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Gumpel v. Copperleaf Homeowners Association, Inc.

Supreme Court of Wyoming

May 2, 2017

GLENN J. GUMPEL and MERRILY GUMPEL, Trustees of the Glenn and Merrily Gumpel Family Trust dated October 8, 2001, Appellants (Plaintiffs/Third Party Defendants),
v.
COPPERLEAF HOMEOWNERS ASSOCIATION, INC., a Wyoming non-profit corporation; RODERICK FULLER and KATHLEEN A. FULLER, Trustees of the Roderick and Kathleen Fuller Family Trust dated January 16, 1997; MOONCREST RANCH a/k/a Mooncrest Ranch, Inc., a Wyoming Corporation successor by merger to Rocking M Ranch, Inc.; and WELLS FARGO BANK, N.A. Appellees (Defendants/Third Party Plaintiffs).

         Appeal from the District Court of Park County The Honorable Marvin L. Tyler, Judge

          Representing Appellants: Matthew W. Kim-Miller and Jordan P. Helvic of Holland & Hart LLP, Jackson, WY. Argument by Mr. Kim-Miller.

          Representing Appellees: Steven F. Freudenthal of Freudenthal & Bonds, P.C., Cheyenne, WY.

          Before BURKE, C.J., and HILL, DAVIS, FOX, and KAUTZ, JJ.

          HILL, Justice.

         [¶1] This is an appeal from the district court's ruling in a dispute between two neighboring Park County communities, the China Wall Tract and the Copperleaf Subdivision. The court interpreted the China Wall Tract's restrictive covenants in a manner that will allow Copperleaf property owners access to and through certain areas in the China Wall Tract. The Gumpel Family Trust, dated October 8, 2001 (Gumpel Trust), owns property in the China Wall Tract, and Glenn and Merrily Gumpel, as trustees and on behalf of the Gumpel Trust, appeal the district court's ruling.

         [¶2] We conclude that the district court did not err in its interpretation of the covenants, but we modify the court's ruling to clarify that an "invitee" and an "owner" do not share equivalent rights under the covenants. We thus affirm, as modified.

         ISSUES

         [¶3] Gumpel Trust states the issues on appeal as follows:

A. Whether, based on a de novo review, the ambiguous "2005 Covenants" should have been interpreted in light of its surrounding circumstances so as to prohibit the Copperleaf "Tract O" owner, the Copperleaf lot owners and the Copperleaf HOA from accessing areas in the "China Wall Tract" outside of the Copperleaf Tract O open space?
B. Whether, based on a de novo review, the 2005 Covenants should have been reformed because of mutual mistake to prohibit the Copperleaf Tract O owner, the Copperleaf lot owners and the Copperleaf HOA from accessing areas in the China Wall Tract outside of the Copperleaf Tract O open space?
C. Whether, as a matter of law, based on the language of the 2005 Covenants, the Copperleaf lot owners and Copperleaf HOA are prohibited from accessing areas in the China Wall Tract outside of the Copperleaf Tract O open space?
D. Whether the 2005 Covenants' purported easement over the "recreational land" and hiking and riding trails near the rocky geological feature known as the "china wall" is void under W.S. § 34-1-141(a)?

         FACTS

         [¶4] This dispute involves two neighboring Park County communities, the China Wall Tract and the Copperleaf Subdivision. The China Wall Tract is located in Section 15, T. 52N, R. 105W, 6th P.M., Park County, Wyoming (Section 15). It consists of the Section 15 lands north of the centerline of the North Fork of the Shoshone River (North Fork) and includes approximately 600 acres owned by ten different land owners. Copperleaf Subdivision is a located to the south of the China Wall Tract and includes property in Sections 15, 22, and 23 T. 52N, R. 105W, 6th P.M., Park County, Wyoming. It consists of 131 single family lots, a tract for condominiums, and four additional tracts of land, and it encompasses a total of approximately 553 acres. Tract O is the largest tract, at approximately 292 acres, and is dedicated to open space.

