Appeal by defendant from judgment entered 11 September 2002 by
Judge Christopher M. Collier in Iredell County Superior Court.
Heard in the Court of Appeals 27 October 2003.
No brief filed on behalf of plaintiff-appellees.
Thomas, Godley & Childers, P.A., by Mark L. Childers, for
defendant-appellant.
EAGLES, Chief Judge.
This appeal arises from a civil action to enforce restrictive
covenants. Defendant appeals from judgment entered upon default,
granting declaratory and injunctive relief in favor of plaintiffs
and awarding attorneys' fees.
The record tends to establish the following: Plaintiffs and
defendant own adjoining lots in the Harbor Cove Subdivision
(“Harbor Cove”), a planned residential subdivision bordering Lake
Norman in Iredell County. Defendant's lot is lake front,
plaintiffs' lot is “lake view.” Plaintiffs must look across
defendant's lot in order to see the lake. All lots within HarborCove are subject to certain covenants, conditions, restrictions and
easements. These restrictions provide that the architectural
committee must approve any “[i]mprovements” to a resident's
property before it is undertaken. The restrictions also regulate
the construction of fences on a resident's property.
On or about 29 March 2002, defendant planted two rows of trees
on his property, one row bordering each side of defendant's
driveway. Although not yet fully mature, the trees partially
obscured plaintiffs' view of the lake. Defendant had not obtained
approval from the architectural committee prior to planting the
trees. Plaintiffs informed defendant that he had planted the trees
in violation of the subdivision's restrictions and asked defendant
to remove the trees; however, defendant refused. The trees soon
grew together and created a solid hedgerow along each side of
defendant's driveway.
On 21 June 2002, plaintiffs filed a civil complaint in Iredell
County Superior Court seeking declaratory and injunctive relief.
Plaintiffs alleged that by planting the trees, defendant had
constructed a “fence” on his property. Plaintiffs further alleged
that defendant violated the restrictive covenants by not obtaining
written approval from the architectural committee prior to
constructing the fence. Despite receiving personal service of the
complaint, defendant failed to file an answer or appear in the
action. On 2 August 2002, default was entered by the clerk. On 11
September 2002, the trial court entered default judgment against
defendant, finding that defendant violated Harbor Cove'srestrictive covenants by “placing a fence consisting of plants (a
hedge fence)” on his property without first obtaining the
permission of the architectural committee. The trial court ordered
the “hedge fence” removed and awarded plaintiffs attorneys' fees in
the amount of $1,487.50. Defendant appeals.
This appeal presents the following issues: (1) whether the
restrictive covenants required defendant to obtain permission from
the architectural committee before planting the trees; and (2)
whether the trial court had authority to award plaintiffs
attorneys' fees. We affirm the decision of the trial court as to
the first issue, but reverse as to the second issue.
I.
Defendant first contends that the trial court erred by
concluding that his trees constitute a “fence” under Harbor Cove's
restrictive covenants. Defendant argues that a “fence” is defined
as an “improvement” under Harbor Cove's restrictive covenants.
Citing
Vogel v. Reed Supply Co., 277 N.C. 119, 177 S.E.2d 273,
(1970), defendant further argues that the term “improvement,” as it
is used in Harbor Cove's restrictive covenants, contemplates the
performance of construction work. Therefore, defendant contends he
was not required to obtain permission from the architectural
committee to plant his trees. We disagree.
As a preliminary matter, we note that neither defendant's
failure to answer the complaint nor the entry of default judgment
against defendant precludes our review of this issue. The failure
of a defendant who has been duly served to appear and answer acomplaint seeking declaratory judgment does not automatically
entitle the plaintiff to judgment; rather, it merely constitutes an
admission of every material fact pled in the complaint which is
essential to the judgment sought.
Baxter v. Jones, 14 N.C. App.
296, 312, 188 S.E.2d 622, 631,
cert. denied, 281 N.C. 621, 190
S.E.2d 465 (1972). The trial court must still proceed to construe
the restrictive covenants.
Id. Proper construction of the
coventants together with the admitted facts determine the rights of
the parties.
Id. Accordingly, the trial court's construction of
Harbor Cove's restrictive covenants is properly before this Court.
