Title: McHuron v. Grand Teton Lodge Co.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

McHuron v. Grand Teton Lodge Co.1995 WY 99899 P.2d 38Case Number: 93-281Decided: 06/28/1995Supreme Court of Wyoming

Gregory I. McHURON and Linda L. McHuron,

Appellants (Defendants),

v.

GRAND TETON LODGE COMPANY, a Wyoming 
corporation,

 Appellee 
(Plaintiff).

 

Appeal 
from District Court, Teton County, Elizabeth A. Kail, 
J.

James K. Lubing, Jackson, for appellants.

Bret F. King of King & 
King, Jackson, for 
appellee.

Before GOLDEN, C.J., and THOMAS, MACY, TAYLOR and 
LEHMAN, JJ.

THOMAS, 
Justice.

[¶1]      The focus of 
concern in this case is a restrictive covenant which required approval by a 
development company of "proposed building plans, specifications, exterior color 
or finish, building materials, plot plan * * *, landscaping plan and 
construction schedule" with respect to lots within the development. More 
precisely, the question is whether Grand Teton Lodge Company (Company), acting 
through an Architectural Review Committee (Committee), unreasonably withheld 
approval of the use of fiberglass shingles by Gregory I. McHuron and Linda L. 
McHuron (McHurons) on the ground their use was "not in keeping with the 
surrounding landscape and natural beauty of the area." Following the filing of 
appropriate materials in support of, and in opposition to, a motion for summary 
judgment presented by the Company, the district court granted a summary judgment 
in favor of the company. We hold the language of the restrictive covenants in 
issue is not ambiguous; there is no genuine issue of material fact; and the 
Company was entitled to summary judgment as a matter of law. We affirm the Order 
Granting Plaintiff's Motion for Summary Judgment.

[¶2]      In their Brief of 
Appellant, the McHurons set forth these issues:

I. Did the District Court err when it held, as a 
matter of law that, the restrictive covenants and the subsequent decisions of 
the Architectural Review Committee establish an enforceable general scheme or 
plan with regard to building materials used by homeowners within the Grand Teton 
Lodge Company subdivision when the Appellant presented evidence that no such 
plan exists?

II. Are the covenants specific enough to allow clear 
interpretation when no plan or scheme is provided for by them and when they 
provide only that the building materials be "in keeping with the natural beauty 
of the surrounding environment?"

III. Did the District Court err when it held, as a 
matter of law, that the Architectural Review Committee had not arbitrarily or 
unreasonably withheld its consent to use high quality asphalt shingles when the 
Appellant presented evidence that it had received no reasoning behind the 
decision, and the Covenants require only that the building material be in 
keeping with the natural beauty of the surrounding landscape and enhance the 
value, desirability, and attractiveness of the homes subject to such 
covenants?

The Company, in its Brief of 
Appellee, does not articulate a separate statement of the issues, however, it 
titles the following arguments in its brief:

I. Standard of Review.

II. The Restrictive Covenants and the decisions of 
the Architectural Review Committee establish a general scheme or design in the 
Jackson Hole Golf and Tennis Club Estates.

III. The Covenants manifest the Declarant's clear 
intention of a general scheme or plan.

IV. The decision of the Architectural Design 
Committee in not allowing the Appellants to use asphalt shingles was 
reasonable.

V. The Affidavit of Greg McHuron is based in part on 
hearsay and lacks foundation and the letter of Jim Cress was not authenticated, 
therefore should not be considered in the Appellants' 
Arguments.

[¶3]      In May of 1975, 
the McHurons purchased a lot in a subdivision in Teton County called the Jackson 
Hole Golf and Tennis Club Estates - Second Filing. Their warranty deed stated 
their lot was subject to the covenants, conditions, and restrictions set forth 
in an instrument recorded by the Company on May 24, 1973. The document referred 
to is entitled "Declaration of Protective Covenants Jackson Hole Golf and Tennis 
Club Estates - Second Filing." The covenants are comprehensive in nature and, 
with respect to the issues in this case, they provide:

2. APPROVAL OF PLANS. No building, fence or other 
structure shall be erected, placed or altered on any lot * * * until the 
proposed building plans, specifications, exterior color or finish, building materials, plot plan * * *, 
landscaping plan and construction schedule shall have been approved in writing 
by Grand Teton Lodge Company * * *, its successors or assigns. Approval of 
plans, location and specifications may not be unreasonably withheld by Company, 
but refusal may be based by the company upon particularly the ground that the 
exterior is not in keeping with the surrounding landscape and natural beauty of 
the area. (Emphasis added.)

