Beaver Creek Fourth Addition Homeowners Association, Inc., D/B/A Beaver Hollow Homeowners Association, Inc. v. Arthur John Vander Zee and Jennifer Vander Zee ( 2016 )

IN THE COURT OF APPEALS OF IOWA
No. 15-1675
Filed May 11, 2016
BEAVER CREEK FOURTH ADDITION
HOMEOWNERS ASSOCIATION, INC.,
d/b/a BEAVER HOLLOW HOMEOWNERS
ASSOCIATION, INC.,
Plaintiff-Appellee,
vs.
ARTHUR JOHN VANDER ZEE and
JENNIFER VANDER ZEE,
Defendants-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Linn County, Mitchell E. Turner and
Ian K. Thornhill, Judges.
Arthur John and Jennifer Vander Zee appeal the district court’s grant of
summary judgment to Beaver Creek Fourth Addition Homeowners Association,
Inc. AFFIRMED.
Arthur John Vander Zee, Cedar Rapids, appellant pro se.
Jennifer Vander Zee, Cedar Rapids, appellant pro se.
Matthew J. Nagle and Steven C. Leidinger of Lynch Dallas, P.C., Cedar
Rapids, for appellee.
Considered by Tabor, P.J., and Bower and McDonald, JJ.
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BOWER, Judge.
Arthur John and Jennifer Vander Zee (the Vander Zees) appeal the district
court’s grant of summary judgment to Beaver Creek Fourth Addition
Homeowners Association, Inc. (the Association), claiming the 1989 declaration
concerning their property was not subject to extension or renewal by
amendment, the district court improperly interpreted and applied the amendment
provisions of the 1989 declaration, the Iowa Homestead Act invalidates the
amended declaration, and the amended declaration does not satisfy the
requirements of a verified claim. They also request court costs and attorney
fees. We affirm the district court’s grant of summary judgment.
I. BACKGROUND FACTS AND PROCEEDINGS
In May 2004, the Vander Zees purchased residential property in the
Beaver Creek Fourth Addition in Linn County. The property was subject to a
“Declaration of Conditions, Covenants, Restrictions, Reservations, Grants and
Easements” (1989 declaration) filed in 1989 by Oakwoods Development of Linn
County, Inc. (the Developer). The relevant portions of the declaration provided,
in part:
ARTICLE IV
General Restrictions
....
9. Home Occupations, Nuisances and Livestock:
The use of any open carport, driveway or parking area which
may be in front of, adjacent to, or part of any lot as a parking place
for recreational or commercial vehicles or articles is prohibited. All
“commercial vehicles” (automobiles, station wagons, trucks, trailers,
etc.), “recreational vehicles” or “articles” shall be stored inside the
garages at all times.
ARTICLE V
General Provisions
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1. Each of the Covenants set forth in this Declaration shall
continue and be binding as set forth in Paragraph 2 of this Article V
for an initial period of twenty-one years (21) years from the date of
recording of this Declaration.
2. The Covenants herein set forth shall run with the land and
bind Oakwoods, its successors, grantees and assigns, and all other
parties claiming by, through or under them. . . .
3. The record owners in a fee simple of the real property
described in Article I may revoke, modify, amend or supplement in
whole or in part any or all of the Covenants and conditions
contained in this Declaration and may release the real property
subject thereto, but only at the following time and in the following
manner:
(a) Any such change or changes may be made effective
at any time from the date of recording of this Declaration if
the record owners in a fee simple of at least three fourths of
said lots consent thereto;
(b) Any such change or changes may be made effective
during the last five (5) years of the initial term of this
Declaration of the record owners in fee simple of at least
two-thirds of said lots consent thereto during the five (5)
years prior to the end of such term;
(c) Any such consents shall be effective only if expressed
in a written instrument or instruments executed and
acknowledged by each of the consenting owners and
recorded in the Office of the Recorder, Linn County,
Iowa. . . . Upon and after the effective date of any such
change or changes, it or they shall be binding upon all
persons, firms and corporations then owning property
described in Article I and shall run with the land and bind all
persons claiming by, through or under any one or more of
them.
