Opinion
NO. 2014-CA-001170-MR
03-02-2018
ENGLISH STATION COMMUNITY ASSOCIATION, INC. APPELLANT v. RON GADDIE; AND MARGE GADDIE APPELLEES
BRIEFS FOR APPELLANT: Mark J. Sandlin Megan P. Keane Prospect, Kentucky BRIEF FOR APPELLEES: Laurel K. Cornell Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE ANGELA MCCORMICK BISIG, JUDGE
ACTION NO. 13-CI-000940 OPINION
AFFIRMING
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BEFORE: ACREE, DIXON, AND TAYLOR, JUDGES. TAYLOR, JUDGE: English Station Community Association, Inc. (Homeowner's Association or HOA) brings this appeal from a May 30, 2014, Order granting Ron and Marge Gaddie's (Gaddies) cross-motion for summary judgment, which was made final by the court's June 8, 2014, order granting the HOA's Kentucky Rules of Civil Procedure (CR) 59 order to alter, amend or vacate. For the reasons that follow, we affirm.
INTRODUCTION
In October 2012, the Gaddies built a 12' x 16' wooden storage shed in their backyard in the English Station subdivision in Jefferson County. HOA demanded that the Gaddies remove the shed for being in violation of subdivision restrictions and further for not seeking permission from the HOA to build it. In 2013, the HOA sued the Gaddies in the Jefferson Circuit Court for violation of the subdivision restrictions. On May 30, 2014, the circuit court granted summary judgment in favor of the Gaddies. This appeal follows.
BACKGROUND
The essential facts in this case are uncontested. In April 2012, the Gaddies purchased a 12' x 16' wooden storage shed from Home Depot to build in their backyard at their home in the English Station subdivision. The Gaddies obtained a survey of their property, a release of a drainage easement held by the Louisville/Jefferson County Metropolitan Sewer District and a building permit from the Louisville-Jefferson County Metro Government Department of Codes and Regulations to construct the shed. In November 2012, the shed was erected in the Gaddies' backyard which is adjacent to an approximate 12-acre-common area owned by the subdivision.
The Gaddies had asked their immediate neighbors if they had any objections to the shed but failed to seek permission from the HOA before building the shed, as required by Article III, Section 1 of the Declaration of Restrictions for the English Station subdivision (the subdivision restrictions). That section provides in relevant part that "[n]o structure may be erected, placed or altered on any lot until the construction plans and building specifications . . . shall have been approved in writing by [Homeowners Association]." Declarations of Restrictions at 8. That same section provides that "[r]eferences to 'structure' in this paragraph shall include any building (including a garage), fence, wall, antennae (except for standard small television antennae) and microwave or other receivers and transmitters ('satellite dishes')." Declarations of Restrictions at 9 (emphasis added).
Shortly after the Gaddies' shed was constructed, the HOA gave the Gaddies notice that they were in violation of the subdivision's restrictions. After an exchange of written correspondence failed to resolve the impasse, the HOA filed this action in February 2013.
In early 2014, the HOA filed a motion for summary judgment and the Gaddies filed a cross-motion for summary judgment. In May 2014, the trial court granted summary judgment to the Gaddies and denied summary judgment to the HOA. The court stated that it was "extremely sympathetic to both positions in the case" but held that "because of the numerous other structures visible from the common area, the Homeowners Association's issues with this individual structure seem arbitrary." The court concluded that given there were numerous structures visible from the common area on other subdivision lots, the Gaddies' shed was not so out of place in material or color such as to change the tone of the neighborhood that the subdivision restrictions were intended to protect.
Oddly, the Homeowner's Association motion and accompanying memorandum are labeled as "Defendant's" Motion for Summary Judgment, albeit the Homeowner's Association was the Plaintiff below.
