Michael K Jeanes, Clerk of Court

*** Electronically Filed ***

S. Bagnall, Deputy
11/28/2014 4:21:00 PM
Filing ID 6260417
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TIMOTHY H. BARNES, P.C.

428 East Thunderbird Road, #150

Phoenix, Arizona 85022
(602) 492-1528 Direct
(602) 331-0731 Facsimile
tim@thbpc.com
Timothy H. Barnes (SBN 003373)
Attorney for Plaintiffs

SUPERIOR COURT OF MARICOPA COUNTY, ARIZONA

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LINDA W. SWAIN, an individual; and

EILEEN T. BRESLIN, an individual,

Case No. CV2014-051035

Plaintiffs
AMENDED COMPLAINT
(Breach of Contract; Breach of
Restrictive Covenant;
Injunctive Relief)

vs.
BIXBY VILLAGE GOLF COURSE,
INC., a California corporation; HIRO
INVESTMENT, LLC, an Arizona limited
liability company; NECTAR
INVESTMENT, LLC, an Arizona limited
liability company; KWANG CO., LLC,
an Arizona limited liability company;
AHWATUKEE GOLF PROPERTIES,
LLC, an Arizona limited liability
company,
Defendants.

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Amended Complaint,

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allege as follows:
Parties, Jurisdiction, Venue

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1.

Linda W. Swain

is an owner of the real property located at 12815

S. 41st Street, Phoenix, Maricopa County, Arizona

2.

Eileen T. Breslin

Street R

is an owner of the real property located at 4229

E. Sandia, Phoenix, Maricopa County,

3.

st

Sandia R

Bixby Village Golf Course, Inc. is a California corporation that is licensed

to do business in Arizona and is doing business in Maricopa County.

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4.

Hiro Investment, LLC is an Arizona limited liability company which is

licensed to do business in Arizona and is doing business in Maricopa County.

5.

Nectar Investment, LLC is an Arizona limited liability company which is

licensed to do business in Arizona and is doing business in Maricopa County.

6.

Kwang Co., LLC is an Arizona limited liability company which is licensed

to do business in Arizona and is doing business in Maricopa County.

7.

Ahwatukee Golf Properties, LLC

is an Arizona limited

liability company which is licensed to do business in Arizona and is doing business in

Maricopa County.

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8.

Collectively, the

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9.

This court has jurisdiction over this matter in accordance with the Arizona

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Constitution, Article 6, 14, A.R.S. 12-123 and A.R.S. 12-1801.

10.

Venue is proper in Maricopa County pursuant to A.R.S. 12-401.

General Allegations

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The Lakes Deed Restriction and 1992 Covenants, Conditions and Restrictions
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On October 16, 1986, Chicago Title Agency of Arizona, Inc. (the

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, as the sole owner in trust for the benefit of The Presley Companies

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of the 18 hole executive golf course known as Ahwatukee Lakes Golf

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Course (the Ahwatukee Lakes Golf Course ), caused to be recorded as Instrument No.

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86-568479 in the records of Maricopa County, Arizona, that certain deed restriction (the

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Lakes Deed

covering the Ahwatukee Lakes Golf Course, the legal

description of which was attached to the Deed Restriction.

12.

A true and correct copy of the Deed Restriction is attached hereto as Exhibit

A and incorporated herein by reference.

13.

The substance of the Lakes Deed Restriction stated as follows:

Chicago Title Agency of Arizona, Inc., an Arizona corporation, as owner

in trust of the real property situated in the County of Maricopa, State of
Arizona, described in Exhibit A attached hereto and incorporated herein
by reference, hereby makes this deed restriction pursuant to A.R.S. 42125.01, restricting the use of said property to use as a golf course,
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facilities and improvements related thereto, for ten (10) years. This
restriction constitutes a covenant between the county assessor and the
owner of subject real property and is not for the benefit of the surrounding
properties or any third party. This restriction may be amended, revoked
or extended for any time at the discretion of the then owner of the
property, subject to the provisions of A.R.S. 42-125.01.

