Miller v. Associated Gulf Land Corp.

• Citation: 941 So.2d 982
• Decision Date: 27 May 2005
• Docket Number: No. 2030426.,2030426.
• Parties: Patsy S. MILLER v. ASSOCIATED GULF LAND CORPORATION.
• Court: Alabama Court of Civil Appeals

Page 982

941 So.2d 982

Patsy S. MILLER v. ASSOCIATED GULF LAND CORPORATION.

No. 2030426.

Court of Civil Appeals of Alabama.

May 27, 2005.

Rehearing Denied December 30, 2005.

Certiorari Denied May 12, 2006.

Alabama Supreme Court 1050472.

A. Carson I. Nicolson of Miller, Hamilton, Snider & Odom, L.L.C., Mobile, for appellant.

Allan R. Chason of Chason & Chason, P.C., Bay Minette, for appellee.

MURDOCK, Judge.

This case involves a covenant restricting the use of certain property owned by Patsy S. Miller in Orange Beach. Miller claims that the covenant should not be enforced against her property. Following a bench trial, the trial court entered a judgment against Miller. We affirm.

In 1967, Associated Gulf Land Corporation ("AGLC") purchased large tracts of land located in what is now the municipality of Orange Beach. Included in one of those tracts is the property now owned by Miller and four adjoining lots situated immediately to the west of the Miller property. The Miller property fronts Alabama Highway 182, and it is approximately 75 feet wide and 300 feet deep.

In 1977, AGLC sold what is now the Miller property to Jerry M. Gilbreath. In 1979, Gilbreath sold the property to William F. Long. Sometime before 1988, a house was constructed on the property. In 1988, Long sold the property and the house located thereon to Patsy Miller and her husband, Larry Miller. At the time the Millers purchased the subject property, they already owned a house nearby, but on the other side of Highway 182; there was testimony that the Millers purchased the subject property because of the existence and ongoing construction of condominiums on the south side of Highway 182 in the vicinity. In 1996, Larry Miller conveyed his interest in the property to Patsy Miller, who is now the sole owner of the property.

The dispute arises from the following language in the deed from AGLC conveying the subject property to Gilbreath:

"The Grantor hereby expressly restricts the use of said real estate by the Grantees, their heirs and assigns to the extenet [sic] that said real estate shall be used only for residential purposes and shall never be used for a trailer park or any other commercial purpose. The burden of this restrictive covenant shall run with said lands, and shall be binding upon the Grantees and their heirs and assigns; provided, however, the benefit of this restrictive covenant is and shall be personal to the Grantor, its successors and assigns, and is a personal covenant which shall not run with any other lands conveyed by Grantor to others."

This restriction was reiterated in the subsequent deeds conveying the property. Miller concedes that she was aware of the "Deed Restriction," as she terms it, when she and her husband purchased the property in 1988.

At the time the Millers purchased their property, the four adjoining lots were also limited to residential use, and only one even had a house on it. The adjoining lots (1) had all been owned by AGLC, (2) were approximately the same size as Miller's property, and (3) were all subject to a restrictive covenant similar to the one quoted above. Beginning in 1995, AGLC released the adjoining lots from the covenant in return for consideration from the owners of those lots.

As a result of AGLC's release of the four adjoining lots from the covenant, Miller's immediate neighbors to the west are now two restaurants doing business as "Bubba's Seafood" and "Jake's Steakhouse," and the parking lots for those businesses. In addition, a theme park doing business as "Adventure Island" is now located immediately to the west of those two restaurants, although the testimony at trial indicated that AGLC played no role in enabling the theme park to be located and operated on that site. In addition, a high-rise "Holiday Inn" hotel and a business known as "Souvenir City" are located across Highway 182 from Miller's property. It is not clear when the Holiday Inn was constructed, and it is not clear from the record that AGLC played any role in enabling the Holiday Inn or Souvenir City to be located where they are. Furthermore, the road that all of these properties face, Alabama Highway 182, has been widened from two lanes at the time of the Millers' purchase to five lanes today. AGLC continues to own land in the general area of the Miller property, including approximately 24 acres of undeveloped land immediately to the north and east of, and contiguous with, Miller's property and the adjoining lots.

In July 2002, Miller filed a "Complaint for Declaratory and Equitable Relief" against AGLC pursuant to Ala.Code 1975, § 6-6-220 et seq. She alleged that she had requested that AGLC release her property from the covenant at issue but that AGLC had refused to do so. Miller also alleged that the covenant was personal to AGLC and Gilbreath and was therefore not enforceable against her. Further, she alleged that her property was no longer suitable for residential use and that continued enforcement of the restrictive covenant would "impose an undue hardship and would be inequitable in light of the development of the surrounding property for commercial purposes." Miller requested that the trial court declare the restrictive covenant unenforceable.

