Davista Holdings, LLC v. Capital Plaza, Inc.

• Court: Court of Appeals of Georgia
• Decided: March 29, 2013
• Docket: A12A2507
• Status: Published

Opinion

THIRD DIVISION MILLER, P. J., RAY and BRANCH, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. (Court of Appeals Rule 4 (b) and Rule 37 (b), February 21, 2008) http://www.gaappeals.us/rules/

March 29, 2013

In the Court of Appeals of Georgia A12A2507. DAVISTA HOLDINGS, LLC v. CAPITAL PLAZA, INC.

B RANCH, Judge.

This case concerns a piece of real property located in Thomas County and

owned by Davista Holdings, LLC. Davista’s property is surrounded on three sides by

property owned by Capital Plaza, Inc. Davista took title to its property subject to

certain restrictive covenants contained in a 1989 warranty deed and subject to a 1989

Access and Parking Easement Agreement (the “Easement Agreement”). Davista filed

this action seeking a declaratory judgment that certain provisions in the Easement

Agreement constitute restrictive covenants that expired by operation of law 20 years

after their creation. The trial court denied Davista’s request for relief and entered

summary judgment in favor of Capital Plaza. Davista now appeals from that order. We find that some of the provisions at issue grant Capital Plaza easements on,

over, and across Davista’s property for parking, ingress, egress, and pedestrian and

vehicular traffic. To the extent that the trial court’s order reaches this same conclusion,

that order is affirmed. We further find, however, that other provisions contained in the

Easement Agreement constitute restrictive covenants, and that these provisions

therefore expired by operation of law, 20 years after their creation. To the extent that

the trial court’s order holds otherwise, that order is reversed.

The facts in this case are undisputed. The record shows that Davista owns a 2.1

acre parcel of property on which is situated a single building housing a fast food

restaurant. Davista’s property is surrounded on three sides by property owned by

Capital Plaza and on which is situated a shopping center. Davista’s predecessor in

title, DeCar, Inc., acquired the property from Capital Plaza’s predecessor in title, GW

Acquisition Corp., by way of a warranty deed executed on June 28, 1989. The 1989

warranty deed contained 11 restrictive covenants that effectively prohibited DeCar

and it successors from using the majority of the property as anything other than a

driveway, thoroughfare, or parking lot. Under the terms of the warranty deed,

however, these restrictive covenants expired on June 25, 2009.

2 Contemporaneously with the execution of the 1989 warranty deed, DeCar and

GW Acquisition entered into the Easement Agreement. Paragraph 1 of that agreement

provides:

DeCar, Inc. hereby creates, grants and conveys to GW Acquisition Corporation over all portions of the real property [conveyed to DeCar] except those portions [on which the existing building sits], a non- exclusive easement, in perpetuity, for pedestrian and vehicular access, ingress and egress in, to, over, across and through said property. DeCar, Inc. also creates, grants and conveys unto GW Acquisition Corporation a non-exclusive easement in perpetuity for parking on all portions of the real property [conveyed to DeCar] except those portions [on which the existing building sits]. Said easements shall inure to the benefit of GW Acquisition Corporation, its successors and assigns, for their use and the use of the various tenants, business invitees, licensees and patrons of Gateway Shopping Center. DeCar, Inc. further agrees that it shall not change or alter the location or direction of the driveways and thoroughfares or otherwise place any landscaping or physical barriers which will change the vehicular traffic or diminish in number the parking spaces on those portions of the real property [conveyed to it] which are not designated as [the existing building], without the express written approval of GW Acquisition Corporation, its successors and assigns.

(Emphasis supplied.)

3 The Easement Agreement further provides that GW Acquisition grants DeCar

nonexclusive, perpetual easements over and on its property “for pedestrian and

vehicular access and ingress in, to, over, across and through all driveways and

thoroughfares located [thereon] . . . together with the nonexclusive right to use all

parking spaces located on the property.”

Davista purchased the property on July 31, 2008, subject to both the terms of

the 1989 warranty deed and the Easement Agreement. 1 Following the expiration of the

restrictive covenants contained in the 1989 warranty deed, Davista made plans to

make improvements to, place new signage on, and subdivide the property. Capital

Plaza objected to the planned changes on the grounds that they would violate the

Easement Agreement, and it threatened to sue Davista if it proceeded. Davista then

filed the current action seeking declaratory relief. Specifically, Davista argued that

certain provisions of the Easement Agreement constituted restrictive covenants and

1 The warranty deed conveying the property to Davista states that its reference to the Easement Agreement “does not imply that the Agreement is still valid and binding, nor shall this reference thereto act as a re-recordation, continuation, or extension of the terms of said Agreement beyond the Agreement’s original period of effectiveness.”

4 therefore expired 20 years after their creation, pursuant to OCGA § 44-5-60 (b).2

Davista moved for summary judgment on its claim, and Capital Plaza filed a cross-

motion for summary judgment. The trial court thereafter entered an order containing

no legal analysis, granting Capital Plaza’s motion for summary judgment, and denying

Davista’s motion. This appeal followed.

