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WYKEHAM RISE, LLC v. FEDERER

Connecticut Superior Court Judicial District of Litchfield at Litchfield
Mar 24, 2010
2010 Conn. Super. Ct. 7381 (Conn. Super. Ct. 2010)

Opinion

No. LLI CV 08 4007541S

March 24, 2010


MEMORANDUM OF DECISION


The motion before the court is the plaintiff's motion for summary judgment (#120) premised on the ground that there are no questions of material fact and the restrictive covenants at issue are null and void as a matter of law. For the following reasons, the plaintiff's motion for summary judgment must be granted.

FACTS

On November 17, 2008, the plaintiff, Wykeham Rise, LLC, filed a revised, one-count complaint against the defendants, Wendy R. Federer and Eric A. Federer, in which it seeks a declaratory judgment that the restrictive covenants in a deed to property it owns in Washington, Connecticut are null, void and of no legal effect. In an answer to the plaintiff's complaint and in a revised counterclaim, the defendants seek to quiet title and allege that they are entitled to enforce these restrictive covenants. The following facts are undisputed.

In May 1990, Wykeham Rise School (the school) sold its property (the school property) to HotelConsult SHCC (HotelConsult). As part of that conveyance, the school placed restrictive covenants on the school property and those covenants were included in the deed from the school to HotelConsult. In its revised complaint, the plaintiff alleges that: 1) the school did not own any other adjacent real property or any other real property when it conveyed the school property to HotelConsult with the restrictive covenants; 2) the deed of conveyance was not part of a general development scheme; and 3) HotelConsult did not convey adjoining property to the school when this conveyance was made.

The covenants in the deed provide: "By its acceptance hereof, the Grantee, for itself and its successors and assigns, hereby covenants and agrees that: 1. It will not construct any buildings or structures or any parking lots on that area of the above described premises lying within 330 feet, more or less, at all points, northerly from the most southerly boundary of said premises, which area is now commonly known as the 'Playing Field.' 2. It will not subdivide the above described premises into more than three (3) parcels, which conform to the then applicable zoning regulations of the Town of Washington. 3. The provisions of paragraph 2 above notwithstanding, in the event that it desires to sell the above described premises at any time subsequent to the date hereof, it will first use its best efforts to attempt to sell the same as a whole, in their entirety. 4. So long as the above described premises are being operated as a post secondary hotel management school, any inn operated on said premises, in conjunction therewith, shall be limited to no more than five (5) units; any restaurant operated on said premises, in conjunction therewith, shall seat no more than forty (40) persons; and such inn and restaurant shall be used solely as practice facilities for the students of said school. 5. The foregoing covenants and agreements shall be binding upon the Grantee, its successors and assigns, shall inure to the benefit of the Grantor, its successors and assigns, and shall run with the land."

In their reply to these allegations, the defendants state that they "lack any knowledge or information sufficient to form a belief . . . and leave [the plaintiff] to its proof." Moreover, the defendants do not dispute these allegations in their memorandum in opposition, and the evidence submitted by defendants supports these allegations.

On July 26, 1991, the Secretary of the State of Connecticut issued a filing of forfeiture, or an administrative dissolution, for the school. On November 29, 1995, the defendants obtained a parcel of property at 27 Bell Hill Road in Washington, Connecticut by a deed from Bertram Read, Wendy Federer's father. The defendants' property is adjacent to a portion of the easterly boundary of the school property. By a deed dated November 14, 2004, HotelConsult conveyed the school property to Les Amis, LLC (Les Amis), and the covenants were not listed therein.

On February 2, 2005, John F. Field, the last chairman of the board of trustees of the school assigned Wendy Federer all right, title and interest in and to the rights and benefits of the restrictive covenants that were originally placed in the deed from the school to HotelConsult. On July 13, 2005, Wendy Federer wrote to Les Amis to remind it of the existence of the restrictive covenants and advised Les Amis of her intention to enforce such covenants. Later, on January 7, 2008, Les Amis responded to Wendy Federer's letter and stated its belief that the restrictive covenants are unenforceable and that the assignment to the defendants was a nullity.

As discussed later in this memorandum, since the court determines that the restrictions are void, it does not reach the issue of whether the assignment was valid.

By a deed dated March 29, 2008, Les Amis conveyed the school property to Wykeham Rise, LLC, the plaintiff. The deed referenced the restrictive covenants. After this conveyance, the plaintiff indicated its intention to build an inn on the school property. The defendants learned of the plaintiff's plan by July 26, 2008, and objected to it. Then, on July 26, 2008, Wendy Federer declared her ownership of the assignment and its benefits therein in a document entitled "declaration of beneficial ownership," which is recorded in the Washington land records.

The "declaration of beneficial ownership" provides: "The undersigned, being duly sworn, deposes and says: 1. That by Conveyance and Assignment from Wykeham Rise School, Incorporated dated February 2, 2005 and recorded in Volume 184 at Page 123 of the Washington Land Records ('the Conveyance and Assignment'), the undersigned acquired, as trustee, all right, title and interest in and to the rights and benefits of certain covenants and agreements under a deed recorded in Volume 114 at Page 593 of the Washington Land Records, as more particularly described in said Conveyance and Assignment. 2. Said rights and benefits relate to restrictions on certain property described in said deed that is recorded in Volume 114 at Page 593 and also described in the deed in favor of Wykeham Rise, LLC dated March 31, 2008 and recorded in Volume 204 at Page 236 of the Washington Land Records (the 'School Property'), the School Property appears by the record as to be owned, as of the dated hereof, by Wykeham Rise, LLC. The School Property is more particularly described as set forth in Exhibit A which is attached hereto and made a part hereof. 3. The undersigned declares and states that, from and after the date of acquisition of the rights and benefits pursuant to the Conveyance and Assignment, she held and now holds such rights and benefits as trustee for the benefit of herself and Eric A. Federer and their heirs and assigns as owners of certain property described in that certain deed in favor of Eric A. Federer and Wendy R. Federer dated November 29, 1995 and recorded in Volume 131 at Page 660 of the Washington Land Records (the "Federer Property") that is adjacent to the School Property, as appurtenances to the ownership of the Federer Property. The Federer Property is by the record owned by Eric A. Federer and Wendy R. Federer. The Federer Property is more particularly described as set forth in Exhibit B which is attached hereto and made a part hereof." The document is dated July 26, 2008, and signed by Wendy R. Federer, Trustee, and two witnesses.