The HOA thereafter timely filed a motion to alter, amend or vacate the summary judgment under CR 59.05, seeking only to add language to the order to limit the order's effect to this particular case only to protect the HOA's future authority to exercise its building approval rights under the subdivision restrictions. The Gaddies did not object. On July 8, 2014, the trial court granted the motion and added the following to its summary judgment order:
Application of this Order shall be limited to the parties herein and the actions and shed which are the subject of this lawsuit and shall not be used in the future by any homeowner of the English Station Community Association as the basis for failing to seek approval prior to the building of a structure [for] which approval is required by the Declaration of Restrictions of the English Station Community Association.Given that the circuit court's orders adjudicated all of the rights and claims of the parties to this action, the judgment was properly appealable pursuant to CR 54.01.
STANDARD OF REVIEW
The standard of review of an appeal of a trial court's entry of summary judgment is well-established and has been concisely summarized by this Court in Lewis v. B & R Corporation, 56 S.W.3d 432 (Ky. App. 2001):
The standard of review on appeal when a trial court grants a motion for summary judgment is "whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." The trial court must view the evidence in the light most favorable to the nonmoving party, and summary judgment should be granted only if it appears impossible that the nonmoving party will be able to produce evidence at trial warranting a judgment in his favor. The moving party bears the initial burden of showing that no genuine issue of material fact exists, and then the burden shifts to the party opposing summary judgment to present "at least some affirmative evidence showing that there is a genuine issue of material fact for trial." The trial court "must examine the evidence, not to decide any issue of fact, but to discover if a real issue exists." While the Court in Steelvest [Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991)] used the word "impossible" in describing the strict standard for summary judgment, the Supreme Court later stated that that word was "used in a practical sense, not in an absolute sense." Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, an appellate court need not defer to the trial court's decision and will review the issue de novo.Id. at 436 (footnotes omitted). Accordingly, an appellate court must view the record below in a light most favorable to the party opposing the motion for summary judgment and all doubts must be resolved in that party's favor. Steelvest, 807 S.W.2d 476. Additionally, we note that that interpretation or construction of restrictive covenants, like the subdivision restrictions in this case, is a question of law; thus, we review this matter de novo. Colliver v. Stonewall Equestrian Estates Ass'n, Inc., 139 S.W.3d 521, 523 (Ky. App. 2003); see also Triple Crown Subdivision Homeowners Ass'n, Inc. v. Oberst, 279 S.W.3d 138 (Ky. 2008).
ANALYSIS
In Kentucky, the fundamental rule in construing restrictive covenants is that the intention of the parties must govern. Colliver, 139 S.W.3d 521. However, an important factor that must be considered when analyzing these restrictions is the general scheme or plan of development for the neighborhood and the surrounding circumstances. Id. Strict construction no longer applies; instead, for nearly sixty years Kentucky has viewed restrictive covenants as protections for the property owner and the public, not merely as restrictions on the usage of the property. Highbaugh Enterprises Inc. v. Deatrick & James Const. Co., 554 S.W.2d 878, 879 (Ky. App. 1977) (citing Brandon v. Price, 314 S.W.2d 521 (Ky.1958)). With these rules in mind we examine the issues raised in this appeal.
The primary focus of this appeal is the disagreement between the parties as to whether the HOA has waived or abandoned its right to enforce the subdivision restrictions applicable to the Gaddies' shed. The right to enforce such restrictions may be lost by waiver or abandonment. Bagby v. Stewart's Ex'r, 265 S.W.2d 75 (Ky. 1954). And, the right of enforcement may also be lost by a general change in the character of the neighborhood to which the restrictions or covenants applied. This is true even where the restrictions are imposed as a part of a general plan or building scheme.
A general change in the character of the neighborhood may occur when it is no longer possible to accomplish the purpose intended by the restriction or covenant at issue. 20 Am. Jur. 2d Covenants, Etc. § 234 (2017). Consequently, "[w]hen the conditions imposed have been disregarded over a period of years by the owners of most or all the lots in the group . . . the courts declare them to have been abandoned by all and enforceable by none." Goodwin Bros. v. Combs Lumber Co., 275 Ky. 114, 120 S.W.2d 1024, 1025 (1938). Arbitrary, selective enforcement of restrictive covenants does not necessarily make them unenforceable. "Instead, [only] when arbitrary enforcement has resulted in a fundamental change in the character of a neighborhood, the purpose of the covenants may be defeated and accordingly become unenforceable." Colliver, 139 S.W.3d at 525. Upon review of the undisputed facts and circumstances surrounding the HOA's conduct regarding the restrictions in this case, we conclude the HOA has abandoned or waived its right to enforce the restrictions as concerns the Gaddies' shed.
