Perel v. Brannan

Present: All the Justices

JONATHAN PEREL, AS TRUSTEE FOR THE
BALLYSHANNON TRUST, ET AL.

v. Record No. 031291 OPINION BY JUSTICE DONALD W. LEMONS
April 23, 2004
SCOTT BRANNAN, ET AL.

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Theodore J. Markow, Judge

In this appeal, we consider the enforcement of certain

restrictive covenants applying to a lot in a residential

subdivision, and the remedies for breach of these covenants.

I. Facts and Proceedings Below

In 1998, Locke Lane, L.C. ("Locke Lane") purchased a

tract of land from the Science Museum of Virginia Foundation,

Inc. and Science Museum Foundation Real Estate, L.L.C.

(collectively, the "Science Museum") for the purpose of

developing a residential subdivision named "River Locke." In

the summer of 1998, Locke Lane and the Science Museum jointly

requested a special use permit and approval of a subdivision

plan from the Richmond City Council. The plan met with

opposition from Jonathan S. Perel ("Perel"), the sole trustee

of the Ballyshannon Trust ("the trust"), which owned a parcel

of land adjacent to the proposed subdivision.

In November 1998, the Science Museum, Locke Lane, and

Perel, as trustee for the Ballyshannon trust, entered into a

Settlement Agreement. Under the Settlement Agreement, Perel
agreed not to object to or contest the approval by the City of

the special use permit or subdivision plan. In return, the

Science Museum and Locke Lane agreed to certain restrictive

covenants running with the land on River Locke lots abutting

the trust's property. The restrictive covenants are contained

in a properly recorded document titled, "Amended and Restated

Declaration of Rights, Restrictions, Affirmative Obligations

and Conditions Applicable to All Property in River Locke" (the

"Declaration"). Locke Lane also agreed "to sell Lot 4 of

River Locke Subdivision . . . to Perel, or such entity or

person as he may designate by assignment or otherwise." River

Locke Lot, L.L.C., now owns Lot 4.

Part V of the Declaration contains covenants restricting

the permissible location and type of buildings in River Locke.

Part V, paragraph 1(c) describes the buffer, setback, and

"[n]o [b]uilding [a]reas" that are part of each lot and

restricts the actions that are permissible within each area.

Part VII makes clear that the covenants and other provisions

of the Declaration run with the land.

Part I, paragraph 9 of the Declaration establishes an

Architectural Review Committee ("ARC") composed of three

members. The ARC is granted the authority to "waive

compliance with the provisions contained herein which are

subject to architectural review (except with respect to Part

2
V, subparagraphs 1(c) and (d) and Part VI, paragraph 1) when

such waiver is reasonably necessary . . . or where no other

reasonable alternative is acceptable." According to Part I,

paragraph 1, a property in River Locke owner must have his or

her plans for improvements approved by the ARC before

construction may begin.

In December 1999, William S. "Scott" Brannan and Melissa

Brannan ("the Brannans") purchased "Lot 1" in the River Locke

subdivision. On June 28, 2000, Scott Brannan submitted a site

plan for Lot 1 to the ARC and it was approved on July 12,

2000. The ARC approved a separate landscape plan for Lot 1 on

September 24, 2001.

Construction began on the Brannan home in the summer of

2000, shortly after the ARC's approval of the site plan. Due

to the slope of the site and the location of some rock

outcroppings, excavation was required for construction of the

house the Brannans had chosen to build. The excavation

removed part of the hillside on the rear portion of the lot

and cut into the designated setback and buffer areas.

Substantial vegetation and eight large trees were also removed

from the buffer area. A retaining wall was then constructed

in the setback area to stabilize the remaining soil. Between

the back of the house and the retaining wall, the Brannans

installed a patio. A covered porch extended from one corner

3
of the house into the setback area but was altered just before

trial to remedy the encroachment.

