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1. Trial--pretrial order--admission of evidence not contained in
The trial court did not abuse its discretion in an action involving an above-ground pool and homeowner's
covenants by permitting amendment of the pretrial order to allow into evidence a previously undisclosed
document delineating the architectural committee's reasons for not approving plaintiffs' application. The record
reflects that it was plaintiffs who offered the exhibit at trial and, by offering no objection at trial, plaintiffs failed
to preserve the question for appellate review. Moreover, admission of evidence not delineated in the original
pretrial order is in the discretion of the trial court.
2. Deeds--restrictive covenants--above-ground pool--disapproval not unresonable
The trial court did not err by concluding that a subdivision architectural committee had not unreasonably
withheld approval of plaintiffs' application for an above-ground pool where unchallenged findings reflect that
plaintiffs' next-door neighbor recused himself from proceedings, the three remaining committee members
independently reviewed plaintiffs' application, and the general consensus was that more information was required
and that the plans as submitted failed to conform to the general plan and scheme of the subdivision. A letter from
the property management company referring to a policy prohibiting above-ground pools, which failed to garner
the required votes of association members, does not bear upon whether approval was unreasonably withheld
because the covenants contain no requirement that approval or disapproval be reasonably communicated, only
that approval not be unreasonably withheld, and the failed attempt to ban above-ground pools is unrelated to the
issue of reasonableness.
3. Deeds--restrictive covenants--above-ground pool--denial letter
The trial court did not err in an action arising from the denial of an above-ground pool application by a
subdivision architectural committee in its treatment of the rejection letter. Whether the author's inaccurate
recitation of the reasons for the denial exceeded her authority is unrelated to whether the architectural committee
unreasonably withheld approval. Plaintiffs' contention that their application was deemed approved under the
covenants because the letter was void and therefore no specific reasons for the denial were given within the
required time period is untenable because the denial itself was specifically communicated to plaintiffs; nothing
more was required under the covenants.
4. Deeds--restrictive covenants--requirements for denial of application--specific to covenants at issue
A decision that subdivision restrictive covenants required only that approval of an application not be
unreasonably withheld, that a denial must be specific, and that no reasons for the denial were required, was based
only on the covenants at issue.
Judge HUNTER dissenting.
Levine & Stewart, by Michael D. Levine, for plaintiffs-appellants.
Jordan, Price, Wall, Gray, Jones & Carlton, by Henry W. Jones, Jr., and Hope Derby Carmichael, for defendant-appellee.
JOHN, Judge.
Plaintiffs D. Michael Hyde and Dina M. Hyde appeal the trial court's 15 September 1998 judgment in favor of defendant Chesney Glen Homeowners Association, as well as the court's 15 January 1999 grant of defendant's motion for attorney's fees and denial of plaintiffs' motions for new trial, see N.C.G.S. § 1A-1, Rule 59 (1999) and for relief from judgment, see N.C.G.S. § 1A-1, Rule 60 (1999). We affirm the rulings of the trial court.
Plaintiffs are residents of Chesney Glen Subdivision, located in Wake County and governed by a “Declaration of Covenants, Conditions and Restrictions for Chesney Glen” (the covenants) administered by defendant. On 25 April 1998, plaintiffs submitted to defendant's Architectural Control Committee (ACC) hand-drawn plans for an above-ground swimming pool and backyard fence (the application). Plaintiffs thereby sought approval for the project pursuant to that section of the covenants providing:
[n]o building, sign, fence, . . . or other structure or planting shall be constructed, erected or planted until the plans and specifications showing the nature, kind, shape, height, materials, floor plans, color scheme, and located (sic) with respect to topography and finished ground elevation shall have been submitted to and approved in writing by the [ACC]. The [ACC] shall have the right to refuse to approve any plans and specifications which are not suitable or desirable, in its sole discretion, for aesthetic or any other reasons, provided such approval is not unreasonably withheld.
(emphasis added). The covenants also state that:
[n]o exposed above-ground tanks except for approved
recreational swimming pools will be permitted . . . .
(emphasis added).
Plaintiffs' application was denied by the ACC, although the grounds for
its action are disputed by the parties. Cindy Hunter (Hunter), an employee
of the property management company engaged by defendant, informed plaintiffs
of the denial by letter dated 15 May 1995 (the Hunter letter). Plaintiffs thereupon fi
led the instant action 5 July 1995 seeking a
declaratory judgment regarding interpretation of the covenants and an
injunction restraining defendant from “interfering with [plaintiffs'] plans
to construct their pool.” Following defendant's original answer, plaintiffs
proceeded with construction of both the pool and fence. Defendant thereafter
filed a supplemental answer and counterclaim requesting the court (1) to
order removal of the pool and fence by plaintiffs; (2) to award costs as well
as reasonable counsel fees pursuant to the covenants; and, (3) to assess
“fines for [plaintiffs'] continuing violation” of the covenants.
