Moore, et. ux. v. Phillips, Sr. ( 1998 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
FILED
May 29, 1998
WAYNE MOORE and wife ) Cecil W. Crowson
DONNA MOORE, ) Appellate Court Clerk
)
Plaintiffs/Appellees, ) Sequatchie Chancery
) No. 1645
VS. )
)
RANDALL PHILLIPS, SR. and wife ) Appeal No.
MAYME PHILLIPS; ) 01A01-9605-CH-00197
RANDALL F. PHILLIPS, JR. and wife )
MICHELLE PHILLIPS; and )
KENNETH LYNN HERRON, )
)
Defendants/Appellants. )
APPEAL FROM THE CHANCERY COURT
FOR SEQUATCHIE COUNTY
AT DUNLAP, TENNESSEE
THE HONORABLE JEFFREY F. STEWART, CHANCELLOR
For Plaintiffs/Appellees: For Defendants/Appellants:
Stephen T. Greer Howard L. Upchurch
Dunlap, Tennessee Pikeville, Tennessee
AFFIRMED AND REMANDED
WILLIAM C. KOCH, JR., JUDGE
OPINION
This appeal involves the enforcement of restrictions on the use of property in
a rural subdivision in Sequatchie County. After their neighbors permitted a mobile
home to be placed on their property, two property owners filed suit in the Chancery
Court for Sequatchie County seeking to enforce common restrictions against mobile
homes. The trial court upheld the restrictions and directed the removal of the mobile
home. The owners of the property on which the mobile home was located and the
owner of the mobile home have appealed. We have determined that the evidence
supports the trial court’s decision to enforce the restrictions and, therefore, affirm the
judgment.
I.
Alton and Olena Rogers owned several acres of undeveloped land along State
Highway 28 and West Valley Road in the Doss Community in southern Sequatchie
County. They decided to divide the property into smaller individual parcels to be
sold as single family home sites. Beginning in February 1977 and continuing through
January 1979, Mr. and Mrs. Rogers sold seven separate parcels from one to three
acres in size to various buyers.
Mr. and Mrs. Rogers never recorded a subdivision1 plat or any other uniform
declaration of restrictions governing the use of the subdivided property. Instead, they
included restrictions in five of the seven deeds, but even these restrictions were not
uniform or consistent. The restrictions covered: (a) using the property for residential
purposes only, (b) not using the property for commercial purposes, (c) constructing
a single residence with at least 1,000 square feet, and (d) prohibiting mobile homes
temporarily or permanently. The restrictions in the deeds to each of the seven parcels
are as follows:
1
Subdivision means any division of land into parcels of less than five (5) acres for the
purpose, whether immediate or future, of sale or building development, and includes resubdivision
and, when appropriate to the context, relates to the process of resubdividing or to the land or area
subdivided. See Tenn. Code Ann. § 13-3-401(4)(B) (1992).
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Date of Original Applicable
Tract No. Original Sale Purchaser Restrictive Covenants
1 2/9/77 Moore a, b, c, & d
2 3/23/77 Moore a, b, c, & d
3 3/31/77 Frizzell (now Phillips) a, b, & d;
and c with a minimum
1200 sq. ft. restriction
4 4/25/77 Bowman (now Higdon) none
5 6/6/77 Bowman (now Higdon) a, b, c, & d
6 5/6/78 Roberts (now Moore) none
7 1/16/79 Moore d
In February and March 1977, Wayne and Donna Moore purchased two
adjoining tracts, totaling three acres, and constructed a 2,100 square feet brick home.
In January 1979, Mr. and Mrs. Moore acquired another one-acre tract adjoining the
first two they had already purchased. In 1986 they purchased another adjoining two-
acre tract from Mr. and Mrs. Charles Vandergriff who had purchased the property
from Mr. and Mrs. Lonas C. Roberts, who had purchased it in 1978 from Mr. and
Mrs. Rogers.
