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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Fannon v. Polo (2/8/2019) sp-7332

Fannon v. Polo (2/8/2019) sp-7332

          Notice:  This opinion is subject to correction before publication in the PACIFIC  REPORTER.  

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                      THE SUPREME COURT OF THE STATE OF ALASKA                                    

LINK  C.  FANNON,                                                  )  

                                                                   )    Supreme Court No. S-16724  


                               Appellant,                          )  

                                                                   )    Superior  Court  No.  3PA-14-01915  CI  

          v.                                                       )  


                                                                   )    O P I N I O N  


NOLA POLO, PERSONAL                                                )  



REPRESENTATIVE OF THE                                              )    No. 7332 - February 8, 2019  


ESTATE OF JUNE SCHEELE,                                            )  


                               Appellee.                           )  




                     Appeal from the Superior Court of the State of Alaska, Third  


                     Judicial District, Palmer, Kari Kristiansen, Judge.  


                     Appearances: WayneG. Dawson, DawsonLawGroup,LLC,  


                     Anchorage, for Appellant.  Danny W. Burton, Eagle River,  


                     for Appellee.  


                     Before:  Bolger, Chief Justice, Winfree, Stowers, Maassen,  


                     and Carney, Justices.  


                     WINFREE, Justice.  



                     The primary issue in this appeal is whether the superior court correctly  


interpreted two property restrictions, one found in asubdivision declaration and theother  


in  a  deed's  greenbelt  covenant,  to  ultimately  determine  that  the  deed's  greenbelt  


covenant  is  enforceable.                  We  conclude  that  the  superior  court  correctly  applied  

----------------------- Page 2-----------------------

interpretation rules by looking at the instrument language without regard to extrinsic                                                                                                                  

evidence and correctly ruled that the subdivision declaration did not preclude the deed's                                                                                                                     

greenbelt covenant.                                 We therefore affirm the superior court's decision.                                                         

II.              FACTS AND PROCEEDINGS                  

                 A.               Facts  

                                  Between 1984 and 1986 August Scheele obtained requisite permitting to                                                              

create Scheele Solid Subdivision in Wasilla. The subdivision consists of seven lots; one                                                                                                                              

lot - Lot 1, Block 1 - has a water well historically supplying the other lots through a                                                                                                                                     

subdivision water system.                       


                                  In 1990 August and the other owners of the Scheele Solid Subdivision lots  


entered into a covenant (the Declaration) prohibiting using the lots for:  (1) residential  


housing; (2) the sale of alcoholic beverages; (3) junkyards, dumps, or rubbish disposal  


or storage; and (4) churches and places of worship.  The Declaration also provided that  


all current and future owners could enforce the restrictions "through any proceedings,  


at law or in equity," specifically including injunctive relief.  


                                  In 1992 August conveyed the five lots he owned, including Lot 1, Block 1,  


to himself and his wife, June Scheele, as tenants by the entirety. August died a few years  


later.  In 1998 June conveyed Lot 1, Block 1 to a new owner; they signed a separate  


agreement for the new owner to assume responsibility for the well and water system.  


The quitclaim deed for Lot 1, Block 1 was signed by the buyer; the deed was made  


subject to assumption of the water system obligations and the following restrictive  

                        1  covenant (Greenbelt Covenant):  


                 1                A greenbelt is "[a]n undeveloped area of land around a city, esp. one set                                                                                                            

                                                                                                                                                                                                           LACK 'S  

aside for parks or farmland or preserved as natural wilderness."                                                                                                         Greenbelt, B 

LAW DICTIONARY (10th ed. 2014).                                          


                                                                                                            -2-                                                                                                   7332

----------------------- Page 3-----------------------


                    Allowed Uses.   Lot 1, Block 1 Scheele Solid Subdivision  


                    may not be used for any purpose other than use as a greenbelt  


                    and use for continued maintenance and operation of the water  


                    system located thereon.  For the purposes of this covenant,  


                    "greenbelt" means maintenance of trees and natural cover in  


                    those areas and of the kind, as presently exist. In interpreting  


                    this  covenant,  a  court  should  resolve  doubts  in  meaning  


                    against the free use of land, rather than in favor of the free  


                    use of land.  (Emphasis in original.)  


The Greenbelt Covenant provides for enforcement  


                    by the grantor, by any owner of land within Scheele Solid  


                    Subdivision, by any person owning land within one-half mile  


                    or  any boundary of Lot 1, Block 1 . . . or by any public  


                    agency, and which may be enforced through injunction or  


                    any other remedy available at law or in equity.  


