DA 06
- 0414 

### IN THE SUPREME COURT OF THE STATE OF MONTANA 2007 MT 265
DENNIS MICKLON, Plaintiff and Appellant,
v. ARTHUR DUDLEY and LYNN C. DUDLEY,

Defendantsand Appellees.

APPEAL FROM: Di strict Court of the Nineteenth Judicial District,

In and For the County

of Linco ln, Cause No. DV

- 20 05
- 85 Honorable Michael C. Prezeau, Presiding Judge
COUNSEL OF RECORD:

For Appellant: William A. Douglas , Douglas Law Firm, Libby, M ontana For Appelle e s : James D. Reintsma , Reintsma Law Firm, Libby, M ontana
Submitted on Briefs: May 9, 2007 Decided: October 22, 2007 Filed:

__________________________________________ Clerk October 22 20072

Justice James C. Nelson delivered the Opinion of the Court. ¶1 Dennis Micklon appeals from the decision of the District Court for the Nineteenth Judicial District, LincolnC ounty , holding that Arthur and Lynn C. Dudleys’ 3,000
- square - foot shopdid not violate a restrictive covenant limiting lot usew ithin the parties’ sub divisionto residential use . W e reverse . ¶2 We restate the issueon appeal as follows: Did the District Court err in concluding that the shopo n the Dudleys’ lot did not violate the sub division’s restrictive covenant mandating that “[ n ] o lot shall be used f or any purpose except residential use ” ? FACTUAL AND PROCEDURAL BACKGROUND ¶3 The Lincoln We st Subdivision (the subdivision) is a 10
- lot subdivision located in Lincoln County, Montana , n ear the town of Libby. O n October 20, 1983 , the subdivision ’sdevelopers (William L. Anderson, Karen M. Anderson, and Fred D. Wolff) filed thesubdivision’s Declarations of Conditions, Covenants and Restrictions (restrictive covenants) with the Lincoln County Clerk and Recorder. M ost relevant to this appeal is p aragraph 6 of the restrictive covenants, which states : “ No lot shall be used for any purpose except residential use .” ¶4 In 1994, Micklon purch ased Lot 6 of the subdivision. The Dudleys purchased Lots 3 and 4 in 2004. Lot 3 was a vacant field at the time. S ituated on Lo t 4 w as a 2,000
- square - foot, three

- bedroom, two

- bathroom house, with an attached two

- car garage . After purchasing Lots 3 and 4, the Dudleys constructed what the District Court termed “a
mammoth shop” on Lot 3. The court described the shop, which is the o nly structure on Lot 3, as follows:3

The shop is 50’ x 60’ feet, or 3,000 square feet, not counting a loft which adds approximately another 840 square feet of interior space. The shop is sided with steel and is windowless. Inside the building is located a3 6’ x 60’ garage, a 14’ x 20’ office/TV room, a 10’ x 14’ bathroom, a 14’ x 20’ wood shop/parts room. The garage area is accessed from the outside by two 14’ tall garage doors. O ne bay of the garage has a “walk under pit” to allow servicing a motor homef rom underneath, and the other bay has a hydraulic lift , which allows smaller ve hicles to be hoisted into the air for servicing. The loft houses a “gun room,” where Mr. Dudley loads ammunition and stores guns. The court noted that “there is a fairly ste ady flow of traffic from friends dropping by the shop to visit and occasionally to have Mr. Dudley assist them in working on their vehicles.” The court also noted that the area around the shop is landscaped with trees, shrubs, and a raised garden area. ¶5 On June 21, 2005, Micklon, along with George “Doc” Sargent and Patricia Sargent ( whow ere the owners of Lot 2 ) filed suit in the District Court. They sought an order requiring the Dudleys to remove the shop from Lot 4and permanently enjoining the Dudleysfrom violating the restrictive covenants. ¶6 On July 8, 2005 , the Dudleys filed a motion to dismiss , which the District Court denied on August 31, 2005

