Supreme Court of Virginia.
William M. BARNER, et al.,
v.
Edward A. CHAPPELL, et al.
Record No. 022710.
585 S.E.2d 590
Sept. 12, 2003.
OPINION BY Justice LAWRENCE
L. KOONTZ, JR.
In this appeal, we consider whether the
chancellor correctly determined that a restrictive covenant prohibiting the
building of a house, garage, or other structure on a lot in a residential
subdivision is enforceable by one or more
neighboring landowners. We further
consider whether the chancellor correctly determined, in the alternative, that
the restriction is enforceable by the neighboring landowners as an equitable
servitude.
BACKGROUND
Beginning in 1922, John Garland Pollard, who
would subsequently serve as the Mayor of the City of Williamsburg and Governor
of Virginia, acquired property in the City of Williamsburg and James City
County along what was then known as Texas Avenue. Between 1924 and 1938, Governor Pollard
subdivided and sold portions of that property for use in the construction of
single-family *280 homes. A
recorded plat of a portion of Governor Pollard's property dated May 30, 1930
reflects the subdivision of the property at that time. [FN1] A short, dead-end
road, subsequently designated "Ballard Lane," extending from Texas
Avenue allowed access to the parcels designated on the plat as Lots 7, 7A, B,
E, and F. A U-shaped road connecting to
Texas Avenue at two points, subsequently referred to in some deeds as
"Hairpin Road," allowed access to the parcels designated on **592
the plat as Lots A, B, C, D, 7, 8, and 9. [FN2] In addition,
another parcel, bounded by Texas Avenue and the interior curve of Hairpin Road,
was designated as a "park."
Along the outer curve of Hairpin Road between Lot 9 and Texas Avenue
there was a large undivided parcel that was not given a number or letter
designation. At the time the plat was
prepared, Lots A, B, and 9 had already been conveyed. Over the
next two years, Governor Pollard conveyed the remaining designated parcels,
with the exception of Lot 7 where he maintained his residence.
FN1. See the attached
copy of the 1930 plat.
FN2. The U-shaped
road was subsequently designated "Pollard Park," which also became
the common designation for the neighborhood.
For clarity, we will refer to the road as "Hairpin Road" and
the neighborhood as "Pollard Park" in this opinion.
The park, which remains undeveloped to this
day, contains a natural, wooded ravine.
The deeds conveying the lots designated as A, B, C, D, E, F, and 9 from
Governor Pollard to the original grantees contain provisions requiring that the
park be maintained perpetually for the mutual benefit of the owners of lots in
Pollard Park. Additionally, provisions in these deeds limit development on the
respective lots to single-family residences, and impose other construction
restrictions such as twenty-foot setback lines and specified building
sites. The deeds expressly state that
these restrictions shall run with the land.
In 1932, Mary W. Craighill (Craighill) was the
record owner of Lot A which is adjacent to Lot 8. By a deed dated December 3,
1932 and recorded on June 20, 1935, Governor
Pollard conveyed Lot 8, a parcel containing less than one-tenth of an acre
located at the midpoint of the outer curve of Hairpin Road, to Craighill (the
Pollard/Craighill deed). This deed provides
that "[t]he property hereby conveyed is to be used in connection with [Lot
A] and no house, garage or structure of any kind shall be erected
thereon." [FN3] This deed further provides that the
restriction shall run with the land "forever." The *281 Pollard/Craighill deed is the
only deed relating to the conveyance of lots in Pollard Park that restricts all
construction.
FN3. On January 29,
1937, Craighill conveyed her interest in Lot A to a third party. She again became the owner of Lot A by
1951. No evidence was produced that the
severance of title of Lot A and Lot 8 constituted a breach of this provision of
the deed, transforming the restriction into a personal covenant that expired
upon the death of Governor Pollard.
At the time of the conveyance of Lot 8 to
Craighill, Governor Pollard had previously conveyed all the other lots
designated on the 1930 plat by either numbers or letters with the exception of
Lot 7, where he continued to reside.
