McMillan v. Iserman

• Decision Date: 06 January 1983
• Docket Number: Docket No. 56065
• Citation: 120 Mich.App. 785,327 N.W.2d 559
• Parties: Donald B. McMILLAN, Vicki McMillan, Maurice R. Yaklin, Verna Yaklin, Douglas Young, Linda Young, Mark Younggren and Ruth Younggren, Plaintiffs-Appellants and Cross-Appellees, v. Billy J. ISERMAN and C. Joane Iserman, and Alternative Living Programs and Health Assistance, Inc., a Michigan nonprofit corporation, Defendants-Appellees and Cross-Appellants.
• Court: Court of Appeal of Michigan — District of US

Page 559

327 N.W.2d 559

120 Mich.App. 785

Donald B. McMILLAN, Vicki McMillan, Maurice R. Yaklin, Verna Yaklin, Douglas Young, Linda Young, Mark Younggren and Ruth Younggren Plaintiffs-Appellants and Cross-Appellees, v. Billy J. ISERMAN and C. Joane Iserman, and Alternative Living Programs and Health Assistance, Inc., a Michigan nonprofit corporation Defendants-Appellees and Cross-Appellants.

Docket No. 56065.

Court of Appeals of Michigan.

Submitted Nov. 12, 1981.

Decided Nov. 2, 1982.

Released for Publication Jan. 6, 1983.

Davidson, Gotshall, Kohl, Secrest, Wardle, Lynch & Clark by William P. Hampton and Michael L. Updike, Farmington Hills, for plaintiffs.

Shaheen, Kranson & Garrett, Detroit, by Jon R. Garrett, for defendants.

Before CAVANAGH, P.J., and ALLEN and MacKENZIE, JJ.

CAVANAGH, Presiding Judge.

Plaintiffs sued the defendants, alleging that the defendants' proposed use of property in their subdivision violated an amended deed restriction which prohibited the use of any subdivision lots for a state-licensed group residential facility, as that term is defined in M.C.L. Sec. 125.216a; M.S.A. Sec. 5.2961(16a), and M.C.L. Sec. 125.583b; M.S.A. Sec. 5.2933(2). The trial court granted the defendants' motion for summary judgment on the basis that the amended deed restriction discriminates against mentally impaired persons and thereby violates the Fourteenth Amendment to the United States Constitution. Plaintiffs appealed by right. Defendants cross-appealed, challenging the trial court's findings regarding the retroactive effect of the amended deed restriction and state public policy.

The issue which we must decide is whether the amended deed restriction prohibiting the use of subdivision property for a state-licensed group residential facility is valid and binding upon the defendants. The parties agree that the property in the subdivision is subject to a 1958 restrictive covenant which also provides that three-fourths of the property owners in the subdivision have the power to amend the restrictions at any time. We find our analysis somewhat hampered by the parties' failure to make the 1958 restrictive covenant a part of this record, especially since the defendants argue that they are not bound by the amended deed restriction which was amended pursuant to the provisions of the 1958 covenant. Although the trial court ruled in the defendants' favor on constitutional grounds, we will first examine the retroactive effect of the amended deed restriction and its conflict, if any, with state public policy.

Defendants argue that the amended deed restriction may not be applied retroactively because to do so would subject the defendants to an impermissible retroactive reciprocal negative easement. The leading case in Michigan concerning reciprocal negative easements is Sanborn v. McLean, 233 Mich. 227, 206 N.W. 496 (1925). In that case the Michigan Supreme Court described a reciprocal negative easement in the following manner:

"It runs with the land sold by virtue of express fastening and abides with the land retained until loosened by expiration of its period of service or by events working its destruction. It is not personal to owners but operative upon use of the land by any owner having actual or constructive notice thereof. It is an easement passing its benefits and carrying its obligations to all purchasers of land subject to its affirmative or negative mandates. It originates for mutual benefit and exists with vigor sufficient to work its ends. It must start with a common owner. Reciprocal negative easements are never retroactive; the very nature of their origin forbids. They arise, if at all, out of a benefit accorded land retained, by restrictions upon neighboring land sold by a common owner." 233 Mich. 230, 206 N.W. 496.

In this case, the reciprocal negative easements consist of the 1958 deed restrictions, which apparently were validly imposed at a time when the subdivision property was in the hands of a common owner. The amended restriction is not, as such, an impermissible retroactive reciprocal negative easement; such a term implies an independent new restriction placed on land and applied retroactively rather than a new restriction stemming from an amendment passed pursuant to an amending clause found in the original deed restrictions.

