Madkour v. Zoltak

Madkour v. Zoltak (2005-447)

2007 VT 14

[Filed 02-Mar-2007]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2007 VT 14

                                No. 2005-447


  Abraham J. Madkour, Brenda Madkour,            Supreme Court
  Lester E. Moody, Virginia D. Moody, 
  Jerry D. Goff, Betty-Jean Goff,
  Ralph B. Welsh, Jr. and 
  Carol B. Welsh, as Trustees of                 On Appeal from
  the Carol B. Welsh Living Trust                Bennington Superior Court
        
           v.
                                                 October Term, 2006
  John Zoltak and Margaret Zoltak


  Karen R. Carroll, J.

  Rodney E. McPhee and Michelle A. Kenny of Kenlan, Schwiebert & Facey, P.C.,
    Rutland, for  Plaintiffs-Appellants.

  Kevin A. Rambold, Manchester Center, for Defendants-Appellees.


  PRESENT:  Dooley, Johnson, Skoglund and Burgess, JJ., and 
            Eaton, D.J., Specially Assigned

        
       ¶  1.  JOHNSON, J.   Plaintiffs Madkours, Moodys, Goffs, Welshes,
  and Trustees of the Carol B. Welsh Living Trust (collectively, "neighbors")
  appeal a superior court order granting summary judgment to defendants,
  Zoltaks.  Neighbors own parcels of land in Manchester, Vermont that once
  comprised the so-called Ames Farm.  Zoltaks, who also own a parcel derived
  from the farm, seek to subdivide and develop the southern portion of their
  lands.  Neighbors brought an action for declaratory judgment in the
  Bennington Superior Court claiming that restrictive covenants burden
  Zoltaks' lands, and seeking a determination that Zoltaks are prohibited
  from developing their lands as proposed.  The court below granted summary
  judgment for Zoltaks-finding that no covenant presently burdens the lands
  proposed for development - and we now affirm.
        
       ¶  2.  The lands owned by neighbors and Zoltaks, together with various
  parcels owned by other individuals, were originally part of a tract of land
  known as the Ames Farm.  The farm, comprised of approximately ninety acres,
  was owned by Yetta Isaacs.  Isaacs acquired the land upon her husband's
  death in 1955.  Beginning in 1964, Isaacs proceeded to subdivide and convey
  the entire lands of the Ames Farm via eight separate deeds.  The last
  conveyance, to Zoltaks, occurred in 1999.

       ¶  3.  The first of the eight conveyances was by warranty deed from
  Isaacs to Jean Viebrock and Phyllis Binkley on June 27, 1964.  Deed one
  included covenants restricting use of the property to a single-family home
  for private residential purposes, and prohibiting the purchasers from
  subdividing,  selling, or leasing the property "in parts smaller than the
  whole."  In addition, deed one provided that:

    The grantor, covenants and agrees that she will not sell or convey
    any of the lands presently owned by her located in the same meadow
    as the lands herein described easterly of a line located 400 feet
    westerly from and parallel with the west line of the lands herein
    described, or located in the meadow adjoining the meadow in which
    said lands are located on the north, as presently fenced, without
    imposing thereon the same or similar restrictions and covenants as
    set forth herein, together with a provision that the said lands
    shall not be sold, leased, or subdivided into parcels of less than
    2 acres of land. 

  Plaintiffs Abraham and Brenda Madkour have since acquired the lands
  conveyed by deed one. 
   
       ¶  4.  The second and third conveyances of the Ames Farm were by
  warranty deed from Isaacs to Barbara Haviland and were both dated March 27,
  1979.  Deeds two and three contained covenants similar to those in deed
  one, restricting the use of the land to residential purposes and
  prohibiting the subdivision, sale, or lease of the land "in parts smaller
  than the whole."  In addition, deeds two and three contained a time limit
  on the restrictive covenants and a promise to impose similar covenants on
  future conveyances.  These provisions read as follows:

    The above restrictions shall expire twenty years from the date
    hereof, but may be renewed for an additional term of fifteen years
    by a two thirds vote of all land owners derived from the "Ames
    Farm". . . .

    Grantor agrees not to convey any remaining lands being a part of
    said Ames Farm, without imposing the same or similar restrictions.  

