Court Opinion

ID: 9956621
Source: CourtListenerOpinion
Date Created: 2024-04-02 17:02:32.873131+00
Date Added: 2024-06-11T08:17:41.956921
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE

                DANIEL MASON, et al., Plaintiffs/Appellants,

                                         v.

          LA GLORIETA HOMEOWNERS ASSOCIATION, et al.,
                       Defendants/Appellees.

                              No. 1 CA-CV 23-0437
                                FILED 04-02-2024

            Appeal from the Superior Court in Maricopa County
                           No. CV2020-010914
                  The Honorable Joan M. Sinclair, Judge

                                   AFFIRMED

                                    COUNSEL

Moyes Sellers & Hendricks, Phoenix
By Keith L. Hendricks, Natalya Ter-Grigoryan
Counsel for Plaintiffs/Appellants

Shaw & Lines, LLC, Phoenix
By Mark E. Lines, Patrick Whelan
Counsel for Defendant/Appellees La Glorieta Homeowners Association

Choi & Fabian, PLC, Chandler
By Hyung Choi, Veronika Fabian
Counsel for Defendant/Appellees Yinong Chen and Hongyan Shi
                  MASON, et al. v. LA GLORIETA, et al.
                       Decision of the Court

                      MEMORANDUM DECISION

Presiding Judge Anni Hill Foster delivered the decision of the Court, in
which Judge Brian Y. Furuya and Vice Chief Judge Randall M. Howe
joined.

F O S T E R, Judge:

¶1             Daniel Mason and Toni Mason appeal the superior court’s
grant of summary judgment in favor of La Glorieta Homeowners
Association (“HOA”) in their breach of contract and declaratory judgment
actions. For the following reasons the superior court’s ruling is affirmed.

                 FACTS AND PROCEDURAL HISTORY

¶2            The Masons own a home within the La Glorieta residential
subdivision two lots away from a house owned by Yinong Chen and
Hongyan Shi. A drainage swale runs in front of the Masons’ and Chen and
Shi’s properties, designed to route water flow from the Masons’ lot to an
outlet grate on Chen and Shi’s lot. In September 2014, a severe
thunderstorm resulted in rainfall that flooded the Masons’ basement. The
resulting damage cost about $2,000 to repair. The day after the flooding, Mr.
Mason discovered water still pooling between his lot and Chen and Shi’s
lot; he concluded that an obstruction on their lot was hindering the runoff’s
flow.

¶3             Over the next few years, the Masons sought to resolve this
drainage issue by speaking with Chen and Shi, seeking resolution at two
HOA meetings, and filing a written complaint with the HOA. In mid-2019,
the HOA’s counsel sent a letter to Chen and Shi informing them “that work
done to [their] front yard/lot area may have contributed to water backups
on lots up the street” and directing them to address the issue. Also, between
2016 and 2020, the Masons spoke with Chandler city officials, who
confirmed that the Masons’ HOA, not the city, was responsible for drainage
in its subdivision. In late 2019 or early 2020, the Masons hired a professional
civil engineer to investigate the cause of the flooding. The engineer’s report
found that Chen and Shi’s lot contained obstructions in the drainage swale.
The Masons’ home has not flooded since 2014.

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                   MASON, et al. v. LA GLORIETA, et al.
                        Decision of the Court

¶4            In September 2020, the Masons sued the HOA, Chen, and Shi
for breach of contract and declaratory judgment. The Masons claimed that
a pathway on Chen and Shi’s property blocked drainage, caused the
flooding in the Mason’s home, and violated the HOA’s Covenants,
Conditions and Restrictions (“CC&Rs”). The HOA moved for summary
judgment on all claims, and the Masons cross-moved for summary
judgment on their declaratory judgment claim. The court ruled in the
HOA’s favor and dismissed all claims against it.1 Over the next month, the
HOA moved for attorneys’ fees and costs, and the Masons moved for
reconsideration. In March 2022, the court filed its judgment, without
addressing either of these new motions. The court certified its judgment
under Arizona Rule of Civil Procedure 54(b), and the Masons appealed.

