Appeal by plaintiffs and cross-appeal by defendant Ronald G.
Overcash from judgment entered 28 November 2005 by Judge W. Erwin
Spainhour in Superior Court, Cabarrus County. Heard in the Court
of Appeals 19 February 2007.
Rallings & Tissue, PLLC, by Christopher J. Culp for
plaintiff-appellants.
Ferguson, Scarbrough & Hayes, PA, by James E. Scarbrough for
defendant-appellant Overcash.
STROUD, Judge.
This is an action for injunctive and declaratory relief
concerning the interpretation and enforcement of a Declaration of
Restrictive Covenants [Declaration] on residential real property,
filed in Superior Court, Cabarrus County. Defendants Ronald G.
Overcash and FC Carolina Alliance [FCCA] have constructed three
soccer fields on a retained landlocked lot adjacent to the Terres
Bend subdivision [Terres Bend]. Plaintiff Terres Bend Homeowners
Association [HOA] and plaintiff lot owner David O'Neal, who is also
the HOA president, sought a permanent injunction of defendant
Overcash's construction of an access road to the soccer fields over
an easement from Highway 73 [Highway 73 Easement], arguing that the
Declaration does not permit the easement to be used for
nonresidential purposes. Defendant Overcash denied the material
allegations of plaintiffs' complaint and filed a counterclaim
seeking a declaratory judgment granting access to the soccer fields
over a separate driveway easement from Banyon Court cul de sac in
Terres Bend [Banyon Court Easement] as well as the Highway 73
Easement.
Plaintiffs and defendant Overcash both moved for summary
judgment, and Superior Court Judge W. Erwin Spainhour granted and
denied each motion in part. In so doing, Judge Spainhour ordered
that the Banyon Court Easement may be used “to gain access to a
residence or dwelling house, and for no other purpose” but that the
“private driveway constructed by the defendant Overcash” from
Highway 73 may be used “for the purpose of using the soccer fields. . . for soccer games or practice, whether organized or
unorganized, or soccer tournaments.” Plaintiffs appeal. Defendant
Overcash cross-appeals.
I. Background
In 1984, John F. Swinson acquired sixty-nine acres of real
property in Cabarrus County for the development of Terres Bend. On
21 February 1984, Swinson prepared plats depicting Phases I and II
of Terres Bend. Phase I included lots numbered one through six and
twenty-three through forty-two. Phase II included lots numbered
seven through twenty-two. Phase II was located behind Phase I.
The plat illustrating Phase II also shows a 14.7 acre parcel
of land adjoining Terres Bend. This parcel is designated on the
plat as land “retained by owner,” and has become known as Lot 43.
Lot 43 is bordered on the east by Irish Buffalo Creek, the north by
the Interstate 85 right-of-way, and the south and west by Terres
Bend. It has no direct access to a roadway; however, the plat
shows a thirty-foot driveway easement crossing Lot 21 and Lot 22,
providing access to Lot 43 off of the Banyon Court cul de sac in
Phase II of Terres Bend. A subsequently created, unplatted
easement crosses Lot 30 and Lot 33 in Phase I of Terres Bend,
providing access to Lot 43 from Highway 73.
On 25 May 1984, Swinson filed the Declaration with the
Cabarrus County Register of Deeds. The Declaration specifically
referred to lots numbered one through forty-two as shown on the
previously prepared plats. Covenant 1 provided, in part, “All lotsshall be used as residential lots and for no other purpose than
residential purposes.” Covenant 12 provided:
No lots shall be used for the purpose of
constructing a public street or to provide
access to and from property located within
Terres Bend Subdivision, or to provide access
to and from properties located in Terres Bend
Subdivision to properties surrounding same
with the exception of John F. Swinson, his
heirs, successors and assigns who reserve the
right to utilize any lots within said
subdivision for the extension of the
subdivision to adjoining property.
(Emphasis added.)
Swinson filed plats for Phases I and II of Terres Bend with
the Cabarrus County Register of Deeds on 26 February 1985.
