811 S.E.2d 1
Ga. Ct. App.2018Background
- Summer Crest subdivision created in 1988; amended declaration (1994) allowed declarant to annex up to 27 additional homes as "Phase 2 Property" by filing an approved plat within 10 years without Association consent.
- In 2003 Stonebridge (as declarant) recorded a Phase II plat showing a 17.338-acre tract broken into 15 lots and a 4.952-acre "Future Development" parcel not then subdivided. The plat included notes stating the phase was subject to the Summer Crest covenants.
- In 2004 Stonebridge executed an agreement with the Association referencing Article X and acknowledging the 4.952-acre area as part of Phase 2 and subject to the Declaration; Stonebridge agreed to pay $25,000 for recreational improvements.
- Great Water purchased the 4.952-acre parcel and a 0.303-acre parcel in 2009. The deed and closing exhibits for the 4.952-acre parcel listed the 1988 declaration (as amended) and the Phase 2 plat as permitted exceptions; a contemporaneously recorded Statement of Intent (not referenced by the deed) asserted the declarant did not subject any Phase 2 property to the amended declaration.
- Great Water sued for declaratory relief (that both parcels are not subject to the covenants) and tort claims; trial court held the 4.952-acre parcel is subject to the covenants, the 0.303-acre parcel is not, and dismissed Great Water’s defamation-of-title and punitive-damages claims. Great Water appealed; the Association cross-appealed interlocutory rulings which the Court later dismissed as moot.
Issues
| Issue | Plaintiff's Argument (Great Water) | Defendant's Argument (Association) | Held |
|---|---|---|---|
| Whether the 4.952-acre parcel is burdened by the Summer Crest declaration of covenants | Deed language listing the declaration as a "Permitted Exception" and a contemporaneous Statement of Intent create ambiguity or show the parcel was not intended to be subject to the covenants | Deed unambiguously conveyed the parcel "subject to" matters in Exhibit B, which expressly listed the declaration and Phase 2 plat; deed controls, so parcel is burdened | The deed is unambiguous; parcel conveyed subject to the declaration and is bound by the covenants (affirmed) |
| Whether the Association’s 2012 recording (amended declaration) stating the parcel is subject to covenants constituted slander/defamation of title | Great Water: recording was false and malicious and injured title | Association: its assertion was true because the parcel was subject to covenants as a matter of law | Because parcel is subject to the covenants, the recording was not false; slander claim fails, so punitive damages derivative claim also fails |
| Whether contemporaneous recorded Statement of Intent under OCGA § 44-2-20 can override an unambiguous deed | Statement of Intent serves as notice and should defeat the deed-based subject-to language | Recording statute only provides notice; it cannot alter an unambiguous conveyance that already subjects title to an encumbrance | Statement of Intent cannot modify an unambiguous deed; it is ineffective to change the deed’s effect |
| Whether trial court’s denial of Association’s motion for judgment on the pleadings and ruling on withdrawal of an admission require reversal | Great Water: n/a (plaintiff did not rely on these) | Association: interlocutory rulings were erroneous because plat alone established covenants | Appeals of those interlocutory rulings are moot because the court ultimately resolved the matter as a matter of law in favor of the Association; cross-appeal dismissed as moot |
Key Cases Cited
- Cowart v. Widener, 287 Ga. 622 (appellate summary-judgment de novo review and rule on constructing writings)
- Second Refuge Church of Our Lord Jesus Christ, Inc. v. Lollar, 282 Ga. 721 (deed construction: determine parties’ intent from instrument; admit extrinsic evidence only if ambiguous)
- Interchange Drive, LLC v. Nusloch, 311 Ga. App. 552 (grantee bound by covenants that run with the land when accepting deed)
- Maxco, Inc. v. Volpe, 247 Ga. 212 (recorded affidavit under recording statute serves as notice, not a conveyance)
- Kemp v. Neal, 288 Ga. 324 (recorded affidavit/statements do not provide a mechanism to cure or alter an existing recorded conveyance)