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14.

On September 11, 1987, the Declarant caused to be recorded as Instrument

No. 87-570515 an amendment to the Lakes Deed Restriction extending the term of the
deed restriction for one (1) additional year.
15.

A true and correct copy of the 1987 amendment to the Lakes Deed

Restriction is attached hereto as Exhibit B and incorporated herein by reference.

16.

On December 27, 1988, the Declarant caused to be recorded as Instrument

No. 88-624742 an amendment to the Lakes Deed Restriction extending the term of the
deed restriction for five (5) additional years.
17.

A true and correct copy of the 1988 amendment to the Lakes Deed

Restriction is attached hereto as Exhibit C and incorporated herein by reference.

18.

On November 13, 1992, the Declarant caused to be recorded as Instrument

No. 92-646838 a Declaration of Covenants, Conditions, Restrictions and Easements (the

and

regarding, in addition to other real

property, the Ahwatukee Lakes Golf Course.

19.

A true and correct copy of the 1992 Covenants, Conditions and Restrictions

is attached hereto as Exhibit D and incorporated herein by reference.

20.

Recital D of the 1992 Covenants, Conditions and Restrictions states as

follows:
Declarant desires to establish certain covenants, conditions, restrictions
and easements with respect to the Property for the mutual benefit of (i)
Declarant and all present and future owners or users of such portions of
the Property as remain subject to this Declaration; and (ii) any other
owner of property located within the Ahwatukee master planned
community as defined on Exhibit B attached hereto.

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pertinent part, as follows:

By this Declaration, Declarant desires to amend and restate the Lakes
Deed Restriction . . .

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22.

By recording this Declaration, the Declarant intends to comply with the

requirements and obtain the benefits of Arizona Revised Statutes Section
42-146 regarding the valuation and taxation of golf courses.

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Recital F of the 1992 Covenants, Conditions and Restrictions states as

follows:

Recital E of the 1992 Covenants, Conditions and Restrictions states, in

23.

Paragraph 2 of the 1992 Covenants, Conditions and Restrictions states as

follows:
Declaration of Use Restriction. Declarant, for the benefit of those
persons or classes of persons described in Recital D above (hereafter,
as follows:
The Property shall be used for no purposes other than golf courses and
such improvements and facilities (including without limitation,
clubhouses, restaurants, pro shops, overnight lodging facilities, resort and
connected recreational facilities, bars, parking areas and golf cart trails)
and uses as are reasonably related to, convenient for or in furtherance of
golf course use or the accommodation of golf course patrons and guests;
except that the Property may be further used for easements for ingress
and egress (vehicular and otherwise), pedestrian trails and walks, cables,
utilities, drainage and other similar easements and rights of way, and for
the construction and maintenance of walls, fences and other boundary
type protection, in each case reasonably related to the development and
use of the Ahwatukee project, together with improvements reasonably
related to said easements, uses and related services. No improvement
shall be made, constructed, installed or located on the Property that is not
reasonably related to, convenient for, or in furtherance of, the
aforementioned purposes. Declarant on its behalf and on behalf of its
successors and assigns, reserves the right to redesign or reconfigure the
golf courses at the Property or remove, modify, alter, relocate, replace,
expand, abandon, demolish, cease the use of or rebuild any of the
improvements or facilities related to the use of the Property for golf
courses, all at the discretion of the then-owner of the Property.
Neither Declarant nor its successors or assigns shall use the Property for
any purpose other than as stated above. Declarant, on behalf of itself and

its successors and assigns, agrees that the covenants and restrictions
herein may be enforced by Declarant or any Benefitted Person.

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24.

