Appeal from the District Court of the First Judicial District of the State of Idaho, in and for Kootenai County. The Hon. John T. Mitchell, District Judge.
The opinion of the court was delivered by: Eismann, Chief Justice.
The judgment of the district court is vacated.
This is an appeal from a summary judgment holding that the defendants violated restrictive covenants in a commercial development. Because the district court misapplied the applicable law, we vacate the judgment.
Jacklin Land Company (Jacklin) owned real property near Interstate 90 in Post Falls that it developed into a commercial, professional, and industrial complex called Riverbend Commerce Park. The development was subject to covenants, conditions, and restrictions (CC&R's), which were recorded on November 7, 1988, and subsequently amended by documents recorded on July 26 and 27, 1989. Initially, the development was not intended to include retail businesses.
In 1990, Quality Centers Associates (QCA) desired to purchase from Jacklin seventeen contiguous unimproved lots on which to construct a shopping center, but it did not want the land to be subject to all of the CC&R's. Jacklin agreed to amend the CC&R's to provide that they did not apply to the seventeen lots, and it recorded an amendment so providing on November 7, 1990. On the same date, it recorded a contract (Agreement) in which QCA agreed to comply with and conform to Articles 2, 3, 4, 5, and 6 of the CC&R's. QCA then constructed a shopping center called "Factory Outlets" on thirteen of the lots, leaving lots 1 through 4 undeveloped. The Agreement also provided that it would be binding on QCA's successors and/or assigns. In 2005, a group consisting of a corporation, trusts, and individuals (herein collectively called KLProperties) purchased the shopping center and land from QCA.
In April 2008, a retailer of recreational vehicles named Blue Dog RV, Inc. (Blue Dog) began negotiating with Jacklin about the purchase of land in Riverbend Commerce Park from which to sell recreational vehicles. Blue Dog also discussed renting a building from Jacklin. During the course of the discussions, Blue Dog inquired about the four undeveloped lots across the street, and Jacklin provided Blue Dog with information on how to contact KL Properties. Ultimately, on July 1, 2008, Blue Dog entered into a written agreement with KL Properties to lease its four undeveloped lots.
During the ensuing week, Blue Dog relocated its retail sales operation to the four lots it was leasing from KL Properties. On July 7, 2008, Blue Dog informed Jacklin that Blue Dog had leased the four lots from KL Properties. The following week, Jacklin informed KL Properties in writing that Blue Dog was to vacate the four lots within ten days. Further negotiations among the parties proved unfruitful, and on August 22, 2008, Jacklin filed this action seeking to enjoin KL Properties and Blue Dog from utilizing any portion of KL Properties's land for the purposes of a commercial recreational vehicle sales and/or rental facility or business. Jacklin also sought a declaratory judgment that the uses by Defendants of the four undeveloped lots violate the Agreement.
On December 11, 2008, Jacklin moved for summary judgment seeking an injunction permanently enjoining Defendants from using the property for a recreational vehicle dealership or facility and a declaratory judgment that such use violates the CC&R's. Two months later, Defendants moved for summary judgment on the grounds that the CC&R's were not binding on them, that the CC&R's did not prohibit Blue Dog's activities on the four lots, that Jacklin had failed to prove any irreparable injury, that it breached the implied covenant of good faith and fair dealing, and that its claim was barred by waiver and estoppel. After the motions were briefed and argued, the district court issued its decision on June 15, 2009, finding that the restrictive covenants were applicable to KL Properties because they were incorporated by reference into the Agreement; that Defendants had breached three articles of the restrictive covenants; that Jacklin had not breached the covenant of good faith and fair dealing; that the defenses of waiver and estoppel were inapplicable under the circumstances; and that Jacklin was not entitled to a preliminary injunction evicting Blue Dog from the property because Jacklin had not shown that any damage it may ultimately suffer could not be compensated by an award of damages.
Jacklin moved for reconsideration of the court's decision to deny it injunctive relief and filed a second motion for summary judgment addressing the same issue. Defendants moved for reconsideration, requesting an order that Jacklin was not entitled to either injunctive relief or damages. After those motions were briefed and argued, the district court issued a decision holding that Jacklin did not need to show irreparable harm in order to receive injunctive relief. It granted Jacklin's motions and denied Defendants' motion for reconsideration.
On October 19, 2009, the district court entered a judgment granting declaratory relief that Blue Dog's current use of the property violated parts (i), (ii), and (iii) of the Agreement and Articles 3 and 4 of the CC&R's that were incorporated into the Agreement. It ordered Defendants to cease and desist from using the four lots for the storage and/or parking of recreational vehicles by October 25, 2009, and to take all action necessary to timely comply with the judgment. It also permanently enjoined Defendants from using any portion of the property in a manner ...