Jennifer Munnik v. Blue Harbor Resort Condominium Association, Inc.
CourtCourt of Appeals of Wisconsin
Date FiledJune 3, 2026
Docket2024AP001901
StatusPublished
📰 News Coverage: Read the LAWS.com news report on this case
Full Opinion
COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
June 3, 2026
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.
Appeal No. 2024AP1901 Cir. Ct. No. 2022CV512
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II
JENNIFER MUNNIK, JOSEPH BONELLI, SCHWIEBL HOLDINGS, LLC,
PALATINE RESORT PROPERTIES, LLC, NEIL BIALK, SUE BIALK,
THOMAS ATKINS AND JOYCE ATKINS,
PLAINTIFFS-APPELLANTS,
V.
BLUE HARBOR RESORT CONDOMINIUM ASSOCIATION, INC.,
SHEBOYGAN RESORT OPERATOR LLC AND SHEBOYGAN ACQUISITIONS LLC,
DEFENDANTS-RESPONDENTS,
WEST BEND MUTUAL INSURANCE COMPANY,
INTERVENOR.
APPEAL from an order of the circuit court for Sheboygan County:
REBECCA L. PERSICK, Judge. Affirmed.
Before Neubauer, P.J., Grogan, and Lazar, JJ.
No. 2024AP1901
¶1 LAZAR, J. The appellants (Unit Owners),1 a group of
condominium owners with units in the Blue Harbor Resort Condominium
Association, Inc. (Blue Harbor) appeal the circuit court’s order granting summary
and declaratory judgment to respondent Blue Harbor declaring that certain
occupancy restrictive covenants contained in its Declaration and Amended
Restrictive Covenant are valid and enforceable. The Unit Owners assert that the
occupancy restrictions are ambiguous and violate Wisconsin condominium law, or
in the alternative that, when read in conjunction with the City of Sheboygan’s
Building Code (Building Code), are prohibited as a matter of law. Blue Harbor
disputes both arguments and contends that the covenants and the concurrent use
restrictions are reasonable, valid, and enforceable. We agree and affirm.
BACKGROUND
¶2 In order to understand the issues on appeal, it is necessary to first set
forth how this condominium project arose. On July 30, 2003, the City of
Sheboygan (City), through its Redevelopment Authority, along with the Great
Lakes Companies, Inc., Blue Harbor Resort Sheboygan, LLC, and Blue Harbor,
entered into a Development Agreement to develop Blue Harbor resort, hotel,
convention center, and water park in downtown Sheboygan. As part of the resort
complex, Blue Harbor, a 64-unit condominium (contained in 16 separate
1
The appellants, a group of Blue Harbor Resort Condominium Association, Inc. unit
owners, are Jennifer Munnik, Joseph Bonnelli, Schweibl Holdings, LLC, Palatine Resort
Properties, LLC, Neil Bialk, Sue Bialk, Thomas Atkins, and Joyce Atkins. For ease of reference,
they are collectively referred to as the Unit Owners. These parties own five of the 64 Blue
Harbor condominium units.
Respondents include Blue Harbor and Sheboygan Resort Operator LLC (SRO) and
Sheboygan Acquisitions LLC (SA). SRO and SA own and/or manage a majority of the Blue
Harbor condominium units.
2
No. 2024AP1901
buildings), was designed to be occupied by owners and their guests only for
periods of time not to exceed 29 consecutive days. This was to “encourage”
transient residential use and allow for the condominium units to be used by Blue
Harbor visitors and water park guests.
¶3 A 29-day occupancy restriction was placed in the Declaration,
executed on June 24, 2004, which was acknowledged and agreed to by each
condominium unit owner prior to purchase.2 The Declaration’s restrictive
provision provides as follows:
12.1 Use. Declarant, each Unit Owner, and their
respective agents, representatives, guests, tenants and
invitees shall be subject to the use restrictions set forth in
this Declaration and the Condominium Documents
including, but not limited to, the Rules and Regulations as
amended from time to time, which such restrictions
include, without limitation, (i) the restriction imposed by
the City’s building code in effect on the date of this
Declaration that no individual may continuously occupy a
Unit for a period exceeding 29 days, and (ii) the restriction
that the Building and Units are intended for and restricted
exclusively to residential uses; provided, however, that
Declarant reserves the right to use each of the unsold Units
as a sample, model or sales office or management office for
the Condominium.
