Opinion
NO. 2016-CA-000249-MR
05-19-2017
DAVID R. CHEESE; AND LOUATHA B. CHEESE APPELLANTS v. STEPHEN A. DEXTER; AND STACEY S. DEXTER APPELLEES
BRIEF FOR APPELLANTS: Frederick V. Short Hustonville, Kentucky BRIEF FOR APPELLEES: J. Hadden Dean Danville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM BOYLE CIRCUIT COURT
HONORABLE DARREN W. PECKLER, JUDGE
ACTION NO. 15-CI-00349 OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
** ** ** ** **
BEFORE: COMBS, MAZE, AND STUMBO, JUDGES. MAZE, JUDGE: David R. Cheese and Louatha B. Cheese (the Cheeses) appeal from an order of the Boyle Circuit Court dismissing their action to enforce restrictive covenants against Stephen A. Dexter and Stacey S. Dexter (the Dexters). They contend that the trial court erred in finding that an outbuilding and a swimming pool built by the Dexters did not violate the restrictions. We agree with the trial court that the swimming pool clearly did not violate the restrictions because the Dexters obtained prior written approval for it. We agree with the trial court that the restriction on outbuildings was unambiguous, and in light of the entire instrument, it did not prohibit the construction of the Dexter's outbuilding. However, we conclude that there is a factual issue whether the Dexters were required to obtain prior approval for the outbuilding. Therefore, we affirm in part, reverse in part, and remand for additional findings on this one issue.
The Cheeses are the owners of Lot 52, Section 1 of the Rolling Meadows Subdivision in Danville, Kentucky. The Dexters are the owners of Lot 25 in the same subdivision. The Cheeses home is across the street and one house down from the Dexters. Both lots are subject to a Deed of Restrictions filed of record in the Boyle County Clerk's Office. Section (16) of the Deed of Restrictions permits any homeowner in the subdivision to bring an action to enforce the restrictive covenants.
In late 2014 or early 2015, the Dexters erected an outbuilding on their property. The Cheeses sent them a letter complaining that the outbuilding violated the Deed of Restrictions. Shortly thereafter, the Dexters had an in-ground swimming pool constructed on their property. On August 24, 2015, the Cheeses brought this action, alleging that the outbuilding and the pool violated the deed of restrictions, and seeking compensatory damages and injunctive relief.
The Dexters responded with a motion to dismiss, arguing that the outbuilding did not violate the unambiguous terms of the Deed of Restrictions. In addition, they presented evidence that their developer had approved the design of the pool, as required by the Deed of Restrictions. After considering the motion and the evidence of record, the trial court granted the motion to dismiss by order entered on January 5, 2016. The Cheeses filed a motion to alter, amend, or vacate the dismissal pursuant to CR 59.05, which the trial court denied. This appeal followed.
Kentucky Rules of Civil Procedure.
This matter was presented to the trial court on a motion to dismiss pursuant to CR 12.02. But when matters outside of the pleading are presented on a motion to dismiss, as in this case, the trial court must treat it as a motion for summary judgment. CR 12.03. "The proper function of summary judgment is to terminate litigation when, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor." Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480 (Ky. 1991). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56.03. The record must be viewed in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor. Steelvest, 807 S.W.2d at 480. The trial court must examine the evidence, not to decide any issue of fact, but to discover if a real issue exists. Id. Since a summary judgment involves no fact-finding, this Court's review is de novo, in the sense that we owe no deference to the conclusions of the trial court. Scrifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996).
The Cheeses argue that both the outbuilding and the swimming pool violate the Deed of Restrictions. With regard to the outbuilding, Section (6) of the deed of restrictions provides that, "[n]o trailer, basement, mobile home, tent, or shack, or other outbuilding shall be placed, erected or used at any time for a residence, either temporarily or permanently." The trial court found that the prepositional phrase, "for a residence" modifies the verbs "placed," "erected," and "used." Consequently, the court concluded that the provision does not prohibit the mere placement of an outbuilding on a subdivision lot, but only prohibits such outbuilding from being used as a residence. For their part, the Cheeses focus on the use of the conjunction "or" in Section (6). In their reading, the provision should be read as prohibiting an outbuilding from being "placed," or "erected," or "used as a residence," either temporarily or permanently.
