Opinion
NO. 2011-CA-001170-MR
03-29-2013
CITIZENS NATIONAL BANK APPELLANT v. RICK WILLIAMS, SR. APPELLEE
BRIEF FOR APPELLANT: P. Franklin Heaberlin Prestonsburg, Kentucky BRIEF FOR APPELLEE: Steven W. Hughes Mt. Sterling, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM BATH CIRCUIT COURT
HONORABLE WILLIAM E. LANE, JUDGE
ACTION NO. 06-CI-90014
OPINION
AFFIRMING
BEFORE: CLAYTON, LAMBERT, AND VANMETER, JUDGES. LAMBERT, JUDGE: Citizens National Bank appeals from an order of summary judgment in favor of Rick Williams Sr. granting him injunctive relief and from the trial court's order denying its motion to alter, amend, or vacate. Finding no reversible error, we affirm the orders of the Bath Circuit Court.
In 1996, Williams purchased a parcel of land in Bath County on the south side of Old Kentucky 36 and adjacent to Interstate 64 in the Cedar Creek Development with the intent to develop the land into commercial lots. On December 30, 1999, Williams filed a document in the Bath County Clerk's Office entitled "Establishment and Declaration of Restrictive or Protective Covenants" governing the parcel of land. Among the covenants listed was covenant number three, which required a purchaser or developer to seek Williams' approval before any permits could be applied for or any buildings constructed on the property. Covenant number two required that all buildings must match the front of the existing Dollar General Store and must be constructed similarly in appearance to the store, which faced Highway 36. The covenant required that the buildings use the same split block facing and continue the same canopy as the Dollar General Store.
Williams sold one particular lot in the subdivision to Phillip and Robin Lawson. This lot was subsequently transferred to Vinson Properties, LLC. On July 3, 2005, this lot was transferred to Otis and Becky Vinson, the owners of Vinson Properties. All of these transfers were subject to the restrictive covenants detailed above. In April 2005, prior to the property being transferred by Vinson Properties to the Vinsons, Williams observed activity on the lot in question and became concerned that the developer intended to violate the restrictive covenants he had established. Williams sent a letter to the Vinsons dated April 1, 2005, in which he referred the Vinsons to the appropriate deed book and page number where the restrictive covenants were established.
On April 11, 2005, the Vinsons responded to Williams' letter and sent a partial copy of the lot plans to Williams for his review. The response did not address all of Williams' concerns, and Williams responded on April 12, 2005. This letter stated:
For the building to be architecturally and aesthetically compatible to the other building, the front of the building must be in line with the other two buildings already there. The front of your building sits approximately ten feet further back and is turned at a different angle than they are. This causes your building not to match the front of the other buildings as required in the deed restrictions.Williams asked Otis Vinson to address these issues before proceeding with construction.
You are also required to use the same split face block as on the other buildings, which means the same color as the other buildings. The block you have there is brown, which is totally different than the grey block on the other buildings.
The deed restrictions state that the width of any parcel bought must be completely used at the time of the initial construction. Your building is being constructed in the middle of your lot with no particular alignment with anything there.
After reviewing your front elevation plan, it appears you plan to use split face block only four feet up on the building and the rest of the way seems to be vinyl or something else. The other buildings have split face block from the ground all the way up to the roof with only spaces left out for windows.
The restrictions also state that I, Rick L. Williams shall be permitted to review all plans for any building to be built on this property and the plans must be approved in writing by me before any permits are applied for or any construction can begin. I only became aware of your plans when I noticed construction beginning.
Thereafter, Otis Vinson sent a reply to Williams acknowledging that he was aware of the restrictions when he purchased the lot, but otherwise failing to respond to any of Williams' concerns. By May 9, 2005, Williams had become frustrated that the construction in violation of the covenants had not ceased and began communicating with the Vinsons via his attorney. In these letters, Williams demanded that the construction on the property cease and reiterated that the construction in its current form violated the restrictive covenants. Construction on the property continued, however, and by November 2005, Williams' attorney was communicating directly with the Vinsons' attorney. Williams offered several alternatives of compromise; however, the construction continued. In January 2006, Williams filed suit for violation of the restrictive covenants.
Also pertinent to this appeal is the fact that in March 2005, Vinson Properties executed a mortgage to Citizens National Bank to secure a promissory note from Otis Vinson and Vinson Properties to Citizens National Bank in the original amount of $300,000.00. The Vinsons defaulted on this note and Citizens National Bank instituted an action against Otis Vinson, Becky Vinson, and Vinson Properties. The Vinsons appeared in court and advised that they were no longer claiming an interest in the property and were dismissed as parties to that action. Since construction in 2005 and 2006, the building located on the Vinson property has been rented to the Kentucky Center of Orthodontics, LLC and has been utilized as an orthodontics office.
