Opinion
Case No. 20040612-CA.
Filed April 13, 2006. (Not For Official Publication).
Appeal from the Third District, Salt Lake Department, 020915089 The Honorable Denise P. Lindberg.
Stephen Christiansen, Cassie J. Medura, and John A. Snow, Salt Lake City, for Appellants.
William A. Meaders and Bryan H. Booth, Salt Lake City, for Appellees.
Before Judges Bench, Davis, and Thorne.
MEMORANDUM DECISION
We affirm summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Utah R. Civ. P. 56(c). We review the trial court's summary judgment ruling for correctness, granting it no deference. See Price Dev. Co. v. Orem City, 2000 UT 26, ¶ 9, 995 P.2d 1237. We review the trial court's denial of Defendants' motion pursuant to rule 56(f) of the Utah Rules of Civil Procedure for an abuse of discretion. e id.
At issue here is whether Defendants violated the Declaration of Covenants, Conditions, and Restrictions (CCRs) applicable to their residential development. Three provisions are relevant. First, the CCRs require that lot owners must submit building designs to an architectural control committee (ACC) for approval. The CCRs specify that the ACC will terminate once a residence is built on each lot or after five years from the effective date of the CCRs, whichever occurs first. Upon termination, "[a]ny and all rights, duties, and/or responsibilities of the [ACC] shall at that time automatically become the rights, duties, and/or responsibilities of the [l]ot [o]wners." Second, the CCRs require that "[e]ach dwelling must have a masonry exterior with all brick, or brick and stucco, or rock and stucco." The terms "brick" and "stucco" are not defined in the CCRs. Third, the CCRs provide that
[a]ny [o]wner shall have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, reservations, liens[,] and charges. . . . Failure by any [o]wner to enforce any covenants or restrictions herein contained shall in no event be deemed a waiver of the right to do so thereafter. Litigation costs arising from noncompliance of these restrictive covenants will be borne by the losing party.
Defendants, who own a lot subject to the CCRs, installed Hardiplank siding on their residence without obtaining approval from the ACC or the lot owners. The trial court determined that in doing so, Defendants violated the CCRs and granted Plaintiffs' motion for summary judgment.
Defendants claim that summary judgment was improper because material issues of fact exist regarding (1) the meaning of "stucco" in the CCRs, (2) the procedure for obtaining building approval after the termination of the ACC, and (3) the abandonment of the CCR restrictions. First, we agree with the trial court that there are no issues of material fact respecting the meaning of "stucco" because the term clearly does not encompass Hardiplank, a form of prefabricated lap siding.
Defendants also claim the trial court failed to balance the injuries in granting injunctive relief. Under the balance of injury test, an equity court may decline to grant injunctive relief when "the plaintiff is not irreparably harmed by the violation, the violation was innocent, defendants' cost of removal would be disproportionate and oppressive compared to the benefits plaintiffs would derive from it, and plaintiffs can be compensated by damages." Crimmins v. Simonds, 636 P.2d 478, 480 (Utah 1981). Defendants concede that they did not expressly raise or argue the issue in their filings below, but contend that the issue should have been obvious to the trial court because the action involved an injunction and Defendants noted in their filings that Hardiplank is superior to and more expensive than traditional stucco.
This argument is unavailing. In order to have raised an issue before the trial court, "[t]he argument must be reasonably discernable from the pleadings, affidavits[,] and exhibits" and be supported by a "'factual showing or . . . submission of legal authority.'" Holman v. Callister, Duncan Nebeker, 905 P.2d 895, 898 (Utah Ct.App. 1995) (final alteration in original) (citation omitted). Defendants provided no legal authority before the trial court on the issue, and the sparse assertions relevant to the issue fail to address key questions of irreparable harm, cost of removal, and the sufficiency of damages. Accordingly, we decline to review the issue on appeal. See, e.g., Pugh v. Draper City, 2005 UT 12, ¶ 18, 114 P.3d 546 ("'It is well-established that we generally will not address issues raised for the first time on appeal' unless a party can demonstrate 'exceptional circumstances.'" (citation omitted)).
