An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA03-387

NORTH CAROLINA COURT OF APPEALS

Filed: 06 April 2004

LONNIE B. WILLIAMS,
    Plaintiff

v .                         New Hanover County
                            No. 00 CVS 1427
KENNETH E. HAIGLER and
PAULA O. HAIGLER,
    Defendants

    Appeal by plaintiff and cross-appeal by defendants from judgment entered 4 September 2002 by Judge James Lanning in New Hanover County Superior Court. Heard in the Court of Appeals 4 December 2003.

    Marshall, Williams & Gorham, L.L.P., by John L. Coble, for plaintiff.
    
    Brown & Bunch, PLLC, by Charles Gordon Brown, and Taft, Taft & Haigler, P.A., by Thomas F. Taft, Sr., for defendants.

    STEELMAN, Judge.

    Plaintiff and defendants are owners of adjacent properties in Quail Woods subdivision in Wilmington, North Carolina. Plaintiff is the owner of 6428 Quail Run, and defendants are the owners of 6420 Quail Run. All lots in Quail Woods subdivision are subject to restrictive covenants, which provide that “no dwelling shall be erected on the property other than a single family dwelling.” However, the restrictive covenants do allow for “a garage, guest house, or servants quarters.” Plaintiff filed this action on 7 April 2000 to compel defendants to remove a structure from theirproperty which plaintiff contends was built by the prior owner in violation of the restrictive covenants.
    The property at 6420 Quail Run was previously owned by a Bahamian company, Fidelity Worldwide Investments, S.A. (“FWI”), which purchased the property on 8 June 1993. Jeffery Collins, also known as Jeff White, represented himself to be an agent for FWI and resided at 6420 Quail Run. In 1994, a separate, detached three-car garage with an overhead storage room was constructed on the property. Thereafter, plaintiff learned of Collins' plans to build a two-level “guest house” on the property. Plaintiff and other property owners in the Quail Run subdivision filed a lawsuit against FWI to prevent construction of the guest house, contending that it would violate the restrictive covenants. Williams et al. v. Fidelity Worldwide Investments, S.A., No. 94 CVS 1908 (New Hanover County Superior Court) [hereinafter “FWI action”].
    FWI proposed to resolve the FWI action by building a “boathouse” rather than a “guest house.” Plans for the building were described in a 16 March 1995 letter to plaintiff's attorney, which stated in part:
        The boathouse would be on pilings, with finished dry wall interior, and will have one large recreation room or storage loft, with a fish cleaning counter and sink, and a separate bath and shower area. The area on the drawing designated “storage loft” is a single large room. The only divided space will be the bath and shower area. It would not have any cooking facilities, except an outdoor BAR-B- QUE on the deck. It will not have any bedrooms or sleeping quarters and will be equipped for recreational use by children and adults. The boathouse will be equipped for year-round use and will be insulated, withheating and air conditioning. It will have all utilities, including telephone and television, washer and dryer and a fireplace. The outdoor decks will also provide space for playing and sitting.
The letter was accompanied by drawings of the proposed boathouse. The drawings depicted no second floor, no stairway from the first to attic level, no room adaptable for use as a bedroom, and no attic level bathroom.
    The parties to the FWI action agreed to FWI's proposal to build the boathouse in a consent judgment, which was entered by Judge W. Allen Cobb, Jr. on 5 July 1995. The consent judgment, which was recorded in the Office of the New Hanover Register of Deeds, provided as follows:
        3. [T]he Restrictive Covenants shall be interpreted and enforced in a uniform fashion in accordance with this Judgment By Consent and that all parties shall henceforth interpret and enforce the Restrictive Covenants in accordance with this Consent Judgment. . . .

        4. The Restrictive Covenants provide that the “property shall be used for residential purposes only and no dwelling shall be erected on the property other than a single family dwelling. . . .”

