Deep Water Brewing, LLC v. Fairway Resources Limited

215 P.3d 990 (2009)

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Nature of the Case

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Facts

Smith and Ahlquist (Ahlquist) are siblings. They owned and operated the Cosina del Lago Restaurant. The land between the restaurant building and a lake was a mature apple orchard. Johnson (D) and Fairway (D) wanted to develop the property between the restaurant and the lake for single-family housing. Development required access over Ahlquist's property. Ds presented Ahlquist with a signed easement that included a provision that no building will be constructed that will obscure the view from Cosina del Lago Restaurant. Ahlquist drafted an easement agreement and included protection for the view from the lounge: The Corporation warrants and covenants that it shall establish and monitor compliance with all necessary building covenants in its development so as to not affect the sight or views from Cosina del Lago restaurant to the lake. There shall not be any homes or structures in the development that interfere with the view of the lake from the restaurant or its lounge. The city of Chelan rejected the easement. It required a dedicated right-of-way before it would approve the development. Eventually, the right-of-way agreement incorporated all of the previous terms of the easement agreement. D signed the agreement granting the right-of-way both individually and in his capacity as president of Key Development. The agreement required a Homeowner’s Association be established to protect Ahlquist’s rights. D created an HOA but failed to disclose the easement. Kenagy (P) purchased the restaurant from Ahlquist in 1998. P was aware of the right-of-way agreement but not the covenants because they were not included with any documents he received when he purchased the restaurant. Deep (P) operated the restaurant and lounge as a brewpub from spring 1999. Around July 2001, P learned that property owners would be allowed to build multistory homes. P then sent letters to D and other lot owners warning that he would enforce the height restrictions set out in the right-of-way agreement. P sued Fairway (D); Key (D); the Homeowners Association (D); and Johnson (D) for declaratory judgment and injunctive relief to enforce the provisions that protected their view and to enjoin Ds from interfering with the restaurant and lounge views. D permitted homes to be built that obscured the view of the law from Ahlquist’s first-floor lounge. P had sold the restaurant before trial. P added Taylor (D) because D had begun construction of a two-story home, approved by Johnson (D) and the HOA (D), which obscured the view of the lake from the restaurant. D got the verdict for $245,000 but that the Taylors (D) were bona fide purchasers without notice and not liable. Ds appealed.