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2004-UP-149 - Hook v. Bishop

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Kristin W. Hook,        Respondent,

v.

Stephen P. Bishop and Sarah A. Bishop and Southtrust Mortgage Company, Defendants, Of Whom Stephen P. Bishop and Sarah A. Bishop are,        Appellants.


Appeal From Lexington County
Clyde N. Davis, Jr., Master in Equity


Unpublished Opinion No. 2004-UP-149
Submitted November 3, 2003 – Filed March 2, 2004


AFFIRMED


James Randall Davis and Patrick J. Frawley, both of Lexington, for Appellants.

Jean Perrin Derrick, of Lexington, for Respondent.


PER CURIAM:  Kristin W. Hook brought this action against Stephen P. Bishop and Sarah A. Bishop (the “Bishops”) seeking enforcement of a restrictive covenant.  The master-in-equity issued a mandatory injunction requiring the Bishops to remove all structures within the twenty-foot side setback adjacent to Hook’s property.  The Bishops appeal, claiming: 1) Hook failed to prove she had the right to enforce the restrictive covenants; 2) the assignment to Hook of the right to enforce the restrictive covenants was not valid; 3) the restrictive covenants are ambiguous and unenforceable; 4) the suit to enjoin construction was not timely commenced; 5) the court failed to properly balance the equities between the parties; and 6) the award of attorney’s fees and costs was improper.  We affirm. 

FACTUAL/PROCEDURAL BACKGROUND

Spence Plantation is a residential subdivision developed by RPW Development and its president, Robert P. Wilkins, Jr., (collectively, “Developer”).  Each lot within the subdivision is subject to detailed and extensive covenants as set forth in every deed.  The covenants require approval by Developer and the Architectural Review Committee (“ARC”) of all building and landscaping plans prior to construction.  To insure compliance, the covenants reserve to “Grantor or Grantor’s nominee” authority to enforce the restrictive covenants. [1]   Wilkins is named in each deed as Grantor’s nominee. 

In anticipation of building their home, the Bishops submitted building and landscaping plans to Developer and ARC.  Although the plans were approved, the Bishops began to erect a retaining wall that was not included on the submitted plans. [2]   When Hook, the adjoining landowner, discovered the retaining wall, she immediately contacted the Bishops to protest the construction.  However, the Bishops continued to build the wall and also began construction of a swimming pool without submitting plans to Developer or ARC for approval. [3]  

As a result, Hook initiated this action seeking an injunction to stop further construction within the twenty-foot side setback line adjacent to her property and requesting removal of all structures within this area.  A temporary restraining order halted construction on the wall and pool on April 20, 2001. 

At trial, the master-in-equity issued a mandatory injunction, ordering the Bishops to remove all structures within the twenty-foot side setback line of Hook’s property, restore the land to its natural condition, and conduct all further construction in accordance with plans approved by Developer and ARC.  The master further awarded Hook $10,071.14 in attorney’s fees and costs. 

On appeal, the Bishops argue Hook did not have the right to enforce the covenants because the document purporting to assign this right to Hook was never introduced or admitted into evidence.  Furthermore, they claim this right can not be assigned to Hook because the covenants designate the succession of individuals that may act as Grantor’s nominee.  The Bishops also contend: 1) the restrictive covenants are ambiguous, and thus, unenforceable; 2) suit was not timely commenced because the wall was completed before an action to enjoin them was initiated; 3) in balancing the equities between the parties, the harm caused by having to move the retaining wall outweighs any damage suffered by Hook as a result of the wall; and 4) the award of attorney’s fees and costs was improper.

LAW/ANALYSIS

I.       Assignment of the Right to Enforce the Restrictive Covenants

Restrictive covenants are imposed as a voluntary contract between parties. Houck v. Rivers, 316 S.C. 414, 416, 450 S.E.2d 106, 108, (Ct. App. 1994); see also Seabrook Island Prop. Owners Ass’n v. Pelzer, 292 S.C. 343, 347, 356 S.E.2d 411, 414 (Ct. App. 1987) (“Restrictive covenants are contractual in nature and bind the parties thereto in the same manner as any other contract.”).  The rules applicable to the construction of contracts are applicable to the construction of restrictive covenants contained in deeds.  Houck, 316 S.C. at 416, 450 S.E.2d at 108. 

An action to interpret a contract is an action at law.  Pruitt v. South Carolina Med. Malpractice Liab. Joint Underwriting Ass’n, 343 S.C. 335, 339, 540 S.E.2d 843, 845 (2001) (“An action to construe a contract is an action at law reviewable under an any evidence standard.”).  “In an action at law, on appeal of a case tried without a jury, our scope of review extends merely to the correction of errors of law; factual findings of the trial judge will not be disturbed on appeal unless a review of the record discloses that there is no evidence which reasonably supports the judge’s findings.”  Crary v. Djebelli, 329 S.C. 385, 388, 496 S.E.2d 21, 23 (1998).        