The case proceeded to trial 3 June 1996. At the close of plaintiffs'
evidence, the trial court granted defendant's motion for directed verdict.
The court further ordered plaintiffs to remove the pool and fence, to payfines accruing until such removal
was effected, and to reimburse defendant's “reasonable attorney
fees.”
Although plaintiffs failed to file written notice of appeal to
this Court, see N.C.R. App. p. 3(a), plaintiffs' subsequent
petition for writ of certiorari was granted, see N.C.R. App. P.
21(a)(1), allowing the appeal to proceed. In an unpublished
opinion, see Hyde v. Chesney Glen Homeowners Assn., 126 N.C. App.
437, 486 S.E.2d 491 (1997) [hereinafter Hyde I], this Court
reversed the judgement of the trial court.
It appears the initial trial court interpreted Raintree
Homeowners Assn. v. Bleimann, 342 N.C. 159, 463 S.E.2d 72 (1995),
as requiring “evidence of arbitrariness or bad faith on the part of
the defendant” homeowners association in order to overturn its
decision denying plaintiffs' application. Perceiving no suchevidence, the court allowed defendant's directed verdict motion.
On appeal, this Court first observed defendant's directed
verdict motion was improper in a non-jury trial. However, we
treated the motion
as having been a motion for involuntary
dismissal under Rule 41(b) [N.C.G.S. § 1A-1,
Rule 41(b)(1999)] in order to pass on the
merits of plaintiffs' appeal.
Hyde I, 126 N.C. App. 437, 486 S.E.2d 491.
This Court then highlighted a significant factual difference
between the covenants at issue in Raintree and those herein, i.e.,
the presence in the latter of a “standard by which the [ACC's]
authority is judged.” Id.
Thus, where there is no standard within the
restrictive covenant itself, as was the case
in Raintree, courts apply “the general rule
that a restrictive covenant requiring approval
of house plans is enforceable only if the
exercise of the power in a particular case is
reasonable and in good faith.” [Boiling
Spring Lakes v. Coastal Services Corp., 27
N.C. App. 191, 196, 218 S.E.2d 476, 479
(1975).] In this case [Hyde I], the standard
by which the [ACC's] authority is judged is
within the restrictive covenant itself, i.e,
whether or not the [ACC's] approval of
plaintiffs' plans was “unreasonably withheld.”
. . . Since the covenant in this case provided
a standard, the trial court erred by failing
to determine whether or not the [ACC]
“unreasonably withheld” its approval.
Id. (citation omitted). Accordingly, Hyde I reversed the trial
court and remanded the case for further proceedings.
On remand, plaintiffs were allowed to supplement their
evidence so as to address the issue of unreasonableness and
defendants proceeded with presentation of their case. The trialcourt entered judgment 11 September 1998, concluding as a matter of
law that the ACC “did not unreasonably withhold approval of the
[p]laintiffs' application for approval of an above-ground pool and
fence.” Plaintiffs were ordered to remove the pool and fence and
to pay fines totaling $6,950.00 for past violations of the
covenants plus an additional $100.00 per week for any continuing
violations.
On 24 September 1998, plaintiffs moved for new trial, for
relief from judgment, and to stay proceedings to enforce the
judgment. The latter motion was allowed 14 January 1999, and the
remaining motions were denied 15 January 1999. Defendant's motion
seeking counsel fees was granted 15 January 1999. Plaintiffs
timely appealed both the 11 September 1998 judgment and the 15
January 1999 orders. Although plaintiffs assigned error to the
award of counsel fees, this issue is not discussed in their
appellate brief and the assignment of error relating thereto is
therefore deemed abandoned. See N.C.R. App. P. 28(b)(5)
(“[a]ssignments of error . . . in support of which no reason or
argument is stated . . . will be taken as abandoned”).
[1]Plaintiffs first argue the trial court on remand
erroneously permitted amendment of “the original pre-trial order to
allow . . . a previously undisclosed document” to be entered into
evidence. Plaintiffs' contention borders on the frivolous.
At the commencement of trial upon remand following Hyde I, the
court heard from the parties regarding witnesses and evidence not
specified in the original pre-trial order. Defendant sought to add“one additional document,” a worksheet prepared by the ACC
delineating the committee's reasons for disapproval of plaintiffs'
application (the worksheet), and plaintiffs objected generally.
