Court Opinion

ID: 4071849
Source: CourtListenerOpinion
Date Created: 2016-09-30 02:24:58.453751+00
Date Added: 2024-06-11T14:05:53.797121
License: Public Domain

ACCEPTED
                                                                     03-14-00660-CV
                                                                             6585410
                                                          THIRD COURT OF APPEALS
                                                                     AUSTIN, TEXAS
                                                                8/20/2015 2:48:47 PM
                                                                   JEFFREY D. KYLE
                                                                              CLERK
                 No. 03-14-00660-CV

                                                     FILED IN
                                              3rd COURT OF APPEALS
In The Court of Appeals For the Third             AUSTIN, TEXAS
                                              8/20/2015 2:48:47 PM
     District of Texas at Austin                JEFFREY D. KYLE
                                                      Clerk

        CRAIG ZGABAY AND TAMMY ZGABAY,
                                         Appellants,
                          v.
      NBRC PROPERTY OWNERS ASSOCIATION,
                                           Appellee.

           On Appeal from the 433rd District
             Court of Comal County, Texas
          Trial Court Cause No. C2014-0501C

Unopposed Tex. R. App. P. 38.7 Motion to Supplement
  (with Proposed Supplemental Case Citation)

                   J. Patrick Sutton
                    SBOT 24058143
                  1706 W. 10th Street
                  Austin Texas 78703
                  Tel. (512) 417-5903
                  Fax. (512) 355-4155
         jpatricksutton@jpatricksuttonlaw.com

                Counsel for Appellants

                                               August 20, 2015
   Motion to Supplement and Supplemental Case Citation

     Appellants the Zgabays hereby seek leave to supplement

their case authority. The Zgabays' brief listed unanimity amongst

the 14 other states that have rejected the argument that short-

term rentals constitute a "business use." Brief of Appellants at 33-

34. A 15th state, Colorado, has joined in the unanimity. Houston v.

Wilson Mesa Ranch Homeowners Ass'n, Inc., 2015 COA 113, ¶ 18,

2015 WL 4760331 (Colo. App. Aug. 13, 2015). A copy of the opinion

is attached hereto for the Court's convenience.
                     Conclusion and Prayer
     Accordingly, the Zgabays ask that the Court grant this

motion and, for brevity, consider their brief supplemented with the

above case authority.
                              Respectfully submitted,
                              /s/ JPS
                              J. Patrick Sutton
                              Texas Bar No. 24058143
                              1706 W. 10th Street
                              Austin Texas 78703
                              Tel. (512) 417-5903
                              Fax. (512) 355-4155
                              jpatricksutton@
                              jpatricksuttonlaw.com

                              Attorney for Appellants

                                 1
                  CERTIFICATE OF SERVICE

     I certify that on August 20, 2015, per T.R.A.P. 6.3(b), a true
and correct copy of this amended brief was served by efiling and
email on:

Tom Newton
Allen Stein & Durbin, P.C.
6243 IH-10 West, 7th Floor
San Antonio, Texas 78201
TNewton@ASDH.com

Brian Hensley
Thompson, Coe, Cousins & Irons, L.L.P.
701 Brazos, Suite 1500
Austin, Texas 78701
Ph (512) 708-8200
Fax (512) 708-8777
BHensley@thompsoncoe.com

                              /s/ J. Patrick Sutton
                              Attorney for Plaintiffs-Appellants

               CERTIFICATE OF CONFERENCE

I certify that I conferred with Brian Hensley, counsel for
Appellee, regarding this motion, and that he stated his clients are
not opposed to this motion.

