Appeal by Plaintiff from order entered 26 July 2006 by Judge
W. Allen Cobb, Jr. in Superior Court, Craven County. Heard in the
Court of Appeals 29 August 2007.
Ward and Smith, P.A., by Eric J. Remington, for Plaintiff-
Troutman Sanders LLP, by Gary S. Parsons, Gavin B. Parsons,
and D. Martin Warf, for Defendants-Appellees Fairfield
Harbourside Condominium Association, Inc.; The Fairways
Condominium Association, Inc.; Sandcastle Village Condominium
Association Inc.; Windjammer Villas Association, Inc.; and
Windjammer Villas Association II Condominium Property Owners
Van Winkle, Buck, Wall, Starnes and Davis, P.A., by Craig D.
Justus, for Defendants-Appellees Fairfield Harbourside IICondominium Association, Inc.; Sandcastle Cove Condominium
Association, Inc.; Sandcastle Village II Condominium
Association, Inc.; and Waterwood Townhouses Property Owners
Fairfield Harbour, Inc. (FHI) recorded a set of restrictive
covenants, entitled Master Declaration of Fairfield Harbour (the
Master Declaration), in 1979. The Master Declaration governs the
property development known as Fairfield Harbour, which is located
in New Bern, North Carolina, and which was, in 1979, owned by FHI.
The Master Declaration applies to all properties within Fairfield
each subdivided lot therein, each unit in a
tract of land submitted to the provisions of
the Unit Ownership Act (Chapter 47A of the
North Carolina General Statutes) or to any
similar act providing for condominium or unit
ownership of property, and to such other
divisions of land or interests therein,
including interval ownership interests[.]
In Article I, entitled "Recreational Amenities Charge," the
Master Declaration sets forth the restrictive covenant at issue in
the present case (hereinafter, the covenant to pay amenity fees):
1. FHI shall have the power to levy an annual
charge, the amount of said charge to be
determined solely by FHI after consideration
of current and future needs of FHI for the
reasonable and proper operation, maintenance,
repair and upkeep of all recreational
amenities owned by FHI and actually provided
for the use of Purchasers at the date of levy
of such charge, such recreational amenities to
include but not be limited to dams, marinas,
beaches, river and canal access tracts, golf
courses, tennis courts, swimming pools,
campgrounds, clubhouses and adjacent clubhouse
In Article II, the Master Declaration declares that every
person acquiring title to property within Fairfield Harbour must
become a member of the Fairfield Harbour Property Owners
Association, Inc. (the Association). The Master Declaration
further states that the Association "shall be responsible for the
operation, maintenance, repair and upkeep of the parks and other
common areas or amenities now or hereafter owned by [the
Association] within Fairfield Harbour."
In Article III, the Master Declaration makes a further
distinction between those recreational amenities owned by FHI, its
successors, or assigns, and the parks or common areas owned by the
1. . . . An easement for the use and
enjoyment of each of the areas designated as
parks is reserved to FHI, its successors and
assigns; to the persons who are from time to
time members or associate members of the
[Association]; to the members and owners of
any recreational facility; to the residents,
tenants and occupants of any multi-family
residential building, guest house, inn or
hotel facility, and all other kinds of
residential structures that may be erected
within the boundaries of Fairfield Harbour;
and to the invitees of all of the
aforementioned persons, the use of which shall
be subject to such rules and regulations as
may be prescribed by FHI or the Association,
if the Association is the owner of the
facility or property involved.
2. The ownership of all of the recreational
amenities within Fairfield Harbour . . . shall
be in FHI or its successors, grantees, or
assigns, and the use and enjoyment thereof
shall be on such terms and conditions as FHI,
its successors, grantees or assigns, from time
to time shall license[.]
FHI continued to develop property within Fairfield Harbour andcreated the time share communities that are represented by
Defendants in this case. FHI recorded restrictive covenants for
each time share community and incorporated the covenant to pay
amenity fees referenced in the Master Declaration.
FHI subsequently sold its recreational amenities to Harbour
Recreation Club, Inc. (HRC) in 1993, and FHI and HRC agreed to a
set of additional restrictive covenants (the 1993 covenants). The
1993 covenants purported to allow the owner of the recreational
amenities to collect amenity fees from time share units at a rate
of up to 5.556 times the fees collected from individual lot owners
within Fairfield Harbour. However, based upon the pleadings, all
parties agree that the 1993 covenants did not fall within the
chains of title of Defendants or their respective time share
A dispute arose between Defendants and HRC as to the amount of
amenity fees charged, and the parties entered into a settlement
agreement (the 1998 settlement agreement). Pursuant to the 1998
settlement agreement, HRC could not assess amenity fees to
individual time share units at a rate higher than the amenity fees
assessed to individual lot owners.
