Morris et al v. West Hayden Estates First Addition Homeowners Association, Inc.
Filing
41
MEMORANDUM DECISION AND ORDER denying 28 Motion to Dismiss for Failure to State a Claim. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
JEREMY R. MORRIS, KRISTY
MORRIS
Case No. 2:17-cv-00018-BLW
Plaintiffs/Counter-Defendants,
MEMORANDUM DECISION AND
ORDER
v.
WEST HAYDEN ESTATES FIRST
ADDITION HOMEOWNERS
ASSOCIATION, INC., an Idaho
Corporation,
Defendant/Counter-Claimant.
INTRODUCTION
Pending before the Court is Plaintiffs/Counter-Defendants’ Motion to Dismiss
Counterclaim (Dkt. 28). For the reasons stated below, the Court will deny the motion.
BACKGROUND
On January 13, 2017 Plaintiffs Jeremy and Kristy Morris filed a Complaint against
the West Hayden Estates First Addition Homeowners’ Association, Inc. (“HOA”),
alleging religious discrimination in violation of the Fair Housing Act, 42 U.S.C. §§
3604(b), 3604 (c), and 3617 (“FHA”). Compl. ¶1, Dkt. 1. Plaintiffs also brought the same
claims under the Idaho Human Rights Act. Id. Plaintiffs Jeremy and Kristy Morris are
Christian, and each year they host a Christmas fundraiser at their home. Id. at ¶ 10.
Plaintiffs allege that the Defendant used disagreements over the Christmas fundraiser,
MEMORANDUM DECISION AND ORDER - 1
including allegations that the fundraiser violated the Declaration, as a pretext for ongoing
intentional discrimination against Plaintiffs based on their Christian religion. See id. at ¶
32-33. 1
The Defendant moved to dismiss Plaintiffs’ claims under Fed. R. Civ. P. 12(b)(1)
and 12(b)(6). Def’s Mot. To Dismiss, Dkt. 5. On August 24, 2017, the Court granted
Defendant’s Motion as to Plaintiffs’ claims under the Idaho Human Rights Act and
dismissed those claims without prejudice. Mem. Dec. and Order, Dkt. 18. The Court
denied Defendant’s motion as to Plaintiffs’ claims under the FHA. Id.
The HOA filed an Answer to Plaintiffs’ Complaint on September 13, 2017, and
simultaneously filed a Counterclaim alleging that Plaintiffs were in violation of multiple
provisions of the Declaration Establishing Covenants, Conditions, Restrictions and
Easements for West Hayden Estates First Addition (“the Declaration”). See Answer and
Countercl. at 11, Dkt. 19. Plaintiffs filed their Motion to Dismiss the Counterclaim (Dkt.
28) on October 2, 2017.
The HOA alleges that Plaintiffs purchased their home subject to the Declaration.
See Answer and Countercl. at 12, Dkt. 19. The HOA further alleges that Plaintiffs
violated the Declaration by (1) decorating the exterior of their home and lot without prior
written consent by the HOA Board; (2) using their property for nonresidential purposes
1
The facts underlying Plaintiffs’ Complaint are laid out in detail in the Court’s August 24, 2017
Decision and Order. See Mem. Dec. and Order at 1-3, Dkt. 18.
MEMORANDUM DECISION AND ORDER - 2
by holding their Christmas fundraiser on the property for “commercial purpose and
effect;” (3) creating a nuisance due to excessive noise and traffic generated by the
Plaintiffs’ Christmas fundraiser; (4) displaying signs related to the Christmas program
without written approval of the HOA Board; (5) maintaining their property in an
“unsightly” condition by their failure to remove and store holiday lights and other items
associated with the Christmas fundraiser throughout the year, and by storing and
operating various equipment on their property during the days the fundraiser is taking
place; (6) creating an unsafe and hazardous condition due to crowds and traffic generated
by the Christmas fundraiser and by keeping a camel on the property during the
fundraiser; and (8) installing 200,000 Christmas lights on their home and in their yard
during the operation of the fundraiser, such that the lighting is “excessively bright” and
not “restrained in design”. See id. at 12-17. The Counterclaim cites specific provisions of
the Declaration, which the HOA alleges Plaintiffs have breached, and seeks an injunction
requiring Plaintiffs to immediately come into compliance and prohibiting future
violations of the Declaration associated with the Christmas fundraiser. Id. at 17.
LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement
of the claim showing that the pleader is entitled to relief,” in order to “give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a complaint attacked by a Rule
12(b)(6) motion to dismiss “does not need detailed factual allegations,” it must set forth
MEMORANDUM DECISION AND ORDER - 3
“more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Id. at 555. To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to “state a claim to relief that is
plausible on its face.” Id. at 570.
The Supreme Court identified two “working principles” that underlie Twombly in
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept as true legal
conclusions that are couched as factual allegations. Id. Rule 8 does not “unlock the doors
of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79.
Second, to survive a motion to dismiss, a complaint must state a plausible claim for relief.
Id. at 679. “Determining whether a complaint states a plausible claim for relief will . . .
be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id. To state a plausible claim for relief, a party must
show “more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678.
