Sonoma Dev., Inc. v. Miller

Brief Fact Summary.

Plaintiffs sued Defendant when Defendant built a house within three feet of Plaintiffs’ house. The trial court held that there was a valid restrictive covenant on Defendant’s lot and ordered Defendant to remove all improvements within three feet of Plaintiffs’ house. Defendant appealed.

Synopsis of Rule of Law.

Horizontal privity exists when a restrictive covenant is made as part of a transaction that also includes the transfer of an interest in land that is either benefitted or burdened by the covenant.

Facts.

Alfred and Mary Schaer owned two lots, Lot 38 and Lot 39, in Alexandria, Virginia. In 1995, they sold Lot 38 to Girard and Lynn Miller (Plaintiffs). There was a house on Lot 38, and Lot 39 stood vacant. The northern wall of the house intruded onto Lot 39 by approximately one inch. The contract of sale included a provision that the Schaers would enter a restriction into the deed of Lot 39 prohibiting construction of any improvements within three feet of the Lot 38 house. On June 30, 1995, the Schaers executed three documents: a deed conveying Lot 38 to Plaintiffs, a “Declaration of Restriction” prohibiting any construction on Lot 39 within three feet of the Lot 38 house, and a “Declaration of Easement” allowing entry onto Lot 39 for the purpose of maintaining the Lot 38 house. The latter two documents mentioned the Schaers by name, but did not mention Plaintiffs. Both documents were recorded with the local court. In 1997, Sonoma Development, Inc. (Defendant) purchased Lot 39 from the Schaers. The deed specified that the property was subject to easements and restrictive covenants. Defendant soon built a house on Lot 39 within three feet of Plaintiffs’ house. Plaintiffs filed suit. The trial court held that there was a valid restrictive covenant on Lot 39, and ordered Defendant to remove all improvements within three feet of Plaintiffs’ house. Defendant appealed, claiming that there was no horizontal privity between Plaintiffs and the Schaers.

Issue.

Whether there is horizontal privity when a party executes a document creating a restrictive covenant on land in conjunction with the party’s sale of another piece of land that is benefitted by the restrictive covenant.

Held.

Yes. The trial court’s ruling is affirmed. Horizontal privity exists when a restrictive covenant is made as part of a transaction that also includes the transfer of an interest in land that is either benefitted or burdened by the covenant.

Discussion.

The parties agree that if there is a restrictive covenant in this case, it is a “real covenant.” Real covenants require that there be privity between the original parties, which is known as horizontal privity. Horizontal privity requires that the original parties made the covenant in connection with the conveyance of an estate in land from one of the parties to the other. The covenant and the conveyance may be created in the same written document, but need not be. In this case, the Schaers executed three documents on the same day. One document conveyed Lot 38 to Plaintiffs; the other two created a restrictive covenant and easement on Lot 39 for the benefit of Plaintiffs and subsequent owners of Lot 38. Thus the restrictive covenant on the Schaers’ land was created as part of the same transaction in which they conveyed the benefitted land to Plaintiffs, satisfying the requirements for there to be horizontal privity.