Rodgers v. Anthem

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 DIVISION ONE FILED: 06/30/2011 RUTH A. WILLINGHAM, CLERK BY: DLL IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE ALLEN and CAROLYN RODGERS, ) ) Plaintiffs/Appellants, ) ) v. ) ) ANTHEM COMMUNITY COUNCIL, INC., ) ) Defendant/Appellee. ) __________________________________) 1 CA-CV 10-0539 DEPARTMENT E MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2010-002792 The Honorable J. Richard Gama, Judge REVERSED AND REMANDED Dessaules Law Group by Jonathan A. Dessaules Douglas C. Wigley Attorneys for Plaintiffs/Appellants Phoenix Meagher & Geer, P.L.L.P. by Thomas H. Crouch Attorneys for Defendant/Appellee Scottsdale P O R T L E Y, Judge ¶1 Allen and of their dismissal declaratory judgment Carolyn Rodgers complaint against ( Plaintiffs ) seeking the Anthem an appeal injunction Community the and Council ( ACC ). For the following reasons, we reverse and remand the case for further proceedings. FACTUAL AND PROCEDURAL BACKGROUND ¶2 The ACC is a non-profit corporation which was created and is governed by the 1999 Declaration of Easements for Anthem ( Master Declaration ). Lot 2 into Anthem in 2003. Rose Philippine became Duchesne subject to the granted the The lot, which is owned by the St. Roman Master Church a and The ACC annexed Catholic Parish Declaration by Declaration 1 between the Church and the ACC. ACC Covenants variance to erect a ( Church ), Supplemental Subsequently, the five cell phone towers on the lot. 2 ¶3 Plaintiffs Declaration. a declaratory nuisance. own a home subject to the Master They sued both the ACC and the Church, and sought judgment, injunctive relief and damages for The ACC filed a motion to dismiss and successfully asserted that Plaintiffs lacked standing to sue. Plaintiffs appealed, and we have jurisdiction pursuant to Arizona Revised Statutes ( A.R.S. ) section 12-2101(B) (2003). 1 The Master Declaration defines a Supplemental Declaration as [a] Recorded instrument which subjects additional property to this [Master Declaration] . . . or which imposes additional restrictions and obligations on property within Anthem which is not subject to an Association Declaration. 2 The Church erected one tower but removed it after discovering that all the necessary county building permits had not been secured. 2 DISCUSSION ¶4 Plaintiffs argue that the trial court erred because (1) they are beneficiaries under the declarations, (2) they have a statutory cause of action, and (3) they have common law standing. ¶5 We review de novo dismissal for failure to state a claim. ¶ 8, Phelps Dodge Corp. v. El Paso Corp., 213 Ariz. 400, 402, 142 P.3d 708, dismissal only if 710 the (App. 2006). plaintiffs would We will not affirm the be entitled to relief under any facts susceptible of proof in the statement of the claim. Mohave Disposal, Inc. v. City of Kingman, 186 Ariz. 343, 346, 922 P.2d 308, 311 (1996). 3 I. ¶6 Plaintiffs first contend that the trial court erred when it ruled that they did not have standing to sue under the declarations. ¶7 between We agree. Restrictive declarations or covenants are a contract the subdivision s individual lot owners. property owners as a whole and Ahwatukee Custom Estates Mgmt. Ass n, Inc. v. Turner, 196 Ariz. 631, 634, ¶ 5, 2 P.3d 1276, 1279 (App. 3 Although Plaintiffs attached pleadings in response to the motion to dismiss, we will not treat the motion to dismiss as a motion for summary judgment because the pleadings are public records. See Strategic Dev. & Constr., Inc. v. 7th & Roosevelt Partners, LLC, 224 Ariz. 60, 64, ¶ 13, 226 P.3d 1046, 1050 (App. 2010). 3 2000). The interpretation of a restrictive declaration generally a question of law that we review de novo. is Burke v. Voicestream Wireless Corp. II, 207 Ariz. 393, 395-96, ¶ 11, 87 P.3d 81, 83-84 (App. 2004). And, we interpret such declarations to give effect to the intention of the parties as determined from the language of the documents in its entirety purpose for which the [declarations] were created. and the Powell v. Washburn, 211 Ariz. 553, 554, ¶ 1, 125 P.3d 373, 374 (2006). ¶8 Because the Supplemental Declaration gave exclusive enforcement of the declarations to the ACC and that declaration explicitly abrogated the rights of third parties, the trial court found that Plaintiffs did not have standing to challenge the variance. The