In May 2009, the Association claimed two-thirds of the record owners
(pursuant to Article V, section 3(b) above) consented to a modification,
amendment, and supplementation of the 1989 declaration, which was
subsequently filed with the Linn County Recorder. The amended declaration
extended the Article V, section 1 timeline for another twenty-one years: “Each of
the Covenants set forth in this Declaration shall continue and be binding as set
forth in Paragraph 2 of this Article for a period of twenty one (21) years from the
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date of recording of this First Amended and substituted Declaration.” Article IX
was amended to state:
The President of the Association is authorized to file this
Declaration upon the consenting vote of 2/3rds of the Association
voting lot members. Consent may be evidence by signing below at,
or following the Association Meeting wherein adoption of this
Declaration is on the meeting agenda. These covenants supersede
and replace the covenants of OAKWOOD DEVELOPMENT OF
LINN COUNTY, Inc. filed of record in the office of the Linn County,
Iowa Recorder on February 10, 1998 [sic] in Vol. 2056, Page 371.
The President of the Association’s signature appears at the end of the amended
declaration with the statement, “IN WITNESS WHEREOF; the Beaver Creek
Fourth Addition Home Owners Association voting members by 2/3rds vote has
caused this instrument to be executed by its President on the 21st day of May,
2009.” Following the president’s signature are the notarized signatures of co-
owners of fourteen lots (each lot was co-owned by two individuals) swearing to
the fact the amended declarations were consented to “by authority of not less
than 2/3rds of the Subdivision Lot Owners.”
The Vander Zees purchased their Beaver Creek Fourth Addition lot
pursuant to a warranty deed that provided the property was subject to
easements, restrictions, covenants, and conditions of record. On May 28, 2008,
the Vander Zees requested a variance from the covenants in the declaration to
allow them to park their boat and boat trailer on their lot and to build a privacy
fence. The Association denied the request. Subsequently, the Association
claimed the Vander Zees parked a boat, boat trailer, and a motorhome in their
driveway. They also erected a privacy fence. The Association requested the
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Vander Zees stop parking the vehicles on the lot as it violated the covenants.
The Vander Zees refused the Association’s requests.
On August 5, 2015, the Vander Zees filed a motion of defective covenants
with the Linn County Recorder claiming their lot was not subject to the covenants
set out in the amended declaration. On September 5, the Association filed a
petition for declaratory judgment and injunctive relief seeking a determination the
amended declaration was valid and barred the Vander Zees from parking the
vehicles on their lot, a permanent injunction from parking any boat, boat trailer, or
motorhome on the lot as long as the amended declaration was in effect, and an
order compelling the Vander Zees to retract their notice of defective covenants.
On September 26, the Vander Zees filed an answer denying the Associations
claims, and a counterclaim claiming (pursuant to Iowa Code section 614.24
(2013)) the 1989 declaration expired on February 10, 2011, and the amended
declaration was not extended. They requested the court find the amended
declaration invalid and unenforceable. The Association filed a reply and motion
to dismiss the Vander Zees’ counterclaim.
On November 20, the Association filed a motion for summary judgment
claiming the amended declaration constituted a duly adopted amendment and
verified claim to the 1989 declaration pursuant to Iowa Code section 614.24. The
Vander Zees filed a resistance and their own motion for summary judgment,
claiming: the Association could not extend the covenants and conditions in the
1989 declaration past twenty-one years as it was barred by Iowa Code section
614.24 and the language of the 1989 declaration, a sufficient amount of lot
owners had not agreed to the amendment, the language concerning amending
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the declaration did not apply to the twenty-one year limitation, even if the
Association could amend the declaration it was barred by Iowa Code section
614.24, the Associations purpose of filing the amended declaration was to
supersede and replace the 1989 declaration and not to extend its use
restrictions. Additionally, the Vander Zees claimed the amended declaration was
void pursuant to article V(3)(b) of the 1989 declaration and the amended
declaration failed to establish the elements necessary to constitute a verified
claim pursuant to Iowa Code section 614.24.
