Swenson v. Erickson

2007 UT 76
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
David Swenson and Barbara Swenson, No. 20060190
Plaintiffs and Petitioners,
v.
David V. Erickson and David R. F I L E D
Limberg,
Defendants and Respondents. September 21, 2007
---
Third District, Salt Lake
The Honorable Stephen L. Henriod
No. 040902545
Attorneys: Budge W. Call, Salt Lake City, for plaintiffs
J. Thomas Bowen, Midvale, for defendants
---
On Certiorari to the Utah Court of Appeals
NEHRING, Justice:
¶1 On this, their second visit to this court, the
plaintiffs provide us with the opportunity to hold that, in
ruling on their first appeal in Swenson v. Erickson (Swenson I),
2000 UT 16, ¶ 34, 998 P.2d 807, we intended to permit the
property owners in the Quail Point Subdivision to vote to change
their restrictive covenants on January 1, 2004, during the
daylight hours and not just within the sixty seconds between
midnight and 12:01 a.m.
BACKGROUND
¶2 With a brief chronicle of events, we endeavor to
explain how a dispute between aggrieved property owners could
produce the issue before this court and the odd outcome advocated
by one of the parties. David and Barbara Swenson, David Limberg,
and David Erickson own adjacent lots in the Quail Point
Subdivision in Sandy, Utah. The subdivision is subject to
restrictive covenants that were recorded in July 1973. In 1997
Mr. Erickson began constructing a shed on his property, allegedly

No. 20060190 2
in violation of the neighborhood’s restrictive covenants. The
Swensons filed suit in district court seeking an injunction
barring Mr. Erickson from completing the shed. The district
court granted the Swensons’ request and held that the structure
violated the subdivision’s restrictive covenants that state in
part, “No structure shall be erected, altered, placed or
permitted to remain on any ‘residential lot’ other than one
detached single family dwelling, a private garage, a guest house,
and outbuildings for pets as hereinafter described.” Swenson I,
2000 UT 16, ¶ 5, 998 P.2d 807.
¶3 Mr. Erickson changed tactics and sought to terminate
the restrictive covenants that barred his proposed construction
project. A majority of the Quail Point property owners supported
the termination and, after a vote on the issue, filed a notice of
termination with the Salt Lake County Recorder dated October 3,
1997. Believing he had cleared the way to finish construction on
his building, Mr. Erickson moved to dismiss the Swensons’ lawsuit
and lift the injunction. The district court granted the motion,
and the Swensons appealed.
¶4 In Swenson I, we held that by their own terms the
restrictive covenants were immune from termination except on
January 1, 2004, the date on which the covenants would
automatically renew unless modified or terminated. Mr. Erickson
waited. When New Year’s Day of 2004 finally arrived, he and the
other Quail Point property owners met at noon. By 2:00 p.m.,
they had once again voted to terminate the restrictive covenants.
After the vote, the property owners recorded another notice of
termination in March.
¶5 The Swensons countered the renewed notice with another
lawsuit. This time, the Swensons sought to invalidate the
termination of the restrictive covenants by arguing that the
covenants permitted their provisions only to change and not to
terminate and that the covenants had already automatically
renewed by the time the termination vote took place. The
district court rejected both arguments, and the Swensons
appealed. The court of appeals affirmed. Swenson v. Erickson
(Swenson II), 2006 UT App 34, ¶ 1, 131 P.3d 267. The Swensons
sought certiorari review in this court. We granted the Swensons’
petition to determine whether the Quail Point property owners
voted too late to change the subdivision’s bylaws and must wait
another ten years. We affirm.