¶5            In December 2022, this Court issued an order staying the
appeal and reinstating jurisdiction in the superior court because the court
had not ruled on the HOA’s request for attorneys’ fees, making the
judgment ineligible for Rule 54(b) certification. In May 2023, the superior
court denied the Masons’ motion for reconsideration and awarded the
HOA attorneys’ fees. The court issued its final judgment the next month,
and the Masons timely appealed. This Court has jurisdiction pursuant to
A.R.S. §§ 12-120.21(A)(1), 12-2101(A)(1).

                               DISCUSSION

¶6              This Court reviews summary judgment rulings de novo.
Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12 (2003). “The court shall grant
summary judgment if the moving party shows that there is no genuine
dispute as to any material fact and . . . is entitled to judgment as a matter of
law.” Ariz. R. Civ. P. 56(a). The interpretation of contracts like CC&Rs is
also a legal question that this Court reviews de novo. Andrews, 205 Ariz. at
240, ¶ 12; see also Powell v. Washburn, 211 Ariz. 553, 555, ¶ 8 (2006) (“A deed
containing a restrictive covenant that runs with the land is a contract.”).

I.     The CC&Rs Do Not Require the HOA to Enforce Violations of
       Those CC&Rs.

¶7           The primary issue on appeal is whether the court erred in
holding as a matter of law that the CC&Rs did not require the HOA to
enforce the CC&Rs. The Masons argue that the HOA must enforce the

1 Chen and Shi joined the HOA’s motion for summary judgment, but the

superior court denied them summary judgment. That portion of the
judgment is not before this Court on appeal.

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                   MASON, et al. v. LA GLORIETA, et al.
                        Decision of the Court

CC&Rs per their provisions. The CC&Rs provision that the Masons claim
Chen and Shi have violated is § 12.17:

       No Owner shall erect, construct, maintain, permit or allow
       any fence or other improvement or other obstruction which
       would interrupt the normal drainage of the land or within any
       area designated on a Plat, or other building document
       (including without limitation Section 4.5 hereof), as a
       “drainage easement” except that, with the prior consent of the
       City and the Design Committee, non-permanent structures,
       including fences, may be erected in those areas which contain
       only underground closed conduit storm drainage facilities.

¶8              Several sections of the CC&Rs address the HOA enforcing the
CC&Rs, but none obligate the HOA to exercise its enforcement power. The
recitals mention that “it is desirable for the efficient management of the
Property to create an owners’ association to which should be delegated and
assigned the powers of . . . enforcing these covenants.” Section 4.7 creates
an easement “in favor of the Association . . . for the investigation and
correction . . . of any and all violations of this Declaration.” Also, § 12.21
provides that “[t]he Association . . . may enter any Lot in which a violation
of these restrictions exists and may correct such violation at the expense of
the Owner owning such Lot.” Section 15.1 says that “[i]n the event of any
default by any Owner . . . the Association . . . shall have each and all of the
rights and remedies which may be provided for in this Declaration . . . and
may prosecute any action or other proceedings against such defaulting
Owner.” The CC&Rs give authority to the HOA to take legal action in
§ 15.3: “In addition to any other remedies available under this Section 15, if
any Owner . . . shall violate any of the provisions of this Declaration . . . then
the Association . . . shall have the power to file an action against the
defaulting Owner.” But none of the provisions require the HOA to use those
powers. This is fatal to the Masons’ claims.

II.    Section 4.5 of the CC&Rs Does Not Provide Liability Protection to
       the HOA for Drainage.

¶9             The superior court found that § 4.5 of the CC&Rs disclaimed
liability for the HOA, but the court misinterpreted that provision. That
lengthy section—entitled Landscape and Drainage Easements—begins by
discussing landscape easements: “There is hereby created an affirmative
easement in favor of the Association . . . upon, over and across the
Transitional Area of each Lot for installation, placement, maintenance and
repair of landscape improvements.” The use of the singular article “an” and

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                  MASON, et al. v. LA GLORIETA, et al.
                       Decision of the Court

the singular demonstrative pronoun “this” expresses that this sentence
creates one easement whose purpose is “for [the] installation, placement,
maintenance and repair of landscape improvements.” See, e.g., Banuelos v.
Barr, 953 F.3d 1176, 1181 (10th Cir. 2020) (“[I]n most contexts, the singular
article ‘a’ refers to only one item.”). Thus, this sentence describes the
landscape easement.