The trial court ruled that both plaintiffs and defendant might
introduce “additional evidence on [the] issue of reasonableness,”
noting this Court had directed resolution of that issue in Hyde I.
Although plaintiffs now challenge introduction of the
worksheet into evidence, the record reflects that it was plaintiffs
who offered the exhibit into evidence at trial. By offering no
objection at trial, plaintiffs have failed to preserve this
question for appellate review. See N.C.R. App. R. 10(b) (to
preserve question for appellate review, “a party must have
presented to the trial court a timely . . . objection”).
Moreover, assuming arguendo proper preservation of this issue
for appellate review, we note that
admission of evidence not delineated in the
[original] pretrial order is within the sound
discretion of the trial court.
Alston v. Monk, 92 N.C. App. 59, 64, 373 S.E.2d 463, 467 (1988),
disc. review denied, 324 N.C. 246, 378 S.E.2d 420 (1989). Given
the unique procedural posture of the instant case, the trial court
cannot be said to have abused its discretion by allowing each of
the parties to present additional evidence and witnesses not
contemplated in the original pre-trial order.
[2]Plaintiffs next contend
the trial court erred in finding as a
conclusion of law that the [ACC] did not
unreasonably withhold approval [of plaintiffs'
application] as such conclusion is unsupportedby the findings of fact.
We do not agree.
If the trial court's conclusions of law are
supported by findings of fact . . . , and the
conclusions of law support the order or
judgment of the trial court, then the decision
from which appeal was taken should be
affirmed.
In re Everette, 133 N.C. App. 84, 85, 514 S.E.2d 523, 525 (1999).
In the case sub judice, the following pertinent findings of
fact, unchallenged by plaintiffs and therefore conclusive on
appeal, see Ply-Marts, Inc. v. Phileman, 40 N.C. App. 767, 768, 253
S.E.2d 494, 495 (1979) (“[w]here exceptions are not taken to the
findings of fact, such findings are presumed to be supported by
competent evidence and are binding on appeal”), were rendered by
the trial court:
9. Mr. Scott Gannon was at [the time of
plaintiffs' application] a member of
[defendant's] Board of Directors and also
served as Chairman of the [ACC]. Mr. Gannon
was also the [p]laintiffs' next-door neighbor.
. . . Mr. Gannon recused himself from
consideration of the [p]laintiffs'
[application], as he was their next-door
neighbor. . . .
10. Between April 25, 1995 and May 15, 1995,
the three remaining members of the [ACC]
independently reviewed the [p]laintiffs'
application . . . .
11. The three members of the [ACC] cited
various reasons for the disapproval of the
[p]laintiffs' application, including the
reasons that a 24-foot pool was too large for
the lot size and that the [p]laintiffs had not
included enough information with their
application for the [ACC] to make a fully-
informed decision. Two members of the [ACC]
specifically reported that they should see theactual pool plans or a photograph from the
pool manufacturer showing the style of the
pool. In addition, one member of the [ACC]
felt that he needed to see landscaping plans
for screening the pool before he could approve
it, and another [ACC] member felt that the
pool might be too close to the side lot line
as it appeared on the [p]laintiffs'
application. The [ACC] also reported that
they might consider the matter again based
upon a proper and complete application.
. . . .
16. Based upon the testimony and documentary
evidence presented by the [d]efendant (which
was not presented at the first hearing of this
case), the [c]ourt finds as a fact that the
[ACC] based its decision to disapprove the
[p]laintiffs' application on the fact that the
above-ground pool and fence requested did not
meet the general scheme and plan of
development for the Chesney Glen community . .
. .
The foregoing findings reflect that plaintiffs' next-door
neighbor recused himself from the proceedings and the three
remaining ACC members independently reviewed plaintiffs'
application. Further, the general consensus among the latter was
that more information was required before the application could be
acted upon and that the plans as submitted failed to conform to the
general plan and scheme of the subdivision. These findings amply
support the trial court's conclusion that the ACC “did not
unreasonably withhold approval of the [p]laintiffs' application,”
and the court's ruling therefore must be affirmed. See Everette,
133 N.C. App. at 85, 514 S.E.2d at 525.
Notwithstanding, plaintiffs insist certain actions of
defendant and Hunter were unreasonable and that denial of
plaintiffs' application must accordingly be characterized asunreasonable. Plaintiffs' contention misses the mark.
