Panos v. Olsen & Associates Construction, Inc.
123 P.3d 816, 2005 UT App 446, 537 Utah Adv. Rep. 3 (2005)
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Rule of Law:
Under the merger doctrine, where a restrictive covenant in a deed uses broad but unambiguous language, the court will not consider parol evidence to add more specific terms that the parties omitted. A provision is not rendered legally ambiguous simply because its broadness allows for multiple compliant interpretations, and any doubts will be resolved in favor of the free and unrestricted use of property.
Facts:
- In July 2001, Patrick T. Panos sold a vacant lot (Lot 29) to Olsen and Associates Construction, Inc. (Olsen), while continuing to reside on an adjacent lot.
- The initial real estate purchase contract included a restriction prohibiting any building on the lot from being higher than thirty-two feet when measured 'from the road,' intended to preserve Panos's view.
- At closing, the final warranty deed contained the restriction that the highest point of any building shall not be higher than 32 feet 'MEASURED FROM THE EXISTING STREET LYING WEST AND ADJACENT TO SAID LAND.'
- The adjacent street, Elm Ridge Road, is on a slope, meaning the elevation varies at different points along the road.
- Prior to the sale, Panos had a survey conducted that used a specific Salt Lake County brass cap monument on Elm Ridge Road as the measurement point, but this specific monument was not referenced in the final deed.
- After Olsen constructed a home on Lot 29, Panos commissioned an updated survey measuring from the monument, which found the home to be 34.91 feet high.
- Olsen commissioned a separate survey that measured from a different, higher-elevation point on Elm Ridge Road (a street gutter), which found the home to be 31.96 feet high.
Procedural Posture:
- Panos filed a complaint in the trial court against Olsen, alleging breach of contract and seeking an injunction and declaratory judgment.
- Olsen filed a motion for summary judgment, and Panos filed a cross-motion for summary judgment.
- The trial court granted Olsen’s motion for summary judgment and denied Panos’s cross-motion.
- The trial court then denied Panos's subsequent motion to amend the judgment.
- Panos, as appellant, appealed the trial court's summary judgment ruling to the Utah Court of Appeals; Olsen is the appellee.
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Issue:
Is a restrictive covenant in a deed that measures height 'from the existing street' ambiguous when the street is sloped, thus permitting the introduction of parol evidence to establish a specific starting point for measurement?
Opinions:
Majority - Bench, Associate Presiding Judge
No. A restrictive covenant in a deed that measures height 'from the existing street' is not ambiguous even if the street is sloped. The court reasoned that under the merger doctrine, the deed is the final and integrated agreement of the parties, superseding all prior negotiations. The phrase 'from the existing street' is broad but not ambiguous; it permits measurement from any point on the specified portion of the street. Because the parties failed to include a more specific measurement point in the deed, the court will not rewrite the contract to add one. Citing the principle that courts resolve doubts in favor of the free and unrestricted use of property, the court concluded that if a measurement from any valid point on the street shows compliance, the restriction is satisfied. The court also rejected Panos's claim of mutual mistake, finding no clear and convincing evidence that both parties intended to use a specific, unstated measurement point.
Analysis:
This case strongly reaffirms the finality of a deed under the merger doctrine and establishes a high bar for claiming ambiguity in a restrictive covenant. It clarifies the distinction between ambiguous language (which is unclear) and broad language (which is general but understandable), holding that broadness alone does not create ambiguity that would permit parol evidence. The decision serves as a significant caution to parties in real estate transactions, emphasizing that they bear the full responsibility for ensuring that all essential terms, particularly precise reference points for measurements, are explicitly included in the final deed. By interpreting the broad covenant in favor of the free use of property, the court makes it more difficult for parties to enforce unwritten intentions against subsequent property owners.
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