Opinion
No. C4-95-2094.
Filed June 11, 1996.
Appeal from the District Court, Benton County, File No. 05-C2-94-000727.
Neil C. Franz, (for Appellants).
Roger J. Nierengarten, Zapp Bank Plaza, (for Respondents).
Considered and decided by Klaphake, Presiding Judge, Randall, Judge, and Foley, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. sec. 480A.08, subd. 3 (1994).
UNPUBLISHED OPINION
FACTS
Appellants claim that the trial court erred by ruling that conditions in a quitclaim deed were a covenant running with the land, that the covenant applied to the south 33 feet of their lot, and that the covenant precluded them from building a fence. We affirm.
When Ed Larson platted land for development in 1968, he dedicated a 66 foot wide street easement to the City of Sauk Rapids, Minnesota, and sold the land south of the easement. Respondents Jeffery and Debra Wimmer later bought that land.
In 1988, Larson started planning to develop the land north of the easement. He petitioned the city to vacate the easement and the city, apparently through its attorneys, told respondents that if the easement were vacated, respondents would get the south half thereof, subject to a utility easement retained by the city. Respondents then negotiated a transfer of their expected easement interest to Larson and his wife. Respondents told Larson that, among other things, they did not want anything built on the easement. Larson relayed these concerns to the city's law firm, which drafted a quitclaim deed from respondents to Larsons. The deed included a term prohibiting putting a "building" on the land south of the city's utility easement. It is unclear whether, in drafting the deed, the law firm was working for the city or Larson.
When respondents asked the law firm about whether the terms of the draft deed would bind the Larsons' successors, a legal assistant sent respondents a letter stating that "subsequent owners of the property will have to follow the conditions[.]" When the city vacated the street easement on March 27, 1989, it retained a 20-foot utility easement, which, except for the east portion of respondents' property, was north of the centerline of the former street easement. Respondents signed the quitclaim deed in April, and it was recorded in July.
In summer and fall 1989, Larson platted the land north of respondents' lot. The plat showed the vacated street easement as the south part of the lot that abutted the north line of respondents' lot. Unlike the resolution vacating the street easement, however, the plat shows that the utility easement extends 20 feet on both sides of the center line of the former street easement. In May 1993, appellants Roger and Jean Schotl bought the property north of respondents' lot. The Schotls' abstract of title, however, failed to mention the recorded quitclaim deed and its prohibition on a building. Appellants later stated that they wanted to build a fence and a shed on the vacated street easement and respondents showed appellants the quitclaim deed and its building prohibition.
In May 1994, appellants obtained the city's permission for their proposed shed to encroach two feet onto the utility easement shown on the plat. In May and June, appellants built a fence 26 inches north of the property line. The fence runs the length of the property, is solid, and varies from four to six feet in height. In July 1994, appellants sued respondents to determine the parties' rights regarding the former street easement. After a bench trial, the trial court ruled that the conditions in the quitclaim deed were a covenant running with the land, that appellants could not build on the land respondents quitclaimed to Larsons, and that the building prohibition precluded constructing a fence.
DECISION
The parties dispute the interpretation of the quitclaim deed. Deeds are interpreted in the same manner as contracts. La Cook Farm Land Co. v. Northern Lumber Co. , 159 Minn. 523, 527, 200 N.W. 801, 802 (1924). When reviewing a contract (a) unless ambiguous, contract language is given its ordinary meaning; (b) contract language is ambiguous if it could have multiple meanings; (c) appellate courts review de novo whether contract language is ambiguous; and (d) when construed, contracts are construed as a whole and the parties' intent is gathered from the entire instrument. Boe v. Christlieb , 399 N.W.2d 131, 133 (Minn.App. 1987) (citing cases).
1. Appellants claim that the building restriction is not a covenant running with the land. A covenant cannot run with the land unless it is the intent of the covenanting parties that their successors be bound by the terms of the covenant. In re Turners Crossroad Dev. Co. , 277 N.W.2d 364, 369 (Minn. 1979). Here, the intent element is satisfied because Wimmer and Larson testified that they understood and intended the covenant to bind the Larsons' successors. In addition to intent, for a covenant to run with the land, it must "touch and concern the land."
Generally speaking, a covenant touches or concerns the land if it is such as to benefit the grantor or the lessor, or the grantee or the lessee, as the case may be. As the term implies, the covenant must concern the occupation or enjoyment of the land granted or demised and the liability to perform it, and the right to take advantage of it must pass to the assignee.