On February 16, 2015, the district court held a hearing on the motions for
summary judgment and entered a ruling on March 19. The court denied both
parties’ motions for summary judgment. The court found:
The Court finds that the use of the language “initial period of
twenty-one (21) years” in Article V, Paragraph 1 of the 1989
Declaration presupposes that there may be subsequent periods
and, therefore, indicates that the record owners could extend the
covenants and conditions beyond the initial twenty-one year period.
Moreover, the Court interprets Article V, Paragraph 3(b) of the 1989
Declaration, based on the plain language set forth therein, to allow
for the amendment or modification of the initial twenty-one year
period, which could include an extension of this period.
However, though the parties at the hearing indicated that the
facts were undisputed such that they were each entitled to
summary judgment on their respective motions, the Court finds that
there are genuine issues of material fact in dispute including, but
not limited to, whether the proper procedure was used in approving
the Amended Declaration. For instance, the Vander Zees argue
that the record owners in fee simple of two-thirds of the lots did not
approve in writing the extension beyond the initial twenty-one
years, because the Amended Declaration was signed by only one
of the record owners of a lot, even when there was more than one
record owner of the lot. The Association asserts that owners
representing no less than two-thirds of such lots provided their
written consent and that the Vander Zees have not presented any
evidence that the owners who executed the Amended Declaration
did so against the will of their respective co-owners. . . .
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Article V, Paragraph 3(b)-(c) of the 1989 Declaration
requires the record owners in fee simple of two-thirds of the lots to
approve a modification, amendment, or supplementation to
covenants and restrictions and requires that the consents shall be
expressed in a written instrument executed and acknowledged by
each of the consent owners. The Court finds that though at least
one record owner of two-thirds of the lots signed the Amended
Declaration, there is a disputed issue of whether all the records
owners in fee simple of two-thirds of the lots consented thereto.
....
The Court finds, however, that if the co-owners, who signed
the written instrument, did have the consent or authority of their
other record co-owners of the lots, then the one co-owner’s written
consent may be sufficient to express the consent of both co-owners
of the lot, particularly since the requirement is not for two-thirds of
the records owners to consent but rather is for the record owners of
two-thirds of said lots to consent.
On July 21, the Association filed a renewed motion for summary judgment,
with attached affidavits establishing that each of the record owners who signed
the amended declaration had the consent or authority of the record co-owners of
their respective lots. The Vander Zees resisted, claiming the affidavits were
insufficient to prove consent.
On September 18, the court entered a ruling granting the Association’s
motion, finding “The Association, by filing the non-signatory co-owners’ affidavits,
has cured the purported procedural deficiency that barred entry of summary
judgment on the previous occasion. The Vander Zees have not proposed any
binding legal authority that invalidates the co-owners’ consent of the Amended
Declaration through submission of affidavits.” The Vander Zees then filed a
motion to enlarge the court’s ruling. The court denied the motion and determined
the provisions of the amended declaration were valid and enforceable and barred
the Vander Zees from parking their vehicles on the lot, the court also entered an
order enjoining the Vander Zees from parking their vehicles on the lot from the
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date of the order for as long as the amended declaration remained in effect. The
Vander Zees now appeal.
II. STANDARD OF REVIEW
We review rulings on motions for summary judgment for the correction of
errors at law. City of Cedar Rapids v. James Props., Inc., 701 N.W.2d 673, 675
(Iowa 2005). “Summary judgment is appropriate only when the entire record
demonstrates that no genuine issue of material fact exists and the moving party
is entitled to judgment as a matter of law.” Stevens v. Iowa Newspapers, Inc.,
728 N.W.2d 823, 827 (Iowa 2007). A genuine issue of material fact exists if
reasonable minds can differ on how an issue should be resolved. Seneca Waste
Sols., Inc. v. Sheaffer Mfg. Co., 791 N.W.2d 407, 411 (Iowa 2010). We examine
the record in the light most favorable to the nonmoving party and draw all
legitimate inferences the evidence bears in order to establish the existence of
questions of fact. Mason v. Vision Iowa Bd., 700 N.W.2d 349, 353 (Iowa 2005).
“A party resisting a motion for summary judgment cannot rely on the mere
assertions in [its] pleadings but must come forward with evidence to demonstrate
that a genuine issue of fact is presented.” Stevens, 728 N.W.2d at 827.
