565 P.3d 299
Mont.2025Background
- The Gallatin West Ranch Subdivision was governed by a set of restrictive covenants, originally enacted in 1992 and amended several times.
- The covenants included a 25-year duration clause, stating they could be extended by a two-thirds majority vote of owners.
- In 2015, a Fourth Amended Declaration was adopted by a majority of participating owners (15 of 24), but did not satisfy the two-thirds majority of all owners.
- In 2023, Charlie’s Win, LLC, a property owner in the subdivision, filed for declaratory judgment, arguing the covenants had expired in 2017.
- The District Court granted summary judgment for Charlie’s Win, holding the two-thirds majority requirement was not met and the covenants had expired.
- Gallatin West appealed, contending the 2015 vote was sufficient or that the modification process was adequate to renew the covenants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the 2015 vote validly renew the covenants? | Vote failed to secure two-thirds of all owners; thus, covenants expired in 2017. | Majority of participating owners approved, so the covenants were renewed. | Vote did not meet two-thirds of all owners; covenants expired. |
| Does modification equal renewal? | Renewal requires a distinct, higher standard; modification alone is insufficient. | Modifications with 60% consent effectively restarted term for 25 years. | Renewal and modification are separate; stricter standard for renewal applies. |
| Are the covenants ambiguous? | Language is clear, requiring two-thirds of all owners to renew. | Ambiguity exists, so history and conduct should be considered. | Covenants are unambiguous; no need for extrinsic evidence. |
Key Cases Cited
- Lewis & Clark Cnty. v. Wirth, 409 Mont. 1 (Mont. 2022) (contract law applies to interpretation of covenants)
- Myers v. Kleinhans, 418 Mont. 113 (Mont. 2024) (plain language governs contract interpretation absent ambiguity)
- Bordas v. Virginia City Ranches Ass’n, 324 Mont. 263 (Mont. 2004) (courts may not insert terms not present in the document)
- Wurl v. Polson School Dist. No. 23, 330 Mont. 282 (Mont. 2006) (summary judgment standard articulated)