HRC sold the recreational amenities it owned to Plaintiff in
1999. The purchase agreement between HRC and Plaintiff referenced
the Master Declaration and the 1993 covenants, but did not
reference the 1998 settlement agreement. From 2000 through 2004,
Defendants, on behalf of their respective time share members, paid
amenity fees to Plaintiff at the same rate that such fees wereassessed to individual lot owners. Plaintiff sells golf and social
memberships to those who seek to use the recreational amenities,
including members of the public who do not own property within
Plaintiff filed this action against Defendants on 4 November
2004, alleging it was entitled to collect amenity fees from
Defendants at the rate of up to 5.556 times the fees collected from
individual lot owners, as set forth in the 1993 covenants.
Plaintiff also alleged it was owed over $1.8 million in past due
amenity fees. Defendants filed their amended answers, raising,
inter alia, the following defense:
The Master Declaration establishes a license
arrangement between the owner of amenities and
the property owners subject to an amenity fee
as to the use of any facilities. As such, and
because said amenity fee is not tied to any
reciprocal benefits and burdens arising from
the ownership of property in Fairfield
Harbour, said obligation is a personal
covenant and not binding on Defendants or
Defendants also filed amended counterclaims for breach of contract,
unjust enrichment, and declaratory judgment.
Plaintiff filed a motion to dismiss Defendants' amended
counterclaims for failure to join all necessary parties.
Defendants filed motions for partial summary judgment on the ground
that the covenant to pay amenity fees was a personal covenant and
was therefore not binding on Defendants or their members.
The trial court entered an order on 26 July 2006 granting
Defendants' motions for partial summary judgment and denying
Plaintiff's motion to dismiss. Subsequently, Defendants FairfieldHarbourside II Condominium Association, Inc., Sandcastle Cove
Condominium Association, Inc., Sandcastle Village II Condominium
Association, Inc., and Waterwood Townhouses Property Owners
Association, Inc. voluntarily dismissed their counterclaims without
prejudice. However, the remaining Defendants did not dismiss their
counterclaims. Accordingly, Plaintiff's appeal from the trial
court's 26 July 2006 order is interlocutory. Nevertheless,
assuming arguendo that Plaintiff appeals from a nonappealable
interlocutory order, we elect to consider the appeal by granting
Plaintiff's conditional petition for writ of certiorari. See
Williams v. Poland, 154 N.C. App. 709, 711, 573 S.E.2d 230, 232
(2002) (stating: "Assuming, arguendo, that the case here is an
interlocutory appeal, we elect to consider the appeal by granting
[the] appellant's petition for writ of certiorari according to
N.C.R. App. P. 21(a)(1).").
Plaintiff first argues the trial court erred by denying its
motion to dismiss Defendants' counterclaims for failure to join all
necessary parties. Specifically, Plaintiff argues that all
property owners within Fairfield Harbor, whose properties are
subject to the Master Declaration, are necessary parties. We
N.C. Gen. Stat. § 1A-1, Rule 19(a) (2005) governs the
necessary joinder of parties and provides:
Subject to the provisions of Rule 23, those
who are united in interest must be joined as
plaintiffs or defendants; but if the consent
of anyone who should have been joined asplaintiff cannot be obtained he may be made a
defendant, the reason therefor being stated in
the complaint; provided, however, in all cases
of joint contracts, a claim may be asserted
against all or any number of the persons
making such contracts.
"'Necessary parties must be joined in an action. Proper parties
may be joined.'" Karner v. Roy White Flowers, Inc.
, 351 N.C. 433,
438, 527 S.E.2d 40, 44 (2000) (quoting Booker v. Everhart
, 294 N.C.
146, 156, 240 S.E.2d 360, 365 (1978)). "A necessary party is one
who 'is so vitally interested in the controversy that a valid
judgment cannot be rendered in the action completely and finally
determining the controversy without [that party's] presence.'" Id.
at 438-39, 527 S.E.2d at 44 (quoting Strickland v. Hughes
, 273 N.C.
