# FILED December 29, 1995 Cecil Crowson, Jr . Appellate Court Clerk IN THE COU RT OF A PPEA LS OF TENN ESSEE WESTERN SECTION AT NA SHVILLE
INDIAN HILLS CL UB ) HOMEOWNER'SAS SN., INC., ) ) Plaintiff/Appellee, ) Sumner C hancery No. 94C-179 ) VS. ) A ppeal No. 01A 01-9507-CH- 00319 ) CLAY TON L. AND

CINDY ) COOPER, ) ) Defendants/Ap pellants. )
APPEAL FROM THE CH ANCER Y COU RT OF S UMNE R COU NTY

AT GALLATIN, TENNESSE E THE HONORABLE CHARLES HI LL BEATY, SPECIA L JUDGE

JAMES R. TOMKINS ROBERT H. JENNINGS, JR. JENNINGS AND TOMKINS Nashvil le, Tennessee Attorneys for Defendants/Appella nts
GERA LD C. WIGGER ORTALE, KELLEY, HERBERT & CRAWFORD Nashvil le, Tennessee Attorney for Plaintiff/Appellee

REVERSED A ND REMA NDED

ALAN E. HIGHERS , JUDGE
CONCUR: W. FRA NK CRA

WFORD, P.J., W.S. WILLIA M H. WILLIA MS, SR. J.
Indian Hills Club Ho meowners' Association ( "Plaintiff"), filed s uit against Clayton a n dCindy

Cooper ("Defendants"), s eeking an in junction prohi biting Defendants from buildi ng a driveway extens ion/parking pad and walkw ay onto their

property. The trial co urt granted Plai ntiff a permanent injun ction, holding that the proposed construction w ould viol ate certain restrictions of record that prohibited any construction or im provement s without approval from the Board of Directors of the Indian Hil ls Homeowne rs' Associ ation. Defenda nts have raised three issues for our consideratio n: (1) whether the Plaintiff's denial of Defendan ts' application a nd approval rested upon a law ful and legitimate basis; (2) whether th e Board's deci sion to deny the app lication was an arbitrary and capr icious
e xercise of control; and ( 3) whether it woul d be unfair and ineq uitable to enforce the rest ricti ve covenant. For the re asons st ated herein, we revers e the decision of the trial court and order

that the injunc

tion be dissol ved.

Defendants own a home located in Indian Hills C lub Subdivi sion. The subdivi sion is subject to v

arious rest rictions an d covenantsset forth in the"Declarations of Covenants, Conditions, and Restric tions" o n r ecor d at t he Re giste r's Of fice for S umn er Cou nty, Tennessee. Article V, Section One of the Declaration s requires thatplans for propos ed construction or improvement be submitted in w riting an d approved by either the Boar

d of Directors or by a Board-appointed ar chitectural committee. T he Declarations also establish standards for approval of proposed constr uction. Arti cle V, Secti on 3 of the Declar ations provides in part:

C. For the purpos e of assuring the maintenance of the Lot s as a neighborhood o f hi gh sta ndards, the Dec larant hereby adopts the followi ng standa rds f or architec tural contro l: The Committee shall have the right to di sapprove any

plans sub mitted hereunder becaus e of failure to ... i nclude an y information required herein, object ion to exter ior de sig n, or such other matter which would render the pr oposed structure or use thereof

inharmonious w ith the structures located upon other lots w ithin the neig hborhood.
Prior to 1992, indiv iduals from Phil lips Builde rs comprise d the architectur al review committee for Indian Hil ls Subdiv ision. In April 1992, the Board met and decided that t he Board of Directors

of the Homeowner

s' Associat ion would take control of the committee.

In October 1993, D efendants submitted a request for architect ural approval to theBoard of Dire cto rs of the Homeow ners' Assoc iation for const ruction of a dri veway

extension/par king pad and a walkway. Mr . Cooper described the proposed additi ons as follows: The proposal is to add a driveway par king extension o nto the

existing driveway. I call it an apron, some people call it a pad, but it's an ex

tra area for par king w hich veers off the existing drive way, and from the point of the r ear of that additional parking area, a sidew

alk from that

point around to the stair s of the rear deck. Mr. Cooper testified that he wanted to add onto the driveway because parking was inadequate in the neighborhoo d.