        5. In addition to a single dwelling, the Restrictive Covenants authorize the construction of “a garage, guest house, or servants quarters.” To avoid violation of the prohibition against a second dwelling, any other structure constructed on property subject to the Restrictive Covenants must be configured so that it cannot be used as a second dwelling. To that end, the parties have agreed that for all properties subject to the Restrictive Covenants, except for a single dwelling, any additional structure, whether existing or later constructed, shall not contain any kitchen or similar cookingfacilities, or any bedrooms or other sleeping accommodations nor shall any part thereof be used as a kitchen or for sleeping accommodations. Recreational facilities such as a pool cabana, barn, boathouse or similar structure will be permitted, but only in accordance with the limitations expressed herein and in the Restrictive Covenants. (emphasis added)

        6. By letter dated March 16, 1995 from counsel for defendant, including the enclosed drawings, plaintiffs have received and reviewed the description and drawings for a boathouse to be constructed by defendant Fidelity Worldwide Investments, S.A. on its property. Plaintiffs have determined that the proposed plans are in accord with this Judgment By Consent and the Restrictive Covenants and therefore consent to construction of the proposed boathouse in accordance with the approved plans . . . . (emphasis added)
        
        . . .

        9. This Judgment by Consent and the interpretation of the Restrictive Covenants, and the limitations and restrictions stated herein in accordance with the Restrictive Covenants, are covenants that run with the land and shall be binding upon the defendant, each of the plaintiffs and their respective heirs, successors and assigns, any one of whom may enforce this Judgment. This Judgment By Consent shall be recorded in the office of the Register of Deeds and shall apply to the property owned by the defendant and each of the plaintiffs.

Several months after entry of the consent judgment, FWI commenced construction on the boathouse.
    On or about 5 February 1997, law enforcement agencies raided the residence located at 6420 Quail Run. Collins was arrested as an escaped felon. Following the raid, plaintiff learned that the boathouse had not been constructed in accordance with the terms ofthe consent judgment entered in the FWI action. On the first level above the boathouse, there was a large open area with a kitchen, microwave, sink, refrigerator, bathrooms, and an enclosed stairway leading to a second level. On the second level, there were bedrooms and a bathroom.
    On 3 March 1997, the United States of America instituted an action for forfeiture in rem against the property located at 6420 Quail Run, Wilmington, North Carolina in the United States District Court for the Southern District of Indiana. The forfeiture was sought under Title 21 of the United States Code as proceeds of illegal drug activity and as being property involved in money laundering transactions under Title 18 of the United States Code. On 27 June 1997, the United States District Court entered an order forfeiting the property located at 6420 Quail Run to the United States of America. This same order approved the sale of the property to the defendants for the sum of two million dollars.
    Plaintiff learned of the impending sale of the property to defendants, and by letter dated 10 July 1997 notified them of several matters concerning the property, including the violations of the 1995 consent judgment in the FWI action. A copy of the 1995 consent judgment and the letter from FWI's counsel dated 16 March 1995 were enclosed with the letter.
    On 29 July 1997, the United States District Court entered an order modifying the terms of the sale of the property to defendants. The purchase price of the property was reduced by $475,000 for necessary repairs to the property. The purchase pricewas further reduced by an additional $125,000 because of “title objections relating to drainage issues, the boathouse and garage.” The United States acknowledged that “the appraised value of the property did not take into account the loss of value caused by restrictions placed on the use and/or loss of the boathouse and garage by restrictive covenants in the chain of title.” Defendants purchased the property on 30 July 1997.
    On 7 April 2000, plaintiff filed this lawsuit seeking enforcement of the 5 July 1995 consent judgment and removal of the boathouse. Defendants filed a counterclaim seeking a declaration that they may construct or own a garage, guest house and servant's quarters on their property. A non-jury trial was held in the New Hanover County Superior Court, before Judge Lanning, which commenced on 22 October 2001.
    On 25 October 2001, the trial court orally announced its ruling in favor of plaintiff in open court. The trial court directed that the parties make additional submissions to the court within sixty days on the appropriate remedy to bring the boathouse into conformity with the consent judgment and restrictive covenants. Defendants filed their Submission Regarding Remedy on 21 December 2001. The trial court conducted a further hearing on the question of an appropriate remedy on 4 September 2002. The trial court's judgment on the original hearing was filed on 4 September 2002, and its order setting forth the appropriate remedy was filed on 29 October 2002.     The court order directed that the defendants modify the boathouse by: (a) the removal of excess cabinetry in the “kitchen area” so that it did not exceed seven feet in length; and (b) lowering the roof of the boathouse by six and a half feet to conform to the 1995 consent judgment. If defendants failed to elect to make these modifications within thirty days, then the boathouse was to be removed within sixty days. The trial court stayed its order pending appeal. On 27 November 2002, both plaintiff and defendants gave notice of appeal to this Court.
    
