Court Opinion

ID: 2727130
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:11:55.588452+00
Date Added: 2024-06-11T10:03:13.193436
License: Public Domain

NO. COA14-167

                       NORTH CAROLINA COURT OF APPEALS

                              Filed: 15 July 2014

EASTERN PRIDE, INC.,
KENNETH E. MOOREFIELD
and wife, LYNN B.
MOOREFIELD,
     Plaintiffs,

    v.                                      Nash County
                                            No. 13 CVS 186
GURDIAL SINGH and wife,
AMANDIP KAUR,
     Defendants.

    Appeal by Defendants from order entered 15 November 2013 by

Judge Gary E. Trawick in Nash County Superior Court.                 Heard in

the Court of Appeals on 19 May 2014.

    Hornthal, Riley, Ellis & Maland, L.L.P., by L. Phillip
    Hornthal, III, and Graebe Hanna & Sullivan, PLLC, by
    Christopher T. Graebe, for Plaintiffs-appellees.

    Nigle B. Barrow, Jr., for Defendants-appellants.

    DILLON, Judge.

    Gurdial Singh and Amandip Kaur (“Defendants”) appeal from a

trial   court’s      ruling   granting    summary   judgment   in    favor   of

Eastern     Pride,    Inc.,     Kenneth   E.   Moorefield,     and   Lynn    B.

Moorefield (“Plaintiffs”)         declaring    that the construction and

operation    of   a    Family    Dollar    store    upon   Plaintiffs’      real
                                         -2-
property does not violate the restrictive covenant contained in

a deed, which prevents certain uses of said property.                         For the

following reasons, we affirm the trial court’s order.

                                    I. Background

       Plaintiffs       commenced    this     action,    seeking    a    declaratory

judgment   that     a    restrictive     covenant       prohibiting     the    use    of

their    real    property    “as     a   convenience      store”    would      not   be

violated by the construction and operation of a Family Dollar

store.     Defendants       filed     their    responsive     pleading        seeking,

inter alia, injunctive relief to prevent the construction and

operation of a Family Dollar store on Plaintiffs’ property.                          The

parties filed cross motions for summary judgment.                       The evidence

presented to the trial court on these motions tended to show as

follows:        As of 2006, Plaintiffs Kenneth and Lynn Moorefield

(“the Moorefields”) owned two adjacent tracts of land in Rocky

Mount.     One tract was developed as a convenience store (the

“Convenience Store Tract”); the other tract was undeveloped (the

“Vacant Tract”).         On or about 29 December 2006, the Moorefields

contracted to sell the Convenience Store Tract to Defendants.

As part of the agreement, the Moorefields and Defendants agreed

that    certain    restrictive       covenants      would    be    placed     on     the

Convenience Store Tract and the Vacant Tract.                     Pursuant to this
                                      -3-
agreement, the Moorefields conveyed the Convenience Store Tract

to Defendants by deed (the “Deed”) which was recorded in the

Nash County Registry on 10 January 2007.            The Deed contained the

following restrictive covenant language:

            1) The [Convenience Store Tract] shall be
            used solely as a convenience store with gas
            pumps and no portion may be used nor may
            there    be   operated    thereon    an    adult
            bookstore, adult video store, or an adult
            entertainment facility.     As long as Grantee
            operates    a   convenience    store    on   the
            [Convenience Store Tract] the Grantor may
            not use [the Vacant Tract] or any portion as
            a convenience store.

            . . . .

            4) These restrictions shall be binding upon
            and inure to the benefit of Grantor and
            Grantee,  their   heirs,   successors   and
            assigns.

(Emphasis added.)

    On 18 July 2012, the Moorefields entered an agreement to

sell the Vacant Tract to Eastern Pride, Inc., who intended to

construct    a   building   thereon    to   be   leased   to   Family   Dollar

Stores of North Carolina, Inc. for the operation of one of its

stores.     On 12 September 2012, Family Dollar Stores executed a

“Letter of Intent” to lease the Vacant Tract from Eastern Pride

at some point after Eastern Pride purchased the tract from the

Moorefields.      However, on 9 October 2012, Defendants’ counsel
                                          -4-
sent a letter to the Moorefields contending that the restrictive

covenant contained in the 2007 Deed prohibited the operation of

a Family Dollar store on the Vacant Tract.