Plaintiffs reference the Hunter letter, prepared at the
direction of Tom Coleman (Coleman), acting chair of the ACC. The
Hunter letter stated:
The [ACC] has reviewed your request submitted
April 25, 1995 to install an above ground pool
and fence. . . .
The [ACC] has denied your request based on the
following: The [ACC] and the Board of
Directors have established architectural
guidelines for the subdivision which will be
published to all homeowners in the near
future. After careful consideration, the
Board of Directors made the decision that
above ground pools will not be allowed in
Chesney Glen. . . .
In its judgment, the trial court found as a fact that:
13. [Coleman] did not authorize [Hunter] to
tell the [p]laintiffs that their application
had been denied because the Association would
not allow above-ground pools. . . .
. . . .
15. . . . [Hunter] acted beyond the scope of
her authority in citing those reasons for
disapproval of the [p]laintiff's application
and . . . [Hunter's] letter does not correctly
reflect the [ACC's] reasons for disapproval of
the [p]laintiff's application.
The court's findings also recited the Board's attempted adoption of
a policy prohibiting all above-ground pools which failed to garner
the required two-thirds vote of association members needed to
effectuate amendment of the covenants.
Plaintiffs seize upon the foregoing findings, maintaining in
their brief that:
It was unreasonable for [Hunter] to send a
denial letter to [plaintiffs] which cited asthe reason for denial of the application that
above ground pools would no longer be allowed
. . . .
. . . .
It was unreasonable for the Board of Directors
to attempt to prohibit above ground pools when
such pools are specifically allowed under the
covenants . . . .
Plaintiffs' assertions to the contrary notwithstanding, the
contents of the Hunter letter under the circumstances sub judice do
not bear on whether “approval [was] . . . unreasonably withheld” by
the ACC. The covenants contain no requirement that approval or
disapproval be “reasonably communicated,” but only that approval
not be “unreasonably withheld.” In this context, we again note
this Court's emphasis in Hyde I on deference to the specific
provisions of the instant restrictive covenants. See Hyde I, 126
N.C. App. 437, 486 S.E.2d 491. As noted herein, the covenants
accord to the ACC
the right to refuse to approve any plans and
specifications which are not suitable or
desirable, in its sole discretion, for
aesthetic or any other reasons . . . .
(emphasis added).
Further, the failed attempt of the Chesney Glen Homeowners
Association Board of Directors (the Board) to ban above-ground
pools is unrelated to the issue of reasonableness. The Board and
the ACC comprise different entities. Indeed, the trial court's
finding of fact 17, also uncontested by plaintiffs and therefore
conclusive on appeal, Ply-Marts, 40 N.C. App. at 768, 253 S.E.2d at
495, stated: the [ACC] deliberated and considered the
[p]laintiffs' application independent of any
action by, and without any influence or
interference of, the Board of Directors
relative to prohibition of above-ground pools.
Plaintiffs counter that this Court in Hyde I commented that
the Hunter letter and the Board's attempt to ban above-ground pools
comprised evidence “the [ACC] acted at least arbitrarily in denying
plaintiffs' request.” Hyde I, 126 N.C. App. 437, 486 S.E.2d 491.
However, in Hyde I we reviewed the trial court's grant of
defendant's Rule 41(b) motion for involuntary dismissal, see G.S.
§ 1A-1, Rule 41(b), and noted that a trial court “should defer
judgment” on such rulings “until the close of all the evidence
'except in the clearest cases,'” Hyde I, 126 N.C. App. 437, 486
S.E.2d 491 (quoting Phillips, 1970 Supplement to 1 McIntosh, North
Carolina Practice and Procedure § 1375). The statement cited by
plaintiffs simply identifies evidence which removed the instant
case from the “clearest cases” category such that the trial court
should have deferred judgment “until the close of all the
evidence.” Id.
Following remand, the trial court received “all the evidence,”
id., weighed that evidence and determined the credibility thereof,
and thereafter rendered judgment. We note also that the worksheet
listing the ACC's reasons for denying plaintiffs' application had
not been introduced into evidence at the time of Hyde I and was
thus not available either to the initial trial court or to this
Court on appeal. Given the new evidence presented at the trial
upon remand and the trial court's uncontested factual findings, wecannot say the court incorrectly concluded as a matter of law that
defendant did not “unreasonably with[hold]” approval of plaintiffs'
application. See Smith v. Butler Mtn. Estates Property Owners
Assn., 90 N.C. App. 40, 43, 367 S.E.2d 401, 405 (1988) (if judgment
is supported by findings of fact, it will be affirmed
notwithstanding fact that contrary evidence may have been offered),
aff'd, 324 N.C. 80, 375 S.E.2d 905 (1989).
