Case Number: 21-2-00050-1

Judge: Bran C. Huber

Court: Superior Court, Douglas County, Washington

Plaintiff's Attorney: Honea Lee Lewis, IV

Defendant's Attorney: Seth Edward Chastain

Description: Waterville, Washington civil litigation lawyer represented Defendant sued by a homeowners' association seeking to enforce a restrictive covenant restricting vacation rental of residence for vacation.

We swim across the Columbia River from Chelan County, the situs of the land in
Wilkinson v. Chiwawa Communities Association, 180 Wn.2d 241, 327 P.3d 614 (2014),
2
to Douglas County, the location of the property in this appeal. We address the same
question resolved by the Washington Supreme Court in Wilkinson: whether a homeowner
association may amend its restrictive covenants to ban or highly regulate the use of a
residence as a vacation rental. Since we are an intermediate appellate court, we decline
to usurp our limited authority and to overrule Supreme Court precedent. We deem the
precedent controlling in this appeal brought by Twin W Owners’ Association. We affirm
the superior court’s summary judgment ruling, favoring homeowners Andrew and
Jennifer Murphy, that declared amended restrictive covenants void. We also affirm a
ruling by the superior court that awarded reasonable attorney fees and costs to the
Murphys for work incurred before the state Supreme Court.
FACTS
Twin W Owners’ Association (Twin W or homeowner association) is a
Washington nonprofit corporation that governs ninety-four properties in rustic Douglas
County. The properties oversee the prodigious Columbia River. In 2004, the homeowner
association adopted and recorded a set of covenants, conditions, and restrictions
encumbering all lots.
We quote some of the Twin W, then known as Twin WW Ranch, protective
covenants relevant to this appeal. The 2004 covenants introduce, in an initial section
labeled “preamble,” a theme of maintaining a rural character and protecting property
values:
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Twin W Owners’ Association v. Murphy
3
1.1 Sometimes there is a fine line drawn between protecting
property owners and inhibiting their life style. To fully understand the
following protective covenants, it is necessary to examine the underlying
theme or intent of Twin WW Ranch as a collection of properties: rural
living with insured [sic] quality and protected life style in the midst of
productive fruit orchards.
1.2 Twin WW Ranch lies in a rural setting offering small acreages
with a tremendous view of the Columbia River. The parcels were designed
so the purchaser could feel comfortable in building a quality home and
estate without fear of devaluation due to his neighbor’s action. In most
cases, homes lack protection and are subject to devaluation. However,
Twin WW Ranch has the ability to protect itself from devaluation and
insure increasing value for its homeowners. More importantly, these
covenants are designed to create and maintain a protected rural life style.
Clerk’s Papers (CP) at 15.
The Twin W covenants constrain, in vague terms, some uses of a lot.
2.1 Reasonable Use. No lot shall ever be used in a fashion which
unreasonably interferes with the other lot owners’ use and enjoyment of
their respective properties.
. . . .
2.4 Offensive Activities. No noxious or offensive activity shall be
carried on upon any lot, nor shall anything be done or maintained thereon
which may be, or become, an annoyance or nuisance, or adversely effect
the use, value, occupation and enjoyment of any adjoining property in the
development.
. . . .
2.12 Businesses. No store or business shall be carried on upon said
premises or permitted thereon which involves on-premises sales, or which
constitutes a nuisance.
CP at 15-18.
The 2004 restrictive covenants address administration of the homeowner
association:
No. 39299-6-III
Twin W Owners’ Association v. Murphy
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3.1 Approval. When these covenants require owner approval such
approval shall be by sixty percent (60%) vote, with one vote per lot (a
“Lot”).
3.2 Amendment. Amendment of these covenants shall be by sixty
percent (60%) vote, with one vote per Lot. Amendments shall be in writing
and recorded in the same manner as these covenants.
CP at 18. No provision expressly reserves to the homeowner association the power to
add new covenants. Finally, the 2004 covenants provide for an award of attorney fees to
a substantially prevailing party in litigation:
3.4 Enforcement. Enforcement shall be by proceedings at law or in
equity against any person or persons violating or attempting to violate any
covenant either to restrain violation or to recover damages. The
substantially prevailing party in any dispute of the enforcement of these
covenants shall be entitled to recover reasonable attorney’s fees.
CP at 19.
Enter Andrew and Jennifer Murphy. In 2007, the Murphys purchased a lot within
Twin W. In 2009, the Murphys built a $1.2 million home on the lot for the purpose of
generating income as short-term rental property.
Other Twin W homeowners complain about the rental nature of Andrew and
Jennifer Murphy’s residence. A neighbor declared that, at times, as many as twenty
people and a dozen cars have occupied the Murphys’ rental property. The large groups
have partied late and emitted loud noise into the early hours of the morning. On one New
Year’s weekend, renters exploded mortar fireworks between 1:00 a.m. and 1:20 a.m. A
call to the Murphys after the fireworks went unanswered.
No. 39299-6-III
Twin W Owners’ Association v. Murphy
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Renters of Andrew and Jennifer Murphy’s vacation rental have deposited, in the
road, garbage in excess of the residence’s garbage can’s capacity. The wind has blown
the garbage into neighbors’ lots. Murphy renters have also abandoned, on a boat dock,
full gas cans at risk of being blown into the Columbia River.
In 2020, Twin W passed, by supermajority vote, new protracted covenants
restricting and regulating short-term rentals. We quote most of the new covenants in
order to illustrate their stretched and painstaking nature:
2.21 Short-Term Rental Properties. Pursuant to Section 1.1
(Preamble), Section 1.2 (Preamble), Section 2.1 (Reasonable Use), and
Section 2.4 (Offensive Activity), the rental of Lots for periods of less than