Because the Easement Agreement constitutes a contract, its interpretation “is

a matter of law for the court.” (Punctuation and footnote omitted.) Nesbitt v. Wilde,

306 Ga. App. 812, 813 (703 SE2d 389) (2010). See also Hardman v. Dahlonega-

Lumpkin County Chamber of Commerce, 238 Ga. 551, 553 (2) (233 SE2d 753)

(1977). And in construing this agreement, we interpret its terms using “their plain,

ordinary, and popular sense.” (Punctuation and footnote omitted.) Nesbitt, supra at

814. Additionally, with respect to this particular contract, we must bear in mind “the

general rule . . . that the owner of land has the right to use it for any lawful purpose”

and that Georgia law does not favor “restrictions on private property.” (Punctuation

2 That statute provides, in relevant part: “[C]ovenants restricting lands to certain uses shall not run for more than 20 years in municipalities which have adopted zoning laws nor in those areas in counties for which zoning laws have been adopted; . . . .” The parties agree that the property at issue is located in the City of Thomasville, which adopted zoning laws in 1958.

5 omitted.) Charter Club on the River Home Owners Assn. v. Walker, 301 Ga. App. 898,

899 (689 SE2d 344) (2009).

The question presented by this appeal is whether the provisions of the Easement

Agreement that purport to restrict Davista from using any part of its property, other

than that part on which the existing building sits, for anything other than a driveway,

thoroughfare, or parking lot, constitute easements or restrictive covenants. An

easement grants an affirmative right “to enter and use land in the possession of

another and obligates the possessor not to interfere with the uses authorized by the

easement.” R ESTATEMENT 3d P ROPERTY (Servitudes) § 1.2 (1); see also comment (b).

Conversely, a restrictive covenant, also known as a “negative easement,” does not

convey any affirmative rights. Id., § 1.2 (4); see also comment (h). Rather, it restricts

the rights of a landowner by limiting the use he may make of his property. Id., § 1.3

(1). As this Court has previously explained:

A restrictive covenant relates to a burden or ‘servitude’ upon land, while an easement relates more to the benefit conferred upon the dominant tenement. Further, an easement . . . differs from a restrictive covenant in that it only requires the servient tenant not to interfere with the reserved rights of the dominant owner. A restrictive covenant [,] [on the other hand,] generally sets limits upon the use of the subject property.

6 (Citations and punctuation omitted.) Brown v. Dept. of Transp., 195 Ga. App. 262,

264 (393 SE2d 36) (1990).

The relevant paragraph of the Easement Agreement, set forth above, consists

of two distinct parts. The first part, comprised of the paragraph’s first three sentences,

constitutes easements; specifically, this part confers a benefit on Capital Plaza’s

property and grants Capital Plaza affirmative rights. It creates and grants non-

exclusive easements “for pedestrian and vehicular access, ingress and egress in, to,

over, across and through” Davista’s property and for parking on that property. See,

e.g., id. at 264 (an “easement relates more to the benefit conferred upon the dominant

tenement”) (citation and punctuation omitted). See also Higginbotham v. Knight, 312

Ga. App. 525, 528 (719 S.E.2d 1) (2011) (whether a document creates an easement

is a question of law for the court).

The second part of the paragraph is comprised of the fourth and final sentence,

which begins “DeCar, Inc. further agrees that it should not change or alter . . . .”

(Emphasis supplied.) Unlike the language contained in the sentences that precede it,

the language in this fourth sentence creates no affirmative right. Rather, this language

operates solely to restrict the rights of Davista, as the landowner, by limiting the use

of its property. Specifically, this language bars Davista from using any portion of its

7 approximately 2 acre property, except for the part on which the current building is

located, for anything other than a driveway, thoroughfare, or parking lot. Accordingly,

this language represents a restrictive covenant that expired by operation of law 20

years after its creation, or on June 26, 2009. See Brown, supra at 264 (if language

operates to set limits on the use of the subject property, then such language constitutes

a restrictive covenant); OCGA § 44-5-60 (b).

Finally, we note that we are making no determination as to the scope of the

ingress, egress, access, and parking easements created in favor of Capital Plaza and

running across, over, and on Davista’s property. Specifically, we do not decide

whether Davista’s proposed changes to the property are, in fact, prohibited by those

easements, as that question is not before us.3

3 We note that under Georgia law the grantor of an easement may not “do anything which would ‘materially interfere’ with the easement holder in the enjoyment of the easement.” (Citation omitted.) Upson v. Stafford, 205 Ga. App. 615, 616 (422 SE2d 882) (1992). But Georgia law also holds that unless an easement is exclusive, “the grantor may construct buildings or other improvements on the land which do not ‘substantially interfere’ with the enjoyment of an easement previously granted.” (Citations omitted.) Id. See Fairfield Corp. No. 1 v. Thornton, 258 Ga. 805 (374 SE2d 727) (1989) (the owner of the land, upon which the easements sits, may develop his property, except to the extent that such development would interfere with the easement); East Beach Properties v. Taylor, 250 Ga. App. 798, 801 (2) (552 SE2d 103) (2001). See also Daiss v. Bennett, 273 Ga. App. 784, 787 (2) (616 SE2d 114) (2005) (recognizing “the general principle that the holder of an easement must be adversely affected, or substantially or materially interfered with, in order to enjoin another owner’s unauthorized use”) (citation and punctuation omitted; emphasis original).

8 We therefore affirm the trial court’s order to the extent that it holds that the first

three sentences of the first paragraph in the Easement Agreement grant Capital Plaza

easements on, over, and across Davista’s property for parking, ingress, egress, and

pedestrian and vehicular traffic. We reverse the trial court’s order, however, to the

extent that it holds that the fourth and final sentence of the first paragraph in the

Easement Agreement constitutes an easement, rather than a restrictive covenant that

expired by operation of law, 20 years after its creation.

Judgment affirmed in part and reversed in part. Miller, P. J., and Ray, J.,

concur.