Maples Homeowners Assoc., Inc. v. T & R Nashville LP ( 1998 )

FILED
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE November 24, 1998
Cecil W. Crowson
Appellate Court Clerk
MAPLES HOMEOWNERS )
ASSOCIATION, INC., )
)
Plaintiff/Appellee, )
) Sumner Chancery
VS. ) No. 95C-293
)
T & R NASHVILLE LIMITED ) Appeal No.
PARTNERSHIP, ) 01A01-9608-CH-00368
)
Defendant/Appellant. )
APPEAL FROM THE CHANCERY COURT FOR SUMNER COUNTY
AT GALLATIN, TENNESSEE
THE HONORABLE THOMAS E. GRAY, CHANCELLOR
For Plaintiff/Appellee: For Defendant/Appellant:
Keith C. Dennen Kenneth F. Scott
James C. Bradshaw Tune, Entrekin & White
Wyatt, Tarrant & Combs Nashville, Tennessee
Hendersonville, Tennessee
REVERSED AND REMANDED
WILLIAM C. KOCH, JR., JUDGE
OPINION
This appeal involves a dispute concerning the interpretation of the declarations
of a planned unit development in Sumner County. After the owner of a rental
apartment complex in the planned unit development recorded conflicting
declarations, the development’s homeowners association filed suit in the Chancery
Court for Sumner County seeking declaratory and injunctive relief. On cross motions
for summary judgment, the trial court held that the development’s declarations
required the owner of the rental apartment complex to record declarations and that the
rental apartment complex’s declarations were inconsistent with the development’s
declarations. The owner of the rental apartment complex asserts on this appeal that
the trial court misinterpreted the development’s declarations and that it was not
required to record declarations of its own. We agree and hold that the owner of the
rental apartment complex, not the homeowners association, is entitled to a judgment
as a matter of law. Therefore, we reverse the summary judgment for the homeowners
association.
I.
Music City Land Development, Inc. acquired two tracts of property in Sumner
County amounting to approximately twenty-eight acres to develop a planned unit
development called The Maples. In July 1975, it recorded an “Amended Declaration
of Covenants, Conditions and Restrictions” for the entire development (“Maples
Declarations”) as required by the Horizontal Property Act [Tenn. Code Ann. §§ 66-
27-101, -123 (1993)]. These declarations anticipated future development of property
in The Maples, and accordingly, Article VII(2) provides, in part:
Any developer of a multi-family complex shall as a
condition precedent to the development of the same cause
to be prepared covenants and restrictions of the type and
nature which may be enforced in a court of equity for the
benefit of all of the residents of said multi-family complex.
The remainder of Article VII(2) deals with the contents, duration, approval, and
recordation of the covenants required by Article VII(2)
-2-
The Maples Declarations contain a fairly standard set of land use restrictions
as well as a mechanism for their enforcement. They establish a homeowners
association whose membership consists of the “owners of lots” in The Maples,1 and
Article VII(1) provides, in part:
The Association, or any Owner, shall have the right
to enforce, by any proceeding at law or in equity, all
restrictions, conditions, covenants, reservations, liens and
charges now or hereinafter imposed by the provisions of
this Declaration.
In December 1993, T & R Nashville Ltd. Partnership (“T & R”) purchased
approximately thirteen acres of property in The Maples and constructed an apartment
complex containing 160 rental apartments called the Waterview Apartments. The
homeowners association decided that the Waterview Apartments was a “multi-family
complex” for the purpose of Article VII(2) and sometime in 1995 requested T & R
to prepare and record restrictions covering the Waterview Apartments. T & R at first
resisted this request because it believed that the term “multi-family complex” in
Article VII(2) meant condominium units, not rental apartments.