         [¶5] Tract O extends into Section 15 and into the China Wall Tract, but otherwise most of the Copperleaf Subdivision is located south of Section 15 and south of the North Fork[1]. The following map depicts how these communities are situated, as well as the Gumpel Trust property[2]:

(Image Omitted)

         A. History of Section 15 and Copperleaf Development

         [¶6] In 1980, YX Ranch, as owner and developer of Section 15, executed and recorded a "Declaration of Restrictions, Conditions and Protective Covenants" for Section 15 (hereinafter 1980 Covenants). The 1980 Covenants were applicable to all lots in Section 15. Concerning access to the Section 15 property north of the North Fork, now known as the China Wall Tract, Paragraph 9(a) provided that "[a]ccess to the property north of the Shoshone River will be by private bridge and private road as designated on the plat recorded with the County Clerk and referred to herein."

         [¶7] In 2004, the predecessor in interest to Worthington Group of Wyoming, Inc. (Worthington Group) began developing the Copperleaf Subdivision and submitted a sketch plan and related development applications to Park County.[3] The proposed subdivision extended into Section 15, with Tract O, the land dedicated to meeting the subdivision's county-imposed open space requirement, extending substantially into the area of Section 15 north of the North Fork. Because the proposed subdivision extended into Section 15, Worthington Group had to negotiate to have the 1980 Covenants vacated and replaced with covenants that would accommodate the proposed subdivision, including Tract O.

         [¶8] By this time, the Section 15 lots were no longer owned by a single entity, and Worthington Group was thus required to negotiate with several Section 15 landowners to vacate the 1980 Covenants. The negotiations lasted several months and involved a number of issues, including cost sharing for replacement of the bridge over the North Fork, the safety of which had been called into question, access easements both north and south of the North Fork, and recreational and fishing rights both north and south of the North Fork. They concluded in 2005 and resulted in "new restrictions, conditions and protective covenants for the lands in Section 15, Township 52 North, Range 105 West, 6th PM, Park County, Wyoming, which lie north of the centerline of the North Fork of the Shoshone River[.]"

         [¶9] The new covenants, entitled "March 21, 2005 Declaration of Restrictions, Conditions and Protective Covenants for Section 15 (China Wall Tract)" (hereinafter 2005 Covenants), were recorded on August 14, 2006. With regard to access and easement rights, the 2005 Covenants generally provided China Wall Owners access as defined by a 1980 Record of Survey, recorded on January 24, 1980.

         [¶10] Park County approved the final plat for the Copperleaf Subdivision on March 14, 2006, and on September 21, 2007, Worthington Group recorded the plat and restrictive covenants for the Copperleaf Subdivision. At some point thereafter, Worthington Group defaulted on its mortgage obligations, and on December 8, 2010, the Park County Sheriff conducted a foreclosure sale on property within Copperleaf Subdivision on which Worthington Group had given mortgages to Shoshone First Bank, predecessor to Wells Fargo Bank, N.A. (Wells Fargo). Through that foreclosure sale, Wells Fargo purchased the great majority of the single family lots, Tracts O, R, S, and W, and most of the condominium lots in Tract F. On March 5, 2012, Wells Fargo recorded the Sheriff's Deed that conveyed it title to that property.

         B. Present Dispute and Proceedings in District Court

         [¶11] On September 30, 2011, the president of the Copperleaf Homeowners Association (Copperleaf HOA) sent a letter addressed to property owners in the China Wall Tract. The letter concerned fishing rights on the North Fork and stated, in part:

Attached is a plat map which outlines the boundaries of the Copperleaf lands as platted. The thread (or centerline) of the river has been highlighted in red, yellow, and blue. The portion of the river that is indicated in red, lies within section 15 and may be accessed by Copperleaf property owners and property owners in Section 15 per the [2005 Covenants]. Please note that this area of the river within Section 15 lies approximately 300 feet to the north and west of the bridge and continues west as indicated. The portion of the river that is indicated in yellow is bound by Copperleaf lands on the north and south sides of the river, lies within Section 22 and is not an area available to anyone for access, parking and fishing or recreating other than Copperleaf property owners. This seems to be the area of greatest misunderstanding.

         [¶12] The dispute over the location of the China Wall Owners' fishing rights continued, and on October 29, 2012, a number of property owners in the China Wall Tract filed a complaint in district court against the Copperleaf HOA, alleging the HOA was interfering with their fishing rights.[4] Through their complaint, Plaintiffs sought a declaration that under the 2005 Covenants the China Wall Owners are entitled to recreational use of the north and south sides of the North Fork in both Sections 15 and 22. Plaintiffs further alleged that "[a]s a result of a scrivener's error and/or mutual mistake of the parties, the 2005 Covenants failed to adequately set out" the China Wall Owners' recreational access to the North Fork in both Sections 15 and 22. Plaintiffs thus also requested that the 2005 Covenants be reformed to correct the mistake.

