IN THE THIRD JUDICIAL DISTRICT COURT IN AND FOR SALT LAKE COUNTY, STATE OF UTAH

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1 Bruce R. Baird (0176) Bruce R. Baird, PLLC 2150 S E., 5th Floor Salt Lake City, Utah Telephone:(801) Attorney for Plaintiffs IN THE THIRD JUDICIAL DISTRICT COURT IN AND FOR SALT LAKE COUNTY, STATE OF UTAH WDIS, LLC AS TRUSTEE OF THE MDMG TRUST DATED APRIL 25, 2016, and DREAMWORKS PROPERTY MANAGEMENT INC. AS TRUSTEE OF THE STEP MOUNTAIN ROAD LAND TRUST DATED NOVEMBER 6, 2007, Plaintiffs v. HI-COUNTRY ESTATES HOMEOWNERS ASSOCIATION, A/K/A HI-COUNTRY ESTATES HOMEOWNERS ASSOCIATION PHASE 11 INC., A/K/A HICOUNTRY ESTATES HOMEOWNERS ASSOCIATION PHASE 11, INC., A/K/A HI-COUNTRY ESTATES HOMEOWNERS ASSOCIATION PHASE I11 INC., A/K/A HI-COUNTRY ESTATES HOMEOWNERS ASSOCIATION PHASE II INC., A/K/A HICOUNTRY ESTATES HOMEOWNERS ASSOCIATION, PHASE II, INC., A/K/A HI-COUNTRY ESTATES PHASE II, A/K/A HI-COUNTRY ESTATES PHASE II HOMEOWNERS ASSOCIATION, A/K/A HI-COUNTRY ESTATES, PHASE II, A/K/A HI-COUNTRY HOMEOWNERS ASSOCIATION, A/K/A HI-COUNTRY ESTATES, A/K/A HI COUNTRY ESTATES HOMEOWNERS ASSOCIATION, A/K/A HI COUNTRY ESTATES II, A/K/A HI COUNTRY ESTATES PHASE II, A/K/A HI COMPLAINT Case No.: Judge: Tier 2

2 COUNTRY ESTATES PHASE II HOMEOWNERS ASSOCIATION Defendants. WDIS, LLC as Trustee of the MDMG Trust dated April 25, 2016, and Dreamworks Property Management Inc. as Trustee of the Step Mountain Road Land Trust dated November 6, 2007 (collectively referred to as Plaintiffs ) hereby complain and alleges against Hi-Country Estates Homeowners Association, A/K/A Hi-Country Estates Homeowners Association Phase 11 Inc., A/K/A Hi-Country Estates Homeowners Association Phase 11, Inc., A/K/A Hi-Country Estates Homeowners Association Phase I11 Inc., A/K/A Hi-Country Estates Homeowners Association Phase II Inc., A/K/A Hi-Country Estates Homeowners Association, Phase II, Inc., A/K/A Hi-Country Estates Phase II, A/K/A Hi-Country Estates Phase II Homeowners Association, A/K/A Hi-Country Estates, Phase II, A/K/A Hi-Country Homeowners Association, A/K/A Hi-Country Estates, A/K/A Hi Country Estates Homeowners Association, A/K/A Hi Country Estates II, A/K/A Hi Country Estates Phase II, A/K/A Hi Country Estates Phase II Homeowners Association (collectively referred to as Defendants ) as follows: SUMMARY OF DISPUTE The dispute concerns competing interests of two groups of land owners within the same roughly 2,000-acre rural neighborhood generally known as phase two of Hi-Country Estates located near Herriman City in Salt Lake County, Utah. The first group of land owners consists primarily of those residing on their properties who, for the most part, are strongly opposed to any further development of the surrounding area (the Home Owners 1 ). The Home Owners have 1 There are other home owners within Hi-Country Estates, phase II who support or are neutral to further development of the area. These home owners are not included within the definition of Home Owners and are not the subject of the allegations included in this Complaint. 2

3 intentionally thwarted improvements to infrastructure that could be used to support additional development. The second group of land owners are the owners of vacant land, many of whom desire to improve and develop their properties at some time in the future but are being prevented or deterred based on the lack of infrastructure required to make development possible (the Vacant Land Owners ). The focus of this Complaint is the Home Owners unauthorized control over the Vacant Land Owners through an illegally and improperly formed and operated homeowner s association. 2 During the 1970s and 1980s, the property owners in the area (both Home Owners and Vacant Land Owners) generally worked cooperatively with shared goals of development. In or around the mid 1990 s, the anti-development Home Owners hijacked control of the HOA in order to intentionally advance their agenda, and have maintained control ever since by willfully manipulating the appointment of positions of power within the alleged HOA. The Board of Directors, which rotates between a small handful of Home Owners, has intentionally excluded votes and opinions that do no align with their own. Further, the HOA s governing documents were executed and, in some cases recorded or filed, illegally and without authority. The HOA s governing documents were subsequently amended without authority. They were also selectively enforced by the HOA Board (intentionally) to the prejudice of the Vacant Land Owners. The alleged HOA, which was never properly formed and has never been operated in a manner consistent with its alleged governing documents, should be deemed a null and void organization resulting in the HOA being formally dissolved and the governing documents declared unenforceable and/or void. The rights of the 2 Referred to as the HOA throughout the Complaint. However, by using this term the Vacant Land Owners do not concede and continue to object to the alleged organization s legitimacy or authority. 3