While there is no “probability requirement,” the facts alleged must allow “the court to
draw the reasonable inference that the defendant is liable for the conduct alleged.” Id.
“[A]s a general rule, [courts] may not consider any material beyond the pleadings
in ruling on a 12(b)(6) motion.” Johnson v. Federal Home Loan Mortg. Corp., 793 F.3d
1005, 1008 (9th Cir. 2015). An exception may be made for “extrinsic evidence not
attached to the complaint if the document’s authenticity is not contested and the . . .
complaint necessarily relies on it.” Id.
MEMORANDUM DECISION AND ORDER - 4
ANALYSIS
Here, the HOA has asserted a claim for injunctive relief to enforce the
Declaration. Under Idaho law, courts “generally appl[y] the same rules of construction as
any contract” when interpreting restrictive covenants. D & M Country Estates
Homeowners Ass’n v. Romriell, 59 P.3d 965, 969 (Idaho 2002). Parties seeking to enforce
a contract bear the “burden of proving the existence of the contract and fact of its
breach.” Melaleuca, Inc. v. Foeller, 318 P.3d 910, 914 (Idaho 2014); see also Jacklin
Land Co. v. Blue Dog RV, Inc., 254 P.3d 1238, 1245 (Idaho 2011) (finding that the mere
breach of a restrictive covenant provides sufficient grounds for injunctive relief). Thus, to
survive the motion to dismiss, the Counterclaim must allege sufficient facts to plausibly
support the HOA’s claim that Plaintiffs are subject to the Declaration and that a breach of
the Declaration occurred. Based on its review of the Counterclaim and the facts alleged
therein, the Court finds they have done so here.
Rather than argue that the facts alleged do not plausibly support the HOA’s
claims, Plaintiffs dispute whether those facts are true. Such arguments are inappropriate
under Rule 12(b)(6), where the Court must accept the facts alleged by the claimants as
true, and determine whether those facts plausibly support a claim for relief. See Twombly,
550 U.S. at 570.
Further, Plaintiffs rely extensively on evidence introduced in their briefing and
exhibits to dispute the facts and legal inferences alleged in the Counterclaim. Plaintiffs
acknowledge that this evidence was neither relied on by or referenced in the
MEMORANDUM DECISION AND ORDER - 5
Counterclaim, and as such it constitutes material beyond the pleadings. See Pl.’s Reply at
3, Dkt. 30; Johnson, 793 F.3d at 1008. As a general rule, the Court must exclude such
evidence from consideration on a motion to dismiss. Johnson, 793 F.3d at 1008.
At most, Plaintiffs’ motion raises a question of whether the Declaration is
ambiguous, or “capable of more than one reasonable interpretation.” Romriell, 59 P.3d at
970. Where a restrictive covenant is ambiguous, “interpretation is question of fact,” such
that determining its meaning requires the court to consider extrinsic evidence. Id. As the
Court must exclude extrinsic evidence offered by Plaintiffs at this stage, Johnson, 793
F.3d at 1008, the only evidence in the record that goes to the construction of the
Declaration is the Declaration itself. Absent the benefit of a fully developed record, the
Court finds that the questions of interpretation and construction raised by Plaintiffs
cannot be decided on a motion to dismiss. For these reasons, the Court will deny
Plaintiffs’ motion.
Plaintiffs separately object to the HOA’s allegation that Plaintiffs left Christmas
lights and other elements of the fundraiser in place throughout the year. Plaintiffs do not
argue that these facts, if true, are insufficient to state a claim that Plaintiffs created an
“unsightly” condition in violation of the Declaration. Instead, Plaintiffs argue that the
allegations are demonstrably untrue and that defense counsel violated Rule 11 by failing
to conduct a reasonable inquiry into their truthfulness. See Fed. R. Civ. P. 11(b)(3). To
the extent that Plaintiffs move to dismiss the Counterclaim on these grounds, they must
show that dismissal is warranted as a sanction for the alleged Rule 11 violation.
MEMORANDUM DECISION AND ORDER - 6
Under Rule 11, a motion for sanctions must be made separate from any other
motion, and any sanctions imposed must be limited in nature “to that which suffices to
deter repetition of the conduct.” Id. at 11(c)(2), (4). Should Plaintiffs decide to pursue
sanctions under Rule 11, they must do so by separate motion, and must demonstrate that
the proposed sanctions are properly tailored to address the violations alleged.
Finally, to the extent Plaintiffs wish to amend their Complaint to add additional
claims, see Pl.’s Reply at 9, Dkt. 30, they shall do so by separate motion. Under the
Amended Case Management Order (Dkt. 17), the deadline to amend pleadings was June
12, 2017, to be extended only upon a showing of good cause. Motions to amend
pleadings are governed by Fed. R. Civ. P. 15 and Dist. Idaho Loc. Civ. R. 15.1.
ORDER
IT IS ORDERED:
1. Plaintiffs/Counter-Defendants’ Motion to Dismiss Counterclaim (Dkt. 28) is
DENIED.
DATED: January 3, 2018
_________________________
B. Lynn Winmill
Chief Judge
United States District Court
MEMORANDUM DECISION AND ORDER - 7
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