Governor Pollard, however, retained ownership of the undivided parcel
located on Hairpin Road between Lot 9 and Texas Avenue. On January 16, 1937, Governor Pollard
conveyed a portion of this parcel to Marion P. Morecock. The deed
conveying this property contained the same restrictions concerning use of the
property for residential purposes and preservation of the park as the deeds
conveying the other Pollard Park lots prior to the conveyance of Lot 8. Through
a series of subsequent conveyances, Eugene R. and Maureen B. Tracy (the Tracys)
acquired this property on July 1, 1985.
Following Governor Pollard's death in 1937,
the remainder of the previously undivided parcel was subdivided into two lots
which were conveyed in 1938 by the executors of Governor Pollard's estate to
the predecessors-in-title respectively of Lloyd A. Julien, Jr. and Sarah B.
Julien (the Juliens) and Pat C. Fulmer and Robert M. Fulmer (the Fulmers). The original deed in the Juliens' chain of
title contained restrictions similar to those in the deeds conveying lots in
Pollard Park prior to Governor Pollard's death;
the original deed in the Fulmers' chain of title did not contain these
restrictions, although it did reference the 1930 plat. On August 5, 1941, the executors conveyed Lot
7 to the predecessor-in-title of Genevieve T. Barrett and Jack C. Barrett (the
Barretts). The original deed in the
Barretts' chain of title contained restrictions similar to those in the deeds
conveying other lots in Pollard Park prior to Governor Pollard's death.
By recorded deed dated August 5, 1998, William
Maxwell Barner, III and Sandra E. Barner (the Barners) became the owners of **593
Lot 8. [FN4] Because they
failed to conduct a title examination, the Barners did not have actual notice of the Lot 8 building restriction
originating from the Pollard/Craighill deed.
However, the Barners do not dispute that the restriction was
discoverable within their chain of title and, thus, that they had record notice
of this restriction. Soon *282
after acquiring Lot 8, the Barners made preparations to construct a
single-family residence upon this lot. [FN5]
FN4. The Barners are
also the record owners of Lot A where they currently reside.
FN5. To build this
home, the Barners needed a variance because of certain setback requirements in
the Williamsburg Zoning Ordinance. On
November 3, 1998, the Board of Zoning Appeals for the City of Williamsburg
granted the requested variance for Lot 8. An appeal of that decision is pending
in the trial court until the resolution of this appeal.
On August 26, 1999, the Tracys, the Juliens,
the Fulmers, Edward A. Chappell, Susan S. Geary, William T. Geary, Elizabeth A.
Rutgers, Marcia T. Smith, Victor H. Smith, and Joseph S. Wheeler (collectively,
the neighboring landowners), who were at that time residents and record owners
of lots in Pollard Park, filed a bill of complaint seeking to enforce the
restriction in the Pollard/Craighill deed. [FN6] The bill of
complaint alleged that the construction of a residence
on Lot 8 would violate this covenant and, therefore, requested that the Barners
be permanently enjoined from building a residence thereon. Although the bill of
complaint did not state the precise theory under which all the neighboring
landowners asserted that they were entitled to enforce the covenant, it
subsequently developed that the majority of these parties, who trace their
ownership of lots in Pollard Park to deeds that predated the Pollard/Craighill
deed, were relying upon the theory that the restrictive covenant represented an
equitable servitude intended to benefit all the lots in Pollard Park.
FN6. The current
record owner of Lot 7, Genevieve Barrett, also joined in the bill of complaint,
but was granted a nonsuit early in the proceedings below. Two other lot owners who initially joined in
the suit have subsequently sold their respective properties, although they have
not formally withdrawn from the suit.
However, the parties remaining in the suit with a current interest in
the litigation are sufficient to allow us to consider all the issues raised in
this appeal.
During an ore tenus hearing held September 27,
2001, the parties presented conflicting evidence on the purpose of the
covenant. The Barners' expert witness
testified that, in 1932, the City of Williamsburg had a sewage disposal problem and that Governor Pollard
supported a drainage plan which would run a new sewer line through Lot 8. The
Barners contended that the building restriction on Lot 8 was intended solely to
prevent any structures from obstructing the proposed sewer line. Because the Barners were willing to reroute
the existing sewer line around the footprint of their proposed residence, they
asserted that the covenant was no longer needed for its intended purpose and,
thus, had lapsed.
