Ritchie Phillips v. Mark Hatfield ( 2021 )

06/01/2021
IN THE SUPREME COURT OF TENNESSEE
November 4, 2020 Session1
RITCHIE PHILLIPS ET AL. v. MARK HATFIELD
Appeal by Permission from the Court of Appeals
Chancery Court for Sullivan County
No. 17-CB-25948(C) E. G. Moody, Chancellor
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No. E2019-00628-SC-R11-CV
__________________________________
The issue in this case is whether restrictive covenants executed and recorded by the
developers of a subdivision after they had sold the parties’ lots apply to the Defendant’s
property. The developers platted a subdivision and sold the vast majority of lots with time-
limited restrictions against non-residential use expressly stated in the deeds that conveyed
the lots. Thereafter, the developers recorded a declaration of more fulsome, non-time-
limited restrictive covenants—including a restriction against non-residential use—that
purported to apply to all lots in the subdivision. Decades later, well after the expiration of
the time-limited deed restrictions, the Defendant purchased lots and proposed to build a
structure for the operation of a retail business. The Plaintiffs, who reside in a home on lots
adjacent to the Defendant’s property, brought a declaratory judgment action to enforce the
non-time-limited restriction against non-residential use contained in the recorded
declaration. The trial court enjoined the Defendant’s proposed commercial use, concluding
that the Defendant’s property was—through the declaration—subject to an implied
negative reciprocal easement that prohibited non-residential use. The Court of Appeals
affirmed. We hold that the developers lacked the authority to impose the declaration’s
restrictions upon the Defendant’s property because they did not own those lots when they
executed and recorded the declaration. We further hold that the developers’ mere re-
acquisition and re-sale of some of the Defendant’s lots after the recording of the declaration
did not retroactively restrict the Defendant’s property through the declaration.
Accordingly, we reverse the decision of the Court of Appeals.
Tenn. R. App. P. 11 Appeal by Permission;
Judgment of the Court of Appeals Reversed;
Remanded to the Chancery Court
1
We heard oral argument through videoconference under this Court’s emergency orders restricting
court proceedings because of the COVID-19 pandemic.
JEFFREY S. BIVINS, C.J., delivered the opinion of the Court, in which CORNELIA A. CLARK,
SHARON G. LEE, HOLLY KIRBY, and ROGER A. PAGE, JJ., joined.
Edward T. Brading, Johnson City, Tennessee, for the appellant, Mark Hatfield.
Ricky A.W. Curtis, Blountville, Tennessee, for the appellees, Ritchie and Roma Phillips.
OPINION
I. FACTUAL AND PROCEDURAL BACKGROUND
Mark Hatfield (“the Defendant”) owns land in Bristol, Tennessee along U.S.
Highway 11E, a divided highway known at that location as Volunteer Parkway.2 The
Defendant purchased the land through two transactions, one in late 2016 and the other in
early 2017. The local property assessor has classified the land as commercial since the
early-to-mid 1990s. The City of Bristol has zoned the property as “General Business,”
which permits retail business. Having purchased the property, the Defendant proposed to
raze an existing structure, construct a new building and parking lot, and open a retail
business known as Intimate Treasures. The business would offer for sale at least some
percentage of “adult novelty items.”
Ritchie and Roma Phillips (“the Plaintiffs”) own land in Bristol at 104 Sunnybrook
Drive. The Plaintiffs reside in a home on this property. Sunnybrook Drive intersects
Volunteer Parkway. The Defendant’s property is situated at the intersection, abutting both
Volunteer Parkway and Sunnybrook Drive. The Plaintiffs’ property abuts Sunnybrook
Drive and lies immediately up the street from the Defendant’s property. The Plaintiffs’
property shares a property line with a portion of the Defendant’s property.
The Plaintiffs’ property and the Defendant’s property are comprised of various
platted lots, or portions thereof, in a subdivision known as Sunnybrook Addition.3
Sunnybrook Addition was platted in 1953 by the then-owners of the land comprising the
subdivision, J.C. and Mary Virginia Chambers (“the Chambers”). Sunnybrook Drive is a
path of ingress into the subdivision from Volunteer Parkway.
2
The address for this property is referred to in the record as 1926 Volunteer Parkway.
3
There are various spellings of Sunnybrook Addition in the record. We will use only Sunnybrook
Addition for the sake of consistency.
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Aggrieved by the Defendant’s plan to open a retail business on his property, the
Plaintiffs filed suit seeking an injunction and a declaratory judgment that certain restrictive
covenants prohibit non-residential structures on the Defendant’s land.4 According to the
Plaintiffs, the Chambers recorded “Protective Covenants” in 1955 (“the 1955 Restrictive
Covenants”) that purported to cover all lots in the subdivision and to “run with the land,”
in other words to bind remote grantees or successive purchasers. The 1955 Restrictive
Covenants consisted of fourteen paragraphs that specified a variety of restrictions, from
building setbacks, to minimum dwelling sizes, to prohibitions on the keeping of livestock
and poultry. Chief among them for purposes of this appeal was a provision governing
“land use and building type.” The provision designated all lots as residential and prohibited
the erection of any structure other than a single-family dwelling. In their Complaint, the
Plaintiffs alleged that the Defendant’s proposed construction would violate this covenant.
At a hearing on the Plaintiffs’ request for a temporary injunction and later again at
trial, the parties presented copious proof—much of it documentary—on the history of
Sunnybrook Addition, other related subdivisions, the Defendant’s property, conveyances
of various lots in Sunnybrook Addition, and restrictive covenants. We will endeavor to
simplify the proof.
