Citizens for Covenant Compliance v. Anderson, S043578

• Decision Date: 29 December 1995
• Docket Number: No. S043578,S043578
• Citation: 47 Cal.Rptr.2d 898,906 P.2d 1314,12 Cal.4th 345
• Court: California Supreme Court
• Parties: , 906 P.2d 1314, 64 USLW 2429, 96 Cal. Daily Op. Serv. 50, 96 Daily Journal D.A.R. 79 CITIZENS FOR COVENANT COMPLIANCE, an unincorporated association, et al., Plaintiffs and Appellants, v. Jared A. ANDERSON et al., Defendants and Appellants.

Page 898

47 Cal.Rptr.2d 898

12 Cal.4th 345, 906 P.2d 1314, 64 USLW 2429,

96 Cal. Daily Op. Serv. 50,

96 Daily Journal D.A.R. 79

CITIZENS FOR COVENANT COMPLIANCE, an unincorporated association, et al., Plaintiffs and Appellants, v. Jared A. ANDERSON et al., Defendants and Appellants.

No. S043578.

Supreme Court of California.

Dec. 29, 1995.

Rehearing Denied March 28, 1996.

[12 Cal.4th 347] [906 P.2d 1315]

Wilson, Sonsini, Goodrich & Rosati, and Debra Summers, Palo Alto, for Plaintiff and Appellant.

Daniel E. Lungren, Attorney General, Roderick E. Walston, Chief Assistant Attorney General, Jan S. Stevens, Assistant Attorney General, Jamee Jordan Patterson, Deputy Attorney General, William M. Pfeiffer, Steven A. Sokol, Sonia M. Younglove, Miller, Starr & Regalia, Harry D. Miller, Rutan & Tucker and Anne Nelson Lanphar as Amici Curiae, on behalf of Plaintiff and Appellant.

Roger Bernhardt, Cooley, Godward, Castro, Huddleson & Tatum, Kenneth J. Adelson, Benjamin K. Riley and Yvonne Gonzalez Rogers, San Francisco, for Defendants and Appellants.

Stephen Cavellini as Amicus Curiae, Santa Rosa, on behalf of Defendants and Appellants.

ARABIAN, Associate Justice.

The Andersons want to plant and harvest grapes, operate a winery, and keep llamas on their property in Woodside. Some neighbors object, and claim such activities are prohibited by covenants, conditions and restrictions (CC & R's) that limit the Andersons' property, and theirs, to residential use. The Andersons counter, thus far successfully, that the CC & R's are not enforceable because they are not mentioned in any deed to their property. The dispute is now before us.

Its resolution requires us to penetrate a legal thicket entangled by the ancient doctrines of covenants that run with the land and equitable servitudes. The task is not easy. "The law of easements, real covenants, and equitable servitudes is the most complex and archaic body of American property law remaining in the twentieth century." (French, Toward a Modern Law of Servitudes: Reweaving the Ancient Strands (1982) 55 So.Cal.L.Rev. 1261.) Another commentator uses stronger language: "The law in this area is an unspeakable quagmire. The intrepid soul who ventures into this formidable wilderness never emerges unscarred. Some, the smarter ones, quickly turn back to take up something easier like the income taxation of trusts and estates. Others, having lost their way, plunge on and after weeks of effort emerge not far from where they began, clearly the worse for wear. On looking back they see the trail they thought they broke obscured with foul smelling waters and noxious weeds. Few willingly take up the challenge again." (Rabin, Fundamentals of Modern Real Property Law (1974) p. 489.)

It is, however, necessary to take up the challenge. In vino veritas. Although the relevant doctrines go back centuries, they are more vital than ever today as California becomes increasingly crowded and people live in closer proximity to one another. Planned communities have developed to regulate the relationships between neighbors so all may enjoy the reasonable use of their property. Mutual restrictions on the use of property that are binding upon, and enforceable by, all units in a development are becoming ever more common and desirable. We recently confronted the question of what restrictions may reasonably be imposed in a condominium setting. (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 33 Cal.Rptr.2d 63, 878 P.2d 1275.) This case addresses an earlier step in the process, considering how a general plan of restrictions is created in the first place.

