Thursday, April 13, 2006
Bob Bennie Investments prevails on appeal against Design Data and Old Cheney LLC's claim for additional contributions for 14th & Old Cheney office park's upkeep; Appeals court agreed with Lancaster County District Court that BobBennie and Design Data had an equal say in the development's upkeep Bob Bennie Properties v. Design Data (Not Designated for permanent publication) Filed April 11, 2006. No. A-04-1096. Appeal from the District Court for Lancaster County: Steven D. Burns, Judge. Affirmed in part as modified, and in part reversed. Design Data CEO Jim Dager developed area around 14th & Old Cheney in Lincoln for an office park. Bob Bennie Investments acquired some property for an office building. Originally the development's association bylaws gave each lot owner one vote over association business (3 lots total) and required a 2/3 vote of the owners to approve changes. On its own Design Data amended the bylaws to charge association upkeep by the owners' square footage, which increased Bennie's costs considerably. further the Association charge Bennie a 10% surcharge for overall Association costs and required upkeep of a golf hole. Bennie sued in Lancaster County District court and the trial court finds the amendments were invalid because each party had an equal say in agreeing to amendments. The appeals court further reverses in favor of Bennie however on the common area and golf hole issue, finding the Association could not charge him for its upkeep nor for the gross associations cost. (here there were) only two lot owners, not three, and construing section 31 to mean that Design Data can amend the covenants merely because it still owns two of the three lots would in essence make the temporary voting rights set out in section 5 meaningless. Section 5 does not grant Design Data one vote per lot; rather, it limits Design Data to one vote regardless of whether one or two lots remain unsold. Similarly, the lack of provisions about subsequent owners does not make the covenants ambiguous. Rather, as discussed above, the covenants read as a whole show that section 5 should be given its plain meaning, which is that Design Data and BBP are each entitled to one vote in the Association until Design Data sells one of the two remaining lots to an unrelated party. Any other construction would contradict the plain meaning of the covenants read as a whole. we find that Design Data's amendments breached the restrictive covenants and that the amendments have no force or effect. We also find that the Association is obligated to pay for the costs to maintain the golf hole located on Lot 2 and for the costs to maintain the area within 15 feet of each building. We reverse the portion of the court order assessing BBP a 10-percent overhead charge on all of the Association's maintenance costs, given that such assessment is not supported by the record. In all other respects the judgment is affirmed as modified.
Posted by stan_sipple at 2:46 PM