Clifford Family Ltd. Liability Co. v. Cox , 334 Ark. 64 ( 1998 )

W.H. “Dub” Arnold, Chief Justice.

This appeal involves protective covenants and arises from an order of the Benton County Chancery Court denying the request of the appellant, the Clifford Family Limited Liability Company, through Mike D. Clifford, the company’s president and general manager (“the Cliffords”), for injunctive relief. The Cliffords assert that the chancellor erred in refusing to require appellees Donald Cox and Lucille M. Cox (“the Coxes”) to remove a deck that they constructed on their property. The Arkansas Court of Appeals affirmed the chancellor’s decision based on the authority of Stuttgart Electric v. Riceland Seed, 33 Ark. App. 108, 802 S.W.2d 484 (1991). Clifford Family Liability Company v. Cox, CA97-516 (Ark. Ct. App. Feb. 11, 1998). We granted review of that decision pursuant to Ark. Sup. Ct. R. 1-2(f), and consider this case as though it were originally filed in this court. Thompson v. State, 333 Ark. 92, 96, 966 S.W.2d 901 (1998). For the reasons set forth below, we reverse and remand the chancellor’s decision.

The parties are owners of adjoining lots in the Jarvis Acres Subdivision in Benton County. At the time the Coxes purchased their lot, they were aware that the land was encumbered by protective covenants, which included the following:

5. No building shall be located on any tract nearer than 25 feet to the front tract line or nearer than 50 feet to any side street line, or nearer than 50 feet to any interior tract line.

The Coxes began constructing a house on their lot in September or October of 1995. According to the Cliffords, they learned in December 1995 that the Coxes’ unfinished deck extended beyond the fifty-foot setback to an interior tract line in violation of paragraph five. In January of 1996, the Cliffords obtained a survey for verification. Thereafter, they wrote the Coxes a letter in which they asked them what they planned to do about the violation of the covenants. The Coxes did not respond to the letter, but contacted the Cliffords on three separate occasions offering to purchase their property. The Cliffords declined, and on May 1, 1996, filed their complaint asking that the chancellor enter an order requiring the Coxes to remove their deck.

At a September 30, 1996 hearing, the chancellor heard testimony from both parties. Mr. Cox stipulated that his deck extended some seventeen feet onto the setback. Robert Cox, who built his brother’s deck, explained that he “was trying to get the [Coxes] the best view of the lake I could.” At the conclusion of the hearing, the chancellor concluded that the deck encroached upon the setback in violation of the protective covenants. The chancellor allowed the parties thirty days to file briefs on the issue of an appropriate remedy.

On November 4, 1996, the Cliffords filed a petition for hearing, alleging that, since the September 30, 1996, hearing in which the chancellor had found that the Coxes had violated the protective convenants, the Coxes had built onto their existing deck by adding a landing and stairs. On December 13, 1996, the chancellor conducted a second hearing in the matter. During the hearing, Mr. Cox explained that, “[i]n order to have access to the hot tub, I went ahead and added that much of a deck with just steps around it.” He admitted that, in building this addition, he knew that he was doing so in the setback. At the conclusion of the hearing, the chancellor stated that he had visited the properties in question and “was unable to discern any interference” with the Cliffords’ enjoyment of their property. Relying on Stuttgart Electric v. Riceland Seed, 33 Ark. App. 108, 802 S.W.2d 484 (1991), the chancellor concluded that the removal of the deck “would be a harsh, drastic and totally inequitable remedy.”

In their petition for review, the Cliffords argue that the Court of Appeals’ decision in Stuttgart Electric v. Riceland Seed, supra, conflicts with this court’s holding in Hays v. Watson, 250 Ark. 589, 466 S.W.2d 272 (1971). The subject of the Stuttgart Electric case was Riceland Seed’s warehouse, which encroached Stuttgart Electric’s land by 2.3 feet. In affirming the chancellor’s decision denying Stuttgart’s request to require Riceland to remove its warehouse, the Court of Appeals observed the chancellor’s findings of fact that the encroachment was slight at only 2.3 feet and was not done intentionally; that Stuttgart had constructed a drainage pipe that encroached onto Riceland’s property; and that removal of the warehouse would cost Riceland $10,000.00. Relying on the Restatement of Torts’ general discussion regarding injunctions, the Court of Appeals held:

We think the law, as indicated by the authorities . . ., holds that the right to an injunction requiring the removal of encroaching buildings upon the property of others is governed by equitable principles.