I. Defendants' Appeal
    In their first assignment of error, defendants argue the trial court committed reversible error by finding facts and concluding as a matter of law that the boathouse violated the restrictive covenants. We disagree.
    The standard of appellate review for a judgment entered after a non-jury trial is whether any competent evidence in the record supports the trial court's findings of fact and whether the findings of fact support the conclusions of law and the ensuing judgment. Sessler v. Marsh, 144 N.C. App. 623, 628, 551 S.E.2d 160, 163 (2001). Findings of fact made by the trial court are binding on appeal if there is competent evidence to support them, even if there is evidence to the contrary. Id.
    With regard to this assignment of error, defendants argue that the restrictive covenants allow “a garage, guest house or servants quarters” and that the structure in question was a “guest house.” This issue was previously litigated by the parties in the FWI action and resolved as to the very structure which is the subject of this action. Paragraph five of the consent judgment in the FWI action specifically discusses the “garage, guest house or servants quarters” language. It goes on to specifically define the prohibition of a second dwelling under the restrictive covenants. In order not to violate this prohibition, the structure “shall not contain any kitchen or similar cooking facilities, or any bedrooms or other sleeping accommodations, nor shall any part thereof be used as a kitchen or for sleeping accommodations.” Paragraph six of the consent judgment states that the boat house proposed by FWI was in accordance with the restrictive covenants, as interpreted by the consent judgment.
    The trial court found as facts that the boathouse: (1) was configured so that it could be used as a second dwelling; (2) contained a kitchen; (3) contained one or more bedrooms; and (4) was intentionally constructed by FWI in violation of the restrictive covenants as interpreted by the consent judgment. Each of these findings was supported by competent evidence in the record. These findings, in turn, support the trial court's conclusion that the boathouse, as constructed, violated the restrictive covenants and the consent judgment. This assignment of error is without merit.
    In their second assignment of error, defendants argue the trial court erred by finding as fact and concluding as a matter of law that the boathouse violated the consent judgment. They arguethat the provisions of the 5 July 1995 consent judgment were extinguished by the forfeiture of the property to the United States. We disagree.
    The United States acquired title to 6420 Quail Run as proceeds of drug trafficking and proceeds traceable to money laundering activities pursuant to 18 U.S.C. § 981(a)(1)(A) and 21 U.S.C. § 881(a)(6). Federal law states that title to property subject to forfeiture “shall vest in the United States upon commission of the act giving rise to forfeiture.” 18 U.S.C. § 981(a)(1)(A) (2003); 21 U.S.C. § 881(a)(6) (2003).     
    Defendants argue that pursuant to the relation-back provision of the criminal forfeiture statute, 21 U.S.C. § 853(c), title to 6420 Quail Run vested in the United States no later than 8 June 1993, the date Collins used his drug trafficking and money laundering proceeds to purchase the property. They argue that because the consent judgment was not entered until 5 July 1995, the United States' title to 6420 Quail Run is prior in time and superior in right to the consent judgment. Defendants contend that as grantees of the United States, they hold the property free and clear of the provisions of the consent judgment. This reasoning is incorrect.
