#25220, #25234-rev & rem-JKM
2010 SD 1
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
EAGLE RIDGE ESTATES
HOMEOWNERS ASSOCIATION,
INC., Plaintiff and Appellee,
v.
TERRY MITCHELL ANDERSON a/k/a
TERRY M. ANDERSON; ANN CAROL
ANDERSON a/k/a ANN C. ANDERSON;
and TRUST OF TERRY MITCHELL
ANDERSON AND ANN CAROL ANDERSON
DATED APRIL 8, 2005, Defendants and Appellants.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
LAWRENCE COUNTY, SOUTH DAKOTA
* * * *
HONORABLE WARREN G. JOHNSON
Judge
* * * *
DYLAN A. WILDE
THOMAS E. BRADY of
Brady & Pluimer, PC Attorneys for plaintiff
Spearfish, South Dakota and appellee.
RODNEY SCHLAUGER
GREGORY J. ERLANDSON of
Bangs, McCullen, Butler,
Foye and Simmons, LLP Attorneys for defendants
Rapid City, South Dakota and appellants.
* * * *
CONSIDERED ON BRIEFS
ON NOVEMBER 16, 2009
OPINION FILED 01/06/10
#25220, #25234
MEIERHENRY, Justice
[¶1.] This case involves a dispute concerning the amount Terry and Ann
Anderson (Andersons) owe to Eagle Ridge Estates Homeowners Association, Inc.
(Homeowners Association) pursuant to a private access easement agreement. The
circuit court granted summary judgment to Homeowners Association. Andersons
appeal. We reverse.
FACTS AND BACKGROUND
[¶2.] Andersons own three lots in Lawrence County, South Dakota, in a
subdivision known as Eagle Crest. 1 Access to Andersons’ property is by way of
roads running through an adjacent subdivision known as Eagle Ridge Estates. By
written agreement, the prior owners of Eagle Ridge Estates subdivision granted a
private access easement to Andersons’ predecessor. The private access easement
operated as a covenant running with the land and bound and inured to the benefit
of “successors in title.” In exchange for the access easement, the grantee agreed to
pay an annual general road assessment for each lot. The agreement originally
established the amount of the annual general road assessment at $200 for a class A
lot (built upon and ready for occupancy) or $100 for a class B lot (not built upon or
ready for occupancy). The agreement further provided that the amount of the
annual general road assessment was subject to change “from time to time [as]
determined by the Covenants.” The Covenants referred to were the restrictive
1. The Andersons personally purchased Lots 40 and 61 of the Eagle Crest
subdivision. Lot 70 was purchased through the trust of Terry Mitchell
Anderson and Ann Carol Anderson. For purposes of this appeal, the
distinction between the personal and trust properties is not material.
-1-
#25220, #25234
covenants the grantor prepared and filed for Eagle Ridge Estates. Only those
provisions of the covenants pertaining to the general road assessments apply to
Andersons. The agreement provided that the grantee would “be subject to and be
bound by all provisions of the Covenants providing for general road assessments for
lots and enforcement of the same, but the Covenants shall not otherwise apply to
Grantee’s Property.” The agreement also specified the manner of collection for an
unpaid assessment. The agreement provided that “the delinquent assessment
together with interest and collection costs as provided in the Covenants shall
become a continuing lien on Grantee’s Property, or on the subdivided lot in default,
as the case may be, until paid as provided in the Covenants.”
[¶3.] Homeowners Association brought suit against Andersons claiming they
owed general assessments for 2005, 2006, and 2007. Andersons claim Homeowners
Association only has authority to assess “general road assessments” against them
under the easement agreement, not “general assessments.” Andersons contend that
Homeowners Association’s general assessments include more than road
assessments and are outside of their contractual obligations. Andersons asked
Homeowners Association to itemize those portions of the general assessment that
were used for roads. Homeowners Association did not provide an itemization. The
circuit court granted summary judgment to Homeowners Association and entered a
Judgment and Judgment for Foreclosure on Andersons’ lots. Andersons argue on
appeal that genuine issues of material fact exist as to the amount they owe for
general road assessments.
-2-
#25220, #25234
STANDARD OF REVIEW
[¶4.] We review the granting of summary judgment by “‘restrict[ing] our
review to determin[e] whether the record before us discloses any genuine issues of
material fact and, if not, whether the . . . [circuit] court committed any errors of
law.’” Flandreau Pub. Sch. Dist. No. 50-3 v. G.A. Johnson Constr., Inc., 2005 SD 87,
¶7, 701 NW2d 430, 434 (quoting Switlik v. Hardwicke Co., Inc., 651 F2d 852, 857-58
(3d Cir 1981)). “There must be no material facts at issue, and there must ‘be no
genuine issue on the inferences to be drawn from those facts.’” Discover Bank v.