4 property owners and the HOA (if any) should be declared, and title quieted as to the properties burdened by the improperly recorded restrictive covenants, bylaws and articles of incorporation. PARTIES JURISDICTION AND VENUE 1. WDIS, LLC is a Utah limited liability company in Salt Lake County, Utah that is the Trustee of the MDMG Trust dated April 25, 2016 which owns properties allegedly within the HOA including15611 S Rose Canyon Rd, S Arnold Hollow Rd, S Overlook Rd, 7944 W High Canyon Rd, 7902 W High Canyon Rd, 7873 W High Canyon Rd, 7891 W High Canyon Rd, 7877 W High Canyon Rd and 7902 W Step Mountain Rd, Herriman, UT Dreamworks Property Management, Inc. is a Utah corporation in Salt Lake County, Utah that is Trustee of the Step Mountain Road Land Trust dated November 6, 2007 which owns property7551 W Step Mountain Rd, Herriman, UT Hi-Country Estates Homeowners Association, A/K/A Hi-Country Estates Homeowners Association Phase 11 Inc., A/K/A Hi-Country Estates Homeowners Association Phase 11, Inc., A/K/A Hi-Country Estates Homeowners Association Phase I11 Inc., A/K/A Hi- Country Estates Homeowners Association Phase II Inc., A/K/A Hi-Country Estates Homeowners Association, Phase II, Inc., A/K/A Hi-Country Estates Phase II, A/K/A Hi-Country Estates Phase II Homeowners Association, A/K/A Hi-Country Estates, Phase II, A/K/A Hi-Country Homeowners Association, A/K/A Hi-Country Estates, A/K/A Hi Country Estates Homeowners Association, A/K/A Hi Country Estates II, A/K/A Hi Country Estates Phase II, A/K/A Hi Country Estates Phase II Homeowners Association purports to be a homeowners association whose principal place of business is in Salt Lake County, Utah. 4. This Court has jurisdiction over the claims pursuant to Utah Code Ann. 78A

5 5. Venue is proper in this Court pursuant to Utah Code Ann. 78B and 78B Pursuant to Rule 26 of the Utah Rules of Civil Procedure, this action is to be characterized as Tier 2 as non-monetary relief is requested. FACTUAL ALLEGATIONS THE HI COUNTRY ESTATES ENTITIES Hi Country Estates Limited Partnership 7. On or around February 9, 1970, Charles Lewton, Gerald Bagley, Harold Glazier, as general partners, filed a Certificate of Limited Partnership of Hi Country Estates with the Utah Secretary of State. 8. The identified purpose of the partnership was to acquire, develop and sell the property located in Salt Lake County, Utah, known as the Nicolette and Mascaro Ranches and such other property as may from time to time be acquired, and to own, manage, mortgage, lease, exchange, sell, or otherwise transfer or dispose of such property. To effectuate the foregoing, the partnership [was] empowered to accept an assignment of the option or contract of sale from Gerald H. Bagley and to do all things necessary to acquire title to such property. 9. Upon information and belief, at the time of executing and filing the Certificate of Limited Partnership of Hi Country Estates, the general partners did not own any of the real property purportedly within the HOA s boundaries. 10. As their initial contribution to the partnership, both Bagley and Glazier contributed their respective alleged undivided interest in contract and transferring of the option contracts on the Nicolette and Mascaro Ranches. 11. In executing the Certificate, each general and limited partner affixed their signature next to clear designation of their title as general partner and/or limited partner. 5

6 12. Pursuant to the later filed Certificate of Limited Partnership of Hi Country Estates Second, Hi Country Estates Limited Partnership was dissolved on or before August 10, Hi Country Estates, Inc. 13. On or around August 10, 1970, Charles Lewton, Gerald Bagley and Harold Glazier filed Articles of Incorporation of Hi Country Estates, Inc. with the Utah Secretary of State. 14. The purpose of Hi Country Estates, Inc. was to acquire, develop and sell real and personal properties. 15. Upon information and belief, at the time of executing and filing the Articles of Incorporation of Hi Country Estates, Inc., the principals and shareholders did not own any of the real property purportedly within the HOA s boundaries. 16. In executing the Articles, each principal affixed their signature next to clear designation of their title as Incorporators. 17. Hi Country Estates, Inc. was dissolved on March 31, Hi Country Estates, Inc. was never re-instated after it was dissolved. Hi Country Estates, Second Limited Partnership 19. Also on August 10, 1970, a Certificate of Limited Partnership of Hi Country Estates, Second was filed with the Utah Secretary of State. 20. Hi Country Estates, Inc. was identified as general partner of Hi Country Estates, Second L.P. 21. The purpose of Hi Country Estates, Second L.P. was to acquire develop and sell real and personal properties. 22. The Certificate of Limited Partnership of Hi Country Estates, Second states that its partners received the real property formerly owned by the former Utah limited partnership known 6

