Court Opinion

ID: 9670475
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:21:22.909302+00
Date Added: 2024-06-11T18:16:04.932726
License: Public Domain

DAVID T. PROSSER, J.
¶ 72. {concurring). The principal question before the court is whether a developer/declarant may file a restrictive covenant on its land that will govern any future condominiums established on that land and also override any provisions in Wis. Stat. ch. 703 — the Condominium Ownership Act — that conflict with the restrictive covenant.
¶ 73. The court answers this question "yes." It answers this question "yes" by excluding from the coverage of Chapter 703 any filed instrument, including a restrictive covenant, that does not opt into Chapter 703 by complying with the detailed provisions of Wis. Stat. § 703.09.
¶ 74. The court's analysis is located in ¶ 16. It reads in part:
We conclude that the Community Declaration [i.e., the developer/declarant's restrictive covenant] is not a condominium instrument subject to ch. 703 .... Condominium instruments include the condominium declaration, plat and plan.... [T]o qualify as a condominium declaration, the document "shall contain" "a statement of the owner's intent to subject the property to the condominium declaration" under the Act, a name including the word "condominium" and a description of the condominium's common elements. Wis. Stat. § 703.09(l)(a), (b), (d). No part of the Community Declaration evinces the Declarant's intent to subject all 1,600 acres to ch. 703.
*596Majority op., ¶ 16 (footnote omitted).1
¶ 75. The practical effect of this analysis is clear. At least prospectively, developers will be permitted to develop condominiums without ever ceding control of those condominiums to unit owners if they follow the simple expedient of filing unambiguous, carefully worded restrictive covenants before they file their condominium declarations.
¶ 76. The court's analysis provides a blueprint for evading the limitations and protections contained in the Condominium Ownership Act. The hole the court creates is so great that condominium law in Wisconsin may never be the same.
¶ 77. Admittedly, the court of appeals reached the same result. See Solowicz v. Forward Geneva Nat'l, 2009 WI App 9, 316 Wis. 2d 211, 763 N.W.2d 828. However, the court of appeals explained that:
Geneva National is a private quasi-town, not a condominium. It is a master-planned community comprising 1600 acres with single- and multi-family homes, commercial and recreational property that caters to people who value its prized golf courses and other recreational options. Because such a complex community requires an extended time to develop and market, we hold that master-planned communities are not subject to ch. 703.
Id., ¶ 1 (emphasis added).
¶ 78. The court backs away from the term "master-planned community" which is derived from the Uniform Common Interest Ownership Act (UCIOA), § 2-123 (1994), inasmuch as Wisconsin has not adopted UCIOA or anything like it. Instead, it employs the term "planned community." See, e.g. majority op., ¶¶ 3, 11, *59714, 16, 18, 19, 20, 21, 22, 23, 24 n.18, 28, 31, 53. Significantly, however, the court does not define the term "planned community." This is understandable, as the term "planned community" appears in the Wisconsin Statutes only once, and only in passing, in Wis. Stat. § 895.07(l)(b).2
¶ 79. The court's use of the term "planned community" is designed to give the impression that its holding applies to mixed-use condominium projects that are visionary, complex, and big. In fact, however, if a properly filed, carefully worded restrictive covenant can trump the provisions of Chapter 703, the size, number or type of the affected condominiums will not matter. Only the controlling effect of the restrictive covenant will matter.
¶ 80. Unfortunately, the court is not willing to confront the huge gap in Wisconsin law between condominiums under Chapter 703 and units of local government. Nor is it willing to acknowledge the full extent of the present developer's control of Geneva National as a result of that gap. This developer may be visionary and honorable in every respect. But the precedent created by the court's opinion opens the door to the kind of abuses by developers that have sparked controversy throughout the country. See Unif. Common Interest *598Ownership Act, prefatory note to the 2008 amendments, 7(IB) U.L.A. 224 (Master Ed. 2009).
I
¶ 81. A detailed statement of the facts is necessary to understand this case.
¶ 82. Geneva National describes itself as "Southern Wisconsin's most notable year-round golf resort community." It is located on Lake Como, four miles west of downtown Lake Geneva, in Walworth County. See www.gnbuilders.com.
¶ 83. On July 25,1989, the original developer, GN Partners, was granted a conditional use permit to develop its 1600 acres of property. The following year, on May 21, 1990, GN Partners recorded a lengthy document with the Walworth County Register of Deeds. This document was entitled "Declaration of Covenants, Conditions, Restrictions and Easements for the Geneva National Community." This document, which the court refers to as the "Community Declaration," contained 12 articles covering more than 70 pages.
