Sonoma Development, Inc. v. Miller
1999 Va. LEXIS 84, 258 Va. 163, 515 S.E.2d 577 (1999)
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Rule of Law:
Horizontal privity, required for a real covenant to run with the land, exists when the covenant is created as part of a transaction that includes the conveyance of an interest in either the burdened or benefited land, even if the covenant and the deed are in separate documents.
Facts:
- Alfred and Mary Schaer owned two adjacent lots, Lot 38, which had a house on it, and Lot 39, which was vacant.
- The north wall of the house on Lot 38 encroached slightly onto Lot 39.
- In 1995, Girard and Lynn Miller entered into a contract to purchase Lot 38 from the Schaers, which required the Schaers to place a building restriction on Lot 39 for the benefit of Lot 38.
- On June 30, 1995, the Schaers executed and recorded a "Declaration of Restriction" prohibiting any construction on Lot 39 within three feet of the north wall of the house on Lot 38.
- On the same day, the Schaers executed and recorded a deed conveying Lot 38 to the Millers.
- In February 1997, Sonoma Development, Inc. purchased Lot 39 from the Schaers.
- In the spring of 1997, Sonoma constructed a house on Lot 39 with a wall situated between 2.5 and 2.6 feet from the Millers' house, violating the three-foot setback restriction.
Procedural Posture:
- The Millers filed suit against Sonoma Development, Inc. in the circuit court (trial court) to enforce the restrictive covenant.
- The Millers moved for summary judgment.
- The circuit court granted summary judgment for the Millers, upholding the covenant's validity and ordering Sonoma to remove the improvements that violated the three-foot setback.
- Sonoma Development, Inc. (appellant) appealed the circuit court's judgment to the Supreme Court of Virginia.
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Issue:
Does horizontal privity exist between original covenanting parties when a restrictive covenant is created in a separate document from the deed, but both documents are part of the same real estate transaction?
Opinions:
Majority - Justice Kinser
Yes. Horizontal privity exists because the covenant was part of a broader transaction that included the conveyance of an interest in land. The court rejected Sonoma's argument that privity must be demonstrated within the four corners of a single document. Instead, the court defined a "transaction" as a series of connected acts or agreements. The real estate contract, the "Declaration of Restriction," and the deed conveying Lot 38 to the Millers were all interconnected parts of a single transaction. Because the covenant was made in connection with the conveyance of Lot 38 (the benefited land), the requirement of horizontal privity was satisfied. The court also affirmed the circuit court's grant of an injunction, reasoning that when a party knowingly violates a clear covenant made for valuable consideration, an injunction is the appropriate remedy to enforce the agreement without balancing the hardships.
Analysis:
This decision clarifies the doctrine of horizontal privity in Virginia for real covenants, moving away from a rigid, formalistic requirement that the covenant be contained within the deed of conveyance. By adopting a more flexible, transaction-based approach, the court aligns Virginia law with the Restatement of Property and modern real estate practices where multiple documents may comprise a single deal. This holding makes it easier for subsequent landowners to enforce restrictive covenants that were clearly part of the original bargain, even if documented separately, thereby strengthening the power of such restrictions and protecting the interests of benefited landowners.
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