Facts
- H.N. Warren and Vera S. Warren, doing business as Warren Construction Company, developed an El Dorado, Arkansas residential project consisting of three adjoining units marketed as one neighborhood.
- The Warrens sold lots by warranty deed; many deeds contained covenants limiting use to “residential purposes only” and imposing minimum size or cost requirements, but some deeds in each unit contained no covenants.
- Deed language frequently referred to “the dwelling,” “the residence,” or “the residence dwelling,” and used singular terms such as “carport.”
- Homeowners testified that, in selling lots and homes, the Warrens represented the development would consist of single-family homes and that apartments or duplexes would not be built.
- After sales to homeowners, the Warrens proposed building two duplexes on lots in Unit Three.
- Homeowners, including Mike Detlefsen, sought an injunction to stop the duplex construction, alleging a subdivision-wide common plan restricting lots to single-family residential use.
Issues
- Whether the pattern of deed restrictions, viewed with the developer’s representations and marketing, established a general plan restricting the subdivision to single-family residential use.
- Whether that plan was enforceable in equity against the developer to enjoin duplex construction on the developer’s remaining lots, despite nonuniform deed restrictions and some deeds without covenants.
Decision
- The Arkansas Supreme Court affirmed the chancery court’s injunction against constructing the duplexes.
- The court upheld the finding that an enforceable general scheme for single-family residential development existed across the project.
- The court accepted the chancellor’s reliance on both recorded deed restrictions and the developer’s representations to purchasers in determining the nature of the plan.
- The court agreed that singular phrasing in the restrictions supported the inference that only one residence per lot was intended.
- The court found no reversible error in the chancellor’s fact-based equitable determination.
Legal Principles
- A general scheme or plan of development may be established from the overall pattern of restrictions used in conveyances together with the developer’s conduct and representations in selling the property.
- Where a common plan for single-family residential use is proven, purchasers may enforce it in equity against the developer’s retained lots, including by injunction.
- Differences in wording among deeds, and the absence of restrictions in some deeds, do not necessarily defeat a common plan when the development was marketed as a unified neighborhood and buyers relied on the plan.
- Restrictive language referring to a single “dwelling” or “residence,” and other singular structural terms, may support construing “residential” restrictions as limiting lots to a single-family home rather than multi-family structures.
Conclusion
The court held that the Warrens’ subdivision-wide development plan, shown by the pattern of residential deed restrictions and corroborated by the Warrens’ assurances to buyers, restricted lots to single-family use and justified enjoining the Warrens from building duplexes on their remaining property.