Patch v. Springfield School District

Supreme Court of Vermont
989 A.2d 500 (2009)

ELI5:

Rule of Law:

In Vermont, a general-plan development with enforceable restrictive covenants is created only when 1) a declaration of covenants is recorded before the first lot is sold, or 2) all property owners subsequently agree to impose the covenants. A common grantor's intent, the existence of a subdivision plat, or the inclusion of similar covenants in a majority of deeds is insufficient to create such a plan.

Facts:

In 1928, Sunmount/Douglass Real Estate Corporation (Sunmount) created a subdivision plan for over 100 lots and recorded a plat map.
In 1929, Sunmount sold the first lot from the subdivision with no restrictive covenants in the deed.
Sunmount subsequently sold sixteen other lots, including the property eventually purchased by Plaintiff, with deeds containing covenants restricting the land to 'dwelling purposes.'
In 1938, Sunmount conveyed its remaining unsold lots, which included the land later acquired by the Springfield School District, back to the original landowners, LaFountain and Woolson. This deed did not contain the restrictive covenant.
In 1946, Woolson's estate conveyed a large parcel comprising many of the unsold lots to the Town of Springfield for the School District. The chain of title for this parcel does not contain the 'dwelling purposes' restriction.
The School District built the Elm Hill School on the property in the late 1940s and has operated it continuously since.
Plaintiff purchased her property in 2002, which is subject to the restrictive covenant and adjacent to the School District's property.
The School District developed a plan to construct a new 23-space parking lot on its property adjacent to Plaintiff's land.

Procedural Posture:

Plaintiff argued before the town zoning board that the parking lot was precluded by restrictive covenants, but the board granted the School District a permit.
Plaintiff filed a lawsuit against the Springfield School District in the superior court, seeking to enjoin construction of the parking lot.
The superior court granted Plaintiff's request for a preliminary injunction, which halted construction.
Following a bench trial, the superior court ruled in favor of the School District, finding the land was not subject to restrictive covenants.
Plaintiff, the appellant, appealed the superior court's decision to the Supreme Court of Vermont.

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Issue:

Does a restrictive covenant limiting land use to dwelling purposes apply to a parcel within a subdivision when the parcel's chain of title does not contain the restriction, but deeds to other lots from the same common grantor do?

Opinions:

Majority - Burgess, J.

No, the restrictive covenant does not apply to the School District's land. A restrictive covenant cannot be implied onto a parcel that lacks the restriction in its chain of title, even if other parcels in the subdivision are burdened by it, unless a general-plan development was properly created. The court, relying on Creed v. Clogston, held that a general-plan development requires either a declaration of covenants recorded before the first lot is sold or a subsequent unanimous agreement by all lot owners. Here, neither condition was met; the first deed from the developer, Sunmount, contained no restrictions, and no prior declaration was filed. The court rejected the argument that the developer's intent to create a common scheme was sufficient. Further, the deeds in the district's chain of title did not incorporate the restrictions by reference, as they contained only conditional language stating the property was subject to restrictions 'if any there are which are legally binding.' Finally, the court declined to adopt the doctrine of reciprocal negative easements, noting that its application would presuppose the existence of a general plan, which was not established.

Analysis:

This decision solidifies Vermont's formalistic and strict approach to the creation of general-plan developments, as established in Creed v. Clogston. It prioritizes certainty and predictability in land titles by requiring a formal, recorded declaration of covenants before any sales, rather than allowing courts to infer restrictions based on a developer's apparent intent or a pattern of restrictions in later deeds. The ruling makes it significantly more difficult to enforce neighborhood-wide restrictions that were not properly documented from the outset, thereby protecting landowners from unwritten, implied burdens on their property. The case serves as a clear warning to developers that an informal or piecemeal approach to imposing restrictions is insufficient to create an enforceable common scheme in Vermont.

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