       ¶  5.  The fourth conveyance of land derived from the Ames Farm was by
  warranty deed from Isaacs to Richard J. Kittredge and Clarence J. Haviland
  on July 20, 1979.  Deed four contained restrictions almost identical to
  those in deeds two and three, including (verbatim) the 20-year time limit
  and reciprocal covenant transcribed above. 

       ¶  6.  The fifth conveyance was by warranty deed from Isaacs to Green
  Mountain Mercantile, a commercial enterprise.  Deed five was devoid of
  residential-use restrictions and included an express disclaimer to that
  effect:

    The herein conveyed premises are not subject to covenants included
    in deeds of conveyance to other purchasers of parcels of the
    so-called "Ames Farm" property.  The herein conveyed parcel is
    zoned for industrial use, and is not subject to any such
    residential covenants.  

       ¶  7.  The sixth conveyance, on July 2, 1991, was by warranty deed
  from Isaacs to plaintiffs Abraham and Brenda Madkour and contained
  ninety-nine-year restrictive covenants proscribing the building of any
  structures upon the deeded land other than outbuildings to be used in
  connection with Abraham and Brenda Madkours' residence located in the lands
  conveyed by deed one.  Furthermore, the deed purported to merge the lands
  of deed six with those of deed one and restricted the subdivision of the
  newly formed parcel "in portions smaller than the whole."  

       ¶  8.  The seventh deed was conveyed by guardian's deed to Manchester
  Health Services, Inc., another commercial enterprise.  Deed seven contained
  no covenants.  
   
       ¶  9.  The eighth-and final-conveyance of the lands derived from the
  Ames Farm was by executor's deed to Zoltaks on July 13, 1999.  Unlike the
  other five deeds to  non-commercial purchasers, deed eight did not include
  any explicit restrictions but stated that: "[t]his conveyance is made
  subject to all covenants, easements, utility easements and restrictions of
  record." 

       ¶  10.  In August 2003, Zoltaks submitted a major development
  application to the Manchester Zoning Board requesting a permit to subdivide
  the southern portion of their lands conveyed by deed eight to construct a
  twelve-lot planned residential development, potentially including duplexes
  and commercial properties.  On March 17, 2004, neighbors filed a complaint
  in the superior court, together with a motion for preliminary injunction,
  seeking a declaration that Zoltaks' property is burdened by restrictive
  covenants, and further seeking an injunction to prevent Zoltaks from
  subdividing and developing the property in violation of the restrictive
  covenant.  The court denied neighbors' motion for preliminary injunction
  because Zoltaks' Act 250 permit was on appeal; the permit decision was
  later affirmed. 
   
       ¶  11.  Zoltaks moved for summary judgment in November 2004 and
  neighbors filed their opposition and a cross-motion for summary judgment
  the following month.  On August 3, 2005, the superior court granted summary
  judgment to Zoltaks and denied neighbors' motion for summary judgment,
  finding that Zoltaks' property was not subject to any restrictive covenants
  that would prevent them from developing their land as proposed.  Neighbors
  now appeal the grant of summary judgment to Zoltaks, basing their appeal on
  three arguments: (1) the lands burdened in perpetuity in deed one include
  the lands currently owned by Zoltaks; (2) the twenty-year equitable
  servitude found in deeds two through four burdens Zoltaks' lands until
  January 13, 2019; and (3) equity requires that the restrictive covenants be
  enforced against Zoltaks.  Our interpretation of the deed language and
  consideration of facts presented by neighbors leads us to conclude that
  summary judgment for Zoltaks was proper.  Thus, we affirm.

       ¶  12.  Our review of a summary judgment decision is de novo.  Mellin
  v. Flood Brook Union Sch. Dist., 173 Vt. 202, 211, 790 A.2d 408, 417
  (2001).  Summary judgment is appropriate "when the record clearly shows
  that there is no genuine issue of material fact and that the movant is
  entitled to judgment as a matter of law."  Bacon v. Lascelles, 165 Vt. 214,
  218, 678 A.2d 902, 905 (1996).  On summary judgment, the Court must
  consider the facts presented in the light most favorable to the non-moving
  party. See id.  Furthermore, a motion for summary judgment is appropriate
  where the movant seeks a declaration of the parties' rights-as is the case
  here.  Price v. Leland, 149 Vt. 518, 519-20, 546 A.2d 793, 795 (1988).

