Court Opinion

ID: 9534129
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:37:03.355368+00
Date Added: 2024-06-11T13:29:38.328547
License: Public Domain

Dore, J.
(concurring in part, dissenting in part) — I concur in the majority's decision that the covenant requiring Looney to pay maintenance assessments survived the tax sale under RCW 84.64.460. I dissent, however, from the majority's decision that gives the validity of the lien claimed by Lake Arrowhead to secure Looney's debt for the assessments. I dissent in part because I believe that the lien is not enforceable, regardless of the validity of the covenant.
Filing the Covenant Did Not Grant Arrowhead a Lien Securing Unpaid Assessments
As the majority correctly states, the covenant at issue here authorizes Lake Arrowhead to charge property owners such as Looney an assessment for the operation and maintenance of community facilities. The covenant, along with others, was properly recorded. The covenant itself does not grant Lake Arrowhead a lien to secure unpaid assessments. Such a lien is granted by Lake Arrowhead's bylaws. The bylaws, however, were not recorded and are not a lien against the property.
At oral argument, counsel for Looney argued that the covenant did not survive the tax foreclosure sale because the bylaws imposing the lien were not recorded. Lake Arrowhead's failure to record the lien, he argued, meant that the conditions of RCW 84.64.460 had not been satisfied. The majority disposes of this argument correctly by noting that the lien's not being recorded has no bearing on the covenant's validity. Since the covenant was recorded, it met the requirements of the statute and survived the tax sale. Footnote 2.
*300The premise of the majority's argument is that the lien and the covenant are separate conveyances. While I agree with the majority on this point, it raises an issue which the majority does not address. If the lien and the covenant are separate conveyances, so that the failure to record the lien does not invalidate the covenant, then the fact that the covenant was recorded does not assure that the lien is valid and enforceable. On the contrary, the lien is unenforceable because the bylaws by which Lake Arrowhead claimed that lien were never recorded. Looney owes Lake Arrowhead a debt, imposed by the valid covenant, but that debt is unsecured and is not a lien against the property.
Lake Arrowhead Was Required To Record Its Bylaws To Obtain a Lien
It appears from the record that the bylaw purporting to impose a lien to secure the assessments was not a regular conveyance, duly executed and acknowledged by Looney. See Clerk's Papers, at 27-28. That alone would not render it unenforceable. The bylaw could qualify as an irregular conveyance as defined in RCW 65.08.030.
However, Lake Arrowhead's failure to record the bylaws does render the lien unenforceable. RCW 65.08.030 provides that documents which are not properly executed and acknowledged: "impart the same notice to third persons, from the date of recording, as if the instrument had been executed, acknowledged, and recorded, in accordance with the laws regulating the execution, acknowledgment, and recording of the instrument then in force." Had the bylaws been recorded, Looney would have had constructive notice of the lien and it would have been binding on him as a subsequent purchaser. Since the bylaws were not recorded, the lien is not enforceable against Looney. RCW 65.08.070.
The case of Murphy v. Seattle, 32 Wn. App. 386, 647 P.2d 540 (1982) (Durham, J.) is closely analogous. In Murphy, Scottish Rite Temple had settled a dispute with the City of Seattle and certain neighbors over the Temple's use of certain parcels of property. The settlement was set *301forth in a stipulation. The stipulation contained a covenant restricting two of the lots owned by the Temple, lots 5 and 6, to residential use. The stipulation was never recorded.
After purchasing lots 5 and 6 from the Temple, Murphy attempted to acquire a conditional use permit which would have allowed him to locate his chiropractic clinic on lot 5. The conditional use was denied based on the stipulation's covenant restricting the lot to residential use. The Court of Appeals held that the denial of the conditional use permit was erroneous. Since the stipulation had never been recorded, the Court of Appeals reasoned, it did not provide constructive notice and was not enforceable against Murphy.
The common thread which runs through these cases is the principle that our recording statute, RCW 65.08.030 et seq., protects parties and their successors who agree to restrict the use of land from subsequent purchasers of the land who wish to escape the burden of the restrictions. The statute imparts constructive notice to such purchasers. It is also clear that in order to enjoy this protection, the original covenantors must record the agreement according to statute.
Murphy, at 392.
Here, the lien contained in the bylaws is analogous to the covenant contained in the stipulation in Murphy. It is an irregular conveyance which will be binding on a subsequent purchaser only if it is recorded. The bylaws, like the stipulation, were not recorded; the lien, like the covenant, is therefore not binding on Looney.
To impose a lien such as this, without notice to the purchaser, is a violation of due process. In Brower v. Wells, 103 Wn.2d 96, 690 P.2d 1144 (1984) we held that foreclosures by the City of Yakima were invalid because of a denial of due process. The City had given notice of foreclosure by publication in a local newspaper. We held that this did not meet the due process standard set by Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 94 L. Ed. 865, 70 S. Ct. 652 (1950) and progeny. Due process requires notice which is actually calculated to inform parties of their rights. *302Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 800, 77 L. Ed. 2d 180,103 S. Ct. 2706 (1983).
Here, the purchaser, Looney, did not even receive constructive notice of the lien which Arrowhead asserts. This clearly falls below the standards of due process, and the majority errs in granting Arrowhead a lien to secure the debt imposed by its valid covenant.
Response to Justice Brachtenbach's Concurring Opinion
Both Justice Brachtenbach and the majority argue that the issue of the lien's validity was not raised by the parties. However, the issue of the lien's validity is raised by the majority itself, because of the way it disposes of the issues which the parties did raise.
If, on remand, the covenant is found valid, Arrowhead will attempt to recover on its debt. Arrowhead purports to have a lien. In the order appealed from, the trial court authorized Arrowhead to foreclose on its lien. The logic of the majority opinion, however, implies that that lien is not valid. I believe we should address the lien's validity for the sake of clarity and efficiency in the disposition of this case, since that issue will inevitably arise on remand.
Conclusion
Since the bylaws purporting to grant a lien to secure payment of assessments under the covenant were not filed, Looney had no constructive notice. The lien, which was never filed, is therefore not binding or enforceable against him. While Looney owes a debt for the unpaid assessments, that debt is unsecured.