ENTRY ORDER


Marsh Inter Vivos Trust v.
McGillvray et al. (2012-060)
 
2013 VT 6
 
[Filed 01-Mar-2013]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40 as well as formal revision
before publication in the Vermont Reports.  Readers are requested to
notify the Reporter of Decisions by email at: JUD.Reporter@state.vt.us or by
mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont
05609-0801, of any errors in order that corrections may be made before this
opinion goes to press.
 
 

2013 VT 6 

 

No. 2012-060

 

Blanche S. Marsh Inter Vivos
  Trust,
Blanche S. Marsh Trustee


Supreme Court


 


 


 


On Appeal from


     v.


Superior Court, Windsor Unit,


 


Civil Division


 


 


Burton and Margaret McGillvray,
William and Lisa Pezzoni, Louis and Rosemarie Scibetta,
  Peter Steffens and Suzanne Kelliher


September Term, 2012


 


 


 


 


William
  D. Cohen, J.


 

Matthew T. Birmingham, III of Birmingham & Moore, P.C.,
Ludlow, for Plaintiff-Appellant.
 
Thomas Hayes
and Susan J. Manley of Hayes & Windish, Woodstock, for
Defendants-Appellees.
 
Robert S. DiPalma and Kristina M. Roomet of Paul Frank +
Collins P.C., Burlington, for Amicus 
  Curiae Quechee Lakes Landowners’
Association, Inc.
 
 
PRESENT:  Reiber, C.J., Dooley, Skoglund, Burgess and
Robinson, JJ.
 
 
¶ 1.            
ROBINSON, J.   This case involves the interplay between
rulings and requirements relating to zoning in connection with a planned
development and enforcement of restrictive covenants and deed restrictions
applicable to property within the development.  Plaintiff obtained
municipal zoning approval to reconfigure the lot lines in her two-lot farmstead
parcel within the Quechee Lakes subdivision, as well as to construct a dwelling
on the second, yet-to-be-developed lot.  The Environmental Division
affirmed the zoning board’s award of the latter permit.  Notwithstanding
this order, in a declaratory judgment action also initiated by plaintiff, the
civil division concluded that plaintiff’s proposed construction violated the
applicable restrictive covenants and deed restrictions.  On appeal,
plaintiff argues that the Environmental Division’s decision resolves the
dispute, that the civil division improperly considered extrinsic evidence when
the disputed deed restrictions were clear on their face, that defendants’
challenge to plaintiff’s right to build the proposed dwelling is time-barred,
and that the character of the development has changed so much that the disputed
deed restrictions are no longer valid.  We affirm.
¶ 2.            
The Quechee Lakes subdivision includes up to 2500 residential units on
approximately 6000 acres, together with specified commercial uses.  In
1971, plaintiff[1]
purchased a “farmstead” parcel, consisting of two contiguous building lots
abutting Hillside Road at Quechee Lakes.  The larger lot was about 5.73
acres, and the smaller lot, identified in the deed as the saleable lot was one
acre.  The warranty deed conveying the property to plaintiff from the
Quechee Lakes Corporation states that the property is subject to the
Declaration of Covenants, Restrictions, Rights and Benefits (“Covenants”)
pertaining to the Quechee Lakes Subdivision.  It also specifically
provides that “the dwelling to be erected on this Farmstead shall be erected at
the set back line of seventy (70) feet from Hillside Road and that the dwelling
to be erected on the Salable Lot shall be erected at the set back line of 40
feet from Hillside Road.”  
¶ 3.            
The Covenants referenced in the deed contain the following pertinent
provisions:
Section
1.01    Definitions. 
.
. .
(e)
       “Farmstead” shall mean a single family
parcel consisting of two Lots and containing not less than a total of four
acres.
(f)
       “Lot” shall mean a portion of the
Subdivision intended for separate ownership, including thereon a residence for
use as permitted in this Amended and Restated Declaration.
.
. .
Section 5.01.   General
Restrictions.
(a)               
Residential Use.  Each Lot . . .
shall be used, improved and devoted exclusively to residential occupancy by a
single family.  
. . .
(iv)       Other than Farmsteads,
Woodsteads or Plantations which are provided with separate buildable parcels,
Lots which contain 2 acres or more, may have a guest house.  Farmsteads,
Woodsteads and Plantations may have a barn.  
. . .
(e)
       Multiple Lots.  Two or more
Lots may be used by an Owner for the erection and construction of a single
family dwelling and incidental buildings permitted under this Amended and
Restated Declaration, but the area consisting of such combined Lots shall not
thereafter be subdivided unless the requirements of the Amended and Restated
Declaration, as to area conveyed and location of buildings are complied with
according to the original Lot boundaries . . . 