June passed away in November 2012 and her daughter, Nola Polo, was appointed as the  


personal representative of June's estate.  


                    In April 2014 Link Fannon acquired Lot 1, Block 1, along with the well and  


water system, from an owner subsequent to June Scheele's 1998 transaction.  The deed  


to Fannon made no mention of the Greenbelt Covenant. Fannon intended to increase the  


well's  production  to  service  at  least  another  ten  acres  of  neighboring  commercial  


property  and  to  "sell bulk  water"  to  the  Department  of  Transportation  for  a  Parks  


Highway upgrade.  Fannon then began clear-cutting trees on Lot 1, Block 1.  

          B.        Proceedings  


                    1.        Preliminary injunction  


                    In June 2014 June's estate brought suit against Fannon for violating the  


Greenbelt Covenant's terms; the estate sought damages, a preliminary injunction against  


further clear-cutting, and an affirmative injunction to restore trees. The estate requested  


expedited consideration of its request for a preliminary injunction. After hearings in July  

                                                               -3-                                                         7332

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and August, the superior court entered a preliminary injunction barring further tree  


clearing but required the estate to post a $60,000 bond before the injunction took effect.  


                    Fannon answered the complaint, counterclaiming, among other things, that  


the Greenbelt Covenant conflicted with the Declaration. Fannon did not assert that either  


covenant was ambiguous.  


                    The estate moved for partial summary judgment in March 2015, arguing  


that no genuine issues of material fact precluded the court from granting a permanent  


negative injunction.   Fannon requested additional time to respond, which the court  


granted.   By April the estate's attempts to post a bond to effectuate the preliminary  


injunction  had  failed.              The  court  granted  Fannon's  motion  to  lift  the  preliminary  


injunction, and Fannon resumed clear-cutting trees on the lot.  


                    2.        Motion to determine rule of law  


                    The estate asked the court to determine the rule of law on several issues,  


including  interpretation  of  the  covenants.                        The  court  understood  the  estate  to  be  


requesting the following rulings:  (1) "intent is not relevant in interpreting covenants"  


and (2) "interpretation of covenants is a question of law."  


                    Fannon opposed the motion and simultaneously cross-moved for summary  


judgment, asserting that no genuine issues of material fact precluded the court from  


determining  that  the  Greenbelt  Covenant  was  void  because  it  contradicted  the  


Declaration's plain meaning and its drafters' intent. Fannon repeatedly asserted that the  


Declaration is unambiguous and restricts the lots to commercial use only, but he made  


no argument about the Greenbelt Covenant's ambiguity.  


                                                                -4-                                                        7332

----------------------- Page 5-----------------------

                                 The   court   partially   granted   the   estate's   motion,   ruling   that   the   law  

articulated in                  HP Ltd. Partnership v. Kenai River Airpark, LLC                                                                        controlled interpretation   


of the covenants.                             

                                3.               Motion to compel deposition of the estate's attorney  


                                 In September, by agreement of the parties, the court stayed its decision on  


the  two  summary  judgment  motions.                                                               Fannon  then  moved  to  compel  the  estate's  


attorney's deposition and the production of any documents in his possession related to  


 Scheele Solid Subdivision. Fannon argued that the information was relevant because the  


attorney had drafted both the Declaration and the Greenbelt Covenant and therefore was  


the sole person who could testify to the deceased founders' intent.  Fannon contended  


that the work product was not privileged because it "was not done in preparation or  


anticipation of litigation with [Fannon]," and he later argued that the estate had waived  


the attorney-client privilege through its discovery responses.  


                                 The superior court initially granted Fannon's motion to compel, agreeing  


that the estate had waived the attorney-client privilege.  But when the estate moved for  


reconsideration, the court changed its decision.  The court held that because Fannon did  


not contend that the Declaration was ambiguous, "[e]xtrinsic evidence is irrelevant" and  


the estate's attorney's testimony about the founders' intent would be "inadmissible."  


