THIS OPINION
HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN
ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Ben J. Nash
d/b/a B&B Rentals, Billy F. Stegall, Jr. and Joseph H. Stegall, Appellants,
v.
The Tara
Plantation Homeowners Association, Inc., Respondent,
and The Tara
Plantation Homeowners Association, Inc., Respondent,
William
Howarth, Paige Howarth, Shirley Vaillancourt, Courtlandt Stone, J. Carroll
Robinson, Connie Robinson, Alan G. Crump, and Patricia D. Crump, Appellants.
Appeal From York County
S. Jackson Kimball, III, Circuit Court
Judge
Unpublished Opinion No. 2010-UP-355
Heard May 18, 2010 Filed July 12, 2010
AFFIRMED
Daniel J. Ballou and Tracy T. Vann, of Rock Hill, for Appellants.
Brian Scott McCoy and Horack Talley, of Rock Hill, for Respondent.
PER CURIAM: Ben J. Nash, d/b/a B&B Rentals, and the other Appellants appeal the trial court's
ruling that restrictive covenants for Tara Plantation subdivision apply to
their lots. We affirm.
FACTS/PROCEDURAL HISTORY
Bob
McLemore (Developer), acting in several corporate names, was the developer of
Tara Plantation subdivision near Fort Mill, South Carolina. On February 16,
1988, Developer filed a plat entitled "A Final Plat Showing Maco
Commercial Park and Tara Plantation." Notes on the plat provided:
"Tara Plantation Lots 1-57 zoned RD-1", which meant residential use,
and "Maco Commercial Park Lots A-F zoned BD-1", which meant
commercial use. The lots in the Maco Commercial Park (Maco Lots) were at the
front of the property owned by Developer on either side of Old Tara Lane. The
plat was filed in Plat Book 91 at Page 128 of the York County RMC Office. On
February 25, 1988, Developer filed restrictive covenants (Covenants), which
provided:
KNOW
ALL PERSONS BY THESE PRESENTS, THAT BOB MCLEMORE AND CO., INC., being the owner
of the real property located in Fort Mill Township, York County, South
Carolina, constituting that certain subdivision known as Tara Plantation, a map
of which is recorded in Plat Book 91 at Page 129 of the York
County, South Carolina, RMC office, does hereby covenant and agree with all
persons, firms or corporations hereafter acquiring any of the lots shown on
said map, that said lots shall be subject to the following restrictive
covenants, governing the use thereof, which shall run with the property by
whomsoever owned.
The
Covenants provided: "All lots shown on said map shall be used for
residential purposes only." In addition, the Covenants stated:
"Nothing herein contained shall be construed as imposing any covenants and
restrictions on any property of the owner of this subdivision other than the
property to which these restrictive covenants specifically apply." The Covenants
do not expressly exclude or include the Maco Lots.
A
plat substantially similar to the original plat was filed at Book 95, page
136. Developer, as Bob McLemore Homes (BMH) built a model home on Maco Lot B.
Developer sold Maco Lot F to Alan and Patricia Crump on April 10, 1992. Lots
B, C, E, and F were rezoned for residential use on June 15, 1992. The
remaining lots were rezoned for residential use on April 18, 1994. On April
22, 1994, a plat was filed showing a revision of Lots A, B, C, D, and E of Maco
Commercial Park to be known as Lots 61-67 of Tara Plantation. In 1995,
Developer as BMH defaulted on the mortgage on Lot B. Home Federal Savings and
Loan Association, which acquired title at the foreclosure sale, sold the
property to the Mitchells. The current owners, Paige and William Howarth
acquired the property after it was foreclosed. Developer filed for bankruptcy
in October of 1994. The bankruptcy trustee sold Lots 61-63 (formerly Maco Lots
C-D) and Lot 65 (formerly Lot A), while Developer sold the remaining lot in
1996. The Appellants are the current owners of what were the Maco Lots.
Ben
J. Nash, Billy F. Stegall, Jr., and Joseph H. Stegall, the current owners of
what are now known as Lots 61 and 62 of Tara Plantation, brought this
declaratory judgment action against the Tara Plantation Homeowners Association
(TPHOA) requesting the court declare their lots unencumbered by the Covenants.
The TPHOA asserted a counterclaim against Nash and the Stegalls and a third party
claim against the other owners of the former Maco Lots seeking a declaration
the lots were subject to the Covenants and seeking collection of homeowner
association dues owed by the Appellants.
