| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
|
You can search the entire site. or go to the recent opinions, or the chronological or subject indices. David L. Meyers and Jan M. Meyers, Sky Ranch Aero Services, LLC v. Sky Ranch, Inc (12/13/2024) sp-7735
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.gov.
THE SUPREME COURT OF THE STATE OF ALASKA
DAVID L. MEYERS, JAN M. )
MEYERS, and SKY RANCH AERO ) Supreme Court No. S-18521
SERVICES, LLC, )
) Superior Court No. 3AN-20-08023 CI
Appellants, )
) O P I N I O N
v. )
) No. 7735 - December 13, 2024
SKY RANCH, INC., )
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Andrew Guidi, Judge.
Appearances: William M. Bankston, John R. Crone, and
Suzanne A. Adler, Bankston Gronning Brecht P.C.,
Anchorage, for Appellants. Sarah A. Badten and Matthew
Widmer, Birch Horton Bittner & Cherot, Anchorage, for
Appellee.
Before: Maassen, Chief Justice, and Carney, Borghesan,
Henderson, and Pate, Justices.
PATE, Justice.
INTRODUCTION
The developers of an aviation-centric common interest community held
special declarant rights associated with a unique lot. The homeowners' association held
a right of first refusal on the unique lot. The developers sold the lot, but the deed did
----------------------- Page 2-----------------------
not clearly convey the special declarant rights, and the developers did not inform the
homeowners' association that they were transferring the special declarant rights with
the sale of the lot.
A dispute subsequently arose between the association and the new owners.
The owners sought a declaratory judgment that they held the special declarant rights,
that construction on the lot was accordingly not subject to oversight by the association,
that they were allowed to rent aircraft facilities on the lot to non-lot owners, and that
those non-lot owners could then use the airstrip. The association sought judgment to
the contrary and also argued that the community's declaration required the owners of
the lot to make tiedowns available on the lot to other members of the community. The
superior court granted summary judgment in favor of the association and awarded
attorney's fees.
We reverse the superior court's ruling on summary judgment and remand
for further proceedings to determine whether the owners of the lot obtained the special
declarant rights. We affirm the court's determination that the owners must make
tiedowns available to other members of the community. We reverse the court's
determination that only lot owners are permitted to use the airstrip and aircraft facilities.
We vacate the superior court's award of attorney's fees.
FACTS AND PROCEEDINGS
A. Facts
1. The Turners develop Sky Ranch and reserve special declarant
rights to Lot 13.
Rexford and Ingeborg Turner were the original developers of Sky Ranch
at Pioneer Peak, a planned common-interest community in Palmer.1 Sky Ranch is a
1 See generally AS 34.08.
2 7735
----------------------- Page 3-----------------------
fly-in community built around a commonly owned airstrip.2 The homeowners
association governing the community is a non-profit named Sky Ranch, Inc. (the
3
Association).
A business owned by the Turners, Turner Custom Homes, Inc., originally
owned Lot 13, Block 5 in Sky Ranch, referred to in the community's declaration4 as the
"Hanger Lot."5 Sky Ranch's declaration singles out Lot 13 as unique. The declaration
reserves "special declarant rights" that allow the declarant to subdivide Lot 13 and
create up to 14 condominium-hangar lots,6 which may be constructed without the
approval of the Association's Architectural Control Committee.7 The special declarant
rights also allow commercial activity on Lot 13, "limited to the sale/lease of tie-down
or hanger spaces and the sale of aircraft fuel." The declaration also states that "[o]wners
of Lots not adjacent to the runway or a taxiway will be offered, on a first come, first
served basis, an assigned tiedown on [Lot 13]."
2 See AS 34.08.990(4) (defining "common elements" to include "the real
estate within a planned community owned or leased by the association").
3 See AS 34.08.310 (explaining that common interest community must have
an "association" whose membership "at all times consists exclusively of all unit
owners"); AS 34.08.320 (defining association's powers). Though the statute refers to
an association comprised of "unit owners," we refer to association members as "lot
owners," which is consistent with the community's usage.
4 See AS 34.08.090 (explaining that creating a common interest community
requires "recording a declaration" and "conveying the real estate subject to the
declaration to the association").
5 The declaration uses the term "hanger" instead of "hangar." We use the
former term when quoting the declaration.
6 This provision also states that each subdivided lot would "be considered a
separate Lot for all purposes after the plat is recorded."
7 The declaration requires any construction, additions or alterations to first
be approved by the Architectural Control Committee. The Committee assesses the
project's location, quality, and whether its design is in "harmony . . . with existing
structures."
3 7735
----------------------- Page 4-----------------------
The declaration provides the Association a right of first refusal to purchase
Lot 13. In the event there is a proposed transfer of Lot 13 to "anyone outside the
immediate family of [the Turners]," the declaration requires Turner Custom Homes to
"notify the Association in writing of the proposed terms of transfer and . . . provide the
Association 45 days to purchase the property on identical terms."
2. The Meyerses purchase Lot 13.
In 2010 David and Jan Meyers, through Sky Ranch Aero Services, LLC,
offered to purchase Lot 13 from Turner Custom Homes for $580,000. Turner Custom
Homes informed the Association in writing of the terms of the offer, including the
transfer of the special declarant rights. During negotiations the Turners asked the
Association to sign a waiver relinquishing its right of first refusal. The Association
refused to sign, and the Meyerses ultimately did not purchase Lot 13 in 2010.
