Dreamland Villa Cmty. Club, Inc. v. Raimey
In Dreamland Villa Cmty. Club, Inc. v. Raimey, 224 Ariz. 42, 226 P.3d 411 (App. 2010), Dreamland Villa Community Club ("DVCC") appealed the trial court's denial of its request for attorneys' fees after it prevailed in litigation against the Petitioners. Id. at 45-46,12-15, 226 P.3d at 414-15.
Petitioners, who own lots located in sections 7, 14, 15, 16, 17, and 18 of Dreamland Villa (the "Six Sections"), cross-appealed, asserting that certain restrictive covenants of DVCC, known as the Second Amended Declarations, were invalid because DVCC "could not create new affirmative obligations where the previous provisions did not alert the homeowners to the possibility that they would be subject to assessments." Id. at 50,32, 226 P.3d at 419.
The Court agreed with Petitioners and held that the "Second Amended Declarations were invalid and unenforceable." Id. at 51,37, 226 P.3d at 420.
The Court also awarded Petitioners their attorneys' fees incurred on appeal but did not address recovery of fees incurred in the trial court. Id.
In Raimey, the Court held that the Second Amended Declarations for the Six Sections were invalid, reasoning as follows:
For decades after the first development of Dreamland Villa, DVCC was a voluntary club with voluntary membership. Homeowners had no right appurtenant to their lot ownership to membership in the club and no such right in the recreational facilities.
There were no common areas. There were no assessments paid to the club, only voluntary dues paid by those who chose to use the facilities. Many homeowners chose not to become members or to use the facilities. The authority to amend the original Declarations did not allow 51% of the lot owners to force the other 49% into club membership the latter had chosen against, nor to assess and lien the properties of such homeowners for an association they did not seek.
It is not reasonable to use the amendment provision to direct that one group of lot owners may, in effect, take the property of another group in order to fund activities that do not universally benefit each homeowner's property or areas owned in common by all. 224 Ariz. at 51,36, 226 P.3d at 420.
The Court reasoned further that "to allow the generic amendment provision present here to burden the homeowners' individual lots would unreasonably alter the nature of the covenants, to which implicit agreement was historically given." Id. at38.
The Court therefore concluded that "the Second Amended Declarations are invalid and unenforceable." Id. at37.
Although the Court noted that the declarations were unenforceable against "the homeowners,"we did not specifically address whether the declarations were unenforceable against other residents of the Six Sections.