Daily Development for Wednesday, May 14, 2003

by: Patrick A. Randolph, Jr.
Professor of Law, UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

DEEDS; CONSTRUCTION: Deed restriction providing for reversion of the
property if an building is constructed "forward of the present building line of the
building presently situate" on property adjacent to the restricted parcel is fatally ambiguous and
unenforceable after restricted parcel is sold to third party unrelated to original transfer.

Cooper River Plaza East, LLC, v. The Briad Group, No. A-3048-01T1 (N.J.
Supr. Ct. App. Div. 4/30/03)

B sold a parcel of land to M in order to provide access to M's building located on a much larger adjacent parcel.  At the time, B owned another property located across the treet from the parcel that was sold, and B imposed a restriction on the property sold that rovided for a number of use limitations, apparently in order to protect the retained parcel.  The estrictions included affirmative landscaping requirements and a restriction on construction of ny structure on the property and a prohibition of parking on the property..  In addition, the prties stated in the restriction that there could be no structure "erected on the premises ajacent to the premises forming the subject matter of this deed [identified as the parcel on which gantee already had a building] forward of the present building line of the building presently situate on said adjacent premises.  The deed went on to provide that if there were any violations of the conditions, the title to the property would revert back to the grantor upon proper application to a court of competent jurisdiction.

After the sale, consistent with the purposes of the sale, access ways benefitting the grantee's building on the adjacent premises were built, and the landscaping installed and maintained.

Later, M sold the restricted lot and the adjacent lot and building to a Wendy's developer, and the developer laid plans to tear down the existing building and build a Wendy's outlet.  By then, B had transferred its parcel across the street as well - to a member of the original B family.

The owner of the adjacent lot threatened to seek reversion of the property if it was developed in a way inconsistent with the restrictions.  As a consequence, after considerable negotiations, the parties agreed that no parking would be installed on the restricted lot and that access would continue as before on the existing ways.  Then the owners of the Wendy's site demolished the existing building and began construction of the Wendy's building.

Unfortunately for the Wendy's developers, the original building was built at something of an angle to the adjacent highway, while their structure was designed and built with a wall parallel to the adjacent highway.  Thus, at one point, their structure did cross over the original building line and occupied a triangle of land beyond the existing line of the old

building on the side of the protected parcel.  The triangle was three feet on a side.  Note that it was not located on the

restricted parcel, but was still in violation of that aspect of the restriction that prohibit structures on the adjacent parcel that cross over the old building line.

The owner of the protected parcel brought suit to declare the title reverted.  The trial court granted summary judgment to Wendy's.  (Dontcha' love those square burgers?)

On appeal, held: affirmed.

Interestingly, there were good and sufficient grounds to bar the enforceability of the restriction on the basis of laches.  The trial court had granted summary judgment on that basis,

On appeal: held: Affirmed.  The Appeals court affirmed the determination that laches barred enforcement of the reversion in any event - the plaintiff had knowledge of the overlap at the start of construction, but didn't formally object until construction was almost complete.  Had there been an early complaint, the problem could have been avoided.  The the

appeals court elected to take the matter one step farther.  It held that the reversionary provision was completely void because it was too vague.

The court noted that the original building - the template - had four sides.  Did the provision providing for reversion if the new building was built "forward of the present building" mean that no wall of the new building could extend beyond any of the equivalent walls of the old building? Or did it refer only to the wall on the highway side (where the protected

property was across the street)?  For that matter, in that context, which direction was "forward?"  The court noted that, at

deposition, one of the grantors (a relative of the plaintiff) contradicted himself in describing what line was intended (amazing what a clever lawyer can get us to say.)

The court conceded that extrinsic evidence could be used to resolve such an ambiguity, but ruled that extrinsic evidence is not an option once the property has passed into the hands of a third party.  It pointed out that basic contract law as well as the policies of the recording act required that third parties to whom contract duties are delegated should not be

bound by vague and unintelligible requirements.

Comment 1: The case, of course, was rightly decided.  The overlap was de minimis (a fact the court also noted) and laches clearly applied.  The language was poorly drafted.  But the editor is forced to say that there likely was no doubt in the mind of any of the principals or the court what the language was really intended to provide.  Ambiguous language ought not

to be enforced.  But here, within the four corners of the document, the parties specifically referred to the parcel that

they were trying to protect.  The side of the existing building that was the controlling template really was quite clear in context.  In the editor's judgment, the court should have limited its function to affirming on the laches question.  The editor has received no square burgers as an inducement to reach this conclusion (although he's open to offers).

Comment 2: We don't need any more lessons to demonstrate to us the usefulness of talented lawyers who are patient enough to reduce the parties' agreement to a clearly and thoroughly detailed agreement.  Sometimes, however, lessons like this are useful to drag out to clients when they see the clock running longer than they expected.

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