Perel and River Locke Lot, L.L.C. (collectively, "Perel")

filed an amended bill of complaint against the Brannans, Locke

Lane, and the three members of the ARC, in their individual

capacities, 1 on March 15, 2002, alleging that the Brannans'

porch and retaining wall encroached on the setback area of Lot

1 in violation of the covenants and that the excavation and

removal of vegetation performed by the Brannans also violated

the covenants. Perel asked the trial court for an injunction

preventing the Brannans from further encroachment on the

buffer and setback areas; an order requiring the Brannans to

restore the buffer and setback areas "to their prior state;"

and an "order that the Brannans must modify their rear porch."

In the same amended bill of complaint, Perel accused

Locke Lane of breaching "its contractual obligation to enforce

the covenants, conditions, and restrictions contained in the

Settlement Agreement and the Amended Declaration." He asked

the court to order Locke Lane to enforce the covenants against

the Brannans. Perel also asked for compensatory damages

against the Brannans and Locke Lane but withdrew the request

1
The ARC members successfully demurred and have been
dismissed from the suit.

4
shortly before trial. All parties eventually sought

attorneys' fees.

Three days before trial, the Brannans sought to amend

their response to a request for admissions submitted by Perel

three months earlier and completed by the Brannans three weeks

after the request was submitted. In their response to the

request for admissions, the Brannans admitted "that they

caused eight trees to be removed from the Lot 1 Buffer before

August 20, 2001 after receiving approval from the ARC to do

so." The Brannans moved the trial court to permit them to

change their response to deny that they had caused eight trees

to be removed from the buffer area, characterizing their

original admission as "inadvertent." The trial court denied

the Brannans' motion.

Following a bench trial, the trial court found that the

Brannans had violated the covenants by removing "the eight

trees and other vegetation from the buffer area" and

constructing a below-grade patio in the setback area.

However, the trial court found that the Brannans' excavation

on Lot 1 and construction of the retaining wall did not

violate the covenants. The trial court denied both parties'

requests for attorneys' fees; ordered the Brannans to replace

the vegetation that had been removed, except the eight large

trees, because of feasibility concerns; and ordered the

5
Brannans "to remove the patio and any other improvements in

the setback area."

Perel appeals the adverse judgment of the trial court,

assigning error to: the trial court's holding that the

retaining walls do not violate the covenants; the trial

court's refusal to order the Brannans to replace the eight

trees that were removed; the trial court's holding that Locke

Lane has no contractual duty to enforce the covenants; and the

trial court's denial of attorneys' fees. The Brannans and

Locke Lane responded with five assignments of cross-error,

assigning error to: the trial court's refusal to permit them

to amend their response to Perel's request for admissions; the

trial court's order requiring removal of the patio; the trial

court's finding that the patio breached the covenants; the

trial court's failure to give the approval of the Brannans'

plans by the ARC sufficient weight in its decision; and the

trial court's rejection of the argument that Perel was

precluded from receiving equitable relief under the "unclean

hands" doctrine.

II. Standard of Review

The trial court's judgment in this case involves both

findings of fact and conclusions of law. As to purely factual

determinations made by the trial court, we will not disturb

those findings unless they are plainly wrong or without

6
evidence to support them. However, we review the trial

court's interpretation of covenants and other written

documents de novo. See Wilson v. Holyfield, 227 Va. 184, 187-

88, 313 S.E.2d 396, 398 (1984).

III. Analysis

A. Removal of the Retaining Wall

In its letter opinion, the trial court held that "[t]he

retaining wall was a necessary adjunct to the permitted

excavation to prevent the collapse of the soil and rock which

remained after the cut was complete," apparently holding that

necessity is an exception to the restrictions on development

in the setback area enumerated in the Declaration. The trial

court also noted, "[p]arenthetically, should the excavation

have been determined to violate the covenants, there is no

evidence on which the court could prepare an enforceable order

that the excavated area be returned to its pre-excavation

state" implying that even if the retaining wall was a

violation of the covenants, the trial court would not order

removal of the wall.

The Brannans concede that the retaining wall lies in the

rear and side setback areas of Lot 1. Part V, paragraph 1(c)

of the Declaration states in part:

No building, structures or other
improvements other than a fence or a driveway
. . . may be permanently or temporarily

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 constructed or erected in any buffer area or
rear building setback area . . . except as
follows:

. . . .