Defendants' contention that Hardiplank is substantially similar to stucco is disingenuous and misleading. They support their position by referring us to a portion of the Webster's dictionary definition, which defines stucco as "a material usually made of portland cement, sand, and a small percentage of lime." Webster's Ninth New Collegiate Dictionary 1170 (1986). From this they conclude that Hardiplank, which they allege to be composed of "cement, ground sand, cellulose fiber[,] and select additives," falls within the broad definition of "stucco." However, they omit the next clause in the definition, which states that stucco is "applied in a plastic state to form a hard covering for the exterior walls." Id. Thus, while the composition of stucco and Hardiplank may arguably be similar, Defendants evade the implausible argument that Hardiplank was applied to their residence in a plastic state similar to stucco. Further, Defendants' assertions that Hardiplank is superior to stucco and that the Hardiplank met building regulations are irrelevant in determining compliance with the CCRs.
Second, we also agree with the trial court that there is no issue of material fact regarding the procedure for obtaining building approval upon termination of the ACC because, under the CCRs, the lot owners as a whole assume the role of approving new construction. Accordingly, failure to obtain approval from the lot owners or their designated representatives is a violation of the CCRs.
Finally, we agree with the trial court that there are no issues of material fact respecting abandonment of the CCRs. For a covenant to be abandoned, "[t]he violations must be so substantial as to destroy the usefulness of the covenant and support a finding that the covenant has become burdensome."Swensen v. Erickson, 2000 UT 16, ¶ 22, 998 P.2d 807. Thus, "[i]f the original purpose of the covenant can still be accomplished and substantial benefit will continue to inure to residents, the covenant will stand." Id. Defendants have not alleged widespread noncompliance with the CCRs such that the "'number, nature[,] and severity of the . . . existing violations'" has undermined the possibility of "'realiz[ing] to a substantial degree the benefits intended through the covenant.'"Id. at ¶ 27 (citation omitted).
We also conclude that the denial of Defendants' rule 56(f) motion was not an abuse of the trial court's discretion. Although "the trial court should liberally grant rule 56(f) motions," it may deny such motions when "they are 'dilatory or lacking merit.'" Price Dev. Co. v. Orem City, 2000 UT 26, ¶ 30, 995 P.2d 1237 (citation omitted).
Here, after Defendants filed their answer, the case remained dormant for over four months until Plaintiffs filed their motion for summary judgment. Defendants opposed the motion and filed concurrently a rule 56(f) affidavit to seek more time for discovery, see Utah R. Civ. P. 56(f), and a rule 16(b) motion to hold a discovery conference, see id. 16(b). In those filings, Defendants claimed further discovery was necessary regarding
[(1)] the CCRS, [(2)] the status or lack of status of an [ACC], [(3)] the abdication of the guidelines after the date they were to expire by their own terms, [(4)] the failure of other residents to comply with the CCRs[,] and [(5)] the general impossibility of performance in obtaining a[n] approval from a[n ACC] that never existed.
In their briefs on appeal, Defendants add that discovery was necessary to determine the intent of the parties regarding certain terms in the CCRs, including the meaning of the word "stucco" and the procedure for seeking approval after the original ACC had terminated.
In Crossland Savings v. Hatch, 877 P.2d 1241 (Utah 1994), the supreme court held that a trial court did not abuse its discretion in denying a defendant's rule 56(f) motion as dilatory when the defendant had failed to initiate discovery during the four months between the filing of the complaint and the plaintiff's motion for summary judgment and had failed to utilize relevant information in its own control. See id. at 1244. The circumstances of the present case are functionally similar to that case. Although Defendants claim Plaintiffs were inactive in the discovery process, Defendants themselves waited five months after filing their answer to pursue discovery by means of a rule 16(b) motion. Moreover, like the defendant inCrossland, Defendants were in possession of the information necessary to establish their claims. They could and did gather information about the common meanings of ambiguous terms in the CCRs, they were aware of their own efforts to comply with the CCRs' approval process and the extent to which they may have been abdicated by the lot owners, they collected information about external noncompliance with the CCRs, and they were in the best position to provide information about the impossibility of performance.
We note that after Crossland was decided, the Utah Rules of Civil Procedure governing discovery were amended to require the plaintiff to commence discovery. See Utah R. Civ. P. 26(f) (requiring plaintiff to schedule a discovery and scheduling conference "as soon as practicable"). However, this change in the discovery procedure does not affect our reliance on Crossland because the rules still permit defendants to commence discovery by filing a rule 16(b) motion. See id. 16(b) (permitting any party to request a scheduling and management conference order to address discovery issues).