(Emphases added.)
¶4 The South Pier District Restrictive Covenants and Cross Easement
Agreement regarding the Blue Harbor units, originally executed on July 30, 2003,
2
The Unit Owners point to an earlier document that reflected prior occupancy
restrictions which could exceed the 29-day occupancy restriction, to wit, the South Pier District
Restrictive Covenants and Cross Easement Agreement, dated July 30, 2003. That document was
superseded by the Declaration of the Blue Harbor Resort Condominium, which also expressly
amended the Restrictive Covenant, both of which documents declare that there is a 29-day
residential occupancy restriction for unit owners. This earlier document is not relevant to this
appeal other than for historical perspective.
3
No. 2024AP1901
was amended on June 25, 2004 (hereinafter the Amended Restrictive Covenant).
The Amended Restrictive Covenant, the pertinent document in this appeal, also
contained a 29-day occupancy residency restriction:
7. Building Code Compliance. The following is added
as a new Section 6(h) in the Original Restrictive
Covenants: “The condominium units have been constructed
to comply with the City of Sheboygan’s building codes
applicable to transient lodging. In order to comply with the
City of Sheboygan’s building codes, no individual may
continuously occupy any particular condominium unit for a
period exceeding 29 days. Any use of a condominium unit
for any purpose other than as transient lodging will violate
the City of Sheboygan’s building codes and the City of
Sheboygan shall have all rights and remedies available to it
in connection with such violation, including without
limitation, the right to require the owner of any such unit to
bring his/her/its condominium unit into compliance with all
applicable building codes. The issuance by the City of
Sheboygan of an occupancy permit for any condominium
unit shall not be deemed to limit or restrict the City of
Sheboygan’s right to enforce its building codes and
ordinances or its right to require any condominium unit
owner to comply with such building codes and ordinances.”
(Emphasis added). The covenants in the Amended Restrictive Covenant “run with
the land” and “shall inure to the benefit of and be binding upon the permitted
successors and assigns of the parties.”
¶5 The State of Wisconsin and the City approved occupancy of the Blue
Harbor condominiums under the R-1 Transient Residential Use zoning
designation. The City has no records that indicate approval of designations other
than R-1 for Blue Harbor. The Building Code, in effect in June 2004, replicated
the 2002 Wisconsin Enrolled Commercial Building Code. In Section 310.01, it
defines residential occupancy as follows:
Residential Group R. Residential Group R occupancy
includes, among others, the use of a building or structure,
or a portion thereof, for sleeping accommodations, when
4
No. 2024AP1901
not classed as an Institutional Group I. Residential
occupancies shall include the following:
R-1 Residential occupancies where the
occupants are primarily transient in nature (less than
30 days) including:
Boarding houses (transient)
Hotels (including motels)
R-2 Residential occupancies containing more
than two dwelling units where the occupants are
primarily permanent in nature, including:
Apartment houses
Boarding houses (not transient)
Convents
Dormitories
Fraternities and sororities
Monasteries
¶6 When submitting a building plan for approval under the Building
Code, the individual or entity must obtain an occupancy classification based upon
the building’s intended use. The occupancy classification for Blue Harbor is, and
has always been, R-1 Transient Residential. The parties agree the final, stamped
construction drawings for Blue Harbor and the building permits indicate an R-1
occupancy classification. Finally, the conditional approval from the Wisconsin
Department of Commerce lists the units’ occupancy as “R-1 Transient
Residential.”
