Recent Cases in Community Association Law

Law Reporter provides a brief review of key court decisions throughout the U.S. each month. These reviews give the reader an idea of the types of legal issues community associations face and how the courts rule on them. Case reviews are illustrations only and should not be applied to other situations. For further information, full court rulings can usually be found online by copying the case citation into your web browser. In addition, the College of Community Association Lawyers prepares a case law update annually. Summaries of these cases along with their references, case numbers, dates, and other data are available online.

Foreclosure Purchaser’s Late Payment is Sufficient to Extinguish Association’s Lien

V&T Investment Corporation v. West Columbia Place Condominium Association, No. 1-17-0436 (Ill. App. Ct. Mar. 30, 2018)

West Columbia Place Condominium Association (association) governed a condominium in Chicago, Ill. In November 2009, the association sued to foreclose its lien against a unit based on the owner’s failure to pay assessments.

In October 2013, V&T Investment Corporation (V&T) purchased the unit at the judicial foreclosure sale. The court confirmed the sale on December 16, 2013, and the deed was issued to V&T on December 31, 2013. V&T made its first payment to the association on February 6, 2014, covering the January and February 2014 assessments. Thereafter, it continued to make monthly assessment payments.

In June 2014, V&T was preparing to sell the unit and asked the association for a paid assessment letter. The association issued a letter indicating that $7,803 was due. V&T paid the amount under protest so it could proceed with the sale, but then it sued the association seeking to recover the same amount as overpayment.

V&T asserted that it became liable for assessments in January 2014, following the court’s sale confirmation, and it was not responsible for any amount left unpaid by the unit’s prior owner. V&T acknowledged that the first month’s payment was late, but it paid the late fee, and every other monthly assessment was paid on time.

The association insisted that V&T was responsible for assessments beginning on November 1, 2013, the first day of the month following the October foreclosure sale, as well as the six months of assessments preceding the date it filed the foreclosure action and attorneys’ fees. The association asserted that, by not making a payment until February 2014, the association’s lien for amounts left unpaid by the prior owner was not extinguished by the Illinois Condominium Property Act (act).

The trial court ruled in the association’s favor, and V&T appealed.

The act provides that the purchaser at a judicial foreclosure sale has a duty to pay assessments from and after the first day of the month after the foreclosure sale. The act specifies that such payment confirms the extinguishment of a lien on a unit due to the prior owner’s failure to pay assessments.

The appeals court found that the act’s plain language indicated that V&T had a duty to pay assessments beginning on November 1 since the act refers to the date of the judicial foreclosure sale, not the date the sale was confirmed by the court or the deed given.

The appeals court recognized that it might be unreasonable for a foreclosure purchaser to pay assessments before it took title or the court confirmed the sale. As such, courts can consider the delay between the sale and the confirmation in determining whether a buyer’s payment is prompt. Since a two-month delay occurred before the court confirmed the sale to V&T, the appeals court found that V&T’s payment was sufficiently prompt to confirm the extinguishment of the prior lien.

The act provides that those who purchase property at a judicial foreclosure sale are responsible for paying the assessments which became due during the six months immediately preceding the institution of the collection action against the prior owner. However, if the outstanding assessments are paid during the collection action, the purchaser has no obligation to pay them.

The appeals court held that the act plainly required V&T to pay the assessments that accrued during the six months before the association sued the prior owner, which the appeals court calculated as $1,432. However, V&T asserted the association obtained a $3,011 judgment against the prior owner.

The association obtained possession of the unit some time in 2010 and rented it out for two years before the foreclosure proceeded. The appeals court found that the roughly $20,000 in rent the association collected during that time far exceeded the amount the association claimed in damages against the prior owner. Therefore, the appeals court concluded that V&T did not have to pay the amounts that accrued before the foreclosure sale. The appeals court also agreed with V&T that it was not responsible for attorneys’ fees the association incurred in its collection action against the prior owner.

The appeals court ruled that V&T was entitled to a $7,293 refund from the association for the amount V&T paid under protest less $510 for the November and December 2013 assessments V&T should have paid. The case was reversed and remanded for further proceedings.

