MYERS V. ARMSTRONG, 2014-NMCA-051,
324 P.3d 388
CURTIS V. MYERS and BARBARA A. MYERS,
husband and wife, Plaintiffs-Appellees,
v.
JACQUELINE K. ARMSTRONG, Defendant-Appellant.
COURT OF APPEALS OF NEW MEXICO
2014-NMCA-051, 324 P.3d 388
APPEAL FROM THE DISTRICT COURT OF OTERO COUNTY, William
H. Brogan, District Judge.
Released for Publication May 20, 2014.
John D. Wheeler & Associates, P.C.,
John D. Wheeler, Alamogordo, NM, for Appellees.
John R. Hakanson, P.C., John R. Hakanson,
Alamogordo, NM, L. Helen Bennett, Albuquerque, NM, for Appellant.
JAMES J. WECHSLER, Judge. WE CONCUR:
CYNTHIA A. FRY, Judge, TIMOTHY L. GARCIA, Judge.
AUTHOR: JAMES J. WECHSLER.
{1} This case is an
appeal of a ruling by the district court enjoining Jacqueline Armstrong
(Defendant) from operating her dog training and boarding businesses on her
residential property and ordering her to remove or alter the metal building she
constructed to house the businesses. Defendant’s activities were found to be in
violation of the restrictive covenants of the subdivision where her property
was located. We affirm the judgment of the district court.
{2} Curtis and Barbara
Myers (Plaintiffs) and Defendant were neighbors in the Tierra del Sol
Subdivision, located in Otero County, New Mexico. In 2000, Defendant opened a
dog training business on her property. In 2003, Defendant added a dog boarding
business. In January 2009, Defendant began construction of a 3,000 square foot
metal outbuilding on her property for use in connection with the businesses.
Construction was completed in October 2009.
{3} Tierra Del Sol is a
residential subdivision, with restrictive covenants put in place by the developer.
These covenants provide that all lots in the subdivision are for residential
purposes only. Dogs can only be maintained on any premises for household,
residential, and non-commercial use or benefit. All improvements in the
subdivision require the written approval of the Architectural Control Committee
(ACC). Only single-family and related structures are permissible. Criteria for
approval include quality of workmanship, materials, and harmony with existing
structures. After 1984, there has not been an ACC.
{4} At trial,
Plaintiffs asserted that Defendant’s 3,000 square foot metal building used for
the dog training businesses and constructed without ACC approval, as well as
the businesses themselves, violated the Tierra Del Sol restrictive covenants.
The district court agreed.
{5} On appeal,
Defendant argues that the restrictive covenants are unenforceable or void in
the absence of an ACC. Defendant also argues that the covenants are
unenforceable because changes in the subdivision undermined the uniformity
sought by these restrictions. Finally, Defendant argues that Plaintiffs have,
by acquiescence, waived their right to enforce the covenants. We address these
arguments in turn.
{6} It is undisputed
that the body empowered to enforce the covenants, the ACC, ceased to exist in a
meaningful way before Defendant began operating her businesses from her
property. Defendant concedes that she violated the restrictive covenants, but
argues that, in the absence of an ACC, the covenants were unenforceable.
Defendant further argues that, in the absence of an ACC, compliance with the
restrictive covenants that required approval for improvements was impossible,
and therefore the entire scheme of the restrictive covenants was void.
Defendant’s arguments raise a legal question, and therefore we review the
question de novo.
Jicarilla Apache Nation v. Rodarte,
2004-NMSC-035, ¶
24,
136 N.M. 630,
103 P.3d 554.
{7} Defendant’s
arguments fall within the ambit of
Jones v. Schoellkopf, which also
addressed a subdivision lot owner who undertook an improvement that was a
potential covenant violation without the required architectural review
committee approval.
See 2005-NMCA-124, ¶¶ 18-19,
138 N.M. 477,
122 P.3d
844. In
Jones, the architectural review committee had fallen into
disuse.
Id. ¶ 21. The
Jones Court noted that the lot owner who
was potentially in violation of a restrictive covenant had a right to review
but that the review power “would have to be exercised reasonably.”
Id. ¶
20. The restrictive covenants were not declared unenforceable or void because
there was not an architectural control committee.
See id. ¶¶ 26-28.
Instead, the
Jones Court remanded to the trial court, requiring an
equitable solution that took into account the rights of all parties, given the
requirements that the reviewing body, whether a court or an architectural
review committee, would have to exercise power reasonably and take into
consideration explicit prohibitions in the covenants.
Id. ¶¶ 20, 26-28.
{8} Defendant relies on
two cases, neither of which is helpful to her. One case,
Hourani v. Katzen,
305 S.W.3d 239 (Tex. Ct. App. 2009), is easily distinguishable on its facts. In
Hourani, a lot owner sought a variance from restrictive covenants to
build a bridge or driveway because access to his lot was severely limited by a
lake that spanned almost the entire width of the property.
Id. at 244.
In the absence of the body charged with enforcement of the covenants, the lot
owner submitted his construction plans to all of the other owners in the
subdivision.