(ii) Rear and Side Yard Setback Areas.
Within the portion of the rear and side yard
setback areas outside of the buffer areas on
the Restricted Lots, clearing, at grade patios
and walkways are permitted, and children's play
equipment and swing sets, properly screened so
as not to be visible from contiguous property
presently owned by the Adjoining Owner, are
permitted.

Walls of any type are absent from the list of permitted

structures and improvements. We conclude that no walls are

permitted in the setback areas for any reason and the

retaining wall erected by the Brannans, therefore, violates

the covenants. The language in Part V, paragraph 1(c)(i) of

the Declaration, permitting "privacy fences or walls" in

buffer areas, cannot save the Brannans' retaining wall because

that language does not apply to the setback area.

While the retaining wall is clearly in violation of the

covenants, Perel is not automatically entitled to have the

retaining wall removed. When parties have a dispute over an

alleged violation of a restrictive covenant, the plaintiff, or

covenantee, may file suit in the court for equitable

enforcement of the restrictive covenant. A restrictive

covenant may be enforced by injunctive relief or through

specific performance. The party seeking enforcement of the

8
restrictive covenant bears the burden of proving the validity

and meaning of the covenant. Mid-State Equipment Co. v. Bell,

217 Va. 133, 140, 225 S.E.2d 877, 884 (1976); Sonoma

Development, Inc. v. Miller, 258 Va. 163, 167-69, 515 S.E.2d

577, 579-81 (1999). The party seeking enforcement must also

establish that the restrictive covenant has been violated by

the acts of the defendant, Hening v. Maynard, 227 Va. 113,

117, 313 S.E.2d 379, 381 (1984); Forbes v. Schaefer, 226 Va.

391, 400, 310 S.E.2d 457, 463 (1983), and request a remedy.

Once the plaintiff satisfies proof requirements, he or

she is entitled to the remedy requested unless the defendant

can establish one of several defenses or the court finds

enforcement unusually difficult. See Bond v. Crawford, 193

Va. 437, 444, 69 S.E.2d 470, 475 (1952) ("Generally, where a

contract respecting real property is in its nature and

circumstances unobjectionable, it is as much a matter of

course for courts of equity to decree specific performance of

it, as it is for a court of law to give damages for a breach

of it."); Spilling v. Hutcheson, 111 Va. 179, 183, 68 S.E.

250, 252 (1910) ("The injunction in this case is granted

almost as a matter of course upon a breach of the covenant.

The amount of damages, and even the fact that the plaintiff

has sustained any pecuniary damages, are wholly immaterial.").

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 A defendant may avoid imposition of the remedy requested

if such a remedy would create a hardship or injustice that is

out of proportion to the relief sought, 2 if performance by the

defendant would be impossible, 3 or if the enforcement of the

decree would be unusually difficult for the court. 4 However,

on the questions of hardship, injustice, or impossibility, the

defendant bears the burden of proving the elements of the

defense. See Harper v. Virginian Ry., 86 S.E. 919, 922

(W. Va. 1915) ("In suits to enforce specific performance of a

contract like the one involved here it is for the defendant to

show by way of defense that it is no longer able to perform

the covenant consistently with its duty to the public in

general, or that performance thereof will be burdensome and

oppressive or otherwise inequitable.").

In order to establish the hardship defense, a defendant

must show that specific performance would create a hardship or

injustice that is out of proportion to the relief sought.

Spinger v. Gaddy, 172 Va. 533, 541, 2 S.E.2d 355, 358 (1939);

Cheatham v. Taylor, 148 Va. 26, 39, 138 S.E. 545, 549 (1927).

The defendant must prove a level of hardship beyond

2
Springer v. Gaddy, 172 Va. 533, 541, 2 S.E.2d 355, 358
(1939); Cheatham v. Taylor, 148 Va. 26, 39, 138 S.E. 545, 549
(1927).
3
Shepherd v. Colton, 237 Va. 537, 541, 378 S.E.2d 828,
830 (1989); Jones v. Tunis, 99 Va. 220, 222, 37 S.E. 841, 841
(1901).

10
"inconvenience." Spilling, 111 Va. at 182, 68 S.E. at 251.

