Garnet O'Marrow and Clarence Gardner v. Dean P. Roles, Jr., d/b/a D&M Training ( 2015 )

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
Garnet O’Marrow and Clarence Gardner )
Plaintiff ) C.A. No. 6808-MA
)
v. )
)
Dean P. Roles, Jr. d/b/a D&M Training )
Defendant )
MASTER’S REPORT
Date Submitted: November 17, 2014
Draft Report: March 31, 2015
Final Report: September 30, 2015
This case involves a dispute between two landowners concerning the
construction of a large barn on one of the owner’s parcel. Plaintiff Garnett
O’Marrow and Defendant Dean Roles, Jr. both reside and raise horses on Heritage
Farm Road, a private road in Bridgeville, Delaware. Both parcels are improved by
barns, run-in sheds, and sun shelters that are used for their horses. In 2012,
plaintiff and another party, now deceased, unsuccessfully sought a temporary
restraining order of this Court to prevent the defendant from erecting a large fabric-
covered barn on his parcel. Pending before me is plaintiff’s request for a
permanent injunction seeking the removal of this barn from defendant’s property
as a violation of the restrictive covenants governing the Heritage Farm Association
(hereinafter “the HFA”). This is my draft report following a trial and post-trial
Page 1 of 33
briefing. For the reasons that follow, I recommend that O’Marrow’s request for a
permanent injunction be denied.
Factual Background
To understand the arguments that have been raised in this case, it is easier
first to describe what HFA is not, rather than what it is. HFA is not a recorded
subdivision in Sussex County. There is no plot plan, recorded or otherwise,
showing the numbered lots within HFA. Instead, HFA consists of several parcels
of land along a private road near Bridgeville.1 These parcels were created by
Donald Booth, Sr. in separate out-conveyances from lands he owned on the
southwesterly side of County Route 531.2 Booth apparently was a jack-of-all-
trades; he bred, raised, and trained horses, and operated a glass and metal
fabricating business on two large parcels of land. Parcel A, which contained
approximately 26 acres, was improved by a two-story barn, a sun shelter, and a
run-in shed for Booth’s horses. Booth’s home, in-ground swimming pool, and
several accessory buildings were also located toward the rear of Parcel A. Parcel
B, which contained approximately 24 acres, was improved by a large building near
Route 531 where Booth operated his fabricating business, and another large barn
and a run-in shed. The private road straddled the boundary line between Parcels A
1
Joint Trial Exhibit (“JTX”) 30.
2
JTX 1.
Page 2 of 33
and B along a 50 feet-wide easement running from Route 531 most of the way to
the rear of Booth’s lands.
On August 13, 1987, Booth conveyed approximately nine acres in Parcel A
abutting the private road and Route 531 to Joseph Mangone and his wife.3 The
Mangones’ deed contains the following five covenants running with the land:
1. All homes shall have a minimum square footage of floor area of 1500 for
a 1 story; 1800 square feet for a 2 story and 1600 square feet for a split
level dwelling, exclusive of all porches, breezeways, carports, garages,
terraces, stoops and the like.
2. No poultry or hog farms shall be permitted.
3. No trailers or mobile homes or other temporary structure of any kind
shall be erected on or moved to any parcel.
4. Each parcel owner shall provide receptacles for garbage in a screened
area not generally visible from any street or road.
5. It shall be the responsibility of each parcel owner to prevent the
development of any unclean, unsightly or unkept conditions of buildings
or grounds which shall tend to substantially decrease the beauty of the
neighborhood as a whole or the beauty of a specific area.4
On November 29, 1988, Booth conveyed approximately 9.5 acres in Parcel
A along the private road between Mangones’ property line and a new property line
near Booth’s residence to Garnet O’Marrow and his wife.5 The O’Marrows’ deed
contains 27 restrictive covenants, the relevant ones being:
Paragraph 1: Each parcel or given land area located at Heritage Farm
Association (hereinafter to be referred to as HFA), shall be solely and
exclusively used for residential purposes. No structure improvements,
3
JTX 2.
4
Id.
5
JTX 9 & 10.
Page 3 of 33
except as hereinafter provided, shall be erected, altered, placed, used or
permitted to remain upon any such numbered parcel thereof.
Paragraph 2: HFA is hereby established as a restrictive development or
neighborhood for single family detached dwellings. For the purposes of
these Restrictions, the word “family” shall mean a single person occupying
the dwelling unit and maintaining a household; two or more persons related
by blood or marriage or adoption occupying a dwelling, living together and
maintaining a common household; not more than three (3) unrelated persons
occupying a dwelling, living together maintaining a common household.
Paragraph 6: An accessory building being a subordinate building the use of
which is customarily incidental to that of any principal building and is used
for an accessory use and is located upon the same parcel as the single family
dwelling may also be constructed upon each numbered parcel. The
accessory building shall not exceed one story in height and shall be solely in
connection with the single family dwelling, except with final approval of
HFA.
Paragraph 12: No structure of any temporary character and no shack, or
other outbuildings, except as provided herein shall be placed on any
numbered parcel within HFA at any time except during periods of
construction for storage of materials and such temporary structures for
storage of materials shall not in any event be used for living quarters.
Paragraph 16: The roads shown on the plot of HFA are hereby dedicated for
the use of the residents and property owners of HFA and each such resident
and property owner of HFA who needs or wants access to the road by the
acceptance of a conveyance of a parcel or parcels in HFA hereby agree to
assume the responsibility of maintaining, repairing and replacing that part of
the road in front of their parcel or parcels on a per parcel served basis.