. The Dudleys subsequently filed an answer and counterclaim
on September 19, 2005, asserting that Micklon and the Sargentsw ere in violation of a number of the restrictive covenants themselves. The District Court held a bench trial on May 2, 2006 , and issued its Findings of Fact, Conclusions of Law, and Judgment on May 4, 2006. The court noted that the Dudleys “have more vehicles than their attached two car garage could possibly house.” S pecifically, the court found that the Dudleys had “at least three ‘regular’ vehicles, a large motor home, two ATVs, and a dune buggy.” The4

court also found that the shop wa s not serving a commercial purpose and that the shop qualified as a “residential use,” given that the Dudleys were activelyu sing the shop in conjunction with the ir

residential dwelling on Lot 4
. The court concluded, therefore , that the shop did not violate p aragraph 6 of the restrictive covenants. The District Court also concluded

that M icklon was not in violation of the restrictive covenants. This appeal by Micklon followed. 1 STANDARD OF REVIEW ¶7 We review a district court’s findings of fact to determin e whether the findings are clearly erroneous. M
. R. Civ. P. 52(a); Denton v. First Interstate Bank of Commerce , 2006 MT 193, ¶ 18, 333 Mont. 169, ¶ 18, 142 P.3d 797, ¶ 18. A district court’s findings are clearly erroneous if the findings are not supporte d by substantial credible evidence, if the court has misapprehended the effect of the evidence, or when a review of the record leaves this C ourt with a definite and firm conviction that a mistake has been made. Denton , ¶ 18. ¶8 We review a district court’s c onclusions of law to determine whether the district court’s interpretation and application of the law is correct. Sunday v. Harboway , 2006 MT 95, ¶ 17, 332 Mont. 104, ¶ 17, 136 P.3d 965, ¶ 17; In re A.N.W. , 2006 MT 42, ¶ 28, 331 Mont. 208, ¶ 28, 130 P.3d 619, ¶ 28.

1 In it s pretrial order dated April 13, 2006, the District Court st at ed that “P la int iff Sargent has sold his lo t and no lo nger has standing to be a party Pl aint iff,” and in it s Findings of Fact, Concl usions of L aw, and Judgment, the court noted that “[Sargent] is no lo nger a part y to the lawsuit.” P resumably, the court’s ref erence to “Sargent” includes both George “Doc” Sargent and Patricia Sargent. I n any event, we note that neit her of the Sargents is a part y to the instant appeal

.5 DISCUSSION ¶9 Did the District Court err in concluding that the shopon the Dudleys’ lot did not violate the subdivision’s restrictive covenant mandating that “[ n ]o lot shall be used for any purpose except residential use ” ? ¶10 When interpreting documents containing restrictive covenants, we apply the same rules of construction as are applied to contracts. Milltow n Addition Homeowner’s Ass’n

v. Geery , 2000 MT 341, ¶ 11, 303 Mont. 195, ¶ 11, 15 P.3d 458, ¶ 11. W e read the restrictive covenants as a wh ole in order to ascertain their meaning. Newman v. Wittmer , 277 Mont. 1, 6, 917 P.2d 926, 929 (1996); § 28

- 3
- 202, MCA. Furthermore, the language of the covenants is to be understood in its ordinary and populars ense. Hillcrest Homeowners Ass’n v. Wiley , 2 39 Mont. 54, 56, 778 P.2d 421, 423 (1989) ; § 2 8
- 3
- 501, MCA. At the same time, however, restrictive covenants are to be strictly construed. Higdem v. Whitham , 167 Mont. 201, 208
- 09, 536 P.2d 1185, 1189
- 90 (1975) (observing that “[t] he overriding policy of individual expression in free and reasonable land use dictates that restrictions should not be aided or extended by implication or enlarged by construction ”). ¶11 Where the language used is plain and unambiguous, the language governs our interpretation. M

illtown , ¶ 11. H ere, there is no serious contention that the language of p aragraph 6 , “n o lot shall be used for any purpose except residential use , ” is ambiguous. The Dudleys refer to this l anguage at one point as “vague”; however, they offer no argument that the language is “susceptible to at least two reasonable but conflicting meanings.” See MaryJ

