Restrictive Covenants & Statute of Limitations - Bekken v. Greystone Residential Assoc., Inc.
Bekken v. Greystone Residential Assoc., Inc., [Ms. 2150365, Jan. 13, 2017] __ So. 3d __ (Ala. Civ. App. 2017) (On reh'g). The court grants rehearing, withdraws the original September 16, 2016 opinion which had reversed an injunction granted by the Shelby Circuit Court to enforce residential restrictive covenants and, on rehearing, unanimously affirms the judgment. The court rejects the homeowner’s arguments that the restrictive covenants contained ambiguities, that the trial court should have applied the relative-hardship test before issuing the injunction, and that affirmative defenses of statute of limitations, laches, and unclean hands applied to require reversal of the judgment.
The court first stated Alabama law relative to whether the restrictive covenants were ambiguous:
"Our Supreme Court has held that
"in construing restrictive covenants, all doubts must be resolved against the restriction and in favor of free and unrestricted use of property. However, effect will be given to the manifest intent of the parties when that intent is clear .... Furthermore, restrictive covenants are to be construed according to the intent of the parties in the light of the terms of the restriction and circumstances known to the parties."
'Hines v. Heisler, 439 So. 2d 4, 5-6 (Ala. 1983).'
Grove Hill Homeowners' Ass'n, Inc. v. Rice, 43 So. 2d 609, 614 (Ala. Civ. App. 2010)(quoting Hipshv. Graham Estates Owners Ass'n, 927 So. 2d 846, 848 (Ala. Civ. App. 2005)).
"When the language of a restrictive covenant is not "of doubtful meaning and ambiguous," the language of that covenant "is entitled to be given the effect of its plain and manifest meaning." Maxwell [v. Boyd], 66 So. 3d [257,] 261 [(Ala. Civ. App. 2010)] (quoting Laney v. Early, 292 Ala. 227, 231-32, 292 So. 2d 103, 107 (1974)). However,
"Where the language [in a restrictive covenant] is ambiguous, "its construction will not be extended by implication or include anything not plainly prohibited and all doubts and ambiguities must be resolved against [the party seeking enforcement]." 'Smith v. Ledbetter, 961 So. 2d [141,] 146 [(Ala. Civ. App. 2006)] (quoting Greystone Ridge Homeowners' Ass'n, Inc. v. Shelton, 723 So. 2d [88,] 90 [(Ala. Civ. App. 1998)], in turn quoting Bear v. Bernstein, 251 Ala. 230, 231, 36 So. 2d 483, 484 (1948)).'
"Traweek v. Lincoln, 984 So. 2d 439, 447 (Ala. Civ. App. 2007).
"In written instruments, two types of ambiguities can arise: a patent ambiguity and a latent ambiguity. McCollum v. Atkins, 912 So. 2d 1146, 1148 (Ala. Civ. App. 2005). A patent ambiguity results when a document, on its face, contains unclear or unintelligible language or language that suggests multiple meanings. Thomas v. Principal Fin. Group, 566 So. 2d 735, 739 (Ala. 1990). On the other hand, '[a]n ambiguity is latent when the language employed is clear and intelligible and suggests but a single meaning but some extrinsic fact or extraneous evidence creates a necessity for interpretation or a choice among two or more possible meanings.' Id."
"Grove Hill Homeowners' Ass'n v. Rice, 43 So. 3d 609, 614 (Ala. Civ. App. 2010) (quoting Smith v. Ledbetter, 961 So. 2d 141, 145 (Ala. Civ. App. 2006)). 'Whether a latent ambiguity exists is a question of law we review de novo.' Id. at 615.'"
VestlakeCmtys. Prop. Owners' Ass'n, Inc. v. Moon, 86 So. 3d 359, 365 (Ala. Civ. App. 2011).
