Walnut Run Homeowner's Association, Inc. v. Jerry Wayne Wilkerson ( 2017 )

06/01/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
March 23, 2017 Session
WALNUT RUN HOMEOWNER’S ASSOCIATION, INC. V.
JERRY WAYNE WILKERSON
Appeal from the Chancery Court for Hamilton County
No. 13-0552 Jeffrey M. Atherton, Chancellor
No. E2016-01084-COA-R3-CV
The owner of property in a residential subdivision appeals the order of the trial court
prohibiting construction of an eight-foot wooden fence. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
JOHN W. MCCLARTY, J., delivered the opinion of the Court, in which D. MICHAEL
SWINEY, C.J., and Andy D. BENNETT, J. joined.
Buddy B. Presley, Jr., Chattanooga, Tennessee, for the appellant, Jerry Wayne
Wilkerson.
Neil A. Brunetz, M. Ellis Lord, Robert F. Parsley, and Lynzi J. Archibald, Chattanooga,
Tennessee, for the appellee, Walnut Run Homeowner’s Association.
OPINION
I. BACKGROUND
In 1987, Harvey and Linda Robinson (“the Robinsons”) acquired property in
Ooltewah, Tennessee. Working with Marshall Berry, Bill Fine, and Terry Payne, the
Robinsons developed a plan to create a residential subdivision called the Walnut Run
Subdivision (“the Subdivision”). In September 2006, a final plat was recorded
establishing the Subdivision, and in March 2007, Restrictive Covenants (“the
Covenants”) governing the subdivision were recorded in the Register’s Office of
Hamilton County. The Covenants, signed by Terry Payne as an “Authorized
Representative” on behalf of Walnut Run, provided for the establishment of the Walnut
Run Homeowner’s Association (“the Association” or “Plaintiff”). As pertinent to this
appeal, the Covenants provided:
WHEREAS, WE HARVEY AND LINDA ROBINSON, BILL FINE, AND
MARSHALL BERRY ARE THE OWNERS OF PROPERTY IN THE
SECOND CIVIL DISTRICT OF HAMILTON COUNTY, TENNESSEE,
KNOWN AS WALNUT RUN SUBDIVISION LOTS 1 THRU 80.
WHEREAS IT IS OUR INTENT, PURPOSE, AND DESIRE TO INSURE
THAT THE VARIOUS LOTS IN SAID SUBDIVISION ARE
DEVELOPED INTO A RESIDENTIAL SECTION, AND FOR SUCH
PURPOSES, THERE ARE IMPOSED ON THE VARIOUS LOTS,
UNLESS SPECIFIED OTHERWISE, THE RESTRICTIVE COVENANTS
AND CONDITIONS HEREINAFTER SETFORTH, WHICH SHALL BE
DEEMED TO BE A PART OF THE CONSIDERATION OF THE
CONVEYING OF SAID LOTS, AND SAID RESTRICTIVE
COVENANTS AND CONDITIONS SHALL RUN WITH THE LAND,
THE SAME BEING FOR USE, PROTECTION, AND BENEFIT OF THE
PRESENT AND FUTURE OWNERS OF LOTS IN SAID SUBDIVISION,
AND ARE TO BE EFFECTIVE, WHETHER OR NOT THEY ARE SET
FORTH SPECIFICALLY IN SUBSEQUENT CONVEYANCES.
***
TERMS OF COVENANTS. THESE COVENANTS RUN WITH THE
LAND AND ARE BINDING ON ALL PARTIES AND ALL PERSONS
CLAIMING UNDER THEM FOR A PERIOD OF TWENTY-FIVE (25)
YEARS FROM THE DATE THESE COVENANTS ARE RECORDED,
AFTER WHICH TIME SAID COVENANTS SHALL BE
AUTOMATICALLY EXTENDED FOR SUCCESSIVE TEN (10) YEAR
PERIODS, UNLESS AN INSTRUMENT SIGNED BY A MAJORITY OF
THEN OWNERS OF THE LOTS HAS BEEN RECORDED AGREEING
TO CHANGE SAID COVENANTS IN WHOLE OR IN PART.
