Perel v. Brannan

• Decision Date: 23 April 2004
• Docket Number: Record No. 031291.
• Citation: Perel v. Brannan, 267 Va. 691, 594 S.E.2d 899 (2004)
• Parties: Jonathan PEREL, as Trustee for the Ballyshannon Trust, et al. v. Scott BRANNAN, et al.
• Court: Virginia Supreme Court

594 S.E.2d 899

267 Va. 691

Jonathan PEREL, as Trustee for the Ballyshannon Trust, et al. v. Scott BRANNAN, et al.

Record No. 031291.

Supreme Court of Virginia.

April 23, 2004.

Howard H. Stahl (March D. Coleman; Steptoe & Johnson, on briefs), Washington, DC, for appellants.

Michael P. Falzone (Chandra D. Lantz; Hirschler Fleicher, on brief), Richmond, for appellees.

Present: All the Justices.

DONALD W. LEMONS, Justice.

In this appeal, we consider the enforcement of certain restrictive covenants applying to a lot in a residential subdivision, and the remedies for breach of these covenants.

I. Facts and Proceedings Below

In 1998, Locke Lane, L.C. ("Locke Lane") purchased a tract of land from the Science Museum of Virginia Foundation, Inc. and Science Museum Foundation Real Estate, L.L.C. (collectively, the "Science Museum") for the purpose of developing a residential subdivision named "River Locke." In the summer of 1998, Locke Lane and the Science Museum jointly requested a special use permit and approval of a subdivision plan from the Richmond City Council. The plan met with opposition from Jonathan S. Perel ("Perel"), the sole trustee of the Ballyshannon Trust ("the trust"), which owned a parcel of land adjacent to the proposed subdivision.

In November 1998, the Science Museum, Locke Lane, and Perel, as trustee for the Ballyshannon trust, entered into a Settlement Agreement. Under the Settlement Agreement, Perel agreed not to object to or contest the approval by the City of the special use permit or subdivision plan. In return, the Science Museum and Locke Lane agreed to certain restrictive covenants running with the land on River Locke lots abutting the trust's property. The restrictive covenants are contained in a properly recorded document titled, "Amended and Restated Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in River Locke" (the "Declaration"). Locke Lane also agreed "to sell Lot 4 of River Locke Subdivision to Perel, or such entity or person as he may designate by assignment or otherwise." River Locke Lot, L.L.C. now owns Lot 4.

Part V of the Declaration contains covenants restricting the permissible location and type of buildings in River Locke. Part V, paragraph 1(c) describes the buffer, setback, and "[n]o [b]uilding [a]reas" that are part of each lot and restricts the actions that are permissible within each area. Part VII makes clear that the covenants and other provisions of the Declaration run with the land.

Part I, paragraph 9 of the Declaration establishes an Architectural Review Committee ("ARC") composed of three members. The ARC is granted the authority to "waive compliance with the provisions contained herein which are subject to architectural review (except with respect to Part V, subparagraphs 1(c) and (d) and Part VI, paragraph 1) when such waiver is reasonably necessary. . . or where no other reasonable alternative is acceptable." According to Part I, paragraph 1, a property in River Locke owner must have his or her plans for improvements approved by the ARC before construction may begin.

In December 1999, William S. "Scott" Brannan and Melissa Brannan ("the Brannans") purchased "Lot 1" in the River Locke subdivision. On June 28, 2000, Scott Brannan submitted a site plan for Lot 1 to the ARC and it was approved on July 12, 2000. The ARC approved a separate landscape plan for Lot 1 on September 24, 2001.

Construction began on the Brannan home in the summer of 2000, shortly after the ARC's approval of the site plan. Due to the slope of the site and the location of some rock outcroppings, excavation was required for construction of the house the Brannans had chosen to build. The excavation removed part of the hillside on the rear portion of the lot and cut into the designated setback and buffer areas. Substantial vegetation and eight large trees were also removed from the buffer area. A retaining wall was then constructed in the setback area to stabilize the remaining soil. Between the back of the house and the retaining wall, the Brannans installed a patio. A covered porch extended from one corner of the house into the setback area but was altered just before trial to remedy the encroachment.

