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[U] The First Wimmerton Community Association, Inc. v. Lynch

Superior Court of Pennsylvania

September 25, 2013



Appeal from the Order July 2, 2012 In the Court of Common Pleas of Westmoreland County Civil Division at No(s): 2710 of 2011




The instant appeals involve the application and enforceability of restrictive covenants contained in the Declaration of Covenants and deeds to property located in Wimmerton Community ("Community"), a planned community in Unity Township. The First Wimmerton Community Association, Inc. ("Association") commenced this action seeking to enjoin Sean M. Lynch and Lynn O'Hara ("Property Owners") from installing an in-ground pool and fence on their property. The trial court granted summary judgment in favor of Property Owners and denied injunctive relief to the Association. The Association appealed, and the Property Owners also appealed and challenge that portion of the trial court's holding that the restrictive covenants were applicable to their property.[1] After thorough review, we vacate the order granting summary judgment and remand for further proceedings consistent herewith.

The record reveals the following. In 1972, the Saint Vincent Arch Abbey and Benedictine Society of Westmoreland County conveyed approximately 1, 000 acres of land contiguous to St. Vincent College to Wimmer Corporation ("Wimmer"), a 501(c)(3) land trustee. Wimmer was charged with managing, selling, and developing that property. Deposition, Fr. Edward V. Grinder, at 14. ("Grinder Deposition"). That same year, Wimmer and National Development Corporation ("NDC") entered into an agreement to develop that land as a planned community known as the "Wimmerton Community, " which was "designed to enhance the value of the land and of the area" and "to increase the quality of living standard and the quality of housing available in Unity Township." Id. at 26-7. On March 12, 1974, the entities amended their agreement because Wimmer was in the process of purchasing another 1, 000 acres from the Benedictine Society of Westmoreland County. Wimmer subsequently acquired that real estate on April 6, 1974, and the parties wanted to include the new property within the Community. The agreement recited that Wimmer and NDC wished to pursue the development of this property and conferred right of access upon NDC for purposes of studies, surveys, and test borings, and all plans were subject to Wimmer's approval. Wimmer agreed to lease other portions of the property to NDC from time to time to permit development as per the terms set forth in the agreement. The agreement also provided that Wimmer could terminate the agreement, and in that event, all drawings, maps, and other descriptive materials would become Wimmer's property.

On January 8, 1975, NDC, as the Declarant, joined by Summit Associates, a Pennsylvania limited partnership, entered into a Declaration of Covenants for Wimmerton. According to Fr. Edward V. Grinder, this document "established the rules, the covenants, by which Wimmer was willing to sell the land to individuals through the developer[, ]" and it was approved by the board of directors of Wimmer. Grinder Deposition, at 22-3. It is recited therein that the Declarant NDC, "the owner and/or lessee of real property described in Article II, " desired to create a residential community with common areas and facilities for the benefit of the community.[2] In order to provide for the "preservation of the value, amenities, and environmental quality in said community" and for the maintenance of common areas and facilities, it desired to subject the property to covenants and restrictions. According to Fr. Grinder, the intent was that, as NDC needed more land, Wimmer would supply it, and "the covenants were to bind all of the properties involved in the Wimmerton development." Id. at 31. Exhibit A described the land expressly governed by the covenants in the Declaration. Exhibit B referred to the reserve area owned by Wimmer, which could "from time to time be annexed by the Declarant, its successors and assigns, and made subject hereto without the consent of members for a period of 20 years from the date of this instrument." Declaration, Article II, Section 4.

The Declaration also provided for the creation of an association, a nonprofit corporation imbued with the power and responsibility for maintaining the common areas and community facilities and enforcing the covenants and restrictions. It provided further that, since Wimmer as the fee owner or lessor of the property, "has a continuing interest in the preservation of the value, amenities, and environmental quality of the community, " Declaration, at 2, "the property was subject to the superior interest of Wimmer Corporation to be sold, leased, used . . . subject to the covenants and restrictions, all of which are deemed to run with the land." Id. at 3.

