Coleman Homes, LLC v. Brech
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ARKANSAS COURT OF APPEALS
DIVISION III
CA08-1113
No.
Opinion Delivered A PRIL 1,
RAUSCH COLEMAN HOMES, LLC
APPELLANT
2009
APPEAL FROM THE LONOKE
COUNTY CIRCUIT COURT,
[NO. CV-08-190]
V.
HONORABLE PHILLIP T.
WHITEAKER, JUDGE
GENE BRECH, ET AL.
APPELLEES
AFFIRMED
ROBERT J. GLADWIN, Judge
Appellant, Rausch Coleman Homes, LLC, appeals the July 18, 2008 order of the
Lonoke County Circuit Court granting summary judgment to appellees, who are thirty-two
owners and residents of the land development at issue. Appellant argues that the trial court
erred as a matter of law in granting appellees’ motion for summary judgment because the
trial court improperly construed the bill of assurance. We disagree and affirm the trial
court’s order.
Appellant is the owner of numerous lots in both Phase I and Phase II of Southern
Comfort Estates in Cabot, Arkansas. Appellees are thirty-two owners and residents of
Southern Comfort Estates Phase I and Phase II. The bill of assurance for Southern Comfort
Estates Phase II provides that the minimum size for a principal residential structure would
be 1700 square feet, heated and cooled. The bill of assurance also provides as follows:
20. DURATION OF COVENANTS. These covenants and restrictions are to run
with the land and shall be binding upon all parties and all persons claiming under
them until January 1, 2024, at which time said covenants and restrictions shall
automatically be extended for successive periods of (10) ten years from each
termination, unless 70% of the then owners of the lots agree in writing to amend said
covenants and restrictions, either in whole or in part.
21. TO CHANGE THE COVENANTS. These covenants and restrictions shall not
be amended, canceled, or supplemented unless an instrument signed by the owners of
at least 70% of the then owners of the lots is placed on record agreeing to change the
covenants and restrictions in whole or in part.
Also at the center of this litigation is a document entitled “Amendment to Bill of
Assurance of Southern Comfort Estates, Phase II,” which was executed on February 29,
2008. It purported to change the minimum size for principle residential structures from 1700
to 1400 square feet, heated and cooled.
Appellees filed a Complaint for Injunction in Lonoke County Circuit Court on March
25, 2008. They asserted that they had complied with the restrictive covenants contained in
the bills of assurance “at great expense” and relied on their enforcement to “maintain their
desired life style and property values.” Appellees alleged that appellant had wrongfully
obtained four building permits1 from the City of Cabot, and that the four house plans did not
meet the minimum square footage requirements of the respective bills of assurance.
Three were in Phase II and one in Phase I. The permit for the house in Phase I was
amended to reflect 1910 square feet of heated and cooled space, thus conforming with the
bill of assurance for Phase I. Therefore, request for injunction became moot as to the
Phase I house.
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Appellees contended that they would suffer irreparable harm if appellant were allowed to
construct these houses and requested an injunction.
Appellant Rausch Coleman Homes, LLC, filed a motion for summary judgment on
April 25, 2008, essentially arguing that there was no basis for an injunction because the
proposed buildings were within the requirements of the properly amended bill of assurance.
A hearing was held on June 20, 2008, and the trial court thereafter issued a letter ruling
denying appellant’s motion for summary judgment. Appellees filed a motion for summary
judgment on July 2, 2008.
On July 18, 2008, the circuit court entered an order denying appellant’s motion for
summary judgment and granting appellees’ motion for summary judgment. The trial court
found that “the plain language of paragraph twenty (20) of the Bill of Assurance of Phase II
of Southern Comfort Estates of Lonoke County, Arkansas, prohibits any amendment of the
Bill of Assurance until the year of 2024.” The trial court noted that restrictions on land are
not favored in the law, but found that because the language of the bill of assurance clearly
and unambiguously prohibited any amendment until 2024, the instrument styled
“Amendment to Bill of Assurance of Southern Comfort Estates, Phase II, Lonoke County,
Arkansas” filed of record on March 4, 2008, violated paragraph twenty (20) of the bill of
assurance. Appellant was enjoined from constructing any buildings inconsistent with the bill
of assurance filed of record on July 24, 2006. This appeal timely followed.
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Normally, on a summary-judgment appeal, the evidence is viewed most favorably for
the party resisting the motion and any doubts and inferences are resolved against the moving
party, but in a case where the parties agree on the facts, the appellate court simply determines
whether the appellee was entitled to a judgment as a matter of law. Aloha Pools & Spas, Inc.
v. Employer’s Ins. of Wausau, 342 Ark. 398, 39 S.W.3d 440 (2000). Our supreme court has
written:
[R]estrictions upon the use of land are not favored in the law. Further, a restrictive
covenant will be strictly construed against limitations on the free use of land. Thus,
all doubts are resolved in favor of the unfettered use of land.
….