The
trial court ruled the Covenants applied to the disputed lots based on the plain
language of the Covenants. In addition, the court held even if an ambiguity
exists, Developer intended for the Covenants to apply to all lots on the plat,
including the disputed lots. Furthermore, the court ruled Appellants were
estopped from asserting the Covenants did not apply to them, waived such
contention, and were barred by the doctrine of laches. The court granted the
TPHOA judgment against the Appellants for the dues owed. This appeal
followed.
STANDARD OF REVIEW
A declaratory
judgment action is neither legal nor equitable, but is determined by the nature
of the underlying issue. Felts v. Richland County, 303 S.C. 354, 356,
400 S.E.2d 781, 782 (1991). The underlying issue in this case is whether the
restrictive covenants can be enforced against the Appellants' lots. An action
to enforce restrictive covenants is an action in equity. Buffington v.
T.O.E. Enter., 383 S.C. 388, 393, 680 S.E.2d 289, 291 (2009); see also Hardy v. Aiken, 369 S.C. 160, 165, 631 S.E.2d 539, 541 (2006) (stating
while action potentially might require the court to construe a contract, the
underlying action was a declaratory action to declare whether the restrictive
covenants were enforceable and thus the standard of review was for an action in
equity). On appeal from an equitable action, an appellate court may find facts
in accordance with its own view of the evidence. Townes Assocs. v. City of
Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976). While this
standard permits a broad scope of review, an appellate court will not disregard
the findings of the trial court, which saw and heard the witnesses and was in a
better position to evaluate their credibility. Tiger, Inc. v. Fisher Agro,
Inc., 301 S.C. 229, 237, 391 S.E.2d 538, 543 (1989).
LAW/ANALYSIS
A. Applicability of
Covenants
Appellants argue
the trial court erred in concluding the Covenants apply to their lots. We
disagree.
Restrictive
covenants are contractual in nature. Hardy, 369 S.C. at 166, 631 S.E.2d
at 542. A restriction on the use of the property must be created in express
terms or by plain and unmistakable implication. Id. Restrictions on
the use of property will be strictly construed with all doubts resolved in
favor of free use of the property; however the rule of strict construction
should not be used to defeat the plain and obvious purpose of the restrictive
covenants. Taylor v. Lindsey, 332 S.C. 1, 4, 498 S.E.2d 862, 863
(1998). The language of a restrictive covenant is to be construed according to
the plain and ordinary meaning attributed to it at the time of execution. Id.
A
restrictive covenant is ambiguous when its terms are reasonably susceptible of
more than one interpretation. S.C. Dep't of Natural Res. v. Town of
McClellanville, 345 S.C. 617, 623, 550 S.E.2d 299, 302 (2001). It is a
question of law for the court whether the language of a restrictive covenant is
ambiguous. Id. at 623, 550 S.E.2d at 302-03. Once the court decides
the language is ambiguous, evidence may be admitted to show the parties' intent. Id. at 623, 550 S.E.2d at 303. The determination of intent is then a
question of fact. Id.
When
restrictive covenants arise by implication, the restrictions are said to create
a reciprocal negative easement. Bomar v. Echols, 270 S.C. 676, 679, 244
S.E.2d 308, 310 (1978).[1] Generally, four elements must be established to show a reciprocal negative
easement: (1) a common grantor, (2) a designation of land subject to
restrictions, (3) a general plan or scheme of restrictions, and (4) the
covenants run with the land. Id. In the various grants of the lots,
there must have been included some restriction for the benefit of the land
retained evidencing a scheme or intent that the entire tract would be similarly
treated, so that once the plan has been effectively put into operation, the
burden placed upon the land conveyed is by operation of law reciprocally placed
upon the land retained. Gambrell v. Schriver, 312 S.C. 354, 358, 440
S.E.2d 393, 395 (Ct. App. 1994). In determining whether a reciprocal negative
easement has been created, the court should consider not only the language of
the deeds, but also the circumstances surrounding the origin of the covenants. Id.
Generally, the developer must establish the general scheme of development
before any lots are sold. Id. All doubts regarding the creation of an
implied reciprocal negative easement must be resolved in favor of the freedom
of land from restriction. Id.
The
Covenants state they apply to "any of the lots shown on [the] map"
recorded in Plat Book 91, Page 129, which is the plat showing the Tara
Plantation Lots, as well as the Maco Lots. The Covenants do not expressly exclude
the Maco Lots. However, the Covenants, which provide the lots will be used for
residential purposes only, are in conflict with the Plat, which states the Maco
Lots are zoned for commercial use.
