would begin to accrue 30 days later unless they brought their trees into compliance.
The Carlsons moved for summary judgment, arguing that the arbitrator's decision was unenforceable because the Club's compliance process was invalid and because the tree covenants were not cross-enforceable between Innis Arden subdivisions. The Rasches and the Club filed a cross-motion for summary judgment.
On January 2, 2007, the trial court granted partial summary judgment to the Rasches and the Club and denied summary judgment to the Carlsons on the tree covenant issues. The trial court found that the Club is a homeowners association pursuant to chapter 64.38 RCW with the authority to enact its covenant compliance process and that the validity and enforceability of the view preservation amendments was barred by res judicata and collateral estoppel. The trial court denied the Carlsons' request for attorney fees and instructed the Club to submit a motion seeking an award of attorney fees as the prevailing party.
The Rasches then filed a motion to enforce the arbitrator's decision. The trial court granted that motion, ruling that the Club process complied with substantive and procedural due process and that there was no showing of fraud, misrepresentation, or undue bias. The court's oral ruling emphasized that the Carlsons had a right to avail themselves of the trial court throughout the process and that until the court process is finalized, daily assessment of fines by the Club against the Carlsons may not occur. Accordingly, the court ruled that fines against the Carlsons would not begin to accrue until 60 days from the date of the court's oral ruling, unless the trees were brought into compliance or the Carlsons could demonstrate that they were prevented from doing so by the City of Shoreline. The court ruled that the fines would continue to accrue during the pendency of any appeal taken.
On March 27, 2007, the trial court granted the Club's motion for award of attorney fees as the prevailing party under RCW 64.38.050 and set a further hearing for determination of the amount. The Club submitted a request for attorney fees of $88,794.15, and on May 15, 2007, the trial court granted a reduced award of $57,592.90. The Carlsons appeal.
Analysis
Cross-Enforceability of Covenants
The Carlsons argue that the trial court erred in granting summary judgment to the Club and ruling that their challenge to the validity and cross-enforceability of the view preservation amendments was 1 barred by res judicata and collateral estoppel. This court reviews a trial court order granting summary judgment de novo. Stalter v. State, 151 Wn.2d 148, 155, 86 P.3d 1159 (2004). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c).
Res judicata ensures the finality of decisions. Camer v. Seattle Sch. Dist. 1, 52 Wn. App. 531, 534, 762 P.2d 356 (1988).
Res judicata, or claim preclusion, bars the relitigation of claims and issues that were litigated, or might have been litigated, in a prior action. Application of the doctrine requires identity between a prior judgment and a subsequent action as to (1) persons and parties, (2) cause of action, (3) subject matter, and (4) the quality of persons for or against whom the claim is made. Collateral estoppel, or issue preclusion, prevents relitigation of an issue after the party estopped has already had a full and fair opportunity to present its case. The requirements for application of the doctrine are: (1) the issue decided in the prior adjudication must be identical with the one presented in the second; (2) the prior adjudication must have ended in a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication; and (4) application of the doctrine must not work an injustice.
Pederson v. Potter, 103 Wn. App. 62, 69, 11 P.3d 833 (2000) (internal citations omitted). The party asserting res judicata has the burden of proving that the claim was decided in the prior litigation. Civil Serv. Comm'n v. City of Kelso, 137 Wn.2d 166, 172, 969 P.2d 474 (1999).
The Carlsons argue that there was no final judgment in the Binns litigation operating against their predecessors in interest, the Berreths, that would give rise to collateral estoppel. They contend that the court's 1990 order on cross-enforceability was merely interlocutory and that there was no final judgment because the special master never ordered the Berreths to cut their trees. The Carlsons further argue that 2 the court's 1987 order has no preclusive effect because (1) it did not address individual disputes, (2) it did not describe the members of the class, (3) the Berreths were not named parties or embraced within any description of class members, and (4) cross-enforceability of the tree covenants was not addressed in the 1987 order, but only in the 1990 order that was entered after defendant class counsel had withdrawn.
