PRAIRIE HILLS WATER v. Gross

• Decision Date: 06 November 2002
• Docket Number: No. 22135.,22135.
• Citation: 2002 SD 133,653 N.W.2d 745
• Parties: PRAIRIE HILLS WATER AND DEVELOPMENT COMPANY, a South Dakota corporation, Plaintiff and Appellee, v. Jim GROSS, Scott Gross, Steve Gross, d/b/a JS & S Wood and Iron, and Linda Paulson, Defendants and Appellants.
• Court: South Dakota Supreme Court

653 N.W.2d 745

2002 SD 133

PRAIRIE HILLS WATER AND DEVELOPMENT COMPANY, a South Dakota corporation, Plaintiff and Appellee, v. Jim GROSS, Scott Gross, Steve Gross, d/b/a JS & S Wood and Iron, and Linda Paulson, Defendants and Appellants.

No. 22135.

Supreme Court of South Dakota.

Considered on Briefs May 28, 2002.

Decided November 6, 2002.

Randall L. Macy of Buckmaster and Macy Belle Fourche, SD, Attorneys for plaintiff and appellee.

Rod Woodruff, Belle Fourche, SD, Attorney for defendants and appellants.

ZINTER, Justice.

[¶ 1.] Prairie Hills Water and Development Company (Prairie Hills) sued Linda Paulson, Jim Gross, Scott Gross, and Steve Gross (collectively referred to as the Grosses). Prairie Hills alleged that Grosses' commercial sandblasting, painting and other business activities were a public nuisance and were in violation of certain real estate covenants and restrictions in a real estate subdivision. The trial court agreed with Prairie Hills and enjoined Grosses' business operations. The trial court also awarded Prairie Hills attorney fees incurred in enforcing the covenants. Grosses appeal both decisions. We affirm the issuance of the injunction. We also affirm that portion of the judgment that awarded attorney fees against the property owners. We reverse that portion of the judgment that awarded attorney fees against non-property owners.

FACTS AND PROCEDURAL HISTORY

[¶ 2.] Prairie Hills Ranchettes is a real estate subdivision located approximately one mile south of the city of Belle Fourche. Prairie Hills is a non-profit corporation formed to regulate development and other matters within the subdivision. The board of directors of Prairie Hills are property owners in the subdivision.

[¶ 3.] All property in the subdivision was sold subject to covenants and restrictions running with the land. The preamble to the covenants provided that the land in the subdivision was developed "for the purpose of building and developing for residential use . . . ." (emphasis added). Covenant # 7 also prohibited "noxious or offensive activit[ies] . . . upon any portions of the . . . property . . .," as well as "anything. . . that will or may become annoying or a nuisance to the surrounding property owners within the subdivision."

[¶ 4.] In 1988, Jim and Linda purchased subdivision Lots 28, 29 and 30. At the time they purchased the lots, Jim was aware that the land was subject to covenants and restrictions running with the property.

[¶ 5.] In 1989, Jim built a building on Lot 29. The building included a living area, a storage area, and work area. In 1991, Jim moved a modular home on Lot 29. In 1997, Jim's sons (Scott and Steve) moved to the property: Scott moved into the living quarters in the building, and Steve moved into the modular home.

[¶ 6.] In 1998, Jim, Scott, and Steve formed a partnership known as JS & S Wood and Iron. This partnership was formed to engage in sandblasting, painting, welding, woodworking, and engine repair. Later that year, Grosses built a sandblasting building on Lot 29, and they obtained a sales tax license for this business.

[¶ 7.] Grosses also began to promote and advertise the business. Their website displayed pictures of belly-dump trucks, buses, a "caterpillar", semi-trucks, and other equipment that had been sandblasted and painted on the property. The website also directed potential customers to drive one and one-half miles through the subdivision to reach Grosses' business.

[¶ 8.] In the spring of 1999, Jim and Susie Casper, neighbors who lived across the street from Grosses, began to complain of noise, dust, and large-vehicle traffic associated with Grosses' business. On May 26, 1999, the Board sent Grosses a letter stating that their business "activity on [the] property may not be consistent with the covenants and restrictions that run with your land." The letter requested an opportunity to address the complaints.

[¶ 9.] On November 4, 1999, the Board followed up by conducting a fact-finding tour at Grosses' business. During the tour, Grosses operated their equipment while the Board made observations at two neighboring residences: the Casper residence and the Lori Wilder residence. The trial court found that it was "very loud" and "very noisy" at both residences.

