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Homeowners of Ash Grove Estates v. Hurley

Court of Appeals of Tennessee, Nashville

June 13, 2018

HOMEOWNERS OF ASH GROVE ESTATES
v.
CARLA HURLEY, ET AL.

          Session September 7, 2017

          Appeal from the Circuit Court for Sumner County No. 83CC1-2015-CV-188 Joe H. Thompson, Judge

         This appeal arises out of a suit to enforce restrictive covenants. Plaintiffs filed suit seeking an injunction to prevent their neighbors from operating a commercial horse facility. After a hearing, the court permanently enjoined Defendants from using or allowing their property to be used for a commercial horse operation and from constructing any additional buildings before they built a residence on the property. The trial court also ruled that Defendants did not have to remove or relocate the already-constructed "run-in shed" at this time, but that once a residence is built, the shed must be removed or moved to the rear of the residence. Defendants appeal. Upon our review, we reverse the judgment enjoining Defendants from conducting a commercial horse operation; in all other respects we affirm the judgment of the trial court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed in Part and Affirmed in Part

          Russell E. Edwards and Michael W. Edwards, Hendersonville, Tennessee, for the appellants, Carla Hurley, Laurale Lowery, and Marcia Johnston.

          Elizabeth Sitgreaves, Brentwood, Tennessee; and C. Jay Ingrum, Gallatin, Tennessee, for the appellees, Homeowners of Ash Grove Estates, Ken LouAllen, Sr., Vicki LouAllen, James Wallace, Jamie Wallace, Paul Curd, Jr., Paul Curd, Sr., and Teresa Curd.

          Richard H. Dinkins, J., delivered the opinion of the court, in which Andy D. Bennett and W. Neal McBrayer, JJ., joined.

          OPINION

          RICHARD H. DINKINS, JUDGE

         I. Factual and Procedural History

         Carla Hurley, Laurale Lowery, and Marcia Johnston (collectively, "Defendants") purchased an 18-acre tract of land in Ash Grove Estates in Sumner County at an estate auction in 2009. The property, known as Tract 7, is subject to restrictive covenants, including that "each residence . . . must have a minimum total of 2000 square feet of interior heated floor space" and that "[s]tock barns are permitted but must be to the rear of the dwelling." The covenants permit horses to be kept on the tracts but prohibit other types of animals. Defendants have constructed a barn-like structure they refer to as a "run-in shed, " which measures 36 feet by 50 feet and provides shelter for the horses, hay, and equipment they keep on the property.

         On February 25, 2015, several of the neighboring homeowners in Ash Grove Estates, namely Paul M. Curd, Sr., Paul M. Curd, Jr., Teresa Curd, Ken LouAllen, Vicki LouAllen, and James Wallace (collectively, "Plaintiffs"), filed a petition seeking a restraining order or other injunctive relief to prevent the Defendants from constructing a commercial horse training facility on their property. The petition alleged that construction had already begun that disregarded certain restrictive covenants. A hearing was held, after which the court entered an order holding that "there was no immediate 'irreparable' harm being done, " that "any harm that was being done could be remedied, " and advising Defendants "that any further work on the building, except for the addition of gutters and gravel, should cease pending a final hearing;" the court did not enter an injunction. The matter was set for trial on June 16, 2015; for reasons unclear from the record, the trial was not held on that date.

         Following a fire that destroyed a barn on another property owned by them in November 2015, Defendants filed a motion on December 9, seeking the court's permission to "add stalls and a lean-to to the existing structure" on Tract 7 to shelter the horses from the other barn that had been destroyed in the fire. The trial court denied the motion in an order entered December 30, and set the case for trial for February 26.

         Plaintiffs filed an amended petition on January 25, 2016; Defendants answered, denying most of the allegations and denying that they "knowingly, willfully violated the Declaration of Covenants, Conditions and Restrictions for Ash Grove." For reasons not clear in the record trial was not held on the scheduled date; rather, a hearing was held and an order entered on March 2 permitting the Defendants to "assume the risk and build a 10' by 10' feed room onto the existing barn structure on their property."[1] The order also required Defendants' counsel to file a description of the Defendants' current and prospective uses for the property within 20 days. On March 28, Plaintiffs moved the court to "visit the property with or without counsel for both parties." Defendants did not file a response to the motion. Following a status conference the court entered an order granting the motion, stating that the court, counsel, and a representative of each party, if desired, "shall visit the property in question after the final hearing set for June 27, 2016, in order to assist the Court in making its ruling in the matter at hand."

          The court entered a Memorandum Opinion and Order on September 9, stating that: As framed by the litigants, the two issues before the court are:

1. What Lead Me On Farm, LLC[2] activities may be conducted on Tract #7?
2. What constitutes the "front" of the property for purposes of determining where the "rear of the residence" is located?