Pursuant to paragraph 6 of the 1992 Covenants, Conditions and Restrictions,

the term of the covenants, conditions and restrict

run with the land and shall be binding upon all present and future owners, occupants and

users of the Property or any portion thereof and all persons claiming an interest in and to

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follows:

Enforcement. In the event of any violation or breach of, or default under,

the provisions of this Declaration, Declarant, Developer or any Benefitted
Person entitled to enforce this Declaration may, in addition to any other
available remedies, seek injunctive relief against the then owners,
occupants or users of the Property causing the breach, default or violation
for the discontinuation of such breach, default or violation, and, if
Declarant, Developer or such Benefitted Person enforcing this
Declaration prevails, Declarant, Developer or such Benefitted Person
shall be entitled to reimbursement of all court costs and reasonable
s or users.
Regarding the Ahwatukee Lakes Golf Course

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26.

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On June 15, 2006, Defendants Bixby Village Golf Course, Inc., Hiro

Investment, LLC, Nectar Investment, LLC and Kwang Co., LLC

Owner

took fee title to the Ahwatukee Lakes Golf Course.

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Paragraph 4 of the 1992 Covenants, Conditions and Restrictions states as

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Owner Defendants took fee title to the Ahwatukee Lakes Golf Course by

Special Warranty Deed which expressly stated, in pertinent part:

GRANTOR WILL WARRANT and defend the right and title to the
above-described property unto Grantee against all claims of all persons
owning, holding or claiming by, through or under Grantor, subject to any
and all covenants, conditions, restrictions, easements, encumbrances,
liens and other matters of record.
28.

A true and correct copy of the Special Warranty Deed is attached hereto as

Exhibit E and incorporated herein by reference.

29.

On June 15, 2006, Owner Defendants entered into a Lease Agreement with

Defendant AGP in which Defendant AGP agreed, among other things, to diligently and

efficiently manage, maintain and operate the Ahwatukee Lakes Golf Course and the

Ahwatukee Country Club (collectively defined in the Lease Agreement

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30.

).

A true and correct copy of the Lease Agreement is attached hereto as Exhibit

F and incorporated herein by reference.

31.

Paragraph 5 of the Lease Agreement states as follows:

Operation of Property and Golf Course. During the term of this Lease,
the LESSEE shall diligently and efficiently manage, maintain and operate
the Property, including the Golf Course, in accordance with the standards
of a high-quality privately-owned public and semi-private golf course.
32.

Paragraph 7 of the Lease Agreement states as follows:

Maintenance and Repairs. The LESSEE shall, at its own expense, cause
the Property and the Golf Course to be maintained in good condition and
shall perform or have performed any and all normal maintenance and
repair work necessary or appropriate to maintain the Property and the
Golf Course in the condition expected of a high-quality privately-owned
public and semi-private golf course at all times during the Term.
33.

Paragraph 23 of the Lease Agreement states, among other things, that

34.

In September 2007, Owner Defendants entered into a Property Ownership

and Operation Agreement

in which, among other

things, the Owner Defendants agreed upon a process by which to make all decisions with
respect to the ownership and operation of the Ahwatukee Lakes Golf Course and the
Ahwatukee Country Club (collectively defined

as

).
35.

A true and correct copy of the

hereto as Exhibit G and incorporated herein by reference.

36.

Paragra

as follows:

is attached

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All decisions with respect to the ownership and operation of the Properties
shall be jointly made by Owners upon consultation. All major decisions,
which affect the Properties, including without limitation, the sale,
disposition of any interests, engagement of operator, shall require the
written consent of two-thirds (2/3) of the vote of the Owners.
37.
President of Defendant Bixby Village Golf Course, Inc.
38.

After

purchased the Ahwatukee Lakes Golf Course,

Defendants did not continuously maintain the Ahwatukee Lakes Golf Course and allowed

the condition of that golf course to deteriorate over time.

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39.

On or about December 6, 2012, the City of Phoenix gave Defendant Bixby

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Village Golf Course, Inc. written Notice of Ordinance Violation for failure to maintain

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the exterior condition of the Ahwatukee Lakes Golf Course. Among other things, the

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written notice described the violations as follows:

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Maintaining an exterior condition on the property which may include, but

is not limited to the following: tumbleweeds, weeds in excess of 6", dead
trees and branches, palm fronds within 10 feet of ground, potential fire
hazards and dry vegetation.
40.