 
(f)       
Setback.  Side Yards.  No building or
part thereof shall be erected, placed or permitted to remain on any Lot within
forty (40) feet from any private or public way or greenbelt . . .
without the consent of the Association.  
 
¶ 4.            
In addition to the rights and restrictions arising from the deed and
Covenants, plaintiff’s property is subject to zoning restrictions under the
Hartford Zoning Regulations.  The Quechee Lakes Master Plan essentially
functions as an “overlay” to the otherwise-applicable zoning regulations
because approval of the Master Plan was part of the Town of Hartford Planning
Commission’s approval of the Quechee Lakes development.  The Master
Plan—essentially a zoning and permitting document—“is conceptual in nature,”
and “represents an overall guide to the development of a large area consisting
of about one fifth of the land area of the Town of Hartford.”  
¶ 5.            
The Master Plan definition of “farmstead” is the same as the definition
in the Covenants.  In addition, the Master Plan defines some additional
relevant terms not expressly defined in the Covenants:
3-3A
   Single-family Dwellings – A residential building designed
for and occupied by one family only and detached from other such
structures.  
. . .
3-3L   
Guest House – A non-rental accessory structure intended for occupancy by
family and friends.  
 
¶ 6.            
The Master Plan establishes the following relevant development
standards:
4-2      
Single Family Dwellings on Individual Lots.  The following
development standards shall apply to all single family homes built on
subdivided lots within the Quechee Lake Corporation P.D.  
 
4-2A   
No building or part thereof shall be erected, placed or permitted to remain on
any single family lot within 40 feet from any public right of way . . . .  
 
4-2B   
Single family lots shall be used only for single family residential
purposes.  A dwelling may have as accessory to it a garage of not more
than three car capacity and other accessory structures which may include
storage buildings, boat sheds, swimming pools, tennis courts, terraces, decks,
porches, playhouses, and other customary accessory structures.  Lots which
contain two acres or more may have a guest house.  Guest houses shall not
exceed twenty (20) feet in height.  Farmsteads and woodsteads may have a
barn.  
 
