                IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  No. COA18-361

                              Filed: 15 January 2019

Mecklenburg County, No. 16 CVS 11053

ELFORD C. DILL, Plaintiff,

             v.

GERARD G. LOISEAU and wife JENNIFER O. LOISEAU, APRIL B. COTTRILL and
husband SHANNON L. COTTRILL, ERIC B. THOMPSON, WILIAM E. KELLAR,
LORI BETH HIRSBERG, GERALDINE C. MCALISTER, SHIRLEY BEACHLER,
TRUSTEE, STEPHEN MATTHEW WILFONG and wife LISA MAYO WILFONG,
HELEN M. WHITE, LISA L. AYERS and husband, CHARLES W. AYERS, and
DAVID LEE EDWARDS, Defendants.


      Appeal by plaintiff from order entered 8 November 2017 by Judge Forrest D.

Bridges in Mecklenburg County Superior Court. Heard in the Court of Appeals 4

October 2018.


      Law Office of Kenneth T. Davies, P.C., by Kenneth T. Davies and G. Brian
      Ernst, for plaintiff-appellant.

      Alexander Ricks PLLC, by Louis G. Spencer and Ryan P. Hoffman, for
      defendants-appellees.


      DAVIS, Judge.


      In this appeal, we consider the circumstances under which (1) restrictive

covenants demonstrate a common scheme of development within a residential

subdivision; (2) changes to the character of a covenanted area can render otherwise

valid restrictive covenants unenforceable; and (3) the right to enforce a restrictive

covenant is waived by a failure to object to prior violations. Elford C. Dill brought
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this action seeking a declaratory judgment that restrictive covenants prohibiting the

subdivision of certain lots in the neighborhood where he lived were unenforceable.

The trial court entered an order concluding that the restrictive covenants at issue

remain enforceable. We affirm.

                     Factual and Procedural Background

      In 1945, Katherine Melton and her husband Guyton Melton acquired a 12.95-

acre tract of land in Mecklenburg County.        On 3 September 1953, Mrs. Melton

recorded a plat map (“the Melton Map”) entitled “Property of Mrs. Guy Melton” with

the Mecklenburg County Register of Deeds that divided the land into seven separate

lots numbered 1-7 (the “Melton Map Properties”). Lots 1-5 were subdivided for sale,

Lot 6 contained Mrs. Melton’s home, and Lot 7 consisted of a larger tract of

undeveloped land.

      Over the next three years, Mrs. Melton sold Lots 1-5. All five of the lots were

purchased subject to identical restrictive covenants stating that “[n]o subdivision

shall be made of the herein conveyed lot.” On 22 March 1963, Mrs. Melton sold Lot

6. This sale was not subject to any restrictive covenants. Lot 7, which was not

encumbered by any restrictive covenants prohibiting subdivision at the time the

Melton Map was recorded, was later divided by Mrs. Melton into three separate

parcels for sale. Between 1960 and 1964, these parcels were conveyed subject to the

same restrictive covenants prohibiting subdivision as those applicable to Lots 1-5.



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       On 5 May 1977, the owners of Lot 1 conveyed a small portion of the lot

consisting of .199 acres to the owner of an adjoining lot that was not depicted on the

original Melton Map. That same day, the owners of the adjoining lot conveyed .046

acres of their property to the owners of Lot 1. The purpose of this exchange of land

(the “Lot 1 Land Swap”) was to provide the owners of the adjacent lot with sufficient

land upon which to build a driveway. On 3 December 1993, Dill purchased a tract of

land that encompassed the majority of Lot 1 and the entirety of Lot 2.

       Lot 6 was acquired by real estate developer K.V. Partners on 10 November

1999. K.V. Partners subsequently recorded a plat map with the Mecklenburg County

Register of Deeds entitled “Bella Brown Preserve” in 2002. This map subdivided Lot

6 into three parcels that were subsequently purchased for residential use.

       On 24 June 2016, Dill filed a civil action in Mecklenburg County Superior

Court against all of the other owners of lots contained on the Melton Map. The named

defendants were Gerard G. Loiseau, Jennifer O. Loiseau, April B. Cottrill, Shannon

L. Cottrill, Eric B. Thompson, William E. Kellar, Lori Beth Hirsberg, Geraldine C.

McAlister, Shirley Beachler, Stephen Matthew Wilfong, Lisa Mayo Wilfong, Helen

M. White, Lisa L. Ayers, Charles W. Ayers, and David Lee Edwards (collectively

“Defendants”).1      In his complaint, Dill sought a declaratory judgment that the

restrictive covenants prohibiting subdivision contained in the deeds to Lots 1-5 were


       1 Dill later voluntarily dismissed his claims against Lisa Ayers, Charles Ayers, Helen White,
and Eric Thompson.

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invalid and unenforceable. Specifically, he alleged that (1) Mrs. Melton “failed to

establish any uniform scheme of development[;]” (2) a “substantial change in usage”

had occurred since the creation of the restrictive covenants; and (3) Defendants had

waived their right to enforce the covenants.