The trial court cited applicable precedent, including Colliver v. Stonewall Equestrian Estates Ass'n, Inc., 139 S.W.3d 521 (Ky. App. 2003), in the order granting summary judgment to the Gaddies. Moreover, the order contains a heading labelled " Waiver of Restrictive Covenant [.]" Thus, though the order itself unfortunately does not explicitly contain a finding of waiver or abandonment, such a finding is readily implicit, so we reject English Station Community Association, Inc. (Homeowner's Association or HOA) argument that the trial court applied incorrect legal standards. In any event, our review is de novo and we may affirm on grounds not relied upon by the trial court. See, Brewick v. Brewick, 121 S.W.3d 524 (Ky. App. 2003).
Though not expressly noted in the restrictions, their purpose logically is to: a) maintain harmonious aesthetics in the subdivision and b) to permit unobstructed views of the expansive common area adjacent to the subdivision that is approximately 12 acres in size. However, the HOA's consistent inaction or acquiescence regarding out buildings or structures constructed in the neighborhood subject to the restrictions - until the Gaddies built their shed - has frustrated both purposes.
As for promoting overall aesthetics in the neighborhood, there is no overarching design, blueprint, or limitation for construction of structures including out buildings in the subdivision. For example, some fences are made from wood and some from metal. Some children's playsets are plastic, and some are wooden. Consequently, there is also no consistent color scheme. The HOA therefore has permitted such a panoply of structures which have a widely diverse array of styles, materials and colors to the point that there really is no aesthetic harmony in regards to outbuildings or structures constructed in the area adjacent to the common area.
The HOA's citation to John & Chris Construction, LLC v. Meadow Peak Homeowners Association, Inc., 2009 WL 2192233 (Ky. App. July 24, 2009) is unavailing. That unpublished case permitted a homeowner's association to prevent construction of a garage because its design did not generally conform with the subdivision. Since English Station has not required structures to have an overall design style, John & Chris Construction is inapposite.
The Court will now turn its attention to whether the Gaddies' shed unduly interferes with views of or from the common area. In so doing, the HOA asks us to focus only on sheds, not other types of structures. The Court declines to do so, for two reasons. First, the word "structure" is not defined in the restrictive covenants. In fact, Article III, Section 1 provides that a "structure" includes "any building[,]" including such things as garages, fences and satellite dishes. However, the term "building" is not expressly defined in the covenants. Therefore, the HOA's argument to the contrary notwithstanding, there is no valid reason from the face of the covenants for the Court to look only at sheds instead of all "buildings" or "structures." After all, the subdivision could easily have expressly set forth special rules for storage sheds if it wanted them to be treated differently as it did when it explicitly prohibited certain structures, such as detached garages or carports in the subdivision restrictions.
The HOA seems to assert that whether structures are permitted or not is at least partly dependent upon whether the lot containing the structure abuts the common area. However, the HOA cites to no specific language in the covenants setting forth such a dichotomy. Leniently, and solely for purposes of argument, the Court will focus primarily on the structures placed on lots which abut the common area. Even so, the HOA's overall arguments are unavailing.