       ¶  13.  Although we disagree with the superior court's interpretation
  of the covenant language in deed one, taking the facts in the light most
  favorable to neighbors, we find no genuine issue of material fact and based
  upon the construction of the restrictive covenants found in deeds one
  through four, we hold that Zoltaks were entitled to judgment as a matter of
  law. 

       ¶  14.  Neighbors first argue that the restrictive covenant included
  in deed one burdens the portion of Zoltaks' property proposed for
  development.  "In construing a deed, [we] must give effect to the intention
  of the parties if it can be gathered from the language used," Creed v.
  Clogston, 2004 VT 34, ¶ 17, 176 Vt. 436, 852 A.2d 577 (quotations omitted),
  and if the language of the deed is clear and unambiguous, judgment may be
  granted as a matter of law.  Addison County Auto., Inc. v. Church, 144 Vt.
  553, 557, 481 A.2d 402, 405 (1984).  To determine which property is
  burdened by the restrictive covenant in deed one, we must look to the
  language of the deed itself and consider Isaacs' intent in the context
  within which she conveyed the property.
   
       ¶  15.  In deed one, Isaacs agreed for the benefit of the grantor,
  grantee and their heirs and assigns, that:

    [S]he w[ould] not sell or convey any of the lands presently owned
    by her located in the same meadow as the lands herein described
    easterly of a line located 400 feet westerly from and parallel
    with the west line of lands herein described, or located in the
    meadow adjoining the meadow in which said lands are located on the
    north, as presently fenced, without imposing thereon the same
    restrictions and covenants as set forth herein. 

  (Emphasis added.)  The parties agree that by its language the deed burdens
  two distinct  locations.  The first location, "easterly of a line located
  400 feet westerly from and parallel with the west line of the lands herein
  described," they agree, burdens an area adjoining the lands originally
  conveyed to Viebrock and Binkley in deed one and currently owned by
  plaintiffs Abraham and Brenda Madkour.  That area includes portions of the
  lands conveyed by deeds three and four in addition to a portion of Zoltaks'
  lands conveyed by deed eight but not currently proposed for development,
  and is south of the lands conveyed in deed four that today comprise the
  Landmark subdivision.   It is the second location, " in the meadow
  adjoining the meadow in which said lands are located on the north, as
  presently fenced," on which the parties disagree, and that determines
  whether Zoltaks' proposed development is prohibited due to the restrictive
  covenant in deed one.
   
       ¶  16.  Although the parties diverge completely in their
  interpretation of which lands comprise  those "located in the meadow
  adjoining the meadow," they interpret the reference to "said lands"
  similarly.  Neighbors construe "said lands" to mean the lands conveyed by
  deed one.   Zoltaks interpret "said lands" to include both the lands
  conveyed by deed one and those lying "easterly of a line located 400 feet
  westerly from and parallel with the west line of the lands" conveyed by
  deed one.  Thus, by either construction, the second location burdened by
  deed one must be in the "meadow adjoining the meadow" in which the lands
  conveyed by deed one were found "on the north," as fenced at the time
  Isaacs conveyed the land in 1964. 

       ¶  17.  In granting summary judgment to Zoltaks, the lower court judge
  concluded  that the location of the fence at the time of deed one was
  immaterial to the construction of the restrictive covenant language.  She
  did so, presumably, because she took Zoltaks' interpretation of the deed
  language to be accurate, and thus determined that the meadow burdened by
  deed one had to be located "to the north" (emphasis added) of the meadow in
  which "said lands" were located.  Such an interpretation of the deed
  language would necessarily exclude the lands that Zoltaks have proposed for
  development-which lie in the very south of the original Ames
  Farm-regardless of where the fence was placed at the time of deed one.  The
  court, however, like Zoltaks, misconstrued the placement of the second
  location burdened by the restrictive covenant to be "to the north"
  (emphasis added) of "said lands," the lands in deed one, as opposed to
  being those in the "meadow adjoining the meadow" in which the lands of deed
  one were located "on the north," (emphasis added) as fenced in 1964.

       ¶  18.  To interpret the language of the deed without the context of
  the fence as laid out in 1964 is to suggest that adjoining meadows on the
  Ames Farm were somehow distinguishable from one another without physical
  demarcation.  We find this to be an unreasonable proposition, as one meadow
  could not be discerned from an adjacent meadow without referencing some
  boundary-line, such as that provided by a fence.
   