¶ 84. The Community Declaration begins with six "WHEREAS" clauses that read in part:
WHEREAS, Declarant is the owner in fee simple of certain real property located in the Town of Geneva, Walworth County, Wisconsin ... hereinafter referred to as the "Property;"
WHEREAS, Declarant intends to develop the Property as a residential, recreational and commercial community ...;
WHEREAS, Declarant intends to construct at least two privately-owned golf courses, a privately-owned clubhouse, and other privately-owned recreational facilities on the Property.
*599WHEREAS, Declarant intends to reserve the right, exercisable in its sole and absolute discretion, to subject to the provisions of this Declaration at a later time ... (i) all or any portion of the real property described . .. and (ii) such other real property as Declarant shall own from time to time.
Id. (emphasis added).
¶ 85. Article I of the Community Declaration is entitled "DEFINITIONS." Among the 50 definitions in Article I are the following:
(e) "Assessment" shall mean and refer to a share of the Community Expenses ... and other charges from time to time assessed against a Unit and the respective Unit Owner by the Community Association ....
(i) "Club" shall mean and refer to any one or more of those clubs as may be located on the Property and formed by or with the written consent of Declarant, including, but not limited to, the Club which is presently named Geneva National Golf Club and any other club on the Property. Declarant presently owns all of the Clubs. The Clubs are not owned or controlled by the Community Association, as hereinafter defined ....
(q) "Community Expenses" shall mean and refer to all expenditures made or expenses incurred by or on behalf of the Community Association and the Trust, as hereinafter defined, together with all funds assessed for creating or maintaining reserves, as provided in this Declaration....
(r) "Condominium" shall mean and refer to any parcel of land within the Property which is hereafter subjected to the Condominium Ownership Act of the State of Wisconsin.
*600(t) "Condominium Declaration" shall mean and refer to any instrument, and any amendments thereto, which is recorded in the Office of the Register of Deeds of Walworth County ... and which creates a Condominium for any part of the Property. Ml covenants, conditions, restrictions, easements and other provisions of each such Condominium Declaration shall be ... subject and subordinate to all covenants, conditions, restrictions, easements and other provisions of this Declaration, unless otherwise expressly provided in this Declaration or in any amendment to this Declaration.
Id. (emphasis added).
¶ 86. Article III is entitled "PROPERTY RIGHTS AND EASEMENTS." Section 3.01 of the article reads in part:
Each Unit Owner shall be entitled to the exclusive ownership and possession of the respective Unit and to the exercise of easement rights in accordance with this Declaration; provided, however, that Declarant hereby reserves the right, in its sole and absolute discretion, to grant, transfer and assign, in whole or in part, to any additional Person for use in common with others any or all of the easement rights reserved or granted by Declarant pursuant to this Declaration.
Id. (emphasis added).3
¶ 87. Article IV describes the "COMMUNITY ASSOCIATION."
¶ 88. Article V describes the "GENEVA NATIONAL TRUST."
*601¶ 89. Article IX is entitled "RIGHTS RESERVED TO DECLARANT." Section 9.01 reads in part as follows:
Control by Declarant. ANY OTHER LANGUAGE OR PROVISION IN THIS DECLARATION, IN THE ARTICLES OF INCORPORATION OF THE COMMUNITY ASSOCIATION OR IN THE BYLAWS OF THE COMMUNITY ASSOCIATION TO THE CONTRARY NOTWITHSTANDING, prior to the conveyance by Declarant of eighty-five percent (85%) of the maximum number of Units which may be located on Single-Family Residence Grounds and Multiple-Family Residence Grounds . . . Declarant shall have the right, exercisable at any time... (i) to remove and to appoint a successor for any member or members of the Board of Directors of the Community Association, any officer or officers of the Community Association, and any management company employed by the Community Association if, at any time, Declarant determines, in Declarant's sole and absolute discretion, that any such member, officer or management company is prejudicial to the rights of Declarant... and (ii) to exercise the rights and discharge the duties and responsibilities of the [Geneva National] Trust and to select either the Community Association or any Club Owner to act under the conditions and in the manner provided in Section 5.01 of this Declaration.
Id. (emphasis added).
