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2007-UP-402 - D&N Realty & HHI Corporation v. CSB Development Co.

THIS OPINION HAS NO PRECEDTIAL VALUE AND 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

D&N Realty, L.L.C., Respondent,

v.

CSB Development Co.,  Inc., Appellant.

&

HHI Corporation, Limited, Respondent,

v.

CSB Development Co.,  Inc., Appellant.


Appeal From Beaufort County
 Curtis L. Coltrane, Circuit Court Judge


Unpublished Opinion No.  2007-UP-402
Heard May 9, 2007 – Filed September 28, 2007


AFFIRMED


Keating L. Simons, III, of Charleston, for Appellant.

Drew A. Laughlin, of Hilton Head Island, for Respondent D&N Realty.

Thomas Justin Finn, of Hilton Head Island, for Respondent HHI Corporation, Limited.

PER CURIAM:  Appellant claims the lower court erred in finding the deed restrictions at issue were real covenants which ran with the land and in failing to give effect to a cancellation of the deed restrictions.[1]  We affirm.

FACTS

This appeal involves multiple contiguous ocean front lots.  Appellant is the owner of Lots 3 and 4.  By deed dated June 28, 2001, Respondent D&N Realty purchased Lot 2, which is located adjacent to Lot 3, and subdivided it into four lots. Respondent D&N Realty has sold three of the subdivided lots and currently owns Lot 2(B).  By deed dated July 29, 2002, Respondent HHI Corporation purchased Lot 2(D), one of the lots subdivided from Lot 2, from Respondent D&N Realty.  Each of the lots involved in this action was once owned by Josephine Driessen.  On August 30, 1972, Driessen sold Lots 3 and 4 to Roscoe and Clara Mae Robinson.  The deed for the transaction contained the following restrictions:

This conveyance is made by the Grantor and accepted by the Grantees subject to the restriction that that area shown on said plat as lying between the drainage ditch and the mean high water mark of the waters of the Atlantic Ocean shall be left unimproved and no structure of any nature whatsoever erected thereon without express written consent of the Grantor which may be arbitrarily withheld.  With regard to the remainder of the premises located west of the above-mentioned drainage ditch, it is understood and agreed that each of these lots is to be used for single-family residential purposes only and that no commercial activity of any nature whatsoever shall be established, kept or maintained thereon.

By written instrument recorded on September 28, 1972, the parties to the initial transaction altered the deed by rescinding the restrictions recited above and replacing them with the following:

It is understood and agreed by and between JOSEPHINE DRIESSEN and ROSCOE ROBINSON and CLARA MAE ROBINSON that Lots 3 and 4 as described in that Deed recorded in the Office of the Clerk of Court for Beaufort County, South Carolina, in Deed Book 201 at Page 936 shall not be used for construction of any type of amusement building thereon, nor shall any type of amusement facility be operated thereon.  It is further understood and agreed that ROSCOE ROBINSON and CLARA MAE ROBINSON, their Heirs and Assigns, shall not in any way alter or destroy the sand dunes existing on the property.

Driessen died on October 27, 1989.  On June 5, 2001, Appellant acquired the property from the Robinsons.  The deed from the Robinsons to the Appellant inadvertently contained the exact same restrictions originally included in the deed from Driessen to Roscoe and Clara Mae Robinson.   

On February 25, 2003, the Robinsons issued a second deed to correct the “scrivener’s error” by entirely removing the restrictions contained in the first deed to Appellant and replacing it with the following restrictions:

Lots 3 and 4 as described in that Deed recorded in Office of the Clerk of Court for Beaufort County, South Carolina, in Deed Book 201 at Page 936 shall not be used for construction of any type of amusement building thereon, nor shall any type of amusement facility be operated thereon.  Further, [Grantee], its successor and assigns, shall not in any way alter or destroy the sand dunes existing on the property.

On March 8, 2003, Driessen’s surviving heirs executed an instrument titled “AGREEMENT (Quitclaim Deed with Limited Warranty)”.  This agreement purported to release and relinquish any and all rights under the deed restrictions, cancel the deed restrictions, and render the restrictions null and void. 

Respondents initiated these actions seeking declaratory judgments as to the applicability of the restrictions with respect to Appellant’s property.[2]  Respondents claimed standing based on their properties and the property of Appellant being adjacent and sharing a common source of title, and Respondents claimed the restrictions in Appellant’s deed were valid and enforceable as real covenants which ran with the land.  Appellant contended the restrictions were personal to the Grantor and did not run with the land and contended the Respondents, as strangers to the transaction between Appellant and the Robinsons, lacked standing to seek a declaration or enforcement of the restrictions.

The lower court framed the issue as whether the restrictions contained in the instrument recorded “on September 28, 1972, [are] real covenant[s] running with the land that can be enforced by subsequent grantees of Josephine Driessen….”  By order dated March 5, 2004, the lower court held the restrictions were “real covenant[s], running with the land, enforceable by” Respondents.  This appeal follows. 

STANDARD OF REVIEW

“A suit for declaratory judgment 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). In the present case, the underlying issue is a declaration as to whether or not the restrictive covenants are enforceable.  Therefore, this is an equitable action.  See Hardy v. Aiken, 369 S.C. 160, 165, 631 S.E.2d 539, 541 (2006).  In an equity action, the appellate court may review the evidence to determine the facts in accordance with its own view of the evidence.  Florence County Sch. Dist. #2 v. Interkal, Inc., 348 S.C. 446, 450, 559 S.E.2d 866, 868 (Ct. App. 2002).  Furthermore, the appellate court is not bound by the trial court’s legal determinations.  Swindler v. Swindler, 355 S.C. 245, 249, 584 S.E.2d 438, 440 (Ct. App. 2003).

