Majestic Oaks Homeowners Association, Inc. v. Majestic Oaks Farms, Inc., 530 S.W.3d 435

Background

Developer (Majestic Oaks Farms) recorded an Original Declaration and plat creating an express easement in gross for use of subdivision private roads “[for so long as Developer]…owns any Lot or any portion of the Property.”
Original Declaration defined "Property" initially as Lots 1–23 but contemplated additional plats; Developer later recorded plats expanding to Lots 1–59 (Sections 1–3) and reserved Section 4 as future development.
§ 8.3 of the Original Declaration provided that the covenants and restrictions could be cancelled, altered, or amended by specified recorded instruments: by a majority-recorded instrument of all owners or by a 67% approval from each class of membership, with Developer retaining certain rights until the last lot sale.
By March 2006 Developer had conveyed Sections 1–3 and no longer owned lots in those sections, though it still owned Section 4; in August 2006 the HOA voted (82%) to amend the Declaration to remove Developer’s easement for Lots 1–59.
The HOA sued to enjoin Developer’s continued use of the easement; the trial court granted summary judgment to Developer and the Court of Appeals affirmed. The Supreme Court granted discretionary review.

Issues

Issue	Plaintiff's Argument (HOA)	Defendant's Argument (Developer)	Held
Whether an express easement in gross can be terminated under the recorded Declaration’s amendment procedure	The Declaration’s amendment clause allows removal of covenants/restrictions (including easements) by the prescribed vote, so Developer’s easement was defeasible and was terminated by the HOA vote	The amendment power applies only to "restrictions," not to Developer’s easement; easement is not covered and thus is not terminable by the HOA vote	Court held the easement was defeasible and terminable under the Declaration’s amendment procedure; HOA’s vote extinguished the easement
Whether Kentucky recognizes defeasible easements (easements that end upon a specified event)	HOA relied on established common-law principles and Kentucky precedent recognizing easements that may end on specified contingencies	Developer disputed applicability but did not meaningfully contest that defeasible easements exist in Kentucky	Court confirmed Kentucky recognizes defeasible easements and applied that doctrine to this express easement
Whether the HOA followed the required procedure to amend the Declaration	HOA contended it complied with the 67% voting requirement and recording formalities	Developer did not dispute procedural validity of the vote	Court found the vote was properly conducted and satisfied the Declaration’s requirements
Whether any ambiguity in § 8.3 should be construed against the drafter (Developer)	HOA argued ambiguities must be construed against Developer who drafted the Declaration	Developer argued its drafting should limit amendment scope to "restrictions" only	Court applied contra proferentem against Developer and interpreted § 8.3 to permit amendment of the easement

Key Cases Cited

Kenner v. American Contract Co., 72 Ky. 202 (recognition that easements may terminate upon occurrence of a condition subsequent)
Louisville Chair & Furniture Co. v. Otter, 294 S.W. 483 (Ky. 1927) (assumed existence of defeasible easements when analyzing termination condition)
Meade v. Ginn, 159 S.W.3d 314 (Ky. 2004) (rules on express easements and fixed instruments defining easement rights)
Sawyers v. Beller, 384 S.W.3d 107 (Ky. 2012) (principle that terms of an express easement govern parties’ rights)
Texas Eastern Corp. v. Carman, 314 S.W.2d 684 (Ky. 1958) (contract principles applied to easement interpretation)

Conclusion: The Kentucky Supreme Court reversed the Court of Appeals, holding the Developer’s express easement in gross was defeasible under the recorded Declaration and was terminated when the HOA properly voted to amend the Declaration; the case was remanded with directions to enter summary judgment for the HOA.