The parties agree that the Shenandoah Street property owned by Property Owners and which is located in Plan 7 is described in Exhibit B and included within the plan for Wimmerton Stage I. Article II, Section 4 provides that the land described in Exhibit B "may from time to time be annexed by Declarant, its successors and assigns, and made subject hereto without the consent of Members for a period of twenty (20) years from the date of this instrument[, ]" provided the annexation is in accordance with the development plan previously approved by the FHA and includes premises included within the general plan for Wimmerton Stage I. It provides further that supplemental declarations of annexation should be used to add property to the scheme of covenants.

By virtue of the Declaration of Covenants, the owners of the lots acquire a "right and easement of enjoyment" in the common areas and facilities, Article IV, Section 1, but retain all responsibility for the maintenance and repair of their dwellings and appurtenances in good order, condition, and repair. The covenants required that homeowners apply to the Association's Architectural and Environmental Control Committee ("Committee") for permission to alter or make any improvement to their property, including fences and walls.

In the mid to late 1980s, NDC and Wimmer were involved in a dispute that progressed to litigation over the 1974 Amended Agreement for the development of the Community. According to Fr. Grinder, the dispute stemmed from NDC's 1984 failure to meet its contractual obligation to Wimmer to generate $100, 000 in rental income. Id. at 36. Wimmer informed NDC that its right of access to the land was terminated, and NDC sued Wimmer, claiming rights independent of the agreement. After protracted litigation, the parties entered into a Final Settlement Agreement in 1989, which Fr. Grinder signed in his capacity as President of Wimmer. In exchange for Wimmer's payment of $100, 000 and two $50, 000 promissory notes to NDC, NDC promised to deliver all of the development plans and assigned all of its rights and interest in the wastewater tap-ins for the entire development, "not just Plan 6, not just Plan 7, but all of the plans yet to be developed, " to Wimmer. Grinder Deposition, at 42.

Paragraph 8 of the settlement agreement provided that NDC would deliver the development plans and authorize its architect and engineer to deliver to Wimmer the plans and "as built" drawings for the community. According to Fr. Grinder, this language indicated that Wimmer purchased, and NDC assigned, the right to develop the property, and explained why Wimmer identified itself as NDC's successor. Id. at 43. At the time, Wimmer was the owner of all lots in Plan 7, the Plan was filed and recorded, and Wimmer was paying taxes on those lots. Id. at 66.

On January 6, 1995, Wimmer, "in its own right and as the successor to the rights of National Development Corporation" entered into a Supplemental Declaration of Annexation of Wimmerton Plan No. 7, which was subsequently recorded on January 17, 1995. The restrictive covenants appear in all successive deeds, including the deed transferring ownership from Paul Berger General Contracting, Inc. to Property Owners on August 15, 2003.

In 2009, Property Owners applied to the Committee for permission to install an in-ground pool and fence on their Shenandoah Street property located in subdivision Section 7. The application was denied without explanation. In 2011, the Committee learned that Property Owners had applied for a building permit from Unity Township to install an in-ground pool on their property. The Association notified Property Owners that no improvement or structures could be erected on their property until the plans had been submitted and approved by the Committee. Counsel for Property Owners responded that they did not intend to submit plans and specifications because an application had been submitted and denied in 2009, and it would be futile to re-submit the same request. Instead, Property Owners intended to proceed with the swimming pool.

The Association filed a complaint against Property Owners on April 26, 2011, seeking equitable relief to enforce the restrictive covenants in the Declaration governing their property and enjoin installation of the swimming pool and appurtances. The Association alleged therein that a swimming pool was an "outbuilding" prohibited under Article VIII, Section 1(k) of the Declaration of Covenants for Wimmerton dated January 8, 1975, and recorded in the Recorder of Deeds Office of Westmoreland County. Furthermore, the Property Owners' decision to go forward without approval from the Committee was allegedly a violation of the covenant contained in Article VII, Section 2 of the Declaration. On May 6, 2011, the Association filed a motion for preliminary injunction asking the court to enjoin installation of the pool and preserve the status quo pending adjudication of its claims.