481, 485, 160 S.E.2d 313, 316 (1968)). However, "[a] proper party
is one whose interest may be affected by a judgment but whose
presence is not essential for adjudication of the action." River
Birch Associates v. City of Raleigh
, 326 N.C. 100, 129, 388 S.E.2d
538, 555 (1990) (citing Strickland
, 273 N.C. at 485, 160 S.E.2d at
In support of its argument that all property owners within
Fairfield Harbour are necessary parties, Plaintiff relies upon
, where the plaintiffs and the defendants owned lots in a
, 351 N.C. at 434, 527 S.E.2d at 41. Our Court
stated that "[w]hen the developer began conveying lots in 1907,
each deed included a covenant restricting the use of each parcel to
residential use only." Id.
The defendants sought to demolish the
residential structures on three lots in the subdivision and sought
to construct a commercial building upon those lots. Id.
Theplaintiffs, who owned lots adjacent to the defendants' lots, filed
an action to enjoin the defendants. Id.
The defendants raised the
affirmative defense that "a change of circumstances had occurred
making use of the lots for residential purposes no longer
The intervenor-plaintiffs, who also owned property within the
subdivision, were allowed to intervene, and the plaintiffs and the
intervenor-plaintiffs filed a motion to join all other property
owners within the subdivision as necessary parties. Id.
527 S.E.2d at 41-42. However, the trial court denied the motion
for joinder, and the Court of Appeals, in a split decision,
affirmed the denial of the motion. Id.
at 435-36, 527 S.E.2d at
The Supreme Court in Karner
recognized that "[t]he placement
of the same restrictive covenant in all of the deeds conveying lots
out of a subdivision according to a common plan of development"
allows a grantee to "enforce the restriction against any other
grantee governed by the common plan of development." Id.
37, 527 S.E.2d at 42-43 (citing Hawthorne v. Realty Syndicate,
, 300 N.C. 660, 665, 268 S.E.2d 494, 497, reh'g denied
N.C. 107, 273 S.E.2d 442 (1980)). Our Supreme Court further
recognized that the right of one grantee to enforce a residential
restrictive covenant against another is a property right with
at 437-38, 527 S.E.2d at 43 (citing Tull v. Doctors
, 255 N.C. 23, 41, 120 S.E.2d 817, 829 (1961)).
Therefore, our Supreme Court held that "each property owner within[the subdivision] has the right to enforce the residential
restriction against any other property owner seeking to violate
that covenant[,]" and that such a right is a valuable property
at 439, 527 S.E.2d at 44.
The Supreme Court also held
that if the defendants successfully abrogated the restrictive
covenant as to their lots, "each property owner within the
subdivision would lose the right to enforce that same restriction."
at 439-40, 527 S.E.2d at 44. Accordingly, because they were
subject to lose a property right, our Supreme Court concluded that
the nonparty property owners in the subdivision were necessary
parties, and the Supreme Court reversed on this issue. Id.
527 S.E.2d at 44-45.
In the present case, unlike in Karner
, the covenant at issue
is one for the payment of amenity fees, not a residential use
restriction. Pursuant to the Master Declaration, only the owner of
the recreational amenities has the power to levy such a
recreational amenity charge. As such, only the owner of the
recreational amenities has the power to enforce this restrictive
covenant. None of the property owners within Fairfield Harbour
have the right to enforce the covenant to pay amenity fees against
any of the other owners. Accordingly, the extinguishment of the
restrictive covenant in the present case would not deprive the
other property owners of any property right akin to the right that
the nonparty property owners were deprived of in Karner
. As a
Plaintiff also relies upon Page v. Bald Head Ass'n
, 170 N.C.App. 151, 611 S.E.2d 463, disc. review denied
, 359 N.C. 635, 616
S.E.2d 542 (2005), where the defendants, the Bald Head Association
and its individual directors, recorded a revised covenant that
provided for a "general assessment to be levied against all units
'at a level which is reasonably expected to produce total income
for the Association equal to the total budgeted Common Expenses,
including reserves.'" Id.
at 152-53, 611 S.E.2d at 464. The
plaintiffs ceased paying annual dues on several lots, which
resulted in liens being placed on those properties. Id.
611 S.E.2d at 465. The plaintiffs filed an action seeking, inter
, to have the new assessment provisions declared null and void,
and the defendants filed a motion to dismiss for failure to join
all necessary parties. Id.
The trial court dismissed without
prejudice the plaintiffs' claim to invalidate the assessment
provisions for failure to join all property owners on Bald Head
On appeal, our Court recited the holding of Karner
"[A]ll property owners affected by a residential use restrictive
covenant [are] necessary parties to an action to invalidate that
at 154, 611 S.E.2d at 465 (citing Karner
, 170 N.C.