         [¶13] On December 3, 2012, Copperleaf HOA filed its answer and counterclaims. Through its counterclaims, Copperleaf HOA sought declaratory and injunctive relief: 1) limiting the access route through Copperleaf Subdivision that China Wall Owners are entitled to use to access their property; 2) recognizing the rights of Copperleaf HOA and its members to have walking and vehicular access to Tract O in Section 15; and 3) recognizing the right of Copperleaf HOA and its members to have walking and vehicular access through the China Wall Tract to National Forest lands north of the China Wall Tract.

         [¶14] On April 3, 2014, Copperleaf HOA amended its answer and counterclaims to assert additional claims for declaratory and injunctive relief. The additional claims sought relief: 1) prohibiting China Wall Owners from granting access to commercial outfitters, guides, and businesses through Copperleaf Subdivision to access National Forest lands north of the China Wall Tract; 2) recognizing the right of Copperleaf HOA and its members to have walking and vehicular access through the China Wall Tract to State lands west of the China Wall Tract; and 3) recognizing Copperleaf HOA's and its members' right of access to and recreational use of the physical feature known as the China Wall within the China Wall Tract.

         [¶15] Copperleaf HOA also filed on April 3, 2014, a third party complaint against all China Wall Owners, which was followed on April 4, 2014, by Plaintiffs' amended complaint, which added four China Wall Owners as named defendants. These pleadings did not change the claims asserted by the parties and were instead intended to ensure that all the necessary parties were joined and properly aligned. On June 30, 2014, Copperleaf HOA filed a motion to realign the parties. Through that motion, it asserted that the Fuller Trust and Mooncrest Ranch (successor by merger to Rocking M Ranch, Inc.), both China Wall Owners, had determined they were aligned with Copperleaf HOA on the substantive issues in dispute and desired to be realigned with Copperleaf HOA as Defendants, Counterclaimants, and Third Party Plaintiffs. The district court, noting no opposition to the motion, granted the motion to realign the parties.

         [¶16] In September 2014, the parties filed competing motions for summary judgment. During the hearing on those motions, the district court and the parties discussed joining Wells Fargo as a necessary party, and with the parties' agreement, the court directed that steps be taken to join Wells Fargo. After the hearing, but before the district court issued an order on the summary judgment motions, Wells Fargo entered its appearance as a named defendant and third party plaintiff. Attached to that entry of appearance was an affidavit by Curtis E. Abernathy, a Wells Fargo vice president, which stated, in part:

6. Without amending, altering or diminishing the terms and conditions of the subdivision approval for the Copperleaf Subdivision from the Park County Commissioners, Wells Fargo designates the Copperleaf Homeowners Association, Inc. and each of its members as invitees of Wells Fargo under Article VI, Section E, of the "March 21, 2005 Declaration of Restrictions, Conditions and Protective Covenants for Sec. 15 (China Wall Tract)" as filed of record on August 14, 2006 in the office of the ex officio recorder and County Clerk of Park County, Wyoming at Reception No. 2006-6322 ("2005 China Wall Covenants"). [citation to summary judgment exhibit omitted]

         [¶17] On May 18, 2015, the district court entered an order joining Wells Fargo as a defendant and third party plaintiff.[5] On September 22, 2015, the court issued its decision on the parties' cross motions for summary judgment. The court granted summary judgment:

1) to Copperleaf HOA on Plaintiffs' reformation claim, finding Plaintiffs failed to rebut Copperleaf HOA's showing that no mutual mistake had occurred in the drafting of the 2005 Covenants' provisions governing fishing and recreational rights;

2) to Copperleaf HOA on Plaintiffs' claim to fishing and recreational rights on Section 22, finding that under the clear and unambiguous terms of the 2005 Covenants, the China Wall Owners did not have fishing or recreation rights on any land other than those lands in Section 15, north of the centerline of North Fork;

3) to Plaintiffs on the question of the China Wall Owners' access to the China Wall Tract through Copperleaf Subdivision, finding that such access was as defined in a recorded easement entitled the Worthington Easement;

4) to Plaintiffs on the question of the China Wall Owners' right to grant access to outfitters, guides, and businesses for commercial purposes over the Copperleaf Subdivision for access to the National Forest lands north of the China Wall Tract, finding that by its clear and unambiguous terms, the Worthington Easement may be used by the China Wall Owners and their "visitors, licensees and invitees;"

5) to Plaintiffs on the question of Copperleaf HOA's and its members' access through the China Wall Tract to reach Tract O, or State or National Forest lands, finding that under the clear and unambiguous terms of the 2005 Covenants, those covenants do not apply to Copperleaf HOA or its members or confer any right or benefit on Copperleaf HOA or its members.

