Riverview Cmty. Grp. v. Spencer & Livingston

CourtWashington Supreme Court
DecidedNovember 20, 2014
Docket88575-3
StatusPublished

This text of Riverview Cmty. Grp. v. Spencer & Livingston (Riverview Cmty. Grp. v. Spencer & Livingston) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Riverview Cmty. Grp. v. Spencer & Livingston, (Wash. 2014).

Opinion

FILE IN CLERKS OPFICE This opinion was filed for record

m~ Rnai~Pt &upreme Court Clark

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

RIVERVIEW COMMUNITY GROUP, a ) non-profit Washington Corporation, ) ) Petitioner, ) No. 88575-3 ) v. ) ) SPENCER & LIVINGSTON, a Washington ) Partnership, and/or its successors-in-interest; ) GEORGE T. and SHEILA LIVINGSTON, ) husband and wife, and the marital community) composed thereof; DEER MEADOWS, INC., ) En Bane a defunct Washington Corporation, ) and/or its successors-in-interest; DEER ) MEADOW DEVELOPMENT, INC., a ) Washington corporation, and/or its ) successors-in-interest; S.O.S., LLC, a ) Washington Limited Liability Company, ) and/or its successors-in-interest; DEER ) MEADOWS GOLF, INC., an inactive ) Washington corporation, and/or its ) successors-in-interest; also all other persons ) NOV 2 0 2014 Filed - - ----- or parties unknown claiming any right, title, ) estate, lien, or interest in the real estate ) described in the complaint herein, ) ) Respondents. ) __________________________) Riverview Communi~y Group v. Spencer & Livingston, et. al., No. 88575-3

GONZALEZ, J.--We are asked whether property developers' representations

about a property anchoring a development may impose an equitable servitude on that

property. We find that such representations may impose a servitude if, among other

things, they are made by someone with the authority to burden the property. We are

also asked whether the Riverview Community Group has the authority to pursue

equitable relief based on the developers' representations to its members. We find that

it does. We reverse the dismissal ofRiverview's lawsuit and remand to the trial court

for further proceedings consistent with this opinion.

FACTS

In the 1980s, Charles Spencer and George Livingston formed a partnership to

develop and sell property in rural Lincoln County near the confluence of Lake

Roosevelt and the Spokane River. Over the next 20 years, this partnership and its

successors built the Deer Meadows Golf Course Complex (including a golf course,

restaurant, hotel, store, and club), platted several nearby parcels of property into

subdivisions (the Deer Meadows arid Deer Heights subdivisions), and sold lots to

private land owners for homes and vacation properties. A plat identifying the golf

course was recorded, and an image of the plat was used to help advertise the

development. A local newspaper quoted Spencer as saying he built the golf course

complex '"so it would help sell the residential lots around here,"' and the lots were

advertised accordingly. Clerk's Papers (CP) at 107. Over the next 20 years,

ownership of the unsold lots and the golf course changed forms and hands several

2 Riverview Community Group v. Spencer & Livingston, et. al., No. 88575-3

times. After Spencer passed away and after most of the lots were sold, Livingston

closed down the golf course complex and began the process of platting the course into

new residential lots.

Many of those who had bought homes in the various subdivisions developed by

Spencer and Livingston believed they had been promised that the golf course complex

would remain a permanent fixture of their community, and they made the decision to

purchase homes based in part on that promise. Some ofthose homeowners formed

the Riverview Community Group, which filed this lawsuit seeking to bar the

defendants from selling off the former golf course as individual homes, among other 0 '

things. Riverview argued that the golf course complex was the heart of the

community and provided necessary amenities and that its members had bought their

property reasonably believing it would remain a part of their development. Riverview

named as defendants the original Spencer & Livingston partnership, George and

Sheila Livingston, the partnership's alleged successors, and anyone else claiming an

interest in the golf course property. Riverview sought to impose an equitable

servitude on the golf course property that would limit its use to a golf course or, if that

was untenable, for other equitable relief. It also sought injunctive relief.

The Livingstons responded that Riverview's attempt to bring any claims

amounted to fraud on the court. They moved for dismissal under CR 12(b )(7) for

failure to join indispensable parties under CR 19. S.O.S. LLC, later joined by

3 Riverview Community Group v. Spencer & Livingston, et. al., No. 88575-3

Livingston, moved for summarY. judgment, arguing, among other things, that equitable

servitud~s were not availabl_e in Washington unless created in writing.

In 2012, the trial judge issued a memorandum decision granting the

Livingstons' motion under CR 12(b )(7) f()r failure to join indispensable parties. The

decision gave Riverview a "reasonable period of time"_ to join the Deer Meadows

property owners. CP at 212. The following month, the trial court issued an order

stating that "the legal issue of whether an equitable servitude can be created by

implication is a question of first impression in the State of Washington" and granted

summary judgment in favor of the defendants to expedite review. Id. at 248.

The Court of Appeals largely reversed the trial court's legal rulings, finding

that Riverview had organizational standing and the individual property owners were

not essential parties, and concluding that Washington recognized equitable covenants.

Riverview Cmty. Grp. v. Spencer & Livingston, 173 Wn. App. 568, 295 P.3d 258

(2013). However, it affirmed summary judgment on the grounds that it would be

"irrational to require the defendants to rebuild and operate a failing business." Id. at

591. We granted Riverview's petition for review. Riverview Cmty. Grp. v. Spencer &

Livingston, 178 Wn.2d 1009, 308 P.3d 643 (2013). We affirm most of the Court of

Appeals' legal rulings but find its dismissal was based on facts not found in the

record. We affirm in part, reverse in part, and remand to the trial court for further

proceedings.

4 Riverview Community Group v. Spencer & Livingston, et. al., No. 88575-3

ANALYSIS

We review summary judgment de novo, taking all inferences in favor of the

nonmoving party. Anderson v. Akzo Nobel Coatings, Inc., 172 Wn.2d 593, 600,260

P.3d 857 (2011) (citing Mulcahy v. Farmers Ins. Co. of Wash., 152 Wn.2d 92, 98, 95

P.3d 313 (2004)). We review CR 12(b)(7) dismissals for failure to join an

indispensable party under CR 19 for abuse of discretion "with the caveat that any

legal conclusions underlying the decision are reviewed de novo." Gildon v. Simon

Prop. Grp., Inc., 158 Wn.2d 483,493, 145 P.3d 1196 (2006) (citing Equal Emp't

Opportunity Comm 'n v. Peabody W Coal Co., 400 F.3d 774, 778 (9th Cir. 2005)).

Such dismissals "should be employed sparingly when there is no other ability to

obtain relief." I d. at 494 (citing 7 CHARLES ALAN WRIGHT, ARTHUR R. MILLER &

MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 1609, at 130 (3d ed.

2001)).

1. MAY RIVERVIEW MAINTAIN THIS ACTION?

Cases should be brought and defended by the parties whose rights and interests

are at stake. See Walker v.

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