Karen M. Oliver, d/b/a Crazy Tony's Restaurant v. Kevin M. Quynn and Nikki L. Quynn, husband and wife

2013 WY 70, 303 P.3d 1119, 2013 WL 2420976, 2013 Wyo. LEXIS 73
CourtWyoming Supreme Court
DecidedJune 5, 2013
DocketS-12-0161
StatusPublished
Cited by2 cases

This text of 2013 WY 70 (Karen M. Oliver, d/b/a Crazy Tony's Restaurant v. Kevin M. Quynn and Nikki L. Quynn, husband and wife) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Karen M. Oliver, d/b/a Crazy Tony's Restaurant v. Kevin M. Quynn and Nikki L. Quynn, husband and wife, 2013 WY 70, 303 P.3d 1119, 2013 WL 2420976, 2013 Wyo. LEXIS 73 (Wyo. 2013).

Opinion

BURKE, Justice.

[T1] This case stems from a dispute about a Party Wall Agreement between Appellant, Karen Oliver, 1 and Appellees, Nikki and Kevin Quynn. 2 The Quynns filed suit seeking a declaration that the Agreement was unenforceable. On summary judgment, the district court ruled that the Agreement's provision prohibiting the Quynns from selling alcohol was void and unenforceable. Ms. Oliver challenges that decision in this appeal. We will reverse and remand for entry of summary judgment in favor of Ms. Oliver.

ISSUES

[T2] Ms. Oliver presents the following issues for our consideration:

1. Whether the terms of the agreement in dispute are equitable servitudes binding on the real property and parties; and
2. Whether the prohibition of the sale of alcoholic beverages is enforceable.

The Quynns present the same issues for our consideration, but organize Ms. Oliver's issues into four more focused questions:

1. Whether the district court properly held the covenant not to compete restraining the Quynns' sale of alcohol is unenforceable due to unreasonable duration;
2. Whether the district court properly held the covenant not to compete restraining the Quynns' sale of alcohol is unen-foreeable because Ms. Oliver failed to prove it bears a reasonable, fair, and nee-essary relation to the business interests Ms. Oliver seeks to protect;
3. Whether the district court properly held the covenant not to compete preventing the Quynns' sale of alcohol is unenforceable because the restraint is greater than needed to protect Ms. Oliver's legitimate interest; and
4. Whether the district court properly held the covenant not to compete restricting the Quynns' sale of alcohol is unenforceable because the threatened harm to the Quynuns outweighs the need and harm of Ms. Oliver.

FACTS

[T3] In 1965, Anthony and Naney Testo-lin owned and operated Crazy Tony's restaurant and bar on Lot C-2 in the West Subdivision of Guernsey, Wyoming. In September of that year, the Testolins sold a portion of Lot C-2 (the west fifty-two feet, four-and-a-haif inches of Lot C-2) to the Nickses. The *1122 Nickses intended to operate a bowling alley on the property. The Testolins and Nickses entered into a Party Wall Agreement, which was recorded in the property records a few days after the conveyance. The pertinent provisions of the Agreement read as follows:

That the parties have, heretofore, constructed on the boundary line between their respective properties, a Party Wall That the parties, for and in consideration of these premises and of the mutual covenants and agreements herein contained, do for themselves, their respective heirs, executors, administrators and assigns, covenant and agree to and with each other, as follows: ...
4. That said Party Wall, as now constructed, has a doorway or doorways from the Nicks property, which shall be used for a bowling alley, into the TESTOLIN property, which shall be used for a restaurant and bar and lounge. NICKS do hereby agree that they will not lock said doors, but shall permit free access to TESTO-LIN'S building through the doorways in said Party Wall, at all hours when said bowling alley is open for business.
That NICKS does hereby agree with TES-TOLIN that he will not, nor will he permit others, to sell any beer, liquor or other alcoholic beverages in his building located upon said premises. The parties understand and agree that this covenant is included herein for the purpose of prohibiting any competition in the sale of alcoholic beverages between the parties and their respective businesses.

Through mesne conveyances, Ms. Oliver now owns the bar and restaurant, and the Quynns own the bowling alley. The Quynus were aware of the Agreement when they purchased the bowling alley in 2009.

[T4] Despite their knowledge of the Agreement, the Quynns sought and obtained a liquor license to sell beer and wine in the bowling alley. They also built an interior wall blocking the doorway between the establishments. Ms. Oliver sent the Quynuns a letter protesting their violation of the Agreement. The Quynns responded by filing a declaratory judgment action contesting the enforceability of the Agreement.

[T5] Both parties filed motions for summary judgment. After a hearing on the motions, the district court entered summary judgment, ruling that: (1) the "covenant not to compete in the sale of alcoholic beverages is unenforceable and void as a matter of law," (2) the covenant not to compete is severable, and other provisions of the Agreement are enforceable, and (8) the Quynuns are enjoined to remove the interior wall blocking the doorway and permit ingress and egress between the businesses as provided in the Agreement. Ms. Oliver appealed the district court's determination that the restriction prohibiting the sale of alcohol in the bowling alley is unenforceable. The district court's ruling with regard to the enforceability of the remainder of the Agreement is not at issue. 3

STANDARD OF REVIEW

[¶6] Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Comet Energy Services, LLC v. Powder River Oil & Gas Ventures, LLC, 2008 WY 69, ¶5, 185 P.3d 1259, 1261 (Wyo.2008). "Because summary judgment involves a purely legal determination, we undertake de novo review of a trial court's summary judgment decision." City of Cheyenne v. Board of County Comm'rs of Laramie, 2012 WY 156, ¶ 4, 290 P.3d 1057, 1058 (Wyo.2012).

DISCUSSION

[¶7] In her first issue, Ms. Oliver contends that the terms of the Agreement are equitable servitudes binding on the real property and parties. Though not entirely clear, her argument seems to be that the Agreement is an equitable servitude rather than a covenant that runs with the land. The key distinction is that a covenant that *1123 runs with the land is enforceable whether or not the owner has notice of it, while an equitable servitude is enforceable only if the owner took the property with notice of the servitude. Streets v. J M Land & Developing Co., 898 P.2d 377, 379 (Wyo.1995), citing 20 Am.Jur2d Covenants, Conditions, and Restrictions § 304, 868 (1965). In this case, it is undisputed that the Quynns took the property with notice of the Agreement. The Agreement is therefore enforceable to the same extent whether it is deemed an equitable servitude or a covenant that runs with the land.

[¶8] In its summary judgment decision, the district court ruled that Ms. Oliver had the burden of proving that the Agreement was reasonable. In its order, the district court stated:

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
2013 WY 70, 303 P.3d 1119, 2013 WL 2420976, 2013 Wyo. LEXIS 73, Counsel Stack Legal Research, https://law.counselstack.com/opinion/karen-m-oliver-dba-crazy-tonys-restaurant-v-kevin-m-quynn-and-nikki-wyo-2013.