         The court found that the restrictive covenants "permit horses to be kept on a noncommercial basis" and that a residence proposed to be constructed on the tract should "face north towards the easement giving access to the property." The court permanently enjoined Defendants from using or allowing their property to be used for a commercial horse operation and from constructing any additional buildings prior to constructing a residence.

         The Defendants appealed, and this Court remanded the case for entry of a final order.[3] While the case was on remand, Plaintiffs moved the trial court to rule on the issue of whether the "run-in shed" should be removed; Defendants opposed the motion. After a hearing on April 3, 2017, the court entered a final order memorializing the parties' agreement that neither party would be awarded attorney's fees; ruling that the Defendants did not have to remove or relocate the run-in shed; and modifying the memorandum opinion and order to require that "at the time a residence is built on the Defendants/Appellants' property, the restrictive covenants must be complied with by either removing the run-in shed or moving it to the rear of the residence." The Defendants appeal, raising the following issues for our review:

1. Whether the trial court erred by sua sponte ordering one of the Appellants to submit a document that contains hearsay as a late-filed exhibit at the trial;
2. Whether the trial court erred by visiting the locus in quo;
3. Whether the trial court erred by permanently enjoining the Appellants from using their property for a commercial horse operation;
4. Whether the trial court erred by permanently enjoining the Appellants from constructing any additional buildings on their property prior to the construction of a residence; and
5. Whether the trial court erred by requiring the Appellants to remove the existing run-in shed at the time a residence is built on their property or move it to the rear of the residence.

         II. Standard of Review

         The judgment was rendered after a non-jury trial; accordingly, it is "subject to our de novo review upon the record of the proceedings below. Tenn. R. App. P. 13(d) mandates that there is a presumption that the trial court's findings of fact are correct, and we must honor that presumption unless the evidence preponderates to the contrary." Cannon v. Loudon Cty., 199 S.W.3d 239, 241 (Tenn. Ct. App. 2005) (citing Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993)). For the evidence to preponderate against the trial court's factual finding, it must support another finding of fact with greater convincing effect. Walker v. Sidney Gilreath & Assocs., 40 S.W.3d 66, 70-71 (Tenn. Ct. App. 2000). We afford no presumption to the correctness of the court's conclusions of law. Cannon, 199 S.W.3d at 241 (citing Campbell v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn. 1996)).

         III. Analysis

         Restrictive covenants are property interests that run with the land but arise from a series of contractual transactions; accordingly, they are treated as contracts and construed using the rules of construction applicable to other contracts. Maples Homeowners Ass'n, Inc., 993 S.W.2d at 38-9. To determine whether a contract's language is ambiguous, this Court in VanBebber v. Roach has explained:

The language in dispute must be examined in the context of the entire agreement. The language of a contract is ambiguous when its meaning is uncertain and when it can be fairly construed in more than one way. A strained construction may not be placed on the language used to find ambiguity where none exists.

252 S.W.3d 279, 284 (Tenn. Ct. App. 2007) (internal citations and quotations omitted). When the language in question is not ambiguous, the court must look no further than the four corners of the document to discern its meaning. Kiser v. Wolfe, 353 S.W.3d 741, 748 (Tenn. 2011) (quoting Whitehaven Cmty. Baptist Church v. Holloway, 973 S.W.2d 592, 596 (Tenn. 1998) ("'An elementary precept of contract law' is that when the language is clear, courts must not look beyond the four corners of the instrument.")). Because construction of a contract is a matter of law, we review the covenant's language de novo, with no deference to the trial court's ruling. VanBebber, 252 S.W.3d at 284.

         In Williams v. Fox, the Tennessee Supreme Court held:

[R]estrictive covenants are not favored in Tennessee because they are in derogation of the right of free use and enjoyment of property. Therefore, such restrictive covenants are strictly construed. Courts refrain from extending a restrictive covenant to any activity not clearly and expressly prohibited by its plain terms. When the terms of a covenant may be construed more than one way, the courts must resolve any ambiguities against the party seeking to enforce the restriction and in a manner which advances the unrestricted use of the property.

         219 S.W.3d 319, 324 (Tenn. 2007) (internal citations omitted). This Court has also explained:

The courts enforce restrictions according to the clearly expressed intentions of the parties manifested in the restrictions themselves. We give the terms used in restrictions their fair and reasonable meaning, and we decline to extend them beyond their clearly expressed scope. We also construe the terms of a restriction in light of the context in which they appear. . . . [F]inally we should resolve all doubts concerning a covenant's applicability against applying the covenant.

Maples Homeowners Ass'n, Inc. v. T & R Nashville Ltd. P'ship, 993 S.W.2d 36, 39 (Tenn. Ct. App. 1998) (internal citations omitted).

         A. Whether the Court Correctly Construed the ...


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