Ingram v. Wirt

864 S.W.2d 237 (1993) 314 Ark. 553

Roy and Norma Shirley INGRAM, Husband and Wife, and Kenneth and Kathy Ingram, Husband and Wife, Appellants,
v.
Sedric and Phyllis WIRT, Husband and Wife, and George and Trudy Henley, Husband and Wife, Appellees.

No. 93-278.

Supreme Court of Arkansas.

November 1, 1993.

Hardin & Grace, Little Rock, for appellants.

Marian M. McMullan, Little Rock, for appellees.

HOLT, Chief Justice.

This is an appeal of the chancery court's finding that a restrictive covenant prevents the appellants, Roy, Norma, Kenneth and Kathy Ingram, from placing two homes on their property, Lot 3, Block 5, Kellogg Addition of Pulaski County, Arkansas. We affirm.

The portion of the Kellogg Subdivision at issue is owned and divided as follows: appellees, Sedric Wirt and his wife, Phyllis, live on Lot 4 and Mr. Wirt's son lives on Lot 5. Appellees, the Henleys, live on Lot 6, and the Wirts' daughter's home is located on Lot 7. Each of the lots in blocks 5 and 6 of this addition are approximately 100 feet wide and 1300 feet deep as evidenced by a plat which was placed in evidence as appellants' Exhibit 4, and reproduced as follows:

Included on the plat and Bill of Assurance for Lot 3 is a restrictive covenant that reads:

Said lot shall be restricted to one family residence only and no business or amusement houses may be built or maintained at any time upon any part of said lot, and this clause shall be taken to include boarding houses, tenement houses, inns, hotels, eating houses, clubs and restaurants.

A similarly worded, though not duplicate, version of this covenant is included in the plats and Bills of Assurance for Lots 4, 7, 8, 9, 12 and 13 (although Lots 12 and 13 are listed as being in the Sylvan Acres subdivision rather than in Kellogg). According to these documents, all of these lots were developed by Metropolitan Trust Company.

Mrs. Bessie Rea, Roy Ingram's mother, owned Lot 3 in Kellogg Addition. Her frame home was located on the north one-third of the lot. In October of 1973, she deeded the south two-thirds of Lot 3, Block 5(3B) to her son and daughter-in-law, Roy and Norma.

In 1975 the neighbors, the Wirts and the Henleys, gave Mr. and Mrs. Ingram permission to move a house onto the south end of Lot 3 so that Roy Ingram could take care of his ailing mother. This approval was given despite the existence of the restrictive covenant forbidding more than one home per lot in the subdivision. As Sedric Wirt explained during his testimony at the trial, "We agreed to do this because we were trying to be good neighbors." The Ingrams moved a house on a transport trailer across the Wirt property onto the south end of Lot 3 in 1975—the house was later remodeled with brick veneer, and a swimming pool was placed behind the house some time later.

In May 1983 the Ingrams purchased the north one-third of Lot 3 from Mrs. Bessie Rea. Mrs. Rea subsequently died, and on April 1, 1989 her frame home burned beyond use and was later torn down. Shortly after the home burned, Mr. Wirt approached Mr. Roy Ingram concerning buying the north one-third of Lot 3 where the house had been situated, but Mr. Ingram refused. In May 1989, the Roy Ingrams sold the north one-third of Lot 3 to their son and daughter-in-law, Kenneth and Kathy Ingram.

Mrs. Roy Ingram mentioned to Ms. Wirt that her son would be putting a manufactured home on the north end of the property in place of the house which had burned down. The Wirts objected to this arrangement as did the Henleys, and as a result, they filed a lawsuit in Pulaski County Chancery Court asking that an injunction be issued against the Ingrams to prevent them from violating the restrictive covenant by placing a second residence on Lot 3. Two days before the trial, the Ingrams filed a replat and new Bill of Assurance as to this lot, replatting it into Lots 3A and 3B and amending the Bill of Assurance to allow one residence per each subdivided lot.

Mr. Basil Shoptaw, a civil engineer and land surveyor with Thomas Engineering Company, testified for the Ingrams. He stated that he had been involved in the replatting of their property. In order to accomplish this task, he had to go to the City of Sherwood for permission—an approval hearing was held on this issue, and the replatting was approved. A new Bill of Assurance was issued allowing two single-family residences on the original Lot 3.

