Title: HAMMONS v. TABLE MOUNTAIN RANCHES OWNERS ASSOCIATION, INC.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

HAMMONS v. TABLE MOUNTAIN RANCHES OWNERS ASSOCIATION, INC.2003 WY 8572 P.3d 1153Case Number: 01-151Decided: 07/15/2003
APRIL 
TERM, A.D. 2003

 

                                                                                                            

 

JOSEPH 
R. HAMMONS and

DARLENE 
S. HAMMONS,

 

Appellants(Plaintiffs) 
,

 

v.

 

TABLE 
MOUNTAIN RANCHES OWNERS

ASSOCIATION,  INC., a Wyoming 
corporation,

 

Appellee(Defendant) 
.

 

Appeal 
from the District Court of Laramie County

The 
Honorable Nicholas G. Kalokathis, Judge

 

Representing 
Appellants:

Alexander 
K. Davison and Wendy J. Curtis of Patton & Davison, Cheyenne, Wyoming.  Argument by Mr. 
Davison.

 

Representing 
Appellee:

Julie 
Nye Tiedeken of Tiedeken Law Offices, Cheyenne, Wyoming.

 

Before 
HILL, C.J., and LEHMAN*, KITE, and VOIGT, JJ., and KAUTZ, 
D.J.

 

*Chief 
Justice at time of oral argument.

 

 

            
KAUTZ, District Judge.

 

[¶1]      This case 
considers whether an "Architectural Control Committee" properly denied 
Appellants', Joseph R. Hammons and Darlene S. Hammons (the Hammons), application 
to place a modular home in Table Mountain Ranches, a subdivision in Laramie 
County.  The district court 
determined that covenants, which specifically excluded modulars in Table 
Mountain Ranches, were invalidly adopted.  
However, it found that prior covenants, still in effect, authorized 
rejection of the Hammons' plans on "aesthetic" grounds.  The district court also found that the 
Architectural Control Committee acted reasonably in denying the 
plans.

 

[¶2]      We conclude that 
the district court properly applied the law and that sufficient evidence 
supports its findings and conclusions.  
We affirm the trial court's declaratory judgment.

 

[¶3]      The Hammons list 
these issues:

1.  Did 
the District Court properly apply Wyoming Law of Aesthetic Covenants when 
determining that the decision of the Board of Table Mountain Ranches was 
reasonable?

 

2.  Is 
the District Court's reliance upon the testimony of the architectural control 
committee clearly erroneous considering its order invalidating the 1998 
covenants?

 

The 
Appellee, Table Mountain Ranches Owners Association, Inc. (TMROA) rephrases the 
issues as follows:

 

Issue 
1  Did 
the Trial Court properly hold that the original purpose of the covenants can 
still be accomplished and thus the covenants have not been 
abandoned?

 

Issue 
2  Did 
the Trial Court properly hold that the actions of the Architectural Control 
Committee in disapproving the Hammons' proposed home was reasonable and made in 
good faith?

 

Issue 
3 a)  Since 
the membership of the Architectural Control Committee was not raised in front of 
the Trial Court, should it be considered by the Supreme Court on 
appeal?

 

b)  Did 
the Trial Court properly hold that the decision of the Architectural Control 
Committee would have been the same under the 1973 version of the covenants and 
should stand even though the 1998 covenants were found to be 
invalid?

 

[¶4]      Table Mountain 
Ranches is a subdivision in Laramie County.  In 1973 its developers filed a 
declaration of protective covenants.  
They made minor adjustments to those covenants in 1974 and 1977.  (The 1973 covenants with the 1974 and 
1977 amendments are referred to herein as the 1977 covenants).  The 1977 covenants created an 
Architectural Control Committee (A.C.C.), whose declared purpose 
was

 

[t]o 
assure, through intelligent architectural control of building design, placement 
and construction, that Table Mountain Ranches shall become and remain an 
attractive community, and to uphold and enhance property 
values.

 

The 
A.C.C. consisted of three members.  
The subdivider appointed one member, and owners of complete dwellings in 
the subdivision selected the other two.  
After 90% of the tracts in the subdivision were sold, the "homeowners 
group" selected all three A.C.C. members.  
Initially, a three-member A.C.C. functioned.  At some point, however, the Homeowner's 
Association Board assumed the role of the A.C.C.

 

[¶5]      The covenants 
required that lot owners submit their plans and obtain written approval from the 
A.C.C. before they build.  The 
A.C.C. had broad latitude in deciding what plans to approve or disapprove under 
the 1977 covenants.  Those covenants 
stated, "[d]isapproval of plans and specifications may be based on any grounds 
including purely aesthetic grounds."