ENFORCEMENT. IN THE EVENT OF VIOLATION OR ATTEMPTED
VIOLATION OF ANYONE OR MORE OF THE FOREGOING
RESTRICTIVE COVENANTS AND CONDITIONS, THE PARTY OR
PARTIES GUILTY THEREOF SHALL BE SUBJECT TO AND LIABLE
AT THE SUIT OF LINDA AND HARVEY ROBINSON, AND/OR
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MCDANIEL AND SON CONSTRUCTION COMPANY INC. THEIR
HEIRS OR ASSIGNS, TO BE ENJOINED BY PROPER PROCESS
FROM SUCH VIOLATION, AND SHALL BE FURTHER LIABLE FOR
SUCH DAMAGES AS MAY ACCRUE, IT BEING STIPULATED THAT
COURT COSTS AND REASONABLE ATTORNEY FEES INCIDENT
TO ANY SUCH PROCEEDINGS SHALL CONSTITUTE LIQUIDATED
DAMAGES, WE RESERVE THE RIGHT AND THE PRIVILEGE OF
WAIVING MINOR VIOLATIONS OF THESE RESTRICTIVE
COVENANTS AND CONDITIONS WHEN THE SAME DO NOT, IN
OUR OPINION, MATERIALLY AFFECT THE PURPOSES SOUGHT
TO BE ATTAINED BY THESE RESTRICTIVE COVENANTS, AND
PROVIDING THAT IF SUCH VARIANCE OR VIOLATIONS, A
VIOLATION OF ANY ZONING ORDINANCE, VARIANCE FOR SUCH
ZONING VIOLATION MUST ALSO BE PROCURED.
The Covenants prohibited lot owners from erecting a fence of a “height more than four
feet from the ground.” Further, lot owners were specifically required to “get written
permission from the developers or their representatives” before erecting a fence. The
Covenants were amended on May 8, 2010,1 to create an Architectural Review
Committee. Relative to fencing, the Covenants, as amended, provided as follows:
No fences will be allowed on any Lot without the prior written consent of the
Architectural Committee. All proposed fences must be submitted to the
Architectural Review Committee showing materials, design height and
location. No chain link fences will be permitted on any lot. All fences must
be 4 ft. tall.
The Covenants, as amended, were signed by Darrell G. Goforth and Martin M. Brewer on
behalf of Plaintiff.
In 2012, the Robinsons conveyed the property at issue to Taylor Cavin, who later
conveyed the property to Jerry Wayne Wilkerson (“Defendant”). Each deed was
recorded and explicitly provided that the conveyance was made “subject to” the
Covenants. Without obtaining written permission, Defendant began construction of an
eight-foot wooden fence surrounding his backyard that contained a pool.
On December 11, 2012, Brian Lichtenberg, Vice President of the Association,
notified Defendant that construction must stop because the fence violated the Covenants.
In response, Defendant submitted a written proposal for construction of an eight-foot
1
The amendment was recorded in the Register’s Office of Hamilton County on April 15, 2013.
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wooden fence. The committee denied the proposal as submitted but offered permission
to build a six-foot vinyl or aluminum fence around the pool. When Defendant continued
construction of the wooden fence, the committee provided notice that failure to remove
the fence within 30 days would result in legal action. Defendant submitted a renewed
proposal for a six-foot wooden fence. His proposal was denied. However, he continued
construction, despite his failure to obtain permission to construct the fence as desired.
Plaintiff filed suit on July 30, 2013, requesting injunctive relief and damages.
Defendant filed an answer on October 14, 2013, in which he claimed that neither the
original nor the amended version of the Covenants prohibited construction of a wooden
fence. He later filed an amended answer, in which he requested a declaratory judgment
holding that the Covenants were not legally binding because the stated signatory, Walnut
Run, was an undefined entity that did not own any of the property subject to the
Covenants. He explained that the Robinsons possessed sole ownership of the property
between June 10, 1987, and June 20, 2012; therefore, neither Mr. Payne nor the
Association had the authority to execute restrictive covenants governing the property. He
also filed a motion for summary judgment recounting the same argument and adding that
the amendment to the Covenants was invalid because it was not executed by a person or
entity with an ownership interest in the property and was not signed by a majority of lot
owners. In support of his motion, Defendant filed a statement of undisputed material
facts, exhibits, and an affidavit. One such exhibit contained a power of attorney,
executed by Mr. Robinson and dated April 24, 2007, authorizing Mr. Payne “to
mortgage, sell, convey, encumber, or otherwise deal with” the property comprising the
Subdivision.
