PRAIRIE HILLS WATER AND DEVELOPMENT COMPANY v. JIM GROSS, SCOTT GROSS, STEVE GROSS et.el 2002 SD 133
Annotate this CasePRAIRIE HILLS WATER AND
DEVELOPMENT COMPANY,
a South Dakota corporation,
Plaintiffs and Appellee
v.
JIM GROSS, SCOTT GROSS, STEVE GROSS,
d/b/a JS&S WOOD
AND IRON, and LINDA PAULSON
Defendants and Appellants
[2002 SD 133]
South Dakota Supreme Court
Appeal from the Circuit Court of
The Fourth Judicial Circuit
Butte County, South Dakota
Hon. John W. Bastian, Judge
RANDALL L. MACY of
Buckmaster and Macy
Belle Fourche, South Dakota
Attorneys for plaintiff and appellee.
ROD WOODRUFF
Belle Fourche, South Dakota
Attorney for defendants and appellants.
Considered on Briefs May 28, 2002
Opinion Filed 11/6/2002
ZINTER, Justice
[¶1.] Prairie Hills Water and Development Company (Prairie Hills) sued Linda Paulson, Jim Gross, Scott Gross, and Steve Gross (collectively referred to as the Grosses). Prairie Hills alleged that Grosses’ commercial sandblasting, painting and other business activities were a public nuisance and were in violation of certain real estate covenants and restrictions in a real estate subdivision. The trial court agreed with Prairie Hills and enjoined Grosses’ business operations. The trial court also awarded Prairie Hills attorney fees incurred in enforcing the covenants. Grosses appeal both decisions. We affirm the issuance of the injunction. We also affirm that portion of the judgment that awarded attorney fees against the property owners. We reverse that portion of the judgment that awarded attorney fees against non-property owners.
FACTS AND PROCEDURAL HISTORY[¶19.] In reviewing a trial court’s decision to grant an injunction we consider “(1) [w]ere any of the facts found by the trial court clearly erroneous? and (2) [i]f not, taking the facts as true, did the court abuse its discretion in granting the injunction?” Maryhouse, Inc. v. Hamilton, 473 NW2d 472, 474 (SD 1991). In deciding whether the trial court’s factual findings are clearly erroneous, “[t]he question is not whether this court would have made the same findings that the trial court did, but whether on the entire evidence we are left with a definite and firm conviction that a mistake has been committed.” Id. (citing Cunningham v. Yankton Clinic PA, 262 NW2d 508, 512 (SD 1978)). We will not disturb the lower court's findings unless we are satisfied that they are contrary to a clear preponderance of the evidence. Id. “The term 'abuse of discretion’ refers to a discretion exercised to an end or purpose not justified by, and clearly against, reason and evidence.” Dacy v. Gors, 471 NW2d 576, 580 (SD 1991)(quoting Gross v. Gross, 355 NW2d 4, 7 (SD 1984)). When this Court reviews a matter “involving judicial discretion [the test] is 'whether we believe a judicial mind, in view of the law and the circumstances, could reasonably have reached that conclusion.’” Id. (quoting Myron v. Coil, 82 SD 180, 185, 143 NW2d 738, 740 (1966)(emphasis and bracketed portion in original).
[¶28.] There was, however, testimony from a number of property owners that Grosses’ business was offensive, annoying, and a nuisance. Jim Casper objected to the noise, dust, and large vehicle traffic. He testified that the noise caused vibrations in his home and could be heard even when his windows and doors were closed. Wilder also had concerns about the noise, dust and traffic from large belly-dump trucks. Langer confirmed that the noise at Casper’s home was “loud and annoying.” Langer also testified that the noise in Wilder’s residence was loud even when Wilder’s windows and doors were closed. Rutz described the business as “excessively noisy.” He also had concerns about the decrease in quality of life and increase in traffic from the business. Others were annoyed by the traffic and did not believe that the business was consistent with the residential character of the subdivision. Considering the totality of the evidence, the trial court was not clearly erroneous in finding that the business was an annoyance and nuisance that “unreasonably” disturbed other property owners in the subdivision.
[¶30.] SDCL 21-10-1 provides that “[a] nuisance consists in unlawfully doing an act, or omitting to perform a duty, which act or omission . . . [a]nnoys, injures, or endangers the comfort, repose, health, or safety of others . . . .” SDCL 21-10-3 provides that a public nuisance “affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon the individuals may be unequal.”