Even assuming Defendants may have required evidence outside of their control, they must still explain in their rule 56(f) filings the type of evidence sought, why it could not have been previously obtained, and how it would aid their opposition to the summary judgment motion. See Utah R. Civ. P. 56(f) (requiring party to explain why it "cannot for reasons stated present by affidavit facts essential to justify the party's opposition" to a summary judgment motion); Grynberg v. Questar Pipeline Co., 2003 UT 8, ¶ 57, 70 P.3d 1 (noting that a party "cannot justify further discovery without providing a viable theory as to the nature of the facts they wish to obtain"); Campbell, Maack Sessions v. Debry, 2001 UT App 397, ¶ 9, 38 P.3d 984 (noting that in filing a rule 56(f) affidavit in opposition to a summary judgment motion, "'the opposing party must show to the best of [its] ability what facts are within the movant's exclusive knowledge or control'" and "'explain how the continuance will aid [its] opposition to summary judgment.'" (citations omitted)). Here, Defendants assert repeatedly that more discovery is required to oppose Plaintiffs' motion for summary judgment, but aside from claiming that Plaintiffs failed to initiate discovery, they have left us to speculate as to the specific nature of the evidence they wish to obtain, why they were prevented from obtaining it, and how the evidence would aid their opposition. Accordingly, we conclude that the trial court did not abuse its discretion in denying their request for further discovery.
Plaintiffs ask for attorney fees incurred on appeal. The CCRs provide that "[l]itigation costs arising from noncompliance of these restrictive covenants will be borne by the losing party." Plaintiffs prevailed below and were awarded attorney fees and, as such, are entitled to attorney fees incurred on appeal. See R.T. Nielson Co. v. Cook, 2002 UT 11, ¶ 27, 40 P.3d 1119.
Having determined that the trial court properly granted Plaintiffs' summary judgment motion and denied Defendants' rule 56(f) motion, we affirm the trial court's ruling and remand for the trial court to determine the proper amount of Plaintiffs' attorney fees incurred on appeal.
Russell W. Bench, Presiding Judge, concur.
I concur in the majority opinion in all respects except its treatment of the Defendants' motion for time to conduct additional discovery under rule 56(f). See Utah R. Civ. P. 56(f) ("Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just."). I believe that the trial court exceeded the bounds of its discretion when it refused to grant the Defendants limited time to conduct discovery targeted at establishing their abandonment claim.
In this case, a scant four months passed between the Defendants' answer and the Plaintiffs' motion for summary judgment. In opposing the motion on the ground of abandonment of the CCRs, the Defendants presented some evidence of non-enforcement of the CCRs. They also initiated discovery by filing a motion to hold a discovery conference, see Utah R. Civ. P. 16(b), and requested additional time to conduct discovery under rule 56(f). The question of abandonment is potentially complex and fact-intensive, and largely implicates information beyond the control of the Defendants.
I believe that these factors take this case outside ofCrossland Savings v. Hatch, 877 P.2d 1241 (Utah 1994), wherein the defendant failed to initiate discovery before or after the plaintiff's motion for summary judgment, failed to present evidence that was within his control, and the issues involved were "neither factually nor legally complex." Id. at 1244. While I agree that the amendment of rule 26(f), placing the burden of initiating discovery on the Plaintiffs, is not dispositive here, I nevertheless view the amendment as strengthening the argument that the Defendants are not solely responsible for the four-month dormancy of this case. See Utah R. Civ. P. 26(f).
"'Rule 56(f) motions opposing a summary judgment motion on the ground that discovery has not been completed should be granted liberally unless they are deemed dilatory or lacking in merit.'"Energy Mgmt. Servs., L.L.C. v. Shaw, 2005 UT App 90, ¶ 10, 110 P.3d 158 (quoting Salt Lake County v. Western Dairymen Coop., Inc., 2002 UT 39, ¶ 24, 48 P.3d 910). I would not deem the Defendants' motion to be either dilatory or lacking in merit, and would hold that the trial court erred by failing to allow the Defendants a reasonable but limited amount of time to pursue additional evidence to support their abandonment theory.
For these reasons, I would reverse the trial court's award of summary judgment on the abandonment issue and remand this matter to allow the Defendants to conduct additional discovery.