App. at 438-40, 527 S.E.2d at 43-44). However, while the
plaintiffs in Page
argued on appeal that the trial court erred by
dismissing their claim, the plaintiffs "acknowledge[d] that Karner
[was] controlling . . . and concede[d] that this Court [was] bound
by prior decisions of our Supreme Court." Id.
at 154, 611 S.E.2d
at 465. Therefore, our Court found the plaintiffs' assignment oferror to be without merit, and affirmed the trial court's
In the present case, Plaintiff argues that Page
because the covenant at issue in Page
was a covenant for the
payment of assessments, which was similar to the one at issue in
the present case. However, Page
does not reveal sufficient facts
for us to determine whether the covenant at issue was similar to
the one at issue in the present case. Moreover, Page
discuss how the nonparty property owners were in danger of losing
a property right by invalidation of the covenant because the
plaintiffs effectively conceded that Karner
applied and that the
Court was bound by Karner
. See id.
While invalidation of the
covenant in the present case could have some effect on nonparty
property owners in Fairfield Harbor, invalidation of the covenant
would not deprive them of any property right, which is required
to make them necessary parties.
For the reasons stated above, we hold the trial court did not
err by denying Plaintiff's motion to dismiss Defendants'
counterclaims. We overrule these assignments of error.
Plaintiff also argues the trial court erred by granting
Defendants' motions for partial summary judgment. Specifically,
Plaintiff argues the trial court erred by concluding that the
covenant to pay amenity fees was a personal covenant that did not
run with the land. Summary judgment is appropriate "if the
pleadings, depositions, answers to interrogatories, and admissionson file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that any party is
entitled to a judgment as a matter of law." N.C. Gen. Stat. §
1A-1, Rule 56(c) (2005). The party who moves for summary judgment
has the burden of "establishing the lack of any triable issue of
fact." Pembee Mfg. Corp. v. Cape Fear Constr. Co.
, 313 N.C. 488,
491, 329 S.E.2d 350, 353 (1985). "[T]he standard of review on
appeal from summary judgment is whether there is any genuine issue
of material fact and whether the moving party is entitled to a
judgment as a matter of law." Bruce-Terminix Co. v. Zurich Ins.
, 130 N.C. App. 729, 733, 504 S.E.2d 574, 577 (1998). We review
the evidence in the light most favorable to the nonmoving party.
The following principles also apply to our review of the
restrictive covenant at issue in the present case. "A covenant is
either real or personal. Covenants that run with the land are real
as distinguished from personal covenants that do not run with the
land." Raintree Corp. v. Rowe
, 38 N.C. App. 664, 669, 248 S.E.2d
904, 907 (1978).
The significant distinction between these
types of covenants is that a personal covenant
creates a personal obligation or right
enforceable at law only between the original
covenanting parties, . . . whereas a real
covenant creates a servitude upon the land
subject to the covenant ("the servient
estate") for the benefit of another parcel of
land ("the dominant estate")[.]
Runyon v. Paley
, 331 N.C. 293, 299, 416 S.E.2d 177, 182 (1992)
(citations omitted). The three essential elements for the creationof a real covenant are "(1) the intent of the parties as can be
determined from the instruments of record; (2) the covenant must be
so closely connected with the real property that it touches and
concerns the land; and, (3) there must be privity of estate between
the parties to the covenant." Raintree
, 38 N.C. App. at 669, 248
S.E.2d at 908.
A. Intent of the Parties
As to the intent requirement, our Court has held that a
recital that the covenant is to run with the land "is not
controlling. The express intent of the parties can prohibit a
covenant from running with the land, but it cannot make a personal
covenant run with the land." Raintree
, 38 N.C. App. at 669, 248
S.E.2d at 908. Our Court has further clarified that "[i]ntent
alone is not sufficient to make the covenant run. The other legal
requirements must be met." Id.
(citing Neponsit Property Owners'
Ass'n v. Emigrant I. Sav. Bank
, 15 N.E.2d 793 (N.Y. 1938)).
"Whether restrictions imposed upon land by a grantor create a
personal obligation or impose a servitude upon the land enforceable
by subsequent purchasers from his grantee is determined by the
intention of the parties at the time the deed containing the
restriction was delivered." Stegall v. Housing Authority
, 278 N.C.