The Board denied Defendants' request and sent Defendants a letter, w hich stated: Please be advised that the Board of Di rectors of Indian Hills Club are now serving in the capaci t y of the Archi tectural Committee. At their last

meeting, it was their

decision to d eny

approval for your reques t un til professio nal assistanc e can be obtained from the Architec

tural Committee . Once th is assi stance has been obtained and stan dards have been set, you may at that point be eligible to resubmit your application; however, at this tim e the application t hat your [s ic] have s ubmitted has been denied.

In May 1994, d espit e the Board's r ejection, the D efendants began const ruction. Pl aint iff fi led suit to enj oin the constr uction. Foll owing a hearing on th e matter, the tr ial court permanently enjoined the Defendants from building a drivew

ay extension/

parking pad
or walkway because it found that Plai ntiff proved by a preponder ance of the eviden ce that the proposed cons truction was inharmonious with the s urrounding neighborhood.

At trial, the evidence sho wed that there existed 14 driveway pads and walkways in the neighborhood t hat were s imilar to th e Defendants' propos ed d rivewa y. In addi tion, the Defendants add uced evidence of man y other driveways in the neighbor hood situated close to boundary lines, leaving very little g reen space. Robert Payne, an ex perienced real estate businessman, tes tified that the pr oposed improvements woul d n ot diminish the value of any propert

y in the neighborhood. Several a dditional w itnesses test ified that the construction would not

result in Defendants' lot bei ng inconsistent or inharmoniou s with t he rest of the subdiv ision.4

The Plaintiff countere d this evi dence with the testimony of an architect, N. Mitchell Bar n ett, who opined t hat the proposed i mprovement would be inharmoni ous with t he character

of the subdivi sion, "that character being more green s pace, less con crete in the fronts of yards." Ba rnett also testified that 10 o f the 14 drivew ay extens ions that the Defendants alleged were similar to their proposal were situated on lots that are "physically and materially

different" in shape from t he Coopers' l ot.

As of November 1994, the Board had not yet established standards by which to exercis e architectur

al control.

In examining the case before us, we a re confronted w ith sever al competing principles

of law. Fi rst, the ge neral rule is th at an injuncti on should not be g ranted except in extreme cas es where courts o f law are unabl e to afford adequate redress. Smit h v. Rodgers , 677 S.W .2d 1, 3 (Tenn. App. 1 984). Furth ermo re, a ltho ugh re stric tive covenants
on real proper

ty are to b e recogniz ed and enforced accor di ng to thei r terms, such restricti ons are to be st rictly construed w ith all doubts resolved in favor of the fre e use of prop erty. Parks v. Richardson , 567 S.W.2d 465 (Tenn. App.1977); Lan d Deve lope rs v. Maxwell , 537 S.W .2d 901 (Tenn. 197 6). As the court stated in Emory v . Sweat , 9 Tenn. App. 167 (1927):

Rest ricti ve covenants ar e in derogati on of the right of unrestrict ed use o f pro pert y, and are to be st rictl y c onstr ued against the p a rty seeki ng to enforce them. They wi ll not be enforced by implication, and will in clude anything not plainly prohibited...Theburden rests upon the person relying on such covenantsto bring himself within its terms. (citations omitted). Id. at 176.

Conve rsely, restrict ive covena nts that condition the right of a lot o wner to make improvementsupon the approval of an associati on of homeowners are general ly val id and enforceable. See , Association o f Regency P ark Condominiu ms v. Thomasson , 878 S.W.2d 560 (Tenn. App. 1994). This pr inciple of validit y holds tr ue especially

where the covenantsthemselves regulate the extent of authority to approve by imposing s tandards5

upon which di sapproval may be based. Hollingsworth v . Szcz esiak , 84 A.2d 816 (D el. Ch. 1951); Winslette v. Keeler , 137 S.E.2d 288 (Ga. 19 64).