 

[¶6]      Initially, the 
A.C.C. excluded prefabricated buildings except for "Boise Cascade Homes."  The evidence established that Boise 
Cascades more resembled stick-built homes than prefabricated homes.  Through 1993 the A.C.C. excluded modular 
homes.  From 1994 to 1996 the A.C.C. 
napped rather than enforced the covenants of the subdivision and permitted 
prefabricated homes by failing to consider or respond to applications.  After this lapse, the subdivision 
contained 107 undeveloped lots, 57 stick-built homes, and 11 prefabricated 
homes.  In 1996, a more vigilant 
A.C.C. assumed the helm.  Since 
then, it has consistently disapproved prefab homes with rectangular low-pitched 
roofs.  It took legal action and 
forced the removal of a "double-wide" or modular prefabricated 
home.

 

[¶7]      In 1998, the 
TMROA attempted to amend the covenants of the subdivision.  For purposes of this case, the 1998 
covenants contained two significant changes.  First, they gave the TMROA board the 
role of the A.C.C.  This change 
reflected the practice that had been followed for some time.  Second, the 1998 covenants added this 
language: "No mobile, manufactured, modular or site built homes resembling basic 
rectangular low pitch roof double wide manufactured or modular homes will be 
authorized."

 

[¶8]      The Hammons 
bought two lots in the Table Mountain subdivision in 1995.  On May 3, 1999, they sought approval for 
a prefabricated home.  The A.C.C. 
denied approval twice, once after some members viewed a sample home, citing 
aesthetic grounds.  Thereafter, the 
Hammons filed this case.  Their 
complaint alleged that the 1998 amendments to the covenants were invalid, and 
that their plans would have been approved under the 1977 
covenants.

 

 

[¶9]      The Hammons sued 
for declaratory judgment.  They 
sought (1) a declaration that the 1998 covenants were invalid, (2) a declaration 
that they were entitled to have their home plans approved, irrespective of which 
covenants governed, and (3) damages.  
The trial court invalidated the 1998 covenants, held that the 1977 
covenants had not been abandoned, and held that under them, the A.C.C. acted 
reasonably and within their authority in denying the Hammons' 
plans.

 

[¶10]   Inspired by the trial court's 
invalidation of the 1998 covenants, the Hammons asked the trial court to amend 
its Findings and Conclusions.  They 
argued that because it invalidated the 1998 covenants, the court should also 
have disregarded the testimony of the Board as to whether the Hammons' home 
would have been disapproved under the older covenants.  The Hammons asserted that because the 
1977 covenants provided a different A.C.C. membership than the 1998 covenants, 
the TMROA could not speak as the A.C.C. under the older covenants.  Several TMROA board members testified 
that they would not approve the Hammons' plans under either set of 
covenants.

 

[¶11]   TMROA submitted a judgment under 
W.R.C.P. 58, to which the Hammons filed an objection, restating the grounds from 
their motion to amend.  The trial 
court considered the motions on March 1, 2001, and entered the declaratory 
judgment without the Hammons' proposed amendments.  The Hammons then filed both a Rule 50(b) 
motion and a motion nominally based on Rules 59(a)(6) and (e).  However, in a strange turn, they 
withdrew those motions and timely filed this appeal.

 

 

[¶12]   The district court's decisions as 
to whether the covenants were abandoned, and whether the board acted reasonably, 
combine questions of law and fact.  
Questions of law are reviewed de novo.   Stansbury v. Heiduck, 961 P.2d 977, 978 (Wyo. 1998).  A 
district court's findings of fact will be upheld unless the findings are clearly 
erroneous.  Mathis v. 
Wendling, 962 P.2d 160, 163 (Wyo. 1998).  A finding is clearly erroneous when, 
"although there is evidence to support it, the reviewing court on the entire 
evidence is left with the definite and firm conviction that a mistake has been 
committed."  Springer v. Blue 
Cross and Blue Shield of Wyoming, 944 P.2d 1173, 1176 (Wyo. 1997) (citing 
Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 538 (Wyo. 
1993)).

 

 

Were 
the Covenants Governing the Table Mountain Ranches Subdivision 
Abandoned?

 

[¶13]   The Hammons claim that TMROA lost 
the right to enforce, or abandoned, the "aesthetic" provision in the 1977 
covenants because other prefabricated homes were built in the 
subdivision.

