New Covenant Baptist Church v. Panther Sark ( 2001 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 29, 2001 Session
NEW COVENANT BAPTIST CHURCH v. PANTHER SARK, ET AL.
Appeal from the Chancery Court for Knox County
No. 140440-3 Thomas R. Frierson, II, Chancellor
FILED FEBRUARY 28, 2002
No. E2000-02930-COA-R3-CV
In this suit New Covenant Baptist Church seeks a declaration that certain restrictions applicable to
Technology Park West subdivision do not preclude New Covenant from using one of the lots for
driveway purposes to other unrestricted property owned by New Covenant outside the subdivision.
Panther Sark, a partnership, and certain other owners of lots in the subdivision were named as
Defendants and they filed a counter-complaint seeking a declaration to the contrary. The Trial Court
found in favor of New Covenant. We reverse and hold in favor of the partnership and other owners
of lots in the subdivision.
Tenn.R.App.P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed;
Judgment Rendered; Cause Remanded
HOUSTON M. GODDARD , P.J., delivered the opinion of the court, in which HERSCHEL P. FRANKS and
CHARLES D. SUSANO, JR., JJ., joined.
Thomas M. Hale, Knoxville, Tennessee, for the Appellants, Panther Sark, Carter Rome Eddleman
Real Estate, LLC, Subland, LLC, and Koontz, Loy & Taylor, LLC
George W. Morton, Jr., Knoxville, Tennessee, for the Appellee, New Covenant Baptist Church
OPINION
This is a suit wherein New Covenant Baptist Church seeks a declaration that it is entitled to
use a lot which it purchased in Technology Park West Subdivision as a driveway and entrance to
other adjoining property owned by it. The Defendants were Panther Sark, a partnership, Carter
Rome Eddleman Real Estate, LLC, Subland, LLC, and Koontz, Loy & Taylor, LLC. These
Defendants also filed a counter-complaint seeking a declaration to the contrary.
Because resolution of this appeal is a question of law depending upon the construction placed
upon the restrictive covenants applicable to the subdivision our review is de novo without a
presumption of correctness of the Trial Court’s determination. Tenn.R.App.P. 13.
The Trial Court accurately sets out the issues raised and facts necessary for disposition of this
appeal, which we hereinafter set out along with the applicable covenants to the subdivision, which
are germane to our disposition of this appeal:
The primary issues presented for adjudication include (1) whether the recorded
protective covenants for Technology Park West subdivision prevent Plaintiff from
using a lot within said subdivision as a driveway or other means of access to
adjoining unrestricted property and (2) whether the amended protective covenants,
subsequently recorded, are valid, binding and enforceable.
FACTUAL BACKGROUND
Plaintiff, New Covenant Baptist Church, an African American Southern
Baptist Convention church, undertook development plans for a new church site
in approximately June, 1998. Desirous of moving from their current location of
209 Canton Hollow Road, Knoxville, Tennessee, church officials considered
several possible locations, including certain acreage located along Alvin Starky
Lane. The primary location considered by the church in the development of its
initial phase facilities was a parcel containing approximately 8.9 acres owned by
Harold D. Ritter and others, Trial Exhibit 1A. Believing access to this tract via
Reliability Circle to be easier and more aesthetically conducive to church purpose,
Plaintiff purchased an adjoining 1.69 acre tract from Sharon Messer Hembree.
Plaintiff’s composite acquisition included a third parcel designated as Lot 3R1-3
of Technology Park West subdivision, Trial Exhibit 1A.1 Lot 3 was purchased by
the church from Bedrock Properties LLC by deed dated August 24, 1998.
Lot 3 of Technology Park West subdivision is a re-subdivided area of
Technology Park subdivision located in the 6th Civil District of Knox County,
Tennessee, Trial exhibit 1B and Exhibit 1C. The named Defendants comprise all
of the remaining owners of lots in Technology Park West subdivision. It is
undisputed that the subject premises are affected by the recorded protective
covenants for both Technology Park subdivision and Technology Park West
subdivision, Trial Exhibit 2 and Trial Exhibit 3.
In connection with Plaintiff’s acquisition of Lot 3 in Technology Park
West subdivision, a preponderance of the evidence supports a finding of the
following chronology of events:
5/10/79 Recordation of protective covenants for Technology Park
Subdivision
10/8/87 Incorporation of New Covenant Baptist Church Inc.
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For ease o f reference, Lo t 3R1 -3 shall here inafter be referred to as L ot 3. (F ootn ote in origin al.)
