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Not designated for publication ARKANSAS COURT OF APPEALS DIVISION I No. CA 08-1395 R.G. SKINNER AND SUSAN M. Opinion Delivered May 13, 2009 SKINNER APPELLANTS APPEAL FROM THE BENTON COUNTY CIRCUIT COURT, V. [NO. CV-07-2161-5] HONORABLE XOLLIE DUNCAN, THOMAS L. SELIGA, PAULA J. JUDGE SELIGA, AND JAMES COX APPELLEES REVERSED AND REMANDED COURTNEY HUDSON HENRY, Judge Appellants Susan and R.G. Skinner appeal from that portion of the trial courts order denying their request for attorneys fees. For reversal, appellants contend that the trial court erred by failing to grant their request because an award of fees was mandatory under the terms of the protective covenants. Appellants argument has merit, and we reverse and remand for an award of attorneys fees. On October 29, 2007, appellants filed suit against appellees Paula and Thomas Seliga. In their complaint, appellants alleged that the parties lived in LaRue Acres Subdivision, which is governed by protective covenants. Appellants maintained that the Seligas violated the covenants by digging a trench across the only road that provided access to the appellants property. Appellants sought both injunctive relief and monetary damages sustained to their
BMW MINI Cooper allegedly caused by driving the vehicle over the ditch. The Seligas answered the complaint and filed a counterclaim alleging that appellants were violating the restrictive covenants by using their home for commercial purposes. Appellants subsequently amended their complaint to join as a defendant, appellee James Cox, another landowner in the subdivision. After a hearing, the trial court ruled that the Seligas and Cox violated the restrictive covenants by digging the ditch across the road. The court thus granted appellants request for injunctive relief and permanently enjoined appellees from engaging in any conduct that interfered with the road. The trial court refused appellants claim for damages to their vehicle and also dismissed the Seligas counterclaim. In addition, the trial court declined to award appellants attorneys fees, ruling that the parties would bear their own fees and costs. Appellants filed a timely motion for the trial court to reconsider its refusal to award attorneys fees. In this motion, appellants asserted that the protective covenants mandated an award of attorneys fees to landowners who file suit to enforce the covenants against violating landowners. The trial court took no action on the motion, and thus by rule, the motion was deemed denied after thirty days. See Ark. R. App. P.–Civil 4(b)(1). Appellants now bring this appeal. As their only point for reversal, appellants contend that the trial court erred by denying their request for attorneys fees. Appellants equate the protective covenants with a contractual agreement and argue that the language of the covenant mandated an award of -2-CA 08-1395
fees. Appellees respond with the argument that appellants are not entitled to attorneys fees because they also pursued a tort claim for damages to their vehicle. The standard of review for bench trials is whether the trial courts decision is clearly erroneous. Smith v. Eisen, 97 Ark. App. 130, 245 S.W.3d 160 (2006). However, we give no deference to the trial courts conclusions on questions of law. Housely v. Hensley, 100 Ark. App. 118, 265 S.W.3d 136 (2007). In Arkansas, attorneys fees are allowed when authorized by contract or by statute. Martin v. Scharbor, 95 Ark. App. 52, 233 S.W.3d 689 (2006). A restrictive covenant is considered a private agreement that rests on the contractual basis of mutual obligation. See White v. McGowan, 364 Ark. 520, 222 S.W.3d 187 (2006); Rickman v. Hobbs, 253 Ark. 969, 490 S.W.2d 129 (1973); Moore v. Adams, 200 Ark. 810, 141 S.W.2d 46 (1940). By purchasing their properties, the parties in this case agreed to be bound by the terms of the protective covenants governing the subdivision, including provisions regarding attorneys fees. See Damron v. Univ. Estates, Phase II, Inc., 295 Ark. 533, 750 S.W.2d 402 (1995). Therefore, we agree with appellants that attorneys fees can be awarded consistent with Arkansas law pursuant to the terms of the protective covenants. The protective covenants at issue in this case contain the following provision: Any lot owner may enforce the provisions of this Declaration by seeking injunctive relief, monetary damages, and any other relief afforded them under the laws of the State of Arkansas or the United States of America. A lot owner shall also be entitled to recover legal fees and costs, including reasonable attorneys fees, from any violating lot owner or owners in any enforcement action. -3-CA 08-1395
(Emphasis supplied.) This provision uses the word shall when addressing a lot owners entitlement to attorneys fees in actions to enforce the restrictive covenants. In construing any contract, courts must consider the sense and meaning of the words used by the parties as they are taken and understood in their plain and ordinary meaning. Magic Touch Corp. v. Hicks, 99 Ark. App. 334, 260 S.W.3d 322 (2007). The use of the word shall indicates mandatory compliance with the contracts terms unless compliance would result in an absurdity. Marcum v. Wengert, 344 Ark. 153, 40 S.W.3d 230 (2001). In Marcum, the supreme court construed a provision in a lease that used the term shall in reference to attorneys fees, and the court held that the provision mandated an award of fees. We must reach the same conclusion here. The provision plainly requires an award of reasonable attorneys fees in enforcement actions against lot owners who violate the protective covenants. Appellees are mistaken in their view that attorneys fees cannot be awarded because appellants included a tort claim for damages in their complaint. Appellees argument is based on Arkansas Code Annotated section 16-22-308 (Repl. 1999), which provides statutory authority for an award of fees to prevailing parties in contract actions. The statute does not, however, permit an award of attorneys fees in a tort case. Barringer v. Hall, 89 Ark. App. 293, 202 S.W.3d 568 (2005). The rule upon which appellees rely arises from cases in which both contract and tort claims are pursued in a single action, where our courts hold that fees are proper under the statute only when the action is based primarily in contract. Jiles v. -4-CA 08-1395
Union Planters Bk., 90 Ark. App. 245, 205 S.W.3d 187 (2005). Here, however, appellants request for fees is based on the contractual provision found in the protective covenants, not the statute. This agreement was enforceable according to its terms independent of the statutory authorization for attorneys fees set forth in section 16-22-308. Marcum, supra; Griffin v. First Natl Bk., 318 Ark. 848, 888 S.W.2d 306 (1994); Nef v. Ag Servs. of America, Inc., 79 Ark. App. 100, 86 S.W.3d 4 (2002). Therefore, the appellants inclusion of a claim for damages is no impediment to an award of fees authorized under the protective covenants. In conclusion, we hold that the parties agreement in the form of the protective covenants authorized and mandated an award of reasonable attorneys fees.” Therefore, we reverse and remand for the trial court to set an appropriate fee. Marcum, supra. Reversed and remanded. GLOVER and BROWN, JJ., agree. -5-CA 08-1395
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