Agua Fria Save the Open Space Ass'n v. Rowe

Decision Date08 April 2011
Docket NumberNo. 29,402.,29,402.
Citation149 N.M. 812,2011 -NMCA- 054,255 P.3d 390
PartiesAGUA FRIA SAVE THE OPEN SPACE ASSOCIATION, an unincorporated association, Plaintiff–Appellant,v.James C. ROWE, Defendant–Appellee.
CourtCourt of Appeals of New Mexico

149 N.M. 812
255 P.3d 390
2011 -NMCA- 054

AGUA FRIA SAVE THE OPEN SPACE ASSOCIATION, an unincorporated association, Plaintiff–Appellant,
v.
James C. ROWE, Defendant–Appellee.

No. 29,402.

Court of Appeals of New Mexico.

April 8, 2011.


[255 P.3d 391]

Alex Chisholm, Albuquerque, NM, for Appellant.Adam D. Rafkin, P.C., Adam D. Rafkin, Ruidoso, NM, for Appellee.

OPINION
VIGIL, Judge.

{1} Agua Fria Save the Open Space Association (Plaintiff) filed an action for injunctive relief seeking to prevent James Rowe (Defendant) from developing residential townhomes in an area of open space known as the Country Club Tract. The district court granted partial summary judgment in favor of Defendant, concluding that Defendant successfully had extinguished the restrictive covenants on the property. Plaintiff appeals, claiming that (1) Defendant is barred from developing the Country Club Tract, pursuant to Ute Park Summer Homes Association v. Maxwell Land Grant Co., 77 N.M. 730, 427 P.2d 249 (1967); Cree Meadows, Inc. (NSL) v. Palmer, 68 N.M. 479, 362 P.2d 1007 (1961); and Knight v. City of Albuquerque, 110 N.M. 265, 794 P.2d 739 (Ct.App.1990), and (2) the Saving Clause, which provides for the extinguishment of the restrictive covenants on any block or tract within the Agua Fria Subdivision, does not apply to the Country Club Tract. We conclude that genuine issues of material fact exist regarding Defendant's authority to extinguish the restrictive covenants on the Country Club Tract. Accordingly, we reverse the judgment of the district court and remand for further proceedings.

I. BACKGROUND

{2} The Country Club Tract is composed of 7.23 acres of open space located in the Agua Fria Subdivision in Lincoln County, New Mexico. The Agua Fria Subdivision is subject to a plat and restrictive covenants recorded with the Lincoln County Clerk by the original developers, Bruce and Georgia Griffith, on July 7, 1954.

{3} Section 3(B) of the restrictive covenants provides as follows:

[255 P.3d 392]

The Country Club Tract may be used for a hotel and/or club house and commercial activities for profit, which generally accompany such establishments, such as restaurants, bars, rooms and halls for dancing, tennis courts, swimming pools, fishing, boating[,] and other athletic events and activities operated in connection with such hotel or club house only.

{4} Section 4(b) of the Saving Clause states:

All of the covenants [herein] shall run with the ownership of the above described property and shall be binding on the undersigned parties and all persons claiming under them until December 31, 1995, at which time said covenants shall be automatically extended for periods of ten years unless by vote of a majority in number of the then owners of lots and tracts within the exterior boundaries of the land described in Section 1–Blanket Restrictions, hereof, it is agreed to change the said covenants in whole or in part.

Provided, however, that at any time hereafter any of said covenants or restrictions, in whole or in part, except the Blanket Restrictions in Section 1 hereof, may be alleviated, [amended], released or extinguished as to any block or tract by written instrument duly executed, acknowledged and recorded by three-fourths of the owners of said block or tract voting according to front foot holding, each front foot counting as one vote, and provided further that the undersigned now own land within the aforesaid boundaries or in close proximity thereto, and that these covenants are a general plan for the benefit of all and any of said land, and consequently that if said restrictions are alleviated or released as aforesaid at any time within ten years from the date hereof, and if at such time Bruce Griffith and Georgia ... Griffith, or either of them, own any land within the aforesaid boundaries, then in addition to the aforesaid vote of property owners, it shall also be necessary to obtain the consent thereto of the undersigned.

{5} Sue Davis, the daughter of Bruce and Georgia Griffith, inherited the Country Club Tract and transferred ownership to the V.R. Davis and Sue G. Davis Trust (the Trust). On November 30, 2004, the Trust granted Defendant the exclusive option to purchase and develop into townhomes “any or all of the 54 lots” situated on the Country Club Tract. Defendant exercised the option and proposed to build a fifty-two lot development entitled “Escondido Hills, A Subdivision of the Country Club Tract, Agua Fria Subdivision[.]”

