City of Gulfport v. Wilson, 89-CA-0470

• Decision Date: 03 June 1992
• Docket Number: No. 89-CA-0470,89-CA-0470
• Citation: 603 So.2d 295
• Parties: CITY OF GULFPORT, and Bayou View Homeowners Association, et al., v. S.R. WILSON, Jr., et al.
• Court: Mississippi Supreme Court

Page 295

603 So.2d 295

CITY OF GULFPORT, and Bayou View Homeowners Association, et al., v. S.R. WILSON, Jr., et al.

No. 89-CA-0470.

Supreme Court of Mississippi.

June 3, 1992.

Wendy L. Allard, James K. Wetzel, Gulfport, for appellants.

R. Christopher Wood, Houston, Tex., for appellees.

Before ROY NOBLE LEE, C.J., and PRATHER and SULLIVAN, JJ.

ROY NOBLE LEE, Chief Justice, for the Court:

The City of Gulfport and Bayou View Homeowners Association appeal from a judgment entered by the Harrison County Chancery Court, permitting lot owners in certain blocks of the Bayou View subdivision to amend a restrictive covenant, which had been in effect since 1950. The chancellor found that the lot owners properly amended the restrictive covenant with respect to Block 46 and Block 47, and that a material change in the area justified nonenforcement of the covenants. The City of Gulfport and Bayou View Homeowners Association have appealed from the judgment to this Court, and present two issues for decision.

FACTS

Bayou View subdivision was given to the City of Gulfport by the federal government after World War II in appreciation for the City's help in training troops. The subdivision is quite large, running north from Pass Christian Road (Pass Road) to Bayou Bernard. In 1950, the City of Gulfport plotted this land into a subdivision of approximately 1300 lots. At the same time, the City also recorded restrictive covenants which limited the use of lots in the subdivision for residential uses only.

This action was initially brought by a group of Bayou View residents whose property either borders Pass Road or is a block away from it. The litigation at first involved owners of Blocks 41, 46, and 47 who sought to amend the 1950 restrictive covenant prohibiting commercial activity in the subdivision. Block 41 was dropped from the action. The case centers around two issues, i.e., (1) whether the language of the restrictive covenant is clear as opposed to ambiguous; and (2) whether there exists a change in circumstances such as to render the covenant unenforceable.

The plaintiffs in the suit to amend the restrictive covenant are comprised of all the lot owners of Block 46 (Lots 1-8) and all but one lot owner of Block 47 (Lots 1-8). The language of the restrictive covenant states that amendments shall be voted on by the entire subdivision, and, in the next sentence states that owners may vote by blocks to amend or "opt out" of the covenants.

A meeting was organized by lot owners and held at an elementary school across the street. None of the residents who testified at the trial could remember exactly how they were notified of the meeting, or by whom. All the residents present at the meeting, who testified in court, stated that there was about a 100% representation of Block 46, and a 90% representation of Block 47. There was discussion about wanting to amend the restrictive covenant to allow for commercial enterprises. A vote was taken, with all owners of Block 46, and all but one owner of Block 47 voting to amend the covenants. The sole dissenter in Block 47 was Hermie Smith, who owns the southern half of Lots 1 & 2, which do not border Pass Road. After the vote, affidavits were signed identifying the owner, the property, and his/her vote on the amendment issue.

The Bayou View Homeowners Association and the City of Gulfport are challenging this amendment. The City and homeowners association claim that the whole subdivision must vote on an amendment, and even if the court rules otherwise, that the amendment was improper, since it was not signed by any of the owners, but by the attorney, Bobby Joe Randall. No powers of attorney were filed on behalf of the lot owners.

Since the subdivision's inception in 1950, there have only been a few occurrences affecting the restrictive covenants. In 1954, the City of Gulfport amended the restrictive covenant with respect to Block 56 of the Bayou View. No vote by the entire subdivision was conducted in the 1954 amendment. In 1955, the restrictive covenant was enforced when it was learned that William Rich, the owner of Lots 4 & 5 in Block 47 had leased the land to an oil company for a possible site of a gas station.

In 1979, the City of Gulfport rezoned the area in question R-B (residential-business) for the land to be used commercially. However, the zoning board did not consider the fact that there were restrictive covenants in place. Later, in 1984, Blocks 46 & 47 voted to amend the restrictive covenants. Also around that time, one of the owners, Sylvia Ballard, owner of Lot 5, Block 46, applied for a building permit from the City to construct an office building. Mrs. Ballard claims that her plans were approved and that she was issued a building permit from the City. The City, on the other hand denies that a permit was ever issued, citing both the Board of Adjustments and the Mayor and Board of Commissioners' decisions. Regardless, construction was never begun, pending the outcome of this litigation.