                              /s/ J. Patrick Sutton
                              Attorney for Appellants

                                2
Houston v. Wilson Mesa Ranch Homeowners Association, Inc., --- P.3d ---- (2015)
2015 COA 113

                     2015 WL 4760331                                                      I. Background

NOTICE: THIS OPINION HAS NOT BEEN RELEASED                        ¶ 2 Wilson Mesa Ranch is a subdivision in San Miguel
FOR PUBLICATION IN THE PERMANENT LAW                              County. The subdivision is subject to protective covenants
REPORTS. A PETITION FOR REHEARING IN THE                          that are enforced by the Association's board of trustees.
COURT OF APPEALS OR A PETITION FOR                                The covenants provide, as relevant here, that “the lands
CERTIORARI IN THE SUPREME COURT MAY BE                            within Wilson Mesa Ranch [are intended to] be developed
PENDING.                                                          and maintained as a highly desirable scenic and secluded
           Colorado Court of Appeals,                             residential area;” that all tracts designated on the recorded
                    Div. III.                                     plats by number “shall be residential tracts;” and that “[n]o
                                                                  lands within Wilson Mesa Ranch shall ever be occupied or
          David HOUSTON, Trustee of the                           used for any commercial or business purpose nor for any
          David Houston 1997 Trust dated                          noxious activity and nothing shall be done ... on any of said
         October 6, 1997, Plaintiff–Appellee,                     lands which is a nuisance or might become a nuisance to the ...
                          v.                                      owners of any of said lands.”
      WILSON MESA RANCH HOMEOWNERS
      ASSOCIATION, INC., a Colorado nonprofit                     ¶ 3 Houston owns a single-family residence in the
           corporation, Defendant–Appellant.                      subdivision. Beginning in December 2012, Houston began
                                                                  renting out the property for short-term vacation rentals. He
             Court of Appeals No. 14CA1086                        advertised the residence on the website of VRBO, a company
             | Announced August 13, 2015                          that facilitates the booking of such rentals. When the board
                                                                  learned that Houston had been renting out the residence, it
San Miguel County District Court No. 13CV30034,                   adopted an amendment (“Section 11”) to its administrative
Honorable Mary E. Deganhart, Judge.                               procedures that prohibited Association members from renting
                                                                  out their properties for periods of less than thirty days without
Attorneys and Law Firms
                                                                  prior board approval. Section 11 also provided for a $500 fine
Solomon Law Firm, P.C., Joseph A. Solomon, Telluride,             for each violation of this prohibition.
Colorado, for Plaintiff–Appellee.
                                                                  ¶ 4 The board notified Houston of its adoption of Section
Dewhirst & Dolven, LLC, Miles M. Dewhirst, Jeffery                11 and ordered him to comply with it. Houston objected
D. Bursell, Denver, Colorado; Garfield & Hecht, PC,               to Section 11 as an unlawful attempt to amend the
Mary Elizabeth Geiger, Glenwood Springs, Colorado, for            covenants. The board responded that short-term rentals were
Defendant–Appellant.                                              a commercial use that was already prohibited under the
                                                                  covenants, and that Section 11 was simply adopted to clarify
Opinion                                                           the board's position and set forth procedures for seeking an
                                                                  exception to the prohibition.
Opinion by JUDGE VOGT *
                                                                  ¶ 5 After the board denied Houston's request to continue
*      Sitting by assignment of the Chief Justice under           leasing the property on a short-term basis, he took two
       provisions of Colo. Const. art. VI, § 5(3), and § 24–51–
                                                                  additional rental reservations through VRBO. The board
       1105, C.R.S. 2014.
                                                                  treated these reservations as anticipatory breaches of the
 *1 ¶ 1 In this dispute regarding the scope of restrictive        covenants and Section 11 and fined Houston $500 for each
covenants, defendant, Wilson Mesa Ranch Homeowners                reservation.
Association, Inc., appeals the district court's judgment on the
pleadings in favor of plaintiff, David Houston, Trustee of the    ¶ 6 Houston then filed this action, seeking a declaration
David Houston 1997 Trust dated October 6, 1997. We affirm.        that the Association could not bar the short-term rental of
                                                                  his property based on the commercial use prohibition in the
                                                                  covenants. The Association counterclaimed for a declaration

               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                              1
Houston v. Wilson Mesa Ranch Homeowners Association, Inc., --- P.3d ---- (2015)
2015 COA 113

that the covenants barred rentals of less than thirty days;         meaning of a covenant, we must adopt the construction that
that Section 11 was enforceable against Houston; and that           favors the unrestricted use of property. Id. at 253–54; see also
Houston was in violation of the covenants and Section 11            Double D Manor, Inc. v. Evergreen Meadows Homeowners'
by advertising, and taking reservations for, short-term rentals     Ass'n, 773 P.2d 1046, 1048 (Colo. 1989).
of his property. The Association also sought a permanent
injunction requiring Houston to comply with the covenants
and Section 11.
                                                                                     B. Scope of the Covenants