It does not appear th at Tennessee courts have as yet had occasion to evaluate the standard by whi ch a committee ' s power of appr oval over construct ion in a resi dential subdivis ion should be rev iewed. In 1994, this Court addressed the s ituation w ith respect to condominium owners. Both parties rely heav ily on Association of Owners of Regency ParkCondominiums v . Thomasson , 878 S.W.2d 560 (Tenn. App. 1994), w here the defendant was a re sident of a condomini um unit whosought to build a deck and stairs o nto his unit. Id. at 561. The board of di rectors of the condominium complex had the authorit

y to approve any

proposed constr uction pursuant to covenants

contained in t he ma ster deed. Id. The board rejec

ted the defendant's re q uest fo r construction and the trial court permanently enjoined defendant from bui lding thedeck and stair s. Id. at 562. On appeal, the Court of A ppe als f or th e Midd le Se ctio n dis cuss ed ca ses f rom s eve ral jurisdict ions review ing the standards t hat ot her state and federal court s employ w hen determining whether to uphold a board' s denial of consent for p roposed constr uction on a condominium unit. Id. at 56 3-66 . Ulti mat ely , the Court hel d that the board's decision to deny consent to th e c onstruction w as not arbitr

ary, capr icious, or unreasonable, and, ther efore , such decisi on would be en forced. Id. at 566. The Court was careful to note, however, that because condom inium owners live in close proximity to each other, "'each unit owner must give up a certain d egree of freedom of choic e which hemight otherwise enjoy in separate, p rivatel y owned property.' " Id. at 563. Conseq uent ly, w e do not find Thomasson to be disposi tive of the present case, which in volves separate, privatel y owned prop erty.

There are essential ly threeviews among the juris dict ions with re spec t to re stric tive covenantsthat requi re approval of construction. The majority view is that the restriction will be enforced as long as the i ndividual o r entity exercises authority reasonably and in1 Rhue v. Chey enne Homes, Inc., 449 P.2d 361 (Co lo. 1969); Levin v. Mountai n Farms, Inc. , 158 A. 2d

493 (Conn. 19 59); Shiel ds v. W elshi re Dev. Co., 144 A.2d 759 (Del. Ch.1958); Engval son v. W ebster , 74 So. 2d 113 (Fla. 1954); Otwell v. W est, 137 S.E.2d 291 (Ga. 1964 ); McN am ee v. Bishop Trust Co. Lt d., 616 P.2d 205 (H aw . 19 80 ); L aV ielle v. Seay , 412 S. W .2d 587 (Ky. Ap p. 19 67); J one s v. N orthw est R eal E state Co ., 149 Md. 271, 131 A. 446 ( Md. Ct. App. 1925) ; Donoghue v . Pry nnwood Corp., 255 N .E.2d 326 (M ass. 1970 ); W est Bloomfiel d Co. v. Haddock, 40 N.W .2d 738 (Mich. 1950); LeBlanc v. Webster, 483 S. W .2d 647 ( Mo. App. 1972); Triewei ler v. Spi cher, 838 P.2d 382 ( Mont. 1992 ); Fri edberg v. River point Bldg. Com mittee , 239 S.E.2d 106 (V a. 1977). 6 good faith. 1 Another posit ion taken by several courts is t hat a discret ion a ry approv al covenant

prohibits the approving authority from imposin g limitations that are more rest ricti ve than the specific restrict ions on the lot owner's use of the property

. See , e.g. , Hollyhock

Farms, Inc. v. Sc hoenlaub , 167 N.E.2d 128(Ohio Ct. C.P. 1959); Lake Forest, Inc. v. Drury , 352 So. 2d 305 (La . App. 1977). F inally, at least one cour t h as held t hat
covenan ts r equiring prior cons ent before construc tion are valid to the ex tent that they furnish adequate n otice to the pr operty ow ner of the specific restrict ion sought to be enforced. Davis v . Huey , 620 S.W.2d 561 (Tex. 1981).