The plaintiffs in this initial action claim that circumstances have changed since the subdivision was platted, and therefore the covenants should not be enforced. To decide whether a change has occurred, a comparison must be made of the area now as opposed to its condition in 1950. At the time that the plat was recorded, the area was of a rural nature. Pass Road was a lightly traveled two-lane road connecting Gulfport and Biloxi. In fact, the subdivision was on the outskirts of town. Testimony at trial indicated that, in 1950, directly south across Pass Road from the subdivision was a pig farm which was on federal land and was run by the patients at the Veteran's Administration Hospital.

Because of the pig farm's presence, the City of Gulfport had trouble selling lots in the subdivision. Further to the east on Pass Road past the pig farm was Ashton's grocery store, which was directly across from Block 41, Lot 21. To the west of the pig farm on Pass Road was the Princess Drive-In restaurant. On the northwest corner of Pass Road and Washington Avenue was a small building housing Bailey Mortgage and Real Estate Company, which is located directly west of Bayou View subdivision. To the east of Block 41, Lot 21, was a large area of vacant land, which housed a plant nursery in the southwest corner abutting Pass Road.

In comparing the same area in 1988, a number of changes can be seen. First of all, Pass Road has been widened to four lanes, and now serves as a major traffic artery between Gulfport and Biloxi. It is the second most traveled thoroughfare in Besides the changes occurring outside the subdivision, equal changes have occurred inside the subdivision. It was testified at trial that two in-home beauty shops were being run in the subdivision, as well as a floor refinishing business, a sand and gravel hauling business, a canoe-rental business, and a drapery business. Some of these claims were disproven at trial, and others were shown to have "special permits" issued by the City.

the area, behind only Highway 90 which traces the beach-front. A pig farm is no longer present south of Pass Road, having been replaced with Pass Road Elementary School. The Princess Drive-In has been replaced with a television repair business. The Bailey Mortgage and Real Estate building has grown into Bailey Plaza, hosting an array of 15 small shops. Ashton's grocery store is now a furniture store. In the area that once occupied the pig farm and the grocery store now stands a Captain D's restaurant. To the east of Ashton's grocery store is Hardy Court Shopping Center, an outdoor "string mall" comprised of about 25 stores. Directly to the north where the nursery and vacant lot used to be now stands the Gulf Mist Apartments, which are low rent housing apartments.

Testimony was heard from one of the plaintiffs, Steve R. Wilson, Jr., stating that when he purchased Lots 4 & 5 of Block 47 in 1982, he bought the undeveloped property for an investment, and with full knowledge of the restrictive covenants. He also testified that he allows a nonprofit organization to sell Christmas trees on his lot each year, as well as an occasional flea market. Mr. Wilson's understanding of the meeting was that they had voted to proceed in chancery court with the matter. He stated that although there were no physical indications (signs) that businesses were being operated in the subdivision, it was common knowledge that several were present.

Mrs. Morris, living on Lot 8, Block 46, testified as to the changes which had occurred since 1950, having moved into the subdivision with her parents in 1950. She testified as to the presence of in-home businesses being operated in the neighborhood. An advertisement listed in the yellow pages of the current phone book, for a floor refinishing business, with an address and phone number inside the subdivision was introduced into evidence.

Jack Ballard, the owner of Lot 5, Block 46, who had requested the building permit alluded to earlier, stated that he purchased the lot as an investment in 1983 from Alabama Savings & Loan. He testified that the prior resident of the lot operated an accounting business out of his home. Also, Mr. Ballard stated that a resident of the subdivision operated a gravel and sand hauling business out of his house. Mr. Ballard had used this man's services for his construction business, but stated that all his equipment is not stored in the neighborhood, and the gravel is moved directly from the pits, not his yard.

The plaintiffs also called on Carl Alphonso, a real estate agent in the area to testify. Mr. Alphonso stated that he has sold many lots in the subdivision, as well as the surrounding area. He did add that on a four mile stretch on Pass Road, the only residential Blocks are those numbered 46 & 47. Also, he stated that lots in Bayou View were desirable because the lots were large and because of the restrictive covenants. However, he testified that Blocks 46...