Stuttgart Electric, 33 Ark. App. at 114. In Hays v. Watson, supra, this court affirmed the chancellor’s decision ordering removal of a sewer system constructed on two lots in a subdivision where protective covenants indicated that the lots were to be used for residential purposes. Recognizing the doctrine of strict construction, this court stated that, when the language of the restrictive covenant is clear and unambiguous, the parties will be confined to the meaning of the language employed, and it is improper to inquire into the surrounding circumstances or the objects and purposes of (the restriction for aid in its construction. Hays, 250 Ark. at 595. This court further explained that the strict rules of construction shall not be applied in such a way as to defeat the plain and obvious purpose of the restriction. Id.

We try chancery cases de novo on the record, but do not reverse a finding of fact by the chancellor unless it is clearly erroneous. Barber v. Watson, 330 Ark. 250, 253, 953 S.W.2d 579 (1997); Holaday v. Fraker, 323 Ark. 522, 920 S.W.2d 4 (1996). In order to demonstrate that the chancellor’s ruling was erroneous, the Cliffords must show that the trial court abused its discretion by making a judgment call that was arbitrary or groundless. Id. The Cliffords rely on this court’s decision in Hays v. Watson, supra, a 1971 case. However, we have discussed our guidelines regarding land restrictions more recently in Barber v. Watson:

Courts do not favor restrictions upon the use of land; if such restrictions exist, they must be clearly apparent. Holaday v. Fraker, 323 Ark. 522, 920 S.W.2d 4 (1996); McGuire v. Bell, 297 Ark. 282, 761 S.W.2d 904 (1988). The general rule governing the interpretation, application, and enforcement of restrictive covenants is the intention of the parties as shown by the covenant. Holaday, 323 Ark. 522, 920 S.W.2d 4. Where, however, the language of the restrictive covenant is clear and unambiguous, the parties will be confined to the meaning of the language employed, so long as the meaning does not defeat the plain and obvious purpose of the restriction. Id. (citing Hays v. Watson, 250 Ark. 589, 466 S.W.2d 272 (1971)). Where no general plan of development exists, restrictive covenants contained in a bill of assurance are not enforceable. McGuire, 297 Ark. 282, 761 S.W.2d 904.

Barber v. Watson, 330 Ark at 254. While the chancellor relied on the general equitable principles recited in Stuttgart Electric v. Riceland Seed, supra, we conclude that our more specific rules relating to restrictive covenants govern the case at bar.

It appears undisputed that a general plan of development existed in Jarvis Acres. In this case, the language in paragraph five is clear that “[n]o building shall be located . . . nearer than 50 feet to any interior tract fine.” When the language of the restrictive covenant is clear and unambiguous, the parties will be confined to the meaning of the language employed. See Barber v. Watson, supra. We have further held that, parties who take title to land with notice that it is subject to an agreement restricting its use will not, in equity and good conscience, be permitted to violate its terms. Holaday v. Fraker, supra (citing Harbour v. Northwest Land Co., 284 Ark. 286, 681 S.W.2d 384 (1984)). Because the language of paragraph five is clear, the chancellor erred in examining the respective properties to determine whether the encroachment by the Coxes caused any interference with the Cliffords’ enjoyment of their land. Where the language of the restriction is clear, it is improper to inquire into the surrounding circumstances or the objects and purposes of the restriction for aid in its construction. Hays v. Watson, 250 Ark. at 595. Under these circumstances, we hold that the chancellor’s findings and conclusions were an abuse of discretion; therefore, the case is remanded for the chancellor to enforce the covenant by requiring the removal of the encroachment.

Reversed and remanded.

Corbin and Thornton, JJ., dissent.