Four years later, the Meyerses made a second offer to buy Lot 13. Turner
Custom Homes provided the Association with a proposed "Purchase and Sale
Agreement." But unlike the offer in 2010, the terms of the agreement made no mention
of the special declarant rights. This time, the Association's president signed a waiver
relinquishing the Association's right of first refusal. The waiver did not mention the
special declarant rights.
The Turners and the Meyerses finalized the sale of Lot 13 by executing a
statutory warranty deed. The deed describes two parcels:
The Grantor(s), Rexford L. Turner, as to Parcel No. 1, and
Ingeborg Turner, Parcel No. 2, . . . for and in
consideration . . . conveys and warrants to the Grantee(s),
Sky Ranch Aero Services LLC, . . . the following described
real property:
Parcel No. 1:
Lot 13, Block 5, Sky Ranch at Pioneer Peak, according to
Plat No. 98-32, located in the Palmer Recording District,
Third Judicial District, State of Alaska EXCEPTING
4 7735
----------------------- Page 5-----------------------
THEREFROM the Special Declarant described as Parcel
No. 2 herein.
Parcel No. 2:
Special Declarant Rights set forth in Article VII,
Section 7.1.a of the Declaration of Sky Ranch at Pioneer
Peak, recorded on November 21, 2000 at Book 110,
Page 0262, and the First Amendment to Declaration of Sky
Ranch at Pioneer Peak, recorded on January 10, 2005, at
Doc. 2005-000587-0 (Special Declarant Rights), including
any right by amendment to subdivide the maximum 14
condominium hangar lots on the Property, each of which will
be considered a separate lot for all purposes after the plat is
recorded, as it affects the following property; Lot 13,
Block 5, Sky Ranch at Pioneer Peak, according to Plat
No. 98-32, located in the Palmer Recording District, Third
Judicial District, State of Alaska.
The deed was recorded in September 2014. In 2019 the Association amended the
declaration to remove its right of first refusal with respect to the sale of Lot 13.
3. Disagreements arise between the Meyerses and the Association.
The Meyerses' relationship with the Association soured over the
Meyerses' use of Lot 13. The Meyerses did not rent any of the available tiedowns8 after
they purchased Lot 13. Instead, over a period of time, they removed all but three of the
tiedowns, which they reserved for personal use.
Between 2019 and 2020, the Association passed a series of resolutions
creating both temporary and permanent tiedowns on taxiways near the airstrip. One of
these resolutions stated it would "remain in effect until adequate tiedowns are available
8 The declaration and a subsequent amendment variously use tiedown, tie-
down, and tie down. When not quoting the declaration or amendment, we use tiedown.
5 7735
----------------------- Page 6-----------------------
for rental by the [Association's] Membership on Lot 13." The Association promulgated
a rental agreement for these tiedowns, setting rent at $25 per month.
In November 2019 the Association amended the declaration to add a
definition of "renter," which it defined as an individual "in an active contract with an
Association Member for living quarters and/or aircraft parking space(s), in a hanger or
outdoors via tie down." This amendment further specified that, "[o]ther than as
described herein for Lot 13 Block 5, homeowners may not separately rent tie downs or
hangers on their lot to non-HOA members."
Disagreements between the Meyerses and the Association followed. The
Association told the Meyerses it had observed construction activity on Lot 13 that had
not been approved by the Architectural Control Committee. Citing the special declarant
rights, the Meyerses claimed they did not need to seek pre-approval from the Committee
9
for improvements to Lot 13.
The Meyerses also claimed they could lease hangars and tiedowns on Lot
13 to non-lot owners who rented property in Sky Ranch, and that these tenants could
then use the airstrip. The Association learned that the Meyerses had leased a residential
lot and a hangar on Lot 13 to a couple who did not own a lot in Sky Ranch. The
Meyerses had also allowed the same couple to use the airstrip. The Association
9 The Meyerses cited article IX, section 9.8(b), which provides that the
"[d]eclarant shall be permitted to construct hanger/condominiums on [Lot 13] without
obtaining approval from the Architectural Control Committee." They also cited article
VII, section 7.8 which provides: "[N]either the Association nor any Lot Owner may
take any action, adopt any rule, make interpretations . . . , or amend this Declaration in
a manner that will interfere with or diminish any Special Declarant Right without prior
written consent of the Declarant."
6 7735
----------------------- Page 7-----------------------
maintained that the declaration prohibited non-lot owners from renting hangars or using
the airstrip.10
B. Proceedings
In September 2020 the Meyerses sued the Association seeking a
declaratory judgment defining whether and how the Architectural Control Committee
could regulate improvements to Lot 13. The Meyerses also sought a declaratory
judgment that they could rent Lot 13 to tenants who did not own lots in Sky Ranch and
that those tenants could use the airstrip.
Before the Association answered, the Meyerses filed an amended
complaint. The amended complaint sought a determination that the Meyerses possessed
the special declarant rights associated with Lot 13 and that those rights allowed it to
lease hangar spaces and tiedowns to non-lot owners.