The Maples homeowners association continued to press the issue. Finally, in
September 1995, T & R mailed the homeowners association a copy of a set of
declarations it intended to record in the office of the Sumner County Register of
Deeds (“Waterview Declarations”). Section 3, the enforcement provision of the
Waterview Declarations, provides:
Enforcement of these Covenants and Restrictions
shall be by any proceeding at law or in equity against any
person or persons violating or attempting to violate any
covenant or restrictions, either to restrain the violation or
to recover damages. These Covenants and Restrictions are
intended to benefit the Residents, the Owner or future
owners of the Apartments. The Owner is the only person
entitled to enforce these Covenants and Restrictions. No
third person or entity is entitled to do so. Failure by Owner
to enforce any Covenant or Restriction herein contained
shall in no event be deemed a waiver of the right to do so
1
See Maples Declarations, Art. III(B). The declarations define “lot” as “any plot of land
shown upon any recorded subdivision map of the Properties with the exception of the Common
Area,” Maples Declarations, Art. I(5), and define “owner” as “the record owner . . . of a fee simple
title to any Lot which is part of the Properties . . ..” Maples Declarations, Art. I(2).
-3-
thereafter. In no event shall Owner have any liability to
any Resident or any third party by virtue of the failure to
enforce any Covenant or Restriction herein contained.
In its transmittal letter, T & R reiterated its belief that Article VII(2) did not require
it to file declarations and that neither the homeowners association nor the other lot
owners in The Maples could proceed directly against the Waterview Apartment’s
tenants for violations of either the Maples Declarations or the Waterview
Declarations. T & R recorded the Waterview Declarations on September 8, 1995.
On October 6, 1995, the homeowners association filed suit in the Chancery
Court for Sumner County seeking a declaration that Section 3 of the Waterview
Declarations was inconsistent with Article VII(1) of the Maples Declarations and
requesting the court to order T & R to conform the Waterview Declarations to the
Maples Declarations. Ultimately, both parties filed cross-motions for summary
judgment based on their respective interpretations of the Maples Declarations. On
June 26, 1996, the trial court granted the homeowners association’s motion for
summary judgment. The trial court concluded, as a matter of law, (1) that the Maples
Declarations applied to the Waterview Apartments, (2) that the Waterview
Apartments was a “multi-family complex” for the purpose of Article VII(1) of the
Maples Covenants, (3) that the Maples Declarations required T & R to record
declarations for the Waterview Apartments, and (4) that Article VII(1) of the Maples
Declarations permitted the homeowners association or any other lot owner in The
Maples to enforce the Waterview Declarations directly against tenants living in the
Waterview Apartments.
II.
The pivotal issue on this appeal involves an interpretation of the Maples
Declarations. T & R asserts that the Waterview Apartments is not a “multi-family
complex” and, therefore, that Article VII(2) does not require it to prepare
declarations. If T & R is correct, then the issue concerning whether the homeowners
association or the other lot owners in The Maples may enforce the Waterview
declarations must be decided in T & R’s favor.
-4-
A.
Covenants, conditions, and restrictions such as the ones contained in the
Maples Declarations are property interests that run with the land. See Turnley v.
Garfinkel, 211 Tenn. 125, 130, 362 S.W.2d 921, 923 (1962). They arise, however,
from a series of overlapping contractual transactions. See Restatement (Third) of
Property: Servitudes § 4.1 cmt. c (Tentative Draft No. 4, 1994). Accordingly, they
should be viewed as contracts, see Clem v. Christole, 582 N.E.2d 780, 782 (Ind.
1991); Russell v. Williams, 964 P.2d 231, 234 (Okla. Ct. App. 1998); Houck v. Rivers,
450 S.E.2d 106, 108 (S.C. Ct. App. 1994); Shafer v. Board of Trustees of Sandy Hook
Yacht Club Estates, Inc., 883 P.2d 1387, 1392-93 (Wash. Ct. App. 1994), and they
should be construed using the rules of construction generally applicable to the
construction of other contracts. See Xinos v. Village of Oak Brook, 698 N.E.2d 667,
669 (Ill. App. Ct. 1998); Hoag v. McBride & Son Inv. Co., 967 S.W.2d 157, 169 (Mo.
