# FILED May 29, 1998 Cecil W. Crowson Appellate Cou rt Clerk J. B. HINSON and wife, MILDRED ) HINSON, THOMAS GUY P ORTER and ) wife, GRACE PORTER , and CHARLES ) BOGGESS and wife, ROBERTA ) BOGGESS, ) ) Wayne County Chancery Plaintiffs/Appellants

, ) No. 9614

) VS. ) ) BEECHVIEW CORPORA TION, BEN ) Appeal No. GASPARRO, m

anager, BILL BATES, ) 01A01-9709-CH-00498 individually, and BEN GASPARRO, ) individually, ) ) Defendants/Appellee

s. )
IN THE COURT OF AP PEALS OF TENNESSEE AT NASHVILLE
APPEAL FROM

THE CHANCERY COURT OF WAYNE COUNTY AT WAYNESBORO, TENNESSEE HONORABLE ROBERT L. JONES, JUDGE
Dougl as Tho mpson Bates , III P.O. Box 1 Centerville, Tennessee 37033 ATTORNEY FOR PLAINTIF FS/APPELLANTS James Y. Ross, Sr. Barrister’s Building 102 Public Square N

orth P.O. Box 1356 Waynesboro, Tennessee 38485 ATTORNEY FOR DEFENDANTS/APPELLEES

AFFIRMED IN P

ART, REVERSED IN PA RT, REMANDED
HENRY F. TODD PRESIDING JUDGE, MIDDL E SECTION

CONCUR: BEN H. CANTRELL, JUDGE WILLIA M C. KOCH, JR., JUDGE-2-

J. B. HINSON and wife, MILDRED ) HINSON, THOMAS GUY P ORTER and ) wife, GRACE PORTER , and CHARLES ) BOGGESS and wife, ROBERTA ) BOGGESS, ) ) Wayne County Chancery Plaintiffs/Appellants

, ) No. 9614

) VS. ) ) BEECHVIEW CORPORA TION, BEN ) Appeal No. GASPARRO, m

anager, BILL BATES, ) 01A01-9709-CH-00498 individually, and BEN GASPARRO, ) individually, ) ) Defendants/Appellee

s. ) 

## O P I N I O N
The captioned plaintiffs seek e nforcement of c ertain restrict

ions upon certain p

roperty locatedin the same area as that of the property of plaintiffs and to require an accounting f

or use of fees charged.

The Trial Court order

ed an accountin

g and up held restrictions as to part, but not all of the area desire

d by plaintif

fs.

Plaintiffs have a

ppealed and state

d the issue on appe

al as follows: 1. Whether the trial court was correct in finding that only Section II and L

ots 1-11 of Secti on III of the BeechviewRecreation Development are subject to the res trictive covenant prohibiting the placement of mobi l e homes on residential lots , and all other lots or land outside of Section II and Lots 1-11 of Section III of said deve lopment was unrestricted unles s conv eyed by deed adopting such covenant prohibiting placement of mobile homes thereon. The captioned de

fendants-appe

llees state the iss

ue on appeal as f

ollows: 1. Whether

the Trial Court

was correct in finding th a tonly Section II and L ots 1-11 of Section III of the BeechviewRecreation Development are subject to the restrictive co vena nt prohibiting the placement of mobi

le homes on residential lots, and all other lots or land outside of Section II and Lots 1-11 of Section III of said deve lopment-3- was unrest

ricted unless conveyed by deed a dopting such covenant prohibiting placement of mobile homes thereon. Although the judgment of the Trial Court requires an accounting, the record contains no evidencethat the accounting was ever accomplished or that final, enforceable judgment was ever rendered thereon. For this reas on, the judgment f rom which this appe

al is prosecuted i

s not a final judgment appea

lable as of right and is

subject to dismissal

pursuant to

TRAP Rule 3(a) and TRCP Rule 54.02. However, due to the advanc ed stage of this a

ppeal, the infirmi

ty is waived, and the issues presented by the parties will be discussed.
The Plaintiffs sought the following relief: 1. That

the Court declare that

since none of the lots have been designated as mo

bile home lots, then, there be no mobile home lots; 2. That

the court declare the mobile hom es located on the development to be in violation of the Declaration; 3. Should

the court not do as above prayed, then , t o assess damages ag a inst the defendan ts for their misrepresentati

on of the mobile home

restrictions; 4. That

the court order the Corpora tion to immediately provide for a wat er fa cil ity a nd to e stablish a time table for such und

er the supervisio

n of the Court; 5. Should

th e Court not do as above pra yed, then, t

o assess damages against the defendant Beechview for its failure to so do; 6. That

the Court order the Corporation to show the plaintiffs their books to show revenues and expenditures of the

fees; 7. For general relief. The parties agreed

to bifurcate the trial and

try the damage issues separately . After the hearing the tri

al judge entere

d the following ju

dgment: This matter came on to be heard on the 30th day o f January 1997 upon the appe

arance of all

parties, together with their attorneys, to wit: for the plaintiffs, Douglas Thompson Bates, III , for the d efendan ts, Billy W. Townsend and James Ross; upon the entire record of the cause and upon sworn-4- testimonypresented in open court, together with exhibits thereto. The pl aintiffs non-suite d all relief requ

ested against a

ll defendants,

except for the request to requir e the corporation to account for its f

ees an d to declare which lots restricted against mobi l e homes. The Court hereby enters an order allowing said non