95, 100, 178 S.E.2d 824, 828 (1971). "Restrictions in a deed will
be regarded as for the personal benefit of the grantor unless a
contrary intention appears, and the burden of showing that they
constitute covenants running with the land is upon the party
claiming the benefit of the restriction." Id.
at 101, 178 S.E.2dat 828. In Raintree
, our Court further recognized that "[t]hese
principles apply with especial force to persons who (such as
Raintree) are not parties to the instrument containing the
, 38 N.C. App. at 669, 248 S.E.2d at 908
, 278 N.C. 95, 178 S.E.2d 824).
In the present case, the Master Declaration states that all
restrictions "shall be deemed to be restrictions running with the
land and binding on Purchasers, their heirs, successors and
assigns[.]" The Master Declaration also specifically declares that
"[t]he power to levy [a recreational amenities charge] shall inure
also to the successors and assigns of each such recreational
amenity[.]" Moreover, the Master Declaration provides that the
provisions set forth therein "shall, as to the owner of each such
property [within Fairfield Harbour], his heirs, successors or
assigns, operate as covenants running with the land for the benefit
of each and all other properties in Fairfield Harbour and their
Defendants counter that the provisions setting forth the
intent that the restrictive covenants run with the land are merely
"boilerplate recitals." Defendants specifically contend that
because the Master Declaration only gave property owners a license
to use recreational amenities, the parties did not intend for the
covenant to pay amenity fees to run with the land. We disagree.
While the fact that property owners merely have a license in the
recreational amenities is material to our analysis of the touch and
concern requirement, discussed below, it has no bearing on theintent of the parties. We hold that by virtue of the several
declarations discussed above, the parties intended that the
covenant to pay amenity fees would run with the land. However, as
we have already recognized, "[i]ntent alone is not sufficient to
make the covenant run. The other legal requirements must be met."
, 38 N.C. App. at 669, 248 S.E.2d at 908.
B. Touch and Concern
Regarding the touch and concern requirement, our Supreme Court
has recognized that this element "is not capable of being reduced
to an absolute test or precise definition." Runyon
, 331 N.C. at
300, 416 S.E.2d at 183. Our Court has stated one of the historical
tests as follows: "'[I]t may be laid down as a rule without any
exception, that a covenant to run with the land, and bind the
assignee, must respect the thing granted or demised, and that the
act covenanted to be done or omitted, must concern the lands or
estate conveyed.'" Raintree
, 38 N.C. App. at 670, 248 S.E.2d at
908 (quoting Nesbit v. Nesbit
, 1 N.C. 490, 495 (1801)). Our Court
has further stated that "[t]o touch and concern the land, the
object of the covenant must be 'annexed to, inherent in, or
connected with, land or other real property,' or related to the
land granted or demised." Id.
(quoting 20 Am. Jur. 2d Covenants,
§ 29 (1965)).
At common law, courts drew a distinction between negative
covenants, which prohibit something, and affirmative covenants,
which require a positive act. Id.
At common law, negative
covenants ran with the land, while affirmative covenants did not. Id.
"As a result of the common law rule on affirmative covenants,
the requirements for a covenant to run are to be more strictly
applied to affirmative covenants than negative covenants." Id.
, the plaintiff, Raintree Corporation, purchased
the original developer's interest in a planned residential
community named the Village of Raintree. Raintree
, 38 N.C. App. at
665, 248 S.E.2d at 906. Pursuant to certain recorded covenants,
conditions and restrictions, every owner of a lot in the Village of
Raintree was a mandatory member of Raintree Country Club and was
obligated to pay club dues. Id.
at 665-66, 248 S.E.2d at 906. The
plaintiff sued the defendants, who owned a lot in the Village of
Raintree, to collect, inter alia
, unpaid country club dues. Id.
665, 248 S.E.2d at 906. The defendants moved to dismiss on the
ground that the plaintiff was not the real party in interest, and
the trial court, which treated the motion as one for summary
judgment, dismissed the action. Id.
at 666, 248 S.E.2d at 906.
In order to determine whether the plaintiff was the real party
in interest, our Court had to examine whether the covenant was real
or personal. Id.
at 668-71, 248 S.E.2d at 907-09. Our Court
determined that the developer intended the covenants to run with
the land. Id.
at 669, 248 S.E.2d at 908. However, because this
determination was not dispositive of the issue, our Court examined
whether the covenant at issue touched and concerned the land,
This covenant creates an affirmative duty, a
charge or obligation to pay money, i.e.
country club dues, for the services and use of
the country club facilities which are notupon, connected with, or attached to the
defendants' land in any way. The defendants
are required to pay, whether they use the
facilities or not. The payment of a
collateral sum of money does not concern the
land. Nesbit v. Nesbit, supra
. Courts have
generally held that covenants to pay money do
not touch and concern the land. Neponsit
Property Owners' Ass'n v. Bank, supra
. . . .
