Skyline Woods Homeowners v. Broekemeier
| Decision Date | 05 December 2008 |
| Docket Number | No. S-07-952.,No. S-07-953.,S-07-952.,S-07-953. |
| Citation | 758 N.W.2d 376,276 Neb. 792 |
| Parties | SKYLINE WOODS HOMEOWNERS ASSOCIATION, INC., et al., appellees and cross-appellants, v. David A. BROEKEMEIER, an individual, et al., appellants and cross-appellees. Paisley, LLC, a Nebraska limited liability company, appellee and cross-appellant, v. Liberty Building Corporation, a Nebraska corporation, appellant and cross-appellee. |
| Court | Nebraska Supreme Court |
David A. Domina, Omaha and Brian E. Jorde, Birmingham, MI, of Domina Law Group, P.C., L.L.O., for appellants.
James D. Sherrets and Diana J. Vogt, of Sherrets & Boecker, L.L.C., Omaha, for appellees Skyline Homeowners Association, Inc., et al., in No. S-07-952.
James E. Lang, Omaha and Kathleen M. Foster, of Laughlin, Peterson & Lang, for appellee Paisley, LLC, in No. S-07-953.
Liberty Building Corporation (Liberty) and its owners appeal from the district court's order finding that the property purchased by Liberty in a chapter 11 bankruptcy sale is burdened by restrictive covenants limiting its use to a golf course. Liberty wished to develop the property for other purposes, but homeowners adjacent to the property filed suit to compel its continued maintenance as a golf course. The parties dispute whether implied enforceable restrictive covenants requiring the property to be maintained and operated as a golf course run with the land and whether the bankruptcy order authorizing the sale of the property to Liberty extinguished any such covenants.
As early as 1967, the property in dispute was operated as a golf course, then known as Chapel Hills Farm and Golf Course. Since that time, its ownership has changed hands many times. The parties agree, however, that sometime in 1969, a group of partners, including Seb A. Circo, purchased the golf course property, although the record does not contain the deed to this transaction. Between 1969 and 1977, the chain of title for the golf course property is unclear. Sometime around 1977, Dennis Circo (Circo), owner of Paisley, LLC, and the chairman of the board and chief executive officer of Precision Industries, acquired the golf course. Circo and his father, Seb, eventually formed a limited partnership called Skyline Golf Club, Ltd. (Skyline Golf), and changed the name of the golf course to Skyline Woods.
Circo also owned a significant amount of land abutting the golf course. He eventually developed the "Skyline Woods" residential area, selling the lots where the plaintiff homeowners and Circo now live. When selling the lots, Circo advertised the proximity and existence of the Skyline Woods golf course. In fact, Circo testified that the golf course was the "center and the heart" of the residential development project.
In 1990, Circo sold the Skyline Woods golf course to American Golf Corporation (American Golf). Circo kept the residential lots that had not yet been sold. Eventually, American Golf merged with National Golf Operating Partnership, L.P. Then, the partnership conveyed the property by special warranty deed to Skyline Woods Country Club, L.L.C. (Skyline Country Club).
In late 2004, Skyline Country Club filed for bankruptcy in the U.S. Bankruptcy Court for the District of Nebraska. The homeowners in the Skyline Woods development were not included in the Skyline Country Club creditor's matrix, and their claimed restrictive covenants were not specifically raised. On February 9, 2005, the bankruptcy court entered an order approving the sale of the golf course property to Liberty, which is owned and operated by David A. Broekemeier and Robin Broekemeier.
The bankruptcy court's order approved the sale of the property "free and clear of all mortgages, liens, pledges, charges, ... easements, options, rights of first refusal, restrictions, judgments, claims, demands, successor liability, defects or other adverse claims, interests or liabilities of any kind or nature (whether known or unknown, accrued, absolute, contingent, or otherwise)." Pursuant to the bankruptcy order, on February 11, 2005, Skyline Country Club issued a warranty deed to Liberty, conveying the property "free from encumbrance except covenants, easements and restrictions of record."