         [¶18] At the close of the district court's written decision, the court instructed the parties as follows:

The Court believes that all pending motions and all pending issues have been decided in this Decision Regarding Motion to Strike and Competing Motions for Summary Judgment. In the event that there are pending motions or material pending issues which remain undetermined, counsel should immediately notify the Court and all other counsel, in writing, specifying those matters which require further determination.

         [¶19] On October 22, 2015, Copperleaf filed a notice of pending issues. Through that notice, Copperleaf notified the district court that neither the summary judgment motions filed to date nor the court's ruling on those motions addressed the question of Wells Fargo's rights under the 2005 Covenants as owner of Tract O in the China Wall Tract. In response, on November 17, 2015, the court issued a briefing schedule for the parties to address the question of Wells Fargo's rights. On the same date, the court issued its final order on the first round of summary judgment motions.

         [¶20] Copperleaf thereafter filed a supplemental motion for summary judgment, by which it sought a declaratory judgment that Wells Fargo, as owner of Tract O, has the right: to use walking or vehicular access routes through the China Wall Tract to access Tract O and State lands; to use all other walking or vehicular access routes through the China Wall Tract, with the exception of the access to National Forest lands; and to access the recreational lands and hiking and riding trails along the China Wall. Copperleaf also requested a declaratory ruling that Copperleaf HOA and its members, as invitees of Wells Fargo, have access to the same routes and areas in the China Wall Tract.[6]

         [¶21] Plaintiffs opposed Copperleaf's supplemental motion, Gumpel Trust filing its own separate opposition. Plaintiffs, other than Gumpel Trust, argued that Wells Fargo may only use its lot in the China Wall Tract property for a single family purpose and using its rights under the 2005 Covenants as a means to treat Copperleaf HOA and its members as invitees is an unpermitted commercial purpose. In its separate opposition, Gumpel Trust argued: 1) the language of the 2005 Covenants and the circumstances surrounding their execution make it clear the China Wall Owners did not intend to allow the Tract O owner the type of access Copperleaf asserted; 2) allowing Wells Fargo to designate Copperleaf HOA and its members as invitees equates to granting an appurtenant easement without adhering to the requirements for an easement and would overburden the easement; 3) an invitee may only be a business visitor or a member of the public to whom the premises are held open and Copperleaf HOA and its members fit neither definition; and 4) the easement for access to recreational lands and hiking and riding trails along the China Wall fails for lack of an adequate description of the easement's location.

         [¶22] On February 8, 2016, the district court issued its decision granting Copperleaf's supplemental motion for summary judgment. The court ruled: 1) under the clear and unambiguous terms of the 2005 Covenants, Wells Fargo is an "owner" and that, as an owner, Wells Fargo had the same access rights as any other China Wall Owner, as defined by the 1980 Record of Survey, except for National Forest access; 2) Wells Fargo may grant Copperleaf HOA and its members permission, as invitees, to enter or access the easements and rights-of-way granted to Wells Fargo under the 2005 Covenants; 3) " 'invitees' of Wells Fargo have the same rights and privileges as Wells Fargo under the terms of the 2005 Covenants;" and 4) the easements granted by the 2005 Covenants were described in sufficient detail to be enforceable.

         [¶23] On April 1, 2016, the district court entered its final order granting Copperleaf's supplemental motion for summary judgment. On April 28, 2016, Gumpel Trust, the only party to appeal, filed a notice of appeal to this Court, appealing all of the district court's summary judgment decisions and orders.

         STANDARD OF REVIEW

         [¶24] We review the district court's entry of summary judgment as follows:

Summary judgment can be an appropriate resolution of a declaratory judgment action, and we invoke the usual standard for review. Continental Western Ins. Co. v. Black, 2015 WY 145, ¶ 13, 361 P.3d 841, 845 (Wyo. 2015). Summary judgment can be sustained only when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c); Felix Felicis, LLC v. Riva Ridge Owners Ass'n, 2016 WY 67, ¶ 29, 375 P.3d 769, 275 P.3d 769, 778 (Wyo. 2016). We review a grant of summary judgment deciding a question of law de novo. Id. We accord no deference to the district court on issues of law and may affirm the summary judgment on any legal grounds appearing in the record. Sky Harbor Air Serv., Inc. v. Cheyenne Reg'l Airport Bd., 2016 WY 17, ¶ 40, 368 P.3d 264, 272 (Wyo. 2016).