The plaintiff's declaratory judgment action commenced on August 22, 2008, and on November 17, 2008, the plaintiff filed a revised complaint. On July 28, 2009, the defendants filed an answer and special defenses in reply to the plaintiff's revised complaint, as well as a revised counterclaim. The defendants raise two special defenses in response to the plaintiff's complaint. In their first special defense, the defendants allege that the plaintiff waived its right to challenge the enforceability of the restrictive covenants. In their second special defense, the defendants allege that the plaintiff has unclean hands. On September 11, 2009, the plaintiff filed a reply to the defendants' first and second special defenses in which it "denies the material allegations" of both defenses.

In their one-count, revised counterclaim, the defendants seek to quiet title and allege that they have the authority to enforce the restrictive covenants and that the restrictive covenants are valid and enforceable and were validly assigned to Wendy Federer. The defendants seek declaratory and injunctive relief that the covenants are valid and that plaintiff is prohibited from violating the covenants and injunctive relief prohibiting the plaintiff from filing applications that would violate the covenants. They also seek monetary damages, costs and any other equitable relief. On September 11, 2009, the plaintiff filed an answer to the defendants' counterclaim, in which it denies, inter alia, that the restrictive covenants are valid and that the defendants have the right to enforce the covenants.

Paragraph 23 of the counterclaim also provides: "[D]uring the administrative proceedings before the Zoning Commission and the Wetlands Commission, the Federers explained that the Restrictive Covenants are a 'conservation restriction' within the meaning of [General Statutes] § 47-42a and that Wykeham failed to follow the procedures required by [General Statutes] § 47-42d."

On the same day, the plaintiff filed the motion for summary judgment that is presently before the court, along with a supporting memorandum of law. The plaintiff moves for summary judgment as to the revised complaint dated November 17, 2008, and the revised counterclaim dated July 28, 2009. On December 7, 2009, the defendants filed a memorandum in opposition to the plaintiff's motion for summary judgment. This matter was heard at the short calendar on December 14, 2009.

DISCUSSION I TRIAL COURT STANDARDS

"Practice Book [§ 17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts, which under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Internal quotation marks omitted.) American Progressive Life Health Ins. Co. of New York v. Better Benefits, LLC, 292 Conn. 111, 119, 971 A.2d 17 (2009).

"A material fact has been defined adequately and simply as a fact which will make a difference in the result of a case." (Internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002). "It is not enough, however, for the opposing party merely to assert the existence of a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45]." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 319, 901 A.2d 1207 (2006). The court may not decide issues of material fact on a summary judgment motion, but only determine whether such genuine issues exist. Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1998).

II THE PARTIES' ARGUMENTS

In its motion for summary judgment, the plaintiff argues that there are no issues of material fact and: 1) the restrictive covenants are null, void and of no legal effect; and 2) the school's transfer of the restrictive covenants to Wendy Federer is null, void and of no legal effect. As to the first argument, the plaintiff states that the initial question is whether the restrictive covenants fall within one of the three types of restrictive covenants generally recognized by the court and whether they run with the land. The plaintiff asserts that the restrictive covenants in the deed do not fall into one of the three categories because: 1) mutual covenants were not exchanged; 2) there is no indication that the school sought to divide the property as part of a general development scheme; and 3) the school did not retain any land adjacent to the grantee when it sold the school property. While the plaintiff acknowledges that the court has recognized the validity of restrictive covenants falling outside of the three general categories, the plaintiff argues that the court has only accepted such covenants in "limited circumstances" and that none of those circumstances apply in the present matter. Moreover, the plaintiff argues that the restrictive covenants do not run with the land, despite the words of succession, because these restrictions are of the type that cannot run with the land.

Specifically, the plaintiff argues that Cannavaro v. Washington Community Housing, Superior Court, judicial district of Litchfield, Docket No. CV 03 0091521 (May 23, 2005, Pickard, J.) [ 39 Conn. L. Rptr. 413], upon which the defendants rely, is inapplicable. In contrast, however, the plaintiff argues that the court's reasoning in Williams v. Almquist, Superior Court, judicial district of Litchfield, Docket No. CV 06 5000595 (October 30, 2007, Marano, J.) [ 44 Conn. L. Rptr. 375], and DeTullio v. Chebrah Bikur Cholim, Inc., Superior Court, judicial district of Fairfield, Docket No. CV 96 0334892 (April 7, 1999, Skolnick, J.) ( 24 Conn. L. Rptr. 338), is applicable.

As to its second argument, the plaintiff asserts that the school's transfer of the restrictive covenant to Wendy Federer in February 2005, is void, null and of no legal effect because the school was dissolved at the time of the conveyance, the school had already wound up its affairs and Wendy Federer was the "impetus" behind the transfer. In support of its motion, the plaintiff submits: 1) an affidavit of Robert Fisher, Jr., the attorney who drafted the warranty deed from Les Amis to the plaintiff, along with certified copies of the 1990 deed from the school to HotelConsult, the 2004 deed from HotelConsult to Les Amis, the 2008 deed from Les Amis to the plaintiff, a release and waiver of the covenants issued by HotelConsult and a letter to the defendants' counsel on behalf of Les Amis; 2) an affidavit of Matthew Klauer, the plaintiff's managing member; 3) an affidavit of Harold Gootrad, a member of Les Amis along with Les Amis' alleged release and waiver of the covenants; and 4) transcript pages from Wendy Federer's deposition, along with several deposition exhibits.