After hearing Mr. Shoptaw's testimony as well as that of the parties, the chancellor determined that there was a common scheme of development at the time that the Kellogg Addition was formed that mandated only one single family residence per lot. In her final order, the chancellor provides an explanation for her decision:

3. Neither the doctrines of laches or estoppel were successfully shown by Defendants. The evidence at trial showed the Plaintiffs had previously acquiesced to two residences on the Defendants' lot, one of which burned, however, this did not constitute laches which would bar the Plaintiffs from seeking removal of the mobile home presently on the lot. The Court finds that the Plaintiffs delay in resorting to court action was not unreasonable under the circumstances and the Defendants did not suffer a detrimental change in position necessary to sustain the defense of laches.

4. The evidence presented at trial supports a finding that there exists a general plan of development in Kellogg Addition that, at the time Kellogg Addition was formed, a common scheme existed for one single family residence per lot.

5. The Court finds there are two residences located on Defendants' lots.

6. The Court finds the Plaintiffs are entitled to enforcement of the restrictive covenants in the Bill of Assurance which restricts one single family residence per lot in Kellogg Addition.

7. The Defendants cannot defeat the restrictive covenants by simply obtaining a replat from the planning commission subdividing their lot. Constant v. Hodges, 292 Ark. 439, 730 S.W.2d 892 (1987). The Court finds the facts in Constant v. Hodges are virtually identical to this case and, further, that Constant is controlling.

8. The Defendants are, therefore, hereby enjoined from further violations of restrictive covenants contained in the Bill of Assurance by Metropolitan Trust Company, Grantor, to the Public, filed for record..... and ordered to remove the second home from their lot within 30 days of entry of this Final Order.

As a result of this order, the Ingrams filed a Motion for Reconsideration.

Thereafter, the Ingrams filed a motion, pursuant to Ark.R.Civ.Pro. 60(b), to vacate judgment. In a hearing on this motion, they attempted to introduce aerial photographs of the Kellogg Subdivision, one of which was made in 1974. These photographs were obtained from the Highway Department. The court refused admission of this evidence but did allow the Ingrams to proffer it.

On appeal, we consider the evidence in a light most favorable to the appellee. Constant v. Hodges, 292 Ark. 439, 730 S.W.2d 892 (1987). This court tries chancery cases de novo on the record and does not reverse a finding of fact made by the chancellor unless it is clearly erroneous. Merchants & Planters Bank & Trust Co. v. Massey, 302 Ark. 421, 790 S.W.2d 889 (1990).

Replat—Restrictive Covenant

The Ingrams first argue that the chancellor erred in holding that they could not replat their lot and that they were governed by the restrictive covenant. In finding for the plaintiffs/appellees, the chancellor relied on Constant v. Hodges, 292 Ark. 439, 730 S.W.2d 892 (1987). In Constant the appellants attempted to subdivide a 1.73 acre lot in Robinwood Subdivision in Little Rock. The Bill of Assurance provided that the land would be restricted to single-family residences since the bill's purpose was to carry out a "general plan to develop said lands as a high-class suburban residential property." Constant, 292 Ark. at 441, 730 S.W.2d at 893.

The chancellor found that a general plan of development existed in Robinwood and that, accordingly, the restrictive covenant was enforceable. In making his decision, the chancellor noted a few characteristics of the area: The character and nature of the Robinwood Subdivision referred to in the Bill of Assurance signed by Cecil Gibson and Vera Gibson has been and is single-family residences consisting of very valuable, large homes on large lots. The nature of the neighborhood and this pattern of development have not changed since the lands described in the Bill of Assurance were developed beginning in 1949, and this pattern has continued through the present time. Although there may have been some violations (as alleged by defendants) of some of the provisions of the Bill of Assurance or some of the restrictions contained in deeds subsequently conveying lands subject to the Bill of Assurance, those violations have been minor and they have not destroyed the purpose of the Bill of Assurance or deed restrictions and these violations have not adversely affected the adjoining property owners.

Constant, 292 Ark. at 443, 730 S.W.2d at 894 (emphasis added).

The chancellor looked at the character and nature of the neighborhood, the continuity of the pattern of development and whether any major violation of the purpose of the Bill of Assurance had occurred. This court agreed with the chancellor and affirmed his decision. Id.

