Opinion
A21-0700
01-18-2022
Windcliff Association, Inc., Appellant, v. Aaron Breyfogle, et al., Respondents.
Ken D. Schueler, John T. Giesen, Dunlap and Seeger, P.A., Rochester, Minnesota (for appellant) Elizabeth J. Roff, Stellpflug Law PLLC, Minneapolis, Minnesota (for respondents)
This opinion is nonprecedential except as provided by Minn. R. Civ. App. P. 136.01, subd. 1(c).
Wabasha County District Court File No. 79-CV-19-1045
Ken D. Schueler, John T. Giesen, Dunlap and Seeger, P.A., Rochester, Minnesota (for appellant)
Elizabeth J. Roff, Stellpflug Law PLLC, Minneapolis, Minnesota (for respondents)
Considered and decided by Reilly, Presiding Judge; Johnson, Judge; and Jesson, Judge.
JESSON, JUDGE.
This appeal centers on the size of a new garage in the Windcliff community in Lake City, Minnesota. Appellant, the Windcliff Association, Inc. (the Association), appeals from a grant of summary judgment to respondents Aaron and Abby Breyfogle, neighbors in the community. The Association contends that the Breyfogles violated two covenants 1 restricting the construction of new buildings in Windcliff. Because the district court correctly concluded that the Breyfogles did not violate the second of the two covenants, we affirm in part. But because the district court erred by granting summary judgment to the Breyfogles on the Association's claim regarding the first covenant, we reverse in part and remand.
FACTS
The Breyfogles live in the Windcliff common interest community. The Association administers Windcliff, having succeeded to that role after the original developers departed from the area. All properties in the community are subject to a set of restrictive covenants contained in the Windcliff Declaration. The Association enforces these covenants.
In 2019, the Breyfogles decided to build a garage. In April, they submitted construction plans to the Association. But because the Breyfogles proposed building a garage that would total 1, 656 square feet, the Association rejected the plans. The Association determined this size violated the first restrictive covenant in the Windcliff Declaration. That covenant states that "outbuildings shall have a maximum size of 1200 square feet (as per Wabasha County zoning restriction)."
All the covenants are listed in separately numbered paragraphs in the Declaration. Because only two covenants are at issue, we refer to them as the first and second covenant. The first covenant is Paragraph 1 of the Declaration, and the second covenant is Paragraph 16.
But the Breyfogles proceeded to build the garage regardless. After learning that the county zoning ordinance limiting outbuildings to 1, 200 square feet had been repealed, the Breyfogles informed the Association that the first covenant "was no longer enforceable." 2
The Association filed suit against the Breyfogles, alleging breach of two restrictive covenants in the Declaration. The first, as stated, set the maximum size of all outbuildings at 1, 200 square feet as per the now-repealed county zoning ordinance. The second required property owners to obtain approval before constructing any building in Windcliff.
In response to the lawsuit, the Breyfogles sought out the original developer of Windcliff, Sylvia Brown. Brown submitted an affidavit in which she explained her intentions at the time that she drafted the disputed restrictive covenants. According to Brown, she (together with her husband) meant that the 1, 200-square-foot size limit in the first covenant would cease to be effective if the county zoning ordinance was repealed. She also averred that the couple intended the covenants to be flexible, and that they generally permitted variances that would not decrease property values in the development.
After receiving Brown's affidavit, the Association deposed her. During the deposition, Brown testified that the Declaration was her first experience drafting covenants. She explained that her goal was to make the first covenant consistent with the county zoning ordinances. But Brown also admitted that, at the time of drafting, she did not contemplate that the county might change its ordinance. She conceded that when she drafted the Declaration, she assumed that all the lots in Windcliff would sell before any change in the zoning ordinances occurred. And she did not recall ever telling anyone (orally or in writing) that the first covenant would change if the zoning ordinance also changed.
After Brown's deposition, the parties moved for summary judgment. The district court concluded that the first covenant was ambiguous because both parties advanced 3 reasonable interpretations of its meaning. Then, reasoning that the available extrinsic evidence conclusively supported the Breyfogles' proposed interpretation, the court determined that the Breyfogles did not breach the first covenant as a matter of law. Next, the court concluded that the Breyfogles did not breach the only reasonable interpretation of the second covenant. As a result, the district court granted the Breyfogles' summary-judgment motion and awarded them attorney fees.
The Association appeals.
