THI RD DI VI SI ON

M I LLER, P. J.

, M CFA DDEN, P. J.

, and M C M I LLI A N, J.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a l s .us /r ule s

M ar ch 9, 2017



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 6 A1 78 8

. NORTH BAY AVALON, L L LP v

. SPEEDW AY, LLC

et al

. M cF-0 7 3

M C F A D D E N , Pres id i n g J u d g e.

Th i s cas e i n v o l v es t h e en fo rceab i l i t y o f res t ri ct i v e co v en an t s i n a d eed

. Th e

t r i a l c o u r t ru l ed t h at t h e res t ri ct i v e co v en an t s ru n wi t h t h e l an d an d b i n d ap p el l an t

No rt h Bay Av al o n , LLLP as s u cces s or i n t i tl e t o t h e o ri g i n al g ran tee, an d t h at t h e

b en efi t s o f t h e res t ri ct i v e co v en an t s are h el d i n g ro s s , s o t h at t hey are en fo rceab l e by

ap p el l ee Sp eed way , LLC, t h e g ran t o r, ev en t h o u g h Sp eed way no l o ng er o wn s an

i n t eres t i n t h e p ro p ert y o r n earb y p ro pert y

. W e co n cl u d e t hat t h e c o v e n an t s are

en fo rceab l e i n eq u i t y , reg ard l es s o f wh et h er o r n ot t h e b urd en s a n d b en efi t s o f t h e

co v en an t s ru n wi t h t h e l an d o r are h el d i n g ro ss

. W e reject No rt h Bay ’ s arg u m en t t h at

t h e co v en an ts are u n co n st i t ut i o n al res t rai n t s i n t rad e. So we affi rm t h e t ri al co u rt

.1

. Fa ct s

.

Th e fact s are larg el y u n d i s p ut ed

. In May 2 0 02

, Sp eed w ay Su perAm eri ca, LLC

( S p e e d w ay , LLC’ s p red eces s o r) s o l d l an d at th e i n t ers ect i o n o f Bo u ld ercres t Ro a d

an d In ters t at e 2 8 5 t o o n e o f No rt h Bay ’ s p red eces s o rs i n t it l e. T h e d eed

, wh i ch was

reco rd ed i n t h e DeKal b Co un t y p ro p ert y reco rd s , co n tai n s two res t ri ct i ve co v en an t s

l i m i ti n g us e o f t h e l an d fo r a g as s t at i o n :

By accep t an c e h ereo f, Gran t ee ag rees t h at fo r a peri o d o f t wen ty -fi ve (2 5 ) y ears fro m an d aft er t h e d at e o f t h i s co n v ey an ce, t he p rem i s es sh al l

n o t b e u s e d as a Tru ck St op fo r t h e s al e, m ark et i ng , s t orag e o r

ad v ert i s i n g o f t ru ck d i es el an d t h e p rem i s es s h al l al so be res t ri ct ed fro m

t h e s al e o f an y p et ro l eu m fu el s o t h er t h an M arat h on , Tex aco , M o b i l

, BP

o r Sh el l b ran d fu el s fo r a p eri o d o f fi ft een (1 5 ) y ears fro m an d aft er th e

d a t e o f t h i s co n v ey an ce, an d t hat t h i s res t ri ct i o n s h al l b e a co v en an t

ru n n i n g wi t h t h e l an d an d s h al l b e co n t ai n ed i n an d m ad e a part o f ev ery

d eed

, m ort g ag e, l eas e o r o t h er i n s t ru m en t affect i n g t i t l e t o s ai d prem i s es

.

No rt h Bay p u rch as ed t h e p ro p ert y i n 20 1 3

. It w as aware o f t h e res t ri ct i v e

co v en an t s wh en i t p urch as ed t h e p r o p ert y

. Two m on t h s lat er, No rt h Bay fi l ed t h i s

q u i et t it l e act io n t o rem o v e t h e res t ri ct i v e co v en an t s i n i t s ch ai n o f t i t l e.

2

. En f o r cea b i li t y

.

2No rt h Bay arg u es t h at t h e co v en an t s are u n en fo rceab l e b ecau s e Sp eed way n o

l o n g er o wn s an i n teres t i n t h e p ro p ert y or an ad jacen t p ro pert y , an d n o Geo rg i a co u rt

ev er h as en fo rced a co v en an t wh ere t h e b en efi t s are h e l d “ ‘i n g ro s s ,’ i

. e., as a

p ers o n al ri g h t an d n o t ru n n i n g wi t h t h e l an d o n t h e b en efi t s id e.” Ba r to n v. G a mmel l

,

1 4 3 Ga. Ap p

. 2 9 1

, 2 9 3 (2 ) (b ) (2 3 8 SE2 d 4 4 5 ) (1 9 7 7 ) (ci t at i o n om i t t ed ). W e fi n d t h at

reg ard l es s of wh et h er t h e co v en an t s o r t h ei r ben efi t s ru n wi t h t h e l an d o r are h el d in

g ro s s , t h e co v en an t s are en fo rceab l e i n eq u i t y

.

