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Napa Valley Owners Association v. Goplerud

Court of Appeals of Iowa

November 6, 2019


          Appeal from the Iowa District Court for Dallas County, Dustria A. Relph, Judge.

         Defendants appeal district court orders enjoining use of and ordering removal of structures on residential property and an award of attorney fees.

          Steven P. Wandro and Kara M. Simons of Wandro & Associates, P.C., Des Moines, for appellants.

          Patrick B. White of White Law, P.C., Des Moines, for appellee.

          Heard by Vaitheswaran, P.J., and Potterfield and Mullins, JJ.

          MULLINS, Judge.

         John Barton Goplerud and Leslie Clemenson ("Gopleruds") appeal district court orders enjoining Lyle and Dorothy Hale ("Hales") from using an outbuilding on the Gopleruds' property as a residential dwelling; ordering removal of a shed, bridge, and concrete slab and restoration of the lot to pre-construction condition; and awarding attorney fees and costs to the Napa Valley Owner's Association ("Association"). The Gopleruds argue the district court erred in: (1) concluding they violated restrictive covenants because the Association (a) lacked authority to enforce the covenants and (b) unreasonably enforced the covenants, (2) ordering injunctive relief, and (3) awarding attorney fees to the Association.

         I. Background Facts and Proceedings

         Napa Valley Estates is a residential housing development. In 1988, a declaration of covenants, conditions, and restrictions was recorded concerning the development. The declaration provided for the creation of the Association for the benefit of the owners and provided for a board of directors ("Board") to manage the affairs of the Association. The document also made provision for an architectural control committee ("ACC"), approval from which would be required before any owner would be allowed to erect or construct certain additions on any lot. All voting rights of the Association were retained by William Knapp. The Association was incorporated as a non-profit corporation in 1989. The Association established corporate bylaws in 1990.

         In 2009, the declaration was restated and amended. The restated declaration included the following provision:

Section 6. No building or structure of a temporary character and no trailer, basement, tent, shack, garage, or Outbuilding shall be used at any time as a residential dwelling on any Lot, either temporarily or permanently.
Notwithstanding the provisions of this Section 6 to the contrary, guest houses may be permitted in Outbuildings subject to rules and regulations of the Association and the approval of plans of such Outbuildings. No guest house shall be used for permanent living quarters, nor shall any guest house be allowed on a Lot which does not have a house erected.[1]

(Emphasis added.) That same year, Knapp transitioned government of the Association to the Board, which is comprised of members elected by lot owners.

         The Gopleruds are both experienced attorneys. The Gopleruds purchased the home in Napa Valley Estates in 2003, with the understanding they were bound to keep the property in accordance with the development's covenants and that the development was governed by the Association. In May 2014, the Gopleruds submitted an ACC application to build an outbuilding. The outbuilding would function in part as a garage, and in part as a retirement residence for Clemenson's parents, the Hales. As a part of the application through the Association's website, Clemenson was required to check a box stating she read and agreed to the declaration of covenants. Clemenson also submitted general blueprints for the outbuilding and plans for a deck but did not include interior plans, nor did she indicate the building would be used as a permanent residence for the Hales. The ACC approved the construction of the outbuilding. At the time of application and approval, neither the ACC nor the Association were aware of the intended residential use. The Hales consistently used the outbuilding as their residence by the end of January 2015.

         In June 2015, the Association began to receive complaints about the Hales' residence in the outbuilding and the sloppy appearance of the Goplerud lot in general. Following the August Board meeting, a letter was sent to the Gopleruds. The August 13, 2015[2] letter asked for an appointment to allow the ACC to inspect the outbuilding. An email sent to the Gopleruds on August 19 followed a second complaint about the property. This complaint prompted Board member Mike Dennis to drive by the Goplerud property, where he observed a shed being constructed.

         A meeting took place on August 20, attended by Clemenson and Board members Dennis, Tom Walton, and Mike Richmond. Richmond was an employee of Knapp Properties, an entity the Association hired for property management. Observations included issues with the outbuilding deck, installation of a second septic system, and landscaping and shed construction. Clemenson also admitted her parents used the outbuilding as a residence and indicated that use would continue permanently.[3]

         Second and third letters, dated August 28 and September 1, were sent to the Gopleruds following the meeting. The letters addressed compliance with the covenants in reference to the Hales' permanent residence in the outbuilding; the size of the deck attached to the outbuilding; construction of a shed, concrete slab, and second septic system; and landscaping that had not been submitted to or approved by the ACC.[4] The letters prompted a second meeting, which took place on September 2. The Gopleruds, Walton, Dennis, and Richmond were present. The landscaping issue was resolved when Clemenson indicated much more rock had mistakenly been installed than originally intended and was scheduled to be removed immediately. The Gopleruds agreed to submit ACC applications for the modified rock landscaping, shed, second septic system, enlarged deck, and a second shed that would be built on the concrete slab.[5] Applications for the deck and landscaping were approved, the application for the existing shed was denied.[6]In September 2015, it was discovered a large bridge was being built on the Goplerud property. No ACC application had been submitted prior to construction, nor had one been submitted at the time of trial.

         Following the October Board meeting, another letter was sent to the Gopleruds that explained the ACC application denials, addressed the new bridge construction, requested an application for the concrete slab, and again asked for written confirmation of compliance with the covenants regarding the use of the outbuilding. This letter requested compliance to "avoid any further proceedings."

         The Gopleruds did not reply, and this lawsuit was filed following a special Board meeting held on October 27.

         Trial was held over eight days in September 2016 and May and June 2017. The trial transcript and record show the district court was presented with thousands of pages of exhibits from the parties. Presentation of the Gopleruds' case-in-chief took five and one-half days, and the Association's took one and one-half days. The district court order was entered April 27, 2018, granting the Association the requested injunctive relief, ordering removal of unapproved structures, and concluding the Association was entitled to recover reasonable attorney fees and costs incurred in the litigation. The Goplerud's appealed. Hearing on the attorney-fee issue was held in August. The district court awarded costs totaling $4140.05 and attorney fees in the amount ...

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