III. MERITS
A. Extension of the 1989 Declaration
The Vander Zees claim no language or mechanism in the 1989
declaration allows a future extension, and if an extension were allowed then the
1989 language is ambiguous. The Vander Zees claim, in order to extend the
1989 declaration, express language should have been included in the 1989
declaration validating a future extension. At best, they claim, the term “initial” is
9
ambiguous and should be construed against the Association as the drafter of the
1989 declaration. In finding the 1989 declaration allowed for an extension, the
district court reasoned in its first summary judgment ruling:
The Court finds that the use of the language “initial period of
twenty-one (21) years” in Article V, Paragraph 1 of the 1989
Declaration presupposes that there may be subsequent periods
and, therefore, indicates that the record owners could extend the
covenants and conditions beyond the initial twenty-one year period.
Moreover, the Court interprets Article V, Paragraph 3(b) of the 1989
Declaration, based on the plain language set forth therein, to allow
for the amendment or modification of the initial twenty-one year
period, which could include an extension of this period.
Whether the extension of the covenants in the 1989 declaration was
permissible hinges on the interpretation of the term “initial period” in Article V(1).
“Restrictive covenants are contracts.” Fjords N., Inc. v. Hahn, 710 N.W.2d 731,
735 (Iowa 2006). Determining the intent of the parties at the time they executed
the agreement is the primary goal of contract interpretation. Walsh v. Nelson,
622 N.W.2d 499, 503 (Iowa 2001). The words of the contract are the most
important evidence of the parties’ intentions. Pillsbury Co. v. Wells Dairy, Inc.,
752 N.W.2d 430, 436 (Iowa 2008); see Iowa R. App. P. 6.903(3)(n) (“[T]he intent
of the parties must control, and except in cases of ambiguity, this is determined
by what the contract itself says.”). The Iowa Supreme Court has provided a two-
step analysis for interpreting a contract:
First, from the words chosen, a court must determine what
meanings are reasonably possible. In so doing, the court
determines whether a disputed term is ambiguous. A term is not
ambiguous merely because the parties disagree about its meaning.
A term is ambiguous if, after all pertinent rules of interpretation
have been considered, a genuine uncertainty exists concerning
which of two reasonable interpretations is proper.
Once an ambiguity is identified, the court must then choose
among possible meanings.
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Walsh, 622 N.W.2d at 503 (citations and internal quotation marks omitted).
Here, the reasonable definition (given the context) of “initial,” is: “of or
relating to the beginning,” “marking the commencement,” “incipient, first.”
Webster’s Third New Int’l Dictionary 1163 (2002). The term “period” is defined as
“a portion of time determined by some recurring phenomenon,” “a division of time
in which something is completed and ready to commence and go on in the same
order.” Id. at 1680. When placed together, the term “initial period” is reasonably
interpreted to mean the beginning or start of a portion or division of time that will
eventually end and begin again. We find this term unambiguously allows the
Association the right to extend or amend the covenants in the 1989 declaration.
We find the district court did not err in its interpretation.
B. Application of the Amended Provisions
The Vander Zees claim the district court erred in applying the amended
provisions because it did not follow the provisions of the 1989 declaration as half
of the owners failed to sign and execute the deed, and the court erred by
accepting the signed affidavits after the twenty-one year deadline.
In its ruling on the renewed motions for summary judgment, the court
reasoned:
The Association, by filing the non-signatory co-owners’
affidavits, has cured the purported procedural deficiency that barred
entry of summary judgment on the previous occasion. The Vander
Zees have not proposed any binding legal authority that invalidates
the co-owners’ consent of the Amended Declaration through
submission of affidavits. The Court’s March 19, 2015 ruling
concluded that if the plaintiff can prove the co-owners actually
consented to the signatory co-owners’ execution of the 2009
Amended Declaration, the amendment would be effective and
binds the Vander Zees.
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....
