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2010-UP-355 - Nash v. The Tara Plantation

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,

v.

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Unpublished Opinion No.  2010-UP-355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).