It is not enough for the defendant to show merely that the

loss to the defendant will be disproportionate to the benefit

to the plaintiff, where the defendant's violation of a

restrictive covenant "was made with full knowledge and

understanding of the consequences" of his or her actions.

Sonoma, 258 Va. 169-70, 515 S.E.2d at 581. Where an assignee

of the covenantor does not have actual or constructive notice

of the covenant, a lesser showing of hardship may be

acceptable. See Springer, 172 Va. at 541, 2 S.E.2d at 358;

Sonoma, 258 Va. 169-70, 515 S.E.2d at 581.

Impossibility is also a defense to specific performance

or injunctive relief requested. Fishburne v. Ferguson, 85 Va.

321, 328, 7 S.E. 361, 364-65 (1888). It may be a defense even

when the defendant "intentionally rendered himself unable to

perform the contract." Jones v. Tunis, 99 Va. 220, 222, 37

S.E. 841, 841 (1901).

Similarly, a requested remedy may be denied if it is

impossible for the court to precisely define the specific

actions to be performed or if the decree would necessarily be

of the type whose enforcement would "unreasonably tax the

time, attention and resources of the court." John Norton

Pomeroy, Pomeroy on Specific Performance of Contracts § 307,

4
See, e.g., Rayner v. Stone, 2 Eden 128, 130 (1762).

11
at 393 (2d ed. 1897). See also Flint v. Brandon, 32 Eng. Rep.

314 (1803) (dismissing a bill seeking specific performance of

a covenant to fill a pit formerly used for digging gravel

partly out of concern that "if a specific performance is

decreed, a question may arise, whether the work is

sufficiently performed.").

In this case, the Brannans' construction of a retaining

wall in the rear setback area of Lot 1 violated the

restrictive covenants intended to benefit Perel. Perel has

satisfied his burden of proving a violation of the covenants

and has requested certain relief. Therefore, it is the

Brannans' burden to prove, by their evidence, defenses to the

remedy requested. Of course, the court may disapprove of the

remedy requested because of difficulty in enforcement.

The trial court erred in holding that the retaining wall

did not violate the covenant. This matter will be remanded to

the trial court for further evidentiary proceedings in

accordance with the proof requirements set forth above.

B. Tree Removal

The Brannans maintain that despite their admissions, the

trial court erred in concluding that the removal of eight

large trees from the buffer zone was a violation of the

covenants because the ARC approved their site and landscape

plans, including the removal of the trees, in good faith.

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 Part V, paragraph (1)(c)(i) of the Declaration states:

"Notwithstanding anything in Section 1 of Part II to the

contrary, all existing vegetation and trees within the buffer

areas shall be preserved, except that dead, fallen or diseased

vegetation or trees may be removed and may be replaced and

supplemental plantings shall be permitted therein." Part I,

paragraph 9 states: "The Architectural Review Committee shall

be charged with making all interpretations, determinations and

necessary approvals under Paragraph 1 of Part I, Paragraph 1

of Part II, and all of Part V . . . (b) The Architectural

Review Committee shall have the power to waive compliance with

the provisions contained herein which are subject to

architectural review (except with respect to Part V,

subparagraphs 1(c) and (d) and Part VI, paragraph 1) when such

waiver is reasonably necessary." (emphasis added).

The language from Part V of the Declaration is clear. No

trees or other vegetation are to be removed from the buffer

area unless dead, fallen, or diseased. There was no

allegation that any of the trees removed were dead, fallen, or

diseased. Therefore, the trial court properly found that the

removal of the trees and other vegetation violated the

covenants.

Despite finding that the removal of the trees was a

violation of the covenants, the trial court declined to order

13
the Brannans to replace those trees with similar trees because

Perel had not produced evidence to show that eight 80- to 100-

foot trees could be successfully replanted in the buffer area.

As previously discussed, it is the Brannans' burden to prove

defenses to the relief requested. As previously stated, those

defenses may include hardship or injustice, impossibility, or

difficulty of enforcement by the court. Therefore, we will

vacate that portion of the trial court's order denying

replacement of the trees and remand the issue to the trial

court for further proceedings and receipt of evidence.