¶10           That same section’s language shows a distinction between the
landscape easement and the drainage easement by creating a second
easement for drainage in the subsequent sentence: “There is hereby further
created a blanket easement upon, across, over and under all Lots for the
purposes of drainage and water retention.” This one sentence is all the
section says about drainage easements before continuing to the disclaimer
language.

¶11           Section 4.5 ends with the disclaimer language at issue in this
case: “This Section 4.5 shall not be construed to require or obligate the
Association to install, place, maintain or repair any landscape
improvements in the Transitional Area.” But the disclaimer language
addresses only the landscape easement; the HOA has the right to use and
maintain landscaping in the Transitional Area, but it is not required to
exercise its power. The HOA argues that the disclaimer language applies
directly to the drainage easement. This interpretation appears to be based
on a reading that § 4.5 creates only one “landscape drainage easement.”
Such an interpretation contradicts the clear language creating two
easements: namely, a landscape easement and a drainage easement. Thus,
the superior court erred in holding that § 4.5 shields the HOA from liability
for drainage issues. But, even if the disclaimer language did cover the
drainage easement and drainage issues, the Masons are not requesting that
the HOA itself install, place, maintain or repair any landscaping
improvements; they are seeking merely to have the HOA enforce the
alleged violation.

III.   The Court Properly Considered a Legal Issue Raised by the
       Masons.

¶12            The Masons claim that the court “relied almost exclusively
upon Gfeller v. Scottsdale Vista N. Townhomes Ass’n, 193 Ariz. 52 (App. 1998)”
and its “proposition that the duty to enforce has to be expressly set forth in
the contract.” They claim that because the HOA never cited or argued
Gfeller they “did not thoroughly address this specific issue” and thus “were
deprived of a meaningful opportunity to litigate the issue.” But in their
response to the HOA’s summary judgment motion the Masons themselves

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                  MASON, et al. v. LA GLORIETA, et al.
                       Decision of the Court

cited and quoted Gfeller to support their claim that the HOA “is
contractually obligated to enforce the CC&Rs.” The statement from Gfeller
they quoted was that “the Association may not forsake its express duty to
enforce the CC & Rs.” Gfeller, 193 Ariz. at 54, ¶ 11. Thus, they logically
connected an alleged contractual duty of the HOA to being expressly stated
in the CC&Rs.

¶13           The court, instead of relying on Gfeller, distinguished it from
the present case because Gfeller involved CC&Rs with explicit enforcement
provisions not present here. See id. at 53–54, ¶¶ 9, 11. The court also found
“nothing in the CC&Rs,” let alone anything explicitly or even impliedly
included, “obligating the Association to enforce anything relative to
drainage.”

¶14           The Masons claim that discretionary enforcement is not the
default rule in Arizona. Not so. Discretionary enforcement is the rule in
Arizona. Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 201–
02, ¶¶ 24–27 (App. 2007) (adopting the Restatement’s approach that HOAs
have a duty to “act reasonably in the exercise of its discretionary powers
including [] enforcement” (quoting Restatement (Third) of Property:
Servitudes § 6.13(1)(c)) (emphasis added)). Thus, HOAs are not required to
enforce their CC&Rs unless the document expressly obligates the HOA to
exercise what is normally a discretionary power. The superior court applied
the correct law.

IV.    No Factual Issues Remained Concerning the Masons’ Breach of
       Contract Claim.

¶15            To succeed on a breach of contract action, the plaintiff must
prove three elements: “the existence of the contract, its breach and the
resulting damages.” Thomas v. Montelucia Villas, LLC, 232 Ariz. 92, 96, ¶ 16
(2013) (quoting Graham v. Asbury, 112 Ariz. 184, 185 (1975)). The parties
agree that the CC&Rs are a contract, so the first element is undisputed. As
for the second element, the Masons allege the HOA breached the contract
by failing to enforce its CC&Rs as the CC&Rs require.

¶16            The Masons contend that “there are disputed facts concerning
the interpretation of the CC&Rs,” specifically whether the parties’
contractual intent required enforcement of the CC&Rs. Thus, they claim
that factual issues remain concerning whether there was a breach, making
summary judgment inappropriate. In support, they cite Taylor v. State Farm
Mut. Auto. Ins. Co. (1993) for the rule that “in Arizona, a court will attempt
to enforce a contract according to the parties’ intent.” 175 Ariz. 148, 152.

