Opinion
No. 31772-9-II
Filed: August 3, 2005 UNPUBLISHED OPINION
Appeal from Superior Court of Skamania County. Docket No: 03-2-00082-7. Judgment or order under review. Date filed: 04/29/2004. Judge signing: Hon. E. Thompson Reynolds.
Counsel for Appellant(s), Steven Erik Turner, Miller Nash LLP, 500 Broadway St Ste 400, Vancouver, WA 98660-3324.
Counsel for Respondent(s), John Maurice Groen, Groen Stephens Klinge LLP, 11100 NE 8th St Ste 750, Bellevue, WA 98004-4469.
After Dennis and Elizabeth Lane sought to enforce a restrictive covenant, the trial court granted Lawrence L'Hommedieu's motion for partial summary judgment. The Lanes appeal, claiming that genuine issues of material fact preclude summary judgment. We agree and reverse and remand.
FACTS
This appeal involves the validity and interpretation of a 1944 covenant. The parties generally do not dispute the facts.
In September 1944, E.E. and Pearl Carroll and Russell and Viretta Ward sold property in Skamania County (the county) to Millard and Verna Christal. The deed described the property:
The Northwest quarter (1/4) of the Northwest quarter (1/4) and the Southwest quarter (1/4) of the Southwest quarter (1/4) of Section 14, and the East half (1/2) of Section Fifteen (15) and the West half (1/2) of the West half (1/2) of the Northwest quarter (1/4) and the West half (1/2) of the Northwest quarter (1/4) of the Southwest quarter (1/4) of Section twenty-three [23] in township 2 North, Range 5 East of the Willamette Meridian, in the County of Skamania, State of Washington.
I Clerk's Papers (CP) at 10.
Additionally, the deed contained a restrictive covenant:
[T]he aforesaid property or any buildings or structures erected thereon, shall not be used for any purpose which will cause polution [sic] to the waters of the Washougal River or any tributary thereof, and all sewage disposal shall be by means of a septic tank of standard design, and no septic tank or drainage shall discharge within fifty feet of the banks of the Washougal River or any tributary therof.
. . . .
These covenants may be voided and made of no effect by the unanimous consent of all owners of the property above described.
I CP at 11.
These properties changed hands several times. In 1966, the county engineer approved a plat map of the River Glen subdivision, portions of which are bound by the covenant. The parties agree that the chains of title for the properties in question trace back to the 1944 deed.
Although the parties live in a subdivision, the covenant does not derive from a common plan. Rather, the covenant originated in 1944, long before the development of the River Glen subdivision.
The Lanes and L'Hommedieu own adjacent property in the River Glen subdivision. Both parties' property borders the Washougal River. The Lanes own Lots 6 and 7 and have a home on the parcels. L'Hommedieu owns Lots 8 and 9, the property to the south of the Lanes' parcels. A waterway runs mostly along the border of Lots 8 and 9.
L'Hommedieu lived in an existing home on Lot 8. He wanted to build a second home on Lot 9. As part of the construction project, he proposed to build two septic systems. The plans called for the septic systems to be located approximately 18 feet from the waterway.
According to the Skamania County Code (SCC), certain streams, creeks, and rivers must have a 25-foot buffer zone, unless the property owner receives a variance. SCC 21A.04.020(C)(3)(b) and (4)(c)(v). The code regulated the waterway on L'Hommedieu's property. SCC, Appendix C (defining `Class V' streams, creeks, or rivers as `all natural waters not classified as Class I, II, III or IV, including streams with or without well-defined channels, areas of perennial or intermittent seepage, ponds, natural sinks and drainageways having short periods of spring or storm runoff'). Because his proposed septic systems were within the 25-foot buffer zone, L'Hommedieu sought and received a variance.
The Lanes filed a petition for review under the Land Use Petition Act (LUPA), challenging the variance. This petition also sought permanent relief enjoining any construction on L'Hommedieu's property violating the 1944 covenant.
L'Hommedieu moved for partial summary judgment on the covenant claim. The trial court granted the motion. In its oral ruling, the trial court determined the following: (1) the Lanes could enforce the covenant, (2) the covenant's purpose was to prevent pollution of the Washougal River, (3) the waterway on L'Hommedieu's property did not constitute a `tributary' as intended by the original parties to the covenant, and (4) the purpose of the covenant was not defeated by the septic systems because they were `very sophisticated' and `probably more efficient than a septic system would have been in 1944 using the standards that were in effect in 1944.' Report of Proceedings (8/28/2003) (RP) at 7.
