Graham v. Beermunder
93 A.D.2d 254, 462 N.Y.S.2d 231, 1983 N.Y. App. Div. LEXIS 17113 (1983)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Where a developer sells lots with substantially uniform restrictions pursuant to a general scheme of development, an equitable right to enforce the restrictions is created among the grantees, even if their deeds do not expressly grant that right to each other.
Facts:
- Stephen Guernsey, III owned a large tract of land, which he decided to subdivide into a residential development called 'Guernsey Hill, Section II.'
- Guernsey had a map of the development prepared and filed with the Town of LaGrange Planning Board in 1967.
- Between 1967 and 1970, Guernsey sold all the parcels in the development, including those later acquired by plaintiffs Wenk and Graham.
- The deeds for the plaintiffs, the Beermunders, and most other lot owners contained a uniform set of ten restrictive covenants, including one prohibiting subdivision without Guernsey's written approval.
- The deeds stated that the restrictions 'shall run with the land.'
- Defendants Beermunder purchased the final parcel in the development directly from Guernsey in August 1970.
- At the time of purchase, Guernsey informed the Beermunders that all parcels in the development were subject to the same restrictions and provided them with a copy of the subdivision map.
- Sometime prior to March 1980, the Beermunders applied to the town planning board for permission to subdivide their property into three lots, contrary to the covenant.
Procedural Posture:
- Plaintiffs Wenk and Graham filed an action against defendants Beermunder in the Supreme Court, Dutchess County (a New York trial court), seeking a declaratory judgment to enforce a restrictive covenant.
- Both parties filed cross-motions for summary judgment.
- The trial court (Special Term) granted summary judgment in favor of the plaintiffs.
- Defendants' subsequent motion for reargument was denied by the trial court.
- Defendants later moved to vacate the summary judgment order on the ground of newly discovered evidence, which the trial court also denied.
- Defendants, as appellants, appealed the trial court's orders to the Appellate Division of the Supreme Court, Second Department (an intermediate appellate court).
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a restrictive covenant in a deed, which is part of a common scheme of development, create an equitable right of enforcement for other grantees within that development, even if the deed does not explicitly state the covenant is for their benefit?
Opinions:
Majority - Gibbons, J. P.
Yes. A restrictive covenant that is part of a common scheme of development is enforceable in equity by any grantee against any other grantee, provided the defendant had notice of the scheme. The court reasoned that while the plaintiffs do not have an action at law as third-party beneficiaries, equity provides a remedy upon a showing of a general plan of development and notice. The evidence of such a plan was clear and definite, established by the filed subdivision map, the substantial uniformity of the restrictions in nearly all deeds, and the grantor's verbal representations to the defendants at the time of purchase. The inclusion of the restrictions in the deed for the very last lot sold is 'very cogent' evidence that the restrictions were intended for the mutual benefit of all prior purchasers. The language that the covenants 'run with the land' would be meaningless if only the grantor could enforce them, especially after the grantor divested himself of all interest in the properties, thereby losing his right of enforcement.
Analysis:
This case clarifies the factors courts use to find an implied reciprocal negative easement, allowing grantees to enforce covenants against each other based on a common scheme of development. The decision demonstrates that intent for mutual enforceability can be inferred from the developer's actions and surrounding circumstances, even without express language in the deeds. It solidifies the principle that once a developer sells all lots in a subdivision, the right to enforce common restrictions intended to 'run with the land' passes to the grantees, rendering any subsequent release or permission from the original developer ineffective.