Paragraph 17: (a) Every person who acquired title, legal or equitable,
and any parcel in HFA shall become a member of HFA Property Owners
Association.
(b) The general purpose of the Association is to further
and promote this community welfare of property owners in HFA.
Page 4 of 33
(c) The Association shall also be the means for the
promulgation and enforcement of all regulations necessary to the governing
of HFA.
(d) The Association shall have all the powers vested in
it by operation of law. The Association shall be governed by a Board of
Governors of not less than 2 members, all of whom shall be property owners
in HFA. Each parcel shall have one membership.
Paragraph 18: Each parcel owner in HFA who has use of access road,
covenants to pay to HFA Property Owners Association, and its successors,
January 1, 1989, and on January 1 of each year thereafter, a maintenance
assessment, such assessment to be Two Hundred Fifty Dollars ($250.00) per
lot for the calendar year 1989 and such assessment thereafter to be
determined by the Board of Governors of HFA Property Owners Association
shall be used and expended by it for the construction and/or maintenance of
streets, walkways, lighting for street, and similar purposes. Each such
maintenance assessment shall be and constitute a lien upon the respective
parcel or parcels of such owner from the due date thereof and the same shall
remain and continue to be a lien thereon until fully paid.
Paragraph 19: For the purpose of further insuring the development of lands
comprehended within HFA as a residential [sic] of high standards, the power
to control buildings, structure or improvements placed on each lot or given
land area therein shall be in the same as hereby invested in the HFA
Property Owners Association and its successors. Approval must be granted
by the Board of Governors. All outbuildings shall be similar in color and
construction to the existing barns and buildings located on HFA.
Paragraph 23: The Restrictions and Agreements set forth herein are made
for the mutual and reciprocal benefit of each and every parcel in HFA and
are intended to create mutual, equitable servitudes upon each of said parcels
in favor of each and all the other parcels therein; to create reciprocal rights
between the respective owners of all said parcels; to create a privity of
contract and estate between the grantees of said parcels, and their heirs,
executors, administrators and assigns and shall, to the owner or owners of
each said parcel their heirs, executors, administrators and assigns, operate as
covenants running with the land for the benefit of each and all other parcels
and their owners.
Page 5 of 33
Paragraph 24: Any parcel owners to whose benefit these Restrictions insure
may proceed at law or in equity to prevent the occurrence, continuation, or
violation of any of these Restrictions and the Court in any such action may
ward the successful party reasonable attorney’s fee. The remedies specified
herein are cumulative and a specification of them shall not be taken to
preclude any aggrieved party from resorting to any other remedy at law or in
equity of under any other statute. No delay or failure on the part of an
aggrieved party to invoke an available remedy in respect to a violation of
any of these Restrictions shall be held to be a waiver of that party or an
estoppel of that part to assert any right available to him upon the recurrence
of the continuation of such violation or the occurrence of a different
violation.
Paragraph 25: These Restrictions may be amended by and with the written
consent of no less than seventy-five percent (75%) of the owners of all the
parcels in HFA. The owners of the various parcels shall have the power to
waive, abandon, terminate, modify, alter, change, amend or add to these
Restrictions or any of them at any time hereafter. Any such waiver,
abandonment or addition shall take effect when a copy thereof executed and
acknowledged by each of the parcel owners who assent thereto in
accordance with the usual form of execution and acknowledgement of deeds
to land, shall have been filed for record in the Office of the Record of Deeds,
in and for Sussex County, and the same shall be waived, abandoned,
terminated, modified, altered, changed, amended, or added to as the case
may be. In the taking of any such vote, or the obtaining of any such written
consent for each parcel or parcels that he may own in HFA.
Paragraph 27: The grantees are aware of an existing non-conforming use of
one parcel of HFA which is currently operated as Booth & Sons. The
grantees, their heirs, executors or assigns, shall have no objection to the
rezoning of said parcel either by a conditional use or change of zone for
commercial purposes to allow the zoning to conform to the current use of the
property.6
Thereafter, on May 12, 1989, Booth conveyed 3.57 acres in Parcel B
abutting the private road and Route 531 to Francis O’Marrow and his wife, who
6
JTX 9.
Page 6 of 33
were O’Marrow’s parents.7 The Francis O’Marrows’ deed contains the same 27
deed restrictions that are in their son’s deed. The Francis O’Marrows’ parcel is
located across the private road from the Mangones’ parcel and has an additional 50
feet-wide easement running along its side and rear boundary lines.
On February 26, 1992, Booth conveyed 8.97 acres to Michael Deaton and
his wife from the portions of Parcels A and B that were furthest from Route 531.8
The Deatons’ deed explicitly gave them the right of “ingress and egress over a 50
foot private road from the subject premises to Sussex County Road 53[sic].” 9 This
deed also contains the 27 deed restrictions. On the same date, Booth conveyed
Parcel B (specifically excepting the parcels owned by the Francis O’Marrows and
the Deatons, and five acres that were about to be conveyed to Dr. Michael Metzler
and his wife) to Margarette Jones, and Jones immediately reconveyed the land
back to Booth, subject to the 27 deed restrictions, an additional restriction
prohibiting trailers or mobile homes or other temporary structures of any kind on
Parcel B, and a right of first refusal to the Deatons if any third party offered to buy
the property.10
7
JTX 11.
8
JTX 12.
9
Id.
10
JTX 18.