C. Locke Lane and the Duty to Enforce the Covenants

Perel claims that the trial court ignored language in the

Settlement Agreement when it dismissed the claims against

Locke Lane in its final order. Perel argues that paragraph 3

of the Settlement Agreement imposes a duty on Locke Lane to

enforce the covenants when it states that, "[i]mpermissible

deviations [from the norms of uniform treatment of lots and

lot owners] would, for example, be . . . the developer

unilaterally modifying or arbitrarily enforcing and/or failing

to carry out or enforce the [covenants] or by-laws once

approved."

There are two flaws in Perel's argument. First, the

Declaration, containing the covenants, limits Locke Lane's

power of enforcement. The only enforcement power given to

14
Locke Lane, by Part VI, paragraph 2(f), is the power to levy

assessments against a property owner for failure to clean and

paint the exterior of the house; failure to maintain the

landscape; failure to complete the construction of a house in

eighteen months or less; and failure to follow guidelines,

rules, or regulations imposed by Locke Lane or the homeowners'

association. The covenants violated in this case do not fall

under the types of actions that Locke Lane may remedy by

assessment.

Second, the Declaration specifically notes that if the

covenants are violated, "[Locke Lane] . . . and any Property

Owner shall have the right to proceed at law or in equity to

compel compliance with the terms hereof or to prevent the

violation or breach." Having the right to sue a violator is

not the equivalent of having a duty to enforce the covenants

against a violator. The trial court did not err in holding

that Locke Lane had no legal duty to enforce the covenants

against the Brannans.

D. Attorneys' Fees

Perel argues that the trial court erred in denying River

Locke Lot, L.L.C., attorneys' fees under the Property Owners'

Association Act, Code §§ 55-508 through –516.2. Perel did not

properly plead that the property in question was subject to

the Property Owners' Association Act or that he was entitled

15
to attorneys' fees under the Act. Accordingly, the trial

court did not err in refusing to award the fees requested by

Perel.

E. Motion to Amend Response to Request for Admissions

The trial court found, based on the Brannans' response to

Perel's request for admissions, that the Brannans had removed

eight large trees and other vegetation from the buffer area,

which violated the covenants' restrictions on activities in

the buffer area. The Brannans had moved the court to allow

them to amend their response to Perel's request for admissions

to deny that the trees removed had been in the buffer area.

The trial court overruled their motion because it "comes too

late" and was "prejudicial to the plaintiff."

Rule 4:11(b) of the Rules of the Supreme Court of

Virginia states that "the court may permit withdrawal or

amendment when the presentation of the merits of the action

will be subserved thereby and the party who obtained the

admission fails to satisfy the court that withdrawal or

amendment will prejudice him in maintaining his action or

defense on the merits." (emphasis added). The permissive

word "may" makes the court's decision on the issue

discretionary. We, therefore, examine the trial court's

decision not to grant permission to amend the response under

16
an abuse of discretion standard. See Shaheen v. County of

Mathews, 265 Va. 462, 475, 579 S.E.2d 162, 170 (2003).

Rule 4:11(b) creates a two-prong test within which the

trial court must exercise its discretion. Shaheen, 265 Va. at

473-74, 579 S.E.2d at 169. Here, the trial court based its

decision on the second prong of the test, which "requires the

non-moving party to demonstrate that amendment or withdrawal

of an admission will prejudice that party." Id. at 474, 579

S.E.2d at 170. The requisite prejudice may occur "because of

the sudden need to obtain evidence with respect to the

questions previously answered by the admissions." Id. Perel

argued to the trial court that the Brannans' motion to amend

came only three days before trial and that he had not prepared

to prove the location of the trees at trial. In light of

these arguments, the trial court did not abuse its discretion

in denying the Brannans' motion as prejudicial to Perel.

F. The Patio

It is well-established that courts may address only those

issues properly pled. Rule 1:4; Ted Lansing Supply Co. v.

Royal Alum. & Construction Co., 221 Va. 1139, 1141, 277 S.E.2d

228, 229 (1981). In this case, Perel never mentioned the

Brannans' patio in his amended bill of complaint.