Ct. App. 1998); Toavs v. Sayre, 934 P.2d 165, 166 (Mont. 1997); Pilarcik v. Emmons,
966 S.W.2d 474, 478 (Tex. 1998).
The courts enforce restrictions according to the clearly expressed intentions of
the parties manifested in the restrictions themselves. See Lapray v. Smith, 804
S.W.2d 87, 89 (Tenn. Ct. App. 1990); Benton v. Bush, 644 S.W.2d 690, 691 (Tenn.
Ct. App. 1982). We give the terms used in restrictions their fair and reasonable
meaning, see Parks v. Richardson, 567 S.W.2d 465, 467-68 (Tenn. Ct. App. 1977),
and we decline to extend them beyond their clearly expressed scope. See Central
Drug Store v. Adams, 184 Tenn. 541, 545-46, 201 S.W.2d 682, 684 (1947); Hamilton
v. Broyles, 57 Tenn. App. 116, 123-24, 415 S.W.2d 352, 355 (1966). We also
construe the terms of a restriction in light of the context in which they appear. See
Hillis v. Powers, 875 S.W.2d 273, 276 (Tenn. Ct. App. 1993).
When the restriction’s terms are capable of more than one construction, we
should adopt the construction that advances the unrestricted use of the property. See
Southern Advertising Co., Inc. v. Sherman, 43 Tenn. App. 323, 327, 308 S.W.2d 491,
493 (1957). We should also resolve ambiguities in the restrictions against the party
who drafted them, see Maxwell v. Land Developers, Inc., 485 S.W.2d 869, 874
(Tenn. Ct. App. 1972), and finally we should resolve all doubts concerning a
-5-
covenant’s applicability against applying the covenant. See Richards v. Abbottsford
Homeowners Ass’n, 809 S.W.2d 193, 195 (Tenn. Ct. App. 1990).
B.
The Maples Declarations do not define “multi-family complex,” and thus we
must look to other portions of the document to garner meaning for the phrase. The
declarations require that all the lots in this planned unit development must be “used
for residential purposes exclusively” and provide that the lots may contain either
“single family residential units” or “residential units within a multi-family unit
structure or complex.” The present dispute does not involve single family residences.
The declarations envision two varieties of multi-family complexes. The first
includes multi-family complexes in which persons own the residential units (i.e., a
condominium complex). The second includes multi-family complexes in which the
residential units are leased to tenants (i.e., an apartment complex). The issue to be
decided is whether the phrase “multi-family complex” as it is used in Article VII(2)
includes both condominium complexes and apartment complexes.
When Article VII(2) is read in its entirety, the only conclusion to be drawn is
that the “covenants and restrictions” to which it refers are those required to be filed
by the Horizontal Property Act. See Tenn. Code Ann. §§ 66-27-102(10), -107(a).
The reason for this conclusion is straightforward. Article VII(2) requires that these
covenants and restrictions shall be “subject to amendment by approval of two-thirds
( ) of the unit owners of the complex.” Condominiums have unit owners, but leased
apartments do not. Accordingly, by making amendments to the covenants and
restrictions in Article VII(2) subject to approval by the “unit owners,” these
covenants and restrictions could only be those associated with a condominium
complex. Accordingly, the only construction of the phrase “multi-family complex”
in Article VII(2) that is consistent with the remainder of the article’s language is that
it means a condominium complex.
Based on our interpretation of Article VII(2), the trial court erred by construing
Article VII(2) to require T & R to prepare and record declarations and covenants
-6-
because the Waterview Apartments is not a condominium complex. Since the Maples
Declarations do not require the preparation or filing of the Waterview Declarations,
it also follows that Article VII(1) of the Maples Declarations does not give the
Maples Homeowners Association the authority to enforce the Waterview
Declarations.
III.
We reverse the summary judgment for the Maples Homeowners Association
and remand the case to the trial court for the purpose of entering an order granting a
summary judgment to T & R Nashville Limited Partnership. We tax the costs of this
appeal to the Maples Homeowners Association, Inc. for which execution, if
necessary, may issue.
______________________________
WILLIAM C. KOCH, JR., JUDGE
CONCUR:
_______________________________
SAMUEL L. LEWIS, JUDGE
_______________________________
BEN H. CANTRELL, JUDGE
-7-