Ashley v. Kehew

• Decision Date: 28 April 2010
• Docket Number: No. 2008-264-Appeal.,2008-264-Appeal.
• Citation: 992 A.2d 983
• Parties: John E. ASHLEY et al. v. Kenneth A. KEHEW et al.
• Court: Rhode Island Supreme Court

992 A.2d 983

John E. ASHLEY et al. v. Kenneth A. KEHEW et al.

No. 2008-264-Appeal.

Supreme Court of Rhode Island.

April 28, 2010.

Quentin G. Anthony, Esq., for Plaintiff.

Kenneth R. Tremblay, Esq., (Kenneth & Mary Ellen Kehew), Kevin P. Gavin, Esq., Portsmouth, (Town of Portsmouth), for Defendant.

Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, and ROBINSON, JJ.

OPINION

Justice FLAHERTY, for the Court.

The central issue before the Court in this appeal is whether restrictive covenants, which are set forth in instruments of conveyance, and which prohibit a further subdivision of two lots in the Town of Portsmouth, remain enforceable. A Superior Court justice ruled that the restrictions no longer were enforceable because all parties had agreed to release them. The owners of one of the two lots in the subdivision appealed. We vacate the judgment.

I Facts and Travel

In 1982, Lucille Ashley deeded lot No. 20 on Assessor's Plat No. 64 in Portsmouth to her granddaughter, Laure Ashley. Subsequently, and for reasons not necessary to decide this appeal, Franklyn Ashley, Laure's father, and John Ashley, Laure's brother, filed suit in Newport County Superior Court against Laure, challenging the conveyance. In 1986, the parties reached a settlement that was approved by the Superior Court. Per the terms of the settlement, which was included as part of a consent judgment entered by the Superior Court, Laure agreed to subdivide lot No. 20 and give John title to "the farm house" on lot No. 20, along with 2.54 acres of land. Laure retained the balance of lot No. 20, roughly five acres.¹ However, in a separate agreement, Laure agreed to convey those same five acres to her attorney, Daniel McKinnon, to satisfy legal fees that she owed to him.

To effectuate the consent judgment, a subdivision application was submitted to the Portsmouth Planning Board (the board) in 1988 designating two discrete lots: lot No. 1, which measured about five acres, and lot No. 2, which was about two and a half acres.² However, the initial plan was not acceptable to the board; it required that amendments be made, including that two conditions be imposed on both lots. Those conditions were that "Lots No. 1 & No. 2 May Not Be Further Subdivided" and "Not More Than One Single Family Home With Normal Outbuildings Shall Be Constructed On Each Lot." McKinnon and Laure agreed to the conditions, and the board eventually approved a subdivision plat that included both conditions on the face of the plat.

In June 1990, Laure executed a quitclaim deed to lot No. 2 to John, which included both of the aforementioned conditions imposed by the board. For some reason, the deed was not recorded in the land evidence record until July 11, 1995. To complicate matters further, at trial, John denied any knowledge of this deed.

When Laure conveyed lot No. 1 to McKinnon in 1991, the quitclaim deed contained the identical covenants found in Laure's 1990 deed to John. ("Said lot may not be further subdivided" and "Not more than one single family home with normal outbuildings shall be constructed on said lot.") The deed to McKinnon was recorded on September 13, 1991.

Then, on June 4, 1996, Laure executed and later recorded what was denominated as a "Confirmatory Quitclaim Deed" to lot No. 2 to John Ashley and Cheryl Beach. That deed contains the same two conditions as the 1990 deed from Laure to John, i.e., "Said lot may not be further subdivided" and "Not more than one single family home with normal outbuildings shall be constructed on said lot." But on that same day, Laure also executed an "Affidavit and Release," which was recorded with the confirmatory quitclaim deed. That document reiterated the same two restrictions but then said that:

"This language was included in the deeds because the Town of Portsmouth has imposed these conditions on the use of the aforementioned property and because these conditions appear on the subdivision plan referred to in said deeds. It was not and is not my intention to burden the aforementioned premises with these restrictions, and, to the extent that I have the authority, I hereby release John E. Ashley and the premises from said conditions."

The confirmatory deed also declared that it is "subject * * * to the terms and conditions of the Affidavit and Release."

On June 19, 2001, McKinnon executed a warranty deed conveying lot No. 1 to himself and John B. Harwood as tenants in common. That deed provided that lot No. 1 was "subject to restrictions put on the face of the above plan imposed by the Town of Portsmouth but released by these grantors." On that same day, McKinnon and Harwood executed a warranty deed for the same premises to Kenneth and Mary Ellen Kehew. This deed also contained the provision that lot No. 1 was "subject to restrictions put on the face of the above plan imposed by the Town of Portsmouth but released by these grantors." Both deeds were recorded on July 9, 2001.