thirty days at a time to any person (“Short-Term Rental”), other than the
rental of an accessory dwelling unit, shall be subject to the following
regulations intended to protect the other Lot owners from unreasonable
interference with their use and enjoyment of their Lots:
In order to be eligible to engage in Short Term Rental activity, a Lot
must have a completed residence constructed; no Lot without a completed
residence shall engage in Short Term Rental activity (i.e.—no renting
vacant lots, motorhomes, trailers, etc.). Commencing in 2021, prior to
renting their properties, all Lot owners desiring to use their Lot for a ShortTerm Rental shall apply to the Twin W board on or before October 15 of
the year prior to renting for permission to engage in Short-Term Rentals for
the upcoming calendar year, using an application to be provided by the
Twin W board and paying the associated processing fee.
For 2021, each applicant desiring to engage in Short-Term Rentals
shall be granted permission by the Twin W board to do so. A Lot owner
must continuously apply for a Short-Term Rental in each year, starting in
2021, or that Lot will forever lose its eligibility to be used as a Short-Term
Rental. All Lots shall forever lose their eligibility to apply to engage in
Short-Term Rentals upon a change of ownership (including a change in the
ownership of shares or units in an entity that owns the Lot) that occurs after
October 15, 2020. A Lot may also lose its eligibility to apply to engage in
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Twin W Owners’ Association v. Murphy
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Short-Term Rentals upon violation of and pursuant to the Short-Term
Rental Rules and Regulations attached as Exhibit A.
Each Lot authorized to engage in Short-Term Rentals shall maintain
a policy of general liability insurance applicable to its Short-Term Rental
with limits of $1,000,000 per occurrence, and which names Twin W, Twin
W’s association administrator at that time, and all Lot owners that
immediately surround the applicant’s Lot as well as all Lot owners who
share joint use of a dock, as additional insureds. Each Lot authorized to
engage in Short-Term Rentals shall pay an administration fee to Twin W to
cover the additional expenses associated with oversight of the Short-Term
Rentals such that no general association dues paid by all Lot owners will be
used for administering Short-Term Rentals. No Lot owner shall rent any
portion of its Lot as a Short-Term Rental at the same time as it is rented as
an ADU [accessory dwelling unit] Rental.
Twin W adopts the Short-Term Rental Rules and Regulations
attached as Exhibit A and incorporated herein to govern Short-Term
Rentals, which may be amended by Twin W’s board from time to time
upon written notice to Lot owners, but without a vote of the Lot owners, to
aid in the efficient administration of Short-Term Rentals, however, no
amendment of the Short-Term Rental Rules and Regulations shall change
the number of annual Short-Term Rentals without a vote of the Lot owners.
. . . 2.22 Accessory Dwelling Unit Rental Properties. Pursuant to
Section 1.1 (Preamble), Section 1.2 (Preamble), Section 2.1 (Reasonable
Use), and Section 2.4 (Offensive Activity), the rental of accessory dwelling
units on any Lot to any person (“ADU Rental”) shall be subject to the
following regulations intended to protect the other Lot owners from
unreasonable interference with their use and enjoyment of their Lots:
Prior to renting their property, all Lot owners desiring to use their
Lot for an ADU Rental shall apply annually on or before October 1 to the
Twin W board for permission of an ADU Rental for the following calendar
year, using an application to be provided by the Twin W board. Up to five
Lots may be used as an ADU Rental in a given year. If Twin W receives
more than five timely ADU Rental applications, all applicants shall be
placed into a lottery and five Lots shall be chosen for approval for the
upcoming calendar year. Each ADU Rental applicant shall maintain a
policy of general liability insurance applicable to its ADU Rental with
limits of $1,000,000 per occurrence, and which names Twin W, Twin W’s
association administrator at that time, and all Lot owners that immediately
surround the applicant’s Lot as well as all Lot owners who share joint use
No. 39299-6-III
Twin W Owners’ Association v. Murphy
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of a dock, as additional insureds. Each ADU Rental applicant shall pay an
administration fee to Twin W to cover the additional expenses associated
with oversight of the ADU Rentals such that no general association dues
paid by all Lot owners will be used for administering ADU Rentals. No
Lot owner shall rent any portion of its Lot as a short term rental at the same
time as it is rented as an ADU Rental. Lot owners are advised to refer to
Douglas County Code 18.16.170, which provides, “The property owner
(which shall include title holders and contract purchasers) shall occupy
either the primary unit or the accessory unit as their permanent residence.”
Twin W adopts the ADU Rental Rules and Regulations attached as Exhibit
A and incorporated herein to govern ADU Rentals, which may be amended
by Twin W’s board from time to time upon written notice to Lot owners,
but without a vote of the Lot owners, to aid in the efficient administration
of ADU Rentals, however, no amendment of the ADU Rental Rules and
Regulations shall change the number of annual ADU Rentals without a vote
of the Lot owners.
. . . .
2.23 Prohibition of Leasing Residences to Multiple Tenants and
Subleasing Residences. No residence shall be leased to more than one
tenant at any time. No residence shall be subleased.
CP at 36-38.
Lot owners in Twin W voted separately on each of the paragraphs of the new
covenants rather than in the aggregate. Covenant 2.21 received sixty-two yes votes and
twenty-three no votes. Covenant 2.22 received fifty-nine yes votes and twenty-seven no
votes. Covenant 2.23 received seventy yes votes and fifteen no votes.
Other property owners in the homeowner association, besides Andrew and
Jennifer Murphy, rent their property on short terms. In 2020, the Murphys’ residence
generated income of $103,171.

Outcome: Affirmed

Plaintiff's Experts:

Defendant's Experts:

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