Wykeham Rise, LLC v. Federer

• Decision Date: 19 June 2012
• Docket Number: No. 18653.,18653.
• Citation: 52 A.3d 702,305 Conn. 448
• Court: Connecticut Supreme Court
• Parties: WYKEHAM RISE, LLC v. Eric A. FEDERER et al.

305 Conn. 448

52 A.3d 702

WYKEHAM RISE, LLC

v.Eric A. FEDERER et al.

No. 18653.

Supreme Court of Connecticut.

Argued Feb. 2, 2012.

Decided June 19, 2012.

Linda L. Morkan, Hartford, with whom were Brian R. Smith and, on the brief, Joel C. Norwood, for the appellants (defendants).

William C. Franklin, Litchfield, for the appellee (plaintiff).

NORCOTT, PALMER, ZARELLA, McLACHLAN, EVELEIGH, HARPER and VERTEFEUILLE, Js.

HARPER, J.

The principal issue in this appeal concerns the circumstances in which, as a matter of law, a covenant restricting the use of land may be deemed unenforceable between nonparties to the initial covenant agreement. The defendants, Eric A. Federer and Wendy R. Federer, appeal ¹ from the judgment of the trial court granting summary judgment in favor of the plaintiff, Wykeham Rise, LLC, with respect to the plaintiff's declaratory judgment action seeking to establish the unenforceability of certain restrictive covenants contained in a deed to its property, and with respect to the defendants' counterclaims seeking to quiet title to the plaintiff's property and to enforce the restrictive covenants. We conclude that summary judgment was inappropriate because, contrary to the trial court's conclusions, the covenants at issue in this case are not void as a matter of law and questions of material fact exist as to whether the defendants are entitled to enforce them.

The following undisputed facts are relevant to this appeal. Prior to 1990, the parcel of land now owned by the plaintiff that is the subject of this appeal was owned by the Wykeham Rise School (school). An adjacent property, now owned by the defendants, was then owned by Wendy Federer's father, Bertram Read, a member of the school's board of trustees and past chairman of that board. In 1990, the school sold its property (school property) to a limited liability corporation subject to a set of restrictive covenants, one of which provides that the grantee “will not construct any buildings or other structures or any parking lots on that area of the above described premises lying within 300 feet, more or less, at all points, northerly from the most southerly boundary of said premises, which area is now commonly known as the ‘Playing Field.’ ” The deed further provides that “[t]he foregoing covenants and agreements shall be binding upon the [g]rantee, its successors and assigns, shall inure to the benefit of the [g]rantor, its successors and assigns, and shall run with the land.” The covenants do not expressly reference any third parties, and the school did not own any property other than the parcel being sold. The year after the conveyance, the school was administratively dissolved by the secretary of the state. Over the following seventeen years, the school property was sold twice, first to another limited liability corporation and ultimately to the plaintiff in 2008, pursuant to a deed that expressly referenced the covenants.²

During the period in which the school property was owned by the plaintiff's predecessor in interest, Read sold the adjacent property to the defendants. Ten years after that sale, and three years before the plaintiff purchased the school property, Wendy Federer and the chairman of the now defunct school's board of trustees executed a document purporting to assign the school's rights under the restrictive covenants to Wendy Federer in exchange for consideration of $500. Several years later, Wendy Federer also executed and recorded a “Declaration of Beneficial Ownership” claiming the right, along with Eric Federer and their heirs and assigns, to the benefit of the covenants as owners of the adjacent property.

The present action arose after the plaintiff sought permits to develop the school property in a manner inconsistent with the terms of the restrictive covenants. The defendants objected to the issuance of the permits and brought an administrative appeal after one such permit was issued, citing the restrictive covenants.³ The plaintiff then sought a judgment declaring that the covenants at issue “are null and void, are of no legal effect, and are accordingly unenforceable as to the plaintiff, its successors, and assigns....” The defendants brought counterclaims seeking, inter alia, to have the covenants declared enforceable, to enjoin the plaintiff from violating the covenants, and to receive monetary damages. The defendants also asserted special defenses of waiver and unclean hands to the plaintiff's declaratory judgment action.