       ¶  19.  In fact, the meadows were separated by a fence and its
  location may be derived from plaintiff Abraham Madkour's affidavit which
  was not disputed by defendants. (FN1)  That fence divided the lands of the
  Ames Farm into two parcels, one southern, and one northern.  The stretch of
  fence that split the farm in two sections ran along the northern border of
  the lands conveyed by deed one to Viebrock and Binkley in a more-or-less
  east-west direction.  As such, we understand Isaacs' reference to adjoining
  meadows to mean the two individually fenced parcels-one northern, one
  southern-and find that the "meadow in which said lands are located on the
  north, as presently fenced" (emphasis added) refers to the southern parcel,
  within which "said lands"-the lands conveyed in deed one to Viebrock and
  Binkley-were located "on the north" just below the fence dividing the
  southern parcel from the northern one.  The only remaining meadow, then-the
  "meadow adjoining the meadow" which was burdened by the restrictive
  covenant-must have been the one indicated by the northern parcel, which
  does not include the lands presently proposed for development by Zoltaks.
                                         
       ¶  20.  Even drawing "all reasonable inferences and doubts" in
  neighbors' favor, Mellin, 173 Vt. at 211, 790 A.2d at 417, we cannot accept
  neighbors' argument that the restrictive covenant in deed one burdens
  Zoltaks' lands planned for development in the south of the original Ames
  Farm.  Nor do we find that there remain any genuine issues of material fact
  regarding the placement of the fence at the time of deed one.  Despite the
  lower court's misinterpretation of the deed language, we find that, given
  the division of the Ames Farm at the time of deed one, Isaacs  intended to
  burden the "meadow" to the north of the lands conveyed by deed one, as
  fenced in 1964, by the restrictive covenant, and therefore Zoltaks were
  entitled to judgment as a matter of law.  See Gochey v. Bombardier, Inc.,
  153 Vt. 607, 613, 572 A.2d 921, 925 (1990) ("We may affirm a correct
  judgment even if the grounds stated in support of it [below] are
  erroneous.").  Thus, neighbors' first argument on appeal fails.  

       ¶  21.  Neighbors next argue that, at a minimum, deeds two through
  four create an equitable servitude that prohibits Zoltaks from carrying out
  their proposed development until January 13, 2019. (FN2)  In deeds two,
  three, and four Isaacs included a twenty-year restrictive covenant limiting
  use of the conveyed lands to private residential purposes with "no more
  than one single family dwelling" to be placed or maintained on each parcel. 
  Isaacs furthermore agreed not to convey any of the remaining lands which
  were once part of the Ames Farm, "without imposing the same or similar
  restrictions."  The deeds did, however, provide a means for extending the
  equitable servitude beyond the express twenty-year period, by "a two thirds
  vote of all land owners derived from the 'Ames Farm.' "  Neighbors contend
  that the language of deeds two through four clearly shows Isaacs' intent to
  "burden all residential properties with restrictive covenants for at least
  twenty years from the date of conveyance."

       ¶  22.  The lower court rejected neighbors' contention, finding that,
  whether or not the equitable servitude applied, the twenty-year time limit
  commenced at the time of deed two on March 27, 1979, and therefore expired
  on March 27, 1999, before Zoltaks purchased their land.  While neighbors
  attempted to invoke the renewal mechanism, they failed to do so in time,
  filing their Declaration of Renewal in July 1999. 
   
       ¶  23.  Neighbors now ask us to adopt a construction of the time
  limit in deeds two through four that would result in each parcels'
  restrictive covenants expiring at different times.  Under this theory, the
  owners of the lands conveyed by deed two are free (as of March 27, 1999) to
  develop their land as they please, commercially or otherwise, while the
  owners of the lands conveyed by deed eight, currently Zoltaks, are
  restricted from development until the year 2019-with the possibility that
  at any point between now and then they may be perpetually restricted at the
  whim of their neighbors by a two-thirds vote.  This strikes us as contrary
  to the underlying purpose of an equitable servitude.

       ¶  24.  The only reasonable construction of the twenty-year time
  limit, we find, is one in which the date of the first deed to include the
  provision, deed two, sets the date of commencement of the equitable
  servitude.  As such, each land owner was on notice that her property was
  restricted until March 27, 1999, unless a two-thirds majority of community
  members chose to renew the restriction by that date, which they did not do. 
  Thus, we reject neighbors' argument that Zoltaks' land is burdened by the
  equitable servitude described in deeds two through four until January 13,
  2019.  Rather, as a matter of law, any equitable servitude that may have
  been enforceable against Zoltaks as land owners within the original Ames
  Farm expired in March 1999.
   
