New Hampshire Donuts, Inc. v. Skipitaris, 86-338

• Decision Date: 09 October 1987
• Docket Number: No. 86-338,86-338
• Citation: 129 N.H. 774,533 A.2d 351
• Parties: NEW HAMPSHIRE DONUTS, INC. et al. v. George SKIPITARIS et al.
• Court: New Hampshire Supreme Court

Page 351

533 A.2d 351

129 N.H. 774

NEW HAMPSHIRE DONUTS, INC. et al. v. George SKIPITARIS et al.

No. 86-338.

Supreme Court of New Hampshire.

Oct. 9, 1987.

Bell, Falk & Norton P.A., Keene (Ernest L. Bell, III, on the brief and orally), for plaintiffs.

Faulkner, Plaut, Hanna, Zimmerman & Freund P.C., Keene (Joseph W. Worthen, II, on the brief and orally), for defendants.

JOHNSON, Justice.

The defendants' appeal arises from the equitable decree of a Master (Frank B. Clancy, Esq.), approved by the Superior Court (Manias, J.), ordering the defendants to remove a portion of their building that materially interferes with the visibility of the plaintiffs' building in violation of certain restrictive covenants. We affirm.

The following issues have been raised: (1) whether the master erred in ruling that a portion of the defendants' building materially interferes with the plaintiffs' donut shop; (2) whether the master erred in ruling that the defendants' building would cause the plaintiffs irreparable harm; (3) whether the master's order results in economic waste; (4) whether the master erred in ruling that the plaintiffs are not bound by representations made by their sublessee to the defendants releasing the defendants from the covenants in question; (5) whether the relief recommended by the master was excessive in view of the nature and language of the restrictive covenants in question; and (6) whether the plaintiffs' claim should be barred by laches under the facts of this case.

The plaintiff New Hampshire Donuts, Inc. is the long-term lessee of land and a donut shop on West Street in Keene, according to the terms of a duly recorded lease dated May 20, 1981, from the late Laurence Colony, Jr., to the plaintiff (hereinafter referred to as the prime lease). The prime lease contains the following covenant:

"[N]o improvements shall be erected on such land of the Lessor [Laurence D. Colony, Jr.] which will materially interfere with the ... visibility of the Lessee's [New Hampshire Donuts, Inc.] shop and its sign to approaching automobile traffic traveling on adjoining highways or streets."

The prime lease further provided that the covenants and restrictions contained therein would be binding on the parties and their respective heirs and assigns.

The plaintiff New Hampshire Donuts, Inc. has subleased the premises to the plaintiff Keene Donuts, Inc., which is presently in possession of the property. The sublease is to run by its terms until February 6, 1988. The premises have at all relevant times been operated as a donut shop.

By deeds dated July 13, 1982, and April 1, 1983, Laurence D. Colony, III, obtained title from trustees under the wills of Laurence D. Colony, Sr. and Laurence D. Colony, Jr., respectively to land adjacent to the premises leased by the plaintiffs. In a sales agreement and deposit receipt dated July 16, 1984, Laurence D. Colony, III, agreed to sell the premises represented by these two deeds to the defendant George Skipitaris. The sales agreement made explicit reference to the restrictive covenants contained in the plaintiffs' lease. The defendants undertook to "[obtain] approval of sign and building location by New Hampshire Donuts, Inc. as provided for in lease dated May 12, 1981, between New Hampshire Donuts, Inc. and Laurence D. Colony." The transaction was consummated by delivery of a deed dated December 3, 1984, to George Skipitaris and Bob Balkanikos, which also made reference to the restrictive covenants. The deed was duly recorded.

The defendants, who are in the business of leasing restaurants, began developing the deeded premises in April, 1985. By June 20, 1985, they had completed the foundation and part of the walls of a building to be leased as a pizza restaurant.

At some time prior to June 20, 1985, the defendants had oral discussions with one Steven Camann, who the defendants claim to have believed was the plaintiffs' representative, regarding permission to build the building substantially as planned.

On June 8, 1985, the plaintiffs advised the defendants in writing that they believed the defendants' proposed building was in violation of the restrictive covenants and that any construction by the defendants would materially reduce the visibility of the plaintiffs' donut shop to passing traffic. On or about June 21, 1985, the plaintiffs gave notice to the defendants of their claimed rights in the defendants' property and of their desire to enforce those rights. The defendants nevertheless proceeded to build.