We elect to adhere to the better- reasoned p os ition of the major ity of juri sdictions that have address ed the issue and h old that the appr oving aut hority must exerci se its power both reasonably and in good faith. In Davis , the Supreme Cour t of Texas succinctly stated the rule as follows:

The majority

view with respect to covenants req uiring submission of plans and consent prior to con struction i s that such clau ses, even if v esting the app roving authority with broad discretionarypowers, are valid and enforceable so l ong as the authority

to consent is exercise reas onably and i n good faith. Id. at 566.

Whether the exerci se of approval of cons tru ction plans i s reasonable i s a factual question to be determined in light of the c ircumstances. Trieweil ler , 838 P.2d at 385. See also , LaVielle , 412 S.W. 2d at 5 93 ; Snowmass American Corp. v. Schoenheit , 524 P.2d 645, 648 (Colo. C t. App. 1974 ). Th ere a re se veral crite ria th at co urts have established t o employ when eval uating the reasonableness of the exercise of pow er to consent . Th e most important of

these criteria, which indicate that disapproval of plan s is reasonable, are lackof compliance w ith the specific restrict ions of the subdiv ision and cons truction that is not consistent or

harmonious w ith the over all plan of development or w ith neighbor ing7

prop erty. Le B lanc v. Webster , 483 S.W.2d 647; LaVielle v . Seay , 412 S.W.2d 587; Validity, C onstr

uction and Effect of Restrictive Covena nt Requiring Consent of Third Person to Cons truction on Lot , 19 A.L.R. 2d 1274 , at p. 1294.

On the o ther hand , cou rts ha ve held that w hen deviatio ns were al lowed in the past, the consenting authority acted unreasonably in withholdi ng consent. Boiling Sp rings Lakes Divisi on of Reeves Telecom Corp. v. Coastal Ser vices C orp. , 218 S.E.2d 47 6 (N.C. Ct. App. 1975); LeBlanc , 483 S.W.2d at 652; Donoghue , 255 N.E.2d 326.

For example, in LeBlanc , 483 S.W.2d 6 47, t he defendants sought a pproval of constructio n plans prov iding for a dr iveway on the north si de of their house. Id. at 6 51

. The plain tiffs, who w ere the devel opers of the subdiv ision, had the r ight to appr ove o r disapprove any plans pur suant to recor

ded restric

tions. Id. at 648. The plaintiffs did not app rove defendants' proposal, reasoning that the drivew ay woul d be unsightly and would devalue other lots. Id. at 652. The Mis souri Cour t of Appeals hel d that the plaintiff's refusal to consent was unreasonably exercis ed because there w as no evidence o f diminution of property v alue, no vi olation of basic restr icti ons, and the propos ed construction was common in the area. Id. at 652.

Simi larly, in Donoghue , 255 N.E.2d 326, the Supreme Court of Massachusetts held that the corporate off icer's dis app rova l of the homeowner 's proposed co nstruction w as unreasonable because simil ar covenants against oth er homeowners had not been enforced. See accord, Boiling Sp rings Lakes , 218 S.E.2d 476.

In appl yi ng the test of re ason able ness and go od f aith to th e cas e bef ore u s, we must consider the surrounding circumstances a n d general s cheme of development t hat has been establishe d up to the time that Defendants submitted their plans for approval to the Board.8

Where, as here, the covenant imposes standardsfor a ppro val, t he re spec tive rights of the p artie s are clea rly es tablished and provide the fram ework within which the board has the discreti on to reject prop osed construction. That discretion is limited by the express confines of the covenant. The board is "pur ely a creature of contract , and possesses only such authority

as may be found in the wr itten instr ument creating it." Johnson v. Dick , 281 S.W.2d 171, 175 (Tex. Ct. App. 195 5).