. Baker Revoc

. T

rust v. Cenex Harvest, 2 007 MT 159, ¶ 20 , 338 Mont. 4 1, ¶ 20, 164 P.3d 851, ¶ 20 . Accordingly, we will proceed to apply the language6

as written. In this regard, we note that the cons truction and interpretation of p aragraph 6 is a question of law. See Baker Revoc. Trust, ¶ 19. ¶12 Micklon offers a sole argument in support of hisclaim that the District Court

erred in concluding that the Dudley s’ shopdid not violate p aragraph6 : B ased on our holding in Hillcrest, a shopb uilt on a lot, wi thout a dw elling house on the same lot, violates a restrictive covenant limiting thel ot’s use to residential purposes. M icklon contendsthat Hillcrest leave s no “wiggle room” for the District Court to conclude that the Dudleys’ shopdid not violate p aragraph 6
. The Dudleys respond that the District Court correctly determined

that their shopw as residential in useand that substantial evidence existed at the time of trial to support this finding. The Dudleys claim that the shop is “an important and continually used residential building to the Dudleys.” ¶13 In support of its conclusion that the Dudleys’ shopdid not violate p aragraph 6 , the District Court cited and discussed two cases in which this C ourt held that structures similar to the Dudleys’ shop did violate restrictive covenants

— Hillcrest and Tipton v. Bennett, 281 Mont. 379, 934 P.2d 203 (1997). In Hillcrest, thedefendants constructed a steel

- sided garag e on their s ubdivision lot

and the homeowners’ association sued to enforce arestrictive covenant stating “[n] o lot shall be used except for single family residential purposes, only one residence per lot and no lot shall be subdivided.” Hillcrest, 239 M ont. at 55, 778 P.2d at 422. Although the defendants planned on constructing a residence on the lot

in addition to the garage , this was never accomplished. Hillcrest, 239 Mont at 55, 778 P.2d at 422. In light of the covenant restricting lot usage to “single family residential purposes,” we concluded that “a garage, by itself, i snot consistent with7

‘single family residential purposes’ when the garage is not used in conjunction with a residential dwelling”o n the same lot and that the defendantsh adviolated the restrictive covenant sb y building the garage and then failing to build, within a reasonable time thereafter , a residential dwelling to accompany the garage. Hillcrest, 239 Mont. at 57, 778 P.2d at 423. In reaching this conclusion, w e observed that “ courts have held that a garage built on a lot without a dwelling house on the same lot v iolates a restrictive covenant when the covenant specifically limits a lot’s use to ‘residential purposes.’ ” Hillcrest, 239 Mont. at 56, 778 P.2d at 423 ( emphasis added)

. W e thenquoted , with approval, the following passage from aWashington Court of Appeals case:

“ A private garage is a proper appurtenance necessary to the enjoyment of a dwelling house and does not violate a ‘for residence purposes only’ covenant [cites omitted]

. However, if the garage is placed on an adjoining lot, it i s no longer deemed to be appurtenant and does violate such a restriction even though used in connection with a residence on an adjoining lot [cites omitted]

. ” Hillcrest, 239 Mont at 57, 778 P.2d at 423 ( alterations in original) (quoting Sandy Point Improvement Co. v. Huber , 613 P.2d 160, 163 (Wash. App. 1980) )

. ¶14 In Tipton , the defendants purchased s ix lots and constructed a 3,200
- square - foot storage building on one of the lots

. Tipton , 281 Mont. at 380, 934 P.2d at 204. The plaintiffs sued , c laiming the structure violated a restrictive covenant requiring “[t]hat the real property hereof shall be used strictly for residential purposes and no business, trade
or manufacture of any sort or nature shall be conducted thereon.” Tipton , 281 Mont. at 380, 934 P.2d at 204. Whilethe defendants described the building as a large garage , the district court found that “it looked like a storage building rather than a residential8

garage.” Tipton , 281 Mont. at 381, 934 P.2d at 204. In Tipton , we took into account Hillcrest and Sandy Point

and affirmed the district court’s conclusion that the storage building violated the restrictive covenant. Tipton , 281 Mont. at 382
- 83, 934 P.2d at 205. Specifically, westated : With or without a residence, a 3,200 square foot storage building is not an appurtenance necessary to the enjoyment of a dwelling house. The building violates the covenant, not only because it stands alone without a dwelling, but also d ue to the fact that a 3,200 square foot storage building is not consistent with “residential purposes.” Tipton , 281 Mont. at 383, 934 P.2d at 206. Thus, under Hillcrest, Tipton , and the language of p aragraph 6, the Dudleys’ shop had to be an appurtenance necessary to the enjoyment of a dwelling house and, in addition , had to be located on the same lot as that dwelling house. ¶15 The District Court, however, viewed the dispositive issue somewhat differently. Specifically, given our statement in Hillc rest that “a garage, by itself, is not consistent with ‘single family residential purposes’ when the garage is not used in conjunction with a residential dwelling,” Hillcrest, 239 Mont. at 57, 778 P.2d at 423 (emphasis added) , and our statement in Tipton that “ a 3,200 square foot storage building is not an appurtenance necessary to the enjoyment of a dw elling house ,” Tipton , 281 Mont. at 383, 934 P.2d at 206 ( em phasis added) , the District Courts tated that “[t]he question here is whether the Dudleys’ use of