The  court  also  disagreed  with  Fannon's  assertion,  raised  for  the  first  time  in  his  


reconsideration opposition, that the Greenbelt Covenant was ambiguous.   The court  


                2                270 P.3d 719, 729 (Alaska2012) (stating                                                          that, ininterpretingcovenant, "the                                    

plain meaning governs" if covenant is unambiguous; if covenant is ambiguous it should                                                                                                           

be "construed within [its] own four corners . . . to effectuate the intent of the parties" to                                                                                                                

the extent that intent "serves to limit the scope and effect of the restriction" (quoting                                                                                                    

Hurst v. Victoria Park Subdivision Addition No. 1 Homeowners' Ass'n                                                                                                    , 59 P.3d 275, 278                

(Alaska 2002))).   

                                                                                                      -5-                                                                                             7332

----------------------- Page 6-----------------------


granted the estate's motion for reconsideration, and it denied Fannon's motion to compel  


the estate's attorney's deposition.  


                     4.        Summary judgment order  


                     In March 2016 the court granted the estate's motion for partial summary  


judgment and denied Fannon's.   The court ruled it would not consider "[e]xtrinsic  


evidence of the covenantors' intents" for either restrictive covenant. Finding that neither  


covenant presented any ambiguity, the court limited its inquiry to the plain language of  


the restrictive covenants.  The court rejected Fannon's contention that the Declaration  


required the subdivision lots to be used only for commercial purposes; the court found  


that such a restriction was neither contained in the Declaration nor implied by the list of  


prohibited activities.  The court also found that the Declaration was not intended to be  


"the exclusive source of restrictions on the lots" and thus did not prohibit lot owners  


from imposing subsequent restrictions upon their land.  Because the Declaration "d[id]  


not prohibit either of the activities protected by the [Greenbelt Covenant]" or "prevent  


the further restriction of [the subdivision's lots]," the court held that the Declaration and  


the Greenbelt Covenant did not conflict.  Concluding that the Greenbelt Covenant "is  


valid and enforceable" and finding that Fannon had violated it, the court entered a  


permanent prohibitory injunction preventing Fannon from conducting activities outside  


the Greenbelt Covenant's scope.  


                     The summary judgment ruling narrowed the issues, and the resulting trial  


focused almost entirely on damages and affirmative injunctive relief. The superior court  


found that the estate "failed to establish damages" or to provide a reason "why the  


greenbelt should be restored."  The court reiterated that the Greenbelt Covenant is valid  


and enforceable, referencing the order granting partial summary judgment.  The court  


concluded  that  "[Fannon's]  plans  to  upgrade  the  water  system  c[ould]  still  be  


accomplished without violating the [Greenbelt Covenant] by utilizing" an existing right- 

                                                                -6-                                                         7332

----------------------- Page 7-----------------------

of-way easement granted to the Matanuska-Susistna Borough.  The court then entered  

another  permanent  injunction,  ordering  Fannon  to  "refrain  from  further  activities  


inconsistent with the 1998 [G]reenbelt [C]ovenant."  


                      Fannonrequestedclarification ofthesuperior court'sorder,asking whether  


certain activities qualified as "continued use and maintenance of the water system" and  


what it meant to "fully utiliz[e] the Borough's prior and current right of way easements."  


The court ruled that Fannon's questions "were not at issue at trial and therefore are not  


properly before the [c]ourt."  


                      Fannon appeals the court's decisions:  (1) granting the estate's motion for  


summary judgment and denying his; (2) denying his motion to compel the estate's  


attorney's deposition; and (3) denying his clarification request.  




                      "We review grants of summary judgment de novo,"3  


                                                                                                                   "affirming if the  


record presents no genuine issue of material fact and if the movant is entitled to judgment  

                                4  "The interpretation of a covenant is a question of law to which we  


as a matter of law." 

apply our independent judgment."5  Rulings on motions for reconsideration are reviewed  


for abuse of discretion.6  


           3          Christensen v. Alaska Sales &Serv., Inc.                         , 335 P.3d 514, 516 (Alaska2014).                         

           4          Hagen v.          Strobel, 353          P.3d   799,   802   (Alaska 2015)                   (quoting   Kelly v.   

Municipality of Anchorage                    , 270 P.3d 801, 803 (Alaska 2012)).                          

           5          HP Ltd. P'ship, 270 P.3d at 726 (quoting Hurst, 59 P.3d at 277).  


           6          See Engstrom v. Engstrom, 350 P.3d 766, 769 (Alaska 2015).  


                                                                     -7-                                                              7332

----------------------- Page 8-----------------------



          A.	       Fannon  Did  Not  Preserve  His  Argument  That  The  Greenbelt  


                    Covenant Is Ambiguous.  


