Forbes v. Schaefer

• Decision Date: 02 December 1983
• Docket Number: No. 810025,810025
• Citation: 226 Va. 391,310 S.E.2d 457
• Parties: Bruce FORBES, et al. v. John R. SCHAEFER, et al. Record
• Court: Virginia Supreme Court

Page 457

310 S.E.2d 457

226 Va. 391

Bruce FORBES, et al. v. John R. SCHAEFER, et al.

Record No. 810025.

Supreme Court of Virginia.

Dec. 2, 1983.

I. Clinton Miller, Woodstock (Patrick M. McSweeney, Jack W. Burtch, Jr., McSweeney, Stutts & Burtch, Richmond, on briefs), for appellants.

Thomas V. Monahan, Leesburg (Kermit L. Racey, Woodstock, Hall, Monahan, Engle, Mahan & Mitchell, Racey & Racey, Leesburg, on brief), for appellees.

No brief or argument for Henry C. Clark, Trustee, V. Stephen Bradshaw, Trustee, I. Clinton Miller, Trustee, and Bryce's Mountain Resort, Inc., appellees.

Before CARRICO, C.J., and COCHRAN, POFF, COMPTON, STEPHENSON, RUSSELL and THOMAS, JJ.

COMPTON, Justice.

In this land use controversy, we consider whether a parcel in a planned resort community is subject to certain restrictive covenants.

Bryce's Mountain, including its residential portion called Sky Bryce, is located in Shenandoah County at the village of Basye. The terrain varies from gently sloping to rugged, mountainous, hilly land. In 1965, Paul B. Brice conceived the idea to develop the area as a residential retirement community. The actual planning began in 1967, and appellee Bryce's Mountain Resort, Inc. was formed to develop the territory.

Eventually, the Resort developed 12 sections with approximately 3,186 lots, ranging from one-half acre to slightly more than one acre. Over the years, the Resort, and others, built ski slopes, a golf course, tennis courts, an olympic-sized swimming pool, an airport, condominiums containing multi-family dwelling units, a ski lodge, and a restaurant. At the time of the July 1980 hearing in this case, 2,762 residential lots had been sold, 340 homes had been built, and there were 31 families living there on a permanent basis.

The focus of this controversy is Section Six and a 7.35-acre parcel known as the "O'Mara tract." In 1970, lots 94 and 95 in Section Six were conveyed separately by the Resort to predecessors in title of appellees John R. Schaefer and Barbara L. Schaefer, his wife. The lots were approximately one-half acre, rectangular parcels. By deed recorded July 13, 1979, the Schaefers acquired lot 95, improved by a single-family dwelling. Lot 94 was conveyed by deed recorded November 15, 1979. The foregoing deeds expressly were made subject to a recorded "Declaration of Protective Covenants and Restrictions--Sky Bryce--Bryce's Mountain Resort, Inc." (hereinafter, the General Restrictions).

This dispute stems largely from varying interpretations of the following provisions of the General Restrictions:

"Bryce's Mountain Resort, Inc., ... the owner of certain lands and premises ... known as Bryce's Mountain Resort, hereby makes and executes the following declaration of protective covenants and restrictions as to that portion of said land which will be subdivided and sold to individual lot purchasers for the purpose of erecting private dwellings or residences thereon, known as SKY BRYCE, it being expressly understood and agreed by such lot purchasers that the said protective covenants and restrictions shall not apply to nor shall anything herein contained be construed as limiting or restricting Bryce's Mountain Resort, Inc. in its use of the portions of the said land now owned or hereafter acquired by said Bryce's Mountain Resort, Inc. that is not subdivided for sale to individual lot purchasers; for example, but not by way of limitation, Bryce's Mountain Resort, Inc. shall not be limited in its use or sale of such portions of the said land as may be used or useful for hotel, lodge, resort, recreational, entertainment or similar purposes nor shall these covenants and restrictions be deemed to prevent the erection and sale of multi-family units, town houses, condominiums or co-operative units, or the sale of lands or lots or portions of lots designed for such use in the overall master land plan to be adopted for the developmont [sic] of said SKY BRYCE and said Resort."

In 1971, the 7.35-acre parcel, which adjoins lot 95, was conveyed by the Resort to A. James O'Mara and Lois J. O'Mara, his wife. This deed expressly was "subject to" the General Restrictions, but also contained the following Special Covenants:

"As a part of the consideration for this conveyance, it is further agreed between the parties hereto as covenants running with the land herein conveyed:

(a) No development of said real estate, including site development, improvements, buildings, improvements or construction of any kind or nature, shall be made on said real estate until the proposed plans and specifications therefor have been approved in writing by the Grantor herein, its successors or assigns.

