Creed v. Clogston, 2004 VT 34 (Vt. 4/16/2004)

• Decision Date: 16 April 2004
• Docket Number: No. 2002-426, November Term, 2003,2002-426, November Term, 2003
• Parties: James and Judith Creed, et al. v. Francis and Debra Clogston
• Court: Vermont Supreme Court

Page 1

2004 VT 34

James and Judith Creed, et al. v. Francis and Debra Clogston

No. 2002-426, November Term, 2003

Supreme Court of Vermont

April 16, 2004

On Appeal from Rutland Superior Court, William D. Cohen, J.

Allan R. Keyes of Ryan Smith & Carbine, Ltd., Rutland, for Plaintiffs-Appellees.

Alison J. Bell of Langrock Sperry & Wool, LLP, Burlington, and Timothy L. Taylor of Meub Associates, Inc., Rutland, for Defendants-Appellants.

Andrew W. MacLean, Christopher K. Rice, and Philip H. White of Wilson & White, P.C., Montpelier, for Amici Curiae Vermont Bankers Association and Vermont Mortgage Bankers Association.

PRESENT: Amestoy, C.J., Johnson and Skoglund, JJ., and Crawford, Supr. J. and Gibson, J. (Ret.), Specially Assigned

AMESTOY, C.J.

¶ 1. In this appeal, we consider whether a restrictive covenant prohibiting the installation of "mobile homes, campers or trailers" for residential purposes prevents defendants Francis and Debra Clogston from placing a "manufactured home" on their lot. The trial court found that the mobile home covenant in defendants' deed reflected an intent to exclude all non-site-built homes from defendants' neighborhood. The court explained that, regardless of the name given to defendants' home, it was a "mobile home" within the meaning of the restrictive covenant because it fell within the type of housing that the covenant sought to preclude. The court therefore granted permanent injunctive relief to plaintiffs, and ordered defendants to remove their home. On appeal, defendants argue that the trial court erred in ascertaining the intent of the parties to their deed. We agree, and reverse and remand for additional findings.

¶ 2. The material facts are largely undisputed. In March 2002, defendants purchased an undeveloped lot from Wales Realty Incorporated. Their deed contains the following covenants:

1. The use of this lot shall be restricted to one single-family dwelling.

2. This lot and dwelling shall be used and maintained for residential purposes only.

3. This lot shall not be subdivided.

4. No mobile homes, campers or trailers shall be installed for residential purposes, even on a part-time basis.

5. This lot shall not be used commercially or for business purposes.

6. No dwelling shall be constructed unless the cost above the foundation exceeds $60,000.

Mr. Clogston testified at trial that he discussed these covenants with a Wales Realty representative, John Bloomer, Jr., and informed Mr. Bloomer that he intended to place a manufactured home on the lot. Mr. Bloomer executed the deed.

¶ 3. Defendants' lot is located within a twenty-lot subdivision covering eleven acres. The original eleven-acre parcel was conveyed by Theodore and Charlotte Nicolet to Remo Segalla, Livio Segalla, and Leon Arrigo in 1963. The deed required, among other things, that the above-foundation cost of a dwelling equal or exceed $15,000 at the present purchasing price of the United States dollar. The deed did not contain a prohibition against mobile homes.

¶ 4. The twenty-lot subdivision was created in 1968 by the recording of a plat in the Rutland land records. At the time of subdivision's creation, there was no declaration of covenants nor any other express scheme of development restricting the eleven-acre parcel. Between 1965 and 1969, nine lots were conveyed, and three additional deeds were granted correcting the boundaries of some of those lots. These twelve deeds contained the Nicolet covenants but they did not contain any additional covenants.

¶ 5. In 1969, the Segallas conveyed the remainder of the original eleven-acre parcel to Wales Realty. Wales Realty did not adopt a declaration of covenants, nor any other express scheme restricting the development of the remaining parcel. Instead, over a twenty-year period, between 1982 and 2002, Wales Realty conveyed eleven lots by eleven separate deeds. Wales Realty incorporated the Nicolet covenants by reference in these deeds, and imposed new covenants. All of the deeds conveyed by Wales Realty contain the same covenants found in defendants' deed, although some require an above-foundation cost of $50,000 rather than $60,000. The deeds provide that the enforcement of the covenants is the "responsibility, privilege, and right" of the owners of any lots that are subject to the covenants.

