Stokes v. Board of Directors of La Cav Imp. Co., 92-CA-00028-SCT

• Decision Date: 27 April 1995
• Docket Number: No. 92-CA-00028-SCT,92-CA-00028-SCT
• Citation: 654 So.2d 524
• Parties: James F. STOKES, Jr. and Edwina Stokes v. The BOARD OF DIRECTORS OF LA CAV IMPROVEMENT COMPANY.
• Court: Mississippi Supreme Court

Page 524

654 So.2d 524

James F. STOKES, Jr. and Edwina Stokes v. The BOARD OF DIRECTORS OF LA CAV IMPROVEMENT COMPANY.

No. 92-CA-00028-SCT.

Supreme Court of Mississippi.

April 27, 1995.

James E. Lambert, Jackson, for appellants.

James L. Martin, Martin Young & Wright, Jackson, for appellee.

Before HAWKINS, C.J., and McRAE and JAMES L. ROBERTS, Jr., JJ.

McRAE, Justice, for the Court:

From a Final Decree entered on November 1, 1991 by the Madison County Chancery Court in a dispute between property owners, James and Edwina Stokes and a property owners' association, La Cav Improvement Company, over the improvement of an earthen pier and construction of a boat slip on Lake Cavalier, the property owners raise this appeal. The chancellor correctly found that the language of a covenant revised in 1984 did not render null and void the restrictive provisions of the Stokes' warranty deed. However, we find that the chancellor erred in interpreting the restriction in the warranty deed against construction of a building on the Stokes' lot as precluding the improvement of the existing pier and the addition of the boat slip. We further find that the chancellor abused his discretion in awarding attorney fees to La Cav Improvement Co. Accordingly, we reverse and remand for proceedings consistent with this opinion.

I.

Lake Cavalier is a residential development in Madison County, Mississippi. Building and design control, as well as lake and land use, are governed and enforced by the Board of Directors of the La Cav Improvement Company ("La Cav"), successor-in-interest to the original developer, Lake Cavalier, Inc. La Cav is a homeowner's association, to which all property owners in the development belong.

Stokes and his ex-wife, Kendra L. Stokes, purchased the subject property, Lots 14 and 17 of Lake Cavalier, Part 1, by warranty deed dated June 16, 1977, from Ben H. Jacks and Ethel T. Jacks. The warranty deed conveying the property from Lake Cavalier, Inc. to the Jacks on August 8, 1960 carried with it certain protective and restrictive covenants which "shall run with the land from this date until the expiration date set forth in said instrument." ¹ With regard to Lot 17, the deed specifically provided:

no building of any kind shall be constructed on Lot 17, and said Lot 17 shall not be sold, transferred, encumbered or conveyed alone, but shall always be sold, transferred, encumbered and conveyed jointly with Lot 14 of Lake Cavalier, Part 1, which said Lot 14 of Lake Cavalier, Part 1, is on the opposite [side] of the private road at the rear of said Lot 17 and the said Lot 17 and the said Lot 14 of Lake Cavalier, Part 1, shall in all respects be treated as one single lot. (emphasis added).

The Stokes' property is one of several Lake Cavalier sites which fronts on two sections of the lake. The Stokes' residence is built on Lot 14, which faces the main lake, where the Stokes share a pier with a neighbor. Lot 17, across the road from Lot 14, is a shallow lot which faces the smaller, quieter fishing lake. Because of its size and location, it is a so-called "non-building" lot. Although the Stokes pay property taxes on the lot, for purposes of membership fees and dues and voting privileges, it is considered one lot together with Lot 14.

Unlike Lot 17, the warranty deed restrictions to the neighboring "non-building" Lots 18, 19, 20, 21 and 22, recorded in 1966, provide in relevant part, as follows:

(a) That no buildings, structures, outbuildings or any other improvements shall be erected on the property conveyed except that a pier may be erected in the water in front of said lot in accordance with the protective covenants applicable to Lake Cavalier, Inc., as recorded in Volume 74 at page 70 of the records of deeds in the Office of the Chancery Clerk of Madison County, Mississippi. (emphasis added).

The provision of the covenants covering all Lake Cavalier lots, adopted May 8, 1959, which governed pier construction, specifies the maximum dimensions of any pier or platform constructed as well as the materials to be used.