-suit. The Court further dismisses all coun ter-claims filed b y the defendants a

gainst the plaint

iffs. The Courtfurther ordered the defendant, Beechview, to pay all co

urt costs. The Court did make findings of facts, which are as follows, to wit: 1. There was a general plan for Beechview dev

elopment, butonly on lots designated in the attachment as the pink area. The Court does f

urther fi nd that that was a general plan on restrictions 12 through 19, but the defendants’ oral statement that mobile homes are allowed on the ridge would be effective to all

ow mobile homes. 2. The restrictions may not be changed by d eclarant or anyone else irrespective

of the langua ge in any filings of the declarant or anyon e in regard to the lots shown on the attachment. 3. There was no general plan as to any other

property in the development. 4. All oth er lots are unrestricted, except those lots having the restrictions in their deeds even though outside of the area held restricted b

y these cov

enants. 5. Fees collected from lot owners under the authority of restrictions or improvements for maintenan ce of the development

are not unrestricted funds of the corporation. Persons against whom ass essmentsare m ade are entitle d to periodic accounting of the total rec eipt s, a breakdown of cl as sification of those receipts, if there are different classifi c ations, and an itemized list of how funds are expended, the payee

s of those distributions and the purposes for which the funds are distributed to payees. This shall not extend to money

derived from the

sell of lots. It is, theref

ore, ORDERED, as f

ollows, to wit: I. The lots shaded in pink are declared to be r estri cted against mobile ho

mes. All other lots w

hose deeds conta

in-5- mobile hom e r estrictions are likewise restricted. The remaining property of Beechview is unrestric ted. II. As to lots restr

ic ted, these restrictions may not be changed by declarant or a nyone irrespect ive of any langua ge of the filings of the declarant or anyone. III. BeechviewCorporati on is ordered to comply to the requests of the plaintiffs for an

accounting of

their fees as set out in the findings above. Attached to the jud

gment is a photosta

tic copy of a dr

awing which is

made Exhibit A

to this opinion. It contains no pink shading.

As we have noted the appellant lot owners in the Beechview subdivision contend

that all the property in the subdivision contains a restriction (either by a rec orded instrum ent or b y a reciprocal neg

ative easement)

against mobile ho

mes.

The record shows that in June of 1988, Beechview Corporation purchased 300 acres of land in the area of Wayne County wher e Beech Creek

flows into the Tennessee River. The first development

took place in June of

1989 when the corporation recorded two plats in the Wayne County Register’s Office along w ith a “Declaration

of Conditions, Coven

ants and Restricti

ons” (the Decl arat ion ) per tai nin g to t he p rop ert y. The Declaration recited that the “development” was to be known as Bee

chview Recrea

tion Development;

that it was a part o

f the property

bought in 1988; and that the deve

lo pment w as more particularly described in Exhibit A attached to the Declaration.

Exhibit A described the property shown on the two plats. The first, designated as “BeechviewRecreation Deve lopment-Section On

e,” was describ

ed in Exhibit A as “lots one (1) through forty-thre

e (43) on the plat a

nd that these lots

were “recreational only.” The second plat,-6-

desi gnated as “Beechview Recreation Development-Section Two,” shows twelve lots designated as “residential only.”

The significance of the residential versus recreational designations lies in the fact that, according to the D eclarat ion, no permanent structures could

be built on the rec

reational lots. They were the lots along the river app aren tly b elow the flo od line, su bject to a TV A flowage easement,and could be used only for campi ng or picnic purposes. The lots on Part Two designated

as residential only were restricted as to the size and structure of the residences to be erecte d thereon and mobile homes as residenc

es were prohibite

d except where the

plats s o designated. The plat did not include any such designation.

At this point we would have to say that the Declaration applied only to the two plats that
were recorded and referenced in the Declaration. There is no credible evidence that the corporationhad a general

plan or scheme to d

evelop the entire

300 acres with re

strictions again

st the use of mobile homes. See Land Developers, Inc. v. Maxwell, 537 S.W.2d 904 (Tenn. 1976). An inference mig

ht be draw n that the develope r intended to rest

rict the use of all

the property to either recreational or residential uses, but the Declaration itself alluded to the possible use of mobile homes on residential lots where such use was designated.