Cheyenne Newspapers, Inc. v. City of Cheyenne, 2016 WY 125, ¶ 10, 386 P.3d 329, 333 (Wyo. 2016).

          [¶25] The interpretation of covenants imposing restrictions or conditions on the use of land is a question of law we review de novo. Wimer v. Cook, 2016 WY 29, ¶ 21, 369 P.3d 210, 218 (Wyo. 2016).

         DISCUSSION

         I. Wells Fargo's China Wall Tract Access Rights

         [¶26] To determine Wells Fargo's access rights to the China Wall Tract, the district court was required to determine Wells Fargo's rights as the owner of Tract O, a substantial portion of which lies in the China Wall Tract. In answering this question, the court looked to the terms of the 2005 Covenants, found them clear and unambiguous, and concluded that Wells Fargo is an "owner" with the same access rights as any other "owner" under the covenants.

         [¶27] Gumpel Trust contends that the district court erred in its ruling because it failed to consider extrinsic evidence, including the history of the area's development, the negotiations between the Copperleaf developers and the Section 15 owners, and the conditions on the ground in interpreting the 2005 Covenants. It asserts that such evidence should have been considered because the covenants are ambiguous. In the alternative, it argues that even if the covenants are determined to be clear and unambiguous, the evidence should have been considered as an aid in interpreting the covenants.

         [¶28] We agree with the district court's finding that the 2005 Covenants are clear and unambiguous and with its interpretation of Wells Fargo's access rights. To reach this conclusion, we begin by addressing the controlling covenant provisions and their plain meaning. We will then turn to the Gumpel Trust's arguments concerning extrinsic evidence, addressing first the alleged ambiguities in the covenants and then the use of extrinsic evidence to interpret a clear and unambiguous contract.

         A. Plain Meaning of 2005 Covenant Terms

         [¶29] Covenants are contractual in nature and we therefore interpret them as we would a contract. Wimer, ¶ 22, 369 P.3d at 218 (citing Omohundro v. Sullivan, 2009 WY 38, ¶ 9, 202 P.3d 1077, 1081 (Wyo. 2009)). This means we use the following rules of interpretation:

Our review of a contract begins with an analysis of the document's plain language. Claman v. Popp, 2012 WY 92, ¶ 26, 279 P.3d 1003, 1013 (Wyo.2012).
[T]he words used in the contract are afforded the plain meaning that a reasonable person would give to them. Doctors' Co. v. Insurance Corp. of America, 864 P.2d 1018, 1023 (Wyo.1993). When the provisions in the contract are clear and unambiguous, the court looks only to the "four corners" of the document in arriving at the intent of the parties. Union Pacific Resources Co. [v. Texaco], 882 P.2d [212, ] 220 [(Wyo.1994)]; Prudential Preferred Properties [v. J and J Ventures], 859 P.2d [1267, ] 1271 [(Wyo. 1993)]. In the absence of any ambiguity, the contract will be enforced according to its terms because no construction is appropriate. Sinclair Oil Corp. v. Republic Ins. Co., 929 P.2d 535, 539 (Wyo.1996).
Id., ¶ 26, 279 P.3d at 1013 (quoting Hunter v. Reece, 2011 WY 97, ¶ 17, 253 P.3d 497, 501-02 (Wyo.2011)). Further, we interpret the contract as a whole and read each provision in light of the others to find the plain meaning. Id., ¶ 28, 279 P.3d at 1013. We avoid interpreting provisions in a way that makes the other provisions inconsistent or meaningless. Id. Finally, "[b]ecause we use an objective approach to interpret contracts, evidence of the parties' subjective intent is not relevant or admissible in interpreting a contract." Id., ¶ 27, 279 P.3d at 1013.

Thornock v. PacifiCorp, 2016 WY 93, ¶ 13, 379 P.3d 175, 180 (Wyo. 2016).

         [¶30] The provisions of the 2005 Covenants relevant to the question of Wells Fargo's access to the China Wall Tract are those governing applicability of the covenants and access and ...


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