In or about May 2013, Defendants announced their intention to cease

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operation of the Ahwatukee Lakes Golf Course as a golf course if an agreement was not

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reached to allow Defendants to develop the Ahwatukee Lakes Golf Course as residential

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property.

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41.

In May 2013, Defendants closed the Ahwatukee Lakes Golf Course so that

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it could not be used for golfing or golfing practice by Swain, Breslin, the Benefitted

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Persons or by the public.

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42.

On July 17, 2013, Defendants entered into a Real Estate Purchase and Sale

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Agreement with Pulte Home Corporation

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other things, to sell the Ahwatukee Lakes Golf Course to Pulte Home Corporation.

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43.

in which Defendants agreed, among

If the sale of the Ahwatukee Lakes Golf Course to Pulte proceeds it will

result in the construction of improvements on the Ahwatukee Lakes Golf Course which

will be in direct violation of the 1992 Covenants, Conditions and Restrictions which

prohibits the construction of any improvement on the Ahwatukee Lakes Golf Course

for, or in furtherance of, the

aforementioned purpos

paragraph 2).
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In the fall of 2013, Defendants placed a fence around the Ahwatukee Lakes

Golf Course.
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(i.e. the restrictive covenants set out in, among others,

In or about May 2014, Defendants drained the ponds from the Ahwatukee

Lakes Golf Course.

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In or about September 2014, the Maricopa County Assessor notified Owner

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Defendants that Owner Defendants would be billed $1.6 million because the Ahwatukee

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Lakes Golf Course no longer qualifies for a special property tax assessment as a golf

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course pursuant to A.R.S. 42-13151, et seq.

47.

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In its current condition caused or allowed to be caused by Defendants, the

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Ahwatukee Lakes Golf Course cannot be used for golfing or golfing practice by Swain,

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Breslin, the Benefitted Persons or by the public.

First Claim for Relief
(Breach of Contract Owner Defendants)

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48.

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Plaintiffs incorporate herein by reference and restate each of the allegations

set forth above.

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By accepting the Special Warranty Deed granting fee title to the Ahwatukee

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Lakes Golf Course, Owner Defendants bound themselves to comply with each of the

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covenants, conditions and restrictions in the 1992 Covenants, Conditions and Restrictions.
50.

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The 1992 Covenants, Conditions and Restrictions constitutes a contract by

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and between, among others, Owner Defendants as the current owners of the Ahwatukee

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Lakes Golf Course and, as express third party beneficiaries, the Benefitted Persons as

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defined in the 1992 Covenants, Conditions and Restrictions.

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51.

As owners of the Ahwatukee Lakes Golf Course since June 15, 2006, Owner

Defendants have been, and continue to be while they remain owners, obligated to fully

comply with each of the covenants, conditions and restrictions of the 1992 Covenants,

Conditions and Restrictions.

52.

As an owner of the 41st Street Residence (which is within the Ahwatukee

master planned community as defined on Exhibit B of the 1992 Covenants, Conditions

and Restrictions), Swain is a Benefitted Person in accordance with the express provisions

of the 1992 Covenants, Conditions and Restrictions.

53.

As a Benefitted Person, Swain is entitled to bring this action seeking

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enforcement of each of the covenants, conditions and restrictions of the 1992 Covenants,

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Conditions and Restrictions.

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54.

As an owner of the Sandia Residence (which is within the Ahwatukee

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master planned community as defined on Exhibit B of the 1992 Covenants, Conditions

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and Restrictions), Breslin is a Benefitted Person in accordance with the express provisions

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of the 1992 Covenants, Conditions and Restrictions.

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As a Benefitted Person, Breslin is entitled to bring this action seeking

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enforcement of each of the covenants, conditions and restrictions of the 1992 Covenants,

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Conditions and Restrictions.

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56.