Turners , 277 N.W.2d at 369 (quoting Pelser v. Gringold , 214 Minn. 281, 285, 8 N.W.2d 36, 39 (1943)). Here, appellants concede that respondents obtained the building restriction to preserve their sight lines. Preservation of sight lines "touches and concerns" land. See Turners , 277 N.W.2d at 370 (for a promise to run with the promisor's land, "[i]t must in some way make the use or enjoyment [of the promisee's land] more satisfactory to his physical senses") (quoting Restatement of Property, § 537, comment f (1944)).
Appellants note that the covenant does not explicitly claim to bind the Larsons' successors and claim that under Restatement of Property, § 531 they are not bound by the covenant against building. While section 531 requires that the intent to bind a promisor's successors be "manifested[,] * * * [t]he circumstances of a particular transaction may yield such an inference without the aid or any specific language to be found in the terms of the promise." Restatement, Property § 531, comment c (1944). Generally, covenants touching and concerning the land are intended to run with the land. Cunningham, et. al, The Law of Property , § 8.16 (1984). Thus, because appellants admit that respondents sought the covenant to preserve their sight lines, and because a covenant to preserve sight lines touches and concerns the land, the circumstances of this case yield the reasonable inference that respondents and the Larsons intended the Larsons' successors to be bound by the covenant. On this record, the trial court did not err in ruling that the covenant ran with the land.
To the extent appellants claim that the language in the quitclaim deed deprives them of notice of the running of the covenant, they are arguing that the building restriction is an equitable restriction, not a covenant. See Cunningham, et. al., The Law of Property § 8.28 (describing equitable restrictions). The theory of an equitable restriction on land was not argued to the trial court. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (appellate courts do not address issues not presented to and decided by the trial court).
2. Appellants claim that because a house has been built on their lot, respondents' sight lines have been destroyed and the covenant should be disregarded. See Minn. Stat. § 500.20, subd. 1 (1994) (covenants "wholly disregarded" if they have become "merely nominal and of no actual or substantial benefit"). Respondents, however, obtained the covenant against building knowing that Larson intended to develop the land residentially. If building a house destroyed respondents' sight lines, respondents would not have (a) been concerned about whether the covenant would bind the Larsons' successors; (b) objected to appellants' construction of the fence or the proposed shed after the house was built; or (c) pursued, rather than settled, this litigation. The record supports a refusal to disregard the covenant under Minn. Stat. § 500.20, subd. 1.
3. Appellants claim that the trial court erred by ruling that the covenant against building applied to the south 33 feet of their land. The quitclaim deed prohibits building south of the utility easement "as now platted." The deed was drafted before the street easement was vacated, was signed after the vacation, and was filed before the plat was finalized. Given this sequence of events, it is unclear to what the "as now platted" language refers. Because the street easement was 66 feet wide, the trial court's ruling that the south 33 feet of appellants' land is governed by the covenant is generally consistent with the city's resolution that, except for the east portion of respondents' property, the city did not retain a utility easement south of the centerline of the former street easement. Appellants' claim that the covenant applies to only the south 13 feet of their land is consistent with the plat, which shows a 40-foot utility easement centered on the centerline of the former street easement. At trial, the judge asked counsel about the discrepancy between the resolution and the plat but received no clear explanation.
The covenant was drafted by the same law firm retained by the city. Also, the covenant was apparently drafted during negotiations regarding vacation of the street easement. Therefore, it is reasonable to infer that the covenant was drafted in light of the then-exiting plans to vacate the easement. See Sina v. Schifsky , 296 Minn. 528, 528-29, 208 N.W.2d 302, 303 (1973) ("upon review, the evidence must be viewed most favorably to the prevailing party [including] the inferences which the trier of fact well could draw from the credited testimony and documentary evidence"). Those plans, as reified in the resolution vacating the street easement, retained a utility easement north of the street easement's center line. Further, Larson and Wimmer both testified that the purpose of the covenant was to preclude construction on what had been the south half of the street easement. On this record, we cannot say that the trial court's finding regarding the land covered by the covenant is clearly erroneous. See Minn.R.Civ.P. 52.01 (findings not set aside unless clearly erroneous).
We reject as inconsistent with the record, appellants' claim that Wimmer's testimony supports the claim that only the south 13 feet of former street easement is covered by the covenant.
