Erthal v. May

Decision Date20 November 2012
Docket NumberNo. COA12–603.,COA12–603.
Citation736 S.E.2d 514
PartiesCharles M. ERTHAL, Delores Erthal, Jerome A. Budde, Jr., and Ilena T. Budde, Plaintiffs, v. Frederick B. MAY and Francine L. Appel, a/k/a Francine L. May, Defendants.
CourtNorth Carolina Court of Appeals


Appeal by defendants from order entered 12 December 2011 by Judge Gary M. Gavenus in Superior Court, Polk County. Heard in the Court of Appeals 10 October 2012.

Prince, Youngblood & Massagee, PLLC, Hendersonville, by Sharon B. Alexander, for plaintiffs-appellees.

Law Offices of Travis S. Greene, PC, by Travis S. Greene, for defendants-appellants.

STROUD, Judge.

The parties to this case are all homeowners in the Stirrup Downs development, an equestrian community. Charles M. Erthal, Delores Erthal, Jerome A. Budde, Jr., and Ilena T. Budde (plaintiffs) brought this action seeking an injunction preventing Fredrick B. May and Francine L. Appel, a/k/a Francine L. May (defendants) from making any commercial use of their land to board horses at their operation known as Serenity Acres. The trial court granted summary judgment allowing the injunction, and defendants appeal. For the following reasons, we reverse in part and remand for entry of summary judgment in favor of defendants, dismissing the plaintiffs' claims, and we affirm in part, as to the dismissal of defendants' counterclaims.

I. Procedural History

On or about 29 March 2010, plaintiffs filed the original complaint.1 On 9 June 2010, defendants filed their answer to plaintiffs' original complaint, denying plaintiffs' allegations and raising several affirmative defenses, a motion to dismiss, and counterclaims for abuse of process and punitive damages. On 25 June 2010, plaintiffs were permitted to file an amended complaint against defendants requesting an injunction based on allegations that defendants were operating a “commercial enterprise” known as “Serenity Acres” in violation of the restrictive covenants of their subdivision. Plaintiffs alleged that at “Serenity Acres” the defendants provide “various and multiple commercial services, including but not limited to sales, events, instruction, riding lessons, horse boarding facilities, and horse training.” On 9 July 2010, defendants filed their answer to plaintiffs' amended complaint, denying plaintiffs' allegations, raising several affirmative defenses, a motion to dismiss, and incorporating by reference the counterclaims for abuse of process and punitive damages as stated in their original answer. On 3 August 2010, plaintiffs filed a motion to dismiss defendants' counterclaims and their reply to those counterclaims. On 28 October 2011, defendants filed a motion to amend their answer to the amended complaint. On the same date, defendants filed a motion for partial summary judgment, with supporting documentation, “based upon the defenses set forth by the Defendants.” On 3, 4, and 15 November 2011, plaintiffs filed affidavits in opposition to defendants' motion. On 6 December 2011, the trial court denied defendants' motion to amend their answer. Following a hearing, the trial court entered an order on 12 December 2011, denying defendants' motion for partial summary judgment. Instead, the trial court granted summary judgment in favor of plaintiffs as to defendants' counterclaims and affirmative defenses; granted summary judgment in favor of plaintiffs as to their request for an injunction; and “order[ed] the Defendants to cease all commercial activities and commercial use of Lot C of Stirrup Downs Subdivision.” On 10 January 2012, defendants filed written notice of appeal from the trial court's 12 December 2011 order. On appeal, defendants contend that (1) the trial court erred in denying their motion for partial summary judgment based on their affirmative defenses and (2) the trial court erred in granting summary judgment as to defendants' counterclaims and plaintiffs' claim for injunctive relief.

II. Factual Background

In 1989 Sardonyx Investments, Inc. began a real estate development in Polk County, North Carolina. On or about 20 September 1992, Sardonyx filed “Declarations of Restrictions” creating the Stirrup Downs subdivision which consisted of six lots (A–F), totaling approximately 110 acres.2 The restrictions for Stirrup Downs include the following pertinent provisions:

1. Each lot shall be used for residential purposes only.


2. There shall be constructed on each lot only one (1) primary single family dwelling, together with accessory buildings and one (1) guest house.


9. No illegal, noxious, or offensive activity shall be permitted, on any part of said land, nor shall anything be permitted nor done thereon which is or may become a nuisance or a source of embarrassment, discomfort or annoyance to the neighborhood. No trash, garbage, rubbish, debris, waste material, or other refuse shall be deposited or allowed to accumulate or remain on any part of said land.