Some other pro vi sions of the Declaration are relevant. In Section VI I the corporation reserved th e right t

o amend the Declaration at any time prior to January 1, 1995, without the approval of any lot owners. Any amendment would be e ffe ctive upon filing in the Wayne County Registers’ Office. In the definitions section t he Declaration again described the “development”

as the property described in Exhibit A (the two plats) and “all other real property which may be anne

xed hereto

as provided herein.” Property could be annexed by a “Certificate of Expansion,” define

d as a recorded

document or plat w

hich commits

an additional portion of the real estate to the Development. In case other prope rty is added it is to be subject to the Declaration.-7- The firs t expansion occurred later in the summer of 1989. On August 31, 1989, the corporationrecorded another plat which is called Beechview Recrea tional Development - Secti on Thr ee. It showed nineteen l ots on the west side o

f the main

road, generally across the roadfrom the residential lots on the plat of Section Two. T he plat does not contain any designationconcerning mobile hom es, nor does it designate the lots as residential or recreational.

Nor does the record

contain any

certificate

of expansion filed i

n connection with this plat.

On October 25, 1990, the corporation filed a Certificate of Expansion bringing Section 1-A and 1-B into the developme nt and subjecting

them tothe Declaration. The plat(s) for this additional do not appear in th e record. The c

orporation filed

anoth er plat on May

31, 1991 designated as Se

ction 2-A. The pla

t does not designa

te any lots r

esidential or rec

reational.

On July 10, 1993, th

e corporatio

n fi led another Certificate of Expansion covering the remainder

of t he 300 acres and sub

jecting it to the D

eclaration “unl

ess a parcel is sp

ecifically excluded from the Declaration of Conditions, Covenants and Restrictions and the amendment thereto when said parce

l is conveyed .” On the same date the corporation filed an amendment to the Declarati

on whic h altered slightly the Declaration’s prohibition against subdividing the lots.
Although the record is not clear as to when other parts of the original 300 ac res wer e actually subdivided, there are references in the record to Se

ctions 3C, 3D, and 3E. But it appears th at large portions of the original 300 acres have not been subdivided, althoug h all of th e property was brought

into the development in the certificate of

expansion filed in 19

93. Thus, the restrictions (whatever they are) apply to the entire tract. And it appears that all the plaintiffs purchased prope

rty that ca me out of the orig

inal 300 acres.1 We take no position on whether the restrictions may be orally waived at the

time of the conveyance, nor do

we take a position on whether allowing the developer to change the restrictions at will can be enforced. See Hamilton v. Broyles , 415 S.W.2d 352 (Tenn. App. 1966). The parties have not addressed these issues. But we note that it would be a good idea to require som e wri tte n rec ord , so tha t th e cha in o f ti tle wil l co nta in t he re str ict ion s, i f any.

2 This case is a good example of how not to create a subdivision. -8- In 1995, the corporation acquired an additional tract of 122 acres adjoining the original tract at the northwest corner. It does not appear, however, that that property has been developed
or r est ric ted in a ny wa y.

As we read the va

rious documents the

following appea

rs: (1) The original property brou gh t into the Development

included Section Two whichwas designated as residential only. Under the terms of the Declaration, residential property c

ould not c ontain mobile homes unless the pl at so designated

. The trial judge

correctly found th a t these lots were so restricted. (2) The record does not show that any

of the lots carved out after that time were specifically designat e d residential. The plats, howeve r, have a lege nd that restricts how ho uses are to be located on the various lots. Fro m tha t evidenceand fro m other evidence in the record we find that all the landabove a certain elevation (which we take to be the flood line) was to be sold for residentalpurposes. Therefore, the conclusion is inescapable that the lots that have been platted and are above

the flood line come under the residential restrictions in the Declaration. Af ter July 10, 1993 the Development inclu

ded the entire 300

acres. (3) Untilthe Declaration was amended on July 10, 1993, the residential restrictions in the Declaration probibited mobile homes on resi dential lots unless the plat designated the lot as one suitable

for mo bile hom es. None of the pla ts contain any such designation. Thus, the residential lots sold prior to July 10, 1993 were restricted to prevent

mobile homes as residences. (4) A fter

July 10, 1993, th

e Declaration a

ll owe d the corporation to exempt any lot from the restrictions “when said parcel is conveyed.” Therefore, the corporation now has the power to designa

te in th e conveyance what restrictions att ach t o th e pro pert y. 1 (5) Th e record does not show what lots were conveyed after July 10, 1993, nor what exemptions from the Declarationmight

have been attempted. Therefore we are not able to deal with the restrictions on specific lots. That determination will have to be made on a case

-by-case basis. 2-9- The lower court’s order

is affirmed

in part. Those findings in Parts 1,2,3, and 4 of the lowercour t’s judgment and the conclusion based thereon that conflict with this opinion are reversed. The cause

is remand

ed to the Ch

ancery Court of Wa

yne County for further proceedings in accordance with this opinion. The issues on remandinclude any issues reserved at the first trial. Tax the costs of appeal equally to the appellants and the appellee.

AFFIRMED IN PART, REVERSED IN PART, REMANDED.

_________________________________ HENRY F. TODD PRESIDI NG JUD GE, MIDDLE SECT IO N

CONCUR:

____________________________ BEN H. CANTRELL, JUDGE

____________________________ WILLIA M C. KOCH, JR., JUDGE