The amended complaint also explained that the Meyerses had obtained a
"Corrective Warranty Deed" signed by the Turners in January 2021. This corrective
deed purported to clarify that the 2014 conveyance included the special declarant rights.
The corrective deed was identical to the prior statutory deed, with one exception: the
words "EXCEPTING THEREFROM the Special Declarant [rights] described as Parcel
No. 2 herein" had been replaced with the words "INCLUDING, BUT NOT LIMITED
TO, ALL Special Declarant rights described in Parcel 2 herein." The Meyerses
executed the corrective deed one day after they filed their amended complaint.
The Association answered and counterclaimed. The Association sought
an injunction requiring the Meyerses to offer tiedowns on Lot 13 to qualified lot owners,
barring the Meyerses' tenants from to using the airstrip, and requiring the Meyerses to
obtain pre-approval from the Architectural Control Committee for improvements on
10 Article IX, section 9.8(b) provides that "commercial usage shall be
permitted on the hanger/condominium Lot, provided said uses are limited to the
sale/lease of tie-down or hanger spaces and the sale of aircraft fuel."
7 7735
----------------------- Page 8-----------------------
Lot 13. The Association moved for summary judgment on its counterclaims. It also
sought summary judgment that neither the statutory deed nor the corrective deed
transferred the special declarant rights.
In response, the Meyerses argued that the definition of "renter" in the 2019
amendment created a genuine dispute of material fact as to whether non-lot-owner
tenants could use the airstrip. They also alleged that the Association had allowed two
non-lot owners to consistently use the airstrip.
The superior court granted summary judgment to the Association and
denied it as to the Meyerses. The court found the 2014 statutory warranty deed was
unambiguous and did not transfer the special declarant rights to the Meyerses. The
court explained that the deed's plain language excepted the special declarant rights. It
further held that, because the special declarant rights were not transferred, they had
terminated. Additionally, it ruled that equitable estoppel rendered the corrective
warranty deed void because the Association had not been notified that the Meyerses'
offer included the special declarant rights.
Based on its determination that the Meyerses did not acquire the special
declarant rights, the court held that improvements on Lot 13 required pre-approval by
the Architectural Control Committee. The court also held the declaration's plain
language required the owner of Lot 13 to provide tiedowns to other lot owners. Finally,
the court held that the declaration restricted use of the airstrip to lot owners.
The Association moved for attorney's fees. The Meyerses deferred
opposition to this motion, explaining that they would seek appellate review of the
court's prevailing party determination depending on the outcome of the principal issues
on appeal. The superior court awarded the Association full costs and attorney's fees.
The Meyerses appeal.
STANDARD OF REVIEW
"We review a grant of summary judgment de novo, 'affirming if the record
presents no genuine issue of material fact and if the movant is entitled to judgment as a
8 7735
----------------------- Page 9-----------------------
matter of law.' "11 We read the record "in the light most favorable to the non-moving
12
party and [make] all reasonable inferences in its favor."
This case requires review of the superior court's interpretation of a deed.
"Whether a deed . . . is ambiguous is a question of law that we review de novo."13 This
case also requires review of the superior court's interpretation of the declaration of a
common interest community. We review the interpretation of a declaration de novo,
14
and interpret it in the same manner as a contract.
DISCUSSION
The Meyerses appeal four aspects of the superior court's ruling, arguing
it was error to determine on summary judgment that: (1) the Meyerses did not obtain
the special declarant rights, (2) Lot 13 is subject to the Architectural Control
Committee's oversight, (3) the Meyerses are required to lease tiedowns on Lot 13 to
non-adjacent lot owners, and (4) tenants who are not lot owners cannot use the airstrip
and aircraft facilities. They also appeal the court's award of attorney's fees to the
Association.
A. It Was Error To Conclude On Summary Judgment That The
Meyerses Did Not Obtain The Special Declarant Rights.
The superior court granted summary judgment to the Association and held
that the Meyerses did not obtain the special declarant rights associated with Lot 13. It
11 Miller v. Fowler , 424 P.3d 306, 310 (Alaska 2018) (quoting Kelly v. Mun.
of Anchorage, 270 P.3d 801, 803 (Alaska 2012)).
12 Schweitzer v. Salamatof Air Park Subdivision Owners, Inc., 278 P.3d
1267, 1271 (Alaska 2012) (quoting Witt v. State, Dep't of Corr., 75 P.3d 1030, 1033
(Alaska 2003)).
13 Reeves v. Godspeed Props., LLC, 426 P.3d 845, 849 (Alaska 2018).
14 See Black v. Whitestone Ests. Condo. Homeowners ' Ass'n, 446 P.3d 786,
791 (Alaska 2019).
9 7735
----------------------- Page 10-----------------------
found the statutory warranty deed was unambiguous and did not transfer the special
declarant rights.
We hold it was error to grant summary judgment to the Association
because the statutory deed is ambiguous. Both parties offer reasonable interpretations
of the statutory deed's text. Under these circumstances we remand for the superior
court to consider extrinsic evidence of the parties' intent in executing the statutory deed.
However, we agree with the superior court that that the corrective deed is invalid and
cannot effectuate a transfer of the special declarant rights because it is barred by
equitable estoppel.