provisions, however, do not bind Plaintiffs because the Supplemental Declaration was only between the Church and ACC.4 the The Master Declaration does not have the additional limitations outlined in the Supplemental Declaration. Because Plaintiffs did not sign or otherwise assent to be bound to the additional property restrictions in the Supplemental Declaration, see Muchesko v. Muchesko, 191 Ariz. 265, 268, 955 P.2d 21, 24 (App. 1997) (holding that mutual assent is an essential element of any enforceable contract), those additional 4 The Supplemental Declaration is titled Supplemental Declaration of Covenants, Conditions, Restrictions and Easements for Lot 2 of Anthem Meridian Drive. 4 restrictions do not apply to them. Consequently, Plaintiffs have standing to challenge the variance. 5 II. ¶9 Plaintiffs also challenge the trial court s determination that they did not have standing to sue because the ACC is not a homeowners association ( HOA ). They assert that they have standing because A.R.S. § 10-3304(B)(2) (Supp. 2010) provides a statutory cause of action. We review questions of statutory interpretation de novo. underlying Kromko v. City of Tucson, 202 Ariz. 499, 501, ¶ 4, 47 P.3d 1137, 1139 (App. 2002). Section 10-3304(B)(2) provides that any member 6 of a ¶10 planned community can seek an injunction to challenge any corporate action if the corporation lacked the power to act. The ACC argued that it was not an HOA because the Master Declaration disclaims any association status and states that the 5 We need not address Plaintiffs argument that they have common law standing. We also do not address Plaintiffs argument that the trial court erred by refusing to allow them to amend their complaint. 6 The ACC also argues that is not an HOA because, as a non-profit corporation, it has no members. Member is not defined in Title 33. When the legislature has not defined a word or phrase in a statute, we may consider the definitions of respected dictionaries. Rigel Corp. v. State, 225 Ariz. 65, 69, ¶ 19, 234 P.3d 633, 637 (App. 2010). Member means [o]ne who belongs to a group or organization. Webster s II New Riverside University Dictionary 740 (1994). Plaintiffs are homeowners in Anthem, pay assessments to the ACC and vote to elect the board of the ACC pursuant to the bylaws; they are members of the ACC. 5 ACC is not subject to the Arizona Planned A.R.S. § 33-1801, et. seq. (1997). Communities Act, The ACC, however, is an HOA. ¶11 An HOA is statutorily defined as: a nonprofit corporation or unincorporated association of owners that is created pursuant to a declaration to own and operate portions of a planned community and that has the power under the declaration to assess association members to pay the costs and expenses incurred in the performance of the association s obligations under the declaration. A.R.S. § 33-1802(1) (2007). The ACC meets this definition. is a non-profit corporation. It The Master Declaration provides that the ACC can own and maintain property, has the power to levy assessments against owners, and enforce liens to secure payment for delinquent assessments. ¶12 Despite association, the its attempt statutory to disclaim definition that is See controls. it an Banner Health v. Med. Sav. Ins. Co., 216 Ariz. 146, 150, ¶ 15, 163 P.3d 1096, 1100 (App. automatically 2007) part (explaining of any that a contract valid statute affected by is it). Consequently, because of the ACC s statutory status, Plaintiffs have standing to seek to enjoin the variance. ¶13 appeal Both under parties A.R.S. request § attorneys 12-341.01 (2003). fees and costs on Because we are remanding this matter, the trial court can consider awarding 6 Plaintiffs conclusion attorneys of this fees, case. if We they will, are successful however, award at the costs on appeal to Plaintiffs upon compliance with ARCAP 21. CONCLUSION ¶14 For the foregoing reasons, we reverse the dismissal of Plaintiffs complaint and remand for further proceedings. /s/ ________________________________ MAURICE PORTLEY, Presiding Judge CONCURRING: /s/ _____________________________ LAWRENCE F. WINTHROP Judge /s/ ______________________________ ROGER BRODMAN, JUDGE Pursuant to Article VI, Section 3 of the Arizona Constitution, the Arizona Supreme Court designated the Honorable Roger Brodman, Judge of the Maricopa County Superior Court, to sit in this matter. 7