Present: All the Justices
SONOMA DEVELOPMENT, INC.
v. Record No. 982098 OPINION BY JUSTICE CYNTHIA D. KINSER
June 11, 1999
GIRARD C. MILLER, ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA
John E. Kloch, Judge
In a decree dated July 29, 1998, the circuit court
upheld the validity of a “Declaration of Restriction” and
ordered Sonoma Development, Inc. (Sonoma), to remove all
improvements that were within three feet of the north wall
of a residence owned by Girard C. Miller and Lynn E. Miller
(the Millers). In granting the Millers’ motion for summary
judgment, the circuit court stated that “there was a valid
declaration of restriction on the property recorded, that
there was privity between the original parties, that it was
the intent and, in fact, actually said in the restriction
itself that it was to run with the land. And certainly, it
does touch and concern the land.”
This appeal concerns the circuit court’s finding that
horizontal privity existed between the original covenanting
parties. Because the “Declaration of Restriction” was part
of a transaction that included a transfer of an interest in
the land to be benefited by the restrictive covenant, we
will affirm the judgment of the circuit court.
Prior to the incident that prompted the present
litigation, Alfred E. Schaer and Mary Schaer (the Schaers)
owned two adjacent lots, numbered Lot 38 and Lot 39, in the
area commonly known as “Old Town” in the City of
Alexandria. Facing the lots from the street on which they
are situated, Lot 38 lies to the left of Lot 39. The lots
are long and narrow, and share a common sideline that runs
from the front to the back of the lots.
When the Schaers owned both lots, a three-story, brick
house was situated on Lot 38, but Lot 39 was vacant. The
north wall of the house on Lot 38 physically encroaches
upon the southern boundary line of Lot 39 by 0.1 foot at
the northeast corner of the dwelling and by 0.2 foot at the
northwest corner of the dwelling.
In 1995, the Millers entered into a real estate
contract with the Schaers for the purchase of Lot 38.
Because the Millers were concerned about future development
on Lot 39, the contract included a provision requiring the
Schaers to provide a deed restriction on Lot 39 prohibiting
the use of a common wall with Lot 38 and requiring a
sufficient easement to facilitate maintenance of the
portion of the dwelling that encroaches on Lot 39. On June
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30, 1995, in furtherance of their obligations under the
contract, the Schaers executed a “Declaration of
Restriction” requiring “[t]hat no improvement of any kind
be constructed upon Lot 39 within three (3) feet of the
north wall of the existing dwelling on Lot 38.” Although
the Schaers were designated as the “Grantor” in the
declaration, the document did not name any entity or
individual as the “Grantee.”
On the same day, the Schaers executed a “Declaration
of Easement” in which they granted an easement on Lot 39
“for the benefit of lot 38 to permit the house to remain in
its present position . . . and to permit ingress and egress
unto lot 39 as reasonably necessary to repair and maintain
the northern wall of the house.” Like the “Declaration of
Restriction,” the “Declaration of Easement” named the
Schaers as the “Grantors” but did not specify anyone as the
“Grantee.” The “Declaration of Easement” did, however,
state that the Schaers had agreed to sell Lot 38 to the
Millers. In addition, both documents were recorded in the
clerk’s office of the circuit court.
Also on June 30, 1995, the Schaers executed a deed
conveying Lot 38 to the Millers. The deed states that the
“conveyance is made subject to recorded conditions,
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restrictions and easements affecting the property hereby
conveyed.”
In February 1997, Sonoma purchased Lot 39 from the
Schaers. The deed from the Schaers to Sonoma, dated
February 21, 1997, specifies that the conveyance is
“subject to easements, restrictive covenants, restrictions
and rights-of-way of record.” 1
In the spring of 1997, Sonoma contracted with
Mitchell, Horn & Associates, Inc., for the construction of
a house on Lot 39. The Millers commenced this action
because the house that was constructed on Lot 39 violates
the three-foot setback requirement contained in the
“Declaration of Restriction.” According to a plat of Lot
39, the dwelling on that lot is situated between 2.5 and
2.6 feet away from the north wall of the house on Lot 38.
