Mary O'Neill-Marnecheck and Philip A. Marnecheck v. Val's Property Development LLC

Court of Appeals of Mississippi·Decided March 24, 2026·No. 2023-CA-01110-COA·Published

Opinion

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI NO. 2023-CA-01110-COA

MARY O’NEILL-MARNECHECK AND PHILIP APPELLANTS A. MARNECHECK

v. VAL’S PROPERTY DEVELOPMENT LLC APPELLEE

DATE OF JUDGMENT: 09/11/2023 TRIAL JUDGE: HON. RANDI PERESICH MUELLER COURT FROM WHICH APPEALED: HARRISON COUNTY CIRCUIT COURT, FIRST JUDICIAL DISTRICT

ATTORNEYS FOR APPELLANTS: JOHN PAUL BARBER HARRISON MAGEE SMITH

ATTORNEYS FOR APPELLEE: MATTHEW WARD McDADE OWEN REX McNALLY

LEWIE G. “SKIP” NEGROTTO IV NATURE OF THE CASE: CIVIL - REAL PROPERTY DISPOSITION: AFFIRMED IN PART; REVERSED AND RENDERED IN PART; REVERSED AND REMANDED IN PART - 03/24/2026 MOTION FOR REHEARING FILED:

BEFORE WILSON, P.J., McDONALD AND LASSITTER ST. PÉ, JJ.

McDONALD, J., FOR THE COURT:

¶1. In 2020, Val’s Property Development LLC (VPD) sued Mary and Philip Marnecheck in the Harrison County Chancery Court for violating subdivision covenants when the Marnechecks made home renovations and repairs without approval from the Architectural Control Committee. After a temporary restraining order had been issued, the Marnechecks counterclaimed that VPD had misrepresented the condition of the home to them when they purchased it in 2019. In November 2020, the chancery court transferred the case to the

Harrison County Circuit Court, where the circuit court severed the claims. The court heard testimony on the covenant-violations claim first and rendered judgment in favor of VPD. The court ordered the Marnechecks to restore their home to its condition prior to the unauthorized improvements, which had cost the Marnechecks over $80,000. The court also ordered the Marnechecks to pay VPD $220,939.19 in attorney’s fees.

¶2. The Marnechecks appeal and raise the following issues: (1) whether the circuit erred in finding that they breached the covenants, (2) whether the court erred in finding VPD was entitled to pursue injunctive relief for the Marnechecks’ alleged breach of the covenants, (3) whether the court erred in granting a permanent mandatory injunction, and (4) whether the court abused its discretion in awarding VPD $220,939.19 in attorney’s fees and expenses. Having reviewed the record, the written and oral arguments of the parties, and relevant precedent, we affirm in part, reverse and render in part, and reverse and remand in part.

Facts

VPD

¶3. On March 5, 2007, Val Mueller, her husband Glenn Mueller, and Richard Galloway (Val’s father) formed Val’s Property Development LLC (VPD) for the purpose of developing property and selling homes in the Estates of Penny Lane Subdivision (Penny Lane) in Long Beach, Mississippi. Val was designated as VPD’s manager. The record does not reflect how many homes were constructed in the subdivision between 2007 and 2012, but Val’s and Galloway’s two homes were constructed prior to the covenants.

Covenants Creating HOA and ACC

¶4. On April 17, 2012, Val, Glenn, and Galloway signed a “Declaration of Covenants, Conditions, and Restrictions for Estates of Penny Lane Subdivisions” (covenants), and through it formed the “Estates of Penny Lane Homeowners Association, Inc.” (HOA). The covenants were filed and recorded in the office of the Chancery Clerk for Harrison County, First Judicial District. Val also filed articles of incorporation with the Mississippi Secretary of State’s office to form the HOA as a non-profit corporation. However, the HOA adopted no by-laws, elected no formal board of directors, held no formal meetings, created no budget reports, recorded no minutes, and provided no annual reports to homeowners.

ACC

¶5. Article IV, Section 1 of the covenants created an Architectural Control Committee (ACC), independent of the HOA, that was to be composed of at least three and not more than five members who would serve until they died or resigned. That section also required that all exterior changes to any of the lots first be submitted to and approved by the ACC “as to the harmony of external design and location in relation to surrounding structures and topography.” Article IV, Section 2 named Glenn, Val, and Jim Mihalik as the three original members of the ACC.1 That section also provided that if the committee fell below the three- member minimum, the remaining member or members were vested with the authority to appoint additional members. Additionally, that section stated that “the Declarant [of the covenants] shall have the authority to appoint committee members in addition to the three

1 Mihalik was the contractor who built the homes in the subdivision. The covenants provided that the remaining members of the committee may remove him if he ceased to construct homes in the subdivision.

original members at Declarant’s sole option.”2 The “Declarant” was the company VPD, whose manager was Val.

¶6. The covenants stated that all requests to the ACC must contain “the site plan, floor plan, exterior elevations of all pending structures or alterations, plans for materials, color schemes, lighting schemes, plans for landscaping and other details that may affect the exterior appearance of the structure.” Further, Article IV, Section 1 provided that a majority vote of the committee was required for a project to be approved, but if the committee failed to approve or disapprove a proposal within thirty (30) days of submission, then approval was not required. Article IV, Section 4 stated that review and approval of any plans was “made on the bases [sic] of aesthetic considerations only.” The ACC never adopted any standards, guidelines, or instructions for homeowners to follow other than what appeared in the covenants.3

¶7. Between June 2012 and January 2019, the ACC functioned with all three original members. Mihalik built several homes through his construction company, and purchasers could choose from several house plans offered by Mihalik that were pre-approved for construction by the ACC, or they could present their own customized plans. In January 2019,

2 The only other entity authorized to appoint ACC members was the Board of the HOA, but only after all lots had been sold and the original members had died or resigned.

3 The covenants separately addressed some specific elements, such as basketball goals and recreational equipment, maintaining building condition, building setbacks, clotheslines, garbage receptacles, driveways, fences, flagpoles, antennas, satellite dishes, landscaping, mailboxes, roofs, siding, swimming pools, and wells, but nothing on porches or dormers.

Glenn Mueller resigned,4 and a year later, in January 2020, Mihalik also resigned, leaving Val as the only remaining member of the ACC. According to both Glenn and Mihalik, during their tenure on the ACC, they only reviewed plans for new construction because no requests for additions to existing homes were made. In other words, the ACC never had to consider plans for a home improvement project prior to the Marnechecks’ renovations and repairs in this case. Mihalik also testified that the ACC (usually he and Val) had met with potential homeowners to review plans and discuss any modifications.

¶8. Val claimed that she did not fill the vacancies left by Glenn in 2019 or Mihalik in January 2020 because allegedly there were no submissions for the ACC to consider. However, the record includes an affidavit VPD submitted to support a motion in the later litigation that contradicts this claim. In the affidavit, Matthew Elias stated the ACC approved the plans for the home he built in the subdivision in May 2020 after he met and reviewed them with Val alone.

Marnecheck Home Purchase

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