On the same day the complaint was filed, Property Owners filed an application for architectural and property improvements with the Committee, requesting permission to install an in-ground pool and a retaining wall and fence connected with brick pillars.[3] They subsequently filed an Answer and New Matter to the Association's complaint alleging that the covenants were not applicable to their property as Plan 7 was never properly annexed to the Declaration of Covenants. Alternatively, Property Owners contended that, even if the covenants were applicable, the restrictions contained therein did not prohibit installation of an in-ground swimming pool, and the Association could not act arbitrarily and capriciously by denying such use in the absence of any direct harm to the Association or other homeowners.

On November 30, 2011, Property Owners filed a motion for summary judgment alleging that "no genuine issue of material fact existed with respect to the [Association's] cause of action, particularly the applicability of the Declaration of Covenants to [Property Owners'] Plan 7 lot and the treatment of in-ground swimming pools by the covenants." Motion for Summary Judgment, ¶1. On March 6, 2012, the trial court entered an order giving the Association sixty days to conduct discovery or supplement the record in support of its position that Wimmer was the successor in interest to NDC under the covenants.

The Association deposed Fr. Grinder and subpoenaed documents from the corporation, including the Final Settlement Agreement, upon which Wimmer based its claim to be the successor of NDC. Wimmer intervened in the action and filed a brief in opposition to summary judgment, asserting it "has an interest in the enforcement of the Restrictive Covenants by virtue of the fact that it is the owner of the remaining tracts of land adjacent to the Wimmerton Community and the enforcement of the Restrictive Covenants is consistent with the development of the Wimmerton Community that has taken place to date." (Wimmer Corporation's Brief in Opposition to Motion for Summary Judgment, at 1).

The trial court concluded that the Declaration was applicable to the Property Owners' property, but that an in-ground swimming pool was not a prohibited "outbuilding." Since it was not prohibited, the court found that no Committee approval was required prior to its installation and denied equitable relief to the Association.

The Association first sought reconsideration, which was denied. It then filed an appeal to this Court at No. 1206 WDA 2012. On November 13, 2012, Property Owners filed the appeal at No. 1243 WDA 2012 from the trial court's ruling that the Declaration of Covenants was applicable to their property. The appeals were consolidated for our review.[4]

The Association presents three questions for our review:
1. Whether the lower court erred in granting Appellees summary judgment as to The First Wimmerton Community Association, Inc.'s claims for breach of Article VII of the Declaration of Covenants because The First Wimmerton Community Association, Inc.'s Architectural and Environmental Control Committee denied Appellees' Application for Architectural and Property Improvements on seven (7) grounds?
2. Whether the lower court erred in granting Appellees summary judgment as to The First Wimmerton Community Association, Inc.'s claims for breach of Article VII of the Declaration of Covenants because Appellees refused to appeal The First Wimmerton Community Association, Inc.'s Architectural and Environmental Control Committee's denial of Appellees' Application for Architectural and Property Improvements to the Board of The First Wimmerton Community Association, Inc., thereby rendering the Committee's decision final?
3. Whether the lower court erred in granting Appellees summary judgment as to The First Wimmerton Community Association, Inc.'s claims for breach of Article VIII of the Declaration of Covenants because the Declaration of Covenants prohibits swimming pools?

Association's brief at 4.

Property Owners raise one issue:
Did the trial court err in holding that, even though the Declarations prohibit anyone, except the developer, from annexing property without an express assignment of authority, annexation by an unauthorized third party was valid simply because that party "intended" it to be?

Property Owners' Brief at 5.