On May 15, 1984, the date on which the original body of restrictive covenants was set to renew automatically absent some action by the property owners, La Cav adopted and recorded a new set of simplified protective covenants, rules and regulations. Under the terms of new covenant, it was provided that:

all covenants and restrictions heretofore imposed on the property comprising the six Lake Cavalier Subdivisions to which reference is hereinabove made shall be null and void and of no further effect and the following covenants, restrictions and regulations, until changed, shall be effective and enforceable against all property comprising the six Lake Cavalier Subdivisions including all easement rights and other hereditaments running with the land on which said subdivisions are located ... (emphasis added).

Provisions analogous to those in the 1959 document were made for pier and pier platform construction.

Given this "regulatory framework," James Stokes and his present wife, Edwina, set out to repair and improve the wood and earth fishing pier which had been built on Lot 17 by its previous owner, Ben Jacks. Stokes testified that the boards supporting the earthen pier had rotted and the land was eroding. He therefore did not seek La Cav's approval or a building permit before hiring a contractor and beginning the project because he felt it was only a only repair project and that he was "basically enhancing and securing the area." Stokes spent $860.00 on the project; $160.00 on construction of the "arm" that created the boat slip next to the earthen pier and the balance, on repairing the earthen pier, itself.

By letter dated April 3, 1990, Bobby Arnold, President of La Cav, then advised Stokes that the Building Committee had discussed his boat slip project, noting that he had failed to seek approval of his plans, and further, that the project was located on a non-building lot. Stokes responded on April 6, 1990, with a sketch of the project and his apologies for failing to submit the proposed "renovation" to the Board.

By letter dated April 13, 1990, Arnold then advised Stokes that the Board requested that he remove the arm that created the boat slip and fill the area in. Attached was a letter from La Cav's attorney, James L. Martin, advising La Cav that he construed the language of the Stokes' warranty deed restriction, "no building of any kind shall be constructed on Lot 17," as providing "an express prohibition against buildings of any kind on Lot 17." He further indicated that both the original and the current covenants restricted any building on the property.

Stokes, who has served on several La Cav committees, including that responsible for revising and adopting the new covenants, testified that he interpreted the warranty deed restriction to mean "I had the privilege of maintaining that lot, mowing it, keeping it up, and ah, paying taxes on that lot, but I could not build a house there."

Arnold testified that the Board interpreted the Stokes' project as being "in violation of the deed restriction concerning building of any kind." On cross-examination, he clarified his position, stating that a simple reading of the restriction "specifically said there was to be no building of any kind on Lot 17. It allowed peers [sic] on Lots 18 through 22. It did not allow boat slips. We're not questioning the earthen peer [sic] on 17. We're questioning the boat slip." ² As to any damages suffered, Arnold testified that La Cav had incurred approximately $1,000.00 in legal fees in "trying to protect the property owners, all the other property owners' rights on the lake...."

La Cav filed a complaint in the Madison County Chancery Court against the Stokes on August 28, 1990. The association sought both permanent and temporary injunctions to prevent the Stokes from any construction activity on their lake front property. In their counterclaim, the Stokes sought a declaratory judgment, asking the court to determine the parties' rights and liabilities under both the warranty deed and the restrictive covenants and to declare the property to be no longer encumbered by the warranty deed restrictions.

A hearing was held on August 21, 1991. The chancellor issued a written opinion on September 27, 1991, finding that the deed restrictions were enforceable; that the Stokes had undertaken the boat slip project without first obtaining a building permit or the approval of the building committee; and that the Stokes continued the project despite notice to the contrary, acting against the interests of property owners covered by the same covenants. In his final judgment, issued November 1, 1991, the chancellor enjoined the Stokes from violating both the Lake Cavalier Protective Covenants and the deed restrictions recorded in Book 82, Page 25 in the Office of the Madison County Chancery Court, requiring them to fill in the boat slip and to refrain from any further construction projects on the lot in question. The Stokes' counterclaim for declaratory judgment was dismissed with prejudice and they were ordered to pay La Cav's attorneys fees in the amount of $750.00, as well as all costs of the proceedings.

II.

When construing restrictive covenants, this Court follows the rule set...