These arguments evince a fundamental misunderstanding of the class action process. The Binns litigation was certified as a class action under CR 23(b)(1) and (2), under which potential class members do not have an automatic right to notice or absolute right of exclusion. Reeb v. Ohio Dep't of Rehab. Corr., 435 F.3d 639, 645 (6th Cir. 2006). Notice is a "safety valve" through which the court protects the rights of absent class members and safeguards against a possible future challenge to the res judicata effect of a CR 23(b)(2) action. 5 Alba Conte Herbert Newberg, Newberg on Class Actions § 16:17 (4th ed. 2002); Sperry Rand Corp. v. Larson, 554 F.2d 868, 876 (8th Cir. 1977).
Federal authority interpreting identical class action provisions in Washington law is "highly persuasive." Pickett v. Holland Am. Lines-Westours, Inc., 145 Wn.2d 178, 188, 35 P.3d 351 (2001).
When damages cannot be proved on a class-wide basis and damage proof by individual class members in a single proceeding would be beyond the administrative capabilities of the court, the court may adjudicate common issues to a final judgment and then appoint a special master to resolve questions of individual damages, with the benefit of res judicata on the common issues. 2 Alba Conte Herbert Newberg, Newberg on Class Actions § 4:33 (4th ed. 2002). As a general rule, when adequate 3 representation is present, judgment in a class action lawsuit will bind absent members of the class described in that judgment with respect to common issues adjudicated. 1 Alba Conte Herbert Newberg, Newberg on Class Actions § 1:6 (4th ed. 2002); Restatement (Second) of Judgments § 41(1)(e) (1982).
The threshold res judicata consideration with respect to class actions is whether the appellants were members of the class described in the final judgment. The next consideration is whether the initial proceedings complied with due process. The court applying res judicata must conclude that the class was adequately represented in the first suit. 5 Conte Newberg, supra, § 16:25. "Adequate representation is usually present when a class representative with typical claims and defenses has no conflict of interest with other members of the class, and the court is satisfied that the class action will be vigorously prosecuted." 2 Conte Newberg, supra, § 4:47 at 342. In the absence of representational adequacy, absent class members can collaterally attack the binding nature of any final judgment on them. Id. (citing Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115, 85 L.Ed.2d 22 (1940).
We conclude that the Binns orders are binding on all Innis Arden homeowners, including the Carlsons. The notice issued by the court to all Innis Arden homeowners (for both the original class action lawsuit and the subsequent cross-enforceability challenge) stated that they could choose to join the plaintiffs' class, the defendants' class, or neither, but that all homeowners in Innis Arden would be bound by the decision. This created a somewhat unusual situation with respect to defining the class to which absent class members 4 belonged — because the covenants run with the land and provide both a burden and a benefit, the absent class members did not fit neatly into either class. But this does not defeat the res judicata effect of both judgments on all Innis Arden homeowners and their successors, including the Carlsons, where there was no right of exclusion and the notice and judgment made it clear that the ruling on common questions would be binding on all.
The Carlsons contend that there is no order with preclusive effect on the cross-enforceability question because the 1987 order did not address that issue and because the defendant class was unrepresented when the 1990 order was issued. But the 1990 order ruled that the cross-enforceability question was barred from further challenge because it had been implicitly addressed in the 1987 order. In so ruling, the court noted that the cross-enforceability issue had actually been raised and argued in the original litigation. Accordingly, the 1987 order does have preclusive effect on that issue. Furthermore, even though defendant class counsel dropped out prior to the 1990 order, the court's notice shows that nine individual defendants continued to be represented by counsel. It is highly likely that all of the represented defendants had the same motivation to vigorously challenge the cross-enforceability of the covenants.
The Carlsons further mischaracterize the 1987 and 1990 orders as interlocutory. The Binns court properly bifurcated the proceedings by adjudicating the common question first — the validity and applicability of the covenants — and then appointing a special master to address individual disputes. The court's 1987 order stating, "The Covenants, as amended, are valid and enforceable as to all lots within Innis Arden," and the court's 1990 order ruling that the 5 cross-enforceability question was barred by the preclusive effect of the 1987 order, were final and binding on the Carlsons' predecessors in interest, the Berreths. The nature and extent of the Berreths' participation in the special master process is irrelevant to the preclusive effect of the 1987 or 1990 orders on the Carlsons with respect to the common questions.