¶ 90. Section 9.02 gives the Declarant the right to execute all documents and undertake any actions affecting the Property which, in the Declarant's "sole and absolute discretion," are either desirable or necessary to exercise or enforce "any of the rights reserved or granted to Declarant." Section 9.03 gives the Declarant "sole and exclusive right to use the names 'Geneva National' and 'Geneva National Golf Club.'" Section *6029.05 reiterates Declarant's "exclusive right, in its sole and absolute discretion," to grant or assign easement rights to additional persons.
¶ 91. Section 9.04 is entitled "Individual Condominium Associations." This section reads in part:
The Declarant reserves the right to review and, in the sole and absolute discretion of Declarant, approve the Declaration of Condominium, Articles of Incorporation, Declaration of Covenants, Conditions and Restrictions, Bylaws, and rules and regulations of any Condominium and any Condominium Association created for any portion of the Property ... and to also so review and approve all amendments to all such documents in its sole and absolute discretion, and no such documents or amendments shall be effective unless and until approved in writing by Declarant. .. . No articles of incorporation shall be filed with the Secretary of State ... no Condominium Declaration and no declaration of covenants, conditions and restrictions shall be effective or filed ... nor shall any amendments to any such documents be effective, unless and until the Declarant approves said documents in writing, which approval shall be at the sole and absolute discretion of Declarant. There shall be no other community association and no homeowner's association formed within the Property unless and until Declarant approves in writing any such formation.
Id. (emphasis added).
¶ 92. Article XI of the instrument is entitled "AMENDMENTS." Section 11.01(a) provides in part:
During any period in which Declarant retains the right to remove and appoint successors to any directors ... Declarant may amend this Declaration by an instrument recorded [with] the Office of the Register of Deeds ... without the approval of any Unit Owner or *603mortgagee of any part of the Property [with a qualification, as determined by Declarant in its sole and absolute discretion].
Id. (emphasis added).
¶ 93. Section 11.01(b) provides in part that "Each Unit Owner, by acceptance of a deed or other conveyance to a Unit, agrees to be bound by all amendments permitted by this Article XI."
¶ 94. Article XII is entitled "GENERAL PROVISIONS." The article reiterates that the covenants, restrictions, conditions, reservations, easements, charges and liens contained in the Declaration "run with and bind the land" and are enforceable by, among others, "the Declarant." Article XII, § 12.01. The article gives the Community Association the power to impose "reasonable monthly fines" against Unit Owners and to "suspend a Unit Owner's right to vote on matters brought before the Members." Article XII, § 12.09.
¶ 95. Section 12.12 concludes:
Discrepancies Between This Declaration and Documents Subsequently Recorded. In the event of any discrepancy, inconsistency, conflict or contradiction between the provisions of this Declaration and the provisions of any other document affecting the Property recorded subsequent to the recording of this Declaration ... unless it is otherwise expressly provided by or with the consent of Declarant in any amendment to this Declaration or in any such other document affecting the Property which is recorded subsequent to this Declaration, the provisions of this Declaration shall control and shall remain in full force and effect.
Id. (emphasis added).
¶ 96. Shortly after it recorded the Community Declaration, GN Partners recorded multiple Condominium Declarations with the Walworth County Regis*604ter of Deeds. These documents were entitled "Declaration of Condominium Ownership and of Easements, Restrictions, Conditions and Covenants for Geneva National Condominium No._."
¶ 97. The first page of each Condominium Declaration states:
Declarant intends by this Declaration to subject the Real Estate Parcel, together with all buildings, structures, improvements and other permanent fixtures of whatsoever kind which are now, or at any time hereafter, located thereon, and all rights and privileges belonging or pertaining thereto, to the provisions of the Condominium Ownership Act of the State of Wisconsin, as amended from time to time.
Id. (emphasis added).
¶ 98. The Condominium Declarations required Declarant to form the Condominium Master Association, Inc. The Condominium Master Association, Inc. is the kind of association described in Wis. Stat. § 703.155.
¶ 99. The Condominium Master Association, Inc. is different from (1) the Community Association outlined in Article IV of the Community Declaration [Restrictive Covenant], and also (2) any association of unit owners, see Wis. Stat. § 703.15, for any of the multiple condominiums within the Geneva National Property.