1. The 2014 statutory warranty deed is ambiguous.
We follow a three-step approach to interpreting a deed.15 First, we "look
at the four corners of the document to see if it unambiguously presents the parties'
intent."16 Unlike interpreting a contract, the first step of interpreting a deed "does not
allow the use of extrinsic evidence in making the threshold determination whether a
deed is ambiguous."17 Second, "[i]f a deed is ambiguous, the next step is to consider
'the facts and circumstances surrounding the conveyance' to discern the parties'
intent."18 The inquiry under this step "can be broad, looking at 'all of the facts and
circumstances of the transaction in which the deed was executed, in connection with
15 Schweitzer, 278 P.3d at 1273 (citing Dias v. State, Dep't of Transp. &
Pub. Facilities, 240 P.3d 272, 274 (Alaska 2010)).
16 Reeves, 426 P.3d at 849 (quoting McCarrey v. Kaylor , 301 P.3d 559, 563
(Alaska 2013)).
17 HP Ltd. P'ship v. Kenai River Airpark, LLC, 270 P.3d 719, 728 (Alaska
2012) (emphasis omitted) (quoting Est. of Smith v. Spinelli, 216 P.3d 524, 530 (Alaska
2009)).
18 Reeves, 426 P.3d at 849-50 (alteration in original) (quoting McCarrey ,
301 P.3d at 563).
10 7735
----------------------- Page 11-----------------------
the conduct of the parties after its execution.' "19 Third, "[i]n the event that the parties'
20
intent cannot be determined, we rely on rules of construction."
Both parties argue that the plain language of the statutory warranty deed
unambiguously supports their respective positions. The Meyerses argue that it is
reasonable to interpret the deed as conveying two parcels,21 the first being the real
property of Lot 13 - which Rexford Turner transferred as the owner of Turner Custom
Homes - and the second parcel being the special declarant rights associated with Lot
13 - which Ingeborg Turner transferred as the declarant. The Association
acknowledges that the statutory deed identified two parcels, but it argues that the deed
excepts the second parcel, which is the special declarant rights, from the transfer.
Both constructions are reasonable. The statutory warranty deed names
two parcels and specifies the grantor associated with each parcel. The deed describes
the first parcel as "Lot 13, Block 5 . . . EXCEPTING THEREFROM the Special
Declarant [Rights] described as Parcel No. 2 herein." The deed describes the second
parcel as the "Special Declarant Rights set forth in . . . the Declaration of Sky Ranch at
Pioneer Peak."
The Association argues that language "excepting" the special declarant
rights from the transfer of the first parcel excluded the special declarant rights from the
sale altogether, and this interpretation is reasonable. But this argument does not address
the reasonable interpretation proposed by the Meyerses: that the "EXCEPTING
19 Id. at 850 (quoting Spinelli, 216 P.3d at 529).
20 Id. (alteration in original) (quoting McCarrey , 301 P.3d at 563).
21 The Association claims that this argument was raised for the first time in
the Meyerses' motion for reconsideration, but this is incorrect. The Meyerses raised
this argument in their second sur-reply regarding their opposition to the Association's
second motion for partial summary judgment. The superior court acknowledged
receiving the second sur-reply and considered the Meyerses' deed interpretation
argument in its ruling, which found that the deed was unambiguous. Thus, the argument
was properly before the superior court, and the Meyerses preserved it for appeal.
11 7735
----------------------- Page 12-----------------------
THEREFROM" language did nothing more than distinguish the first parcel from the
second. In other words, even if the first parcel excluded the special declarant rights, the
deed separately conveyed the special declarant rights as the second parcel.
This is not a case where "the words of the deed taken as a whole are
capable of but one reasonable interpretation."22 Both the Meyerses' and the
Association's interpretations are reasonable, so the deed is ambiguous.23 We therefore
remand to the superior court to consider the facts and circumstances surrounding the
conveyance to discern the parties' intent, if possible.
2. The 2021 corrective warranty deed did not transfer the special
declarant rights.
The Meyerses attempt to use the 2021 corrective warranty deed as
extrinsic evidence of the parties' intent in executing the 2014 statutory warranty deed
for Lot 13.24 In the alternative, they argue that even if the statutory deed did not transfer
the special declarant rights, the corrective deed accomplished the transfer. The
Association responds that equitable estoppel precludes transfer of the special declarant
rights via the corrective deed.
The superior court did not consider extrinsic evidence because it found the
deed was unambiguous. The court held that the special declarant rights "expired" or
"automatically terminat[ed]" after not being conveyed to the Meyerses via the statutory
warranty deed. But even assuming the Turners retained the special declarant rights, the
22 Spinelli, 216 P.3d at 530 (quoting Norken Corp. v. McGahan , 823 P.2d
622, 626 (Alaska 1991)).
23 See 26A C.J.S. Deeds § 177 (West 2024) ("Ambiguity may be found when
the language of the deed is subject to conflicting interpretations, both of which are
reasonable.").
24 The Meyerses also introduced a title insurance policy as extrinsic evidence
in support of their interpretation of the statutory warranty deed. Because we remand to
the superior court to proceed to the second step of interpretation, we do not consider
evidence of the policy on appeal.
12 7735
----------------------- Page 13-----------------------
court found using a corrective warranty deed to transfer those rights would prejudice
the Association by circumventing its right of first refusal and was thus barred by
equitable estoppel.