    The relation-back provision of 21 U.S.C. § 853(c), which allows the government to reach forfeitable assets transferred to third parties, was intended to prevent defendants from shielding their assets from forfeiture by transferring them to third parties. United States v. McHan, 345 F.3d 262, 272 (4th Cir. 2003). In thiscase, there was no attempt to transfer the property to defeat the claims of the United States. The restrictions applicable to all lots in Quail Woods subdivision, including the property located at 6420 Quail Run, were in effect prior to FWI acquiring the property on 8 June 1993. The consent judgment of 5 July 1995 merely construed the provisions of the restrictions that were already in effect. The deed from the United States to defendants expressly stated that the conveyance was made subject to the restrictions. Further, the modified judgment and order of sale, dated 29 July 1997, acknowledged the validity of the restrictions and the loss of value to the property based upon their effect on the use or loss of the boathouse. This was one of the factors which led to defendants negotiating a $125,000 reduction in the sales price of the property. This assignment of error is without merit.
    In their third assignment of error, defendants argue that the trial court committed reversible error by requiring removal or modification of the boathouse. We disagree.
    A mandatory injunction may be issued to require modification or removal of a structure in violation of restrictive covenants. Buie v. Johnston, 313 N.C. 586, 589, 330 S.E.2d 197, 198 (1985). The propriety of an injunction “depends upon the equities between the parties.” Ingle v. Stubbins, 240 N.C. 382, 390, 82 S.E.2d 388, 395 (1954). When a trial court makes the decision, based on a balancing of the equities, that a mandatory injunction is appropriate, the court should make appropriate findings of fact and conclusions of law, sufficient to allow appellate review for abuseof discretion. See Roberts v. Madison County Realtors Ass'n, 344 N.C. 394, 401, 474 S.E.2d 783, 788 (1996).
    In its Order on Remedy and Final Judgment, the trial court directed that certain modifications be made by defendants to the boathouse. In the event that defendants elected not to make these modifications, then defendants were ordered to remove the boathouse from the property. The only modification which defendants contest is the lowering of the roof of the boathouse by a minimum of six and one-half feet, eliminating the dormers and windows of the attic level of the structure.
    Defendants contend that the dormers and windows can be removed from the second story of the boathouse for a much lower cost than the remedy ordered by the trial court. Once the dormers and windows were removed, the second story of the boathouse could not be used as a “sleeping room” under section 303.1 of the North Carolina Residential Building Code. Defendants assert that it was an abuse of discretion for the trial court to order the more drastic remedy when a less costly alternative was available.
    The law does not require the trial court to adopt a party's less costly proposed remedy. This case is remarkably similar to the case of Higgins v. Builders & Finance, Inc., 20 N.C. App. 1, 200 S.E.2d 397 (1973). In Higgins, the defendant constructed duplex dwellings on lots subject to restrictive covenants that limited dwellings to single family units. Id. at 2-3, 200 S.E.2d at 399. The defendant made certain minor modifications to the units, which it contended brought them into compliance with therestrictions. Id. at 3-4, 200 S.E.2d at 400. The trial court concluded that the proposed modifications did not convert the units to single family residences, and ordered the units removed. Id. at 7, 200 S.E.2d at 402. This Court affirmed the trial court, holding that: “When all facts found by the trial court are considered together, they fully support the court's conclusion that the structures erected by defendant 'have not as a matter of law been converted into single family residential dwellings to conform with the restrictive covenants . . . .'” Id. at 10, 200 S.E.2d at 404.     Thus, the issue is whether the trial court's findings are supported by the evidence and the findings in turn support the conclusions of law. In this review, we consider the findings and conclusions contained in both the Judgment dated 4 September 2002, and the Order on Remedy and Final Judgment dated 18 October 2002.
    The trial court made the following findings relevant to this issue:
        7. The Judgment By Consent provided . . . “any other structure constructed on property subject to the Restrictive Covenants must be configured so that it cannot be used as a second dwelling.”

