Quail Hollow West Owners Ass'n v. Brownstone Quail Hollow, LLC

136 P.3d 1139, 206 Or. App. 321, 2006 Ore. App. LEXIS 830
CourtCourt of Appeals of Oregon
DecidedJune 14, 2006
DocketC034386CV; A125874
StatusPublished
Cited by1 cases

This text of 136 P.3d 1139 (Quail Hollow West Owners Ass'n v. Brownstone Quail Hollow, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quail Hollow West Owners Ass'n v. Brownstone Quail Hollow, LLC, 136 P.3d 1139, 206 Or. App. 321, 2006 Ore. App. LEXIS 830 (Or. Ct. App. 2006).

Opinion

*324 LANDAU, P. J.

Plaintiff Quail Hollow West Owners Association (the association) is an association of townhouse owners. It initiated this action against defendants Brownstone Quail Hollow, LLC, Brownstone Quail Hollow, Brownstone Homes, LLC, Brownstone Homes, Randall C. Myers, and Ralph W. Fullerton (collectively referred to as the developers), the developers and builders of the townhouses. Plaintiff alleges that the homes were defectively constructed and asks for an award of damages equal to the repair costs necessitated by the defects and for compensation to the individual owners for their loss of use. The trial court dismissed the complaint on the ground that the association is not the real party in interest.

The association appeals, arguing that it is the real party in interest because it is obligated under the bylaws and the declaration of covenants, conditions, and restrictions of the Quail Hollow West development to maintain and repair portions of the development that are affected by the construction defects. The developers argue that the trial court was correct in dismissing the association’s complaint because the individual owners — not the association — are the real parties in interest. We agree with the developers and affirm.

I. BACKGROUND

Because this is an appeal of a judgment dismissing all claims on the face of the complaint, we accept as true all allegations in the complaint, as well as any reasonable inferences that may be derived from those allegations. McAlpine v. Multnomah County, 131 Or App 136, 138, 883 P2d 869 (1994).

Quail Hollow West is a class 1 planned community development consisting of some 93 townhouse units contained within 14 separate buildings. It includes common areas for use by all Quail Hollow West residents. Each individual owner, however, owns separately his or her lot and townhouse, including the front and back yard.

The Quail Hollow West project was developed in five stages, beginning in 1997. After completing the first phase, *325 the developers filed a Declaration of Covenants, Conditions, and Restrictions of Quail Hollow West (“CCRs”). As each additional phase was completed and new properties were brought into the development, the developers filed an amended declaration.

The CCRs begin with a “[g]eneral declaration” that they

“shall run with and bind the Property, each Lot, and other division, if any, of the Property, the Owners, the Occupants, and all other Persons acquiring any interest in the Property or any portion thereof, and the heirs, successors and assigns of the Owners, the Occupants and such other Person. These [CCRs] shall inure to the benefit of and be burdens upon and enforceable by Declarant and upon and by all Owners, Occupants, fiiture Owners and future Occupants.”

The CCRs, among other things, contain restrictions on the uses of and activities on the property within Quail Hollow West, require the owners to maintain their residential units in “good condition and appearance,” and specify that each lot owner is a member of the homeowners association. The CCRs authorize the association to levy both annual and special assessments on lots within the development and specify generally that the assessments shall be used “to promote the health, safety and welfare of the Owners, to perform the maintenance and repair provided for herein, and to pay the common expenses of the Association.” The CCRs specify that the owners “covenant and agree to pay” these assessments to the association, which is also specifically authorized to “enforce the provisions of the [CCRs and] Bylaws, * * * including prompt action to collect any unpaid assessment.”

The association amended the CCRs in July 2002. As amended, the CCRs specify in some detail the repair and maintenance obligations of both the lot owners and the association. The association, for example, is responsible for the maintenance, cleaning, and repairing of gutters and downspouts, as well as “roof replacement, painting and caulking of building exteriors and all other exterior maintenance and repairs in order to prevent water intrusion into the Residential units.” The unit owners, on the other hand, are required *326 to maintain and repair common walls, foundations, crawl spaces, and “the interiors of their respective Residential Units within the building structure.”

The developers initially controlled the association. In October 2002, however, the developers turned over control of the association to the individual owners. After that turnover, the association discovered a number of construction defects associated with the grading of yards, irrigation systems, foundations and subterranean walls, fasteners, garage slabs, vertical trim, soffits, windows and doors, roofing material, gutters, roof vents, siding, porch lights, painting, and staining.

The association then filed a complaint against the developers alleging claims for negligence, nuisance, breach of contract, breach of warranty, unlawful trade practices, fraud, and breach of fiduciary duty. The complaint alleges that, as a result of the defects in the construction of the townhouses, the individual homes have experienced “[w]ater intrusion, water damage, and other problems.” Specifically, the complaint alleges that

“[t]he water intrusion, use of improper or defective materials, improper installation, and/or noncompliance with local, state and generally approved and accepted building standards has caused extensive property damage to townhomes and to those areas and components that the Association is required to maintain. Said property damage is evidenced by extensive consequential and water damage, dry rot, and mold to and on the beams, headers, sills, ledgers, plywood sheeting, joists, siding, wall studs, decks, outdoor storage closets, garages, dry wall, exterior and interior walls, interior trim, particle board, insulation, carpet, subfloors, and other flooring. Multiple water stains exist throughout Quail Hollow West. Mold, fungi, mildew, and/or rot has been located in some of the interior wall cavities, the interior of townhomes, and other areas within the residential buildings.”

The developers responded with a motion to dismiss on the ground that the association was not the real party in interest. ORCP 21 A(6). The developers argued that the individual owners, not the association, are the real parties in interest. The developers argued that the extent to which a *327 homeowners association may initiate litigation is limited by ORS 94.630(l)(e) and that none of the circumstances listed in the statute as ones in which an association may initiate an action applies to this case. The association responded that this case, in fact, does come within several of the circumstances described in the statute in which a homeowners association is permitted to initiate an action. The association further argued that, in any event, it is the real party in interest under ORCP 26.

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Related

Mountain High Homeowners Ass'n v. J. L. Ward Co.
209 P.3d 347 (Court of Appeals of Oregon, 2009)

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Bluebook (online)
136 P.3d 1139, 206 Or. App. 321, 2006 Ore. App. LEXIS 830, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quail-hollow-west-owners-assn-v-brownstone-quail-hollow-llc-orctapp-2006.