Suburban Realty Co. v. Cantley
| Decision Date | 27 May 2021 |
| Docket Number | 948),Case No. 118,349 (Companion with Case No. 118 |
| Parties | In the Matter of the Application of SUBURBAN REALTY CO., INC., for the vacation of Lot Use Restrictions contained in Paragraph D.1. of the Plat & Deed of Dedication for Country Crossing, an Addition to the City of Bixby, in part of the Northeast Quarter of Section 36, Township 18 North, Range 13 East, of the Indian Base and Meridian, Tulsa County, State of Oklahoma, according to the U.S. Government Survey thereof, Appellee, v. Pamela CANTLEY, Douglas Rainwater, Jason Knapp, Donald L. Morehouse, Susan C. Morehouse, Lyle Arbuckle and Donnie Calhoun, Appellants. |
| Court | United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma |
Larry D. Leonard, J. Schaad Titus, TITUS HILLIS REYNOLDS LOVE, P.C., Tulsa, Oklahoma, for Appellee
Stephen P. Gray, STEPHEN P. GRAY & ASSOCIATES, Broken Arrow, Oklahoma, Mickey K. Leslie, LESLIE & ASSOCIATES, PLLC, Tulsa, Oklahoma, for Appellants
OPINION BY JANE P. WISEMAN, PRESIDING JUDGE:
¶1 Homeowners Pamela Cantley, Douglas Rainwater, Jason Knapp, Donald J. Morehouse, Susan C. Morehouse, Lyle Arbuckle, and Donnie Calhoun appeal a judgment in favor of Suburban Realty Co., Inc. Suburban counter-appeals that part of the same judgment denying Suburban's alternative claim to vacate a portion of a Plat. The Pretrial Order listed additional homeowners as trial participants, but Homeowners listed above are the only members of that group shown as parties to this appeal.
BACKGROUND
¶2 The present dispute centers on whether a mistake was made in a filed Plat and Deed of Dedication, and, if so, is there a proper means to correct the mistake. Homeowners also assert that Suburban's action is barred by the statute of limitations among other affirmative defenses. The evidence presented in the non-jury trial consisted of stipulations, testimony and documents.
¶3 Mr. and Mrs. L. C. Neel owned a tract of land which they caused to be platted in 1966 as Southwood Extended Addition. This Plat established residential lots, except Block 9, a single commercial lot on the northeast corner of the tract. The Deed of Dedication exempted Block 9 from the residential restrictions.
¶4 In 1989, this Addition was re-platted as the Country Crossing Addition to the City of Bixby, Oklahoma. The Country Crossing Plat maintained Lot 1, Block 9, consisting of just under two acres, established in the former Plat. The Plat's residential lots are generally of uniform size and smaller than Lot 1. Lot 1, Block 9's zoning designation on the Plat is CS or "commercial shopping," and this CS zoning preceded the filing of the new Plat.
¶5 During the past few years, Lot 1, Block 9 has been used for commercial purposes to sell fireworks and as a staging area for intersection improvements. At one time, the Neels posted a large "for sale" sign on the property and the sign noted the commercial zoning.
¶6 Lot 1, Block 9 is a corner lot abutting two arterial streets meeting at an improved four-lane intersection. In the absence of a special exception from the City of Bixby, local regulations prohibit use of Lot 1, Block 9 for residential purposes because ingress and egress would be to these arterial streets. There is no access to Lot 1 from the residential lots abutting it. The tract is fenced on the residential sides. No residential block in the addition contains only a single lot.
¶7 The Neels formed Suburban Realty Co., Inc., and were its sole stockholders. They conveyed the real estate comprising Country Crossing Addition to the corporation. Before her demise, Mrs. Neel transferred her shares to Mr. Neel and he then transferred all of the Suburban shares to his trust.
¶8 Suburban entered into a contract to sell Lot 1, Block 9 for $1,000,000 to a purchaser planning to use the property for a convenience store. A title requirement was imposed after a title examination disclosed that paragraph D.1. of the Deed of Dedication for Country Crossing Addition provides:
D.1. No lot shall be used for business or professional purposes of any kind or for any commercial or manufacturing purpose.1
¶9 To satisfy the title requirement, Suburban filed this action and asked the trial court to reform the Deed of Dedication to insert "residential" before "lot" in paragraph D.1. Suburban also amended its petition seeking to vacate the Plat as to Lot 1, Block 9.