Shortly thereafter, the Kehews applied to the Portsmouth Planning Board to subdivide lot No. 1 so that Mr. Kehew's brother could build a home. It appears that their initial application was withdrawn, but in 2005 another application was submitted in its stead. The board approved the Kehews' application to subdivide the property, and it agreed to rescind the condition that it had previously imposed prohibiting any further subdivision of either lot No. 1 or lot No. 2.³

On March 8, 2005, John Ashley and Cheryl Beach filed a complaint in Newport County Superior Court against the Kehews, seeking injunctive relief. Specifically, they asked that the Kehews "be permanently enjoined and restrained from presenting to the Portsmouth Planning Board an application to subdivide Lot No. 1 into 2 lots, subdividing Lot No. 1 into 2 lots and erecting or permitting a third person to erect a residential dwelling on said lot."⁴

After a trial without a jury, the trial justice issued a decision. After summarizing the essential facts surrounding the three purported releases by Laure Ashley, by McKinnon and Harwood, and by the board, the trial justice articulated the law upon which she relied in reaching her decision. She observed that restrictive covenants can be discharged either through releases or agreements. Then she commented that "several jurisdictions have held that the consent of all owners is required to release a subdivision's restrictions" and cited three cases for this proposition: Flowers v. August, 426 S.W.2d 480, 482 (Ky.1968); Dartmouth-Willow Terrace, Inc. v. MacLean, 371 S.W.2d 937, 938 (Ky.1963); Truong v. City of Houston, 99 S.W.3d 204, 214 (Tex.Ct.App.2002).

The trial justice went on to hold that:

"The credible evidence demonstrates that all the parties agreed to the release of the original restrictions, albeit not simultaneously. Since the lot owners by `mutual agreement' have `released and relinquished their right to enforce the same' the restrictions in controversy are no longer enforceable. See Dartmouth-Willow Terrace, 371 S.W.2d at 938."

The trial justice found that the board had released the restrictions on the subdivision plat in 2005, that McKinnon had released the restrictions on lot No. 1 through his deed to Harwood and himself and then "reinforced that release" via his deed to the Kehews, and that lot No. 2 was released from the restrictions by the 1996 confirmatory quitclaim deed and affidavit and release signed by Laure. The trial justice entered a judgment denying John Ashley and Cheryl Beach's claim for injunctive relief to enforce the restrictive covenants.

John Ashley and Cheryl Beach timely appealed to this Court. On appeal, we must resolve whether the restrictions remain in effect or whether they effectively were released by the respective parties.

II Standard of Review

"A judgment in a nonjury case will be reversed on appeal when it can be shown that the trial justice misapplied the law, misconceived or overlooked material evidence or made factual findings that were clearly wrong." Ondis v. City of Woonsocket ex rel. Touzin, 934 A.2d 799, 802 (R.I.2007) (quoting Town of West Greenwich v. A. Cardi Realty Associates, 786 A.2d 354, 357-58 (R.I.2001)). When we examine the record, "we review with deference the factual findings made by a trial justice in a nonjury case." State v. Germane, 971 A.2d 555, 573 (R.I.2009). When, as is the case here, the issue is a pure question of law, our review is de novo. Ondis, 934 A.2d at 802.

III Analysis

We recognize at the outset that Rhode Island law is relatively scant on what constitutes an effective release of a restrictive covenant. Previously, when faced with an issue about the enforceability of a restrictive covenant when a Rhode Island law was unclear or sparse, we have looked "to leading authorities and the law of other jurisdictions for guidance in making our determination." Ridgewood Homeowners Association v. Mignacca, 813 A.2d 965, 972 (R.I.2003) (quoting Liberty Mutual Insurance Co. v. Harbor Insurance Co., 603 A.2d 300, 302 (R.I.1992)); cf. Jackvony v. Poncelet, 584 A.2d 1112, 1116 (R.I.1991) ("No case law exists in Rhode Island that directly addresses the precise issue now before us. Consequently we must look to the general law dealing with the extinguishment of easements and to any other jurisdictions that have ruled on the issue."). We do so here as well.

Covenants can be terminated by merger, release, rescission, unclean hands, acquiescence, abandonment, laches, and estoppel. 9 Richard R. Powell, Powell on Real Property § 60.101 at 60-120 (Michael Allan Wolf ed., LexisNexis Matthew Bender 2009). "A person entitled to enforce the benefit of a covenant may extinguish this right by means of a written and recorded release." Id. at 60-122. "Such a release, however, extinguishes the obligation only so far as it relates to the estate of the releasor, and all of the benefited property owners must join in a release in order to completely extinguish the obligation." Id.

When we...