We may use the trial court's oral ruling to interpret its consistent written ruling. State v. Ward, 125 Wn. App. 138, 145, 104 P.3d 61 (2005).
The trial court denied the Lanes' motion for reconsideration. It also affirmed the land use decision that granted the variance.
Initially, the Lanes named the county as a defendant. By stipulation, the county is not a party on appeal.
The Lanes appeal.
ANALYSIS Interpretation of the Covenant, L'Hommedieu's Arguments
L'Hommedieu urges us to affirm because the covenant is unenforceable. He sets forth several of the arguments that he asserted below in his motion for partial summary judgment. The court disagreed, determining that the covenant was valid and enforceable. We address his arguments before turning to the Lanes' assignments of error.
Validity of the Covenant
A `covenant' is `a covenantor's promise to a covenantee to do or to refrain from doing something, which the convenantee may enforce in court.' 17 William B. Stoebuck John W. Weaver, Washington Practice: Real Estate: Property Law sec. 3.1, at 123 (2004). A covenant that runs with the land may be enforced by a successor of the covenantee or against a successor of the covenantor. 17 Wash. Practice sec. 3.1, at 123.
Generally, there are two types of running covenants, real covenants (developed and enforced at law) and equitable covenants (developed and enforced in the Chancery). Hollis v. Garwall, Inc., 137 Wn.2d 683, 691, 974 P.2d 836 (1999). But distinctions between these types of covenants have `largely vanished' from Washington case law. 1515-1519 Lakeview Boulevard Condo. Assoc. v. Apartment Sales Corp., 146 Wn.2d 194, 203, 43 P.3d 1233 (2002).
Running covenants are useful because, inter alia, they "permit the creation of stable arrangements for shared use of land, providing an alternative to acquisition of fee-simple interests for transportation corridors and natural-resource exploitation." Lake Limerick Country Club v. Hunt Manufactured Homes, Inc., 120 Wn. App. 246, 253, 84 P.3d 295 (2004) (quoting Restatement (Third) of Property: Servitudes sec. 1.1 cmt. a, at 9 (2000)). `While restrictive covenants were once disfavored . . . modern courts have recognized the necessity of enforcing such restrictions to protect the public and private property owners from the increased pressures of urbanization.' Lakes at Mercer Island Homeowners Ass'n v. Witrak, 61 Wn. App. 177, 179, 810 P.2d 27, review denied, 117 Wn.2d 1013 (1991).
In 1515-1519 Lakeview, our Supreme Court set forth the elements of a running covenant:
(1) a promise which is enforceable between the original parties; (2) which touches and concerns; (3) which the parties intended to bind successors; and (4) which is sought to be enforced by an original party or a successor, against an original party or a successor in possession; (5) who has notice of the covenant or has not given value.
146 Wn.2d at 203 (quoting William B. Stoebuck, Running Covenants: An Analytical Primer, 52 Wash. L. Rev. 861, 909-10 (1977)). If the covenant does not meet these requirements, it is simply a contract enforceable only by the original parties. 1515-1519 Lakeview, 146 Wn.2d at 202.
Here, the September 1944 covenant read, in relevant part:
[T]he aforesaid property or any buildings or structures erected thereon, shall not be used for any purpose which will cause polution [sic] to the waters of the Washougal River or any tributary thereof, and all sewage disposal shall be by means of a septic tank of standard design, and no septic tank or drainage shall discharge within fifty feet of the banks of the Washougal River or any tributary therof.
. . . .
These covenants may be voided and made of no effect by the unanimous consent of all owners of the property above described.
I CP at 11.
The parties dispute two elements, namely, whether the 1944 covenant constituted an enforceable promise and whether L'Hommedieu had sufficient notice.
Enforceable Promise
First, L'Hommedieu claims that the covenant is not enforceable because it contains an illusory promise. In the alternative, he argues that the covenant terminated by merger.
L'Hommedieu raises his merger argument for the first time on appeal. A party may state a basis to affirm for the first time on appeal if the `record has been sufficiently developed to fairly consider the ground.' RAP 2.5(a). That is not the case here and we do not address the argument.
Under the merger doctrine, a covenant terminates if a single person or group of persons owns both the benefited and burdened land. Schlager v. Bellport, 118 Wn. App. 536, 539, 76 P.3d 778 (2003) (noting that when the benefit and burden merge, `the [covenant] ceases to serve any function. Because no one else has an interest in enforcing the [covenant], [it] terminates.') (quoting Restatement (Third) of Property sec. 7.5 cmt. a (2000)).
