Nickerson v. Green Valley Recreation (CA2 11/30/11)

This opinion about a homeowners’-fee dispute throws a mountain of law at what is apparently a molehill of a case.

The deeds on Plaintiffs’ homes are subject to restrictions requiring them to be members of GVR. When GVR imposed a fee on new purchasers many homeowners sued, arguing that the restrictions were invalid. The trial court denied their request for preliminary injunction; then, saying that its conclusions at the injunction hearing were the law of the case, granted GVR summary judgment.

Plaintiffs pointed out that injunction conclusions are not the law of the case. But they didn’t do so until the Motion for New Trial; their opposition to summary judgment hadn’t mentioned it. So the Court of Appeals says that they waived the issue and, anyway, the trial court was right.

Plaintiffs’ main argument was  that the restrictions didn’t “touch and concern” the land. That’s a traditional requirement for such a covenant but GVR argued, inter alia, that it no longer applies. The Restatement no longer includes it and and some recent statutes haven’t. The opinion announces that it will discuss that issue first, does so for awhile, then says that it won’t decide it because the statutes came after the deed restrictions and were not retroactive. “Nor do we look to the Restatement for guidance because . . . the . . . covenants do touch and concern the land” (based on the facts and cases from other jurisdictions). In other words, after going out of its way to feature the issue the court evades it rather than address it, which is the only thing it could do anyway since – as the opinion notes but doesn’t mention the significance of — the issue is one of Supreme Court precedent.

Plaintiffs also made arguments about unconscionable and illusory contracts. The opinion disposes of the latter in a paragraph but devotes about seven pages to the former, for reasons we don’t know. This makes it a useful source for cites on the issue – including a discussion of “procedural” versus “substantive” unconscionability – but there’s little real analysis here since the facts, at least as reported in this opinion, didn’t come very close to supporting the argument.

GVR cross-appealed the trial court’s failure to award it attorney fees. The court had done the usual thing: deny the claim but, as a sop, deny fees for reasons that don’t bear too much scrutiny – here, the supposed “novel” and “close” nature of the claim and the “chilling effect” on future litigation. The Court of Appeals affirms since the trial court “articulated a reasonable basis.” Which proves – and this is perhaps the important point of the case – that nonsensical does not necessarily equal unreasonable.

(link to opinion)