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5/23/96 Creation of protective covenants for Technology Park West
Subdivision
7/30/96 Recordation of protective covenants for Technology Park West
Subdivision
8/6/97 Contract between Panther Sark and Bedrock Properties LLC for
Lot 3R1-3
8/14/97 Deed from Panther Sark to Bedrock Properties LLC for Lot 3R1-3
6/22/98 Contract between Bedrock Properties LLC and Plaintiff for
purchase of Lot 3
6/24/98 Contract between Ritter and Plaintiff for purchase of 8.9 acre tract
6/24/98 Contract between Bedrock Properties LLC and Plaintiff for
purchase of Lot 3
6/25/98 Letter from Tennessee Technology Corridor Development
Authority
7/8/98 Letter from Panther Sark indicating that it was inclined to grant
Plaintiff’s requested use of Lot 3
7/17/98 Letter from Panther Sark to Mike Fuller objecting to Plaintiff’s
requested use of Lot 3
7/21/98 FAX transmission of letters dated 7/8/98 and 7/17/98 to Realty
Executives
7/30/98 Contract between Hembree and Plaintiff for purchase of 1.69 acre
tract
8/21/98 Amended covenant for Technology Park West Subdivision
established
8/21/98 TAX transmission of amended protective covenants from Panther
Sark to Attorney Howard G. Hogan
8/23/98 Congregational meeting of Plaintiff wherein decision was made to
purchase Lot 3
8/24/98 Amended covenants for Technology Park West Subdivision
recorded
8/24/98 Purchase of Lot 3 by Plaintiff from Bedrock Properties LLC
8/25/98 Recordation of warranty deed from Bedrock Properties LLC to
Plaintiff
8/27/98 Meeting between Plaintiff and Defendant property owners
9/25/98 Letter from Panther Sark to Plaintiff denying request to use
property as access to adjoining tract.
9/29/98 Recordation of warranty deed from Ritters to Plaintiff
9/29/98 Recordation of warranty deed from Hembree to Plaintiff.
Upon inquiry by Bedrock Properties LLC, Defendant Panther Sark, as the
original developer of Technology Park West subdivision, considered the request
by Plaintiff that Lot 3 be permitted for use as a driveway and/or means of access
to the church’s adjoining unrestricted property from Reliability Circle. By letter
dated July 8, 1998, directed to the remaining property owners of the subdivision,
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Donald K. Lorenzo, on behalf of Defendant, Panther Sark, indicated an inclination
to grant said request, Trial Exhibit 8. The remaining subdivision owners
responded by indicating their general opposition to the use of Lot 3 in this
fashion. As a result, Mr. Lorenzo retreated from his initial position by
communicating to the agent of Bedrock Properties LLC that Panther Sark could
not approve plans for use of Lot 3 as contemplated by the Plaintiff, Trial Exhibit
18.
Notwithstanding the Defendants’ stated position, the Plaintiff, by and
through counsel, proceeded to consummate its acquisition of Lot 3. Learning of
an impending closing date for the transfer of title between Bedrock Properties
LLC and Plaintiff, the Defendant, Panther Sark, through Mr. Lorenzo, prepared
and filed for recordation an amended declaration of protective covenants,
designed to specifically preclude the use of any lot for vehicular access to real
property located beyond the perimeter boundaries of Technology Park West
subdivision. The amended declaration of protective covenants was filed on the
same day as, but shortly before, the closing between Bedrock Properties LLC and
Plaintiff. The corporate warranty deed evidencing the transfer of title was filed
for public record the following day.
PERTINENT PARTS OF RESTRICTIVE COVENANTS
WHEREAS, in order to achieve the highest quality in site design, building
arrangement, landscaping and maintenance, and traffic circulation, and to protect
the rights and interests of purchasers of lots, owners of property and occupants of
buildings in the park from incompatible uses and structures, declarant desires to
impose certain conditions and restrictions upon the use of the property in
Technology Park.
1. Establishment of Restrictions. Declarant hereby declares that Technology
Park is now and shall be subject to the protective covenants hereinafter set
forth for the benefit of the owner and occupant of each and every building
site within Technology Park, which covenants shall be binding upon the
heirs, successors and assigns of declarant and of any owner and occupant
thereof.
2. Purpose and Function of the Covenants. The purpose of these protective
covenants is to insure proper development and use of each building site
within Technology Park and to assure a means of enforcement of the
restrictions herein below stated so as to protect each such site against
improper development and use of other sites as might depreciate the value
of any site, to prevent the erection of structures of unsuitable design or
built of improper materials, to prevent inharmonious improvements, to
secure and maintain adequate setbacks from streets and adequate free
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space between structures and in general to provide for a higher quality of
improvement of Technology Park.
....
4. Uses.
A. Permitted Uses. Uses of building sites within Technology Park shall be for
one or more of the following: athletic club or facilities, banks and all types of
financial institutions, churches, electrical appliances and equipment assembly,
electronic equipment assembly and manufacturing, instrument and meter
manufacturing, libraries, medical and dental clinics, museums, offices, office
supply outlets, optical goods manufacturing, post offices, research and
development, and water treatment equipment and chemical process equipment
assembly and manufacturing.
B. Conditional Uses. (permitted only upon written approval of declarant):
commercial services, hotels and motor hotels, light industrial distribution
enterprises, personal services, public utilities, restaurants, retail stores, and other
such conditional uses not permitted in 4A above as in the sole opinion of the
declarant conform to the intended character of Technology Park.
