Delano v. Pike

Summary

The Idaho Court of Appeals affirmed dismissal of a complaint seeking to prevent homeowners from operating platform-based short-term rentals under subdivision CC&Rs. The court held that the CC&Rs’ prohibition on commercial enterprises, together with an express allowance for private dwelling rentals, did not clearly prohibit short-term residential rentals. Any remaining ambiguity was resolved in favor of the free use of land under Idaho precedent.

Holdings

1. Paragraph 6 does not prohibit short-term rentals. Residential rentals, whether short-term or long-term, do not constitute commercial activity prohibited by the covenant, and the covenant does not impose a duration or advertising-method restriction on permitted private rentals.
2. Canons of construction are used to assist contract interpretation only when an ambiguity exists; they are not used to ascertain the plain meaning of an unambiguous provision. The Homeowners' ambiguity argument was also unpreserved because they had argued below that paragraph 6 was plain and unambiguous.
3. Any unresolved ambiguity in paragraph 6 must be resolved in favor of the Pikes' free use of their land.
4. The Pikes were entitled to attorney fees associated with oral argument and to costs on appeal because the Homeowners raised unsupported, unpreserved, and inconsistent arguments at oral argument.

Questions Presented

1. Whether paragraph 6 of the Swan Shores CC&Rs prohibits short-term rentals of residential property.
2. Whether the court could apply interpretive canons or examine extrinsic evidence concerning the drafters' intent when the parties had argued that paragraph 6 was plain and unambiguous.
3. Whether the district court erred by resolving any remaining ambiguity in favor of the free use of land.
4. Whether the Pikes were entitled to attorney fees related to oral argument and costs on appeal.

Disposition

affirmed