*           
*           
*           
*           
*           
*

24. VARIANCES. The Company may allow reasonable 
variances and adjustments of the within conditions and restrictions in order to 
overcome practical difficulties, and prevent unnecessary hardships in the 
application of regulations contained herein, provided this may be done in 
conformity with the intent and purposes hereof and also provided in every 
instance that such variance or adjustment will not be materially detrimental or 
injurious to other property or improvements in the 
neighborhood.

The Company established the 
Committee for the purpose of enforcing the covenants. 

[¶4]      Almost fifteen 
years after they acquired their lot, the McHurons sought approval by the 
Committee of the building plans for a home to be constructed on their lot. After 
examining the proposed plans, the Committee sent a letter to the McHurons in 
which the plans as submitted were not approved. The Committee stated in its 
letter that the plans could not be approved until the McHurons submitted, among 
other items, a drawing showing the total height of the house to be no more than 
eighteen feet, and a letter requesting a variance for the roofing materials. 
That letter advised the McHurons they would have to present a sample of their 
proposed roofing materials to the Committee.

[¶5]      The McHurons 
responded to these requests in a letter in which they formally requested a 
"variance for the section of our proposed house that goes to 19 feet, as you 
have done for others in the past." The McHurons also asked permission from the 
Committee to install the fiberglass shingles after explaining their reasons for 
using them. The Committee granted the request of the McHurons for a variance on 
the height of the building, but denied the request for use of fiberglass 
shingles. The McHurons were advised they should "plan to use the standard cedar 
shakes used by all your neighbors when building your 
home."

[¶6]      Despite the 
disapproval by the Committee of the roofing material, the McHurons installed the 
fiberglass shingles on their home. The Committee demanded the McHurons stop 
installing those fiberglass shingles, and the demand letter specifically stated 
the Committee intended to "enforce our right to determine the architectural 
materials installed on all buildings on the Estates." The Committee did permit 
the McHurons to complete the roof with fiberglass shingles to prevent water 
damage to the home and, in a subsequent letter, the Committee agreed it would 
permit the fiberglass shingles to remain on the home if eighty percent of the 
homeowners in the subdivision, in a straw poll, agreed to the use of the 
fiberglass shingles. The results of the poll were not favorable to the 
McHurons.

[¶7]      The Company then 
brought this action seeking enforcement of the covenants by a mandatory 
injunction. The Company filed a Motion for Summary Judgment, and discovery 
materials, consisting primarily of affidavits, were presented in support of, and 
in opposition to, that motion.

[¶8]      The trial court 
held a hearing with respect to the Motion for Summary Judgment. At that hearing, 
the court sagaciously and prophetically remarked:

The fact is, of course, that this Court is not going 
to get itself in the position where it is determining whether a particular home 
and materials used in the home, the landscaping or any other feature, is in 
keeping with the natural beauty of the area, nor fitting with the general scheme 
of the developers in the subdivision.

If that were to happen, I can see great disaster, if 
the Court substitutes its judgment for that of the committee that was appointed 
to represent all of the homeowners and to represent the 
developer.

The real issue here is whether or not the decision of 
the committee was unreasonable, the denial of Mr. McHuron's application for a 
so-called variance was unreasonable. That's the only issue that this Court needs 
to determine either today or in a subsequent trial.

Now, what am I going to hear? What evidence 
concerning whether or not that denial was unreasonable? What am I going to hear 
differently at trial than what I read by the affidavits that are on 
file?

The court then entered its 
Order Granting Plaintiff's Motion for Summary Judgment requiring the McHurons to 
remove their fiberglass shingles and replace them with cedar shakes or a gravel 
roof. This appeal is taken from that order.