Page 7 of 33
On March 18, 1992, Booth conveyed a five-acre lot directly behind the
Francis O’Marrows’ property to Dr. Metzler and his wife.11 This new parcel
contained the former “Booth & Sons” building where the glass and metal
fabricating business had operated, which the Metzlers now wanted to use for a
veterinary hospital. Although the record is not clear, it appears that Booth’s
manufacturing building may have stood on a small parcel containing
approximately one acre that had been carved out of Parcel B. However, the
Metzlers needed five acres under County regulations to operate a veterinary
hospital, so Booth conveyed an additional four acres from Parcel B to the Metzlers.
The Metzlers’ deed contains the same 27 restrictions, but the following sentence
was added to Paragraph 27: “Further, the five acres, more or less, tract herein
conveyed is expressly exempted from the Restrictions to allow the use of that tract
for a veterinary hospital or any other use permissible in an AR-1 Agricultural
Residential District by the Planning and Zoning Commission for Sussex County.”12
Because the existing building was too close to the Francis O’Marrows’ property
line, the Metzlers applied for a variance to the County’s sideyard setback
requirements.13 Their application was opposed by both O’Marrow families on the
grounds that the veterinary hospital violated the deed restrictions, increased traffic
11
JTX 16.
12
Id.
13
JTX 24.
Page 8 of 33
on the private road, created excessive noise, and depreciated their property
values.14 The variance was granted on July 27, 1992, with some conditions.15 On
September 17, 1992, the Metzlers and the O’Marrows executed an “Agreement and
Restrictive Covenants.”16 Under the terms of this agreement, the O’Marrow
families agreed to forego an appeal to the Superior Court from the variance
approval and an action in this Court to challenge the deed restrictions in the
Metzlers’ deed in exchange for the Metzlers’ agreement to abide by the conditions
imposed by the Board of Adjustment and certain additional conditions imposed by
the O’Marrow families, including the removal of a large sign from the building,
and limitations on hospital’s hours of operations.17
All of Booth’s lands were now sold, with the exception of a parcel
containing approximately 14.27 acres, located along Heritage Farm Road between
the Metzlers’ property and the Deatons’ property. On April 28, 1992, Booth
obtained a building permit from the County allowing him to modify his barn on
this parcel to create a small apartment within the existing structure.18 For several
more years, Booth resided in this apartment inside the barn along with the horses in
their stalls. Booth subsequently built more structures on this 14.27 acre parcel,
14
Id.
15
JTX 26.
16
JTX 2.
17
Id.
18
JTX 34.
Page 9 of 33
including another barn, a six-bay garage, a turn-in shed, and a shop that was added
to the rear of one barn. Although he obtained permits from the County.19 Booth
never sought or obtained permission from his neighbors in the community for these
improvements. In time, Booth started a construction business and a landscaping
business, and stored his commercial vehicles on this parcel. In November 2002,
during a homeowners meeting, Booth was informed that he was out of compliance
with the deed restrictions.20 By this time, Booth was renting his parcel to Roles
and his then-wife Margaret. A formal lease was executed in February 2003, in
which the Roles were referred to the deed restrictions.21 Roles is a horse trainer
and farmer.22 He had known Booth since 1993 when Booth was in the business of
raising, showing, and breeding horses.23 On October 29, 2004, Booth conveyed
the 14.27 acre parcel to Margaret, subject to the 27 restrictions.24 After their
divorce, Margaret conveyed this parcel to Roles on January 22, 2010.25 The deed
between Margaret and Roles included no reference to any restrictive covenants.
19
Id.
20
JTX 70.
21
JTX 20.
22
Trial Transcript (“TT”) 302.
23
TT 312.
24
JTX 17.
25
JTX 19.
Page 10 of 33
HFA was incorporated in 1990.26 According to the certificate of
incorporation, in order to be a member of HFA, one had to be a property owner in
“Heritage Farms.”27 According to the deed restrictions that can be found in the
deeds conveyed by Booth to all of the original property owners except the
Mangones, the name of the community is “Heritage Farms Association” or “HFA,”
not “Heritage Farms.”28 These deed restrictions, moreover, require each property
owner in the HFA to become a member of a homeowners association called “HFA
Property Owners Association” that was to be governed by a Board of Governors.
In reality, however, no formal HFA Property Owners Association was ever
incorporated nor was a Board of Governors selected. There are no written bylaws
or regulations governing this neighborhood other than the deed restrictions.
Through the years, HFA has had only two elected officers, a president and a
treasurer.29 O’Marrow has been the treasurer since 1992.30 The position of the
president has changed many times. At the time of trial, the president was Jeremy
Taylor, who with his wife had purchased the parcel formerly owned by Clarence
“Skip” Gardner from his estate on November 2, 2012.31 There was never an
26
JTX 32.
27
Id.
28
JTX 9.
29
TT 104.
30
TT 98.
31
TT 40; JTX 15.
Page 11 of 33
official secretary, but minutes were usually recorded by the hostess in whose
dwelling the homeowners meeting took place.32
Membership in this community fluctuated as properties were sold and also
because the property owners were not always sure if they were part of HFA. The
Mangones and Francis O’Marrows had access to their parcels from Route 531, and
did not use Heritage Farm Road. In 1995, the Mangones subdivided their parcel in
order to convey 1.5 acres to their son Jeffrey Alloway and his wife.33 Because the
Alloways’ proposed parcel needed access to HFA’s private road, Mangone and
Alloway sought and were given permission for the Alloways to join HFA.