¶ 100. The powers of the Community Association are extensive. They are spelled out in Section 4.02 of the Community Declaration [Restrictive Covenant]. They include the power to provide for a general fund; levy assessments; enforce any lien for nonpayment of assessments; maintain private roadways and other portions of the Property; contract with any person, including Declarant, for security services, water supply, sanitary sewer service, operation, maintenance, and repair *605of private roadways, cable television, and television antennae; buy, sell, lease, pledge, mortgage and hold title to real and personal property; obtain secured and unsecured loans; encumber the assets of the Community Association to pay Community Expenses; hire agents, employees, management services, and professional services; and "take any other lawful action necessary in the sole and absolute discretion of the Board of Directors" to exercise all powers and discharge all duties and responsibilities and liabilities of the Community Association. The composition and voting power of the five members of the Board of Directors is set out in Article IV of the Community Declaration, as amended.
¶ 101. The powers and duties of the Condominium Master Association are more limited than the powers and duties of the Community Association because they are administrative only and include such routine tasks as repair and maintenance of multi-family buildings, landscaping, snow removal, street sweeping, and providing insurance and common area utilities. The Condominium Master Association, consisting of representatives from all distinct condominium parcels on the Property, may levy assessments to support its limited powers and duties.
¶ 102. The other entity that governs the Property is the Geneva National Trust, described in Article V of the Community Declaration. The Geneva National Trust is administered by three trustees. Its purpose is "to provide for the orderly development of the Property, to preserve and maintain the natural environment within the Property," see Section 5.01, and "to adopt and enforce Architectural Standards as provided in Article VIII." Section 5.03(a). However, the Trust also is empowered "to take any other action appropriate or nec*606essary in the sole and absolute judgment and discretion of the Trustees to fulfill the Trust purposes." Section 5.03(d).
¶ 103. Section 5.06, entitled "Financial Affairs of the Trust," provides in part that "[a]ll costs and expenses incurred by the Trust shall be paid by the Community Association." "All costs and expenses of the Trust submitted by the Trust to the Community Association shall be immediately paid, and the Trust shall have no obligation to seek or obtain the prior consent or the subsequent approval" of the Community Association. Id. In short, the Community Association is required to assess Unit owners for the expenses of the Trust.
II
¶ 104. The interests of the original developer/ declarant, GN Partners, were acquired by Forward Geneva National in 2001. Forward Geneva National, in turn, was acquired by Keefe & Associates, Inc. in 2005. There is no dispute that Forward Geneva National is the successor-in-title to the original developer/declarant's interest in the Property. There also is no dispute that whoever controls Forward Geneva National is entitled to exercise all rights that GN Partners was entitled to exercise.
¶ 105. The present developer, Keefe & Associates, Inc., has enormous direct power. It has the power to amend the Restrictive Covenant without the approval of others. This includes the power to amend the 85 percent provision that is slated to diminish the developer's power at some point in the future. It has the power to undertake any action affecting the Property that the developer deems desirable or necessary to *607exercise or enforce any right reserved or granted to the developer. It has the power to remove elected directors of the Community Association, officers of the Community Association, and management companies hired by the Community Association, and to appoint successors. It also has a never-ending power to name one of the five directors of the Community Association. In addition, it has the power to exercise the rights and discharge the duties of the Geneva National Trust. And it has the power to approve any condominium declaration, any bylaws, and any rules and regulations of any condominium or condominium association within the Property. Considering this latter power, it is difficult to understand how the court of appeals could conclude that the "Developer has no control over the Condominium Master Association." Solowicz, 316 Wis. 2d 211, ¶ 4, and how that conclusion is confidently reasserted in the court's opinion. Majority op., ¶ 5.
¶ 106. The developer also has control over the Geneva National Trust. According to the petitioners, "The majority of the Trustees are principals of the Developer: The unelected Trustees are Michael Keefe, Robert Keefe, and their business partner Paul Votto." The Trust is independent of the Community Association. As a result, the Trust may dictate to the Community Association assessments upon Unit owners.
¶ 107. Ostensibly, the developer has only four of the 19 votes that are cast by Directors of the Community Association. In 2006, however, the vice president of the Community Association was Scott Lowell, a builder with close ties to Keefe & Associates. In December 2005 Keefe & Associates purchased the interest of Harlow, LLC in Forward Geneva National. At a Geneva National Community Town Hall meeting in February 2006, Community Association Treasurer Rob Keefe *608explained that "Harlow, under the leadership of Scott Lowell, will remain active within Geneva National as a builder and property owner." Thus, an officer of one of the former owners of Forward Geneva National remains active, in part, by serving as Vice President of the Community Association, representing commercial interests.
