Mann v. Levin, 2004 VT 100 (VT 10/1/2004)

• Decision Date: 01 October 2004
• Docket Number: No. 2003-394.,2003-394.
• Citation: 2004 VT 100
• Court: Vermont Supreme Court
• Parties: Bette Mann and Kelley Mann v. Diane Levin

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2004 VT 100

Bette Mann and Kelley Mann v. Diane Levin

No. 2003-394.

Supreme Court of Vermont

October 1, 2004

On Appeal from Lamoille Superior Court, Edward J. Cashman, J.

Heather Rider Hammond and Robert F. O'Neill of Gravel and Shea, Burlington, for Plaintiffs-Appellees.

Christopher D. Roy of Downs Rachlin Martin PLLC, Burlington, for Defendant-Appellant.

PRESENT: Amestoy, C.J.,¹ Dooley,² Johnson, Skoglund and Reiber, JJ.

REIBER, J.

¶ 1. In this appeal, we consider whether the trial court erred in interpreting the terms of a restrictive covenant that limited the "height" of any building on defendant Diane Levin's property to that of a neighboring farmhouse. The trial court found that the covenant was intended as a scenic easement, and thus, it restricted buildings from exceeding the absolute elevation, or "ridge line," of the farmhouse. Because Levin's building exceeded the ridge line by approximately seven feet, the court granted permanent injunctive relief to plaintiffs Bette and Kelly Mann, and ordered Levin to reduce the height of her building. Levin appealed, arguing that the court erred in interpreting the covenant. We affirm.

¶ 2. Levin and the Manns own real property in Jeffersonville, Vermont. The property is located along Route 108, and it is surrounded by the mountain range that includes the Smuggler's Notch ski area and Mt. Mansfield. Levin acquired title to her property as follows. In 1994, Thomas Kontos subdivided property that he owned in Jeffersonville into three parcels, Parcel 1A, 1B, and 1C. In December 1994, he sold Parcel 1A, and a right of first refusal in Parcel 1B, to Levin and her then-husband Doug Walker. The deed contained numerous restrictions, including the following covenant at issue in this appeal:

The 7.8 acre parcel [(Parcel 1A)] and the 3.2 acre parcel [(Parcel 1B)] retained by the Grantors herein shall both be restricted for commercial or residential or light farming. Any building must be limited to height no greater than the adjoining farmhouse (2 ½ stories). Specifically, steel-sided warehouse-type facilities are excluded, along with mobile homes.

It is undisputed that the "adjoining farmhouse" referred to in the deed is the Mannsview Inn, a bed and breakfast owned and operated by the Manns.

¶ 3. In March 1999, Levin and Walker divorced, and they divided Parcel 1A into two lots. Walker retained approximately 3.05 acres, and quit-claimed the remaining 4.89 acres to Levin. Levin's quit-claim deed contained the building height restriction. In September 1999, Levin and Walker exercised their option to purchase Parcel 1B. Within "ten minutes" after purchasing the lot, Levin and Walker sold it to Demars Properties. In December 2001, after a failed development attempt, Demars Properties sold Parcel 1B to the Manns. Parcel 1B adjoins Walker's portion of Parcel 1A, which in turn adjoins Levin's property. The grade of Levin's property is at a higher elevation than that of the Inn.

¶ 4. In the summer of 2001, Levin excavated her lot. She stripped the top soil and brought in numerous loads of fill. In August 2002, she began construction of a building. During the construction process, she showed the Manns several drawings of her proposed building, and assured them that her building would comply with the height restriction in the deed. However, while Levin's building was being framed, and particularly after the roof trusses were added, Walker and the Manns became increasingly concerned that Levin's building would violate the height restriction. In October 2002, Mrs. Mann wrote Levin a letter expressing her concerns, as did Walker. Levin responded to Mrs. Mann by letter, asserting that her home complied with the restrictive covenant.

¶ 5. In December 2002, the Manns filed suit against Levin, alleging that she had violated the terms of the restrictive covenant, and seeking permanent injunctive relief. Levin filed a counterclaim, alleging that she had not violated the covenant, and that the Manns' claims were made solely to interfere with the construction on her lot. On December 11, 2002, the court held a hearing on the Manns' motion for a temporary restraining order and preliminary injunction. The court concluded that the covenant appeared to be ambiguous, and it ordered Levin not to increase the present height of her building pending a trial on the merits.