C. Uses Not Permitted. Uses which in general will not be permitted are: any
business or activity not permitted in 4A above that does not lend itself to the
character of the property in the sole opinion of the declarant, who in making such
determination may consider among other factors, the following: noise or sound
that is objectionable because of volume, duration, intermittence, beat or shrillness;
smoke; obnoxious odors; dust, dirt, or flyash; noxious, toxic or corrosive fumes;
unusual fire or explosion hazards; and unsightly debris.
....
11. Constructive Notice and Acceptance. Upon recordation of this declaration
in the office of the Register of Deeds for Knox County, every person or entity
who or which nor or hereafter owns or acquires any right, title, estate or interest
in any portion of said property is and shall be conclusively deemed to have
consented and agreed to every covenant, condition and restriction contained
herein whether or not any reference to this declaration is contained in the
instrument by which such person or entity acquired an interest in said property.
....
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15. Prior Nonconforming Use. These restrictions shall not apply to any use of
the property or any portion thereof being presently made on the date of
recordation of these restrictions.
16. Restrictions. Declarant, in its sole discretion, reserves the right to amend
this declaration until all the lots have been sold, at which time, the association
shall have the right to amend by majority vote.
REVISED SEC. 4 Cow.
C. Uses Not Permitted. Uses which in general will not be permitted are: any
business or activity not permitted in 4A above that does not lend itself to the
character of the property in the sole opinion of the declarant, who in making such
determination may consider among other factors, the following: noise or sound
that is objectionable because of volume, duration, intermittence, beat or shrillness;
smoke; obnoxious odors; dust, dirt, or flyash; noxious, toxic or corrosive fumes;
unusual fire or explosion hazards; and unsightly debris. No lot or portion thereof
shall be used for vehicular access to any property outside of this development and
no easement shall be granted for access to or egress from any property outside of
this development. No roadway shall be built across any lot that would connect
Reliability Circle to any roadway outside of this development. (Revision in Sec.
4C underlined.)
In resolution of this appeal we recognize that under our case law restrictive covenants-- being
in derogation of the right of unrestricted use of property--are to be strictly construed against the party
seeking to enforce them. This proposition of law was enunciated some 75 years ago in the case of
Emory v. Sweat, 9 Tenn. Ct. App. 167 (1927), which was reaffirmed by this Court in a 1995
opinion, Beacon Hills Homeowners Association v. Palmer Properties, Inc., 911 S.W.2d 736 (Tenn.
Ct. App. 1995). Notwithstanding this rule, however, this Court has held in Jones v. Englund,, 870
S.W.2d 525 (Tenn. Ct. App. 1993), quoting from Waller v. Thomas, 545 S.W.2d 745 (Tenn. Ct.
App. 1976), the following (870 S.W.2d at 529):
[T]he court is required to give a fair and reasonable meaning to restrictive
covenants in order to determine the parties’ intention and once the intention of the
parties is ascertained, the covenant will be enforced, provided it serves a
legitimate purpose and does not constitute a nuisance per se. White v. Gulf
Refining Co., 156 Tenn. 474, 2 S.W.2d 414 (1928).
While it seems clear to us that the restrictions contemplate buildings on each of the
subdivision lots, and though it is true the restrictions do permit churches, it was contemplated it
would be church buildings, not driveways to other church property. We believe this result is
particularly compelling in light of the purpose stated in the restrictions of the subdivision, as well
as particular direction given as to construction of the buildings contemplated. (See Appendix for
copy of original restrictions.)
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We also note that in an unreported opinion of this Court, Burnett v. Hamby, filed in Nashville
on November 19, 1997, (LEXIS 846), a case strikingly similar to the one on appeal, this Court
affirmed the trial court’s finding that use of a lot in a residential subdivision for a driveway to
unrestricted property outside the subdivision violated the subdivision restrictions. The case at bar
presents a stronger argument in favor of the Defendants’ position in that in Burnett the restriction
prohibited any use “except for residential purposes.” Here we have a restriction which permits
“churches,” but not use for “church purposes.” Another case, Lapray v. Smith, 804 S.W.2d 87(Tenn. Ct. App. 1990), also enjoined the use of a lot within a subdivision as a driveway for
unrestricted property outside of the subdivision.
We also observe that under the Chancellor’s decree there is nothing to prevent New Covenant
from subdividing its 9.8-acre tract transferring lots, together with an easement, to other churches
which would enable them to use the lot in question as a driveway.
In view of our resolution relative to the original restrictions imposed, we pretermit the issue
regarding the purported amendment to the covenants--which came to the attention of New Covenant
prior to its committing to purchase lot 3--that specifically prohibits the use of any lot as a driveway
for property outside the subdivision.
For the foregoing reasons the judgment of the Trial Court is reversed and a judgment is
entered finding the proposed use of Lot 3 a violation of the original restrictive covenants.
The case is remanded for collection of costs below, which are, as are costs of appeal,
adjudged against New Covenant Baptist Church.
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HOUSTON M. GODDARD, PRESIDING JUDGE
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