[3]Lastly, plaintiffs find fault with the trial court's
treatment of the Hunter letter. Plaintiffs first maintain the
trial court's finding of fact 15, set out above, was not supported
by competent evidence in the record and in any event is actually a
conclusion of law on the issue of Hunter's “scope of authority.”
The classification of finding of fact 15 has no bearing on the
outcome of this case. Whether Hunter's inaccurate recitation of
the reasons for denial of plaintiffs' application exceeded her
authority is unrelated to whether the ACC “unreasonably withheld”
approval of the application. Accordingly, any error of the trial
court in categorizing finding of fact 15 is harmless. See Shepard,
Inc. v. Kim, Inc., 52 N.C. App. 700, 711, 279 S.E.2d 858, 865
(judgment will not be disturbed if one finding is unsupported by
the evidence or immaterial to the case as long as other findings
supported by competent evidence are sufficient to support the
judgment), disc. review denied, 304 N.C. 392, 285 S.E.2d 831
(1981). Further, we note the trial court pointedly determined
Hunter exceeded her authority only by “citing those [incorrect]
reasons for disapproval,” not in writing the denial letter nor ininforming plaintiffs their application had been denied.
Nonetheless, plaintiffs interject, the covenants provide that
[i]n the event the [ACC] shall fail to
specifically approve or disapprove the plans
and specification[s] submitted in final and
complete form, within thirty (30) days after
written request for final approval or
disapproval such plans and specifications
shall be deemed approved.
(emphasis added). Therefore, plaintiffs continue,
[i]f [Hunter] exceeded her authority . . .
then the denial letter was null and void, and
as a result, no specific reasons for the
denial were conveyed from the [ACC] to
[plaintiffs]
as required under plaintiffs' interpretation of the covenants. In
short, plaintiffs assert that no specific reasons for denial were
given within thirty days of their application and that their
application was therefore “deemed approved.”
Plaintiffs' argument is untenable. Although the reasons
assigned to denial of plaintiffs' application may have been
inaccurate, the denial itself was “specifically” communicated to
plaintiffs. When courts interpret the language of restrictive
covenants such as those at issue herein,
the covenant must be given effect according to
the natural meaning of the words . . . .
Hobby & Son v. Family Homes, 302 N.C. 64, 71, 274 S.E.2d 174, 179
(1981).
A dictionary is an appropriate place to gather
the natural meaning of words.
Agnoff Family Revocable Trust v. Landfall Assoc., 127 N.C. App.
743, 744, 493 S.E.2d 308, 309 (1997), disc. review denied, 347 N.C.572, 498 S.E.2d 375 (1998).
“Specifically” is defined as “with exactness and precision .
. . in a definite manner,” Webster's Third New International
Dictionary 2187 (1966), and as “explicitly, particularly,
definitely,” Black's Law Dictionary 1398 (6th ed. 1990). The
Hunter letter stated the ACC “has denied your request,” thus
“explicitly” and “definitely” conveying that plaintiffs'
application had been disapproved. Nothing more was required under
the covenants, which set the standards by which the ACC's conduct
must be judged, see Hyde I, 126 N.C. App. 437, 486 S.E.2d 491
(actions of ACC must be judged by standards in the covenants),
which provide that the ACC may “refuse to approve” any plan “in its
sole discretion” based upon aesthetics “or any other reason[].”
Plaintiffs' attempt to read into the covenants a requirement that
the ACC provide “specific” reasons for disapproval of an
application is therefore unavailing.
[4]Prior to concluding, we address the assertion raised by
the dissent that the majority decision herein would operate to
allow an architectural review committee to give a property owner
any reason it wished, no matter how
ridiculous, or no reason at all for denying an
application, so long as valid reasons existed
that could be presented to a judge in a later
court hearing.
We disagree.
First, the instant decision applies only to the covenants at
issue in the case sub judice. Decisions of architectural control
committees governed by covenants containing no standard by which tojudge that committee's authority must be reviewed under the
standard promulgated in Boiling Spring Lakes, 27 N.C. App. at 196,
218 S.E.2d at 479, and we do not speculate as to whether
“reasonable communication” might be required thereunder. Thus,
both Raintree, 342 N.C. 159, 463 S.E.2d 72, and Smith, 90 N.C. App.
40, 367 S.E.2d 401, cited by the dissent for the proposition that
homeowners must be given valid reasons for denial of construction
applications, were governed by a different standard than that at
issue herein and are inapposite.