Plaintiff responded with an amended complaint, in which it argued that the
Covenants, as amended, contained the same relevant restrictions and provided for the
same relief requested in the original complaint. Plaintiff also filed its own motion for
summary judgment, arguing that it was entitled to judgment as a matter of law because
the Covenants are enforceable under Tennessee law both as real covenants and as an
equitable servitude. Plaintiff claimed that the term Walnut Run is a clear reference to the
property owners listed at the outset of the Covenants. Plaintiff further argued that the
Robinsons, Marshall Berry, and Bill Fine executed a written agreement providing Mr.
Payne with the necessary authority to execute the Covenants on their behalf. Plaintiff
claimed that the Robinsons intended for the Covenants to apply to the disputed property
and that Defendant likewise intended for the Covenants to apply to his property as
evidenced by his acceptance of the deed transferring ownership.
In support of its motion, Plaintiff filed affidavits and a statement of undisputed
material facts. The Robinsons attested that they intended for certain restrictions to
govern the property, that they authorized Mr. Payne to sign the Covenants on their behalf,
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and that they were the only owners of the property when the Covenants were executed
but that they intended to convey parcels of property to Mr. Berry and Mr. Fine. Plaintiff
also included the document that purportedly authorized Mr. Payne to sign on behalf of
the Robinsons. The document, undated but signed by the Robinsons, Mr. Fine, Mr.
Berry, O. Lamar McDaniel, Jane F. McDaniel, and Mr. Payne, provided as follows:
WHEREAS, WE THE OWNERS OF ALL LOTS IN WALNUT RUN
(LINDA ROBINSON, HARVEY ROBINSON, BILL FINE, AND
MARSHALL BERRY) DO HEREBY ACKNOWLEDGE THE WRITING
AND APPROVAL OF THE WALNUT RUN RESTRICTIVE
CO[V]ENANTS THAT WILL PROTECT OUR INTEREST ALONG
WITH FUTURE OWNERS OF SUBDIVISION. WE ALSO
ACKNOWLEDGE OUR PARTNERS IN THIS DEVELOPMENT IN
WRITING THESE COVENANTS O. LAMAR MCDANIEL, JANE F.
MCDANIEL, AND TERRY L. PAYNE. IT IS WITH ALL OUR
APPROVAL THAT ANY OF THE BELOW LISTED AND SIGNED,
MAY ACT ON OUR BEHALF IN CARRYING OUT ENFORCING AND
SIGNING THIS DOCUMENT.
Mr. Payne attested, in pertinent part, that he, Mr. Berry and Mr. Fine were builders for
the Subdivision and that he intended for certain restrictions to govern the subdivision. He
claimed that the Robinsons authorized him to sign the Covenants on their behalf.
Following a hearing, the trial court granted summary judgment in favor of Plaintiff
and denied Defendant’s motion. In so holding, the trial court read the term Walnut Run
as an unambiguous reference to the actual property owners as set forth in the outset of the
Covenants and found that the record contained sufficient evidence to establish that Mr.
Payne had the requisite authority to execute the Covenants on behalf of the property
owners. The court alternatively held that the Covenants were enforceable as an equitable
servitude. The court noted that even if Mr. Payne did not have the authority to bind the
property, the restrictive covenants were incorporated into the later transfers of property
from the Robinsons to Mr. Cavin and from Mr. Cavin to Defendant. The court ordered
Defendant to comply with the Covenants and granted Plaintiff’s request for attorney fees.
This timely appeal followed.