Shortly after purchasing the property, David Broekemeier called a meeting with the members of Skyline Country Club to inform them that because of the bankruptcy sale, he was not bound by their existing membership contracts and would not be honoring them. Liberty operated the property as a golf course for only 1 year, did not rehire the staff, and did not honor the original membership contracts, which brought in $70,000 a month from the club members. Further, David Broekemeier testified that he had no intention of reopening the golf course in its then-present condition.
The condition of the golf course property has deteriorated since Liberty purchased the property. David Broekemeier himself admitted that the property is in a worse condition now than it was when Liberty purchased it. Circo testified that trees have been uprooted and left on the property and that water has been taken out of the pond located on the 12th hole, causing algae growth and other problems such as an increase in mosquitoes. A licensed real estate broker testified that the property is in horrible condition, as the lagoons are unhealthy and the property is covered in weeds. In fact, he described the property as "a real eyesore."
Skyline Woods Homeowners Association, Inc.; The Villas at Skyline Woods Homeowners Association; and numerous individual homeowners (collectively Homeowners) filed suit against Liberty and the Broekemeiers in the district court for Douglas County, Nebraska, to compel Liberty and the Broekemeiers to maintain the property as a golf course. Homeowners asked the court to enter a temporary restraining order and temporary and permanent injunctions ordering Liberty and the Broekemeiers to cease and refrain from destroying or interfering with the continued maintenance and operation of the golf course and to comply with all state and local laws and ordinances regarding maintenance of private property. Finally, Homeowners asked the court to award monetary damages.
In a separate action, Paisley filed suit against Liberty, alleging trespass and breach of restrictive covenants.
At trial, various documents were entered into evidence that purported to demonstrate an implied restrictive covenant to maintain the property as a golf course.
A land contract was recorded in 1976, wherein Skyline Golf agreed to sell the property to the "Office of Willis Mouttet, Inc." The land contract specifically identified the property as a golf course and clubhouse and required the buyer to maintain the course in its then "present condition" "during the term of this agreement to prevent the course from deteriorating." The land contract also referenced Willis Mouttet's plan for developing residential lots in combination with the golf course and country club. The record is not clear whether ownership of the property actually passed under the land contract. If it did, the property was apparently later reconveyed to Skyline Golf.
A "Declaration of Protective Covenants" was recorded on April 10, 1981, which placed requirements on homes built on the residential lots adjacent to the golf course, including the following:
No unused building material, junk, or rubbish shall be exposed on any property except during actual building operations.
... No property owner may golf on the fairways just behind his or her house, nor on any part of the golf course except starting and paying at the clubhouse.
... No perimeter fencing shall be allowed. ...
... No trees with trunks over one inch in diameter shall be moved, removed, damaged or destroyed without prior written approval of the Architectural Control Committee.
In 1983, Skyline Golf recorded a "Second Amendment to Declaration of Protective Covenants" burdening the abutting residential lots. The second amended covenants added the requirement that "[t]he windows of all dwellings shall have a protective covering consisting of (i) plexiglass, (ii) laminated glass, (iii) tempered glass, (iv) a wire screen or (v) such other protective covering as may be approved by the Architectural Control Committee."
Skyline Golf recorded a "Third Amendment to Declaration of Protective Covenants" in 1985. This amendment created an architectural control committee "`[i]n order to maintain and establish continuity, integrity, beauty and uniqueness of the development.'"
In 1986, Skyline Golf recorded a "Ratification and Reaffirmation of Declaration of Protective Covenants." This document includes the following statement of intent:
NOW, THEREFORE, with the intent of establishing a general plan for the development and use of the aforedescribed property meant to secure the enforcement of the existing restrictions and covenants upon the usage and development of all said lots, Declarant hereby announces, ratifies and reaffirms the Original Covenants ... and announces and declares that said covenants are and shall be binding upon, [and] adhere to the benefit of, and apply to [Skyline Golf], as well as its respective successors and assigns. ...
On May 18, 1990, Circo recorded an easement against the properties of homeowners in the Skyline Woods subdivision to ensure the use of the property as a golf course was not disturbed by the adjacent homeowners. It required that golf balls be allowed to go through the air and across the homeowners' grass....
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