Hollis v. Garwall, Inc.

974 P.2d 836
Procedural entryThis page is a short order in Hollis v. Garwall, Inc.. Read the opinion of the Court — 137 Wash. 2d 683
Washington Supreme Court·Decided April 15, 1999·No. 66254-1·Published

Opinion

974 P.2d 836 (1999)
137 Wash.2d 683

Jim C. HOLLIS and Connie M. Hollis, husband and wife; Richard L. Mansor And Toni C. Mansor, husband and wife, Respondents,
v.
GARWALL, INC., a Washington Corporation; Stephen Garner and Jane Doe Garner, husband and wife; Charles Wallin and Jane Doe Wallin, husband and wife; Ibex Construction, Inc., a Washington Corporation, Petitioners.

No. 66254-1.

Supreme Court of Washington, En Banc.

Argued September 24, 1998.
Decided April 15, 1999.
Reconsideration Denied June 2, 1999.

*838 Winston & Cashatt, James Reed, Spokane, McGrane & Schuerman, David E. McGrane, Colville, for Petitioners.

David I. Davison, Winslow, for Respondents.

*837 GUY, C.J.

This is an action to enforce a restrictive covenant set forth in a subdivision plat. We accepted review to resolve a conflict existing between the divisions of the Court of Appeals with respect to whether the "context rule" articulated in Berg v. Hudesman, 115 Wash.2d 657, 801 P.2d 222 (1990), applies to the interpretation of restrictive covenants.

We now hold that the Berg rule applies to the judicial interpretation of restrictive covenants. Applying that rule to the case before us, we affirm the result reached by both the trial court and the Court of Appeals.

FACTS

In January 1981, the owners of 360-plus acres of land near the City of Chewelah in Stevens County subdivided the land and filed a six-page plat titled, "Short Plat 79-80 by Survey." The property was divided into 18 parcels. Fourteen, designated Tracts A through N, are just over 20 acres each in size. The remaining four parcels, labeled SP-1 through SP-4, range in size from just over 10 acres to just under 19 acres. There is nothing in the plat to indicate that Tracts A through N are to be treated differently than SP-1 through SP-4. The first two pages of the plat show the boundaries of the various parcels. The legal descriptions of the parcels are set forth on the last four pages. Page three additionally contains a surveyor's certificate, plat certificate, auditor's certificate, and an acknowledged "owner's certificate," which states: "We the undersigned do hereby acknowledge that this plat, as described and shown hereon has been made with our consent and in accordance with our desires." The owner's certificate is signed by 10 individuals.[1] A three-paragraph section labeled "Restrictions" is set forth in the upper left corner of page three of the plat, and states:

RESTRICTIONS

1. Prior to construction, placement or development of any living quarters, wellsites or roadways with this plat, a permit to install an individual sewage disposal system shall be secured from the N.E. Tri-County Health District.
2. No tract or lot shall be further divided for sale or lease without prior approval of the Plat Administrator.
*839 3. This plat is approved as a residential subdivision and no tract is to have more than one single family residential unit. Conversion of any lot to other than its authorized occupancy must be in accordance with authorizations associated with separate application and procedure.

Exhibit 1, at 3 (emphasis added).

In June 1981, Plaintiffs Richard and Toni Mansor bought SP-2, an 18.75-acre lot within the subdivision. Their statutory warranty deed sets out verbatim the above restrictions. The Hollis property was acquired in May 1986 (SP-3), and June 1990 (SP-4). The warranty deed and real estate contract connected with the purchase of the Hollis property show that their lots are subject to the restriction quoted above.

In October 1993, Defendant Garwall, Inc. purchased Tract B.[2] The statutory warranty deed transferring ownership in that property states that the tract is subject to easements set forth in the Short Plat 79-80 by Survey, but does not specifically mention the three restrictions contained in that plat.

In May 1995, Garwall, Inc., with IBEX Construction, Inc., cleared the land in Tract B and began a mining and rock crushing operation to provide rock for a nearby highway project. The operation included blasting, crushing rock, production of asphalt, development of a slurry pond, and continuous truck traffic to remove the crushed rock off the property. Plaintiffs Hollis and Mansor (hereafter Plaintiffs) notified Garwall that they objected to the use of the land for a rock crushing operation and that the operation violated the subdivision's restrictive covenants. When Garwall and IBEX continued with their mining operation, Plaintiffs filed this action for injunctive relief and for damages.[3]

The Plaintiffs moved for partial summary judgment, claiming Garwall's mining and rock crushing activities violated the plat restriction language as a matter of law. Plaintiffs argued that the language of the plat restriction created a residential subdivision and limited each tract to one single family residential unit. Garwall responded that the intent of the subdividers in agreeing to the restrictions was to place restrictions only on the four smaller lots, SP-1 through SP-4. In support of its position, Garwall offered an affidavit of Ron Matney, one of the original owners/developers of the subdivision, stating that the developers intended the restriction to apply to the smaller lots but not to the larger ones. Garwall also offered the affidavit of a Stevens County plat administrator, who states that the County required approval of the short plat but not of the entire subdivision shown in the "Short Plat 79-80 by Survey." The plat administrator testified by affidavit that the restriction language is required in short plats. She further testified that it was not the County's intent to establish any restrictions as to the uses that could occur on Tract B, the property involved here.

The trial court refused to consider extrinsic evidence to prove the intent of the original developers and granted the Plaintiffs' motion for partial summary judgment. The trial court ruled, in pertinent part: (1) The subdivision document (Exhibit 1) is not ambiguous with respect to the "Restrictions" provisions. (2) The affidavits submitted by Garwall were not admissible because the subdivision document was not ambiguous. (3) The "Restrictions" provision applies to all property within the subdivision, allows only residential use, and prohibits commercial mining and related activities. The trial court granted a permanent injunction and ordered that the Plaintiffs could proceed to trial with the damages portion of their case.

*840 Garwall appealed, arguing that extrinsic evidence should have been admitted, under Berg, 115 Wash.2d 657, 801 P.2d 222, to show the intent of the developers of the subdivision. The Court of Appeals agreed with the trial court that the Berg rule does not apply to the interpretation of restrictive covenants. Hollis v. Garwall, Inc., 88 Wash.App. 10, 945 P.2d 717 (1997).

After the Court of Appeals filed its opinion, Garwall moved to supplement the record with an additional affidavit. The Court of Appeals denied the motion, holding that it would be inequitable, and thus inconsistent with RAP 9.11(a)(6), to permit Garwall to wait until the Court of Appeals had issued its opinion to come forward with evidence that might have supported a different result.[4]

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Hollis v. Garwall, Inc., 974 P.2d 836 (Wash. 1999).

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