According to the minutes of a homeowners meeting on January 8, 1995, the
members present (O’Marrow and his wife, and Joseph Liefbroer and his wife, who
were successors in interest to the Deatons) observed that the Alloways had been
approved by the County to construct a dwelling that met the requirements and
restrictions of HFA, and that all HFA restrictions would be attached to the deed
conveying the property to the Alloways.34 It appears from the record that the
Mangones had been part of the community during the early years of HFA’s
existence because Mr. Mangone was copied on the meeting minutes and
32
TT 104. The minutes in the record are incomplete, but in1995, the minutes were
titled “Minutes of Meeting for HFA.” JTX 61-62. Thereafter, they were titled
“Heritage Farm Homeowners Association.” JTX 63-78.
33
JTX 3.
Page 12 of 33
participated in maintaining HFA’s entrance and private road, at least through
February 1998.35 At some later point in time, the Mangones were no longer
considered part of the community, and on December 1, 2005, HFA rejected the
Mangones’ formal request to join the neighborhood by a vote of three of the four
homeowners present (Alloway, Roles, O’Marrow, and Gardner, successor in
interest to the Liefbroers).36 Dr. Metzler was copied on some of the early minutes
as well, but Dr. Metzler believed that he had been dismissed from HFA after he
stopped using the private road and dug his own well, and so he stopped attending
the meetings.37
During this time, as each parcel was sold by Booth or, like the Alloways,
was subdivided from a larger parcel, new homes, garages and other buildings were
erected in HFA. O’Marrow testified that when he bought his 9.5 acre parcel, there
was already a large barn, a sun shelter and a run-in shed on it.38 He subsequently
built a house with attached garage, another run-in shed, and placed a manufactured
utility shed on his property.39 According to O’Marrow, when he built his second
run-in shed, he first had asked permission of Booth, and when O’Marrow put the
34
JTX 61. In fact, the 27 deed restrictions were not included by reference in the
Alloways deed until 2008. JTX 4B.
35
JTS 61-65.
36
JTX 72.
37
TT 29-30, 39.
38
TT 66-67.
39
TT 78-79.
Page 13 of 33
utility shed on his property, he made Booth and Liefbroer aware of what he was
doing and they had no problems with his plan.40 O’Marrow conceded that Booth
did not ask permission of any other property owner when he built more run-in
sheds on his 14.27 acre parcel (before Booth sold this parcel to Margaret Roles),
but O’Marrow also testified that Booth informed other property owners that he was
building a large garage to house his farm tractors, and no one had any concerns.41
Dr. Metzler added two accessory structures to his property without seeking any of
his neighbor’s permission, but O’Marrow explained that the HFA undertook no
enforcement action because Dr. Metzler’s structures conformed to the rest of the
community in color and type.42 Alloway placed a prefabricated shed on his
property without seeking anyone’s permission, but when he built a two-story
garage he went to his neighbors out of politeness to tell them what he was planning
on building.43 Alloway also testified that when Booth lived on the road, Booth had
expressed concerns about structures the other neighbors were putting on their lands
while the other neighbors had concerns about what Booth was building.44
There was a meeting of homeowners on March 4, 2007. Only O’Marrow
and his wife, Gardner, and Roles were present. Roles was told that the horsing
40
TT 180, 185.
41
TT 187-189.
42
TT 189.
43
TT 158-161.
44
TT 164.
Page 14 of 33
training business he was operating on Heritage Farm Road was a violation of the
deed restrictions and was causing excessive traffic on the private road.45
According to the minutes taken by O’Marrow’s wife, Roles became very upset.
On June 26, 2007, HFA, Inc. filed a complaint in this Court to enforce the deed
restrictions against the Roles.46 After the O’Marrows, the Gardners, and the
Alloways were joined as plaintiffs, the parties entered into a settlement agreement
on October 14, 2008.47 Under the agreement, the Roles agreed to pay the HFA
$750.00 as an annual assessment while the other parties would pay $250.00 as an
annual assessment to be applied to the maintenance of Heritage Farm Road. The
parties agreed that an accounting would be prepared annually by HFA for all
expenditures made to maintain the common road. The Roles agreed that no
delivery of horses to their property would be made after 9:00 p.m., except their
own horses, and that there should be no more than 15 horses owned by persons
other than the roles on the Roles’ property. The parties agreed that the Roles might
continue to use their property for equestrian activities, including the training,
boarding, and breeding of horses, and that such activity would not be a violation of
the deed restrictions. The parties also “agree[d] to attempt to negotiate in good
faith a set of restrictive covenants for the Heritage Farms subdivision that are
45
JTX 75.
46
HFA, Inc. v. Roles, C.A. No. 3053-MG (Del. Ch.). JTX 21.
47
JTX 21.
Page 15 of 33
mutually agreeable and compatible with the uses made by the parties for the two
(2) years preceding the filing of the Law Suit.”48
It appears that Roles requested accountings from HFA for expenditures
made for the maintenance of the Heritage Farm Road, but he received no
information. In a letter dated March 29, 2010, Roles’ attorney demanded that HFA
provide accountings for the years 2007 through 2010.49 By letter dated April 9,
2010, O’Marrow provided a list of the cash disbursements for the common road
from October 14, 2008 through March 30, 2010, which totaled $972.64.50 Further
correspondence requesting the road maintenance expenditures for 2007 and 2008
was met with the following response by O’Marrow: “Our records indicate that
your client Mr. Dean Roles was not a property owner during this period. It is our
policy to only share our financial information with members in good standing.”51
By letter dated April 1, 2011, Roles, through his attorney, informed HFA
that he would no longer be contributing $750.00 as an annual assessment, only the
$250.00 paid by other lot owners, as a result of HFA’s continuing breach of the
terms of the Settlement Agreement by (1) failing to produce annual accountings to
Roles, (2) constructing improvements on the common road without the unanimous
consent of the members of the HFA, and (3) failing to negotiate or even propose a
48
Id.
