Court Opinion

ID: 8895143
Source: CourtListenerOpinion
Date Created: 2022-11-26 23:50:17.598956+00
Date Added: 2024-06-11T17:07:26.502185
License: Public Domain

Judge Hunter
concurring in part and dissenting in part.
I respectfully dissent from the majority opinion on the issue of whether the Architectural Control Committee (“ACC”) unreasonably withheld approval of plaintiffs’ application for construction of an above-ground swimming pool and backyard fence.
The record reveals that on 25 April 1995, plaintiffs submitted hand-drawn plans to the ACC for an above-ground swimming pool and backyard fence. Plaintiffs thereby sought approval for the project pursuant to the Chesney Glen Subdivision Declaration of Covenants, Conditions, and Restrictions (“Covenants”), which provide in pertinent part:
No building, sign, fence, ... or other structure or planting shall be constructed, erected or planted until the plans and specifications showing the nature, kind, shape, height, materials, floor plans, color scheme, and located (sic) with respect to topography and finished ground elevation shall have been submitted to and approved in writing by the [ACC], The [ACC] shall have the right to refuse to approve any plans and specifications which are not suitable or desirable, in its sole discretion for aesthetic or *618any other reasons, provided such approval is not unreasonably withheld.
(Emphasis added.) The covenants also provide:
No exposed above-ground tanks except for approved recreational swimming pools will be permitted ....
This section of the covenants clearly indicates that above-ground pools, similar to the one plaintiffs sought approval for, are allowed in the Chesney Glen Subdivision. This is supported by the sixth finding of fact by the trial court, which provides:
6. During the period in which the builder/developer was in control of the Association, the builder/developer approved an above-ground swimming pool for Mr. Joe Smith, a resident of Chesney Glen and a member of the Association. The builder/developer also approvéd another above-ground swimming pool and a hot tub for other lot owners within Chesney Glen during the time of the builder/developer’s control of the Association.
Therefore, it is obvious that above-ground pools existed in the Chesney Glen Subdivision at the time plaintiffs submitted their application.
After receiving plaintiffs’ application, the ACC did not request any additional information from the plaintiffs concerning their application. By letter dated 15 May 1995, plaintiffs were informed by Cindy Hunter (“Hunter”), an employee of the property management company engaged by defendant, that their application had been denied. The record reveals that this letter was written at the direction of Tom Coleman (“Coleman”), acting chair of the ACC, after Coleman and Hunter had a conversation about the denial and decided that the actual reasons for the denial did not need to be conveyed to the plaintiffs. The letter stated in pertinent part: *619Plaintiffs were given no other reasons for the denial of their application, and the denial letter did not address or comment on any of the characteristics or features of the pool the plaintiffs had proposed to build. On 25 May 1995, plaintiffs wrote a letter of protest in response to the denial letter, asserting that the Board did not have the authority to prohibit all above-ground pools. There is no evidence in the record that plaintiffs received a response to this letter. In fact, the record contains no evidence of any correspondence between plaintiffs and the ACC in regards to what additions or changes plaintiffs could make to their application to make it acceptable to the ACC.
*618The [ACC] has reviewed your request submitted April 25, 1995 to install an above ground pool and fence. . ..
The [ACC] has denied your request based on the following: The [ACC] and the Board of Directors have established architectural guidelines for the subdivision which will be published to all homeowners in the near future. After careful consideration, the Board of Directors made the decision that above ground pools will not be allowed in Chesney Glen. . . .
*619On 3 July 1995, plaintiffs filed an action for a declaratory judgment as to whether their application had. been unreasonably denied under the Covenants. During the pendency of this action, plaintiffs proceeded with construction of both the pool and the fence. Plaintiffs did so pursuant to that section of the Covenants which provides:
In the event the [ACC] shall fail to specifically approve or disapprove the plans and specifications submitted in final and complete form, within thirty (30) days after written request for final approval or disapproval such plans and specifications shall be deemed approved.
(Emphasis added.)
On 17 October 1995, at the annual meeting of the Chesney Glen Homeowners’ Association, a proposed amendment to the Covenants which would have prohibited all above-ground pools was considered, but failed to receive the required two-thirds approval of the membership. The ACC subsequently published to all Chesney Glen homeowners its “Revised Architectural Control Guidelines,” which were to become effective 1 March 1996. These guidelines include a section that sets forth specific design guidelines for above-ground pools, indicating that future above-ground pools would be allowed, completely contradicting the 15 May 1995 denial letter sent to the plaintiffs.
The North Carolina Supreme Court has addressed the rules of construction which are to be applied when interpreting restrictive covenants, and has stated:
“Covenants and agreements restricting the free use of property are strictly construed against limitations upon such use. . . . Doubt will be resolved in favor of the unrestricted use of property, so that where the language of a restrictive covenant is capa*620ble 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) (quoting 20 Am. Jur. 2d Covenants, Conditions and Restrictions § 187 (1965). The construction against limitations upon the beneficial use of land must be reasonable and cannot defeat the plain and obvious purposes of a restriction. Boiling Spring Lakes v. Coastal Services Corp., 27 N.C. App. 191, 195, 218 S.E.2d 476, 478 (1975). This Court has held that the exercise of authority with respect to covenants requiring the submission of plans and prior consent to construction, even if vesting the approving authority with broad discretionary power, is valid and enforceable so long as the authority to consent is exercised reasonably and in good faith. Smith v. Butler Mtn. Estates Property Owners Assoc., 90 N.C. App. 40, 48, 367 S.E.2d 401, 407 (1988). With regard to the exercise-of authority given architectural review committees, the Supreme Court has stated: “ ‘[A] restrictive covenant requiring approval of house plans is enforceable only if the exercise of the power in a particular case is reasonable and in good faith.’ ” Raintree Homeowners Assn. v. Bleimann, 342 N.C. 159, 163, 463 S.E.2d 72, 74 (1995) (quoting Boiling Spring Lakes, 27 N.C. App. at 195-96, 218 S.E.2d at 478-79).