¶ 7.            
In 1973, plaintiff built a single-family dwelling within the area of the
one-acre saleable lot.  In 1984, the Hartford Planning Commission approved
the resubdivision of plaintiff’s two-lot parcel into two, equal-sized lots,
each approximately 3.3 acres.  Effective following the 1984
reconfiguration of the lot lines, Lot A of plaintiff’s parcel abuts Hillside
Road and contains the existing single-family dwelling.  Lot B is
undeveloped and begins about 280 feet from Hillside Road.  Lot B has no
road frontage, and accesses the road by a right-of-way over Lot A.  
¶ 8.            
In 1985 and 1986, plaintiff received zoning permits to build a garage
with guest quarters upstairs on Lot A and constructed
the building.  Lot B remained undeveloped.  
¶ 9.            
In response to objections by some neighbors that construction of a
dwelling on Lot B would violate a deed restriction, and in connection with her
own efforts to sell Lot B, in 2007 plaintiff filed a declaratory judgment
action against a group of neighbors (defendants) in the civil division to
establish her right to build a single-family dwelling on Lot B more than 70
feet from Hillside Road.  
¶ 10.        
In 2008, while the civil suit was pending, plaintiff applied to the Town
of Hartford for a building permit to construct a single-family dwelling with
attached garage and deck on Lot B.  The Hartford Zoning Administrator
issued a building permit, and a group of neighbors appealed that decision to
the Hartford Zoning Board of Adjustment, which upheld the building permit.[2]  The neighbors then appealed to the
Environmental Division, arguing that because the Covenants did not authorize
the construction of a “guest house” on Lot A, the dwelling unit constructed
within the garage on Lot A in 1986 should be counted as the second
single-family dwelling allowed on plaintiff’s two-lot farmstead parcel, and
that, therefore, the single-family dwelling now proposed for Lot B should be
counted as an impermissible third single-family dwelling on the overall
farmstead parcel.  
¶ 11.        
In 2009, the Environmental Division rejected this argument on the
grounds that the Covenants were not incorporated into the Master Plan and
therefore did not directly bear on the applicable zoning restrictions; if the
accessory guest dwelling unit was noncompliant with the Master Plan, that
nonconforming use would have no effect on whether the proposal to build a
single-family dwelling on Lot B should be approved; and the proposed
construction on Lot B did not run afoul of the Master Plan or applicable zoning
regulations.  
¶ 12.        
Meanwhile, the civil suit progressed to trial, concluding in 2011. 
Defendants argued that the deed requirement that dwellings on the two lots in the
farmstead parcel be built “at” 70- and 40-foot setbacks, respectively,
precluded the construction of a dwelling on Lot B, which began over 280 feet
from the road.  They also took the position that the Covenants prohibited
guest houses on farmstead lots, that the guest quarters on Lot A were therefore
not permissible as a “guest house,” that the guest quarters should therefore be
treated as a second dwelling, and that plaintiff was therefore precluded from
building a third dwelling on Lot B.  The trial testimony included a
deposition of the subdivision’s original developer who testified about, among
other things, his vision for the development and the intent underlying various
deed and Covenant provisions.  
¶ 13.        
In 2012, the civil division entered a decision against plaintiff. 
The superior court credited the testimony of the subdivision’s original
developer in discerning the meaning of the Covenants and deed restrictions and
held that the construction of a dwelling on Lot B represented an impermissible
third dwelling on the farmstead property, barred by the applicable deed
restrictions and covenants.  Plaintiff appeals.
I.
¶ 14.        
Plaintiff contends that defendants’ challenges to plaintiff’s proposed
construction of a dwelling on Lot B are time-barred.[3]  In particular, plaintiff points to
the eight-year statute of limitations for the enforcement of a restrictive
covenant contained in a deed and argues that by 1987 the neighbors had notice
of the reconfiguration of the lot lines, and thus the potential development of
the back lot with a single-family dwelling that would be well more than 70 feet
from Hillside Road; notice of the approval and construction of the guest
quarters on Lot A of the farmstead parcel; and “inquiry notice” of a state
subdivision permit for construction of another single-family dwelling on the
back lot.  
¶ 15.        
The applicable statute provides: “An action founded on covenant,
contained in a deed of lands . . . shall be
brought within eight years after the cause of action accrues, and not
after.”  12 V.S.A. § 505.  We have not
had occasion to directly address when a “cause of action accrues” to begin the
limitations period under § 505, but have held in the context of a breach
of contract claim that “[t]he statute of limitations begins to run when a party
can first sue on [the] cause of action.”  White v.
White, 136 Vt. 271, 273, 388 A.2d 386, 388 (1978).  
¶ 16.        
We conclude that a cause of action for breach of a restrictive covenant
accrues upon breach of the covenant.  See Girsh v. St. John, 218
S.W.3d 921, 925 (Tex. App. 2007) (“An enforcement action accrues upon breach of
the restrictive covenant.”).  Where the alleged covenant
violations involve the construction of a noncomplying structure, the
construction itself, and not merely preparatory steps that may be necessary
predicates to the construction but do not themselves constitute or require the
construction, starts the limitations period.  See Inv. Mgmt.
Servs., Inc. v. Vill. of Folsom, 808 So. 2d 597,
604 (La. Ct. App. 2001) (limitations period beginning upon “noticeable
violation” not triggered by filing of invalid map in public records; statute
required “a violation on [the lot] itself, such as clearing or staking out of
land or the actual building of a house on the lot”).  Bruce
v. Simonson Invs., Inc., 197 So. 2d 754, 759 (La. Ct. App. 1967)
(limitations period regarding challenge to allegedly invalid amendment to
covenants did not commence upon registration of amendment in land records but,
rather, began when landowner began using property for commercial purposes
pursuant to allegedly invalid amendment); see also Girsh, 218 S.W.3d at
925, 929 (limitations period for violation of covenant against mobile homes
began running with placement of mobile home on property). 
¶ 17.        
Plaintiff’s reconfiguration of her lot lines and procurement of a
revised subdivision permit from the State of Vermont in the 1980s, while
necessary steps to building a dwelling on the reconfigured Lot B, were not
sufficient to constitute the alleged violation of the Covenant provisions that
defendant neighbors invoke in opposition to plaintiff’s building plans in this
case, and thus did not trigger the statute of limitations.[4]
II.
¶ 18.        
Plaintiff argues that the civil division did not have jurisdiction over
