Mallard Pointe Lot Owners Association, Inc. v. Thomas Flynn & Wilma Hart-Flynn

• Court: Missouri Court of Appeals
• Decided: December 5, 2023
• Docket: ED111564
• Status: Published

Opinion

In the Missouri Court of Appeals Eastern District DIVISION TWO

MALLARD POINTE LOT OWNERS ) No. ED111564 ASSOCIATION, INC., ) ) Respondent, ) Appeal from the Circuit Court ) of Lincoln County v. ) Cause No. 21L6-CC00096 ) THOMAS FLYNN & ) Honorable Patrick S. Flynn WILMA HART-FLYNN, ) ) Appellant. ) Filed: December 5, 2023

Introduction

Appellants Thomas Flynn and Wilma Hart-Flynn (Appellants) appeal the trial court's

grant of summary judgment in favor of Mallard Pointe Lot Owners Association, Inc.

(Respondent) on Respondent’s petition for breach of its subdivision restrictive covenant, seeking

injunctive relief and damages. In their five points on appeal, Appellants argue summary

judgment was improperly granted because the restrictive covenant was ambiguous in its

requirements and Respondent unreasonably denied Appellants a building permit. Appellants also

argue that the trial court erred because Respondent failed to follow the procedures outlined in the

restrictive covenant for giving proper notice of the hearing to address a violation, and because

the covenant contained an unenforceable penalty clause. Because we agree that Respondent failed to give proper notice under the rules of the restrictive covenant, the judgment of the trial

court is reversed.

Background

In March 2021, Appellants sought approval of a construction permit through their

homeowner’s association, Respondent, for plans to build a fence on their property. Appellants

reside on a lot located within Mallard Pointe Subdivision in Lincoln County, Missouri, and, as

such, are subject to a restrictive covenant entitled Second Amendment to Declarations of

Restrictions, Easements, Liens, and Covenants for Mallard Pointe, Lincoln County, Missouri

(Declarations).

On March 29, 2021, Appellants submitted construction plans and specifications to the

Architectural Review Committee (ARC) for Mallard Pointe Lot Owner’s Associations for a

proposed fence on their property. On March 30, 2021, M.C., a member of the ARC, sent

Appellants correspondence notifying them that their plans and specifications had been approved

by the ARC. However, the correspondence directed Appellants to submit their signed “builder’s

checklist,” a document acknowledging compliance with Respondent’s construction regulations,

and a construction deposit of $500 prior to beginning any work on the fence.

On April 1, 2021, the parties corresponded via e-mail, where M.C. reiterated the

requirement of the signed builder’s checklist and construction deposit. M.C. confirmed to

Appellants that the deposit would be held in an escrow account until completion of the project, at

which time the money would be returned to Appellants, minus any amounts due for damages to

the subdivision common areas caused by the project. Appellants did not submit the required

builder’s checklist or construction deposit prior to beginning installation of the fence.

2 On June 10, 2021, Respondent sent Appellants a “courtesy notice” informing them that

they were in violation of Sections 8.3, 8.4, and 8.4.1 of the Declarations, which govern the

construction permit application for lot owners. Specifically, the notice stated, “[a] Builder’s

Checklist must be submitted along with a ($500.00) deposit, before any installation of a fence on

your lot begins.” The notice advised Appellants of their options, including remedying the

violation or requesting a hearing in front of the Board of Directors to discuss or refute the

violation.

Appellants subsequently received notice of a hearing set for June 28, 2021 to discuss the

violation. The notice once again informed Appellants that they could remedy the violation by

submitting the signed builder’s checklist and $500 deposit.

On July 7, 2021, Respondent sent the hearing results to Appellants informing them that

the Board had considered their rebuttal, but that Appellants were still found to be in violation of

the Declarations. Accordingly, the notice informed Appellants that they must submit the

builder’s checklist and deposit before resuming installation of the fence, and that a $25 per day

fine was being imposed from the day of the hearing until the violation was remedied, as

permitted under section 5.3.2.2 of the Declarations.

On January 14, 2022, Respondent filed an Amended Petition for Breach of Subdivision

Indentures and Restrictions, praying for injunctive relief and daily fines until the judgment for

the injunctive relief was satisfied. On April 13, 2022, Appellants filed a Motion for Summary

Judgment. On June 8, 2022, Respondent filed a Motion for Summary Judgment.