Because we conclude that the Carlsons' challenge to the validity and cross-enforceability of the view preservation amendments was barred by res judicata and collateral estoppel, we need not reach the merits of that claim. Club Covenant Compliance Process
We observe, however, that Save Sea Lawn Acres Ass'n v. Mercer, 140 Wn. App. 411, 166 P.3d 770 (2007) is factually distinguishable from this case.
The Carlsons argue that the trial court erred in granting summary judgment for the Club and ruling that its compliance process was valid. They acknowledge that the covenants expressly allow the Club to access the court's "proceedings in law or equity" to resolve a covenant dispute. But they argue that the Club has no inherent or statutory authority to circumvent the court by forcing its residents to submit to a hearing process or to levy fines. The Club contends that its compliance process is authorized by its covenants and bylaws, as well as by statute.
The Carlsons argued for the first time in their reply brief, without analysis or citation to authority, that under this court's ruling in Binns, the Club has no inherent authority to enforce the original covenants. Arguments not supported by authority or analysis, as well as arguments raised for the first time in the reply brief, need not be considered. Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992). Accordingly, we disregard this assertion.
The interpretation of a restrictive covenant is a question of law, reviewed de 6 novo. Parry v. Hewitt, 68 Wn. App. 664, 668, 847 P.2d 483 (1992). Questions of statutory construction are reviewed de novo. State v. Votava, 149 Wn.2d 178, 183, 66 P.3d 1050 (2003). "The primary goal of statutory interpretation is to ascertain and give effect to the legislature's intent and purpose." In re Seattle Popular Monorail Auth., 155 Wn.2d 612, 627, 121 P.3d 1166 (2005). We read the statute as a whole to give effect to all language used. In re Pers. Restraint of Skylstad, 160 Wn.2d 944, 948, 162 P.3d 413 (2007).
The Carlsons argue that the Club's compliance process is contravened by the Innis Arden covenants, which explicitly provide the right to enforce the covenants in court. They further contend that chapter 64.38 RCW, the homeowners' association act, limits a homeowners association's (HOA) powers to those enumerated in the statute. Because RCW 64.38.020(11) expressly permits HOAs to hold hearings and 7 levy fines for "violation of the bylaws, rules, and regulations" but not for violations of covenants, the Carlsons argue that the Club's process is also unauthorized by statute.
The HOA act was passed in 1995. It is based on the Uniform Common Interest Ownership Act (UCIOA) as drafted by the National Conference of Commissioners on Uniform State Laws in 1994.
RCW 64.38.020(11) provides that a HOA may "[i]mpose and collect charges for late payments of assessments and, after notice and an opportunity to be heard by the board of directors or by the representative designated by the board of directors and in accordance with the procedures as provided in the bylaws or rules and regulations adopted by the board of directors, levy reasonable fines in accordance with a previously established schedule adopted by the board of directors and furnished to the owners for violation of the bylaws, rules, and regulations of the association."
The general rule, as summarized in the Restatement (Third) of Property (Servitudes) § 6.8 cmt. b (2000), favors the Club's compliance process.
The restatement cites Glen Devin Condo. Ass'n v. Makhluf, 1994 Mass. App. Div. 227 (1994), where the court held that a condominium association had inherent authority under its governing documents to impose fines. Carlson argues that the Glen Devin court acknowledged that its opinion was overruled by statute. That is incorrect. The opinion actually stated that the condominium's process was now expressly authorized by statute, but because the statute was not retroactive, the court had to analyze the case in terms of inherent authority.
Fines, penalties, late fees, and withdrawal of privileges to use common recreational and social facilities may be used unless prohibited by statute or the governing documents. . . . Fines and penalties are commonly used to deter violations of use restrictions. . . . The power to impose fines or penalties has been sometimes denied common-interest communities on the ground that only the government may exercise such powers, but the prevailing view regards fines and penalties as legitimate tools of the common-interest community. The amounts must be reasonable, and the procedures adopted must provide property owners with notice of their potential liabilities and a reasonable opportunity to present the facts and any defenses they may have.
The Carlsons' argument that the Innis Arden covenants expressly contravene the Club's process is not persuasive. The Club's process does not purport to bar an aggrieved homeowner from bringing the dispute to court. Instead, it is a community-based process that allows for an initial evaluation of the dispute, with notice and a hearing, prior to judicial review. The Binns trial court judge recommended that Innis Arden develop such a process. Moreover, the original Innis Arden covenants gave express authority to the grantor (whose powers are now invested in the Club) to make a 8 final determination regarding the permissible height of walls, fences, and hedges and the removal of "spite or nuisance" hedges or trees. These covenants further provide inherent authority for the Club's process, subject to judicial review.