49
JTX 107.
50
JTX 109.
Page 16 of 33
new set of restrictions.52 A check for $250.00 was included with this letter, but the
check was never cashed.
Procedural Background
On August 25, 2011, O’Marrow and Gardner filed this action seeking to
enjoin Roles from: (a) expanding his equestrian business beyond the terms of the
settlement agreement; (b) constructing a large accessory building on his property
without prior approval from the HFA; and (c) expanding his easement over
Heritage Farm Road as a result of the increased equestrian business on his
property. Alternatively, O’Marrow and Gardner sought specific performance of
the Settlement Agreement, reformation of the Settlement Agreement, and shifting
of attorney fees. Initially, plaintiffs unsuccessfully sought a temporary restraining
order to stop the construction of the barn. Roles later moved for summary
judgment, asserting that the plaintiffs were barred by the doctrines of res judicata
and collateral estoppel, and the equitable doctrine of unclean hands. In a draft
report to which no exception was taken, I recommended that the Court grant Roles’
motion for summary judgment in part as to the use of his property since the
plaintiffs had bargained away their right to complain against Roles’ equestrian
51
JTX 110.
52
JTX 108.
Page 17 of 33
business except as to the hours of delivery and the number of horses. 53 However, I
found that the plaintiffs were not precluded as a matter of law from bring their
claim regarding Roles’ construction of a large accessory building without prior
approval from HFA and that material questions of fact existed whether the
plaintiffs had unclean hands that precluded relief.54 Before this matter could go to
trial, however, Gardner passed away, leaving O’Marrow as the sole plaintiff.
Issues
O’Marrow argues that the deed restrictions are enforceable, and that Roles
had both actual and constructive notice of the requirement of prior approval and of
the standards governing the construction of accessory structures and outbuildings
in the HFA. According to O’Marrow, there are two different standards, as
reflected in paragraphs 6 and 19 of the deed restrictions. The first standard (found
in paragraph 6) applies to accessory buildings, which are allowed with the
following limitations: (1) one accessory structure per lot; (2) the accessory
structure shall be one story in height; and (c) the accessory use must be in
connection with the single family dwelling. He describes garages, pool houses,
and utility sheds as falling within the category of accessory structures. The second
standard (found in paragraph 19) applies to outbuildings, which O’Marrow argues
53
JTX 56-57. O’Marrow v. Roles, 2013 WL 3752995 (Del. Ch. July 15, 2013)
(Master’s Draft Report).
54
O’Marrow v. Roles, 2013 WL 3752995, at *7.
Page 18 of 33
are different from accessory structures because they are not related to the dwelling
per se, but have other functions. O’Marrow describes barns, run-in sheds, and sun
shelters as outbuildings and argues that any new outbuilding must be similar in
color and construction to the existing outbuildings in the HFA. Until the erection
of the new barn at issue, the existing outbuildings in the HFA were all pole
buildings, i.e., framed with wood, sided with ribbed metal panels that were painted
barn red,55 and covered with either ribbed metal panels painted white or white
asphalt tiles. These include Roles’ barns, six-bay garage, turn-in sheds, and sun
shelter, O’Marrow’s two-story barn, run-in sheds and sun shelter, and Dr.
Metzler’s veterinary hospital and two sheds. O’Marrow describes Roles’ new barn
as enormous, more than twice the size of any other outbuilding in the HFA, and
because it is framed with steel beams and covered with fabric, he contends that
Roles’ barn violates the standard for outbuildings. O’Marrow argues that
paragraph 19 of the deed restrictions is akin to language requiring visual harmony
found in covenants that were upheld by this Court in other cases, specifically citing
Dolan v. Villages of Clearwater Homeowners Assoc., Inc.,56 and is enforceable.
O’Marrow also denies that the HFA ever breached the settlement agreement.
55
At trial, O’Marrow described the red color of Roles’ new barn as “Chinese red”
instead of the barn red color used on the other buildings. TT 148.
56
2005 WL 2810724 (Del. Ch. Oct. 21, 2005).
Page 19 of 33
Instead, O’Marrow accuses Roles of breaching the agreement by not paying his
annual assessment of $750.00.
Roles acknowledges that he had actual and constructive notice of the deed
restrictions, but he argues that, as part of the previous settlement agreement
between the parties, O’Marrow had an obligation to make a good faith attempt to
agree on a set of revised restrictions that would allow the parties to continue to use
their properties as they had been for the previous two years, which he failed to do.
Now, Roles argues that these restrictions are unenforceable for numerous reasons.