[¶ 10.] After the fact-finding tour, the Board unsuccessfully attempted to find a way in which the Grosses could continue their business without annoying their neighbors. The Board ultimately concluded that Grosses' "heavy industrial" business was not compatible with the subdivision. Because no compromise was reached, Prairie Hills instructed Grosses to stop their business activities, move their business, or be sued. Grosses refused and this suit was commenced. The suit alleged that Grosses' business (1) was an annoyance and nuisance in violation of the covenants and restrictions running with the land, and (2) that the business constituted a public nuisance in violation of SDCL 21-10-1.¹

[¶ 11.] At trial, Caspers testified that they could hear noise from the businesses' back-up alarms, welding machines, grinders, and equipment. Jim Casper testified that the noise was so loud it caused vibrations in his house. He indicated that the noise could be heard in any portion of his house with the windows and doors closed. Lori Wilder also testified that she could hear the noise from Grosses' business inside her house. She additionally expressed concerns about dust and traffic from the large belly-dump trucks. Board member Richard Langer corroborated that the noise heard at Casper's property was "loud and annoying," and that the noise at Wilder's residence was loud even when the windows and doors were closed.

[¶ 12.] Four other property owners also testified. Jeffrey Rutz testified that when he drove past Grosses' business, he could hear compressors running. He described them as "excessively noisy." Rutz also testified that the noise at Casper's house was loud and sounded like "a radio out of tune." Rutz finally indicated that Grosses' business caused concerns about traffic and a possible decrease in the value of his home and the quality of life.

[¶ 13.] Carl Ogaard testified that Grosses' business created too much traffic and junk, created a disturbance, and was not appropriate to be located in Prairie Hills Ranchettes. Brad Schreiber testified that Grosses' business was "not consistent with the residential character" of the subdivision. Both Ogaard and Schreiber indicated that they purchased their property in Prairie Hills Ranchettes because it was a residential subdivision protected by covenants. Only Linda Shuft, the subsequent purchaser of the Wilder home, testified that she did not find the noise from Grosses' business annoying. She was also not concerned about the dust or traffic.

[¶ 14.] Grosses called an expert witness, Dr. Carter Kerk. Dr. Kerk visited the business on two occasions. Although his testimony was generally favorable to Grosses, he did testify that he was able to hear the noise of the air compressor and sandblasting on the property of all neighbors surrounding Grosses' business. Dr. Kerk also failed to perform tests on all noises emanating from Grosses' business, such as the noise created by grinding metal and trucks coming in and out of Grosses' property.

[¶ 15.] A summary of Grosses' commercial business activities in 1999 reflected that Grosses sandblasted and painted six 45-foot belly-dump trailers, eight 30-foot belly-dump trailers, four 16-foot horse trailers, five pickups, and three buses. Sandblasting a 45-foot belly-dump trailer took up to fourteen hours to complete. They sometimes sandblasted the entire day. In these activities, Grosses used over 300 gallons of paint and paint thinner. Grosses also admitted that their goal was to expand the business. Up to the time of trial, Grosses continued to promote their business through newspaper advertising.

[¶ 16.] After hearing this evidence, the trial court found that Grosses were operating a full-time commercial business. The trial court found that the business activities included sandblasting, painting, grinding, welding and other related activities necessary to carry on large scale commercial sandblasting and painting business. The court also found that Grosses had used the property for the purpose of holding a commercial auction.

[¶ 17.] The trial court ultimately concluded that Grosses' business was inconsistent with residential use and was an annoyance and nuisance to other residential property owners in violation of the covenants and restrictions running with the property. The court also found that the sight, noise, dust, and safety problems created a public nuisance. Grosses were enjoined from operating the business within six months. Based on attorney fee language in Covenant # 11, the trial court also awarded Prairie Hills attorney fees for enforcement of the restrictive covenants.

[¶ 18.] Grosses appeal raising the following issues:

1. Whether Grosses' commercial business violated any residential covenants and restrictions.

2. Whether Grosses' commercial business created a public nuisance.

3. Whether the trial court abused its discretion in granting a permanent injunction.

4. Whether defendant property and non-property owners were liable for the attorney fees incurred in enforcing the covenants and restrictions.

STANDARD OF REVIEW

[¶ 19.] In reviewing a trial court's decision to grant an injunction we consider "(1) [w]ere any of the facts found by the trial court clearly erroneous? and (2)[i]f not, taking the facts as true, did the court abuse its discretion in granting the injunction?" Maryhouse, Inc. v. Hamilton, 473 N.W.2d 472, 474 (S.D.1991). In deciding whether the trial court's factual findings are clearly erroneous, "[t]he question is not whether this court would have made the same findings that the trial court did, but whether on the entire evidence we are left with a definite and firm conviction that a mistake...