 

[¶14]   A protective covenant is abandoned 
by failure to enforce that covenant when the covenant is violated, the 
violations are ignored or acquiesced to, and the violations 
are

 

 
so great, or so fundamental or radical as to neutralize the benefits of the 
restriction to the point of defeating the purpose of the covenant. In other 
words, the violations must be so substantial as to support a finding that the 
usefulness of the covenant has been destroyed, or that the covenant has become 
valueless and onerous to the property owners.

 

Keller 
v. Branton, 
667 P.2d 650, 654 (Wyo. 1983) (citing Riley v. Stoves, 22 Ariz. App. 223, 
526 P.2d 747, 68 A.L.R. Fed. 1229 (1974)).  
The trial court properly utilized the standard from Keller in 
deciding the abandonment issue.

 

[¶15]   The purpose and benefit of the 
"aesthetic" provision in the 1977 covenants is specified in the covenants 
themselves.  The covenants 
specifically state that their intent is to "protect and enhance the value, 
desirability and attractiveness" of the subdivision.

 

[¶16]   The record contains considerable 
evidence indicating that the purpose of protecting and enhancing the value of 
property in the subdivision by excluding certain prefabricated homes remains 
viable.  Although 11 prefabricated 
homes now exist there, there are 57 stick-built homes and the balance of the 217 
lots are undeveloped.  The evidence 
indicated that the manner in which those remaining lots are developed could have 
a significant impact on the value of the existing homes.  The trial court recognized this evidence 
and held that the "aesthetic" covenant was not abandoned.  We find that this decision is supported 
by evidence and not "clearly erroneous."

 

Should 
this Court Consider Membership of the A.C.C. When that Issue Was Not Presented 
to the Trial Court Until After the Trial Court's 
Decision?

 

[¶17]   This Court will ordinarily 
entertain only arguments raised in the court below.  Cooper v. Town of Pinedale, 1 P.3d 1197, 1208 (Wyo. 2000).  
Exceptions to this rule exist if the argument is jurisdictional, or if it 
is "of such a fundamental nature that it must be considered."  Id. (citing WW Enterprises v. 
City of Cheyenne, 956 P.2d 353, 356 (Wyo. 1998) and Bredthauer v. 
TSP, 864 P.2d 442, 447 (Wyo. 1993)).

 

[¶18]   The Hammons did not allege in their 
complaint that the selection of A.C.C. members under the 1977 covenants was 
invalid.  They did not assert that 
if the 1998 covenants were improperly adopted, the court should order a 
different committee to review the Hammons' plans.  The Hammons did not present this issue 
to the trial court, and the trial court did not consider it.  They asked only for a declaration that 
their plans should be approved under the 1973 covenants.

 

[¶19]   The issue about composition of the 
A.C.C. is not jurisdictional.  It is 
not so "fundamental" that it must be considered.  The Hammons did not raise this issue 
until after the trial court decided the case.  This Court will not consider the issue 
now.

 

[¶20]   The Hammons imply that it is 
logically impossible for the trial court to invalidate the 1998 covenants, but 
then to consider testimony from the A.C.C. formed under the 1998 covenants.  That testimony indicated that the 1998 
A.C.C. would not approve the Hammons' plans even under the 1977 covenants.  The evidence established, however, that 
the composition of the A.C.C. under the 1998 covenants was the same as had been 
put in practice before the 1998 amendments.  The Hammons did not assert that the 
A.C.C. membership was invalid before the 1998 amendments, and we will not 
consider that issue now.

 

[¶21]   After the trial court issued its 
decision, the Hammons attempted to raise their questions about the A.C.C. 
membership through motions.  Then 
they withdrew their motions.1  Those motions did not timely raise an 
issue that should have been presented before trial.  A motion to alter or amend "cannot be 
used to raise arguments which could, and should, have been made before judgment 
issued."  Beyah v. Murphy, 
825 F. Supp. 213, 214 (E.D. Wis. 1993); F.D.I.C. v. World University Inc., 
978 F.2d 10, 16 (1st Cir. 1992).  Further, Appellants withdrew the 
motions.  A motion withdrawn leaves 
the record as it stood prior to the filing of the motion, i.e., as though 
it had not been made.  In re 
Stoute, 458 N.Y.S.2d 640, 641 (N.Y. App. Div. 1983); People v. 
Steinhoff, 195 N.W.2d 780, 781 (Mich. Ct. App. 1972); 56 Am.Jur. 2d 
Motions, Rules, and Orders § 32 (2000).

 

Did 
the Trial Court Properly Hold that the Actions of the Architectural Control 
Committee in Disapproving the Hammons' Proposed Home was Reasonable and Made In 
Good Faith?