On 21 January 1986, Swinson conveyed twenty-four of the
platted Terres Bend lots to John F. Swinson General Contractors,
Inc. [Swinson, Inc.]. The deed from Swinson to Swinson, Inc.
provided that the conveyance was “made and accepted subject to
Protective Covenants for Terres Bend Subdivision dated 25 May
1984,” noting the Deed Book and page of recordation. On 12
December 1994, Swinson conveyed Lot 14C, Lot 39, and Lot 43 to
Swinson, Inc., subject to “subdivision restrictions and covenants”
for Terres Bend as well as “easements shown in the recorded plat.”
(See footnote 1)
Finally on 3 March 1999, Swinson Inc. conveyed Lot 14C, Lot 7, Lot
26, Lot 31, Lot 33, Lot 41, Lot 42 and Lot 43 to defendant
Overcash. The deed from Swinson, Inc. to defendant Overcashconveyed “all of the Seller's easements and rights appurtenant to
the foregoing property.” The deeds described above were General
Warranty Deeds conveying each group of lots in its entirety and
without reservation except as noted herein.
Thereafter, defendant Overcash obtained approval from the City
of Concord to build soccer fields on Lot 43, which were completed
in 2004. In so doing, defendant Overcash submitted to the city a
boundary survey plat depicting Phase IIA of Terres Bend. Phase IIA
consisted solely of the development of soccer fields on Lot 43.
The City of Concord's Unified Development Ordinance permits soccer
fields in areas zoned Compact Residential, subject to city approval
of a site plan.
Defendant Overcash also constructed a private road to access
the soccer fields located on Lot 43. The private road crosses Lot
33, which defendant Overcash owns, and Lot 30, which is owned by
defendants London who have granted defendant Overcash an easement
for the access road. Defendant Overcash leases the soccer fields
to FCCA, which is a non-profit youth soccer organization, for $1.00
per year.
On 6 January 2005, plaintiffs filed a complaint against
defendant Overcash, seeking a temporary restraining order,
preliminary injunction, and permanent injunction. In their
complaint, plaintiffs alleged that construction of the access road
to Lot 43 over the Highway 73 Easement violated Declaration
Covenants 1 and 12 because Lot 43 was not being used for a
residential purpose. Defendant answered and counterclaimed,seeking declaratory judgment that the Banyon Court Easement could
be used to access Lot 43.
Plaintiffs later amended their complaint to add additional
defendants: Bruce and Kathryn Salzman,
(See footnote 2)
Steve and Phyllis London,
and FCCA. Defendants Salzman are the owners of Lot 21 and
defendants London are the owners of Lot 30.
Judge Spainhour granted and denied each party's motion for
summary judgment in part, permitting the Highway 73 Easement to be
used to access the soccer fields but limiting the Banyon Court
Easement to use as an access only to a residence. Plaintiffs
appealed and defendant Overcash cross-appealed.
This Court must now determine whether defendant Overcash
possesses the right retained by Swinson in Covenant 12 “to utilize
any lots within said subdivision for the extension of the
subdivision to adjoining property” and, if so, whether defendant
Overcash may use either the Highway 73 Easement or Banyon Court
Easement to access Lot 43 and the soccer fields constructedthereon.
(See footnote 3)
The parties agree that Lot 43 itself is not subject to
the Declaration and may be used for non-residential purposes.
This Court reviews the trial court's award of summary judgment
de novo.
Falk Integrated Techs, Inc. v. Stack, 132 N.C. App. 807,
809, 513 S.E.2d 572, 574 (1999).
II. Rights held by Defendant Overcash
Plaintiffs argue that defendant Overcash “did not succeed to
the rights of [Swinson] as Declarant under the Declaration,” and
therefore, defendant Overcash does not possess the right retained
by Swinson in Declaration Covenant 12 “to utilize any lots within
said subdivision for the extension of the subdivision to adjoining
property.” Although plaintiffs do not cite legal authority in
support of this position, plaintiffs appear to argue that Covenant
12 is personal to Swinson and does not “run with the land.”
Alternatively, plaintiff appears to argue that defendant Overcash
is not a “successor” or “assign” of Swinson. We disagree.
A. Personal Covenant v. Covenant “Running with the Land”
[1] “Covenants accompanying the purchase of real property are
contracts which create private incorporeal rights, meaning non-
possessory rights held by the seller, a third-party, or a group of
people, to use or limit the use of the purchased property.”