On September 25, 1985, the plaintiffs filed a petition for a preliminary and permanent injunction, requesting a court order that the defendants' building be removed and that the plaintiffs' rights under the prime lease be enforced. After a two-day trial before a master, which included a fact-finding view of the buildings in question, the master found, inter alia, that the plaintiffs' operation is an "impulse buying" restaurant which must be recognized quickly by travelers on the highway. The master further found that a southeasterly triangular portion of the defendants' building materially interferes with the visibility of the plaintiffs' shop. The defendants appeal the granting of a permanent injunction ordering that a portion of their building be removed.

We first consider whether the master erred in ruling that a portion of the defendants' building materially interferes with the plaintiffs' donut shop. After taking a view, and hearing all the evidence in the case, the master reached the conclusion that the southeasterly portion of the defendants' building did in fact materially interfere with the visibility of the plaintiffs' building. In asking us to overturn this finding of fact, the defendants bear a heavy burden. This court will not substitute its judgment for that of the trier of fact if it is supported by the evidence, particularly when the trier of fact has bolstered his conclusions with a view. Heston v. Ousler, 119 N.H. 58, 60, 398 A.2d 536, 537 (1979).

In this case, we cannot say that the master's determination of material interference is unsupported by the evidence. The master took an extensive view of the buildings in question and of the approaches to them. Such a view is evidence for all purposes for the trier of fact. See Carpenter v. Carpenter, 78 N.H. 440, 101 A. 628 (1917). On this basis, we will not substitute our own finding for that of the trier of fact, and the master's determination that the defendants' building materially interferes with the visibility of the plaintiffs' donut shop, in violation of the restrictive covenants, must be sustained.

Next we consider whether the master erred in ruling that the defendants' building as constructed would cause the plaintiffs irreparable harm. Injunctive relief is one of the peculiar and extraordinary powers of equity, Bassett v. Company, 47 N.H. 426, 437 (1867), normally to be exercised "only when warranted by 'imminent danger of great and irreparable damage,' " Johnson v. Shaw, 101 N.H. 182, 188, 137 A.2d 399, 403 (1957) (quoting Wason v. Sanborn, 45 N.H. 169, 171 (1862)). Where clear violations of restrictive covenants are involved, however, the irreparable harm requirement is considerably relaxed. Indeed, "[t]he injunction in this class of cases is granted almost as a matter of course upon a breach of the covenant. The amount of damages, and even the fact that the plaintiff has sustained any pecuniary damages, are wholly immaterial." J.N. Pomeroy, 4 Pomeroy's Equity Jurisprudence § 1342, at 943 (1941) (emphasis in original). In the words of one of the ablest of the early equity judges:

"It is clearly established by authority that there is sufficient to justify the court interfering, if there has been a breach of the covenant. It is not for the court, but the plaintiffs, to estimate the amount of damages that arises from the injury inflicted upon them. The moment the court finds that there has been a breach of the covenant, that is an injury, and the court has no right to measure it, and no right to refuse to the plaintiff the specific performance of his contract, although his remedy is [an injunction]."

Trial court opinion of Sir George Jessel, M.R., reported in case on appeal, Leech v. Schweder, L.R. 9 Ch. 463, 465 (Eng.1901) (reversing decision below). This position is in accord with the modern viewpoint that "the former policy of strictly construing restrictive covenants is no longer operative," Joslin v. Pine River Dev. Corp., 116 N.H. 814, 817, 367 A.2d 599, 601 (1976), and that restrictions on the use of land by private parties have been particularly important in our century when the value of property often depends upon maintaining the character of the neighborhood within which the property is situated. Traficante v. Pope, 115 N.H. 356, 358, 341 A.2d 782, 784 (1975).

When, however, equity is asked to order the removal of a structure, when construction could once have been enjoined, there may be a further question whether the trial court's order results in economic waste. In Johnson v. Shaw, 101 N.H. 182, 137 A.2d 399 (1957), the defendant constructed certain buildings in violation of a restrictive covenant, and the trial court enjoined him from completing a building and compelled its removal. This court held in Johnson that where an order for removal "is found inequitable under all the circumstances, the petition should be dismissed." Id. at 189, 137 A.2d at 404. This court also noted in Johnson, however, that a lower court finding with respect to whether an injunction will be equitable under all the circumstances will "ordinarily be implied, in the absence of indication that it was not in fact made." Id. at 189, 137 A.2d at 404.

In Johnson, this court concluded that it was not possible to infer a finding of equitability because the injunction imposed an evident hardship upon the defendant and because "the absence of an express finding by the Court and of any substantial...