Ou r Su p rem e Co u rt h as h el d t h at

[c] o v en an t s rel at in g t o l an d

, o r i t s m od e o f u s e o r en jo y m en t, are

en fo rceab l e ag ai n s t s ub s eq u en t g ran t ees wi t h n o t ice, wh et h er n am ed i n

t h e i n s t ru m en t o r n o t

, an d t h o u gh t h ere i s n o p r i vi t y o f es t at e. It i s

i m m at eri al i n s u ch cas es wh et h er t he co v en an t ru ns wi t h t h e lan d o r n ot

,

t h e g en eral ru l e bei n g th at i t wi ll b e en fo rced acco rd i n g t o t h e in t en t i o n

o f t h e p art i es

. It i s o n ly n eces s a r y t h a t t h e co ven a n t co n cer n t h e l a n d o r

i t s u s e, a n d t h a t t h e s u b seq u en t g r a n t ee h as n o t i ce o f i t

. Co v en an t s are

s o en fo rced on t h e pri n ci p l e o f p rev en ti ng a p art y h av i ng k n o w l ed g e o f

t h e ju s t ri g h t s o f an o t h er fro m d efeat i n g s u ch ri g ht s

. Wh e t h e r t h e

. . .

co v en an t ru n [s ] wi t h t h e l an d o r [i s ] an eq u it ab l e serv i tu d e, i t i s cl ear

t h a t a r e s t r i ct i v e co v en an t

. . . i s an en fo rceab l e co v en an t ag ai n s t a

p u rch as er wi th n o t i ce.

3Ti mb er

st o n e Ho meo wn er ’s As s n

. v. S u mm e r l i n , 2 6 6 Ga. 3 2 2

, 3 2 3 (4 6 7 SE2 d 3 3 0 )

(1 9 9 6) (em

p h as i s s u p p l i ed ; ci tat i o n s o m it t ed ). See al s o OCGA § 2 3 -1 -1 6 (“ He wh o

t a k e s w i t h n o ti ce o f an eq u it y t ak es su b ject t o t h at eq u i t y .”). Here, t h e co v en an t s

co n cern t h e u s e o f t h e la n d

, a n d i t i s u n di sp u t ed th at No rt h Bay h ad n o ti ce o f t h em

wh en i t p u rch as ed t h e p ro p ert y

. Co n s eq u en t l y , t he tri al co u rt co rrect l y ru l ed t h at t h e

co v en an t s are en fo rceab l e.

3

. S t an d i n g

.

No rt h Bay arg u es t h at Sp eed way ’ s l ack o f in t eres t i n t h e p ro p ert y o r an

ad jacen t p ro p ert y , as wel l as i t s l ack o f an y leg i t i m at e in t eres t i n t h e co v en an t s ’

en fo rcem en t , d efeat s s tan d i n g. W e d i s ag ree.

Th e p ers o n en ti t l ed t o t h e b en efi t of a co v en an t h as s t an d i n g to en fo rce i t

. See

g en eral l y Jo n es v. G a dd

y , 25 9 Ga. 35 6

, 3 5 7 ( 2 ) ( 3 80 SE2 d 7 06 ) (1 9 8 9 ); Ba r t o n v.

At ki ns o n , 2 2 8 Ga. 7 3 3

, 7 4 3 (2 ) (1 8 7 SE2 d 8 3 5) (1 9 7 2 )

. Th u s as l o n g a s S p e e d way

was i n t en d ed t o b en efi t fro m t h e co v en an ts

, it h as s t an d i n g t o en fo rce t h em , ev en i f

i t ret ai ned n o i n t eres t i n t h e b u rd en ed p ro p ert y n o r an ad jacen t p ro p ert y

. Ba r t o n , 2 2 8

Ga. at 7 4 3 (2 ). An d t he ci rcu m s t an ces m ak e cl ear t h at t h e co v en an ts were i n t en d ed

t o b en efi t Sp eed way b y i m p o s i n g cert ai n l i m i t s on co m p et i t i o n

. “ Th o u g h n o l an g u ag e

o f t h e pro m i se m ay s u g g es t an i n t en t i o n th at t h e b en efi t o f t h e p ro m i s e s hal l ru n , t h e

4ad v an t ag e fro m i t s ru n n i n g m ay b e s o o b v i o u s t h at i t i s p ro p er t o i n fer t hat t h e p art i es

i n t en d ed i t t o d o s o

. ” Jo n es , 2 5 9 Ga. at 3 5 8 (ci t at io n o m i t t ed ).