Armstrong v. The Ledges Homeowners Ass'n, Inc., 360 N.C. 547, 554,633 S.E.2d 78, 85 (2006). “Real Covenants 'run with the land'
creating a servitude on the land subject to the covenant.”
Id. A
covenant is a real covenant if “(1) the subject of the covenant
touches and concerns the land, (2) there is privity of estate
between the party enforcing the covenant and the party against whom
the covenant is being enforced, and (3) the original covenanting
parties intended the benefits and burdens of the covenant to run
with the land.”
Runyon v. Paley, 331 N.C. 293, 299-300, 416 S.E.2d
177, 182-83 (1992). A covenant that “runs with the land” is
“enforceable at law or in equity by the owner of the dominant
estate against the owner of the servient estate, whether the owners
are the original covenanting parties or successors in interest.”
Id. at 299, 416 S.E.2d at 182-83. However, “a personal covenant
creates an obligation or right enforceable at law only between the
original covenanting parties.”
Id.
Here, plaintiffs seek the equitable relief of an injunction.
See Wise v. Harrington Grove Cmty Ass'n, 357 N.C. 396, 407, 584
S.E.2d 731, 739 (2003) (“Prior to the enactment of the [Planned
Communities Act], restrictive covenants were generally enforceable
only by an action at law for damages or by a suit in equity for an
injunction.).
(See footnote 4)
Plaintiffs urge the Court to enforce Declaration
Covenants 1 and 12 against defendant Overcash to restrict his useof lots 20, 21, 30 and 33 to residential purposes, but also to
conclude that the exception contained in Covenant 12 permitting
construction of a street or access is personal to Swinson, meaning
that defendant Overcash cannot enforce the exception against
plaintiffs. By seeking to enforce the Declaration against
defendant Overcash, plaintiffs effectively concede that the
Declaration “touches and concerns” the land and that there is
privity of estate between the defendant Overcash and themselves.
The sole remaining question is whether Swinson and his
grantees intended the exception in Covenant 12 to be enforceable by
Swinson's successors in interest. “Ordinarily, the parties' intent
must be ascertained from the deed or other instrument creating the
restriction.”
Runyon, 331 N.C. at 305, 416 S.E.2d at 186. Where
the “language contained in a written instrument” is “unambiguous,”
the question of the parties' intent is a matter of law.
Id.
Here, Declaration Covenant 18 provides that “[t]hese
protective covenants and restrictions are to
run with the land and
shall be binding on all parties and all persons claiming under
them” for a period of thirty years. (Emphasis added.) Moreover,
Covenant 12 provides that “
John F. Swinson, his heirs, successors
and assigns . . . reserve the right to utilize any lots within said
subdivision for the extension of the subdivision to adjoining
property.” (Emphasis added.) This is unambiguous language from
which the Court concludes that the parties intended the exception
contained in Covenant 12 to “run with the land” and to be
enforceable by Swinson, his heirs, his successors, and his assigns.B. “Successor” or “Assign”
[2] As stated above, Covenant 12 pertains to “John F. Swinson,
his heirs, successors and assigns.” Plaintiffs argue that
defendant Overcash is not a successor of Swinson because “the
interjection of [Swinson, Inc.] in the chain of title . . . cuts
off any possible argument that [d]efendant Overcash is an 'heir,
successor, or assign' of Swinson individually.” We disagree.
In
Runyon v. Paley, the North Carolina Supreme Court explained
that a final grantee, who purchases real estate from a grantor who
obtained the real estate by mesne conveyance, is a “successor[] in
interest” of the original property owner. 331 N.C. at 303, 416
S.E.2d at 185. The Court emphasized that “[t]he mere fact” that
the final grantee “did not acquire the property directly from the
original covenanting parties is of no moment.”
Id.
Similarly, defendant Overcash obtained Lot 14C, Lot 7, Lot 26,
Lot 31, Lot 33, Lot 41, Lot 42 and Lot 43 by conveyance from
Swinson, Inc. Swinson, Inc. obtained Lot 43 by mesne conveyance
from Swinson. The deeds described above were General Warranty
Deeds conveying the lots in their entirety and without reservation,
except reference to the Declaration and platted easements.
Therefore, defendant Overcash is Swinson's successor in interest
and “the mere fact” that defendant Overcash “did not acquire the
property directly from” Swinson “is of no moment.”