      A bench trial was held beginning on 6 June 2017 before the Honorable Forrest

D. Bridges. On 8 November 2017, the trial court entered a declaratory judgment in

favor of Defendants “declaring that the subdivision restrictions . . . present in the

chain of title for Lots 1 and 2 of the Melton Subdivision are consistent with a common

scheme of development, and therefore, these restrictive covenants are valid and

enforceable[.]” Dill filed a timely notice of appeal on 5 December 2017.

                                        Analysis

      On appeal, Dill argues that (1) “the restrictive covenants pertaining to the

Melton Properties failed to evidence a common or general scheme of development;”

(2) even assuming a general plan of development existed at some point, it was later

abandoned by Mrs. Melton; and (3) Defendants are estopped from enforcing the

restrictive covenants against Dill by virtue of their failure to object to prior violations

of the covenants. We address each argument in turn.

I.   General Plan of Development

      Dill first contends that the restrictive covenants prohibiting subdivision

imposed upon the Melton Map Properties failed to establish a common plan of



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development. As a result, he asserts, they do not run with the land and may not be

enforced against him by Defendants. We disagree.

      It is well established that where “an owner of a tract of land subdivides it and

conveys distinct parcels to separate grantees, imposing common restrictions upon the

use of each parcel pursuant to a general plan of development, the restrictions may be

enforced by any grantee against any other grantee.” Hawthorne v. Realty Syndicate,

Inc., 300 N.C. 660, 665, 268 S.E.2d 494, 497 (1980). Restrictions imposed “under a

general plan of development may be enforced against subsequent purchasers of the

land who take with notice of the restriction. The test for determining whether a

general plan of development exists is whether substantially common restrictions

apply to all similarly situated lots.” Medearis v. Trs. Of Myers Park Baptist Church,

148 N.C. App. 1, 5-6, 558 S.E.2d 199, 203 (2001) (citation omitted), disc. review

denied, 355 N.C. 493, 563 S.E.2d 190 (2002).

      Our appellate courts have held that restrictions need not be imposed upon

every lot in a subdivision in order to demonstrate a general scheme of development.

However, a general development scheme will not be recognized where a substantial

proportion of lots lack similar restrictive covenants. Compare Franklin v. Elizabeth

Realty Co., 202 N.C. 212, 217, 162 S.E. 199, 201 (1932) (holding omission of restriction

from single lot in subdivision did not destroy general plan of development), with

Sedberry v. Parsons, 232 N.C. 707, 711-12, 62 S.E.2d 88, 91 (1950) (concluding no



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general plan of development existed where only 11 out of 21 lots contained similar

restrictions).

       In Rice v. Coholan, 205 N.C. App. 103, 695 S.E.2d 484, disc. review denied, 364

N.C. 435, 702 S.E.2d 303 (2010), this Court determined that a general plan of

development existed where 14 out of 18 total lots in a subdivision “contained the same

or similar restrictions, while the deeds to four lots were not similarly restricted.” Id.

at 113, 695 S.E.2d at 491. In Rice, the four lots that were not subject to similar

restrictive covenants were those retained by the family that initially owned the entire

acreage that formed the basis for the subdivision. Id. We concluded that “there are

substantially common restrictions applicable to all lots of like character” and that

“there was a general plan of development for the lots in Jefferson Park[.]” Id. at 114,

695 S.E.2d at 492.

       In the present case, the Melton Map was recorded in 1953 and consisted of

seven lots in total. Lots 1-5 were all conveyed between 1953 and 1956 and were each

subject to identical restrictive covenants prohibiting subdivision.       Lot 6, which

contained Mrs. Melton’s home, was not subject to any restrictive covenants either at

the time the Melton Map was recorded or when Mrs. Melton sold the property in 1963.

Lot 7, which consisted of a large undeveloped tract of land, was similarly

unencumbered by covenants at the time Lots 1-5 were conveyed. However, Lot 7 was




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later subdivided into three small parcels and sold between 1960 and 1964 subject to

the same restrictions prohibiting subdivision as Lots 1-5.

