Facts
- Madalyn and Henry Eisenberg and Carol and Sidney Dana owned residential property adjoining a rural tract known as the “Buffer Lands,” which separated their homes from active quarry operations.
- Allied Corporation owned the quarry property and the Buffer Lands, which included wetlands and forested areas.
- In 1986, Allied conveyed the quarry property (including the Buffer Lands) to General Crushed Stone Company, later Milestone Materials.
- The 1986 deed contained a restrictive covenant requiring that the Buffer Lands “remain in their natural state” so long as any portion of the conveyed premises was used as a quarry.
- The deed stated the restriction was for the benefit of adjoining property owners and identified The Nature Conservancy as an entity entitled to enforce the covenant.
- In 1997, Milestone conveyed a substantial portion of the Buffer Lands (about 461 acres) to Scott Congel by deed stating the conveyance was “subject to all other matters of record.”
- Congel intended to build a personal residence and erect fencing on the Buffer Lands, actions the plaintiffs claimed would violate the “natural state” restriction.
- The adjoining owners and The Nature Conservancy sued to enforce the covenant and sought injunctive relief.
- Supreme Court denied plaintiffs’ request for a preliminary injunction and granted defendants’ cross-motions to dismiss, reasoning that plaintiffs lacked privity with the covenant’s original grantor and treating the covenant as unenforceable or extinguishable under RPAPL 1951(1).
Issues
- Whether adjoining landowners expressly identified in the deed as beneficiaries may enforce a restrictive covenant as third-party beneficiaries despite the absence of privity with the original grantor.
- Whether the restrictive covenant requiring the Buffer Lands to remain in their natural state was enforceable against Congel as a successor in title who took “subject to” matters of record.
- Whether the covenant should be extinguished under RPAPL 1951(1) on the ground that it provided no actual and substantial benefit to those seeking enforcement.
- Whether plaintiffs were entitled to a preliminary injunction to prevent Congel from altering the Buffer Lands pending resolution of the action.
Decision
- The Appellate Division, Fourth Department, reversed the order that dismissed the complaint.
- The court reinstated the complaint, holding that the adjoining owners (and the Nature Conservancy, as named in the deed) could enforce the restriction as intended beneficiaries even without privity with the original grantor.
- The court rejected extinguishment under RPAPL 1951(1), concluding the covenant continued to provide an actual and substantial benefit to the neighboring owners.
- The court granted plaintiffs’ motion for a preliminary injunction, preserving the status quo and preventing alteration of the Buffer Lands during the litigation.
Legal Principles
- A restrictive covenant may be enforced by a neighboring landowner when the deed shows the covenant was imposed for that neighbor’s benefit; privity of estate with the original grantor is not required when enforcement is based on third-party-beneficiary status.
- Deed language stating a restriction is “for the benefit of and enforceable by” adjoining owners can establish the intent necessary to allow those owners to sue to enforce the covenant.
- A successor in title may be bound by a restrictive covenant appearing in the chain of title where the covenant is of record and the successor takes title “subject to” recorded matters.
- RPAPL 1951(1) permits extinguishment only when the restriction is of no actual and substantial benefit to the party seeking enforcement; a covenant is not extinguished merely because the burdened owner seeks a different use.
- A preliminary injunction may issue to prevent changes to the land that would defeat the covenant’s purpose, where plaintiffs show likelihood of success, irreparable harm from alteration of the property, and equities favoring preservation of existing conditions.
Conclusion
Nature Conservancy v. Congel held that a recorded covenant requiring “Buffer Lands” to remain in their natural state could be enforced by adjoining owners and a conservation organization expressly identified in the deed, even though the beneficiaries lacked privity with the original grantor, and the restriction was not extinguished under RPAPL 1951(1) because it continued to provide a real and substantial benefit; the Appellate Division reinstated the action and granted a preliminary injunction to prevent development pending final resolution.