The Chambers acquired a 417-acre tract of land in 1946. On a portion of that land,
the Chambers set out to develop the subdivision known as Sunnybrook Addition. To that
end, the Chambers recorded a plat for Sunnybrook Addition in 1953, dividing the
subdivision into eight sections or blocks, ranging in size from five to sixteen lots. The
subdivision contained a total of seventy-nine lots. The plat did not restrict the lots to
residential use.
Over the course of 1953 and 1954, the Chambers sold sixty-seven of the seventy-
nine lots.5 Included in the deeds conveying the vast majority of those lots were four
expressly stated restrictive covenants (“the Original Restrictive Covenants”):
(1) The property was to be used for residential purposes only;
4
In his Answer and Counterclaim, the Defendant sought a declaratory judgment that the restrictive
covenants at issue are “invalid and inapplicable” to his property.
5
The Chambers sold the first lots as they were recording the plat. The record does not reveal when
the Chambers sold the twelve lots that remained in their ownership as of the recording of the 1955
Restrictive Covenants.
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(2) Any dwelling house was subject to a minimum square footage
requirement;
(3) No outside toilets were permitted; and
(4) There were setbacks for the building of homes in reference to various
property lines.
The language of the deeds provided that the covenants ran with the land. The deeds also
contained a statement that the covenants were binding for a period of only twenty years.6
Sunnybrook Addition section B-2 is comprised of eight lots. The Plaintiffs own a
portion of lots seven and eight. The Defendant owns lots one, two, three, and a portion of
lot four. All of the parties’ lots were among those conveyed by the Chambers during the
course of 1953–54.7
The initial deeds for all of the parties’ lots—from the Chambers as grantors to the
various initial grantees in 1953—contained the Original Restrictive Covenants. However,
by the terms of the deeds, the covenants were binding for a period of only twenty years.
Thus, it is uncontested that the express residential-use restriction contained in the deeds for
the Defendant’s property terminated by its own terms long ago.
Each of the Defendant’s lots was conveyed multiple times between the initial sale
in 1953 and when the Defendant purchased it. Lot one was sold by the Chambers in 1953
and remained in the hands of that purchaser until August 8, 1956, when the purchaser sold
the lot back to the Chambers. Lot two was sold by the Chambers in 1953, and was sold
three more times before it also was sold back to the Chambers on May 21, 1956. After the
Chambers reacquired lots one and two in 1956, the lots were always conveyed together.
The Chambers re-sold lots one and two in 1960, and the lots were conveyed four more
times before the Defendant bought them in 2016.
6
In two separate transactions in late 1954, having already conveyed dozens of lots subject to the
Original Restrictive Covenants, the Chambers conveyed three lots and a portion of a fourth lot with no
restrictions listed in the deeds. The record does not reveal why the Chambers conveyed this property
without the deed restrictions.
7
In fact, all eight lots that comprise Sunnybrook Addition section B-2 were among the first to be
sold in 1953.
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The Chambers sold lots three and four to Standard Advertising Corporation in
8
1953. They remained in the hands of the corporation until 1983, when the corporation
dissolved and sold lot three and a portion of lot four together. Thereafter, lot three and the
portion of lot four were sold together three more times before the Defendant purchased
them in 2017.
The crux of the controversy in this case involves the 1955 Restrictive Covenants.
On May 3, 1955, the Chambers recorded the 1955 Restrictive Covenants,9 even though by
then they had already sold the vast majority of lots in Sunnybrook Addition.10
Nevertheless, the 1955 Restrictive Covenants purported “to cover the Sub-division Plot as
to lots in the entire Sub-division, but no further or otherwise,” and they specifically stated
they were to “run with the land.” As previously mentioned, among the covenants was a
restriction as to “land use and building type:”
All lots in the tract shall be known and designated as residential lots. No
structure shall be erected, altered or placed or permitted to remain on any lot
other than one detached single family dwelling not to exceed two stories in
height and a private garage for not more than two cars and usual domestic
servants quarters.
By their terms, the 1955 Restrictive Covenants were to be binding for a definite period of
time but were to renew automatically for successive ten-year periods unless a majority of
the then-owners of the lots agreed to change the covenants.11
None of the deeds that conveyed the Defendant’s property after May 3, 1955,
incorporated or referred to the 1955 Restrictive Covenants. Some of the deeds involving
8
Coincidentally, the record reflects that there is a billboard located on lot three. The record does
not reveal exactly when the billboard came to be located on lot three, but it was before the Defendant
acquired the lot.
9
The Chambers executed the 1955 Restrictive Covenants on March 4, 1955, but recorded them on
May 3, 1955.
10
We reiterate that the deeds for nearly all of these conveyances, including those for all of the
parties’ lots, contained the Original Restrictive Covenants, which were still in effect when the Chambers
recorded the 1955 Restrictive Covenants.
11
In their Complaint, the Plaintiffs alleged that a majority of lot owners has never agreed to change
the residential-use provision of the 1955 Restrictive Covenants. The record reveals nothing further on this
point.
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the Defendant’s predecessors-in-title contained no restrictive language at all. In fact, the
deed by which the Chambers re-sold lots one and two in 1960 after they had reacquired the
lots in 1956 contained no restrictive language whatsoever. On the other hand, some of the
deeds involving the Defendant’s predecessors-in-title contained general language that the
conveyance was subject to valid restrictive covenants of record, if any. In fact, the 2016
and 2017 deeds conveying the properties to the Defendant stated: “This conveyance is
made subject to valid restrictive covenants and easements, if any, appearing of record.”
