Puyallup Ridge, LLC v. Courtney Ridge Estate Owners Association ( 2016 )

Filed
Washington State
Court of Appeals
Division Two
August 30, 2016
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
PUYALLUP RIDGE, LLC, a Washington No. 47843-9-II
limited liability company,
Respondent,
UNPUBLISHED OPINION
v.
COURTNEY RIDGE ESTATES OWNERS
ASSOCIATION, a Washington non-profit
corporation,
Appellant.
SUTTON, J. — This appeal relates to two undeveloped parcels (Units E and F), later
acquired by Puyallup Ridge LLC, in the condominium development plan recorded by the Courtney
Ridge Estates Master Association (Master Association) through a Master Declaration. Courtney
Ridge Estates Owners Association (Courtney Ridge) appeals from the trial court’s order granting
summary judgment to Puyallup Ridge, and claims residual membership, ownership interest, and
voting rights in the Master Association. Courtney Ridge argues that the trial court erred because
(1) Courtney Ridge is a sub-association of the Master Association, and (2) the language in the
Master Declaration did not meet the statutory requirements to automatically withdraw the airspace
units under the Washington Condominium Act (WCA).1
1
Chapter 64.34 RCW.
No. 47843-9-II
We conclude that (1) there is no sub-association relationship between Courtney Ridge and
the Master Association, and that (2) once developed, the four airspace units at issue (Units A
through D) were effectively withdrawn from the Master Association and transferred to Courtney
Ridge. Thus, we hold that Courtney Ridge has no membership or residual interest in the Master
Association and no voting rights related to Puyallup Ridge’s January 2014 amendment to the
Master Declaration. We affirm.
FACTS
A. FACTUAL BACKGROUND
Riech Land Inc. acquired the undeveloped property at issue in 2006 and transferred it to
Courtney Ridge LLC (Declarant). The Declarant recorded the site plan, survey map, 2 and
Condominium Declaration3 of the Courtney Ridge Estates Master Association (an airspace
condominium).4 The Master Condominium consisted of six undeveloped parcels of land as
“airspace units,” Units A through F, intended to be developed in phases. Four of the units were
eventually developed and, through four amendments to the Master Declaration, were withdrawn
from the Master Condominium, and transferred to the Courtney Ridge Estates Condominiums
(Courtney Ridge).
2
The survey map and plans are recorded under Pierce County recording number 200703195003.
3
Hereinafter referred to as the “Master Declaration.” The Master Declaration was recorded on
March 19, 2007, under Pierce County recording number 200703190705.
4
Hereinafter referred to as the “Master Condominium” and “Master Association.”
2
No. 47843-9-II
The relevant provision stated,
33.1 Declarant’s Right. [The Master Condominium] consists of six (6)
airspace units. The Declarant reserves the right to withdraw each airspace unit from
[the Master Condominium] and then convert that Condominium into another
Condominium known as Courtney Ridge Estates Condominiums so that within
each airspace unit there would be created units within buildings to be constructed
in the airspace. Upon including that airspace unit within the condominium to be
known as Courtney Ridge Estate Condominiums, it shall be withdrawn from [the
Master Condominium] and shall not be subject to any of the restrictions or
conditions set forth in [the Master Declaration].
Clerk’s Papers (CP) at 98. The Master Declaration further provided that Courtney Ridge
Condominiums “shall be established in phases and each phase shall constitute an airspace unit as
created under [the Master Declaration].” CP at 99.
The Declarant exercised this right, and recorded an amendment for “Phase I,” which
developed “Unit A.” CP at 170. That amendment stated that “Unit A of [the Master Association]
is and will constitute the first phase of [the Courtney Ridge Condominiums] . . . and shall not be
subject to any of the restrictions or conditions” of the Master Declaration. CP at 170 (emphasis
added). The subsequent amendments contained the same language regarding the development and
inclusion of Units B through D into the Courtney Ridge Condominiums.
Along with the amendments, the Declarant recorded certificates, survey maps, and plans.
The survey maps and plans outlined the same boundaries as the Master Condominium, but each
of the recorded amendments referenced the individual units. The declaration for “Phase IV”
described the property in the amendment as “Airspace Unit D” and explicitly excepted from the
3
No. 47843-9-II
amendment the prior airspace units of the Courtney Ridge Condominium from inclusion in the
amendment.5
After the original Declarant recorded the amendment and developed the fourth airspace
unit, it went bankrupt and transferred title to the two remaining airspace units, E and F, to the bank.
Puyallup Ridge then acquired the title to “Airspace Units E and F” of the Master Association in
October 2013.