[¶31.] In Wellman we stated, “[t]he existence of a nuisance is subject to a rule of reason. It involves the maintenance of a balance between the right to use property and the right to enjoy property unaffected by others’ uses.” 352 NW2d at 205.
The ultimate question in each cause is whether the challenged use is reasonable in view of all of the surrounding circumstances. Having regard for the needs and methods of defendant, the degree of discomfort and injury occasioned plaintiff in person or in the enjoyment of his property, and the present use and trends of use of surrounding property, if the use made by defendant is not such as an ordinary man would make, and the resulting discomforts and injuries are not such as people of common sensibilities and tastes should be required to endure, the questioned use is unreasonable.
[¶33.] However, as we previously noted in Issue 1, Grosses’ business was an annoyance and nuisance to other property owners in that their peace and tranquility as property owners was unreasonably disturbed. Grosses’ commercial operation involved sandblasting, painting, welding, and related activities in a residential subdivision. Although there was conflicting evidence concerning the extent of the noise,[3] dust, and traffic from large trucks, there was evidence that it was excessive. The finder of fact resolved those differences adversely to Grosses. The trial court’s findings regarding a nuisance were not clearly erroneous.
[¶34.]3. The trial court did not abuse its discretion in granting a permanent injunction.
[¶36.] SDCL 21-8-14 provides that “a permanent injunction may be granted to prevent the breach of an obligation existing in favor of the applicant: (1) [w]here pecuniary compensation would not afford adequate relief, [or] (2) [w]here it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief . . . . ” The ultimate decision “rests in the discretion of the trial court.” Maryhouse, 473 NW2d at 475 (citing Gross v. Conn. Mut. Life Ins. Co., 361 NW2d 259, 264 (SD 1985))(emphasis added).
[¶37.] We have adopted four factors to generally consider in exercising that discretion to grant injunctive relief:
1) Did the party to be enjoined cause the damage?
2) Would irreparable harm result without the injunction because of [a] lack of an adequate and complete remedy at law?
3) Is the party to be enjoined acting in bad faith or is its injury-causing behavior an “innocent mistake”?
4) In balancing the equities, is the “hardship to be suffered by the [enjoined party] . . . disproportionate to the . . . benefit to be gained by the injured party”?
[¶42.] Generally, attorney fees are only allowed in this jurisdiction when authorized by statute or contract. O'Connor v. King, 479 NW2d 162, 166 (SD 1991). Covenant #11, provided that “[a]ny property owner violating any of the covenants . . . shall be liable and responsible for attorneys fees and costs that may result from the specific enforcement of the . . . covenants.” The trial court concluded that this covenant constituted an agreement or contract to pay attorney fees. Therefore, the court awarded Prairie Hills the attorney fees it incurred in enforcement of the covenants. There is substantial legal support for the trial court’s decision. See McLain v. Anderson, 933 P2d 468, 472-473 (Wyo 1997); Valenti v. Hopkins, 926 P2d 813, 816 (Or 1996); Donaca v. Ivall, 605 P2d 709, 714 (OrCtApp 1980); Sheridan v. Martinsen, 523 P2d 1392, 1395 (Mont 1974); Riley v. Boyle, 434 P2d 525, 528 (ArizCtApp 1967); Barrows v. Jackson, 247 P2d 99, 102 (CalCtApp 1952); Ludgate v. Somerville, 256 P 1043, 1045 (Or 1927).
[¶45.] Grosses next argue that the attorney fee provision of Covenant #11 is not enforceable against them because they are not in privity with the original grantor/developer, [6] and they contend that Covenant #11 does not run with the land. Grosses’ point out that under SDCL 43-12-2(1), only covenants made for the “direct benefit of the property” run with the land. Grosses contend that under the common law, the obligation to pay money for attorney fees is not for the “direct benefit of the property”. Rather, it is a “personal obligation” that does not “touch and concern the land.” Grosses point to a number of authorities holding that such covenants to pay money do not “touch and concern” the land, and therefore, they do not run with the land.[7]
[¶46.] Grosses’ reliance on these cases from other jurisdictions is misplaced because they fail to consider SDCL 43-12-2. That statute contains four categories of covenants that run with the land, two of which are relevant here. The first provision, SDCL 43-12-2(1), involves the traditional common law covenants that are “made for the direct benefit of the property,” and therefore are the type that “touch and concern the land.” SDCL 43-12-2(4), however, also includes covenants that are merely “incidental” to the other covenants that are made for the direct benefit of the property. Under SDCL 43-12-2, the two relevant covenants that run with the land are:
(1) Those made for the direct benefit of the property or some part of it, then in existence;
(2) . . .