At trial, the Defendant offered evidence that the 1955 Restrictive Covenants did not
appear in the chain of title to his property. The Defendant’s witness in this regard explained
that the Chambers had sold the lots in question before recording the 1955 Restrictive
Covenants. The witness testified that in the case of restrictions recorded after a
conveyance, it was standard practice for the parties to a conveyance to join and expressly
recognize that the property will be encumbered by the restrictions. That practice did not
occur with respect to what became the Defendant’s property.12
The Defendant’s witness also offered testimony about related subdivisions. The
Sunnybrook Addition plat showed two adjacent areas of land in the name of J.C. Chambers.
The record reveals that the Chambers, after platting Sunnybrook Addition in 1953, platted
two additional subdivisions adjacent to Sunnybrook Addition. The Chambers recorded the
plat for Sunnybrook Acres Addition in February 1956, and they recorded the plat for
Sunnybrook Heights Addition in May 1956. Contemporaneous with the recording of the
plats, the Chambers recorded “Protective Covenants” for each subdivision. These
covenants were nearly identical to the 1955 Restrictive Covenants—including the
residential-use restriction—and like the 1955 Restrictive Covenants, they contained
language expressly stating that the covenants were to run with the land and “to cover the
subdivision plot as to lots in the entire subdivision, but no further or otherwise.”13
However, unlike the circumstances surrounding Sunnybrook Addition lots and the 1955
Restrictive Covenants, the Defendant’s proof showed that for conveyances of lots in the
subsequently-platted subdivisions, the deeds stated that the conveyance was subject to the
restrictions placed on those subdivisions and referenced the miscellaneous book page
where the applicable restrictive covenants were recorded.
12
Furthermore, the Defendant’s witness testified that even after the recording of the 1955
Restrictive Covenants, the Chambers conveyed some lots through deeds that still listed the Original
Restrictive Covenants.
13
The witness confirmed on cross-examination that the three developments are commonly known
simply as Sunnybrook, but the witness reiterated that each set of restrictive covenants specifically stated
that it covered the lots in the individual subdivision and no further.
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After hearing all of the evidence, the trial court concluded that the Defendant’s
property was restricted to residential use and entered a declaratory judgment in favor of the
Plaintiffs. The basis for the trial court’s ruling was a conclusion that the Defendant’s
property was subject to an implied negative reciprocal easement through the 1955
Restrictive Covenants. In reaching this conclusion, the trial court found that:
(1) the Chambers were the original developers of and common grantor
for the Sunnybrook neighborhood, comprised of the three platted
developments of Sunnybrook Addition, Sunnybrook Acres, and
Sunnybrook Heights;
(2) the Chambers had a general plan of development for Sunnybrook and
recorded nearly identical restrictive covenants for all three
subdivisions;
(3) the Chambers intended for the 1955 Restrictive Covenants to apply to
all of Sunnybrook Addition; and
(4) the Defendant acquired his property “subject to valid restrictive
covenants . . . appearing of record” and “had, at a minimum,
constructive notice of the restrictions owing to their public recording
and due to the general nature of the property.”
Accordingly, the trial court enjoined the Defendant from constructing any retail business
or commercial enterprise on his property.
Upon the Defendant’s appeal, the Court of Appeals reviewed “whether the trial
court properly found the existence of an implied negative reciprocal easement.” Phillips
v. Hatfield, No. E2019-00628-COA-R3-CV, 2019 WL 6954182, at *4 (Tenn. Ct. App.
Dec. 18, 2019), perm. app. granted, (Tenn. July 17, 2020). The Court of Appeals concluded
that the evidence did not preponderate against the trial court’s findings related to the
elements of establishing an implied negative reciprocal easement:
(1) that the parties derived their titles from a common grantor;
(2) that the common grantor had a general plan for the property involved;
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(3) that the common grantor intended for the restrictive covenant to
benefit the property involved; and
(4) that the grantees had actual or constructive knowledge of the
restriction when they purchased their parcels.
Id. at *4 (citing Ridley v. Haiman, 47 S.W.2d 750, 755 (Tenn. 1932)). The intermediate
appellate court concluded that the evidence established “that an implied reciprocal negative
easement existed . . . , such that [the Defendant’s] lots were subject to the residential-use
restriction contained in the [1955 Restrictive Covenants].” Id. at *6. Accordingly, the
court affirmed the trial court’s judgment. Id. at *8.
We granted the Defendant’s application for permission to appeal. In this Court, the
Defendant argues that the 1955 Restrictive Covenants do not apply to his property; that
even if the 1955 Restrictive Covenants apply to his property, he lacked notice when he
purchased the property; and that even if he had notice, any restriction against non-
residential use has been abandoned. We need not reach all of the Defendant’s arguments
to resolve this appeal. For the reasons set forth below, we hold that the 1955 Restrictive
Covenants do not apply to the Defendant’s property.
II. ANALYSIS
This case revolves around private restrictions on the use of land. Such restrictions
undoubtedly have a complex history of terminology. See Citizens for Covenant
Compliance v. Anderson, 906 P.2d 1314, 1316 (Cal. 1995) (referring to the historical law
of real covenants, equitable servitudes, and easements as “an unspeakable quagmire”
(quoting Edward H. Rabin, Fundamentals of Modern Real Property Law 489 (1974))). We
do not intend to untangle that complexity in this opinion. Instead, we will identify terms
and concepts relevant to this appeal, and we will attempt to employ consistent terminology
throughout the opinion when possible.
In the context of this case, a covenant is quite simply “a solemn or formal
obligation.” Restatement (Third) of Prop.: Servitudes § 1.3 cmt. a (Am. L. Inst. 2000).