7 as Hi Country Estates, organized be certificate dated February 2, 1970, filed in the Clerk s office of Salt Lake County, Utah, on February 9, 1970 which had been dissolved. 23. Upon information and belief, at the time of executing and filing the Certificate of Limited Partnership of Hi Country Estates, Second, the general partners did not own any of the real property purportedly within the HOA s boundaries. 24. The Certificate of Limited Partnership of Hi Country Estates, Second, clearly identified that each partner signed in his individual capacity, and that Hi Country Estates, Inc., through its authorized agents, also signed as a general partner. 25. For example, Gerald Bagley, executed the Certificate of Limited Partnership of Hi Country Estates, Second on behalf of general partner Hi Country Estates, Inc. 26. The signature block for general partner Hi Country Estates, Inc. identified Bagley as the President of the corporation, and further is attested to by the corporation s Secretary, Charles Lewton. 27. The Certificate of Limited Partnership of Hi Country Estates, Second demonstrates that the partners (specifically Bagley and Lewton) knew how to distinguish between executing a contract in an individual capacity and executing a contract on behalf of an entity. 28. An Amended Certificate of Limited Partnership of Hi Country Estates, Second adding Lewton as a general partner was filed December 31, Hi Country Estates, Second Limited Partnership s registration with the State of Utah expired in January 12, 1991 for non-renewal. THE HOA S PURPORTED GOVERNING DOCUMENTS Articles of Incorporation for the HOA 30. On or around October 5, 1973, Charles E. Lewton, as identified incorporator, filed a Certificate of Incorporation of Hi-Country Estates Homeowners Association (the HOA ) 7

8 herein referred to as the Articles of Incorporation (the Articles ), with the Utah Secretary of State. (The Articles are attached hereto as Exhibit A.) 31. The HOA was organized under the Utah Non-Profit Corporation and Co-operative Association Act, Utah Code Ann et seq. 32. Utah Code Ann , in effect at the time, provided that a corporation formed thereunder shall not be the same as, or deceptively similar to, the name of any other existing corporation. 33. The name of the HOA identified in the Articles, Hi-Country Estate Homeowners Association matched that of a nonprofit home owner s association already registered and existing at that time. Articles. 34. The stated purpose of the HOA was described as follows: [t]his Association is not organized for pecuniary profit or gain to the members thereof, and the specific purpose for which it is formed are to provide maintenance, upkeep and preservation of the streets, roads and common area within... This Association is also formed to promote the health, safety and welfare of the residents within Hi-Country Estates. 35. No subdivision plat for Phase II of the Hi-Country Estates was attached to the 36. No subdivision plat for Phase II of Hi-Country Estates has ever been legally approved or recorded. 37. The Articles defined HOA Membership as follows: Every person or entity who is a record owner of a fee or undivided fee interest in any Lot which is subject by covenants or record to assessment by the Association... shall be a member of the Association... Membership shall be appurtenant to and may not be separated from ownership of any lot which is subject to assessment by the Association. 38. The Articles state that Directors shall be elected to terms of one year. 8

9 39. The Articles expressly provided for dissolution of the HOA with the approval of not less than two-thirds of all members; provided however, that the assets must then be dedicated to an appropriate public agency to be used for the purpose similar to those for which this Association was created, or in the event such dedication is refused acceptance, such assets shall be granted, conveyed and assigned to a non-profit corporation, association, trust or other organization to be devoted to such similar purposes. 40. Accordingly, the Articles set forth procedures for protecting the assets of the HOA in the event of dissolution. 41. The Articles could only be amended upon approval of seventy-five percent of the entire membership. 42. Upon information and belief, while the Articles were allegedly subsequently amended, the amendments were never approved by seventy-five percent of the entire membership and therefore were invalid. 43. Upon information and belief, the HOA does not have record that the Utah Secretary of State ever issued a certificate of incorporation affixed to the Articles as required by Utah Code Ann Utah Code Ann , in effect in 1973, provided that all conveyances of real estate or other recorded documents which may affect real estate must be proved or acknowledged by a judge, clerk, notary public, county clerk or county recorder. 45. Section required that certificate of such acknowledgment be accompanied by the official seal of the officer or notary. 46. While the Articles, which purport to affect and burden real property, contain an executed signature block for a notary public, the notary did not affix a notary seal. 9

10 47. The Articles were signed only by Charles Lewton, with no designation that he was signing other than in his personal capacity. 48. Nowhere in the Articles does Lewton purport to be acting in a representative capacity for a partnership or corporation (Hi Country Estates Limited Partnership, Hi Country Estates, Inc., Hi Country Estates, Second Limited Partnership or any other entity). 49. Accordingly, it must be presumed that Lewton was acting in his personal capacity. 50. Upon information and belief, the real property included in the property legal description attached to the Articles comprised approximately 2,035 acres. 51. A map of the purported boundaries of the HOA as depicted in the property legal description attached to the Articles is attached hereto as Exhibit B. 52. Upon information and belief, at the time the Articles were filed, Lewton owned only a single 8-acre parcel of real property that was within the HOA s purported boundaries (less than 1% of the land purportedly within the legal description of the Articles). 53. Upon information and belief, the 8-acre parcel that was owned by Lewton (and three other individuals) was the only property Lewton ever personally owned inside the HOA s purported boundaries. 54. This property is Salt Lake County Parcel #: (A map showing the real property owned by Charles Lewton is attached hereto as Exhibit C.) 55. Upon information and belief, at the time the Articles were executed, none of the Hi Country Estates entities owned any of the real property included in the property description attached to the Articles. 56. None of the owners of the remaining 2,027 acres (99%) of real properties purportedly included in the HOA s boundaries are identified as parties to the Articles, incorporators or members of the HOA. 10