Puyallup Ridge intended to build 22 rental apartments in airspace Units E and F with a
design consistent with the Master Association’s original design. On January 28, 2014, Puyallup
Ridge executed and recorded an amendment to the Master Declaration reducing the minimum
rental period from six months to thirty days and removing the restrictions on the number of rental
tenants permitted. In a letter dated January 8, 2014, Puyallup Ridge advised Courtney Ridge of its
plans regarding Units E and F.
B. PROCEDURAL BACKGROUND
In December 2014, Puyallup Ridge filed suit. Courtney Ridge filed its answer, affirmative
defenses, and counterclaims. Puyallup Ridge filed its motion for summary judgment, which the
trial court heard in May 2015.
After argument, the trial court entered its order for summary judgment in favor of Courtney
Ridge. Puyallup Ridge moved for reconsideration and the trial court entered an order granting
5
Units A through C. The certification describes the property in the amendment as “Airspace Unit
D of [the Master Condominium],” provides the Pierce County record number for the Master
Declaration recording number and Master Condominium survey map and plans recording number,
and states “Excepting therefrom any portion lying within amendment to Courtney Ridge Estates
recorded under Pierce County Auditor’s file no. 200805285014.” CP at 422.
4
No. 47843-9-II
reconsideration of its prior ruling and granted summary judgment in favor of Puyallup Ridge.
Courtney Ridge appeals.
ANALYSIS
The parties agree on the underlying facts of the case, but disagree on whether the
amendments to the Owner’s Declaration effectively withdrew the four airspace units from the
Master Association and whether the Courtney Ridge owners have any interest, membership, or
voting rights in the Master Association.
A. STANDARD OF REVIEW AND LEGAL PRINCIPLES
We review a grant of summary judgment de novo. Club Envy of Spokane, LLC v. Ridpath
Tower Condo. Ass’n, 184 Wash. App. 593, 599, 337 P.3d 1131 (2014). Summary judgment is proper
when there is “‘no genuine issue as to any material fact and . . . the moving party is entitled to a
judgment as a matter of law.’” Lake v. Woodcreek Homeowners Ass’n, 169 Wash. 2d 516, 526, 243
P.3d 1283 (2010) (quoting CR 56(c)). We construe facts and reasonable inferences from those
facts in the light most favorable to the nonmoving party. Club Envy, 184 Wash. App. at 599.
All condominiums are created by statute. Shorewood West Condo. Ass’n v. Sadri, 140
Wash. 2d 47, 52 992 P.2d 1008 (2000). The WCA governs all condominiums created after July 1,
1990. Shorewood West, 140 Wash. 2d at 52. Because condominiums are statutory creations, the
rights and duties of condominium unit owners are different from those of real property owners at
common law. Shorewood West, 140 Wash. 2d at 53.
A condominium may be created pursuant to [the WCA] only by recording a
declaration executed by the owner of the interest subject to this chapter in the same
manner as a deed and by simultaneously recording a survey map and plans pursuant
to RCW 64.34.232.
5
No. 47843-9-II
RCW 64.34.200(1). A condominium declaration is like a deed, which we review as a mixed
question of law and fact. Lake, 169 Wash. 2d at 526. The factual issue is the declarant’s intent, and
the declaration’s legal consequences are questions of law which we review de novo. Club Envy,
184 Wash. App. at 603.
B. MASTER ASSOCIATION
Courtney Ridge argues that it is a sub-association of the Master Association, has delegated
some of its powers to the Master Association, and by virtue of the relationship between it and the
Master Association, Courtney Ridge could never be fully withdrawn from the Master Association.
Puyallup Ridge argues that Courtney Ridge’s argument has no basis in law or the Master or Owners
Declarations to support its argument. We agree with Puyallup Ridge.
RCW 64.34.276(1) describes a master association as an entity to which the declaration
provides or delegates any of the powers of one or more other associations “for the benefit of the
unit owners.” Bellevue Pac. Ctr. Condo. Owners Ass’n v. Bellevue Pac. Tower Condo. Ass’n, 124
Wash. App. 178, 189, 100 P.3d 832 (2004). For RCW 64.34.276(1) to apply, the following three
elements must be met:
(1) [T]he declaration of the owners’ associations must provide that powers granted
to them by the WCA are to be exercised or delegated to another corporation; (2)
that corporation exercises those powers on behalf of the development; and (3) there
is one or more condominiums.
Bellevue Pac., 124 Wash. App. at 189. When there is no delegation in the declaration, the declaration
does not create a master association. Bellevue Pac., 124 Wash. App. at 190. Here, there is no
delegation of powers in either declaration, and neither is there any indication that the Master
6
No. 47843-9-II
Association exercises any powers on behalf of the Courtney Ridge Owners. Thus, we hold that
Courtney Ridge is not a sub-association of the Master Association.