First, Roles argues that there is a lack of uniformity since not all parcels within
HFA are burdened with the same deed restrictions. Second, he argues that the
restrictions and the process for approval have been unevenly applied to the
residents of HFA. According to Roles, many of the parcels in HFA have more
than one accessory structure and the requirement of prior architectural approval has
been waived because many of the property owners, including Roles, have placed or
modified multiple accessory structures on their properties without seeking prior
approval. Roles contends that the language of paragraph 19 is too vague and
ambiguous to be enforceable because there are many ways the language could be
interpreted. He argues, moreover, that not only is the phrase “visual harmony”
absent from the deed restrictions, but also there is no coherent visual style within
the neighborhood. According to Roles, the deed restrictions applying to structures
Page 20 of 33
in paragraphs 6, 12, and 19 are so contradictory that they fail to create an
unambiguous, objective, non-arbitrary set of standards that are capable of even-
handed enforcement. Roles also claims that O’Marrow lacks standing to bring this
action because his wife, with whom he owns the property in HFA as tenants by the
entirety, did not join him as a plaintiff in this action, citing Henderson v. Chantry,57
in support of his argument. Finally, Roles argues that the covenants no longer
serve a purpose in the HFA since none of the present property owners in HFA,
other than O’Marrow, has any concern about his new barn.
In reply, O’Marrow argues that the deed restrictions are enforceable by
implication and by a common plan of development since Booth intended to create
a binding and restrictive covenant on all the properties in the HFA. Moreover, the
fact remains that both O’Marrow and Roles have the same relevant restrictions in
their deeds which, according to O’Marrow, are based on objective standards, i.e.,
the buildings that were in existence in 1988 when Booth first conveyed a deed
containing the 27 deed restrictions. O’Marrow also argues that Roles is barred
from raising the issue of plaintiff’s standing because Roles failed to raise it as an
affirmative defense in any previous pleading. Finally, he contends that Henderson,
the case on which Roles relies, is inapposite here because it involved a
57
2002 WL 244692 (Del. Ch. Feb. 5, 2002).
Page 21 of 33
husband/landowner who was giving up a property right, not one who was seeking
to enforce a restrictive covenant.
Analysis
This is another case demonstrating the tension that arises when a
neighboring landowner’s expectations for his community conflicts with the desires
of another landowner to use his property as he may lawfully choose.58 Both
properties in question here appear to be subject to substantially the same restrictive
covenants in their deed or chain of title. The presence of these restrictions, which
touch and concern the land:
calls into question competing legal interests. One is the right of a
willing buyer and willing seller to enter into a binding contract. The
other competing interest is the special nature of land, which has
historically been permitted free use. The courts have sought to
harmonize these competing interests by developing special guidelines
as to the enforcement of restrictive covenants and the rule has evolved
that “while the law favors the free use of land and frowns on
restrictive covenants, they are recognized and enforced … where the
parties’ intent is clear and the restrictions are reasonable.”59
A restriction, like the one in paragraph 19 of the O’Marrows’ deed, requiring
a property owner to obtain prior approval of a homeowners association or a
committee thereof, before making any improvements to the land is commonplace
58
The Greylag 4 Maintenance Corp. v. Lynch-James, 2004 WL 2694905, at *5
(Del. Ch. Nov. 18, 2004).
59
Id. (quoting Chambers v. Centerville Tract No. 2 Maintenance Corp., 1984 WL
19485, at *2) (Del. Ch. May 31, 1984)).
Page 22 of 33
in planned subdivisions or developments.60 “However, architectural review is
suspect due to its tendency to be arbitrary, capricious, and therefore
unreasonable.”61 In order to be upheld, the power of architectural review must be
exercised reasonably, and any doubt as to its reasonableness must be resolved in
favor of the landowners.62
Several challenges have been raised by Roles to the overall enforcement of
the deed restrictions in light of the history of the development of this community.
O’Marrow has responded to these challenges by arguing that the fact that Booth
subjected his own property, through a straw-conveyance in 1992, to the same deed
restrictions as were placed on every other out-conveyance with two exceptions (the
Mangones and the Metzlers), is strong evidence of Booth’s intent to create a
planned development. Secondly, O’Marrow argues that the explicit written
language in his deed and Roles’ chain of title reflects the intent of the grantor and
grantee to create a restrictive covenant, with each party bearing the same burden on
their land and each having the right to enjoin a breach of such restrictions by the
other.
Booth did not testify at trial. However, the evidence strongly suggests that it
was not Booth’s intent to create a planned development along the lines that
60
Seabreak Homeowners Assoc. v. Gresser, 517 A.2d 263, 268 (Del. Ch. 1986).
61
Id.
62
Id.
Page 23 of 33
O’Marrow now describes. According to Dr. Metzler, Booth simply wanted to sell
his land, and so he promised people whatever they wanted to hear. 63 Booth’s first
conveyance was to the Mangones, and their deed contains only five restrictions.
However, it appears that O’Marrow wanted more protection for the property he
was about to purchase for his retirement home and horse farm. According to his
testimony, O’Marrow understood that Booth intended to sell all his land and
O’Marrow claims to have seen a plan showing Booth’s property divided into six
lots.64 O’Marrow then worked with Booth to develop the 27 restrictions that were
placed in O’Marrow’s deed, and was assured by Booth that the same deed
restrictions would be placed on the other lots.65 These same 27 restrictions were
included in the 1989 deed to O’Marrow’s parents. In 1992, shortly before Booth
sold the five acres of land to the Metzlers, he conveyed 8.97 acres to the Deatons,
who apparently wanted a right of first refusal on Booth’s remaining available
lands, i.e., the parcel containing 14.27 acres that Roles later purchased. On the
same day Booth conveyed 8.97 acres to the Deatons, Booth conveyed the 14.27
acres to Jones, in a straw-conveyance whereby Jones immediately reconveyed the
14.27 acre parcel to Booth. Not only did the Deatons’ deed include the 27
restrictions, but Booth’s new deed to the 14.27 acres now included the 27 deed
63
TT 19.
64
TT 62-63.
65
TT 87-89.
Page 24 of 33
restrictions, the Deatons’ right of first refusal, and a covenant concerning a
commission for the Deatons’ broker. However, Booth’s later actions demonstrate
that he never intended to be bound by these 27 deed restrictions because he started
to operate two commercial businesses on his 14.27 parcel. When Booth conveyed
the five acres to the Metzlers, he also never intended the Metzlers to be bound by
the 27 deed restrictions because their deed explicitly allowed the Metzlers’ parcel
to be used for a veterinary hospital and any other permitted use in the County’s
AR-1 zoning district, in total contravention of several other restrictions limiting or
pertaining to the use of the property solely and exclusively for residential purposes.
Booth had concerns about what his neighbors were building on their
properties,66 but there is no evidence that Booth ever sought to enforce any deed
restriction against other property owners in the HFA while he lived there. Instead,
the record shows that it was always O’Marrow who sought to enforce the deed
restrictions. The first instance occurred when the two O’Marrow families invoked
the deed restrictions in opposing the Metzlers’ application for a variance and in
threatening to file an enforcement action in this Court. The end result was that
additional restrictive covenants were imposed on the Metzlers’ property, running
with the land for as long as it is used for a veterinary hospital. The second time
occurred during a homeowners meeting at O’Marrow’s house on November 17,
66
TT 164.
Page 25 of 33
2002, when Booth was asked to terminate the use of his 14.27 acre parcel for his
landscaping and construction businesses, and O’Marrow’s wife was given the
authority to contact the County to investigate the matter.67 The end result was that
the County became involved, and Booth shortly thereafter sold the 14.27 parcel to
Roles’ wife and left the neighborhood. The third time occurred when O’Marrow
and Gardner, acting on behalf of HFA, Inc., brought suit in this Court to enforce
the deed restrictions against Roles for operating a horse training and boarding
business on the 14.27 acre parcel.68 The end result was that additional restrictions
were imposed on Roles’ use of his land by a settlement agreement. Although the
individual property owners who had access to the private road were added as
plaintiffs and joined in the stipulation and settlement, the pattern is clear. The
development of this neighborhood owes as much, if not more, to O’Marrow as to
Booth, the original grantor. O’Marrow appears to have crafted the 27 deed
restrictions, albeit jointly with Booth, and then through threatened or actual
enforcement actions against his neighbors, has controlled the neighborhood.
Ironically, at the same time O’Marrow was using his own parcel in HFA as the
base for his small commercial horse breeding and horse racing business.69
67
JTX 70.
68
JTX 74.
69
TT 263-264, 273.
Page 26 of 33
As shown above, the deed restrictions and the history of the development of
this neighborhood are problematic, but the fact remains that paragraph 19 of the
Booth to O’Marrow deed is, like paragraph 19 in the deed from Jones to Booth,
which is in Roles’ chain of title, is a covenant that touches and concerns the land
and O’Marrow and Roles appear reciprocally bound by this deed restriction. It is
undisputed that Roles did not request anyone’s approval before he built the new
barn on his property. Nor had Roles asked anyone’s approval when he previously
erected three new run-in sheds and a dog kennel on his property. Roles now
argues that the neighborhood has never enforced this restriction against him or
other property owners who also made improvements to their properties without
seeking prior approval and, therefore, this restriction has been waived, if not
abandoned completely, by the HFA. It is not necessary for me to address this
argument because, assuming the architectural review restriction has not been
waived or abandoned, paragraph 19 is too vague, unclear, and ambiguous to be
enforced.
Paragraph 19 states:
For the purpose of further insuring the development of lands
comprehended within HFA as a residential [sic] of high standards, the
power to control buildings, structure or improvements placed on each
lot or given land area therein shall be in the same as hereby invested
in HFA Property Owners Association and its successors. Approval
must be granted by the Board of Governors. All outbuildings shall be
similar in color and construction to the existing barns and buildings
located on HFA.
Page 27 of 33
Aside from the fact that there currently exists no Board of Governors, this
covenant contains no specific method or procedure for obtaining approval from the
Board of Governors.70 There is no application process outlined in the covenant,
such as the requirement of the submission of written plans to the Board of
Governors. Nor does this covenant dictate the method by which the Board would
reach a decision on an application. Under paragraph 17(d), the Board of
Governors may consist of no fewer than two property owners in HFA. If there was
a tie vote, paragraph 19 does not state whether the application would be deemed
approved or denied.
More problematic is the fact that approval power is based on the Board of
Governors determining whether the outbuildings are “similar in color and
construction to the existing barns and buildings located on HFA.” O’Marrow
argues that this standard is an objective one because all of the other outbuildings
on HFA reflect a red and white color motif, and consist of wooden pole buildings,
with metal siding and roofs covered with metal or asphalt shingles. Citing Dolan,
O’Marrow argues that anyone looking at the community would see the standards
for construction used for the outbuildings in HFA. However, even if I were to
accept O’Marrow’s argument that there are two different standards, one for
accessory structures and another for outbuildings, there is no covenant requiring
Page 28 of 33
visual harmony in paragraph 19 or elsewhere in the deed restrictions. Furthermore,
there is no explicit limitation on the size of any outbuilding or on the types of
construction materials to be used for outbuildings in the deed restrictions.