      On   15    November      2013,    the    trial      court   entered     an      order

allowing    Plaintiffs’          motion       for    summary      judgment,          denying

Defendants’ motion for summary judgment, and declaring that “[a]

Family Dollar Store is not a ‘convenience store’ as prohibited

in   the   Deed[,]”      the    construction        and    operation    of       a    Family

Dollar store did not violate the restrictive covenants in the

deed, and a copy of the order was to be recorded in the register

of deeds’ office.          On 10 December 2013, Defendants gave notice

of appeal from the trial court’s order.

                               II. Standard of Review

      In   appeals    from      a     trial   court’s      ruling   from     a       party’s

motion for summary judgment from a declaratory judgment ruling,

            [s]ummary judgment may be granted in a
            declaratory judgment proceeding where the
            pleadings,     depositions,    answers    to
            interrogatories, and admissions on file,
            together with the affidavits, if any, show
            that there is no genuine issue as to any
            material fact and that any party is entitled
            to a judgment as a matter of law.

Steiner v. Windrow Estates Home Owners Ass'n, 213 N.C. App. 454,

456-57,    713    S.E.2d       518,    521-22       (2011)   (citations       omitted).

Interpretation      of    the    language      of    a    restrictive   covenant         is
                                          -5-
generally a question of law reviewed de novo by this Court.                           See

Moss Creek Homeowners Ass'n v. Bissette, 202 N.C. App. 222, 228,

689 S.E.2d 180, 184 (observing that “restrictive covenants are

contractual in nature.”) (citation omitted)), disc. rev. denied,

364   N.C.   242,    698   S.E.2d    402    (2010);       Harris   v.    Ray   Johnson

Const. Co., Inc., 139 N.C. App. 827, 829, 534 S.E.2d 653, 654

(2000) (stating that contract interpretation is a matter of law,

reviewed de novo).

                                 III.      Analysis

      Defendants contend that the trial court erred in granting

summary judgment in favor of Plaintiffs and declaring that the

construction     and   operation      of    a    Family    Dollar    store      on    the

Vacant   Tract       did   not      violate       the     restrictive       covenants

prohibiting    the     operation     of     a    “convenience      store”      on    that

tract.   We disagree.

      “In construing restrictive covenants, the fundamental rule

is that the intention of the parties governs, and that their

intention must be gathered from study and consideration of all

the   covenants      contained      in     the     instrument       or   instruments

creating the restrictions.”              Cumberland Homes, Inc. v. Carolina

Lakes Prop. Owners' Ass'n, 158 N.C. App. 518, 521, 581 S.E.2d

94, 96 (2003) (emphasis in original).                   “However, this intention
                                       -6-
may not be established by parol.             Neither the testimony nor the

declarations of a party is competent to prove intent.”                 Schwartz

v. Banbury Woods Homeowners Ass’n, 196 N.C. App. 584, 591, 675

S.E.2d 382, 388 (2009), disc. review denied, 363 N.C. 856, 694

S.E.2d 391 (2010).        “[A]ny ambiguities in the restrictions are

to be resolved in favor of the free and unrestricted use of the

land.”    Black Horse Run Ppty. Owners Assoc. v. Kaleel, 88 N.C.

App. 83, 85, 362 S.E.2d 619, 621 (1987), disc. review denied,

321 N.C. 742, 366 S.E.2d 856 (1988).              That is, as our Supreme

Court has explained, any doubt should be resolved in favor of

“the unrestricted use of property, so that where the language of

a restrictive covenant is capable of two constructions, the one

that limits, rather than the one which extends it, should be

adopted, and that construction should be embraced which least

restricts the free use of the land.”            Long v. Branham, 271 N.C.

264, 268, 156 S.E.2d 235, 239 (1967).               This “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.”        Erthal v. May, ___ N.C. App. ___, ___, 736

S.E.2d    514,   518    (2012),   appeal     dismissed   and   disc.    review

denied, 366 N.C. 421, 736 S.E.2d 761 (2013).
                                       -7-
       Applying these principles to the present case, we believe

that, for the reasons stated below, the operation of a Family

Dollar store does not violate the restrictive covenant in the

Deed, and, therefore, hold that the trial court did not err in

granting summary judgment to Plaintiffs.

       The   term    “convenience      store”         is     not    defined    in    the

restrictive covenant language in the Deed.                         We have held that

“[u]nless     the   covenants    set     out      a   specialized       meaning,     the

language of a restrictive covenant is interpreted by using its

ordinary meaning.”         Erthal, ___ N.C. App. at                ___, 736 S.E.2d at

522.     A dictionary with the copyright date on or about the time

the restrictive covenant was executed “is an appropriate place

to ascertain the then customary definitions of words and terms.”