The court also rejected the homeowner’s contention that enforcement of the restrictive covenants should be rejected because of the “relative-hardship test”:
The relative-hardship test is "an equitable doctrine that generally provides that a restrictive covenant 'will not be enforced if to do so would harm one landowner without substantially benefitting another landowner.'" Grove Hill II, 90 So. 3d at 736 (quoting Lange v. Scofield, 567 So. 2d 1299, 1302 (Ala. 1990)). The party seeking the invocation of the relative-hardship doctrine, however, must have "clean hands." Maxwell v. Boyd, 66 So. 3d 257, 261 (Ala. Civ. App. 2010).
"A pertinent specific application of the clean-hands doctrine is that a restrictive covenant should be enforced if the defendant had knowledge of it before constructing an improvement contrary to its provisions, even if the harm is disproportionate. Green v. Lawrence, 877 A.2d 1079, 1082 (Me. 2005) (citing 9 Powell on Real Property § 60.10(3)); accord Turner v. Sellers, 878 So. 2d 300, 306 (Ala. Civ. App. 2003) (affirming denial of relief from restrictive covenant when the burdened parties 'knew that there were restrictions on the free use of their lot when they purchased it'). The knowledge sufficient to warrant denial of the relative-hardship defense need not be actual, but may be constructive. Miller v. Associated Gulf Land Corp., 941 So. 2d 982, 989 (Ala. Civ. App. 2005) (noting that trial court's judgment denying relief from covenant was supported by evidence that the owners of the burdened lot had 'purchased the subject property knowing of the nature of the deed restriction and therefore at least constructively knowing' of nearby land conditions and property owners' rights)."
Maxwell, 66 So. 3d at 261-62; see Grove Hill II, 90 So. 3d at 738-39 (quoting Gladstone v. Gregory, 95 Nev. 474, 480, 596 P.2d 491, 495 (1979)) ("'[W]here one takes land with notice of restrictions, equity and good conscience will not permit that person to act in violation thereof ....'"). "The application of the clean hands doctrine is a matter within the sound discretion of the trial court." J & M Bail Bonding Co. v. Hayes, 748 So. 2d 198, 199 (Ala. 1999).
In a scholarly dissertation, the court rejects the homeowner’s contention that the 6-year statute of limitations set forth in § 6-2-34(4), (6), and/or (9) apply to the facts of the case (Ms. *38-45) or that the doctrine of laches barred the action against him. Ms. *45-6.
Finally, the court rejected the homeowner’s contention that the defense of unclean hands applied to the actions of the homeowner’s association and the committee seeking to enforce the restrictive covenants. The court explained:
"[O]ne 'who seek[s] equity must do equity' and 'one that comes into equity must come with clean hands.' Levine v. Levine, 262 Ala. 491, 494, 80 So. 2d 235, 237 (1955). The purpose of the clean hands doctrine is to prevent a party from asserting his, her, or its rights under the law when that party's own wrongful conduct renders the assertion of such legal rights 'contrary to equity and good conscience.' Draughon v. General Fin. Credit Corp., 362 So. 2d 880, 884 (Ala. 1978). The application of the clean hands doctrine is a matter within the sound discretion of the trial court. Lowe v. Lowe, 466 So. 2d 969 (Ala. Civ. App. 1985)."
J & M Bail Bonding Co. v. Hayes, 748 So. 2d at 199. "'[T]he doctrine of unclean hands cannot be applied in the context of nebulous speculation or vague generalities; but rather it finds expression in specific acts of willful misconduct ....'" Retail Developers of Alabama, LLC v. East Gadsden Golf Club, Inc., 985 So. 2d 924, 932 (Ala. 2007) (quoting Sterling Oil of Oklahoma, Inc. v. Pack, 291 Ala. 727, 746, 287 So. 2d 847, 864 (1973), citing in turn Weaver v. Pool, 249 Ala. 644, 32 So. 2d 765 (1947)); see also Weaver v. Pool, 249 Ala. at 648, 32 So. 2d at 768 ("the maxim refers to willful misconduct rather than merely negligent misconduct").