The Carlsons argue that even if the Club once had inherent authority to enforce covenants, its powers have been expressly limited by the HOA act to those enumerated in RCW 68.34.020 — particularly where RCW 68.34.020(11) expressly grants the authority to hold hearings and impose fines for violation of "bylaws or rules and regulations" but not covenants. We disagree. Nothing in the HOA act expressly overrides the Club's inherent authority to enforce covenant compliance under its governing documents. Rather, RCW 68.34.020 enumerates a list of powers that an HOA may exercise "[u]nless otherwise provided in the governing documents," including the power to "[a]dopt and amend bylaws, rules, and regulations;" "levy reasonable fines . . . for violation of the bylaws, rules, and regulations of the association" after notice and an opportunity to be heard; "[e]xercise any other powers conferred by the bylaws;" and (14) "[e]xercise any other powers necessary and proper for the governance and operation of the association." RCW 68.34.020(1), (11), (12), (14). The HOA act's definition of "governing documents" is broad and expressly includes covenants and bylaws. The Innis Arden bylaws authorize the Club's process and do not purport to 9 restrict the homeowner's right to seek judicial review of the final determination issued by the Board or the outside arbitrator.
"Governing documents" is defined as "the articles of incorporation, bylaws, plat, declaration of covenants, conditions, and restrictions, rules and regulations of the association, or other written instrument by which the association has the authority to exercise any of the powers provided for in this chapter or to manage, maintain, or otherwise affect the property under its jurisdiction." RCW 64.38.010(2).
Wimberly v. Caravello, 136 Wn. App. 327, 149 P.3d 402 (2006) does not compel a different result. In Wimberly, an HOA's board declined to enforce a building restriction covenant. The affected homeowner sued, and the trial court enjoined the building. The building owner appealed, arguing that chapter 64.38 RCW expresses the legislature's intention that boards exercise the authority granted by their bylaws and that judges cannot substitute their judgment for that of the board. The court disagreed.
But the homeowners' association act begins, "Except as provided in the association's governing documents. . . ." And the governing documents here clearly do provide otherwise. The Association's bylaws and covenants provide that individuals may invoke the jurisdiction of the court to resolve covenant disputes. And that is what the Wimberlys did. By definition, "jurisdiction" is the power of a court to impose its judgment on the parties and subject matter of litigation.
Wimberly at 335-36 (internal citation omitted).
The Carlsons assert that Wimberly stands for the proposition that an HOA has no authority to decide covenant disputes if the covenants provide for judicial review. This is incorrect. Wimberly held that a homeowner may bring suit to enforce a covenant that an HOA declines to enforce where the governing documents expressly provide that right. Nothing inWimberly prevents an HOA from creating a covenant compliance procedure as a community-based precursor to judicial review.
The Carlsons also argue that the trial court should have issued an order staying arbitration, because the Carlsons and the Rasches never entered into a written arbitration agreement as required by RCW 7.04.070(2) and because neither the Club nor the arbitrator had the authority to adjudicate the dispute.
We disagree. The bylaw expressly states that it is authorized by the HOA act and the Club's inherent authority under its governing documents. It makes no reference to chapter 7.04A RCW as a source of authority. The bylaw further provides that the arbitrator shall "function as the Board's representative in the compliance matter and render a decision for the Board," thereby acknowledging that the outside decisionmaker has no more authority than the Board. The bylaw's use of the term "arbitrator" to refer to the outside decisionmaker does not convert the Club's covenant compliance process into an arbitration under the purview of chapter 7.04A RCW.
The Carlsons further argue that the court erred in ruling on summary judgment that the Club was an HOA because there were questions of material fact regarding whether the Club's mandatory dues amendments and parallel bylaws were validly adopted. We disagree. RCW 64.38.010(1) defines a "homeowners' association" as
a corporation, unincorporated association, or other legal entity, each member of which is an owner of residential real property located within the association's jurisdiction, as described in the governing documents, and by virtue of membership or ownership of property is obligated to pay real property taxes, insurance premiums, maintenance costs, or for improvement of real property other than that which is owned by the member.