In his affidavit, Attorney Fisher attests, inter alia: "[W]hen HotelConsult . . . conveyed the school property to Les Amis . . . in November 2004, the deed of conveyance made no reference to the restrictive covenants that [the school] had purportedly placed on the property . . . [I]n my capacity as legal counsel for Les Amis, LLC, I drafted the warranty deed by which Les Amis . . . conveyed the [s]chool [p]roperty to Wykeham Rise, LLC. I included a reference in that deed to the restrictions and covenants that had been placed in the deed from Wykeham Rise School, Incorporated to HotelConsult . . . dated May 9, 1990, because such restrictions arguably appeared of record in the chain of title; however, on the date I drafted that deed, neither Les Amis nor I believed that the restrictions and covenants referenced in that paragraph were legally binding on either party to that transaction. To the contrary, based on my examination of the Washington Land Records, the documents referenced herein, and my education, training and experience, I believed at the time I drafted the Les Amis . . . deed to Wykeham Rise . . . that the restrictive covenants specifically referenced therein were null and void and of no legal effect; That after [the plaintiff] acquired the School Property by virtue of the deed of conveyance from Les Amis, LLC to [the plaintiff] in March 2008, [the plaintiff] retained me to provide [the plaintiff with] legal services in connection with the efforts of [the plaintiff] to obtain permits from various land use boards within the Town of Washington to develop the School Property by constructing a country inn."

In his affidavit, Klauer attests, inter alia, "[A]t the time Wykeham Rise, LLC purchased the School Property, I was aware that there were purported restrictions and covenants that had previously existed in the chain of title by which Wykeham Rise . . . acquired the school property . . . [B]ased upon my own research, and the advice of lawyers retained by Wykeham Rise . . . to provide me opinions in this regard, I believed that on the date Wykeham Rise . . . purchased the School Property from Les Amis . . . and each date thereafter, the restrictive covenants referenced herein were null and void, and of no legal effect, notwithstanding my knowledge that reference to such restrictive covenants was contained in the deed of conveyance by which Wykeham Rise, LLC acquired the School Property from Les Amis . . ."

In his affidavit, Gootrad attests "the inclusion of the restrictive covenants in the deed of conveyance from Les Amis . . . to Wykeham Rise . . . occurred as a result of advice provided to me by our attorney . . . I did not believe Les Amis . . . ever had the right to enforce those restrictive covenants, as to Wykeham Rise . . . or any other entity . . . I have executed a release and waiver verifying that Les Amis . . . waives the right to enforce said restrictive covenants, if Les Amis . . . ever had such right in the first instance . . ."

On December 7, 2009, the defendants filed a memorandum in opposition to the plaintiff's motion for summary judgment in which they argue, inter alia, that there are genuine issues of material fact and, as a result, the court may not grant summary judgment. In their statement of the facts, the defendants acknowledge that the Secretary of the State issued a certificate of dissolution for the school on July 26, 1991, and that on September 9, 1992, the school's board of trustees voted to dissolve the school and transfer the school's remaining assets to the Gunn Memorial Library and Museum. The defendants also note, however, that "[d]espite ceasing its day-to-day operations, the School's Board of Trustees continued to intend that the Restrictive Covenants should be enforced after dissolution" and that the board retained the restrictive covenants despite the school's dissolution and transfer of its assets.

Specifically, the defendants state: "From 1990 to 2004, the School did not transfer the Restrictive Covenants because there was no indication during that time that the owner of the Property intended to violate the Restrictive Covenants. In early 2005, the School learned that the new owner of the Property, Les Amis, LLC, believed the Restrictive Covenants were unenforceable and was exploring development plans for the Property that would violate the Restrictive Covenants . . . Wendy Federer also first learned this information in early 2005. In 2005, the School determined that the best means to ensure the Restrictive Covenants would continue to be enforced, as it had intended when it created the restrictions was to convey the rights and benefits of the Restrictive Covenants to the Defendant, Wendy Federer. Accordingly, the School gave, granted, bargained, sold and assigned to Wendy Federer, Trustee, the rights and benefits of the Restrictive Covenants in a Conveyance and Assignment dated and recorded on February 2, 2005 . . ."

Based on this iteration of the facts, the defendants argue that there are several genuine issues of material fact in dispute. First, they argue, there are genuine issues of material fact in dispute as to the school's ability to convey the rights and benefits of the restrictive covenants after the school dissolved. Second, they argue, there are material issues of fact in dispute as to whether the plaintiff "waived any objections to the enforceability of the Restrictive Covenant[s] or is barred from seeking equitable relief due to its unclean hands regarding this issue." Third, they argue, there are material issues of fact in dispute as to whether the restrictive covenants "benefit the [defendants' property] and whether the School intended for them to do so, which will establish the validity of the Restrictive Covenants."

The court addresses these arguments later in this memorandum.

The defendants assert that the restrictive covenants were intended to benefit the defendants' property because of the request made by Bertram Read, the defendants' predecessor in interest to their property, and because of Wendy Federer's declaration of ownership. The defendants argue that various affidavits and deposition testimony support the notion that the covenants were intended to benefit their property. For example, John Field, the last board chairman of the school, attests in an affidavit submitted with the defendants' motion in opposition to summary judgment that "the school intended the Restrictive Covenants to benefit the properties surrounding the Property from being overdeveloped, and by preserving the rural character of the Property and the neighborhood. Bertram Read, [owner of the] property located a 27 Bell Hill Road, Washington, Connecticut, asked me if the Restrictive Covenants could be imposed, in part, to benefit his property. I asked the other members of the School's Board of Trustees if this was acceptable and we, on behalf of the School, agreed to propose them in negotiations, as long as the imposition of the Restrictive Covenants would not adversely affect the sale to HotelConsult. HotelConsult did not object, so the Restrictive Covenants were included in the final deed."
The defendants also argue that Matthew Klauer, the plaintiff's managing member, did not ask John Field about the school's intention in creating the restrictive covenants when they discussed the covenants. Moreover, the defendants argue that Matthew Klauer's statements about the value of the property as related to the restrictive covenants "raise serious issues about his credibility and compound the issues of fact whether the Restrictive Covenants benefit the [defendants'] property."

Regardless of these purported issues of material fact, the defendants assert that the restrictive covenants are valid as a matter of law and that the defendants, as third-party beneficiaries, are entitled to enforce the covenants. The defendants do not argue that the covenants fall within one of three generally recognized categories of deeds. Rather, they claim that "[b]oth Connecticut and other states enforce restrictive covenants . . . inside and outside the three typical categories of restrictive covenants when third party beneficiaries seek to enforce restrictive covenants that benefit their property and were intended to so." In addition, the defendants argue, Wendy Federer's recording of the declaration of beneficial ownership "explicitly shows that the restrictive covenants benefit" the defendants' property.