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Owners Cannot Disapprove Emergency Special Assessment

Dedic v. Board of North Shore, No. 1-17-1842 (Ill. App. Ct. Mar. 29, 2018)

Club Breached Membership Agreement by Terminating Memberships

Bass v. Tour 18 at Rose Creek, L.P., No. CIV-17-006-R (W.D. Okla. Mar. 30, 2018)

Tour 18 at Rose Creek, L.P. (Tour 18) owned the Rose Creek Country Club (club) in Edmond, Okla. Tour 18 sold 50 master memberships in the club using a membership agreement. Andy Bass purchased one of those memberships.

The agreement provided that a $30,000 membership deposit constituted lifetime dues and entitled the member, spouse, and minor children to lifetime club privileges. Other types of memberships were available that did not require a large deposit but did require paying monthly dues.

There was no mechanism for resigning the master membership, but it could be passed to an immediate family member when a member died. For a $3,000 fee, a member could also sell a master membership.

The agreement provided that the $30,000 deposit would be refunded to the member if Tour 18 should discontinue club operations or sell or transfer the club. The agreement stated that, should Tour 18 terminate the master membership pursuant to the club rules, the master member would be entitled to a refund of the deposit less an amount equal to the number of months he had been a member, times the monthly family dues the member would have paid for golf membership.

In December 2016, Tour 18 notified all master members that it was terminating their memberships pursuant to the club rules due to numerous issues with the master memberships. To determine the deposit refund due to Bass and the other original master members (collectively, the plaintiffs), Tour 18 multiplied the number of months they had been members by the family membership dues rate as follows: 89 x $350 = $31,150. Since the total exceeded the membership deposit, Tour 18 notified the plaintiffs that they were not due a refund.

The plaintiffs sued Tour 18 for breach of the membership agreement. Tour 18 argued that the agreement’s reference to termination “pursuant to the club rules” was effective to incorporate the rules provision granting it the discretion to terminate a member at any time it deemed necessary.

The court stated that, although no magic words were required to incorporate provisions from the rules into the agreement, the language referencing the rules must have conveyed a clear intent to incorporate the terms. The court held that the phrase “pursuant to” was insufficient to incorporate by reference either all rules or any specific rule.

In addition, no particular section of the rules addressed terminating master memberships, and it was unclear which provisions would apply if the rules were fully incorporated into the agreement. Tour 18 relied on a note regarding termination in the resignation section. The rules provided that dues would stop 30 days after receiving a member’s written resignation. Following this provision was a note indicating that management could terminate a member at any time it deemed necessary.

Another rules section dealing with member conduct gave the club the right to suspend or terminate a member for improper conduct. However, the rules also created a three-step process for disciplinary actions, and membership would not be terminated until a third warning letter was sent.

The court found that “rule” is generally defined as a norm mandating or guiding conduct. Thus, termination “pursuant to” the rules would reasonably be interpreted as referring only to those rules that governed members’ behavior. Moreover, the location of the termination note in the resignation section was insufficient to warn master members about Tour 18’s termination rights and the possible loss of the entire deposit. The resignation provisions appeared to apply only to regular members since the master members did not pay dues, so master members had no reason to believe that section applied to them.

The court further found the rules provision granting Tour 18 complete discretion to terminate members to be at odds with the other termination provisions, which outlined a three-step process for dealing with violations. The court found the two approaches incompatible and irreconcilable. Where uncertainty exists, the agreement language must be interpreted most strongly against the party who drafted the agreement and caused the uncertainty to exist. In this case, that was Tour 18.

Accordingly, the court held that Tour 18 breached the membership agreement by terminating the master memberships and amortizing the membership deposit. The court invalidated Tour 18’s attempted termination of the master memberships and granted summary judgment in the plaintiffs’ favor.