Id. Because he received notice that his neighbors
disapproved, he brought a prospective action for declaratory judgment.
Id.
at 244-45. The Texas Court of Appeals affirmed the grant of summary judgment in
favor of the lot owner seeking a variance, but did not do so by determining
that the covenants were generally unenforceable or void in the absence of the
body entitled to enforce them.
Id. at 252-254. Rather, the lot owner
prevailed because of the strength of his right to access his property.
Id.
The other case relied on by Defendant,
Hanchett v. East Sunnyside Civic
League, 696 S.W.2d 613 (Tex. Ct. App. 1985), in fact, directly supports
Plaintiffs. Defendant cites
Hanchett for the proposition that failure to
get approval from a defunct architectural review committee is insufficient to
justify an order to remove the violating structure.
Id. at 615-16. But
relying on the fact that there was a clear violation of a clear covenant, the
Hanchett
Court upheld the covenant and affirmed the order to remove the offending
structure.
Id. at 616.
{9} The fact that the
ACC fell into disuse does not excuse compliance with the remainder of the
covenants.
Jones,
2005-NMCA-124, ¶ 26. Covenants impose binding
obligations upon owners in planned subdivisions.
Nettles v. Ticonderoga
Owners’ Ass’n,
2013-NMSC-030, ¶ 1,
306 P.3d 441. Defendant’s dog boarding
and training businesses clearly violate the covenants limiting subdivision lots
to residential purposes and prohibiting the maintenance of dogs for commercial
purposes. Defendant’s construction of a large commercial building clearly
violates the covenant allowing only single-family residential and related
structures. A court, sitting in the place of the ACC, cannot ignore the
explicit prohibitions in the covenants.
See Jones,
2005-NMCA-124, ¶ 27
(holding that a court sitting in the place of a defunct architectural control
committee must take into consideration explicit prohibitions in the covenants).
The lack of an active ACC did not, of itself, permit Defendant to violate clear
prohibitions in the restrictive covenants.
CHANGES IN THE SUBDIVISION
{10} Defendant argues
that because the uniformity sought by the restrictive covenants was effectively
destroyed by other violations, equity favored denial of the relief requested by
Plaintiffs. We review the district court’s exercise of equitable powers under
an abuse of discretion standard.
Amkco Co. v. Welborn,
2001-NMSC-012, ¶
8,
130 N.M. 155,
21 P.3d 24. Unless the decision of a trial court is clearly
untenable or not justified by reason, we refrain from reversing a decision as
an abuse of discretion.
State v. Rojo,
1999-NMSC-001, ¶ 41,
126 N.M.
438,
971 P.2d 829.
{11} “Restrictive
covenants have historically been used to assure uniformity of development and use
of a residential area to give the owners of lots within such an area some
degree of environmental stability.”
Heltman v. Catanach,
2010-NMCA-016,
¶ 17,
148 N.M. 67,
229 P.3d 1239 (internal quotation marks and citation
omitted). “[S]uch covenants constitute valuable property rights of the owners
of all lots in the tract.”
Montoya v. Barreras,
1970-NMSC-111, ¶ 12,
81
N.M. 749,
473 P.2d 363. But a covenant may be set aside when the uniformity or
other purpose of the covenant has been destroyed by other violations or changes
in the neighborhood.
Heltman,
2010-NMCA-016, ¶ 17. In order to
extinguish a covenant, the degree of change must be so significant and radical
that it is impossible to carry forward the original purpose and intent of the
grantors.
Id.
{12} Defendant points out
that there were businesses in the subdivision other than hers, also in
violation of the covenants. For several years, an auto mechanic operated a shop
on his property. He first operated out of his attached garage and then built an
800-square-foot structure to house the business. The new structure conformed
architecturally to the style of his home. When the business was ready to
expand, he decided to move the business to town rather than construct a large
building on his property. In part, he did so because he was concerned that a
large, commercial building would have been intrusive to his neighbors and, for
this reason, construction of such a building would not have worked. Another
homeowner had sideline businesses rebuilding backhoes, purchasing and
rebuilding Volkswagens, and dealing guns. This owner moved out prior to the
start of Defendant’s businesses. Also, Plaintiffs admit that there was a
document destruction business with a presence in the subdivision in the form of
trucks related to the business. The district court found that the business did
not operate out of the subdivision. Finally, there was a large metal carport on
one property.
{13} Under New Mexico
precedent, the district court had a reasonable basis to conclude that
conditions in the subdivision had not changed so radically that the original
purpose and intent of the covenants was frustrated. In
Mason v. Farmer,
our Supreme Court refused to enforce a restrictive covenant in Cloudcroft
because in the sixty or so years since the passage of the covenant, Cloudcroft
was transformed from an exclusively residential and pedestrian summer resort
that was reachable only by wagon road to a full-service village with numerous
year-round residents, a school, and highway access.