3 No. 20060190
DISCUSSION
¶6 This review tows a considerable history behind it as it
arrives in this court, which makes our approach to this case
unusual and substantially limits this decision’s precedential
value. As is our practice, we review the court of appeals’
decision and not the ruling of the district court. E.g.,
Colosimo v. Roman Catholic Bishop of Salt Lake City, 2007 UT 25,
¶ 11, 156 P.3d 806. We cede no deference to the court of appeals
with regard to the two sources we consider to resolve the issue
before us: the plain language of the restrictive covenants and
the meaning of Swenson I.
¶7 We are mindful that many covenants may exist within the
borders of our state that provide for their modification and
renewal in language that is identical or similar to that used for
Quail Point. Our approach to this case may not be helpful,
however, in guiding someone who desires to modify or terminate
such covenants toward the lawful achievement of that goal. The
holding in Swenson I emerged from a traditional contract analysis
that focused on the covenant’s text. Although in this appeal we
again look to the same covenants, we do so while considering an
issue--what procedures the restrictive covenants require to
conduct a lawful termination vote--that we did not confront in
Swenson I.
¶8 Considering the holding in Swenson I clearly
anticipated a renewed effort to terminate the restrictive
covenants, we commented in the form of dictum on the occasion for
that vote and noted, “[W]e assume that the next such time [to
terminate the covenants] will be on January 1, 2004.” Swenson I,
2000 UT 16, ¶ 34, 998 P.2d 807. Whether styled as dictum or
otherwise, our remarks on the timing of a subsequent vote and the
fate of the covenants clearly appear to have influenced the
scheduling of the 2004 vote, and we must account for those
remarks here. We do not, therefore, express our view here of the
legitimacy of the 2004 Quail Point vote based on the text of the
covenants themselves using our traditional methods of contract
analysis. Instead we consider this challenge in light of our
pronouncement in Swenson I regarding how a legitimate covenant
vote might take place. This same challenge confronted the court
of appeals, and we conclude that it met that challenge and
therefore affirm.
¶9 We begin our analysis by returning to the relevant text
of the restrictive covenants. Article XIV provides:
These covenants are to run with the land and
shall be binding on all parties claiming

No. 20060190 4
under them until January 1, 1994, at which
time said covenants shall be automatically
extended for successive periods of 10 years
unless by vote of a majority of the then
owners of the building sites covered by these
covenants it is agreed to change said
covenants in whole or part.
Id. ¶ 33. Embedded within article XIV are three concepts that
reflect the intent of the parties to the restrictive covenants:
an affirmation of the right to modify the covenants, a belief
that the interests of the Quail Point property owners would best
be served by predictability that would be provided by covenants
featuring a minimum ten-year life that would automatically renew
unless modified, and a recognition that the property owners
empowered to change the covenants should be limited to those most
likely to be affected by the modifications. Our approach to the
problem that we faced in Swenson I implicitly honored each of
these principles. We acknowledged that the covenants could be
modified but not by an executory action taken more than six years
before the effective date of the modifications. Now we are faced
with the task of applying these principles to determine voting
rules that are both permitted by article XIV and not offensive to
Swenson I. According to the Swensons, the sole procedure that
achieves this end is one that limits the time for an effective
vote to terminate the restrictive covenants to the sixty seconds
after the beginning of 2004 but before the automatic extension of
the covenants at 12:01 a.m. We disagree.
¶10 The Swensons’ preferred voting procedure comes closest
to achieving certainty that only those property owners most
likely to be bound by changes to the restrictive covenants would
be empowered to enact those changes. A perfect convergence of
ownership and effectiveness would occur if a vote were taken at
the instant before the covenants automatically renewed. Such
perfection cannot practically be achieved. Even armed with the
most sophisticated clock and impeccable choreography, it is
simply beyond the capability of human beings to exercise their
collective will under these constraints. The Swensons’ narrow
window similarly promises to make a lawful vote all but
impossible before 12:01 a.m. arrives to rescue the covenants for
another ten years from the reach of those who would modify them.
The obvious problem with the Swensons’ position is that it wholly
disregards the first principle of article XIV--the parties to the
covenants intended that they could be modified. In our view,
hyperattentiveness to automatic renewal and voting eligibility
renders the covenants impossible to modify and therefore offends
the clear intentions of the parties to the covenants.

5 No. 20060190
¶11 We signaled as much when we indicated in Swenson I that
we assumed the Quail Point property owners could modify or
terminate the covenants on January 1, 2004. In the view of the
Swenson I court, the property owners had twenty-four hours
available to them every ten years to conduct the business
associated with modifying or terminating the covenants. We
reaffirm that view today.
CONCLUSION
¶12 By interpreting article XIV to permit a vote to occur
at any time on January 1, we provide a voting window that fairly
accommodates each of the principles informing article XIV and
thereby conforms to the intent of the parties to the covenants.
We accordingly affirm the judgment of the court of appeals.
---
¶13 Chief Justice Durham, Associate Chief Justice Wilkins,
Justice Durrant, and Justice Parrish concur in Justice Nehring’s
opinion.