C. DECLARATION & WITHDRAWAL OF UNITS
Courtney Ridge argues that the Owners Declaration and Master Declaration lacked the
“statutorily required elements in order to effectuate a withdrawal” of the units from the Master
Association. Br. of Appellant at 15. While we agree that the withdrawal was imperfect, we hold
that it does not invalidate the plain language of the Master Declaration.
1. Statutory Requirements
A condominium declaration is a document unilaterally creating a type of real property, and
can be solely amended by compliance with the WCA.6 Bellevue Pac., 124 Wash. App. at 188. At
the same time the declaration is recorded, the survey map and plan for the condominiums must
also be recorded. RCW 64.34.200(1).
RCW 64.34.232 requires that the survey map and plans be recorded when any amendments
to the declaration are made. RCW 64.34.232(1). Courtney Ridge argues that the survey map’s
failure to label the airspace units with “MAY BE WITHDRAWN FROM THE CONDOMINIUM”
as required by RCW 64.34.232(2) renders the withdrawal ineffective.7 Br. of Appellant at 18-19.
But Courtney Ridge ignores another subsection that states,
Upon exercising any development right, the declarant shall record either a new
survey map and plans necessary to conform to the requirements of subsections (1),
(2), and (3) of this section or new certifications of a survey map and plans
6
RCW 64.34.
7
Courtney Ridge does not argue that the survey map and plans for Phase I are invalid.
7
No. 47843-9-II
previously recorded if the documents otherwise conform to the requirements of
those subsections.
RCW 64.34.232(6) (emphasis added). Here, the Declarant chose the second option, filing a new
certification of the previously recorded survey map and plan.
The certification accompanying the first amendment to the Master Declaration adding
“Phase I” to Courtney Ridge Estates Condominium included a property description referencing
“Unit A” of the Master Association. When the Declarant filed the amendment for the “Phase IV”
addition, the property description in that certification referenced “Unit D” of the Master
Association, additional language in the property description read, “Excepting therefrom any
portion lying within amendment to Courtney Ridge Estates recorded under Pierce County
Auditor’s File No. 200805285014.” CP at 422. The same, unaltered survey map was recorded
with each phase.
A plain reading of the certification indicates that the intent of the amendments was to
withdraw the airspace Units A-D, although the recording of the unaltered survey map was
statutorily imperfect. We hold that the alleged imperfection does not invalidate the plain language
of the certification or the Master Declaration as analyzed below.
2. Declarant’s Intent
We discern the declarant’s intent from the face of the declaration. Club Envy, 169 Wash. 2d
at 526. The Master Declaration provides:
33.1 Declarant’s Right. [The Master Condominium] consists of six (6)
airspace units. The Declarant reserves the right to withdraw each airspace unit from
[the Master] Condominium and then convert that Condominium into another
Condominium known as Courtney Ridge Estates Condominiums so that within
each airspace unit there would be created units within buildings to be constructed
8
No. 47843-9-II
in the airspace. Upon including that airspace unit within the Condominium to be
known as Courtney Ridge Estates Condominiums, it shall be withdrawn from [the
Master Condominium] and shall not be subject to any of the restrictions or
conditions set forth in this Declaration.
CP at 98 (emphasis added). The Declarant exercised this right under Paragraph 33.1, recording
the four amendments to the Master Declaration, transferring Units A, B, C, and D from the Master
Condominium to Courtney Ridge Estates, thus subjecting them to the Owner’s Declaration.
Each amendment contained the following identical language, changing only the reference
to the unit and phase,
1. Unit A of [the Master Association] is and will constitute the first phase
of Courtney Ridge Estates.
2. Pursuant to the provisions of [the Master Declaration], each
condominium unit of the Courtney Ridge Estates created within said airspace units
shall not be subject to any of the restrictions or conditions as set forth in [the Master
Declaration].
CP at 170-81.
The Owners Declaration also provides that:
For each subsequent phase following Phase 1, the Declarant shall execute
and record an amendment to [the Owners Declaration] stating that said subsequent
phase is established as a Condominium under the [WCA]. From and after the
recording of said amendment, all of the land within Phase 1 and within the
subsequent phase for which such an amendment has been recorded, together with
all units, shall constitute a single Condominium.
CP at 159 (emphasis added). The words “shall” and “withdraw” in the Master Declaration when
read with the amendments’ provision that the unit “is and will constitute” the development phase
of Courtney Ridge, are unambiguous. Upon recording the amendment, the Declarant’s intent
expressed in the Master Declaration was that the airspace unit would be fully withdrawn from the
9
No. 47843-9-II
Master Association and not subject to the rights and restrictions of the Master Declaration, the
effect of which is to leave the members of the Owners Association subject only to the Owners
Declaration.