1969-NMSC-050, ¶¶ 8-11, 13,
22,
80 N.M. 354,
456 P.2d 187. The
Mason Court determined that the
evidence supported a finding by the district court that it would be inequitable
to enforce restrictions prohibiting commercial uses because widespread changes
in Cloudcroft rendered the property in violation unsuitable for residential
uses.
Id. ¶ 22. The
Mason Court also held that enforcement of the
restriction would accrue no benefits to the other lots.
Id. This case is
unlike
Mason. Instead, it is akin to
Jones, in which this Court
found that prohibiting the enforcement of a restrictive covenant was an abuse
of discretion when six of 170 lots had some degree of violation.
2005-NMCA-124,
¶ 16. The subdivision at issue in this case has fifty-four lots. Over the
years, there were only two lots with commercial activities taking place. Only
one of the two had a commercial structure, and that structure was relatively
small and built in the style of the related residential structure. By the time
Defendant chose to construct her building, no other commercial activity
remained in operation in the subdivision. The evidence seems to suggest that
the only violation or potential violation was a metal carport. The number,
magnitude, and tenor of violations presented to the district court do not
indicate radical change such that the purpose and intent of the covenants
restricting commercial structures and activities was frustrated. We are
therefore unwilling to reverse the district court’s exercise of discretion and
set aside the covenant on the basis of changed conditions and covenant
violations.
{14} Plaintiffs were
aware of some of the other covenant violations in the subdivision and also of
Defendant’s businesses, but they did not attempt to enforce the covenants until
after Defendant built her large metal building. Defendant asserts that
Plaintiffs’ failure to enforce the covenants against other violators and delay
in enforcement against her constitute acquiescence on the part of Plaintiffs.
Defendant asserts that in not so finding, the district court committed
reversible error. Neither party raised a statute of limitations issue, and therefore
we do not consider whether any statute of limitations applies in this case.
See
In re Doe,
1982-NMSC-099, ¶ 3,
98 N.M. 540,
650 P.2d 824 (recognizing that
appellate courts should not reach issues not raised by the parties).
{15} We review the district
court’s refusal to apply the equitable defense of acquiescence on these facts
for an abuse of discretion.
See Wolf & Klar Cos. v. Garner,
1984-NMSC-040, ¶ 10,
101 N.M. 116,
679 P.2d 258 (holding that a trial court’s
application of “clean hands” or other equitable defenses is reviewed under an
abuse of discretion standard).
{16} Waiver of the right
to enforce a covenant by acquiescence requires a showing that the party
attempting to enforce the covenant previously acquiesced to other violations of
the same or similar covenants on another restricted lot.
Heltman,
2010-NMCA-016, ¶ 23. Important considerations include “whether the party
seeking to enforce the covenant had actual or constructive knowledge of the
prior violations, the magnitude of the current violation as compared to prior
violations, and whether the prior violations were temporary, occasional, or
permanent.”
Id. Failure to enforce against minor and trivial violations
does not, of itself, constitute acquiescence.
See Neff v. Hendricks,
1953-NMSC-060, ¶ 7,
57 N.M. 440,
259 P.2d 1025 (holding that failure to enforce
minor and trivial violations did not bar enforcement of restrictive covenants).
{17} Plaintiffs knew that
there was a car mechanic who operated out of his attached garage and then from
a structure built in the style of his dwelling. In comparison to Defendant’s
metal building, the mechanic’s structure was small and built to conform with
the existing residence. He spoke with his immediate neighbors prior to opening
his business, none of whom objected. Instead of building a large structure like
Defendant’s, he moved his business into town to accommodate expansion. By the
time Defendant opened her business, the mechanic was no longer in the
subdivision. The owner with the sideline businesses was also out of the
subdivision by the time Defendant opened her businesses and built her
structure. The metal carport, although large, is unlike Defendant’s activities.
In short, the impacts of these other violations or possible violations were
minor and trivial in comparison with the impact of Defendant’s building and
businesses directly across from the lots owned by the Plaintiffs. Furthermore,
the restrictive covenants specifically provide that the failure to promptly
enforce any of the covenants or restrictions does not bar subsequent
enforcement.
{18} We reject the notion
that individual owners in a subdivision must move to enforce the covenants
against relatively minor violations that have little impact on them in order to
maintain the right to enforce against violations that significantly impact
their rights.
See 3 Herbert Thorndike Tiffany,
The Law of Real
Property, ch. 18, § 874, at 516 (3d ed. 1939) (stating that “[a]cquiescence
in a breach of a minor character would not, in any state, it seems probable,
constitute grounds for denying relief against a breach of a much more serious
character”);
see also Neff,
1953-NMSC-060, ¶ 7 (holding that failure to
enforce minor and trivial violations did not bar enforcement of restrictive
covenants). To adopt Defendant’s acquiescence argument would allow any sort of
construction within the limits of zoning laws in this subdivision because
minor, ultimately temporary, violations were not previously protested. The
district court did not abuse its discretion in declining to find that
Plaintiffs waived their right to enforce the restrictive covenants on the basis
of acquiescence.
{19} The judgment of the
district court is affirmed.
Topic Index for Myers v. Armstrong, No. 32,334