On May 1, 2023, the trial court entered its Findings of Facts and Conclusions of Law,

finding in favor of Respondent on their motion for summary judgment and against Appellants.

This appeal follows.

3 Standard of Review

We review a grant of summary judgment de novo. Brockington v. New Horizons

Enterps., LLC, 654 S.W.3d 876, 880 (Mo. banc 2022). In reviewing the decision to grant

summary judgment, this Court applies the same criteria as the trial court in determining whether

summary judgment was proper. Id. Summary judgment is proper only if the moving party

establishes there is no genuine issue as to the material facts, and the movant is entitled to

judgment as a matter of law. Id. The record is reviewed in the light most favorable to the party

against whom summary judgment was entered, and that party is entitled to the benefit of all

reasonable inferences from the record. Id.

A genuine issue that will prevent summary judgment exists where the record shows two

plausible, but contradictory, accounts of the essential facts, and the genuine issue is real, not

merely argumentative, imaginary, or frivolous. Id. at 382. “Facts set forth by affidavit or

otherwise in support of a party's motion are taken as true unless contradicted by the non-moving

party's response to the summary judgment motion.” Id. at 376. The moving party bears “the

burden of establishing a legal right to judgment and the absence of any genuine issue of material

fact required to support that right to judgment.” Id. at 378. “A trial court can abuse its discretion

through the inaccurate resolution of factual issues or through the application of incorrect legal

principles.” State v. Taylor, 298 S.W.3d 482, 492 (Mo. banc 2009).

Discussion

In the case at bar, the parties do not dispute the material facts. Appellants raise five points

on appeal. In their first two points they argue the trial court erred in granting summary judgment

in favor of Respondent because the Declarations did not clearly require the submission of a $500

deposit and a signed Builder’s Checklist for the construction of a fence. In their third point,

4 Appellants argue that the trial court further erred because it was unreasonable for the ARC to

disapprove of the fence. In their fourth point on appeal, Appellants argue that the trial court erred

in finding that Respondent could levy a daily fine of $25 against Appellants for noncompliance

with the Declarations because Respondent failed to give 20 days’ advance written notice that a

hearing would be held, as required by the Declarations. In their fifth and final point, Appellants

argue that the court further erred in imposing the fine because it constitutes an unenforceable

penalty clause. Because Point IV is dispositive, we address only that point.

Point IV: Failure to Give 20 Days’ Notice of Hearing

In Point IV, Appellants argue that Respondent is barred from levying a fine of $25 per

day against them because Respondent failed to satisfy the condition precedent set within the

Declarations to provide at least 20 days advance written notice of a hearing to determine if a

violation of the Declarations exists and the application of a fine. In response, Respondent argues

that Appellants’ failure to properly raise this claim before the trial court constitutes a waiver of

the issue. Specifically, Respondent argues that this claim constitutes an affirmative defense

which Appellants failed to raise in their pleadings or in their response to Respondent’s motion

for summary judgment. As such, Respondent argues that, because the defense was improperly

plead and is being raised for the first time on appeal, it is waived.

The law generally favors the free and untrammeled use of real property. Country Club

Dist. Homes Ass'n v. Country Club Christian Church, 118 S.W.3d 185, 189 (Mo. App. W.D.

2003) (internal quotes and citation omitted); Proetz v. Cent. Dist. of Christian & Missionary All.,

191 S.W.2d 273, 277 (Mo. App. 1945). But the right of one property owner to the protection of a

restrictive covenant is a property right just as inviolable as is the right of others to the free use of

5 their property when unrestricted. Marose v. Deves, 697 S.W.2d 279, 289 (Mo. App. S.D. 1985);

Proetz, 191 S.W.2d at 277.

