Lake Limerick Country Club v. Hunt Mfg. Homes, Inc.

84 P.3d 295
CourtCourt of Appeals of Washington
DecidedFebruary 18, 2004
Docket29774-4-II
StatusPublished
Cited by13 cases

This text of 84 P.3d 295 (Lake Limerick Country Club v. Hunt Mfg. Homes, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lake Limerick Country Club v. Hunt Mfg. Homes, Inc., 84 P.3d 295 (Wash. Ct. App. 2004).

Opinion

84 P.3d 295 (2004)

LAKE LIMERICK COUNTRY CLUB, a Washington not-for-profit corporation, Respondent,
v.
HUNT MFG. HOMES, INC., a Washington corporation, Appellant.

No. 29774-4-II.

Court of Appeals of Washington, Division 2.

February 18, 2004.

*296 Robert Dryden Wilson-Hoss, Attorney at Law, Shelton, WA, for Respondent.

James Philip Kintner, Kintner Law Group Inc PS, Poulsbo, WA, for Appellant.

MORGAN, J.

The primary questions in this appeal are (1) whether a Declaration of Restrictions is enforceable against the land it describes, and (2) whether a Declaration of Restrictions, when "correlated"[1] with the articles and bylaws of a homeowners' association, can render a member of the association personally liable for dues accruing during its membership. The trial court answered yes to both *297 questions, and so do we. Accordingly, we affirm.

In the mid-1960s, Lake Limerick Associates (LLA) developed about 1300 residential lots in Mason County. It also incorporated a homeowners' association called Lake Limerick Country Club, Inc. (LLCC). LLCC had articles and bylaws at all times pertinent here.

On December 20, 1967, LLA recorded a "Declaration of Restrictions" that provided in part as follows:

The Real property subject to this Declaration is situated in Mason County, State of Washington and is more particularly described as follows:
Lake Limerick, Division No. 4, ...
. . .
The owners of any Lot in said Tract or portion of said Tract shall be bound by the Articles of Incorporation and the By-Laws of the Lake Limerick Country Club. Dues and Assessments as levied in accordance with said By-Laws and Articles of Incorporation of the Lake Limerick Country Club, Inc. shall constitute a lien against the lots in the Tract described in Article I and can be foreclosed by Lake Limerick Country Club, Inc. in the manner provided by the laws of the State of Washington for the foreclosure of liens, including interest on the amount due together with reasonable attorney fees.
. . .
The covenants, conditions and restrictions herein contained shall run with said land and shall be binding and in force and effect until December 31, 2010, for the mutual benefit of all lots and building sites in said Tract.[[2]]

Even before LLA recorded this Declaration of Restrictions, it filed LLCC's Articles of Incorporation with the Secretary of State. Insofar as pertinent here, those Articles said that LLCC's purposes were (1) "[t]o enforce assessments, liens, charges, restrictions, conditions and covenants existing upon and/or created for the benefit of parcels of real property in the plat or added to the plat of Lake Limerick Country Club, Inc."; and (2) "[t]o fix, establish, levy and collect annually such charges and/or assessments as may be necessary in the judgment of the board of trustees, to carry out any or all of the purposes for which this corporation is formed, but not in excess of the maximum from time to time fixed by the By-Laws."[3]

At least by 1998, LLCC's bylaws provided that each of its members was responsible to pay annual membership dues. The bylaws stated:

The Board of Trustees shall impose, and the members of the corporation and the lots or tracts of land in which they hold an interest shall be responsible for and pay, annual membership dues for the purpose of providing funds for the operation, maintenance, repair, replacement and/or protection of existing real and personal property of the corporation; ...
. . .
The requirement to pay dues and assessments is a lien upon each lot within the development, prior to all other liens, regardless of the status of any account for the same.... The aggregate amount of all such dues and assessments, including expenses, fees and costs reasonably imposed pursuant hereto associated with the same shall be a personal obligation of the lot owner and/or purchaser, shall run with the title to the lot, and may be sued upon directly by the corporation.

In addition, the amount of any dues or assessments not paid pursuant to the terms for payment set forth by the Board of Trustees, as well as all expenses, attorney fees and costs, including title search and certificate costs, reasonably incurred in enforcing and collecting judgments for the same shall be a lien upon the land assessed and the membership appurtenant thereto, superior to any and all other liens created or permitted by the owner of such land, and enforceable by foreclosure proceedings in the manner provided by law for foreclosure of mortgages upon land or non-judicial foreclosure of deeds of trust, *298 at the option of the Board of Trustees; provided, that no proceedings for the foreclosure of any said liens in this Article VIII provided, shall be commenced except upon the expiration of four months from and after the day of mailing said notice of dues and/or assessment in this section described. Deficiency judgments in such foreclosure proceedings are specifically authorized.[[4]]

In early 2000, LLCC was owed a substantial amount of homeowners' dues on Lot 53. On February 28, 2000, Hunt Manufactured Homes, Inc., a Washington corporation, acquired title to that lot. Hunt did not pay all the dues, costs, and fees that were then outstanding. Nor has it paid all the dues, costs, and fees that since have accrued. For convenience, we will refer to dues, costs, and fees simply as "dues."

In October 2001, LLCC sued for the dues owed on Lot 53. It alleged that Lot 53 should be held liable for all such dues and that Hunt should be held personally liable for dues accruing after it had acquired the lot (i.e., for dues accruing after February 28, 2000).

In October 2002, the trial court heard cross-motions for summary judgment. After finding that unpaid dues had accrued both before and after February 28, 2000, it entered judgment against Lot 53 for the total amount of such dues, and judgment against Hunt personally for the portion of such dues that had accrued after February 28, 2000. It ruled that a lien secured all such dues, that the lien should be foreclosed, and that the lot should be sold. It ordered that the proceeds of sale be applied first to dues assessed only against the lot and that LLCC receive a deficiency judgment against Hunt for the remaining balance, if any, of dues assessed against Hunt personally. It awarded costs and reasonable attorney fees against the lot and a major portion of those costs and fees against Hunt personally.[5]

Hunt now appeals. It claims that homeowners' dues should not have been charged against Lot 53 because the obligation to pay them did not "run with the land." It also claims that it should not have been held personally liable for such dues because it never contracted to pay them. Finally, it claims that the trial court awarded an amount of dues that was "unconscionable" and an amount of attorney fees that was not reasonable.

I.

The first issue is whether the Declaration of Restrictions gave rise to a covenant running with the land. If it did, Lot 53 is liable for unpaid homeowners' dues accruing both before and after February 28, 2000. If it did not, Lot 53 is not liable for homeowners' dues.

Covenants running with the land are useful "because they create land-use arrangements that remain intact despite changes in ownership of the land."[6]

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Cite This Page — Counsel Stack

Bluebook (online)
84 P.3d 295, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lake-limerick-country-club-v-hunt-mfg-homes-inc-washctapp-2004.