315 P.3d 792
Idaho2013Background
- Black Rock developed a 659-acre PUD on Lake Coeur d’Alene with CC&Rs granting Declarant rights to Black Rock Development to appoint directors/officers of the HOA.
- The Golf Club at Black Rock, LLC acquired the Club’s real property in 2010 and later the Declarant rights, asserting it could qualify as a Successor Declarant under Section 27.7.
- CC&Rs define Declarant, Successor Declarant, and Expansion Property; Property is defined as real property and Expansion Property must be incorporated into the Project to be “Property.”
- Plaintiffs (lot owners) sued to challenge The Golf Club’s status as Successor Declarant and its exercise of Declarant rights; district court granted summary judgment in favor of The Golf Club.
- Court applied contract-interpretation rules, held the CC&Rs unambiguous, and concluded The Golf Club did not take title to Property for development and sale, so it did not qualify as a Successor Declarant; decision reversed and fees awarded on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does The Golf Club qualify as a Successor Declarant under §27.7? | Golf Club took title to Property for development/sale of Club Property. | Intention to develop/sell memberships suffices to satisfy §27.7. | No; property must be real property taken for development/sale, Expansion Property not qualifying. |
| Does Expansion Property qualify as Property under the CC&Rs? | Expansion Property can be developed/sold as part of the Project. | Expansion Property must be owned and annexed; future expansion cannot satisfy §27.7. | Expansion Property must be incorporated and owned by Declarant to become Property; unresolved Expansion Property cannot satisfy §27.7. |
| Are Appellants entitled to attorney fees on appeal? | Prevailing party entitlement under §24.8 supports fees. | Costs/fees should be controlled as per district court ruling. | Appellants prevailed on appeal; costs and attorney fees awarded on appeal. |
| Scope of protections under contract-interpretation rules? | CC&Rs are ambiguous and should be construed in favor of property use. | CC&Rs unambiguous; terms fixed by plain meaning. | CC&Rs are unambiguous; terms read to refer to real property and restrictive covenants. |
Key Cases Cited
- Pinehaven Planning Bd. v. Brooks, 138 Idaho 826 (Idaho 2003) (contract interpretation; restrictions in derogation of free use of land must be clear)
- Bream v. Benscoter, 139 Idaho 364 (Idaho 2003) (ambiguity review; contract terms interpreted by plain meaning)
- Howard v. Perry, 141 Idaho 139 (Idaho 2005) (ambiguous vs. patent ambiguity; legal standard for contract interpretation)
- Swanson v. Beco Constr. Co., Inc., 145 Idaho 59 (Idaho 2007) (ambiguity in contract terms; surface evaluation of instrument)
- Ward v. Puregro Co., 128 Idaho 366 (Idaho 1996) (face-of-instrument ambiguity standard; land-use restrictions)
- In re Estate of Kirk, 127 Idaho 817 (Idaho 1995) (latent ambiguity arises from application to facts; not on face)
- Idaho Trust Bank v. Christian, 154 Idaho 657 (Idaho 2013) (contract interpretation; party-definitions may differ from ordinary meanings)
- Lovey v. Regence BlueShield of Idaho, 139 Idaho 37 (Idaho 2003) (contract terms must be reasonably subject to conflicting interpretations)