 *2 ¶ 7 Both parties moved for judgment on the pleadings            ¶ 10 It is undisputed that the covenants do not expressly
pursuant to C.R.C.P. 12(c). In a detailed written order,            prohibit short-term rentals of residences within Wilson Mesa
the district court entered judgment in favor of Houston             Ranch. The issue is whether such rentals are prohibited by
and dismissed the Association's counterclaims. It reviewed          necessary implication based on covenant language that (1)
the covenant language, found no Colorado case law that              Wilson Mesa Ranch is to “be developed and maintained
was “dispositive on the issue of whether a prohibition on           as a ... residential area,” with all subdivision tracts to
commercial use bars short term rentals or conversely whether        be “residential tracts,” and that (2) “[n]o lands within
the requirement of residential use is somehow inconsistent          Wilson Mesa Ranch shall ever be occupied or used for
with short term rentals,” and reviewed cases from other             any commercial or business purpose.” The Association
jurisdictions that the parties had cited. The court concluded       contends that the district court erred in failing to construe
that nothing in the covenants prohibited short-term rentals,        the “commercial use” prohibition as precluding unapproved
either expressly or by implication; that the covenant language      rentals of less than thirty days, and in failing to recognize that
was ambiguous regarding the permissibility of short-term            such short-term rentals are inconsistent with the covenants'
rentals; and that, because such ambiguity required that all         “residential use” requirement. We disagree.
doubts be resolved in favor of the free and unrestricted use
of property, the covenants did not prohibit or limit Houston's      ¶ 11 We are aware of no Colorado case that has addressed
short-term vacation rentals. It also found that Section 11's        the meaning of prohibitions against “commercial use” or
“differentiation between forbidden ‘short term’ rentals and         requirements of “residential use” in the context of short-term
permitted ‘long term’ rentals [was] arbitrary and ... not           rentals of residences. With the exception of Double D Manor,
plainly within the confines of the [c]ovenants;” thus, the fines    discussed below, Colorado case law discussing these terms
imposed against Houston were not enforceable.                       in other contexts affords little guidance in resolving the issue
                                                                    before us.

                        II. Discussion                              ¶ 12 Like the district court, we find the two Colorado cases
                                                                    on which the Association relies—Jackson & Co. (USA),
                                                                    Inc. v. Town of Avon, 166 P.3d 297, 298–300 (Colo. App.
       A. Standards of Review and Applicable Law                    2007), and E.R. Southtech, Ltd. v. Arapahoe County Board of
                                                                    Equalization, 972 P.2d 1057, 1059–60 (Colo. App. 1998)—
¶ 8 Our review is de novo, both because the district court's
                                                                    to be distinguishable. The Jackson division concluded that a
judgment was a judgment on the pleadings, see Melat,
                                                                    duplex with six individual bedroom-bathroom suites, used for
Pressman & Higbie, L.L.P. v. Hannon Law Firm, L.L.C.,
                                                                    short-term vacation rentals, qualified as a “lodge” under the
2012 CO 61, ¶ 17, 287 P.3d 842, and because the court
                                                                    definition of that term in a municipal ordinance; thus, such
construed a written instrument. See In re Estate of Foiles,
                                                                    short-term rentals were impermissible under the ordinance
2014 COA 104, ¶ 20, 338 P.3d 1098.
                                                                    and a subdivision plat that explicitly prohibited the use of
                                                                    property within the residential subdivision as a lodge. There
¶ 9 We construe restrictive covenants according to their plain
                                                                    is no such explicit prohibition in the covenants here.
language, interpreting them as a whole and keeping in mind
their underlying purpose. See Evergreen Highlands Ass'n v.
                                                                    ¶ 13 In Southtech, the division held that, for property tax
West, 73 P.3d 1, 3 (Colo. 2003); Good v. Bear Canyon Ranch
                                                                    purposes, rentals of space in a large housing complex for less
Ass'n, 160 P.3d 251, 253 (Colo. App. 2007). A covenant will
                                                                    than thirty days should be taxed as a “hotel-type commercial
be enforced as written if it is clear on its face. Good, 160 P.3d
                                                                    use,” while longer rentals should be taxed as “apartment-
at 253. However, if there is any ambiguity or doubt as to the

