Viking Properties, Inc. v. Holm

118 P.3d 322, 155 Wash. 2d 112, 2005 Wash. LEXIS 674
Washington Supreme Court·Decided August 18, 2005·No. No. 75240-1·Published·Cited by 57 cases

Opinions

¶1 J.M. Johnson, J.

Appellant homeowners (Homeowners) and respondent Viking Properties, Inc. (Viking), own residential properties in a subdivision in the city of Shoreline (City) subject to a decades-old restrictive covenant. The covenant bars racial minorities from ownership of the land and imposes a density limitation providing that there may be no more than one dwelling on each one-half acre. Viking asked Homeowners to release the entire covenant so Viking could redevelop a lot it purchased in 2002. After Homeowners refused this demand, Viking [116]*116filed a declaratory judgment action to invalidate the covenant.

¶2 On summary judgment, the trial court invalidated the entire covenant on the following grounds: (1) the racial restriction was unenforceable and not severable from the remainder of the covenant; (2) the density limitation violated public policy as set forth in the Growth Management Act (GMA), chapter 36.70ARCW, the City’s comprehensive plan, and the City’s zoning regulations; and (3) judicial enforcement of the covenant would violate Viking’s substantive due process rights. We reverse and remand, severing the racial provision and upholding the density limitation as enforceable.

I. Facts and Procedural History

¶3 The parties to this suit all own property derived in title from a common grantor. In 1932, the grantor acquired a block of property located in the Richmond Beach neighborhood of what is now the city of Shoreline and subdivided the block into lots. Between 1937 and 1941, the grantor sold each lot within the subdivision subject to an identical restrictive covenant. The covenant contains four sentences and states:

This property shall not at any time, directly or indirectly, be sold, conveyed, rented or leased in whole or in part, to any person or persons not of the White or Caucasian race. [2.] No person other than one of the White or Caucasian race shall be permitted to occupy any portion of any residence tract or of any building thereon, except a domestic servant actually employed by a White occupant of such tract and/or building. [3.] No building or structure shall be erected, constructed, maintained or permitted upon this property except a single family, detached private dwelling house on each one-half acre in area. [4.] As appurtenant to such dwelling house a private garage, garden house, pergola, convervatory [sic], servant quarters or other private appurtenant outbuildings or structures, may be erected, constructed and maintained.

Clerk’s Papers (CP) at 44.

[117]*117¶4 All parties agree that the racial restrictions contained in the first two sentences are unenforceable and void under Shelley v. Kraemer, 334 U.S. 1, 68 S. Ct. 836, 92 L. Ed. 1161 (1948), and RCW 49.60.224, enacted by Laws of 1969, 1st Ex. Sess., ch. 167, § 6.1 However, the Homeowners claim that they purchased and developed their properties in reliance on the continued validity and enforceability of the density limitation contained in the last two sentences of the covenant, which has been continuously observed.

¶5 Today, the subdivision contains 13 lots, each of which is at least one-half acre2 in size and contains only one single-family dwelling. Under the City’s zoning regulations, the subdivision has a prescribed minimum density of four dwelling units per acre. See Shoreline Municipal Code (SMC) Table 20.50.020(1). Up to eight dwelling units per acre are allowed under the City’s “cottage housing” regulations. See SMC 20.40.120, .300(C).

¶6 In July 2002, Viking bought a 1.46 acre lot located within the subdivision. Viking admits that it was aware of the terms of the covenant prior to purchase. Three months after the purchase, Viking’s president sent a letter to each of the Homeowners asking them to execute a total release of the covenant and informing them that they would be sued if they refused. All Homeowners declined Viking’s request.

¶7 Viking thereafter filed a declaratory judgment action in King County Superior Court, seeking an order quieting title and declaring the covenant unenforceable in its en[118]*118tirety.3 After discovery, Viking moved for partial summary judgment. Viking argued, inter alia, that (1) the covenant’s racial restriction is invalid and cannot be severed from its density limitation; (2) public policy favoring higher densities as set forth in the GMA, the City’s comprehensive plan, and the City’s zoning regulations conflict with the density limitation, thereby rendering it unenforceable; and (3) judicial enforcement of the covenant would violate Viking’s substantive due process rights because Viking could not comply with both the covenant and the applicable zoning regulations. The trial court agreed with Viking, holding that the covenant was unenforceable on each of the above grounds, and entered summary judgment in Viking’s favor.

f 8 The Homeowners moved for reconsideration, arguing that the court had wrongfully placed the burden of summary judgment on the nonmoving party. The Homeowners also submitted a declaration from the planning manager for the City, stating that she had consulted with the city attorney and had concluded that the City:

would process building permits on a lot with area that exceeded the minimum densities under the code for the land use district as a nonconforming lot. A plat application creating lots larger than the minimum density for the land use district would be approved so long as the lot configurations proposed allowed for further subdivision to the Development Code minimum density in the future. This has the same effect as a provision allowing gradual but not immediate conformity with the development standards for nonconforming uses.

CP at 310-11. The City’s conclusion would allow for two dwellings to be located on Viking’s lot.

¶9 The court denied the motion for reconsideration and entered a final order incorporating the court’s rulings on [119]*119summary judgment and reconsideration. The Homeowners then appealed directly to this court.

II. Standard of Review

¶10 “This court reviews the facts and law with respect to summary judgment de novo.” Schaaf v. Highfield, 127 Wn.2d 17, 21, 896 P.2d 665 (1995). “In reviewing the evidence, the trial court must consider the evidence and the reasonable inferences therefrom in a light most favorable to the nonmoving party.” Id. Summary judgment is appropriate only when, after reviewing all facts and reasonable inferences in the light most favorable to the nonmoving party, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); see also Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982).

III. Analysis

¶11 Restrictive covenants are enforceable promises relating to the use of land. See generally Hollis v. Garwall, Inc., 137 Wn.2d 683, 690-91, 974 P.2d 836 (1999); 17 William B. Stoebuck & John W. Weaver, Washington Practice: Real Estate: Property Law § 3.1, at 123 (2d ed. 2004).

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Viking Properties, Inc. v. Holm, 118 P.3d 322, 155 Wash. 2d 112, 2005 Wash. LEXIS 674 (Wash. 2005).

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