11 57. A list of the names of legal owners of the real property, as well as a map that reflects legal owners, at the time the Articles were filed is attached hereto as Exhibits D and E, respectively; 58. Accordingly, as of the date of the filing, 99% of the owners (2,027 acres) of real property did not agree to be bound by the Articles, nor did they have knowledge of the filing. 59. Upon information and belief, Lewton was not the lawful agent of the other owners of the real property purportedly made part of the HOA. 60. Upon information and belief, Lewton did not have a power of attorney for the other owners of the properties within the HOA s boundaries authorizing him to act on their behalves. 61. Upon information and belief, if Lewton had such power of attorneys, he did not record them. 62. Accordingly, the Articles were not executed with authority of all owners of real property purportedly made part of the HOA. 63. The HOA s name in the title (and the FIRST paragraph) of the Articles, Hi- Country Estates Homeowners Association, does not match the name of the HOA in the title of the Covenants, Hi-Country Estates, Phase II. Addendum to Articles 64. On or around August 16, 1973, Charles Lewton executed an Addendum to the Articles adding terms thereto ( Addendum to Articles ) and filed the Addendum to Articles with the Utah Secretary of State on the same date. 65. The Addendum to Articles is attached hereto as Exhibit F. 66. Accordingly, the Addendum to Articles was filed with the State almost two months before the original Articles were filed (October 5, 1973). 67. There is no reference in the Articles to an approved addendum thereto. 11

12 68. There is no property legal description attached to the Addendum to Articles. 69. The notable term added by the Addendum to Articles concerns voting and funding of utility and road improvements, specifically; that all such installations require a vote of fifty percent (50%) of members of the HOA and a deposit of the voting member s pro rata share of costs for the improvements. 70. Upon information and belief, this provision was never followed by the HOA; 71. Upon information and belief, there are no records that will demonstrate that the roads that have been improved received 50% approval prior to improvement; 72. Upon information and belief, there are no records that will demonstrate that the approving members deposited their pro rata share of improvement costs prior to improvement of said roads. 73. The Addendum to Articles also distinguishes that if improvements are installed in an area not electing the improvements, the members in that area may not use the improvement (roads) until the members in the area paying for the improvements have been reimbursed the cost of the improvement. 74. The Addendum to Articles was signed only by Charles Lewton. 75. The Addendum to Articles was not notarized. 76. Nowhere in the Addendum to Articles does Charles Lewton purport to be acting in a representative capacity for a partnership or corporation (Hi Country Estates Limited Partnership, Hi-Country Estates, Inc., High Country Estates, Second Limited Partnership). 77. Accordingly, it must be presumed that Lewton was acting in his personal capacity in executing the Addendum to Articles. 12

13 78. At the time the Addendum to Articles was executed and filed, Lewton owned less than 1% (an 8-acre parcel) of the real property purportedly included within the HOA boundaries reflected by the legal description attached to the Articles. 79. At the time the Addendum to Articles was executed and filed, none of the Hi Country Estates entities owned any of the real property purportedly within the HOA s boundaries. 80. Upon information and belief, Lewton lacked authority to execute the Addendum to Articles on behalf of the of the 99% of owners of the real property (2,027 acres) within the HOA s purported boundaries. 81. Accordingly, the Addendum to Articles was executed without the authority of all properties allegedly burdened thereunder. 82. The Addendum to Articles did not contain any representation that they had been authorized by 75% of membership as required by the Articles. 83. Upon information and belief, 75% of the owners of the real properties had not approved the Addendum to Articles. 84. Upon information and belief, there are no records documenting that 75% of the owners of the real properties approved the Addendum to Articles. 85. Utah Code Ann , in effect at the time, required amendments to articles of incorporation be voted on and approved by at least two-thirds of members at a properly noticed meeting, or, if there are no members, that two-thirds of the governing board of trustees vote to approve the amendment. 86. If an amendment was approved by two-third of members, Utah Code Ann , then in effect, required that the amendment expressly identify either the date of the membership meeting at which the amendment was voted on and approved by two-thirds of the 13

14 votes, or that the amendment was adopted by consent in writing signed by all members entitled to vote. 87. The Addendum to Articles does not identify the date of a properly noticed meeting at which it was approved by two-thirds of HOA members. 88. Upon information and belief, the Addendum to Articles was not approved by twothirds of the HOA s alleged membership at a properly noticed meeting. 89. The Addendum to Articles does not identify that it was approved by written consent of all HOA members. 90. Upon information and belief, members of the HOA did not provide written consent for the approval of the Addendum to Articles 91. Upon information and belief, there are no records demonstrating that the Addendum to Articles were voted on and approved by two-thirds of the Board of the HOA. 92. A properly adopted amendment must also be executed by one principal of the corporation and verified by another officer s signature on the amendment pursuant to Utah Code Ann The Addendum to Articles is not verified by the signature of an officer of the HOA Articles 94. On or around March 16, 2015, Arlene Johnson, declaring to be acting within the powers vested in [her] as President of the Hi Country Estates Homeowners Association executed Addendum Number 2 Certificate of Incorporation Hi-Country Estates Phase II Homeowners Association (the 2015 Articles ). 95. The 2015 Articles are attached hereto as Exhibit G. 96. The name of the HOA in the title of the 2015 Articles does not match the name of the HOA as set forth in the Articles and Addendum to Articles. 14