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Houston v. Wilson Mesa Ranch Homeowners Association, Inc., --- P.3d ---- (2015)
2015 COA 113

type residential” use. The division relied on constitutional and   used as a dwelling place, or it can refer to a place where
statutory provisions that excluded “hotels and motels” from        one intends to live for a long time.”); Scott v. Walker, 274
the definition of “residential real property” for property tax     Va. 209, 645 S.E.2d 278, 283 (2007) (Restrictive covenant's
purposes but included “apartments” in that definition. Again,      requirement that lots be used for “residential purposes” was
the covenants at issue here do not contain similar definitional    “ambiguous both as to whether a residential purpose requires
language.                                                          an intention to be physically present in a home for more than
                                                                   a transient stay and as to whether the focus of the inquiry is on
 *3 ¶ 14 We therefore look to the plain meaning of the             the owner's use of the property or the renter's use.... Moreover,
covenant language, and we find guidance in cases from other        if the phrase ‘residential purposes' carries with it a ‘duration
jurisdictions that have applied this language in situations        of use’ component, it is ambiguous as to when a rental of
involving short-term rentals of residential property.              the property moves from short-term to long-term.”); see also
                                                                   Dunn v. Aamodt, 695 F.3d 797, 800 (8th Cir. 2012) (phrase
                                                                   “residential purposes” in restrictive covenant was ambiguous
                                                                   as to short-term rental of property). These courts concluded
             1. Requirement That Subdivision
                                                                   that, because ambiguities in restrictive covenants were to be
                  Tracts Be “Residential”
                                                                   construed in favor of the free use of property, short-term
¶ 15 “Residential” is defined as “used, serving, or designed as    rentals were not precluded as inconsistent with residential
a residence or for occupation by residents.” Webster's Third       use.
New International Dictionary 1931 (2002). “Residence”
means “the act or fact of abiding or dwelling in a place for       ¶ 18 Other courts have found no ambiguity, reasoning that,
some time; an act of making one's home in a place.” Id.;           as long as the property is used for living purposes, it does
see also The American Heritage Dictionary of the English           not cease being “residential” simply because such use is
Language 1483 (4th ed. 2000) (defining “residential” as “[o]f,     transitory rather than permanent. In Lowden, 909 A.2d at 267,
relating to, or having residence,” or “[o]f, suitable for, or      the court summarized cases applying the term “residential”
limited to residences,” and defining “residence” as “[t]he         to a variety of structures used for habitation purposes and
place in which one lives; a dwelling,” or “[t]he act or a period   recognizing that the transitory or temporary nature of such
of residing in a place”).                                          use did not defeat the residential status. It concluded that
                                                                   “[w]hen the owner of a permanent home rents the home to
¶ 16 “ ‘Residential use,’ without more, has been consistently      a family, and that family, as tenant, resides in the home,
interpreted as meaning that the use of the property is for         there obviously is no violation of the [d]eclaration. While the
living purposes, or a dwelling, or a place of abode.” Lowden       owner may be receiving rental income, the use of the property
v. Bosley, 395 Md. 58, 909 A.2d 261, 267 (2006); see also          is unquestionably ‘residential’.” Id. In Pinehaven Planning
Mullin v. Silvercreek Condo. Owner's Ass'n, 195 S.W.3d             Board v. Brooks, 138 Idaho 826, 70 P.3d 664, 667–68 (2003),
484, 490 (Mo. Ct. App. 2006) (A place used for “residential        the covenants at issue restricted the use of residential property
purposes” is, according to its plain and ordinary meaning,         to the construction of a single-family residence, which could
“one in which people reside or dwell, or which they make           not be used for commercial, industrial, or business purposes.
their homes, as distinguished from one which is used for           The Idaho Supreme Court held that renting a property to
commercial or business purposes.” (quoting Blevins v. Barry–       people who used it for residential purposes, whether short
Lawrence Cnty. Ass'n for Retarded Citizens, 707 S.W.2d 407,        or long term, did not violate the covenants. Id. at 668–
408 (Mo. 1986))).                                                  69; see also Slaby v. Mountain River Estates Residential
                                                                   Ass'n, 100 So. 3d 569, 579 (Ala. Civ. App. 2012) (“[P]roperty
¶ 17 Although “residential” unambiguously refers to use for        is used for ‘residential purposes' when those occupying it
living purposes, courts have recognized ambiguity in the           do so for ordinary living purposes. Thus, so long as the
term in cases involving short-term rentals or other situations     renters continue to relax, eat, sleep, bathe, and engage in
where those residing in the property are living there only         other incidental activities ... they are using the [property]
temporarily, not permanently. See Yogman v. Parrott, 325 Or.       for residential purposes.”); Ross v. Bennett, 148 Wash.App.
358, 937 P.2d 1019, 1021 (1997) (“The ordinary meaning of          40, 203 P.3d 383, 388 (2008) (rejecting argument that short-
‘residential’ does not resolve the issue between the parties.      term vacation rentals were distinguishable from permitted
That is so because a ‘residence’ can refer simply to a building    long-term rentals and concluding that: “Renting the ... home

