Schartz v. D R B & M Real Estate Partnership

Court of Appeals of Kansas
621 P.2d 1024, 5 Kan. App. 2d 625 (1982)

ELI5:

Rule of Law:

Equitable defenses such as laches, waiver, or abandonment will not bar the enforcement of a restrictive covenant via mandatory injunction, even at great cost to the violator, so long as the covenant retains value and its original purpose has not been subverted by other minor violations, and at least one plaintiff has standing to sue without being barred by personal misconduct.

Facts:

A restrictive covenant was recorded for a tract of land prohibiting the construction of buildings within 80 feet of the north section line to preserve appearance and views.
D R B & M Real Estate Partnership purchased a parcel within this tract on December 11, 1975, to build a Taco Tico restaurant.
In December 1975, appellee Wade Schartz learned of the sale and informed the seller's agent of the restrictions.
In February 1976, appellee William Esfeld observed the footings for the new building being dug inside the restricted area but did not inform the partnership of the violation.
In mid-March 1976, Wade Schartz suspected an encroachment and contacted Esfeld, who was told by the contractor that city setbacks superseded the covenant; Esfeld relayed this incorrect information to Schartz.
After being alerted by his tenant, Schartz measured the property, confirmed the violation, and consulted an attorney.
The Taco Tico building was completed on May 3, 1976, encroaching 24 feet into the setback area.
On May 11, 1976, the partnership received its first notice of the violation via a letter from the appellees' attorney.

Procedural Posture:

William Esfeld and other neighboring property owners (appellees) sued D R B & M Real Estate Partnership (appellants) in a Kansas trial court.
The plaintiffs sought a mandatory injunction to compel the removal of a Taco Tico building that violated a recorded setback covenant.
The trial court found that plaintiff William Esfeld was guilty of laches and plaintiff Edna Schartz did not have 'clean hands.'
Despite these findings, the trial court granted the mandatory injunction, ordering the removal of the encroaching structure.
D R B & M Real Estate Partnership appealed the trial court's injunction order to the Kansas Court of Appeals.

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Issue:

Does the equitable defense of laches, waiver, or abandonment prevent the enforcement of a recorded restrictive covenant through a mandatory injunction when the plaintiffs delayed notifying the defendant of the violation until after construction was complete, some plaintiffs may be guilty of laches or have unclean hands, and other minor violations of the covenant exist in the area?

Opinions:

Majority - Meyer, J.

No. The equitable defenses of laches, waiver, or abandonment do not prevent the enforcement of the restrictive covenant. The primary responsibility to comply with recorded restrictions rests with the property owner, who is held to have constructive notice. Although some plaintiffs were found to be guilty of laches or have unclean hands, their conduct does not bar relief for the other plaintiffs who are not similarly disqualified. Furthermore, prior minor violations, such as a fence and a temporary structure, do not constitute an abandonment or waiver of the covenant because they did not subvert the original scheme of development, and the covenant protecting visibility retains significant value for the commercial properties. Despite the substantial financial loss to the appellants, the trial court did not abuse its discretion in balancing the equities and issuing the mandatory injunction for removal.

Analysis:

This case reinforces the durability of recorded restrictive covenants against equitable defenses. It establishes that the misconduct of one co-plaintiff (e.g., laches) does not defeat the rights of other plaintiffs to enforce a shared covenant. The ruling also clarifies the standard for abandonment, holding that violations must be so substantial as to undermine the entire purpose of the restriction, not merely minor or temporary. This precedent places a heavy burden on developers to perform due diligence, as courts are willing to enforce covenants through costly mandatory injunctions even when the plaintiffs' delay contributed to the magnitude of the loss.

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