Any restriction on the use of land must be clearly apparent in the language of the
asserted covenant. Where the language is clear and unambiguous, the parties will be
confined to the meaning of the language employed, so long as the meaning does not
defeat the plain and obvious purpose of the provision. In addition, we have said that
the general rule governing the interpretation, application, and enforcement of
restrictive covenants is that the intention of the parties as shown by the covenant
governs.
Cochran v. Bentley, 369 Ark. 159, 166, 251 S.W.3d 253, 260 (2007) (internal citations
omitted).
The rule of strict construction is limited by the basic doctrine of taking the plain
meaning of the language employed. Holaday v. Fraker, 323 Ark. 522, 920 S.W.2d 4 (1996).
The first rule of interpretation of a contract is to give to the language employed the meaning
that the parties intended. Wal-Mart Stores, Inc. v. Coughlin, 369 Ark. 365, 255 S.W.3d 424
(2007). The court must consider the sense and meaning of the words used by the parties as
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they are taken and understood in their plain and ordinary meaning. Id. It is a well-settled rule
that the intention of the parties is to be gathered, not from particular words and phrases, but
from the whole context of the agreement. Id. Different clauses of the contract must be read
together and the contract construed so that all of its parts harmonize, if that is possible. See
Tyson Foods, Inc. v. Archer, 356 Ark. 136, 147 S.W.3d 684 (2004). The best construction
is that which is made by viewing the subject of the contract, as the mass of mankind would
view it, as it may safely be assumed that such was the aspect in which the parties themselves
viewed it. Magic Touch Corp. v. Hicks, 99 Ark. App. 334, 260 S.W.3d 322 (2007). Language
is ambiguous if there is doubt or uncertainty as to its meaning and it is fairly susceptible to
more than one equally reasonable interpretation. Id.
The issue in this case is whether the bill of assurance for Phase II allowed for
amendment of its covenants prior to January 1, 2024. Appellant argues that the covenant at
issue could be amended at any time by agreement of seventy percent of the then owners.
First, appellant points to the language and punctuation of Paragraph 20. Appellant urges this
court to view the renewal provision, which is set off by commas, as a “separate provision.”
Appellant is arguing that Paragraph 20 should be read as stating that the covenants shall be
binding until 2024 unless seventy percent of the owners agree in writing to amend them and
that it had the authority under the original bill of assurance to amend as it did.
Furthermore, appellant contends that the use of the word “unless” is significant as
meaning “except on the condition that.”
However, there is no disagreement that the
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covenants contained in the bill of assurance can be amended on the condition that seventy
percent of the then owners agree to the amendment in writing; the question is when that
amendment can take place.
Appellant’s next argument is that Paragraph 20 must be read in conjunction with
Paragraph 21. It is true that different clauses of a contract must be read together and the
contract construed so that all of its parts harmonize, if that is at all possible. Tyson Foods,
Inc. v. Archer, supra. A construction that neutralizes any provision of a contract should
never be adopted if the contract can be construed to give effect to all provisions. Id.
However, we agree with appellees that paragraph twenty-one simply provides the proper
procedures for which the then owners of the lots must take to amend the covenants during
the times authorized by the preceding paragraph.
In the case of Barber v. Watson, 330 Ark. 250, 953 S.W.2d 579 (1997), the supreme
court interpreted the language of a bill of assurance to determine when amendment could
take place. The bill of assurance read:
The covenants and restrictions of the Bill of Assurance shall be binding for a period
of
25 years from the date of recording, after which time the covenants and restrictions
shall be automatically extended for successive periods of ten years unless an
instrument
signed by a majority of the owners has been recorded agreeing to change or terminate
the covenants and restrictions.
Id. at 253, 953 S.W.2d at 581.
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The supreme court concluded that this language was clear and unambiguous. It found
that the twenty-five year period provided in the original bill of assurance would have expired
in November 1993, making the amended bill of assurance executed in August 1995 untimely
and therefore invalid. Id. The court cited to White v. Lewis, 253 Ark. 476, 487 S.W.2d 615
(1972), another case the parties cite as significant here. In White v. Lewis, our supreme court
held that the bill of assurance providing that covenants restricting the use of land in a
subdivision to residential purposes were to be binding for twenty-five years from the date of
recordation, after which they could be automatically extended for successive periods of ten
years. The supreme court noted there that, unless an instrument signed by a majority of
property owners was filed agreeing to change in whole or in part, the bill of assurance could
not be amended prior to the end of the twenty-five-year period. Id.
Appellant attempts to distinguish our case by pointing out that the bill of assurance
in Barber was unambiguous because it used the language “after which” and contained no
separate amendment clause.
Appellees, on the other hand, argue that the restrictive
covenants in Barber and White are “virtually identical” to the one at issue and that the
supreme court’s interpretation in those cases requires that the trial court’s interpretation be
affirmed in this case. We agree. There is no reason for the January 1, 2024 date to be
included in the bill of assurance other than as the beginning point for the then owners to be
able to amend the covenants. While appellant makes a fairly persuasive argument, the plain
language and simple logic dictate otherwise. Accordingly, we affirm.
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Affirmed.
R OBBINS and B AKER, JJ., agree.
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