Applying this test to the facts before us brings the same result. First of all, the permitted violation of the purpose of the Bills of Assurance, although major, was temporary. While it is true that the Wirts and Henleys gave the Ingrams permission to move a second house onto Lot 3 in 1975, this permission was of limited duration. Testimony at trial revealed that the Wirts and Henleys gave their permission only in order for the Ingrams to care for their ailing mother who was up in years and unable to care for herself. Once Mrs. Rea passed away, Mrs. Ingram's daughter and son moved into Mrs. Rea's home. Mrs. Henley testified that her family's reason for not complaining at that point was:

Mrs. Ingram's daughter and her son moved into the house. We talked about talking to the Ingrams, but Mrs. Ingram's daughter had cancer, so we didn't say anything. We felt that she needed to be there close to her mother. She got sicker and she moved back in with her mother and dad in the back of the property. Then it was a rent house for a short time. And we had discussed very definitely that we were going to have to take action about the renters because we could not tolerate the noise. About that time the kids that rented the house moved and the house burned. So we still had hopes that, perhaps, Roy would keep it to have the space or that he would sell it to Mr. Wirt.

. . . .

I think our expectations were that Mr. and Mrs. Ingram would ... their children would move away and then it would be a couple there as there is at Mr. Wirt's house and mine. It hasn't worked like that. There are lots of people that live in one house with lots of traffic and now it's moved to the front, to Kellogg, and now it's going to be more traffic.

Clearly, the Wirts and Henleys gave their permission for placement of the second house on Lot 3 only in order to help their neighbors take care of an ailing family member. Once Mrs. Rea passed away and her home burned down, Lot 3 contained one family residence and was in compliance with its Bill of Assurance. Lot 3 was then in keeping with the common scheme of development in Kellogg Addition.

The Ingrams also argue that there were other violations proven at the trial. We disagree. For example, the Ingrams contend that Lots 12 and 13 of Block 5, which originally were governed by the same restrictive covenant as Lot 3, were transformed into a subdivision containing approximately thirty lots. These lots now have about twenty five to thirty homes on them. While these two lots are only four lots away from the Henley's property, the original Bill of Assurance for Lots 12 and 13 lists them as being in Sylvan Acres not Kellogg Addition. Thus, these lots are simply not part of the Kellogg Addition. The fact that Metropolitan Trust was a common developer of both subdivisions is of no moment.

After examining the Bills of Assurance provided in the exhibits and noting the same restrictive covenant in all of them, it is easy to see how the Chancellor arrived at the decision that there was a general scheme of development in this area. The primary test for the existence of a general plan of development is whether substantially common restrictions apply to all lots of like character or similarly situated. Jones v. Cook, 271 Ark. 870, 611 S.W.2d 506 (1981).

For their next arguments on appeal, the Ingrams claim that the trial court erred in refusing to hold that either waiver or unclean hands defeat the restrictive covenant. These arguments have no merit.

Waiver

The Ingrams contend that the Henleys and Wirts waived any right to enforcement of the restrictive covenant when they permitted the Ingrams to place the second home on Lot 3.

The Ingrams concede that waiver was not raised in the pleadings but argue that the facts giving rise to this claim were tried with the consent of both parties. In support of this argument, they refer to comments made by the chancellor at trial in which she allegedly "implicitly recognized" the issue of waiver:

Also I'm inclined to rule that neither the doctrine of laches or estoppel prevents the plaintiffs from bringing this case.... Clearly they knew about and allowed the home the [sic] be placed on the rear of the lot and so long as that house was there and there was a house in the front I don't think they could ever have complained about either of those houses because they allowed that to happen. And I recognize that they did it because they felt like the family needed to look after Mrs. Rea and that once Mrs. Rea was dead that they still weren't too happy about the two houses there but that whether they were happy about it or not they hadn't gotten any conditions, they's agreed to it. But now when that, you know, frame house burned down in '89, I think there could be a question about whether or not by agreeing to a second house going on they were forever forbidden to complain about it. But before anything else was—now, I recognize some planning steps may be have been taken, but before anything else was done they talked to the Ingrams and said, you know, we don't want you to move another house on here.... But I think they did serve notice that their agreement to allow two houses on there had been to the houses, the structures, that were there and that ... anyway, I'm just not inclined, unless somebody shows me a case that's very explicitly like this, to say that by agreeing to allow the house that the Ingrams now live in to be moved onto the back part of the lot they forever agreed that two houses could be there.

Estoppel and waiver are not synonymous. Black's Law Dictionary 1417 (5th ed. 1979). However, the two terms are commonly used interchangeably, especially in insurance law. Black's Law Dictionary, 495 (5th ed. 1979); See Continental Ins. Cos. v. Stanley, 263 Ark. 638, 569 S.W.2d 653 (1978). Here, it seems, the chancellor, while referring to estoppel, was actually discussing the defense of waiver. Accordingly, we will address this issue on appeal. Nevertheless, we find that it has no merit.

