Inc. v. Burnett

         Rehearing Denied July 12, 2019.

         Appeal from Madison Circuit Court (CV-18-900380).

          James T. Baxter III of Ables, Baxter & Parker, P.C., Huntsville, for appellant.

          Bethany Sneed and Dustin D. Key of Harrison & Gammons, PC, Huntsville, for appellees.

         THOMPSON, Presiding Judge.

         Heaven's Gate Ministries International, Inc. ("Heaven's Gate"), appeals from a declaratory judgment entered by the Madison Circuit Court ("the trial court") that terminated and released five restrictive covenants connected to the Frank Clark Acres commercial subdivision ("the subdivision") in Huntsville.

         The record indicates the following. Jewelon B. Burnett and Burnett Investment Group, Inc. ("the investment group"), each owned a parcel of property in the subdivision. Specifically, Burnett owned lot 3, and the investment group owned lot 4. At the time the declaratory-judgment action was filed on February 22, 2018, Remlap Properties, LLC ("Remlap"), had entered into a contract with Burnett and the investment group to purchase lots 3 and 4 ("the property"). (Hereinafter, Burnett, the investment

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group, and Remlap are collectively referred to as "the plaintiffs.") Heaven's Gate owned lot 17 in the subdivision and had a church at that location.^[1]

         The subdivision was created in 2003. Before any of the 23 lots in the subdivision were sold, the developers established and recorded restrictive covenants. Five of those restrictive covenants are at issue in this action: numbers 1, 2, 3, 8, and 9. Those five restrictive covenants provide as follows:

"1. (A) No building shall be erected, placed or altered on any lot until the construction specifications, a plat showing the location of the structure on the lot and a landscape plan, showing the type, size and location of plants and trees, and a parking layout, have been approved by the Architectural Control Committee. Approval will be to (1) insure the harmony of the external design with existing or planned structures and (2) to identify location with respect to topography and finish grade elevation. Approval shall be as hereafter provided.

"(B) The Architectural Control Committee (the `Committee') is composed of Timothy D. Clark, Donald B. Weir, Jr., and Patti R. Clark or their designated agents or successors. Neither the members of the Committee, nor their designated representatives, shall be entitled to any compensation for services performed pursuant to the Covenant.

"(C) Architectural Standards: No exterior construction, alteration, addition, or erection of any nature whatsoever shall be commenced or placed upon any part of the subdivision, except such as is installed by the Declarant, or as is approved in accordance with this Section, or as is otherwise expressly permitted herein. No exterior construction, addition, erection, or alteration shall be made unless and until plans and specifications showing at least the nature, kind, shape, height, materials, and location shall have been submitted in writing to and approved by the Architectural Control Committee.

"In the event that the Architectural Control Committee fails to approve or to disapprove submitted plans and specifications within thirty (30) days after the plans and specifications have been submitted to it, approval will not be required, and this Section will be deemed to have been fully complied with. As a condition of approval under this Section, an owner, on behalf of himself and his successors-in-interest, shall assume all responsibilities for maintenance, repair, replacement, and insurance to and on any change, modification, addition or alteration. In the discretion of the Architectural Control Committee, an owner may be made to verify such condition of approval by a recordable written instrument acknowledged by such owner on behalf of himself and his successors-in-interest. The Architectural Control Committee shall be the sole arbiter of such plants [sic] and may withhold approval for any reason, including purely aesthetic considerations, and it shall be entitled to stop any construction in violation of these restrictions. Any member of the Architectural Control Committee or its representatives have the right, during reasonable hours and afer reasonable notice, to enter upon any property to inspect for the purpose

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of ascertaining whether or not these restrictive covenants have been or are being complied with. Such person or persons shall not be deemed guilty of trespass by reason of such entry. In addition to any other remedies available, the Architectural Control Committee may record in the appropriate land records office a notice of violation naming the violating owner.

"Plans and specifications are not approved for engineering or structural design or quality of materials, and by approving such plans and specifications neither the Architectural Control Committee or the members thereof assumes liability or responsibility therefore, not for any defect in any structure constructed from such plans and specifications. Neither Declarant, the Architectural Control Committee, employees, and agents of any of them shall be liable in damages to anyone submitting plans and specifications to any of them for approval, or to any owner of property affecting [sic] by these restrictions by mistake in judgment, negligence, or nonfeasance arising out of or in connection with the approval or disapproval or failure to disapprove any such plans or specifications. Every person who submits plans or specifications and every owner agrees that he/she will not bring any action or suit against Declarant, the Architectural Control Committee, employees and agents of any of them to recover any such damages and hereby releases, remise, quitclaims and covenants not to sue for all claims, demands and causes of action arising out of or in connection with any judgment, negligence, or nonfeasance and hereby waives the provisions of any law which provided that a general release does not extend to claims, demands, and causes of action not known at the time the release is given.

