Case Title: Sonoma Development Inc. v. Miller

Citation: 

Docket Number: 982098

State: virginia

Court: Virginia Supreme Court

Date: 1999-06-11T00:00:00Z

Document:
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 
 
2
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, 
 
3
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. 
 
 
 
5
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 
 
6
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 
the promise.” 4  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 
 
7
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.” 
 
 
8
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.” 
 
9
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. 
 
10