Perel and River Locke Lot, L.L.C. (collectively, "Perel") filed an amended bill of complaint against the Brannans, Locke Lane, and the three members of the ARC, in their individual capacities,¹ on March 15, 2002, alleging that the Brannans' porch and retaining wall encroached on the setback area of Lot 1 in violation of the covenants and that the excavation and removal of vegetation performed by the Brannans also violated the covenants. Perel asked the trial court for an injunction preventing the Brannans from further encroachment on the buffer and setback areas; an order requiring the Brannans to restore the buffer and setback areas "to their prior state;" and an "order that the Brannans must modify their rear porch."

In the same amended bill of complaint, Perel accused Locke Lane of breaching "its contractual obligation to enforce the covenants, conditions, and restrictions contained in the Settlement Agreement and the Amended Declaration." He asked the court to order Locke Lane to enforce the covenants against the Brannans. Perel also asked for compensatory damages against the Brannans and Locke Lane but withdrew the request shortly before trial. All parties eventually sought attorneys' fees.

Three days before trial, the Brannans sought to amend their response to a request for admissions submitted by Perel three months earlier and completed by the Brannans three weeks after the request was submitted. In their response to the request for admissions, the Brannans admitted "that they caused eight trees to be removed from the Lot 1 Buffer before August 20, 2001 after receiving approval from the ARC to do so." The Brannans moved the trial court to permit them to change their response to deny that they had caused eight trees to be removed from the buffer area, characterizing their original admission as "inadvertent." The trial court denied the Brannans' motion.

Following a bench trial, the trial court found that the Brannans had violated the covenants by removing "the eight trees and other vegetation from the buffer area" and constructing a below-grade patio in the setback area. However, the trial court found that the Brannans' excavation on Lot 1 and construction of the retaining wall did not violate the covenants. The trial court denied both parties' requests for attorneys' fees; ordered the Brannans to replace the vegetation that had been removed, except the eight large trees, because of feasibility concerns; and ordered the Brannans "to remove the patio and any other improvements in the setback area."

Perel appeals the adverse judgment of the trial court, assigning error to: the trial court's holding that the retaining walls do not violate the covenants; the trial court's refusal to order the Brannans to replace the eight trees that were removed; the trial court's holding that Locke Lane has no contractual duty to enforce the covenants; and the trial court's denial of attorneys' fees. The Brannans and Locke Lane responded with five assignments of cross-error, assigning error to: the trial court's refusal to permit them to amend their response to Perel's request for admissions; the trial court's order requiring removal of the patio; the trial court's finding that the patio breached the covenants; the trial court's failure to give the approval of the Brannans' plans by the ARC sufficient weight in its decision; and the trial court's rejection of the argument that Perel was precluded from receiving equitable relief under the "unclean hands" doctrine.

II. Standard of Review

The trial court's judgment in this case involves both findings of fact and conclusions of law. As to purely factual determinations made by the trial court, we will not disturb those findings unless they are plainly wrong or without evidence to support them. However, we review the trial court's interpretation of covenants and other written documents de novo. See Wilson v. Holyfield, 227 Va. 184, 187-88, 313 S.E.2d 396, 398 (1984).

III. Analysis

A. Removal of the Retaining Wall

In its letter opinion, the trial court held that "[t]he retaining wall was a necessary adjunct to the permitted excavation to prevent the collapse of the soil and rock which remained after the cut was complete," apparently holding that necessity is an exception to the restrictions on development in the setback area enumerated in the Declaration. The trial court also noted, "[p]arenthetically, should the excavation have been determined to violate the covenants, there is no evidence on which the court could prepare an enforceable order that the excavated area be returned to its pre-excavation state" implying that even if the retaining wall was a violation of the covenants, the trial court would not order removal of the wall.

The Brannans concede that the retaining wall lies in the rear and side setback areas of Lot 1. Part V, paragraph 1(c) of the Declaration states in part:

No building, structures or other improvements other than a fence or a driveway. . . may be permanently or temporarily constructed or erected in any buffer area or rear building setback area . . . except as follows:

. . . .

(ii) Rear and Side Yard Setback Areas. Within the portion of the rear and side yard setback areas outside of the buffer areas on the Restricted Lots, clearing, at grade patios and walkways are permitted, and children's play equipment and swing sets, properly screened so as not to be visible from contiguous property presently owned by the Adjoining Owner, are permitted."

Walls of any type are absent from the list of permitted structures and improvements. We conclude that no walls are permitted in the setback areas for any reason and the retaining wall erected by the Brannans,...