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                              3
Houston v. Wilson Mesa Ranch Homeowners Association, Inc., --- P.3d ---- (2015)
2015 COA 113

to people who use it for the purposes of eating, sleeping,                      Also, these are seven acre parcels and do not have
and other residential purposes is consistent with the plain                     neighbors wall to wall.
language of the ... [c]ovenant. The transitory or temporary
nature of such use by vacation renters does not defeat the
residential status.”).                                                       2. Prohibition Against Commercial Use

                                                                    ¶ 20 “Commercial” means “occupied with or engaged in
 *4 ¶ 19 In this case, the pleadings and attached documents do      commerce ... related to or dealing with commerce ... [or]
not suggest that renters used Houston's residence for anything      having profit as the primary aim.” Webster's Third New
other than ordinary living purposes, and the Association            International Dictionary 456 (2002). “Commerce,” in turn,
does not so argue. 1 In these circumstances, we agree with          means “the exchange or buying and selling of commodities
the courts that have held that mere temporary or short-term         esp. on a large scale,” but it can also mean “dealings of any
use of a residence does not preclude that use from being            kind.” Id. A “commercial use” is one “that is connected with
“residential.” Moreover, even if we were to find the covenants      or furthers an ongoing profit-making activity.” Black's Law
ambiguous in this regard, we would be required to adopt             Dictionary 1775 (10th ed. 2014).
the construction of “residential” that favors the free and
unrestricted use of Houston's property. See Good, 160 P.3d          ¶ 21 As with the requirement of “residential use,” the
at 253–54.                                                          dictionary definitions of “commercial” and “commercial use”
                                                                    do not by themselves resolve the question of whether short-
1      In a letter to the Association (which, because it was        term vacation rentals are prohibited under the covenants at
       attached to Houston's verified complaint, could be           issue here; and the covenants do not further define those
       considered by the district court in ruling on cross-         terms.
       motions under C.R.C.P. 12(c), see Van Schaack v.
       Phipps, 38 Colo. App. 140, 143, 558 P.2d 581, 584             ¶ 22 As in cases construing “residential use,” some courts
       (1976); see also C.R.C.P. 10(c)), Houston's counsel          have recognized an ambiguity in the term “commercial
       explained the use of the property as follows:                use” when deciding whether prohibitions against commercial
            The HOA also argues that the current use is a
                                                                    use apply to short-term rentals of residential property. See
            commercial use. It is not. Mr. Houston has owned
                                                                    Yogman, 937 P.2d at 1021 (“commercial” use encompasses
            his Wilson Mesa home for over twenty years. At one
                                                                    a broad range of meanings, from merely using the property
            point, he used the home for long-term rental. After
            that time, he made the decision he did not want the
                                                                    in a way that generates revenue up to operating a business,
            wear and tear on the house that permanent tenants       such as a bed and breakfast, with profit as its primary
            bring. As a consequence he stopped renting it and       aim); see also Russell v. Donaldson, 222 N.C.App. 702, 731
            hoped to use it more.                                   S.E.2d 535, 538–39 (2012) (where covenants did not define
            However, it became apparent without people in           “business or commercial purpose,” they were ambiguous as
            the house and the accompanying maintenance, the         to whether short-term residential vacation rentals came within
            house actually suffered. Mr. Houston decided the        the prohibition against use of lots for such purpose; however,
            best solution for the property was to have it used to   upon review of cases from other states, and given requirement
            some extent, and thus he has been leasing it out for    that ambiguities be construed in favor of unrestricted use of
            some vacation rental use.                               property, court held that prohibition did not bar short-term
            The home is very small. Occupancy is limited to
                                                                    residential vacation rentals).
            a maximum of four guests. It is typically used by
            a couple, or a single adult. Mr. Houston also has
                                                                     *5 ¶ 23 Other courts have held that prohibitions against
            a local caretaker handling maintenance and other
            related home needs.
                                                                    commercial or business uses unambiguously do not bar short-
            The amount of people staying in the residence with      term vacation rentals of residences where a renter uses the
            one vehicle certainly presents less road traffic than   premises for residential activities such as eating and sleeping
            if Mr. Houston had a permanent tenant with two          and not for commercial activities such as running a business.
            vehicles. Also, Wilson Mesa is usually quite vacant.    In Slaby, a residential association claimed that property
            Most properties are rarely occupied second homes.       owners' short-term rentals of their cabin violated restrictive
            Very few homes are occupied on a full time basis.       covenants prohibiting commercial use. 100 So. 3d at 571.
                                                                    However, the court reviewed case law from other states

