Englund, et al. v. Dauphin Island Prop. Owners Assoc.; Dauphin Island Prop. Owners Assoc. v. Englund, et al., [Ms. SC-2024-0414; SC-2024-0437, Aug. 29, 2025] __ So. 3d __ (Ala. 2025). The Court (Bryan, J.; Stewart, C.J., and Shaw, Wise, Sellers, Mendheim, McCool, and Lewis, JJ., concur; Cook, J., concurs specially) reverses the Mobile Circuit Court’s judgment granting permanent injunctive relief to the Dauphin Island Property Owners Association (“the DIPOA”). The injunction required Rodney G. Englund, Dyann K. Englund, and Georgetown Contractors, LLC (“Georgetown”), to halt construction of the Englunds’ house on Dauphin Island and to remove portions of the house built in violation of restrictive covenants.
Pursuant to the relative-hardship test, a court must inquire as a matter of equity “if the benefit that the plaintiff might receive by effectuating the intended purpose of the restrictive covenant at issue outweighs the harm that permanent injunctive relief will cause to the defendant. The defendants’ breach of the pertinent restrictive covenants alone does not, in and of itself, satisfy all the required elements for obtaining a permanent injunction.” Ms. *44.
DIPOA argued that the clean-hands maxim precluded the defendants’ reliance on the relative hardship defense because they intentionally breached the restrictive covenants. The Court rejects this argument because “ ‘the [clean-hands] maxim refers to willful misconduct rather than merely negligent misconduct and must be morally reprehensible as to known facts. Furthermore, equity will consider the conduct of the adversary, the requirements of public policy and the relation of the misconduct to the subject matter of the suit and to defendant.’ ” Ms. *36, quoting Weaver v. Pool, 249 Ala. 644, 648, 32 So. 2d 765, 768 (1947). The Court concludes
[T]he totality of the evidence presented regarding the Englunds’ application to the Town ... does not support a determination that the defendants’ actions “rose to the level of morally reprehensible, willful misconduct. … Even if the relevant evidence presented would support a conclusion that Rodney had acted carelessly and without sufficient diligence to obtain the DIPOA’s approval before beginning construction and had, therefore, engaged in negligent misconduct, such misconduct is insufficient to support a finding of unclean hands.”
Ms. *40, citing Weaver, 249 Ala. at 648, 32 So. 2d at 768.
The Court “conclude(s) that the harm to the Englunds caused by a permanent injunction is considerably disproportionate to the benefit received by the DIPOA [protection of views from neighboring properties] as to the violation of the Silver Cay II setback requirement.” Ms. *52. The Court further “concludes that any benefit to the DIPOA regarding precedent and future enforcement of its restrictive covenants is also considerably disproportionate to the harm resulting to the Englunds from having to tear down, reconfigure, and rebuild their house.” Ms. *54.