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Abandoned Golf Course Reverts to Association

Codale Commercial Funding, LLC v. Villages of Marlborough Community Association, Inc., No. 01481 (Md. Ct. Spec. App. Apr. 12, 2018)

Villages of Marlborough Community Association, Inc. (association) governed the Villages of Marlborough community in Upper Marlboro, Md. In 1985, as part of the community’s development, the developer asked the county for a density bonus, which allowed greater density and intensity of development than was otherwise permitted by zoning.

The county granted the density bonus, but it was conditioned on the developer maintaining the existing 131.6-acre golf course as community open space. The developer recorded restrictive covenants specifically providing that, should the developer or its assignee cease to own or operate the golf course for 365 consecutive days, the golf course would revert automatically to the association (the reversion clause).

In 2010, Codale Commercial Funding, LLC (Codale) acquired the golf course after foreclosing on its mortgage on the property. It was not until after Codale foreclosed that it visited the golf course and discovered its poor condition. The clubhouse had been vandalized, and the golf course was overgrown and did not appear to have been reseeded in many years. Codale estimated it would take about $5 million to refurbish the property.

After determining that it would be economically infeasible to reopen the golf course, Codale maintained the property as open space. It also began discussing alternative options for redeveloping the property with the association’s board of directors. The board discussed whether the reversion clause had been triggered. Although there was disagreement about when the golf course closed, everyone agreed that Codale maintained the property as open space for about four years.

Some board members expressed concerns about the association acquiring the property due to the maintenance costs. The discussions with Codale ended, however, when the board unanimously agreed to enforce the reversion clause.

The association sued Codale for declaratory judgment (judicial determination of the parties’ legal rights) and to quiet title (definitively establish property ownership) in the property. Codale brought counterclaims against the association for fraud, negligent misrepresentation, and unjust enrichment. The trial court ruled in the association’s favor, declaring the association owned the property. Codale appealed.

Codale asserted the reversion clause was not triggered so long as Codale continued to own the property. The appeals court disagreed with Codale’s interpretation, finding that approach would require that the word “or” in the reversion clause be replaced with “and.” Applying the plain meaning of the word “or,” the appeals court found that the reversion clause provided for two distinct scenarios: the property would revert to the association if Codale ceased to own the property as a golf course or if Codale ceased to operate the property as a golf course.

Codale argued that the golf course requirement must be invalidated under the changed circumstances doctrine. A court may invalidate a restriction when circumstances have changed so much that its original purpose can no longer be fulfilled. However, a restriction has continued validity unless there has been a radical change in the community causing the restriction to outlive its usefulness.

Codale asserted that the covenants’ purpose was to provide the association with an operational golf course. Since it was no longer economically feasible to reopen the golf course, Codale argued the purpose could no longer be fulfilled. However, the covenants specifically stated their purpose was to retain the 131.6-acre parcel as part of the open space network. Moreover, the property had been dedicated as green space in exchange for the density bonus. The fact that the property had previously been operated as a golf course was immaterial since the property could continue to serve as open space.

Codale contended the association waived its right to enforce the reversion clause by negotiating alternative uses with Codale and not strictly enforcing the reversion clause. The appeals court disagreed. Although certain directors expressed personal concerns and preferences, Codale knew the board hadn’t voted to waive the covenants’ requirement or to enter into an agreement with Codale. The association had no obligation to enforce the covenant until Codale “stirred” the board to enforcement by continuing to declare itself to be the property’s owner.

Codale further argued the association was unjustly enriched by allowing Codale to pay property taxes and maintenance expenses. It also contended the association induced Codale to make such payments by indicating that it did not want the property and would not enforce the covenants. However, the evidence revealed that Codale voluntarily paid these expenses hoping the association would give up its right to the property and support Codale’s redevelopment plans. As such, the appeals court found nothing unjust in allowing the association to retain the benefit of the payments.

Accordingly, the trial court’s judgment was affirmed.

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Association Exceeded Authority

Watson v. The Village at Northshore I Association, Inc., No. 2016-316, 2018 VT 8 (Vt. Feb. 9, 2018)

Village at Northshore I Association (association) governed a 136-unit condominium in Chittenden County, Vt. Roy Watson owned a unit.

