PMZ Oil Co. v. Lucroy

• Decision Date: 21 March 1984
• Docket Number: No. 54751,54751
• Citation: 449 So.2d 201
• Parties: PMZ OIL COMPANY, Appellant, v. Robert LUCROY and Patricia Lucroy, Appellees.
• Court: Mississippi Supreme Court

Page 201

449 So.2d 201

PMZ OIL COMPANY, Appellant, v. Robert LUCROY and Patricia Lucroy, Appellees.

No. 54751.

Supreme Court of Mississippi.

March 21, 1984.

C.E. Sorey, II, Ward, Martin, Terry, King & Sorey, Vicksburg, for appellant.

Robert G. Ellis, Ellis, Braddock & Bost, Vicksburg, for appellees.

Before WALKER, P.J., and HAWKINS and ROBERTSON, JJ.

ROBERTSON, Justice, for the Court:

I.

This appeal raises the question whether the developer of a real estate subdivision, the plat and covenants of which have not been recorded, should be equitably estopped from violating those covenants communicated to and relied upon by homeowners.

Here the developer told all lot purchasers, including Robert and Patricia Lucroy, the complainants below and appellees here, that its sixteen lot subdivision would be restricted to one quality single-family dwelling per lot. The Lucroys relied on these representations and purchased their lot and built their home. Thereafter, on one of the lots it retained, the developer sought to build six townhouse condominiums, a clear violation of the covenants communicated to the Lucroys.

After plenary hearing on the merits, the Chancellor held the developer estopped from violating the one-single-family-dwelling-per-lot-covenant. We affirm.

II.

A.

PMZ Oil Co., Defendant below and Appellant here, is a Mississippi corporation having its principal place of business in Warren County, Mississippi. J. Murray Pinkston, Jr., has at all times been the dominant individual within and actor on behalf of the corporation.

At some time in 1976 PMZ acquired two adjoining tracts of land in Section 33, Township 16 North, Range 4 East, Warren County, Mississippi. The property adjoins Porters Chapel Road near Vicksburg.

In the following year PMZ engaged the services of professional surveyors who inspected the land and prepared a subdivision plat, dividing the land into 16 lots of various sizes and configurations. Each lot is in excess of one acre in size and several approach two acres. The plat was never presented to the Warren County Board of Supervisors for approval nor has it ever been recorded in the office of the Chancery Clerk of Warren County. See Miss.Code Ann. Secs. 17-1-23, 19-27-21, et seq. (1972).

PMZ originally planned to develop an exclusive residential subdivision to be known as Raintree Subdivision. Acting through another corporation, Pinkston built a quality home on Lot 10. This home was designed to set the tone for the whole subdivision. On November 7, 1977, the Lot 10 dwelling was conveyed by Pinkston's other corporation to John C. Stepan and Rebecca E. Stepan. The deed reflecting the conveyance contained 13 protective covenants, the critical one of which provided that "no more than one (1) residence shall be built on a lot."

On June 28, 1978, Pinkston, again acting through another of his corporations, caused Lot 12 to be sold to Dan J. Cizek and Beverly J. Cizek. The deed to the Cizeks contained the same protective covenants found in the deed to the Stepans.

In the spring of 1978 Robert Lucroy learned of the proposed Raintree Subdivision. He engaged the services of Ernest Thomas, a real estate broker in Vicksburg. Acting on behalf of the Lucroys, Thomas approached Pinkston and inquired regarding the purchase of one of the lots in the Raintree Subdivision. Pinkston displayed to Thomas the subdivision plat and explained the gist of the protective covenants PMZ intended to impose within the subdivision. Pinkston made it clear to the Lucroys' agent that he contemplated a very exclusive subdivision, that each home would have to be at least 2,000 square feet and of quality build, and that only single-family dwellings would be allowed.

On January 25, 1979, PMZ Oil Co. executed and delivered unto Robert H. Lucroy and Patricia A. Lucroy its warranty deed conveying to the Lucroys Lot 11 of the Raintree Subdivision. This deed contained the same protective covenants as had been presented to realtor Thomas, and as had been included in the deeds to the Stepans and the Cizeks.

The deed had been preceded by sales contracts between PMZ and the Lucroys dated April 6, 1978, and May 16, 1978. The evidence reflects that some time after the execution of the April 6, 1978, contract but prior to the May 16, 1978, contract, Pinkston talked directly to Mr. Lucroy and explained the 13 protective covenants that were to apply to the Raintree Subdivision.

At some time in 1979 (the precise date is not clear from the record), the Lucroys constructed on their Lot 11 the home in which they presently reside.