¶7 All of the Blue Harbor units were occupied as transient residential
units from the date they were built through this lawsuit. But, it appears that not all
of the condominium unit owners were happy with the bargain they struck
regarding limited occupancy. Following discussions in late 2020 with the City,
Blue Harbor (under a Board that was not yet aligned with SRO and/or SA)
requested a waiver and release of the 29-day occupancy restriction from the City
and its Redevelopment Authority. The Board did not take a vote of the owners of
5
No. 2024AP1901
the units before it reached out to the City. The Redevelopment Authority
ultimately voted, in April 2021, in favor of waiving and removing the 29-day
occupancy restriction and “authoriz[ing] Staff to modify any necessary documents
to accomplish that waiver/release.”
¶8 Nothing more happened with this waiver and release.3 There is no
evidence in the Record to indicate that, at any time following that meeting, the
Redevelopment Authority or the City modified any necessary documents to
effectuate the vote.
¶9 Around the same time the former Board was pursuing this waiver,
some condominium owners began listing their units for sale as “owner-occupied
units[.]” Cognizant of the waiver attempt, and, that the Board of Directors for the
condominium association was not enforcing the transient occupancy restriction,
SRO and SA brought these concerns to the Board and, on October 7, 2021, filed a
Notice of Claim pursuant to WIS. STAT. § 893.80(1d)(a) and (b), “seeking a
declaration that the 29-Day [Occupancy] Restriction is enforceable ... .” The
Board wrote a letter to the condominium owners in December 2021 asserting that
it had concluded that the 29-day occupancy restriction “artificially reduced the
value of the units and prevented the normal market for sales of real estate.” The
Board, in the letter, affirmatively stated:
In the process of reviewing the 29-day Rule, the Board, the
City, and legal counsel for both discovered that the alleged
29-day Rule was an implicit restriction instead of an actual
restriction and that the 29-day Rule was predicated or
3
Contrary to the assertions of the Unit Owners in the circuit court, we cannot find
support in the Record for the statement that “[t]he Redevelopment Authority and its building
inspector agree that there is no restriction imposed by the building code limiting continuous
occupancy.”
6
No. 2024AP1901
preconditioned on units not also being in compliance with
owner-occupied residential building codes.
¶10 Following that December 2021 letter from the Board, its
composition was changed, and new Board members were voted into office.4 A
special meeting of condominium owners led by the new Board was held in August
2022, at which time the Board announced that it would be enforcing the
condominium restrictions set forth in its documents, including the 29-day
occupancy restriction.
¶11 The Unit Owners filed a complaint in circuit court in October 2022,
seeking a declaration and injunction that the 29-day occupancy restriction is no
longer valid and enforceable.5
¶12 In November 2023, Blue Harbor moved the circuit court for
summary and declaratory judgment. SRO and SA joined those motions. The
same day as Blue Harbor’s motion, the Unit Owners filed their motion for
summary judgment. The court initially denied both motions in an oral ruling on
January 23, 2024, but it allowed further briefing on two questions: (1) “were the
condos always designated R1 or R2[,]” and (2) “even if they were only R1, ...
whether the Code prohibits occupancy because the language in the Code reads that
R1 applies primarily, not exclusively, but primarily to transient occupancy.” In
4
The Record is not clear when the new Board members (who were more aligned with
SRO and SA’s view on occupancy) were voted on to the Board, but the Minutes of the Special
Meeting of Unit Owners, held on August 23, 2022, indicates that there was an Annual Meeting of
the Association held on May 23, 2022. It can be assumed that the new Board members were
elected at the Annual Meeting.
5
The complaint was amended several times. West Bend Mutual Insurance Company’s
motion to intervene was granted, but the circuit court, finding it had a duty to defend, denied
West Bend’s motion for summary judgment on that issue.
7
No. 2024AP1901
sum, the court found6 that it was a question of fact as to “whether the restriction
actually applied at the time of the creation of the condos.” The parties sought and
were given permission to file supplemental briefs and affidavits. The matter was
set for another oral ruling in June 2024.