In March 1977 Mr. and Mrs. Rogers sold a 2.5 acre tract adjoining the Moores’
property to Terry D. and Rhonda Frizzell. In 1993 the Frizzells sold their property
to Randall and Mayme Phillips. The warranty deed, recorded September 29, 1993,
contained the following express restrictions:
This conveyance is made subject to the following
restrictions, limitations, and reservations, which shall be
binding upon the purchaser and all future owners:
1. Said land shall be used for residential purposes only.
2. No commercial use of trade of non-residential activities
shall be permitted on the above described lot, nor shall any
commercial building be built on the above described lot.
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3. Only one residence shall be built on the above described
lot with a minimum of one thousand two hundred (1,200)
square feet.
4. No mobile homes, temporary or otherwise, to be placed
on the above described property.
Mr. and Mrs. Phillips did not improve their property and eventually decided
to attempt to remove the restrictions on their use of the property from their deed. On
March 22, 1994, they executed an agreement with both their immediate grantors and
with the surviving original developer of the property, purporting to revoke and
remove the restrictions on the property. The agreement recited:
NOW, THEREFORE, FOR AND IN CONSIDERATION
of the sum of One ($1.00) Dollar, cash in hand paid, and
other good and valuable considerations, the receipt of
which is hereby acknowledged, we, OLENA B. ROGERS,
widow of Alton D. Rogers, and TERRY D. FRIZZELL and
wife, RHONDA M. FRIZZELL, being the grantor and
grantees in that certain deed dated March 31, 1977, and
recorded in Deed Book 43, page 380, in the Register’s
Office of Sequatchie County, Tennessee, in and by which
certain restrictions were imposed, and RANDALL
PHILLIPS and wife, MAYME PHILLIPS, do hereby
wholly and completely revoke, cancel, annul, and remove
said restrictions as recited in said deed, and specify that
said restrictions shall be of no further force or effect.
Mr. and Mrs. Phillips thereafter conveyed a portion of their property to their
son and daughter-in-law, Randall and Michele Phillips. The younger couple
constructed a house on that property. Sometime toward the end of 1994, the senior
Mr. and Mrs. Phillips permitted Kenneth Herron to move a mobile home onto their
remaining property and live there temporarily until the house Mr. Herron was
building elsewhere was completed. Mr. and Mrs. Moore complained to Mr. and Mrs.
Phillips, Sr. that the presence of Mr. Herron’s trailer on their property violated the
restrictions in their deeds. When Mr. and Mrs. Phillips, Sr. declined to have the
trailer removed, Mr. and Mrs. Moore filed suit in the Chancery Court for Sequatchie
County seeking both injunctive relief and damages for violations of the restrictive
covenants that they contended applied to the property.
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Following a bench trial in October 1995, the trial court found (1) that Mr. and
Mrs. Rogers were the common grantors of all the parcels involved in this dispute, (2)
that Mr. and Mrs. Rogers subdivided and sold their property under a common plan,
(3) that the four restrictions in the deeds prepared by Mr. and Mrs. Rogers ran with
the land, and (4) that the restrictions applied to all parcels at issue. The trial court
also held that the restrictions were in the nature of negative reciprocal easements and
could be enforced by any of the owners holding property in the common
development. Accordingly, the trial court found that the attempted revocation of the
restrictions on Mr. and Mrs. Phillips’ property was legally void and ordered Mr.
Herron to remove his mobile home from Mr. and Mrs. Phillips’ property. The trial
court also enjoined all the parties from violating any of the restrictions on the parcels.
II.
It is well-settled that property owners may subdivide their property for sale and
place restrictions on the use of each parcel sold for the benefit of both themselves and
the buyers. See Laughlin v. Wagner, 146 Tenn. 647, 653, 244 S.W. 475, 476 (1922);
Benton v. Bush, 644 S.W.2d 690, 691 (Tenn. Ct. App. 1982). One of the most
common forms for imposing restrictions on subdivided property is for the property
owner to establish a general building plan of improvement covering a tract of land
divided into lots. See Arthur v. Lake Tansi Village, Inc., 590 S.W.2d 923, 928 (Tenn.