In the present cas e, the Board's refusal of Defendants' appli cation was not based
on reasons bearin g a rel atio n to t he ge nera l plan of d evelo pme nt of the c omm unit y. Rather, t he Bo ard's reason for disapproving Defend ants' application was that the Board did not have pro fessional assi stance to aid them in evaluating proposed construct ion. This basis for denial was not a proper basis pursuant to the standards establ ished in the Declarations, which al lows the B oard to deny a request w hen there is an objection to exterior design or the constructi on would be i nharmonious w ith the neig hborhood.

The ex istence and ex

tent of waiver or abandonment i s another factor t hat sh oul d be considered i n evaluatingthe reasonableness of the Board's act ions. See , e.g. , LaVielle , 412 S. W.2d a t 593. Waiver can occur when a part

y that is attempting to enforce a subdivis ion restri ction prev iously acquiesced to violatio ns on another re stricted l ot. See , Waiver of Right to Enforce Restrictive Covenant by Failure to Object to Other Viol

ations , 25 A.L.R. 5th 123. Abando nment of a rest rictiv e covenant occurs when there is "community

acquiescence" to continued violations of restrictions. Scan dlyn v. McDill Columbus Corp. , 895 S.W.2d 342, 349 (Tenn. App. 1994). In addition, the right to enf orce a subdivisi on restricti on may be lost by a gener

al change in the character of the neighborhood. "Restric tions lose the ir force w hen they fail t o serve any useful purpose." Elm Hill Homes, Inc. v. Jessie , 857 S.W.2d 566, 571 (Tenn. App. 19 9 3). W hen there
occurs a material change in the character of restrict ed prop erty that r enders the enforcement of restricti ve coven ants unfair or i nequitable, courts may pr operly refuse to enforce them. Land Developers, Inc. v. Maxwell , 537 S.W.2d 904 (Tenn. 1976); Oliver v.9

Marbut , 123 S.W.2d 859 (Tenn. App. 1938).

Althou gh the architec

tural rev iew committ ee was compr ised ofdifferent individuals wh en 13 of the 14 driveway extensions were constructed, the Board acquiesc ed to th e construction of t hose drivewa ys. We do not find the fact that thecommittee was not comprised of homeow ners when t hose deviati ons were pe rmitted to be relevant.

Other pertine nt circumstances include that P laintiff produced an expert, w ho was hired nine months after theBoard's denial of Defendants' req uest, who testified that the construction would be inharmonious, while Defendants produced several w itnesses w ho testified that there already existed se veral lots with si milar driv eways and thus, the construction would be in harmony with the neighborhood. Moreover, Defend ants' expert testified that there would be no deval uation of other prop e rty in the subdiv ision. Other notable evidence revealed at trial was that the Cooper s live n ext door to the president of the Homeowner

s' Associat ion.

The record dis closes that th e Board u nreaso nably rej ected Defendants' pl an without proof of diminished pro perty value or a dis turbed general plan. Here, the Defendants' pl an does not violate a specific r estriction of the covenants, is not in c onflict wi th other homes in the subdivi sion, and does not diminish the v

alue of the subdi vision. Moreover , the Board previous ly acq uiesced to the construction of si milar driv eways. In cases deal ing wi th rest ricti ve covenants, we strive to adopt an interpretation that will assure reasonab le use of property for legitimat e purposes. W hit e v. Gulf Refini ng Co. , 2 S.W.2d 414 (Tenn. 1928). We deem a relatively mi nor driveway ex tension desig ned to ensure adeq uate park ing sp ace a nd a wa lkway to be a re ason able and l egiti mat e use of p rope rty.

The evidence, considered in i ts entirety , does not e stablish Pl aintiff's rig ht to inju ncti ve relief. Plain tiff's r equest for dis cretionary costs and attor ney's fees is denied. The trial cour

t's injunct ion is hereby

dissolved and the case is remanded wi th instructi ons10

to en ter jud gmen t for

Defe ndan ts. Cos ts o n app eal are tax ed toPla inti ff.

HIGHERS, J.

CONCUR:

CRAWFORD, P.J., W.S.

W ILLIAMS, SR. J.