Bob Layne Contractor, Inc. v. Buennagel
| Decision Date | 04 October 1973 |
| Docket Number | No. 272A6011,272A6011 |
| Citation | 301 N.E.2d 671,158 Ind.App. 43 |
| Parties | BOB LAYNE CONTRACTOR, INC., Appellant (Defendant below), v. Donald E. BUENNAGEL et al., Appellees (Plaintiffs below). |
| Court | Indiana Appellate Court |
Frank E. Gilkison, Kelly N. Stanley, White, Haymond, Pierce, Beasley & Gilkison, Muncie, for appellees.
This is an appeal by defendant-appellant Bob Layne Contractor, Inc. (Layne) from a permanent injunction granted plaintiffs-appellees Donald R. Buennagel, et al (Buennagel) on their Complaint to enjoin violation of restrictive covenants upon lots in a subdivision originally owned and platted by Layne.
We affirm.
The facts and evidence most favorable to Buennagel and the judgment of the trial court are:
In 1960, Layne owned a tract of land which he platted into approximately 207 lots and developed into a subdivision known as 'Layne Crest Addition' near Muncie, Indiana of which approximately one hundred thirty-five lots have been sold.
On May 4, 1960, Layne recorded the plat of the subdivision together with covenants restricting the use of the lots in the subdivision to 'residential purposes' (single family residences). These restrictive covenants applied to 'each and every lot in said Addition . . .' and were to run with the land and to be binding on all parties and all persons claiming under them for a period of twenty-five years, renewable automatically for successive periods of ten years unless an instrument signed by a majority of the owners of the lots expressed an agreement to change the covenants in whole or in part. The restrictive covenants also provided for enforcement of violations of the covenants by injunction if no adequate legal remedy existed.
Buennagel and the other plaintiff-appellees are the owners of eleven lots in Layne Crest subject to the restrictive covenants and are members of the Northwest Citizens Association (the Association) formed to oppose rezoning of part of the subdivision by Layne. The only use of lots in this subdivision has been for single family residences.
Prior to the platting and development of Layne Crest by Layne, no road existed on the northern boundary of Layne Crest. However, during the mid-1960's plans were revealed for the development of a four-lane freeway along the northern boundary of Layne Crest.
Recognizing that the existence of a four-lane freeway would render a substantial number of lots at the north end of the subdivision more suitable for commercial than residential development, Layne initiated a proceeding in the Delaware Circuit Court entitled, 'Petition to Vacate Part of Plat of Layne Crest Addition in the City of Muncie, Indiana, and Certain Streets Therein' in January of 1967 (the Vacation Suit) seeking to vacate this northern group of lots (the Subject Property) from the Layne Crest Addition. It contained no reference to the restrictive covenants. The 'City of Muncie, Indiana, and the Citizens Thereof' were named defendants.
Statutory notice pursuant to Ind.Ann.Stat. § 48--909 (Burns 1963) was given to the 'City of Muncie, Indiana and The Citizens Thereof.' On March 1 and March 8, 1967 notice of the filing of this Petition was published in The Muncie Star and the exact lot numbers of the subject property to be vacated were described in this notice. These published notices made no reference to the restrictive covenants.
None of the plaintiffs in this action were named as defendants in the Vacation Suit nor were they given personal notice The City of Muncie filed an Answer to the Petition, and the Muncie Water Works Company and the Indiana and Michigan Electric Company filed Remonstrances.
of the Vacation Suit. No attempt was made subsequent to filing of the Vacation Suit to seek an agreement by a majority of the lot owners to nullify the restrictions as provided in the covenants.
On March 23, 1967, a judgment was entered by the Delaware Circuit Court vacating the Subject Property 'as a part of the plat of . . .' the Layne Crest subdivision, again, with no reference to the restrictive covenants.
On May 4, 1967 (still within the time allowed for an appeal from the Vacation Suit), Buennagel and members of the Association hired the attorney who represented the remonstrating parties in the Vacation Suit to investigate Layne's activities and the effect of the Vacation Suit.
On September 7, 1967, Layne obtained approval from the Muncie Planning Commission to rezone the Subject Property for commercial use. This approval, however, was later overruled by the Muncie City Council.
On January 16, 1968, Buennagel and the Association met and agreed to file a suit seeking to enjoin Layne's violation of the restrictive covenants (the Injunction Suit). This action was filed in Superior Court No. 2 of Delaware County on February 9, 1968.
