Akers v. Butler

2015 Ark. App. 650, 476 S.W.3d 183, 2015 Ark. App. LEXIS 724
CourtCourt of Appeals of Arkansas
DecidedNovember 12, 2015
DocketCV-15-295
StatusPublished
Cited by6 cases

This text of 2015 Ark. App. 650 (Akers v. Butler) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Akers v. Butler, 2015 Ark. App. 650, 476 S.W.3d 183, 2015 Ark. App. LEXIS 724 (Ark. Ct. App. 2015).

Opinion

DAVID M. GLOVER, Judge

|,The appellants in this case are twenty-one property owners who filed a “Verified Petition for Temporary Restraining Order and Permanent Injunction” against appel-lees, Angie and Darrell Butler, in April 2014. The petition alleged the Butlers were violating the “Land Use and Architectural Controls” of the Forest Ridge Estates subdivision by using their property for commercial purposes. The Butlers moved to dismiss or, alternatively, answered and counterclaimed for declaratory judgment. Later in the case, the Butlers filed a motion for summary judgment, seeking dismissal of the cause of action filed against them, or, alternatively, declaring the “Land Use and Architectural Controls” inapplicable to them. Appellants responded.

Following a hearing on the motion for summary judgment, the trial court found the Butlers were not bound by the document entitled “Land Use and Architectural Controls” because they did not sign it and the document was not effective against third parties, which |2included the Butlers. The trial court dismissed the complaint against the Butlers with prejudice. This appeal followed, with appellants contending the trial court erred in granting summary judgment in favor of the Butlers because 1) the land-use restrictions were valid and unambiguous and the fact that the Butlers did not sign the restrictions was of no consequence because, at the time the restrictions were signed, the Butlers did not own any subdivision property, and 2) the lack of the magic word “consideration” in all of the acknowledgments was of no consequence because the Butlers were not third parties and they had actual knowledge of the restrictions at all relevant times, making them sufficient as a matter of law. Also incorporated within their argument is the contention that material issues of fact remain in dispute. We affirm.

In April 2005, the Butlers entered into an “Agreement for Deed” with Mary and Kenneth LaBuy, who were developing property called Forest Ridge Estates. The agreement was for the sale and purchase of property at issue here. At the time this agreement was executed, the “Land Use and Architectural Controls” referenced as part of the agreement had not been filed and were not listed in the agreement. The “Agreement for Deed” provided that if the Butlers defaulted on the agreement, the LaBuys could cancel the contract and retain all the payments made by the Butlers as liquidated damages.

The referenced “Land Use and Architectural Controls” restrictions were not filed until October 28, 2005. The document was signed and acknowledged on that same date by fourteen property owners within the subdivision, but the Butlers’ signatures were not among them. Included among the restrictions was one in paragraph 1.1 prohibiting the use of ^subdivision property for commercial purposes. In addition, paragraph 3.1 of the document provided a mechanism for amending the controls. None of the acknowledgments to the document referenced “consideration.”

A document entitled “Modification of Land Use and Architectural Controls” was recorded on April 30, 2013. Pursuant to that document, paragraph 1.1 of the original restrictions was amended as follows: “No noxious or offensive activity, and no commercial activities of any kind shall be carried on or upon any tract in Forest Ridge Estates, nor shall anything be done thereon that may become an annoyance or nuisance to the area, except that rentals for special events shall be allowed.” (Emphasis added to show amended language.) The document goes on to state that the modification applies to certain described lands. It was signed by the Butlers, and, according to them, it was also signed by thirty-seven other owners of property within Forest Ridge Estates, including the developers (the LaBuys). Also, according to the Butlers, thirty-seven owners represented over eighty percent of the total owners, and sixteen of the twenty-one plaintiffs in the instant case signed the modification.

The Butlers thereafter built a barn on a portion of their property and began renting it out. The appellants’ petition for a temporary restraining order and permanent injunction followed, initiating this case.

Our standard of review for cases involving summary judgment is well known. Summary judgment should be granted only when it is clear that there are no genuine issues of material fact to be litigated, and the moving party is entitled to summary judgment as a matter of law. Wilcox v. Wooley, 2015 Ark. App. 56, 454 S.W.3d 792 (quoting Harvest Rice, Inc. v. Fritz & Mertice Lehman Elevator & Dryer, Inc., 365 Ark. 573, 575-76, 231 S.W.3d 720, 723 (2006)). The purpose of summary judgment is not to try the issues, but to determine whether there are any issues to be tried. Id. Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On appellate review, we determine if summary judgment was appropriate based on whether the evidentia-ry items presented by the moving party in support of the motion leave a material fact unanswered. Id. We view the evidence in the light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Id. Moreover, if a moving party fails to offer proof oh a controverted issue, summary judgment is not appropriate, regardless of whether the nonmoving party presents the court with any countervailing evidence. Id.

Appellants contend the circuit court erred in granting summary judgment in favor of the Butlers, thus allowing them to operate a commercial business in a residential .subdivision. Specifically, they argue the restrictions on land use for the subdivision were valid and unambiguous and should have been enforced against the Butlers by the court, and the fact the Butlers did not sign the restrictions is of no consequence because, when the restrictions were signed, the Butlers did not “own” any land in the subdivision, only an inchoate right to acquire land at some future date if their rights were not forfeited under their contract. We disagree.

I .^Arkansas Code Annotated section 18-12-103 (Supp. 2013) provides in pertinent part: .

(a) As used in this section, “restrictive covenant” means a restriction on the use or development of real property regardless of whether the restriction is created by a covenant in a deed or bill of assurance, or by any other instrument.
(b) An instrument creating a restrictive covenant is not effective to restrict the use. or development of real property unless the instrument purporting to rer strict the use or development of the real property is executed by the owners of the real property and recorded in the office of the recorder of the county in which the property is located.

(Emphasis added.)

In its December 2, 2014 letter opinion, the trial' court explained its decision in part:

A. Undisputed facts:
1. The> document purporting' to.

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Bluebook (online)
2015 Ark. App. 650, 476 S.W.3d 183, 2015 Ark. App. LEXIS 724, Counsel Stack Legal Research, https://law.counselstack.com/opinion/akers-v-butler-arkctapp-2015.