Hyde v. Liebelt, 15125
| Decision Date | 22 October 1986 |
| Docket Number | No. 15125,15125 |
| Parties | C.W. HYDE, Trustee of the Pauline Klabo Trust, Plaintiff and Appellee, v. Jonathan W.A. LIEBELT and Charlotte A. Liebelt, Defendants and Appellants. |
| Court | South Dakota Supreme Court |
Kent Hyde of Hyde Law Office, Aberdeen, for plaintiff and appellee.
Carlyle E. Richards, P.C., Aberdeen, for defendants and appellants.
This case, involving summary judgment, constitutes a rehearing on the opinion rendered in Hyde v. Liebelt, 391 N.W.2d 186 (S.D.1986). After the submission of written and oral arguments, we reverse the prior opinion and affirm the trial court's original grant of Summary Judgment.
Via Contract for Deed, Pauline Klabo (Klabo) purchased real estate situated in Brown County, South Dakota, from Jonathan and Charlotte Liebelt (Liebelts). Paragraph 9 of said Contract for Deed states:
Buyer, for herself, her successors in interest and assigns, agrees that no part of the above described premises shall ever be used for any of the following purposes:
(a) An area for the display or sales of mobile homes or trailer homes of any kind; or
(b) An area for the display, sales or servicing of any sort of recreational vehicles, whether of the two, three or four-wheel kind; or
(c) For the construction of a motel or motor inn.
The parties agree that these restrictions shall constitute covenants running with the land and that any conveyance signed by Sellers shall be subject to the within covenants.
Since the execution of this contract, Klabo died and by will left her equitable interest in the real estate in trust. C.W. Hyde (Hyde) is the trustee of this trust and the plaintiff-appellee herein.
Hyde and the owner of a motel on adjacent property executed a purchase agreement for the sale of the real estate. The motel owner, however, backed out of the purchase agreement when the above-quoted restriction was discovered.
In April 1985, Hyde filed a Complaint which sought a declaratory ruling as to whether the restrictive covenant ran with the land or was personal in nature, and, in the alternative, also sought a declaration of the uses the property could be put to without violating the covenant. The Liebelts defendants-appellants herein, answered Hyde's Complaint, denying the allegations therein and raising the affirmative defenses of estoppel, laches, and waiver. The Liebelts further alleged that Hyde's action was premature as he had not paid the balance owed under the Contract for Deed, and that his Complaint failed to allege any cause of action for which relief could be granted.
After Hyde filed a Certificate of Readiness for Trial, the Liebelts moved for summary judgment. In support of their motion, the Liebelts referred to the Complaint and Answer filed herein. No other supporting documents, i.e., admissions, affidavits, answers to interrogatories, or depositions, were filed. Hyde resisted the Liebelts' motion by filing an affidavit in resistance thereto. Thereafter, Hyde also moved for summary judgment and supported his motion with an affidavit.
The trial court, apparently after a hearing (the transcript of which is not contained in the settled record), granted summary judgment in favor of Hyde. In so doing, the trial court determined that the covenant in question was personal and did not run with the land because it benefitted the Liebelts' business. 1 The trial court also determined the covenant was not enforceable as an equitable servitude.
The Liebelts appealed the Summary Judgment to this Court, raising the propriety of the latter determination only. In our previous opinion, the trial court's equitable servitude determination was reversed. After the rendition of that opinion, Hyde petitioned this Court for a rehearing which was duly granted.
After reviewing our prior writings, the settled record, the Petition for Rehearing and the Liebelts' response thereto, and after presentation of oral arguments, we reverse the prior opinion of this Court and affirm the Summary Judgment on appeal.
Summary judgment is properly granted when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Aetna Life Ins. Co. v. McElvain, 363 N.W.2d 186, 188 (S.D.1985). The question presented to the trial court below was a question of law. In summary judgment proceedings, the trial court's rulings are presumed to be correct, and the party alleging error has the burden to show it affirmatively by the record. Crook v. Pap, 303 N.W.2d 818, 819 (S.D.1981). We conclude, for two reasons, that the trial court properly granted summary judgment.
