Summary
finding that the trial court did not abuse its discretion in upholding injunctive relief where the injunction only affected one lot within a subdivision
Summary of this case from Fed. Point Yacht Club Ass'n, Inc. v. MooreOpinion
No. COA11–1287.
2012-07-17
Donald Edwin MATTHIEU, Jr., and Carol Carter Matthieu, Plaintiffs, v. Steven M. MILLER, Jennifer A. Miller, and J & S Electric Co., Inc., Defendants.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by D.J. O'Brien III, for plaintiffs-appellants. Farver, Skidmore & McDonough, LLP, by Darren A. McDonough, for defendants-appellees.
Appeal by plaintiffs from order entered 17 February 2011 by Judge John O. Craig III in Rockingham County Superior Court. Heard in the Court of Appeals 22 February 2012. Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by D.J. O'Brien III, for plaintiffs-appellants. Farver, Skidmore & McDonough, LLP, by Darren A. McDonough, for defendants-appellees.
BRYANT, Judge.
Where the trial court did not abuse its discretion in the scope of the injunctive relief granted, the order of the trial court is affirmed.
Facts and Procedural History
Plaintiffs Donald Edwin Matthieu, Jr. and Carol Carter Matthieu own several lots (Lots 18, 19, 20, and 22) in Spring Lake Farms, a subdivision in Rockingham County. Steven M. Miller and Jennifer A. Miller (“the Millers”) own Lot 16 in the same subdivision. Steven M. Miller is the sole stockholder of J & S Electric Company (“J & S”), a corporation with its principal place of business in Rockingham County.
On 3 August 2010, plaintiffs filed a complaint against the Millers and J & S (collectively “defendants”) seeking injunctive relief against defendants' alleged violations of the subdivision's restrictive covenants, particularly, a prohibition from conducting any commercial activity on Lot 16 and limiting the use of Lot 16 to single-family dwelling purposes. The complaint also alleged malicious prosecution, abuse of process, obstruction of justice, and conspiracy against the Millers.
On 12 November 2010, defendants filed a motion for partial summary judgment
on the ground that there is no genuine issue as to any material fact relating to the issue of whether the Plaintiffs can enforce the restrictive covenants relevant in this matter against any of the defendants, and movant is entitled to judgment as a matter of law dismissing the Plaintiffs' claims that seek injunctive relief against any of the defendants.
Following a hearing, the trial court entered an order on 17 February 2011 denying defendants' motion for partial summary judgment and granting partial summary judgment in favor of plaintiffs in their claim for injunctive relief. The trial court permanently enjoined defendants from conducting business, trade, or commercial activity on Lot 16 and for using the lot for anything other than residential single-family dwelling purposes. In its order, the trial court enumerated specific activities from which defendants were enjoined. The 17 February 2011 order also enumerated activities from which defendants were not enjoined such as conducting telephone calls, clerical activities, and listing the street address of Lot 16 as a principal business address of J & S. In July 2011, plaintiffs filed a notice of voluntary dismissal with prejudice as to the remaining claims for relief. From the 17 February 2011 order, plaintiffs appeal.
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“We review a trial court's order granting or denying summary judgment de novo. Under a de novo review, th[is] court considers the matter anew and freely substitutes its own judgment for that of the lower tribunal.” Ginsberg v. Bd. of Governors of the Univ. of N.C., ––– N.C.App. ––––, ––––, 718 S.E.2d 714, 715–16 (2011) (citation omitted). Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that [the party] is entitled to a judgment as a matter of law.” Yates v. Haley, 103 N.C.App. 604, 606, 406 S.E.2d 659, 660 (1991) (citation omitted).
In the present case, although the trial court granted partial summary judgment in favor of plaintiffs, plaintiffs argue that the trial court erred by specifically not enjoining defendants from certain activities in view of the applicable restrictive covenants. In other words, the issue before us is whether the trial court erred in the scope of the injunctive relief granted.
When enforcing a restrictive covenant and restoring the status quo, a mandatory injunction is the proper remedy. Whether injunctive relief will be granted to restrain the violation of such restrictions is a matter within the sound discretion of the trial court ... and the appellate court will not interfere unless such discretion is manifestly abused.
Schwartz v. Banbury Woods Homeowners Ass'n, 196 N.C.App. 584, 596, 675 S.E.2d 382, 391 (2009) (citations and quotations omitted).
Plaintiffs concede that the trial court correctly found that the subdivision's restrictive covenants applied to defendants and that defendants violated the restrictive covenants. However, plaintiffs argue that the trial court “impermissibly attempted to compromise the unambiguous language of the Restrictive Covenants so as to permit some types of nonresidential, business, and/or commercial activity” in the subdivision. We disagree.
Specifically, plaintiffs contend the trial court erred by failing to permanently enjoin defendants from the following activities:
a. Locating the principal office of J & S Electric Co., Inc. or any other business at Defendants' Lot 16;
b. Driving commercial vehicles and towing commercial trailers to and from Defendants' Lot 16;
c. Parking or storing a commercial vehicle at Defendants' Lot 16;
d. Placing Defendants' Lot 16 into commercial use as evidenced by loan agreements of J & S Electric Co. and Mr. and Mrs. Miller;
e. Inviting, placing, and receiving business telephone calls to and from Defendants' Lot 16;
f. Listing Defendants' Lot 16 as the principal office mailing address and principal office street address for J & S Electric Co. on the records of the North Carolina Secretary of State;
g. Listing Defendants' Lot 16 as the address for J & S Electric Co. on the records of the North Carolina State Board of Examiners of Electrical Contractors;
h. Listing Defendants' Lot 16 as the address for J & S Electric Co. on a business license for the city of High Point;
i. Listing Defendants' Lot 16 as the address for J & S Electric Co. on a privilege license for the city of Greensboro;
j. Maintaining a business office with associated equipment and supplies at Defendants' Lot 16; and
k. Allowing commercial vehicles and private vehicles owned or operated by employees or subcontractors of J & S Electric Co., Inc. to travel across Defendants' Lot 16 to access property adjacent to the Subdivision[.]