Here, L'Hommedieu's motion for partial summary judgment correctly noted that the 1944 deed does not identify the benefited land. Nor did the parties present other evidence to identify such property. Because we cannot determine whether the benefited and burdened land came under common ownership, we do not address his merger argument.
L'Hommedieu's primary argument, however, is that the 1944 contract was illusory and thus the covenant is unenforceable.
A supposed promise is illusory if it is so indefinite that it cannot be enforced or if its performance is optional or discretionary on the part of the promisor. Zuver v. Airtouch Communications, Inc., 153 Wn.2d 293, 317, 103 P.3d 753 (2004). Illusory contracts cannot be enforced because they lack consideration. St. John Med. Ctr. v. Dep't of Soc. Health Servs., 110 Wn. App. 51, 68, 38 P.3d 383, review denied, 146 Wn.2d 1023 (2002).
Here, the relevant language reads: `These covenants may be voided and made of no effect by the unanimous consent of all owners of the property above described.' I CP at 11. When the Carrolls and Wards transferred the property, the Christals became the sole `owners of the property above described.' I CP at 11. Arguably, then, performance of the covenant became optional or discretionary at the time of transfer because of the Christals' sole ownership.
Assuming, without finding, that the September 1944 promise was illusory, the Christals incorporated the covenant by reference in subsequent property transfers. On November 6, 1944, the Christals, retaining section 23 and part of section 14, sold another part of section 14 and all of section 15 to the Tappendorffs. And the deed stated that the transfer was subject to `conditions and restrictions as contained in [the] deed of record.' II CP at 135. Thus, on November 6, 1944, the `out' clause was no longer contractually problematic because there were multiple `owners of the property above described.' I CP at 11. When the deed incorporated the covenant, it revived its terms.
Further, the Tappendorffs quickly sold their portion of section 14 to the Montchalins on November 14, 1944, keeping section 15. Similarly, their deed incorporated the covenant by reference; the transfer remained subject to `building restrictions and conditions of record.' II CP at 137. On this date, there were three couples who owned property subject to covenant, rendering the `out' clause permissible.
Because later deeds incorporated the covenant by reference, the covenant remains enforceable.
Notice
Next, L'Hommedieu contends that he did not have notice of the covenant. In support of his argument, he cites his declaration, which states that both he and numerous neighbors in the subdivision were unaware of the covenant.
Like his merger claim, L'Hommedieu did not assert this argument below. Nor did the trial court make a ruling on this basis. Under RAP 2.5(a), then, he may present this ground to affirm only if there is sufficient evidence in the record to fairly consider it. But the evidence in the record suggests that L'Hommedieu had constructive notice of the covenant.
RCW 65.08.070 provides that when conveyances of real property are recorded, these conveyances are valid as against subsequent purchasers:
A conveyance of real property . . . may be recorded in the office of the recording officer of the county where the property is situated. Every such conveyance not so recorded is void as against any subsequent purchaser or mortgagee in good faith and for a valuable consideration . . . of the same real property or any portion thereof whose conveyance is first duly recorded.
RCW 65.08.060(3) defines the term `conveyance' as `every written instrument by which any estate or interest in real property is created, transferred, mortgaged or assigned or by which the title to any real property may be affected.'
When persons record a covenant, then, third parties are deemed to have constructive notice of such covenants. 17 Wash. Practice sec. 3.16, at 155. As described by Professor Stoebuck:
Notice may be actual or constructive. . . . [T]he recording of an instrument that conveys an interest in land imparts notice of the contents of that instrument to persons who subsequently acquire interests in the land. The recording of an instrument containing an equitable restriction imparts notice of it to persons who later acquire interests in the burdened land. Since covenants are usually contained in formal, recorded instruments, persons subsequently dealing with the land are usually charged with constructive notice of them.
17 Wash. Practice sec. 3.16, at 155-56 (footnotes omitted).
Here, L'Hommedieu had constructive notice of the covenant. The covenant can be found in deeds recorded in September and November 1944. Whether he had actual notice is a matter for the fact finder. But because the Christals recorded the deed, and thus the covenant, L'Hommedieu had sufficient notice.
Because L'Hommedieu had constructive notice, we do not examine his declaration.
As such, the trial court properly found the existence of a valid covenant.
