Myers v. Kleinhans, 556 P.3d 529

A group of homeowners (the "neighbors") in the Whitehorse Estates Minor Subdivision sued Joseph and Amanda Kleinhans for allegedly violating subdivision restrictive covenants.
The dispute arose after the Kleinhans converted their garage into an accessory dwelling unit (ADU) and rented it as an Airbnb.
The neighbors claimed this use violated covenants restricting lots to single-family dwellings and prohibiting commercial businesses.
The District Court granted summary judgment for the Kleinhans, finding the covenants did not prohibit short-term rentals and interpreting them as structural, not use, restrictions.
The Montana Supreme Court reviewed whether short-term rentals constituted a prohibited "commercial business" under the subdivision’s restrictive covenants.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the "single-family dwelling" covenant prohibit short-term rentals?	Use by multiple, transient renters is not consistent with covenant requiring single-family residence.	Covenant is only a structural restriction; renting doesn't alter residential purpose.	Covenant is a structural restriction, not a use restriction; does not prohibit short-term rentals.
Does operating a short-term rental constitute a "commercial business" in violation of covenants?	Renting the ADU as an Airbnb is a "commercial business" and thus prohibited.	Short-term rentals are not a commercial business and the term is ambiguous.	Short-term rental is a "commercial business" for profit and violates covenants; term is not ambiguous.

Patton v. Madison County, 265 Mont. 362 (Mont. 1994) (addressed the structural versus use restrictions in property covenants)
Czajkowski v. Meyers, 339 Mont. 503 (Mont. 2007) (standard for ambiguity in covenants)
Newman v. Wittmer, 277 Mont. 1 (Mont. 1996) (interpretation of contract/covenant as a whole)
Creveling v. Ingold, 331 Mont. 322 (Mont. 2006) (plain language application in contracts)