A.      Proof of Assignment

The Bishops argue the master erred by finding Hook was assigned the right to act as grantor’s nominee.  Specifically, the Bishops argue the document purporting to assign the right to enforce the covenants was never introduced or admitted into evidence.  Thus, they claim Hook failed to prove the assignment.  We disagree.

“Judicial notice is a substitute for formal proof of a matter by evidence.”  29 Am. Jur. 2d Evidence § 24 (2003).  Judicial notice is the means by which the court will admit into evidence and consider, without proof, “matters of common and general knowledge or those that are easily capable of immediate verification.”  Id.  The effect of judicial notice of an adjudicative fact is to conclusively establish the fact.  Moss v. Aetna Life Ins. Co., 267 S.C. 370, 377, 228 S.E.2d 108, 112 (1976).

The restrictive covenants of Spence Plantation allow “Grantor or Grantor’s nominee” to enjoin or take other legal steps to prevent a violation of the restrictive covenants.  By document dated April 20, 2001, signed by Wilkins as Grantor’s nominee, Hook was assigned the right to enforce the restrictive covenants pertaining to this litigation.  This document was filed with Hook’s initial pleadings, and Wilkins’ trial testimony confirmed the intent to make this assignment.

The record indicates the master took judicial notice of the assignment document, without objection.  As judicial notice of the document was not objected to at trial, this issue is not preserved for appellate review.  See Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) (“It is axiomatic that an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial judge to be preserved for appellate review.”).  By taking judicial notice of the executed assignment document, the existence and content of the document was established as a fact.

B.      Validity of Assignment

The Bishops argue the master erred by finding the assignment to Hook was valid because the covenants designate the succession of individuals that may act as Grantor’s nominee, and whose authority must be revoked prior to designating another individual to act as nominee.  We disagree. 

“Words of a restrictive covenant will be given the common, ordinary meaning attributed to them at the time of their execution.”  Taylor v. Lindsey, 332 S.C. 1, 4, 498 S.E.2d 862, 863 (1998).  However, “[g]reater regard should be given to the intention of the parties, as ascertained from the language used and the surrounding circumstances, than to the exact words used in attempting to express that intention.”  Richard R. Powell, Powell on Real Property §60.05 at 60-75 (2000); see also Palmetto Dunes Resort v. Brown, 287 S.C. 1, 6, 336 S.E.2d 15, 18 (Ct. App. 1985) (holding because restrictive covenants are contractual in nature, the paramount rule of construction, to ascertain and give effect to the intent of the parties as determined from the whole document, is applied to restrictive covenants). 

The restrictive covenants provide:

Grantor hereby names Robert P. Wilkins, Jr. as Grantor’s nominee.  If for any reason he is unable or unwilling to serve, the following are named as substitutes in the order named:  Robert P. Wilkins, Anne Wilkins Brooks, Rose T. Wilkins, and Sarah W. Weiss.  Grantor further reserves the right to revoke its designation and to name some other person or persons in writing.

The covenants delineate the order of substitutes to serve as Grantor’s nominee in the event Wilkins “is unable or unwilling to serve.”  However, Wilkins has never been “unable or unwilling to serve” as Grantor’s nominee, nor does a partial assignment of his right to enforce the covenants make him “unable or unwilling to serve.”  See O’Shea v. Lesser, 308 S.C. 10, 15, 416 S.E.2d 629, 632 (1992) (holding the right to enforce a restrictive covenant is not fiduciary and may be assigned to another). 

As Wilkins has continuously acted as Grantor’s nominee and has never been “unable or unwilling to serve,” the covenant delineating the order of succession to serve as Grantor’s nominee is not applicable.  Thus, the evidence within the record supports the master’s finding the assignment to Hook was valid. [4]

II.      Enforceability of the Restrictive Covenants

The Bishops argue the master erred by failing to find the restrictive covenants ambiguous.  Specifically, they contend the Minimum Architectural Standards read with the covenants create ambiguity between the documents causing the covenants to be unenforceable.  We disagree.

The rules applicable to the construction of contracts are applicable to the construction of restrictive covenants contained in deeds.  Houck, 316 S.C. at 416, 450 S.E.2d at 108.  “An action to construe a contract is an action at law reviewable under an any evidence standard.”  Pruitt, 343 S.C. at 339, 540 S.E.2d at 845.  Restrictions on the free use of land are not favored in the law and any ambiguity within a covenant should be construed strictly against the grantor and persons seeking to enforce it.  Hamilton v. CCM, Inc., 274 S.C. 152, 158, 263 S.E.2d 378, 381 (1980); Taylor, 332 S.C. at 4, 498 S.E.2d at 864.  Conversely, this rule of strict construction will not be used to defeat the clear and express language of a restrictive covenant.  Sea Pines Plantation Co. v. Wells, 294 S.C. 266, 270, 363 S.E.2d 891, 894 (1987).

