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Inc. v. Capps

Court of Appeals of Tennessee, Knoxville

May 29, 2019

RIVER PLANTATION HOMEOWNER'S ASSOCIATION, INC.
v.
R. RANDALL CAPPS, ET AL.

          Session April 16, 2019

          Appeal from the Chancery Court for Greene County No. 20130205 Douglas T. Jenkins, Chancellor

         This appeal arises from a lawsuit concerning the enforcement of restrictive covenants in a subdivision. River Plantation Homeowner's Association, Inc. ("the Association"), later joined by certain individual property owners ("Plaintiffs" collectively), sued property owners R. Randall Capps and his wife Carolyn Brown Capps ("the Capps") in the Chancery Court for Greene County ("the Trial Court") seeking enforcement of a restrictive covenant requiring homeowners to have a paved driveway. The Capps have a gravel driveway and wish to keep it. The Trial Court found in favor of Plaintiffs and ordered the Capps to install a concrete driveway. The Capps appeal, raising several issues, including one as to whether the Association lacks standing. We hold, inter alia, that the Association, although not specified in the restrictive covenants as a party capable of suing to enforce restrictions, has standing to do so. In light of the unambiguous driveway restriction and the fact that the Association never waived enforcement, we affirm the Trial Court's judgment in favor of Plaintiffs. However, we modify the Trial Court's judgment to allow the Capps, if they so choose, to use asphalt instead of concrete, as the Association has no objection to it. In addition, we reverse the Trial Court's decision to not award Plaintiffs their attorney's fees incurred in successfully bringing this enforcement action where the restrictive covenants specifically provide for such attorney's fees. We, therefore, remand for the determination and award to Plaintiffs of reasonable attorney's fees. Otherwise, we affirm the judgment of the Trial Court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed as Modified, in Part, and Reversed, in Part; Case Remanded

          Thomas C. Jessee, Johnson City, Tennessee, for the appellants, R. Randall Capps and Carolyn Brown Capps.

          William S. Nunnally, Greeneville, Tennessee, for the appellees, River Plantation Homeowner's Association, Inc. and Robert Clayton Northrop, Tammy Northrop, Teddy Brown Haley, Mary June Haley, Steven Goad, Jan Willis McAlpin, and Judy A. McAlpin.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Richard H. Dinkins and John W. McClarty, JJ., joined.

          OPINION

          D. MICHAEL SWINEY, CHIEF JUDGE

         Background

         River Plantation is an upscale subdivision in Greene County, Tennessee. The Capps are residents of River Plantation. Construction began on the Capps' home in 2005 and concluded in 2007. Restrictive covenants run with the land in this community. The restrictive covenants provide, as relevant:

5. DRIVEWAYS: Before any construction is begun, a temporary driveway shall be installed and said drive shall be crowned and have proper drainage so that overflow, if any, from the building site shall not flow upon the main road. After construction is completed, the driveway shall be constructed of either concrete or a surface approved by Developer. Owners shall be responsible to reimburse Developer for any cost for removal of debris or for damage to public streets caused by the owner or his agents.
12. TERM: Each and every one of the aforesaid covenants, conditions, and restrictions shall attach to and run with each and every lot of land; and all titles to, and estates therein, shall be subject thereto and the same shall be binding upon each and every owner of said lots until October 15, 2019, and shall be extended automatically for successive period of ten (10) years, unless by action of a minimum of Sixty-Seven percent (67%) of the then owners of lots, the owners agree to modify these covenants and restrictions in whole or in part, provided that the instrument evidencing such action or modification must be in writing and shall be duly recorded in the Register's Office of Greene County, Tennessee. The Developer may amend these restrictions unilaterally at any time so long as it owns over Fifty percent (50%) of the lots shown on the recorded plat of the subdivision.
17. ENFORCEMENT: If any owner or their heirs or assigns shall violate or attempt to violate any of the covenants herein, it shall be lawful for any other person or persons owning any real property situated in said RIVER PLANTATION SUBDIVISION, to prosecute any proceedings at law or in equity against the person or persons violating or attempting to violate any such covenants and either enjoin him or them from doing so and/or to recover damages or any other dues for such violations. Incident thereto, any successful enforcing party shall be entitled to recover from a party found to be in violation of these covenants, reasonable attorney's fees incurred in so doing, and the violator or violators shall also be liable for any such other and additional damages as may occur including, but not be limited to, court costs.
18. WAIVER: For the purpose of property improvements, as long as it retains record ownership of any lot in the subdivision, the Developer reserves the right to grant waivers from these restrictive covenants. Said waiver must be in writing and recorded in the Register's Office for Greene County, Tennessee. The grant of any waiver shall be conclusive proof that the waiver shall not materially effect the protective purposes sought by the Developer. Other owners of lots in the subdivision shall not be entitled to bring suit to enforce the compliance of the original restriction where a waiver has been given by the Developer, nor will any owner be entitled to recover damages from the Developer for any waiver granted it.