The CC & R's of this case were recorded before any of the properties they purport to govern were sold, thus giving all buyers constructive notice of their existence. They state they are to bind and benefit each parcel of property as part of a planned community. Nevertheless, the Court of Appeal held they are not enforceable because they were not also mentioned in a deed or other document when the property was sold. We disagree, and adopt the following rule: If a declaration establishing a common plan for the ownership of property in a subdivision and containing restrictions upon the use of the property as part of the common plan, is recorded before the execution of the contract of sale, describes the property it is to govern, and states that it is to bind all purchasers and their successors, subsequent purchasers who have constructive notice of the recorded declaration are deemed to intend and agree to be bound by, and to accept the benefits of, the common plan; the restrictions, therefore, are not unenforceable merely because they are not additionally cited in a deed or other document at the time of the sale.

We therefore reverse the judgment of the Court of Appeal.

I. THE FACTS

Defendants Jared A. and Anne Anderson (the Andersons), own two adjacent parcels of property in Woodside that were part of separate subdivisions developed at different times.

One parcel was part of Skywood Acres, created in the 1950's when Joseph and Claire Stadler subdivided land into some 60 residential building lots. On June 5, 1958, an instrument entitled "Declarations Imposing Covenants Restrictions and Agreements Affecting ... Skywood Acres," executed by the Stadlers, was recorded in San Mateo County. It states that the Stadlers owned the property, the map of which had previously been recorded, and expresses their "desire to establish a general plan for the improvement and development of said property and to subject said property to the following conditions, restrictions, covenants and reservations upon and subject to which all of said property shall be held, improved and conveyed...." Numerous restrictions follow, the first of which is that each lot "shall be used for residential purposes only." The instrument provides that "Dogs, cats, hares, fowls and fish may be kept as household pets provided they are not kept, bred or raised for commercial purposes or in unreasonable number," and allows keeping horses on specified lots under certain conditions. It also states, "All these conditions and restrictions shall run with the land and shall be binding upon all parties and all persons claiming under them...." It further provides that, as to the Stadlers and "their grantees and successors in interest of any lot or lots" in the subdivision, the conditions are to be "covenants running with the land" enforceable by "the Subdividers, grantees or assigns, or by such owners or successors in interest."

The portion of Skywood Acres involved here was sold on October 14, 1958, and, after intermediate conveyances, was eventually acquired by the Andersons. Neither the original grant deed nor any other deed in the chain of title leading to the Andersons refers to the recorded restrictions. The Andersons' title insurance report, however, identifies the Skywood Acres CC & R's. ¹

The second parcel was part of the Friars subdivision, comprised of four lots. On January 24, 1977, the Town of Woodside adopted a resolution approving the parcel map for the subdivision upon certain conditions, including that the developer submit to the town attorney for approval "the covenants, conditions and restrictions applicable to this land division." On May 10, 1977, a "Declaration Imposing Covenants, Restrictions, Easements and Agreements," executed by the owner, was recorded.

This declaration describes the property in the subdivision and states that the owner desired and intended "to subject [the property] to certain conditions, covenants and charges between them and all subsequent purchasers...." It declares that the property "shall be conveyed subject to the conditions, covenants and charges" set forth, including that the property is to be used solely for single family residences, and specifically "exclude[s] every form of business, commercial, manufacturing, or storage enterprises or activity...." Keeping animals other than household pets and horses is prohibited. The restrictions "are declared to constitute mutual equitable covenants and servitudes for the protection and benefit of each property in the said subdivision," and "are to run with the land." Moreover, "Each grantee of a conveyance or purchaser under a Contract or Agreement of Sale by accepting a Deed or a Contract of Sale or Agreement of purchase, accepts the same subject to any of the covenants, restrictions, easements and agreements set forth in this Declaration and agrees to be bound by the same." The owner of any of the parcels may enforce the restrictions.

The portion of the Friars subdivision involved here was sold two days after the CC & R's were recorded, and eventually was acquired by the Andersons at a foreclosure sale. The original deed refers to the parcel map, but not to the CC & R's. No other deed in the Andersons' chain of title refers to them. The title insurance report for this lot, purchased by the original buyers, identifies the Friars CC & R's.

The parties agree that both subdivisions were "developed from a general plan of uniform development." Both sets of CC & R's contain provisions regarding possible modification and termination of the restrictions. The record does not indicate whether any other deed to property in either subdivision mentions the CC & R's.

After purchasing the two parcels of property, the Andersons entered into a limited partnership agreement with a company located in the island of Guernsey in the United Kingdom to operate a winery under the name Chaine d'Or Vineyards. They have obtained permits from the Town of Woodside to grow grapes and produce wine on their property, subject to specified conditions. In addition, the Andersons have admitted to keeping seven llamas on the property as pets.

The plaintiffs, an unincorporated association named Citizens for Covenant Compliance and individual landowners representing both subdivisions (hereafter, collectively, Citiz...