In Virginia, we recognize two types of restrictive
covenants: “the common law doctrine of covenants running
with the land and restrictive covenants in equity known as
equitable easements and equitable servitudes.” Sloan v.
Johnson, 254 Va. 271, 274-75, 491 S.E.2d 725, 727 (1997);
1
First American Title Insurance Company issued a title
insurance policy to Sonoma on February 26, 1997. The
policy lists the “Restrictive Covenants” and “Declaration
of Easement” as items that are excluded from coverage under
the policy.
4
accord Mid-State Equip. Co., Inc. v. Bell, 217 Va. 133,
140, 225 S.E.2d 877, 884 (1976). In the present case, the
Millers acknowledge that the “Declaration of Restriction”
does not fall within the second category of restrictive
covenants. Thus, the issue is whether that document
creates a valid common law restrictive covenant that runs
with the land, frequently referred to as a “real covenant.” 2
To enforce a real covenant in Virginia, a party must
prove the following elements: (1) privity between the
original parties to the covenant (horizontal privity); 3 (2)
privity between the original parties and their successors
in interest (vertical privity); (3) an intent by the
original covenanting parties that the benefits and burdens
of the covenant will run with the land; (4) that the
2
Covenants affecting the use of land that run to the
benefit or burden of remote successors in interest to the
land came to be called “real covenants.” 9 Richard R.
Powell and Patrick J. Rohan, Powell on Real Property
§ 60.01[2] (1999).
3
A number of jurisdictions have abolished the
requirement of horizontal privity. 7 Thompson on Real
Property § 61.04(a)(3) (David A. Thomas ed., 1994); 9
Powell on Real Property § 60.11[3]. The Restatement
(Third) of Property: Servitudes § 2.4 (Tentative Draft No.
1, 1989), states that horizontal privity between the
parties is not required to create a servitude. See Moseley
v. Bishop, 470 N.E.2d 773, 778 n. 1 (Ind. Ct. App. 1984)
for a discussion regarding the status of the horizontal
privity requirement.
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covenant “touches and concerns” the land; and (5) the
covenant must be in writing. Sloan, 254 Va. at 276, 491
S.E.2d at 728. Sonoma contends that the element of
horizontal privity is absent in this case. It argues that
horizontal privity did not exist between the original
covenanting parties, the Schaers and the Millers, because
only the Schaers were named as a party in the “Declaration
of Restriction.” In other words, Sonoma posits that
horizontal privity must be demonstrated within the four
corners of a single document.
In two of this Court’s recent cases upon which Sonoma
relies, we did, indeed, include horizontal privity as one
of the elements of a covenant running with the land.
Waynesboro Village, L.L.C. v. BMC Properties, 255 Va. 75,
81, 496 S.E.2d 64, 68 (1998); Sloan, 254 Va. at 276, 491
S.E.2d at 728. However, because the real covenants at
issue in those cases were contained in deeds between named
grantors and grantees, we did not focus on the essential
components of horizontal privity. Waynesboro Village, 255
Va. at 78, 496 S.E.2d at 66; Sloan, 254 Va. at 277, 491
S.E.2d at 728-29. Thus, in Waynsboro Village and Sloan, we
did not resolve the issue that is currently before us.
With regard to the precise issue presented in this
appeal, we conclude that horizontal privity did exist
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between the Schaers and the Millers. We are not willing to
say that, in every situation, only one document can be
examined in order to determine if horizontal privity
existed between the original covenanting parties. See Cook
v. Tide Water Associated Oil Co., 281 S.W.2d 415, 419 (Mo.
Ct. App. 1955) (upholding restrictive covenant that was
entered into prior to deed); Leighton v. Leonard, 589 P.2d
279, 281 (Wash. Ct. App. 1978) (upholding restrictive
covenant created in agreement after deed conveying real
estate was executed).