Interpretation of the Covenant, the Lanes' Argument Nature of the Waterway
The Lanes first argue that reasonable minds could differ as to whether the waterway, bordering L'Hommedieu's property, constitutes a `tributary' within the covenant's meaning.
On review of any pleadings, depositions, answers to interrogatories, admissions, and affidavits on file, summary judgment is available if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Mercer Place Condo. Ass'n v. State Farm Fire Cas. Co., 104 Wn. App. 597, 601, 17 P.3d 626 (2000), review denied, 143 Wn.2d 1023 (2001); CR 56(c). When resolving a motion for summary judgment, we view the facts and all reasonable inferences in the light most favorable to the nonmoving party. Tanner Elec. Coop. v. Puget Sound Power Light Co., 128 Wn.2d 656, 668, 911 P.2d 1301 (1996). Engaging in the same inquiry as the trial court, we review orders granting summary judgment de novo. Mercer Place Condo. Ass'n, 104 Wn. App. at 601.
CR 56(c) provides, in relevant part: `[T]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'
When interpreting a covenant, our primary objective is to discern the parties' intent. Lakes at Mercer, 61 Wn. App. at 179. We generally look to the covenant's purpose to determine such intent. Lakes at Mercer, 61 Wn. App. at 180.
As a general rule, the parties' intentions present questions of fact. Paradise Orchards Gen. P'ship v. Fearing, 122 Wn. App. 507, 517, 94 P.3d 372 (2004), review denied, 153 Wn.2d 1027 (2005). We interpret terms as a question of law when (1) the interpretation does not depend on the use of extrinsic evidence or (2) if extrinsic evidence is used, only one reasonable interpretation can be drawn from it. Tanner, 128 Wn.2d at 674. Summary judgment is rarely appropriate when extrinsic evidence is needed. Hearst Communications, Inc. v. Seattle Times Co., 120 Wn. App. 784, 791, 86 P.3d 1194 (2004), aff'd, ___ P.3d ___ (2005).
Washington follows the context rule in which `extrinsic evidence is admissible as to the entire circumstances under which the contract was made, as an aid in ascertaining the parties' intent.' Berg v. Hudesman, 115 Wn.2d 657, 667, 801 P.2d 222 (1990). The contract need not be ambiguous before extrinsic evidence is admissible. Berg, 115 Wn.2d at 669. In Hollis, our Supreme Court extended the context rule to restrictive covenants. 137 Wn.2d at 686.
We give undefined terms their "plain, ordinary and popular" meaning. Kitsap County v. Allstate Ins. Co., 136 Wn.2d 567, 576, 964 P.2d 1173 (1998) (quoting Boeing Co. v. Aetna Cas. Sur. Co., 113 Wn.2d 869, 877, 784 P.2d 507 (1990)). We may ascertain this meaning by reference to standard English dictionaries. Queen City Farms, Inc. v. Cent. Nat'l Ins. Co., 126 Wn.2d 50, 77, 882 P.2d 703 (1994).
When clear and unambiguous, we interpret a covenant's terms as a question of law. Paradise Orchards, 122 Wn. App. at 517 (applying contract law). A provision is ambiguous if it is fairly susceptible to two different, reasonable interpretations. McDonald v. State Farm Fire Cas. Co., 119 Wn.2d 724, 733, 837 P.2d 1000 (1992). But a term is not ambiguous simply because the parties suggest opposing meanings. Paradise Orchards, 122 Wn. App at 517. Summary judgment is proper if the term, viewed in light of the parties' objective manifestations, has only one reasonable meaning. Go2Net, Inc. v. C I Host, Inc., 115 Wn. App. 73, 85, 60 P.3d 1245 (2003).
Here, the covenant provides that `no septic tank or drainage shall discharge within fifty feet of the banks of the Washougal River or any tributary thereof.' I CP at 11 (emphasis added). In competing declarations, the parties disputed the nature of the waterway.
In his declaration, L'Hommedieu described the waterway:
The ditch that runs through my lots is manmade [sic]. It is not a natural creek. The entire vicinity has historically been fairly wet. The ditch functions to help channel surface waters for better drainage of the area. The ditch is approximately two feet wide and typically has no more than a few inches of flowing water. Although an exact year is uncertain, the ditch was constructed sometime after 1966 when the area was subdivided.
I CP at 18.