Thus, the plain language of the Master Declaration, the amendments, and the survey
certifications plainly creates another condominium. Thus, we hold that Units A-D were effectively
withdrawn from the Master Association and made subject to, and included in, the Courtney Ridge
Owner’s Association.8
D. RESIDUAL OWNERSHIP INTEREST AND VOTING RIGHTS
Courtney Ridge argues that, because they have an “allocated interest in the common
elements of the Master Association,” individual unit owners are members of the Master
Association and retain voting rights in the Master Association. Br. of Appellant at 24-26. We
disagree.
The Master Declaration explicitly defines the terms “common elements or facilities,”
“owner,” “unit,” and “unit owner.” CP at 4, 6-7.
1.7.9 “Common Elements or Facilities” means all portions of the
Condominium other than the Units.
....
1.7.27 “Owner” or “Unit Owner” shall mean the Owner of record, whether
one or more persons, of a Unit.
....
8
The legislature intended the WCA to have strong consumer protection provisions. See One Pac.
Towers Homeowners’ Ass’n v. HAL Real Estate Inv., Inc., 148 Wash. 2d 319, 330-31, 61 P.3d 1094
(2002). But Courtney Ridge owners were not mislead as to the contents of the declarations, the
plans for phased development of the airspace units, or the withdrawal of the developed phases,
nor do they claim they were misled.
10
No. 47843-9-II
1.7.36 “Unit” means a physical portion of the Condominium designated for
separate ownership, the boundaries of which are described in the Survey Map and
Plans and in this Declaration.
1.7.37 “Unit Owner” means a Declarant or other person who owns a Unit,
but does not include a person who has an interest in the Unit solely as security for
an obligation. Unit Owner also means the vendee, not the vendor, of a Unit under
a real estate contract.
CP at 51, 53-54 (emphasis added).
A member of the Master Association is defined in the following: “[An] Owner (including
Declarant) shall be a member of the Association and shall be entitled to one membership for each
Unit so owned. . . . Ownership of a Unit shall be the sole qualification for membership in the
Association.” CP at 58-59. Owners, qualified Master Association members, have one vote per
unit owned in the condominium.
The Master and Owners Declarations also provide mutually reciprocal easements over the
other units. The Master Declaration reserves easements over the common elements owned by the
Master Association “for the benefit of all unit owners of condominium units which may be created
within each airspace unit.” CP at 99. The Master Declaration also reserves the right to “withdraw
and transfer all of the common elements” to Courtney Ridge “subject to the condition that the
airspace units transferred into [Courtney Ridge] shall have easements rights of ingress and egress
over said common elements.” CP at 99. The Owners Declaration provides for similar access
easements and establishes the obligation of the easement holders “to pay a prorata share (based on
relative number of living units) of the costs of subsequent repairs, maintenance and operation” of
the “utilities, roadway[] [and recreational facilities].” CP at 161.
11
No. 47843-9-II
There is no indication in the Master Declaration or the Owners Declaration that Courtney
Ridge members hold any residual membership or ownership interest in the Master Association
from their interest in the common elements. The Master Declaration specifically exempts units
from the definition of “[c]ommon [e]lements or [f]acilities.” CP at 51. Owners/ownership is
limited to unit ownership and does not include any interest in common elements, and only owners
can qualify as voting members of the Master Association.
Further, it is clear from the easement provisions that, once the airspace units were
withdrawn from the Master Condominium, the common elements of the roadways, utilities, and
recreational facilities were available to Courtney Ridge through an easement, and not through any
ownership interest. A share in the repair and maintenance of the common elements does not equate
to a residual membership or ownership interest. Thus, we hold that Courtney Ridge members have
no residual membership or ownership interest in the Master Association based on the easements
over the common elements. We also hold that because they were not qualified voting members in
the Master Association, that the Courtney Ridge members had no voting rights for the Puyallup
Ridge amendment to the Master Declaration.
CONCLUSION
We hold that (1) there is no sub-association relationship between Courtney Ridge and the
Master Association, (2) airspace Units A through D were effectively withdrawn from the Master
Association because the declarant’s intent to fully withdraw each airspace unit from the Master
Association is apparent from the Master Declaration’s plain language, (3) there is no residual
membership or ownership interest in the common elements of the Master Association, and (4)
12
No. 47843-9-II
Courtney Ridge members were not qualified voting members in the Master Association.
Therefore, Courtney Ridge had no voting rights regarding Puyallup Ridge’s January 2014
amendment to the Master Declaration. Thus, we affirm the trial court’s order granting summary
judgment to Puyallup Ridge.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,
it is so ordered.
SUTTON, J.
We concur:
BJORGEN, C.J.
JOHANSON, J.
13