By their actions and inactions, Owner Defendants have breached and

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defaulted the 1992 Covenants, Conditions and Restrictions by not abiding the covenants,

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conditions and restrictions of, among others, paragraph 2 of the 1992 Covenants,

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Conditions and Restrictions and are therefore in violation thereof.

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57.

By their actions and inactions, Owner Defendants have breached and

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defaulted the 1992 Covenants, Conditions and Restrictions by not assuring Defendant

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AGP abides by the covenants, conditions and restrictions of, among others, paragraph 2

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of the 1992 Covenants, Conditions and Restrictions and are therefore in violation thereof.

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58.

By reason of Owner Defendants breach, default and violation of the 1992

Covenants, Conditions and Restrictions, Swain, Breslin and all Benefitted Persons have

been damaged by, inter alia, the loss of compliance with, among others, paragraph 2 of

the covenants, conditions and restrictions in the 1992 Covenants, Conditions and

Restrictions which run with the land to which those covenant, conditions and restrictions

apply as expressly provided therein.

59.

By reason of Owner Defendants breach, default and violation of the 1992

Covenants, Conditions and Restrictions, Swain, Breslin and all Benefitted Persons have

been damaged by, inter alia, their inability to use the Ahwatukee Lakes Golf Course for

golfing or golfing practice.

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Second Claim for Relief

(Breach of Covenant of Good Faith and Fair Dealing

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60.

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Owner Defendants)

Plaintiffs incorporate herein by reference and restate each of the allegations

set forth above.

61.

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While they have owned the Ahwatukee Lakes Golf Course, Owner

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Defendants have taken a series of steps to consciously disregard the express provisions of,

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among others, paragraph 2 of the 1992 Covenants, Conditions and Restrictions and in so

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doing consciously took steps to deprive Swain, Breslin and all Benefitted Persons of the

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benefits and protections of, among others, paragraph 2 of the 1992 Covenants, Conditions

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and Restrictions.

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By their actions and inactions, Owner Defendants have impaired the rights

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of Swain, Breslin and all Benefitted Persons to receive the benefits and protections of,

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among others, paragraph 2 of the 1992 Covenants, Conditions and Restrictions.

63.

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By reason of Owner

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fair dealing implied in the 1992 Covenants, Conditions and Restrictions, Swain, Breslin

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and all Benefitted Persons have been damaged by, inter alia, the loss of compliance with

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the covenants, conditions and restrictions in, among others, paragraph 2 of the 1992

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Covenants, Conditions and Restrictions which run with the land to which those covenant,

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conditions and restrictions apply as expressly provided therein.

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64.

By reason of Owner Defendants breach, default and violation of the 1992

Covenants, Conditions and Restrictions, Swain, Breslin and all Benefitted Persons have

been damaged by, inter alia, their inability to use the Ahwatukee Lakes Golf Course for

golfing or golfing practice.

Third Claim for Relief

(Breach of 1992 Covenants, Conditions and Restrictions

65.

Plaintiffs incorporate herein by reference and restate each of the allegations

set forth in paragraphs 1

66.

Defendant AGP)

47 above.

As the lessee of the Ahwatukee Lakes Golf Course since June 15, 2006,

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Defendant AGP has been, and continues to be while it remains the lessee, obligated to

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fully comply with each of the covenants, conditions and restrictions of the 1992

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Covenants, Conditions and Restrictions.

67.

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By its actions and inactions, Defendant AGP is violating, among others,

paragraph 2 of the 1992 Covenants, Conditions and Restrictions.

68.

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By its actions and inactions, Defendant AGP has impaired the rights of

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Swain, Breslin and all Benefitted Persons to receive the benefits and protections of, among

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others, paragraph 2 of the 1992 Covenants, Conditions and Restrictions.

69.

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By Defend

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Benefitted Persons have been damaged by, inter alia, the loss of compliance with the

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covenants, conditions and restrictions in, among others, paragraph 2 of the 1992

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Covenants, Conditions and Restrictions which run with the land to which those covenant,

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conditions and restrictions apply as expressly provided therein.