Courts in this state and in other jurisdictions generally recognize that land use covenants containing restrictions such as reciprocal negative easements may include a clause giving the grantees or lot owners the power to amend, modify, extend or revoke the restrictions and that any such action taken by the property owners applies to all of the properties which are subject to the restrictions. Sampson v. Kaufman, 345 Mich. 48, 75 N.W.2d 64 (1956); Ardmore Park Subdivision v. Simon, 117 Mich.App. 57, 323 N.W.2d 591 (1982); Riley v. Boyle, 6 Ariz.App. 523, 434 P.2d 525 (1967); Montoya v. Barreras, 81 N.M. 749, 473 P.2d 363 (1970); Valdes v. Moore, 476 S.W.2d 936 (Tex.Civ.App.1972), and Anno: Validity, construction and effect of contractual provision regarding future revocation or modification of covenant restricting use of real property, 4 A.L.R.3d 570, 582-586, Sec. 4(b). Cases concerning the issue of amended deed restrictions have generally dealt with parties opposing the amendment on the basis that it was not properly adopted (i.e., less than the required number agreed to the amendment) or that the amendment would apply only to a portion of the restricted area. None of the cases we have found address a factual scenario similar to the one presented here, i.e., relying upon the absence of any relevant deed restriction, defendants Iserman entered into a binding lease agreement with defendant Alternate Living Program and Health Assistance and subsequently the land use contracted for became impermissible because of a new amendment to the original deed restrictions. Thus, we are concerned here with an amendment which imposes a harsher restriction than any imposed in the original deed restrictions and which becomes effective after a lot owner has detrimentally relied on the absence of such a restriction.

This Court has not previously been faced with the issue of whether amended deed restrictions may be more restrictive than those contained in the original deed restrictions. The facts in other cases dealing with challenges to amended deed restrictions usually involved an amendment which is less restrictive. See Couch v. Southern Methodist University, 10 S.W.2d 973 (Tex.Comm.App.1928), Valdes v. Moore, supra. In Johnson v. Three Bays Properties # 2, Inc., 159 So.2d 924 (Fla.App.1964), the Court considered an amendment that was indisputably less restrictive yet the Court broadly held that amended deed restrictions may be more or less restrictive than the original deed restrictions. In Van Deusen v. Ruth 343 Mo. 1096, 125 S.W.2d 1 (1938), the Court held that the word "amend" contained in the original deed restrictions could not be construed as permitting the imposition of harsher restrictions than those which had been originally imposed. Recently in Ardmore Park Subdivision, supra, a contested amendment imposed a harsher restriction prohibiting fences over four feet in height, but the propriety of imposing subsequent restrictions which are more restrictive was apparently not at issue.

We are not prepared to say that a clause permitting original deed restrictions to be amended must be limited to allow for only the imposition of restrictions which are less restrictive than those originally imposed. As the plaintiffs point out, defendants Iserman were on notice that the restrictions originally imposed and applicable to their land when they bought it were not absolute and could be amended at a later date. Presumably there was nothing in the amending clause which led defendants Iserman to believe that an amendment to the restrictions could only serve to lessen the original restrictions; the language of the clause itself has not been disputed by the parties. Although imposing a harsher restriction by amendment in and of itself does not trouble us, we are concerned with such an amendment when it seeks to affect a lot owner who has detrimentally relied on the absence of any such restriction.

Here we have lot owners who, in the absence of a deed restriction to the contrary, bind themselves by contract to a particular use of their land. After making this commitment, they are suddenly faced with an amendment to the deed restrictions, passed after they had bound themselves by contract, prohibiting such use of their land. To comply with the amended restriction would force them to be in breach of contract. We find this result to be manifestly unfair. Even with the knowledge that deed restrictions can be amended, lot owners have a right to rely on those restrictions in effect at the time they embark on a particular course of action regarding the use of their land, and subsequent amended deed restrictions should not be able to frustrate such action already begun.

For example, it certainly would be manifestly unfair to permit a subsequent amended deed restriction to force a lot owner to modify a preexisting use or structure which does not conform to the amendment. If a lot owner builds a garage, a subsequent amended deed restriction prohibiting garages could not force the owner to tear down his or her garage, which had been built when the owner relied on the absence of any such deed restriction. We see only a difference in degree between an amendment which seeks to affect a lot owner with a completed garage, a partially completed garage, or a contract to build a garage. In each case the lot owner would have, without notice to the contrary, relied on existing deed restrictions when embarking on the particular course of action, and a subsequent amendment should not be permitted to impose a hardship on such reliance.

We thus hold that an amended deed restriction does...