806 P.2d 1054 (N.M. 1991)
On January 3, 1979, The Presley Company of New Mexico recorded with the Bernalillo County Clerk a replat for the Vista Del Sandia subdivision in Albuquerque.1 On October 8, 1982, Presley recorded a set of restrictive covenants covering all the property shown on the replat, including a tract in the subdivision arroyo.2 The covenants regulated the land use, building type, quality, and size of the residential single-family dwellings that were to be placed on the subdivision property.3
In November 1982, Daniel and Patricia Appel met with Presley and its agents regarding the possible purchase of a lot in the subdivision.4 The Appels allege that representations were made concerning lots in the subdivision and the purpose of the restrictive covenants.5 The Appels further allege that the restrictive covenants were used as a sales tool which they relied on in purchasing a lot and constructing their home.6
On April 25, 1984, the subdivision's Architectural Control Committee, consisting of three members who were all employees or officers of Presley, executed an amendment of the restrictive covenants.7 This amendment deleted nine lots from the effect of the restrictive covenants, including Lots 28-A and 30 which are involved in this appeal.8 Since the covenants were amended, some of the lots have been subdivided into smaller lots and townhouses have been constructed on them.9 Presley sold Lot 28-A to Wolfe Company, Inc. in April 1988.10 Wolfe is replatting Lot 28-A into four lots for single family residences.11 No development plans exist for Lot 30, the arroyo lot.12
The Appels filed their complaint against Presley and Wolfe asserting three claims: breach of restrictive covenants; negligent and fraudulent misrepresentation; and unfair trade practices.13 They requested a permanent injunction enjoining Wolfe from constructing any building on its lot unless it complied with the restrictive covenants applicable to the subdivision.14 The Appels also requested a permanent injunction enjoining Presley from constructing any building in the arroyo area of the subdivision.15 In addition, the Appels sought compensatory and punitive damages against Presley.16 The trial court granted summary judgment to the defendants, and the Appels appealed to the Supreme Court of New Mexico.17
Whether the trial court properly granted summary judgment dismissing the Appels' claim for breach of restrictive covenants?18
In deciding whether summary judgment is proper, a court must look to the whole record and view the matters presented in the light most favorable to support the right to trial on the merits.19 Provisions allowing amendment of subdivision restrictions are subject to a requirement of reasonableness.20 A court of equity will not enforce restrictions where there are circumstances that render their enforcement inequitable.21 The clause allowing the owners the right to alter, amend, repeal, or modify these restrictions at any time in its sole discretion is a valid clause so long as it is exercised in a reasonable manner so as not to destroy the general scheme or plan of development.22 If it is found that the exceptions were applied in an unreasonable manner, thereby breaching the covenants, the trial court should apply the doctrine of relative hardships.23 In determining whether injunctive relief should issue, the court may consider the following factors and should balance equities and hardships where required: the character of the interest to be protected, the relative adequacy to the plaintiff of injunction in comparison with other remedies, the delay if any in bringing suit, the misconduct of the plaintiff if any, the interest of third persons, the practicability of granting and enforcing the order or judgment, and the relative hardship likely to result to the defendant if an injunction is granted and to the plaintiff if it is denied.24
No. The Appels filed their complaint to enjoin Wolfe's proposed replatting and construction and to enjoin the construction of any buildings on Lot 30.25 The trial court granted summary judgment based on the language in paragraph 20 allowing amendments and exceptions by the Architectural Control Committee.26 However, the amendment deleting nine lots from the restrictive covenants, including Lots 28-A and 30, must be examined for reasonableness to determine if it destroyed the general scheme or plan of development for single-family dwellings.27 The Appels relied on the restrictive covenants when purchasing their lot in November 1982, after the covenants were recorded in October 1982.28
Since the amendment in April 1984, some lots have been subdivided and townhouses constructed.29 This determination of reasonableness is a factual matter that requires testimony and cannot be resolved on summary judgment.30 Additionally, the trial court must balance the equities using the listed factors when considering the request for injunctive relief.31
Whether the Architectural Control Committee's amendment deleting individual lots from the restrictive covenants was subject to a requirement of reasonableness?35
Provisions allowing amendment of subdivision restrictions are subject to a requirement of reasonableness. A court of equity will not enforce restrictions where there are circumstances that render their enforcement inequitable. The clause allowing the owners the right to alter, amend, repeal, or modify these restrictions at any time in its sole discretion is a valid clause so long as it is exercised in a reasonable manner so as not to destroy the general scheme or plan of development. The developer's exercise of his right to cancel or modify the restrictive covenants must be reasonable.36 It must be with due regard for the property rights and investments of the persons who relied upon the residential covenants which were in full force at the time of their purchase.37
Yes. The language permitted the Architectural Control Committee to make amendments or exceptions to the restrictive covenant.38 However, courts have determined that provisions allowing amendment of subdivision restrictions are subject to a requirement of reasonableness.39 The court noted the inherent inconsistency between an elaborate set of restrictive covenants, designed to provide for a general scheme or plan of development, and a clause reserving in the grantor the power to change or abandon any part of it.40 The court reconciled the inconsistency by reading into the restrictive clause a requirement of reasonableness.41
The amendment must be exercised in a reasonable manner so as not to destroy the general scheme or plan of development.42 This requires due regard for the property rights and investments of the persons who relied upon the residential covenants.43
The Architectural Control Committee's amendment deleting individual lots from the restrictive covenants was subject to a requirement of reasonableness.44
Whether the trial court properly granted summary judgment dismissing the Appels' claims for negligent and fraudulent misrepresentation and unfair trade practices?45
A proceeding on a motion for summary judgment is not an opportunity to resolve factual issues, but should be employed to determine whether a factual dispute exists.46 If genuine controversies as to the facts exist, a motion for summary judgment should be denied and the factual issues should proceed to trial.47 In considering a motion for summary judgment, the trial court must view the pleadings, affidavits and depositions in the light most favorable to the opposing party.48 The trial court erred in finding no material issue of fact regarding misrepresentation and violation of the Uniform Trade Practices Act.49
No. The trial court erred in granting summary judgment on the claims of misrepresentation and unfair trade practices.50 The trial court focused only on statements made by Presley representatives in 1982 about lots not being developable, ignoring other alleged misrepresentations concerning the effect of the covenants.51 The Appels produced sufficient evidence to raise factual questions as to whether Presley misrepresented that Lot 30 would remain open space and that the covenants would maintain the intended character of the subdivision.52 Whether or not the statements made to the Appels about Lots 28-A and 30 were true or false at the time made are issues of fact to be determined at trial.53
They are not to be resolved by the court on summary judgment.54