                    Fannon argues that the Greenbelt Covenant is "susceptible to multiple  


interpretations":  one requiring courts to construe its provisions against the free use of  


land; another "allowing the owner of Lot 1, Block 1, to develop and grow the water  


system and distribution." Fannon contends the superior court erred by failing to identify  


this ambiguity and "determine the scope and meaning of the full agreement in light of  


all available evidence."  


                    But Fannon did not preserve this argument; he failed to properly raise it  


before the superior court.  He made this argument only in his opposition to the estate's  


motion for reconsideration of a discovery order. The court rejected the argument in that  


context.  This was not error, as a court is not required to consider an issue raised for the  

                                                                                 7  Because Fannon failed to make  


first time in the context of a motion for reconsideration. 

this  argument  at  any  other  point  unrelated  to  the  motion  for  reconsideration,  the  


argument is forfeited, and we do not need to consider it on appeal.  


          B.	       TheGreenbeltCovenantDoes Not Conflict WithTheDeclaration, And  


                    Fannon's  Other  Arguments  About  The  Greenbelt  Covenant  Lack  



                    Fannon  contends  that  because  June  added  the  Greenbelt  Covenant  


"unilaterally," and because the Covenant benefits a residence outside the subdivision at  


the  expense  of  the  subdivision's  commercial  purpose,  the  Greenbelt  Covenant  is  


incompatible and conflicts with the Declaration's express intent.  But we see no error in  


the superior court's interpretation of the interaction between the two covenants, nor its  


          7         See McCarter v. McCarter, 303 P.3d 509, 513 (Alaska 2013) (holding  


argument raised for first time in motion for reconsideration waived).  


                                                              -8-	                                                           7332  

----------------------- Page 9-----------------------

conclusion   that   they   are   compatible.     "Where   the   language   of   a   covenant   is   not  

ambiguous, the plain meaning governs."                                                                         8  

                                     The superior court, after concluding that no ambiguity existed in either the  


Declaration or the Greenbelt Covenant, appropriately limited its analysis to the plain  


meaning of both covenants.9  The Declaration's text does not delineate an "express intent  


to limit the subdivision to commercial use only," as Fannon contends.  The Declaration  


makes clear that the subdivision is non-residential, but it does not prohibit a lot's use as  


a  greenbelt.                           Nor  does  the  Declaration  emphasize  that  courts  should  construe  the  


document's  intent  to  maximize  each  lot's  commercial  productivity.                                                                                                                               Perhaps  most  


significantly, the Declaration does not reference the water system on Lot 1, Block 1 at  


all, or place any mandates on its use or disuse.  


                                     We further conclude, contrary to Fannon's contention that the Greenbelt  


Covenant and the Declaration are incompatible, that the Greenbelt Covenant does not  


conflict with the Declaration. By its plain language, the Greenbelt Covenant merely adds  


a new restriction on Lot 1, Block 1 - a restriction on which the Declaration is silent.  


                  8                 HP Ltd. P'ship                            , 270 P.3d at 729 (quoting                                               Hurst, 59 P.3d at 278).                          

                  9                  See id.            at 729 ("Covenants are construed within their own four corners."                                                                              

(quoting Hurst, 59 P.3d at 278)); 20 AM. J   UR. 2                                                                             D  Covenants, Etc.                                170 (2015) ("Where                  


the language of a restrictive covenant is plain and unambiguous, a court is limited to                                                                                                                                                 

applying   the   words   of   the   agreement   and   is   prohibited   from   considering   extrinsic  

evidence regarding the parties' intent . . . .").                                                             

                                     Fannon argues that the superior court erred by granting the estate's motion                                                                                                          

for reconsideration and denying his motion to compel the estate's attorney's deposition.                                                                                                                                                        

But extrinsic evidence like the information Fannon sought in the deposition - details                                                                                               

about   the   Declaration's   drafters'   intent   -   is   irrelevant   because   the   Declaration  is  

unambiguous.   See HP Ltd. P'ship                                                            , 270 P.3d at 729. We thus see no error in the superior                                                                   

court's determination                                         that the deposition                                     was   "not reasonably calculated                                                           to   lead   to  

admissible evidence," and we do not reach Fannon's remaining arguments about the                                                                                                                                                    

estate's waiver of the attorney-client privilege.                                                     

                                                                                                                   -9-                                                                                                          7332

----------------------- Page 10-----------------------

The Greenbelt Covenant does not require that other lots in the subdivision also preserve                                                 

tree   cover   nor   does   it   grant   the   purchaser   of   Lot   1,   Block   1   "rights   .   .   .   that   are  

                                                                                                         10   It also does not lift the  

inconsistent with rights granted earlier" in the Declaration.                                                                              

Declaration's prohibitions on building a junkyard, residence, liquor store, or church, and  


is therefore not in contravention of the Declaration.  