Developer's
brother Danny Charles McLemore, who served as Director of Sales for his
brother's company, testified that in developing a subdivision, Developer would
have the front of the property zoned commercial and place a model home there.
He would then use the model home for sales to the public, would hold real
estate days there, and would allow dignitaries to use it for dinners. Once the
subdivision was finished, Developer would have the model home rezoned
residential and would place the same restrictions on it as the rest of the
subdivision. He stated he had "always thought [the Maco Lots] would be
back as residential homes." At the time he left Developer's company, the
Maco Lots were all vacant except for the model home. Shortly thereafter, the
company went bankrupt.
Developer's son,
Thad McLemore, who was Assistant Vice President for his father's company, testified
the original intent for the subdivision was for all of the lots to be
residential. The application to rezone lots B, C, E, and F as residential lots
stated the reason for the rezoning was to keep with the original intent for the
subdivision.
The evidence shows
Developer intended for the restrictive covenants to apply to all of the lots
shown on the Plat once they were sold to homeowners, including the Maco Lots. Developer
established a general scheme of development before any of the lots were sold
and designated the lots shown on the Plat as being subject to the restrictive
covenants. As the Maco Lots were rezoned residential, the conflict with the
restrictive covenants was removed. The evidence shows the only reason
Developer originally had the Maco Lots zoned commercial was to allow for the
model home to be used for sales and similar purposes. The model home,
otherwise, was consistent with the requirements of the Covenants. A revised
plat was filed to show that the Maco Lots were renamed as Tara Plantation Lots.
All of the Appellants except the Crumps acquired their lots after the revision
and their deeds designate their lots as being part of Tara Plantation.
Although the Crumps purchased their lot from Developer before the renaming of the
Maco Lots, their lot was rezoned residential after they entered into a
contract. Furthermore, the Crumps' mortgage refers to their property as
"Lot F, Tara Plantation."
The Appellants were
aware of the restrictions and all of them paid dues to the TPHOA. In addition,
many of the Appellants voted on amendments to the Covenants and participated in
TPHOA meetings. On May 19, 2005, lead plaintiff Nash wrote to the president of
the TPHOA requesting a release of his lots from the Covenants.
Considering all of
the surrounding circumstances, we find Developer intended for the Covenants to
apply to Appellants' lots. Accordingly, we find the trial court did not err in
holding the Covenants could be enforced against Appellants.
B. Estoppel and waiver
The Appellants
argue the trial court improperly held they were barred from asserting the
restrictive covenants did not apply to their lots under the equitable doctrines
of estoppel and waiver. We disagree.
The Appellants
claim these doctrines are not applicable because they cannot be used as
offensive weapons.
Estoppel
and waiver are protective only, and are to be invoked as shields, and not as
offensive weapons. Their operation in all cases should be limited to saving
harmless or making whole the party in whose favor they arise and should not, in
any case, be made the instruments of gain or profit. While the doctrine of
waiver or equitable estoppel may be invoked as affirmative defenses to
counterclaims, they may not be asserted in a complaint as offensive weapons.
Janasik v. Fairway Oaks
Villas Horizontal Prop. Regime, 307 S.C.
339, 345, 415 S.E.2d 384, 388 (1992) (citations omitted).
In Janasick,
homeowners sought an injunction to prevent a regime and management company from
requiring them to remove improvements constructed in violation of covenants. Id. at 341, 415 S.E.2d at 386. They asserted in their complaint equitable
estoppel and waiver. Id. The regime and management company
counterclaimed seeking an injunction enforcing the covenants. Id. at
342, 415 S.E.2d at 386. While the supreme court affirmed the master's finding that
evidence supported the homeowners' entitlement to benefits arising in their
favor under equitable considerations, it reversed to the extent his ruling let
stand those portions of the complaint that alleged the affirmative defenses of
equitable estoppel and waiver. Id. at 345, 415 S.E.2d at 388.
The TPHOA
is the party seeking to maintain the status quo and is using the equitable
doctrines of estoppel and waiver as "shields." The TPHOA did not
assert the equitable doctrines in a complaint but rather in response to Nash's
and the Stegalls' claims. The other Appellants asserted a counterclaim asking
for a declaration that the Covenants do not apply. Although there is not a
responsive pleading to this counterclaim in the record, the Appellants do not
raise any issue concerning the lack of the responsive pleading. We find Janasek does not prevent the TPHOA's use of these doctrines.
