Nickerson v. Green Valley Recreation, Inc.
228 Ariz. 309
| Ariz. Ct. App. | 2011Background
- GVR is a merged nonprofit providing recreational services in Green Valley; two membership paths exist: subdivision CC&Rs mandating GVR membership and private MDR-based membership.
- MDRs bind homeowners with recorded covenants requiring dues; some homes are subject to both MDR and subdivision covenants.
- In 2000, GVR amended bylaws to impose a new-member capital fee; MDR was amended to reflect the new fee for affected properties.
- Plaintiffs filed suit in 2009 seeking quiet title, declaratory relief, damages; they challenged legality, unconscionability, and running with the land of the covenants.
- Trial court granted summary judgment for GVR, held the covenants run with the land as equitable servitudes, and denied plaintiffs’ injunction and reconsideration; GVR sought attorney fees.
- Plaintiffs appeal; GVR cross-appeals on denial of attorney fees; issue includes whether law-of-the-case doctrine affected the ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the covenants run with the land (touch-and-concern) | GVR servitudes fail touch-and-concern; burdened land gains no benefit | Covenants touch and concern; provide benefit and access to facilities | Yes, covenants touch and concern and run with land |
| Are the contracts unconscionable | Contracts are procedurally/substantively unconscionable due to power and terms | No procedural unfairness; terms not substantively unconscionable | Not procedurally or substantively unconscionable as a matter of law |
| Are the contracts illusory or unilateral | GVR retains secret unilateral right to change terms | No secret terms; board and bylaws govern changes with member rights | Not illusory or unilateral; consideration exists |
| Was law-of-the-case doctrine properly applied | Law-of-the-case misapplied to law on touch-and-concern and enforceability | Law-of-the-case doctrine referenced but does not control outcome | Law-of-the-case doctrine not dispositive; servitudes valid on other grounds |
Key Cases Cited
- Powell-Cerkoney v. TCR-Montana Ranch Joint Venture, II, 176 Ariz. 275 (App. 1993) (law-of-the-case relevance for preliminary injunctions not binding on summary judgment)
- Choisser v. Eyman, 22 Ariz.App. 587, 529 P.2d 741 (App. 1974) (touch-and-concern element for real covenants)
- Federoff v. Pioneer Title & Trust Co. of Ariz., 166 Ariz. 383, 803 P.2d 104 (198?) (requires touch-and-concern for covenants to run with land (privity))
- Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007) (adopted de novo standard for summary judgment review; Restatement influence on servitudes)
- Maxwell v. Fid. Fin. Servs., Inc., 184 Ariz. 82, 907 P.2d 51 (1995) (two forms of unconscionability; procedural and substantive)
- Nelson v. Rice, 198 Ariz. 563, 12 P.3d 238 (App. 2000) (procedural/substantive unconscionability framework)
- Shamrock v. Wagon Wheel Park Homeowners Ass’n, 206 Ariz. 42, 75 P.3d 132 (App. 2003) (homeowner association governance; voting and amendment rights)
- Dreamland Villa Cmty. Club Inc. v. Raimey, 224 Ariz. 42, 226 P.3d 411 (App. 2010) (limits on unilateral amendments to covenants)
- Four Seasons Homeowners Ass’n v. Sellers, 62 N.C.App. 205, 302 S.E.2d 848 (App. 1983) (rec facilities covenants touch and concern land despite location)