Court Opinion

ID: 9784782
Source: CourtListenerOpinion
Date Created: 2023-08-30 20:53:48.835026+00
Date Added: 2024-06-11T07:35:59.126726
License: Public Domain

BUSTAMANTE, Judge (dissenting). {36} I respectfully dissent. The majority refuses to recognize that there can or ought to be any limit on the enforcement of restrictive covenants other than statutory, constitutional or (undefined) public policy strictures. I believe there are and should be limits on the scope of private-law devices such as restrictive covenants. {37} The Restatement (Third) of Property (Servitudes) § 3.1 (1998) recognizes such a limit: A servitude created as provided in Chapter 2 is valid unless it is illegal or unconstitutional or violates public policy. Servitudes that are invalid because they violate public policy include, but are not limited to: (1) servitude that is arbitrary, spiteful, or capricious; (2) a servitude that unreasonably burdens a fundamental constitutional right; (3) a servitude that imposes an unreasonable restraint on alienation under § 3.4 or § 3.5; (4) a servitude that imposes an unreasonable restraint on trade or competition under § 3.6; and (5) a servitude that is unconscionable under § 3.7. The provision applicable to this case is subsection (1). In this context the term “unreasonable”-used by the parties and the district court-is synonymous with arbitrary and capricious. The record in this case supports a finding that the covenant distinguishing between New Mexico CID and HUD-regulated homes is “arbitrary” and “capricious.” {38} The trial court considered the deposition testimony of the director of CID and the Manufactured Housing Division of the New Mexico Department of Regulation and Licensing. Viewed in the light most favorable to upholding the trial court’s decision, his testimony is that there is no substantive difference between CID and HUD-regulated manufactured homes. The homes are equivalent with regai'd to safety, longevity, performance, and placement on-site. {39} The trial court found that there was no substantive difference between the two types of homes. Plaintiffs do not challenge the trial court’s finding in this regard. As an appellate court, we must accept finding of facts that are supported by substantial evidence. Stueber v. Pickard, 112 N.M. 489, 491, 816 P.2d 1111, 1113 (1991). If there is no difference between the two types of homes, there is no reason for the prohibition of non-CID homes other than pure preference untethered to any reasonable rationale. See Mulligan v. Panther Valley Prop. Owners Ass’n, 337 N.J.Super. 293, 766 A.2d 1186 (2001) (imposing reasonableness standard on amendment to covenants); Armand Arabian, Condos, Cats, and CC & RS: Invasion of the Castle Common, 23 Pepp. L.Rev. 1 (1995). {40} Restrictive covenants serve a useful purpose. They have developed into powerful instruments regulating everyday neighborhood life in much of the country. But, their regulatory power must be shown to serve some legitimate purpose — aesthetic, economic, health, and safety interests chief among them. I cannot believe we would enforce, for example, a covenant allowing Pomeranians as pets, but forbidding Pekingese. The Association failed to demonstrate to the trial court any real, much less legitimate, purpose served by excluding homes that are the functional equivalent of homes that are allowed. We should affirm.