Recorded Anti-Nuisance Covenants Remain Enforceable Despite Overlapping Tort Duties: Contractual Fee Shifting Controls

A. Legal Reasoning

1. The declaration established direct, reciprocal obligations among owners

Burkett argued that the CC&Rs were not directly a contract between her and the Dryjas. The Court rejected that position through the declaration’s text. Section 10.2 made each provision a covenant benefiting “any other Owner,” while section 10.3 allowed “any Owner” to enforce “each provision.” Together, those provisions created both a duty to comply and a corresponding right to demand compliance from other owners.

This reasoning is important because it separates association enforcement from owner enforcement. The Association’s decision not to pursue the Dryjas did not eliminate Burkett’s contractual enforcement rights. Conversely, her exercise of those rights brought the declaration’s reciprocal fee consequences into play.

The Court also rejected the suggestion that enforcement was inappropriate because individual homeowners rarely draft CC&Rs. These restrictions and fee obligations appeared in the recorded declaration accepted with title. This was not a case involving subsequently imposed obligations for which the original declaration provided inadequate notice.

2. The Court identified three reasons the preexisting nuisance duty did not defeat the covenant

First, consideration supported the declaration as a whole. The lower courts’ reasoning confused a rule about consideration with a categorical prohibition against contractual promises that resemble legal duties. Each owner accepted a comprehensive set of restrictions in exchange for reciprocal obligations from other owners and the Association. Those obligations governed matters including assessments, landscaping, irrigation, and home size.

The Court did not require a distinct exchange for every covenant. Even if a promise to avoid nuisance would not, standing alone, supply new consideration, that did not invalidate the same promise within a broader, supported agreement. The opinion therefore preserves the preexisting-duty rule while rejecting its clause-by-clause misuse.

Second, section 7.18 was not identical to common-law nuisance law. The covenant benefited every owner and authorized enforcement by any owner or the Association. A common-law private nuisance claim ordinarily protects the affected person’s interest in the enjoyment of property; the covenant instead established a subdivision-wide contractual obligation.

The provision also separately prohibited objectionable sounds based on their beat, frequency, shrillness, or loudness, and categorically restricted specified exterior sound devices. These restrictions were not necessarily coextensive with nuisance liability. The Court nevertheless declined to decide precisely how far the covenant’s noise standard departed from the common law.

Third, even complete overlap would not destroy contractual enforceability. This is the decision’s broadest doctrinal point. With sufficient consideration, parties may promise to refrain from conduct that the law already prohibits. The same conduct may therefore violate both an agreed contractual term and an independently imposed tort duty.

The Court grounded that conclusion in freedom of contract, while retaining familiar limits: legislation may prohibit a term, and sufficiently weighty public policy may overcome enforcement. Neither barrier was established here.

3. Statutory fee eligibility and contractual fee entitlement are different inquiries

A.R.S. § 12-341.01(A) permits a discretionary fee award in a contested action “arising out of a contract.” Cases interpreting that language ask whether a tort claim could exist without the contractual breach. That inquiry limits statutory fee recovery where a contractual relationship merely provides the setting for an independent tort.

Section 10.3 asked a different question. It covered court proceedings “instituted in connection with” the declaration’s enforcement rights and remedies. Moreover, the statute expressly preserves agreements providing for attorney fees. Importing the statutory test into this provision would therefore replace the parties’ chosen language with a judicial limitation drawn from a different source.

4. The enforcement attempt triggered the clause even though Burkett lost

Burkett alleged a violation of section 7.18, claimed breach of the CC&Rs, sought the injunctions and damages section 10.3 authorized, and requested fees under that same provision. Her action did not merely mention the declaration: it invoked its enforcement machinery.

The Dryjas prevailed on every claim. Because section 10.3 applied to prevailing parties generally, it protected successful defendants as well as successful enforcing plaintiffs. Otherwise, the agreement’s reciprocal allocation of litigation risk would be undermined.

Burkett’s own fee request reinforced the nature of the proceeding, but the holding did not depend on a rule that requesting fees automatically creates liability for an opponent’s fees. Entitlement followed from the contractual text and the substance of the action.

5. The holding has express boundaries

The Court did not hold that every lawsuit between subdivision owners triggers section 10.3 merely because the CC&Rs are relevant. It expressly reserved the clause’s outer limits. It also did not decide the Dryjas’ alternative theory based on Burkett’s claims against the Association.

Nor did the Court eliminate the requirement of reasonableness. The award was mandatory as to entitlement, but the superior court still had to determine the reasonable amount. The decision establishes neither automatic reimbursement of every dollar claimed nor unrestricted enforcement of every provision in every declaration.

B. Precedents Cited and Their Influence

1. Contract interpretation and reciprocal property restrictions

• Powell v. Washburn, 211 Ariz. 553 (2006). This decision supplied the foundational proposition that a deed containing a restrictive covenant running with the land is a contract. It also supported the reciprocal nature of subdivision restrictions: each lot bears restrictions while receiving enforceable benefits against other lots. Those principles directly defeated Burkett’s argument that no contractual relationship existed between neighboring owners.