l ot 3 is sufficiently different from the uses [at issue in Hillcrest and Tipton ] to justify a different result.” In this regard, the court determined that the Dudleys’ shop was “actively incorporated into the Dudleys’ daily routine” and “there is nothing i n the covenants to prevent the Dudleys from owning many vehicles and from9

having a state of the art facility in which to service those vehicles.” On this basis, the court concluded that the Dudleys’ shop w as “actively ‘used in conjunction with a residential dwelling’ ” (quoting Tipton , 281 Mont. at 38 2 , 934 P.2d at 20 5 ), and, thus,
was “an appurtenance ”to the Dudleys’ residence

. The court acknowledged that the Dudleys’ shop was nearly the same size as the storage building in Tipton , but the court distinguished the shop a s being “not just an amorphous ‘large storage building’ ” (quoting Tipton , 281 Mont. at 382, 934 P.2d at 205). Thus, the court concluded that the shop did not violatethe “residential use” restriction contained in p aragraph 6. ¶16 However, in reaching thisc onclusion, the District Court overlooked our agreement , in Hillcrest, w ith the following two rules of law: “ a garage built on a lot without a dwelling house on the same lot violates a restrictive covenant when the
covenant specifically l imits a lot’s use to ‘residential purposes,’ ” Hillcrest, 239 Mont. at 56, 778 P.2d at 423 ( em phasis added) , and a garage that is used in connection with a residence is not appurtenant to that residence “ ‘ i f the garage is placed on an adjoining lot, ’ ” Hi llcrest, 239 Montat 57, 778 P.2d at 423 (emphasis added) (quoting Sandy Point, 613 P.2d at 163)

. Here, the Dudleys’ shop stood alone on Lot 3, while their residential dwelling was located on the adjoining Lot 4. Under therule sset out in Hillcrest, thi s is a plain violation of p aragraph 6 , which states: “No lot shall be used for any purpose except residential use .” ¶17 The District Court’s contrary conclusion that the Dudleys’ shop had a“residential use” rested entirely on the shop’s association with the Dudleys’ residential dwelling; in other words, the court made no finding that the shop , on its own, served a residential10

purpose. H owever, under Hillcrest, because the shop was located on its own lot without
an accompanying dwelling, it h ad to serve a res idential purpose independent of the Dudleys’ dwelling on an adjoining lot

. 2 Accordingly, we reject the Dudleys’ argument that becausetheir 3,000
- square - foot shop is used in conjunction withtheir residential dwelling

—though admittedly located on an adjoining lot

—their situation is distinguishable from that in Hillcrest an d warrants a different result. ¶18 In short, we conclude that the District Court erred in its determination that the Dudleys’ shop does not violate p aragraph 6 of therestrictive covenant s li miting lot use to

“residential use

. ” CONCLUSION ¶19 We hold that when a restrictive covenant limits as ubdivision lot’s use to “residential use,” a non - residential structure that is placed on that lot without an accompanying residential dwelling on the same lo t violates the covenant, notwithstanding the fact that the structurei s used in conjunction with a residential dwelling on an adjoining lot. Accordingly, because the Dudleys’ shop w as constructed on a lot unaccompanied by a dwelling house on the same lot, the D istrict Court erred in concluding that the shopdid not violate the subdivision’s restrictive covenant limiting all lotsto “residential use. ” ¶20 Reversed.

2 We note, in this regard, that p aragraph 3 of the restrictive covenants states: “ No basement, tent, shack, garage, barn, lo g house, mo bile ho me or other outbuilding shall be erected at any time to be used as a residence.”11 /S/ JAMES C. NELSON

We Concur: /S/ KARLA M. GRAY /S/ PATRICIA COTTER /S/ W. WILLIAM LEAPHART /S/ JOHN WARNER