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Cossitt v. Flathead Industries, Inc.

Supreme Court of Montana

April 10, 2018

JAMES H. COSSITT; GLACIER MOUNTAINEERING GUIDES, LLC., Plaintiffs and Appellants,
v.
FLATHEAD INDUSTRIES, INC., Defendant and Appellee.

          Submitted on Briefs: February 28, 2018

          APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 17-99-C Honorable Heidi J. Ulbricht, Presiding Judge

          For Appellants: James H. Cossitt, James H. Cossitt P.C., Kalispell, Montana

          For Appellee:Antonia P. Marra, William J. Levine, Marra, Evenson & Bell, P.C., Great Falls, Montana

          OPINION

          Justice Jim Rice

         ¶1 James Cossitt and Glacier Mountaineering Guides, LLC (collectively "Cossitt") appeal from the Order Dismissing Complaint entered by the Eleventh Judicial District Court, Flathead County. Cossitt raises four issues, but we address the following:

1. Did the District Court err by dismissing the claims asserted under the Montana Residential Landlord and Tenant Act of 1977 (Landlord-Tenant Act)?
2. Did the District Court err by dismissing claims alleging violations of the restrictive covenants? We affirm in part, reverse in part and remand for further proceedings.

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶2 Cossitt and Flathead Industries, Inc. (Flathead) own neighboring townhouse duplexes in Kalispell. Cossitt owns the duplex located at 1229 and 1231 Sixth Street West, and Flathead owns the duplex at 1233 and 1235 Sixth Street West. The duplexes share a common property boundary, with a fence separating the two properties. Flathead rents its townhouses to disabled persons. Flathead is an assisted-living service provider, and, as such, provides assisted-living services to its tenants. Cossitt occupies one townhouse and rents out the other townhouse in his duplex.

         ¶3 Pursuant to a 1980 Declaration of Covenants, Conditions, and Restrictions of Sixth Street West Townhouses (Covenants), Cossitt and Flathead are the only members of a homeowners' association. Article IX of the Covenants contains "Use Restrictions, " prohibiting use of the properties for business or commercial purposes and prohibiting members from engaging in "noxious or offensive activity" that may "interfere with the quiet enjoyment of each of the owner's respective residence."

         ¶4 On January 25, 2017, Cossitt filed a Complaint against Flathead and "John Does 1-5, " referring to the tenants of Flathead's property. Count I alleged that Flathead violated the business use restriction in the Covenants by conducting its living support programs "at" the townhouse for its tenants, and "out of" the property; allowing employees and contractors to park vehicles on lawns and non-paved surfaces, and plowing snow to create de facto employee parking lots in the front yard, causing vehicle congestion; and allowing trash and construction materials to accumulate. Count I also alleged that Flathead and the tenants engaged in "noxious or offensive activity" in violation of the Covenants by allowing employees to drive vehicles across Cossitt's front yard, damaging flower beds, landscaping boundaries, and border materials; smoking on Flathead property and allowing smoke to waft onto Cossitt's property; parking in a manner that obstructs Cossitt's access to his driveway; having frequent loud conversations; and operating televisions loudly. Count II prayed for a Temporary Restraining Order and preliminary injunction. Count III alleged that Flathead breached obligations to Cossitt under the Landlord-Tenant Act. Count IV prayed for a declaratory judgment as to the rights, status, and legal relations between all parties.

         ¶5 Flathead responded by filing a M. R. Civ. P. 12(b)(6) motion to dismiss the Complaint for failure to state a claim.[1] On August 1, the District Court entered its Order Dismissing Complaint, granting the motion. Regarding Count I, the District Court determined that Cossitt pled no facts to support a violation of the Covenants' business use restrictions, reasoning that providing assisted-living services to residences could not itself be considered running a business. The court did not separately analyze the alleged breach of the Covenants' prohibition against "noxious or offensive activity." As to Count III, the court determined Cossitt failed to establish standing to assert claims under the Landlord-Tenant Act, ...


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