15 97. The name of the HOA in the title of the 2015 Articles does not match the name of the HOA for which Arlene Johnson is allegedly authorized to act on behalf of as set forth in the signature section of the 2015 Articles. 98. The first notable change in the 2015 Articles states that pursuant to Utah Code Ann. 57-8a-104(2), approval required for amending the Articles be reduced from 75% to 67%, which would have required a 75% vote to effectuate such a change. 99. The second notable change to the 2015 Articles included a major revision to the legal description of the land included within HOA boundaries, resulting in a discrepancy of approximately 962 acres between the property descriptions attached to the two documents (the Articles and the 2015 Articles) A map of the property legal description attached to the 2015 Articles is attached hereto as Exhibit H The HOA s legal description from the Articles does not include Arlene Johnson s personally owned properties When Ms. Johnson made this amendment to the 2015 Articles, all of her properties were intentionally included in the updated legal description of that document The 2015 Articles do not represent that membership voted on or approved the amended property description and no records exist, including minutes of meetings which are required to be kept indefinitely, of any such vote Upon information and belief, membership did not vote on or approve the amended text in the 2015 Articles Upon information and belief, membership did not vote on or approve the amended property legal description. 15

16 106. Upon information and belief, there are no minutes or records demonstrating that 67% of membership approved the amended the text and the property legal description on the 2015 Articles Accordingly, upon information and belief, there was no authority to amend the text and the HOA s property description as set forth in the 2015 Articles Upon information and belief, the 2015 Articles were rejected by the State of Utah and were never officially filed. Protective Covenants 109. On or around October 10, 1973, Charles Lewton recorded Protective Covenants for Hi-Country Estates, Phase II (the Covenants ) in the Salt Lake County recorder s office. (The Covenants are attached hereto as Exhibit I.) 110. The Covenants do not define the terms Grantor(s), or Grantee(s) therein, yet these terms are used several times in the Covenants The Covenants were signed only by Lewton The Covenants purportedly bind subsequent owners of said development, however, there is no recorded plat defining the development, no map of the development attached to the Covenants and no list of owners attached to the Covenants The Covenants are purportedly entered by the owners of the herein described property and purport to apply to all real property described in the attached legal description: Know all men by these presents: That the owners of the herein described property, hereby subject said property to the following covenants, restrictions and conditions; and the acceptance of any deed or conveyance thereof by the grantee or grantees therein; and their, and each of their heirs, executors, administrators, successors, and assigns, shall constitute their covenant and agreement with the undersigned, and with each other, to accept and hold the property described or conveyed in or by such deed of conveyance, subject to said covenants, restrictions and conditions, as follows, to-wit: (Emphasis added.) 16

17 114. Upon information and belief, the owners of the property described in legal description attached to the Covenants did not sign the Covenants The property description attached to the Covenants is different from the property description attached to the Articles; purportedly encumbering about 1,955 acres instead of the 2,035 purportedly encumbered by the Articles A map of the real property purportedly burdened by the Covenants as depicted in the legal description attached to the Covenants is attached hereto as Exhibit J The differences between the two property descriptions attached to the Articles and the Covenants are substantial, resulting in a discrepancy of approximately 80 acres The Covenants do not contain an explanation for the differing property descriptions, nor purport to be an authorized amendment to the property description included in the Articles In fact, the Covenants do not make any reference to, or specifically tie themselves to, the Articles The HOA s name in the title of the Covenants, Hi-Country Estates, Phase II has never been registered with the State of Utah and does not match the name of the HOA in the Articles, Hi-Country Estates Homeowners Association The Covenants were not executed or approved by the owners of the real property purportedly encumbered therein Upon information and belief, of the 1,955 acres of real property purportedly encumbered by the Covenants, Lewton owned only 8 of the acres (less than 1% of the encumbered land) inside that area Upon information and belief, none of the Hi Country Estates entities owned any real property within the boundaries of the legal description attached to the Covenants. 17

18 124. The Covenants purport to impose various restrictions, covenants and conditions on the real property, including the following: a. Restricting building types and usage; b. Restricting homes to only allow one family per dwelling; c. Requiring subdivision of lots to be approved by a yet-to-be-formed Architectural Control Committee ( ACC ); d. Restricting placement of structures upon lots (only one barn and a 3-car garage allowed); e. Requiring prior ACC approvals for any building or altering of any structure (including buildings, trailers, fences, walls, swimming pools) f. Requiring ACC approval for any building location; g. Referencing easements on a plat. There was no subdivision plat attached to these Covenants nor was a subdivision ever recorded; h. Prohibiting nuisances, specifically the burning of trash (which is to be placed in covered containers, concealed from public view by an attractive enclosure); i. Prohibiting old or second-hand structures or permanent trailers from being placed on a property; j. Prohibiting signage of any type; k. Prohibiting any type of trade or commercial activity of any kind on any lot; l. Requiring all garbage to be disposed of in designated areas; m. Requiring animals to not be an annoyance and to be housed if outdoors; n. Requiring natural vegetation to be left undisturbed; o. Requiring that water, butane, propane and storage tanks be screened and hidden from view; 18