                       Fannon's argument that the Greenbelt Covenant "dooms" other property  


owners to an eventual loss of their water supply and "is completely antithetical" to the  


subdivision's commercial purpose is belied by the plain text of the covenant.   The  


Greenbelt Covenant allows for "use as a greenbelt and use for continued maintenance  


and operation of the water system located thereon." (Emphasis added.)  Any owner of  


Lot 1, Block 1 may do what is reasonably necessary to prevent the well from falling into  


disrepair or dysfunction and continue the subdivision's enterprises.  


                       Fannon's  argument  that  the  Greenbelt  Covenant  is  void  because  it  


constitutes a "unilateral revision to [a] common plan or general scheme of development"  


is unavailing.  The Greenbelt Covenant does not amend, modify, or conflict with the  


Declaration.  And June's putative intent to benefit property outside the subdivision is  


irrelevant; a covenant is not invalid simply because it confers benefits upon a third party  


- in this case, the estate and future owners of the Blodgett Lake residence.11   That June  


            10         See  1R     ESTATEMENT  (THIRD) OF  PROP.: S                         ERVITUDES   4.12 (AM.L                    AW  INST .  


2000) ("Except as enabled by operation of a recording act, the creator of [a] servitude  


lacks the power to grant rights to later purchasers that are inconsistent with rights granted  



            11         See 1 R      ESTATEMENT  (THIRD)  OF  PROP.: S                         ERVITUDES   2.6 (A               M. L   AW  INST .  



2000) (noting "the benefit of a servitude may be granted to a person who is not a party  


to the transaction that creates the servitude"); see also cmt. e. (stating "the parties to a  


transaction creating a servitude may freely create benefits in third parties, whether the  


servitude is a covenant, easement, or profit").  

                                                                        -10-                                                                  7332

----------------------- Page 11-----------------------

personally benefitted from a restriction placed on her own property does not invalidate                                                                                                                                                                                                                                                             

the Greenbelt Covenant or place it in conflict with the Declaration.                                                                                                                                                                                                                                         

                                                           We   conclude   that   the   Greenbelt   Covenant   does   not   conflict   with   the  


Declaration, and we affirm the superior court's summary judgment ruling.                                                                                                                                                                                                                                                                           

V.                            CONCLUSION  

                                                            The superior court's decision is AFFIRMED.  


                              12                           Fannon asserts in his points on appeal that the superior court erred by                                                                                                                                                                                                                                                 

enjoining   him   from   engaging   in   further   activities  inconsistent   with   the   Greenbelt  

Covenant "without delineating                                                                                                           what futureuse,maintenanceor modification to the water                                                                                                                                                                          

 system is allowed under the injunction."                                                                                                                                            Fannon makes only a vague reference to this                                                                                       

line of argument in his opening brief, claiming that the injunction prohibits him from                                                                                                                                                                                                                                                                                    

"work[ing] on" or "repair[ing]" the water system.                                                                                                                                                                                        Because he failed to develop the                                                                                                        

argument in his brief, we will not consider it on appeal.   See Petersen v. Mut. Life Ins.  

 Co. of N.Y.                                     , 803 P.2d 406, 410 (Alaska 1990) ("Where a point is not given more than a                                                                                                                                                                                                                                                                

cursory statement in the argument portion of a brief, the point will not be considered on                                                                                                                                                                                                                                                                                            

appeal."). Even had Fannon developed this argument in his opening brief, we agree with                                                                                                                                                                                                                                                                                      

the superior                                             court that the questions he raised                                                                                                                             in his clarification                                                                    request  were not   

properly before the superior court, and it thus would be improper to consider them on                                                                                                                                                                                                                                                                                               

appeal.   See Harvey v. Cook, 172 P.3d 794, 802 (Alaska 2007) ("[I]ssues not properly  

raised in the trial court will not ordinarily be considered on appeal.").                                                                                                                                                                                                

                                                                                                                                                                                       -11-                                                                                                                                                                                7332

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