The fundamental rule in construing restrictive covenants is
that the intentions of the parties govern.
Donaldson v. Shearin,
142 N.C. App. 102, 106, 541 S.E.2d 777, 780,
aff'd per curiam, 354
N.C. 207, 552 S.E.2d 142 (2001). The parties' intentions “must be
gathered from study and consideration of
all the covenants
contained in the instrument or instruments creating the
restrictions.”
Id. (quoting
Long v. Branham, 271 N.C. 264, 268, 156
S.E.2d 235, 238 (1967)). Although covenants and agreements
restricting the free use of property are strictly construed,
“restrictive covenants should not be so strictly construed 'as to
defeat the purpose of the restriction.'”
Id. at 106, 541 S.E.2d at
780 (quoting
Robinson v. Pacemaker Investment Co., 19 N.C. App.
590, 594, 200 S.E.2d 59, 61 (1973),
cert. denied, 284 N.C. 617, 201
S.E.2d 689 (1974)). “Where the meaning of restrictive covenants is
doubtful 'the surrounding circumstances existing at the time of the
creation of the restriction are taken into consideration indetermining the [parties'] intention.'”
Long v. Branham, 271 N.C.
264, 268, 156 S.E.2d 235, 239 (1967)
(quoting V. Woerner,
Annotation,
Maintenance, Use, or Grant of Right of Way Over
Restricted Property As Violation of Restrictive Covenant, 25 A.L.R.
2d 904, 905 (1952)).
The term “fence” is not defined by Harbor Cove's restrictive
covenants. Instead, § 6.1 of the Declaration of Covenants,
Conditions, Restrictions and Easements (“Declaration”) provides in
pertinent part:
Other than the Initial Improvements [
i.e. “residences,
outbuildings and other structures initially constructed
within the Subdivision”], no building, fence, wall,
porch, deck or any other structure or improvement
(collectively “Improvements”) including, without
limitation, the alteration or painting of the exterior
surface of any existing Improvements or Initial
Improvements shall be undertaken upon any Lot unless the
plans and specifications and location of the proposed
Improvements shall have been expressly approved in
writing by the Architectural Committee . . . .
In
Vogel v. Reed Supply Co., 277 N.C. 119, 177 S.E.2d 273
(1970)
,
our Supreme Court noted:
“The word 'improvement' is a relative and very
comprehensive term, whose meaning must be ascertained
from the context and the subject matter of the instrument
in which it is used.” The word is sometimes used to refer
to any enhancement in value, particularly in relation to
non-structural changes to land. But where . . . it is
used in context with the words
building and
structure,
its meaning is otherwise. As used here it connotes the
performance of construction work and presupposes the
prior existence of some structure to be improved. As used
with reference to land, the word improvement presupposes
the prior existence of the land itself.
Id. at 132-33, 177 S.E.2d at 281-82
(citations and emphasis
omitted). Defendant, relying on
Vogel, argues that the term
“[i]mprovement,” as it is used in § 6.1 of the Declaration
contemplates the performance of construction work and, therefore,
does not apply to merely planting trees. After careful review of
all of Harbor Cove's restrictive covenants,
we conclude that
defendant's construction of the term “[i]mprovement” is overly
narrow and fails to give effect to either the manifest intent of
the parties or the purpose of the restriction.
First, defendant's construction of the term requires viewing
§ 6.1 of the Declaration in isolation. However, § 6.1 is not the
only portion of the Declaration that references the term
“[i]mprovements.” Article VII of the Declaration provides in part:
Each Owner shall be responsible for the maintenance of
his or her dwelling and lot. Maintenance of such dwelling
and lot shall include, without limitation, painting,
replacement and care of roofs, gutters, downspouts,
exterior building surfaces, lawns, trees, shrubs,
driveways, walks and
other exterior improvements.
(Emphasis added).
When Article VII's reference to “exterior improvements” is
considered in conjunction with § 6.1's use of the disjunctive “or”
in providing examples of “[i]mprovements,” as well as the “without
limitation” language, it appears the parties intended § 6.1 to
apply to: (1) additions or alterations to existing structures; (2)
new structures; or (3) any other exterior improvements, which may
or may not require the performance of construction work.