Over the years, the association amended the declaration of condominium and bylaws multiple times. In 2013, Watson brought numerous claims against the association regarding several amendments. The trial court ruled in the association’s favor on all the claims, and Watson appealed.

Watson complained that several amendments exceeded the association’s authority under the Vermont Condominium Ownership Act (COA) or the Vermont Common Interest Ownership Act (CIOA), which became effective in 1999. Some CIOA provisions apply retroactively, but the COA continues to apply where the CIOA does not control.

The original declaration authorized the association’s board of directors to enter the units as reasonably necessary to maintain and repair the common elements. The amended declaration authorized entry into a unit for emergency repairs, and, after prior notice, to determine and enforce compliance with the declaration and the rules and for other lawful purposes.

Under the CIOA, the association had an easement to enter units as reasonably necessary to carry out the association’s duty to maintain and repair the common elements. An easement expansion must generally be of the type originally contemplated and not materially burden the owner beyond what was intended.

The appeals court determined that the expanded access rights imposed a material burden on Watson because the amendment materially expanded the entry purposes. The appeals court held the amended declaration was void to the extent it expanded the association’s access rights beyond what were “reasonably necessary” for maintenance, repair, and common element replacements.

In 2008, the association amended the declaration to redefine the limited common elements to include the attic spaces and roof structures located immediately above the unit. In 2010, the declaration was amended to add skylights as limited common elements and remove the roof as a limited common element.

Watson did not dispute that the declaration was amended with the vote required under the declaration’s general amendment requirements, but he asserted that his limited common element roof could not be taken away without his consent. The COA requires only that a declaration describe the limited common elements and the units to which they are assigned. It does not prohibit altering those assignments without the owner’s consent.

The appeals court stated that the purchase of a unit subject to the declaration comes with full knowledge that the declaration may be amended in accordance with its terms. As such, the appeals court held that the limited common element amendment was valid.

Watson also complained that the association violated his rights by allowing owners to expand into the attic or air space above their units. The association had approved eight expansions creating lofts or dormers. The loft expansions involved removing the roof trusses to create a cathedral ceiling and installing an internal staircase leading to a lofted area with skylights in the former attic space. For the dormer expansions, a significant portion of the roof was removed and reconfigured to enclose a portion of the airspace above the unit to create an additional room.

Watson argued that altering the attic or air space to make it livable area was an alteration of the unit boundaries requiring unanimous owner approval. The COA provides that each unit’s percentage of undivided interest in the common elements shall have a permanent character and cannot be altered without the consent of all owners. The appeals court determined that Watson’s percentage interest was altered only if other unit owners received exclusive use of common elements and Watson did not receive equivalent rights.

The original declaration was silent on how roofs and attics were classified. However, it provided that the limited common elements included improvements designated to serve, attached to, or adjacent to a single unit. Thus, the attic space qualified as a limited common element under both the original and amended declaration.

The appeals court determined that the loft expansions did not alter the common element interest allocations since all owners had the power to expand into their attic spaces. Removing the physical divider between unit and attic did not bring the attic within the unit boundaries; the attic remained a limited common element for that unit’s exclusive use. The attic was never a common element accessible and usable by other owners. Moreover, Watson’s unit continued to have attic space, into which he was entitled to expand if he so desired. Therefore, other owners were not given greater rights than Watson, and the association’s approval of loft expansions was valid.

However, the dormer expansions were not valid. The airspace did not qualify as a limited common element appurtenant to any one unit. Rather, it was shared by all units in common. The appeals court held that an allocation of a portion of the airspace to an individual unit resulted in a reallocation of the common elements to a single unit, which required the unanimous consent of all owners.

The trial court’s judgment was affirmed in part and reversed in part, and the case was remanded for further proceedings.

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Club Not Responsible for Member’s Fall

Armstrong v. Lakes Golf & Country Club, Inc., No. 17 CAE 08 0054, 2018-Ohio-1018 (Ohio Ct. App. Mar. 19, 2018)

Lakes Golf and Country Club, Inc. (club) operated a club in Delaware County, Ohio. Scott Armstrong was a club member.