{6} Plaintiff, an unincorporated association of homeowners in the Agua Fria Subdivision, filed a complaint in district court seeking to enforce the restrictive covenants and enjoin Defendant from developing the Country Club Tract. Defendant moved for summary judgment, arguing that “[n]othing in the Restrictive Covenants prohibits the building of single family residences in the Country Club [T]ract.” The district court denied the motion because “genuine issue[s] of material facts exist[ed].”

{7} On February 21, 2006, Defendant exercised his right under the Saving Clause to extinguish, alleviate, and release all restrictive covenants, except for the Blanket Restrictions, on the Country Club Tract. Approximately one month later, Plaintiff filed an “Amendment to Restrictive Covenants,” which was adopted by a majority of the homeowners in the Agua Fria Subdivision. The amendment provided that “[t]he Country Club Tract shall remain permanently undeveloped and an open space park, as it has for the last ... 51 years, for the benefit of Agua Fria owners.”

{8} Thereafter, Defendant moved for reconsideration of his motion for summary judgment based on new circumstances, namely, the extinguishment of the restrictive covenants. The district court granted Defendant's motion “to the extent that the Restrictive Covenants have been properly extinguished by Defendant as to the Country Club Tract.” Thus, Plaintiff was “foreclosed from relying on the Restrictive Covenants, other than [the Blanket Restrictions] at the trial.” However, the district court allowed Plaintiff to present evidence of the “oral misrepresentations allegedly made by the developer to support its argument that the Country Club Tract was meant to remain an ‘open space.’ ”

[255 P.3d 393]

{9} The issue of whether the homeowners in the Agua Fria Subdivision had been induced to purchase their lots based on the developer's representations that the Country Club Tract “would always remain open space” was tried to the jury. The jury found in favor of Defendant and the district court rendered judgment accordingly. On appeal, Plaintiff does not challenge the jury verdict but, rather, argues that the district court improperly held as a matter of law that Defendant had extinguished the restrictive covenants on the Country Club Tract.

II. DISCUSSION

{10} “When reviewing a trial court's grant of summary judgment, we view the facts in the light most favorable to the party opposing summary judgment, drawing all inferences in favor of that party.” Gormley v. Coca–Cola Enters., 2005–NMSC–003, ¶ 8, 137 N.M. 192, 109 P.3d 280 (internal quotation marks and citation omitted). “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Romero v. Philip Morris, Inc., 2010–NMSC–035, ¶ 7, 148 N.M. 713, 242 P.3d 280 (internal quotation marks and citation omitted). “We review these legal questions de novo.” Self v. United Parcel Serv., Inc., 1998–NMSC–046, ¶ 6, 126 N.M. 396, 970 P.2d 582.

A. Whether the Homeowners Acquired an Easement to the Open Space in the Country Club Tract

{11} Plaintiff claims that Defendant is barred from developing the Country Club Tract, pursuant to Ute Park, Cree Meadows, and Knight, which hold that “a developer [is not] allowed to induce purchasers to buy property by purporting to include open space such as parks or golf courses in a subdivision plat, only to subsequently change the uses of those open space areas.” Knight, 110 N.M. at 266, 794 P.2d at 740. Defendant responds that there is “no ... evidence in the case at bar” to establish that “the Country Club [T]ract was intended to always remain an ‘open space.’ ”

{12} “[W]here land is sold with reference to a map or plat showing a park or like open area, the purchaser acquires a private right, generally referred to as an easement, that such area shall be used in the manner designated.” Ute Park, 77 N.M. at 735, 427 P.2d at 253; see Cree Meadows, 68 N.M. at 482, 362 P.2d at 1009 (holding that open space could not be developed where the trial court found that “the defendants had sold lots to purchasers in some of the subdivisions by references to the then-existing plat and the restrictive covenants and that some persons had purchased lots at higher prices than ordinarily would have been paid after having examined the plat, the covenants, and heard the representations of the owners or their agents”).

The rationale of the rule is that a grantor, who induces purchasers, by use of a plat, to believe that streets, squares, courts, parks, or other open areas shown on the plat will be kept open for their use and benefit, and the purchasers have acted upon such inducement, is required by common honesty to do that which he represented he would do. It is the use made of the plat in inducing the purchasers, which gives rise to the legally enforceable right in the individual purchasers, and such is not dependent upon a dedication to public use, or upon the filing or recording of the plat.

Ute Park, 77 N.M. at 735, 427 P.2d at 253. “The private rights created when buyers...

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