The statutory warranty deed is ambiguous and we therefore do not address
whether the special declarant rights would be extinguished if not transferred. However,
we agree with the superior court that equitable estoppel should bar the Meyerses from
arguing that the corrective deed conveyed the special declarant rights in 2021. If the
special declarant rights were transferred, it must have been accomplished through the
statutory deed in 2014.
The Meyerses argue that equitable estoppel should not invalidate the
corrective deed. They claim that the Association was not prejudiced because the
Association amended the declaration in 2019 to formally extinguish its right of first
refusal, so the Association did not have this right when the corrective deed was executed
in 2021. The superior court rejected this argument, finding the Association relinquished
its right of first refusal under the assumption that the sale of Lot 13 did not include the
special declarant rights. The court determined that transferring the special declarant
rights by the corrective deed was barred by equitable estoppel because such a result
would circumvent the Association's right of first refusal and consequently prejudice the
Association. We agree with the superior court.
"[T]he general requirements for application of the doctrine of equitable
estoppel are the assertion of a position by conduct or word, reasonable reliance thereon
by another party, and resulting prejudice."25 A right of first refusal includes a right to
adequate notice of an offer to purchase the property burdened with the right, including
26
"reasonable disclosure of the material terms" of the offer.
25 Foster v. Hanni, 841 P.2d 164, 171 (Alaska 1992).
26 Castle Props., Inc. v. Wasilla Lake Church of the Nazarene, 347 P.3d 990,
994 (Alaska 2015) (quoting Roeland v. Trucano, 214 P.3d 343, 348 (Alaska 2009)).
13 7735
----------------------- Page 14-----------------------
The special declarant rights were a material term of the 2014 transaction
between the Meyerses and the Turners for Lot 13. David Meyers stated that he would
not have agreed to purchase Lot 13 if the special declarant rights were not part of the
purchase, and the Association's then-president stated that the Association likely would
not have waived its right of first refusal had it known that the offer included the special
declarant rights. The failure of the 2010 sale, which explicitly included transfer of the
special declarant rights, and Lot 13's unique characteristics further support the
conclusion that the special declarant rights were a material term of the 2014 transaction.
Turner Custom Homes did not provide notice of this material term and the
Association reasonably assumed that the 2014 transaction did not include the special
declarant rights. The Association waived its right to first refusal and subsequently
amended the declaration to eliminate the right based on this reasonable assumption.
Allowing the corrective deed to transfer special declarant rights under these
circumstances would prejudice the Association. The Meyerses thus are equitably
estopped from arguing that the corrective deed transferred the special declarant rights.
B. It Was Error To Conclude On Summary Judgement That Lot 13 Is
Subject To The Architectural Control Committee's Oversight.
The superior court ruled that because the Meyerses did not hold the special
declarant rights, their construction activity on Lot 13 is subject to the Architectural
Control Committee's power of pre-approval under section 9.8(b) of the declaration. On
appeal both parties acknowledge that resolution of this issue depends on whether the
Meyerses possess the special declarant rights. Because we have held that it was error
to conclude on summary judgment that the Meyerses did not obtain the special declarant
rights, it was also error to conclude on summary judgment that Lot 13 is subject to the
Committee's oversight. The superior court must reconsider this issue on remand.
14 7735
----------------------- Page 15-----------------------
C. The Superior Court Did Not Err By Ruling That The Meyerses Are
Required To Provide Tiedowns On Lot 13.
The superior court ruled that the plain language of Section 9.7(g) of the
declaration requires the owner of Lot 13 to offer tiedowns to owners of lots not adjacent
to the runway or taxiway on a first-come, first-served basis. The court refused to
consider an expert affidavit that the Meyerses produced, instead ruling that expert
opinions are applicable to questions of fact, not law. The court held that the Meyerses
cannot avoid their obligation to provide tiedowns by removing several tiedowns and
using the remainder for their personal use.
On appeal, the Meyerses argue that the superior court erred in its
interpretation of the declaration. They invite us to consider their expert's affidavit in
determining whether there is a genuine dispute of material fact about the meaning of
relevant portions of the declaration. They also argue that the declaration lacks
specificity because it does not prescribe the number of tiedowns Lot 13 must host,
guarantee that any tiedowns will be available for lease, or provide an alternative for lot
owners in the event Lot 13 has no available tiedowns. They compare the requirements
of section 9.7(g) to an unenforceable, gratuitous offer because the provision merely
requires Lot 13's owner to "offer" a tiedown space if one is available. The Meyerses
conclude that "offering" a tiedown space is necessarily less affirmative than an
obligation to "provide" one.
The Association counters that the declaration provides non-adjacent lot
owners priority for use of the tiedowns on Lot 13. It notes that the Meyerses can make
tiedowns available by storing their own aircraft on their residential lot, which abuts the
airstrip. It also claims that the Meyerses frustrated the purpose of section 9.7(g) by
removing all but three tiedowns, and that the Meyerses could simply add back tiedowns
to make more available.