In September 2014, Armstrong had a golf outing at the club. Instead of parking his car in a designated parking space, he parked along the curb closest to the clubhouse. Armstrong had a few drinks while golfing and then went to the club bar afterwards. Armstrong contended that he had five or six drinks over about six hours, but he was not drunk and had no difficulty walking when he decided to leave around 7:30 p.m.

The sun was setting as Armstrong walked to his car, but he said there was still plenty of light. Instead of walking on the paved and lighted walkway leading to the parking lot, Armstrong cut through a mulched landscape bed. Armstrong claimed members frequently used this shortcut, and he had done so perhaps a dozen times over 10 years.

As Armstrong stepped from the landscape bed into a grassy area that lay in front of his car, he stepped into an open valve box, causing him to fall and injure his knee. After Armstrong was able to get up, he could see that the green valve box cover was off and lying next to the box.

In July 2016, Armstrong sued the club for premises liability negligence. Finding that the hole was open and obvious, the trial court granted summary judgment (judgment without a trial based on undisputed facts) in the club’s favor. Armstrong appealed.

No one could explain why the cover was off the valve box. The club’s grounds superintendent said none of the club’s employees had worked on the box, and the cover was not removed when the grass was last cut. The club’s chief operating officer also said he had never heard of anyone using the landscaped bed as a pathway.

To establish a negligence claim, Armstrong had to show the club breached a duty to keep him safe and that he was injured as a result of the breach. A property owner owes invitees a duty to maintain the property in a reasonably safe condition so that the invitees will not be unreasonably or unnecessarily exposed to danger. No one disputed that Armstrong was an invitee.

Owners must warn invitees of concealed dangers that the owner knows about or has reason to know about. However, a property owner is not an insurer against all accidents that may occur. Invitees are expected to take reasonable precautions to avoid dangers that are open and obvious.

The open and obvious doctrine is a complete bar to a negligence claim and negates the standard duty to warn of dangers. An objective standard is used to determine whether a danger is open and obvious. The relevant question is whether a reasonable person would find the danger obvious and apparent, not whether the injured party was personally aware of the danger.

The appeals court agreed with the trial court’s conclusion. Armstrong admitted that he was not looking where he was walking and was instead focused on his car. Armstrong acknowledged that he could clearly see the hole after he picked himself up. Photographs taken the next afternoon also showed the hole could be seen from several feet away. As such, a reasonable person should have been able to see the hole and avoid it.

Armstrong asserted that the attendant circumstances exception applied to negate the open and obvious rule. For the exception to apply, there must have been attendant circumstances beyond Armstrong’s control that distracted him and were significant enough either to reduce the degree of care Armstrong was required to exercise for his own safety or to enhance the hole’s danger.

Armstrong argued that the area where he fell had insufficient lighting, his attention was drawn to the people coming and going in the parking lot, and the valve box cover was the same color as the grass. The appeals court found that none of these circumstances was significant enough to reduce Armstrong’s responsibility to take care where he was walking.

The parking lot traffic was no more than one would expect. Additionally, darkness itself is considered an open and obvious condition, thus increasing rather than decreasing the care one must take while walking in the dark. The color of the valve box cover was also irrelevant since Armstrong said he could see both the hole and the cover when he stood up after the fall.

Accordingly, the trial court’s judgment was affirmed.

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Stringent View Protection Restriction Upheld

Pritchett v. Picnic Point Homeowners Association, No. 75555-2-I, 2 Wn. App. 2d 872 (Wash. Ct. App. Mar. 19, 2018)

Picnic Point Homeowners Association (association) governed the Picnic Point community in Snohomish County, Wash. In 1996, the Picnic Point declaration of covenants, conditions, and restrictions (declaration) was amended to prohibit constructing or modifying a structure that would exceed the restriction’s height limitations or obstruct the view of Puget Sound from another lot.

In 1999, Thaddeus Pritchett purchased a home in the community. In May 2009, Pritchett submitted plans for a substantial home remodel and expansion to the design committee. The proposed plan would have increased the height of Pritchett’s roof by about seven feet, but he did not believe this would obstruct the views in his neighborhood.

