Bradley W. Madsen and S. Grace Acosta of the firm Scalley Reading Bates Hansen & Rasmussen, PC, recently obtained a defense verdict on behalf of Sunpeak Association. . The defendant, Sunpeak Association, is an incorporated Homeowners Association of approximately 380 homes located in Park City, Utah. The case was brought by a closely held corporation that owned one of the properties within the Sunpeak community. The case was tried before the Honorable Ryan M. Harris
The plaintiff alleged that Sunpeak Association had violated the terms of the Community Covenants and Restrictions by failing to enforce, or improperly enforcing, multiple provisions. The plaintiff further alleged that Sunpeak Association was in violation of Utah's Community Association Act, Section 57-8a-213, which restricts an association from taking arbitrary or capricious enforcement action. The plaintiff had previously began construction of a garage addition to the property, and the parties disputed whether construction was authorized. Sunpeak Association ultimately fined the plaintiff for its actions and placed a lien on the property. The plaintiff also alleged that other properties in the Sunpeak community were in violation of the Community Covenants and Restrictions, and that Sunpeak Association was liable for not properly enforcing the Community Covenants and Restrictions as to those other properties. In closing arguments, plaintiff's counsel sought $250,000 in damages, which allegedly arose from a diminution in value to the plaintiff's property. The plaintiff also sought punitive damages.
In response, the defense argued that Sunpeak was not in breach of the Community Covenants and Restrictions, and that none of its actions constituted arbitrary or capricious enforcement action. The defense pointed out that the Community Covenants and Restrictions are primarily the responsibility of individual homeowners, and that the responsibilities of the Association required it to apply sound judgment and discretion when enforcing the Community Covenants and Restrictions. The defense also argued that the alleged violations of the Community Covenants and Restrictions did not cause any discernible diminution of value to the plaintiff's property.
The case was tried over four days. The jury of eight deliberated for approximately eight hours before returning a verdict in favor of Sunpeak Association. The jury concluded that Sunpeak Association did not breach the Community Covenants and Restrictions, and that Sunpeak Association did not take any enforcement action that was arbitrary or capricious. Accordingly, there was no award of damages.