Heltman v. Catanach

2010 NMCA 016, 229 P.3d 1239, 148 N.M. 67
CourtNew Mexico Court of Appeals
DecidedAugust 27, 2009
Docket28,613; 32,003
StatusPublished
Cited by13 cases

This text of 2010 NMCA 016 (Heltman v. Catanach) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heltman v. Catanach, 2010 NMCA 016, 229 P.3d 1239, 148 N.M. 67 (N.M. Ct. App. 2009).

Opinion

OPINION

VANZI, Judge.

{1} Defendant appeals from an order enjoining him from subdividing his property and building a single-family residence on the resulting lot. The district court’s order was based on the terms of a restrictive covenant governing the use of the lots in Defendant’s subdivision. Defendant raised two equitable defenses to the enforcement of the covenants, but the district court concluded that the evidence did not warrant nonenforcement. As we conclude that the district court erred in refusing to consider relevant evidence in evaluating Defendant’s equitable defenses, we reverse and remand for a new trial on the issue of whether those defenses should prevent enforcement of the covenants against Defendant in this ease. BACKGROUND

{2} Plaintiff, Harriet Heltman, and Defendant, Albert Catanach, are the owners of separate residential lots in the Lovato Subdivision No. 1 in Santa Fe, New Mexico (the City). In January 2004, Defendant applied to the City for approval to split his lot. Defendant’s home was already positioned on part of the lot, and he hoped to build a residential structure on the resulting new lot after the split. Soon after Defendant filed his application with the City, Plaintiff initiated this lawsuit seeking a declaratory judgment that Defendant’s proposed use of the property would violate the restrictive covenants governing the subdivision and seeking an injunction to prevent Defendant from subdividing his lot and building a residence on the resulting lot. In the district court, the parties disputed which of several sets of restrictive covenants actually governed the subdivision, whether the restrictive covenants barred Defendant’s proposed use of his property, and whether Defendant’s affirmative defenses prevented enforcement of the covenants against him. After a bench trial, the district court entered a judgment declaring that Defendant’s proposed subdivision of his lot and construction of a residential structure on the resulting lot would violate the governing restrictive covenants. The district court enjoined Defendant from carrying out his plans.

DISCUSSION

{3} Defendant appeals, arguing: (1) that the district court erred by applying the wrong set of covenants; (2) that even if the district court relied on the correct covenants, those covenants do not expressly prohibit subdivision of Defendant’s lot; (3) that the district court erred in limiting the scope of evidence it would consider as relevant to Defendant’s affirmative defenses; and (4) that the district court erred in concluding that Defendant’s affirmative defenses did not prevent the enforcement of the covenants against him in this case.

The 1940 Covenants Are Controlling

{4} The Lovato Subdivision was originally controlled by a set of restrictive covenants that was recorded in 1936. A second set of covenants purporting to supercede the 1936 covenants was recorded in 1940. In 2005, after this litigation had commenced, Defendant recorded an agreement among a majority of property owners in the subdivision to modify the covenants. Subsequent to Defendant’s recorded amendment, Plaintiff recorded her own amendment. The district court determined that the 1940 covenants were applicable to the subdivision and that, to the degree either Defendant’s or Plaintiffs amendments were effective, they would not actually take effect until the year 2015. Defendant asserts that the district court erred in applying the 1940 covenants and claims that either the 1936 covenants or his 2005 amendments should control.

{5} A determination of which set of covenants is applicable required the district court to interpret the covenants themselves — -a legal determination that this Court reviews de novo. See Baker v. Bennie J. Aday & Dixie J. Aday Revocable Trust, 1999-NMCA-123, ¶ 9, 128 N.M. 250, 991 P.2d 994 (applying de novo review to the district court’s interpretation of the terms of a covenant). The 1936 covenants provided that they were to “remain in force until July 1, 1960, and thereafter until such time as the same may be modified or abrogated by a vote of two thirds of the owners of lots within said subdivision.” Defendant argues that since the 1940 covenants were recorded prior to July 1, 1960, they were ineffective because they violated the plain meaning of the 1936 covenants’ requirement that no amendment take place prior to that date. Plaintiff points out that there was evidence that the 1940 covenants were recorded by unanimous agreement of all the then-owners of the Lovato Subdivision and argues that because it was unanimous, the amendment was effective.

{6} We agree that the unanimous agreement in 1940 of all the then-owners of the property in the subdivision was effective to amend the 1936 covenants. Generally, the “obligation of the burdened party under a covenant can be extinguished by action by the person entitled to enforce the covenant.” Gerald Korngold, Private Land Use Arrangements: Easements, Real Covenants, and Equitable Servitudes § 11.03, at 386 (1990). “Termination by release or agreement is based on fundamental principles of contract law, as one entitled to enforce a promise may relieve the promisor of his or her obligation.” Id. at 386-87. “As a corollary to the rule that a covenant can be terminated by the agreement of the parties, a covenant may be amended upon agreement of the parties. Under the general rule, all of the parties entitled to enforce the covenant must agree to the amendment.” Id. § 11.13, at 419 (footnote omitted).

{7} Where a provision such as the one in the 1936 covenant provides that a covenant shall remain in effect for an initial period, after which it may be modified by less than unanimous consent, courts have interpreted these provisions to simply provide an exception, after a certain number of years, to the general rule that unanimity is required in order to amend a restrictive covenant. See, e.g., Johnson v. Howells, 682 P.2d 504, 505 (Colo.Ct.App.1984) (holding that the district court erred in concluding that the covenant could be amended by sixty percent of the property owners prior to the expiration of the initial twenty-year period and stating that amendment during this period could only be effected by unanimous consent); Kauffman v. Roling, 851 S.W.2d 789, 794 (Mo.Ct.App.1993) (interpreting such a provision to mean that the covenant could be amended during the initial period only by unanimous consent, but could be subsequently amended by the two-thirds majority provided for in the covenant).

{8} Defendant has cited no authority to support his claim that the then-owners of the properties in the Lovato Subdivision could not unanimously agree to enact the 1940 covenants, thereby amending the 1936 covenants. Accordingly, we assume that there is none. See In re Adoption of Doe, 100 N.M. 764, 765, 676 P.2d 1329, 1330 (1984). And while we have no quarrel with the case cited by Defendant for the proposition that under a similar provision a covenant cannot be modified by less than unanimous consent during the initial period, see White v. Lewis, 253 Ark. 476, 487 S.W.2d 615

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Bluebook (online)
2010 NMCA 016, 229 P.3d 1239, 148 N.M. 67, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heltman-v-catanach-nmctapp-2009.