[¶9]      We agree with the 
trial court that the critical issue in this case is whether the decision of the 
Committee to disapprove the use of fiberglass shingles on the McHurons' home was 
unreasonable. The covenants in this case are contractual in nature and are to be 
interpreted in accordance with the principles of contract law. Kindler v. 
Anderson, 433 P.2d 268 (Wyo. 1967). Aesthetic covenants such as these have been 
found to be enforceable by a majority of the courts if their purpose and intent 
can be ascertained. E.g., Rhue v. Cheyenne Homes, Inc., 168 Colo. 6, 449 P.2d 361 (1969); Palmetto Dunes Resort, Div. of Greenwood Dev. Corp. v. Brown, 287 
S.C. 1, 336 S.E.2d 15 (1985).

[¶10]   We said in Bowers Welding and 
Hotshot, Inc. v. Bromley, 699 P.2d 299, 303 (Wyo. 1985) (citing Dawson v. Meike, 
508 P.2d 15 (Wyo. 1973)):

A 
common way in which to uphold restrictive covenants is to find a general plan or 
scheme for the development of a tract of land. To determine this, we must look 
to the restrictive covenants and construe them to effectuate the intent of the 
parties.

The purpose and intent of 
the covenants at issue are gleaned from the first page of the covenants where 
this language is found:

WHEREAS, the property is unusually attractive and 
valuable as a place of residence because of the surrounding landscape, and 
Declarant [the Company] executing this Declaration intends to offer said 
property for sale and desires to establish and impose a general plan for the 
improvement, development, use and occupancy of said property and each and every 
part thereof; all of which shall be binding on and inure to the benefit of the 
owners and future owners of said property in order to enhance the value, 
desirability, attractiveness, and to be in keeping with the surrounding area of 
Grand Teton National Park, as well as to subserve and promote the sale of said 
property: * * *.

[¶11]   Summary judgment is appropriate 
with respect to contract cases in the absence of any ambiguity because the 
construction of the contract is a question of law. See Colorado Interstate Gas 
Co. v. Natural Gas Pipeline Co. of Am., 842 P.2d 1067 (Wyo. 1992). If no 
ambiguity is discernible from a reading of the covenants, the clear meaning is 
to be gleaned only from the language of the covenants, although the court may 
look to the situation of the parties, the subject matter, and the purpose to be 
served. Jackson Hole Racquet Club Resort v. Teton Pines Ltd. Partnership, 839 P.2d 951 (Wyo. 1992). In this instance, the Declaration of Protective Covenants 
Jackson Hole Golf and Tennis Club Estates - Second Filing manifests an intent to 
establish a general scheme for the subdivision and a purpose of preserving 
aesthetics and property values. That scheme and purpose were to be maintained by 
the creation of the Committee, which was charged with making reasonable 
pre-approval decisions concerning all aspects of proposed construction in the 
subdivision. The Committee could disapprove a planned residence on the ground 
that it is "not in keeping with the surrounding landscape and natural beauty of 
the area."

[¶12]   The McHurons contend the quoted 
phrase manifests ambiguity because it furnishes no notice that roofing materials 
in the subdivision are limited to "natural materials," namely gravel or wood 
shingles. They also argue there is no specific requirement in the covenants 
prescribing any particular type of roofing material. The same argument could be 
advanced with respect to other aspects of construction 
materials.

[¶13]   The McHurons had notice of the 
existence of a general scheme as to approved roofing materials. In the 
subdivision, it was apparent only wood shake and gravel roofs had been 
installed. There is no evidence any roofs in the subdivision have ever been 
constructed with material other than the wooden shakes or gravel. The absence of 
any other roofing materials suffices to demonstrate the Company had construed 
the covenants in a way demonstrating a purpose and intent to limit subdivision 
roofs to natural materials in keeping with the surrounding area of Grand Teton 
National Park. The McHurons produced no evidence to contradict the existence of 
such a scheme and plan with respect to this subdivision.

[¶14]   The covenants are unequivocal in 
their requirement that any conceivable 
structure must be approved in writing by the Committee. The McHurons not 
only had actual notice this provision was incorporated in the covenants, but the 
covenants were imposed in such a way that they would run with the land and be 
enforceable against any owner. The McHurons' actual knowledge is manifested by 
their seeking permission from the Committee to use fiberglass shingles when they 
were told to submit a request for a variance. The McHurons concluded they were 
not bound by the Committee's decision after they requested a variance, and the 
variance was denied. The inconsistency of the McHurons' approach is demonstrated 
by the fact they were granted, and took advantage of, a variance with respect to 
the height of their building.