Furthermore, the defendants argue, recent Superior Court decisions relied on by the plaintiff are "erroneously . . . based on rules for covenants not to compete, not on the property law rules for restrictive covenants." (Emphasis in original.) The defendants note: "For restrictive covenants falling outside of these categories, different Superior Court decisions have used different methods of analysis. The most convincing approach was used in Cannavaro v. Washington Community Housing, [Superior Court, judicial district of Litchfield, Docket No. CV 03 0091521 (May 23, 2005, Pickard, J.) ( 39 Conn. L. Rptr. 413)], where the court held that third-party beneficiaries can enforce restrictive covenants that benefit their property." Finally, the defendants argue that the covenants run with the land because words of succession create a presumption that they run with the land, and there is evidence that the covenants enhance the value of the defendants' property.

In support of their objection to the plaintiff's motion for summary judgment, the defendants submit: 1) an affidavit of Wendy Federer, attached to which are copies of: a) the school's deed to HotelConsult; b) HotelConsult's deed to Les Amis; c) the alleged assignment from the school to Wendy Federer; d) a copy of the cancelled check that Wendy Federer gave to the school as consideration for the conveyance of the alleged assignment; e) Les Amis' deed to the plaintiff; f) Wendy Federer's "declaration of ownership"; g) surveys that the plaintiff submitted with its 2008 application to the zoning commission and wetlands commission, which includes a notation that the property is subject to the restrictive covenants; and h) a letter that the plaintiff allegedly attached to its zoning commission application in which it offered to issue restrictive covenants to the town of Washington that the defendants' claim are similar to the covenants being challenged in the present matter; 2) an affidavit of John H. Field, the school's last chairman, attached to which are copies of: a) the school's bylaws; b) a February 2, 2005 affidavit of John H. Field; c) a copy of the school's deed to HotelConsult; d) confirmation of the school's alleged conveyance to Wendy Federer; e) the assignment of conveyance given by the school to Wendy Federer; 3) an affidavit of Bertram Read, Wendy Federer's father, who is also the school's past trustee and chairman and the prior owner of the property at 27 Bell Hill Road, Washington, Connecticut; 4) copies of select transcript pages from: Wendy Federer's November 13, 2008 deposition, Matthew Klauer's November 12, 2009 deposition and Harold Gootrad's November 12, 2009 deposition; 5) copies of exhibits submitted during Harold Gootrad's deposition, all of which the defendants claim are business records; and 6) various other documents, including the plaintiff's mortgage deed and two letters from Ellen Sostman, title counsel for the Connecticut Attorneys Title Insurance Company (CATIC).

IV THE RESTRICTIVE COVENANTS

"The determination of the intent behind language in a deed, considered in the light of all the surrounding circumstances, presents a question of law . . . The meaning and effect of the [language in the deed] are to be determined, not by the actual intent of the parties, but by the intent expressed in the deed, considering all its relevant provisions and reading it in light of the surrounding circumstances." (Internal quotation marks omitted.) Arnold v. Hoffer, 94 Conn.App. 53, 57-58, 891 A.2d 53 (2006). "The primary rule of interpretation of such [restrictive] covenants is to gather the intention of the parties from their words, by reading, not simply a single clause of the agreement but the entire context, and, where the meaning is doubtful, by considering such surrounding circumstances as they are presumed to have considered when their minds met." (Internal quotation marks omitted.) Contegni v. Payne, 18 Conn.App. 47, 65, 557 A.2d 122, cert. denied, 211 Conn. 806, 559 A.2d 1140 (1989). "[I]t is not enough that the parties had . . . [a particular] intention in fact [that is, as a unanimous state of mind], unless they have expressed it in some way in . . . [the] deed. The question is not what did the parties actually mean to say, but what is the meaning of what they have said." (Internal quotation marks omitted.) Faiola v. Faiola, 156 Conn. 12, 17, 238 A.2d 405 (1968). "A restrictive covenant must be narrowly construed and ought not to be extended by implication . . . Moreover, if the covenant's language is ambiguous, it should be construed against rather than in favor of the covenant." (Citation omitted; internal quotation marks omitted.) Morgenbesser v. Aquarion Water Co. of Connecticut, 276 Conn. 825, 829, 888 A.2d 1078 (2006).

The restrictive covenants that were first included in the deed from the school to HotelConsult and are in the deed from Les Amis to the plaintiff provide: "By its acceptance hereof, the Grantee, for itself and its successors and assigns, hereby covenants and agrees that: 1. It will not construct any buildings or structures or any parking lots on that area of the above described premises lying within 330 feet, more or less, at all points, northerly from the most southerly boundary of said premises, which area is now commonly known as the 'Playing Field.' 2. It will not subdivide the above described premises into more than three (3) parcels, which conform to the then applicable zoning regulations of the Town of Washington. 3. The provisions of paragraph 2 above notwithstanding, in the event that it desires to sell the above described premises at any time subsequent to the date hereof, it will first use its best efforts to attempt to sell the same as a whole, in their entirety. 4. So long as the above described premises are being operated as a post secondary hotel management school, any inn operated on said premises, in conjunction therewith, shall be limited to no more than five (5) units; any restaurant operated on said premises, in conjunction therewith, shall seat no more than forty (40) persons; and such inn and restaurant shall be used solely as practice facilities for the students of said school. 5. The foregoing covenants and agreements shall be binding upon the Grantee, its successors and assigns, shall inure to the benefit of the Grantor, its successors and assigns, and shall run with the land."

Given that the present motion is one for summary judgment, the first issue is whether there are material issues of fact in dispute as to the validity of the restrictive covenants. In support of its motion for summary judgment, the plaintiff submits the relevant deeds and a number of affidavits that discuss the various conveyances which this court has examined. The court concludes that the plaintiff's evidence is sufficient to support a judgment. The next question is whether the defendants have presented evidence contradicting the plaintiff's evidence, thereby creating a genuine issue of material fact. The defendants' evidence does not raise questions as to whether the conveyances occurred or whether the restrictive covenants were a part of those conveyances. Although the defendants argue that there is a material question of fact in dispute as to whether the restrictive covenants benefit the defendants' property and whether the school intended them to do, this argument belies the fundamental rule of construction that the parties' intent is derived from the intent expressed in the deed, which presents a question of law. Given that the defendants' evidence does not challenge the validity of the conveyances and their evidence only goes to the intent behind the deed, there are no material issues of fact in dispute. As a result, the next issue is whether the plaintiff has established its entitlement to judgment on the ground that the restrictive covenants are void.