19 p. Requiring all fence types and plans be reviewed by the ACC prior to installation. Also the use of barbed wire fencing is prohibited on all road frontages; q. Requiring that fire-damaged buildings be re-built or removed in a timely manner (including all debris and the foundations); r. Declaring that all roads, road maintenance and snow removal shall be under the exclusive jurisdiction of a to-be-formed HOA. s. Requiring plans to be approved by the ACC prior to any excavations, construction or remodeling or adding to any structure and that a set of those plans shall be filed as a permanent record with the ACC The land use restrictions in the Covenants referenced have not been uniformly enforced and have been abandoned Rather, the land use restrictions in the Covenants have been applied in a discriminatory fashion to harass Vacant Land Owners while willfully promoting an antidevelopment agenda The Covenants provide that Hi-Country Estates, Inc., will form a non-profit HOA (at some future date) and that each lot owner or owners will be members of such association. (Art. II, Sec. 1) Hi-Country Estates, Inc. never formed a non-profit HOA with the State of Utah Neither do the Covenants reference that they were tied to, or enforceable by, any already formed HOA The Covenants reference that each land owner covenanted and agreed to pay annually his pro-rata share of the costs to maintain the roads, streets and common areas, including, but not limited to, the common areas set aside for the delivery and pickup of mail, the pickup of 19

20 children for school by school buses and other vehicles, and an area for garbage collection. (Art. II, Sec 2) The Covenants reference future HOA assessments, but the commencement date and amount of assessment is left blank The Covenants provide that assessments may be increased (from the unspecified amount) up to five percent (5%) each year, unless approved by written consent of a majority of the lot owners As to assessments, the Covenants provide that [a]t such time as any public body shall undertake to maintain the roads and streets and provide the other services contemplated herein, this covenant shall cease, terminate, and be held for naught By their express terms, the Covenants may not be amended for a twenty-five (25) year period and require a written agreement executed by the then record owners of more than three-fourths (3/4) in area of said property... be placed on record in the office of the County Recorder of Salt Lake County, by the terms of which agreement any of said conditions or covenants are changed, modified or extinguished..., and then only at twenty (20) year intervals thereafter by mutual written agreement with not less than seventy per cent (70%) of the then owners of record title of said property... duly executed and placed of record in the office of the Country Recorder of Salt Lake County, Utah (Art. III, Sec. 1) The Covenants provide that the ACC members must be approved by a majority of owners of lots in the property herein described and only owners of said lots shall be privileged to vote for said Architectural Control Committee. (Art. III, Sec. 6) 136. The Statute of Frauds, codified at Utah Code Ann and in effect in October 1973, requires that covenants burdening or granting an interest in real property be in writing and signed by the owner of the land in order to be valid. 20

21 137. The Covenants do not satisfy the Statute of Frauds for the following reasons: a. The Covenants were signed only by Lewton; b. The notary public certified that Charles Lewton signed personally, and does not state that he was signing on behalf of any other entity; c. Lewton owned less than 1% (a single 8-acre parcel) of the real property included in the property description attached to the Covenants; d. None of the owners of the remaining 99% of real property (1,955 acres) purportedly burdened by the Covenants signed the Covenants (a list of the names of legal owners of the real property, as well as a map that reflects the legal owners, at the time the Covenants were recorded is attached hereto as Exhibits K and L, respectively); e. Accordingly, none of these other owners of real property agreed to be bound by the Covenants. f. Pursuant to Utah Code Ann in effect at the time, a land owner cannot convey a greater interest in real property than he is lawfully entitled to. g. In other words, Lewton could only burden real property which he lawfully owned at the time. h. In order for Lewton to lawfully convey or burden real property not owned by him, Lewton would have to have a power of attorney to convey an interest in real estate as an agent for the owner of the property burdened. i. Pursuant to Utah Code Ann , a power of attorney to convey an interest in real property on behalf of the property s owner must be acknowledged or proved, and certified and recorded. 21

22 j. Upon information and belief, the owners of the properties purportedly burdened by the Protective Covenants did not execute powers of attorney permitting Lewton to burden their properties on their behalf. k. Upon information and belief, if any such powers of attorney were executed, the documents were not properly certified and recorded. l. Accordingly, upon information and belief, Lewton did not have authority to burden all properties within the alleged legal description attached to the Covenants by recording the Covenants. m. Accordingly, based on the plain language of the Covenants, Lewton is acting as the presumed grantor. n. Accordingly, only those owners who took title through Lewton s personal 8- acre property would be Lewton s grantees bound by the Covenants. o. Hi-Country Estates is typed above Lewton s signature. p. There was no entity operating under the name Hi-Country Estates registered with the State of Utah at that time, or at any time. q. To the extent Hi-Country Estates executed the document, there is no information identifying which entity with a similar name purportedly executed the Covenants (Hi Country Estates, Limited Partnership; Hi Country Estates, Second Limited Partnership; Hi Country Estates, Inc.; Hi-Country Estates Homeowners Association) or Lewton s affiliation with, and authority to act on behalf of, said entity. r. None of the Hi Country Estates entities owned any of the real property burdened by the Covenants; 22