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II. ISSUES
We consolidate and restate the issues on appeal as follows:
A. Whether the trial court erred in granting summary judgment.
B. Whether Plaintiff is entitled to attorney fees on appeal.
III. STANDARD OF REVIEW
A motion for summary judgment is a question of law and we review it de novo
with no presumption of correctness to the trial court’s decision. Rye v. Women’s Care
Ctr. Of Memphis, 477 S.W.3d 235, 250 (Tenn. 2015). Summary judgment is appropriate
when “the pleadings, depositions, answers to interrogatories, and admissions on file,
together with affidavits . . . show that there is no genuine issue of material fact and that
the moving party is entitled to a judgment as a matter of law.” Tenn. R. Civ. P. 56.04.
“The nonmoving party ‘must do more than simply show that there is some metaphysical
doubt as to the material facts.’” Rye, 477 S.W.3d at 265 (citing Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). It must indicate specific facts in
the record “which could lead a rational trier of fact to find in favor of the nonmoving
party.” Rye, 477 S.W.3d at 265.
IV. DISCUSSION
A.
“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, 474-75 (citations omitted).
Accordingly, “Tennessee law does not favor restrictive covenants, because they are in
derogation of the rights of free use and enjoyment of property.” Id. (citations omitted).
“Nevertheless, residential developments subject to restrictive covenants and governed by
homeowners’ associations . . . have rapidly proliferated in recent decades.” Id. at 475
(citation omitted). “[T]he courts will uphold covenants running with the land where the
intent of the parties to bind their remote successors can be determined by the language of
the covenant and the circumstances of its making.” Hillis v. Powers, 875 S.W.2d 273,
275 (Tenn. Ct. App. 1993). Such restrictive covenants are interpreted and enforced as
contracts, with “[a]ny doubt concerning the applicability of a restrictive covenant
construed against the restriction.” Hughes, 387 S.W.3d at 481.
Defendant first argues that the court erred in granting summary judgment when the
Covenants were executed by Mr. Payne, someone without any ownership interest in the
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property. Plaintiff responds that this issue was not timely raised at the trial court level or
adequately presented in the appellate brief. Plaintiff further argues that the record
sufficiently established Mr. Payne’s authority to execute the Covenants. Regardless of
any potential for waiver, a review of the record reveals that Mr. Payne’s authority to
execute the Covenants on behalf of the Robinsons, the original property owners, was
sufficiently established. Indeed, the record contained (1) a power of attorney executed by
Mr. Robinson authorizing Mr. Payne to act in his stead concerning the Subdivision and
(2) another document authorizing multiple individuals to act on behalf of the Robinsons
in establishing the Subdivision and its restrictive covenants.
Defendant next argues that the court’s interpretation of Walnut Run was flawed
when the document does not contain a definition for the term or indicate that the property
owners comprise Walnut Run. Plaintiff responds that the court did not err in interpreting
the term Walnut Run as evidenced by the fact that Walnut Run was listed as the
signatory. We agree that the court’s interpretation of the term “Walnut Run” was flawed.
The Covenants provide, in pertinent part, as follows:
WHEREAS, WE HARVEY AND LINDA ROBINSON, BILL FINE, AND
MARSHALL BERRY ARE THE OWNERS OF PROPERTY IN THE
SECOND CIVIL DISTRICT OF HAMILTON COUNTY, TENNESSEE,
KNOWN AS WALNUT RUN SUBDIVISION LOTS 1 THRU 80.
The term clearly and unambiguously refers to the property, not the owners of the
property. Nevertheless, this distinction does not void the enforceability of the restrictive
covenants at issue when the Covenants were executed by Mr. Payne, an authorized
representative of Mr. Robinson, a property owner.
Defendant next argues that the Covenants are unenforceable because they did not
contain language specifically binding future grantees. Plaintiff responds that this issue is
waived because it was not timely presented to the trial court. Plaintiff alternatively
argues that the intent to bind future grantees was evident in the wording of the Covenants
and that it presented affidavits reinforcing that fact. We agree. Regardless of any
potential for waiver, a clear reading of the Covenants reflects intent to bind future
grantees as evidenced by the following language:
WHEREAS IT IS OUR INTENT, PURPOSE, AND DESIRE TO INSURE
THAT THE VARIOUS LOTS IN SAID SUBDIVISION ARE
DEVELOPED INTO A RESIDENTIAL SECTION, AND FOR SUCH
PURPOSES, THERE ARE IMPOSED ON THE VARIOUS LOTS,
UNLESS SPECIFIED OTHERWISE, THE RESTRICTIVE COVENANTS
AND CONDITIONS HEREINAFTER SETFORTH, WHICH SHALL BE
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DEEMED TO BE A PART OF THE CONSIDERATION OF THE
CONVEYING OF SAID LOTS, AND SAID RESTRICTIVE
COVENANTS AND CONDITIONS SHALL RUN WITH THE LAND,
THE SAME BEING FOR USE, PROTECTION, AND BENEFIT OF THE
PRESENT AND FUTURE OWNERS OF LOTS IN SAID SUBDIVISION,
AND ARE TO BE EFFECTIVE, WHETHER OR NOT THEY ARE SET
FORTH SPECIFICALLY IN SUBSEQUENT CONVEYANCES.