"In general, restrictive covenants fall into three classes: (1) mutual covenants in deeds exchanged by adjoining landowners; (2) uniform covenants contained in deeds executed by the owner of property who is dividing his property into building lots under a general development scheme; and (3) covenants exacted by a grantor from his grantee presumptively or actually for the benefit and protection of his adjoining land which he retains." (Internal quotation marks omitted.) Contegni v. Payne, supra, 18 Conn.App. 47, 51. "Generally, if a restrictive covenant falls into one of these three categories it will be found enforceable." (Internal quotation marks omitted.) Max's Place, LLC v. DJS Realty, LLC, Superior Court, judicial district of Middlesex, Docket No. CV 07 5002325 (April 2, 2009, Wilson, J.) ( 47 Conn. L. Rptr. 483, 484) (appeal pending). "Without the retention of any adjoining land by the [grantor] there can be no presumption that the intent of the covenant was to benefit any adjoining land." Id.

In very few instances, trial courts have considered the enforceability of restrictive covenants falling beyond these classes. "[T]he trial court may in determining the rights of the parties, properly consider equitable principles in rendering its judgment . . . This conclusion . . . is . . . in accord with our position favoring liberal construction of the declaratory judgment statute in order to effectuate its sound social purpose . . . Although it is rare for the courts to consider restrictive covenants outside of the three categories, it is not entirely unheard of." (Citation omitted; emphasis added; internal quotation omitted.) Williams v. Almquist, Superior Court, judicial district of Litchfield, Docket No. CV 06 5000595 (October 30, 2007, Marano, J.) ( 44 Conn. L. Rptr. 375, 377). In Williams and at least three other Superior Court decisions, Max's Place, LLC v. DJS Realty, LLC, supra, Superior Court, Docket No. CV 07 5002325 ( 47 Conn. L. Rptr. 483), Cannavaro v. Washington Community Housing, Superior Court, judicial district of Litchfield, Docket No. CV 03 0091521 (May 23, 2005, Pickard, J.) ( 39 Conn. L. Rptr. 413) and DeTullio v. Cholim, Superior Court, judicial district of Fairfield, Docket No. CV 96 0334892 (April 7, 1999, Skolnick, J.) ( 24 Conn. L. Rptr. 338), trial courts considered restrictive covenants falling outside of the three categories. In all but Cannavaro, however, the court determined that the restrictive covenants at issue were unenforceable because they were "unreasonable."

The issue in the present matter is whether the restrictive covenants are null, void and of no legal effect or whether they are valid and enforceable. The defendants do not argue that the restrictive covenants fall within the three generally accepted classes of restrictive covenants or that they constitute any other particular type of covenants. Based on the undisputed facts, the court agrees that the covenants do not fall within any of the three classes recognized by the appellate authority of this state. As a result, the next issue is whether the restrictive covenants are otherwise valid.

The defendants argue that the Superior Court decisions upon which the plaintiff relies are inapplicable and that Cannavaro v. Washington Community Housing, supra, Superior Court, Docket No. CV 03 0091521 ( 39 Conn. L. Rptr. 413) is controlling. Since the cases upon which the plaintiff relies involve restrictive covenants in deeds to restrain business competition or are based upon cases involving such facts, the court agrees that the Superior Court decisions upon which the plaintiff relies are inapplicable. Despite this conclusion, however, the court also finds Cannavaro distinguishable and concludes that, for the following reasons, it is not controlling or persuasive in the present matter.

The defendants note, correctly, that Cannavaro stands for the proposition that "third-party beneficiaries can enforce restrictive covenants that benefit their property" and that this conclusion was based on the court's recognition of the demise of the unity of title doctrine. The facts underlying the application of this proposition in Cannavaro, however, are completely distinguishable from the present matter. In Cannavaro, there were three adjacent parcels of land. Id., 413-14. Originally, Norman Couch owned two parcels, and the town of Washington owned the third parcel. Id., 413. In 1952, Norman Couch conveyed one of his two parcels to Allen and Barbara Couch, and, after one interim conveyance, that parcel was conveyed to the plaintiffs, the parties attempting to enforce the covenants, in 1986. Id. In 1953, a year after he conveyed the first parcel to Allen and Barbara Couch, Norman Couch conveyed the second parcel to the town of Washington, so that the town owned both the second and third parcels. Id.

In a deed of conveyance to the town, Norman Couch placed restrictive covenants on the second piece of property to benefit the property owned by Allen and Barbara Couch. Id., 414. The restrictive covenants stated in relevant part: "Said premises are further subject to the following rights and restrictions which shall be covenants running with the land for the benefit of Allen N. Couch and Barbara M. Couch owners of the adjoining premises, their heirs and assigns, who shall have the right of enforcing the same . . ." Id. When the town sought to convey both the second and third parcels to a group that wanted to build on the property in a way that was prohibited by the covenants, the plaintiffs filed a declaratory judgment action to enforce the covenants. Id. The heart of the decision was based on the demise of the unity of title doctrine as it applied to the "retained land theory," or the third class of generally recognized restrictive covenants, since the restrictions at issue could have fallen within the third class of covenants if Norman Couch still retained the first parcel of property when he sold the second parcel.

