223 N.C. App. 373
N.C. Ct. App.2012Background
- Homeowners in Stirrup Downs sue to enjoin defendants Serenity Acres from commercial horse services on Lot C.
- Restrictive covenants allow residential use and horses, with buildings for stables and storage, but do not expressly ban commercial activity.
- Defendants began boarding horses in the early 1990s, expanding to a business with up to about ten horses at times.
- A prior Stanley lawsuit alleged commercial use; it settled in 2005, after which Serenity Acres continued operating and advertising.
- Trial court granted Plaintiffs’ injunction and dismissed Defendants’ counterclaims; trial court also denied Defendants’ partial summary judgment.
- On appeal, court reverses in part, remands for judgment in Defendants’ favor on Plaintiffs’ claims, and affirms in part regarding counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do covenants prohibit commercial boarding | Plaintiffs argue covenants restrict to residential use only and prohibit commercial pasturing/boarding. | Defendants contend covenants allow pasturing and boarding as part of residential use without a strict prohibition on commercial activity. | Covenants interpreted to permit commercial boarding when tied to residential use; no express ban. |
| Is covenant 9 unconstitutionally vague | Plaintiffs rely on covenant 9 to ban nuisance-like activities including noise and traffic from Serenity Acres. | Defendants argue covenant 9 provides guidance against nuisance; the terms are not vague when read in context. | Covenant 9 is void for vagueness; lacks objective standards to determine nuisance. |
| Whether the counterclaims for abuse of process and punitive damages were properly resolved | Plaintiffs claim counterclaims were properly resolved in their favor based on alleged abuse of process and damages. | Defendants contend the trial court lacked authority to rule on counterclaims given the motion scope and notice. | Court affirms dismissal of counterclaims; but precedent allows broader consideration of evidence on related claims. |
Key Cases Cited
- J.T. Hobby & Sons, Inc. v. Family Homes, 302 N.C. 64 (1981) (residential use includes activities normally incident to habitation; compensation does not make use non-residential)
- Belverd v. Miles, 153 N.C. App. 169 (2002) (interpret covenants together; ambiguities resolved in favor of free use)
- Bumgarner & Bowman Bldg., Inc. v. Hollar, 7 N.C. App. 14 (1969) (ambiguous covenants assessed by reading provisions together)
- Steiner v. Windrow Estates Home Owners Ass’n, Inc., 713 S.E.2d 527 (2011) (restrictive covenants vague where terms lack objective definition; needs context)
- A-S-P Associates v. City of Raleigh, 298 N.C. 207 (1979) (summary judgment on all claims permissible when evidence on all claims is before court)
- Harris v. Ray Johnson Const. Co., Inc., 139 N.C. App. 827 (2000) (contract interpretation governed by de novo review)
- Wein II, LLC v. Porter, 198 N.C. App. 472 (2009) (restrictive covenants must be sufficiently definite)