her declaratory judgment action in light of the Environmental Division’s ruling
that construction of a single-family dwelling on Lot B, 340 feet from Hillside
Road was permitted by the Master Plan.  Plaintiff’s argument takes two
forms.  First, plaintiff argues, citing 24 V.S.A. § 4472, that the
exclusive means for challenging an action pursuant to Chapter 117 of Title
24—in this case, presumably, the award of a building permit for a dwelling on
Lot B—is through an appeal to the zoning board of adjustment or development
review board, followed by an appeal to the Environmental Division.  Citing
a host of our prior decisions on the subject, plaintiff explains that
§ 4472 precludes collateral attacks on the validity of permits.  The
second iteration of plaintiff’s argument is a more straightforward claim of res
judicata or, at a minimum, collateral estoppel:  Given that the
Environmental Division ruled on “the propriety of constructing a single-family
dwelling on Lot B,” plaintiff argues, the civil division “should have
refrained” from addressing the same question of “the propriety of constructing
a single-family dwelling” on Lot B.  
¶ 19.        
Both of these arguments rest on a misunderstanding of the difference
between the issuance (or denial) of a zoning permit pursuant to applicable
zoning regulations and enforcement of private property rights embodied in deed
restrictions and covenants.  The two matters are distinct.  The
governing sources of law—Hartford’s zoning regulations and the Master Plan upon
which municipal approval of the development was predicated in the case of the
zoning permit application, and the deed and Covenants in the case of the private
property rights—are separate.  Different courts have the authority to
decide the respective questions.  Compare In re Woodstock Cmty. Trust & Hous. Vt. PRD, 2012 VT 87, ¶ 40, __ Vt.
__, __ A.3d __ (“[T]he Environmental Division does not have jurisdiction to
determine private property rights.” (citing Nordlund
v. Van Nostrand, 2011 VT 79, ¶ 17, 190 Vt. 188, 27 A.3d 340)), with 24
V.S.A. § 4471 (municipal zoning decision appealable to Environmental
Division).  
¶ 20.        
If the question in this case were the validity of the municipal zoning
permit issued to plaintiff to authorize construction of a single-family
dwelling on Lot B, we might agree with plaintiff’s arguments.  But the
question in this case is not the validity of the municipal zoning permit. 
The questions posed by plaintiff’s quiet title action are whether the deed
restrictions providing that the dwellings on the two farmstead parcel lots be
erected “at the set back line” of 70 feet from Hillside Road and 40 feet from
Hillside Road were effective; whether the restrictive covenant is a minimum
setback restriction only, and not a maximum setback restriction; and whether,
in light of applicable deed restrictions, plaintiff or a subsequent purchaser
could build a single-family residence on Lot B.
¶ 21.        
The civil division clearly had authority to address these latter
questions, and the Environmental Division did not.  See 4 V.S.A.
§ 31; 12 V.S.A. § 402(a) (“Actions concerning real estate shall be
brought in the unit in which the lands, or some part thereof, lie.”).  The
cases cited by plaintiff, relating to the jurisdiction of the Environmental
Division with respect to zoning appeals, have no bearing on the central issue
in this case.  
¶ 22.        
Likewise, the res judicata effect of the Environmental Division’s ruling
on the zoning permit does not reach the distinct issue of whether plaintiff can
build the proposed dwelling on Lot B in light of the Covenants and deed
restrictions.  See In re Tariff Filing of Cent. Vt. Pub. Serv. Corp.,
172 Vt. 14, 20, 769 A.2d 668, 673 (2001) (“The doctrine of res judicata
. . . bars the litigation of a claim or defense if there exists a
final judgment in former litigation in which the parties, subject matter and
causes of action are identical or substantially identical.”  (emphasis added) (quotation
omitted)).  The related doctrine of collateral estoppel “bars the
relitigation of an issue, rather than a claim, that was actually litigated by
the parties and decided in a prior case.”  Id.  Plaintiff suggests
that the “issue” decided by the Environmental Division was “the propriety of
constructing a single-family dwelling” on Lot B, that the issue in this case is
the propriety of the proposed construction, and that therefore, the
Environmental Division has already decided the issue in this case. 
Plaintiff’s characterization of the issues in the respective cases is overly
broad; in neither case has a court been asked to rule globally on the
“propriety” of the proposed construction.  In the Environmental Division,
the focus of the legal challenge was the permit; in the civil division, the
question before the court involved the property rights of plaintiff and
defendant neighbors.  
¶ 23.        
Plaintiff suggests, though, that the Master Plan governs in the event of
a conflict between the Master Plan and any other document; because the
Environmental Division’s decision rested on an interpretation of the Master
Plan, the argument goes, the Environmental Division did decide the
central issue in this case.  Plaintiff’s argument rests on the premise
that, for the purposes of determining plaintiff’s or defendants’ property
rights, the Master Plan trumps any provisions in the relevant deeds or
Covenants that impose greater restrictions on plaintiff’s use of the property
than the Master Plan.  Nothing in the Master Plan could or does purport to
disrupt established private property rights or obligations, or to lessen
plaintiff’s obligations pursuant to her deed and Covenants, and the
Environmental Division’s recognition that the Master Plan is the conclusive
authority in the event of a conflict with other documents relates specifically
to the zoning context.[5] 
The Environmental Division recognized that it could consider provisions in
deeds and private covenants, but only insofar as those issues relate to issues
within its jurisdiction.  Against this backdrop, that court specifically
explained the scope and limitations of its authority to interpret the Master
Plan:
[I]ssues
of whether the proposal conflicts with certain deed restrictions or covenants
does not relate to that jurisdiction, as those deed restrictions or covenants
were not part of the municipal approval of the development, even if the
development uses those covenants or deed restrictions internally to carry out
the overall plan for the development. . . .  All that can be
before this Court in this case is whether the new house proposed for Lot B is
allowed under the zoning ordinance and under any municipal approvals of the
Quechee Lakes Planned Development.  The municipal approval of the Quechee
Lakes Planned Development requires the determination of whether the new house
proposed for Lot B conforms with the Quechee Lakes
Master Plan.  On the other hand, any question regarding whether the
proposal conflicts with the Quechee Lakes Covenants or with individual deed
restrictions is a matter for superior court. 
 