The Club is a nonprofit corporation whose members are homeowners in Innis Arden. The Club has the authority through its bylaws and through chapter 64.38 RCW to impose fees for community expenses. Accordingly, it meets the definition of an HOA, regardless of any purported flaws in the adoption of the mandatory dues amendments.
Attorney Fees 1
The Carlsons argue that the trial court erred in granting attorney fees to the Club pursuant to RCW 64.38.050 because that statute authorizes a fee award only for aggrieved homeowners, not for homeowners' associations. The question of whether a party is entitled to attorney fees is an issue of law reviewed de novo. Tradewell Group, Inc. v. Mavis, 71 Wn. App. 120, 126-27, 857 P.2d 1053 (1993).
We disagree. RCW 64.38.050 states, "Any violation of the provisions of this chapter entitles an aggrieved party to any remedy provided by law or in equity. The court, in an appropriate case, may award reasonable attorneys' fees to the prevailing party." On its face, the statute does not limit an award of fees to aggrieved homeowners but does allow fees to the "prevailing party." This allows HOAs, which are funded by the community as a whole, to recoup expenses incurred in defending against nonprevailing homeowners.
The Carlsons next argue that the trial court erred in finding that the Club was the prevailing party. The trial court's award of attorney fees is reviewed for abuse of discretion. Taliesen Corp. v. Razore Land Co., 135 Wn. App. 106, 141, 144 P.3d 1185 (2006). The determination of the prevailing party is a mixed question of law and fact that is reviewed under an error of law standard. Sardam v. Morford, 51 Wn. App. 908, 911, 756 P.2d 174 (1988). The prevailing party is the party who receives an affirmative judgment in their favor, Riss v. Angel, 131 Wn.2d 612, 633, 934 P.2d 669 (1997), or who substantially prevails,Hertz v. Riebe, 86 Wn. App. 102, 105, 936 P.2d 24 (1997). If both parties prevail on a major issue, neither party is a prevailing party.Id.
The Club prevailed on all of the major issues, including the Carlsons' quiet title claim — their challenge to the validity of 2 the covenant compliance process, including the imposition of fines; the Club's status as an HOA, and the cross-enforceability of the covenants. The trial court did rule that the Carlsons' challenge to the Club's remodel procedures and policies was reserved for a further hearing and that fines against the Carlsons would not begin to accrue until 60 days after the entry of its oral ruling. Nevertheless, given the scope of the Club's success on the major issues, we conclude that the trial court did not abuse its discretion in awarding fees to the Club as the prevailing party.
Carlson further argues that the court erred in entering an award of attorney fees without entering findings of fact or conclusions of law that would establish a record to review the award, as required by Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632 (1998). But the record shows that the Club extensively documented the basis for its request, and the court's order contained findings and conclusions. The attorney fee award was proper.
The Club requests attorney fees for costs incurred on appeal based on RAP 18.1(a), which permits an award of fees where "applicable law grants to a party the right to recover reasonable attorney fees on review. . . ." Here, the applicable law is RCW 64.38.050, which allows fees to the prevailing party for a dispute concerning violations of chapter 64.38 RCW. Because the Club is the prevailing party under this statute below and on appeal, we grant the Club's request for attorney fees under RAP 18.1.
We need not decide the Club's alternative request for attorney fees based on RAP 18.9 or CR 11.
The Rasches also request attorney fees on appeal based on RAP 18.1. But the Rasches made only a bare request, with no argument or citation to authority regarding the appropriate grounds for an award of fees. This is insufficient under RAP 18.1(b), which requires a party to devote a section of its brief to its request for attorney fees. "Argument and citation to authority are required under the rule to advise us of the appropriate ground . . . for the award." Wilson Court Ltd. P'ship v. Tony Maroni's, Inc., 134 Wn.2d 692, 710 n. 4, 952 P.2d 590 (1998). The absence of any supporting argument in the Rasches' brief is particularly problematic where, as here, the trial court 4 denied the Rasches' request for attorney fees below. Accordingly, we deny the Rasches' request for attorney fees on appeal.
We affirm.
WE CONCUR: