VICTORVILLE WEST LIMITED PARTNERSHIP v. THE INVERRARY ASSOCIATION, INC. , 226 So. 3d 888 ( 2017 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
VICTORVILLE WEST LIMITED PARTNERSHIP,
Appellant,
v.
THE INVERRARY ASSOCIATION, INC.,
a Florida Non-Profit Corporation,
Appellee.
No. 4D16-2266
[August 23, 2017]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Dale Ross, Judge; L.T. Case No. 13-000536 (08).
Matthew P. Leto of Hall, Lamb and Hall, P.A., Miami, for appellant.
Geralyn M. Passaro and Angela M. Swenka of Litchfield Cavo, LLP, Fort
Lauderdale, for appellee.
LEVINE, J.
Appellant purchased a golf course with a restrictive covenant and now
seeks to cancel the covenant because the golf course has become
unprofitable. Appellant contends there has been a substantial change in
circumstances such that the covenant’s purpose can no longer be carried
out and that the covenant is an unlawful restraint on alienation.
Additionally, appellant argues that the statute of limitations did not bar
its claim. Thus, we are confronted with the issue of whether a property
owner may cancel a restrictive covenant when that covenant has become
financially onerous. Although we find appellant’s claim not to be time-
barred, we conclude that the restrictive covenant may not be cancelled
because it remains beneficial to the dominant estate holders and does not
create an unlawful restraint on alienation.
The Inverrary Golf Course and Clubhouse within the Inverrary
community has been encumbered by a restrictive covenant since 1971.
This covenant states as follows:
The [Golf Course] shall henceforth be used solely for
recreational purposes, including all sports as defined
herein, and for the Facilities and amenities appurtenant
thereto, such as clubhouses and recreational,
maintenance, and storage facilities and equipment. For
the purposes of this Declaration, the term “sports” shall
be deemed to include, by way of illustration and not in
limitation thereof, the following: Golf, tennis, horseback
riding, swimming and all such other recreational
activities as may be appropriate and in keeping with the
overall development of Inverrary. . . .
....
Developer agrees that henceforth, when at any time [the
Golf Course] has a roster of Fifteen Hundred (1500) Golf
Memberships . . . it will not at any such time offer, sell,
or admit to golf membership any persons or families not
then bona fide residents of Inverrary.
....
Duration. The foregoing Restrictions shall run with, and
be binding upon, the [Golf Course] as an obligation and
charge against the same, running with the land for the
benefit of the owners of the property . . . for a term of
twenty-five (25) years from the date this Declaration is
recorded, after which time the said restrictions shall be
automatically renewed for successive ten (10) year
periods; provided however that at the expiration of the
initial term or any renewal thereof, the foregoing
restrictions may be amended, modified or terminated by
the affirmative vote of the owners of not less than two-
thirds (2/3) of the land area . . . .
This covenant is recorded in the Broward County records and is
incorporated into the deeds of the surrounding residential properties.
In 2006, Victorville West Limited Partnership purchased the golf course
“SUBJECT TO . . . all covenants . . . listed in the Public Records of Broward
County, Florida.” Since purchasing the golf course, membership,
particularly among Inverrary residents, has dropped significantly. As a
result, Victorville has suffered financially.
Victorville asked The Inverrary Association, Inc., the local homeowners
association, to facilitate a vote of local residents so Victorville could relieve
itself of the restrictive covenant. The association refused. When Victorville
attempted to hold its own meeting, only one to two percent of residents
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chose to attend. Members of the community indicated they liked the golf
course, even if they did not have a membership, because it provided a
tranquil view, prevented overcrowding, and preserved the nature of the
community.
Victorville filed suit against the association in 2012, arguing the
covenant was an economic hardship and sought to cancel the covenant.
Following a non-jury trial, the trial court concluded Victorville’s claim was
time-barred because the statute of limitations began to run when it
purchased the golf course and it did not bring its claim within the five-
year statutory limit. The trial court further found that even if the statute
of limitations had not run, Victorville was not entitled to vacate the
restrictive covenant, stating the covenant remained beneficial to the
surrounding community. Victorville appealed.
On appeal, Victorville argues the trial court should have cancelled the
restrictive covenant because a substantial change in circumstances
prevented the covenant’s original purpose from being carried out and the
covenant was an unlawful restraint on alienation.
We review the trial court’s findings of fact under the clearly erroneous
standard of review and its legal conclusions and application of the law to
the facts de novo. See Fito v. Attorney’s Title Ins. Fund, Inc., 83 So. 3d 755,
757-58 (Fla. 3d DCA 2011).
