Millstone Property Owners Association, Respondent/Cross-Appellant v. Nithyananda Dhyanapeetam of St. Louis, Appellant/Cross-Respondent, Fogarty Farms, Respondent/Cross-Appellant.

Supreme Court of Missouri·Decided December 10, 2024·No. SC100574·Published

Opinion

SUPREME COURT OF MISSOURI en banc

MILLSTONE PROPERTY OWNERS ) Opinion issued December 10, 2024 ASSOCIATION, )

)

Respondent/Cross-Appellant, )

)

v. )

)

NITHYANANDA DHYANAPEETAM ) No. SC100574 OF ST. LOUIS, )

)

Appellant/Cross-Respondent, )

)

FOGARTY FARMS, )

)

Respondent/Cross-Appellant. )

APPEAL FROM THE CIRCUIT COURT OF JEFFERSON COUNTY The Honorable Victor J. Melenbrink, Judge

This appeal concerns a tract of land that was platted into a subdivision designed for single-family residential use. The subdivision’s original owner recorded restrictions on the land. A subsequent purchaser acquired the subdivision in its entirety and attempted to develop the land in a manner at odds with the restrictions, including building a structure not intended for residential use. When the subsequent purchaser’s plans proved unsuccessful, a few lots, including the lot with the structure, were transferred to one organization. The remaining subdivision lots were sold to another entity. This latter entity

also received an assignment of developer rights from the subsequent purchaser, despite no express transfer of those rights from the subdivision’s original owner. This appeal focuses on whether developer rights transferred from the subdivision’s original owner and whether the subdivision’s restrictions were abandoned.

After a bench trial, the circuit court found the original owner transferred developer rights and held the restrictions were not abandoned. With the restrictions in place, the circuit court determined a property owners association created pursuant to the restrictions was proper and the organization owning the few lots was required to act in accordance with the restrictions. The circuit court further invalidated a challenged transfer of common ground. Following a provision in the restrictions, the circuit court awarded reasonable attorney fees to the property owners association. This Court affirms the circuit court’s judgment in all respects.

Factual and Procedural Background In May 2004, Essex Development Inc. executed and recorded restrictions for a tract of land in Jefferson County known as Millstone Subdivision (“the subdivision”). The stated purpose of the restrictions was to preserve the land “as a respectable and attractive residential neighborhood.” In pursuit of that purpose, the restrictions established governance for the subdivision, outlined a process for levying assessments, set forth a list of restrictions applicable to lots, and provided for enforcement of the restrictions. The lots in the subdivision were expressly “restricted to single family residence usage only.” As to enforcement of the covenants, the restrictions stated “[f]ailure or forbearance to enforce any covenant or restriction shall not be deemed a waiver of the right to do so thereafter.”

Another restriction discussing severability provided: “Nor shall the failure to enforce a covenant or agreement herein act as a waiver or prohibit the enforcement of same in the future.”

The restrictions discussed certain rights of Essex or the owner of the subdivision.

The restrictions declared:

Owner shall have the right to assign all or a portion of its powers and responsibilities under these Restrictions to a subsequent purchaser or developer of unsold lots of the subdivision as Owner sees fit. After said assignment, the assignee purchaser or developer shall have all the powers and responsibilities of Owner under these Restrictions subject to any limitations set forth in said assignment by Owner.

Additionally, Essex or its “successors or assigns” had a broad power to amend the restrictions while they retained ownership of any lot in the subdivision. Any such amendments had to be recorded.

The subdivision’s first phase, as reflected on a recorded plat, consisted of 21 numbered lots. An unnumbered lot on the plat containing a lake was labeled as common ground. 1 The plat noted “[t]he common ground area as shown hereon shall remain with and be maintained by all present and future lot owners of [the subdivision] and all future plats of [the subdivision].” Under the restrictions, delineated common areas were to be used “for the benefit of the lot owners of the Subdivision” and common areas had to “be transferred by deed of conveyance from Owner to the Millstone Property Owners

1 The circuit court’s judgment and testimony at trial referred to a total of 24 lots. The discrepancy is irrelevant to this appeal.

Association to be created as set forth below at such time as Owner deems proper and in the sole discretion of Owner.”

In October 2007, Essex transferred the entire subdivision to Ananda LLC by general warranty deed. The general warranty deed contained a habendum clause 2 providing: “TO HAVE AND TO HOLD the same, together with all rights and appurtenances to the same belonging, unto [Ananda], and to the heirs and assigns of such party(ies) forever.” Essex did not execute a separate assignment of its developer rights in the subdivision. Contemporaneously with transferring of the subdivision to Ananda, Essex liquidated its interest in surrounding real estate. Since transferring the subdivision, Essex has taken no action whatsoever with respect to the property.

Ananda initiated a plan to transform the land within the subdivision into a mixed-

use development to be known as Ananda Temple. The proposed development was to include a community center/temple, an educational center, and housing to consist of single- family homes, condominiums, and townhouses. Ananda submitted plans to the Jefferson County planning division in an attempt to rezone the property to allow the development to move forward. The plans ultimately failed.

While Ananda was pursuing its plans for Ananda Temple, it constructed a utility building to house carved stone deities on one of the subdivision’s lots. In December 2008,

2 A habendum clause is used to explain, qualify, or define the interest granted in a deed. Tennison v. Walker, 190 S.W. 9, 13 (Mo. 1916); see also Habendum Clause, Black’s Law Dictionary (12th ed. 2024) (defining “habendum clause” as “[t]he part of an instrument, such as a deed or will, that defines the extent of the interest being granted and any conditions affecting the grant” and explaining “[t]he introductory words to the clause are ordinarily to have and to hold”).

Ananda transferred the lot containing the utility building and two adjacent lots to Nithyananda Dhyanapeetam of St. Louis (“Nithyananda”) by quit claim deed. Nithyananda members visited the carved stone deities daily until sometime in 2016 and used the lake lot, which was adjacent to Nithyananda’s lots, for spiritual purposes.

In October 2015, Ananda transferred the remaining subdivision lots to Fogarty Farms LLC by general warranty deed. At the same time, Ananda executed an “Assignment of Developer Rights” to Fogarty Farms. Pursuant to the restrictions, Fogarty Farms then incorporated the Millstone Property Owners Association (“the association”). The association was tasked with maintaining the subdivision’s streets and common areas and enforcing the restrictions. A board of directors managed the association and, among other duties, possessed the power to levy assessments.

In June 2016, Fogarty Farms adopted a “First Amendment to Millstone Subdivision Restrictions.” The amendment purported to remove the lake lot as common ground to make it available for use as a saleable lot. The amendment also changed restrictions applicable to lots. In May 2017, the association deeded the lake lot to Fogarty Farms.

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Millstone Property Owners Association, Respondent/Cross-Appellant v. Nithyananda Dhyanapeetam of St. Louis, Appellant/Cross-Respondent, Fogarty Farms, Respondent/Cross-Appellant., (Mo. 2024).

Millstone Property Owners Association, Respondent/Cross-Appellant v. Nithyananda Dhyanapeetam of St. Louis, Appellant/Cross-Respondent, Fogarty Farms, Respondent/Cross-Appellant. (Millstone Property Owners Association, Respondent/Cross-Appellant v. Nithyananda Dhyanapeetam of St. Louis, Appellant/Cross-Respondent, Fogarty Farms, Respondent/Cross-Appellant.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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