Covenants are characterized by the nature of the performance called for, typically referred
to as the “burden” of the covenant. Id. § 1.3 cmt. e. More specifically, an “affirmative
covenant” calls for the performance of some act, whereas a “negative covenant” calls for
the covenantor to refrain from doing some act. Id. § 1.3(2). If the nature of a negative
covenant limits the uses that can be made by an owner or occupier of land, the covenant is
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often termed a “restrictive covenant.” Id. § 1.3(3). A “negative easement” is a restrictive
covenant, that is to say, it is an obligation that limits the use of land. Id.
A covenant is binding on the covenantor but not necessarily binding on others. Id.
§ 1.3 cmt. a. However, when a successor to land is required to abide by a restrictive
covenant even without assumption of that obligation, the burden of a restrictive covenant
is said to “run with the land.” In other words, it passes automatically with the land when
ownership or possession changes, whether or not the successor consents. Id. §§ 1.1 cmt.
b, 1.3 cmt. d. The interest in land with which the burden runs is referred to as the
“burdened” or “servient” estate. Id. § 1.1(1)(c).
When the burden of a restrictive covenant runs with the land, the covenant qualifies
as a “servitude.” Id. §§ 1.3(1), 5.1 cmt. a. Servitude is a generic term that describes legal
devices that private parties use to create rights and obligations that run with land, which
are useful precisely “because they create land-use arrangements that remain intact despite
changes in ownership of the land.” Id. § 1.1(1), 1.1 cmt. a. For instance, servitudes “permit
the creation of neighborhoods restricted to particular uses.” Id. § 1.1 cmt. a. Generally
speaking, a restrictive covenant runs with the land—in other words, qualifies as a
servitude—if it is intended to do so, has been effectively created, is not invalid for certain
reasons, and has not terminated in certain ways. Id. § 1.3 cmt. a.
Servitudes include a variety of devices, including covenants, easements, and profits.
Id. § 1.1 cmt. d. We acknowledge that Tennessee caselaw has often referred to “negative
easements,” “negative reciprocal easements,” and “implied negative reciprocal
easements.” See, e.g., Massey v. R.W. Graf, Inc., 277 S.W.3d 902, 909–11 (Tenn. Ct. App.
2008). The Restatement makes clear that in spite of historical differences, “[a] ‘negative’
easement, the obligation not to use land in one’s possession in specified ways, has become
indistinguishable from a restrictive covenant.” Restatement (Third) of Prop.: Servitudes
§ 1.2 cmt. b. See also id. § 1.2 cmt. h (explaining historical differences between the
concepts). In this opinion, we predominantly will use “restrictive covenant” to refer to the
device that the Chambers recorded in 1955 that purported to prohibit non-residential land
use throughout Sunnybrook Addition. However, some of the caselaw cited and quoted
herein uses “negative easement” terminology.
A. Standard of Review
The case before us is a declaratory judgment action. See generally Tenn. Code Ann.
§§ 29-14-102 & -103 (2012) (empowering a court to declare parties’ rights under
instruments such as a deed). It was tried without a jury before the Sullivan County
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Chancery Court. We review a non-jury case de novo on the record with a presumption of
correctness as to the findings of fact of the trial court, unless the evidence preponderates
otherwise. Kelly v. Kelly, 445 S.W.3d 685, 691–92 (Tenn. 2014); Rogers v. Louisville
Land Co., 367 S.W.3d 196, 204 (Tenn. 2012); Tenn. R. App. P. 13(d). For evidence to
preponderate against the trial court’s findings of fact, the evidence must support another
finding of fact with greater convincing effect. C-Wood Lumber Co. v. Wayne Cnty. Bank,
233 S.W.3d 263, 272 (Tenn. Ct. App. 2007); Realty Shop, Inc. v. RR Westminster Holding,
Inc., 7 S.W.3d 581, 596 (Tenn. Ct. App. 1999). Because the trial court is able to observe
witnesses as they testify, appellate courts afford deference to the trial court’s credibility
assessments of live, in-court testimony. Kelly, 445 S.W.3d at 692; Wells v. Tenn. Bd. of
Regents, 9 S.W.3d 779, 783–84 (Tenn. 1999). On the other hand, when evaluating
documentary proof, the ability of an appellate court to assess the evidence is the same as
that of the trial court, and thus there need be no deference afforded to the trial court’s
assessment. Kelly, 445 S.W.3d at 693; Wells, 9 S.W.3d at 783–84. Of course, we review
questions of law de novo with no presumption of correctness. Kelly, 445 S.W.3d at 692;
Rogers, 367 S.W.3d at 204.
B. General Principles Concerning Restrictive Covenants
The central issue in this case is whether the Defendant’s property is restricted to
residential use. It is clear that for a period of time from the 1950s to the 1970s, what is
now the Defendant’s property indeed was restricted to residential use by virtue of the
Original Restrictive Covenants. However, by its own terms, this restriction terminated
after twenty years—long before the Defendant acquired his property. The only other
potential source of restriction is the 1955 Restrictive Covenants. Thus, the heart of this
case is whether the 1955 Restrictive Covenants apply to the Defendant’s property.