¶10 At trial, the surveyor of the Plat testified that the intent was to preserve Lot 1, Block 9 as a commercial tract. The Plat design would have to be changed to accommodate a residential designation for the tract. The Neels' daughter is Mr. Neel's trustee, and she has been involved with the subdivision. In summary, she testified that the all-inclusive language in paragraph D.1. is a mistake and that Lot 1, Block 9 was always intended as a commercial tract. She also provided the information and documentation showing that Lot 1 has always been zoned commercial and used commercially for a fireworks vendor's sales location. Taxes have been assessed and paid based on the commercial zoning. The use of the tract and its zoning had not been an issue with any homeowners in the past. The tract's value would be substantially diminished assuming that a special exception permitted residential use; otherwise, the tract would have little value and the pending sale would not be closed.
¶11 Homeowners testified to the adverse effects of the proposed commercial use of the tract, but they did not have a specific dollar reduction in the home values attributed to the proposed use. Some of the Homeowners had read the covenants and restrictions when they purchased their property, some had not, and others had seen but not read the covenants and restrictions.
¶12 Suburban relies on specific statutes as authority to reform the Deed of Dedication or vacate the Plat as to Lot 1, Block 9: 11 O.S.2011 §§ 41-111 to 114, 42-101(2), and 42-102.2 And, Suburban cites general contract law regarding correction of mistakes and recognition of intent. Suburban further asserts that Homeowners had waived or were estopped from asserting that the restriction should remain as written because they had taken no action in the past to enforce the covenants and restrictions.
¶13 Homeowners argue that the only way to amend the restrictive covenants is prescribed in 11 O.S.2011 § 42-106.1, which requires approval by 60% of the owners in the platted area. Suburban did not follow this procedure. They also maintain that 11 O.S.2011 § 42-1063 provides the only way to vacate a plat and Suburban did not follow this process. Last, Homeowners argue that Suburban had actual and constructive notice of the Plat and Deed of Dedication wording at issue, and the statute of limitations bars the action. Homeowners contend the statute of limitations began to run when the Plat and Deed of Dedication were filed in 1989. Homeowners raise the additional defenses of laches, estoppel and detrimental reliance.
¶14 The trial court found that a mistake had been made by using the all-inclusive language in paragraph D.1. in the Deed of Dedication. The trial court reformed the Deed of Dedication by inserting the word "residential" so that the sentence reads:
D.1. No residential lot shall be used for business or professional purposes of any kind or for any commercial or manufacturing purpose.
Homeowners appeal this decision. The trial court denied Suburban's request to vacate the Plat as to Lot 1, Block 9. Suburban counter-appeals that decision. However, Suburban is satisfied with the reformed language and states that its appeal "may be" moot if the decision reforming the Deed of Dedication is affirmed.4
STANDARD OF REVIEW
¶15 "An action to reform a deed is equitable, and in the case of a mutual mistake of fact, equity will correct the mistake." Pangaea Expl. Corp. v. Ryland , 2007 OK CIV APP 106, ¶ 10, 173 P.3d 108. " ‘In a case of equitable cognizance, a judgment will be sustained on appeal unless it is found to be against the clear weight of the evidence or is contrary to law or established principles of equity.’ " Laubenstein v. Bode Tower, L.L.C. , 2016 OK 118, ¶ 9, 392 P.3d 706 (quoting McGinnity v. Kirk , 2015 OK 73, ¶ 8, 362 P.3d 186 ).
¶16 "Whether a contract is ambiguous and hence requires extrinsic evidence to" clear up the ambiguity "is a question of law for the courts." Pitco Prod. Co. v. Chaparral Energy, Inc ., 2003 OK 5, ¶ 12, 63 P.3d 541. "Although limitation issues may involve mixed questions of law and fact, they are ordinarily reviewed in this Court as questions of law." Calvert v. Swinford , 2016 OK 100, ¶ 19, 382 P.3d 1028. Questions of law are reviewed de novo . Kluver v. Weatherford Hosp. Auth. , 1993 OK 85, ¶ 14, 859 P.2d 1081.
ANALYSIS
¶17 This Court agrees with the trial court's finding that a mistake was clearly made in paragraph D.1. by use of the all-inclusive language. This conclusion is evident not only from the testimony, but also from the Plat and Deed of Dedication. When they are considered together, as they must,5 it is clear that Lot 1, Block 9 is not a residential lot and was never intended as such. The D.1. limitation on all lots makes no sense when the Plat is examined; it does show Lot 1, Block 9 to be a tract segregated from the residential tracts and zoned CS, with an actual configuration consistent with the Plat. On-the-ground inspection shows Lot 1, Block 9 is segregated from and varies greatly from the remaining residential tract as to size and configuration. The pre-existing CS designation and Lot 1's location on the arterial streets' intersection will either preclude residential use or require regulatory approval for residential use.
¶18 Considering the Plat and Deed of Dedication together creates ambiguity because two inconsistent results are possible for Lot 1, Block 9. Haworth v. Jantzen , 2006 OK 35, ¶ 13, 172 P.3d 193 (...
To continue reading
Request your trial