¶13 During its final oral ruling, the circuit court relied primarily upon the
City Planner’s affidavit, which indicated that the condominium buildings were
only approved as R-1 Transient Residential, and that such occupancy is for fewer
than 30 days. The court, noting that it was not concerned if the units could have
also been designated as R-2 residential occupancy when built, denied the first
argument of the Unit Owners’ motion. It denied the second argument of the Unit
Owners’ motion with respect to condominium laws by explaining that “it’s pretty
common for condos that are part of resort communities to have those types of
occupancy limitations.”7
¶14 The circuit court memorialized its final oral ruling in a written order
entered on August 6, 2024, in which it granted Blue Harbor’s motion, denied the
Unit Owners’ motion, and dismissed the Unit Owner’s complaint on the merits,
with prejudice. The court made several declarations, including that: the 29-day
occupancy restriction in the Condominium Declaration is valid and enforceable
(regarding Section 12.1), and the 29-day occupancy restriction in the Amended
Restrictive Covenant is valid and enforceable (regarding Section 6(h)).
6
The circuit court found that “the 29-day occupancy restriction is tied to the City’s
Building Code[,]” and concluded “that if the Code limiting occupancy did apply in 2004, the fact
that it no longer applies does not change the declaration or the cross easements.”
7
The circuit court issued a second written order on that same date that also granted Blue
Harbor’s motion and denied the Unit Owners’ motion; that order, however, did not contain the
declarations.
8
No. 2024AP1901
¶15 The Unit Owners timely appealed.
STANDARD OF REVIEW
¶16 Interpretation of a statute or condominium documents presents
questions of law which we review de novo. Apple Valley Gardens Ass’n, Inc. v.
MacHutta, (“Apple Valley Gardens II”), 2009 WI 28, ¶12, 316 Wis. 2d 85, 763
N.W.2d 126; DOR v. Menasha Corp., 2008 WI 88, ¶44, 311 Wis. 2d 579, 754
N.W.2d 95. “We also independently review whether the language employed in a
restrictive covenant is ambiguous.” Nordstrom v. Kane, 2021 WI App 71, ¶15,
399 Wis. 2d 522, 966 N.W.2d 91.
¶17 We review a circuit court’s summary judgment decisions de novo,
“applying the same method employed by the [circuit] court.” Koepsell’s Olde
Popcorn Wagons, Inc. v. Koepsell’s Festival Popcorn Wagons, Ltd., 2004 WI
App 129, ¶2, 275 Wis. 2d 397, 685 N.W.2d 853. “[S]ummary judgment is
appropriate when there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law.” M & I First Nat’l Bank v. Episcopal
Homes Mgmt., Inc., 195 Wis. 2d 485, 497, 536 N.W.2d 175 (Ct. App. 1995);
WIS. STAT. § 802.08(2). “Generally, when both parties file cross-motions for
summary judgment, it is the equivalent of a stipulation of facts permitting the case
to be decided solely on the legal issues presented.” Carlin Lake Ass’n, Inc. v.
Carlin Club Props., LLC, 2019 WI App 24, ¶19, 387 Wis. 2d 640, 929 N.W.2d
228.
DISCUSSION
¶18 The Unit Owners present two arguments to this court. First, they
assert that the 29-day occupancy restriction, in and of itself, is a violation of
9
No. 2024AP1901
Wisconsin’s condominium law and it violates their real property rights and
concomitant rights to possess and use their condominium units for any lawful
purpose. In support of this argument, the Unit Owners argue that the restrictive
covenant is not only ambiguous, but is so unreasonable and absurd that it cannot
be upheld. They next contend that the restriction should be invalidated because
when it is read in conjunction with the Building Code, there is no provision for a
required prohibition on continuous occupancy of the condominium units. We
disagree.
¶19 Based upon its plain language, the terms of the 29-day occupancy
restriction are not fairly susceptible to more than one reasonable interpretation; to
the contrary the restriction is clear and unambiguous. It is, thus, valid and
enforceable. The parties entered into their condominium purchase agreement
contracts with their eyes wide open and with a full understanding that they were
limited in how long they could continuously occupy their units so as to encourage
visitors to the resort. The property was zoned and approved as R-1 Transient
Residential. Merely because the zoning designation could be changed by the City
does not alter the fact that the documents were valid when signed and were based
upon the R-1 classification. Thus, neither of the Unit Owners’ arguments has any
merit, and the circuit court did not err when it granted summary and declaratory
judgment in favor of Blue Harbor.