The Bishops contend the covenants are ambiguous because they require a twenty-foot side setback for “buildings, other structure[s] or any improvement[s],” while the Minimum Architectural Standards provide fences “may run along the property lines.”  The Bishops argue because the terms “building,” “structure,” “improvement,” “fence,” and “wall” are not defined or differentiated from one another, the documents are ambiguous and thus unenforceable. 

The restrictive covenants provide, “[n]o building, or other structure or any improvement shall be located on said lot within twenty (20') feet of the front line, within Twenty (20') feet of the side lines, and within Fifty (50') feet of the rear line.”  Providing additional guidance, the Minimum Architectural Standards state, “[f]ence[s] must start at the back corners of the house and may run along the property lines.  Brick, wrought iron, stucco and wooden fences (with approval) are allowed. . . . [f]ence will be no higher than 5 feet.”  (emphasis added). 

Although we do not see any ambiguity in these two documents, the first restrictive covenant, as contained in every deed in Spence Plantation, mandates:

NO BUILDING, FENCE, . . . OR ANY OTHER STRUCTURE OF ANY KIND SHALL BE BEGUN, ERECTED OR PLACED ON THE LOT UNTIL THE BUILDING PLANS, SPECIFICATIONS, DESIGN AND PLOT PLAN SHOWING THE LOCATION OF SUCH BUILDING, FENCE, . . . OR STRUCTURE ON THE LOT IN QUESTION HAVE FIRST BEEN APPROVED BY GRANTOR OR GRANTOR’S NOMINEE . . . .

(emphasis in original).

In submitting building and landscaping plans, the Bishops did not depict any structure within the twenty-foot side setback area.  Subsequently, they constructed a retaining wall and a swimming pool within this area.  Even if the retaining wall constituted a fence, the Bishops failed to comply with the covenant requiring owners to obtain approval prior to construction.  Moreover, the covenants prohibit any fence to exceed five feet in height.  The Bishops’ wall ranges in height from 6.7 feet to 11.7 feet, clearly outside of the permissible limits. 

As the Bishops failed to obtain approval prior to building, and the structure exceeds all permissible limits for construction of a fence, ample evidence exists within the record to support the master’s finding that this structure violates the restrictive covenants.  Thus, the master did not err by enforcing the covenants and ordering removal of the wall and all structures within the twenty-foot side setback adjacent to Hook’s property.

III.    Failure to Timely Commence Suit

The Bishops argue the master erred by finding suit was timely commenced because they completed the wall before an action to enjoin them was initiated.  Thus, they contend their wall should be deemed conforming.  We disagree.

“A suit seeking an injunction to enforce restrictive covenants is an action in equity.”  Arnoti v. Lukie, 350 S.C. 177, 179, 564 S.E.2d 691, 692 (Ct. App. 2002).  Although equitable remedies are ordinarily left to the sound discretion of the trial court, on appeal of an equitable action tried by the master alone, an appellate court may find facts in accordance with its own view of the preponderance of the evidence.  Id.; County of Richland v. Simpkins, 348 S.C. 664, 668, 560 S.E.2d 902, 904 (Ct. App. 2002).

The restrictive covenant at issue provides:

In the event the Grantor, or his nominee shall fail to approve or disapprove within thirty (30) days after plans and specifications have been submitted to the Grantor, or in any event, if no suit to enjoin the construction has been commenced prior to the completion thereof, approval will not be required and the related covenants shall be deemed to have been fully complied with.  

It is undisputed Hook immediately objected upon learning of the wall, and attempts were made between the parties and Developer to reach an amicable solution.  However, during these negotiations and while on notice of Hook’s objections, the Bishops continued to build the wall.  Furthermore, by Mr. Bishop’s own testimony, the wall was not yet complete at the time of trial.  Bishop testified his plans include installing thirty-two-inch-high wrought-iron brackets between the nine pillars capping the wall and topping the pillars with one-foot tall brass lanterns. 

As the evidence in the record indicates the wall was not yet complete at the time of trial, the master did not err by finding suit was timely commenced.

IV.    Balancing of Equities

The Bishops argue the master erred by failing to properly balance the equities between the parties.  We disagree.

“A court does not automatically issue a mandatory injunction once it finds a restrictive covenant has been violated.  The court must balance the equities between the parties; and if the harm to the defendant outweighs the plaintiff’s benefit, no relief will be granted.”  Sea Pines, 294 S.C. at 274, 363 S.E.2d at 896 (citing Hunnicutt v. Rickenbaker, 268 S.C. 511, 515-516, 234 S.E.2d 887, 889 (1977)).  Although the issuance of a mandatory injunction requires a balancing of the equities between the parties, the decision of whether to issue such relief rests in the court’s sound discretion.  Sea Pines, 294 S.C. at 274, 363 S.E.2d at 896.