(3) . . . ; and
(4) All covenants incidental to any of the foregoing covenants.
SDCL 43-12-2 (emphasis added).
[¶47.] In this case, there is no dispute that the residential use and annoyance covenants are the type that directly benefit the land, and therefore, run with the land under subdivision (1). Unlike Grosses authorities, however, subdivision (4) provides that “incidental” covenants also run with the land. Because Covenant #11 provides for the enforcement of the covenants that are made for the direct benefit of the land, Covenant #11 is incidental to other covenants. Because Covenant #11 is incidental to a covenant that runs with the land, Covenant #11 also runs with the land. SDCL 43-12-2(4). Because Covenant #11 runs with the land, its attorney fee provision is enforceable against subsequent grantees like Jim Gross and Linda Paulson, even though they are not in privity with the original grantor.
[¶48.] We do, however, agree with Grosses’ final contention that even if Covenant #11 permits recovery of attorney fees, its express terms only subject the “owner” of the property to payment of attorney fees. Because the attorney fee award entered by the trial court applied to all defendants, including some who were not property owners, that portion of the judgment is reversed and remanded so that
the attorney fee obligation will only be imposed against the property owners--Jim Gross and Linda Paulson.
[¶50.] The judgment issuing the injunction is affirmed. That portion of the judgment awarding attorney fees against property owners Jim Gross and Linda Paulson is affirmed. That portion of the judgment awarding attorney fees against non-property owners is reversed.
[¶51.] GILBERTSON, Chief Justice, and SABERS and KONENKAMP, Justices, and AMUNDSON, Retired Justice, concur.
[1] . SDCL 21-10-1 provides that “[a] nuisance consists in unlawfully doing an act, or omitting to perform a duty, which act or omission . . . [a]nnoys, injures, or endangers the comfort, repose, health, or safety of others . . . .”
[2] . Grosses also devote much of their briefs to their contention that there is insufficient evidence to find that property values have declined in the development as a result of their business. We do not address this argument because a “reduction in property values” was not a factor utilized by the trial court in its findings of fact and conclusions of law.
[3] . The trial court found that the study performed by Dr. Kerk had some defects and was just one factor in determining whether Grosses’ business violated the covenants and restrictions and created a public nuisance.
[4] . Grosses also argue that the trial court erred in not entering a finding on factor 3. Grosses’ argument regarding factor three is without merit. This record clearly shows that Grosses were acting with knowledge of the restrictive covenants. There is no evidence of an innocent mistake.
[5] . We have also not required an explicit consideration of all factors in other contexts. See, State v. Mark Weaver, 2002 SD 76, ¶25, 648 NW2d 355, 365 (stating that although the trial court did not make an explicit consideration of all Daubert factors, an express rendering of the trial court’s decision-making process is not required where the court’s specific findings are supported by the record and further explanation is not required to uphold the order).
[6] . The record reflects that original developer and grantor was Darrell J. Nickelson.
[7] . See Paloma Investment Limited Partnership v. Jenkins, 978 P2d 110 (ArizCtApp 1998)(covenant’s attorney fee provision did not “touch and concern” the land, and therefore, based on common law principles, did not run with the land); White v. Wilhelm, 665 P2d 407 (WashCtApp 1983)
(plaintiff limited only to attorney fees incurred in pretrial efforts to dissolve injunction, court did not address issue of whether right to attorney fees were included in covenant running with the land); Eagle Enterprises, Inc. v. Gross, 349 NE2d 816 (NYAppDiv 1976)(landowner’s obligation to purchase seasonal supply of water from grantor was a personal, contractual promise rather than an interest running with the land); Raintree Corporation v. Rowe, 248 SE2d 904 (NCApp 1978)(covenant to be member of country club and pay country club dues was in no way connected to the land, and was therefore, based on common law, a personal covenant rather than covenant running with the land); Choisser v. Eyman, 529 P2d 741 (ArizAppCt 1974)(refund rights under water extension agreement was personal right, and under common law could not, by definition, be a covenant running with the land); Latses et al v. Nick Floor, Inc., 104 P2d 619 (Utah 1940)(in unlawful detainer action, agreement to pay attorney fees was a personal covenant between parties of contract and therefore did not run with the land under common law principles).
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