In reviewing the grant or denial of preliminary injunctive relief,
our review of a trial court's order granting or denying preliminary injunctive relief is "highly deferential". Summit Towne Centre, Inc. v. Shoe Show of Rocky Mount Inc., 573 Pa. 637, 828 A.2d 995, 1000 (Pa. 2003). This "highly deferential" standard of review states that in reviewing the grant or denial of a preliminary injunction, an appellate court is directed to "examine the record to determine if there were any apparently reasonable grounds for the action of the court below." Id. n7. We will find that a trial court had "apparently reasonable grounds" for its denial of injunctive relief where the trial court has properly found "that any one of the following 'essential prerequisites' for a preliminary injunction is not satisfied." Id. at 1002.

Warehime v. Warehime, 860 A.2d 41 (Pa. 2004). In reviewing the grant or denial of a final or permanent injunction, we are limited to determining whether the trial court committed an error of law, as a "permanent injunction will turn on whether the lower court properly found that the party seeking the injunction established a clear right to relief as a matter of law. This inquiry involves a legal determination by the lower court." Buffalo Township v. Jones, 813 A.2d 659, 664 n.4 (Pa. 2002), cert. denied, 540 U.S. 821 (2003).

The law is well settled that "summary judgment is appropriate only in those cases where the record clearly demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Atcovitz v. Gulph Mills Tennis Club, Inc., 812 A.2d 1218, 1221 (Pa. 2002); Pa. R.C.P. No. 1035.2(1). When considering a motion for summary judgment, the trial court must take all facts of record and reasonable inferences therefrom in a light most favorable to the non-moving party, and any doubt as to the existence of a genuine issue of material fact must be resolved against the moving party. Toy v. Metropolitan Life Ins. Co., 928 A.2d 186, 195 (Pa. 2007). Summary judgment is only appropriate "where the right to such judgment is clear and free from all doubt." Id.

This Court may reverse a grant of summary judgment only if the trial court erred as a matter of law or abused its discretion. The question of whether there are genuine issues as to any material fact presents a question of law, and therefore, on that question our standard of review is de novo, and we need not defer to the determinations of the trial court. Weaver v. Lancaster Newspapers, Inc., 926 A.2d 899, 902-03 (Pa. 2007) (internal citations omitted). To the extent that this Court must resolve a question of law, we shall review the grant of summary judgment in the context of the entire record. Id. at 903. Summers v. Certainteed Corp., 997 A.2d 1152 (Pa. 2010).

The errors alleged by the Association involve the trial court's construction and application of covenant language to the proposed in-ground swimming pool. Property Owners challenge the trial court's finding that the Declaration of Covenants applies to their property. Since this latter issue, if meritorious, would render the Association's issues moot, we address that claim first.

In the instant case, there is no question that Property Owners had notice of the restrictive covenants prior to their purchase of the property; the Declaration and supplemental declaration were recorded and the deed referenced the restrictions. See 21 P.S. § 351, the Pennsylvania Recording Act of May 12, 1925 (providing that "in order to bind a successor in title to a restrictive covenant, the successor must have actual or constructive notice unless such deed, conveyance, contract, or instrument of writing shall be recorded"). Property Owners contend, however, that the Declaration expressly excluded the property described in Exhibit B, a portion of which subsequently became their property. While the property listed on Exhibit B could be annexed to the Declarations, that document provided that only the NDC, or its successor or assign[5] could file supplemental annexation. According to Property Owners, the NDC never assigned its right to Wimmer to annex the property to the Declarations and Wimmer was not a successor. Thus, according to Property Owners, Wimmer had no authority to file an annexation of Plan 7, "in its own right and as a successor to the rights of NDC, " two days before the twenty-year annexation term expired. Supplemental Declaration of Annexation of Wimmerton Plan No. 7, at 1.

Property Owners rely upon our decision in Burns v. Baumgardner, 449 A.2d 590 (Pa.Super. 1982), for the proposition that the recital in a deed that the property is "subject to" the restrictions of "the Declaration of Covenants for Wimmerton dated January 8, 1975 and recorded in Deed Book Volume 2178, page 882, " is not valid if the restrictions do not otherwise apply. Property Owners' brief, at 21. Property Owners maintain that, since Wimmer had no authority to annex Plan 7 to the Declaration, the annexation was invalid. Therefore, any language in the deeds purporting to subject their property to the restrictions in the Declaration has no legal effect and is unenforceable.