       We believe our decision in Rice controls the determination of this issue in the

present case. There, as discussed above, a general plan of development was found to

exist where 14 out of 18 total lots in a subdivision contained “substantially common

restrictions.” Id. Notably, the four unrestricted lots remained in the possession of

the family that owned the land prior to the creation of the subdivision. Similarly,

here Lots 1-5 were all conveyed by Mrs. Melton subject to identical restrictive

covenants prohibiting subdivision. As in Rice, Mrs. Melton retained ownership of the

lots that were not initially subject to any restrictive covenants. Furthermore, when

Lot 7 was later sold as three smaller parcels, those parcels were all conveyed subject

to the same restrictive covenant prohibiting subdivision as Lots 1-5.

       Thus, we are satisfied that the trial court did not err in determining that a

general plan of development existed for the Melton Map Properties. Accordingly,

Dill’s argument to the contrary is overruled.

II.   Abandonment of Intent

       Dill next argues “[e]ven assuming arguendo that Mrs. Melton intended to

develop pursuant to a general plan, she abandoned this intent by taking actions

inconsistent with any such plan.” As a result, he contends, the restrictive covenants

affecting the Melton Map Properties are no longer enforceable. In support of this



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proposition, he directs our attention to the Lot 1 Land Swap and the fact that Lots 6

and 7 were subsequently subdivided following the sale of Lots 1-5.

      This Court has held that otherwise valid restrictive covenants may “be

terminated when changes within the covenanted area are so radical as practically to

destroy the essential objects and purposes of the agreement.” Medearis, 148 N.C.

App. at 6, 558 S.E.2d at 203 (citation and quotation marks omitted).

             Where a residential subdivision is laid out according to a
             general scheme or plan and all the lots sold or retained
             therein are subject to restrictive covenants, and the value
             of such development to a large extent rests upon the
             assurance given purchasers that they may rely upon the
             fact that the privacy of their homes will not be invaded by
             the encroachment of business, and that the essential
             residential nature of the property will not be destroyed, the
             courts will enforce the restrictions and will not permit
             them to be destroyed by slight departures from the original
             plan.

             On the other hand, when there is a general scheme for the
             benefit of the purchasers in a development, and then,
             either by permission or acquiescence, or by a long chain of
             violations, the property becomes so substantially changed
             that the whole character of the subdivision has been
             altered so that the whole objective for which the restrictive
             covenants were originally entered into must be considered
             at an end, then the courts will not enforce such restrictive
             covenants.

Logan v. Sprinkle, 256 N.C. 41, 47, 123 S.E.2d 209, 213 (1961) (internal citations

omitted). Our Supreme Court has stated that “[w]hether the growth and general

development of an area represents such a substantial departure from the purposes of



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its original plan as equitably to warrant removal of restrictions formerly imposed is

a matter to be decided in light of the specific circumstances of each case.” Hawthorne,

300 N.C. at 667, 268 S.E.2d at 499.

      It is well established that violations of restrictive covenants must be

substantial in order to constitute the type of radical change sufficient to render the

covenants unenforceable.      For example, in Hawthorne a public library was

constructed and a branch bank office opened within a subdivision in violation of a

covenant restricting the property to residential uses. Id. at 668, 268 S.E.2d at 499.

Our Supreme Court held that these violations did not constitute a radical change,

concluding that “the library and the . . . bank office represent no more than minor

intrusions upon the quiet enjoyment of an area otherwise residential in nature.” Id.

at 668-69, 268 S.E.2d at 500; see also Tull v. Doctors Bldg., Inc., 255 N.C. 23, 39-40,

120 S.E.2d 817, 828 (1961) (use of six lots in a residential subdivision as parking

space for an office building was not “such a radical or fundamental change or

substantial subversion as practically to destroy the essential objects and purposes of

the restriction agreement”); Williamson v. Pope, 60 N.C. App. 539, 544, 299 S.E.2d

661, 664 (1983) (residential covenant remained enforceable despite fact that 11 out of

69 blocks were used for commercial purposes).

      Conversely, in Medearis this Court held that a radical change had, in fact,

rendered a residential restriction unenforceable where six out of twelve lots were



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used for commercial purposes, four were vacant, and only one lot currently contained

a residential structure. Medearis, 148 N.C. App. at 9, 558 S.E.2d at 205. In that case,

we concluded that “the changes have destroyed the uniformity of the plan and the

equal protection of the restriction.” Id. (citation and quotation marks omitted).

