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Crescent H Homeowners Association, Inc. v. Crescent H Association of Homeowners

December 14, 2009

CRESCENT H HOMEOWNERS ASSOCIATION, INC., APPELLANT (PLAINTIFF),
v.
CRESCENT H ASSOCIATION OF HOMEOWNERS, INC., APPELLEE (DEFENDANT), AND JONES HOLDINGS, LLC, A WYOMING LIMITED LIABILITY COMPANY, APPELLEE (INTERVENOR-DEFENDANT).



Appeal from the District Court of Teton County The Honorable Nancy J. Guthrie, Judge.

The opinion of the court was delivered by: Burke, Justice.

Before VOIGT, C. J., and HILL, KITE, and BURKE, JJ., and JAMES, D. J.

[¶1] This appeal involves a dispute between two homeowner associations regarding regulation of fishing and land use activities within Crescent H Ranch. Crescent H Homeowners Association, Inc. (First Filing Association) contends that it and Crescent H Association of Homeowners, Inc. (Fourth Filing Association) formed a contract that made them jointly responsible for creating and enforcing rules governing recreational activities on the Ranch. The Fourth Filing Association and Intervenor, Jones Holdings, LLC, assert that the Fourth Filing Association has the sole right to regulate these activities. The district court granted summary judgment in favor of the Fourth Filing Association and Jones Holdings. We affirm.

ISSUES

[¶2] The First Filing Association presents these issues:

1. Whether the district court erred in finding that the Rules and Regulations did not form a valid contract between the First Filing Association and the Fourth Filing Association.

a. Whether the district court erred in finding that there was no consideration exchanged to support a binding contract.

b. Whether the district court erred in relying on extrinsic evidence in finding that the Rules and Regulations were "merely an iteration of existing rules."

2. Whether the district court erred in finding that the First Filing Association and the Fourth Filing Association exceeded their authority by adopting the Rules and Regulations governing fishing and other recreational amenities at Crescent H Ranch.

a. Whether the district court erred in considering the issue of authority in the context of a contractual dispute.

b. Whether the district court erred in ignoring the authority granted to the First Filing Association and the Fourth Filing Association under their CC&Rs to adopt the Rules and Regulations.

3. Whether the district court erred in ruling that the Fourth Filing Association, as assignee of the Licensor, has sole authority to regulate fishing and other recreational amenities at the Crescent H Ranch.

FACTS

[¶3] The 1,300 acre Crescent H Ranch in Wilson, Wyoming is home to two residential developments, the First Filing development and the Fourth Filing development. The Crescent H Guest Ranch (Guest Ranch) sits on an approximately 55 acre tract of land in the Fourth Filing development. The origin of the fishing and recreational use rights at issue in this case dates back to the early development of the Crescent H Ranch residential properties by Donald H. Albrecht. Mr. Albrecht purchased the Crescent H Ranch in 1964 and then in 1981 conveyed it to Rivermeadows Associates, Ltd. (RMA), a limited partnership of which Mr. Albrecht was the sole general partner. Mr. Albrecht and RMA continued to operate the Guest Ranch and, in 1985, they filed a "Declaration of Covenants, Conditions and Restrictions for Crescent H Guest Ranch" and began developing the First Filing residential subdivision.

[¶4] With the purchase of a lot in the First Filing development, each purchaser received fishing rights, along with other amenities including access to Guest Ranch services and access to hiking trails. The fishing and recreational use rights conveyed varied among the First Filing homeowners, both in terms of the rights and amenities conveyed and in the manner in which the rights were documented. The variations in the fishing and recreational use rights came to a head in the mid-1990s as a result of RMA's bankruptcy in January 1995. Several First Filing homeowners initiated an adversary proceeding in Bankruptcy Court to confirm their fishing and recreational use rights. The homeowners' adversary proceeding was resolved pursuant to a Settlement Agreement Resolving Homeowners Issues (Bankruptcy Settlement), dated June 23, 1997. The parties to the Bankruptcy Settlement were the Bankruptcy Trustee, all First Filing homeowners, and Countryside I, LLC. Countryside was a party to the Bankruptcy Settlement because the Bankruptcy Court had in February 1997, prior to resolution of the homeowners' issues, approved the sale of Crescent H Ranch to Countryside.

[¶5] The Bankruptcy Settlement confirmed the homeowners' fishing and recreational use rights and provided for the creation and recording of a new Fishing License and a new Use Agreement that would supersede and replace all other instruments or provisions purporting to govern the fishing and recreational use rights. The Bankruptcy Settlement provided, in relevant part:

(a) Fishing Licenses. Upon entry of an order approving this settlement, Countryside will sell, grant and convey to each of the Homeowners a fishing license in the form of Exhibit B (the "New Fishing License"). The New Fishing License shall be an interest in real property and shall have provisions for appropriate recording in the real property records. * * *

(b) Use Agreement. Countryside and each of the Homeowners will execute a Use Agreement in the form of Exhibit C (the "New Use Agreement"). The New Use Agreement shall grant "Riparian Use Rights" (as defined therein), which shall constitute an interest in real property and shall have provisions for appropriate recording in the real property records.

[¶6] All First Filing homeowners consented to the Bankruptcy Settlement and the Bankruptcy Court issued an order approving the settlement. The Bankruptcy Court entered an Order of Dismissal with Prejudice of the homeowners' adversary litigation on April 20, 1998. In keeping with the terms of the Bankruptcy Settlement, Countryside issued to all First Filing homeowners new Fishing License and Use Agreements. Memoranda of the two Agreements were recorded in the Teton County land records.

[¶7] The new Fishing License and Use Agreements designated each respective homeowner as Licensee, and Countryside as Licensor. The new Fishing License Agreement reserved to the Licensor the authority and discretion to regulate the fishing rights, provided the regulations were "applicable on a nondiscriminatory basis to Licensor, its guests and all current and future licensees." The new Use Agreement contained a similar provision providing for regulation of the recreational use rights. Neither Agreement identified any other entity authorized to regulate fishing and recreational use rights.

[ΒΆ8] While the new Fishing License Agreement was being negotiated, finalized, and issued, Countryside, as the new owner of Crescent H Ranch, began development of the Fourth Filing residential subdivision. As required by the Bankruptcy Settlement, Countryside conveyed with each parcel fishing and recreational use rights in the form of the new Fishing License and Use Agreements. On June 25, 1997, Countryside filed a ...


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