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and agreed with “the majority of other jurisdictions” that         108, 110–13 (2008), the amended covenants—unlike the
rental of the cabin for eating, sleeping, and other residential    covenants here—expressly prohibited rentals of under thirty
purposes did not amount to commercial use. Id. at 580–82;          days. Similarly, in Munson v. Milton, 948 S.W.2d 813, 817
see also Pinehaven Planning Bd., 70 P.3d at 668 (“[R]enting        (Tex.App.1997), the court relied on specific language in the
[defendants'] dwelling to people who use it for the purposes       covenants that defined “business use” to include “transient-
of eating, sleeping, and other residential purposes does not       type housing” as supporting a conclusion that short-term
violate the prohibition on commercial and business activity        rentals were prohibited.
as such terms are commonly understood.”); Lowden, 909
A.2d at 267 (“The owners' receipt of rental income in no           ¶ 27 Finally, in concluding that short-term rentals were
way detracts from the use of the properties as residences by       prohibited under the covenants at issue in Benard v. Humble,
the tenants.”); Mason Family Trust v. DeVaney, 146 N.M. 990 S.W.2d 929, 930 (Tex.App.1999), the court applied a
199, 207 P.3d 1176, 1178 (N.M.Ct.App.2009) (“While [the            Texas statute requiring that covenant language be “liberally
owner's] renting of the property as a dwelling on a short-term     construe[d].” Noting the tension between the statutory
basis may have constituted an economic endeavor on [his]           requirement and the common law, the court observed:
part, to construe that activity as one forbidden by the language
of the deed restrictions [prohibiting use for business or                        The present case is a prime example
commercial purposes] is unreasonable and strained. Strictly                      of the dilemma: The deed restrictions
and reasonably construed, the deed restrictions do not forbid                    in question do not explicitly contain
short-term rental for dwelling purposes.”).                                      language covering temporary renting
                                                                                 of property. Were we to give
¶ 24 We agree with the cases discussed above and conclude                        construction against the drafter of
that short-term vacation rentals such as Houston's are not                       the covenant [instead of liberally
barred by the commercial use prohibition in the covenants.                       construing it], we would be required
Our conclusion is consistent with the Colorado Supreme                           to reverse the trial court's judgment
Court's holding, in a different context, that receipt of                         [finding that short-term rentals are
income does not transform residential use of property into                       prohibited].
commercial use. In Double D Manor, the court addressed a
                                                                   Id. at 931.
homeowners association's challenge to use of property in the
subdivision as a home for developmentally disabled children.
                                                                   ¶ 28 Unlike Texas, Colorado adheres to the common law
773 P.2d at 1046. In rejecting the association's argument
                                                                   principle that ambiguities in covenants are construed in favor
that such use was not a permissible “residential use” because
Double D used the property to earn money to pay wages and          of the unrestricted use of property. 2
cover costs, the court stated: “Double D's receipt of funding
and payment to its staff to supervise and care for the children    2       In its reply brief, the Association also cites unpublished
do not transform the use of the facilities from residential to             cases from three other jurisdictions. Because these
commercial.” Id. at 1051.                                                  unpublished opinions are not to be used as precedent
                                                                           under the rules of those jurisdictions, we do not consider
¶ 25 Finally, we are not persuaded to reach a contrary                     them.