Moreover, defendant Overcash is Swinson's successor in the
sense that he is a successive developer of Terres Bend. Citing
Black's Law Dictionary 1283 (1979), the North Carolina SupremeCourt has defined the term “successor” to mean “[o]ne that succeeds
or follows; one who takes the place that another has left, and
sustains the like part or character; one who takes the place of
another by succession.”
Rosi v. McCoy, 319 N.C. 589, 356 S.E.2d
568 (1987). Thus, the Court concluded, “'successor' does not
invariably refer to a successor in title; rather, the reader must
consider the nature of the 'part or character' to be taken.”
Id.
In
Rosi v. McCoy, the Court determined that the “natural meaning of
the term 'successors'” as used in the restrictive covenant at issue
was “[s]uccessor-developers,” because the “'part or character” in
question was that of the developers as developers rather than as
mere lot owners.”
Id.
Here, defendant Overcash's relationship to Swinson is that of
both successor in title and successor-developer. Defendant
Overcash, who “engages in the business of developing real estate,”
purchased Swinson's remaining lots in Terres Bend, as well as the
land retained by Swinson when he began developing Terres Bend. The
deed from Swinson, Inc. to defendant Overcash conveyed “all of the
Seller's easements and rights appurtenant to the foregoing
property.”
For these reasons, we conclude that defendant Overcash is
Swinson's successor for purposes of Declaration Covenant 12.
C. Conclusion
The Declaration, including Covenant 12, “runs with the land”
and the exception contained therein, permitting utilization of “any
lots within said subdivision for the extension of the subdivisionto adjoining property,” is exercisable by defendant Overcash, who
is Swinson's successor.
III. Easements
[3] Plaintiffs argue that Covenant 1 prohibits use of the
Highway 73 Easement and the Banyon Court Easement for non-
residential purposes; therefore, the easements may not be used to
access the soccer fields defendants Overcash and FCCA have built on
Lot 43. Alternatively, plaintiffs argue that the soccer fields are
not an “extension of the subdivision”; therefore, the exception
contained in Declaration Covenant 12 does not control. Plaintiffs
“do not challenge defendant Overcash's right to build and maintain
soccer fields” on Lot 43.
In considering plaintiffs argument, we refer to Declaration
Covenants 1 and 12, construing them together.
See J.T. Hobby &
Son, Inc. v. Family Homes, Inc., 302 N.C. 64, 71, 274 S.E.2d 174,
179 (1981) (explaining that each part of a declaration of
restrictive covenants must be given effect);
Long v. Branham, 271
N.C. 264, 268, 156 S.E.2d 235, 238 (1967) (When construing
restrictive covenants, the parties intention “must be gathered from
study and consideration of all the covenants contained in the
instrument . . . creating the restrictions.”). Covenant 1
provided, in part, “[a]ll lots shall be used as residential lots
and for no other purpose than residential purposes,” describing a
residential building as a “detached single family dwelling.”
Covenant 12 provided:
No lots shall be used for the purpose of
constructing a public street or to provideaccess to and from property located within
Terres Bend Subdivision, or to provide access
to and from properties located in Terres Bend
Subdivision to properties surrounding same
with the exception of John F. Swinson, his
heirs, successors and assigns who reserve the
right to utilize any lots within said
subdivision for the extension of the
subdivision to adjoining property.
(Emphasis added.) Construing Covenant 1 and Covenant 12 together,
we conclude that the exception contained in Covenant 12 is also an
exception to the general rule contained in Covenant 1 that Terres
Bend lots may be used only for residential purposes: the
construction of a public street or access roads is not a
residential purpose.
A. Banyon Court Easement
[4] The original plat of Terres Bend registered by Swinson in
the Cabarrus County Register of Deeds shows a thirty-foot driveway
easement crossing Lot 21 and Lot 22, providing access to Lot 43 off
of a cul de sac named Banyon Court. The sole and obvious purpose
of the Banyon Court Easement is to provide access to Lot 43 from
Terres Bends' existing platted roads. More importantly, the plain
language of Covenant 12 permits defendant Overcash to use the
Banyon Court Easement to access an extension to Terres Bend.
Accordingly, we conclude that defendant Overcash may use the Banyon
Court Easement to provide access to an extension of Terres Bend.