LAW/ANALYSIS

Deed Restrictions

The lower court based its holding that the restrictions were real covenants and, therefore, ran with the land on the language contained in the preamble and express wordage of the instrument recorded on September 28, 1972.  The preamble to the instrument states that the “Deed of Conveyance did contain certain restrictions and limitations running with the land” and that Driessen was then “desirous of releasing and/or modifying” the restrictions.  The text of the instrument states that Driessen “in substitution thereof does herewith impose the following restrictions upon the said property in lieu of those previously governing the same”:

 It is understood and agreed by and between JOSEPHINE DRIESSEN and ROSCOE ROBINSON and CLARA MAE ROBINSON that Lots 3 and 4 as described in that Deed recorded in Office of the Clerk of Court for Beaufort County, South Carolina, in Deed Book 201 at Page 936 shall not be used for construction of any type of amusement building thereon, nor shall any type of amusement facility be operated thereon.  It is further understood and agreed that ROSCOE ROBINSON and CLARA MAE ROBINSON, their Heirs and Assigns, shall not in any way alter or destroy the sand dunes existing on the property. 

“A restrictive covenant runs with the land, and is thus enforceable by a successor-in-interest, if the covenanting party intended that it run with the land, and the covenant touches and concerns the land.”  West v. Newberry Elec. Co-op.,  357 S.C. 537, 542, 593 S.E.2d 500, 503 (Ct. App. 2004) (citing Marathon Fin. Co. v. HHC Liquidation Corp., 325 S.C. 589, 604, 483 S.E.2d 757, 765 (Ct. App. 1997)).  A party seeking to enforce a covenant must show it applies to the property either by its express language or by a plain and unmistakable implication.  Sea Pines Plantation Co. v. Wells, 294 S.C. 266, 363 S.E.2d 891 (1987). 

Restrictive covenants are to be construed most strictly against the grantor and persons seeking to enforce them, and liberally in favor of the grantee, all doubts being resolved in favor of a free use of property and against restrictions. This rule, however, obtains only where the parties have failed to express their meaning with sufficient clarity to enable the court to say that its construction is plain and admits of no doubt; the rule will not be applied to defeat the obvious purpose of the restrictions, nor does it require an unnatural and strained construction of the words used; and before giving effect to the rule the court will have recourse to every aid, rule, or cannon of construction to ascertain the intention of the parties, since it is the duty of the courts to enforce, not to make, contracts.

Stanton v. Gulf Oil Corp., 232 S.C. 148, 151, 101 S.E.2d 250, 251 (1957) (citation omitted).

The express language of the preamble to the instrument executed by Driessen reveals that the original restrictions were intended to run with the land.  The language of the instrument also reveals that the purpose for executing the instrument was to substitute the original restrictions with the newly drafted restrictions.  Accordingly, the newly drafted restrictions would have the same future application as the original restrictions.  The instrument clearly illustrates Driessen’s intent to have the restrictions run with the land.  Moreover, as to the restriction prohibiting the altering or destruction of the sand dunes existing on Lot 3 and 4, the language of the restriction expressly states that that restriction is to apply to the heirs and assigns of the Robinsons. 

The generally accepted test provides that the benefit of a covenant meets the touch and concern requirement if “the covenantee’s legal interest in land is rendered more valuable by the covenant’s performance.” 5 R. Powell & P. Rohan, Powell on Real Property  673[2], at 60-49-60-50 (rev. ed. 1996).  The restrictions at issue render the surrounding lots more valuable.  Eugene J. Laurich, the self proclaimed “D in D&N Realty”, testified that the restriction on Lot 3 and 4 made Lot 2 more valuable because they insured Lots 2(B) and 2(D) would be entitled to an unobstructed view down the beach and across Folly Creek.  In his testimony, he cited the restrictions as being the reason D&N Realty decided to cease its initial efforts to purchase Lots 3 and 4 and to purchase Lot 2 instead.  These restrictions limit the use of the property by prohibiting the building or operation of any amusement facility on Lot 3 and 4 and by prohibiting the alteration or destruction of the sand dunes on Lots 3 and 4.  The restrictions also increase the value of Respondents’ property.   Accordingly, the restrictions touch and concern the land. See West v. Newberry Elec. Co-op.,  357 S.C. 537, 543, 593 S.E.2d 500, 503 (Ct. App. 2004); See also Marathon Finance Co. v. HHC Liquidation Corp.,  325 S.C. 589, 606, 483 S.E.2d 757, 766 (Ct. App. 1997)(Cureton, J. dissenting).

 Because we find Driessen intended to have the restrictions run with the land and find the restrictions touch and concern the land, we affirm the lower court’s determination that the restrictions are real covenants which run with the land and, therefore, are enforceable by Respondents. 

Cancellation of the Deed Restrictions

Our determination of the first issue is dispositive of this issue. See Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (holding an appellate court need not review remaining issues when its determination of a prior issue is dispositive of the appeal).

For the reasons stated above, the order of the lower court is 

AFFIRMED.

STILWELL, SHORT, and WILLIAMS, JJ., concur.


[1] The parties and the lower court refer to the pertinent section of the instrument as being a restriction.  There are two separate restrictions included in the section.  The first restriction is a prohibition against the building or operation of any amusement facility on Lots 3 and 4, and the second restriction is a prohibition against altering or destroying the sand dunes on Lots 3 and 4.

[2] These actions were consolidated and tried together, and the parties submitted a consolidated record on appeal.  Accordingly, we have consolidated the opinions for these two cases.