[T]he Association’s submission of affidavits does not
constitute an ex post facto ratification of contracts. The affidavits of
the co-owners merely serve to resolve a disputed material fact
specified in the Court’s March 19, 2015 ruling that precluded
summary judgment on the previous occasion. In light of the
Association’s affidavits in support of the Renewed Motion for
Summary Judgment, the Court deems the factual dispute
concerning the non-signatory co-owners’ consent properly
resolved. Therefore, summary judgment should be entered in favor
of the Association.
Upon our review, we find the district court did not err in its application of
the language in the amended provisions. The clear language of the 1989
declaration—“the record owners in fee simple of at least two-thirds of said lots
consent thereto”—was followed in 2009 when fourteen lot owners signed the
amended declaration in representing two-thirds of the lots. The affidavits
submitted after the district court’s first ruling on summary judgment provided an
additional, and potentially unnecessary, step confirming that two-thirds of the lots
agreed to the amended declaration. Pursuant to our rules of contract
interpretation, the Vander Zees have been unable to demonstrate, by legal
authority or otherwise, the language “two-thirds of said lots” actually means two-
thirds of said lot owners. We affirm the district court.
C. Homestead
The Vander Zees claim that because their property is their “homestead” it
falls under the protection of Iowa Code section 561.13 and therefore the
amended declaration is inapplicable because they did not sign it. They claim
both spouses jointly holding a lot are legally required to execute the amended
declaration to the extent the lot qualified as a homestead.
Iowa Code section 561.13(1) provides:
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A conveyance or encumbrance of, or contract to convey or
encumber the homestead, if the owner is married, is not valid,
unless and until the spouse of the owner executes the same or a
like instrument, or a power of attorney for the execution of the same
or a like instrument . . . .
The Vander Zees claim the amended declaration and its covenants “are a totally
new set of covenants that supersede and replace the old covenants rather than
simply amend them.” Pursuant to our holdings above, we find the amended
declaration was not a new conveyance or encumbrance and Iowa Code section
561.13(1) is inapplicable. The Vander Zees were bound to the 1989 declaration,
as well as, the subsequently amended declaration, pursuant to the language in
the warranty deed when they purchased their property. “[R]estrictive covenants
. . . are recognized under Iowa law and exist to protect existing and future
property owners in a subdivision by placing certain restrictions on the land so that
lot owners use their lots in conformity with those restrictions.” Stone Hill Cmty.
Ass’n v. Norpel, 492 N.W.2d 409, 410 (Iowa 1992). The Vander Zees are bound
by the covenants in the amended declaration, pursuant to the warranty deed, and
thus they do not have the right to park vehicles on the property in violation of the
covenants.
D. Verified Claim
The Vander Zees claim the amended declaration does not satisfy the
requirements of a verified claim pursuant to Iowa Code section 614.24 and
therefore is invalid.
The section imposes a twenty-one-year limit on the life of land-use
restrictions “by providing for automatic termination of the covenants in the
absence of affirmative actions to continue them.” Compiano v. Jones, 269
13
N.W.2d 459, 461 (Iowa 1978). In order to avoid automatic termination of
restrictive covenants, a claimant may file a verified claim to extend the limit for an
additional twenty-one years. Iowa Code § 614.25; Fjords N., 710 N.W.2d at 735
(explaining that restrictive covenants are contracts covered by section 614.24).
A verified claim filed in the county recorder’s office
must set forth the nature of the interest (identify whether it is a
reversionary, reverted, or use-restriction interest), the manner the
interest was acquired (identify the deed, conveyance, contract, or
will) and the time the deed, conveyance, or contract was recorded
or if acquired by will, the time the will was probated.
Fjords N., 710 N.W.2d at 740 (emphasis omitted). Further, the verified claim
so filed shall be recorded, and the entries required in section
614.17A and any applicable entries specified in sections 558.49
and 558.52 indexed, in the office of the recorder of the county
where such real estate is situated.
Iowa Code § 614.18.
Upon our review, we agree with the district court that the requirements for
a verified claim were met by the Association.
VI. ATTORNEY FEES
The Vander Zees request court costs and appellate attorney fees,
pursuant to Iowa Code chapter 625. We decline to delve into the merits of the
Vander Zees request and find that because the Vander Zees have not prevailed
on appeal, they are not entitled to appellate attorney fees or court costs.
AFFIRMED.