¶ 6. In April 2002, defendants purchased a 1600-square-foot single-level manufactured home from Moore's Auto. The home was delivered in two pieces on wheels that were temporarily attached to permanent I-beams. The two halves of the home were placed on and affixed to a concrete slab foundation, and were joined in the middle through a bolting system. Water, sewage, and electricity hookups were established. Workers placed siding on both ends of the home, finished the roof, hung doors and electrical fixtures, and finished the walls and floors. This process took approximately 150 hours to complete, and defendants were able to move in within approximately one week after their home was delivered.

¶ 7. Plaintiffs James and Judith Creed, Karen Harrison, Arlie Welch, Ray and Laura Wilburn, Jean O'Rourke, John and Jody LaFaso, Anthony and Lise Chioffi, and Diane Byrne reside in defendants' neighborhood and with the exception of Harrison, Welch, and the Wilburns,¹ their deeds contain the restrictive covenant prohibiting the installation of mobile homes. In April 2002, plaintiffs filed a complaint against defendants seeking injunctive relief, arguing that defendants' home violated the mobile home covenant.

¶ 8. After a trial, the court granted permanent injunctive relief to plaintiffs. The court concluded that the mobile home covenant in defendants' deed was intended to prohibit non-site-built homes from defendants' neighborhood. In reaching its conclusion, the court began its analysis by considering the relationship between the terms "mobile home" and "manufactured home" under state and federal law. The court found that, although the term "manufactured home" had replaced the term "mobile home" under federal law in 1980, the Vermont legislature had not amended its statutes accordingly. Thus, the court reasoned, because the Vermont legislature had not adopted the term, the drafter's failure to use it in the deed was not dispositive of an intent to exclude such homes, particularly because the term was "relatively new" in 1982.

¶ 9. Examining the deed as a whole, the court found it significant that the deed required that no dwelling be "constructed" unless its above-foundation cost exceeded $60,000. Relying on a dictionary definition of the term "construct," the court found that the use of the term reflected the drafter's intent that "any home placed on the defendants' land be site-built, that is, . . . constructed on site." The court found that defendants' home had not been "constructed" on their property, but instead had been constructed in a factory and then brought to the site.

¶ 10. Taking this provision together with the covenant prohibiting mobile homes, the court concluded that it was evident that the drafters of the covenant intended to create a neighborhood that contained only site-built homes. To implement this intent, the court refused to give the term "mobile home" a static definition. Instead, the court considered defendants' home a "mobile home" within the meaning of the restrictive covenant because it fell within the type of housing that the covenant sought to preclude. Based on its conclusion, the court granted permanent injunctive relief to plaintiffs, and ordered defendants to remove their home within six months. Defendants appealed, and pursuant to their request, the trial court stayed its order pending the resolution of this appeal.

¶ 11. On appeal, defendants assert that the trial court erred in concluding that their manufactured home violated the terms of the restrictive covenant in their deed. Specifically, they argue that: (1) the court erred as a matter of law in concluding that the terms of the mobile home covenant were ambiguous; (2) alternatively, if the covenant is ambiguous, the court erred as a matter of law by ignoring the uncontroverted and direct evidence of the parties' intent at the time the deed was executed; and (3) the court's finding that the mobile home covenant was intended to prohibit manufactured homes was clearly erroneous.

¶ 12. We first address defendants' assertion that the trial court erred in finding the mobile home covenant ambiguous. According to defendants, the covenant is unambiguous because it plainly prohibits only those homes that are "moveable and transitory in nature," not those that are permanent and immovable. In support of this argument, defendants point to the use of the words "mobile" and "part-time basis" in the deed, as well as the grouping of the term "mobile home" with other dwellings that are "mobile" in nature. Defendants assert that the uncontroverted evidence shows that their home is "of a fixed and permanent nature," and no more movable than any "stick-built" home. Thus, they maintain that their home is not prohibited by the plain language of the mobile home covenant.

¶ 13. When the meaning of a restriction in a deed is clear and unambiguous, "there is no room for construction and the instrument must be given effect according to its terms." Aiken v. Clark, 117 Vt. 391, 393, 92 A.2d 620, 621 (1952). The trial court must determine, as a matter of law, whether an ambiguity exists. Isbrandtsen v. N. Branch Corp., 150 Vt. 575, 577, 556 A.2d 81, 83 (1988). In making this determination, the court may consider the circumstances surrounding the making of an agreement. Id. at 579, 556 A.2d at 84. An ambiguity exists when "a writing in and of itself supports a different interpretation from that which appears when it is read in light of the surrounding circumstances, and both interpretations are reasonable." Id.; see also Trs. of Net Realty Holding Trust v. AVCO Fin. Servs. of Barre, Inc., 144 Vt....