Court Opinion

ID: 9850132
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:52:31.179816+00
Date Added: 2024-06-11T09:20:32.215848
License: Public Domain

GEER, Judge,
dissenting.
Although I would agree as a general matter with the majority opinion’s analysis of the proper meaning of the phrase “single family dwelling,” see Danaher v. Joffe, 184 N.C. App. 642, 650, 646 S.E.2d 783, 788 (2007) (Geer, J., concurring), I would hold in this case that the restrictive covenant, as drafted, is only a limitation on the type of structure that may be placed on the property and not a restriction on the type of occupancy permitted within the dwelling. I believe that this conclusion is mandated by J.T. Hobby & Son, Inc. v. Family Homes of Wake County, Inc., 302 N.C. 64, 274 S.E.2d 174 (1981), and the well-established rules of construction applicable to restrictive covenants. The majority opinion has, in effect, rewritten the restrictive covenant to add a limitation not currently there. I must, therefore, respectfully dissent.
Our Supreme Court, in Hobby, set out the principles governing enforcement of restrictive covenants such as the one in this case:
We begin our analysis of this case with a fundamental premise of the law of real property. While the intentions of the parties to restrictive covenants ordinarily control the construction of the covenants, such covenants are not favored by the law, and they will be strictly construed to the end that all ambiguities will be resolved in favor of the unrestrained use of land. The rule of strict construction is grounded in sound considerations of public policy: It is in the best interests of society that the free and unrestricted use and enjoyment of land be encouraged to its fullest extent. Even so, we pause to recognize that clearly and narrowly drawn restrictive covenants may be employed in such a way that the legitimate objectives of a development scheme may be achieved.
*639Id. at 70-71, 274 S.E.2d at 179 (emphases added) (internal citations omitted). Hobby thus reiterated that (1) a restrictive covenant must be “clearly and narrowly” drafted, and (2) any ambiguities in a covenant will be resolved in favor of the free use of land. Id.
Hobby addressed a restrictive covenant that included two pertinent components: (1) “No lot shall be used except for residential purposes,” and (2) “No building shall be erected . . . other than one detached single-family dwelling . . . .” Id. at 65-66, 274 S.E.2d at 176. The Supreme Court acknowledged that the first component restricted the use of the property to residential purposes, but rejected the plaintiffs’ contention that the second part of the covenant also limited the use that could be made of the building after construction.
The Supreme Court explained, repeating the fundamental principles regarding restrictive covenants:
[Plaintiffs’ position is inconsistent with one of the fundamental premises of the law as it relates to restrictive covenants: Such provisions are not favored by the law and they will be construed to the end that all ambiguities will be resolved in favor of the free alienation of land. While it is possible that a restriction as to the type of structure would, in some instances, limit the character of the type of usage to which the building is employed, we conclude that such is not necessarily the case. Indeed, it is not uncommon for buildings that had once served as residences to be acquired by businesses and other concerns for renovation and subsequent utilization in new and varied ways.
Id. at 74, 274 S.E.2d at 181. The Court then flatly held:
[A] provision in a restrictive covenant as to the character of the structure which may be located upon a lot does not by itself constitute a restriction of the premises to a particular use. While a restrictive covenant may be so clearly and unambiguously drafted that it regulates the utilization of property through a structural limitation, such was not done in the present case.
Id. at 75, 274 S.E.2d at 181-82 (emphasis added) (internal citation omitted).
In this case, the Article addressing “Use Restrictions” contained a section entitled “Use of Property.” That section provides in pertinent part:
*640(a) Only one single family dwelling or replacement thereof shall be placed upon each lot as designated on the said plat and no such lot shall be further subdivided by future owners for the purpose of accommodating additional buildings ....
(b) This property shall be used for single family residential structures and no duplex houses, apartments, trailers, tents or commercial or industrial buildings shall be erected or permitted to remain on the property provided, however, that this restriction shall not preclude the inclusion of one small light housekeeping apartment within the residential structure for occupancy by not more than two persons.
(c) No single family dwelling shall be built, erected, altered or used unless the main body of the structure, exclusive of garages, porches, breezeways, stoops and terraces, shall contain at least 1650 square feet of finished and heated floor space in the main body of the house if the structure is a one-story building or at least 2,000 square feet for all other structures. . . .
I can perceive no meaningful distinction between this restrictive covenant and the one in Hobby. Indeed, subsection (c) is essentially identical to the provision in Hobby.
Each of these provisions describes only “the character of the structure which may be located upon a lot.” Hobby, 302 N.C. at 75, 274 S.E.2d at 181. The subsections regulate only the type and size of the building and the number of buildings. Nowhere in these subsections is there any language specifically restricting the type of occupancy or use that may be made of the dwelling. Each of- the subsections focuses exclusively on construction and other structural concepts. In short, we have only “a provision in a restrictive covenant as to the character of the structure,” which Hobby holds “does not by itself constitute a restriction of the premises to a particular use!” Id.
The majority, however, focuses on subsection (b)’s provision that “[t]his property shall be used for single family residential structures,” suggesting that it parallels the provision upheld in Higgins v. Builders & Fin., Inc., 20 N.C. App. 1, 200 S.E.2d 397 (1973), cert. denied, 284 N.C. 616, 201 S.E.2d 689 (1974), a case decided before Hobby. In Higgins, however, the restrictive covenant stated: “No structure shall be erected . . . other than for use as a single family residential dwelling . . . .” Id. at 2, 200 S.E.2d at 399 (emphasis added). The two provisions are dispositively different. *641The covenant in this case restricts the use of the property to certain types of “structures,” as did the one in Hobby, while the Higgins covenant restricted the use of the structure to a single family dwelling. The headings used in the restrictive covenant in this case do not bring this provision within Higgins because they refer only to the use of the “property,” a concept equally consistent with both structural and occupancy restrictions.
Moreover, if the restrictive covenant is read in the manner suggested by the majority, subsection (b) is rendered internally inconsistent. On the one hand, according to the majority, only a single family may live in the building placed on the lot, but on the other hand, subsection (b) permits a two-person housekeeping unit with no restriction on who can live in that unit. A housekeeping unit could result in the house being inhabited by two families. '
In any event, in light of Hobby and Higgins, the restrictive covenant in this case is at best ambiguous. It cannot be viewed as being “clearly and unambiguously drafted,” as required by Hobby. 302 N.C. at 75, 274 S.E.2d at 182. In the absence of the requisite clarity, the ambiguity must be resolved in favor of free use of the property. Other jurisdictions have reached the same conclusion with respect to similar restrictive covenants. See, e.g., Double D Manor, Inc. v. Evergreen Meadows Homeowners’ Ass’n, 773 P.2d 1046, 1048-49 (Colo. 1989) (holding that “[tjhe covenant as written restricts only the type of structure to single-family dwellings” and citing cases from other jurisdictions to same effect); Permian Basin Ctrs. for Mental Health & Mental Retardation v. Alsobrook, 723 S.W.2d 774, 776 (Tex. Ct. App. 1986) (“There is no mention in this [paragraph providing that only a single-family dwelling could be erected] or any other paragraph of the covenant that seeks to impose a single-family occupancy requirement.”). I do not believe plaintiffs have offered any persuasive reason for reaching a different result, especially in light of Hobby.
In sum, I believe the law is clear, but the restrictive covenant is not. This Court may not restrict the use of the property when the restrictive covenant has failed to do so in a clear manner.