In Burns, the four owners of a 175-acre tract recorded a declaration of restrictive covenants pertaining to certain lots in phase I of a planned community. Among other restrictions, the declaration provided that only detached single-family dwellings could be constructed on the lots. A year later, a plan for phase II of the community was prepared and recorded and an identical declaration of building restrictions was imposed upon those lots. Five years later, two of the owners conveyed their interest in the remaining tract to their co-owners, and the deed stated that the conveyance was "subject to" the restrictions set forth in the recorded declaration of covenants. Thereafter, another declaration of restrictive covenants was executed for another parcel that did not contain the "detached single-family dwelling[s]" restriction. The Burnses intended to build townhouses on nine lots that were not expressly included within the declarations, but the deeds conveying those lots contained language that they were "subject to" the declarations.

This Court held that the trial court erred when it inferred that building restrictions applicable to a portion of the tract applied to the entire tract merely because the deed conveying the property contained a "subject to" clause referring to those restrictions. We found that provision to be merely "an acknowledgement that building restrictions existed with respect to a portion of the tract. It did not create new restrictions or expand existing restrictions to unencumbered portions of the tract." We held that the "subject to" language in the deed did not make the covenants applicable when the declaration itself did not apply.

Property Owners contend that under the rationale in Burns, supra, the restrictive covenants do not apply to their property because the Declaration expressly did not apply to Plan 7 and the supplemental annexation was undertaken without authority. The Association counters that Burns is inapposite and that authority was conferred upon Wimmer as successor to NDC in the 1989 Final Settlement Agreement between those entities. Furthermore, as the owner of the lots in Plan 7 and a party-in-interest to the Declarations, Wimmer had both the right to restrict the use of its property and the intention to bind those lots to the covenants in the Declarations. The fact that Wimmer filed and recorded the supplemental annexation prior to conveying those lots clearly indicated that it intended the covenants to apply.

The trial court found that while the Final Settlement Agreement between NDC and Wimmer in 1989 did not contain an express, written assignment or transfer of NDC's rights with respect to the Declaration, Wimmer had the authority to execute Supplemental Annexation binding Plan 7 lots to the Declaration. We agree. Wimmer, by virtue of the final settlement agreement terminating the development agreement with NDC, acquired the development rights formerly held by NDC. As its successor, Wimmer, the owner and developer of the property, executed the Supplemental Annexation with the stated purpose of ensuring "that owners of lots in said plan shall be bound by and entitled to the benefits of the Declaration of Covenants as aforesaid." Wimmer subsequently conveyed that property by deeds subject to the restrictions set forth in the Declaration. In contrast to Burns, the restrictions herein referenced in the deeds did, in fact, exist.

Having concluded that the Plan 7 lots were properly annexed to the Declaration of Covenants, we turn to the issues raised by the Association. First, the Association contends that the trial court erred in finding that the proposed in-ground swimming pool was not prohibited under Article VIII, section 1(k) of the covenants entitled, "Prohibited Uses and Nuisances." That provision states that "[n]o structure of a temporary character, and no trailer, tent, shack, barn, pen, kennel, run, stable, outdoor clothes dryer, playhouse shed, or other outbuildings shall be erected, used or maintained on any Lot at any time." The Association contends that the trial court erred in failing to construe the term "outbuilding" as including any man-made structure. Furthermore, it argues that the litany of other exclusions "evidences a firm intention on the part of the drafters of the Covenants to specifically exclude the installation and erection of accessory structures within the Wimmerton Development unless specifically permitted elsewhere therein." Association's Brief at 16.