The association’s president believed the remodel might obstruct the view from his home, located one-quarter mile uphill from Pritchett’s home. However, the design committee chair noted that the homes in Pritchett’s area already exceeded the maximum height restriction, and the restriction must have been ignored when those homes were built.

The committee asked Pritchett to put stakes on his roof to mark the proposed new roof height. Once that was done, the committee could see that the president’s view would be obstructed. The committee determined that the declaration did not permit view obstructions, so the association rejected Pritchett’s plans.

In January 2010, Pritchett submitted revised plans that reduced, but did not eliminate, the height increase. The association again refused to approve the plans.

In September 2010, Pritchett sued the association, seeking a determination that his proposed remodel did not violate the declaration and that the association unreasonably denied the proposal. Pritchett also sought damages for loss of his property’s use as well as increased construction costs.

After finding the view protection restriction ambiguous because there was no objective standard against which it could be measured, the trial court concluded the plans did not violate the declaration. The trial court relied on comments of former board members, who did not believe the restriction was to be literally applied. The trial court found the association unreasonably disapproved Pritchett’s plans and stated the association was to use a flexible approach and apply the restriction on a case-by-case basis to avoid absurd results.

The trial court ordered the association to approve Pritchett’s plans and to amend the declaration to establish “objective, measurable standards” to make the view protection restriction enforceable. Pritchett was awarded $298,784 in damages. The association appealed.

The appeals court emphasized that the declaration must be interpreted in a manner that protects the owners’ collective interests. It noted that the view protection restriction suggested that any obstruction of existing views, no matter how minimal, was prohibited. The declaration excepted new home construction on a vacant lot from the restriction, but it prohibited later additions or modifications from further obstructing views.

The appeals court found that reading all the restriction’s provisions together led to only one conclusion—that once built, homes may not later be modified in a manner that would obstruct another home’s existing Puget Sound view, and partial or minimal obstructions were not exempted from the restriction.

The appeals court determined that the restriction included an objective standard against which possible violations could be measured—either an existing home’s view would be obstructed or would not. The fact that the restriction did not discuss the extent to which an existing view could be obstructed did not make the restriction ambiguous. By assuming that a minimal view obstruction could not possibly violate the restriction, the trial court erred by introducing a subjective standard into an otherwise objective restriction.

The appeals court looked at the declaration’s statement of purpose to aid in interpreting the restriction. The statement of purpose specified that the declaration was adopted to preserve the community as a “panoramic and tranquil alternative to city living” and where the “spectacular views of Puget Sound” were maintained.

The appeals court stated that the owners’ intent in adopting the restriction should be discerned by the events and comments leading up to the restriction’s adoption, not post-hoc statements of select board members made years after the fact. At the time, the owners were concerned that existing trees would grow to block views, and the discussions centered on owners having to prune or remove trees as they got too big. Everyone agreed the restriction was not intended to create views but to preserve existing views.

The trial court also erred in ordering the association to amend the declaration to add language to conform to the court’s interpretation. A court may neither add obligations which never existed or take away obligations to which the parties have agreed.

Accordingly, the trial court’s judgment was reversed, and the case was remanded for further proceedings.

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Changed Circumstances Render Restriction Unenforceable

Bueno v. Firgeleski, No. AC 39074, 180 Conn. App. 384 (Conn. App. Ct. Mar. 27, 2018)

Luz Bueno and Edward den Dooven (plaintiffs) owned a 1.38-acre parcel in Darien, Conn. Their home was located in the parcel’s northern portion, and they wanted to subdivide the parcel to create a separately developable lot in the southern portion. Michael Firgeleski and other owners of adjacent property (defendants) asserted that a deed restriction barred the subdivision. The plaintiffs sued the defendants for a declaratory judgment (judicial determination of the parties’ legal rights) that the restriction was void and unenforceable.