70.

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By reason of Defendant AGP s breach, default and violation of the 1992

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Covenants, Conditions and Restrictions, Swain, Breslin and all Benefitted Persons have

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been damaged by, inter alia, their inability to use the Ahwatukee Lakes Golf Course for

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golfing or golfing practice.

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//

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Fourth Claim for Relief

(Injunctive Relief Defendants)

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set forth above.

72.

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Plaintiffs incorporate herein by reference and restate each of the allegations

By their actions and inactions, Defendants continue to violate the 1992

Covenants, Conditions and Restrictions.

73.

By their actions and inactions, Defendants have made it clear they will not

comply with each provision of the 1992 Covenants, Conditions and Restrictions, but will

continue to consciously breach, default or violate those covenants, conditions and

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restrictions.
74.

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The Defendants continued breach, default or violation of the 1992

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Covenants, Conditions and Restrictions diminishes the benefits and protections afforded

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Swain, Breslin and all Benefitted Persons by the covenants, conditions and restrictions of

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the 1992 Covenants, Conditions and Restrictions.

75.

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The Defendants continued breach, default or violation of, among others,

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paragraph 2 of the 1992 Covenants, Conditions and Restrictions, precludes Swain, Breslin

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and all Benefitted Persons from using the Ahwatukee Lakes Golf Course for golfing or

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golfing practice.

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76.

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Paragraph 4 of the 1992 Covenants, Conditions and Restrictions expressly

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provides that in an action to enforce those covenants, conditions and restrictions

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Benefitted Persons are entitled to reimbursement of all court costs and reasonable
any defaulting owner, occupants or users.

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77.

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In the event the

of paragraph 4 of the 1992

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Covenants, Conditions and Restrictions is not enforced, this being an action arising out of

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contract, Swain and Breslin are entitled to recover from Defendants such amount of
-341.01.

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//

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Wherefore, Plaintiffs Linda W. Swain and Eileen T. Breslin pray for judgment

against Bixby Village Golf Course, Inc., Hiro Investment, LLC, Nectar Investment, LLC,

Kwang Co., LLC and Ahwatukee Golf Properties, LLC, jointly and severally, as follows:

A.

For an order finding that Bixby Village Golf Course, Inc., Hiro Investment,

LLC, Nectar Investment, LLC, Kwang Co., LLC and Ahwatukee Golf Properties, LLC,

and each of them, have breached, defaulted and violated the covenants, conditions and

restrictions of the 1992 Covenants, Conditions and Restrictions;

B.

For the issuance of a permanent injunction ordering Bixby Village Golf

Course, Inc., Hiro Investment, LLC, Nectar Investment, LLC, Kwang Co., LLC and

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Ahwatukee Golf Properties, LLC, and each of them, to fully comply, and thereafter

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continue compliance, with each of the covenants, conditions and restrictions of the 1992

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Covenants, Conditions and Restrictions;

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C.

For the permanent injunction to order Bixby Village Golf Course, Inc., Hiro

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Investment, LLC, Nectar Investment, LLC, Kwang Co., LLC and Ahwatukee Golf

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Properties, LLC, and each of them, to restore the Ahwatukee Lakes Golf Course so that it

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may be used for golfing or golfing practice by Swain, Breslin, the Benefitted Persons or

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by the public;

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D.

For an award against Bixby Village Golf Course, Inc., Hiro Investment,

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LLC, Nectar Investment, LLC, Kwang Co., LLC and Ahwatukee Golf Properties, LLC,

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and each of them,

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and Breslin, together with interest thereon at the statutory Arizona legal rate of interest;

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E.

For the taxable court costs incurred by Swain and Breslin; and

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F.

For such other and further relief as the court deems is just in the

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circumstances.
Dated this 28th day of November, 2014.

TIMOTHY H. BARNES, P.C.

By /s/ Timothy H. Barnes (SBN 003373)
Timothy H. Barnes
Attorney for Plaintiffs

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