 

[¶22]   Covenants "are contractual in 
nature and are to be interpreted in accordance with the principles of contract 
law."  McHuron v. Grand Teton 
Lodge Company, 899 P.2d 38, 40 (Wyo. 1995) (citing Kindler v. 
Anderson, 433 P.2d 268 (Wyo. 1967)).  
The district court invalidated the 1998 covenants because of procedural 
defects in the amendment process.  
Neither side appealed that ruling.  
Consequently, the prior covenants remained effective.  They said:

 

Authority:  No 
structure, including walls and fences shall be erected, 
converted, placed, added to or altered on any lot until the 
construction plans, specification (to include samples of exterior 
materials and colors to be used) and a plan showing the location of the 
structure have been approved in writing by the Architectural Control 
Committee.  Consideration 
will be given to quality of workmanship and materials, harmony of external 
design with existing structure, location with respect to other structures 
(actual and planned), topography and to finished grade elevation.  Disapproval of plans and 
specifications may be based on any grounds including purely aesthetic 
grounds.  Structural color 
schemes will be compatible with the natural environment of the subdivision.  Natural or earth colors will be 
required.  [Emphasis 
added.]

 

[¶23]   "Aesthetic grounds," should not be 
a carte blanche for arbitrary use of power by a homeowners' 
association.   By that same 
token, courts should not be arbiters of taste.  The majority approach in other states 
requires decisions under a consent-to-build covenant to be reasonable, e.g., 
Riss v. Angel, 934 P.2d 669, 678 (Wash. 1997); Trieweiler v. Spicher, 
838 P.2d 382, 385 (Mont. 1992) (citing nine cases from eight states); see 
also McHuron, 899 P.2d  at 43-44 (Golden, C.J., dissenting) (discussing the 
reasonableness approach).  We adopt 
the requirement of reasonableness, even if the covenants do not specifically 
impose such a requirement.

 

[¶24]   The trial court properly reviewed 
the A.C.C.'s denial of the Hammons' plans to determine if that decision was 
reasonably made.  The trial court's 
finding of reasonableness was a finding of fact.  Trieweiler, 838 P.2d  at 385.  That finding of fact will be upheld 
unless it is clearly erroneous.  
Mathis, 962 P.2d  at 163.   Such error is absent 
here.

 

[¶25]   The district court found that, 
"[t]he decision of the A.C.C. was not based upon caprice, but was a good faith 
attempt to carry out the original intent of the developers of the 
subdivision."  The court then went 
on to discuss the incompatibility between the Hammons' proposed prefabricated 
home and the character of the subdivision.  
There was evidence directly supporting the trial court's finding.  A vast majority of the other homes in 
the subdivision were not modulars.  
Witnesses established that additional modulars would negatively impact 
the value of existing homes and would change the nature of the subdivision.  The A.C.C. did not single out the 
Hammons for rejection, but consistently denied applications to erect modular 
homes.  This Court will not 
substitute its judgment on the value of this evidence for that of the A.C.C. or 
the trial court.  The trial court's 
finding of reasonableness was not clearly erroneous.  We affirm the trial court's finding that 
the A.C.C. acted reasonably.

 

[¶26]   The Hammons argue that the district 
court improperly employed a test that balanced their interests against TMROA's 
interests when it determined reasonableness.  Although the district court's decision 
letter stated that "their (Hammons') plight  must be  weighed 
against the aspirations of the homeowners..." and found in favor of TMROA 
"after weighing the factors," it did not employ a balancing of 
interests test.  The "weighing" 
language does not demonstrate a balancing test, but only shows the trial court's 
serious consideration of the positions taken by each side.  The district court's decision letter 
properly addresses the legal standard for enforceability of an aesthetic 
covenant.  It discusses evidence 
that supports reasonableness in the A.C.C.'s decision.

 

 

[¶27]   Sufficient evidence supports the 
trial court's findings that the aesthetic covenant was not abandoned, and that 
the A.C.C. of TMROA acted reasonably when it denied the Hammons' application to 
install a modular home.  The Hammons 
did not claim that the A.C.C. membership was improper in the trial court, and 
this Court will not consider that new issue now.  The judgment of the district court is 
affirmed.

FOOTNOTES

1The 
withdrawal of the Hammons' post-trial motions is not a direct issue in this 
case.  We note, however, that the 
Hammons incorrectly believed they could not appeal while a motion was 
pending.  The Hammons relied on 
Rutledge v. Vonfeldt, 564 P.2d 350 (Wyo. 1977) for this belief.  We decided Rutledge before 
adopting the Wyoming Rules of Appellate Procedure.  WRAP 2.04 solves the Hammons' concerns 
under Rutledge by preserving the effect of a premature notice of 
appeal.