The Property Owners counter that the absence of swimming pool in the Declaration, or in the lengthy and detailed list of prohibited outbuildings, is a strong indication that it was not intended to be prohibited. Furthermore, they contend that a swimming pool, while a familiar term, is not generally included in the definition of outbuilding. Since restrictive covenants are not favored and must be strictly construed against the person seeking to enforce them, Property Owners submit that the term "outbuilding" cannot be enlarged by implication to include a swimming pool.

While the law does not favor restrictions on an owner's free use and enjoyment of real property, restrictive covenants are legally enforceable. Vernon Twp. Volunteer Fire Dep't, Inc. v. Connor, 855 A.2d 873 (Pa. 2004). However, they are to be strictly construed against persons seeking to enforce them and in favor of the free and unrestricted use of property. Baumgardner v. Stuckey, 735 A.2d 1272, 1274 (Pa.Super. 1999). As with contracts generally, the interpretation is a question of law for the Court, Currid v. Meeting House Restaurant Inc., 869 A.2d 516, 519 (Pa.Super. 2005), and the intention of the parties generally controls. Baumgardner, supra.

In our recent decision in Pocono Summit Realty, LLC v. Ahmad Amer, LLC, 52 A.3d 261, 269 (Pa.Super. 2012), we held, "In order to ascertain the intentions of the parties, restrictive covenants must be construed in light of: (1) their language; (2) the nature of their subject matter; (3) the apparent object or purpose of the parties; and (4) the circumstances or conditions surrounding their execution." When the restrictive covenant is unambiguous, we are confined to the covenant itself. When "ambiguity exists, every doubt and ambiguity in a restrictive covenant's language will be resolved in favor of the owner." Id. quoting Jones v. Park Lane for Convalescents, 120 A.2d 535, 537-38 (Pa. 1956).

The trial court applied the rule of ejusdem generis in construing the covenant. That rule provides that "when a general word or phrase follows a list of specific persons or things, the general word or phrase will be interpreted to include only persons or things of the same type as those listed." Black's Law Dictionary, (7th edition 1999) at 535. Since "the phrase 'other outbuildings' followed 'trailer, tent, shack, barn, pen, kennel, run, stable, outdoor clothes dryer, and playhouse shed, '" which the court characterized as 'small above-ground structures' that could be considered 'eyesores in a manicured, residential, development of well-maintained . . . homes, '" it concluded that a swimming pool did not fit within the definition. Trial Court Opinion, 7/2/12, at 7.

We agree with the trial court's conclusion that a swimming pool is not an outbuilding under Article VIII, Section 1(k). Such a term generally connotes small buildings and structures, and the list of examples is consistent with that definition. Furthermore, had it been the intention of the parties to the Declaration to prohibit in-ground swimming pools, one would expect it to have been specifically listed well before kennels and stables. The court then concluded, however, that, since a pool was not prohibited, Property Owners were not required to submit their request to install such a pool to the Committee for written approval. The court did not address the Association's additional contention that failure to seek and obtain Association approval for the pool, fence, and retaining wall was a breach of Article VII, Section 2 of the Declarations. That section provides that no improvements can be erected on property within the community "until such complete plans and specifications showing the precise and exact nature, kind, shape, height, set-back, materials, color and location of the same" are submitted to the Committee and approved. Article VII, Section 2. Complaint paragraph 10. The Association alleged that Property Owners' refusal to adhere to this requirement constituted a breach of the Declaration. Id. at ¶27.

Property Owners do not argue that the proposed pool, fence, and retaining wall are not improvements to their property subject to Committee approval under Article VII, Section 2. There is considerable Pennsylvania authority upholding covenants that require approval of plans and specifications before construction. See Harmon v. Burow, 106 A. 310 (Pa. 1919). The Harmon Court held that such "a covenant is a contract made by the parties that runs with the land; its evident purpose is to add to the desirability and value of the lots in the plan and protect all the purchasers of said lots." Id. at 310-11. As Property Owners point out, however, a property association's denial of permission to undertake an improvement cannot be capricious or unreasonable in light of the circumstances and the purpose of the restriction. Estate of Paul Arthur Hoffman, et al. v. Gould, 714 A.2d 1071 (Pa.Super. 1998).