B. Highway 73 Easement
The Highway 73 Easement crosses Lot 30 and Lot 33. Defendants
London own Lot 30 and have granted permission for defendantOvercash to construct an access road over part of their lot.
Defendant Overcash owns Lot 33. Although this easement is not
platted, we conclude that it is permitted by the plain language of
Covenant 12, which permits defendant Overcash to use “any lot” to
access an extension of Terres Bend.
C. “Extension” of Terres Bend
[5] Plaintiffs argue that the soccer fields are not an
“extension” of the Terres Bend residential neighborhood. The
Declaration does not define the term “extension”; rather “[s]ound
judicial construction” of the covenant requires the Court to give
effect to this clause “according to the natural meaning of the
words.” J.T. Hobby & Son, Inc., 302 N.C. at 71, 274 S.E.2d at 179.
The ordinary meaning of the term “extension” is “an act or instance
of extending,” “the state of being extended,” “that by which
something is extended,” or “an enlargment in scope or degree.”
Random House Webster's College Dictionary, 472 (1st ed. 1991). To
the extent the term is ambiguous, we construe it “in favor of the
unrestrained use of land.” J.T. Hobby & Son, Inc., 302 N.C. at 70,
178 S.E.2d at 178. “The rule of strict construction is grounded in
sound considerations of public policy: It is in the best interests
of society that the free and unrestricted use and enjoyment of land
be encouraged to its fullest extent.” Id.
Lot 43, which is located in the 100-year flood plain, is not
suitable for the development of single family homes. This land was
retained by Swinson at the time he developed Terres Bend. At that
time, Swinson also expressly retained the Banyon Court Easement toprovide access to the otherwise landlocked lot. In light of these
circumstances, we think it clear that Swinson intended that Lot 43
would be developed in the future, but that the development would
not include residences.
Defendant Overcash submitted to the City of Concord a boundary
survey plat depicting Phase IIA of Terres Bend, which consisted
solely of the development of soccer fields on Lot 43. The City of
Concord's Unified Development Ordinance permits soccer fields in
areas zoned Compact Residential, subject to city approval of a site
plan. Plaintiffs do not dispute that the City of Concord approved
the construction of soccer fields on Lot 43 as the development of
an extension to Terres Bend.
The soccer fields constructed on Lot 43 replace an overgrown
and poorly drained field, which was described in an affidavit
submitted for purposes of summary judgment as “infested with
mosquitos, rodents, and snakes.” At least one resident of Terres
Bend has commented that “construction of the soccer field has
eliminated the rodent and snake problem and nearly eliminated the
mosquito problem.” The fields are accessible to residents of
Terres Bend and members of the local community, including several
local youth soccer teams. Such recreational space is generally a
desirable and appropriate extension of a residential subdivision.
We conclude that Lot 43 and the recreational soccer fields
constructed thereon may properly be classified as an “extension” of
the Terres Bend residential community.
D. Conclusion Defendant Overcash may use either the Banyon Court Easement or
the Highway 73 Easement or both easements to access an “extension”
of Terres Bend. The recreational soccer fields built on Lot 43 are
an “extension” of Terres Bend.
IV. Conclusion
For the reasons stated above, we hold that Declaration
Covenant 12 “runs with the land” and that defendant Overcash is a
“successor” of Swinson for purposes of the exception contained
therein. We further hold that defendant Overcash may use either
the Banyon Court Easement or the Highway 73 Easement or both
easements to access an “extension” of Terres Bend. The
recreational soccer fields built on Lot 43 are an “extension” of
Terres Bend. In so holding, we note that plaintiffs' alternative
interpretation of the Declaration would render Lot 43 landlocked
and unuseable. Finally, we hold that the defendant Overcash's
right to use either easement is limited to use for access to Lot 43
as an extension of Terres Bend but is not limited to “using the
soccer fields . . . for soccer games or practice . . . or soccer
tournaments.”
(See footnote 5)
The order entered 28 November 2005 by Judge W. Erwin Spainhour
in Superior Court, Cabarrus County is affirmed in part and reversedin part. We remand this case to that court for further proceedings
not inconsistent with this opinion.
Affirmed in part; Reversed in part; Remanded.
Chief Judge MARTIN and Judge BRYANT concur.
Footnote: 1