Because "structure" is not defined in the restrictive covenants, we will give the term its typical meaning. Black's Law Dictionary (10th ed. 2014) defines structure in relevant part as "[a]ny construction, production, or piece of work artificially built up or composed of parts purposefully joined together <a building is a structure>." Thus, the fences, playsets, etc. are all "structures." --------
Because storage sheds are lumped in with other types of structures in the restrictions, cases whose outcome is dependent on a how a structure is treated by a neighborhood and/or specifically addressed in its restrictions are distinguishable. For example, in Colliver, the restrictive covenant specifically required preapproval for the construction of detached garages. Colliver, 139 S.W.3d at 523. This Court thus found it immaterial that the covenant's restrictions against pools and fences had not been enforced. Id. at 525. ("Moreover, we find that even if such were the case in reference to pools, fences, etc., it clearly has not been the case with detached or second garages . . . . Having specifically required prior approval for garages, this court may not substitute what the grantor may have intended to say for the plain import of what he said.") (quotation omitted). See also Williams v. Moser Farms Homeowners Ass'n, Inc., 2009 WL 413990, at *6 (Ky. App. Feb. 20, 2009) ("Moser Farms' relaxation of enforcement of the covenant regarding playsets and satellite dishes has no bearing on whether there has been a waiver of the right to enforce the covenant regarding fences.").
The record reflects there are approximately fifteen lots abutting the common area in the subdivision, including the Gaddies' property. Out of those fifteen, eleven have at least one structure (swing set/child's playset, pergola, fence, etc.) other than the residence itself. Indeed, some lots contain multiple structures. Thus, tacitly or expressly, the Homeowner's Association has approved the placement of structures on over two-thirds of the lots which contain common area frontage. This means these structures can be viewed by anyone in the common area. Yet, nothing in the record shows that the Gaddies' shed is interfering with any subdivision resident's enjoyment of the common area. As inferred by the trial court, the HOA's treatment of the Gaddies' shed appears arbitrary on its face, which essentially means that if the restrictions were intended to restrict structures adjacent to the common area, they have been effectively abandoned by the HOA over a period of years.
Obviously, there are inherent differences in the size and aesthetics of the mishmash collection of structures (which, again, supports the conclusion that the HOA is treating the Gaddies differently than other landowners). Nonetheless, because only a few lots which abut the common area have the structure-free status the HOA seeks to impose upon the Gaddies, the restrictive covenants "have been disregarded over a period of years by the owners of most or all the lots in the group" meaning that the HOA has waived or abandoned its right to deny permission for the Gaddies to build the shed in question as a matter of law. See Goodwin Bros., 120 S.W.2d at 1025.
The second problem with the HOA's approach to the Gaddies' structure is that the Gaddies are not the only landowners with property abutting the common area who have erected a shed. There is at least one other shed on such a lot and there is another similar "structure" (which purportedly is used as a children's playhouse but resembles a storage shed) on another lot. Consequently, even utilizing the HOA's unduly narrow focus of sheds on lots which abut the common area, this does not refute the arbitrariness of their actions toward the Gaddies' shed.
This leads us to the final argument raised by the HOA for reversing the trial court, that being the Gaddies' failure to seek preapproval from the HOA before erecting their shed. While the Gaddies did violate this restriction, that failure is not sufficient to require the shed's removal. As noted previously, the HOA has permitted a plethora of divergent structures, including 2 sheds which were preapproved. Consequently, the HOA should have approved the Gaddies' shed, and arguably would have approved the shed had the Gaddies sought preapproval, since the HOA has advanced no plausible reason for denying approval. However, the Gaddies' failure to seek preapproval is essentially moot due to the Court's conclusion that the HOA has waived or abandoned its right to enforce the covenants in such a way as to prevent the Gaddies from keeping their shed. Thus, we agree with the trial court that the HOA acted arbitrarily in its dealings with the Gaddies.
Finally, we note that in the trial court's order, granting the HOA's motion to alter, amend or vacate, the trial court stated that its ruling was limited to the Gaddies' shed since other hypothetical structures could be found to violate the restrictive covenants in the future. The Gaddies did not appeal this ruling and thus it is not before the Court at this time. Accordingly, we will not address the merits or legal effect of the ruling in this Opinion. We simply affirm the trial court's summary judgment in favor of the Gaddies for the reasons and authority cited herein.
For the foregoing reasons, the summary judgment of the Jefferson Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT: Mark J. Sandlin
Megan P. Keane
Prospect, Kentucky BRIEF FOR APPELLEES: Laurel K. Cornell
Louisville, Kentucky