As we evaluate this issue, we begin with a well-established principle of Tennessee
law: “A property owner’s right to own, use, and enjoy private property is a fundamental
right.” Hughes v. New Life Dev. Corp., 387 S.W.3d 453, 474 (Tenn. 2012) (citing
McArthur v. E. Tenn. Nat. Gas Co., 813 S.W.2d 417, 419 (Tenn. 1991); State v. Gainer,
22 Tenn. (3 Hum.) 39, 40 (1842)). Long ago, this Court stated:
[E]very proprietor of land, where not restrained by covenant or custom, has
the entire dominion of the soil and the space above and below to any extent
he may choose to occupy it, and in this occupation he may use his land
according to his own judgment, without being answerable for the
consequences to an adjoining owner, unless by such occupation he either
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intentionally or for want of reasonable care and diligence inflicts upon him
an injury.
Humes v. Mayor of Knoxville, 20 Tenn. (1 Hum.) 403, 407 (1839). “Not surprisingly,
then, Tennessee law does not favor restrictive covenants, because they are in derogation of
the rights of free use and enjoyment of property.” Hughes, 387 S.W.3d at 474–75.
Nevertheless, we have recognized that an owner of land does have the authority to
“sell portions thereof and make restrictions as to the use for the benefit of himself as well
as those to whom he sells other portions of the land.” Laughlin v. Wagner, 244 S.W. 475,
476 (Tenn. 1922). See also Hughes, 387 S.W.3d at 475 (noting that the concept of a
developer employing restrictive covenants to privately control land use is well-
recognized). In fact, we have stated that there is “good reason” for the authority to impose
restrictive covenants “when applied to the common practice of inserting in deeds a
restriction such as tends to create a residential section against those uses which would tend
to mar the beauty and detract from the value of the property by uses inconsistent with the
uses intended.” Laughlin, 244 S.W. at 477.
However, because such restrictive covenants are in derogation of the right to free
use and enjoyment of property, Tennessee courts construe them strictly. Hughes, 387
S.W.3d at 481 (citing Williams v. Fox, 219 S.W.3d 319, 324 (Tenn. 2007); Arthur v. Lake
Tansi Vill., Inc., 590 S.W.2d 923, 927 (Tenn. 1979)). Thus, “if the right to enforce the
covenant as to other property is doubtful such right will be denied.” Shea v. Sargent, 499
S.W.2d 871, 874 (Tenn. 1973) (quoting S. Advert. Co. v. Sherman, 308 S.W.2d 491, 493
(Tenn. Ct. App. 1957)). Similarly, we have stated that any doubt concerning the
applicability of a restrictive covenant will be resolved against the restriction and in favor
of the property’s unrestricted use. Hughes, 387 S.W.3d at 481 (citing Massey, 277 S.W.3d
at 908; Parks v. Richardson, 567 S.W.2d 465, 467–68 (Tenn. Ct. App. 1977)). Likewise,
when the terms of a restrictive covenant can be construed in more than one way, courts
must resolve any ambiguity against the party seeking to enforce the restriction and in a
manner that advances the unrestricted use of the property. Id. (citing Williams, 219 S.W.3d
at 324).
C. The 1955 Restrictive Covenants
The record reflects that when the Chambers executed and recorded the 1955
Restrictive Covenants—the only potential source of restriction for the Defendant’s
property in this case—they did not own any of the parties’ lots. Under these circumstances,
there is a fundamental flaw in the Plaintiffs’ attempt to burden the Defendant’s property
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through the recording of the 1955 Restrictive Covenants. As we mentioned above, for a
restrictive covenant to qualify as a servitude and run with the land, the covenant not only
must have been intended to run with the land, it also must have been created effectively.
Restatement (Third) of Prop.: Servitudes § 1.3 cmt. a. Of keen importance under the
circumstances of this case, to create a servitude, “the grantor must own the servient estate.”
Id. § 2.1 cmt. b, note. Cf. id. § 2.13, note (observing in the context of servitudes implied
by reference to a plat or map that “[u]nless the grantor has the power to create the servitude,
there would be no point to implying the servitude”).
In recognition of this precept, courts from other jurisdictions have held that a person
cannot restrict the use of another’s land simply by recording restrictive covenants that
purport to apply to that land. Birdwood Subdivision Homeowners’ Ass’n v. Bulotti
Constr., Inc., 175 P.3d 179, 183 (Idaho 2007) (“It is axiomatic that one person cannot
unilaterally restrict the use of another’s land simply by drafting and recording restrictive
covenants allegedly applicable to that land.”); Ruder v. Ohio Valley Wholesale, Inc., 736
N.E.2d 776, 781 (Ind. Ct. App. 2000) (finding restrictions that were recorded by the
developer after the sale of certain lots inapplicable to those lots); Pollock v. Ramirez, 870
P.2d 149, 152 (N.M. Ct. App. 1994) (stating that a declaration of covenants filed when the
grantors no longer owned the property did not validly impose restrictive covenants); White
v. Cordes, 685 S.W.2d 524, 525 (Ark. Ct. App. 1985) (holding that a person who had no
title in the land they sought to burden could not validly impose restrictions); Arnold v.
Chandler, 428 A.2d 1235, 1237 (N.H. 1981) (finding irrelevant a declaration of restrictions
recorded under the name of a corporation that did not have title to the land).
Likewise, our court of appeals also has recognized that a person cannot validly
impose restrictions on property it does not own simply by recording restrictive covenants
that purport to apply to that property. In Graham v. Edmondson, No. 01A01-9809-CH-
00482, 1999 WL 476466, at *1 (Tenn. Ct. App. July 12, 1999), a developer acquired title
to a large tract of land that eventually became a neighborhood known as Bluff Road Acres.