The plaintiff then moved for summary judgment with respect to both its declaratory judgment action and the defendants' counterclaims, claiming that the covenants are void and that the school's transfer of its rights under the covenants similarly is void. With respect to the covenants, the plaintiff contended principally that they neither fell within the three categories of restrictive covenants permitted by law nor satisfied the requirement that there be “unity of title” between the burdened and the benefited parcels of land at the time of covenant formation. The plaintiff further asserted that any covenant benefits that did exist did not pass to the defendants, both because the covenants do not run with the land and because the school did not validly assign the benefits to the defendants. The defendants objected to the plaintiff's motion, claiming that, as a matter of law, the covenants are not invalid because the abolition of the unity of title doctrine expands the types of covenants recognized by law and that, consequently, they are entitled to enforce the covenants as third party beneficiaries. They further claimed that there are material issues of fact as to, inter alia: whether the school conveyed its right to enforce the restrictive covenants, whether the covenants benefit the defendants' property and whether the school intended to confer such a benefit. In support of their claimed third party beneficiary status, the defendants submitted several affidavits, including one from the chairman of the school's board of trustees at the time the covenants were created attesting that “[Read] ... asked me if the [r]estrictive [c]ovenants could be imposed, in part, to benefit his property. I asked the other members of the [board of trustees] if this was acceptable and we, on behalf of the [s]chool, agreed to propose them in negotiations, as long as the imposition of the [r]estrictive [c]ovenants would not adversely affect the sale to [the buyer]. [The buyer] did not object, so the [r]estrictive [c]ovenants were included in the final deed.” On the basis of the pleadings and affidavits submitted by both parties, the trial court rendered judgment in favor of the plaintiff. The court concluded that the “the restrictive covenants are null, void and of no legal effect because they were void at the time they were first conveyed in 1990,” relying in significant part on the fact that “the covenants do not fall within any of the three classes [of restrictive covenants] recognized by the appellate authority of this state.” The court further concluded that the facts did not establish that the covenants were intended to benefit the defendants' property and that the covenants were of a personal nature that did not run with the land. In light of these conclusions, the court did not reach the issue of whether the school could assign its rights under the covenants after its administrative dissolution. The trial court also rejected the defendants' equitable special defenses. The defendants' appeal followed.

On appeal, the defendants contend, inter alia, that questions of material fact bear on the proper interpretation of the restrictive covenants, that this court's decision in Bolan v. Avalon Farms Property Owners Assn., Inc., 250 Conn. 135, 735 A.2d 798 (1999), abolished the unity of title doctrine so that a covenant may exclusively benefit a third party, and that the covenants run with the land. The defendants also claim that the trial court improperly rejected their equitable special defenses of waiver and unclean hands. The plaintiff, in response, asserts that no material facts bear on the interpretation of the covenants, that the covenants do not fall into any of the three categories of restrictive covenants recognized by Connecticut law, and that unity of title remains a prerequisite for the creation of covenants. We conclude that summary judgment was improper because the covenants were not void upon creation as a matter of law and questions of material fact must be resolved to determine whether the covenants can be enforced by the defendants against the plaintiff. Additional facts will be set forth as necessary.

The standard governing our review of a decision to render summary judgment is well established. “Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law.... Our review of the trial court's decision to grant [the plaintiff's] motion for summary judgment is plenary.” (Citation omitted; internal quotation marks omitted.) Plato Associates, LLC v. Environmental Compliance Services, Inc., 298 Conn. 852, 862, 9 A.3d 698 (2010).

To determine whether summary judgment was proper in this case, we proceed by outlining the present state of the law as it pertains to the creation and enforcement of restrictive covenants, with the intent of both clarifying the issue before us and resolving some apparent confusion that has recently arisen in the lower courts. Specifica...