We find that the performance by the defendants
of this covenant is not connected with the use
of their land and does not touch or concern
their land to a substantial degree.
at 670, 248 S.E.2d at 908-09. Therefore, the Court held that
the covenant to pay country club dues was a personal covenant. Id.
at 671, 248 S.E.2d at 909. Accordingly, because personal covenants
are not assignable, our Court held that the plaintiff was not the
real party in interest and, therefore, affirmed the trial court.
at 671-72, 248 S.E.2d at 909.
Like the covenant at issue in Raintree
, the covenant at issue
in the present case is an affirmative covenant. Therefore, we must
strictly construe the requirements for creation of a real covenant.
, 38 N.C. App. at 670, 148 S.E.2d at 908. Also, as in
, Defendants in the present case are required to pay the
recreational amenity fees whether or not they use the amenities
financed by the charge. Additionally, the recreational amenities
are open, for a fee, to members of the public who do not own
property within Fairfield Harbour.
In support of its holding in Raintree
, our Court recognized
that the country club facilities were "not upon, connected with, or
attached to the defendants' land in any way[,]" and that "the
performance by the defendants of this covenant is not connectedwith the use of their land and does not touch or concern their land
to a substantial degree." Id.
at 670, 248 S.E.2d at 908-09.
However, our Court did not explain why the performance of the
covenant was not sufficiently connected with the use of the
defendants' land. In support of its holding in Raintree
, our Court
did cite a New York case, Neponsit Property Owners' Ass'n v.
Emigrant I. Sav. Bank
, 15 N.E.2d 793 (N.Y. 1938), and we find
instructive on this issue.
, the plaintiff's predecessor in interest had sold
lots in a residential community, including the land sold to the
defendant's predecessor in title, subject to restrictive covenants.
, 15 N.E.2d at 793-94. One of the covenants provided for
payment of a sum of money "devoted to the maintenance of the roads,
paths, parks, beach, sewers and such other public purposes as shall
from time to time be determined by the party of the first part, its
successors or assigns." Id.
at 794. The Court of Appeals of New
York determined that the covenant was a real covenant that ran with
the defendant's land. Id.
at 797. The Court of Appeals of New
York emphasized that the grantees of the plaintiff's predecessor in
title "obtained not only title to particular lots, but an easement
or right of common enjoyment
with other property owners in roads,
beaches, public parks or spaces and improvements in the same
(emphasis added). The Court further held as follows:
For full enjoyment in common by the defendant
and other property owners of these easements
or rights, the roads and public places must be
maintained. In order that the burden of
maintaining public improvements should rest
upon the land benefited by the improvements,the grantor exacted from the grantee of the
land with its appurtenant easement or right of
enjoyment a covenant that the burden of paying
the cost should be inseparably attached to the
land which enjoys the benefit. It is plain
that any distinction or definition which would
exclude such a covenant from the
classification of covenants which 'touch' or
'concern' the land would be based on form and
not on substance.
, the fact that the grantees of lots within the
development received an easement in the common areas and amenities
financed by those fees was central to the Court's holding that the
covenant to pay a fee touched and concerned the land. See id.
contrast, by virtue of the unique set of covenants at issue in the
present case, Defendants do not have any easement rights in the
recreational amenities financed by the recreational amenity charge;
they only have easement rights in the common areas, or parks,
within Fairfield Harbour. The Master Declaration provides that
"the use and enjoyment [of the recreational amenities] shall be on
such terms and conditions as FHI, its successors, grantees or
assigns, from time to time shall license[.]" Therefore, Defendants
merely have a revocable license to use the recreational amenities.
We find this to be a key distinction, and hold that in the present
case, the covenant to pay amenity fees did not touch and concern
Our decision is further supported by Homeowners Assoc. v.
, 62 N.C. App. 205, 302 S.E.2d 848, cert. denied
, 309 N.C.
461, 307 S.E.2d 364 (1983), where our Court dealt with an
affirmative covenant for the payment of maintenance assessments incommon areas and amenities in which the lot owners had easement
rights. In Homeowners Assoc.