Shortly after acquisition, the developer sold two smaller tracts within the larger tract. After
that sale, the developer executed and recorded a declaration of restrictive covenants that
purported to cover all of Bluff Road Acres, including the two smaller tracts. Years later,
the defendant acquired part of one of the two smaller tracts. Id.When the defendant took actions allegedly in violation of the restrictive covenants,
the plaintiff homeowner in Bluff Road Acres brought suit to enforce the restrictions. Id. at
*2. The defendant “claim[ed] her property [wa]s not subject to the restrictive covenants
because it was deeded to her predecessor in title prior to the placement of the restrictions
on the property.” Id. Our court of appeals addressed “the power of a developer to bind
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property it does not own by filing a subdivision plat which includes restrictive covenants.”
Id. at *4. The court stated that the restrictive covenants “must be confined to the property
as it existed at the time of the covenant[s].” Id. (emphasis removed) (quoting Sherman,
308 S.W.2d at 493). Because the developer sold the land that became the defendant’s
property before recording the restrictive covenants, the court concluded that the
defendant’s property was not burdened by the restrictions. Id.In this case, it is true that the language of the 1955 Restrictive Covenants purported
to cover all lots in Sunnybrook Addition. However, the Chambers did not own lots one
through four when they recorded the 1955 Restrictive Covenants. Therefore, the
inescapable conclusion is that the Chambers lacked the authority to impose a servitude on
the land that became the Defendant’s property simply through recording the 1955
Restrictive Covenants.
The land that eventually became the Defendant’s property changed hands multiple
times after the 1955 Restrictive Covenants were recorded. In each instance, the grantor
obviously would have had the authority to burden the property. Accordingly, we will
briefly address whether any of these conveyances exhibited an intent on the part of the
grantor to impose the 1955 Restrictive Covenants as a servitude.
In our view, none of the conveyances after the recording of the 1955 Restrictive
Covenants subjected the Defendant’s property to the restrictions. None of the deeds for
these conveyances incorporated or referred to the 1955 Restrictive Covenants. Some of
the deeds made no mention of any potential restrictions whatsoever. In fact, the deed by
which the Chambers re-sold lots one and two in 1960 contained no restrictive language at
all. This circumstance stands in stark contrast to the proof in the record that with respect
to the related subdivisions platted in 1956, the Chambers conveyed lots with specific
language in the deeds subjecting the lots to the restrictive covenants they had recorded for
the subdivisions.
We acknowledge that some of the deeds—including the specific deeds by which the
Defendant came to acquire his property—contained language that the conveyance was
subject to valid restrictive covenants, if any, appearing of record.14 Under the
circumstances of this case, however, we do not believe this general language reflects
sufficient intent on the part of any grantor subsequent to the recording of the 1955
Restrictive Covenants to subject the property to the unnamed restrictions, which did not
14
This language in no way remedies the fact that the Chambers lacked the authority to burden lots
one through four when they recorded the 1955 Restrictive Covenants.
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appear in the property’s chain of title, given that we must resolve any doubt against the
existence of the restriction.15 See Hughes, 387 S.W.3d at 481; Shea, 499 S.W.2d at 874.
See also Restatement (Third) of Prop.: Servitudes § 2.2 cmt. d (“Courts are justifiably
hesitant to find the intent to create servitudes in vague language or informal writings
because servitudes create interests running with the land that affect people beyond the
immediate parties.”).
Nevertheless, looking to the elements of an implied negative reciprocal easement,
the Plaintiffs argue—as the courts below found—that the 1955 Restrictive Covenants apply
to the Defendant’s property. We respectfully disagree.
Tennessee recognizes negative reciprocal easements. The concept is reflected in
the following language from this Court:
The general rule is that, where the owner of a tract of land subdivides
it and sells the different lots to separate grantees, and puts in each deed
restrictions upon the use of the lot conveyed, in accordance with a general
building, improvement, or development plan, such restrictions may be
enforced by any grantee against any other grantee.
Ridley v. Haiman, 47 S.W.2d 750, 753 (Tenn. 1932). The concept is concerned primarily
with “[w]hether a person not a party to a deed containing a restrictive covenant is entitled
to enforce that covenant.” Id.The doctrine of implied negative reciprocal easements is an extension of the original
concept that addresses circumstances in which the creation of a servitude on certain land is
not expressly apparent and, therefore, must be implied. Under the doctrine, the creation of
a servitude can be implied by virtue of, among other circumstances, the conveyance of land
pursuant to a general plan of development. See Restatement (Third) of Prop.: Servitudes
§ 2.14. The quintessential example occurs in the context of restrictive covenants applicable
to a residential subdivision. See id. § 2.14 cmt. a & b. The Restatement explains the
doctrine as follows:
The idea underlying the doctrine is that when a purchaser buys land subject
to restrictions imposed to carry out a general plan of development, the
15
Because we conclude that none of these conveyances exhibited an intent to apply the 1955
Restrictive Covenants to the Defendant’s property, we need not address whether the Plaintiffs would be in
a position to enforce the restrictions.
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purchaser is entitled to assume that all land in the development is, or will be,
similarly restricted to carry out the general plan. By selling land with
restrictions designed to put into effect a general plan of development, the
developer impliedly represents to the purchasers that the rest of the land
included in the plan is, or will be, similarly restricted. That representation is
enforced, on the grounds of estoppel, by imposing an implied reciprocal
servitude on the developer’s remaining land included in the plan.
Id. § 2.14 cmt. i (emphasis added). The Restatement summarizes the application of the
doctrine as follows: “A conveyance by a developer that imposes a servitude on the land
conveyed to implement a general plan creates an implied reciprocal servitude burdening
all the developer’s remaining land included in the general plan, if injustice can be avoided
only by implying the reciprocal servitude.” Id. § 2.14(2)(b) (emphasis added).