Based on a plain reading of the declaration, the Meyerses must offer
tiedowns to owners of lots not adjacent to the runway or taxiway on a first-come, first-
15 7735
----------------------- Page 16-----------------------
served basis because they own Lot 13. Article IX, section 9.7(g) of the declaration
provides in part:
Owners of Lots which are adjacent to the runway or a
taxiway . . . may park a maximum of two aircraft on their
Lot via tie down. No aircraft will be allowed to park on or
adjacent to runways except those belonging to the Lot
Owners described above. Owners of Lots not adjacent to the
runway or a taxiway will be offered, on a first come, first
served basis, an assigned tiedown on Lot Thirteen (13) . . . .
Those owners may transfer their interest in the tiedown only
if the interest in their primary Lot is also transferred.
Article VI, section 6.3 of the declaration, as amended in 2019, provides that:
Operation and maintenance of Lot Thirteen (13), Block Five
(5) is privately held and shall be the sole responsibility of the
propertys [sic] owner. The owner of that property may
charge airport apron user fees at the rate commonly used on
an area of 1200 square feet for each assigned tie down. The
owner of the aircraft will be responsible for the maintenance
of his or her specific tie down facility.
The Meyerses' expert affidavit is of minimal persuasive value. Expert
opinion testimony is meant to "assist the trier of fact to understand the evidence or to
determine a fact in issue."27 But in this case, the expert opinion essentially drew
conclusions of law. The expert opined that section 9.7(g) created "no defined property
interest" and "constitute[d] an unreasonable restraint on alienation." The superior court
disagreed. It found that the declaration adequately described the property interest
because it applied to non-adjacent lot owners on a first-come, first-served basis. The
court also found that the declaration described the essential terms of the tiedown
agreement because it provided that a rental fee would be set at the commonly used rate
27 Alaska R. Evid. 702(a).
16 7735
----------------------- Page 17-----------------------
for similar tiedowns. The court's decision to discount the expert's affidavit was
reasonable because the expert was offering legal conclusions, not factual assertions.
The Meyerses' argument that section 9.7(g) lacks specificity does not
convince us that it is merely an unenforceable offer. The plain language of the
declaration provides that non-adjacent lot owners "will be offered" tiedowns on Lot
13.28 And it allows Lot 13's owner to collect fees from those who use the tiedowns.
The language of section 9.7(g) does not require the Meyerses to guarantee an unlimited
number of tiedowns. However, "[u]nder Alaska's contract law, 'the covenant of good
faith and fair dealing . . . is implied in all contracts.' "29 Therefore, the declaration
requires the Meyerses to offer, in good faith, unused tiedowns for lease to interested
non-adjacent lot owners. Although the ownership of Lot 13 comes with the burden of
offering tiedowns, that burden comes with the benefit of collecting fees for those
services. The requirement in section 9.7(g) is not an unreasonable restraint on
alienation30 or a violation of public policy.31
28 See Matanuska Elec. Ass'n, Inc. v. Chugach Elec. Ass'n, Inc. , 99 P.3d 553,
562 (Alaska 2004) (explaining parties' intent is determined in part by "examining the
language of the disputed provisions").
29 Lockwood v. Geico Gen. Ins. Co. , 323 P.3d 691, 697 (Alaska 2014)
(quoting State Farm Mut. Auto. Ins. Co. v. Weiford, 831 P.2d 1264, 1266 (Alaska
1992)).
30 Shaffer v. Bellows, 260 P.3d 1064, 1071-72 (Alaska 2011) (explaining
that restraint on alienation is "invalid if the restraint is unreasonable[,] [which] is
determined by weighing the utility of the restraint against the injurious consequences
of enforcing the restraint" (quoting RESTATEMENT (THIRD) OF PROPERTY : SERVITUDES
§ 3.4 (AM. L. INST . 2000))).
31 Wayson v. Stevenson, 514 P.3d 1263, 1274 (Alaska 2022) (listing
examples of servitudes violating public policy, including "if they (1) '[are] arbitrary,
spiteful, or capricious;' (2) 'unreasonably burden[] a fundamental constitutional right;'
(3) 'impose[] an unreasonable restraint on alienation;' (4) 'impose[] an unreasonable
restraint on trade or competition;' or (5) '[are] unconscionable.' " (alterations in
17 7735
----------------------- Page 18-----------------------
The Meyerses are correct that the declaration does not provide non-
adjacent lot owners a priority to all available tiedowns on Lot 13. Nothing in the
language of 9.7(g) indicates non-adjacent lot owners would have such a priority. But
the Meyerses are obligated to make good faith offers to non-adjacent lot owners who
32
are interested in renting tiedowns.
D. It Was Error To Conclude On Summary Judgment That Only Lot
Owners Are Permitted To Use The Airstrip Or Aircraft Facilities.
The superior court ruled on summary judgment that the exclusive use
provisions of the declaration limit use of the airstrip and aircraft facilities to lot owners.
This ruling was error because the declaration is ambiguous on this point. Further, there
is extrinsic evidence that, viewed in the light most favorable to the Meyerses, suggests
the declaration allows non-lot owners to use the airstrip and aircraft facilities in some
circumstances. However, we agree with the superior court that the Association has not
abandoned the declaration's limits on such use. We remand for a determination
regarding the extent to which non-lot owners are permitted to use the airstrip and
aircraft facilities.
original) (quoting RESTATEMENT (THIRD) OF PROPERTY : SERVITUDES § 3.1 (AM. L.
INST . 2000))).
