Shaff v. Leyland

• Decision Date: 06 December 2006
• Docket Number: No. 2005–848.,2005–848.
• Citation: 154 N.H. 495,914 A.2d 1240
• Court: New Hampshire Supreme Court
• Parties: Margaret A. SHAFF v. Edith W. LEYLAND.

154 N.H. 495

914 A.2d 1240

Margaret A. SHAFF

v.Edith W. LEYLAND.

No. 2005–848.

Supreme Court of New Hampshire.

Argued: Oct. 18, 2006.

Opinion Issued: Dec. 6, 2006.

Devine, Millimet & Branch, P.A., of Manchester (David P. Eby on the brief and orally), for the petitioner.

Cassidy Law Office, PLLC, of Concord (James M. Cassidy on the brief and orally), for the respondent.

HICKS, J.

The respondent, Edith W. Leyland, appeals an order of the Superior Court (Conboy, J.) granting summary judgment to the petitioner, Margaret A. Shaff, on the basis that the respondent lacked standing to enforce a restrictive covenant contained in a warranty deed. We affirm.

The trial court found the following facts. In the 1960s, the respondent acquired approximately seventy-five acres along Mont Vernon Road in Amherst, where she lived in the only house located on the property. Beginning with the sale of her home in 1975, the respondent sold portions of this land to various parties. In 1985, she conveyed approximately twenty-three acres to the petitioner by a warranty deed that contained the following restrictive covenant:

The above described premises are conveyed subject to the restriction, which shall run with the land, that the Grantees, their heirs and assigns shall construct on said premises only a colonial-type residence having a market value of at least One Hundred Thousand Dollars ($100,000).

The respondent did not reserve a right of enforcement in the deed. In 1998, she conveyed the last 11.6 acres of the original seventy-five acre parcel. The respondent currently owns no real estate near the original seventy-five acre parcel or in the town of Amherst.

The petitioner sought a declaratory judgment that the restrictive covenant does not limit the number of homes to be built on her property. She moved for summary judgment, requesting that the trial court determine as a matter of law that the respondent lacks standing to object to the relief she sought. Noting that "the respondent does not dispute that she currently owns no land in Amherst ... that benefits from the Restrictive Covenant," the trial court entered summary judgment for the petitioner because "the respondent will suffer no legal injury" if the restrictive covenant is extinguished and thus she lacks standing to enforce it.

In reviewing the trial court's grant of summary judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. Handley v. Providence Mut. Fire Ins. Co., 153 N.H. 340, 341, 898 A.2d 492 (2006). "If there is no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, the grant of summary judgment is proper. We review the trial court's application of the law to the facts de novo ." Id. (quotations and citation omitted).

"One seeking to enforce a restriction in equity must have a standing entitling him to seek equitable relief." Rogers v. State Roads Commission, 227 Md. 560, 177 A.2d 850, 852 (1962) ; see Lake v. Sullivan, 145 N.H. 713, 716, 766 A.2d 708 (2001) ("In evaluating whether a party has standing to sue, we focus on whether the [party] suffered a legal injury against which the law was designed to protect." (quotation omitted)).

Because the issue is one of first impression in New Hampshire, the trial court looked to the law of other jurisdictions. It applied the majority rule that "[i]f an individual does not own the property that is benefited by th [e] restrictive covenant, he or she has not suffered a legal injury," and therefore does not have standing to enforce the restriction. The trial court found this rule to be "consistent with New Hampshire law concerning restrictive covenants and standing."

"A covenant, as used in the context regarding the use of property, is an agreement by one person, the covenantor, to do or refrain from doing something enforceable by another person, the covenantee. Every covenant has a burden to the covenantor and a benefit to the covenantee." Waikiki Malia Hotel v. Kinkai Properties, 75 Haw. 370, 862 P.2d 1048, 1056 (1993) (citation omitted).

The benefit and the burden of a covenant are subject to two general classifications —"appurtenant" and "in gross"—which themselves are subject to further classification as "personal" or "running with the land." Restatement (Third) of Property: Servitudes § 1.5 comment a . at 31 (2000). " ‘Appurtenant’ means that the rights or obligations of a servitude are tied to ownership or occupancy of a particular unit or parcel of land." Id. § 1.5(1). An appurtenant burden is created when the obligation or promise is enforceable only against "the owner or occupier of [the] particular parcel of land" upon which the restriction is placed. Id. comment a . at 31. An appurtenant benefit is created when the right to "receive the performance of a covenant ... [is] held only by the owner or occupier of [the] particular unit or parcel" meant to be benefited by the restriction. Id. § 1.5(1). " ‘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." Id. § 1.5(2). Covenants appurtenant and covenants in gross can be personal or can run with the land. Id. § 1.5(3). "Running with the land means that the benefit or burden passes automatically to successors...." Id. comment a . at 31. " ‘Personal’ means that a servitude benefit or burden is not transferable and does not run with land." Id. § 1.5(3).

Since the common law has not always recognized covenants in gross, it does not distinguish between covenants appurtenant or covenants in gross with regard to a party's standing. Id. § 8.1 comment a. at 474–75. Thus, the common law requires that a person own land that benefits from the restriction in order to have standing to enforce it: "Where a person no longer has any land in the vicinity which might be affected by the disregard of a covenant, he or she cannot enforce the restrictions." 20 Am.Jur.2d Covenants, Etc. § 244 (2005) ; see 7 G. Thompson, Commentaries on the Modern Law of Real Property § 3172, at 189 (1962 Replacement); 3 H. Tiffany, The Law of Real Property § 864, at 494 (1939). This principle has been adopted by many jurisdictions. See, e.g., Stegall v. Housing Authority of City of Charlotte, 278 N.C. 95, 178 S.E.2d 824, 829 (1971) ; Minch v. Saymon, 96 N.J.Super. 464, 233 A.2d 385, 387 (1967) ; Forman v. Safe Deposit & Trust Co., 114 Md. 574, 80 A. 298, 300 (1911).

The petitioner urges us to affirm the common law rule relied upon by the trial court, and rule that the respondent lacks standing to enforce the covenant because she no longer owns property benefited by the restriction. The respondent argues that we should adopt the view of the Restatement (Third) of Property, which eliminates the requirement of an ownership interest in benefited property in order to have standing to enforce a covenant in gross, instead requiring only that a holder "establish a legitimate interest in enforcing [it]." Restatement (Third) Property: Servitudes § 8.1. Adoption of this view would change the common law standing requirement for covenants in gross, but not for covenants appurtenant. Id. comment a. at 474–75. In her brief, the respondent assumes that the covenant at issue is held in gross and therefore our adoption of the Restatement view would give her standing to seek enforcement of the covenant.

The trial...