DECISION
To evaluate the district court's grant of summary judgment to the Breyfogles, we must interpret both covenants. We use the tools of contract interpretation to do so. Snyder's Drug Stores, Inc. v. Sheehy Props., Inc., 266 N.W.2d 882, 884 (Minn. 1978). Our primary aim in this regard is to determine the parties' intent. Staffing Specifix, Inc. v. Tempworks Mgmt. Servs., Inc., 913 N.W.2d 687, 692 (Minn. 2018). The first step is to determine whether the language of the covenant is ambiguous, a question of law that we review de novo. Glacial Plains Coop. v. Chippewa Valley Ethanol Co., 912 N.W.2d 233, 236 (Minn. 2018). If the covenant is unambiguous, we will interpret it de novo. Sehlstrom v. Sehlstrom, 925 N.W.2d 233, 238 (Minn. 2019). With this framework in mind, we turn first to the language of each restrictive covenant, then to the grant of summary judgment to the Breyfogles, and finally the district court's grant of attorney fees. 4
I. The district court erred by interpreting the first covenant as a matter of law.
The first covenant states: "All such outbuildings shall have a maximum size of 1200 square feet (as per Wabasha County zoning restriction)." The Association argues that the district court erred by concluding that the covenant was ambiguous and that the Breyfogles had not violated it.
A. The first covenant is ambiguous.
We begin by determining whether the first covenant's language is ambiguous or clear on its face. Glacial Plains Coop., 912 N.W.2d at 236. The language of a contract is ambiguous if it can be reasonably interpreted in two or more ways. Id.
In support of their respective motions for summary judgment, both parties argued that the language of the first covenant unambiguously supported their contrary interpretations. The Association argued that the covenant could only mean that the maximum size for all outbuildings was 1, 200 square feet, and that the parenthetical clause was incidental and functionally meaningless. The Breyfogles argued that the covenant meant that the maximum size for outbuildings was capped at the applicable limit set by the county zoning ordinance. Because both interpretations are reasonable based on its language, the first covenant is ambiguous.
To convince us otherwise, the Association argues first that the district court erred because it relied on extrinsic evidence. That occurred, the Association asserts, when the court noted that the Wabasha County zoning ordinance had changed. But the language of the covenant is susceptible to two reasonable interpretations regardless of whether the ordinance changed. Accordingly, we are unpersuaded. 5
Next, the Association claims that the use of parentheses compels its interpretation of the first covenant. That covenant, the Association contends, has two distinct components: the "mandatory clause" containing the 1, 200-square-foot size restriction, and the "nonrestrictive clause" containing the parenthetical reference to the zoning ordinance. Under the Association's reading, the "mandatory clause" is controlling and should be enforced, while the "nonrestrictive clause" is ineffective. But when we interpret a contract, we construe the language as a whole and attempt to harmonize all of the clauses. Storms, Inc. v. Mathy Const. Co., 883 N.W.2d 772, 776 (Minn. 2016). The Association's reading fails to harmonize the clauses because it disregards entirely the parenthetical clause. In sum, the district court correctly determined that the first covenant is ambiguous.
The Association also contends that the district court's interpretation renders the "mandatory clause" superfluous. But the "mandatory clause" is not rendered superfluous just because it is potentially subject to change. And because the Association's own interpretation renders the parenthetical clause superfluous, this argument does not persuade us that the district court erred.
B. The interpretation of the first covenant is a question of fact for a jury.
Even if the first covenant is ambiguous, the Association asserts, then the district court erred by granting summary judgment to the Breyfogles because the interpretation of the covenant is a question of fact that should have gone to a jury. We review this grant of summary judgment de novo to determine whether the district court correctly concluded that no genuine issues of material fact exist. Montemayor v. Sebright Prods., Inc., 869 N.W.2d 623, 628 (Minn. 2017). The interpretation of an ambiguous contract term poses a question of fact in the absence of conclusive extrinsic evidence. 6 Donnay v. Boulware, 144 N.W.2d 711, 716 (Minn. 1966). And when the terms of a contract are ambiguous and disputed by the parties, summary judgment is generally not appropriate. Id.
To determine whether the extrinsic evidence is conclusive here, we turn to Brown's affidavit and deposition statements. This evidence is far from conclusive. In her affidavit, Brown stated that the language of the first covenant "was meant to be interpreted in such a manner that the 1200 square foot size restriction would be inapplicable if repealed by the Wabasha County Zoning Commission." At her deposition, Brown agreed with the Breyfogles' counsel that her "goal in the drafting was to make the covenant consistent with the county zoning rules." But Brown also stated that if she had been aware that the county would change its ordinance, she would have added language indicating that the covenant would change along with the ordinance. She also admitted that at the time she drafted the Declaration, she assumed that all lots would sell before the county changed its ordinance. These statements imply that Brown may not have anticipated that the ordinance would change and thus, at the time of drafting, she may not have intended to tie the maximum-size limitation to the county ordinance.
Because the extrinsic evidence does not conclusively demonstrate Brown's intent, the meaning of the ambiguous and disputed language of the covenant presents a genuine issue of material fact. Id. Accordingly, the district court erred by granting summary judgment to the Breyfogles on this issue.
