Cundiff v. Cox, 1 CA-CV 15-0371

Background

The Coxes used their 19-acre lot in Coyote Springs Ranch to grow and store inventory for a family nursery business; they lived on the property part‑time and obtained an agricultural use exemption from the county.
The subdivision is governed by a Declaration of Restrictions declaring parcels "residential" and prohibiting trade/business; §19 contains a non‑waiver clause preserving enforcement despite prior nonenforcement.
Plaintiffs (neighboring property owners including the Cundiffs and Varilek) sued for injunctive and declaratory relief alleging the Coxes’ tree‑farm use violated the Declaration; the Coxes pleaded abandonment, waiver, estoppel, laches, and unclean hands.
Earlier rulings: the trial court initially denied summary judgment on waiver/abandonment (question of fact), but this court’s 2007 decision held the Coxes’ tree farm was an agricultural business and thus could violate the Declaration; only abandonment remained for trial; the court later ordered joinder of other subdivision owners as necessary/indispensable parties.
After additional discovery and briefing, the trial court granted summary judgment for Plaintiffs, holding the Declaration had not been completely abandoned and §19’s non‑waiver clause remained enforceable; the court awarded attorneys’ fees to Plaintiffs and Varilek.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Declaration was abandoned (so §19 non‑waiver is unenforceable)	Cundiffs: The subdivision remains rural/residential; violations by others do not amount to complete abandonment; non‑waiver controls.	Coxes: Widespread, long‑standing violations by many owners show abandonment or waiver of restrictions.	Court: No complete abandonment as a matter of law; summary judgment for Plaintiffs.
Whether trial court erred by reconsidering prior rulings / law‑of‑the‑case	Cundiffs: Subsequent authority and additional evidence justified reconsideration.	Coxes: Judge Mackey already ruled; later motion violated law‑of‑the‑case and was an improper horizontal appeal.	Court: No error; law‑of‑the‑case does not bar reconsideration or different judge re‑examining nonfinal rulings.
Whether necessary/indispensable parties were joined before final disposition	Cundiffs: They substantially complied with joinder orders (service, publication); the court’s joinder process was adequate.	Coxes: Many other property owners were never properly served; judgment invalid without joinder.	Court: Plaintiffs substantially complied; joinder concerns were moot because the Declaration was held not abandoned; summary judgment stands.
Whether attorneys’ fees awards were proper and reasonable (to Cundiffs and Varilek)	Plaintiffs: Fee awards justified under A.R.S. §12‑341.01; attorney‑client relationship and obligation to pay established; hours and rates reasonable.	Coxes: Funding by nonparty (Alfie Ware) undermines fee entitlement; some work was duplicative or for losing claims; Varilek improperly awarded fees as an aligned nonparty.	Court: No abuse of discretion; fee claims supported (Cundiffs had repayment agreement with funder); Varilek was a joined/active party and eligible; amounts were reasonable.

Key Cases Cited

Powell v. Washburn, 211 Ariz. 553, 125 P.3d 373 (Arizona Supreme Court) (rejected strict‑construction rule for covenants relied on by trial court)
College Book Centers, Inc. v. Carefree Foothills Homeowners' Ass'n, 225 Ariz. 533, 241 P.3d 897 (Ariz. Ct. App.) (non‑waiver provision preserves restrictions unless there is complete abandonment)
Burke v. Voicestream Wireless Corp. II, 207 Ariz. 393, 87 P.3d 81 (Ariz. Ct. App.) (frequent violations may support waiver/abandonment absent non‑waiver clause)
Condos v. Home Dev. Co., 77 Ariz. 129, 267 P.2d 1069 (Arizona Supreme Court) (complete abandonment requires fundamental change destroying the restrictions' purpose)