Aragon v. Brown

• Decision Date: 28 August 2003
• Docket Number: No. 22,472.,22,472.
• Citation: 134 N.M. 459,78 P.3d 913
• Parties: Jim ARAGON, et al., as homeowners in the Vista Land Subdivision, Plaintiffs-Appellants, v. George F.M. BROWN and Yvette Brown, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

78 P.3d 913

134 N.M. 459

Jim ARAGON, et al., as homeowners in the Vista Land Subdivision, Plaintiffs-Appellants, v. George F.M. BROWN and Yvette Brown, Defendants-Appellees.

No. 22,472.

Court of Appeals of New Mexico.

August 28, 2003.

John P. Hays, Kenneth J. Cassutt, Cassutt, Hays & Friedman, P.A., Santa Fe, NM, for Appellants.

James A. Chavez, James A. Chavez, P.C., Albuquerque, NM, for Appellees.

OPINION

VIGIL, Judge.

{1} This case presents an issue of first impression: whether validly enacted, unambiguous restrictive covenants running with the land (covenants) that do not violate public policy, statutory, or constitutional provisions are subject to a separate requirement of "reasonableness" before they are enforced by injunctive relief. Sixty-seven landowners in the Vista Land Subdivision (Subdivision) filed a complaint for injunctive relief seeking to remove a manufactured home Defendants (the Browns) placed in the Subdivision. The manufactured home violates pre-existing, valid covenants which clearly and unambiguously exclude the Browns' manufactured home. The covenants do not violate public policy, statutory, or constitutional provisions. However, the trial court ruled that insofar as the covenants exclude the Browns' manufactured home, they are "not reasonable and should not, in equity, be enforced" and denied injunctive relief. We hold that the trial court imposed an unnecessary requirement of "reasonableness" to issue an injunction in the circumstances of this case and reverse.

FACTS

{2} In 1971 the Vista Land Company established the Subdivision in Santa Fe County, New Mexico, to sell residential lots. The Vista Land Company established and recorded restrictive covenants in a Declaration of Restrictions binding all purchasers and successors in interest. The covenants, in pertinent part, provide that all lots in the Subdivision shall be known and described as residential lots, that only a single-family dwelling and other structures associated with a dwelling may be constructed on the lots, and that "[n]o building shall be erected, placed or altered on any lot of this subdivision that does not conform" to the covenants. The covenants originally stated, "[n]o trailer ... shall at any time be used as a residence temporarily or permanently, nor shall any structure of a temporary character be used as a residence." The lot owners formed the Vista Landowners Association (Association) to enforce the covenants. {3} The Association always allowed conventional homes which were not built on site, such as those built by Preferred Building Systems (Preferred), if they otherwise complied with the covenants. There are several such homes in the Subdivision, and not all of them were built by Preferred. However, when lot owners attempted to place manufactured homes on their lots, the Association told them manufactured homes were not allowed under the covenants, and asked that the manufactured homes be removed. All complied.

{4} The terminology of trailers versus mobile homes versus manufactured homes started getting confusing. Since the original covenants were binding until January 1, 2000, and automatically extended for successive periods of ten years unless a majority of the lot owners agreed to a change, the Association decided to clarify the covenants on the recommendation of their attorney. The ballot sent to the lot owners with the proposed change states in pertinent part:

I [We} approve [ ] do not approve [ ] (mark one) the proposed amendment to paragraph E of the Covenants, clarifying that manufactured homes are not permitted in the Subdivision, but offsite conventional homes (such as are built by Preferred Builders) are permitted.

{5} Sixty-six owners voted in favor of the amendment, and five voted against it. As amended, effective January 1, 2000, the covenants at issue read:

No trailer, trailer house, motor home, mobile home, manufactured home, premanufactured home, modular home or other non site built home shall be moved onto or placed upon any lot in the Subdivision for use as a temporary or permanent residence, regardless of whether such home meets any federal or state standards for construction of such homes, and regardless of whether such home is placed on a permanent foundation. Notwithstanding the foregoing, conventional homes constructed offsite, similar to those currently sold by Preferred Building Systems in Albuquerque, New Mexico, shall be permitted, provided that the home meets all regulations and standards promulgated by the New Mexico Construction Industries Division for such homes. (Emphasis added.)

