Title: Orange Beach Marina, Inc. v. Warner

State: alabama

Issuer: Alabama Supreme Court

Document:

500 So. 2d 1068 (1986)
ORANGE BEACH MARINA, INC.
v.
George D. WARNER, Jr., et al.
85-404.

Supreme Court of Alabama.
December 5, 1986.
Beth McFadden Rouse and William M. Lyon, Jr., of McFadden, Riley & Parker, Mobile, for appellant.
John Earle Chason of Chason & Chason, Bay Minette, for appellee.
MADDOX, Justice.
This appeal involves the interpretation of restrictive covenants applicable to a platted subdivision on Alabama's Gulf Coast.
Plaintiff George D. Warner, Jr., and other property owners in Terry Cove Subdivision, Unit One, a subdivision located in Orange Beach, Alabama, filed a declaratory action in the Circuit Court of Baldwin County against Orange Beach Marina, Inc. (hereinafter "Orange Beach"), in which they sought an interpretation of restrictive covenants applicable to the Terry Cove Subdivision, Unit One, and the effect of those covenants on the proposed use of certain lots in the subdivision by Orange Beach for development of a high quality condominium project called "Homeport," which would include 40 single-family residential units arranged in a circular fashion around a private yacht basin or marina, *1069 with a yacht club, health club, tennis courts, and guard house, all exclusively for the use of the unit owners.
The restrictive covenants read as follows:
The matter was tried before the Honorable Harry J. Wilters, Jr., and he issued an order in which he found that the proposed development by Orange Beach violated the restrictive covenants, and that the restrictive covenants could not be amended without the consent of the Terry Cove property owners. Orange Beach filed a "motion for reconsideration, or in the alternative to amend the judgment to provide for specific declaratory relief," which was denied by Judge Wilters. Because the plaintiffs, in their original complaint, and in a subsequent amendment thereto, had requested additional relief, and because there were still issues pending in the case, Judge Wilters entered the following order:
Orange Beach appealed to this Court.
The legal issues presented in the appeal are as follows:
(1) Whether the restrictive covenants preclude erection by Orange Beach of the proposed Homeport condominium on the 13 lots located within the subdivision;
(2) Whether the restrictive covenants preclude Orange Beach from resubdividing the 13 lots into smaller lots on each of which respectively it could construct a single family detached condominium unit;
(3) Whether any structure could be erected on any lot other than one presently designed for occupancy by families and containing not less than 900 square feet, and, if so, whether any of the proposed amenities, such as a yacht basin, a yacht club, tennis court, putting green, office, pool, or guard house, would violate the restrictive covenants;
(4) Whether a purported amendment by the developer, Dot-Dot Corporation, designating areas for commercial and marina use pursuant to the reserved power in the restrictive covenants is valid;
(5) Whether a general scheme of development exists with regard to the subdivision, and, if so, whether the amendment of the covenants allegedly made pursuant to the power reserved by the developer would be a reasonable exercise thereof and consistent with the general scheme of the development.
Orange Beach argues that its proposal to place a first-class, exclusive residential development on property partly outside of and adjacent to the Terry Cove Subdivision, and partly on property within the subdivision, which would include a private yacht basin, with clubhouse, tennis courts, etc., and which would be restricted to ownership *1070 use, would not violate the specific wording of the restrictive covenants. Alternatively, Orange Beach argues that the original developer, Dot-Dot Corporation, had reserved the right to designate certain lots in the subdivision for a commercial venture and to designate a wet or dry marina location. Orange Beach contends that by virtue of an amendment to the restrictive covenants, the developer did designate certain lots in the subdivision for use as proposed by Orange Beach. It is undisputed, however, that Dot-Dot Corporation, at the time of the execution of the amendment purporting to authorize commercial use of the lots owned by Orange Beach, had conveyed its entire interest in all of the lots in Terry Cove Subdivision and had no pecuniary interest in the subdivision.
Orange Beach alternatively argues that it had two alternative proposals for development of the lots it owned in the subdivision and that neither of these alternative proposals would violate the restrictive covenants.
In its brief, Orange Beach argues that the restrictive covenants should not be enforced, and supports its argument as follows:
Orange Beach also argues that the condominium form of ownership in Alabama, although authorized in 1964 at the time the restrictive covenants were placed on the land, was still relatively unknown at that time, and that the restrictions should now be read to include the more prevalent forms of multi-family structures and uses which have developed since the restrictions were initially executed.
We have carefully considered the language of the restrictive covenants and the particular facts of this case, and we are of the opinion that the trial court correctly applied the established rules of construction in its interpretation of the restrictive covenants here involved, and that the judgment of the trial court, therefore, is due to be affirmed. As this Court said in Hines v. Heisler, 439 So. 2d 4 (Ala.1983), in a case involving a substantially similar situation:
*1071 We are aware that the courts of Texas and Tennessee have held that a restrictive covenant which provides that the property is "for residential purposes only" does not preclude the building of a residential-type condominium. Parks v. Richardson, 567 S.W.2d 465 (Tenn.Ct.App. 1977); Travis Heights Improvement Association v. Small, 662 S.W.2d 406 (Tex.Dist. Ct.App.1983). Of course, this Court has held that a restriction providing that "the property ... conveyed shall be used only for `residential purposes'" does not prohibit the construction of an apartment house. In Virgin v. Garrett, 233 Ala. 34, 169 So. 711 (1936), this Court held:
233 Ala. at 39, 169 So.  at 714.
In Hines v. Heisler, supra, this Court pointed out the effect of restricting the use of land for "private" residential purposes. There, this Court opined:
439 So. 2d  at 6.
We are of the opinion, therefore, that the restrictive covenants in this case, where the words are "single family private dwelling or residence," prevent the construction of the proposed development by Orange Beach.
In reaching this conclusion, we agree with the plaintiffs that the so-called amendment to the restrictive covenants apparently executed by Dot-Dot Corporation after the trial of this case by the trial court was ineffective, because the parties stipulated that Dot-Dot Corporation did not hold any pecuniary interest in the property at the time the so-called amendment to the restrictive covenants was executed.
We will now address Orange Beach's argument that the restrictive covenants permit a re-subdivision of its lots, and, therefore, *1072 would not prohibit its alternative uses.
Orange Beach introduced as evidence during the trial of the case some alternative proposals for the development of Homeport. The alternatives involve the layout of the residential units on the various lots owned by Orange Beach. The first alternative plan involves a re-subdivision of the existing lots, and the arrangement of the buildings on those lots so that there would be one four-unit building per lot.
The second alternative proposed by Orange Beach involves a re-subdivision of the existing lots, and the placement of one detached single-family unit per lot.
Regarding alternative # 1, we are of the opinion that the rule of law stated in Hines v. Heisler is controlling and would prohibit the use as proposed by Orange Beach in its alternative # 1.
Orange Beach argues, in its brief, that this Court should follow the concurring opinion by Chief Justice Torbert in Hines v. Heisler, wherein he stated:
Orange Beach contends that Chief Justice Torbert's concurring opinion in Hines supports the use of the second alternative of detached single-family units for re-subdivided lots within the Homeport development.
While plaintiffs agree that there is no prohibition on a re-subdivision of the existing lots, they still contend that Orange Beach did not present the court with any evidence of any alternative proposal for approval showing any re-subdivision of the lots and any private single-family dwellings to be constructed on those lots as re-subdivided, which would not violate the restrictive covenants. Orange Beach points to some evidence in a deposition of one of the architects to the effect that an alternative plan was considered, but we are of the opinion that the record does not show sufficient evidence of a concrete proposal by Orange Beach with regard to any re-subdivision of the lots and a use of these lots in a development such as Homeport, which would not be violative of the restrictive covenants. Consequently, we are of the opinion that the trial court did not err in finding, in effect, that Orange Beach had put before the court no evidence of any alternative proposal which would not violate the restrictive covenants.
Based on the foregoing, therefore, we are of the opinion that the judgment of the trial court is due to be, and it hereby is, affirmed.
AFFIRMED.
TORBERT, C.J., and JONES, BEATTY and HOUSTON, JJ., concur.