In the instant case, the covenants require only that (1) the
ACC may not “unreasonably with[hold]” approval of an application;
and, (2) that if an application is denied, such denial must be
specific. The covenants contain no requirement that any reasons
for denial be communicated to the homeowner.
Accordingly, although plaintiffs may have received inaccurate
reasons for denial, the denial itself was specifically communicated
and the trial court's uncontested findings, see Ply-Marts, 40 N.C.
App. at 768, 253 S.E.2d at 495, reflect the ACC possessed valid
reasons for denial. Therefore, we are not confronted with the
dissent's hypothetical circumstance wherein a homeowners'
association has attempted to justify its decision post hoc at
trial. We reiterate that the worksheet prepared by ACC members
contemporaneously with denial of the application was introduced
into evidence by plaintiffs themselves.
As noted by the dissent, it appears plaintiffs wrote
defendants a letter of protest following denial by the ACC, whichcommunication was not responded to in writing. Nonetheless, while
the covenants contain no procedure to protest denial of an
application, defendant presented the testimony of both Hunter and
Coleman that plaintiffs had been invited to a Board meeting to
discuss denial of their application, but failed to attend.
In sum, although plaintiffs' vigorous arguments have proved
persuasive to the dissent, we decline to second guess the ruling of
the trial court. After a full trial, hearing evidence at length
from both sides, the court determined the ACC
did not unreasonably withhold [its] approval,
. . . [and] acted deliberately, reasonably and
in good faith in considering and ultimately
disapproving the [p]laintiffs' application . .
.
. . . [Further,] the [ACC's] disapproval
of the [application] was neither arbitrary nor
capricious.
As plaintiffs have not challenged the findings of fact upon
which the trial court based the foregoing conclusions, see Ply-
Marts, 40 N.C. App. at 768, 253 S.E.2d at 495, and as those
conclusions of law are supported by the court's findings of fact,
see Everette, 133 N.C. App. at 85, 514 S.E.2d at 525, we affirm the
trial court's decision, id.
Affirmed.
Chief Judge EAGLES concurs.
Judge HUNTER concurs in part and dissents in part in a
separate opinion.
HUNTER, Judge, concurring in part and dissenting in part. I respectfully dissent from the ma jority opinion on the issue of whether the Architectural Control Committee (“ACC”) unreasonably withheld approval of plaintiffs' application for construction of an above-ground swimming pool and backyard fence.
The record reveals that on 25 April 1995, plaintiffs submitted hand-drawn plans to the ACC for an above-ground swimming pool and backyard fence. Plaintiffs thereby sought approval for the project pursuant to the Chesney Glen Subdivision Declaration of Covenants, Conditions, and Restrictions (“Covenants”), which provide in pertinent part:
No building, sign, fence, . . . or other structure or planting shall be constructed, erected or planted until the plans and specifications showing the nature, kind, shape, height, materials, floor plans, color scheme, and located (sic) with respect to topography and finished ground elevation shall have been submitted to and approved in writing by the [ACC]. The [ACC] shall have the right to refuse to approve any plans and specifications which are not suitable or desirable, in its sole discretion for aesthetic or any other reasons, provided such approval is not unreasonably withheld.
(Emphasis added.) The covenants also provide:
No exposed above-ground tanks except for
approved recreational swimming pools will be
permitted . . . .
This section of the covenants clearly indicates that above-ground
pools, similar to the one plaintiffs sought approval for, are
allowed in the Chesney Glen Subdivision. This is supported by the
sixth finding of fact by the trial court, which provides: 6. &n
bsp; During the period in which the
builder/developer was in control of the
Association, the builder/developer approved an
above-ground swimming pool for Mr. Joe Smith,
a resident of Chesney Glen and a member of the
Association. The builder/developer also
approved another above-ground swimming pool
and a hot tub for other lot owners within
Chesney Glen during the time of the
builder/developer's control of the
Association.
Therefore, it is obvious that above-ground pools existed in the
Chesney Glen Subdivision at the time plaintiffs submitted their
application.
After receiving plaintiffs' application, the ACC did not
request any additional information from the plaintiffs concerning
their application. By letter dated 15 May 1995, plaintiffs were
informed by Cindy Hunter (“Hunter”), an employee of the property
management company engaged by defendant, that their application had
been denied. The record reveals that this letter was written at
the direction of Tom Coleman (“Coleman”), acting chair of the ACC,
after Coleman and Hunter had a conversation about the denial and
decided that the actual reasons for the denial did not need to be
conveyed to the plaintiffs. The letter stated in pertinent part:
The [ACC] has reviewed your request submitted
April 25, 1995 to install an above ground pool
and fence. . . .