"2. (A) Any metal exterior on the front of any building without brick, stucco, or synthetic stucco or decorative block or painted wood or acceptable siding shall not be permitted. Metal exterior on the rear or side of any building shall be permitted and approved by the Architectural Control Committee per Paragraph 2 above.

"(B) All parking lots or facilities shall be paved, landscaped, well lighted and kept clean.

"3. It shall be the responsibility of each owner and occupant to prevent the development of any unclean, unhealthy, unsightly, or unkept condition on his or her property. No building shall be permitted to stand with its exterior in an unfinished condition for longer than twelve (12) months after commencement of construction. No property within the subdivision shall be used, in whole or in part, for the storage of any property or thing that will cause such lot to appear to be in an unclean or untidy condition or that will be obnoxious to the eye; nor shall any substance, thing or material be kept that will emit foul or obnoxious odors or that will cause any noise or other condition that will or might disturb the peace, quiet, safety, comfort, or serenity of the occupants of surrounding property.

"....

"8. The authority of the Architectural Control Committee shall include the approval of construction plans, plot plans showing the location of the building and any and all other

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structures to be located on said lot, landscape plans, parking lots, exterior paint colors, exterior materials and color, roof type and color of shingles. The builder and subsequent owners of a building shall not change or deviate from those selections approved by the Architectural Control Committee.

"9. The Architectural Control Committee may issue guidelines detailing acceptable fence styles, but in no event will a woven wire, hog wire or barbed wire fence be approved. Prior to starting construction of any fence a plan showing where the fence is to be located and a cross section of the fence must be submitted for approval to the Architectural Control Committee."

         The plaintiffs filed this action seeking a declaratory judgment alleging, among other things, that the restrictive covenants at issue had "effectively been abandoned, the purpose of the [restrictive covenants had] failed, and the reason for the existence of the [restrictive covenants had] ended." The plaintiffs further alleged that the five restrictive covenants at issue were overbroad and ambiguous and, therefore, they contended, unenforceable. The plaintiffs asserted that all of the lot owners in the subdivision would benefit if the five restrictive covenants at issue were declared unenforceable.

         On July 24, 2018, a trial was held on the matter. The evidence adduced at that trial indicated that the subdivision was zoned by the City of Huntsville for light industrial use. At the time of the trial, the lots in the subdivision were used for various commercial purposes. Curtis Parcus, a witness for the plaintiffs, testified that he was a due-diligence coordinator for the Broadway Group, which, he said is a related entity of Remlap. Parcus said that once a parcel of property is under contract he performs the title work, obtains a survey and environmental reports, and begins working with the municipality and related departments to prepare the site for construction. In this case, Parcus said, his company was developing the property for a "national tenant." Later testimony indicated that that tenant was Dollar General and that a Dollar General store was to be constructed on lots 3 and 4.

         In performing the title work, Parcus said, he noticed there were some restrictions on the property and that, sometimes, such restrictions "can be an issue with our tenant." The specific restrictions with which Parcus had difficulty were in covenants 1, 2, 3, 8, and 9, as set forth above. Parcus testified that a "Release of Restriction" document ("the release") was prepared to terminate the restrictions at issue. He said that the owners of 22 of the 23 lots signed the release. Only Heaven's Gate refused to sign it.

         Parcus said that he met with board members of Heaven's Gate to see whether his tenant and Heaven's Gate could negotiate a compromise. Parcus testified that the board members complained to him of the wrecked vehicles that were stored in the lot adjacent to Heaven's Gate's property. The lot belonged to an automobile-repair shop; lots 3 and 4 are on the far side of the subdivision, away from the location of Heaven's Gate's property. Parcus said that his client offered to erect a wooden privacy fence so that the vehicles would not be visible from the Heaven's Gate's church in exchange for approval to terminate the restrictions at issue. Heaven's Gate board members requested a metal fence instead. Parcus ...