Meanwhile, Layne filed a new Petition for Rezoning of the Subject Property, and in August of 1968 the Muncie City Council approved rezoning of the Subject Property for commercial use, thereby permitting Layne to proceed with his plans to construct a shopping center.
Buennagel then filed an Amended Complaint for Damages on February 24, 1970, but the claim for damages was later withdrawn. Layne filed an Amended Answer on September 17, 1970, which did not include the affirmative defense of res judicata or of estoppel and filed a Second Amended Answer raising those defenses on the second day of trial (December 16, 1970).
Trial of the Injunction Suit began on December 15, 1970, and at the close of Buennagel's case Layne filed a Motion to Dismiss on the ground that the court had no jurisdiction because the Delaware Circuit Court retained jurisdiction as a court of concurrent jurisdiction, which was overruled.
Layne attempted to introduce evidence of change of conditions in the character of the neighborhood surrounding Layne Crest. However, considerable evidence was introduced revealing that the land to the north, south, and west of Layne Crest was of either a residential or noncommercial character. Layne also attempted to prove that enforcement of the restrictive covenants would result in a loss to him of nearly $450,000, whereas the loss to Buennagel and each of the members of the Association resulting from dissolution of the covenants would be only $1,000.
After taking the matter under advisement, the trial court on May 25, 1971, awarded an injunction prohibiting Layne's violation of the restrictive covenants, finding that the restrictive covenants ran with the land, that they were not dissolved by Layne's suit to vacate the Subject Property from Layne Crest, and that they could be dissolved only by an agreement of the majority of the owners or by legal action with notice to each owner.
Layne now appeals.
ISSUE ONE. Did the Vacation Suit operate to dissolve the restrictive covenants upon the Subject Property, thereby precluding their enforcement by Buennagel?
ISSUE TWO. Does the doctrine of res judicata bar the Injunction Suit brought ISSUE THREE. Did Delaware County Superior Court No. 2 have jurisdiction over the subject matter of the Injunction Suit?
by Buennagel because the enforcement of the restrictive covenants was an issue which could have been raised in the Vacation Suit?
ISSUE FOUR. Did the award of a permanent injunction against Layne constitute excessive relief as it imposed a greater restriction upon Layne than the actual terms of the restrictive covenants?
ISSUE FIVE. Were Buennagel and the members of the Association barred by laches from bringing the Injunction Suit?
ISSUE SIX. Did Buennagel and the members of the Association have an adequate remedy at law, thereby precluding equitable relief by way of an injunction?
ISSUE SEVEN. Were the conditions surrounding the development of Layne Crest so drastically changed as to warrant dissolution of the restrictive covenants?
As to ISSUE ONE, Layne argues that vacation of the Subject Property from Layne Crest operated to dissolve the restrictive covenants upon the Subject Property because the Subject Property was no longer a part of the addition.
Buennagel replied that vacation has no effect upon the enforceability of the restrictive covenants. The restrictive covenants continue to exist until they are dissolved pursuant to the terms of the covenants or proper legal action with notice.
As to ISSUE TWO, Layne contends that Buennagel and the members of the Association were estopped by the judgment in the Vacation Suit to seek enforcement of the restrictive covenants in a subsequent action for the reason that they failed to intervene in the Vacation Suit and raise the issue of the restrictive covenants.
Buennagel, however, argues that since the Vacation Suit had no effect upon the restrictive covenants, res judicata does not apply and that he was not estopped to seek enforcement of the restrictive covenants in a subsequent action.
As to ISSUE THREE, Layne contends that the Circuit Court of Delaware County first obtained exclusive jurisdiction over the parties and identical subject matter to the exclusion of the Superior Court.
Buennagel replies that the subject matter of the Vacation Suit, concerning whether or not to vacate the Subject Property from Layne Crest, was not the same subject matter as in the Injunction Suit, which concerned the enforceability of the restrictive covenants. Therefore, the Superior Court No. 2 of Delaware County did have jurisdiction over the subject matter in the Injunction Suit.
As to ISSUE FOUR, Layne contends that the award of a permanent injunction constituted excessive relief for the reason that it perpetually restrained Layne in his use of the Subject Property, thereby imposing a restriction for a period longer than that established by the covenants themselves (twenty-five years).
Buennagel agrees that the scope of the injunction should be limited to...
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