Ultimately the two cases were consolidated below. On May 25, 2010, the Bath Circuit Court entered summary judgment in favor of Williams, finding that the building on the Vinsons' lot was in violation of the restrictive covenants established in 1999. The trial court was not persuaded by Citizens National Bank's argument that as the de facto owners of the land due to a foreclosure, they were immune to the remedy of injunctive relief, as they took possession of the property after suit was initially filed against the Vinsons. The trial court held that the Vinsons willfully violated the restrictive covenants and ordered that the building be brought into conformity with the covenants within 90 days or else be removed. This appeal now follows.
On appeal, Citizens National Bank argues that summary judgment was inappropriate because issues of fact existed and that the extraordinary remedy of injunctive relief should not have been granted.
Our standard of review in this appeal is as follows:
The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. Kentucky Rules of Civil Procedure (CR) 56.03. There is no requirement that the appellate court defer to the trial court since factual findings are not at issue. Goldsmith v. Allied Building Components, Inc., Ky., 833 S.W.2d 378, 381 (1992).Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). "Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, an appellate court need not defer to the trial court's decision and will review the issue de novo." Lewis v. B&R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001) (footnote omitted). We review a trial court's ruling on a CR 59.05 motion for abuse of discretion. Bowling v. Kentucky Dept. of Corrections, 301 S.W.3d 478, 483 (Ky. 2009) (citing Gullion v. Gullion, 163 S.W.3d 888, 892 (Ky. 2005)).
Initially, we note that while Citizens National Bank argues that summary judgment was inappropriate in the instant case because issues of fact existed, it does not support its argument with any proposed material issues of fact. The trial court found that the property in question violated the restricted covenants established by Williams in 1999. Further, the trial court found that the Vinsons had clear notice of the violation of the restrictive covenants and failed to take any action during the building process to remedy the errors. These findings of fact are supported by the evidence of record and are not in dispute. Citizens National Bank's argument that material issues of fact exist is without merit.
Citizens National Bank's main argument on appeal is that injunctive relief was not appropriate in the instant case and that damages for the diminution of value to Williams' property were instead proper. We agree with Citizens National Bank that injunctive relief is an extraordinary remedy. See Brock v. Kentucky Ridge Mining. Co., Inc., 635 F.Supp. 444 (W.D. Ky. 1985). However, Kentucky courts have generally held that plaintiffs have a right to injunctive relief when a violation of a restrictive covenant occurs in the absence of some conduct by the plaintiffs which waives or estops this right.
If there is a negative covenant[] . . . the court has no discretion to exercise. If parties for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a court of equity has to do is to say, by way of injunction, that the thing shall not be done. In such a case the injunction does nothing more than give a sanction of the process of the court to that which already is the contract between the parties. It is not, then, a question of the balance of convenience or inconvenience or of the amount of damage or injury: it is the specific performance by the court of that negative bargain which the parties have made, with their eyes open, between themselves.Home Depot, U.S.A., Inc. v. Saul Subsidiary I Ltd. Partnership, 159 S.W.3d 339, 341-42 (Ky. App. 2004) (citing Marshall v. Adams, 447 S.W.2d 57 (Ky. 1969)). In general, in order to waive his rights under restrictive covenants, a plaintiff must have previously failed to enforce other covenants or failed to take action or inform the defendants of the violation of the covenants in such a way as to be estopped from later demanding injunction. Green v. Eversole, 296 Ky. 437, 177 S.W.2d 559 (Ky. 1944).
Citizens National Bank argues that Williams waived his right to enforce the covenants and should be estopped from seeking injunctive relief because he did not file suit until after the structure at issue was built. We disagree. The evidence clearly indicates that as soon as he noticed that the construction was in violation of the established restrictive covenants, Williams immediately contacted the Vinsons to remedy the situation. He gave them ample notice of the violations and attempted to work with them, as demonstrated by several letters between the parties found in the record. Furthermore, Williams offered to meet the Vinsons to discuss the construction and they failed to show up at the meetings. The evidence indicates that the Vinsons willfully violated the restrictive covenants despite adequate and appropriate notice by Williams. We do not agree that Williams unreasonably delayed action such that injunctive relief is barred as a form of recovery. Id.
Finally, Citizens National Bank argues that because it acquired the property after the structure was built and was not the party who violated the covenants, injunctive relief is not appropriate. However, Citizens National Bank points to no authority in support of this argument, and we are not convinced by its bare assertion. As stated in Home Depot, supra, "[i]t is not [] a question of the balance of convenience or inconvenience or of the amount of damage or injury . . . ." Home Depot, 159 S.W.3d at 342.
Accordingly, no material issues of fact existed to preclude the trial court's entry of summary judgment in the instant case. The record clearly indicates that the established restrictive covenants were violated in 2005 by the Vinsons. Furthermore, we find no error with the trial court's order granting injunctive relief to Williams for violation of these covenants.
Therefore, we affirm the May 25, 2010, entry of summary judgment and the June 1, 2011, order denying Citizens National Bank's motion to alter, amend, or vacate.
ALL CONCUR. BRIEF FOR APPELLANT: P. Franklin Heaberlin
Prestonsburg, Kentucky
BRIEF FOR APPELLEE: Steven W. Hughes
Mt. Sterling, Kentucky