On cross-examination, the Barners' expert
testified that Lot 8 was naturally a part of the ravine in the center of
Pollard Park prior to the construction of Hairpin Road. Additionally, he
testified that Governor Pollard could have chosen to place the sewer line along
the edge *283 of Lot 8 instead of permitting the sewer line to bisect
this lot so that no dwelling could be built on it. The neighboring landowners contended that
this indicates that facilitation of the proposed sewer plan was not Governor
Pollard's primary purpose in creating the building restriction on Lot 8.
Rather, they contended that Governor Pollard's intention, as demonstrated by
the building restrictions in all the deeds conveying lots in Pollard Park, was
to preserve the natural, green character of the subdivision.
In a final decree dated August 21, 2002, the
chancellor, based on the evidence and a view of Pollard Park, found that
Governor Pollard intended to preserve Lot 8 as an open, green space and that
the purpose of the covenant, therefore, had
not lapsed. The chancellor further found
that there was sufficient vertical privity between at least one of the
neighboring landowners and Governor Pollard and that the restrictive covenant
in the Pollard/Craighill deed met all other requirements for a covenant running
with the land. Thus, the chancellor
determined that this covenant could be enforced against the Barners. The chancellor also expressly **594
found, in the alternative, that the restriction was enforceable by all the
neighboring landowners as an equitable servitude. Based upon these findings, the chancellor
permanently enjoined the Barners and their successors from building a house,
garage, or structure of any kind on Lot 8. We awarded the Barners this appeal.
DISCUSSION
[1] Under well established principles of appellate review, we
will affirm the chancellor's judgment unless it is plainly wrong or without
evidence to support it. Code
§ 8.01-680.
Moreover, we consider the evidence in the light most favorable to the parties
who prevailed in the proceedings before the chancellor. Willard
v. Moneta Building Supply, Inc.,
258 Va. 140, 149, 515 S.E.2d 277, 283 (1999).
[2] We first consider whether the chancellor correctly
determined that the restrictive covenant in the Pollard/Craighill deed
originally conveying Lot 8 in Pollard Park is enforceable by at least one of
the neighboring landowners. A restrictive covenant is enforceable if a landowner
establishes: (1) horizontal privity; (2) vertical privity; (3) intent for the restriction to run with
the land; (4) that the restriction
touches and concerns the land; and (5) that the covenant is in writing. Waynesboro
Village, L.L.C. v. BMC Properties,
255 Va. 75, 81, 496 S.E.2d 64, 68 (1998); Sloan
v. Johnson,
254 Va. 271, 276, 491 S.E.2d 725, 728 (1997). The parties agree that the only requirement *284
at issue in this appeal is whether any of the neighboring landowners can
establish vertical privity to enforce the restrictive covenant. In addition,
the Barners contend that the chancellor erred in failing to find that the
purpose of the restrictive covenant has lapsed.
[3][4] Vertical privity exists when there is privity between the
original parties and their successors-in-interest. Id. More precisely, vertical privity
requires that the benefit of a restrictive covenant extend only to "one
who succeeds to some interest of the beneficiary in the land respecting the use
of which the promise was made." Old
Dominion Iron & Steel Corp. v. Virginia Electric & Power Co.,
215 Va. 658, 663, 212 S.E.2d 715, 719-20 (1975)
(citing Restatement
of Property § 547 (1944)). In the present
case, the neighboring landowners who trace their ownership of property in
Pollard Park through chains of title to conveyances from Governor Pollard that
pre-date the Pollard/Craighill deed have not established the necessary vertical
privity. This is so because the
interests of their predecessors pre-date the creation of the covenant in the
Pollard/Craighill deed and, thus, they did not succeed
"to some interest of the beneficiary" of the covenant. [FN7] These landowners
are Edward A. Chappell, Susan S. Geary, William T. Geary, Elizabeth A. Rutgers,
Marcia T. Smith, Victor H. Smith, and Joseph S. Wheeler.
FN7. We recognize
that the beneficiary of an express covenant in a deed may not always be limited
to the grantor. Here, however, there was
no express intention to extend the benefit of the covenant directly to third
parties. The absence of such an express
extension of the benefit of the covenant does not, however, preclude the
possibility that third parties may claim the benefit as an equitable servitude,
as will be discussed infra.
[5] By contrast, the Tracys, the Juliens, and the Fulmers
trace their ownership of property in Pollard Park to original grantees in deeds
executed after the execution of the Pollard/Craighill deed and, thus, meet the
requirements for vertical privity because they can trace their interests
directly to Governor Pollard, the beneficiary of the restrictive covenant
contained in that deed.