The same day the Association filed the Complaint commencing this action, Property Owners filed an application, their second, seeking approval of the swimming pool, retaining wall and fence. Thus, Property Owners did not contravene the covenant requiring that they seek Committee approval prior to undertaking any improvement to their property. Two months later, and while this action was pending, the Committee rejected the application, citing seven reasons for the denial. Thus, on the current state of the record, Property Owners proposed improvements have not received the approval necessary to comply with the covenants.

Property Owners contend that the denial was arbitrary and capricious. The Association counters first that, since Property Owners did not appeal the denial to the Board, the Committee's decision was final. It equates this conduct to a party's failure to exhaust contractual or administrative remedies. The Property Owners point out that the Association commenced the within action, not Property Owners. Furthermore, the Declaration provides that "an aggrieved property owner may appeal the decision to the Board and, upon the written request of such Owner, shall be entitled to a hearing before the Board[, ]" not that such an appeal is required. Declaration, Article VII, Section 6.

We agree with Property Owners. Appeal to the Board was optional, not mandatory. In light of the fact that the Association had already commenced this civil action to enjoin construction of the pool, such an appeal was futile. Furthermore, Property Owners cannot be charged with failure to exhaust all contractual remedies when it was the Association, not Property Owners, which initiated legal proceedings. This claim fails.

By letter dated January 22, 2012, counsel for the Association conveyed to counsel for Property Owners the seven grounds for disapproving Property Owners' application. In addition to stating that the pool was a prohibited outbuilding, the Association maintained that it also did not qualify as an extension of the existing patio. It found that the fence was not in conformity with the Community's "open design concept, " and that there would be safety issues with an unfenced pool. Furthermore, a private pool was contrary to the open design concept of the Community, as exemplified by the Association's construction of a community pool in the common area. Finally, the application failed to indicate whether the proposed pool would interfere with easements for utilities or whether it would obstruct drainage channels to the detriment of adjacent property owners.

Property Owners counter that the Association's rejection of their application was arbitrary and capricious. They rely on the trial court's finding that the pool is not a prohibited outbuilding, and hence, it is of no consequence that it is not an extension of the existing patio. Additionally, Property Owners aver that the Association's denial premised on violation of the "open concept" of the Community is unreasonable where such a concept is neither defined nor articulated in the Declaration of Covenants. Furthermore, Property Owners point to the fact that fences are permitted with Committee approval as conclusive that a fence is not per se violative of any open design concept. Moreover, Property Owners contend that the Committee need only refer to the Unity Township construction permit to verify that the proposed improvements do not interfere with easements or storm water runoff. Finally, Property Owners assert that any alleged harm to the Association from their proposed in-ground swimming pool "pale[s] in comparison to this infringement" of their full use and enjoyment of their property. Property Owners' brief at 13.

The proper issue is whether the Association's rejection of Property Owners' application to build an in-ground pool, fence, and retaining wall was arbitrary and capricious. We find the record was factually incomplete to make such a determination. Hence, summary judgment is improper and further proceedings are necessary to resolve this dispute.

In conclusion, we agree with the trial court's finding that the Plan 7 lots, including Property Owners' property, were properly annexed to the Declaration of Covenants, and hence, the restrictions were applicable. Additionally, we affirm the court's finding that an in-ground swimming pool and fence is not prohibited by those covenants. We must vacate the order granting summary judgment, however, because the trial court erroneously concluded that since the proposed improvement was not prohibited, no prior Committee approval was required. Consequently, the court did not reach the issue of whether the Committee's denial of Property Owners' application was arbitrary and capricious, and we find genuine issues of material fact that preclude the grant of summary judgment.

For the foregoing reasons, we vacate the order granting summary judgment in favor of Property Owners and remand for further proceedings consistent with this opinion.

Order vacated. Case remanded for further proceedings consistent herewith. Jurisdiction relinquished.

Judgment Entered.

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