• Wallace v. St. Clair, 127 S.E.2d 742 (W. Va. 1962). Quoted through Powell v. Washburn, this case explained that a restricted lot is also “clothed with the benefit” enforceable against other parcels. Its role was explanatory and persuasive: it illustrated the mutual property rights underlying the Court’s reading of the declaration.

• Duffy v. Sunburst Farms E. Mut. Water & Agric. Co., 124 Ariz. 413 (1979). The Court relied on this case both for ordinary-meaning interpretation and for the principle that accepting a deed subject to recorded restrictions binds the owner. It supported enforcement despite the owners’ lack of personal participation in drafting the CC&Rs.

• Henderson v. Moskowitz, 261 Ariz. 8 (2025). Cited for interpreting CC&Rs according to the plain and ordinary meaning of their words in context, this authority supported the text-centered approach to sections 7.18, 10.2, and 10.3.

• Apollo Educ. Grp., Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 250 Ariz. 408 (2021). This case reinforced contextual contract interpretation. Here, the anti-nuisance provision could not properly be isolated from the provisions identifying its beneficiaries, authorizing enforcement, and allocating litigation expenses.

• Wilson v. Playa de Serrano, 211 Ariz. 511 (App. 2005). Its rule that clear, unambiguous restrictive covenants are enforced according to their express terms supported giving effect to the declaration rather than replacing it with a tort-only characterization.

• Am. Power Prods., Inc. v. CSK Auto, Inc., 242 Ariz. 364 (2017). This decision supplied the de novo standard for statutory application and contract interpretation. The Supreme Court independently determined the provisions’ legal meaning rather than deferring to the lower courts’ interpretations.

• Kalway v. Calabria Ranch HOA, LLC, 252 Ariz. 532 (2022). The Court distinguished this case’s concern with new affirmative obligations imposed without adequate notice in the original declaration. Here, both the anti-nuisance covenant and fee provision were already recorded when the owners accepted title. The distinction preserves limits on later amendments while enforcing existing restrictions.

2. Consideration and the preexisting-duty rule

• Travelers Ins. Co. v. Breese, 138 Ariz. 508 (App. 1983). The court of appeals had relied on this decision to conclude that parties could not contractually create duties already imposed by law. The Supreme Court explained that the case concerned an agreement unsupported by consideration: a workers’ compensation carrier undertook nothing beyond its existing statutory obligations. The comprehensive, reciprocal CC&Rs were materially different. The precedent remained valid but did not justify excising one covenant from an otherwise supported agreement.

• Demasse v. ITT Corp., 194 Ariz. 500 (1999). The Court cited this decision generally for its discussion of changes to particular terms of an at-will employment contract. Its role was contextual within the consideration analysis, not as direct authority governing nuisance covenants or homeowners’ associations.

The Court also relied on the Restatement (Second) of Contracts. Section 73 describes the preexisting-duty rule, while its commentary recognizes consideration consisting of additional or materially different performance. Section 80(2) explains that a bargain may supply consideration even if one component would not do so independently. Section 79, comment c, supports the general reluctance to scrutinize the adequacy of consideration. Together, these provisions directed attention to the overall exchange rather than an isolated promise.

3. Nuisance duties and concurrent contractual obligations

• Armory Park Neighborhood Ass'n v. Episcopal Cmty. Servs. in Ariz., 148 Ariz. 1 (1985). This case supplied the distinction between private nuisance, involving interference with a person’s enjoyment of real property, and public nuisance, involving unreasonable interference with a public right. Those definitions established the common-law baseline against which the Court assessed section 7.18’s broader beneficiaries and restrictions.

• Sirrah Enters., LLC v. Wunderlich, 242 Ariz. 542 (2017). This was the opinion’s central supporting precedent. It recognized that negligent residential construction can support both contract and tort claims and treated the legally implied warranty of workmanship and habitability as a contractual term capable of triggering a contractual fee provision. The Court reasoned that an express recorded covenant deserved no less contractual recognition. The case also supported de novo review of fee-clause applicability and the distinction between mandatory contractual fees and discretionary statutory fees.

4. Freedom of contract and its limits

• Zambrano v. M & RC II LLC, 254 Ariz. 53 (2022). The Court drew from this case both the strong public policy favoring freedom of contract and its qualifications. Contract terms may be unenforceable when legislation prohibits them or an identifiable public policy clearly outweighs enforcement. No such obstacle was established for the provisions here.

• Consumers Int'l, Inc. v. Sysco Corp., 191 Ariz. 32 (App. 1997). Quoted through Zambrano v. M & RC II LLC, this authority supplied the description of freedom of contract as a “paramount public policy.” It reinforced judicial reluctance to disregard an otherwise lawful contractual allocation of obligations and remedies.