[¶15]   Having concluded the covenants are 
enforceable according to their terms, we must address whether the actions of the 
Committee were reasonable. The covenants provide the Committee must act 
"reasonably." In analyzing the claimed issue of material fact with respect to 
reasonableness, we follow the approach articulated in McKenney v. Pac. First 
Fed. Sav. Bank of Tacoma, Washington, 887 P.2d 927 (Wyo. 1994). That analysis 
leads to the conclusion that the decision of the district court finding the 
action of the Committee was reasonable is supported by this record. The Company 
produced affidavits explaining the intent underlying the adoption of the 
covenants; the historical application of the covenants; and the dialogue with 
the McHurons. Responding to that showing, the McHurons produced information as 
to the general desirability of fiberglass shingles; asserted the possible 
violation of the Uniform Building Code based upon the pitch of the roof provided 
in their plans in relationship to other materials; and stated their opinion that 
the fiberglass shingles were aesthetically appropriate.

[¶16]   The record is silent as to the 
applicability of the Uniform Building Code to the subdivision. If it were 
applicable, it was not disputed at the hearing on summary judgment that the 
approved roofing materials would violate code. The covenants, however, make it 
clear the company assumes no responsibility for compliance with building codes. 
It was the responsibility of the McHurons to submit plans that would conform to 
any applicable building codes and still receive the approval of the Committee as 
to the materials.

[¶17]   The record is clear that, far from 
allowing a broad spectrum of roofing materials, the Committee had limited roofs 
in the subdivision to gravel or wooden shakes. Since the Committee in the past 
had limited other roofs in the subdivision to either gravel or wood shakes, its 
decision not to permit fiberglass was in keeping with that precedent and, 
therefore, "reasonable." In effect, the offer of a straw ballot to justify a 
variance serves only as additional evidence of the attempt of the Company to 
proceed in a reasonable fashion with respect to the McHurons' building 
plans.

[¶18]   We find no merit in the McHurons' 
contention that the Company is not permitted to insist on the utilization of 
certain materials. The simple fact that fiberglass shingles are generally 
suitable and desirable for construction does not pose a genuine issue with 
respect to aesthetic propriety. The McHurons' opinion concerning the aesthetic 
aspects of the fiberglass shingles is of questionable admissibility at trial 
but, in any event, a disagreement between the McHurons and the Committee does 
not manifest a genuine issue of material fact as to the enforceability of the 
covenants. The discretion with respect to that determination clearly was vested 
in the Committee.

[¶19]   A contrary holding in this case 
would place the judicial branch of government in an untenable position. In each 
instance, a court would be required to determine the application of an aesthetic 
standard even though the application of that standard was clearly reserved to a 
developer according to the validly-adopted covenants. It is not the prerogative 
of this court or that of the district court to determine whether certain 
materials, such as fiberglass shingles are "in keeping with the surrounding 
landscape and natural beauty of the area." That determination clearly is vested 
in the Committee by virtue of the language of the covenants imposed by the 
Company. We are limited to addressing the reasonableness of the action of the 
Committee, and we find no issue of fact as to reasonableness in this 
case.

[¶20]   We are satisfied the district court 
correctly resolved this case. The Order Granting Plaintiffs' Motion for Summary 
Judgment is affirmed.

GOLDEN, 
C.J., files a dissenting opinion in which MACY, J., joins. 

GOLDEN, 
Chief Justice, dissenting, with whom MACY, Justice, 
joins.

[¶21]   I respectfully dissent. The 
majority approves the committee's argument that its discretion is unlimited, its 
decision is final without articulated reason to a lot owner, and a lot owner is 
precluded from any legal recourse for an arbitrary decision. Aesthetic covenants 
are generally upheld, however, under a rule which offers dual protection to both 
parties. By resolving the reasonability issue as a question of law, the majority 
opinion fails to afford due process protection to a lot owner, a process other 
jurisdictions do find legally tenable.