¶ 108. The Secretary of the Community Association, according to a 2006 document in the record, was Kevin Paluch, representing the Paloma Golf Group, Inc. [e.g., a Club]. As noted in the Community Declaration, all Clubs were owned by the developer/declarant at the time the Declaration was filed. In 2001 the developer altered the Declaration to reduce the assessments on Clubs by shifting all assessments related to the Swim and Racquet Club to residential unit owners. This amendment was signed on behalf of the developer by Kevin Paluch, Vice President of Paloma Development Group, Inc. Presumably, what the developer giveth in terms of assessment relief to Clubs, the developer may taketh away.
¶ 109. To sum up, Robert Keefe, the President of Keefe & Associates, the developer, is also one of three trustees of the Geneva National Trust and Treasurer of the Community Association. He has the power to remove any other director of the Community Association, as well as its executive director — who in 2006 also happened to be the executive director of the Condominium Master Association. In reality, the developer controls both the Geneva National Trust and the Community Association.
Ill
¶ 110. One purpose of the 1990 Community Declaration was to establish "an overall development *609scheme for the l,600[-]acre planned community." Majority op., ¶ 16. An equally important purpose was to assure the developer's control of the "planned community," in every important respect, for as long as the developer wished to retain power. The intent of the Community Declaration in this latter regard is absolutely clear. There are no "checks and balances" in the document. The dispersal of power is largely illusory. As noted above, the Community Declaration trumps the Condominium Ownership Act whenever the two conflict.
¶ 111. Petitioners now challenge the degree and duration of the developer's control of the residential condominiums at Geneva National. In reviewing this challenge, the court appears untroubled that the Geneva National "community of condominiums" is not subject to the Condominium Ownership Act except when the developer wants it to be. If developers are able to secure all the benefits of the condominium form of ownership without submitting themselves to the statutory limitations of the Condominium Ownership Act, they will render the statutory protections of unit owners a legal mirage.
¶ 112. As I see it, petitioners have presented a convincing picture of one-sided control by the developer. However, they have not constructed a compelling argument that the Community Declaration that affords this control is unlawful. They have not pointed to specific Wisconsin statutes that invalidate the Community Declaration nor have they persuaded any justice that "public policy" permits and requires this court to rewrite a 70-page document to give them a better deal. The truth is, this court is not in a position to concoct a remedy for every alleged wrong. In my view, the petitioners have made a strong case for the Wisconsin *610legislature to adopt the Uniform Common Interest Ownership Act to provide additional protections to unit owners.
¶ 113. The individual provisions in the Community Declaration related to developer control are not ambiguous. An argument might be made that provisions of the Condominium Declarations are ambiguous in context because the declarant's stated intent in the Condominium Declarations "to subject the Real Estate Parcel... to the provisions of the Condominium Ownership Act of the State of Wisconsin" is decisively overcome by multiple provisions in the Community Declaration. However, petitioners do not make an extended argument with respect to contextual ambiguity4 and how it would affect the outcome, and they do not present evidence that they and other unit owners were duped when they acquired their units.
¶ 114. Legislative redress appears to be the most promising means of effecting greater balance among the numerous interests in this "planned community." The 2008 amendments to the Uniform Common Interest Ownership Act seek to enhance the protections of unit owners. In my view, greater balance among the interests would make Geneva National a more appealing venue for present and future residential unit owners.
¶ 115. For the foregoing reasons, I reluctantly concur.

 The Walworth County Circuit Court adopted a similar analysis in its decision granting summary judgment.

 Wisconsin Stat. § 895.07 is entitled "Claims against contractors and suppliers." Subsection (1) contains definitions. Paragraph (b) reads: " 'Association' means a homeowner's association, condominium association under s. 703.02(lm), unit owner's association, or a nonprofit corporation created to own and operate portions of a planned community that may assess unit owners for the costs incurred in the performance of the association's obligations." (Emphasis added.) Wisconsin Stat. § 895.07 did not become part of Wisconsin law until April 11, 2006. See 2005 Wis. Act 201.

 Article I, section l.OKjj) defines "Person" to mean and refer to not only "a natural person" but also a "corporation, partnership, association, trust, or other legal entity, or any combination thereof."

 See Folkman v. Quamme, 2003 WI 116, 264 Wis. 2d 617, 665 N.W.2d 857.