First, equitable enforcement of a restrictive covenant is properly granted when the restriction benefits the property of the person seeking enforcement and the person against whom enforcement is sought had notice of the restriction. 20 Am.Jur.2d Covenants, Conditions, and Restrictions Sec. 293, at 857 (1965). See also, Chappell v. Winslow, 144 F.2d 160, 161 (4th Cir.1944); McSweyn v. Inter-Urban R. Co., 256 Iowa 1140, 1146, 130 N.W.2d 445, 448 (1964); Lovell v. Columbian Nat'l Life Ins. Co., 294 Mass. 473, ---, 2 N.E.2d 545, 547 (1936); Toothaker v. Pleasant, 315 Mo. 1239, 1245, 288 S.W. 38, 43 (1926); Coughlin v. Barker, 46 Mo.App. 54, 62-63 (1891); Traficante v. Pope, 115 N.H. 356, 360, 341 A.2d 782, 785 (1975); and 3 H. Tiffany, The Law of Real Property Sec. 865, at 495 (3rd ed. 1939).
Here, the Liebelts moved for summary judgment, and although not raised in their pleading or asserted in their motion, the Liebelts apparently argued, alternatively, the enforcement of the covenant as an equitable servitude. 2 The Liebelts, however, failed to file admissions, affidavits, depositions, etc., in support of their motion and to meet their burden of proof that the restrictive covenant was appurtenant to and benefitted their land. Under Lovell, 2 N.E.2d at 547, Liebelts failed to carry their burden of proof. In resolving whether the covenant ran with the land for enforcement purposes, the trial court determined the covenant did not benefit the Liebelts' property but instead benefitted their recreational vehicle and mobile home business and was thus personal in nature. 3 Having failed to establish that the covenant benefitted their property as opposed to conferring a personal benefit, by failing to present supporting documentation at a time when the law requires such, summary judgment could be entered against the Liebelts because they failed to establish the first element of equitable servitudes. Liebelts failed to meet their burden. Crook, 303 N.W.2d at 819.
Second, this case was brought before the trial court for a declaratory ruling under SDCL ch. 21-24 by Hyde. Per SDCL 21-24-3 and SDCL 21-24-4, the construction and validity of a contract can be determined, and the rights, status, and legal relations declared. But the Liebelts' case herein centers on the proposition that a court of equity will place an equitable servitude against property which would restrict its use by a subsequent grantee with notice. The settled record, however, does not reveal the existence of a subsequent grantee with or without notice, and we will not permit trial courts to wax into law on theoretical questions. See Kneip v. Herseth, 87 S.D. 642, 648, 214 N.W.2d 93, 96 (1974); State of North Dakota v. Perkins County, 69 S.D. 270, 274, 9 N.W.2d 500, 501 (1943); and Security State Bank v. Breen, 65 S.D. 640, 644, 277 N.W. 497, 499 (1938). Concerning the equitable servitude issue, the trial court resolved that the covenant did not benefit the Liebelts' property; rather, it was personal in nature. Under the pleading and showing below, we affirm the Summary Judgment.
The opinion rendered in Hyde v. Liebelt, 391 N.W.2d 186, is accordingly reversed.
The majority opinion omits the issue on appeal. The complaint seeking declaratory relief prayed:
[T]hat the Court enter judgment declaring that the restrictive covenants in the contract for deed are personal in nature and do not run with the land or in any way affect a subsequent purchaser; or, in the alternative, that the Court enter a judgment declaring the uses which a motel existing on adjacent property may make of the property in dispute without violating the restriction.... (emphasis added).
The majority omits and ignores the underscored portion of the prayer for declarative relief. The judgment entered by the trial court provided:
The restrictive covenants ... will not run with the land being purchased under the contract or in any way affect a subsequent purchaser of the legal title to such property.
Obviously, the judgment parroted the prayer for relief. Appellant's have not appealed from that portion of the judgment holding the covenants do not run with the land. They do appeal from that portion of the judgment which holds the covenants will not "in any way affect a subsequent purchaser [.]"
Where a restrictive covenant does not touch and concern the land, it has been said to be personal as between the parties and may not be enforced by or against anyone other than the original parties to the covenant. Since it was early recognized that such rigid limitations on the use of restrictive covenants could produce harsh results, courts of equity have long been enforcing personal restrictions where to do otherwise produce inequitable results. Such enforcement of restrictive covenants has been termed the doctrine of Tulk v. Moxhay, 2 Phil.Ch. 774, 41 Eng.Rep. 1143 (Ch. 1848).
Tulk v. Moxhay established the rule that equity will enforce a covenant against all subsequent purchasers with notice, independently of the question of whether it runs with the land. The equitable restriction binds a subsequent purchaser who has acquired an interest with notice of...
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