Roles reviewed paragraphs 16 and 19 of the deed restrictions, and with these
in mind, he constructed a one-story barn with a white and red color motif, and with
metal framework angled in a way that resembled the Dutch-style roof on
O’Marrow’s two-story barn.71 Roles understood the word “construction” as
meaning the style or silhouette of the building, not the materials with which it was
made.72 His interpretation is not an unreasonable one, given that Webster’s Third
New International Dictionary contains the following definition of “construction”
as: “2a: The act of putting parts together to form a complete integrated object:
FABRICATION; b(1): The form or manner in which something has been put
together: DESIGN; (2): The science or study of building or erection; c:
Something built or erected: STRUCTURE.”73
O’Marrow, on the other hand, would have the Court read into the word
“construction” in paragraph 19 limitations on both the size of an outbuilding and
the types of materials used in constructing an outbuilding. However, when
70
Daweiko v. Grunewald, 1988 WL 140225, at *5 (Del. Ch. Dec. 27, 1988).
71
TT 334, 363-374.
72
TT 366-367.
73
Webster’s Third New International Dictionary, Unabridged (2002 Merriam-
Webster, Inc.).
Page 29 of 33
construing deed restrictions, “where the meaning of a restriction is doubtful, the
doubt shall be resolved in favor of the grantee.”74 Therefore, it cannot be said that
Roles’ new barn violates the standard found in paragraph 19. The architectural
review provision in paragraph 19, which leaves to the discretion of a Board of
Governors the determination whether the color or construction of an outbuilding is
“similar” to existing barns or buildings in HFA, is too vague and imprecise to be
enforceable.75
A final issue remains to be resolved regarding O’Marrow’s request for
specific performance of the October 14, 2008 settlement agreement, which he
claims was beached by Roles. By letter dated April 1, 2011, Roles informed HFA
that he would no longer pay the $750.00 assessment because of HFA’s continuing
breach of the agreement and, instead, proferred $250.00 as his assessment. 76
O’Marrow previously had refused to convey additional financial information to
Roles for the stated reason that it was HFA policy not to disclose financial
information to persons who were not owners in good standing. O’Marrow’s
rationale was specious; HFA has no written by-laws or policies and Roles had been
74
Daniels Gardens, Inc. v. Hilyard, 49 A.2d 721, 723 (Del. Ch. 1946).
75
See Benner v. Council of the Narrows Assoc. of Owners, 2014 WL 7269740, at
*11 (Del. Ch. Master’s Final Report) (suggesting that the “substantially similar to
the original construction” standard was unenforceable). See generally, People v.
Mazzochetti, 696 N.Y.S.2d 618, 622 (1998) (voiding town statute applicable to
“fences, walls, and any other similar construction,” as unconstitutionally vague and
indefinite).
Page 30 of 33
actively participating in homeowners meetings for years before he became the
property owner. Now, O’Marrow argues that the settlement agreement was
intended to require only future accountings. As reflected in the April 1, 2011
letter, Roles contends that O’Marrow failed to make any good-faith effort to revise
the deed restrictions. In response, O’Marrow argues that he was but one of several
homeowners who would have had to agree to revisions. During the trial,
O’Marrow testified that there was a homeowners meeting after the settlement
agreement to discuss possible revisions to the restrictions, but since Roles failed to
attend after being given notice, the owners present voted unanimously not to
amend the restrictions.77 Roles denied that he had been given notice of a meeting
to address the restrictive covenants.78 The other parties to the settlement included
Mrs. O’Marrow, the Alloways and Gardner. Gardner is deceased. Neither Mrs.
O’Marrow nor the Alloways have joined with O’Marrow in seeking specific
performance of the settlement agreement. I find Roles to have been the more
credible witness and, therefore, I conclude that it was O’Marrow and the other
parties, not Roles, who breached the settlement agreement by failing to negotiate in
good faith to revise the deed restrictions. Therefore, O’Marrow is not entitled to
specific performance.
76
JTX 110.
77
TT 133-136.
78
TT 308.
Page 31 of 33
Conclusion
To obtain a permanent injunction forcing Roles to remove his new barn,
O’Marrow must show: (1) actual success on the merits of the claims; (2) that the
plaintiff will suffer irreparable harm if injunctive relief is not granted; and (3) that
the harm to the plaintiff outweighs the harm to the defendant is an injunction is
granted. I find that O’Marrow has failed to demonstrate success on the merits of
his claim. Therefore, I recommend that the Court deny O’Marrow’s request for a
permanent injunction forcing Roles to remove his barn from his property, deny
O’Marrow’s request for specific performance, and deny O’Marrow’s request for
attorney’s fees.
I have reviewed Plaintiff Garnet O’Marrow’s exceptions to my draft report
recommending the denial of Plaintiff’s request for (a) a permanent injunction
forcing Defendant Dean P. Roles, Jr. to remove the barn from his property, (b)
specific performance of the settlement agreement, and (c) attorney’s fees. None of
Plaintiff’s arguments persuades me that I was mistaken in my factual finding that
O’Marrow was the first party to breach the settlement agreement or that I erred in
concluding that the restrictive covenant was too vague and imprecise to be
enforceable. Therefore, I am adopting my draft report as my final report. The
Page 32 of 33
parties are referred to Court of Chancery Rule 144 for taking exception to a
Master’s Final Report.
Respectfully,
/s/ Kim E. Ayvazian
Kim E. Ayvazian
Master in Chancery
KEA/kekz
cc: Dean A. Campbell, Esquire
John A. Sergovic, Jr., Esquire
Page 33 of 33