Wesley M. Breland, Realtor, Inc. v. Amanatidis

Citations: 996 So. 2d 176; 2008 Miss. App. LEXIS 719; 2008 WL 5064900Docket: 2007-CA-01129-COA

Court: Court of Appeals of Mississippi; December 1, 2008; Mississippi; State Appellate Court

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Wesley M. Breland, Realtor, Inc. was permanently enjoined by the Lamar County Chancery Court from developing a 'reserved' parcel of land in the Serene Hills subdivision for anything other than residential use. Breland appealed, arguing that the restrictive covenants of Serene Hills applied only to lots 1-71 and did not restrict 'reserved' parcels, which he claimed were intended for other uses by the grantors. The Court of Appeals affirmed the chancellor's judgment in favor of Nick and Cherry Amanatidis, concluding that it was supported by substantial evidence and not clearly erroneous.

The case centers on the interpretation of restrictive covenants and subdivision regulations regarding Breland's 'reserved' parcel. Breland, one of the original developers of Serene Hills, sold a sixty-acre parcel for development, which became the Serene Hills subdivision. The subdivision's plat, prepared by Shows, Dearman, Waites, was approved in compliance with subdivision regulations, which required detailing the purpose of reserved sites. Breland's parcel was marked 'reserved' but lacked a specified purpose.

The Serene Hills plat was recorded after the subdivision regulations had been in effect for six years. The restrictive covenants, adopted on November 17, 1995, explicitly stated that all lots in the subdivision were to be used only for residential purposes, prohibiting the construction of commercial buildings. Breland owned the front corner 'reserved' lot, while a separate 'lagoon' designated lot was located at the back. The absence of a designated purpose for Breland's lot on the plat contributed to the court's decision to uphold the injunction against its commercial development.

The Amanatidises purchased land adjacent to Breland's lot on October 19, 2005, believing all lots in the Serene Hills subdivision, including those marked 'reserved,' were designated for residential use. Nick Amanatidis reviewed the plat and restrictive covenants prior to the purchase but did not consult any legal or real estate professionals. Upon learning of Breland's intentions to develop his 'reserved' lot for commercial purposes, the Amanatidises filed a complaint in chancery court to prevent this development. They sought a declaratory judgment regarding the applicability of the subdivision's restrictive covenants to Breland's lot and claimed equitable estoppel against Breland's commercial development plans.

At trial, testimony from original developers and investors clarified the intended meaning of 'reserved' in relation to the plat. The chancellor ruled in favor of the Amanatidises on June 28, 2007, finding Breland equitably estopped from commercial use of his lot and permanently enjoining him from such development. Breland appealed, arguing the chancellor erred in affirming the Amanatidises' reliance on the plat and covenants.

The core issue is whether Breland's 'reserved' lot is restricted to residential use. The chancellor interpreted the relevant documents and concluded that Breland's lot must remain residential. The appellate court upheld the chancellor's ruling, noting it was supported by substantial evidence and not clearly erroneous. Legal standards indicate that findings of fact by a chancellor are upheld unless there is manifest error, while questions of law are reviewed de novo. The case raises two key legal questions: the applicability of the restrictive covenants to Breland's parcel and the original intent behind the reservation of Breland's lot.

Breland's arguments and Issues I and II were analyzed collectively, revealing that the chancellor's findings were adequately supported by evidence. Breland contended that the chancellor erred in favor of the Amanatidises for several reasons: 1) the designation of the 'reserved' lot implied it was not exclusively for residential use despite lacking a specified purpose in regulations; 2) the restrictive covenants for Serene Hills indicated only lots 1-71 were limited to residential development; and 3) the regulation requiring a plat to specify the purpose of reserved parcels was irrelevant since the Lamar County Board of Supervisors approved the plat. The court disagreed with Breland's claims.

Contract construction is a legal question subject to de novo review, with ambiguous contracts assessed under a substantial evidence/manifest error standard. The court employs a three-tiered approach to contract interpretation: first, the 'four corners' test examines the contract's language as a whole; second, if ambiguity remains, canons of construction apply, interpreting ambiguities against the drafter; finally, if clarity is still elusive, extrinsic evidence can be considered. 

The chancellor referenced three key documents— the plat of Serene Hills, the restrictive covenants, and subdivision regulations— to inform his decision. He concluded that understanding the plain meaning of these documents was paramount, rendering the developers' intentions irrelevant. The chancellor found no ambiguity in the documents using the 'four corners' approach, thus he did not proceed to further interpretative steps.

The chancellor identified two 'reserved' lots in the Serene Hills subdivision, confirming that Breland's lot, adjacent to the Amanatidises' lot, qualifies as a 'lot' under the subdivision's restrictive covenants. The covenants stipulate that all lots must be used as residential properties, prohibiting commercial buildings. Since Breland's lot was not designated for any specific purpose, it is presumed to be for residential use according to subdivision regulations, which mandate that undeclared parcels default to residential classification.

Breland's argument against the residential restriction was rejected. The chancellor emphasized that the intent of Breland and his investors must be judged by their explicit actions and statements rather than their intentions. The Amanatidises' claim of equitable estoppel was upheld, as it would be unjust to allow Breland to alter the usage of his property to commercial after the Amanatidises relied on the subdivision plat, restrictive covenants, and regulations when purchasing their home. The chancellor determined that the Amanatidises had reasonably assumed that the adjacent 'reserved' lot would not be developed for commercial use.

The chancellor's ruling, which affirmed the Amanatidises' position based on equitable estoppel, was supported by substantial evidence and correct legal principles. The judgment of the Lamar County Chancery Court was therefore affirmed, with all appeal costs assigned to Breland.