        . . .

        12. [T]he “boathouse” had not been constructed in accordance with the letter of March 16, 1995, and the drawings which had been approved by the parties, but had been deliberately constructed in violation thereof, as well as in violation of the restrictive covenants and Judgment By Consent.

        . . .

        21. The “boathouse” violates the restrictive covenants as interpreted and construed by theJudgment By Consent in each of the following respects:
                    A. As configured it can be used as a second dwelling.
                    B. It contains a “kitchen” even though there is not a range.
            C. It contains a second living level.
            D. It contains one or more bedrooms.        

        . . .

        23. In balancing the equities between the parties, the Court has considered the following:

            . . .
        
                    C. Defendants had record and personal notice of the Judgment By Consent and that the “boathouse” was constructed in violation thereof.
                    D. Defendants negotiated a reduction in the purchase price of $125,000 because of the “boathouse”.

We find that each of these findings are supported by evidence in the record, and that they in turn support the court's conclusions of law, including that the equities in the case favored plaintiff.
    We further find that the trial court did not abuse its discretion in fashioning a remedy in this matter. The trial court could have ordered the total removal of the boathouse as an appropriate remedy for the violations. Instead, the court allowed defendants the opportunity to bring the structure into compliance with the restrictions as interpreted by the consent judgment. This assignment of error is without merit.     

II. Plaintiff's Appeal    In his first assignment of error, plaintiff argues the trial court committed reversible error by finding that the boathouse could be modified to substantially conform to the restrictive covenants and the consent judgment. We disagree.
    The trial court concluded in its Order on Remedy and Final Judgment that the boathouse could be modified to substantially comply with the restrictive covenants and consent judgment. As discussed above, this conclusion is supported by the trial court's findings of fact, which are supported by competent evidence. This assignment of error is without merit.
    In his second assignment of error, plaintiff argues the trial court committed reversible error in that its Order on Remedy and Final Judgment filed 29 October 2002 contradicts its Judgment of 4 September 2002. We disagree.
    Whether a mandatory injunction to compel the removal or modification of a building is appropriate “depends upon the equities between the parties.” Ingle, 240 N.C. at 390, 82 S.E.2d at 395. “[S]uch a balancing of equities is clearly within the province of the trial court.” Crabtree v. Jones, 112 N.C. App. 530, 534, 435 S.E.2d 823, 825 (1993). In the 25 October 2001 Judgment, the trial court balanced the equities between the parties and concluded that the equities favor plaintiff. As discussed above, this conclusion of law is supported by the trial court's findings of facts, and those findings of facts are supported by competent evidence. Therefore, the court's conclusion that the equities favor plaintiff is binding on appeal.     In the 29 October 2002 Order on Remedy, however, the trial court concluded that “certain equitable considerations favor the defendants.” We agree with plaintiff that there are no findings to support this conclusion. However, the trial court's remedy ordering modification or removal of the offending structure was consistent with its balancing of the equities in favor of plaintiff. Therefore, the contradicting statement that certain equities favor the defendants does not amount to reversible error. See Stewart v. Dixon, 229 N.C. 737, 738, 51 S.E.2d 182, 183 (1949) (“It is incumbent upon the appellant not only to show error in the ruling of the trial court but also that the error complained of was injurious to her cause, and that but for such ruling a different finding on the facts would have resulted.”). This assignment of error is without merit.
    In his third assignment of error, plaintiff argues the trial court committed reversible error by failing to enter a mandatory injunction requiring removal of the boathouse. We disagree.
    Whether an injunction is appropriate relief to restrain the violation of a restrictive covenant is a matter within the sound discretion of the trial court. Buie v. High Point Assocs. Ltd. Partnership, 119 N.C. App. 155, 161, 458 S.E.2d 212, 216 (1995). “'[T]he appellate court will not interfere unless such discretion is manifestly abused.'” Id. (quoting 20 Am. Jur. 2d Covenants, Conditions, and Restrictions § 313 (1965)).
    As discussed in detail above, evidence in the record indicates that the modifications ordered by the trial court will bring theboathouse into substantial compliance with the consent judgment and restrictive covenants. Plaintiff has not shown that the trial court abused its discretion in giving defendants the option to modify their home rather than removing it. This assignment of error is without merit.
    AFFIRMED.
    Judges TYSON and LEVINSON concur.
    Report per Rule 30(e).

*** Converted from WordPerfect ***