(b) No more than twelve (12) dwelling units, whether apartments, single residence units, or multiple residence units, shall be placed or constructed on said real estate."

In 1978, after the O'Maras contracted to convey the parcel to appellants Bruce Forbes and Lois J. Forbes, his wife, an agreement was entered into between the Resort, the O'Maras, and the Forbeses affecting the 7.35 acres. Reciting that the Forbeses had requested elimination of the Special Covenants, the agreement, dated July 28 and recorded 16 months later, provided that the covenants were "terminated, released, null and void and of no further force and effect and that said covenants will no longer be any restriction whatsoever" upon the 7.35 acres. By deed recorded December 5, 1978, the O'Maras sold the parcel to Bruce Forbes. The realty was "conveyed subject to" the General Restrictions.

In October of 1979, upon application of the Forbeses, the County issued them a building permit to construct, on the 7.35-acre parcel, two three-story buildings of six residential units each for condominiums. The estimated cost of the improvements was $250,000. Construction began after issuance of the building permit, and this suit followed in December of 1979. At the time of trial, the contractor was in the process of putting roofs on the two buildings. Also at that time, the Forbeses had pending before the county authorities an application for a special use permit to construct on the subject property seven three-story buildings of six residential, condominium units each.

The Schaefers proceeded by declaratory judgment in equity, naming as defendants the Forbeses, the trustees under deeds of trust affecting the O'Mara tract, and the Resort. In an amended bill, the Schaefers alleged that their real estate, "as well as approximately 3,000 other lots within the same development and similarly situated," were conveyed specifically subject to the General Restrictions. Objecting to construction of multi-family dwellings on the subject parcel, they pointed to provisions of the restrictions that permit only one single-family, private residential dwelling to be erected on any lot in Sky Bryce, that limit the height of the dwellings to two and one-half floors, and that prohibit renting or leasing any rooms in any dwelling for any period of time, except pursuant to an agreement made by the owner with the Resort.

They alleged that the O'Mara tract is included within Section Six and that it was subdivided for sale to individual lot purchasers for the purpose of erecting private dwellings or residences on it. Referring to the deed from the Resort to the O'Maras, with the Special Covenants included, the Schaefers noted the release of the covenants and asserted that the covenants "which appeared to authorize multi-family units were legally and validly vacated by virtue of the aforesaid Release." They alleged that the Forbeses thus were bound by the General Restrictions. They also alleged that construction of multi-family units on the parcel would overburden the access road to the property, thereby creating a nuisance in further violation of the restrictions. In addition, the Schaefers alleged that the contemplated use of the multi-family dwellings under a "time-sharing device" constituted another violation of the restrictions.

In the prayer of their bill, the Schaefers sought a declaration whether the O'Mara tract was subject to the General Restrictions and, if so, whether the Forbeses were violating them. In addition, having also contended in the alternative that the release of the Special Covenants was invalid, the Schaefers contended that if the parcel in question was not subject to the General Restrictions, then its use nevertheless was restricted to 12 multi-family units. The Schaefers also sought entry of a permanent injunction against the Forbeses and their successors in interest if the court determined there had been a violation of any of the restrictions or covenants applicable to the subject property.

In their answer, the Forbeses denied the subject property was a part of Section Six, or that the 7.35-acre parcel had been subdivided for sale to individual lot purchasers for the purpose of erecting private dwellings on it. They denied their property was subject to the General Restrictions or that the Schaefers were entitled to the relief sought.

In a cross-bill against the Forbeses, the Resort contended the release of the Special Covenants was invalid for lack of consideration and for other errors of form. It joined the Schaefers in seeking to enjoin the Forbeses from violation of the General Restrictions.

Appellee Sky Bryce Association, Inc. was permitted to intervene and adopted the major portion of the Schaefers' bill and the Resort's cross-bill. The association is composed of all lot owners at the resort.

Following a four-day ore tenus hearing, the chancellor declared that the Schaefers failed to establish "an express restrictive covenant with respect to the land of [the Forbeses] limiting them to the construction of less than 12 living units upon the said property." The trial court further declared that the Special Covenants, and the General Restrictions not in conflict with the Special Covenants, were applicable to the 7.35-acre tract,...