In order to establish horizontal privity, the party
seeking to enforce the real covenant must prove that “the
original covenanting parties [made] their covenant in
connection with the conveyance of an estate in land from
one of the parties to the other.” Runyon v. Paley, 416
S.E.2d 177, 184 (N.C. 1992); accord 7 Thompson On Real
Property § 61.04(a)(2). The Restatement of Property
§ 534(a) (1944), provides that horizontal privity is
satisfied when “the transaction of which the promise is a
part includes a transfer of an interest either in the land
benefited by or in the land burdened by the performance of
4
the promise.” In other words, the covenant must be part
4
The Restatement’s comment on clause (a) states that
“[a] transfer of an interest in land as a part of a
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of a transaction that also includes the transfer of an
interest in land that is either benefited or burdened by
the covenant. Johnson v. Myers, 172 S.E.2d 421, 423 (Ga.
1970); Moseley, 470 N.E.2d at 778; Runyon, 416 S.E.2d at
184-85; Bremmeyer Excavating, Inc. v. McKenna, 721 P.2d
567, 569 (Wash. Ct. App. 1986).
The term “transaction” is defined as “an act or
agreement, or several acts or agreements having some
connection with each other, in which more than one person
is concerned, and by which the legal relations of such
persons between themselves are altered.” Black’s Law
Dictionary 1496 (6th ed. 1990); cf. Virginia Housing Dev.
Auth. v. Fox Run Ltd. Partnership, 255 Va. 356, 364-65, 497
S.E.2d 747, 752 (1998) (quoting Richmond Postal Credit
Union v. Booker, 170 Va. 129, 134, 195 S.E. 663, 665
(1938)) (“‘[N]otes and contemporaneous written agreements
executed as part of the same transaction will be construed
together as forming one contract.’”). In the context of
the present case, we find that the transaction of which the
covenant was a part commenced with the real estate contract
between the Schaers and the Millers, and culminated with
__________________
transaction in which a promise respecting the use of land
is made is sufficient to create the relationship essential
to the running of the burden of the promise.”
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the deed conveying Lot 38 to the Millers. The “Declaration
of Restriction” fulfilled the Schaers’ contractual
obligation to establish a restriction on Lot 39, which lot
was being retained by the Schaers at that time, and was
executed in conjunction with the deed to the Millers.
Thus, it was part of a transaction that included the
transfer of an interest in the land benefited by the real
covenant. 5
Sonoma also assigns error to the circuit court’s
award of injunctive relief without receiving evidence with
regard to an appropriate remedy in equity. Sonoma contends
that the facts necessary to determine the remedy remained
in dispute and that summary judgment was, therefore, not
warranted. We find no merit in this argument.
Sonoma does not dispute that it had notice of the
“Declaration of Restriction.” Indeed, it was in Sonoma’s
chain of title and was specifically excluded from coverage
in its title insurance policy.
If parties, for valuable consideration, with their
eyes open, contract that a particular thing shall not
be done, all that a court of equity has to do is to
say by way of injunction that which the parties have
already said by way of covenant--that the thing shall
not be done; and in such case the injunction does
5
Sonoma does not dispute the validity of the
“Declaration of Easement” even though the Schaers were the
only parties named in that document. Yet, it is part of
the same transaction as the “Declaration of Restriction.”
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nothing more than give the sanction of the process of
the court to that which already is the contract
between the parties. It is not, then, a question of
convenience or inconvenience, or of the amount of
damage or injury. It is the specific performance, by
the court, of that negative bargain which the parties
have made, with their eyes open, between themselves.
Spilling v. Hutcheson, 111 Va. 179, 182, 68 S.E. 250, 251
(1910). We further stated in Lindsay v. James, 188 Va.
646, 661, 51 S.E.2d 326, 333 (1949), that “[r]elief by way
of a mandatory injunction will not be denied merely because
the loss caused will be disproportionate to the benefits
accruing to the opposing party where it appears that the
obstruction or the violation of a right was made with full
knowledge and understanding of the consequences which
result.” See also Marks v. Wingfield, 229 Va. 573, 577,
331 S.E.2d 463, 465 (1985) (remanding to trial court for
entry of injunction to enforce restrictive covenant).
Thus, we find no reason why the circuit court needed
to hear additional evidence on this issue. An injunction
was the appropriate remedy to enforce the terms of the
“Declaration of Restriction.”
For the reasons stated, we will affirm the judgment of
the circuit court.
Affirmed.
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