Collateral
estoppel does not apply.[6]
 

 
III.
¶ 24.        
The two deed restrictions and Covenants at issue in this case involve
(1) the deed requirement that “the dwelling to be erected on this Farmstead
shall be erected at the set back line of seventy (70) feet from Hillside Road
and that the dwelling to be erected on the Salable Lot shall be erected at the
set back line of 40 feet from Hillside Road” and (2) the Covenant prohibition
of a guest house on a farmstead parcel coupled with the restriction against
more than one dwelling per lot (or two per farmstead parcel).  Plaintiff
challenges the civil division’s consideration of the original developer’s
intent in construing these restrictions in the absence of a finding of
ambiguity.  Moreover, plaintiff argues that the plain meaning of the
unambiguous documents supports her position, and allows the proposed dwelling
on Lot B.
A.
¶ 25.        
With respect to the first prong of her argument, plaintiff is correct
that the trial court upended the ordinary principles of construction by
writing, “[T]he court need not decide whether the deed’s language is ambiguous
because, even if it is, [the original developer]’s testimony shows a clear
intent to limit development on plaintiff’s property.”  When
a deed restriction “is clear and unambiguous, ‘there is no room for
construction and the instrument must be given effect according to its terms.’ ”  Mann, 2004 VT 100, ¶ 14 (quoting Aiken
v. Clark, 117 Vt. 391, 393, 92 A.2d 620, 621 (1952)).  Although a
court’s assessment of whether a document is ambiguous may itself require some
consideration of extrinsic circumstances, the question of ambiguity generally
comes first.  Isbrandtsen v. N. Branch Corp., 150
Vt. 575, 579, 556 A.2d 81, 84 (1988) (when assessing whether written
instrument is ambiguous, court may consider circumstances surrounding making of
agreement).  A court should generally decline to consider extrinsic
evidence in interpreting the meaning of deed language when the language itself
is unambiguous, but not the reverse; that is, a court should not generally
decline to consider whether the meaning of deed language is clear when it
concludes that the extrinsic evidence about the meaning is persuasive. 
¶ 26.        
However, given the record, plaintiff is not in a position to challenge
the trial court’s consideration of extrinsic evidence in interpreting the deed
and Covenant restrictions.  At the trial below, before defendants
took and sought to introduce the deposition testimony of the original
developer, plaintiff called as a witness an attorney who had spent more than
twenty years representing the developer at Quechee Lakes.  Plaintiff
called the lawyer to testify about “what happened, what people did, what
Quechee Lakes Corporation did.”  Plaintiff explained that the testimony
would “provide the context for interpreting the documents” before the court,
and noted that “context frankly in this case is everything.”  Plaintiff
specifically asked the witness whether the developer sometimes sought to
specify where on a lot a house or barn could be built.  In response to a
question from the court about this line of inquiry, counsel stated,
[L]et me be direct about what the point is.  When Quechee
Lakes Corporation wanted to specify where a particular house or a particular
barn was going to be constructed it had a method and that method was it puts
language in the Deed and it attaches a plot plan.  That is the method
Quechee Lakes Corporation used when it wanted to identify and specify a
particular place for construction.  Not the ambiguous language that
appears in this Deed.  
 
¶ 27.        
When plaintiff specifically asked her own witness to explain the
restriction in the deed requiring construction “at” the specified setbacks, the
witness testified:
I
have no idea.  It uses zoning language.  It says it’s a
setback.  A setback to me . . . creates
a no development area between a road or a property line and . . .
construction.  I . . . don’t understand
the language in this context and . . . [have] tried to see if I could
make some sense of this language and . . . I really can’t. 