The
Appellants also assert the equitable doctrines may only be used to bar
enforcement of covenants. However, this is an action in equity. The appellate
courts have "consistently held that courts should consider equitable
doctrines when determining whether to enforce a restrictive covenant . . .
." Buffington v. T.O.E. Enter., 383 S.C. 388, 393, 680 S.E.2d 289,
291 (2009).
In Seabrook
Island Property Owners Association v. Pelzer, 292 S.C. 343, 348, 356 S.E.2d
411, 414 (Ct. App. 1987), this court found the appellant was estopped from
seeing a refund of assessments, even though the assessment violated the
applicable restrictive covenants and bylaws. The court held:
[The
appellant] acquiesced in the method of assessment and paid the charges. The
Association expended the moneys for purposes authorized by the by-laws. [The
appellant] received the benefit of those expenditures. He cannot now return
the benefits or restore the Association to its former position . . . . If a
party stands by and sees another dealing with his property in a manner
inconsistent with his rights and makes no objection while the other changes his
position, his silence is acquiescence and it estops him from later seeking
relief.
Id.
We
find the trial court did not err in considering the equitable doctrines.
We
next consider whether the trial court erred in its application of the
doctrines. "The doctrine of estoppel applies if a person, by his actions,
conduct, words or silence which amounts to a representation, or a concealment
of material facts, causes another to alter his position to his prejudice or
injury." Rushing v. McKinney, 370 S.C. 280, 293, 633 S.E.2d 917,
924 (Ct. App. 2006) The elements of equitable estoppel as to the party
estopped are: (1) conduct amounting to a false representation or concealment
of material facts, or, at least, which is calculated to convey the impression
that the facts are otherwise than, and inconsistent with, those which the party
subsequently attempts to assert; (2) the intention or expectation that such conduct
will be acted upon by the other party; and (3) actual or constructive knowledge
of the real facts. S. Dev. Land & Golf Co., v. S.C. Pub. Serv. Auth.,
311 S.C. 29, 33, 426 S.E.2d 748, 750 (1993). The elements as to the party
claiming the estoppel, are: (1) lack of knowledge and of the means of
knowledge of the truth as to the facts in question, (2) reliance upon the
conduct of the party estopped, and (3) prejudicial change in position. Id.
Waiver is defined
as "a voluntary and intentional abandonment or relinquishment of a known
right. Generally, the party claiming waiver must show that the party against
whom waiver is asserted possessed, at the time, actual or constructive
knowledge of his rights or of all the material facts upon which they
depended." Janasik, 307 S.C. at 344, 415 S.E.2d at 387-88.
"The doctrine of waiver does not necessarily imply that the party
asserting waiver has been misled to his prejudice or into an altered
position." Id. at 344, 415 S.E.2d at 388.
As stated above,
the Appellants paid dues, voted on TPHOA issues, and participated in meetings
for years before asserting their lots were not bound by the Covenants. The
Appellants had access to the same facts that give rise to their current
contention they are not bound by the Covenants. During this time, the TPHOA
maintained the entranceway to the subdivision with landscaping, lighting, and
placement of a sign. Until Nash and the Stegalls brought this action in
December of 2005, none of the Appellants took any action inconsistent with their
lots being bound. The trial court held: The TPHOA was "prejudiced by the
[Appellants'] delay by spending money and effort regarding the landscaping
improvements, sign and lights adjacent to the [Appellants'] properties, all of
which implicitly considered the disputed lots as part of the subdivision and
was done without any reason to believe such a contention would be made." We
find the evidence supports this finding. Accordingly, we find no error in the
trial court's ruling that the Appellants are estopped from or have waived their
contention the Covenants do not apply to their lots.[2]
CONCLUSION
For the above
stated reason, the order of the trial court is
AFFIRMED.
HUFF, SHORT, and
WILLIAMS, JJ., concur.
[1] Appellants assert the issue of negative reciprocal easement is not preserved.
This court may affirm for any ground appearing in the record. I'On v. Town
of Mt. Pleasant, 338 S.C. 406, 418, 526 S.E.2d 716, 722 (2000). It is not
always necessary for a respondent-as the winning party in the lower court-to
present its issues and arguments to the lower court and obtain a ruling on them
in order to preserve an issue for appellate review. Id. at 420, 526
S.E.2d at 723. Thus, this court may address the issue of negative reciprocal
easement.
[2] We do not reach the issue of laches. See Futch v. McAllister Towing
of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (stating
an appellate court need not discuss remaining issues when disposition of prior
issue is dispositive).