4. The parties dispute whether appellants' fence is a "building" under the terms of the covenant. Generally, terms in contracts are given their common meaning. Boe , 399 N.W.2d at 133. Dictionaries defining "building" for general purposes vary regarding whether the definition of "building" includes the element of habitability or shelter that appellants seek to read into the term. Therefore, whether "building," as used in the covenant, includes an element of habitability or shelter and does not include a fence, is ambiguous. See Boe , 399 N.W.2d at 133 (term is ambiguous if it is susceptible to multiple meanings). A trial court's reading of an ambiguous deed term is a fact question. See Owatonna County Club, Inc. v. Kohlmier , 353 N.W.2d 227, 231 (Minn.App. 1984) (where deed was ambiguous, evidence was sufficient to support trial court's finding of grantor's intent); see also City of Virginia v. Northland Office Properties Ltd. Partnership , 465 N.W.2d 424, 427 (Minn.App. 1991) (trial court's reading of ambiguous contract term is a fact question) review denied (Minn. Apr. 18, 1991). When interpreting an ambiguous deed provision, "[t]he cardinal rule of construction is to ascertain and give effect to the intention of the parties to the instrument * * *." Application of Mareck , 257 Minn. 222, 227, 100 N.W.2d 758, 762 (1960) (quoting Grueber v. Lindenmeier , 42 Minn. 99, 101, 43 N.W. 964, 965 (1889)). Here, viewing the evidence in the light most favorable to the trial court's findings, the testimony of Wimmer and Larson support the trial court's refusal to read the covenant's use of the term "building" as narrowly limited to a house or another building suitable for human habitation. The trial court's reading of the term "building" to include this fence was not clearly erroneous under rule 52.01.
Compare The American Heritage Dictionary Second College Edition, 215 (1982) ("building" defined as "[s]omething that is built; structure" and noting that "building," "structure," "edifice," and "pile" all "refer to something built") with The American Heritage Dictionary of the English Language, 250 (3rd. ed. 1992) ("building" defined the same way but noting that "building," "structure," "edifice," and "pile" "denote something, such as a house or school, constructed for human habitation or use").
Appellants' argument that the covenant does not preclude construction of fences is inconsistent with their admission that respondents sought the covenant to preserve their sight lines. It is common knowledge that fences, particularly solid fences like appellants' that completely obstruct vision from the ground to its four to six feet height, are inconsistent with preserving sight lines.
5. While the record before this court suggests that appellants are innocent of wrongdoing, that innocence does not entitle appellants to recover from respondents. The record proves unequivocally that the respondents are also innocent, and have the better side of the dispute legally and equitably. It is conceded that respondents' quitclaim deed was properly recorded and that the world was on notice (Minnesota, like many states, is a "notice" state) of the prohibition against buildings long before appellants built their fence . See Miller v. Hennen , 438 N.W.2d 366, 369-70 (Minn. 1989) (properly recorded instrument imputes notice to all purchasers even though the purchaser has no actual notice of the record). Respondents did exactly what Minnesota law requires them to do to preserve their rights. Further, respondents are not responsible for the omission in appellants' abstract of title. At oral argument before this court, appellants' counsel stated that if the respondents' deed had been properly noted on his clients' abstract, and if it had been pointed out to his clients that the recorded encumbrance was a cloud on title, his clients may not have been so quick to build the solid fence that they did.
Depending on the facts, the appellants may have a recovery elsewhere. That issue is not before the court. We conclude as the trial court did, that the appellants are not entitled to any recovery from the respondents.
Affirmed.
I concur with the majority's determinations that the prohibition on constructing buildings is a covenant running with the land, that construction of a house on the lot north of Wimmers' lot does not require the covenant to be disregarded under Minn. Stat. § 500.20, subd. 1 (1994), and that the trial court's ruling regarding the land covered by the covenant is not clearly erroneous. I must respectfully dissent, however from the majority's holding that Schotls' constructing of their fence violated the covenant against constructing "buildings."
Absent ambiguity, deed language is given its ordinary meaning and whether deed language is ambiguous is a legal question on which this court does not defer to the trial court. See La Cook Farm Land Co. v. Northern Lumber Co. , 159 Minn. 523, 527, 200 N.W. 801, 802 (1924) (deeds read in same manner as contracts); Boe v. Christlieb , 399 N.W.2d 131, 133 (Minn.App. 1987) (contract language given ordinary meaning unless ambiguous; existence of ambiguity is a legal question). The deed states that "[g]rantees shall not construct any buildings south of the utility easement to be retained by the [city] * * *." This prohibition is clear and unambiguous, it prohibits construction of "buildings." Because no fair interpretation of the ordinary meaning of the word "buildings" includes fences, Schotls' installation of a fence did not violate the prohibition on constructing "buildings."
Even if the term "buildings" is ambiguous, here it is used in a deed drafted by the city's law firm while the city was involved in negotiations with Larson to vacate the street easement so that Larson could develop the property. Given these circumstances, the local zoning ordinance must have been the background against which the deed was drafted. Under the relevant zoning provision, a fence is not a building. See Sauk Rapids Zoning Ordinance, § 10.02, subd. 2 (1994) (defining "building" as "[a]ny structure for shelter, support or enclosure of persons, animals, chattels or personal property of any kind, affixed to the land").