 
Plaintiff went on
to note the two competing interpretations of the language regarding the setback
requirement—plaintiff’s interpretation that the requirement simply established
a minimum distance from the road, and defendants’ interpretation that the term
“at” meant that a dwelling had to be built exactly that distance from the
road—no closer and no further.  Plaintiff argued, “[H]ow the Corporation
has acted in the past is illuminative on what is meant by this particular
document.”  The trial court recognized that it could consider the
extrinsic evidence only upon a finding that the deed language was ambiguous,
and specifically asked for plaintiff’s position on whether the deed was
ambiguous or unambiguous.  Plaintiff’s counsel replied, “It’s ambiguous.”  
¶ 28.        
In short, plaintiff’s theory of the case below was that the deed
language was ambiguous; plaintiff was instrumental in framing the trial court’s
task as one of construing ambiguous deed language; and plaintiff led the way in
introducing extrinsic evidence in support of plaintiff’s own
interpretation.  See Mann, 2004 VT 100, ¶ 14 (“An ambiguity
exists when ‘a writing in and of itself supports a different interpretation
from that which appears when it is read in light of the surrounding
circumstances, and both interpretations are reasonable.’ ” (quoting Isbrandtsen
v. N. Branch Corp., 150 Vt. at 579, 556 A.2d at
84). 
¶ 29.        
Given this record, plaintiff cannot now challenge the trial court’s
consideration of extrinsic evidence to interpret the documents.  See State
v. Hammond, 2012 VT 48, ¶ 27, __ Vt. __, 54 A.3d 151 (“Defendant
opened the door to this topic on cross-examination and cannot complain of
prejudice resulting from his own initiative.”); State v. Blaise, 138 Vt.
430, 437, 418 A.2d 27, 31 (1980) (“A party who knew or should have known his
questioning would elicit reference to excluded evidence cannot be heard to
complain of the answer . . . .”); Milne v. Capital City Gas
Co., 129 Vt. 308, 309, 276 A.2d 632, 633 (1971) (“The plaintiff cannot now
be heard to complain since the chancellor adopted the course of action
requested, and agreed to, by the plaintiff.”).
B.
¶ 30.        
Plaintiff’s strategy made sense.  On the merits, plaintiff could
not win on the setback issue on the basis of the deed language alone.  Either
the plain language required that the second dwelling be constructed “at” the
designated line, or the language was, as conceded by the plaintiff,
ambiguous.[7] 
Under no circumstances could we conclude, in the absence of extrinsic evidence
or considerations apart from the deed language itself, that the plain meaning
of the requirement that a dwelling “shall be erected at the set back line” is
that the dwelling may be constructed anywhere behind the setback line. 
The term “at” cannot be said to unambiguously mean “at or beyond.”[8]  Accordingly, plaintiff suffered no
prejudice from the trial court’s decision to consider the testimony about the
context surrounding the disputed deed language—both that offered by plaintiff
and by defendants.  
¶ 31.        
Assuming for the sake of argument that the language was ambiguous, the
trial court’s findings about the surrounding context were supported by the
evidence.  See Beyel v. Degan, 142 Vt. 617, 619, 458 A.2d 1137,
1138 (1983) (“Findings of fact challenged on appeal are not to be set aside
unless, taking the evidence in the light most favorable to the prevailing party
and excluding the effects of modifying evidence, they are clearly
erroneous.”).  The civil division found, among other things, that the
development was originally designed to minimize intrusion on open spaces and
views and to preserve undeveloped land to achieve the goal of maintaining a
rural feel; the farmstead lots were intended to maintain the maximum amount of
open space; the developer desired that the homes be built near the road and
required open spaces to be maintained; each lot within the farmstead
development was individualized; the developer did not want any homes
constructed in the middle of the field; the developer did the best he could to
avoid scattered development; the deed in question required that . . .
each dwelling was required to abut Hillside Road; and the deed was very specific
as to where the homes needed to be distanced from the road.  
¶ 32.        
Likewise, the civil division’s critical conclusion on the “setback”
issue was supported by the evidence and its findings:  “To achieve his
goal of maintaining open space, [the developer] directed that the homes be
built near Hillside Road, specified in the deed the distance that each house
was to lie from the road, and restricted development of each farmstead to
include only a house, a barn, and a saleable lot.”  On the basis of these
findings and conclusions, the trial court’s implicit conclusion that the deed
prohibited construction of the proposed dwelling, well beyond the “setback”
line required by the deed, was well supported.
C.
¶ 33.        
Because we affirm the civil division’s denial of plaintiff’s motion for
declaratory judgment on the ground that plaintiff’s proposed construction would
violate the deed’s requirement regarding the placement of a second dwelling
relative to Hillside Road, we need not reach the question of whether, alternatively,
the proposed construction would violate the deed and Covenant provisions
limiting the number of dwellings on the farmstead parcel in light of
plaintiff’s construction of guest quarters over the garage on Lot A. 
Given the configuration of the lots reflected in the record before us,
plaintiff could not possibly build a dwelling on Lot B at a line 70 feet from
Hillside Road because Lot B as a whole is removed from Hillside Road by
approximately 280 feet.  
¶ 34.        
However, we are mindful that during the pendency of this matter,
plaintiff applied to resubdivide the lot lines again—this time to a
configuration in which the border between Lots A and B runs perpendicular to,
rather than parallel to, Hillside Road.  If plaintiff succeeds in
reconfiguring the lot lines, she will no longer face a geographic impediment to
constructing a dwelling on Lot B at a line 70 feet from Hillside Road. 
Mindful that declaratory judgment actions are designed to clarify the legal
relations of the parties and “terminate the uncertainty and insecurity of the