13. The Developer expressly intends to permit the pasturing of horses upon the various lots. However, such pasturing of horses shall be limited to reasonable use of the land. Because horses are permitted, the phrase “customary outbuildings” is expressed [sic] defined to include storage facilities, barns and stables.

The restrictions do not include any specific prohibition of commercial or business use of the lots.

On or about 12 January 1993, defendants purchased Lot C in the Stirrup Downs subdivision. Plaintiffs Charles and Delores Erthal purchased Lot B in Stirrup Downs on or about 14 February 1994, but did not began residing there until 1996. On or about 11 August 1997, plaintiffs Jerome and Ilena Budde purchased Lot D in Stirrup Down but did not began residing there until 2000. Shortly after moving into their residence in 1993, defendants begin to board horses for other owners, ultimately expanding this operation by constructing a barn and progressively adding multiple stables to accommodate boarded horses; they also expanded their pastures and built a hay storage area and a riding arena. The defendants' operation is known as “Serenity Acres.”

The name Serenity Acres is somewhat ironic, as serenity has not been the order of the day for the legal affairs within Stirrup Downs. On 22 July 2004, Gilbert and Dorothy Stanley, owners of lot E in the Stirrup Downs subdivision, filed a complaint against the Stirrup Downs Landowners Association, and the other owners of lots in Stirrup Downs, including plaintiffs Charles and Delores Erthal and Jerome and Ilena Budde, and defendants Frederick and Francine May. This complaint made the following specific allegations:

29. That the owner of Lot C is operating an active horse boarding, training, sales and dressage and eventing lesson business, known locally as “Serenity Acres” with public advertisement through both the Tryon Daily Bulletin and the internet.

30. Said horse boarding business is in violation of the restrictions limiting the use of the property for residential purposes only.

31. That as a direct result of the operation of said commercial business, there is excessive vehicular traffic, including truck and trailer traffic, on the road.

In their answer to this complaint, plaintiffs and defendants herein, all defendants in the Stanley lawsuit, denied these allegations. The Stanley lawsuit was ultimately settled by a consent judgment in 2005. After the settlement, Defendants continued to operate Serenity Acres, continued to advertise in local publications for horse boarding services, and made various improvements to their operation. From the affidavits and depositions filed in this case, it is clear that Defendants do board, breed, sell, and care for horses at Serenity Acres and that they receive financial remuneration for these services, although the exact number of horses has varied over time as boarders come and go and with the births, sales, and deaths of horses; it appears that there have never been more than ten horses, whether owned by defendants or boarded, at Serenity Acres at any one time.

III. Standard of review

In appeals from a trial court's ruling from a party's motion for summary judgment

[t]his Court's standard of review is de novo, and we view the evidence in the light most favorable to the non-movant. The standard of review for an order granting a motion for summary judgment requires a two-part analysis of whether, (1) the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact; and (2) the moving party is entitled to judgment as a matter of law.

Green v. Kearney, ––– N.C.App. ––––, ––––, 719 S.E.2d 137, 140 (2011) (quoting Honeycutt v. Honeycutt, 208 N.C.App. 70, 77, 701 S.E.2d 689, 694 (2010)) (citations and quotation marks omitted). “Summary judgment is appropriate if: (1) the non-moving party does not have a factual basis for each essential element of its claim; (2) the facts are not disputed and only a question of law remains; or (3) if the non-moving party is unable to overcome an affirmative defense offered by the moving party.” Griffith v. Glen Wood Co., 184 N.C.App. 206, 210, 646 S.E.2d 550, 554 (2007) (citation, footnote, and quotation marks omitted).

Interpretation of the language of a restrictive covenant is a question of law reviewed de novo. See Moss Creek Homeowners Ass'n v. Bissette, 202 N.C.App. 222, 228, 689 S.E.2d 180, 184 (observing that “restrictive covenants are contractual in nature.” (citation omitted)), disc. rev. denied,364 N.C. 242, 698 S.E.2d 402 (2010); Harris v. Ray Johnson Const. Co., Inc., 139 N.C.App. 827, 829, 534 S.E.2d 653, 654 (2000)(stating that contract interpretation is a matter of law, reviewed de novo ).

IV. Summary Judgment
A. Defendants' affirmative defenses

Defendants argue that the trial court erred in denying their motion for partial summary judgment as the forecast of evidence established all of their pled affirmative defenses including laches, consent,...

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