Menne v. Keowee Key Prop. Owners' Ass'n

• Decision Date: 03 April 2006
• Docket Number: No. 4100.,4100.
• Citation: 629 S.E.2d 690
• Court: South Carolina Court of Appeals
• Parties: Douglas J. MENNE, as Trustee of the First Supplemental Trust Agreement created by Douglas J. Menne dated 11/22/96 (as amended), Appellant, v. KEOWEE KEY PROPERTY OWNERS' ASSOCIATION, INC., Respondent.

629 S.E.2d 690

Douglas J. MENNE, as Trustee of the First Supplemental Trust Agreement created by Douglas J. Menne dated 11/22/96 (as amended), Appellant, v. KEOWEE KEY PROPERTY OWNERS' ASSOCIATION, INC., Respondent.

No. 4100.

Court of Appeals of South Carolina.

Heard March 7, 2006.

Decided April 3, 2006.

Rehearing Denied May 18, 2006.

COPYRIGHT MATERIAL OMITTED

Andrea Hawkins, of Spartanburg, and Christopher M. Kelly, of Greenville, for Appellant.

James B. Richardson, Jr., of Columbia, and Samuel F. Albergotti, of Anderson, for Respondent.

GOOLSBY, J.:

Douglas Menne brought this declaratory judgment action against the Keowee Key Property Owners' Association, Inc. seeking a determination regarding the validity of a restrictive covenant that prevents him from building an individual boat dock on his lake-front property. The master in equity ruled the covenant was valid and enforceable. Menne appeals. We affirm.

FACTS

Keowee Key is a gated residential community on Lake Keowee. The community is divided into units, with each unit further divided into multiple lots. Keowee Key, a large area comprised of over 2,200 lots, covers approximately 1,600 acres. Each unit contains its own distinct set of restrictive covenants that apply only to the lots within that unit.

In 1985, Menne's mother purchased from the Lake Keowee Development Corporation Lot 24, a lakefront tract within Unit 20 of Keowee Key. Unit 20 abuts the largest cove at Lake Keowee, informally called the Leisure Trail Cove (the "Cove").

Menne's mother purchased the property subject to a restrictive covenant that the developer recorded in Oconee County on April 19, 1985. The covenant prohibits construction of individual boat docks in Unit 20 and provides in relevant part as follows:

No docks or other structures of a permanent or temporary nature shall be placed in or upon the waters or the shoreline of Lake Keowee by any individuals, partnership or corporation other than Lake Keowee Development Corporation, its successors or assigns.

The developer created the Leisure Trail, a walking path along the edge of the Cove at Lake Keowee, for the enjoyment of all Unit 20 property owners, including the owners of interior lots. The developer believed the natural aesthetics of the Leisure Trail would be better preserved by a few community boat docks, or "cluster docks," rather than numerous individual boat docks. The covenant maintains this appearance by preventing the construction of individual boat docks. In lieu of individual docks, however, Unit 20 property owners can lease boat slips from a nearby community boat dock, the Gazebo Dock.

At the time Menne's mother purchased Lot 24 in 1985, the Cove contained community docks in two locations, one consisting of 58 slips (the "Main Dock") and another consisting of the 18-slip Gazebo Dock, for a total of 76 slips. At one end of the Cove is Unit 21, which, like Unit 20, borders the Cove. At the other end of the Cove formerly stood the Yacht Club. It housed a restaurant and meeting area. The Leisure Trail started near the Yacht Club, traversed Unit 20, and ended within Unit 21.¹ From the time she bought the property, Menne's mother rented a boat slip at the Gazebo Dock.

In 2000, Menne took over ownership of Lot 24 from his mother subject to the covenant.² Menne admittedly knew when he acquired the property that the covenant prohibited Lot 24 from having an individual dock. He had accompanied his mother when she purchased the property in 1985. Menne also knew the covenant applied only to Unit 20 and did not apply to the other units in the Cove.

In 2001, Menne contacted the Keowee Key Property Owners' Association³ and requested permission to build an individual boat dock on Lot 24 so he could house his three watercraft on the lake. Menne explained that, although he continued to lease one boat slip at the Gazebo Dock (as his mother had done), he wished to dock more boats at Lake Keowee because, in addition to his pontoon boat, he now owned a ski boat and jet ski used by his children. Menne complained about having to remove his watercraft from the lake on a daily basis. He said it cut into the amount of "water time" that he had on the lake. He viewed the Unit 20 restriction as "neither fair, logical or legal."