controversy,” we accordingly consider the trial court’s ruling that plaintiff
is precluded from building a dwelling on Lot B wholly apart from the “setback”
issue.  Commercial Ins. Co. of N.J. v. Papandrea,
121 Vt. 386, 392, 159 A.2d 333, 337 (1960). 
¶ 35.        
The civil division’s ruling flowed from its finding that a Covenant
restriction limited construction on a farmstead lot to a house and a
barn.  The relevant section in the Covenants provides: “Other than
Farmsteads, Woodsteads or Plantations which are provided with separate
buildable parcels, Lots which contain 2 acres or more, may have a guest
house.  Farmsteads, Woodsteads and Plantations may have a barn.”  The
court found that the second structure on Lot A was a “guest home”; however,
because the Covenants did not allow the construction of a guest house on a
farmstead lot, the civil division treated the guest quarters as a second
dwelling on Lot A.  The court then invoked equitable considerations to
prohibit the construction of a “third dwelling” on Lot B of plaintiff’s
property—essentially as a remedy for plaintiff’s violation of the applicable
covenants with respect to Lot A.
¶ 36.        
We need not determine whether the trial court was correct in concluding
that a guest house was not authorized on Lot A by virtue of the
Covenants.  To the extent neighbors seek to invoke an alleged longstanding
Covenant violation on Lot A to enjoin construction of a new
dwelling on Lot B, we conclude that the statute of limitations will bar
their claims.
¶ 37.        
As noted above, the statute of limitations for enforcing a covenant in a
deed is eight years.  12 V.S.A. § 505. 
The guest house was permitted in 1986 and apparently built around that
time.  The time for challenging an alleged covenant violation with respect
to Lot A expired long ago—whether the second structure on Lot A is deemed an
impermissible guest house or an impermissible second dwelling on a single lot.[9]  To the extent that neighbors seek
to enjoin otherwise-allowable construction on Lot B as a remedy for plaintiff’s
claimed violation of the applicable Covenants in connection with Lot A, absent
additional considerations, their claim is time-barred.  They cannot
reprise a challenge to the guest house on Lot A under the cloak of opposition
to proposed and otherwise allowed construction on Lot B.
IV.
¶ 38.        
Finally, plaintiff argues that the original developer, the Quechee Lakes
Governing Association, and defendant neighbors themselves have undermined any
purported scheme of development by reconfiguring internal lot lines,
constructing dwellings away from the tree line, and failing to cluster
buildings by the road.  They note that plaintiff is the only one in the
neighborhood required to cluster development near the front of her lot, and the
Quechee Lakes Governing Association has approved development inconsistent with
the alleged scheme relied upon by the civil division.  Plaintiff argues
that a court should not enforce a restrictive covenant “where a fundamental
change has occurred in the intended character of the neighborhood that renders
the benefits underlying imposition of the restrictions incapable of
enjoyment.”  El Di, Inc. v. Town of Bethany Beach, 477 A.2d 1066,
1069 (Del. 1984). 
¶ 39.        
We need not decide in this case whether and under what circumstances a
restrictive covenant may become invalid by virtue of a change in the character
of an area that renders the purposes of the restriction obsolete.  The
showing required to support such a conclusion would no doubt be
substantial.  See, e.g., El Di, 477 A.2d at 1069-71 (declining to
enforce turn-of-the-last-century restrictive covenant prohibiting sale of
alcoholic beverages where area surrounding property had evolved from quiet,
residential to overwhelmingly commercial, area had transformed from
church-affiliated residential community to summer resort visited annually by
thousands of tourists, and practice of “brown-bagging,” whereby restaurant
patrons brought their own alcoholic beverages, had continued unchallenged for
at least twenty years at commercial establishments in restricted area); see
also Duffy v. Mollo, 400 A.2d 263, 266 (R.I. 1979) (holding deed
restriction limiting property to residential use invalid where character of
surrounding land had radically changed to commercial use since time of
restrictions, and lot was virtually useless and valueless for residential
purposes).
¶ 40.        
In this case, the civil division made no findings to support plaintiff’s
argument that her property alone was subject to restrictions that sought to
promote development goals that no longer make sense in light of subsequent
surrounding development.  Nor would plaintiff’s evidence in this case
support such a conclusion.  Evidence that the plaintiff’s deed is the only
one in the neighborhood, of which plaintiff’s attorney-witness is aware, that
has the restrictive setback language does not establish the invalidity of that
language—especially where the trial court specifically found, on the basis of
competent evidence, that each lot within the farmstead development was
“individualized.”  As this Court has explained, “[B]y virtue of [the
restriction’s] appearing in the deed the [deed holder] knew or should have
known of the restrictive covenant. . . .  Moreover, [one]
who takes land with notice of such a restriction will not in equity and good
conscience be permitted to act in violation of the restriction.”  McDonough
v. W. W. Snow Const. Co., 131 Vt. 436, 441, 306 A.2d 119, 122 (1973)
(citations omitted); see also id. at 442, 306 A.2d at 123 (noting that
deed restriction “limit[ing] construction on the lot to a dwelling house and
outbuildings” is “enforceable for the purpose of protecting a view” (citing Fuller
v. Arms, 45 Vt. 400 (1873))).  
¶ 41.        
Moreover, plaintiff’s anecdotal evidence regarding instances of nearby
development that is comparable to plaintiff’s own plans, and general assertions
(some without citation to any evidence in the record) that by virtue of various
exceptions and changes over time the development in the neighborhood of
plaintiff’s parcel no longer conforms to the original plan, are insufficient to
invalidate the deed restrictions and Covenants that block plaintiff’s proposed
construction of a dwelling on Lot B.
Affirmed.
 