32 At oral argument, the Association declined to take a position on the
number of tiedowns that the Meyerses must make available because this issue was
"outside the scope of what the trial court was asked to determine." Consequently, we
decline to prescribe the number of tiedowns that the Meyerses must offer under the
declaration. Harvey v. Cook, 172 P.3d 794, 802 (Alaska 2007) (explaining "issues not
properly raised in the trial court will not ordinarily be considered on appeal" because
deciding such issues "is both unfair to the trial court and unjust to the opposing litigant"
(quoting In re Marriage of Walker , 42 Cal. Rptr. 3d 325, 332 (Cal. App. 2006))).
18 7735
----------------------- Page 19-----------------------
1. The declaration is ambiguous as to whether non-lot owners are
permitted to use the airstrip or aircraft facilities.
33
We interpret a declaration in the same manner as a contract.
Interpretation of a contract is ordinarily a question of law.34 "But interpretation
'becomes a task for the trier of fact when the parties present extrinsic evidence to clarify
a contract's meaning, when this evidence points towards conflicting interpretations of
the contract, and when the contract itself is reasonably susceptible of either
35
meaning.' "
Here, the superior court's analysis began by appropriately focusing on the
relationship between two provisions in the declaration. First, Article IX, section 9.7(f),
entitled "Guest Use of Airstrip," provides, "No aircraft not owned by a Lot Owner shall
be allowed to land on the airstrip or to use any of the aircraft facilities located within
the Community." But "guests may utilize the runway at the invitation of Lot owners,"
so long as they follow rules established for the runway and park their aircraft at the
owner's lot or tiedown for no longer than 72 hours.
Second, the 2019 amendment to the declaration, which defined the term
"Renter," provides:
A renter is an individual who is currently in an active
contract with an Association Member for living quarters
and/or aircraft parking space(s), in a hanger or outdoors via
tie down. Other than as described herein for Lot 13 Block 5,
homeowners may not separately rent tie downs or hangers
on their lot to non-HOA members.
33 See Black v. Whitestone Ests. Condo. Homeowners ' Ass'n, 446 P.3d 786,
791 (Alaska 2019).
34 Norville v. Carr-Gottstein Foods Co., 84 P.3d 996, 1004 (Alaska 2004).
35 Id. (quoting Little Susitna Constr. Co. v. Soil Processing, Inc., 944 P.2d
20, 23 (Alaska 1997)).
19 7735
----------------------- Page 20-----------------------
The superior court concluded that Section 9.7(f) was unambiguous and the 2019
Amendment did not "change or rescind" Section 9.7(f), which it found "explicitly
precludes" non-lot owner use. We disagree. The declaration is ambiguous and extrinsic
evidence suggests that non-lot owners are allowed some use of the airstrip and aircraft
facilities in some circumstances.
While the declaration is reasonably susceptible to the superior court's
interpretation, it is also reasonably susceptible to a conflicting interpretation. The first
sentence of the 2019 amendment could be reasonably interpreted to mean that non-lot
owners are permitted to rent living quarters, hangar space, and tiedowns in Sky Ranch.
Under this interpretation of the 2019 amendment, non-lot owners who are renting living
quarters must be allowed to use the airstrip because otherwise the declaration would
prevent them from flying into or out of Sky Ranch.
In line with this interpretation, the definition of "renter" must, at a
minimum, allow non-lot owners who are renting living quarters to use the common
airstrip and aircraft facilities. And the second sentence of the 2019 amendment could
reasonably be understood to clarify that lot owners, with the possible exception of the
owner of Lot 13, may only rent hangar space or tiedowns to non-lot owners who are
contracting with a community member for living quarters; while the owner of Lot 13 is
permitted to rent to non-lot owners regardless of whether they are contracting with a
community member for living quarters.
Additionally, the superior court acknowledged that the Meyerses offered
extrinsic evidence that non-lot owners used the airstrip and aircraft facilities an
undetermined number of times over several years. The court only considered this
evidence as it related to the abandonment argument addressed immediately below; it
did not consider it when interpreting the meaning of the declaration. However, the
Meyerses' extrinsic evidence creates a genuine dispute of material fact regarding the
extent to which non-lot owners may use the airstrip. In one instance, the Association
determined that no enforcement action was warranted against a lot owner who allowed
20 7735
----------------------- Page 21-----------------------
a non-lot owner who was renting his residence to use the airstrip in a plane that he and
the non-lot owner jointly owned. When viewed in the light most favorable to the
Meyerses, this extrinsic evidence shows non-lot owner use that exceeded that permitted
to a guest under section 9.7(f) and tends to support an interpretation of the declaration
that allows non-lot owners to use the airstrip and aircraft facilities - at least if they are
renting living quarters from a community member.
2. The Association did not abandon restrictions on non-lot owner
use.
The Meyerses argue that permitting two instances of non-owner use
constitutes abandonment of the exclusive use provisions, so the Association cannot
enforce them. Because the non-owners' use continued for several years, the Meyerses
argue the Association allowed "habitual[] and substantial[]" violations. The
Association responds that permitting two violations is insufficient to constitute
"substantial and general noncompliance" required to find the Association abandoned
the exclusive use provisions.