Accordingly, the trial court's order requiring the Brannans to

remove the patio will be reversed.

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 G. Impact of the ARC's Approval of Building Plans on the
Trial Court's Findings of Covenant Violations

The Brannans maintain that, because the ARC approved

their landscape and site plans, they did not violate the

covenants by building a retaining wall in the setback area or

by removing the eight large trees from the buffer area. The

Brannans argue that if the trial court had shown proper

deference to the ARC's interpretations of the covenants, it

could not have found that their actions violated the

covenants. They point to Part I, paragraph 9 of the

Declaration as granting the ARC authority to make "all

interpretations, determinations and necessary approvals under

Paragraph 1 of Part I, Paragraph 1 of Part II, and all of Part

V." However, according to Part I, paragraph 9(b) of the

Declaration, the ARC may not waive compliance with Part V,

paragraph 1(c) of the Declaration, which expresses the

restrictions on activity in the setback and buffer areas.

The ARC's approval of the Brannans' plans did not state

the ARC's reasons for granting approval of the plans. If the

ARC approved the plans because it decided to waive the

requirements of Part V, paragraph 1(c) of the Declaration, its

decision is not entitled to deference because it did not have

the authority under the covenants to waive those requirements.

If the ARC approved the plans because it interpreted Part V,

18
paragraph 1(c) of the Declaration to allow the Brannans'

construction of the retaining wall and removal of the trees,

its interpretation was contradictory to the plain language of

the covenants. Even when an entity's interpretation of a

document is entitled to deference, an interpretation of the

document that is contrary to the plain language of the

document may be properly rejected by the court. Virginia High

Sch. League v. J.J. Kelly High Sch., 254 Va. 528, 531, 493

S.E.2d 362, 363-64 (1997) ("[W]hen bylaw language is

unambiguous, we need not defer to an interpretation of a

corporation's various boards and committees."). The trial

court did not err in finding that the Brannans violated the

covenants by building a retaining wall in the setback area and

removing trees from the buffer area, despite the ARC's

approval of such actions.

H. Unclean Hands Doctrine

The Brannans maintain that Perel is barred from seeking

any equitable remedy for any violations of the covenants

committed by the Brannans under the "unclean hands" doctrine.

In Richards v. Musselman, 221 Va. 181, 187, 267 S.E.2d 164,

168 (1980), we stated:

[T]he maxim that a party must come into a court
of equity with clean hands only applies to the
particular transaction under consideration, for
a court will not go outside of the case for the
purpose of examining the conduct of the

19
 complainant in other matters or questioning his
general character for fair dealing. The wrong
must have been done to the defendant himself
and must have been in regard to the matter in
litigation.

Id. (internal quotation mark omitted). Here, Perel's alleged

"unclean" act was trespass upon the Brannans' property for the

purpose of taking photographs. Perel's alleged trespass is

not part of the "particular transaction under consideration"

here because it could not have encouraged, invited, aided,

compounded, or fraudulently induced the Brannans' violation of

the covenants. Whether or not Perel's alleged trespass was

proper, it does not bar him from seeking equitable relief in

this case.

IV. Conclusion

For the reasons stated, we hold that:

1. The trial court erred in its judgment that the

retaining walls did not violate the covenants;

2. The trial court erred in its judgment, without

evidence to support it, that replacement of the

eight trees was not feasible;

3. The trial court did not err in its judgment that

Locke Lane has no contractual duty to enforce the

covenants at issue;

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 4. The trial court did not err in refusing to award

attorneys' fees and costs to Perel under the

Property Owners' Association Act;

5. The trial court did not err in refusing to permit

the Brannans to amend their response to Perel's

request for admissions;

6. The trial court erred by ordering relief that was

not pled, namely that the Brannans' must remove the

patio;

7. The trial court did not err in its consideration of

the Architectural Review Committee's approval of

the Brannans plans nor in refusing the Brannans'

defense of "unclean hands."

This case is remanded to the trial court for proceedings

including receipt of evidence concerning the remedy requested

by Perel for the encroachment of the retaining walls and the

removal of eight large trees.

Affirmed in part,
reversed in part,
and remanded.

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