There is no merit to the Barners' contention
that the Tracys, the Juliens, and the Fulmers do not have the necessary
vertical privity because their lots were originally a part of the previously
undivided parcel between Lot 9 and Texas Avenue as shown on the 1930 plat. The mere fact that this parcel was not given a specific number or letter designation on this
plat is of no significance and does not preclude the conclusion that Governor
Pollard intended for this parcel also to benefit from the restriction imposed
upon Lot 8. No evidence in the record suggests that Governor Pollard intended
only Lot *285 7, upon which he maintained his residence, to benefit from
the restriction he placed upon Lot 8.
**595 [6][7][8] Once a restrictive covenant has been established, the
party asserting that the restriction is unenforceable because changed
conditions have defeated the purpose of the restriction has the burden of
proving that the purpose of the restriction no longer exists. Conditions must have changed so substantially
that the essential purpose of the covenant is defeated. Smith
v. Chesterfield Meadows Shopping Center Associates, L.P.,
259 Va. 82, 84, 523 S.E.2d 834, 835 (2000); Booker
v. Old Dominion Land Co.,
188 Va. 143, 148, 49 S.E.2d 314, 317 (1948). The only evidence presented by the Barners
regarding this issue was that Governor Pollard supported a plan to run a sewer
line through Lot 8, the plan would not have worked without the sewer line in
that approximate location, and currently the sewer line can be relocated on Lot
8 so as not to prevent the construction of a single-family home upon the lot.
The neighboring landowners, however, presented
sufficient evidence to support the chancellor's determination that the purpose
of the restrictive covenant was to maintain
Lot 8 as an open, green area in Pollard Park. This purpose is consistent with
the setback requirements and building restrictions in the various deeds and the
provisions that the ravine area be maintained as a park. The evidence that Lot 8 was a natural
extension of the ravine prior to the construction of Hairpin Road is also
consistent with the determination that the grantor's intent was to maintain Lot
8 as an open, green area. Finally, the
chancellor's view of Pollard Park clearly established that the conditions in
the neighborhood have not changed so substantially that the purpose of the
restrictive covenant has been defeated.
Indeed, the evidence shows that Pollard Park remains substantially
unchanged. Accordingly, we hold that the
chancellor's determination that the restrictive covenant on Lot 8 is enforceable
by at least one of the neighboring landowners is supported by the evidence and
not plainly wrong.
[9] Finally, we now address the question whether those
landowners who acquired their interests in lots in Pollard Park through chains
of title to conveyances from Governor Pollard that pre-date the
Pollard/Craighill deed may enforce the restriction contained in that deed as an
equitable servitude benefiting their properties.
[10][11] By definition, an equitable servitude can only arise when
a common grantor imposes a common restriction upon land developed for sale in
lots. *286Forster
v. Hall,
265 Va. 293, 300, 576 S.E.2d 746, 749-50 (2003) (citing Duvall
v. Ford Leasing Development Corp.,
220 Va. 36, 41, 255 S.E.2d 470, 472 (1979)). The burden is on the party claiming the
benefit of the equitable servitude to show that a common restriction was
intended. Minner
v. City of Lynchburg,
204 Va. 180, 188, 129 S.E.2d 673, 678 (1963).
The prohibition against erecting a
"house, garage or structure of any kind" is not a common restriction
on the lots in Pollard Park because only Lot 8 is restricted in that way. Accordingly, we hold that the chancellor
erred in determining that this restriction contained in the Pollard/Craighill
deed is enforceable as an equitable servitude.
CONCLUSION
For these reasons, we will affirm the
chancellor's judgment that Lot 8 is burdened by a restrictive covenant that is
enforceable by those neighboring landowners who acquired their interests
through original grantees in deeds executed after the execution of the
Pollard/Craighead deed. In this case, those
neighboring landowners are the Tracys, Juliens, and Fulmers. We will reverse the chancellor's judgment
that the restrictive covenant is enforceable by the other neighboring
landowners as an equitable servitude, and enter final judgment upholding the permanent
injunction issued against the Barners.
Affirmed in part, reversed in part, and
final judgment.
**596
