Civil Litigation

Sam Harkinson
Previously employed as an Assistant County Attorney, and as an insurance adjuster, now as an associate at Hoefle, Phoenix, Gormley & Roberts

No. 2018-0490, March 11, 2020
Affirmed

  • Whether a leasehold in a  cooperative extends beyond the footprint of a manufactured home and, assuming yes, whether the owner of a leasehold is en- titled to quiet

Centennial Estates Cooperative, Inc. (the “Defendant”), after trial, appeals a finding that it was liable for violating the covenant of quiet enjoyment of Mr. Mark Diminico (the “Plaintiff”). The Plaintiff also appeals a finding of the amount of damages and a finding denying a request for attorney’s fees.

The parties entered into a contractual relationship in 2012 with the Plaintiff purchasing a leasehold in the Defendant’s cooperative park. At the time, the lot adjacent to the Plaintiff’s lot was unimproved.  In 2016, the Defendant decided  to improve the adjacent lot and carried out plans to develop the lot to allow for a leasehold plot to be established on the lot. These plans included digging a trench on the Plaintiff’s lot. The Plaintiff had been unaware of the Defendant’s intentions as he had been out of the area. The Plaintiff first sought relief from the Defendant’s Board of Directors, but then sought Court intervention in the form of an injunction, requesting that the Defendant be ordered to return his lot to its prior condition. The Defendant maintained that the Plaintiff’s rights of possession ended at the natural footprint of his manufactured home, and that the Defendant retained the ability to carry out development of the remainder of the lot that the Plaintiff’s manufactured home occupied. The Trial Court found for the Plaintiff and the Defendant’s appeal followed.

The Court, in affirming the finding of the Trial Court, found that the Plaintiff had possessory interest in the entire lot, not just the natural footprint of his manufactured home. The Court based this on the review of the Lease Agreement between the par- ties, as well as the Cooperative Member- ship Agreement. The Court concluded that both documents inherently gave the Plaintiff a possessory right in more than the mere footprint of his manufactured home. The Court also noted that the Vice President of the Defendant’s Board of Di- rectors testified that the plan laying out the cooperative accurately and fairly depicted the cooperative. In addressing whether the Defendant’s development violated the Plaintiff’s covenant of quiet enjoyment, the Court concluded that the deforestation and other subsequent development clearly interfered with the Plaintiff’s beneficial use or enjoyment of the premises and, therefore, affirmed the finding that the Defendant had violated the covenant of quiet enjoyment. The Court next affirmed the Trial Court’s limitation on the amount of remediation, finding that the amount the Trial Court ordered was appropriate and that the amount requested by the Plaintiff would be disproportionate to the value of the Plain- tiff’s lot. The Court agreed with the Trial Court’s reasoning that while the amount would not fully repair the damage done, it would “go a very long way toward restoring [the Plaintiff’s] seclusion and privacy and vegetation.”

Finally, the Court addressed the Trial Court’s denial of the Plaintiff’s request for attorney’s fees. In affirming the Trial Court’s determination, the Court looked to whether the actions that lead to a violation of the covenant of quiet enjoyment on the part of the Defendant was willful. Concluding that a finding of a willful violation could not be found, the Court affirmed the Trial Court’s denial of the statutory request for attorney’s fees.

Mr. David M. Stamatis and Mr. William

  1. Parnell of Parnell, Michels & McKay, PLLC, on the Brief, with Mr. Stamatis orally for the Plaintiff. Mr. Robert M. Shepard of Smith-Weiss Shepard, P.C. on the Brief and orally for the Defendant.