Though the parties refer to both "waiver" and "abandonment," they map
their arguments onto the test for abandonment, albeit in different formulations.36 The
Meyerses argue that the applicable standard for abandonment comes from B.B.P. Corp.
v. Carroll.37 In B.B.P. Corp. we held that "[i]f a covenant which applies to an entire
tract has been habitually and substantially violated so as to create an impression that it
has been abandoned, equity will not enforce the covenant."38 The Association urges us
36 Abandonment terminates a covenant that has not been enforced. B.B.P.
Corp. v. Carroll, 760 P.2d 519, 523 (Alaska 1988). In contrast, waiver relinquishes an
otherwise-existing right in a particular instance. See Powers v. United Servs. Auto.
Ass'n , 6 P.3d 294, 299 (Alaska 2000) (holding appellees did not waive right to arbitrate
appellant's claim for damages).
37 760 P.2d 519.
38 Id. at 523-24 (quoting White v. Wilhelm, 665 P.2d 407, 411 (Wash. App.
1983)).
21 7735
----------------------- Page 22-----------------------
to follow a more recent case, Kalenka v. Taylor .39 In Kalenka, we explained that
40
covenants may be abandoned through "substantial and general noncompliance."
Both standards lead to the same outcome. In Collins v. Hall, a property
owner sought to enforce a subdivision's restrictive covenants.41 Noting widespread
violations of the covenants and the lack of any homeowners' association to enforce the
covenants, we concluded the covenants had been abandoned.42 But while we
determined the covenant had been abandoned under those facts, we cautioned that
"[f]ailure to enforce a covenant against a single party or property is not sufficient to
43
establish abandonment."
Under the circumstances of this case, two possible violations of the
exclusive use provision do not constitute the "widespread lack of enforcement" or
"substantial and general noncompliance" necessary to show a covenant has been
abandoned.44 Although the Meyerses allege the two violations were long-term, they
appear more like isolated cases of favoritism: One alleged violator was a romantic
partner of the President of the Association's Board of Directors and the other was a
former lot owner. It is not clear that the latter instance violated the declaration; the
Association ultimately determined that the non-lot owner could land on the airstrip in a
plane titled to a current lot owner. And unlike in Collins, where the community never
created an association to enforce its covenants,45 the Association here took action. It
39 896 P.2d 222 (Alaska 1995).
40 See id. at 226 (quoting B.B.P. Corp., 760 P.2d at 523-24).
41 453 P.3d 178, 180 (Alaska 2019).
42 Id. at 192.
43 Id.
44 See id.; Kalenka , 896 P.2d at 226.
45 See 453 P.3d at 192.
22 7735
----------------------- Page 23-----------------------
sent notices of suspected violations to the lot owners soon after the Meyerses brought
up the issue. The Meyerses' abandonment argument thus fails.
E. Attorney's Fees Must Be Decided On Remand.
The superior court awarded the Association full attorney's fees and costs
pursuant to the declaration.46 We have upheld awards of actual, reasonable attorney's
fees in cases where a common interest community's declaration provides for such
47
awards.
The Meyerses argue that if we grant their requested relief, we should
determine they are the prevailing party and remand the issue for calculation of an award.
The Association counters that we should simply remand for further proceedings if we
reverse the superior court's substantive rulings.
We agree with the Association. The prevailing party determination is
within the broad discretion of the superior court.48 Because we reverse portions of the
superior court's ruling on summary judgment, we also vacate the award of attorney's
49
fees and remand for reconsideration of the prevailing party determination.
46 The declaration entitles the prevailing party in an action between any lot
owner and the Association to attorney's fees and costs.
47 See Stadnicky v. Southpark Terrace Homeowner's Ass'n, 939 P.2d 403,
406 (Alaska 1997); Black v. Whitestone Ests. Condo. Homeowners' Ass'n, 446 P.3d
786, 796 (Alaska 2019).
48 Lee v. Konrad , 337 P.3d 510, 525 (Alaska 2014).
49 See Guerrero v. Guerrero, 362 P.3d 432, 446 (Alaska 2015) (vacating
attorney's fees award so "[t]he superior court may make a new prevailing party
determination and attorney's fees calculation at the conclusion of the proceedings on
remand"); see also Curtiss v. Hubbard, 703 P.2d 1154, 1154 (Alaska 1985) ("An
appellate decision affirming a judgment in part and reversing it in part may change
important facts on which an earlier prevailing party determination was based. The trial
court has the power to reconsider its determination after such a decision so that the goal
of awarding partial attorney's fees to the party who has won the lawsuit can be
realized.").
23 7735
----------------------- Page 24-----------------------
CONCLUSION
We REVERSE the superior court's order granting summary judgment and
REMAND for further proceedings to determine whether the Meyerses possess the
special declarant rights and the extent to which non-lot owners are permitted to use the
airstrip and aircraft facilities. The court's determination regarding possession of the
special declarant rights will inform whether Lot 13 is subject to the Architectural
Control Committee's oversight. We AFFIRM the court's determination that Lot 13's
owners must offer tiedowns on Lot 13 to non-adjacent lot owners. We VACATE the
superior court's award of attorney's fees to the Association pending resolution of the
matters on remand and a new prevailing party determination.
24 7735
 |
| Case Law Statutes, Regs & Rules Constitutions Miscellaneous |
|