“Creation of servitudes by implication normally arises on severance of a single
possessory interest into two or more possessory interests.” Id. § 2.11 cmt. d. For that
reason, the Restatement makes clear that the servitude becomes effective “when the first
conveyance of a lot or unit is made pursuant to the development plan.” Id. § 2.7 cmt. f.
Tennessee law recognizes the implied negative reciprocal easement doctrine. For
instance, in Land Developers, Inc. v. Maxwell, 537 S.W.2d 904 (Tenn. 1976), we reiterated
the principles of negative reciprocal easements: that when a property owner subdivides
land and sells lots with deed restrictions in accordance with a general plan, the restrictions
may be enforced by any grantee against any other grantee. 537 S.W.2d at 912. We went
on to state: “Likewise, the property remaining in the hands of the vendor may also be held
in equity to be subject to a servitude so as not to be used in a manner different from that
contained in the restrictions.” Id. Thus, in Maxwell, when considering the question of
“whether or not like or reciprocal easements or restrictions upon use may be imposed, in
equity, upon the property remaining in the hands of the grantor, and those who stand as
successors or assigns of the grantor,” we had:
no hesitancy in holding that the unsold lands of [the developer] were
restricted in his hands by essentially the same covenants as he had imposed
in the deeds to his various grantees, by an equitable servitude, because there
seems to be little question but that he did intend a general plan for the
development of the entire area as a residential “suburb” or subdivision.
Id. at 913. See also Arthur, 590 S.W.2d at 928 (recognizing that restrictive covenants may
be implied pursuant to a general plan or scheme of development).
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The doctrine “undercuts the Statute of Frauds and creates uncertainty in land titles.”
Restatement (Third) of Prop.: Servitudes § 2.14 cmt. i. Thus, we have stated that the
doctrine “is to be applied with great care.” Maxwell, 537 S.W.2d at 913 (citing McCurdy
v. Standard Realty Corp., 175 S.W.2d 28, 30 (Ky. 1943) (stating that the “doctrine ought
to be used and applied with extreme caution”)).
As is evident from the discussion above, the factual scenario presented in this case,
at least with respect to the 1955 Restrictive Covenants, is not the typical one recognized
under the implied negative reciprocal easement doctrine.16 Rather, what initially occurred
during the development of Sunnybrook Addition vis-à-vis the implementation of the
twenty-year residential use restriction by virtue of the Original Restrictive Covenants is the
typical scenario historically addressed by the implied negative reciprocal easement
doctrine. The Chambers owned all of the land comprising Sunnybrook Addition as of
1946, recorded a plat for the subdivision in 1953, and sold sixty-seven of seventy-nine lots
over the course of 1953–54. The deeds for nearly all of these conveyances, including all
of those that occurred in 1953, expressly listed the Original Restrictive Covenants. The
implied negative reciprocal easement doctrine would operate to subject the lots remaining
in the hands of the Chambers to the time-limited Original Restrictive Covenants.17 See
Maxwell, 537 S.W.2d at 912–13; Restatement (Third) of Prop.: Servitudes § 2.14(2)(b).
The factual scenario was markedly different by the time the Chambers recorded the
1955 Restrictive Covenants. By then, the Chambers had conveyed the vast majority of
lots, and they owned none of the parties’ lots. So far as the record shows, the land
remaining in the hands of the Chambers at the time they recorded the 1955 Restrictive
Covenants consisted of only twelve of seventy-nine lots, spread sporadically through only
16
In fact, the Restatement suggests that the implied negative reciprocal easement doctrine
ordinarily does not come into play when the developer records a declaration of servitudes applicable to an
entire general-plan area. Restatement (Third) of Prop.: Servitudes § 2.14 cmt. i. See also Walters v.
Colford, 900 N.W.2d 183, 194 (Neb. 2017). In such circumstances, there is no need to imply the existence
of a general plan or the application of restrictions to land not otherwise mentioned in relevant documents—
such as deeds—because the written declaration precisely evidences the intent to subject specific parcels of
land to the servitudes pursuant to a general plan. Regardless, because the courts below focused on the
doctrine of implied negative reciprocal easements, we will address the purported application of the doctrine.
17
Obviously, the issue in this case was never whether the lots remaining in the hands of the
Chambers upon their initial 1953 conveyances were subject to the Original Restrictive Covenants, and we
do not hold they were. We merely are observing that the facts in the record pertaining to the initial
development of Sunnybrook Addition are akin to the typical implied negative reciprocal easement scenario.
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six of the eight sections of Sunnybrook Addition—and not including the entire section that
contained all of the parties’ lots.
In the seminal case of Sanborn v. McLean, 206 N.W. 496 (Mich. 1925), the
Michigan Supreme Court stated:
[An implied negative reciprocal easement] must start with a common owner.
Reciprocal negative easements are never retroactive; the very nature of their
origin forbids. . . . If a reciprocal negative easement attached to defendants’
lot, it was fastened thereto while in the hands of the common owner of it and
neighboring lots by way of sale of other lots with restrictions beneficial at
that time to it.