1979).
Property owners may establish a subdivision plan in a number of ways. They
may expressly enter into reciprocal covenants promising to insert like restrictive
covenants in all deeds conveying property out of the divided tract. See Arthur v. Lake
Tansi Village, Inc., 590 S.W.2d at 928. They may also establish a general
subdivision plan by selling lots while making oral statements inducing buyers to rely
that all lots will be sold with the same restrictions. See Arthur v. Lake Tansi Village,
Inc., 590 S.W.2d at 928. The restrictive language contained in a series of deeds
conveying parcels out of a common tract of land may also establish a general
subdivision plan. See Ridley v. Haiman, 164 Tenn. 239, 255-57, 47 S.W.2d 750, 755
(1932); see also Swanson v. Green, 572 So. 2d 1246, 1248 (Ala. 1990).
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Where property owners intended to establish a general subdivision plan, the
fact that some lots in a subdivision are sold with no restrictions does not invalidate
restrictions on the other subdivided lots. See McIntyre v. Baker, 660 N.E.2d 348, 352
(Ind. Ct. App. 1996). A grantor may intend to establish a general subdivision plan
even if the restrictions on all the lots are not perfectly identical. See Owenby v.
Boring, 38 Tenn. App. 540, 547, 551, 276 S.W.2d 757, 760, 762 (1954).
When a property owner sells parcels of a tract and includes in the warranty
deeds restrictive covenants for the benefit of other buyers, then grantees acquire not
absolute, unqualified title, but rather title limited by the deed restrictions. See Ridley
v. Haiman, 164 Tenn. at 251, 47 S.W.2d at 753. The enforceable interests arising in
grantees from such restrictive covenants are now commonly known in Tennessee as
reciprocal negative easements. See Leach v. Larkin, No. 01A01-9302-CH-00066,
1993 WL 377629, at *3 (Tenn. Ct. App. Sept. 24, 1993) (No Tenn. R. App. P. 11
application filed).
Buyers of restricted subdivision property may normally enforce such
restrictions against other subdivision grantees. See Land Developers, Inc. v. Maxwell,
537 S.W.2d 904, 912 (Tenn. 1976); Leach v. Larkin, 1993 WL 377629, at *3.
Grantees seeking to enforce reciprocal negative easements must prove:
(1) that the parties derived their titles from a common
grantor; (2) that the common grantor had a general plan for
the property involved; (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.
See Ridley v. Haiman, 164 Tenn. at 256, 47 S.W.2d at 755.
Parties may lose their right over time to enforce restrictive covenants if the
covenants relate to the existing condition of the property and its surroundings. If the
character of the neighborhood completely changes thereby defeating the original
purpose of the covenants, the courts will not enforce the covenants if to do so would
be inequitable and unjust. See Hysinger v. Mullinax, 204 Tenn. 181, 187, 319 S.W.2d
79, 82 (1958); Hackett v. Steele, 201 Tenn. 120, 129, 297 S.W.2d 63, 67 (1956).
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Courts will likewise decline to enforce reciprocal negative easements where their
purpose has been defeated by a radical change in the character of the neighborhood.
See Hackett v. Steele, 201 Tenn. at 129, 297 S.W.2d at 66.
It is undisputed that all the parties in this case derived their titles from a
common grantor. It is also undisputed that Mr. and Mrs. Phillips had constructive
notice, by virtue of their warranty deed, of the restrictions on the property when they
purchased their lot. The dispositive issue in this appeal is thus whether the trial court
erred in holding that Mr. and Mrs. Rogers had a general plan or scheme for the
subdivision of the property. The trial court found that such a general subdivision plan
existed. We review that determination de novo with a presumption of correctness
unless the evidence preponderates otherwise. Tenn. R. App. P. Rule 13(d); Randolph
v. Randolph, 937 S.W.2d 815, 819 (Tenn. 1996).
