WDIS v. Hi-Country Estates
2022 UT 17
| Utah | 2022Background
- In 1973 Charles Lewton recorded restrictive covenants purporting to create Hi‑Country Estates HOA over ~2,000 acres though he owned only an 8‑acre parcel; other landowners did not sign.
- The covenants were amended in 1980 by HOA board members without written signatures from the affected property owners.
- Multiple landowners later purchased lots within the HOA; in 2015 they discovered the recording defects and sued to quiet title and to avoid the covenants.
- The district court denied the landowners’ motion for summary judgment, applying the two‑factor Ockey/Wittingham test (whether law declares the contract absolutely void and whether it harms the public).
- On interlocutory appeal the Utah Supreme Court held the unsigned restrictive covenants are voidable (ratifiable), not void ab initio, and affirmed denial of summary judgment; remand to determine ratification issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether restrictive covenants recorded without signatures of affected owners are void ab initio | Such covenants violate public policy and thus are absolutely void and incapable of ratification | Presumption that defective contracts are voidable; no clear statutory or caselaw public‑policy rule rendering them absolutely void | Covenants are voidable, not void ab initio; may be ratified |
| Whether the Wrongful Lien Act (WLA) requires declaring the covenants void | WLA treats unauthorized encumbrances as wrongful liens void ab initio when not signed by owner | WLA targets liens; ambiguity whether covenants are the type of encumbrance WLA covers; statutes authorizing similar encumbrances remove them from WLA’s sweep | WLA does not clearly evince a public policy that makes these covenants absolutely void |
| Whether the statute of frauds makes unsigned covenants absolutely void | Statute of frauds requires written/signed instruments for interests in land, so unsigned covenants are void | Statute is primarily evidentiary and contains exceptions (part performance, estoppel, waiver) permitting enforceability in some circumstances | Statute of frauds does not demonstrate a clear public policy rendering these covenants categorically void |
| Whether existing Utah caselaw establishes categorical invalidity of unsigned covenants | Prior cases (e.g., Gunnell) show unsigned covenants invalid and thus support a rule of absolute voidness | Prior decisions invalidated particular covenants but did not announce a broad, clear public‑policy rule; precedents treat many unauthorized property instruments as voidable | Utah caselaw does not clearly declare all unsigned restrictive covenants absolutely void; precedents support voidable treatment |
Key Cases Cited
- Ockey v. Lehmer, 189 P.3d 51 (Utah 2008) (sets framework distinguishing void vs voidable and presumes voidable absent clear public policy)
- Wittingham, LLC v. TNE Ltd. P’ship, 469 P.3d 1035 (Utah 2020) (articulates two‑factor test applying Ockey: statutory/legal declaration and public harm)
- Hutter v. Dig‑It, Inc., 219 P.3d 918 (Utah 2009) (interprets WLA phrase "expressly authorized" and limits WLA’s reach to categories of liens)
- Gunnell v. Hurst Lumber Co., 515 P.2d 1274 (Utah 1973) (invalidated specific unsigned covenants but did not announce a categorical rule)
- WDIS, LLC v. Hi‑Country Ests. Homeowners Ass’n, 449 P.3d 171 (Utah 2019) (prior remand and procedural history concerning validity of HOA encumbrances)