• 1800 Ocotillo, LLC v. WLB Grp., Inc., 219 Ariz. 200 (2008). This decision supported the presumption that private parties generally are best positioned to determine whether contractual terms serve their interests. Applied here, that principle favored respecting the declaration’s reciprocal enforcement and fee provisions.

• Flagstaff Affordable Hous. Ltd. P'ship v. Design All., Inc., 223 Ariz. 320 (2010). The Court relied on its recognition that parties may specify remedies modifying common-law recovery, including preserving certain tort remedies in construction agreements. Its significance here was that overlap with tort law does not prevent parties from agreeing on their own remedial structure.

5. Statutory fee cases distinguished, not displaced

• Sparks v. Republic National Life Insurance Co., 132 Ariz. 529 (1982). This case developed the statutory test allowing fees where a tort claim could not exist but for a contractual breach. An insurer’s bad-faith claim qualified because it depended on an insurance contract and breach. The Supreme Court distinguished that statutory inquiry from interpretation of an express fee agreement.

• Barmat v. John & Jane Doe Partners A-D, 155 Ariz. 519 (1987). This decision held that legal-malpractice duties did not depend on contract and therefore did not support statutory fees merely because an attorney-client relationship existed. Its purpose was to prevent ordinary tort litigation from becoming fee-eligible whenever the parties also had a contractual relationship. It did not invalidate express contractual promises or control the contractual entitlement here.

• Ramsey Air Meds, L.L.C. v. Cutter Aviation, Inc., 198 Ariz. 10 (App. 2000). This case applied the statutory inquiry by asking whether a duty of care would exist without a contract. The lower courts relied on that reasoning because nuisance duties existed independently. Their error was not necessarily the statutory test itself, but its substitution for the declaration’s express fee language.

6. Enforcement and interpretation of the fee provision

• McDowell Mountain Ranch Cmty. Ass'n v. Simons, 216 Ariz. 266 (App. 2007). This decision supported the settled rule that attorney-fee agreements are enforced according to their terms. It reinforced the conclusion that section 10.3, rather than a generalized statutory characterization of the action, controlled.

• Heritage Heights Home Owners Ass'n v. Esser, 115 Ariz. 330 (App. 1977). Quoted through McDowell Mountain Ranch Cmty. Ass'n v. Simons, this case supplied the underlying formulation of that contractual-enforcement rule. Its inclusion showed that the Court was applying an established principle to the disputed covenant.

• D.M.A.F.B. Fed. Credit Union v. Emps. Mut. Liab. Ins. Co., 96 Ariz. 399 (1964). This case cautioned against adding terms to an unambiguous contract. Importing the statutory “but-for” limitation would have inserted a restriction the owners’ agreement did not contain.

• Cal. Cas. Ins. Co. v. Am. Fam. Mut. Ins. Co., 208 Ariz. 416 (App. 2004). The Court used its ordinary definition of “connection” as a link, association, or relationship. Burkett’s direct invocation of the declaration’s enforcement provisions plainly satisfied that meaning without requiring a decision about more remote connections.

The Court also invoked the interpretive principle stated in Antonin Scalia and Bryan A. Garner’s Reading Law: The Interpretation of Legal Texts: every word and provision should, if possible, receive effect. That principle supported applying “prevailing party or parties” to all qualifying litigants, not only the Association.

7. The vacated intermediate decision

Burkett as Tr. of Stephanie Rae Burkett Revocable Tr. Dated Jan. 28, 2011 v. Dryja, 260 Ariz. 1 (App. 2025). The Supreme Court rejected its two linked premises: that the preexisting tort duty deprived the covenant of contractual significance, and that statutory fee cases supplied the controlling contractual test. Vacatur removed that opinion as the governing appellate resolution of the dispute.

C. Potential Impact

More reliable owner-to-owner enforcement

The decision confirms that sufficiently clear declarations can create enforceable obligations among owners themselves. An association’s nonintervention does not necessarily leave an owner without a contractual remedy. Because section 7.18 benefited the entire subdivision, its enforcement framework also differed from the injury-focused framework of common-law nuisance.

Greater significance for fee-clause wording

Future disputes should focus on the actual contractual trigger, the authorized enforcement rights, and the identity of prevailing parties. Courts cannot automatically deny contractual fees by labeling the underlying conduct tortious. Equally, this decision does not establish that every nuisance suit between owners falls within every declaration’s fee clause.

Balanced litigation incentives

The ruling protects successful enforcing owners and successful defending owners alike. A claimant invoking contractual restrictions must consider the possibility of paying reasonable defense fees if the claim fails. At the same time, mandatory recovery may help owners pursue meritorious enforcement claims whose litigation costs would otherwise be prohibitive.

A broader lesson about overlapping duties

The reasoning may inform other disputes involving promises to comply with independently existing legal duties. Its central lesson is that overlap alone does not invalidate a supported contractual promise. Any extension must still account for the agreement’s language, consideration, applicable legislation, public policy, and any area-specific restrictions.