Dill v. Loiseau

• Court: North Carolina Court of Appeals
• Writing for the Court: DAVIS, Judge.
• Citation: Dill v. Loiseau, 263 N.C.App. 468, 823 S.E.2d 642 (N.C. App. 2019)
• Decision Date: 15 January 2019
• Docket Number: No. COA18-361,COA18-361
• Parties: Elford C. DILL, Plaintiff, v. Gerard G. LOISEAU and Wife Jennifer O. Loiseau, April B. Cottrill and Husband Shannon L. Cottrill, Eric B. Thompson, Wiliam E. Kellar, Lori Beth Hirsberg, Geraldine C. McAlister, Shirley Beachler, Trustee, Stephen Matthew Wilfong and Wife Lisa Mayo Wilfong, Helen M. White, Lisa L. Ayers and Husband, Charles W. Ayers, and David Lee Edwards, Defendants.

263 N.C.App. 468

823 S.E.2d 642

Elford C. DILL, Plaintiff,

v.Gerard G. LOISEAU and Wife Jennifer O. Loiseau, April B. Cottrill and Husband Shannon L. Cottrill, Eric B. Thompson, Wiliam E. Kellar, Lori Beth Hirsberg, Geraldine C. McAlister, Shirley Beachler, Trustee, Stephen Matthew Wilfong and Wife Lisa Mayo Wilfong, Helen M. White, Lisa L. Ayers and Husband, Charles W. Ayers, and David Lee Edwards, Defendants.

No. COA18-361

Court of Appeals of North Carolina.

Filed: January 15, 2019

Law Office of Kenneth T. Davies, P.C., by Kenneth T. Davies and G. Brian Ernst, for plaintiff-appellant.

Alexander Ricks PLLC, by Louis G. Spencer and Ryan P. Hoffman, Charlotte, for defendants-appellees.

DAVIS, Judge.

In this appeal, we consider the circumstances under which (1) restrictive covenants demonstrate a common scheme of development within a residential subdivision; (2) changes to the character of a covenanted area can render otherwise valid restrictive covenants unenforceable; and (3) the right to enforce a restrictive covenant is waived by a failure to object to prior violations. Elford C. Dill brought this action seeking a declaratory judgment that restrictive covenants prohibiting the subdivision of certain lots in the neighborhood where he lived were unenforceable. The trial court entered an order concluding that the restrictive covenants at issue remain enforceable. We affirm.

Factual and Procedural Background

In 1945, Katherine Melton and her husband Guyton Melton acquired a 12.95-acre tract of land in Mecklenburg County. On 3 September 1953, Mrs. Melton recorded a plat map ("the Melton Map") entitled "Property of Mrs. Guy Melton" with the Mecklenburg County Register of Deeds that divided the land into seven separate lots numbered 1-7 (the "Melton Map Properties"). Lots 1-5 were subdivided for sale, Lot 6 contained Mrs. Melton’s home, and Lot 7 consisted of a larger tract of undeveloped land.

Over the next three years, Mrs. Melton sold Lots 1-5. All five of the lots were purchased subject to identical restrictive covenants stating that "[n]o subdivision shall be made of the herein conveyed lot." On 22 March 1963, Mrs. Melton sold Lot 6. This sale was not subject to any restrictive covenants. Lot 7, which was not encumbered by any restrictive covenants prohibiting subdivision at the time the Melton Map was recorded, was later divided by Mrs. Melton into three separate parcels for sale. Between 1960 and 1964, these parcels were conveyed subject to the same restrictive covenants prohibiting subdivision as those applicable to Lots 1-5.

On 5 May 1977, the owners of Lot 1 conveyed a small portion of the lot consisting of .199 acres to the owner of an adjoining lot that was not depicted on the original Melton Map. That same day, the owners of the adjoining lot conveyed .046 acres of their property to the owners of Lot 1. The purpose of this exchange of land (the "Lot 1 Land Swap") was to provide the owners of the adjacent lot with sufficient land upon which to build a driveway. On 3 December 1993, Dill purchased a tract of land that encompassed the majority of Lot 1 and the entirety of Lot 2.

Lot 6 was acquired by real estate developer K.V. Partners on 10 November 1999. K.V. Partners subsequently recorded a plat map with the Mecklenburg County Register of Deeds entitled "Bella Brown Preserve" in 2002. This map subdivided Lot 6 into three parcels that were subsequently purchased for residential use.

On 24 June 2016, Dill filed a civil action in Mecklenburg County Superior Court against all of the other owners of lots contained on the Melton Map. The named defendants were Gerard G. Loiseau, Jennifer O. Loiseau, April B. Cottrill, Shannon L. Cottrill, Eric B. Thompson, William E. Kellar, Lori Beth Hirsberg, Geraldine C. McAlister, Shirley Beachler, Stephen Matthew Wilfong, Lisa Mayo Wilfong, Helen M. White, Lisa L. Ayers, Charles W. Ayers, and David Lee Edwards (collectively "Defendants").¹ In his complaint, Dill sought a declaratory judgment that the restrictive covenants prohibiting subdivision contained in the deeds to Lots 1-5 were invalid and unenforceable. Specifically, he alleged that (1) Mrs. Melton "failed to establish any uniform scheme of development[;]" (2) a "substantial change in usage" had occurred since the creation of the restrictive covenants; and (3) Defendants had waived their right to enforce the covenants.