F u r t h er, t o h o ld t h at t h e co v en an t s are no t en fo rceab l e b ecau s e Sp eed w a y

ret ai n ed n o i n t eres t i n t h e b u rd en ed o r n earb y p ro p ert y wo u ld m ean t hat t h e co v en an t s

were v o id fro m t h ei r i n cep ti o n ; Sp eed way co n v ey ed i t s en ti re parcel v i a t h e deed t h at

co n tai n ed t he co v en an t s , s o fro m t h e b eg i n n i n g o f t h e co v en an t s ’ d urat i on , Sp eed way

n o lo n ger p o s s es s ed an i nt eres t i n t h e p ro p ert y

. Sp eed way as g ran t o r an d t h e o ri g i n al

g r an t ee co u l d no t h av e i n t en d ed th e co ven an t s t o b e v o id ab i n i t i o , an d “ co v en an t s

are t o b e co n s t ru ed so as t o carry i n t o effect t h e i n t en ti o n o f t h e p art i es

. . . .” S mi t h v.

Gu l f Ref i n i n g Co

. , 1 6 2 Ga. 1 9 1 , 1 9 4 (1 3 4 SE 4 4 6) (1 92 6 ) (ci t at i o n an d pu n ct u at i o n

o m it t ed ).

In ad d i t i o n , t h e tri al co u rt ex p res s l y fo u n d as fact th at Sp eed way h as an i n t eres t

i n en fo rci ng t h e co v en an t s

. He hel d t h at t h e co v en an t s “ p ro v i d e a l eg i t i m at e

co m p et i t i v e a d v a n t a g e t o Sp eed way b y p res erv i n g an at tract i ve o p p o rt u n i t y fo r

Sp eed w a y t o r e en t er t he Geo rg i a m ark et

. ” Th e co u rt h el d t h at t h e ori g i n al reas o n

Sp eed way en t ered t h e co v en an t s

– t o prev en t th e p ro pert y fro m b ei n g d ev el o p ed an d

u s e d as a co m

p et i t i v e t ru ck s t o p o r g as s t at i o n

– p ers i s t s. No t h i n g i n t h e reco rd

co n trad i ct s t h es e fact u al fi n d i n g s

.

5Becau s e Sp eed way an d th e i n it i al gran t ee i n ten d ed Sp eed way t o b en efi t fro m

t h e c o v en an t s, t h e t ri al co u rt di d n o t err i n ru l i n g t h at Sp eed way h as s t an d i n g t o

en fo rce t hem

.

4

. Un co ns t it u t i o n a l r es t r a i n t o f t ra d e

.

No rt h B a y arg u es t h at th e res t ri ct i v e co v en an ts are n ot en fo rceab l e b ecau s e

t h ey are u n co n st i tu ti o n al , i l l eg al res t rai nt s o n t rad e. W e d i s ag ree.

In i t s o rd er t ran s ferri ng t h i s ap p eal t o o u r co u rt , o u r Su p rem e Co u rt h el d t h at

“ an y i s s ue as t o wh et h er t h e pro h i b i t i o n fo u n d i n Ga. Co n s t

. Art

. III, Sec. VI, Para.

V[, w h i ch co n cern s res t rai n t s o n t rad e,] ap p l ies t o res t ri ct i v e co v en an t s o n t h e u s e o f

l an d i s w el l set tl ed ,” ci ti n g Go d l ey Pa r k Ho meo wn er

s As s n

. v. Bo wen , 28 6 G a. Ap p.

2 1

, 2 3 (6 49 SE2 d 3 08 ) (2 0 0 7 ). In t h at cas e, we h el d t h at th e co n s ti t u t io n al p ro v i s i o n

an d OCGA § 13 -8 -2 (a) (2 ), wh i ch ren d ers co n t ract s i n g en eral re s t r a i n t o f t rad e

u n en fo rceab l e as ag ai n s t p u b li c p o l i cy , d o no t ap p ly t o res tri ct i v e co v en an t s o n t h e

u s e o f r e a l p ro p ert y

. Go d l ey Pa r k

, 2 8 6 G a. Ap p

. at 2 3 (c). W e o bs erv ed th at

, “ [i ] n

Geo rg i a, i t i s cl ear t h at t wo p art i es m ay co n t ract away

o r ex t en d t h ei r ri g ht s as t h ey

p l eas e reg ard i ng t he us e o f real p ro p ert y s o l o n g as p u b l i c p o l i cy i s n o t vi ol at ed .” Id

.

(ci t at i o n o m i t t ed )

. Fo r th es e reas o n s , we d o n ot fi n d th at t h e t ri al co u rt erred by

h o l d i n g t h at t h e co v en an t s at i s s u e were n o t u nen fo rceab l e res t rai n t s o n t rad e.

6Ju d

g men t a f f i r m ed . Mi l l er

, P. J., a n d

McMi l l i a n , J., co n cu r

.

7