Restrictive covenants are private contractual obligations generally governed by the same

rules of construction applicable to any covenant or contract. Woodglen Ests. Ass'n v. Dulaney,

359 S.W.3d 508, 513 (Mo. App. W.D. 2012). Because restrictive covenants are not favorites of

the law, when interpreting such, courts must give effect to the intent of the parties as expressed

in the plain language of the covenant. Blevins v. Barry–Lawrence County Ass'n for Retarded

Citizens, 707 S.W.2d 407, 408 (Mo. banc 1986). “This principle, however, should never be

applied in a manner that would defeat the plain and obvious purpose and intent of the

restriction.” Id. If a covenant is not ambiguous, it is not open to judicial construction. Lake at

Twelve Oaks Home Ass'n, Inc. v. Hausman, 488 S.W.3d 190, 198 (Mo. App. W.D. 2016). Valid

restrictive covenants cannot be disregarded. Id.

Section 5.3.2.2 of the Declarations, a subsection of article V governing all assessments

and liens upon or against lots within Mallard Pointe, states,

The Board may by resolution levy a fine of up to Twenty-five ($25.00) per day upon any Lot for the continuing violation of the Declarations or the Rules and Regulations by the Lot Owner’s tenant or occupant. Such fine shall only be imposed after the Board has given the Owner at least twenty (20) days written notice that a hearing will be held to determine the existence of any violation and only after the Board determines at such hearing that a violation exists. Any unpaid fines shall constitute a lien against the Lot. (Emphasis added).

Appellants received a “courtesy notice” on June 10, 2021, informing them of a possible

violation and offering the option for Appellants to request a hearing before the Board to discuss

or refute the violation. Appellants subsequently received a notice of hearing to be held on June

28, 2021, to determine if a violation existed and to address any “penalties associated with the

continued violation.” It is unclear exactly when this notice was sent to Appellants, but

6 Respondent does not deny that it was sometime after the courtesy notice was sent and thus less

than 20 days before the date the hearing was scheduled. The hearing was held as planned on June

28, 2021. On July 7, Appellants received the hearing results, notifying them that they were in

violation of the Declarations and imposing the $25 daily fine effective from the date of the

hearing.

The record here shows, in contradiction to Respondent’s claim that this issue is being

raised to the first time on appeal, that Appellants raised the issue of improper notice before the

trial court several times during the pendency of the litigation. First, in their motion for summary

judgment, Appellants argued that Respondent had failed to provide Appellants with the required

20 days written notice mandated in the Declarations, and, thus, any such fine entered as a result

of the hearing was improper. Next, Appellants addressed improper notice and the imposition of

the fine in their reply in support of their motion for summary judgment, this time arguing that

Respondent’s failure to address the claim for the $25 fine in their response motion or motion for

summary judgment essentially abandoned the claim, and also arguing that the fine was an

unenforceable penalty clause. Finally, Appellants raised the issue of notice during the hearing on

the cross motions for summary judgment on January 10, 2023, arguing that the fines were

impermissible on account of Respondent’s failure to follow notice procedures set by the

Declarations, but the trial court dismissed the argument outright. Appellants also raised the issue

in their oral motion to amend the judgment during the same motion hearing, which the trial court

denied.

Rule 78.07 governs preservation of error through an after-trial motion, specifying which

allegations of error must be raised in a motion for new trial or motion to amend in order to

properly preserve them for appellate review. In a court-tried case, “neither a motion for a new

7 trial nor a motion to amend the judgment or opinion is necessary to preserve any matter for

appellate review.” Rule 78.07(b). However, “[e]ven in a court-tried case, where a post-trial

motion is not necessary to preserve an otherwise properly raised issue for appellate review, the

appellant must make some effort to bring the alleged error to the trial court's attention.” Bank of

Am., N.A. v. Duff, 422 S.W.3d 515, 518 (Mo. App. E.D. 2014) (emphasis added). For purposes

of Rule 78.07, a summary judgment proceeding is a “trial” because it results in a judicial

examination and determination of the issues between the parties. Id. Therefore, as Appellants

properly brought their claim in Points IV to the trial court’s attention during the summary

judgment proceedings as discussed above, the issue is preserved for appellate review.

Nevertheless, Respondent argues that the issue of insufficient notice is waived on appeal

because it constitutes an affirmative defense that was not properly pleaded in Appellants’ answer

to Respondent’s petition. “An affirmative defense seeks to defeat or avoid a plaintiff's cause of

action, and alleges that even if plaintiff's petition is true, plaintiff cannot prevail because there

are additional facts that permit the defendant to avoid legal responsibility.” Templeton v.