***
TERMS OF COVENANTS. THESE COVENANTS RUN WITH THE
LAND AND ARE BINDING ON ALL PARTIES AND ALL PERSONS
CLAIMING UNDER THEM FOR A PERIOD OF TWENTY-FIVE (25)
YEARS FROM THE DATE THESE COVENANTS ARE RECORDED,
AFTER WHICH TIME SAID COVENANTS SHALL BE
AUTOMATICALLY EXTENDED FOR SUCCESSIVE TEN (10) YEAR
PERIODS, UNLESS AN INSTRUMENT SIGNED BY A MAJORITY OF
THEN OWNERS OF THE LOTS HAS BEEN RECORDED AGREEING
TO CHANGE SAID COVENANTS IN WHOLE OR IN PART.
Defendant next argues that the court erred in applying the doctrines of estoppel by
deed and equitable estoppel. Plaintiff responds that the court did not rely upon either
doctrine in granting its motion for summary judgment. We agree with Plaintiff.
Finally, Defendant objects to the court’s alternative ruling that the Covenants are
enforceable as an equitable servitude. He claims that the ruling was in error because the
party executing the servitude, Walnut Run, did not actually own an interest in the
property. Plaintiff responds that the court did not err in its ruling. “For a covenant to
bind remote grantees in equity, (1) it must “touch and concern” the land; (2) the original
parties to the covenant must intend that it run with the land and bind remote grantees; and
(3) the remote grantee must have had notice of the covenant.” Gambrell v. Nivens, 275
S.W.3d 429, 437 (Tenn. Ct. App. 2008). Defendant does not take issue with any of these
substantive elements. Instead, he again asserts that the Covenants were not executed by
someone with a possessory interest in the property. We have already rejected this
argument. Moreover, we agree with the trial court that the Covenants were also
incorporated into the deeds transferring the property from the Robinsons to Mr. Cavin
and from Mr. Cavin to Defendant.
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With all of the above considerations in mind, we conclude that the court properly
found that there were no genuine issues of material fact and that Plaintiff was entitled to
an award of summary judgment.
B.
Plaintiff requests attorney fees on appeal pursuant to the terms of the Covenants.
Tennessee follows the American Rule which provides that “litigants pay their own
attorney’s fees absent a statute or an agreement providing otherwise.” State v. Brown &
Williamson Tobacco Corp., 18 S.W.3d 186, 194 (Tenn. 2000); accord Taylor v. Fezell,
158 S.W.3d 352, 359 (Tenn. 2005). “Under the American [R]ule, a party in a civil action
may recover attorney fees only if: (1) a contractual or statutory provision creates a right
to recover attorney fees; or (2) some other recognized exception to the American [R]ule
applies, allowing for recovery of such fees in a particular case.” Cracker Barrel Old
Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009) (citing Taylor, 158
S.W.3d at 359; John Kohl & Co. v. Dearborn & Ewing, 977 S.W.2d 528, 534 (Tenn.
1998)). An award of attorney fees on appeal is appropriate pursuant to the terms of the
Covenants. We remand this case to the trial court for proceedings to determine the
reasonable amount of such fees incurred on appeal.
V. CONCLUSION
The decision of the trial court is affirmed. The case is remanded for further
proceedings. Costs of the appeal are taxed to the appellant, Jerry Wayne Wilkerson.
_________________________________
JOHN W. McCLARTY, JUDGE
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