Halls v. White

• Decision Date: 24 May 2006
• Docket Number: No. 23708.,No. 23683.,23683.,23708.
• Parties: Marvin J. HALLS, Plaintiff and Appellant, v. Jerry A. WHITE and Janet D. White, Defendants and Appellees.
• Court: South Dakota Supreme Court

Page 577

715 N.W.2d 577

2006 SD 47

Marvin J. HALLS, Plaintiff and Appellant, v. Jerry A. WHITE and Janet D. White, Defendants and Appellees.

No. 23683.

No. 23708.

Supreme Court of South Dakota.

Argued on February 14, 2006.

Decided May 24, 2006.

Rehearing Denied June 28, 2006.

Patrick M. Ginsbach, Heather M. Sudbeck of Farrell, Farrell and Ginsbach, Hot Springs, South Dakota, for plaintiff and appellant.

Timothy L. Thomas of, Thomas, Nooney, Braun, Solay & Bernard, LLP, Rapid City, South Dakota, for defendants and appellees.

MEIERHENRY, Justice.

[¶ 1.] Marvin J. Halls (Halls) sought a permanent injunction against Jerry and Janet White (Whites) to enforce a restrictive covenant prohibiting the use of a mobile home as a temporary or permanent residence in a housing development. Whites claimed that the covenants do not prohibit moving a "manufactured home" onto their lot because the definition of "mobile home" is different from and does not include "manufactured home." Whites also claimed that Halls should be denied equitable relief because of unclean hands. Based on the evidence, the trial court found Halls could seek equitable relief; however, the court denied the relief. The court determined that the definition of "mobile home" as used in the restrictive covenant did not preclude Whites from placing their manufactured home on the lot. We affirm the trial court's determination that Halls could seek injunctive relief, but we reverse the denial of the permanent injunction.

FACTS

[¶ 2.] Gary and Meredith Shelstead established the Pine Haven development in 1974 along with Malon and Katherine Anderson. Pine Haven included twenty lots which were subject to certain covenants and restrictions running with the land.¹ On November 29, 2004, Whites, as buyers, and Gary and Meredith Shelstead, as sellers, signed a purchase agreement for a Pine Haven lot. Whites' offer, however, was contingent on whether they would be allowed to place a manufactured home on the lot. Gary Shelstead (Shelstead) agreed to that contingency.

[¶ 3.] Whites closed on the property in early 2005. Shortly thereafter they began the process of moving the home onto the lot. This prompted Halls, a resident of Pine Haven, to seek injunctive relief against Whites. Halls sought to enforce the Pine Haven covenants' restriction against mobile homes. Halls claimed that Whites' manufactured home fell within the "mobile home" restriction of the covenants. The trial court granted a temporary restraining order in Halls' favor. After a hearing, however, the trial court dissolved the temporary restraining order and denied Halls' request for a permanent injunction. Halls appeals that determination and presents for review the following issue:

Whether the trial court erred in holding that the Pine Haven covenants allowed Whites to place a manufactured home on their lot.

STANDARD OF REVIEW

[¶ 4.] Our review of a trial court's decision regarding injunctive relief is well established:

Granting or denying an injunction rests in the sound discretion of the trial court. We will not disturb a ruling on injunctive relief unless we find an abuse of discretion. An abuse of discretion can simply be an error of law or it might denote a discretion exercised to an unjustified purpose, against reason and evidence.

Hendrickson v. Wagners, Inc., 1999 SD 74, ¶ 14, 598 N.W.2d 507, 510-11 (quoting Knodel v. Kassel Twp., 1998 SD 73, ¶ 6, 581 N.W.2d 504, 506) (citations omitted). In doing so, we review the trial court's findings of fact under a clearly erroneous standard, but we give no deference to the trial court's conclusions of law. Id. ¶ 9, 598 N.W.2d at 509 (citations omitted). The interpretation of a covenant is a legal question which we review de novo. Harksen v. Peska, 1998 SD 70, ¶ 11, 581 N.W.2d 170, 173. Equitable determinations, however are reviewed only for abuse of discretion. Adrian v. McKinnie, 2002 SD 10, ¶ 9, 639 N.W.2d 529, 533.

DECISION

Applicability of Covenants to Whites' Manufactured Home

[¶ 5.] The covenant provision at issue is entitled, "Mobile Homes, Trailers and Basement Houses Prohibited." It provides:

No mobile home or trailer or basement house shall be used as a residence at any time, either temporary or permanent, on any of the lots in the above described subdivision. No mobile homes, excepting utility or camping trailers, may be stored on any lot.