The Association rejected Menne's request based on the restrictive covenant in Unit 20. The Association noted no private docks existed in the restricted area and it was in the process of constructing additional community boat slips.⁴

Menne subsequently enlisted the help of an Ohio attorney to negotiate with the Association about building an individual dock on Lot 24. Menne met with the Association's general manager, David Coe, but the Association maintained its position that the Unit 20 covenant prevented Menne from constructing an individual boat dock on Lot 24.

Menne thereafter filed this declaratory judgment action seeking a determination that the Unit-20 covenant could no longer be enforced because of a change of conditions in the area. The master in equity reviewed the pleadings, stipulations, testimony, and exhibits, and walked the Leisure Trail with the consent of all parties, and concluded no radical change of conditions had occurred that would support an invalidation of the Unit 20 restrictive covenant regarding the construction of private docks. The master noted the Leisure Trail had retained its aesthetic appeal despite the addition of a few community docks in the Cove. Finally, the master ordered Menne to pay attorney fees and costs of $56,273.25 to the Association.

LAW/ANALYSIS

I. Change of Conditions

Menne contends the master erred in failing to invalidate the restrictive covenant based on a change of conditions.

Under South Carolina law, a party may bring a declaratory judgment action to invalidate a restrictive covenant based on a change of conditions.⁵ The party bringing the action bears the burden of proof by the preponderance of the evidence.⁶

In an action for a declaratory judgment, "affirmative relief may be granted against a restrictive covenant where there is such a change in the character of the neighborhood as to render the enforcement of the covenant valueless to the covenantee and oppressive and unreasonable as to the covenantor."⁷ A party seeking to annul a restrictive covenant must show the change of conditions represented so radical a change that the original purpose of the restrictive covenant can no longer be realized.⁸ Even if, however, a change of conditions has occurred and inflicts a hardship upon the servient estate, equity will enforce a restrictive covenant if it "remain[s] of substantial value."⁹

Since Menne's mother purchased Lot 24 in 1985, the Cove has changed. When she purchased Lot 24, the Cove contained 76 community boat slips — 18 slips at the Gazebo Deck and 58 slips at the Main Dock. In 1992, the Association built a 24-slip cluster dock off the Leisure Trail, increasing the total number of boat slips to 100. Like the Gazebo Dock, this cluster dock accommodates property owners who could not build individual docks on the lake because they purchased property along the Leisure Trail. This particular cluster dock was built for Unit 21 property owners. In 1996, the Association added 12 slips to the Main Dock, increasing the total number of slips in the Cove to 112. In 2001, the Association built a 20-slip cluster dock off the Leisure Trail called the Tall Ships Dock. These additional slips, combined with the 2-slip Fordco Dock that had been in the Cove for an indeterminate number of years, brought the total number of slips near the Leisure Trail in the Cove to 134 overall.

The Association also has plans for future development. It has submitted an application to Duke Energy Corp. to build another cluster dock comprised of 14 slips next to the Main Dock at the beginning of the Leisure Trail.

The Yacht Club was razed and replaced with a town house development called Sunrise Pointe between 2001 and 2003. The developer of Sunrise Pointe built an 8-slip cluster dock and has already submitted a proposal to increase the dock to 12 slips. Sunrise Pointe is not located on the Leisure Trail and is not governed by the Association, but it is within the Cove. The old 2-slip Fordco Dock near the Sunrise Pointe property is slated to be removed, however.

The purpose of the Unit 20 covenant is to preserve the aesthetics of the Leisure Trail that runs along the Cove and crosses Unit 20. The developer believed prohibiting individual docks along the Unit 20 shoreline would best preserve the Leisure Trail. By building community docks, the Leisure Trail would remain open along the Unit 20 shoreline and Unit 20 property owners would still have access to the lake. To this end, the original purpose of the Unit 20 covenant can and continues to be realized.

As of this date, the Leisure Trail enjoys an open shoreline within Unit 20. No individual boat docks have been added to the Unit 20 shoreline and there have been no violations of the covenant since it was recorded. Although community docks have been built elsewhere in the Cove, no community docks have been added to the Unit 20 shoreline since Menne's mother purchased Lot 24. Consequently, there has been little change to the aesthetics of the Leisure Trail within Unit 20, let alone a radical change warranting the invalidation of the Unit 20 covenant at issue here.

Moreover, the Association's enforcement of the Unit 20 covenant is not oppressive to Menne. Because Menne currently leases two boat slips from the Association at the Gazebo Dock, two of his three watercraft are already housed on the lake. Thus, even if there was a radical change of conditions within Unit 20, we do not believe the fact that Menne cannot house additional boats or other watercraft on the lake places such an exorbitant burden on him that the Unit 20 covenant should be invalidated.

II. Evidence of Changes Outside the Restricted Area

Menne argues the...