Pertzsch v. Upper Oconomowoc Lake Association

Steven and Doris Pertzsch (plaintiffs) owned lakeside property in Wisconsin. The property was governed by the declarations of the Upper Oconomowoc Lake Association (Lake Association) (defendant). The Pertzsches sought permission to build a home and a detached lakeside boathouse. The declarations established an architectural committee that had certain approval powers and was charged with consenting to the construction of buildings and structures located within property governed by the Lake Association. The declarations also provided that a boathouse was a permissible structure, subject to the approval of the architectural committee. However, the architectural committee denied the Pertzsches’ plans for the boathouse. In its denial letter, the architectural committee stated that the proposed boathouse was not in conformity with existing structures and the boathouse’s architectural design was not in harmony with existing structures with respect to topographical elevation and setback. However, the sole support that the architectural committee provided for its conclusions was the fact that there were no other detached boathouses on the lake. It was undisputed that the proposed boathouse met all required setbacks and architectural control standards that were expressly enumerated in the Lake Association’s declarations. The Pertzsches filed suit, and the trial court found in their favor, holding that the architectural committee’s decision was arbitrary and capricious. The Lake Association appealed.