A question involving the construction of a deed or contract is a question of law that will be decided by the court and, unless there is ambiguity, the parties' intentions must be discerned from the four corners of the instrument. Melton v. Melton, 221 S.W.3d 391, 393 (Ky. App. 2007). An instrument is ambiguous if it is capable of more than one reasonable interpretation. Richey v. Perry Arnold, Inc., 391 S.W.3d 705, 709 (Ky. 2012). The primary rule for construing an ambiguous or inconsistent contract is to discern the parties' intent from the entire document; reconcile inconsistent terms where possible; and effectuate the parties' intent. Id. Extrinsic evidence is only admissible if the intention of the parties cannot be gathered from the four corners of the instrument. Hoheimer v. Hoheimer, 30 S.W.3d 176, 178 (Ky. 2000). Furthermore, any ambiguity in a restrictive covenant must be construed strictly against the party seeking to enforce it. Goodwin Bros. v. Combs Lumber Co., 275 Ky. 114, 120 S.W.2d 1024, 1025 (1938).
We agree with the Cheeses that Section (6), when read in isolation, could be susceptible to more than one reasonable interpretation, including the one that they proffer. Nevertheless, when read in light of the entire Deed of Restrictions, we conclude that Section (6) is unambiguous. As the Dexters note, Section (3) of the Deed of Restrictions requires a homeowner to obtain the approval of the developer prior to building any "structure" on a subdivision lot. Such approval is inconsistent with a categorical prohibition against the placement of any structure on a subdivision lot.
Furthermore, where general words follow a designation of particular subjects or classes of persons, the meaning of the general words will ordinarily be presumed to be restricted by the particular designation, and to include only things or persons of the same kind, class or nature as those specifically enumerated, unless there is a clear manifestation of a contrary purpose. Mills v. City of Barbourville, 273 Ky. 490, 117 S.W.2d 187, 188 (1938). Here, Section (6) identifies the types of structures, "trailer, basement, mobile home, tent, or shack, or other outbuilding," which cannot be "placed, erected, or used . . . ."
The inclusion of "basement" is particularly notable. Unlike the other listed structures, a basement is usually part of another structure and not freestanding. Indeed, Section (4) of the Deed of Restrictions anticipates that residences may have a basement, but excludes the square footage of any basement from the minimum required living space. The more likely interpretation of this provision is that the developer merely intended to prohibit the placement, erection, or use of a basement as a residence. Likewise, the same interpretation must apply to the other listed structures, including "outbuilding." When read in this context, the trial court correctly concluded that the Dexter's storage shed did not violate the deed of restrictions.
Joseph Sharpe, who was one of the original developers of the subdivision, submitted an affidavit stating that the restriction was intended to prohibit the placement or erection of a basement "by itself." However, such extrinsic evidence is not admissible to explain the meaning of an unambiguous term such as "basement."
The Cheeses also argue that the Dexters failed to obtain prior approval for the storage shed as required by Section (3). The trial court found that the Dexters were not required to obtain approval for the outbuilding. The court noted that Section (11) requires prior approval for a swimming pool or tennis court and specifically references Section (3), but Section (6) does not include a similar reference. However, the language of Section (3) requires prior approval from the developer for any "structure." Section (3) also requires approval for a fence, even though Section (11) addresses fence requirements but does not reference the approval process.
And, as noted above, the most reasonable interpretation of Section (6) is that the listed structures may be permitted, but are subject to the approval process of Section (3). We conclude that this ambiguity cannot be clearly resolved from the four corners of the instrument. The trial court also suggested that any approval requirement for outbuildings has been waived through non-enforcement. The right to enforce a restrictive covenant may be lost by waiver or abandonment. Bagby v. Stewart's Ex'r, 265 S.W.2d 75, 77 (Ky. 1954). However, the existence of such a waiver is a question of fact, which was not ripe for summary judgment. Therefore, we must remand these issues to the trial court for additional findings of fact.
With regard to the swimming pool, the Dexters presented an affidavit from R. Steele Gregory, who was vested with the sole authority to approve swimming pool plans in the Rolling Meadows Subdivision. Gregory stated that he reviewed and approved the swimming pool plans submitted by the Dexters. The Cheeses do not contest that the Dexters obtained the proper approval, but contend that the Dexters' pool failed to comply with the design specifications set out in Section (11). They suggest that the Dexters failed to make a full disclosure to Gregory about the design and materials used for the swimming pool. However, Gregory specifically stated in his affidavit that the Dexters fully disclosed their plans, materials to be used, and specifications for their swimming pool. In the absence of any more specific allegations of fraud, CR 9.02, there is no factual issue remaining for the trial court to decide. Therefore, the trial court properly granted summary judgment on this matter.
In a separate affidavit, Gregory also stated that he denied approval for the Dexter's outbuilding. --------
Accordingly, the order of the Boyle Circuit Court is affirmed in apart, reversed in part, and remanded for additional proceedings and findings whether the Dexters were required to obtain prior written approval for their outbuilding, and whether such requirement or restriction has been waived through non-enforcement.
ALL CONCUR. BRIEF FOR APPELLANTS: Frederick V. Short
Hustonville, Kentucky BRIEF FOR APPELLEES: J. Hadden Dean
Danville, Kentucky