Stanley, 2008 SD 111, ¶16, 757 NW2d 756, 762 (quoting A-G-E Corp. v. State, 2006
SD 66, ¶17, 719 NW2d 780, 786). However, “this Court will affirm the circuit
court’s ruling granting a motion for summary judgment if any basis exists to
support the ruling.” Id. ¶19 (citing Westfield Ins. Co., Inc. v. Rowe ex rel Estate of
Gallant, 2001 SD 87, ¶4, 631 NW2d 175, 176) (additional citations omitted).
ANALYSIS
[¶5.] Andersons concede they are required to pay general road assessments
under the terms of the easement. Terms in an easement agreement that are
specific in nature are to be “‘decisive of the limits of the easement.’” Canyon Lake
Park, L.L.C. v. Loftus Dental, P.C., 2005 SD 82, ¶17, 700 NW2d 729, 734 (quoting
Picardi v. Zimmiond, 2005 SD 24, ¶20, 693 NW2d 656, 662). We ascertain the
meaning of agreement terms “by examin[ing] the [agreement] as a whole and
giv[ing] words their ‘plain and ordinary meaning.’” Id. (quoting Gloe v. Union Ins.
Co., 2005 SD 30, ¶29, 694 NW2d 252, 260). The terms of the easement agreement
specifically require Andersons to pay general road assessments. Homeowners
-3-
#25220, #25234
Association claims that general road assessments are the same as general
assessments imposed by Homeowners Association. To support its argument,
Homeowners Association focuses on the language of Eagle Ridge Estates’ covenant
provisions. It argues that because the covenants only use the terms “general
assessments” and “special assessments,” no third category of “general road
assessments” exists.
[¶6.] The covenants incorporated by the easement consist of several pages of
provisions giving Homeowners Association authority to do a variety of things
beyond maintaining roads, such as “protecting the value of the lots . . . [,][keeping
the Development] attractive, beneficial, free from nuisance and guarding against
fires and unnecessary interference with the natural beauty.” In order to carry out
the purpose of the covenants, Homeowners Association is given authority to assess
general and special assessments to be “used to promote welfare and safety, and to
protect the investment of the owners and residents of ‘the Development.’”
[¶7.] In contrast, the language of the easement agreement only refers to
roads. The easement agreement requires Andersons to pay for “general road
assessments” subject to periodic adjustments as “determined by the Covenants.”
The easement agreement only incorporates those covenants dealing with “general
road assessments for lots and enforcement of the same.” While the easement
agreement incorporates certain provisions of the covenants, the covenants cannot
expand Andersons’ obligation beyond the terms of the easement agreement.
[¶8.] Homeowners Association’s argument that the covenant term “general
assessments” is synonymous with “general road assessments” has the effect of
-4-
#25220, #25234
expanding Andersons’ obligation. The covenants do not equate the two terms. The
term “general assessments” is broadly defined in the Covenants to include:
“operating expenses; management and administration; taxes; insurance costs;
reserves; improvements; and maintenance.” Conversely, the plain meaning of the
easement term “general road assessments” indicates it is limited to expenses
associated with roads. It cannot by definition include expenses unrelated to roads
otherwise assessed against Homeowners Association members.
[¶9.] Consequently, it becomes a question of material fact whether the
assessment that Homeowners Association imposed upon Andersons only includes
assessments for roads. Homeowners Association failed to undisputedly show the
assessment is strictly for roads. Although Homeowners Association makes the
argument that the assessment is a road assessment, its own evidence indicates it
used general assessments to pay for items other than roads, such as liability
insurance and miscellaneous expenses, including postage and photocopies. Minutes
from an Eagle Ridge Board meeting refer to what appear to be general assessments
as “annual dues.” The president of Homeowners Association merely stated in her
affidavit that Andersons had failed to pay “general assessments.” Her affidavit
never referred to general road assessments.
[¶10.] Andersons would not be required to pay assessments unrelated to
general road assessments per the easement agreement. Eagle Ridge cannot
demonstrate the absence of material facts given the ambiguity that exists as a
result of its imprecise and interchangeable application of general assessments with
general road assessments. Consequently, this issue should not have been resolved
-5-
#25220, #25234
through summary judgment. The evidence, viewed in the light most favorable to
Andersons, indicates that Homeowners Association’s assessment included more
than road assessments. We reverse and remand for further proceedings consistent
with this opinion. 2
[¶11.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and
SEVERSON, Justices, concur.
2. Because we hold the circuit court erred in granting summary judgment, we
reverse the award of attorneys’ fees and need not reach the issue raised by
Homeowners Association by notice of review.
-6-