206 N.W. at 497. See also Dwyer v. City of Ann Arbor, 261 N.W.2d 231, 234 (Mich. Ct.
App. 1977), rev’d on other grounds, 387 N.W.2d 926 (Mich. 1978) (stating that the
“retroactive effect [of applying restrictions to land not owned by the grantor at the time the
restrictions were created] is at odds with the reciprocal negative easement requirement of
common ownership at the time the express restrictions are created”). Accord Hun Es Tu
Malade? # 16, LLC v. Tucker, 963 So. 2d 55, 67 (Ala. 2006) (stating that “a negative
reciprocal easement must attach, if at all, while the property is held by a common grantor”);
Shipyard Prop. Owners’ Ass’n v. Mangiaracina, 414 S.E.2d 795, 802 (S.C. Ct. App. 1992)
(stating that “reciprocal negative easements are never retroactive”); Saccomanno v. Farb,
492 S.W.2d 709, 713 (Tex. Civ. App. 1973) (“A reciprocal negative easement is never
retroactive.”). Tennessee law is in accord with this principle. See E. Sevier Cnty. Util.
Dist. v. Wachovia Bank & Trust Co., 570 S.W.2d 850, 853 (Tenn. 1978) (stating that “no
set of covenants should be given any general retroactive effect”); Conn v. Powell, 1984
WL 588785, at *3 (Tenn. Ct. App. Nov. 5, 1984) (stating “that reciprocal negative
easements are never retroactive”).
The 1955 Restrictive Covenants purported to cover all lots in Sunnybrook Addition.
However, the Chambers were the common grantor for the lots in Sunnybrook Addition in
1953, when they conveyed the first lots subject to the Original Restrictive Covenants. By
the time of the recording of the 1955 Restrictive Covenants, the Chambers were no longer
acting as the common grantor with respect to the parties’ properties, for the Chambers did
not then own those lots. Under these circumstances, we conclude that the 1955 Restrictive
Covenants cannot burden the Defendant’s property by virtue of an implied negative
reciprocal easement. To hold otherwise would be to impose the 1955 Restrictive
Covenants retroactively.
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The Plaintiffs point out that the Chambers reacquired lots one and two in 1956. The
record does not reveal why the Chambers reacquired the lots. We acknowledge there is a
precedent for imposing an implied negative reciprocal easement after the re-acquisition of
the subject property. Cook v. Bandeen, 96 N.W.2d 743 (Mich. 1959). In Cook, the
defendants purchased an unsubdivided tract of land. The defendants moved to the property
and began developing it. Id. at 744. They sold various lots, referring in the deeds to a
description based on an unrecorded plat. Id. at 746. The deeds also contained an express
restriction that the property was “to be used for dwelling purposes only and any dwelling
house erected thereon is to cost not less than $5,000.” Id.
Before the sale of any of the restricted lots, the defendants sold an unrestricted lot
to a relative. After the sale of the restricted lots, the defendants reacquired the unrestricted
lot. The defendants then sought to use the lot to expand a pre-existing trailer park, a use
that apparently would violate the aforementioned restriction. Id. The court ultimately
concluded that the lot was subject to the restriction by virtue of a negative reciprocal
easement. Id. at 747–48.
Needless to say, we are not bound by Cook. However, we also believe it is
distinguishable from the case before us. Aside from the obvious factual differences, we
note that the Cook court imposed the restriction by estoppel based on a finding of fraud:
We likewise believe, as did the chancellor, that for defendants to
formulate such a plan [as reflected on the unrecorded plat], sell restricted lots
in pursuance thereof, watch homes be built by their grantees in reliance
thereon, and then purchase back an unrestricted lot in one of the same blocks
and propose to use same for a commercial use, would constitute fraud, actual
or constructive.
Id. at 747. There is no suggestion of fraud in the case before us. We further note that the
Cook court acknowledged the rule of Sanborn v. McLean, that “a reciprocal negative
agreement is never retroactive.” Id. (citing Sanborn, 206 N.W. at 497). The court stated
that the Sanborn rule would have required that the defendants’ lot remain unrestricted were
it not for the circumstances of fraud. Id.
In our view, when the Chambers reacquired lots one and two in 1956—after at least
sixty-seven of the seventy-nine lots in the subdivision had been sold, some more than
once—they stood in the same shoes as any other purchaser. They acquired lots one and
two subject to the Original Restrictive Covenants, and they were free to use or sell the lots.
We do not believe that the implied negative reciprocal easement doctrine can be stretched
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to impose a restriction upon property when the grantor parted ways with it before
attempting to impose the restriction, simply because the grantor reacquired it a year after
recording the purported restriction.18 Thus, we conclude that the Chambers’ re-acquisition
and later re-sale of lots one and two did not trigger the imposition of the 1955 Restrictive
Covenants as a servitude upon the Defendant’s property.
Accordingly, in light of the discussion above, we are compelled to conclude that the
1955 Restrictive Covenants do not apply to the Defendant’s property. The Defendant is
entitled to a declaratory judgment to that effect.
III. CONCLUSION
For the foregoing reasons, we reverse the decision of the Court of Appeals. We
hold that the Chambers lacked the authority to impose the 1955 Restrictive Covenants as a
servitude upon the Defendant’s property because they did not own the property when they
executed and recorded the 1955 Restrictive Covenants. We further hold that the 1955
Restrictive Covenants do not limit the Defendant’s property to residential use through an
implied negative reciprocal easement. We remand the case to the Sullivan County
Chancery Court for entry of a declaratory judgment that the 1955 Restrictive Covenants do
not apply to the Defendant’s property and for such other proceedings as are consistent with
this opinion.
The costs of this appeal are taxed to the Plaintiffs, for which execution may issue if
necessary.
_________________________________
JEFFREY S. BIVINS, CHIEF JUSTICE
18
We note that the Chambers did not place any additional restrictions of record on lots one and two
after they reacquired the lots. We also reiterate that the Chambers never owned the Plaintiffs’ lots, lot three,
or the relevant portion of lot four after 1953.
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