Saturday, November 29, 2008

Unambiguous and Undefined terms of Endearment

Royal Kunia Community Association v. Nemoto (ICA November 28, 2008)

Background. The Nemotos lived in a planned residential community where a restrictive covenant ran with the land. The covenant stated that any "improvement" to the property was subject to the approval of a design committee; there was, however, a provision allowing "landscaping" without approval. The Nemotos sought approval to pour a slab of cement around their home. The committee approved only part of their plan and asked for more specific plans. However, the Nemotos laid the cement in front of their house, poured gravel over the cement, and deemed it a "Japanese rock garden." Months later the Community Association requested the Nemotos weigh a truck parked on their property. The covenant prohibited any trucks weighing with more a one-ton capacity near any of the lots. The Nemotos did not respond to the request and the Association investigated the weight of the truck and determined the capacity weight exceeded the one-ton capacity rule. It calculated this by subtracting the minimum "gross vehicle weight ratings" provided by the manufacturer minus the tare weight shown on the safety inspection certificate, which it had on file. Based on these incidents, the Association brought a complaint. The circuit court granted the Association's motion for summary judgment. Specifically, the circuit court concluded that the Nemotos kept a vehicle with more than a one-ton weight capacity and illegally laid a concrete pad.

Weighty (and Genuine) Issues of Material fact. Both the trial court and the appellate court, reviewing de novo, employs a three-step analysis in reviewing a motion for summary judgment: (1) identify the issues framed by the pleadings; (2) determine whether the movant established facts justifying judgment--even if opposition is weak; and (3) when there is a prima facie justification for a judgment, the opposing party demonstrates "the existence of a triable, material factual issue. Counter-affidavits and declarations need not prove the opposition's case so long as they disclose the existence of a triable issue." Wailuku Agribusiness Co. v. Ah Sam, 112 Hawai'i 241, 250, 145 P.3d 784, 793 (App. 2006). The ICA applied the three-step analysis. First, the weight of the truck is certainly at issue and is material to the case. Second, the Association made a prima facie case for judgment. Given its method of measuring the weight capacity, it would be in excess of one-ton. Finally, however, the Nemotos provided an article from the Association's newsletter that provided an alternative method of determining the truck's weight capacity. Under that alternative method, the truck was not in excess of the one ton. The ICA with the Nemotos that this alternative method of weighing the truck makes the issue a disputed and, therefore, triable.

Ambiguous Covenant terms Construed Against the Drafter/Enforcer. The covenant, according to the ICA, required approval by the design committee of "improvements, alterations, landscaping, and other work on property that may be visible from neighboring properties or the street." The Association claimed that pouring cement and spreading gravel to make a "Japanese rock garden" breached the covenant. The Nemotos counter that the covenant was ambiguous because the term "landscaping" was undefined and ambiguous. When construing a restrictive covenant, the intention of the parties are determined by the language of the deed. Hiner v. Hoffman, 90 Hawai'i 188, 190, 977 P.2d 878, 880 (1999). "Moreover, substantial doubt or ambiguity is resolved against the person seeking its enforcement." Id.

An Undefined term is not Necessarily an Unambiguous term. The ICA agreed with the Nemotos that the term "landscaping" was undefined, but it did not find the covenant ambiguous. According to the ICA, "an ambiguous term is not an undefined term, but one that yields more than one meaning." And as long as the terms of the covenant are not ambiguous, i.e. "not capable of being reasonably understood in more ways than one," the terms must be interpreted according to their plain, ordinary, and accepted sense in common speech. Pelosi v. Wailea Ranch Estates, 10 Haw. App. 424, 436, 876 P.2d 1320, 1327 (1994). The ICA looked up the word "landscape" in the dictionary and concluded that the term had many meanings, but could be characterized as activities changing the environment for the sake of aesthetic improvement. According to the ICA, a "Japanese rock garden" is certainly an alteration for the sake of aesthetic improvement and so the covenant was unambiguous and enforceable against the Nemotos.

And a Broad term is not Necessarily Unambiguous Either. So an undefined term does not automatically render it ambiguous. And even when the term itself encompassed a wide variety of activities, the ICA did not find it "capable of being reasonably understood in more ways than one." At first blush it would seem that such a broad term was capable of different meanings thereby making it ambiguous after all. But a broad term that encompasses a lot of different activities does not change the underlying meaning of the term. The varied activities constituted "landscaping" all have something in common: they were aesthetic improvements to the land.

The Other Issues. The ICA resolved the other issues raised by the Nemotos and rejected them all. It first held that the Nemotos waived issues relating to the admission of allegedly hearsay evidence because it was not raised before the circuit court. It also held that the circuit court did not abuse its discretion in denying the Nemotos' motion to continue, in granting the Association a mandatory injunction to remove the slab, and in denying the motion to reconsider.

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