However, injunctions are routinely granted even though the injunctive remedy may cause economic hardship to the defendant.  Sea Pines, 294 S.C. at 275, 363 S.E.2d at 896.  Furthermore, “a restrictive covenant will be enforced irrespective of the amount of damage which will result from the breach, and even though there is no substantial monetary damage to the complainant by reason of the violation.  The amount of damages and even the fact that the Plaintiff has sustained no pecuniary damages are totally immaterial.”  Houck, 316 S.C. at 419, 450 S.E.2d at 109.  A court of equity will issue an injunction when it is necessary to prevent an individual from violating the equitable rights of another where he has notice, actual or constructive, of such rights.  Sprouse v. Winston, 212 S.C. 176, 185, 46 S.E.2d 874, 878 (1948). 

The evidence presented at trial shows the removal cost of the retaining wall would be $20,000.00, while the cost to rebuild the wall outside of the twenty-foot side setback area would be between $60,000.00 and $80,000.00.  The Bishops also assert the removal of the wall would diminish their ability to use the existing garage.  However, the master found this expense is incurred solely by the Bishops’ actions in willfully proceeding to build the wall while on notice of Hook’s objections. 

In contrast to the harm caused by having to move the retaining wall, the Bishops argue Hook has suffered no damage as a result of the wall.  However, the master found Hook’s property had substantially diminished in value due to the breach of the covenants by the Bishops.  Without issuance of an injunction, this harm would be irreparable.  Thus, the only remedy available to restore Hook to the position she was in prior to the violation is an injunction.    

Furthermore, upon review of the record, it appears the master, in balancing the equities, weighed heavily that Bishop proceeded to build while on notice of Hook’s objections.  The record clearly supports the master’s finding that equity favors Hook, and thus, the master did not abuse his discretion by issuing the mandatory injunction.  See Arnoti, 350 S.C. at 183, 564 S.E.2d at 694 (“[W]hile removal . . . will result in a hardship to the [plaintiffs], it was caused by [their] own actions in knowingly failing to either comply with the restrictions of the subdivision or seek, through proper means, an amendment of the restrictions.” ).

V.               Attorney’s Fees

The Bishops argue the master erred by allowing Hook to recover attorney’s fees and costs.  We disagree.

It is well settled in South Carolina that attorney’s fees are recoverable only when authorized by contract or statute.  Baron Data Systems, Inc., v. Loter, 297 S.C. 382, 383, 377 S.E.2d 296, 297 (1989).  “Where there is a contract, the award of attorney’s fees is left to the discretion of the trial judge and will not be disturbed on appeal unless an abuse of discretion is shown.”  Baron Data Systems, 297 S.C. at 384, 377 S.E.2d at 297; see also Donahue v. Donahue, 299 S.C. 353, 365, 384 S.E.2d 741, 748, (1989) (“An award of attorney’s fees and costs is a discretionary matter not to be overturned absent abuse by the trial court.”)

The restrictive covenants allow Grantor’s nominee to collect reasonable attorney’s fees and all other expenses incurred by the nominee in any legal action.  The master found Wilkins effectively assigned Hook his rights to enforce the covenants against the Bishops.  As the assignment transfers “all rights, power, and authority to enforce this particular covenant,” the right to recover fees and costs was also transferred.  Thus, the master did not abuse his discretion in awarding Hook attorney’s fees and costs as incurred in this action.

CONCLUSION

 For the foregoing reasons, the decision of the master is

AFFIRMED.

HEARN, C.J., HOWARD, and KITTREDGE, JJ., concurring.


[1] “Grantor” is Spence Plantation Phase III Limited Partnership, of which RPW Development is the general managing partner. 

[2] At present, the wall ranges in height from 6.7 feet to 11.7 feet, and is 104 feet long.  It sits approximately eleven feet from Hook’s property line.  Although, the majority of the wall runs parallel to Hook’s property line, an additional segment of the wall extends perpendicularly from the side of the Bishops’ house to within six inches of Hook’s property line. 

[3] The pool is located approximately ten feet from Hook’s property line.

[4] The master found the assignment was made by Wilkins, as both general managing partner of the Grantor and as Grantor’s nominee.  Pursuant to this covenant, the right to designate other individuals to serve as nominees to enforce the restrictive covenants is reserved by the Grantor.  Therefore, the assignment was valid as made by Wilkins in his capacity as the general managing partner of the Grantor.  Furthermore, the master finds the right to enforce the covenants is also assignable by Wilkins as Grantor’s nominee, and that Wilkins, in his capacity as Grantor’s nominee, effectively made a partial assignment of his right to enforce the covenants.