In Continental Ins. Cos. v. Stanley, 263 Ark. 638, 569 S.W.2d 653 (1978), an insurance case in which estoppel and waiver are used interchangeably, we defined waiver as:

[V]oluntary abandonment or surrender by a capable person of a right known by him to exist, with the intent that he shall forever be deprived of its benefits. It may occur when one, with full knowledge of material facts, does something which is inconsistent with the right or his intention to rely upon that right. The relinquishment of the right must be intentional.

Applying this definition to the facts at hand, it seems that the appellees did not voluntarily abandon the restrictive covenant when they permitted Mr. Ingram to place a second home on Lot 3 so he could care for his mother. Clearly, when the Henleys and Wirts gave their permission for the placement of a second home on the premises in violation of the Bill of Assurance, they did not intend to "forever be deprived of its benefits." See Stanley. Accordingly, we hold that they did not waive their right to the restrictive covenant.

Unclean Hands

The Ingrams also argue that the trial court should have refused to enforce the restrictive covenant because of the doctrine of unclean hands—in other words, "equity will not intervene on behalf of a plaintiff whose conduct in connection with the same manner has been unconscientious or unjust." Merchants and Planters Bank & Trust Co. of Arkadelphia v. Massey, 302 Ark. 421, 790 S.W.2d 889 (1990).

The basis of this argument is that there was some confusion as to whether there was more than one house located on Lot 6 which is owned by the Henleys. Chancellor Brantley adopted the testimony of the appellees, specifically Mrs. Henley, as to the existence of only one house on this lot. The Ingrams contended that there was a rent house on the Wirt's property which bordered on Lot 6 and the Henley home was located on Lot 6. There was contradictory evidence on this issue, and the Chancellor chose to believe Mrs. Henley when she said there was only one home located on this lot. We will not set aside a chancellor's finding of fact unless clearly erroneous. Southeast Arkansas Landfill, Inc. v. State, 313 Ark. 669, 858 S.W.2d 665 (1993). Deference is given to the superior position of the chancellor to judge the credibility of witnesses. Riddick v. Streett, 313 Ark. 706, 858 S.W.2d 62 (1993). In order to overturn the chancellor's ruling, the appellants must demonstrate that the trial court abused its discretion by making a judgment call that was arbitrary or groundless. Employers Nat'l Ins. Co. v. Grantors, 313 Ark. 645, 855 S.W.2d 936 (1993). The Ingrams have failed to provide proof of such abuse, and we, therefore, hold that their argument fails.

Motion to Vacate Judgment

For their final issues on appeal, the Ingrams contend that the chancery court erred in refusing to admit the aerial photographs during the hearing on the motion to vacate judgment and in denying this motion. At the hearing on the motion to vacate judgment, some three months after the final order in this case was entered, the Ingrams attempted to admit aerial photographs obtained from the Arkansas Highway Department of the Kellogg neighborhood to establish "that a general plan of development had not been applied to all lots of like character to the lot of Defendants in the Kellogg Addition." The Ingram's motion to vacate was filed pursuant to Ark.R.Civ.Pro. 60(b) which provides:

Ninety-Day Limitation. To correct any error or mistake or to prevent the miscarriage of justice, a decree or order of a circuit, chancery or probate court may be modified or set aside on motion of the court or any party, with or without notice to any party, within ninety days of its having been filed with the clerk.

In interpreting the language in Ark.R.Civ. Pro. 60(b) we have said that the "miscarriage[s] of justice" referred to in the rule are a reference to those clerical errors or mistakes described in Rule 60(a). Phillips v. Jacobs, 305 Ark. 365, 807 S.W.2d 923 (1991). Rule 60(a) provides:

Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time on its own motion or on the motion of any party and after such notice, if any, as the court orders. During the pendency of an appeal, such mistakes may be so corrected before the appeal is docketed in the appellate court and thereafter while the appeal is pending may be so corrected with leave of the appellate court.

Such a clerical mistake was not demonstrated to the chancellor. Accordingly, we hold that the chancellor was correct in refusing to admit the aerial photographs. Similar to this argument is the Ingram's claim that the denial of the Motion to Vacate was error.

In their Motion to Vacate Judgment, the Ingrams stated that the trial court made a mistake in determining that there was a general plan of development in the Kellogg Addition. Other than the aerial photographs— which were not admitted—the Ingrams had nothing more to offer the judge as a basis for vacating the judgment. Under the circumstances, the decision to deny the motion was proper.

Affirmed.