Angel v. Truitt, 108 N.C. App. 679, 683, 424 S.E.2d 660, 663

(1993)    (applying    a    definition    from        the    1982    edition    of   The

American      Heritage      Dictionary       to       determine       the     customary

definition of the term “mobile home” as used in a restrictive

covenant executed in 1981) (citation omitted)).

       Here, the restrictive covenants were entered into in 2006.

“[C]onvenience store” is defined as “[a] small retail store that

is open long hours and that typically sells staple groceries,

snacks,      and    sometimes   gasoline.”                 The     American    Heritage
                                        -8-
Dictionary of the English Language, 401 (4th. ed. 2000).                             The

Merriam-Webster’s         Collegiate          Dictionary,           also      defines

“convenience store” as “a small often franchised market that is

open long hours.”         Id. at 272 (11th. ed. 2003).                   Using these

accepted definitions, the ordinary meaning of the words show

that a key feature of a “convenience store” is its small size,

long   store     hours,   and    it   sells    some      groceries,      snacks,     and

sometimes gasoline.

       A   Family     Dollar     store,      however,        is   more     accurately

described as a discount store, rather than as a convenience

store.     For instance, in a Form 10-K filed with the Securities

and Exchange Commission, Family Dollar Stores, Inc. states that

its “stores are generally open seven days a week and operate

between the hours of 8:00 a.m. and 9:00 p.m.”; that its store

size is typically between 7,500 and 9,500 square feet; and that

it sells “quality merchandise at everyday low prices” with the

majority    of     products    priced   at    $10   or    less    and    offering    “a

focused    assortment     of    merchandise     .   .    .   such   as     health   and

beauty     aids,    packaged     food   and    refrigerated         products,       home

cleaning     supplies,        housewares,     stationery,         seasonal      goods,

apparel, and home fashions.”            The Family Dollar letter of intent
                                                -9-
with Eastern Pride states that the proposed building for the

Vacant Tract would be 8,320 square feet.

    Looking           at    the     dictionary        definitions      for      “convenience

store” cited above, we do not believe a retail store occupying a

8,320 square-foot space is a “small retail store”; and, further,

it is at best ambiguous whether a store which is open only 13

hours    per    day        constitutes        being   open    for   “long       hours.”       We

further note that none of above definitions for a convenience

store state that it typically sells products at discount prices,

like a Family Dollar store.                       We further note that the code

assigned       to    a     Family      Dollar    store      under   the     North     American

Industrial          Classification           System   (“NAICS”)1       is    not      the   code

assigned        by         NAICS        to      convenience         stores         generally.

Specifically, the NAICS code assigned to Family Dollar stores is

452990, whereas the NAICS code generally assigned to convenience

stores    selling          gas    is    447110    and       the   NAICS     code      generally

assigned       to     convenience        stores       not    selling      gas    is    445120.

1
     The NAICS is a number system used by businesses and
governmental agencies throughout North America.   For instance,
the United States Department of Labor’s Bureau of Labor
Statistics utilizes the NAICS, describing it as a “framework to
group establishments into industries based on the activity in
which         they         are       primarily        engaged.”
http://www.bls.gov/bls/naics.htm.
                                       -10-
Accordingly, we do not believe that a Family Dollar Store falls

within the ordinary definition of a “convenience store.”

       It is apparent that Defendants do not want an establishment

operating on the Vacant Tract which sells products which they

sell   in   their      convenience    store   on   their   Convenience    Store

Tract.      Defendants could have negotiated that the restrictive

covenant    contain     language     prohibiting   certain   types   of   goods

from being sold from a store operating on the Vacant Tract;

however, such language limiting the type of products that can be

sold on the Vacant Tract             is not in the Deed.           Rather, the

language in the Deed merely prevents the type of store that can

operate     on   the    Vacant     Tract.     Certainly,     the   restrictive

covenant at issue would not prevent a Food Lion grocery store or

a Wal-Mart store from operating on the Vacant Tract since they

are clearly not “convenience store[s],” even though they sell

many of the same products that are sold in convenience stores.

       We have reviewed the other arguments raised by Defendants

in their brief and find them unpersuasive.                   Accordingly, we

affirm the trial court’s order.

       AFFIRMED.

       Chief Judge MARTIN and Judge STEELMAN concur.