       ¶  25.  Finally, neighbors' argument that the restrictive covenants
  in deeds one through four must be enforced against Zoltaks on the basis of
  equitable principles and fairness fails for the same reasons articulated in
  response to neighbors' first two arguments.  Because the restrictive
  covenant in deed one does not burden the lands that Zoltaks plan to develop
  and the equitable servitude created by deeds two through four expired
  several years ago, the fact that neighbors relied on the restrictions
  placed in the deeds and Zoltaks had notice of those restrictions cannot
  create current restrictive covenants where none exist.  As such, we affirm
  the superior court's grant of summary judgment in favor of Zoltaks.
  Affirmed.         
       

                                       FOR THE COURT:


                                       _______________________________________
                                       Associate Justice


------------------------------------------------------------------------------
                                 Concurring

       ¶  26.  DOOLEY, J., concurring.  I join the majority's disposition of
  neighbors' arguments on the duration of the restrictive covenants in some
  of the deeds and on the application of equitable principles as contained in
  ¶¶ 21-25 of the majority opinion.  I join the result of its analysis of
  neighbors' primary argument-that the restrictive covenant in the
  Viebrock/Binkley deed applies to the land that Zoltaks propose to develop. 
  I agree that the covenant does not apply to the development land.  I
  disagree, however, that there is only one reasonable construction of the
  operative language of the deed and the superior court was erroneous in
  adopting a different construction from the majority.  In my view, the
  language of the deed is ambiguous, as neighbors argue, but this ambiguity
  does not help neighbors because their reading of the language is
  unreasonable.
   
       ¶  27.  The superior court found the operative language grammatically
  difficult, a description that is probably charitable.  The burdened land is
  described as "located in the meadow adjoining the meadow in which said
  lands are located on the north, as presently fenced."  In the majority's
  view the directional locator "north" describes where the deeded land lies
  in relation to the rest of the meadow within which it is located.  Since it
  undisputed that the lands lie in the northerly part of the southern meadow,
  the other meadow described in the language-that is the "meadow
  adjoining"-must be the northern meadow. 

       ¶  28.  In the trial court's view, the directional locator "north"
  describes where one meadow is located in relation to the other.  Under that
  view, the phrase "on the north" modifies "meadow adjoining" and not "lands
  are located."  

       ¶  29.  In my view, either of these constructions is possible and both
  work on the ground.  The majority presumes the better English construction
  free of misplaced modifiers because "on the north" modifies the immediately
  preceding "lands are located."  For the superior court, I would say that
  the word "on" rather than "in" suggests that the language speaks to the
  relationship of the meadows rather than the land within a meadow.

       ¶  30.  Contrary to the majority's view, its difference with the
  superior court is not about where the dividing fence was placed. 
  Neighbors' argument was that there was another fence south of where the
  dividing fence was placed and south of the land conveyed in the
  Viebrock/Binkley deed, but north of the land on which Zoltaks propose to
  place their development.  The superior court rightly held that the location
  of this fence did not need to be determined because the deed language could
  not be construed to apply to meadows separated by this southern fence line.

       ¶  31.  While I disagree with the majority in its holding that there
  is one right construction of the language that can be determined as a
  matter of law on summary judgment without extrinsic evidence, I agree that
  no reasonable construction can be reached that would burden the lands in
  issue in this case.



                                       ______________________________________
                                       Associate Justice


------------------------------------------------------------------------------
                                  Footnotes


FN1.  A copy of the map included in Abraham Madkours' affidavit (with the
  thick black line demarcating the location of the fence in 1964) and
  submitted to the Court on appeal is appended to the end of this opinion
  [not available online] for illustrative purposes only.

FN2.  Neighbors contend that the equitable servitude was meant to be enforced
  against all future  "residential" conveyances of land derived from the Ames
  Farm, as evidenced by Isaacs' express exclusion of the parcel conveyed by
  deed five from the restrictions of record because it was zoned commercial. 
  Neighbors further presume that Isaacs intended the same exclusion for lands
  conveyed by deed seven, as they were also zoned commercial and the deed
  included no restrictive covenant language.