, the plaintiff homeowners'
association filed an action against the defendants for unpaid
monthly assessments which were required by the subdivision's
restrictive covenants. Id.
at 206, 302 S.E.2d at 850. The
restrictive covenants provided that the plaintiff could levy
assessments "to provide funds for, among other things, maintenance,
landscaping, and beautification of the common areas of the
Importantly, the covenants further provided as
follows: "The common areas are all the real property owned by the
Association for the use and enjoyment of members of the
Association. Every owner has a nonexclusive right and easement of
enjoyment in the common areas. The easements are appurtenant to
each lot." Id.
The trial court found and concluded that the defendants were
required to pay the maintenance assessments, and the defendants
at 206-07, 302 S.E.2d at 850. However, because the
defendants failed to except to any of the trial court's findings of
fact and conclusions of law, our Court's review was limited to the
questions of "whether the judgment rendered [was] supported by the
findings of fact and whether any error of law appear[ed] on the
face of the record." Id.
at 209-10, 302 S.E.2d at 851-52. Because
the trial court "found [that] the covenants and restrictions ran
with the land, and [that] [the] defendants were delinquent in
paying the required assessments, the judgment obviously was
supported by the findings of fact and conclusions of law." Id.
at210, 302 S.E.2d at 852.
Nevertheless, our Court went on to state that "[a]lthough not
necessary to the disposition of this case, we will briefly address
the issues [the] defendants have attempted to raise in their
Although dicta, our Court's analysis is instructive.
The defendants argued that the covenant "[did] not touch and
concern the land because some of the recreational facilities, which
[were] financed by the maintenance fees, [were] several blocks away
from [the] defendants' lots." Id.
Our Court stated that
[t]he covenant, however, runs with each lot in
the entire subdivision of which [the]
defendants' lots are but a small part. The
recreational facilities are in the
subdivision, for the use of all the people who
live in the subdivision. It does not matter
that the facilities are not adjacent to each
lot, it is sufficient that they touch and
concern the entire subdivision.
Our Court further stated that "[t]his case is easily
distinguishable from Raintree
because the recreation facilities
here are not in a country club, but are actually on the
. . . subdivision for the benefit of lot owners
at 211, 302
S.E.2d at 853 (emphasis added).
In Homeowners Assoc.
, the lot owners had easement rights in
the common areas, which included some recreational facilities.
However, Defendants in the present case do not have easement rights
in the recreational amenities; they only have easement rights in
the common areas, or parks, within Fairfield Harbour. In
, although not explicitly stated, it appears that
by virtue of the defendants' easement rights, and because thecommon areas were therefore "appurtenant to" the defendants' lots,
the covenant for payment of assessments to maintain those common
areas touched and concerned the defendants' land. See Homeowners
, 62 N.C. App. at 206-11, 302 S.E.2d at 850-53. In contrast,
in the present case, the recreational amenities are not appurtenant
to Defendants' properties, and therefore, the covenant to pay
amenity fees does not touch and concern Defendants' properties.
Plaintiff argues that Runyon
provides support for its argument
that a covenant for maintenance of recreational amenities touches
and concerns land within a subdivision if the value of the lots
within the subdivision are affected by the maintenance of the
recreational amenities. We disagree.
, the plaintiffs sought to enjoin the defendants from
constructing condominiums on their property in violation of a
restrictive covenant placed on the defendants' property by the
plaintiffs' predecessor in interest. Runyon
, 331 N.C. at 297-98,
416 S.E.2d at 181-82. In determining whether the plaintiffs were
entitled to enforce the covenant, our Supreme Court analyzed the
touch and concern requirement. Id.
at 300-01, 416 S.E.2d at 183-
84. The Supreme Court recognized that "the nature of the
restrictive covenants at issue in this case (building or use
restrictions) is strong evidence that the covenants touch and
concern the dominant and servient estates." Id.
at 301, 416 S.E.2d
at 183. The Supreme Court then concluded as follows:
Considering the close proximity of the lands
involved here and the relatively secluded
nature of the area where the properties are
located, we conclude that the right torestrict the use of [the] defendants' property
would affect [the] plaintiffs' ownership
interests in the property owned by them, and
therefore the covenants touch and concern
at 301, 416 S.E.2d at 184.