Cambiano, 558 S.W.3d 101, 104 (Mo. App. W.D. 2018) (emphasis added) (internal quotation

omitted). Since an affirmative defense, by definition, includes a new matter or additional facts,

Rule 55.08 requires such a defense to be pleaded in order to give notice to the plaintiff. World

Enters., Inc. v. Midcoast Aviation Servs., Inc., 713 S.W.2d 606, 609 (Mo. App. E.D. 1986);

Schimmel Fur Co. v. Am. Indem. Co., 440 S.W.2d 932, 939 (Mo. banc 1969). The term

“additional facts” contemplates a new matter, i.e., acts, transactions, or occurrences which do not

form part of the original contract or transaction, but those which have arisen since the plaintiff's

cause of action came into existence. Id. (citing Nall v. Brennan, 23 S.W.2d 1053, 1056 (Mo.

banc 1929)). In the case at bar, the facts pertaining to Appellants’ insufficient notice claim, such

8 as the date of the courtesy notice, the subsequent notice of the hearing, and the date of the

hearing, were included by Respondent in their own amended petition, as they related to their

claim of damages in the form of the $25 daily fine. Thus, such facts do not constitute a new fact,

act, transaction, or occurrence outside the scope of the facts pleaded by Respondent and of which

Respondent already had sufficient notice.

Respondent additionally raised for the first time during oral argument the proposition that

Appellants’ failure to object to the lack of proper notice at the time of the violation hearing on

June 28, 2021, constituted waiver of the claim in subsequent litigation. However, this argument

was not raised in their brief, where they addressed only the doctrine of waiver as it related to

Appellants’ failure to raise improper notice as an affirmative defense in their pleadings. An

appellate court will not consider arguments not raised in a party's brief. State ex rel. Vacation

Mgmt. Sols., LLC v. Moriarty, 610 S.W.3d 700, 703 (Mo. banc 2020); Rule 84.13(a).

As Appellants’ claim was not waived, we may now address the merits. Our analysis of

waiver is essentially the same analysis Respondent asked us to apply in Points I, II, and III to

find that Appellants are liable for failing to strictly comply with the procedural rules outlined in

the Declarations for obtaining a construction permit. Respondent has likewise failed to adhere to

the procedural requirements of the covenant stipulated in section 5.3.2.2 for imposition of a daily

$25 fine for violation of the terms of the covenant when they provided less than 20 days written

notice of the hearing. This requirement is not ambiguous and such valid restrictive covenants

may not be disregarded by the courts. Lake at Twelve Oaks Home Ass'n, Inc., 488 S.W.3d at 196.

As such, the trial court erred in granting summary judgment in favor of Respondent because

Respondent failed to adhere to the proper procedures required to hold a hearing to determine a

restrictive covenant violation and impose the $25 daily fine. Point IV is granted.

9 “When disposing of a case on appeal, Rule 84.14 requires this Court to ‘give such

judgment as the [trial] court ought to give’ and ‘dispose finally of the case,’ unless ‘justice

otherwise requires.’” John Patty, D.O., LLC v. Missouri Pros. Mut. Physicians Pro. Indem.

Ass'n, 572 S.W.3d 581, 594 (Mo. App. E.D. 2019) (quoting Mathes v. Nolan, 904 S.W.2d 353,

355 (Mo. App. E.D. 1995)). Here, as Appellants are entitled to judgment as a matter of law, Rule

84.14 requires us to enter judgment in Appellants' favor, without remanding the case to the trial

court. Justice does not require us to remand the case for further proceedings because no purpose

would be served by additional proceedings, as the material facts are not in dispute. Accordingly,

it is proper to enter judgment in favor of Appellants, pursuant to Rule 84.14.

Conclusion

For the foregoing reasons, the judgment of the trial court granting Respondent’s motion

for summary judgment and denying Appellants’ motion for summary judgment is reversed, and

judgment is hereby entered in favor of Appellants, pursuant to Rule 84.14.

Renée D. Hardin-Tammons, J.

Kurt S. Odenwald, P.J., and Michael E. Gardner, J., concur.