¶ 6. In February 2003, the court held a trial, and made findings on the record. The court found that the covenant was a scenic easement, and the uncontradicted evidence established that "height" referred to the ridge line of the Inn. The court explained that the parenthetical reference to "2½ stories" was intended to identify the particular farmhouse to which the deed referred. Although the court found that Levin had attempted to frustrate the covenant, it could not establish the extent to which her building exceeded the Inn's ridge line because the parties' experts, apparently using the same mathematical formula, had reached different results. To prevent future disputes, the court ordered the evidence to remain open so that the ridge line height could be conclusively established. The parties later submitted a joint expert report in which the experts agreed that Levin's building exceeded the Inn's ridge line by 6.7 feet.

¶ 7. On April 30, 2003, the court held an additional factual hearing, and closed the evidence. At the hearing, the court rejected Levin's argument that her violation of the covenant was de minimis, or that a balancing of the relative hardships weighed in her favor. In response to the Manns' request, the court indicated that it would be agreeable to an order requiring Levin to present it with a compliance plan within thirty days, and to comply with the height restriction within sixty days after the plan was filed. The court stated that it was prepared to order Levin to vacate the building until she complied with the restriction, and it would impose a fine of $500 per day for noncompliance.

¶ 8. In July 2003, the court issued a written order granting the Manns' request for a permanent injunction. The court reiterated its earlier finding that the height restriction in the deed referred to the ridge line of the Inn. Because the evidence showed that Levin's building exceeded the ridge line by 6.7 feet, the court found that she had violated the restrictive covenant. The court noted that Levin had not contested the existence of the deed restriction or its applicability to her property in any of the underlying hearings. It thus rejected her assertion, raised for the first time in her proposed findings, that the Manns lacked standing to enforce the covenant under the doctrine of merger. The court also rejected Levin's argument that the Manns were barred from enforcing the covenant under the doctrine of equitable estoppel. The court explained that Levin had received repeated advice that her home, then under construction, would exceed the height restriction.

¶ 9. The court ordered Levin to present it with a plan for reducing the ridge line elevation of her home no later than August 1, 2003, and to comply with the height restriction by September 1, 2003. The court stated that if Levin failed to comply with any of these deadlines, she would have to immediately vacate the premises and pay $500 per day until compliance was reached. The court granted Levin's request for a temporary stay of its order, and this appeal followed.

¶ 10. On appeal, Levin argues that the court erred in finding that her building violated the terms of the restrictive covenant. Specifically, she argues that: (1) the Manns lacked standing to enforce the covenant under the doctrine of merger; (2) the court erred in concluding that the covenant was ambiguous; (3) alternatively, even if the covenant is ambiguous, the court erred in finding that the parties intended to limit the height of any building to the ridge line of the Inn; (4) the doctrines of equitable estoppel and laches prevent the Manns from enforcing the restriction; (5) the court failed to balance the hardships before granting injunctive relief; and (6) the court improperly imposed onerous prospective fines.

¶ 11. We first address Levin's assertion that the Manns lack standing to enforce the terms of the covenant under the doctrine of merger. Levin maintains that as of September 1999, she and her ex-husband held title to both Parcel 1A and 1B, which benefitted from and were burdened by the height restriction. According to Levin, because there is no evidence that the height restriction was intended to continue in force beyond this merger of title, the height restriction was extinguished and it therefore cannot be enforced by the Manns. See Albright v. Fish, 136 Vt. 387, 395, 394 A.2d 1117, 1121 (1978) (discussing doctrine of merger).

¶ 12. Levin waived this argument by failing to fairly present it to the trial court. See Bull v. Pinkham Eng'g Assocs., 170 Vt. 450, 459, 752 A.2d 26, 33 (2000) ("Contentions not raised or fairly presented to the trial court are not preserved for appeal."). Contrary to Levin's assertion, she did not preserve this argument by pleading "lack of standing" as an affirmative defense in her answer to the Manns' complaint. She did not argue that the doctrine of merger applied during any of the underlying factual hearings. Indeed, her attorney stated at trial that no merger of title had occurred. As the trial court explained, each side presented their case with the concession that the deed restriction formed the controlling issue. We therefore conclude that Levin waived this argument, and we do not address it.

¶ 13. Levin next argues that the court erred in finding the covenant ambiguous. Relying on a dictionary definition of the word "height," Levin asserts that the covenant plainly prohibits the measured height of her building from exceeding the measured height of the Inn, regardless of the respective elevations of the lots. Levin also argues...