The [ACC] has denied your request based on the
following: The [ACC] and the Board of
Directors have established architectural
guidelines for the subdivision which will be
published to all homeowners in the near
future. After careful consideration, the
Board of Directors made the decision that
above ground pools will not be allowed in
Chesney Glen. . . .
Plaintiffs were given no other reasons for the denial of their
application, and the denial letter did not address or comment on
any of the characteristics or features of the pool the plaintiffs
had proposed to build. On 25 May 1995, plaintiffs wrote a letter
of protest in response to the denial letter, asserting that the
Board did not have the authority to prohibit all above-ground
pools. There is no evidence in the record that plaintiffs received
a response to this letter. In fact, the record contains no
evidence of any correspondence between plaintiffs and the ACC in
regards to what additions or changes plaintiffs could make to their
application to make it acceptable to the ACC.
On 3 July 1995, plaintiffs filed an action for a declaratory
judgment as to whether their application had been unreasonably
denied under the Covenants. During the pendency of this action,
plaintiffs proceeded with construction of both the pool and the
fence. Plaintiffs did so pursuant to that section of the Covenants
which provides:
In the event the [ACC] shall fail to
specifically approve or disapprove the plans
and specifications submitted in final and
complete form, within thirty (30) days after
written request for final approval or
disapproval such plans and specifications
shall be deemed approved.
(Emphasis added.)
On 17 October 1995, at the annual meeting of the Chesney Glen
Homeowners' Association, a proposed amendment to the Covenants
which would have prohibited all above-ground pools was considered,
but failed to receive the required two-thirds approval of themembership. The ACC subsequently published to all Chesney Glen
homeowners its “Revised Architectural Control Guidelines,” which
were to become effective 1 March 1996. These guidelines include a
section that sets forth specific design guidelines for above-ground
pools, indicating that future above-ground pools would be allowed,
completely contradicting the 15 May 1995 denial letter sent to the
plaintiffs.
The North Carolina Supreme Court has addressed the rules of
construction which are to be applied when interpreting restrictive
covenants, and has stated:
“Covenants and agreements restricting the
free use of property are strictly construed
against limitations upon such use. . . .
Doubt will be resolved in favor of the
unrestricted use of property, so that where
the language of a restrictive covenant is
capable of two constructions, the one that
limits, rather than the one which extends it,
should be adopted, and that construction
should be embraced which least restricts the
free use of the land.[”]
Long v. Branham, 271 N.C. 264, 268, 156 S.E.2d 235, 239 (1967)
(quoting 20 Am. Jur. 2d Covenants, Conditions and Restrictions §
187 (1965). The construction against limitations upon the
beneficial use of land must be reasonable and cannot defeat the
plain and obvious purposes of a restriction. Boiling Spring Lakes
v. Coastal Services Corp., 27 N.C. App. 191, 195, 218 S.E.2d 476,
478 (1975). This Court has held that the exercise of authority
with respect to covenants requiring the submission of plans and
prior consent to construction, even if vesting the approving
authority with broad discretionary power, is valid and enforceable
so long as the authority to consent is exercised reasonably and in
good faith. Smith v. Butler Mtn. Estates Property Owners Assoc.,
90 N.C. App. 40, 48, 367 S.E.2d 401, 407 (1988). With regard to
the exercise of authority given architectural review committees,
the Supreme Court has stated: “'[A] restrictive covenant requiring
approval of house plans is enforceable only if the exercise of the
power in a particular case is reasonable and in good faith.'”
Raintree Homeowners Assn. v. Bleimann, 342 N.C. 159, 163, 463
S.E.2d 72, 74 (1995) (quoting Boiling Spring Lakes, 27 N.C. App. at
195-96, 218 S.E.2d at 478-79).
In Raintree, the defendant homeowners wanted to replace wood
siding with vinyl siding. Pursuant to a restrictive covenant, the
defendants applied to the Architectural Review Committee (“ARC”)
for approval of their plans. This restrictive covenant made the
ARC the sole arbiter of such plans, with the authority to withhold
approval for any reason, similar to the restrictive covenant atissue sub judice. Defendants attended an ARC meeting on the
evening of 26 March 1990 and presented evidence in support of their
application. The ARC denied defendants' application because it
found that the use of vinyl siding was not harmonious with the
general theme of the subdivision. The ARC informed defendants that
their application for approval had been denied by letter dated 6
April 1990. Defendants replied with a letter requesting that the
ARC reconsider their application. The ARC did so at its next
meeting and unanimously reaffirmed its prior denial. Defendants
attended another ARC meeting a month later and again presented
evidence in support of their application and suggested a compromise
by which their home would be deemed a “test case” for vinyl siding.