conclusion based on the cases on which the Association relies.      *6 ¶ 29 In sum, we conclude that Houston's short-term
                                                                   vacation rentals are not barred under the covenants.
¶ 26 Ewing v. City of Carmel–By–The–Sea, 234 Cal. App. 3d
1579, 286 Cal. Rptr. 382, 388 (1991), cited by the Association
for the proposition that short-term vacation rentals are
                                                                                      C. Validity of Section 11
inconsistent with the residential character of a neighborhood,
was addressing the validity of a municipal ordinance               ¶ 30 The Association further contends that the district court
explicitly prohibiting rentals under thirty days in an area        erred in concluding that Section 11, the amendment to the
zoned for single-family residential use; it was not interpreting   board's administrative procedures that precludes unapproved
a covenant lacking any such explicit prohibition. In Mission       short-term rentals and imposes fines for violations of that
Shores Ass'n v. Pheil, 166 Cal. App. 4th 789, 83 Cal.Rptr.3d         prohibition, was arbitrary and thus unenforceable. We agree

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                                                                     property were invalid because they were not promulgated in
with the district court that Section 11 is unenforceable,
                                                                     compliance with covenant provisions regarding amendment
although we reach that conclusion for reasons other than those
                                                                     procedures); Johnson v. Howells, 682 P.2d 504, 505 (Colo.
stated by the district court. See Meister v. Stout, 2015 COA
                                                                     App. 1984) (same); cf. Good, 160 P.3d at 253–55 (where
60, ¶ 8, ––– P.3d –––– (where district court reaches correct
                                                                     covenants allowed amendment and amendment procedures
result, its judgment may be affirmed on different grounds that
                                                                     were followed, amendment prohibiting construction of guest
are supported by the record).
                                                                     houses and caretaker residences was valid).
¶ 31 The Association argues that Section 11 was adopted
at a “duly called and duly conducted board meeting” to
“clarif[y] that the [covenants'] prohibition on commercial and                             D. Attorney Fees
business uses of property ... prohibits the unapproved short-
term rental” of lots within the subdivision. However, as set         ¶ 33 Given our resolution of the issues raised in this appeal,
forth above, the covenants do not prohibit such rentals.             we deny the Association's request for attorney fees under
                                                                     section 38–33.3–123(1)(c), C.R.S. 2014.
¶ 32 Thus, while the Association has the authority to enforce
the covenants, it cannot rely on that authority to enforce
a nonexistent covenant provision. For short-term vacation                                   III. Conclusion
rentals to be prohibited, the covenants themselves must be
amended. It is undisputed that the amendment procedure set           ¶ 34 The judgment is affirmed.
forth in the covenants—which, among other things, requires a
vote of three-fourths of the Association members and permits
such vote only at ten-year intervals—was not followed
                                                                     JUDGE LICHTENSTEIN and JUDGE FOX concur.
here. The board's attempt to accomplish such amendment
through its administrative procedures was unenforceable.             All Citations
See Mauldin v. Panella, 17 P.3d 837, 838–39 (Colo. App.
2000) (purported amendments to restrictive covenants that            --- P.3d ----, 2015 WL 4760331, 2015 COA 113
would have precluded the plaintiff's proposed use of his

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               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                6