Duffy v. Sunburst Farms East Mutual Water & Agricultural Co.
Docket: No. 1 CA-CIV 4345
Court: Court of Appeals of Arizona; February 8, 1979; Arizona; State Appellate Court
The appeal addresses whether homeowners in Sunburst Farms East are released from restrictive covenants mandating payment of fixed water assessments to Sunburst Farms East Mutual Water Agricultural Company, Inc. The homeowners from three subdivisions (No. 3, No. 4, and No. 7) contend that they should not be required to pay for water services they do not utilize. Originally, the properties were subject to a 'Declaration of Covenants, Conditions and Restrictions' requiring membership in the water company and the payment of related fees.
Several homeowners opted out of the water service and executed an Amended Declaration, which eliminated mandatory membership and the obligation to pay fees. The water company subsequently filed liens against those homeowners for unpaid assessments. The homeowners initiated quiet title actions to contest the liens, which were consolidated for this appeal.
The trial court ruled against the homeowners, finding that the amendment to the Declaration was invalid due to noncompliance with the Association’s Bylaws, specifically regarding voting procedures and membership status. It determined that a majority of votes came from homeowners who were not in "good standing" (i.e., had not paid their dues), invalidating the amendment. The homeowners argue that the Bylaws do not govern the validity of the restrictive covenants and assert that a majority supported the amendment. The case hinges on the interpretation of the Bylaws and the validity of the Amended Declaration.
Article IV, Section 3 establishes that the restrictions and covenants are binding until January 1, 1998, unless amended or revoked by a majority vote of the lot owners in SUNBURST EAST FOUR. Homeowners argue that there is no formal voting procedure required and that they were not obligated to notify others or hold a meeting prior to collecting signatures. The water company contends that as an incorporated homeowners' association, any changes affecting property rights must adhere to established procedures and bylaws. Upon acquiring their deeds, owners accepted the original Declaration and its restrictions.
Article III of the Declaration states that property owners automatically become members of the Association and that ownership is required for membership. The Bylaws mandate that membership is compulsory for all owners, regardless of facility usage, and outline the necessary notice procedures for meetings.
Homeowners are attempting to isolate Article IV, Section 3, asserting that only a majority signature is needed for an Amended Declaration, disregarding other relevant provisions. However, it is determined that homeowners cannot selectively follow parts of the Declaration while ignoring others. A comprehensive interpretation of the Declaration and Bylaws indicates that the attempted Amended Declaration is void due to lack of proper notice and adherence to meeting procedures. The court finds that the homeowners did not achieve the requisite majority of valid signatures for the amendment. The right to amend covenants exists but must follow prescribed procedures, which were not followed in this case. The Amended Declaration is therefore declared null and void. The ruling is affirmed.