[I]n an action to cancel a restrictive covenant the test is
whether or not the covenant is valid on the basis that the
original intention of the parties can be carried out despite
alleged materially changed conditions or, on the other hand,
whether the covenant is invalid because changed conditions
have frustrated the object of the covenant without fault or
neglect on the part of the party who seeks to be relieved from
the restrictions.
Essenson v. Polo Club Assocs., 688 So. 2d 981, 984 (Fla. 2d DCA 1997)
(citation omitted); see also AC Assocs. v. First Nat’l Bank of Fla., 453 So.
2d 1121, 1127 (Fla. 2d DCA 1984) (“If a restriction on the servient estate
was for the benefit of, and is still of substantial value to, the dominant
estate, it will be enforced regardless of changed conditions.”). A restrictive
covenant’s purpose is “determined by a fair interpretation of the entire text
of the covenant.” Wilson v. Rex Quality Corp., 839 So. 2d 928, 930 (Fla.
2d DCA 2003) (citation omitted).
The golf course continues to benefit the “dominant estate[s],” the
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surrounding residential properties. Although few Inverrary residents have
memberships at the golf course, the golf course preserves the character of
the community and provides residents with a pleasant view. These are
reasonable objectives of a restrictive covenant. See Metro. Dade Cty. v.
Sunlink Corp., 642 So. 2d 551, 555 (Fla. 3d DCA 1992); Imperial Golf Club,
Inc. v. Monaco, 752 So. 2d 653, 654 (Fla. 2d DCA 2000). Thus, even if the
golf course is failing financially, the covenant must be enforced because it
remains a “substantial value to” the surrounding residences, the dominant
estates. AC Assocs., 453 So. 2d at 1127.
Victorville argues that the covenant anticipates a bilateral relationship
where members of the community get memberships in the club and the
club provides a recreational facility. Although the covenant prioritizes
community members over non-community members, nothing in the
covenant shows that its intent is for the golf course to be a profitable
enterprise. Victorville’s financial hardships do not support cancellation of
the covenant because “the law does not permit cancellation of property
restrictions for the purpose of accommodating the best or most profitable
use of a particular piece of property affected by the restriction.” Essenson,
688 So. 2d at 983.
Victorville also argues the covenant is perpetual, as getting a two-thirds
vote is virtually impossible without the association’s assistance. “The rule
against restraints on alienation ‘has long been recognized as precluding
only unlimited or absolute restraints on alienation.’” Camino Gardens
Ass’n v. McKim, 612 So. 2d 636, 640 (Fla. 4th DCA 1993) (citation omitted).
“When determining the validity of restraints on alienation, courts must
measure such restraints in terms of their duration, type of alienation
precluded, or the size of the class precluded from taking.” Id. at 639. The
duration of the covenant is significant though not perpetual because the
covenant may be removed by a two-thirds vote of surrounding
homeowners. See Sunlink Corp., 642 So. 2d at 554. Further, there is no
restriction on the “type of alienation precluded” or “the size of the class
precluded from taking.” See Camino Gardens, 612 So. 2d at 639. Indeed,
no evidence suggested Victorville ever attempted to even market the
property. Therefore, the covenant does not create an “unlimited or absolute
restraint[] on alienation.” Id. at 640 (citation omitted).
The trial court also concluded Victorville filed its claim after the five-
year statute of limitations had run because its claim came into existence
when it purchased the golf course. See § 95.11(2)(b), Fla. Stat. (2013). We
find this portion of the trial court’s order to be error. The statute of
limitations begins to run “when the action ‘may be brought.’” See Harris
v. Aberdeen Prop. Owners Ass’n, 135 So. 3d 365, 368 (Fla. 4th DCA 2014)
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(quoting City of Riviera Beach v. Reed, 987 So. 2d 168, 170 (Fla. 4th DCA
2008)). For the statute of limitations to have begun to run when Victorville
purchased the golf course, a substantial change in circumstances would
have had to have taken place before Victorville purchased the property,
but no evidence was presented to indicate that such a change had taken
place.
In summary, although we conclude the trial court incorrectly found the
statute of limitations barred Victorville’s claim, we nevertheless affirm
because the trial court correctly found the covenant could not be cancelled
because it remained a substantial benefit to the surrounding homeowners
and was not an unlawful restraint on alienation.
Affirmed.
GERBER, C.J., and CONNER, J., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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