Appel v. Presley Companies

• Court: New Mexico Supreme Court
• Writing for the Court: FRANCHINI; SOSA, C.J., and MONTGOMERY
• Citation: Appel v. Presley Companies, 806 P.2d 1054, 111 N.M. 464, 1991 NMSC 26 (N.M. 1991)
• Decision Date: 08 March 1991
• Docket Number: No. 18798,18798
• Parties: Daniel B. APPEL and Patricia E. Appel, Plaintiffs-Appellants, v. The PRESLEY COMPANIES, a foreign corporation, a/k/a The Presley Company of New Mexico, a New Mexico corporation, Wolfe Company, Inc., Charles E. Cook, C.W. Reynolds and Thomas N. Burlison, Defendants-Appellees.

Page 1054

806 P.2d 1054

111 N.M. 464

Daniel B. APPEL and Patricia E. Appel Plaintiffs-Appellants, v. The PRESLEY COMPANIES, a foreign corporation, a/k/a The Presley Company of New Mexico, a New Mexico corporation Wolfe Company, Inc., Charles E. Cook, C.W. Reynolds and Thomas N. Burlison, Defendants-Appellees.

No. 18798.

Supreme Court of New Mexico.

March 8, 1991.

[111 NM 464] Cynthia A. Fry, M. Terrence Revo, Albuquerque, for plaintiffs-appellants.

[111 NM 465] Pongetti, Myers & Wilson, John A. Myers, Kevin J. McCready, Moses, Dunn, Beckley, Espinosa & Tuthill, Leonard G. Espinosa, Albuquerque, for defendants-appellees.

OPINION

FRANCHINI, Justice.

Plaintiffs Daniel and Patricia Appel appeal from an order granting summary judgment to defendants The Presley Company of New Mexico (Presley) and Wolfe Company, Inc. (Wolfe). The Appels are homeowners in the Vista Del Sandia subdivision in Albuquerque, which is owned by Presley. Wolfe is a developer and the owner of a tract in the subdivision on which it intends to build four townhouses. In their complaint, the Appels asserted three claims: breach of restrictive covenants; negligent and fraudulent misrepresentation; and unfair trade practices. They requested a permanent injunction enjoining Wolfe from constructing any building on its lot unless it complied with the restrictive covenants applicable to the subdivision. The Appels also requested a permanent injunction enjoining Presley from constructing any building in the arroyo area of the subdivision. In addition, the Appels sought compensatory and punitive damages against Presley. We reverse and remand.

FACTS

On January 3, 1979, Presley recorded with the Bernalillo County Clerk a replat for the Vista Del Sandia subdivision. On October 8, 1982, Presley recorded a set of restrictive covenants covering all the property shown on the replat, including a tract in the subdivision arroyo. The covenants regulated the land use, building type, quality, and size of the residential single-family dwellings that were to be placed on the subdivision property. In November 1982, the Appels met with Presley and its agents regarding the possible purchase of a lot in the subdivision. The Appels allege certain representations were made concerning lots in the subdivision and the purpose of the restrictive covenants. The Appels further allege that the restrictive covenants were used as a sales tool which they relied on in purchasing a lot and constructing their home. On April 25, 1984, the subdivision's Architectural Control Committee, consisting of three members who were all employees or officers of Presley, executed an amendment of the restrictive covenants. This amendment deleted nine lots from the effect of the restrictive covenants, including Lots 28-A and 30 which are involved in this appeal. Since the covenants were amended, some of the lots have been subdivided into smaller lots and townhouses have been constructed on them. Presley sold Lot 28-A to Wolfe in April 1988. Wolfe is replatting Lot 28-A into four lots for single family residences. No development plans exist for Lot 30, the arroyo lot.

I. RESTRICTIVE COVENANTS

In deciding whether summary judgment is proper, a court must look to the whole record and view the matters presented in the light most favorable to support the right to trial on the merits. C & H Constr. & Paving Co. v. Citizens Bank, 93 N.M. 150, 597 P.2d 1190 (Ct.App.1979). The Appels filed their complaint to enjoin Wolfe's proposed replatting and construction and to enjoin the construction of any buildings on Lot 30. The following provisions contained in the restrictive covenants were relied on by the trial court to authorize the amendments:

15. ARCHITECTURAL CONTROL COMMITTEE: * * * At any time, the then record owners of the majority of the lots shall have the power, through a duly recorded written instrument, to change the membership of the Committee or to withdraw from the Committee, or restore to it any of its powers and duties.

* * * * * *

17. TERMS OF COVENANTS: These covenants are to run with the land and shall be binding on all parties and all persons claiming under them for a period of thirty (30) years from the date these covenants are recorded, after which time said covenants shall be automatically extended for successive periods of ten (10) years, unless an instrument signed by a majority of the then lot owners of the lots have been recorded, agreeing to change said covenants in whole or in part.

* * * * * *

20. VARIANCE: A majority of the Architectural Control Committee, may from time to time, make amendments and/or exceptions to these restrictions, covenants and reservations without the consent of any of the owners of any of the other lots in said subdivision.

In particular, the trial court emphasized the "amendments and/or exceptions to these restrictions" language of paragraph 20 in the restrictive covenants. The trial court found that the language was unambiguous and that the covenant permitted the Architectural Control Committee to make exceptions and remove individual lots from the covenants. This court has recognized the importance of enforcing protective covenants where the clear language of the covenants, as well as the surrounding circumstances, indicates an intent to restrict use of land. Cunningham v. Gross, 102 N.M. 723, 699 P.2d 1075 (1985). In Montoya v. Barreras, 81 N.M. 749, 473 P.2d 363 (1970), we refused to allow an individual lot to be removed from the effect of a restrictive covenant in spite of a provision in the covenant allowing change by majority approval. We held: "To permit individual lots within an area to be relieved of the burden of such covenants, in the absence of a clear expression in the instrument so providing, would destroy the right to rely on restrictive covenants which has traditionally been upheld by our law of real property." Montoya, 81 N.M. at 751, 473 P.2d at 365. Here, the trial court found the "amendments and/or exceptions to these restrictions" language to be the clear expression required by Montoya.

We agree that the language permitted the Architectural Control Committee to make amendments or exceptions to the restrictive covenant. However, courts have determined that provisions allowing amendment of subdivision restrictions are subject to a requirement of reasonableness. As stated in 7 G. Thompson, Real Property, Sec. 3171 (repl.1962), "A court of equity will not enforce restrictions where there are circumstances that render their enforcement inequitable * * *."

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