23 1974 Covenants 138. On or around February 4, 1974 a corrected version of the Covenants was recorded as entry ( 1974 Covenants ) The 1974 Covenants are attached hereto as Exhibit M The 1974 Covenants are identical to the Covenants with the exception of one change to the legal description of the real property The legal description attached to the 1974 Covenants changed the legal description from West ½ of Section 8 to East ½ of Section 8, changing approximately 640 acres A map illustrating the property description attached to the 1974 Covenants is attached hereto as Exhibit N The HOA s name in the title of the 1974 Covenants, Hi-Country Estates, Phase II has never been registered with the State of Utah and does not match the name of the HOA in the Articles, Hi-Country Estates Homeowners Association The 1974 Covenants were not duly authorized and executed, rather, the document contained only a photocopy of Lewton s signature, exactly as it appeared on the original Covenants The legal description attached to the 1974 Covenants purportedly encumbered 1,955 acres Upon information and belief, on the date of the re-recording, Lewton owned only 8 acres (less than 1%) of the real property purportedly encumbered by the 1974 Covenants legal description (1,955 acres) Upon information and belief, on the date of the re-recording, none of the Hi Country Estates entities owned any of the real property purportedly encumbered by the 1974 Covenants. 23

24 148. Upon information and belief, on the date of re-recording on February 4, 1974, the real property purportedly encumbered by the 1974 Covenants was still owned as described in the list of owners and the ownership map attached as Exhibits K and L, respectively Upon information and belief, there are no records demonstrating that the owners of the real properties purportedly added to the HOA through the amended property description consented to, approved or even had notice that their properties were being added to the HOA Upon information and belief, the owners of the real properties purportedly added to the HOA through the amended property description did not execute any document authorizing their properties to be burdened by the 1974 Covenants, the Articles, or any other document relied upon or enforced by the HOA Upon information and belief, the amended property description in the 1974 Covenants was not approved in writing by 75% of members as required for amendments under the Covenants The 1974 Covenants were not a permitted amendment as they were premature and executed before expiration of the twenty-five year period required by the Covenants The 1974 Covenants also state that Hi-Country Estates, Inc., will form a nonprofit HOA (at some future date) and that each lot owner or owners will be members of such association. (Article II, Section 1) Hi-Country Estates, Inc. never formed a non-profit HOA with the State of Utah Neither do the 1974 Covenants reference that they were tied to, or enforceable by, any already formed HOA Upon information and belief, the Articles were not amended to adopt the property description attached to the 1974 Covenants, resulting in a discrepancy of approximately 720 acres between the property descriptions attached to the two documents. 24

25 1980 Covenants 157. The Second Revised, Supersedes Original and Corrected Protective Covenants dated July 31, 1973 for Hi-Country Estates, Phase II was recorded on December 19, 1980 as entry (the 1980 Covenants ). (The 1980 Covenants are attached hereto as Exhibit O.) 158. Similar to the original Covenants, the 1980 Covenants do not define the Grantor(s) or Grantee(s) The HOA s name in the title of the 1980 Covenants, Hi-Country Estates, Phase II has never been registered with the State of Utah and does not match the name of the HOA in the Articles, Hi-Country Estates Homeowners Association The 1980 Covenants are almost identical to the Covenants and the 1974 Covenants, however a few restrictions were added, including the following: a. Each residence must have a minimum of 1200 square feet of living area on the ground floor and exposed concrete must be finished; b. Any re-subdivision (lot split) approved by the ACC must result in lots that are five acres or larger; c. Each residence shall have a minimum two-stall garage; d. All recreational vehicles (boats, snowmobiles, motorcycles, etc.) must be stored in a garage or permanent outbuilding; e. Minimum setbacks for any buildings are 75 feet from the frontage road. Corner lots require 75 feet (front) and 50 feet (side) setbacks; f. The use of recreational vehicles on other s real property was prohibited; g. No permanent mobile homes were allowed; h. Only one sign is allowed if an owner is trying to sell or rent their property; 25

26 i. Animals raised on a property (livestock and/or poultry) cannot be used as a major source of income to the property owner; j. Fence heights must be less than five feet, barbed wire fencing was prohibited, chain link fencing was prohibited as frontage fencing (and more than 75 feet from the residence); k. Requirements that property owners install their own drainage structures (culverts, Irish crossings, etc.) where driveways enter the main road; l. Responsibility of property owners to repair damages caused during construction The land use restrictions added to the 1980 Covenants referenced have not been uniformly enforced and have been abandoned Rather, the land use restrictions added to the 1980 Covenants have been intentionally applied in a discriminatory fashion to harass the Vacant Land Owners and promote an anti-development agenda Like the Covenants and the 1974 Covenants, the 1980 Covenants state that Hi- Country Estates, Inc., will form a non-profit HOA (at some future date) and that each lot owner or owners will be members of such association. (Art. II, Sec. 1). a. Hi Country Estates, Inc. never formed a nonprofit HOA with the State of Utah. b. The 1980 Covenants do not contain any language that states that they were tied to, or enforceable by, any already formed HOA. c. At the time the 1980 Covenants were executed, Hi Country Estates, Inc. s registration with the State of Utah had already expired, and the corporation had been dissolved. 26