The ARC once again denied the application. The Supreme Court found
the defendants had failed to produce any evidence that the ARC
acted unreasonably or in bad faith -- the ARC had considered
defendants' application for vinyl siding on three separate
occasions, despite the fact that it had previously found the
material unacceptable, and the ARC had consistently denied other
applications for vinyl siding. Id. at 165, 463 S.E.2d at 75.
In Smith, the plaintiffs submitted a set of plans for a
proposed dwelling to the architectural review committee for
approval. Plaintiffs' plans were rejected because they failed to
meet the restrictive covenant's square footage requirement.
Plaintiffs then submitted a second set of plans which were rejected
by the architectural review committee based on the roofline and
geodesic design of the house. The plaintiffs were sent a letterfrom the president of the property owners association indicating
that the proposed house reflected a marked departure from the home-
building styles in the area and that the plaintiffs might consider
a design closer to those in existence. The plaintiffs were given
a definite and legitimate reason why their application had been
denied, as well as suggestions on what changes were needed for
possible reconsideration and approval. Therefore, this Court held
that the architectural review committee had acted reasonably in
denying plaintiffs' application. Smith, 90 N.C. App. at 48, 367
S.E.2d at 407.
In both Raintree and Smith, the respective architectural
review committees involved the landowners in the application
process. Once the application was initially denied, the
architectural review committees made concrete suggestions to the
landowners about what was needed for approval. The committees also
clearly communicated to the landowners legitimate reasons why their
applications had been denied. None of this occurred in the case
sub judice. Here, plaintiffs' original application was denied for
an invalid reason, the plaintiffs' letter protesting this decision
was disregarded, and plaintiffs were given no specific reason why
their application had been denied prior to proceeding with
construction, aside from the Board's invalid attempt to prohibit
all above-ground pools in the subdivision.
The majority opinion claims to find ample support for its
conclusion in the following findings of fact by the trial court:
11. The three members of the [ACC] cited
various reasons for the disapproval of thePlaintiffs' application, including the reasons
that a 24-foot pool was too large for the lot
size and that the Plaintiffs had not included
enough information with their application for
the [ACC] to make a fully-informed decision.
Two members of the [ACC] specifically reported
that they should see the actual pool plans or
a photograph from the pool manufacturer
showing the style of the pool. In addition,
one member of the [ACC] felt that he needed to
see landscaping plans for screening the pool
before he could approve it, and another [ACC]
member felt that the pool might be too close
to the side lot line as it appeared on the
Plaintiffs' application. The [ACC] also
reported that they might consider the matter
again based upon a proper and complete
application.
. . .
16. Based upon the testimony and
documentary evidence presented by the
Defendant (which was not presented at the
first hearing of this case), the Court finds
as a fact that the [ACC] based its decision to
disapprove the Plaintiffs' application on the
fact that the above-ground pool and fence
requested did not meet the general scheme and
plan of development for the Chesney Glen
community . . . .
I believe the majority's ruling would be correct on this issue if
it was simply concluding that valid reasons existed for the ACC to
deny plaintiffs' application. However, the majority is using these
findings to support its conclusion that the ACC did not act
unreasonably in withholding approval of plaintiffs' application.
In my opinion, the record lacks any showing, and the trial court
made no findings of fact, that these legitimate reasons for denial
were ever communicated to the plaintiffs prior to the second
hearing in front of the trial court on 4 March 1998. The majority
states that: “The covenants contain no requirement that approvalor disapproval be 'reasonably communicated,' but only that approval
not be 'unreasonably withheld.” Following this line of reasoning,
an architectural review committee could give a landowner any reason
it wished, no matter how ridiculous, or no reason at all for
denying an application, so long as valid reasons existed that could
be presented to a judge in a later court hearing. I believe that
the majority's construction of “unreasonably withheld” and
“specifically approve or disapprove” in the present case is not a
strict construction against limitations on the beneficial use of
plaintiffs' property as required by Boiling Spring Lakes, 27 N.C.
App. at 195, 218 S.E.2d at 478. I believe a reasonable
construction against limitations on the beneficial use of property
is one which requires the ACC to give notice to the applicant of
valid reasons why the application was denied. As in Rainwater and
Smith, plaintiffs should have been given valid reasons for denial
so that they could have worked with the ACC to remedy the problems
with their application, if possible. Accordingly, I would reverse
the judgment of the trial court on this issue.
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