I. The restrictive covenant is valid and enforceable.
A. Ambiguity was not waived by the Unit Owners.
¶20 Blue Harbor first asserts that the Unit Owners belatedly raised the
issue of ambiguity only in their appeal and that, per Dalka v. American Family
Mutual Insurance Co., 2011 WI App 90, ¶5, 334 Wis. 2d 686, 799 N.W.2d 923,
10
No. 2024AP1901
we should reject this argument out of hand. While it is correct that issues must be
preserved below in order for this court to consider them on appeal, State v.
Huebner, 2000 WI 59, ¶10, 235 Wis. 2d 486, 611 N.W.2d 727, the Unit Owners
raised the issue of ambiguity in several of their briefs8 which cited to related
caselaw including Nordstrom, 399 Wis. 2d 522, ¶16, and Zinda v. Krause, 191
Wis. 2d 154, 170, 528 N.W.2d 55 (Ct. App. 1995).
¶21 Accordingly, the Unit Owners have preserved this issue for appeal,
and we shall address it in full.
B. There is no ambiguity in the restrictive covenant.
¶22 The Unit Owners contend that, while a condominium association
may restrict the use of its units in ways that adversely impact the owners’ property
rights, such restrictions “must be expressed in clear, unambiguous, and
peremptory terms” in order to be enforceable. Nordstrom, 399 Wis. 2d 522, ¶16
(citing Forshee v. Neuschwander, 2018 WI 62, ¶16, 381 Wis. 2d 757, 914
N.W.2d 643). The 29-day occupancy restriction, they assert, is “anything but
clear in [its] intent” because it is tied to the Building Code, which, itself, contains
additional ambiguous language. Blue Harbor responds that, for a restriction to be
considered ambiguous (and thus subject to interpretation or being found
unenforceable), specific language must be identified, and no such language was
put forth by the Unit Owners.
8
The concept of ambiguity was raised in the summary judgment motion brief, reply
brief, and supplemental brief by the Unit Owners.
11
No. 2024AP1901
¶23 We agree. In fact, the Unit Owners first pointed in their reply brief
to specific language they allege is ambiguous. That alone would warrant our
dismissal of this argument. See State v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d
633 (Ct. App. 1992) (stating the court may decline to address arguments that are
undeveloped). However, we still are able to address this issue regardless of
whether it was fully raised below or adequately briefed on appeal. See State v.
Ortiz, 2001 WI App 215, ¶¶11-13, 247 Wis. 2d 836, 634 N.W.2d 860. Even when
we consider the belated support for their first argument, the Unit Owners fail to
establish any ambiguity in the restriction.
¶24 Before we consider the language at issue in this appeal, it is
necessary to address the underlying condominium and property right laws. “The
public policy of the State of Wisconsin favors the free and unrestricted use of
property.” Nordstrom, 399 Wis. 2d 522, ¶16. Like any other parcel of real
property, a condominium “unit, together with its undivided interest in the common
elements, for all purposes constitutes real property.” WIS. STAT. § 703.04.
Accordingly, a condominium unit owner holds real property and has all the rights
and privileges that go along with such ownership. “There is no doubt that owners
of real property have the right to use that property as they see fit ... . That being
said, this use-of-property right is not absolute ... .” Wildwood Estate, LLC v.
Village of Summit, 2025 WI App 47, ¶24, 418 Wis. 2d 22, 25 N.W.3d 581.
¶25 Wisconsin’s statutes clearly permit a condominium association to
include restrictions or limitations in its declaration. WIS. STAT. § 703.09(1)(g).
Condominium declarations “shall contain” a “[s]tatement of the purposes for
which the building and each of the units are intended and restricted as to use.” Id.
