Equine Holdings LLC v. Auburn Woods LLC
Equine Holdings LLC v. Auburn Woods LLC, 2021 UT App 14 (Harrison, J.)
Owners in a subdivision disputed regarding the size of a Special Use Area easement burdening one of the lots. The district court granted summary judgment in favor of Defendants, ruling that the amended CC&Rs governing the subdivision were unambiguous and described a Special Use Area much smaller than argued by Plaintiff. On appeal, the Utah Court of Appeals reversed:
- The court of appeals rejected Plaintiff’s argument that the Special Use Area, which had been created by plat, could only be amended by modifying the plat. Amendment of the CC&Rs was sufficient to modify the Special Use Area. Nonetheless, the district court erred in ruling that the amended CC&Rs were not ambiguous and in effectively reforming the covenants in favor of Defendants under the guise of interpreting them.
- Because neither interpretation advanced by the parties was consistent with the actual text, the amended CC&Rs were ambiguous, which means that the intent of the drafters (rather than the language of the covenants) is controlling. The court of appeals remanded the case so the district court could consider extrinsic evidence of the drafters’ intent and consider whether reformation based on mutual mistake could be proper.