Unlike Cannavaro, the present matter does not involve a grantor who, at one time, owned two adjacent parcels of land. The defendants do not argue or suggest that the school ever owned their adjacent property. Thus, the retained land theory is not implicated in any way, and there is no presumption that the covenants were created to benefit the adjacent land. Moreover, the covenants at issue in Cannavaro specifically named the adjacent landholders, as owners of the adjacent property, and their heirs, as beneficiaries. As a result, their rights logically flowed to the plaintiffs, who were successors in interest as a result of their purchase of the benefitted property that was specifically referenced in the deed. In the present matter, the deed references a beneficiary that no longer retained any land after the sale of the property, but not a benefitted parcel. Despite the affidavits submitted in support of the defendants' objection, in which at least three parties attest that the defendants' property was the intended beneficiary of the covenants, and despite Wendy Federer's 2005 "declaration of beneficial ownership," the deed clearly and specifically states that the covenants were for the benefit of the grantor, which was the school, and its heirs and assigns. Furthermore, besides the deed, there is no documentation from 1990 that illuminates upon the surrounding circumstances and indicates that the covenants were intended for the benefit of the defendants' property. As a result, the court may not reach the conclusion that the covenants were enacted to benefit the defendants' property. Moreover, even if the court accepts the defendants' assertion that their property was the intended beneficiary, the defendants' own iteration of the facts contradicts this claim. The defendants state that the school held onto the restrictive covenants for approximately fifteen years before conveying the covenants to them. It is unclear why the school would do this if the defendants were always the intended beneficiaries.

Furthermore, although there is a presumption that words of succession indicate an intention to run with the land, "[i]t is well settled that a covenant personal in its nature and relating to something collateral to the land cannot be made to run with the land so as to charge the assignee by the fact that the covenator covenanted on behalf of himself and his assigns." Pulver v. Mascolo, 155 Conn. 644, 650-51, 237 A.2d 97 (1967). In Pulver, the court found that a covenant in which the grantor, a building company, retained the right to approve building and design plans on parcels of property after the grantor sold all of those parcels and no longer owned any parcels constituted a "personal" covenant that was created to benefit the grantor and the grantor's heirs and assigns and was not for the benefit of the owners of other tracts of land in the development. Id., 652-53. In reaching this conclusion, the court reasoned: "[T]he test applied is whether it was the intention of the owner in creating the restrictions . . . to make the benefit of them available, not to itself, but to the owners of other lots . . . In light of the surrounding circumstances and the language used in the covenant, it is our conclusion that this portion of the covenant was not intended to, and did not, enure to the benefit of the [parties seeking to enforce the covenants]. The right of prior approval was personal to the company and ceased to be effective when the company disposed of its interest in [the property]." (Citation omitted.) Id. As in Pulver, the present deed expresses a clear intent to benefit the grantor, the school, not the defendants' property, and the surrounding circumstances do not contradict that intent. As a result, the present covenants constitute restrictions that were personal to the school and ceased to exist when the school sold its property. This also supports the conclusion that the covenants are void because the restrictions could not go into effect until the property was conveyed.

The defendants cite Castonguay v. Plourde, 46 Conn.App. 251, 699 A.2d 226 (1997) for the proposition that the covenants at issue here run with the land. Castonguay is distinguishable, however, because the covenants at issue in that case were part of a general development scheme. Id., 256. Thus, the right to enforce those covenants was not collateral to the land. The defendants also rely on Bauby v. Krassow, CT Page 7402 107 Conn. 109, 139 A. 508 (1927), for the proposition that the covenants are enforceable, even if they do not run with the land, if the plaintiff took title to the property with notice of them. This proposition is also inapplicable here because the court's determination in Bauby was dependent upon the conclusion that the covenant was exacted for the benefit of the grantor's retained land. Id., 112-14.

Finally, the defendants allege that the covenants constitute "conservation restrictions" under General Statutes § 47-42a. Section § 47-42b provides in relevant part: "No conservation restriction held by any governmental body or by a charitable corporation or trust whose purposes include conservation of land or water areas . . . shall be unenforceable on account of . . . lack of benefit to particular land." This statute addresses the very defect that exists in the restrictions in this case: "lack of benefit to particular land." But, neither the school nor the defendants may benefit from the protections of that statute because neither is a charitable corporation whose purposes include conservation of land or water areas. The court, in at least one instance, has acknowledged that § 47-42a et seq. does not apply to any and every organization that claims to create a restriction for conservation purposes. "[T]he restrictions are enforceable by the entities that are permitted to hold them, certain public officials and charitable entities." (Emphasis added.) Burgess v. Breakell, Superior Court, judicial district of Litchfield, Docket No. CV 95 0068033 (August 7, 1995, Pickett, J.) ( 14 Conn. L. Rptr. 610, 611). The defendants do not suggest or argue that the school constituted a charitable corporation, such as a conservation organization or commission, as required under this statute. As a result, the protections in § 47-42b do not apply, and the court cannot hold that a benefitted parcel is unnecessary here.

General Statutes § 47-42a defines a "conservation restriction" as "a limitation, whether or not stated in the form of a restriction, easement, covenant or condition, in any deed, will or other instrument executed on behalf of the owner of the land described therein, including, but not limited to, the state or any political subdivision of the state, or in any order of taking such land whose purpose is to retain land or water areas predominantly in their natural, scenic or open condition or in agricultural, farming, forest or open space use."

In Burgess, the court also stated: "Under Connecticut's conservation restriction statutes, only governmental bodies or charitable corporations or trusts that have 'the power to acquire interests in land' may acquire conservation restrictions, which are considered interests in land. General Statutes [§]47-42c. By limiting the entities that may acquire such interests, it follows that the legislature also intended to limit the enforceability of the restrictions to those same entities, namely governmental bodies or charitable corporations or trusts." Burgess v. Breakell, supra, Superior Court, Docket No. CV 95 0068033 ( 14 Conn. L. Rptr. 610, 611). Thus, even if the restrictions were valid as conservation restrictions, the defendants could not attempt to enforce them because they could not acquire such interests as individuals.

Since Cannavaro is distinguishable from the present facts, and the covenants do not benefit a parcel of property, there is no authority under which the court can find these covenants valid. As a result, the court concludes that the restrictive covenants are null, void and of no legal effect because they were void at the time they were first conveyed in 1990. Consequently, the court need not reach the issue of whether the school could assign its right to the covenants after administrative dissolution. Despite this conclusion, the court must consider whether the restrictive covenants are potentially enforceable as a result of the defendants' allegations regarding waiver and unclean hands.