In October 2003, the trial court conducted an ore tenus proceeding. In January 2004, it entered a judgment in favor of AGLC. Miller appealed to this court. We transferred the case to the Alabama Supreme Court for lack of subject-matter jurisdiction. The Supreme Court deflected the case to this court, pursuant to § 12-2-7, Ala.Code 1975.

"`We note that under the ore tenus standard of review, the trial court's findings of fact based on oral testimony, and a judgment based on those findings, are given a presumption of correctness. A judgment based on such findings will not be reversed unless it is shown to be plainly and palpably wrong. The appellate courts are not allowed to substitute their own judgment for that of the trial court if the trial court's decision is supported by reasonable inferences to be drawn from the evidence. The reason for giving such deference to the trial judge's findings based on disputed evidence in ore tenus proceedings is that the trial judge has the benefit of observing the witnesses' manner and demeanor and has the better opportunity to pass upon the credibility of their testimony.'

"Ex parte Pielach, 681 So.2d 154, 154-55 (Ala. 1996) (citations omitted). `Under the ore tenus rule, the trial court's judgment and all implicit findings necessary to support it carry a presumption of correctness and will not be reversed unless found to be plainly and palpably wrong.' Transamerica Commercial Fin. Corp. v. AmSouth Bank, N.A., 608 So.2d 375, 378 (Ala. 1992) (citations and internal quotation marks omitted)."

Creel v. Crim, 812 So.2d 1259, 1260-61 (Ala.Civ.App. 2001).

I.

On appeal, Miller first argues that the deed restriction at issue was personal to AGLC and Gilbreath, i.e., that the burden imposed by that restriction does not "run with the land" so as to be binding upon her.

In order for a covenant to be enforced as one that "runs with the land," it must both (1) have been intended by the parties creating it to run with the land and (2) touch and concern the land. See, e.g., Allen v. Axford, 285 Ala. 251, 231 So.2d 122 (1970); Smith v. First Sav. of Louisiana, FSA, 575 So.2d 1033 (Ala. 1991); Patterson v. Atlantic Coast Line R. Co., 202 Ala. 583, 589, 81 So. 85, 91 (1919) (noting that, in keeping with the seminal English case known as "Spencer's case" (5 Coke, 16), "a covenant will not run with the land if it be merely collateral, and doth not touch or concern the thing demised").¹ In discussing these requirements, we find it convenient to utilize the following definitions stated in the Restatement (Third) of Property (Servitudes) § 1.5 (2004):

"(1) `Appurtenant' means that the rights or obligations of a servitude are tied to ownership or occupancy of a particular unit or parcel of land. The right to enjoyment of an easement or profit, or to receive the performance of a covenant that can be held only by the owner or occupier of a particular unit or parcel, is an appurtenant benefit. A burden that obligates the owner or occupier of a particular unit or parcel in that person's capacity as owner or occupier is an appurtenant burden.

"(2) `In gross' means that the benefit or burden of a servitude is not tied to ownership or occupancy of a particular unit or parcel of land.

"(3) `Personal' means that a servitude benefit or burden is not transferable and does not run with land. Whether appurtenant or in gross, a servitude benefit or burden may be personal."

Turning first to the requirement that the covenant have been intended by the parties creating it to run with the land, we observe that the deed from AGLC to Gilbreath expressly addresses this issue. First, as to the burden of the covenant, the deed restricts the use of what is now the Miller property "by the Grantees, their heirs and assigns." Further, it specifically provides that the burdened property ("the servient estate") shall "never be used for a trailer park or any other commercial purpose." (Emphasis added.) Even plainer and more to the point, the deed expressly states that "the burden of this restrictive covenant shall run with said lands and shall be binding on the grantees, their heirs and assigns." (Emphasis added.)

While the deed from AGLC to Gilbreath clearly expresses an intention for the burden of the covenant to run with the servient estate, it appears to express the contrary intention as to the benefit of the covenant, namely, that it be "personal" to AGLC. The deed states that "[t]he benefit of this restrictive covenant is and shall be personal to the Grantor, its successors and assigns, and it is a personal covenant which shall not run with any other lands conveyed by Grantor to others."² We note that the word "personal" in the first clause of the quoted...