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                   MASON, et al. v. LA GLORIETA, et al.
                        Decision of the Court

True, courts seek to give effect to the parties’ intent “at the time the contract
was made.” Id. at 153 (internal citation and quotes omitted). But the CC&Rs’
language is the best indicator of the parties’ intent. See State v. Jones, 246
Ariz. 452, 454, ¶ 5 (2019); Reuben M. v. Ariz. Dep’t of Econ. Sec., 230 Ariz. 236,
240, ¶ 20 (App. 2012). Thus, the rule in Taylor applies when the court must
interpret the meaning of a contract’s language to discern the parties’ intent.
Maxwell v. Fidelity Fin. Servs., Inc., 184 Ariz. 82, 92–93 (1995). But the rule
has no application where a contract’s language is unambiguous. Grosvenor
Holdings, L.C. v. Figueroa, 222 Ariz. 588, 593, ¶ 9 (App. 2009) (“Where the
intent of the parties is expressed in clear and unambiguous language, there
is no need or room for construction or interpretation and a court may not
resort thereto.” (quoting Mining Inv. Group, L.L.C. v. Roberts, 217 Ariz. 635,
639, ¶ 16 (App. 2008))). Here, as discussed above, the meaning of the
CC&Rs’ language concerning the HOA’s enforcement of the CC&Rs’
provisions is not ambiguous. The HOA had no duty to enforce. The
Masons’ breach of contract claim failed as a matter of law.

V.     The Court Properly Granted Summary Judgment on the Masons’
       Declaratory Judgment Action.

¶17            The Masons also claim that the court erred in granting
summary judgment in the HOA’s favor on their declaratory judgment
claim that the HOA had to enforce § 12.17 of the CC&Rs. Arizona’s Uniform
Declaratory Judgments Act allows individuals whose rights are affected by
a contract to bring a claim to “obtain a declaration of [their] rights” under
the contract. A.R.S. § 12-1832. The Act’s “purpose is to settle and to afford
relief from uncertainty and insecurity with respect to rights.” A.R.S. § 12-
1842; see also State v. Mabery Ranch, Co., L.L.C., 216 Ariz. 233, 242–43, ¶ 37
(App. 2007) (“The purpose of a declaratory judgment action is to obtain a
judicial determination of parties’ rights and obligations in a controversy
prior to one party’s breach of those rights.”). But as shown above, the
CC&Rs did not obligate the HOA to enforce the CC&Rs’ provisions; thus,
the Masons had no corresponding right to have the HOA enforce the
CC&Rs. Their declaratory judgment claim against the HOA also fails as a
matter of law, and summary judgment was appropriate.

VI.    The Court Properly Awarded the HOA Its Attorneys’ Fees and
       Costs.

¶18           Lastly, the Masons contend that the court erred in granting
the HOA its attorneys’ fees and costs under A.R.S. §§ 12-341 and 12-341.01.
This Court reviews a superior court’s award of attorneys’ fees and costs for
an abuse of discretion. Gregory G. McGill, P.C. v. Ball, 254 Ariz. 144, 150, ¶ 21

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                  MASON, et al. v. LA GLORIETA, et al.
                       Decision of the Court

(App. 2022). The cited statues allow a prevailing party to recover costs and
permit a court to award attorneys’ fees in suits arising from contracts. A.R.S.
§ 12-341 (costs); A.R.S. § 12-341.01(A) (attorneys’ fees). As the prevailing
party, the HOA could recover both attorneys’ fees and costs. The court did
not abuse its discretion.

                               CONCLUSION

¶19           The superior court’s judgment is affirmed.

¶20           On appeal, the Masons request their appellate fees and costs;
as the non-prevailing party, their request is denied. The HOA also requests
its reasonable fees under A.R.S. § 12-341.01. As the prevailing party in a case
arising from a contract, its request is granted, along with costs, contingent
upon its compliance with Arizona Rule of Civil Appellate Procedure 21.
A.R.S. § 12-341; A.R.S. § 12-341.01(A).

                         AMY M. WOOD • Clerk of the Court
                         FILED: TM

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