V SPECIAL DEFENSES OF WAIVER UNCLEAN HANDS

"The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action." (Internal quotation marks omitted.) Danbury v. Dana Investment Corp., 249 Conn. 1, 17, 730 A.2d 1128 (1999); see also Practice Book § 10-50. "Only one of the defendants' defenses needs to be valid in order to overcome the motion for summary judgment." Union Trust Co. v. Jackson, 42 Conn.App. 413, 417, 679 A.2d 421 (1996). "The presence . . . of an alleged adverse claim is not sufficient to defeat a motion for summary judgment. A party must substantiate his adverse claim by specifically showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue." Farrell v. Farrell, 182 Conn. 34, 39, 438 A.2d 415 (1980). "It is appropriate for a court to render summary judgment in favor of a plaintiff when the special defenses asserted by a defendant are either not legally viable or do not present a genuine issue of material fact." Kazlon Communications, LLC v. American Golfer, Inc., 82 Conn.App. 593, 596, 847 A.2d 1012 (2004). In the present matter, the defendants raise two special defenses: waiver and unclean hands.

A Waiver

In support of their first allegation as to waiver, the defendants argue that Attorney Robert Fisher's affidavit, which was submitted with the plaintiff's motion for summary judgment, supports waiver because Attorney Fisher admits that he included the restrictive covenants in the deed of conveyance from Les Amis to the plaintiff, even though he also admits that he believed the covenants were unenforceable. The defendants argue that HotelConsult considered the issue of enforceability when it conveyed the covenants to Les Amis and that CATIC's lead counsel, Ellen Sostman, recommended removing the reference to the restrictive covenants and requested a "release from the seller of its right to enforce the covenants, which contradicts the position that the Restrictive Covenants were allegedly unenforceable as a matter of law." Moreover, the defendants argue, CATIC suggested that the "parties to the HotelConsult/Les Amis transaction seek to have the School's board of trustees release the Restrictive Covenants," and that the plaintiff accepted a 2008 deed that re-inserted the covenants as an encumbrance, despite CATIC's recommendation to exclude the restrictive covenants. The defendants note: "Because the conduct of including the Restrictive Covenants as encumbrances does imply that the Plaintiff waived any objection to the Restrictive Covenants, there is a genuine issue as to the material facts of waiver." The defendants argue that excerpts of Matthew Klauer and Harold Gootrad's deposition testimony and the CATIC letters support this conclusion.

The defendants argue that the court cannot consider Attorney Fisher's opinion that the restrictive covenants are unenforceable. Specifically, the defendants argue: "To the extent the Plaintiff is relying on Attorney Fisher's belief or opinions (expert or otherwise), they are irrelevant and inadmissible because they involve an ultimate issue in the case and because he has served as an attorney for the Plaintiff."

In support of their second allegation as to waiver, the defendants state that an exhibit submitted with Wendy Federer and Klauer's deposition testimony shows that the surveys attached to the plaintiff's land use applications reference the restrictive covenants. The defendants argue that these surveys, along with Klauer's statement that he disagreed with the reference to the restrictive covenants, but never discussed the issue with the surveyor or had any knowledge of the covenants' removal from the surveys, confirms waiver. The defendants conclude: "[B]y denying the [d]efendants' . . . special defense of waiver, the [p]laintiff is disputing the facts of waiver, thereby creating a genuine issue as to the material facts of waiver."

"Waiver is the voluntary relinquishment of a known right. It involves the idea of assent, and assent is an act of understanding. This presupposes that the person to be affected has knowledge of his rights, but does not wish to assert them . . . The rule is applicable that no one shall be permitted to deny that he intended the natural consequences of his acts and conduct . . . In order to waive a claim of law it is not necessary . . . that a party be certain of the correctness of the claim and its legal efficacy. It is enough if he knows of the existence of the claim and of its reasonably possible efficacy." (Citation omitted; internal quotation marks omitted.) General Accident Ins. Co. v. Powers, Bolles, Houlihan Hartline, Inc., 50 Conn.App. 701, 711-12, 719 A.2d 77 (1998), aff'd, 251 Conn. 56, 738 A.2d 168 (1999). "Waiver is a question of fact. Waiver prevents a party from exercising rights that might otherwise have existed." (Internal quotation marks omitted.) Frantz v. Romaine, 93 Conn.App. 385, 400, 889 A.2d 865, cert. denied, 277 Conn. 932, 896 A.2d 100 (2006). Waiver may be express, or it may be inferred from circumstances. New Haven v. Local 884, Council 4 AFSCME, AFL-CIO, 237 Conn. 378, 387, 677 A.2d 1350 (1996). "A party seeking to assert the defense of waiver, must show that he was substantially prejudiced." Advest, Inc. v. Wachtel, 235 Conn. 559, 569, 668 A.2d 367 (1998).

Although the court is mindful that a number of cases that stand for the proposition that waiver is not ordinarily susceptible to summary judgment because whether waiver has occurred presents a question of fact; see, e.g. Chapman Lumber, Inc. v. Tager, Superior Court, judicial district of Litchfield, Docket No. CV 01 0086006 (March 3, 2004, Pickard, J.); the court also recognizes that several courts have granted motions for summary judgment when the special defense of waiver is not legally viable or when the party has failed to present a genuine issue of material fact as to waiver. See, e.g., J.E. Robert Co. v. Signature, Superior Court, complex litigation docket at Hartford, Docket No. CV X04 5026084 (February 3, 2010, Shapiro, J.); Heyse v. Case, Superior Court, judicial district of Litchfield, Docket No. CV 06 5001028 (September 9, 2009, Pickard, J.) ( 48 Conn. L. Rptr. 455). In the present matter, the defendants have not presented sufficient evidence to raise a legally viable claim of waiver, nor have they raised a genuine issue of material fact as to waiver.

The defendants' evidence shows that Robert Fisher, who was originally Les Amis' attorney, included the restrictive covenants in the deed from Les Amis to the plaintiff, despite the exclusion of the same covenants in the deed from HotelConsult to Les Amis. Fisher attests in an affidavit submitted in support of the plaintiff's motion for summary judgment that he included the restrictive covenants on Les Amis' behalf "because such restrictions arguably appeared of record in the chain of title." The evidence also shows that HotelConsult and Les Amis consulted CATIC in 2004 regarding the restrictive covenants at issue. Fisher later represented the plaintiff, but this was after the sale of the school property from Les Amis to the plaintiff.