{6} Mr. and Mrs. Wilkinson had owned Lot 10-B in the Subdivision for approximately seventeen years. Mrs. Wilkinson served on the board of the Association and held various positions with the Association during the time she owned Lot 10-B. Mr. and Mrs. Wilkinson voted in favor of the amendments to the covenants. On October 13, 2000, the Browns acquired Lot 10-B from the Wilkinsons in a quitclaim deed. Mrs. Brown is the daughter of the Wilkinsons. The Browns had previously lived in the Subdivision in a Preferred home. They knew there were covenants, and they knew Preferred homes complied with the covenants. The Browns called Preferred to purchase a home, but because Preferred was going to take three months to provide a home, and the Browns wanted a home immediately, they decided to buy their home elsewhere. The Browns bought their home in July 2000, before they actually received title to their lot.

{7} When the home was delivered, neighbors immediately complained to the Browns that the home did not comply with the covenants. The president of the Association met with them and their builder and told them the home did not comply. The Association formally demanded that the home be removed, and the Browns refused. This suit to remove the home followed.

{8} The undisputed evidence is that the Browns' home does not meet all regulations and standards promulgated by the New Mexico Construction Industries Division (CID) for such homes, but it is built in conformance with all applicable federal Housing and Urban Development (HUD) regulations for a manufactured home built off-site. The trial court found that federal regulations:

Are intended to address and meet all local building codes. The match is not perfect and there can arise variances between the HUD standards and any given local building code but, in the main, there is no practical difference between homes built to HUD standards and homes built to New Mexico's standards as set by the State's Construction Industries Division.

Based upon this finding, the trial court concluded, "[t]he Browns' home meets federal building standards which are substantially equivalent to the State's building standards and is functionally the same as the types of homes acceptable under the [covenant] Restrictions." It was on this basis that the trial court concluded that in excluding the Browns' home, the covenants are not reasonable and should not, in equity, be enforced. Plaintiffs appeal, and we reverse.

STANDARD OF REVIEW

{9} The complaint seeks injunctive relief which is directed to the sound discretion of the trial court. Wilcox v. Timberon Protective Ass'n, 111 N.M. 478, 485, 806 P.2d 1068, 1075 (Ct.App.1990). However, the trial court abuses discretion when it applies an incorrect standard, incorrect substantive law, or its discretionary decision is premised on a misapprehension of the law. See N.M. Right to Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 7, 127 N.M. 654, 986 P.2d 450

(stating decision premised on a misapprehension of the law may be characterized as an abuse of discretion); LaBalbo v. Hymes, 115 N.M. 314, 318, 850 P.2d 1017, 1021 (Ct.App.1993) (stating trial court may abuse its discretion by applying incorrect standard or incorrect substantive law for preliminary injunction). Whether the "reasonableness" of pre-existing, validly enacted, unambiguous covenants that do not violate public policy, statutory, or constitutional provisions may be considered when enforcing such covenants by injunctive relief presents a question of law, which we review de novo. See Cafeteria Operators, L.P. v. Coronado-Santa Fe Assocs., 1998-NMCA-005, ¶ 19, 124 N.M. 440, 952 P.2d 435 (stating injunction left to discretion of trial court so long as consistent with well established standards).

ANALYSIS

{10} Montoya v. Barreras, 81 N.M. 749, 751, 473 P.2d 363, 365 (1970), teaches that restrictive covenants have historically been "used to assure uniformity of development and use of a residential area to give the owners of lots within such an area some degree of environmental stability." They have allowed the creation of stable arrangements of land use, and because their use is a concomitant right of property ownership, they can be used for any purpose that is not illegal or against public policy. See generally Restatement (Third) of Property (Servitudes) § 1.1 cmt. a (2000). Furthermore, "such covenants constitute valuable property rights of the owners of all lots in the tract," Montoya, 81 N.M. at 751-52, 473 P.2d at 365-66, and we have repeatedly recognized that reliance on restrictive covenants is a valuable property right. Wilcox, 111 N.M. at 485, 806 P.2d at 1075; see Appel v. Presley Cos., 111 N.M. 464, 466, 806 P.2d 1054, 1056 (1991)

; Cunningham v. Gross, 102 N.M. 723, 725, 699 P.2d 1075, 1077 (1985); see also Gorman v. Boehning, 55 N.M. 306, 310, 232 P.2d 701, 704 (1951) (stating a restrictive covenant is something of value to all lots in a tract which cannot be divested by a stranger acquiring title adverse to the common owner).

{11} In Montoya, the Supreme Court recognized that each owner of a lot has a contractual right to have the restrictions enforced against the owner of any other lot. 81 N.M. at 752, 473 P.2d at 366. The reason is that a restrictive covenant is part of the valuable contract consideration given and relied upon in the conveyance of...