(emphasis added). The statutes further provide that all unit owners shall “comply
strictly” with the “covenants, conditions[,] and restrictions” contained within the
12
No. 2024AP1901
condominium declaration. WIS. STAT. § 703.10(1). This is because the
condominium “declaration is the instrument through which a property becomes
subject to WIS. STAT. ch. 703, the Condominium Ownership Act, and which, when
recorded with the plat, creates the condominium.” Apple Valley Gardens Ass’n,
Inc. v. MacHutta, (“Apple Valley Gardens I”), 2007 WI App 270, ¶12, 306
Wis. 2d 780, 743 N.W.2d 486, aff’d, Apple Valley Gardens II, 316 Wis. 2d 85.
¶26 “Condominium ownership is a statutory creation that obligates
individual owners to relinquish rights they might otherwise enjoy in other types of
real property ownership.” Apple Valley Gardens II, 316 Wis. 2d 85, ¶17. A
condominium owner is bound by the declaration, bylaws, and other legal
documents creating their ownership. Id. A prospective owner is obligated to
carefully read all of the terms and conditions that are contained within the
condominium documents. See Deminsky v. Arlington Plastics Mach., 2003 WI
15, ¶30, 259 Wis. 2d 587, 657 N.W.2d 411 (“Failure to read a contract ... is not an
excuse that relieves a person from the obligations of the contract.”); Kanack v.
Kremski, 96 Wis. 2d 426, 432, 291 N.W.2d 864 (1980). Our supreme court
recognizes that the caveat emptor (or “buyer beware”) principle “broadly applies
to the transfer of real estate interests ... .” Brenner v. Amerisure Mut. Ins. Co.,
2017 WI 38, ¶28, 374 Wis. 2d 578, 893 N.W.2d 193. That court explained that
parties to a business transaction must “use their faculties
and exercise ordinary business sense, and not [] call on the
law to stand in loco parentis to protect them in their
ordinary dealings with other business people.”
Id., ¶30 (citation omitted).
¶27 The law is clear that “[reasonable restrictions concerning use,
occupancy[,] and transfer of condominium units are necessary for the operation
13
No. 2024AP1901
and protection of the owners in the condominium concept.” Apple Valley
Gardens I, 306 Wis. 2d 780, ¶21 (citation omitted). Thus, restrictions of some
sort are permissible in condominium declarations.
¶28 Even the Unit Owners concede that a condominium association may
restrict the use of its units. They note, as permissible, restrictions on pets, age, and
rental to third parties. See Apple Valley Gardens II, 316 Wis. 2d 85, ¶31 (rental to
third parties). The Unit Owners declare that those type of restrictions are
enforceable, but that a time-limit restriction in a resort designed to provide
housing for resort guests and where the units were sold with the understanding that
they would be more akin to investment properties is not clear and unambiguous.
We are hard-pressed to see how the clearly-stated limited-day restriction is not
clear, direct, and to the point.
¶29 “[R]estrictive covenants are strictly construed to favor the
unencumbered use of property.” Nordstrom, 399 Wis. 2d 522, ¶16; see Zinda,
191 Wis. 2d at 165. Ambiguity in a document (such as the Declaration or
Amended Restrictive Covenant) is only found when there is language that is
“fairly susceptible to more than one reasonable interpretation.” Wilson Mut. Ins.
Co. v. Falk, 2014 WI 136, ¶24, 360 Wis. 2d 67, 857 N.W.2d 156 (citation
omitted); see Zinda, 191 Wis. 2d at 165-66. “[W]e do not look for amorphous
general intent, but rather, we determine the meaning of the restriction by the words
actually used.” Nordstrom, 399 Wis. 2d 522, ¶17 (quoting Forshee, 381 Wis. 2d
757, ¶17). “By intent we do not mean the subjective intent of the drafter, but the
scope and purpose of the covenant as manifest by the language used.” Zinda, 191
Wis. 2d at 166.
14
No. 2024AP1901
¶30 “Where the terms of a [document] are clear and unambiguous, we
construe the [document] according to its literal terms.” See Tufail v. Midwest
Hosp., LLC, 2013 WI 62, ¶26, 348 Wis. 2d 631, 833 N.W.2d 586. “Thus, in order
to be enforceable, a restriction that limits the free use of property ‘must be
expressed in clear, unambiguous, and peremptory terms.’” Nordstrom, 399
Wis. 2d 522, ¶16 (quoting Forshee, 381 Wis. 2d 757, ¶16). Under these
principles, we conclude that the 29-day occupancy restriction is unambiguous and
that its purpose—to encourage visitors to the Blue Harbor resort and to support an
investment-owner strategy—is readily discernable from the words in the
restriction.
