375 P.3d 769
Wyo.2016Background
- Declarant recorded Riva Ridge covenants (1996) establishing seven tracts, an Owners Association, and a three‑member Site Committee with authority to approve building plans and alterations.
- Covenants include a visibility restriction: no structure within a building envelope may be visible "from any principal residence site as designated on Exhibit H." Exhibit H marks a single "homesite" on each tract.
- Baker‑Stein bought Tract B (2010), submitted plans for a house and detached studio; Site Committee repeatedly rejected plans because portions would be visible from neighboring owners’ homes.
- Baker‑Steins proposed planting trees to screen visibility; Site Committee claimed planting and other landscaping require prior approval under the covenants and refused to accept landscaping as a mitigation for visibility.
- Baker‑Steins sued for breach of contract, tortious breach of the covenant of good faith and fair dealing, interference, injunctive relief, punitive damages, and sought declaratory relief on the meaning of "principal residence site" and whether tree‑planting needs approval. District court: held "principal residence site" ambiguous (trial on meaning), ruled landscaping requires Site Committee approval, and granted summary judgment to Association on damages; bench trial concluded Association intended complete invisibility between homes.
- Wyoming Supreme Court: held "principal residence site" unambiguous — it refers to the specific points shown on Exhibit H (homesites), reversed summary judgment dismissal of breach‑of‑contract damages claim (bad faith issue survives), and affirmed that planting trees requires Site Committee approval.
Issues
| Issue | Plaintiff's Argument (Baker‑Stein) | Defendant's Argument (Association) | Held |
|---|---|---|---|
| Meaning of "principal residence site" | Means the specific point(s) shown on Exhibit H; restriction applies only from those marked homesites | Means visibility protection extends to views from anywhere within principal residences (effective complete invisibility) | Held: unambiguous — refers to the specific areas on Exhibit H; structure must be invisible only from those designated points |
| Recoverability of contract damages from Site Committee/Board | Denial of plans was in bad faith; covenants do not immunize bad‑faith conduct — damages possible | No covenant provision allows damages; committee actions protected and reasonable; summary judgment appropriate | Held: reversed summary judgment — covenants immunize committee only if acted in good faith; bad‑faith claim raises genuine issues of material fact and may support damages |
| Whether planting trees requires Site Committee approval | Trees are landscaping and permitted; planting should not be restricted or require approval | Covenants unambiguously require approval for excavation/alteration and landscape activities; prior approval necessary | Held: affirmed — planting trees alters natural state/excavation for landscaping and requires Site Committee/Board approval |
| Standard of review for committee interpretation | Court should give weight to drafter's intent (attorney) and not substitute collective owner belief | Committee's interpretation should be given deference unless unreasonable | Held: Court declines a deferential "reasonableness" standard for interpreting covenants; interpretation is a matter of contract law and is reviewed de novo |
Key Cases Cited
- Moore v. Wolititch, 341 P.3d 421 (Wyo. 2015) (bench‑trial factual findings reviewed for clear error; legal conclusions reviewed de novo)
- Stevens v. Elk Run Homeowners' Ass'n, 90 P.3d 1162 (Wyo. 2004) (covenants are contractual and interpreted under contract law)
- Dwan v. Indian Springs Ranch Homeowners' Ass'n, Inc., 282 P.3d 1188 (Wyo. 2010) (homeowner must identify covenant provision authorizing damages; association not automatically liable)
- Star Valley Ranch Ass'n v. Daley, 334 P.3d 1207 (Wyo. 2014) (interpretation of covenants follows contract‑law principles)
- Anderson v. Bommer, 926 P.2d 959 (Wyo. 1996) (contract interpretation: determine intent from instrument as whole; unambiguous language enforced as written)