         The Capps have a gravel driveway, which drew opposition from the Association. In October 2013, the Association, as successor to the developer, sued the Capps for breaching the restrictive covenants. The Association sought specific performance, costs, expenses and attorney's fees. The Capps filed an answer asserting a number of affirmative defenses, including the following:

1. The plaintiff's complaint should be dismissed for failure to state a claim upon which relief can be granted. The defendants further allege that the plaintiffs have failed to join all of the landowners of River Plantation Subdivision, Phase I. Because of all the existing variances approved, the defendants affirmatively allege that all landowners must be parties to this action.
3. The defendants affirmatively allege that they obtained approval from the developer to install a gravel driveway when the developer was in control of the homeowners association. The defendants affirmatively allege that they are in compliance with enumerated paragraph number five,

labeled Driveways, of the restrictive covenants of the River Plantation Subdivision, Phase I.

4. The defendants affirmatively allege that the slope of the defendants' residence in the River Plantation Subdivision, Phase 1 is steep and hazardous, thereby necessitating a gravel surface for health and safety reasons. The defendants affirmatively allege that to deny the defendants the gravel surface would place the defendants and their guests at risk. The plaintiff's denial also constitutes an unreasonable abuse of discretion by the plaintiff in applying enumerated paragraph number five, labeled Driveways, of the restrictive covenants of the River Plantation Subdivision, Phase I.
5.The defendants affirmatively allege that the plaintiff waived any objection and granted approval to the defendants' driveway surface by not alleging a violation of the restrictive covenants of the River Plantation Subdivision, Phase I until six years after the defendants' home was constructed and the defendants started their occupancy and use of the residence. The defendants would affirmatively allege that their lender worked closely with the developer to confirm that the driveway access ultimately approved by the developer was in compliance in order to protect their first mortgage.
6.The defendants affirmatively allege that the plaintiff has either not enforced or selectively enforced the covenants and restrictions of the River Plantation Subdivision, Phase I, thereby rendering such covenants and restrictions unenforceable.

         This matter was tried in June 2017, by which point certain subdivision property owners had been added as plaintiffs. Subdivision developer Glen Glafenhein testified regarding whether he ever had approved the Capps' gravel driveway:

Q. Okay. Well, let's do it like that. What if somebody said, "I want to just do a gravel driveway"?
MR. JESSEE: Objection, Your Honor. It's speculative.
THE COURT: Overruled. I think he can answer that. Go ahead.
A. No. I wouldn't have approved a gravel, a soft surface next to a hard surface for erosion purposes.
Q. All right.
A. You know, if you've got dirt and gravel going out onto a street, that's not, that's not something you want to do.
Q. Do you recall having any discussions with Mr. or Mrs. Capps about that subject?
A. I talked to Carolyn probably a year ago, and she was -- we had [a] phone conversation, and I basically said I don't recall. She said that I represented that I may have given a variance on the driveway there, and I don't recall doing that. And I don't believe I would because of very reasons [sic]. Now typically I'll look at a situation because in the restrictions it allowed if something came up for me to look at where I didn't think it would hurt the value or hurt the neighborhood, I could make clarity to what my intent was when I wrote the -- had the restrictions written. So I mean I did keep something in. I know Carolyn's driveway is long, and we did have a conversation, and. . .
Q. Do you know about when you had a -- would there have been an earlier conversation besides the one that took place about a year ago?
A. I'm sorry. I just -- I mean if I did, I don't recall.
Q. Okay.
A. So I apologize. I mean it's. . .
Q. Do you have any recollection of ever granting Mr. or Mrs. Capps permission to just have a gravel driveway as opposed to a hard surface or concrete driveway?
A. No. I don't. I'm sorry. I don't.
Q. Do you -- looking backwards or with your knowledge of what you do, would you have consented to a request of a. . .
MR. JESSEE: Objection, Your Honor. Speculative. What he would have done in the past? He's answered and says he doesn't remember.
THE COURT: I'm going to let him -- I'm going to let him -- overruled. Go ahead.
Q. To the extent that she will testify or has testified that you gave her some sort of permission to just keep a gravel driveway, would that be true?
A. No. I don't recall that. If I had looked at the situation, you know, her drive, I've got a Google map so I can see switchbacks and everything, you know, I'll just -- if this came to me today and I was the developer, I would look at it, and I could see where you could probably pave the drive maybe until you got to where there wasn't a problem with erosion, where it wasn't going to hurt anyone and probably would have given her a variance. But that would be, you know, sitting and studying and looking at it. Typically, if I do that, and I've done some variances, I get with both of the adjoining neighbors because I wouldn't tick a neighbor off because they already own. So I would have a document prepared to give the neighbors to agree if I did anything like that. So I look at it, and I can see -- I could see where maybe that needed to be done, but that's none of my business.
Q. Do you have any recollection or any records that suggest that you did such a thing in this case?
A. No.
Q. What is the concern about gravel in a steep, a relatively steep area? What's the problem with that?
A. Well, you're coming from a good hard surface road, and you're -- if you've got dirt and rock going out on the road, that's not good for, you know, the community. I mean you don't want erosion going on the road and having to have clean-up. I mean. . .
Q. And is that the -- what is the effect of rain or heavy rain on gravel, and what does the effect of gravity do?
A. Well, it becomes a maintenance issue. I mean, you know, if you're in a city or a town, they're going to require a certain amount of asphalt so that doesn't happen. But that would be the purpose of a hard surface connecting to the existing county hard surface road. That's. . .
Q. Now, again in searching your memory back, do you have any recollection of ever giving any kind of consent, oral or otherwise, to the Capps to not have to pave, you might say, their driveway?
A. No. I don't recall that.
Q. Okay. Let me call your attention to. . .
THE COURT: Have you got what you need?
Q. Yes.
THE COURT: Let me ask you a question while he's getting ready there. Did you ever grant a variance on anything? Did you ever grant a variance?
A. Yes. Usually in a subdivision of this size something will come up where I could grant a variance for clarity of what the intentions were.
THE COURT: So you remember granting one or more in this?
Q. We're about to talk about it.
THE COURT: Okay. I was going to ask you how did you do that? Did you just over the phone go, "Yeah. Go ahead. It's fine," or did you have something prepared and signed?
A. We would have a paper trail. We'd put it in a, some type of agreement.
THE COURT: Okay.
THE COURT: Well, in response to their assertion, it might be more safe graveled. Are you saying you don't agree with that or you do?
A. Well, if you have ice on the road and maybe in certain circumstances, g[r]avel would be -- I mean I'm sure there are -- you know, if you've got ice, you'd probably be better off with gravel than being an asphalt or a concrete drive.

         Mark Brannan, owner of a lot in River Plantation and a former President of the Association, testified regarding a conversation he had with Mrs. Capps sometime in ...


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