The evidence makes plain that when the Mr. and Mrs. Moore purchased the
original subdivision parcels, they wanted restrictions within the entire subdivision
prohibiting both mobile homes and the placement of more than one residence on a
parcel. Mr. and Mrs. Rogers placed restrictive covenants to that effect in the deeds
covering the first three parcels. The price Mr. and Mrs. Moore paid for their original
parcels reflected its restricted nature, and as buyers, they relied on those restrictions.
The fact that the last parcel they purchased was unrestricted by deed did not matter
to Mr. and Mrs. Moore because they intended to use the property consistent with the
general subdivision restrictions.
Mr. and Mrs. Rogers did not place the restrictions on the property for their
personal benefit. They did not live on the property, and once they subdivided the
tract, they sold all the parcels without retaining any of the land for themselves.
Although the parcels by deed are not perfectly, uniformly restricted, the restrictions
used are similar in aim and are all consistent with the development of a single-family
frame home neighborhood. The evidence does not preponderate against the trial
court's conclusion that Mr. and Mrs. Rogers, as the common grantors, intended to
establish a general subdivision plan for the property. Therefore, Mr. and Mrs. Moore
could properly insist on the restrictions' enforcement.
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We are not persuaded that Mr. and Mrs. Moore’s conduct in having a barn,
some farm equipment, and a few head of livestock on their parcels constituted a
“commercial use” of subdivision property that would estop them to enforce the
subdivision restrictions. The evidence does not preponderate against the trial court's
finding on that point. Nor are we persuaded that the area around the subdivision has
so radically changed since the late 1970's so as to make it inequitable now to enforce
the subdivision restrictions. When Mr. and Mrs. Moore bought their first lots in
1977, an established trailer park existed on the opposite side of West Valley Road.
The park in 1977 had twenty-five or twenty-six trailers; its former owner testified that
two or three years ago, when he sold the park, it had “close to thirty.” That hardly
constitutes a radical change in the neighborhood's character. As to the other
development pointed to by Mr. and Mrs. Phillips, it is outside the subdivision.
Mr. and Mrs. Phillips and their allies also contend that even if Mr. and Mrs.
Rogers originally sold the parcels pursuant to a general subdivision plan, Mrs.
Rogers, and Mr. and Mrs. Frizzell, as mesne grantors, later “released” the subdivision
restrictions on Mr. and Mrs. Phillips’ lot. Mr. and Mrs. Phillips argue that because
deeds are contractual instruments, the parties to a deed can, by agreement, change the
contractual terms post-sale to remove subdivision restrictions.
The trial court correctly rejected that argument as a matter of law. Subdivision
restrictions are intended to benefit all lot owners within a subdivision, and any
attempted unilateral release of the restrictions without the assent of the other
subdivision owners is of no effect. See Ridley v. Haimon, 164 Tenn. at 247, 47
S.W.2d at 752; Caudill v. Hamlet, 490 S.W.2d 538, 542 (Tenn. Ct. App. 1972);
Gercas v. Davis, 188 So. 2d 9, 11 (Fla. Dist. Ct. App. 1966); Water’s Edge
Homeowners’ Ass’n, Inc. v. Weissman, 614 N.Y.S.2d 67, 68-69 (App. Div. 1994);
Smith v. Butler Mountain Estates, 375 S.E.2d 905, 908 (N.C. 1989); Farmer v.
Thompson, 289 S.W.2d 351, 355 (Tex. Civ. App. 1956). The trial court correctly
gave no effect to the March 22, 1994 Revocation and Removal of Restrictions.
III.
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We affirm the judgment and remand the case to the trial court for whatever
further proceeding may be required. We also tax the costs of this appeal, jointly and
severally, to Randall Phillips, Sr., Mayme Phillips, Randall Phillips, Jr., Michelle
Phillips, and Kenneth Herron, and their surety for which execution, if necessary, may
issue.
______________________________
WILLIAM C. KOCH, JR., JUDGE
CONCUR:
__________________________________
HENRY F. TODD, PRESIDING JUDGE
MIDDLE SECTION
__________________________________
SAMUEL L. LEWIS, JUDGE
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