¶31 The Unit Owners hang their ambiguity hat on a far-flung tree
branch. They assert that the preface to the phrase in the Declaration “that no
individual may continuously occupy a Unit for a period exceeding 29 days”
qualifies that restriction in a manner that ties it to the Building Code. 9 We
question why that matters. In and of itself, that does not make the restriction
language ambiguous. To the contrary, that qualifying phrase appears to illustrate
where the concept for the 29-day occupancy restriction arose. The reference to the
Building Code (as it existed in 2004) does not alter the clarity of the 29-day
occupancy restriction nor does it render that restriction ambiguous. It merely
9
The “qualifying” phrase is highlighted below:
12.1 Use. Declarant, each Unit Owner, ... shall be subject to the
use restrictions set forth in this Declaration ... including, ... (i) the
restriction imposed by the City’s building code in effect on the
date of this Declaration that no individual may continuously
occupy a Unit for a period exceeding 29 days ... .
(Emphasis added.)
15
No. 2024AP1901
offers an explanation for the precise timeframe by tying the limitation to the
existing laws. The circuit court expressly found that the 29-day occupancy
restriction was tied to the Building Code. We agree, but that is not a basis for lack
of clarity.
¶32 Next, the Unit Owners complain that corresponding language in the
Amended Restrictive Covenant is also ambiguous because that 29-day occupancy
restriction is likewise “reliant upon the City’s [B]uilding [C]ode[.]” They point to
the following:
7. Building Code Compliance. ... “The condominium
units have been constructed to comply with the City of
Sheboygan’s building codes applicable to transient lodging.
In order to comply with the City of Sheboygan’s building
codes, no individual may continuously occupy any
particular condominium unit for a period exceeding 29
days. Any use of a condominium unit for any purpose
other than as transient lodging will violate the City of
Sheboygan’s building codes and the City of Sheboygan
shall have all rights and remedies available to it in
connection with such violation, including without
limitation, the right to require the owner of any such unit to
bring his/her/its condominium unit into compliance with all
applicable building codes. ...”
(Emphases added.) The Unit Owners assert, again, that the restriction is tied to the
Building Code and that in this provision it appears that the City has rights to
enforce violations. Again, this argument misses the mark.
¶33 The Unit Owners do not explain why the connection of clear,
peremptory language in a restriction tied to a building code inserts ambiguity into
16
No. 2024AP1901
that unambiguous language.10 The 29-day occupancy restriction refers to a
timeframe for transient occupancy (that which is under 30 days). The Unit
Owners argue that tying the restriction to the then-existing Building Code
“amplifie[s]” the ambiguity, but they still fail to explain precisely what ambiguity
exists to be amplified. The drafters of the condominium documents wanted to
impose a short-term occupancy restriction on the units so that resort guests would
have lodging options available when they paid to stay at Blue Harbor’s resort.
¶34 The drafters clearly designated that the occupancy timeframe would
be 29 days maximum so that the resort would fall within the R-1 Transient
Residential designation as it existed at the time. Even if that occupancy
designation was altered after the fact or if the Building Code was later amended, it
does not change the clear and precise number of days that a unit owner can
continuously stay in their unit. In fact, the restriction could not be clearer—
29 days is the limit: not one day more. Once that timeframe passes, the owner can
return to the unit for another 29 days.