On August 21, 1979, PMZ conveyed to the Cizeks Lot 13, the lot adjoining the lot the Cizeks had previously purchased. This deed contained the protective covenants in issue. On February 13, 1980, PMZ conveyed to Ferguson Builders of Vicksburg, Inc. three lots--Lots 14, 15 and 16, again with the protective covenants contained in the deed the same as in the deed to the Lucroys.

At the time the Lucroys began the construction of their home, they were aware of the protective covenants by virtue of Mr. Lucroy's discussions with Mr. Pinkston, by virtue of information conveyed by Mr. Pinkston through Mr. Thomas as the Lucroys' agent, and from the terms of the warranty deed of January 25, 1979. At that time there were at least two other deeds on file in the Office of the Chancery Clerk of Warren County, Mississippi containing the same protective covenants. These deeds affected Lots 10 and 12, the lots on either side of Lot 11 which was acquired by the Lucroys. One of those deeds, that to the Stepans, dated November 7, 1977, had been of record for a year and 72 days prior to the consummation of the sale to the Lucroys, and, of course, prior to the Lucroys commencing construction on their lot.

The problems began in 1980 when Pinkston advised each of the then residents of the subdivision of his intention to build six townhouse condominiums on Lot 3. He presented to each a proposed plat which considerably reduced the number of lots that would be considered a part of Raintree Subdivision. The Lucroys and others made it clear, first that they considered the covenants as limiting the use of all 16 lots in Raintree Subdivision and second, that they considered these covenants as binding upon Pinkston and his corporation, PMZ Oil Co., as well as all subsequent purchasers of lots. They refused to consent to the construction of the townhouses. Pinkston's retort was that, if the homeowners prevented him from building the townhouses, he would not pave Raintree Drive as he had previously promised.

Late in 1980 Pinkston began to lay the foundation for the townhouses on Lot 3.

B.

On September 11, 1980, Robert Lucroy and Patricia Lucroy commenced this civil action by filing their bill of complaint against PMZ Oil Co. in the Chancery Court of Warren County, Mississippi. The Lucroys asked, inter alia, that PMZ be enjoined from construction of the townhouses, as they were not single-family dwellings.

On May 20, 1981, the case was called for trial on its merits in the Chancery Court of Warren County, Mississippi, Hon. Nat W. Bullard, Chancellor, presiding. After receipt of considerable testimony and exhibits on behalf of each of the parties, the Chancellor took the matter under advisement.

On October 16, 1981, Chancellor Bullard released an opinion containing findings of fact and conclusions of law and providing in essence that PMZ Oil Co. would be enjoined from constructing the townhouses on Lot 3 and from violating in other ways the restrictive covenants in question. The Chancellor's opinion further provided:

"Defendants will be further mandatorily enjoined to record in the land records of Warren County in the Office of the Chancery Clerk the restrictive covenants as they appear in the deed to Mr. and Mrs. Lucroy as covenants running with the land applicable to the land described by metes and bounds that constitute Lots 1-8 of Raintree Subdivision (unrecorded), or as applicable to said lots if defendant elects to record the plat of said Raintree Subdivision."

In due course the parties presented to Chancellor Bullard a decree the form of which each had approved, which decree in turn was entered by the Chancellor on November 20, 1981. That decree carried into effect the essence of the opinion which had previously been released by Chancellor Bullard.

III.

A.

Agrieved at the Chancellor's injunction, PMZ Oil Co. appeals to this Court and presents a single assignment of error, to wit:

The Court erred in granting the Appellees the relief prayed for in their complaint, based upon estoppel, in the absence of proof of reliance to their detriment on the contended actions of Appellant.

The decree appealed from did not purport to enforce any legal right vested in the Lucroys. The Chancellor in no way held that the covenants imposed legal restrictions upon the use of Lot 3 (or any of the other lots still owned by PMZ Oil Co.), as would have been the case had the plat and covenants been formally approved by the Board of Supervisors of Warren County and filed for record in the land records of Warren County, Mississippi. Rather, the Chancellor held "This arises as a matter of equity and fair dealing--defendant (PMZ) having represented that the covenants applied to the whole unrecorded subdivision and having followed that general scheme halfway, is now estopped to deny that the lots remaining are subject to the same restrictions for the benefit of those who dealt with defendant in reliance on those representations.

By its assignment of error, PMZ challenges the Chancellor's implicit fact finding that the Lucroys relied upon PMZ/Pinkston's representations. PMZ in no way challenges the fact finding that the representations were made.

We regard the issue as a relatively simple one, factually. The Lucroys were interested in building a new residence in a quality subdivision. They had reviewed the plans of the proposed Raintree Subdivision,...