Still the Breyfogles argue that the district court correctly interpreted the covenant following Mission Covenant Church v. Nelson, 91 N.W.2d 440 (Minn. 1958). Mission Covenant 7 concerned a church that subdivided real property it owned into three plots. 91 N.W.2d at 441. The church conveyed two of the three plots to Nelson and imposed restrictive covenants on both plots. Id. at 441-42. Later, Nelson conveyed the plots to two others, who then attempted to enforce the restrictive covenants against the church on the portion of the original property that the church retained. Id. at 442. The issue before the supreme court was whether the church, by conveying two of the three subdivided plots burdened with restrictive covenants, had also created an implied restrictive covenant that burdened its retained plot. Id. In this context-a pure question of law-the supreme court reasoned that covenants restricting property are to be "strictly construed against limitations" on the use of property. Id. The Breyfogles seize upon this language, but they do not explain how it applies in context of the factual dispute posed here.
The Breyfogles also argue that Costley v. Caromin House, Inc., supports the district court's interpretation of the first covenant as a matter of law. 313 N.W.2d 21 (Minn. 1981). But Costley involved the interpretation of an unambiguous restrictive covenant term in context of a motion for a temporary injunction and is inapposite. Id. at 26.
Because the first covenant is ambiguous, and the extrinsic evidence is not conclusive, its interpretation presents a question of fact for a jury.
II. The district court correctly interpreted the second covenant.
The second covenant provides that no construction can begin unless the property owner first submits building "plans to Declarants and obtain[s] prior written approval of the plans from Declarants." The Association argues that the district court correctly concluded that the second covenant was unambiguous but erred by concluding that the Breyfogles did not breach it. 8
Here, the only reasonable interpretation of the second covenant is that the Breyfogles were required to obtain prior approval from "Declarants" before building the garage. The "Declarants" are defined as "Rodger H. & Sylvia A. Brown." No provision in the Declaration provides for the Association taking over the role of the Declarants. Accordingly, the only reasonable interpretation of the second covenant is that Windcliff residents must obtain prior written approval from Rodger and Sylvia Brown, not the Association. The district court properly granted the Breyfogles' motion for summary judgment on this claim.
The Association argues that this result is harmful to Windcliff because it is illogical for persons with no further connection to the community to have the power to approve or deny construction projects. It further contends that the Breyfogles conceded that they were required to submit plans to the Association because they did submit plans in April 2019. But our task is to enforce the plain language of the second covenant without regard to extrinsic evidence. Am. Bank of St. Paul v. Coating Specialties, Inc., 787 N.W.2d 202, 205 (Minn.App. 2010), rev. denied (Minn. Oct. 27, 2010).
Still the Association contends that because it took over enforcing the covenants, it has the power to withhold approval from building plans under the second covenant. To support this assertion, the Association points to section 5.6(1) of the Restatement of Property (Third) (2000). This provision contemplates the transfer of the right to enforce restrictive covenants to a homeowner's association. But Restatements are not binding authority unless specifically adopted in Minnesota law. Williamson v. Guentzel, 584 N.W.2d 20, 24-25 (Minn.App. 1998), rev. denied (Minn. Nov. 24, 1998). And this unadopted provision is further unpersuasive because the right to enforce the covenants does not give the Association the power to insert itself into the place of Declarants for purposes 9 of the second covenant. In sum, the district court properly granted summary judgment to the Breyfogles on the Association's claim of breach of the second covenant.
III. The award of attorney fees was premature.
Finally, the Association argues that the district court prematurely granted the Breyfogles' motion for attorney fees. Parties may only recover attorney fees if they are authorized to do so by a statute or a contract, and we will not reverse a decision to award attorney fees unless the district court abused its discretion. Bolander v. Bolander, 703 N.W.2d 529, 548 (Minn.App. 2005), rev. dismissed (Minn. Oct. 28, 2005).
Here, a third provision in the Declaration states: "The Declarants or any other future Owners of a Lot shall have the right to enforce the [covenants] . . . and the prevailing party shall be awarded reasonable attorneys fees and court costs in connection therewith." In its order, the district court concluded that the Breyfogles were entitled to attorney fees because it reasoned that they were the "prevailing party" upon successfully moving for summary judgment. Because we reverse a portion of the summary judgment order, the "prevailing party" remains yet to be determined. Accordingly, we reverse the award of attorney fees as premature.
The Breyfogles urge us to reach an issue not decided by the district court: whether the Association proved that it has suffered irreparable harm from the Breyfogles' garage. But we generally do not address issues presented to but not decided by the district court and decline to do so here. Singelman v. St. Francis Med. Ctr., 777 N.W.2d 540, 543 (Minn.App. 2010).
Affirmed in part, reversed in part, and remanded. 10