The trial court found ambiguity in the term "mobile home" because it was not defined elsewhere in the covenants. Consequently, the trial court looked beyond the document to the statutory definitions of "mobile home" and "manufactured home." In addition, the trial court considered Shelstead's intent when drafting the covenants as well as testimony from realtors and contractors. Shelstead testified that he used the term "mobile homes" to mean pull-behind campers and self-contained motor homes. Construing the restrictive covenant strictly in favor of free use of property, the trial court concluded that covenants did not apply to Whites' "manufactured home."²

[¶ 6.] Halls claims that the trial court erred in finding ambiguity in the term "mobile home" and should have applied the ordinary meaning set out in the South Dakota statutes in effect at the time the covenants were written in 1976. Alternatively, Halls argues that if the term is found ambiguous, it should be construed against the preparer and in favor of the testimony of several witnesses who testified that the commonly accepted definition of "mobile home" was the 1976 statutory definition. Under either scenario, Halls maintains that Whites' manufactured home falls within the covenant's prohibition of using a "mobile home" as a residence and that our decisions in Farnam v. Evans, 306 N.W.2d 228 (S.D.1981), and Vaughn v. Eggleston, 334 N.W.2d 870 (S.D.1983), control.

[¶ 7.] When interpreting the terms of a restrictive covenant, we use the same rules of construction applicable to contract interpretation. See Harksen, 1998 SD 70, ¶¶ 11-20, 581 N.W.2d at 173-74. A term is ambiguous if it is reasonably capable of being understood in more than one sense. Piechowski v. Case, 255 N.W.2d 72, 74 (S.D.1977). Thus, a covenant is ambiguous if we have "a genuine uncertainty as to which of two or more meanings is correct." Harksen, 1998 SD 70, ¶ 15, 581 N.W.2d at 173 (citation omitted). A finding of ambiguity, however, requires more than the disagreement of two parties as to the meaning of a term. Id. (citation omitted). We have said, "[u]nder the Plain Meaning Rule, if a term `appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to extrinsic evidence of any nature.'" Id. (citation omitted).

[¶ 8.] The provision in the covenant clearly prohibits using a mobile home as a residence. It specifies that "[n]o mobile home . . . shall be used as a residence at any time, either temporary or permanent, on any of the lots in the above described subdivision." Because the term "mobile home" was not defined in the covenant, the trial court determined the term was ambiguous. Failure to define a term in a covenant, however, does not automatically create ambiguity. We have said that a term is not ambiguous if "the term . . . has a plain and ordinary meaning and that meaning can be defined." Spring Brook Acres Water Users Ass'n, Inc. v. George, 505 N.W.2d 778, 780 (S.D.1993). Guidance as to the plain and ordinary meaning of a term in a restrictive covenant may come from statutory definitions. Cf. Divich v. Divich, 2002 SD 24, ¶¶ 12-13, 640 N.W.2d 758, 762 (relying on the statutory definition of "benefit" in determining that the term had a plain and ordinary meaning as used in a divorce stipulation). Other courts have relied upon statutory definitions to determine the plain and ordinary meaning of an undefined word in a restrictive covenant. See, e.g., Adult Group Props., Ltd. v. Imler, 505 N.E.2d 459, 465-66 (Ind.Ct.App.1987) (considering definitions from case law, statutes, and a legal dictionary when interpreting the term "family" in a restrictive covenant); Newman v. Wittmer, 277 Mont. 1, 8-9, 917 P.2d 926, 930-31 (1996) (determining that a sentence in a restrictive covenant which prohibited mobile homes to be used as a residence was not ambiguous); Hill v. Cmty. of Damien, 121 N.M. 353, 359-60, 911 P.2d 861, 867-68 (1996) (considering the definition of "family" in zoning ordinances when interpreting that undefined term in a restrictive covenant); LuMac Dev. Corp. v. Buck Point Ltd. P'ship, 61 Ohio App.3d 558, 573 N.E.2d 681, 685-86 (1988) (consulting the statutory definition of "house trailer" which existed when covenants were drafted in order to determine if a "manufactured home" constituted a "house trailer" under restrictive covenants). Thus, the plain, ordinary meaning of a term in a covenant may be gleaned from statutory definitions. Consequently, we turn our attention to the term, "mobile home," as established by South Dakota and federal law.

[¶ 9.] At the time the Pine Haven covenants were drafted, South Dakota law defined the term "mobile home." See Farnam, 306 N.W.2d at 229-30 (setting forth the statutory definition of "mobile home"). The term first appeared in South Dakota law in 1973. At that time, the statutory definition provided:

"Mobile home," a moveable or portable unit, designed and constructed to be towed on its own chassis (comprised of frame and wheels), and designed to be connected to utilities for year-round occupancy. The term shall include: (a) units containing parts that may be folded, collapsed or telescoped when being towed and that may be expanded to provide additional cubic capacity; and (b) units composed of two or more separately towable components designed to be joined into one integral unit capable of being separated again into the components for repeated towing. The term shall include units designed to be used for residential, commercial,...