This construction is further supported by § 6.3, which
provides that “[t]he Architectural Committee shall, from time to
time, publish and promulgate architectural,
landscape, and/or lakebuffer guidelines . . .
as a guide to assist the Architectural
Committee in reviewing any proposed plans, specifications and
materials submitted . . . for approval.” (Emphasis added). This
language evidences an intent that the architectural committee would
have approval authority over landscaping improvements.
Finally, although one of the primary purposes for establishing
the restrictive covenants was “to insure the attractiveness of the
Development[and] to prevent any future impairment thereof,” there
is no provision in the Declaration that specifically addresses
landscaping apart from those already mentioned. If this Court were
to adopt defendant's construction of the term “[i]mprovement,” the
architectural committee would have no authority over landscaping or
any other improvements made to the land. In addition to nullifying
portions of § 6.3, this would defeat, at least in part, the stated
purpose of the Declaration. This could not have been what the
parties intended. We conclude the term “[i]mprovement,” as used in
Harbor Cove's Declaration, refers to any exterior alteration or
improvement to both structures and land.
We hold that by planting his trees, defendant made an
“[i]mprovement” to his land, which required permission from the
architectural committee. Accordingly, the decision of the trial
court is affirmed.
II.
Defendant next contends that the trial court improperly
awarded plaintiffs' attorneys' fees. Defendant argues that although
the restrictive covenants provided for the recovery of attorneys'fees, there was no statutory authority to support the award. We
agree.
A party may not recover attorneys' fees, even when authorized
by a declaration of restrictive covenants, “'unless such a recovery
is expressly authorized by statute.'”
McGinnis Point Owners Ass'n
v. Joyner, 135 N.C. App. 752, 756, 522 S.E.2d 317, 320
(1999)(quoting
Stillwell Enter., Inc. v. Interstate Equip. Co., 300
N.C. 286, 289, 266 S.E.2d 812, 814 (1980)). There are two statutory
bases for the recovery of attorneys' fees applicable to the
enforcement of restrictive covenants: G.S. § 47F-3-120 and G.S. §
6-21.2. After careful review of the record, we conclude neither
statute applies in this case.
First, G.S. § 47F-3-120 authorizes the recovery of attorneys'
fees in any action to enforce restrictive covenants brought
pursuant to Chapter 47F (the North Carolina Planned Community Act).
However, the provisions of Chapter 47F do not apply to planned
communities created prior to 1 January 1999, unless the community's
declaration is amended to specifically incorporate Chapter 47F.
G.S. § 47F-1-102. Here, Harbor Cove was created in 1996 and as of
the date of this appeal, Harbor Cove had not amended its
declaration in accordance with G.S. § 47F-1-102. Therefore, the
attorneys' fees provisions of Chapter 47 do not apply here.
Second, G.S. § 6-21.2 authorizes the recovery of attorneys'
fees upon the collection of a “note, conditional sale contract or
other evidence of indebtedness . . . .”
Id. “[T]he term 'evidence
of indebtedness' as used in G.S. 6-21.2 has reference to anyprinted or written instrument, signed or otherwise executed by the
obligor(s), which evidences on its face a legally enforceable
obligation to pay money.”
Stillwell Enter., Inc. v. Interstate
Equip. Co., 300 N.C. 286, 294, 266 S.E.2d 812, 817 (1980).
Here, defendant did not sign Harbor Cove's declaration of
restrictive covenants. Moreover, the covenants being enforced do
not evidence, on their face, a legally enforceable obligation to
pay money.
Cf. Four Seasons Homeowners Ass'n. v. Sellers, 72 N.C.
App. 189, 192, 323 S.E.2d 735, 738 (1984).
Therefore, the trial
court's order awarding attorneys' fees is not authorized by G.S. §
6-21.2.
Since there was no statutory authority to enter an award of
attorneys' fees in this case, we reverse the portion of the trial
court's order directing defendant to pay plaintiffs' attorneys'
fees.
Affirmed in part, reversed in part.
Judges HUNTER and GEER concur.
Report per Rule 30(e).
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