This case involved a dispute between a homeowners association (Association) and a homeowner member of Association (Owner) over the construction of a retaining wall and fence by Owner that Association contended was in violation of specific limitations contained in Associations CC&Rs. The CC&Rs provided that fences and walls could not sit closer than 20 feet to any street, and fences could not exceed 6 feet in height.
In May 2016, Owner submitted an application to Associations Architectural Committee for approval to perform what was described as: (i) Fence Repair: Fence will be repaired and extended on the east side facing N. Cayuse Way to cover the full length of the house; and (ii) Landscaping: In order to repair the fence and to level the fence with the house, some landscaping will be needed at the backyard and the east side of the house. Association conditionally approved the application and informed owner that, *- Fence to be stained to match- All repairs to be in compliance with CC&Rs and all applicable municipal, county, and state codes.
After obtaining Associations conditional approval, Owner began constructing a 3 retaining wall with a new fence on top of the retaining wall. Seeing the work was not consistent with what was described in Owners application, Association instructed Owner to submit a second application that described the work that was taking place. Owner filed the second application which was then denied by Association because it violated the limitations contained in the CC&Rs in the following respects: (i) the fence exceeded the 6 feet limit because it was constructed on top of a 3 foot retaining wall; (ii) the fence was placed too close to the street; and (iii) the retaining wall could negatively impact drainage to the adjacent properties.
After unsuccessful efforts to resolve the dispute with Owner through informal internal meetings, in June 2017, Association filed suit against Owner seeking injunctive relief in the form of an order directing Owner to restore the property to its previous condition, or, alternatively, permit Association to restore the property and seek reimbursement from Owner. In response, Owner raised the equitable defenses of waiver, laches, and estoppel. Owner also contended that Association its good faith and fiduciary duties and the implied duty of good faith and fair dealing by approving similar improvements for other owners.
The trial court grant summary judgment in favor of Association after finding that: (i) Owner had exceeded the scope of the project that Association approved; (ii) Owners waiver defense did not apply because Associations CC&Rs also contained a no waiver provision and no evidence had been presented that supported a finding that Association had approved similar projects; and (iii) Association did not breach its duty of good faith and fair dealing by approving other variances before denying Owners project because Associations decision and actions were within its discretion.
Thus, the trial court ordered Owner to remove the unapproved construction and to restore the property to compliance with the CC&Rs. It also awarded Association attorneys fees. After the trial court denied Owners motion for reconsideration of its judgment, Owner appealed the decision.
The appellate court ruled that Owners work exceeded the scope of what was approved in Owners first application to Associations Architectural Committee and that it did not comply with the CC&Rs. The appellate court further ruled that Owners defense of waiver did not apply because Owner did not produce sufficient evidence to reasonably infer from Associations conduct a clear and unequivocal act manifesting an intent to waive the specific covenants regarding fence height, or the non-waiver provisions contained in the CC&Rs. Finally, the appellate court ruled that Association did not violate the implied covenants of good faith and fair dealing because the Board acted within its discretion under the CC&Rs, which the Board had carefully considered. According, the appellate court affirmed the trail courts judgment and awarded Association fees and costs incurred in connection with Owners appeal.
Idaho Appellate Court decision (November 7, 2019).
See court decision: Eagle_Springs_Homeowners_Ass’n_v._Rodina