      In determining whether the Melton subdivision has undergone a radical

change since the recordation of the Melton Map, we first examine the Lot 1 Land

Swap. As noted above, the land swap was undertaken to provide the owners of

property adjacent to Lot 1 with sufficient space to build a driveway. In its findings

of fact, the trial court found that the parcel totaled .199 acres and “consisted of a long,

thin strip of land that proceeds along Rosemary Lane to Sharon Hills Road. No

structures have been constructed on the Lot 1 Land Swap property.”

      Thus, although the Lot 1 Land Swap constituted a technical violation of the

restriction against subdivision, it ultimately had little to no impact upon the

character of the neighborhood. Accordingly, the trial court correctly determined that

the Lot 1 Land Swap did not “have any substantial change upon the character of the

subdivision[.]”

      With regard to the subdivision of Lots 6 and 7, we observe that no restrictive

covenants were ever placed upon Lot 6. Furthermore, while Lot 6 was ultimately

subdivided into three smaller parcels, those parcels were intended for residential use.

Although Lot 7 originally consisted of an unencumbered tract of undeveloped land, it



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was later divided by Mrs. Melton into three smaller residential lots. These lots were

conveyed subject to restrictive covenants prohibiting their subdivision identical to

those applicable to Lots 1-5.

         Based upon our thorough review of the record and applicable case law from our

appellate courts, we are unable to agree with Dill’s contention that the subdivision of

these lots constituted a change radical enough “as practically to destroy the essential

objects and purposes of the scheme of development.” Williams v. Paley, 114 N.C. App.

571, 578, 442 S.E.2d 558, 562 (1994) (citation and quotation marks omitted). If

anything, these changes arguably served to reinforce the original purpose of Melton’s

scheme of development. We hold that the trial court did not err in determining the

actions relied upon by Dill did not have the effect of invalidating the covenants at

issue.

III. Waiver of Right to Enforce Covenants

         In his final argument, Dill contends that Defendants have waived their right

to enforce the subdivision restriction against him by their failure to object to

“numerous prior subdivisions within the Melton Properties.” Once again, he cites the

Lot 1 Land Swap and the subdivisions of Lots 6 and 7 as support for this argument.

         “A waiver may be express or implied.” Medearis, 148 N.C. App. at 11, 588

S.E.2d at 206 (citation omitted). A waiver is implied “when a person dispenses with

a right by conduct which naturally and justly leads the other party to believe that he



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has so dispensed with the right.” Id. at 12, 588 S.E.2d at 206-07 (citation and

quotation marks omitted). This Court has held that “[a]n acquiescence in a violation

of restrictive covenants does not amount to a waiver of the right to enforce the

restrictions unless changed conditions within the covenanted area are so radical as

practically to destroy the essential objects and purposes of the scheme of

development.” Williams, 114 N.C. App. at 578, 442 S.E.2d at 562 (citation and

quotation marks omitted).

      As an initial matter, we observe that neither Lot 6 nor Lot 7 was subject to a

restriction against subdivision at the time of the recordation of the Melton Map.

Thus, Defendants could not have waived their right to object to the subdivision of

Lots 6 and 7 because they never possessed such a right in the first place. Moreover,

our conclusion that the Lot 1 Land Swap did not constitute a change so radical as to

effectively destroy the essential purposes of the development scheme applies with

equal force to Dill’s waiver argument. See Williamson, 60 N.C. App. at 544, 299

S.E.2d at 664 (holding that failure to object to minor violation of restrictive covenant

did not waive “right to enforce the covenant against . . . a much more radical

departure from the permitted use”). Accordingly, we conclude the trial court did not




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err in ruling that Dill has failed to show Defendants waived their right to enforce the

subdivision restrictions against him.2

                                           Conclusion

         For the reasons stated above, we affirm the trial court’s 8 November 2017

order.

         AFFIRMED.

         Judges HUNTER, JR. and MURPHY concur.




         2 Dill also argues that the trial court’s 8 November 2017 order contained several findings of
fact that were unsupported by evidence of record. Based on our careful review of the record, we are
satisfied that even assuming arguendo portions of the court’s findings were erroneous, any such error
was harmless. See In re E.M., __ N.C. App. __, __, 790 S.E.2d 863, 869 (2016) (“[T]he inclusion of an
erroneous finding of fact is not reversible error where the court’s other factual findings support its
determination.” (citation omitted)).

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