¶35 Finally, we note that the Unit Owners’ ambiguity argument is further
belied by their conduct. There is substantial evidence in the Record that
10
Moreover, the Unit Owners also contend that the underlying Building Code (in
particular Section 310.1 Residential Group R) is confusing and anything but clear. They contend
that there is no way to determine whether R-1 or R-2 designations or both apply to a given
project. Frankly, not only is that incorrect, but it is entirely beside the point. A project is
designed with a proposed occupancy designation that the owners seek; the City has to approve
that designation. Simply because a property could be designated as both R-1 and R-2 does not
alter the fact that Blue Harbor sought to be designated as R-1; its plans and permits were all
designed for that designation, and it was designated as R-1. Again, we do not see the confusion
the Unit Owners claim. Similarly, their argument that the use of the phrase “primarily transient in
nature” in the R-1 definition or the lack of specific reference to condominiums does not pose any
confusion. The only reasonable interpretation is that transient occupancy is under 30 days, and
29 days is, clearly, less than 30 days.
17
No. 2024AP1901
demonstrates the Unit Owners knew and acknowledged that the 29-day occupancy
restriction was in effect. First, they encouraged the former Board to seek a waiver
and release of that restriction from the City and its Redevelopment Authority in
January 2021. And, in the retention agreement with an architect, it declares that
he was hired “to review the feasibility of converting the existing condominiums
from an existing use of R1 to a combined R1/R2 use.”
¶36 Given all of these facts, it is clear that the Unit Owners have failed to
show that the 29-day occupancy restriction (in either condominium document) was
ambiguous. It is clear; it is susceptible to only one reasonable interpretation. That
would resolve the first issue, but, this is not the only ambiguity argument made by
the Unit Owners.
C. The 29-day occupancy restriction is reasonable.
¶37 The Unit Owners also assert that the 29-day occupancy restriction is
unreasonable and, thus, invalid. With respect to this argument, they concede, as
they must, that reasonableness of a restrictive covenant only comes into play when
that covenant is ambiguous. See Solowicz v. Forward Geneva Nat’l, LLC, 2010
WI 20, ¶41, 323 Wis. 2d 556, 780 N.W.2d 111; Le Febvre v. Osterndorf, 87
Wis. 2d 525, 533, 275 N.W.2d 154 (Ct. App. 1979) (“[A] restriction on the use of
real estate must be reasonable under all of the facts and circumstances.”). We
have already determined that the restrictive covenant was not ambiguous. Yet,
even if it was ambiguous, we conclude it is not unreasonable. The Unit Owners
argue that the 29-day occupancy restriction is considered unreasonable, absurd,
and even ludicrous because “it has the effect of requiring unit owners to vacate
their unit every 29 days, but presumably with the right to return a day, an hour, or
perhaps just a minute later to start the 29-day cycle over again.”
18
No. 2024AP1901
¶38 Blue Harbor asserts that, like their first ambiguity argument, the Unit
Owners present no support for this argument in their initial brief. Again,
reasonableness is only defined in the Unit Owners’ reply brief where they make an
opening-the-door-to-any-restriction, slippery-slope type of argument as well as
complain about changes made to the documents before they were signed. This
argument is not persuasive.11 Blue Harbor aptly explains that the 29-day
occupancy restriction is entirely reasonable given the nature of the resort itself: it
was designed to accommodate resort guests who wanted to be close to the water
park complex. Again, we agree with the circuit court and Blue Harbor.
¶39 “The primary goal in contract interpretation is to ‘give effect to the
parties’ intent, as expressed in the contractual language.’” Maryland Arms Ltd.
P’ship v. Connell, 2010 WI 64, ¶22, 326 Wis. 2d 300, 786 N.W.2d 15 (citation
omitted). “We ascertain the parties’ intentions by looking to the language of the
contract itself.” Seitzinger v. Community Health Network, 2004 WI 28, ¶22, 270
Wis. 2d 1, 676 N.W.2d 426; see State ex rel. Journal/Sentinel v. Pleva, 155
Wis. 2d 704, 711, 456 N.W.2d 359 (1990).
¶40 From the very start—before any owner purchased their unit—the
condominium documents stated that occupancy was only permitted for a period
not to exceed 29 consecutive days to allow for resort guests to obtain housing.
11
In support of their argument for unreasonableness, the Unit Owners make much ado
about the fact that there are no cases that forbid a condominium owner from continuously
occupying their unit. They also assert that Blue Harbor appears to argue that there are no limits
on what restrictions a condomi