In contrast, the Lanes claimed that the waterway had a natural source:
[The] stream begins across Washougal River Road, the major route along the Washougal River, and is piped under Washougal River Road and River Glen Road and flows across the L'Hommedieu property to the Washougal River. The source is an underground spring and possibly a mountain lake on a mountain on the other side of the Washougal River Road. We have followed this stream to its source.
II CP at 224.
In its ruling, the trial court first noted that it had reviewed both declarations. It then determined that the waterway was not a `tributary' within the meaning of the covenant:
[L'Hommedieu's] affidavit states that the stream across his property is man-made and was constructed after 1966.
And this is somewhat supported by the affidavit of Dennis and Elizabeth Lane. . . .
. . . .
I cannot find under those facts that this [waterway] meets the requirements for being a tributary of the Washougal River. I don't think that was what was intended. I'd have to go back to the intent of the original people who created the covenant, and they didn't even know anything about this at that time, obviously, this was 1944. It wasn't in existence in 1944. . . . It does not appear to meet the definition of a tributary.
RP at 5-7 (emphasis added). When making this ruling, then, the trial court determined the original parties' intentions, an issue generally reserved for the fact finder. And although the parties disputed these facts, the trial court found that the waterway had been man-made.
Further, the term `tributary' remains ambiguous because it has more than one reasonable meaning. The covenant does not define the term `tributary.' I CP at 11. But the common and ordinary meaning of `tributary' is `[a] stream flowing directly or indirectly into a river.' Black's Law Dictionary 1545 (8th ed. 2004). This definition does not distinguish between naturally-occurring and man-made waterways. Both interpretations are reasonable. Further, man-made channels often capture natural run off displaced by impervious or developed areas.
Accordingly, the trial court erred in granting summary judgment on this issue.
Purpose of the Covenant
Finally, the Lanes contend that there is a `reasonable inference that the 50-foot setback continues to serve its intended purpose of protecting the Washougal River.' Appellant's Brief at 23. They claim that the trial court improperly applied the doctrine of changed neighborhood conditions.
As a defense to enforcement of a covenant, a party may assert changed neighborhood conditions. 17 Wash. Practice sec. 3.8, at 142. Professor Stoebuck described the changed neighborhood doctrine as follows:
The fact pattern that gives rise to the defense is that the neighborhood covered by a covenant . . . has so changed since the covenant was made that to enforce it against one owner would be of no substantial benefit to the persons attempting to enforce it. This means, of course, that within the neighborhood the covenant is not now being observed in a number of locations, either because owners are violating it or because persons who might have enforced it have waived enforcement.
17 Wash. Practice sec. 3.8, at 142.
This defense applies if there is `a material change in the character of the neighborhood
. . . so as to `render perpetuation of the restriction of no substantial benefit to the dominant estate and to defeat the object or purpose of the restriction." St. Luke's Evangelical Lutheran Church v. Hales, 13 Wn. App. 483, 485, 534 P.2d 1379 (quoting Annot. 4 A.L.R.2d 1111, 1119 (1949)), review denied, 86 Wn.2d 1003 (1975). The availability of this defense is generally a question of fact. St. Luke's, 13 Wn. App. at 486.
Here, the trial court explained its ruling:
[I]f Mr. L'Hommedieu's actions somehow polluted the river, first of all, the state wouldn't let him put [in] a septic system. . . . But in this case, the purpose of the covenant to prevent pollution is not defeated by Mr. L'Hommedieu's actions, because, again, the unconverted [sic] affidavits are that this septic system
. . . is a very sophisticated system, that it's probably more efficient than a septic system would have been in 1944 using the standards that were in effect in 1944.
There's an affidavit from another engineer that says, well, this is a good system, however, it could fail. Well, yes, certainly anything could fail. But assuming that the system is maintained and kept up, I'd have to presume that . . . it does control pollution. Which, again, was the purpose of the covenant all along . . . to prevent things from being either built or a septic [system] from being discharged, which would somehow pollute the Washougal River.
RP at 7 (emphasis added). This ruling does not identify a material change in the neighborhood. Nor does it state whether other owners have violated the covenant or waived enforcement. Notably, these issues are questions of fact. Even if the trial court had identified a material change in the neighborhood, questions of fact remain. The fact finder should decide whether the septic systems' technological sophistication renders the covenant unnecessary. In essence, the trial court's ruling makes the location of the septic systems irrelevant because it is premised on the assumption that the systems will never pollute the Washougal River. This issue is not one properly resolved on summary judgment.
Reversed and remanded.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
MORGAN, J., and ARMSTRONG, J., concur.