This evidence does not show that the plaintiff was involved in the CATIC discussion, and the defendants do not submit evidence to suggest that the plaintiff had knowledge of the communications with CATIC prior its purchase of the school property and this lawsuit. Rather, this evidence simply shows that HotelConsult and Les Amis contemplated the issues raised by CATIC and that Les Amis was the party that placed the restrictions back in the deed. Moreover, even if the plaintiff knew that the validity of the covenants was in dispute when it accepted the deed, doing so is insufficient to establish a legally viable claim of waiver when the plaintiff filed this declaratory judgment action almost immediately after the defendants objected to its land use proposals, thereby expressing an intent to enforce its rights, not relinquish those rights.

As to the evidence that the surveys submitted with the plaintiff's land use applications reference the restrictive covenants, the court concludes that this action cannot support an implication that the plaintiff intended to relinquish its right to challenge the covenants when defendants admit that the plaintiff's applications, on their face, violate the restrictive covenants. Thus, it would be unnecessary to remove the reference to the covenants in the survey when the plaintiff's own applications show that they intended to violate those covenants. Rather than imply that the plaintiff intended to relinquish a known right, this latter evidence implies that the plaintiff intended to challenge the restrictive covenants because its proposal violated the restrictive covenants referenced on the survey map.

Finally, the defendants have failed to submit any evidence that they have been prejudiced in any way. While the plaintiff's disregard of the covenants may certainly impact the defendants, the defendants have not submitted any evidence that shows that the plaintiff ever intended to abide by the covenants or that they relied on such an intention. As a result, the court concludes that the defendants have not submitted sufficient evidence to establish a legally viable claim as to waiver and that they have failed to raise a question of material fact as to waiver.

B Unclean Hands

As to the second special defense of unclean hands, the defendants allege that the doctrine of unclean hands is applicable because the plaintiff proposed to convey a covenant to the town of Washington's zoning commission that is of the same form as the covenants it is challenging in the present matter. The defendants allege that Wendy Federer's affidavit and Klauer's deposition support this conclusion and that the plaintiff's proposed covenant to the town of Washington provides: "During the period from Monday before Memorial Day through the last full week of September, children under age 14 will be allowed to lodge (meaning reside or sleep) at the Wykeham Rise Inn for a total of three specified weeks. For the balance of the year, there will be no age restrictions for prospective guests. During the period from the Monday before Memorial Day through the last full week of September, the Function Room will be available for reservations by guests only."

The defendants allege that this restrictive covenant, like the restrictive covenants that the plaintiff is challenging in the present matter, is not part of a general development scheme, is not part of a reciprocal exchange between adjacent landowners and would not be for the benefit of land retained by the grantor. The defendants contend that the plaintiff's action is inequitable and constitutes a form of misconduct that harmed and continues to harm them. The defendants conclude: "Barring the equitable relief sought by the Plaintiff will preserve the integrity of the court by ensuring litigants will not benefit from taking inconsistent positions to obtain advantage in court and in land use applications and administrative appeals thereafter. By generally denying this special defense of unclean hands, moreover, the Plaintiff has raised genuine issues as to the material facts whether the Plaintiff has unclean hands."

The "[a]pplication of the doctrine of clean hands rests within the sound discretion of the trial court." Thompson v. Orcutt, 257 Conn. 301, 308, 777 A.2d 670 (2001). "The clean hands doctrine is applied not for the protection of the parties but for the protection of the court . . . It is applied not only by way of punishment but on considerations that make for the advancement of right and justice . . . The doctrine of unclean hands expresses the principle that where a plaintiff seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue . . . Unless the plaintiff's conduct is of such a character as to be condemned and pronounced wrongful by honest and fair-minded people, the doctrine of unclean hands does not apply." (Citation omitted; internal quotation marks omitted). Id., 310. "The party seeking to invoke the clean hands doctrine to bar equitable relief must show that his opponent engaged in wilful misconduct with regard to the matter in litigation." (Internal quotation marks omitted.) Monetary Funding Group, Inc. v. Pluchino, 87 Conn.App. 401, 407, 867 A.2d 841 (2005).

As with the special defense of waiver, the defendants have not submitted sufficient evidence to support a legally viable claim as to unclean hands, nor have they raised material issues of fact as to the applicability of the doctrine of unclean hands. The defendants have not submitted evidence that shows that the plaintiff's conduct could, in any way, be considered of such a character as to be condemned or pronounced wrongful by honest and fair minded people, nor have the defendants submitted evidence that could in any way support a conclusion that the plaintiff engaged in wilful misconduct. It is undisputed that the plaintiff offered to convey the described covenant to the town before the court decided the validity of the restrictive covenants at issue here. Thus, despite the plaintiff's belief that the covenants at issue in the present matter were void, for all it knew, the court could have found otherwise in the present action. Furthermore, there is nothing inherently wrongful about a party taking inconsistent positions in different situations. Although the court does not attempt or intend to comment on the validity of the plaintiff's proposed covenant to the town, the court recognizes, generally, that facts vary from case to case and what may be invalid in one setting may be valid in another. In sum, the court concludes that the defendants' evidence is insufficient to support a legally viable claim for unclean hands and that the defendants have failed to raise a genuine issue of material fact as to unclean hands.

CONCLUSION

Since the court concludes that the restrictive covenants at issue are void, and the defendants have failed to submit evidence that supports legally viable claims for waiver and unclean hands or that raises genuine issues of material fact as to those claims, the court hereby grants the plaintiff's motion for summary judgment.


Summaries of

WYKEHAM RISE, LLC v. FEDERER

Connecticut Superior Court Judicial District of Litchfield at Litchfield
Mar 24, 2010
2010 Conn. Super. Ct. 7381 (Conn. Super. Ct. 2010)
Case details for

WYKEHAM RISE, LLC v. FEDERER

Case Details

Full title:WYKEHAM RISE, LLC v. ERICA A. FEDERER ET AL

Court:Connecticut Superior Court Judicial District of Litchfield at Litchfield

Date published: Mar 24, 2010

Citations

2010 Conn. Super. Ct. 7381 (Conn. Super. Ct. 2010)