[¶22]   Courts uphold aesthetic covenants 
as enforceable guarantees to a purchaser of a subdivision lot that his house 
will be protected against adjacent construction which will impair its value and 
that a general plan of construction will be followed. Rhue v. Cheyenne Homes, 
Inc., 168 Colo. 6, 449 P.2d 361, 362 (1969). Committee approval is an accepted 
method of accomplishing and maintaining guarantees of value and general plan. 
The corollary to enforceability of a covenant requiring committee approval is 
protection and due process of law to a lot owner, namely, that a committee's 
refusal to approve plans must be reasonable and made in good faith and must not 
be arbitrary or capricious. Rhue, 449 P.2d  at 363.

[¶23]   Whether a particular aesthetic 
covenant is valid and enforceable is a question of law, but better reasoned 
cases consider the question whether the committee was reasonable or arbitrary in 
exercising its power of refusal a factual question to be considered in light of 
the circumstances. Trieweiler v. Spicher, 254 Mont. 321, 838 P.2d 382, 385 
(1992) (collecting cases). Such approval may not be unreasonably withheld 
without legal recourse on the part of the party subject to the restriction. See 
La Vielle v. Seay, 412 S.W.2d 587, 592-93 (Ky. 1966).

[¶24]   The McHurons are contending, first, 
that the restriction is invalid and, second, that consent has been unreasonably 
withheld. Their first contention, that the aesthetic covenant was so vague as to 
deny due process, is properly resolved against them and found valid. The clear 
purpose and intent of the aesthetic covenant was to establish a general scheme 
and then empower a committee to preserve the subdivision against homes 
inharmonious with the surroundings to such an extent that property value is 
diminished or the general plan is violated.

[¶25]   The specifics of the McHurons' 
second contention are the committee is unreasonably rejecting a material 
(fiberglass shingle) without proof of diminished property value or a disturbed 
general plan. Generally, a refusal can be proved to be reasonable by a showing 
the building plans or materials will diminish the value of the subdivision, or 
so conflict with the architecture of other nearby homes that it causes damages 
to the property value of those homes, or is specifically prohibited by the 
covenants or the committee's own lists. See LeBlanc v. Webster, 483 S.W.2d 647, 
650 (Mo. App. 1972); Syrian Antiochian Orthodox Archdiocese v. Palisades 
Associates, 110 N.J. Super. 34, 264 A.2d 257, 262 (1970). McHurons contend none 
of these harms are present and the committee's refusal unreasonably denies them 
the use of an attractive, quality, harmonious material safer and more suitable 
to the surroundings.

[¶26]   A proper ruling by the majority 
would state the McHurons are entitled to legal recourse when material questions 
of fact exist on the issue of unreasonably withheld approval. Other 
jurisdictions require that a committee's power of refusal be exercised 
objectively, honestly and reasonably and the committee's whims or aesthetic 
tastes are not subjectively imposed on lot owners. Trieweiler, 838 P.2d  at 386. 
Under this standard, a committee's refusal of a roofing material which does not 
diminish the value and general plan of the subdivision; which does not violate a 
specific restriction either of the covenants or the committee's lists; and which 
is not in conflict with the other homes so that it creates damages would be 
unreasonable.

[¶27]   McHurons presented summary judgment 
materials demonstrating material questions of fact exist concerning the issue of 
reasonableness and, in opposition, the committee only claimed that the roofing 
material is aesthetically unattractive because it is synthetic. With the barest 
of assertions, the committee declared that property values would be harmed. 
Applying the standard articulated above, at trial the committee may very well 
prevail but only after proving that the variation would be unsightly, causing 
diminished values, or inharmonious to the extent that the general plan was 
disturbed. It is difficult to believe that the McHurons would not be able to 
counter that a fiberglass shingle designed as a cedar shake look-alike does not 
disturb the general plan, is not unsightly, and actually enhances property 
values because it is safer, fire resistant and, therefore, more suitable to a 
wooded area. Regardless, due process requires they be afforded a proper 
opportunity to present evidence of the roofing material's harmony and 
suitability with the surroundings. The committee's discretion is not unlimited 
and the reasonableness of their decision is a material question of fact which 
should be tried.

[¶28]   I would reverse and remand for a 
trial on the issue of reasonableness.