In Raintree, the defendant homeowners wanted to replace wood siding with vinyl siding. Pursuant to a restrictive covenant, the defendants applied to the Architectural Review Committee (“ARC”) for approval of their plans. This restrictive covenant made the ARC the sole arbiter of such plans, with the authority to withhold approval for any reason, similar to the restrictive covenant at issue sub judice. Defendants attended an ARC meeting on the evening of 26 March 1990 and presented evidence in support of their application. The ARC denied defendants’ application because it found that the use of vinyl siding was not harmonious with the general theme of the subdivision. The ARC informed defendants that their application for approval had been denied by letter dated 6 April 1990. Defendants replied with a letter requesting that the ARC reconsider their application. The ARC did so at its next meeting and unanimously reaffirmed its prior denial. Defendants attended another ARC meeting a month later and again presented evidence in support of their application and suggested a compromise by which their home would be deemed a “test case” for vinyl siding. The ARC once again denied the application. The *621Supreme Court found the defendants had failed to produce any evidence that the ARC acted unreasonably or in bad faith — the ARC had considered defendants’ application for vinyl siding on three separate occasions, despite the fact that it had previously found the material unacceptable, and the ARC had consistently denied other applications for vinyl siding. Id. at 165, 463 S.E.2d at 75.
In Smith, the plaintiffs submitted a set of plans for a proposed dwelling to the architectural review committee for approval. Plaintiffs’ plans were rejected because they failed to meet the restrictive covenant’s square footage requirement. Plaintiffs then submitted a second set of plans which were rejected by the architectural review committee based on the roofline and geodesic design of the house. The plaintiffs were sent a letter from the president of the property owners association indicating that the proposed house reflected a marked departure from the home-building styles in the area and that the plaintiffs might consider a design closer to those in existence. The plaintiffs were given a definite and legitimate reason why their application had been denied, as well as suggestions on what changes were needed for possible reconsideration and approval. Therefore, this Court held that the architectural review committee had acted reasonably in denying plaintiffs’ application. Smith, 90 N.C. App. at 48, 367 S.E.2d at 407.
In both Raintree and Smith, the respective architectural review committees involved the landowners in the application process. Once the application was initially denied, the architectural review committees made concrete suggestions to the landowners about what was needed for approval. The committees also clearly communicated to the landowners legitimate reasons why their applications had been, denied. None of this occurred in the case sub judice. Here, plaintiffs’ original application was denied for an invalid reason, the plaintiffs’ letter protesting this decision was disregarded, and plaintiffs were given no specific reason why their application had been denied prior to proceeding with construction, aside from the Board’s invalid attempt to prohibit all above-ground pools in the subdivision.
The majority opinion claims to find ample support for its conclusion in the following findings of fact by the trial court:
11. The three members of the [ACC] cited various reasons for the disapproval of the Plaintiffs’ application, including the reasons that a 24-foot pool was too large for the lot size and that the Plaintiffs had not included enough information with their *622application for the [ACC] to make a fully-informed decision. Two members of the [ACC] specifically reported that they should see the actual pool plans or a photograph from the pool manufacturer showing the style of the pool. In addition, one member of the [ACC] felt that he needed to see landscaping plans for screening the pool before he could approve it, and another [ACC] member felt that the pool might be too close to the side lot line as it appeared on the Plaintiffs’ application. The [ACC] also reported that they might consider the matter again based upon a proper and complete application.
16. Based upon the testimony and documentary evidence presented by the Defendant (which was not presented at the first hearing of this case), the Court finds as a fact that the [ACC] based its decision to disapprove the Plaintiffs’ application on the fact that the above-ground pool and fence requested did not meet the general scheme and plan of development for the Chesney Glen community....
I believe the majority’s ruling would be correct on this issue if it was simply concluding that valid reasons existed for the ACC to deny plaintiffs’ application. However, the majority is using these findings to support its conclusion that the ACC did not act unreasonably in withholding approval of plaintiffs’ application. In my opinion, the record lacks any showing, and the trial court made no findings of fact, that these legitimate reasons for denial were ever communicated to the plaintiffs prior to the second hearing in front of the trial court on 4 March 1998. The majority states that: “The covenants contain no requirement that approval or disapproval be ‘reasonably communicated,’ but only that approval not be ‘unreasonably withheld.’ ” Following this line of reasoning, an architectural review committee could give a landowner any reason it wished, no matter how ridiculous, or no reason at all for denying an application, so long as valid reasons existed that could be presented to a judge in a later court hearing. I believe that the majority’s construction of “unreasonably withheld” and “specifically approve or disapprove” in the present case is not a strict construction against limitations on the beneficial use of plaintiffs’ property as required by Boiling Spring Lakes, 27 N.C. App. at 195, 218 S.E.2d at 478. I believe a reasonable construction against limitations on the beneficial use of property is one which requires the ACC to give notice to the applicant of valid reasons why the application was denied. As in Rainwater and Smith, plaintiffs *623should have been given valid reasons for denial so that they could have worked with the ACC to remedy the problems with their application, if possible. Accordingly, I would reverse the judgment of the trial court on this issue.