Plaintiff makes much of the Supreme Court's language in Runyon
that for a covenant to touch and concern land, "[i]t is sufficient
that the covenant have some economic impact on the parties'
ownership rights by, for example, enhancing the value of the
dominant estate and decreasing the value of the servient estate."
at 300, 416 S.E.2d at 183. However, Runyon
distinguishable from the present case because it dealt with a
negative, rather than an affirmative covenant. While the negative
nature of the covenant in Runyon
was "strong evidence" that it ran
with the land, the affirmative nature of the covenant in the
present case is strong evidence that the covenant did not run with
the land. See Runyon
, 331 N.C. at 301, 416 S.E.2d at 183; see also
, 38 N.C. App. at 670, 248 S.E.2d at 908 (recognizing that
"[a]s a result of the common law rule on affirmative covenants, the
requirements for a covenant to run are to be more strictly applied
to affirmative covenants than negative covenants."). Furthermore,
did not deal with a covenant common to an entire
subdivision, like the one at issue in the present case. Rather,
the covenant at issue in Runyon
was between two parties with
properties in close proximity to one another. Accordingly, Runyon
does not analogize well with the present case, and does not provide
support for Plaintiff's argument. Both Plaintiff and Defendants also cite Bermuda Run Country
Club v. Atwell
, 121 N.C. App. 137, 465 S.E.2d 9 (1995), where a set
of restrictive covenants provided that the Board of Governors of a
country club had to approve increases in assessments and club dues.
at 138, 465 S.E.2d at 11. The plaintiff corporation, which
owned and operated the country club, sought a declaration that the
restrictive covenants were null and void. Id.
at 139-40, 465
S.E.2d at 12. The plaintiff argued that the covenants created
rights and responsibilities that existed independently of the
parties' ownership interests in the land and that the covenants did
not run with the land. Id.
at 142, 465 S.E.2d at 13. However, the
defendants argued that the covenants did run with the land, arguing
"that the country club is located within a residential community,
and thus, the residents' interests in protecting the value of their
investment and membership in the club would be substantially
impaired and diminished if the covenants were not upheld." Id.
Our Court held: "The covenants at issue here allow the Board of
Governors to give or veto approval of increases in assessments or
dues of the country club. These covenants are not directly
connected with the land in the instant case; therefore, they do not
touch and concern the land." Id.
In the present case, Plaintiff makes an argument similar to
the one rejected by our Court in Bermuda Run
. In Bermuda Run
defendants argued that "the residents' interests in protecting the
value of their investment and membership in the club would be
substantially impaired and diminished if the covenants were notupheld." Id.
However, the Court held that the covenants were not
"directly connected with the land[.]" Id.
Like the defendants in
, Plaintiff in the present case argues that if the
covenant is not upheld, it will diminish the value of the land in
Fairfield Harbour. However, as in Bermuda Run
, the covenant in the
present case, which calls for payment of a recreational amenities
charge, is not "directly connected" to Defendants' properties
because Defendants merely have a license to use the recreational
amenities; those recreational amenities are not appurtenant to
For all the reasons stated above, we hold that the covenant to
pay amenity fees did not touch and concern Defendants' properties.
C. Privity of Estate
Defendants do not appear to challenge whether privity of
estate existed in the present case. In fact, one set of Defendants
concedes the existence of privity of estate. However, because we
hold that the covenant to pay amenity fees did not touch and
concern the land, we need not address the issue of privity of
estate. See Raintree
, 38 N.C. App. at 670-71, 248 S.E.2d at 909
(holding that "[s]ince the covenant does not touch and concern the
land, an essential requirement is absent and it is not necessary to
discuss the question of privity of estate.").
Because we hold that the covenant to pay amenity fees did not
touch and concern Defendants' properties, we hold that the covenant
was a personal covenant. As such, the covenant did not run withthe land and was not enforceable by Plaintiff, as a successor in
interest to the original covenantor. Accordingly, the trial court
did not err by granting Defendants' motions for partial summary
Plaintiff also argues that "if the provision of the Master
Declaration providing for payment of the amenity fee is held to be
a personal covenant and unenforceable, the 1993 covenants which are
premised on the validity of the amenity fee provision of the Master
Declaration also should be declared unenforceable." However, it
does not appear that Plaintiff made this argument before the trial
court. Therefore, this issue is not properly before us. See Wood
, 160 N.C. App. 697, 699, 586 S.E.2d 801, 803 (2003),
disc. review denied
, 358 N.C. 550, 600 S.E.2d 469 (2004)
(recognizing that "a contention not raised and argued in the trial
court may not be raised and argued for the first time in the
appellate court."). Moreover, because this contention was not
assigned as error, this issue is not properly presented for review.
N.C.R. App. P. 10(a) (stating: "Except as otherwise provided
herein, the scope of review on appeal is confined to a
consideration of those assignments of error set out in the record
on appeal in accordance with this Rule 10."). Accordingly, this
argument is not properly before us.
Judges HUNTER and SMITH concur.
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