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McGrath v. Edwards

A-1583-08T2 (N.J. Super. App. Div. 2009) (Unpublished)

EASEMENTS — Deed restrictions and easements meant to bind strangers to the initial transaction must manifest the intent of the restriction in the language of the document itself, otherwise they are not enforceable because if there are ambiguities, they cannot be resolved by resort to extrinsic evidence as would be the case if the initial signatories disputed the language of the easement or deed restriction.

A large tract was bought with the intention of developing it. The lot was subdivided so as to create a single lot having a large house with the balance of the tract remaining vacant. In connection with the sale, the sellers agreed to a sight easement on the remaining property. It was set forth on a site plan depicted on a “Schedule B” appended to the deeds memorializing the subdivision and the sale. Schedule B provided for a “defined field” where the grantors agreed that they “would not build anything” and would protect the view. It also designated certain areas where buildings needed to be “approved by [the grantor]” before construction could begin. The buyers then resold the property to its present owners who stated that they did not read Schedule B or seek a legal opinion as to its enforceability at the closing. Then, they substantially enlarged their home. The original owners then sold off the remaining parcels within the larger tract. One of the buyers of the remaining parcels started to build another large home. Construction was almost complete when the owners of the lot enjoying the sight easement sued them. The suit was the result of a dispute between the two owners when the new homebuilders decided to place numerous trees within the “defined field.” They also claimed that the new home was located on an unauthorized site as identified in the easement. The new homebuilders responded by claiming that: (a) the plantings did not violate any covenant or easement; and (b) the sight easements were ambiguous and unenforceable.

The Chancery Division dismissed all claims for monetary damages against the property owner who built the new home and with respect to the location of their home. The issues relating to the scope of the easement or its application to the location of the new home were addressed by the Law Division.

The Law Division ruled in favor of the owners of the new home on the issue of whether their house was mislocated in violation of the easement. It stated that the house was not in an prohibited location because the owners of the dominant estate did not present evidence as to any location restriction in either the documents or through the intent of the parties who executed the documents. However, the lower court limited the easement to the defined field in order to preserve the view for the holders of the dominant estate. The Court limited the use of the field to agricultural purposes and prohibited any roofed structures to be built in the defined area. The lower court also ordered removal of the trees that obstructed the view at the northeast corner of the defined field. Both parties appealed.

The Appellate Division affirmed, ruling that the easement was ambiguous. It noted that although the document contained the statement that “we will not build anything in this field,” the document did not define what was meant by “build” or “anything,” and it did not address what other activities could occur in the designated area. As to those limitations relating to the location of a home to be built within the easement area, it cited case law holding that deed restrictions meant to bind strangers to the initial transaction must manifest the intent of the restriction in the language of the document itself. If not, they are unenforceable. If ambiguities remain, it ruled that they cannot be resolved by resort to extrinsic evidence, as would be the case if the initial signatories disputed the term. If the rule were otherwise, parties subsequently purchasing a property would not have sufficient notice of the restriction. Accordingly, it affirmed the lower court’s determination that the restrictions relating to the location of the house built by the new homeowners were ambiguous (since they were susceptible to several interpretations) and thus unenforceable. It noted there was nothing in Schedule B that provided a means to determine which of these interpretations was correct.

It took a different approach with respect to the sight restrictions. Although the Court found the phraseology used in the easement to be ambiguous, it recognized that the sight restriction had the obvious purpose of preserving, unobstructed, the view in favor of the dominant estate. Thus, it affirmed the lower court’s determination restricting the use of the designated filed to farmland purposes and its barring of any structure with a roof. Moreover, it held there was no reversible error in the lower court’s inquiry into the drafters’ original intent, even though neither the original grantor nor grantee retained an ownership interest in the properties involved in the dispute, because the testimony elicited was consistent with the sensible outcome reached by the lower court.

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