All of the parties’ properties were originally part of a 30-acre farm owned by Wilbur Waterbury. Waterbury died, leaving the farm to his nieces. In 1934, the nieces sought to sell portions of the farm but needed the court’s permission to partition it (divide land owned as joint tenants or tenants in common).

Following the partition, Mary Alice Vaughan acquired 2.11 acres containing the Waterbury homestead and outbuildings. In 1941, Mrs. Vaughan’s husband, Clyde Vaughan, acquired another 1.544 acres of the farm. Mr. Vaughan’s deed permitted only one dwelling on the parcel, prohibited any building within 25 feet of the southern boundary line, and required the seller’s approval to construct any structure (the restriction).

In 1954, a 1.38 acre parcel was carved out from Mr. Vaughan’s property and conveyed by a deed containing the restriction. The plaintiffs acquired this property in 2008.

In 1954, the remainder of the farm (about 26 acres) was subdivided into 31 lots and developed as the Briar Brae subdivision. None of the Briar Brae deeds contained the restriction.

In 1971, a three-lot subdivision (Webb subdivision) was created in the remainder of the Vaughan property. Lot 2 contained the Waterbury homestead, but new homes were constructed on lots 1 and 3. Lot 3 was adjacent to the plaintiffs’ parcel, and it included the remainder of Mr. Vaughan’s property after the plaintiffs’ parcel was split off. Kenneth and Rachel Martin acquired lot 3 by a deed stating that the property was subject to the restriction’s effect, if any.

The plaintiffs argued that the farm property circumstances had changed so significantly since the restriction was created that it was no longer effective. In analyzing whether a restrictive covenant should be modified or nullified based on changed circumstances, it must be shown that the covenant’s purpose has been permanently frustrated. “The changes must be so great as clearly to neutralize the benefits of the restrictions to the point of defeating the object and purpose of the covenant.” The change of circumstances must be drastic and permanent, not transient.

The trial court compared the circumstances when the restriction was created in 1941 to the present conditions. In the nieces’ partition action, they asserted that the land was no longer adapted for farming, and much of the surrounding farmland had been subdivided and homes constructed. The area was changing from agricultural to suburban, but the area where the farm was located had not yet experienced that suburban transition.

The trial court concluded the restriction was intended to benefit only the Waterbury homestead, not all Waterbury land. Briar Brae, with the exception of one lot, was a higher elevation and physically isolated from the plaintiffs’ parcel.

The trial court found the plaintiffs had amply satisfied the changed circumstances test. It found that the right to enforce the restriction had been abandoned over the 74 years since it was created because no one exercised it with any of the 35 lots in the Waterbury land, except for the plaintiffs’ parcel.

The trial court concluded the Webb subdivision already violated the restriction. When more than one home was constructed in the Webb subdivision, the purpose of the 25-foot setback became meaningless. The trial court held that the restriction either continued in effect or failed with respect to the entire parcel as originally conveyed, not just one part.

The trial court further determined that the plaintiffs’ parcel already violated the restriction. In 1959, a garage was constructed without the seller’s consent. In 2004, a house expansion and shed construction violated the setback. A fence was also installed without the seller’s approval. As such, the defendants were not benefitted by the restriction. The trial court found in the plaintiffs’ favor, and the defendants appealed.

The defendants argued the trial court erred by looking beyond the restriction’s language. The appeals court embraced the trial court’s findings and reminded that the paramount rule of interpreting deeds is to effectuate the parties’ intent, if possible. In arriving at that intent, it is always acceptable to consider the situation of the parties and the circumstances connected with the transaction.

The appeals court noted that defendants could not explain how permitting the plaintiffs to subdivide their parcel into two lots of approximately 0.75 acres would harm them. Lot 3 was already about that size, but the Briar Brae lots were only about one-half acre.

The appeals court found the nieces’ partition action was predicated on an assumption that change was coming to the Waterbury farm, and the restriction was intended to limit density and protect the homestead. The appeals court further stated that, if Briar Brae was the intended beneficiary of the restriction, the beneficial purpose was not obvious because Briar Brae was the embodiment of what the restriction was intended to prevent.

Accordingly, the trial court’s judgment was affirmed.

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