Equestrian Ridge v. Equestrian Ridge Estates II
953 N.W.2d 16
Neb.2021Background
- In 2004 Grace and Dowd executed an agreement requiring Dowd’s future subdivision (DGS/ERE II) to share maintenance costs for a private road (232nd Street) connecting the subdivisions to public roads; the agreement expressly named ERE HOA as a third‑party beneficiary.
- Dowd recorded a 2010 Declaration for ERE II obligating ERE II lot owners / the ERE II HOA to pay one‑fourth of maintenance costs for the portion of 232nd Street within ERE.
- Dowd relinquished declarant powers in July 2015 and the ERE II HOA accepted the relinquishment; ERE II HOA thereafter paid some road bills through May 2016.
- In 2016 ERE II HOA amended its Declaration to remove any obligation to contribute to 232nd Street maintenance and then refused further payments; ERE HOA paid the bills and sued in July 2017.
- The district court found (after a bench trial) that the 2004 Agreement created a covenant that ran with the land binding ERE II HOA, awarded $18,732.74 in damages, and ordered specific performance and declaratory relief; ERE II HOA appealed.
Issues
| Issue | Plaintiff's Argument (ERE HOA) | Defendant's Argument (ERE II HOA) | Held |
|---|---|---|---|
| Standing to enforce 2004 Agreement | ERE HOA is an express third‑party beneficiary named in the 2004 Agreement | ERE HOA is not a party and lacks standing | Held: ERE HOA has standing as an intended third‑party beneficiary (expressly named) |
| Whether 2004 Agreement binds ERE II HOA (real covenant) | The 2004 covenant was intended to bind successors, touches and concerns land, and privity exists | Agreement didn’t create a covenant running with land binding a nonparty | Held: Covenant runs with the land (intent, touch & concern, privity met); binds ERE II HOA |
| Whether Dowd delegated duties and ERE II HOA assumed them (contract theory) | Dowd’s relinquishment assigned declarant duties to ERE II HOA and HOA accepted (minutes + payments) | No binding delegation / no acceptance by ERE II HOA | Held: Dowd delegated the duty; ERE II HOA accepted by resolution and conduct, so contractually bound |
| Whether ERE II HOA validly terminated obligation by amending Declaration | Amendment procedure allowed unilateral change; Dowd’s duty was only to "subject" once | 2004 Agreement’s language and surrounding provisions show an ongoing obligation; amendment cannot defeat covenant that runs with land | Held: Amendment breached the continuing obligation; ERE II HOA liable; remedies affirmed |
Key Cases Cited
- Regency Homes Assn. v. Egermayer, 243 Neb. 286, 498 N.W.2d 783 (1993) (adopts test for whether covenant touches and concerns land)
- Neponsit P. O. Ass’n v. Emigrant I. Sav. Bank, 278 N.Y. 248, 15 N.E.2d 793 (1938) (classic authority on covenants that run with the land)
- Chesapeake Ranch Club v. CRC Members, 60 Md. App. 609, 483 A.2d 1334 (1984) (distinguishes road charges that touch and concern land from social dues that do not)
- Brick Development v. CNBT II, 301 Neb. 279, 918 N.W.2d 824 (2018) (enumerates elements for covenant to run with the land)
- Ames v. George Victor Corp., 228 Neb. 675, 424 N.W.2d 106 (1988) (delegation/assumption of duties may be inferred from acceptance)
- Acklie v. Greater Omaha Packing Co., 306 Neb. 108, 944 N.W.2d 297 (2020) (contract formation principles)
- DH‑1, LLC v. City of Falls City, 305 Neb. 23, 938 N.W.2d 319 (2020) (equitable claims are contract substitutes and displaced if contract is enforceable)
- Boyles v. Hausmann, 246 Neb. 181, 517 N.W.2d 610 (1994) (addresses amendment procedures for restrictive covenants)