“The law looks with disfavor upon covenants restricting the free use of land.” Schwartz, 196 N.C.App. at 591, 675 S.E.2d at 387 (citation omitted).
In construing restrictive covenants, the fundamental rule is that the intention of the parties governs, and that their intention must be gathered from study and consideration of all the covenants contained in the instrument or instruments creating the restrictions. Moreover, restrictive covenants are “strictly construed in favor of the unrestricted use of property.” A trial court should not interpret a restrictive covenant in an unreasonable manner or a manner that defeats the plain and obvious purpose of the covenant.
Cumberland Homes, Inc. v. Carolina Lakes Prop. Owners' Ass'n, 158 N.C.App. 518, 521, 581 S.E.2d 94, 96–97 (2003) (citations omitted).
Doubt will be resolved in favor of the unrestricted use of property, so that where the language of a restrictive covenant is capable of two constructions, the one that limits, rather than the one which extends it, should be adopted, and that construction should be embraced which least restricts the free use of the land.
Rice v. Coholan, 205 N.C.App. 103, 117, 695 S.E.2d 484, 493 (2010) (citation omitted).
In the case before us, restrictive covenants applicable to Lot 16 provide that the “premises shall be used only for residential single-family dwelling purposes” and included a specific covenant that: [n]o business, trade, or commercial activity of any kind, including farming and the practice of a profession, shall be conducted on the premises.”
The trial court's 17 February 2011 order stated the following:
[Defendants] are specifically not enjoined from listing the street address of the lot as the principal business address of J & S, and they are hereby allowed to conduct telephone calls, internet usage, invoicing or other clerical activities related to the business, within the confines of the residence on the Lot.
(emphasis added). However, defendants were permanently enjoined from “conducting business, trade, or commercial activity on the [defendants'] Lot and/or from using the [defendants'] Lot for anything other than residential single-family dwelling purposes.” Further, defendants were specifically enjoined from engaging in certain activities on Lot 16: meeting with employees or subcontractors of J & S or any other Miller business/sole proprietorship for business purposes; allowing employees or subcontractors of J & S or any other Miller business/sole proprietorship to park their vehicles; parking more than one van or other commercial vehicle; storing commercial equipment or inventory for J & S or any other Miller business/sole proprietorship except for tools kept in the allowed van or other commercial vehicle; and offering commercial vehicles, equipment, or inventory for sale.
Plaintiffs' contend that our Court in Walton v. Carignan, 103 N.C.App. 364, 407 S.E.2d 241 (1991), held that a restrictive covenant with language similar to that in the instant case prohibited any business or commercial activity. Although the Walton Court held that “[t]he covenants are plain and clear—no commercial activity, no business operation” and that the defendants had violated the restrictive covenants applicable to their home, the facts are before us are clearly distinguishable. Id. at 368, 407 S.E.2d at 243. The Walton defendants operated a day-care business out of their residence whereas here, as a result of the portion of the trial court order from which plaintiffs did not appeal, defendants no longer operate any portion of their business on the premises of their residence.
Having reviewed the language of the restrictive covenants, we conclude that the covenants intended to limit the use of the property for residential purposes only and the trial court's order, permanently enjoining defendants from conducting business, trade, or commercial activity on their lot, upholds that purpose. We find that the activities upon which plaintiffs predicate their appeal—performing other clerical activities incidentally related to their electrical business, i.e. listing the street address of Lot 16 as a business address, making telephone calls, using the internet, and invoicing—are all activities that take place within the confines of defendants' residence, and do not destroy the residential character of the property or defeat purpose of the restrictive covenants.
Plaintiffs rely on Karner v. Roy White Flowers, Inc., 351 N.C. 433, 527 S.E.2d 40 (2000), and argue that the trial court erred by attempting to “rewrite” the restrictive covenants, contending that “it is not the role of the Court in enforcing a residential restrictive covenant to attempt to balance competing interests among neighbors.” The issue before the Karner court was whether nonparty property owners of a subdivision were necessary parties, pursuant to Rule 19 of the North Carolina Rules of Civil Procedure, in an action to enforce a restrictive covenant. Id. at 435, 527 S.E.2d at 42. The Karner court stated that “[c]ontractual relations do not disappear as circumstances change. So equity cannot balance the relative advantages and disadvantages of a covenant and grant relief against its restrictions merely because it has become burdensome.” Id. at 437, 527 S.E.2d at 43 (citation omitted). Karner is not applicable to the instant case however, as the trial court did not “rewrite” the restrictive covenants as plaintiffs allege. Rather, the trial court applied a reasonable construction of the covenants, thereby embracing the “least restric[tive] free use of the land.” Rice, 205 N.C.App. at 117, 695 S.E.2d at 493. The trial court's order served the purpose of eliminating commercial activity from defendant's residence without policing defendants' telephone calls and other clerical activities incidental to defendants' business but conducted within the confines of their home. Further, the order did not threaten, indeed, it served to maintain, the residential character of the subdivision.
Based on the foregoing, we conclude that the trial court did not abuse its discretion in the scope of injunctive relief granted in the 17 February 2011 order. The order of the trial court is affirmed.
Affirmed. Judges HUNTER, JR., Robert N. and BEASLEY concur.
Report per Rule 30(e).