Mark Caputo v. Thomas Monge

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 7, 2018
• Docket: 17-35133
• Status: Unpublished

Opinion

+CORRECTED NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 7 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MARK E. CAPUTO, in his capacity as No. 17-35133 Trustee for the Mark E. Caputo Sun Valley Residence Trust; and LISA CAPUTO, in D.C. No. 1:14-cv-00277-LAB her capacity as Trustee of the Lisa S. Caputo Sun Valley Residence Trust, MEMORANDUM *

Plaintiffs-counter- defendants-Appellees,

v.

THOMAS R. MONGE, ELMAR GRABHER, ELISABETH GRABHER, and INFINITY PROJECTS LLC, an Idaho Limited Liability Company,

Defendants-counter- claimants-Appellants.

On Appeal from the United States District Court for the District of Idaho +Larry Alan Burns, District Judge

Submitted June 5, 2018** Portland, Oregon

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Before: M. SMITH and MURGUIA, Circuit Judges, and HELLERSTEIN, *** District Judge.

Defendants-Appellants appeal from the district court’s order, following a

bench trial, granting a mandatory injunction to remove two townhomes developed

and built by Defendants-Appellants in violation of a restrictive covenant benefiting

Plaintiffs-Appellees and others. Appellants concede that they violated the

restrictive covenant. The district court had diversity jurisdiction. 28 U.S.C.

§ 1332. We have jurisdiction of the appeal. 28 U.S.C. § 1291. We find no error

or abuse of discretion in the district court’s judgment and affirm.

Appellants took title to “Lot 19” on January 15, 2014, intending to develop

the property with four single-family townhomes. After a contested hearing, the

City of Ketchum Zoning Commission granted permission to Appellants, on June

23, 2014, to subdivide Lot 19 and to build four townhomes. Construction began in

September 2014.

Appellees, the owners of Lot 18, the lot directly north of Lot 19, objected to

Appellants’ intended development as a violation of the restrictive covenant

governing Lot 19. Appellees notified Appellants of their objection before the latter

took title, and contested Appellants’ application for subdivision during the Zoning

Commission hearings. Appellees filed a complaint on July 7, 2014, in the district

*** The Honorable Alvin K. Hellerstein, United States District Judge for the Southern District of New York, sitting by designation. 2 court for declaratory judgment as to the parties’ rights and liabilities under the

restrictive covenant. Following the onset of Appellants’ construction, in

September 2014, Appellees amended their complaint to seek an order directing

removal of the offending structures.

After discovery, cross-motions for summary judgment, and a bench trial, the

district court found in Appellees’ favor and issued an injunction ordering the

removal of two of Appellants’ townhomes. Citing and applying the traditional

four-factor test for injunctions articulated in eBay, Inc. v. MercExchange, LLC, 547

U.S. 391 (2006), the district court held that damages were incalculable, and that,

balancing the equities, an injunction was appropriate. This appeal followed.

Appellants argue, first, that the district court lacked jurisdiction because

Appellees did not appeal the adverse order of the Zoning Commission, see

Ketchum Code § 17.144.020, and therefore failed to exhaust their administrative

remedies. See Idaho Code Ann. § 67-6519. We review de novo whether there is

subject matter jurisdiction, Kildare v. Saenz, 325 F.3d 1078, 1082 (9th Cir. 2003)

and, after doing so, uphold jurisdiction. Appellees’ lawsuit is based on the

restrictive covenant, a private contractual matter, not on the decision of the

Ketchum Zoning Commission. Accordingly, Appellees were not required to

exhaust any administrative remedies.

3 Appellants argue next that the City of Ketchum is both a necessary and an

indispensable party under Rule 19, Fed. R. Civ. P., and that Appellees failed to join

the City. Appellants failed to raise this issue in the district court, and may not raise

it for the first time on appeal. In any event, the argument lacks merit. The lawsuit

relates to a private dispute about rights under a restrictive covenant. The City has

no interest in this litigation, nor is the City necessary for Appellants’ compliance

with the district court’s order. If, as Appellants speculate, the City refuses to issue

demolition permits, see Ketchum Code § 15.16 et seq., Appellants can request

appropriate relief at that time.

Next, Appellants argue that the district court should have based its decision

on Idaho Law and not the factors stated in eBay, 547 U.S. at 391. Appellants argue

that Idaho law does not authorize mandatory injunctions in the context of

restrictive covenants, and that “[t]he general equitable powers of federal courts

should not enable a party suing in diversity to obtain an injunction if state law

clearly rejects the availability of that remedy,” Sims Snowboards, Inc. v. Kelly, 863

F.2d 643, 647 (9th Cir. 1988). However, Appellants’ argument is contrary to

Idaho law, for injunctions are available in the context of restrictive covenants. See

Jacklin Land Co. v. Blue Dog RV, Inc., 254 P.3d 1238, 1244 (Idaho 2011). The

district court’s judgment would be the same under eBay or under Idaho law.

4 The district court did not err in issuing a mandatory injunction. We review

for abuse of discretion. See Columbia Pictures Indus., Inc., v. Fung, 710 F.3d

1020, 1030 (9th Cir. 2013); Fischer v. Bd. Of Trustees of Meridian Joint Sch. Dist.

No. 2, 965 P.2d 1292, 1292–93 (Idaho 1998). The district court held that monetary

damages were incalculable, it being impossible to assess the value of the view to

Appellees; that Appellants proceeded with the construction at their own risk; and

that the cost of removal of the townhomes was not prohibitive (less than

$100,000). There was no abuse of discretion.

Finally, Appellants have no defense of laches. Appellants argued laches in

their unsuccessful motion for summary judgment, but did not further raise the issue

at trial. “[A]fter a full trial on the merits, no appeal can be taken of an order

denying summary judgment.” U.S. Fid. & Guar. Co. v. Lee Investments LLC, 641

F.3d 1126, 1138 (9th Cir. 2011). In any event, Appellees gave consistent notice of

objections before Appellants took title and thereafter, and filed this lawsuit before

construction began. There was no laches.

AFFIRMED.