An ambiguity in an item’s classification can sometimes lead to humorous discussions. For example, the late-night television host Stephen Colbert has asked two Justices of the Supreme Court of the United States whether hotdogs are sandwiches: both Justice Ginsberg and Justice Sotomayor ruled in the affirmative. And in 2006, in a dispute that was not as exciting as the headline, a court in Massachusetts held that burritos, tacos, and quesadillas are not sandwiches.
But an ambiguity in an HOA’s declaration or a condominium association’s master deed and bylaws can have real-world consequences for both an owner and the HOA or condominium association. The following case, Crestwood Homeowners Association, Inc v Pawlanta, unpublished per curiam opinion of the Court of Appeals, issued September 29, 2022 (Docket No. 359070), is an example of the tools that courts may use when interpreting ambiguous restrictions. The dissenting opinion in this case also highlights that not every judge or court will reach the same conclusion on how to interpret an ambiguous term or provision within the restrictive covenants.
Background Facts
Kathleen Pawlanta owned a lot in the Crest Wood Manor subdivision #2, which was subject to a number of restrictions, including the following:
No building or other structure shall be erected or altered or permitted on any site in the Plat of Crest Wood Manor #2 and Crest Wood Manor #3 other than one single family dwelling house with attached garage; except swimming pool, tennis court, badminton court, walls or fences and such other auxiliary construction.
Pawlanta built a shed on her lot so that she could store her snow blower and other winter items during the off-season. The HOA sent her two letters demanding that she remove the shed because the restrictive covenants prohibited structures other than single-family residences. Pawlanta refused and the HOA filed a lawsuit requesting that the court require her to remove the shed because all outbuildings were prohibited in the subdivision according to the HOA’s restrictive covenants. Pawlanta defended the lawsuit by arguing that the term “auxiliary construction” was ambiguous and unenforceable. The trial court agreed with Pawlanta’s argument and dismissed the lawsuit.
Interpreting Ambiguity in Restrictive Covenants
The HOA appealed the dismissal of the lawsuit to the Michigan Court of Appeals, arguing that the term “auxiliary construction” was not ambiguous and that the shed was not an auxiliary construction permitted under the restrictive covenant. The Court began its analysis of the issue by discussing how restrictive covenants are interpreted and enforced:
Unambiguous restrictive covenants “must be enforced as written.” Johnson Family Ltd Partnership v White Pines Wireless, LLC, 281 Mich App 364, 389; 761 NW2d 353 (2008). A contract is ambiguous if its language may be reasonably understood in two or more different ways. Edmore v Crystal Automation Sys Inc, 322 Mich App 244, 262; 911 NW2d 241 (2017). “[T]he language employed in stating the restriction is to be taken in its ordinary and generally understood or popular sense, and is not to be subjected to technical refinement, nor the words torn from their association and their separate meanings sought in a lexicon.” Eager, 322 Mich App at 180-181 (quotation marks and citation omitted). See also Terrien v Zwit, 467 Mich 56, 75-76; 648 NW2d 602 (2002) (stating that a term that is not defined in a contract will be interpreted “in accordance with its commonly used meaning.”). “[A]ny uncertainty or doubt must be resolved in favor of the free use of property.” Thiel, 504 Mich at 497.
The Court then turned to the language of the restrictive covenant itself. The absence of a definition of “auxiliary construction” did not render the covenant ambiguous. Instead, the Court consulted the dictionary definitions of auxiliary and construction to define the term, and found that an “auxiliary construction” is a structure “that complements and supplements a single-family home.”
In addition to consulting the dictionary, the Court used a doctrine of contract interpretation called ejusdem generis. Under this doctrine, words in a list that refer to a common subject will be presumed to be and interpreted as following that subject. As the Court explained, “when ‘general words follow a designation of particular subjects the meaning of the general words will ordinarily be presumed to be construed as restricted by the particular designation and as including only things of the same kind, class, character or nature as those specifically enumerated.’ Rott v Rott, 508 Mich 274, 299 n 11; 972 NW2d 789 (2021).” Under the doctrine of ejusdem generis, structures that qualify as “auxiliary construction” are to be interpreted in connection with swimming pools, tennis and badminton courts, walls, and fences.
Swimming pools, tennis and badminton courts, walls, and fences complement and supplement single-family homes and do not exist without having a single-family home. The HOA also permitted, in addition to the listed structures, owners to build dog kennels, playhouses, firewood storage structures, and structures that attached to the single-family residence. A shed used to store a snowblower and other winter items, similar to the other allowed structures, complements and supplements a single-family home. Accordingly, the Court determined that Pawlanta’s shed was an auxiliary construction allowed by the restrictive covenant.
The HOA further argued that the shed should not be allowed because it could be used for commercial purposes and was large enough to park a vehicle in, both of which were not permitted by the restrictive covenant. The Court dismissed these arguments because the shed was used to store a snowblower and winter items – there was no evidence that the shed was actually used for a commercial purpose or as a second garage.
The Dissent
One Judge agreed with the Majority’s definition of “auxiliary construction” and use of ejusdem generis, but disagreed with how the Majority applied the doctrine. The Dissent explained the disagreement:
This cannon of construction states that when construing a provision that includes a list of terms that includes a catch-all phrase, the meaning of the catch-all phrase is limited to the same kind or type of items that are in the list. Stated more plainly, the cannon would instruct that—in a list limited to apples, oranges, grapefruit, strawberries, tangerines, and ‘other foods’—the phrase ‘other foods’ would include only fruits.
Under the restrictive covenant, all buildings and other structures were prohibited unless otherwise expressly authorized. Only one type of building was authorized under the restrictive covenants: a single-family residence with an attached garage. The other list of structures that were allowed included a swimming pool, tennis and badminton courts, walls, and fences. The items in this list had the unifying characteristics as being structures as opposed to buildings. A shed is properly considered a building instead of a structure. Therefore, a shed could not properly be included as an “auxiliary structure.” Accordingly, the Dissent would have prohibited the owner from keeping the shed.
Conclusion
When an amgibuous term exists in an HOA’s governing documents, the Crestwood Homeowners Association, Inc, case shows that one way to resolve the ambiguous term is to consult a dictionary. If the ambiguous term is contained in a list, another option is to look at the unifying characteristics of the other terms in the list to see if they provide clarity. In either situation though, if the parties cannot come to an agreement on the interpretation of the restrictive covenant’s ambiguous term, a community association lawyer can assist in interpreting and resolving the ambiguity.
Michael T. Pereira is an attorney with Hirzel Law, PLC and focuses his practice on community association law. Mr. Pereira received his Bachelor of Arts in Political Science from the University of Michigan. He then obtained his Juris Doctor degree from the University of Detroit Mercy School of Law, where he graduated second in his class and served as the Executive Editor of Outside Articles on the Detroit Mercy Law Review. After law school, Mr. Pereira worked as a research attorney at the Michigan Court of Appeals before clerking for the Honorable Patrick M. Meter and the Honorable Anica Letica in the Michigan Court of Appeals. Mr. Pereira can be reached at (248) 986-2290 or mpereira@hirzellaw.com.