 


 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Associate
  Justice

 





[1]
 Some of the transactions described above in connection with the disputed
property involved Blanche Marsh as an individual, Blanche Marsh and her late
husband William Marsh, William Marsh individually, and Blanche Marsh as trustee
of the Blanche Marsh trust.  For convenience, we designate all of the
above as “plaintiff” in our discussion.


[2]
 Several but not all of the defendants in this quiet title action were
among those appealing to the Hartford Zoning Board of Adjustment.


[3] 
Defendants contend that plaintiff “is precluded from raising the statute of
limitations defense on appeal for the first time, where she did not raise it
below,” and where it has been waived.  V.R.C.P. 8(c); see also Mann v.
Levin, 2004 VT 100, ¶ 26, 177 Vt. 261, 861 A.2d 1138.  However,
we consider the issue as plaintiff raised it in Plaintiff’s Pre-Trial
Memorandum, in argument to the court, and in Plaintiff’s Request for
Conclusions of Law.  
 


[4]
 Although we hold that defendants’ claim that construction of a dwelling on
Lot B violates the covenants is not time-barred, defendants’ effort to
block construction of a dwelling on Lot B as a remedy for an alleged
covenant violation in connection with the construction of a guest house on
Lot A is not timely.  See infra, ¶¶ 36-37. 
 


[5]
 For example, the Environmental Division declined to consider the
provision in the Covenants that farmstead lots were not allowed to have a guest
house because that provision was never incorporated into the Master Plan and so
the Master Plan “governs with regard to the present zoning application
over any conflicting provision in the Declaration of Covenants.”  
 


[6]
 Plaintiff seems to have conceded as much before the civil division at one
point.  Asked whether plaintiff contested that the issues involving
interpretation of the Covenants are for the civil division and not the
Environmental Division, plaintiff’s counsel responded, “No.  I do
not.”  


[7]
 As suggested by the testimony of plaintiff’s witness, the ambiguity could
well arise from the coupling of the preposition “at,” which is “used to
indicate a point or place occupied in space . . .
in, on, or near,” Random House Unabridged Dictionary 129 (2d ed. 1993), with
the term “setback,” a term of art in the zoning context that typically connotes
a minimum but not maximum distance from a boundary.  See Black’s Law Dictionary
(9th ed. 2009) (defining setback as “minimum amount of space required between a
lot line and a building line”).
 


[8]
 In arguing that the setback provision in the deed unambiguously
established a minimum but not a maximum setback, plaintiff relies on the
Environmental Division’s decision interpreting the Master Plan.  As set
forth above, the Master Plan is a zoning document, and is not a document within
plaintiff’s chain of title determining the scope of her property rights and
restrictions, except to the extent that specific provisions of the Master Plan
may be incorporated by reference into the Covenants.  Plaintiff’s
invocation of the Master Plan accordingly takes us beyond the plain language of
the deed and Covenants and into the very realm of extrinsic considerations that
plaintiff argues should not be considered in construing the deed.


[9]
 The record reflects that in 1986, the Quechee Lakes Architectural Review
Board wrote plaintiff, expressed disappointment that plaintiff had not conveyed
in advance an intent to build a barn/guest house, and
cited the restrictions at issue in this case.  Rather than taking action
to enforce the Covenant, the Architectural Review Board expressly asserted that
the “barn/guest house cannot be used as a second full-time-single-family
residence.”  In the face of this history, the argument that the guest
house should now be recharacterized as a single-family dwelling is particularly
incongruous. 
 



