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Fair. of C.l. Thse A. v. Shen. Dev. Corp.

OPINION FILED APRIL 8, 1983.

FAIRWAYS OF COUNTRY LAKES TOWNHOUSE ASSOCIATION ET AL., PLAINTIFFS-APPELLANTS,

v.

SHENANDOAH DEVELOPMENT CORPORATION ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County; the Hon. Robert McLaren, Judge, presiding.

JUSTICE NASH DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 9, 1983.

Plaintiffs, Fairways of Country Lakes Townhouse Association and Fairway of Country Lakes Homeowners Association, appeal from a summary judgment entered in favor of defendants, Shenandoah Development Corporation and Parkway Bank and Trust Company, and the denial of a summary judgment sought by plaintiffs. The parties do not dispute the facts giving rise to this litigation, but only their legal effect.

In 1974, developers known as the Richards Group, who are not parties to this action, owned a tract of land in Du Page County which, for clarity, will be discussed as two separate parcels, the Fairway and the Greens. The Richards Group constructed a townhome development on the Fairway, the present owners of which are members of plaintiff associations. After construction, the Richards Group recorded two declarations (hereinafter called Fairway Declarations) which, as amended, provided for the formation of the plaintiff associations for the purpose of maintaining the townhomes on the Fairway as well as maintaining and operating the amenities thereto, including the swimming pool, clubhouse and tennis courts.

As relevant, the two Fairway Declarations contained substantially similar provisions. Their preamble provided, in part:

NOW, THEREFORE, the Developer hereby declares that only the real property described in Exhibit `B', which is attached hereto and made a part of the Declaration (hereinafter referred to as the `Premises') and such additions thereto as may hereafter be made pursuant to paragraph 5.01, is and shall be transferred, held, sold, conveyed and accepted subject to this Declaration of Covenants, Conditions, Restrictions and Easements.

The Developer does hereby further declare that the following rights, easements, covenants, restrictions, conditions, burdens, uses, privileges, charges and liens shall: (1) exist at all times hereafter among all parties having or acquiring any right, title or interest in any portion of the Premises; (2) be binding upon and inure to the benefit of each Owner (as further defined in paragraph 1.05); and (3) run with the land subjected to this Declaration, to be held, sold and conveyed subject thereto." (Emphasis added.)

Exhibit "B" described the land comprising only the Fairway portions of the tract and did not include the Greens. However, paragraph 5.01 of the Fairway Declarations permitted the addition of other property in the tract providing, in part:

"* * * [t]he Developer may, at its sole discretion, from time to time hereafter add additional portions of the Proposed Development Area to the Premises or the Common Area and improve the same respectively with Dwelling Units or Community Facilities. Developer is not obligated in any manner pursuant to this Declaration to annex any properties from the Proposed Development Area, and said decision to annex shall be at its sole discretion.

Where the Developer elects to annex additional properties from the Proposed Development Area to the Premises or Common Area, said annexation shall be consummated by the recording of a Supplementary Declaration. Said Supplementary Declaration shall contain, but not be limited to, the legal description of the property which is to be annexed to the Premises or Common Area." (Emphasis added.)

For purposes of the Fairway Declarations, the "Developer" was defined as follows:

"THE RICHARDS GROUP OF ILLINOIS, INC., a Delaware corporation, and its successors and assigns, or CHICAGO TITLE AND TRUST COMPANY, not personally but as Trustee under Trust Agreement dated June 12, 1973, and known as Trust No. 62371." (Emphasis added.)

After formation of the plaintiff associations and prior to any annexation of additional property to the Fairway Declarations, the Richards Group conveyed title to the remaining portion of the tract, the Greens, to Naper Venture, also a nonparty, which in turn, conveyed title to defendants. The defendants thereupon developed the Greens with townhomes similar to those constructed by the Richards Group on the Fairway. In June 1981, the defendants recorded a declaration (hereinafter called Greens Declaration) which established the Greens of Country Lakes Homeowners Association with stated purposes similar to those of plaintiff associations. The Greens Declaration contained almost identical language as the Fairway Declarations except that it applied only to the Greens portion of the tract and did not purport to reserve to its developer (Shenandoah Development Corp.) any right to annex additional property to the declaration.

Notwithstanding the foregoing, on January 11, 1982, defendants, as developers of the Greens, recorded a "Supplemental Declaration" which purported to annex the Greens property to the Fairway Declarations as provided therein. Plaintiffs objected and commenced this litigation seeking a declaratory judgment that the Supplemental Declaration was void and of no effect. The parties filed cross-motions for summary judgment supported by affidavits and, after argument, the trial court found: (1) that the developer's right to annex property to the Fairway Declarations ran with the land to defendants; (2) that the defendants were developers within the meaning of the Fairway Declarations; (3) that the Greens Declaration was valid but did not constitute an annexation of the land to the Fairway Declarations; and (4) that the Supplemental Declaration was a valid annexation of the Greens to the Fairway ...


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