27 d. Accordingly, even if Hi Country Estates, Inc. attempted to form an HOA after executing the 1980 Covenants, it could not legally do so. e. Like the Covenants, the 1980 Covenants do not reference or otherwise tie the 1980 Covenants to the Articles. f. If the 1980 Covenants intended for the Articles to satisfy the requirement therein regarding a to be formed HOA, the 1980 Covenants should have expressly stated as much, or, at the very least, the documents should have been consistent in referencing the HOA/owners of the burdened property by the same name (Articles filed on behalf of Hi-Country Estates Homeowners Association; 1980 Covenants titled as being recorded by Hi-Country Estates, Phase II but executed by Hi-Country Estates. ) 164. Like the Covenants, the 1980 Covenants do not provide a commencement date or define an amount for HOA assessments Like the Covenants, the 1980 Covenants provide that they may only be amended after twenty-five (25) years, and then only at twenty (20) year intervals thereafter, and subject to seventy percent (70%) written member approval. a. The 1980 Covenants were premature and executed before the twenty-five year waiting period required for amendments. b. The 1980 Covenants were not accompanied by written approval of 70% of members, recorded with the County The 1980 Covenants were purportedly executed by Hi-Country Estates and signed by Larry F. Fuller in his self-proclaimed capacity as President, Homer Engle, in his selfproclaimed capacity as Vice President and Eldon Kent Howard in his self-proclaimed capacity as Director. 27

28 167. As there are several Hi Country Estates entities, the 1980 Covenants fail to identify which entity the 1980 Covenants were purportedly executed on behalf of In the notary block below the signatures the notary public certified the following: the [signing individuals] personally appeared before me, who being by me first duly sworn, declared that they are the persons authorized to sign the foregoing instrument and duly acknowledged to me that they executed the same in response to the wishes of the majority of Association Members during the Annual Membership Meeting on July 6, (Emphasis added.) 169. Upon information and belief, there are no records documenting that the 1980 Covenants were voted on and approved of in writing by at least 70% of the entire ownership of the Association Upon information and belief, individuals who were not owners of real properties within the HOA s then purported legal boundaries (from the Articles), and therefore lacked authority to vote, were improperly permitted to vote The 1980 Covenants also included another revised legal description of the real property purportedly burdened by the Covenants A map illustrating the purported boundaries of the HOA according to the revised legal description attached to the 1980 Covenants is attached hereto as Exhibit P The revised property description added approximately 320 acres to the HOA boundaries The revised property description also completely removed a separate property (approximately 82 acres in size) from the HOA s boundaries In sum, over 402 acres of real property were affected by the revised legal description; either being added to the HOA s purported boundaries and being burdened by the 28

29 accompanying restrictions and regulations, or being released therefrom. (Compare Ex. M and Ex. O ) The primary consequence of the revised property description attached to the 1980 Covenants was the purported addition of land owned by approximately ten new owners A map of the legal owners of the real property at the time the 1980 Covenants were recorded is attached hereto as Exhibit Q Upon information and belief, the owners of the properties that were purportedly added to the HOA through the 1980 Covenants desired to avail themselves of the common areas that had already been funded (roads and water system), or were being funded, by the owners in the area purportedly functioning as the HOA A secondary consequence of the revised property description attached to the 1980 Covenants was the 82-acre parcel that was removed from the HOA s legal description was allowed continued access to their property on HOA roads while escaping the need to pay HOA assessments to maintain and snowplow these roads Upon information and belief, there are no minutes or voting records from the July 6, 1980 meeting of HOA members at which the amendment to change the property description (adding parcels as well as removing parcels from HOA boundaries) was allegedly voted on and adopted by the majority of owners Upon information and belief, there are no records demonstrating that the majority of the owners even had notice of the change to the property description While notes from the annual HOA meeting document that other changes to the Covenants were discussed and voted on, there is no indication from the notes that membership ever discussed or voted on revising the legal description as attached to the 1980 Covenants. 29

30 183. Upon information and belief, there are no records demonstrating that 70% of members provided written authorization for the recording of the amended property description Upon information and belief, there are no records demonstrating that the owners of the real properties purportedly added to the HOA through the amended property description consented to, approved or even had notice that their properties were being added to the HOA Upon information and belief, the owners of the real properties purportedly added to the HOA through the amended property description did not execute any document authorizing their properties to be burdened by the 1980 Covenants, the Articles, or any other document relied upon or enforced by the HOA Both the Covenants and the 1980 Covenants state that Hi Country Estates, Inc. may add plat[ted] additional subdivision areas which would be an extension of the road system and common areas and effectively increase the real property subject to and entitled to the benefits under the Covenants However, upon information and belief, there is no documentation that Hi Country Estates, Inc. (dissolved by the date of the 1980 Covenants), approved the change to the property description or plat[ted] additional subdivision areas which would be an extension of the road system and common areas as contemplated by the original Covenants As there is no documentation that Hi Country Estates, Inc., approved the change to the property description or that at least seventy percent of the members approved the change, there is no evidence that the change to the amended legal description attached to the 1980 Covenants was lawfully authorized The Articles were not amended to adopt the property description attached to the 1980 Covenants, resulting in a discrepancy of approximately 962 acres between the property descriptions attached to the two documents (nearly half of the 2,000 acres in this area). 30