A bench trial was held beginning on 6 June 2017 before the Honorable Forrest D. Bridges. On 8 November 2017, the trial court entered a declaratory judgment in favor of Defendants "declaring that the subdivision restrictions ... present in the chain of title for Lots 1 and 2 of the Melton Subdivision are consistent with a common scheme of development, and therefore, these restrictive covenants are valid and enforceable[.]" Dill filed a timely notice of appeal on 5 December 2017.

Analysis

On appeal, Dill argues that (1) "the restrictive covenants pertaining to the Melton Properties failed to evidence a common or general scheme of development;" (2) even assuming a general plan of development existed at some point, it was later abandoned by Mrs. Melton; and (3) Defendants are estopped from enforcing the restrictive covenants against Dill by virtue of their failure to object to prior violations of the covenants. We address each argument in turn.

I. General Plan of Development

Dill first contends that the restrictive covenants prohibiting subdivision imposed upon the Melton Map Properties failed to establish a common plan of development. As a result, he asserts, they do not run with the land and may not be enforced against him by Defendants. We disagree.

It is well established that where "an owner of a tract of land subdivides it and conveys distinct parcels to separate grantees, imposing common restrictions upon the use of each parcel pursuant to a general plan of development, the restrictions may be enforced by any grantee against any other grantee." Hawthorne v. Realty Syndicate, Inc. , 300 N.C. 660, 665, 268 S.E.2d 494, 497 (1980). Restrictions imposed "under a general plan of development may be enforced against subsequent purchasers of the land who take with notice of the restriction. The test for determining whether a general plan of development exists is whether substantially common restrictions apply to all similarly situated lots." Medearis v. Trs. of Meyers Park Baptist Church , 148 N.C. App. 1, 5-6, 558 S.E.2d 199, 203 (2001) (citation omitted), disc. review denied , 355 N.C. 493, 563 S.E.2d 190 (2002).

Our appellate courts have held that restrictions need not be imposed upon every lot in a subdivision in order to demonstrate a general scheme of development. However, a general development scheme will not be recognized where a substantial proportion of lots lack similar restrictive covenants. Compare Franklin v. Elizabeth Realty Co. , 202 N.C. 212, 217, 162 S.E. 199, 201 (1932) (holding omission of restriction from single lot in subdivision did not destroy general plan of development), with Sedberry v. Parsons , 232 N.C. 707, 711-12, 62 S.E.2d 88, 91 (1950) (concluding no general plan of development existed where only 11 out of 21 lots contained similar restrictions).

In Rice v. Coholan , 205 N.C. App. 103, 695 S.E.2d 484, disc. review denied , 364 N.C. 435, 702 S.E.2d 303 (2010), this Court determined that a general plan of development existed where 14 out of 18 total lots in a subdivision "contained the same or similar restrictions, while the deeds to four lots were not similarly restricted." Id. at 113, 695 S.E.2d at 491. In Rice , the four lots that were not subject to similar restrictive covenants were those retained by the family that initially owned the entire acreage that formed the basis for the subdivision. Id. We concluded that "there are substantially common restrictions applicable to all lots of like character" and that "there was a general plan of development for the lots in Jefferson Park[.]" Id. at 114, 695 S.E.2d at 492.

In the present case, the Melton Map was recorded in 1953 and consisted of seven lots in total. Lots 1-5 were all conveyed between 1953 and 1956 and were each subject to identical restrictive covenants prohibiting subdivision. Lot 6, which contained Mrs. Melton’s home, was not subject to any restrictive covenants either at the time the Melton Map was recorded or when Mrs. Melton sold the property in 1963. Lot 7, which consisted of a large undeveloped tract of land, was similarly unencumbered by covenants at the time Lots 1-5 were conveyed. However, Lot 7 was later subdivided into three small parcels and sold between 1960 and 1964 subject to the same restrictions prohibiting subdivision as Lots 1-5.

We believe our decision in Rice controls the determination of this issue in the present case. There, as discussed above, a general plan of development was found to exist where 14 out of 18 total lots in a subdivision contained "substantially common restrictions." Id. Notably, the four unrestricted lots remained in the possession of the family that owned the land prior to the creation of the subdivision. Similarly, here Lots 1-5 were all conveyed by Mrs. Melton subject to identical restrictive covenants prohibiting subdivision. As in Rice , Mrs. Melton retained ownership of the lots that were not initially subject to any restrictive covenants. Furthermore, when Lot 7 was later sold as three smaller parcels, those parcels were all conveyed subject to the same restrictive covenant prohibiting subdivision as Lots 1-5.

Thus, we are satisfied that the trial court did not err in determining that a general plan of development existed for the Melton Map Properties. Accordingly, Dill’s argument to the contrary is overruled.

II. Abandonment of Intent

Dill next argues "[e]ven assuming arguendo that Mrs. Melton intended to develop pursuant to a general plan, she abandoned this intent by taking actions inconsistent with any such plan." As a result, he contends, the restrictive covenants...