FLAMINGO RANCH ESTATES, INC., APPELLANT,
v.
SUNSHINE RANCHES HOMEOWNERS, INC., ETC., ET AL., APPELLEES
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The court determined that jurisdiction to pass upon the subject matter of the suit rested in the Public Service Commission, not the circuit court, in a dispute over water service charges.
The court affirmed the trial court's summary judgment for the utility, holding that the Public Service Commission had exclusive jurisdiction over the dispute concerning water service charges.
[1] A grantor's reserved right to unilaterally amend restrictive covenants is valid only when exercised reasonably and in a manner that does not destroy the general scheme or…
[2] Restrictive covenants designed to establish a general scheme or plan of development for the benefit of grantees are subject to a reasonableness requirement when interpret…
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Join FLexlaw to unlock all legal intelligenceHomeowners sued a utility for breach of contract regarding water charges, alleging unlawful increases beyond a contractually agreed-upon rate. The uti…
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OWEN, Chief Judge.
The trial court declared null and void that portion of certain restrictive covenants which had reserved to the appellant, a land developer, the right to amend the restrictions at any time in its sole discretion.
Appellant is the successor to the original developer. No issue is raised on this appeal concerning appellant’s right to exercise the rights reserved to the original developer, the only issue being the validity of (1) the clause reserving to the owner the right to alter, amend, repeal or modify the restrictions at any time in its sole discretion, and (2) a particular amendment to the restrictions which had been made pursuant to such reserved right.
Appellant’s predecessor, seeking to develop a tract of land, had placed of record certain Declaration of Restrictions regulating and restricting the use of and improvements upon the individual lots to be sold in the development in order to insure “the development of the lands as a residential area of high standards”. Sales of the individual lots were promoted and procured in reliance upon this feature. Appellees include certain of the lot owners and a non-profit Florida corporation whose members are composed of persons residing in and owning homes upon the property affected by such Declaration of Restrictions. Each of these individual lot owners was on notice of the restrictions, including the one which reserved to the developer the right to alter, amend, repeal or modify the re strictions at any time in its sole discretion. On several occasions in the past the Declaration of Restrictions had been altered or amended. No objections had been made by anyone to the prior amendments, but none appeared to be inconsistent with the general scheme'or plan of development of the property as a residential area.
When appellant sought to amend the restrictions so as to permit a portion of the property to be used for both business and residential purposes, this suit was filed, initially seeking an injunction but ultimately being amended to one seeking declaratory judgment. The trial court held void this latest amendment, and also voided the clause which reserved to the grantor the right to alter, amend, repeal or modify the restrictions at any time in its sole discretion.
In the case of Johnson v. Three Bays Properties #2, Inc., Fla.App. 1964, 159 So. 2d 924, at 925, 4 A.L.R.3d 565, the court, though not squarely faced with the issue, stated in a footnote:
“1. It is well recognized that where a grantor reserves the right to alter, modify or change restrictive covenants, he may do so without the consent of the grantee. 14 Am.Jur., Covenants, Conditions and Restrictions, § 292 ; 26 C.J.S. Deeds § 168. See also Matthews v. Kernewood, Inc., (1945), 184 Md. 297, 40 A. 2d 522; Bright v. Forest Hill Park Development Co., (1943), 133 N.J.Eq. 170, 31 A. 2d 190; Thrasher v. Bear, (1940), 239 Ala. 438, 195 So. 441.”
In the cited case, the court also stated in its opinion, however, a recognized limitation on this right in the following language :
“Appellants are entitled to protection against an unreasonable diminution of the building requirements of the subdivision . . . .” (e. s.)
As stated in 7 Thompson, Real Property, Section 3171, at 188:
“A court of equity will not enforce restrictions where there are circumstances that render their enforcement inequitable. ...”
In a sense, there is an inherent inconsistency between an elaborate set of restrictive covenants designed to provide for a general scheme or plan of development (generally considered to be for the benefit of the respective grantees), and a clause therein whereby the grantor reserves to itself the power at any time in its sole discretion to change or even arbitrarily abandon any such general scheme or plan of development (a power which is solely for the benefit of the grantor). When such occurs, as it has in this case, rules of construction require that clauses which are apparently inconsistent with or repugnant to each other be given such an interpretation and construction as will reconcile them, if possible. 7 Fla.Jur., Contracts, Section 91.
In the instant case, this can be done by reading into the reservation clause a requirement of reasonableness, much as suggested by the court in Johnson v. Three Bays Property, supra. We hold, therefore, that the clause in the Declaration of Restrictions, which reserves to the owner “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 as not to destroy the general scheme or plan of development.
The judgment is reversed, and upon remand the trial court shall apply this test to the amendment which the judgment declared void, with discretion to take additional testimony on the issue should it appear to the court either necessary or desirable to do so.
Reversed and remanded, with directions.
CROSS, J., and TROWBRIDGE, C. PFEIFFER, Associate Judge, concur.
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Cited By (12 total)
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Klinow v. Island Court AT Boca W. Prop. Owners' Ass'n, Inc., 64 So. 3d 177 (Fla. 4th DCA 2011)…ifications. This court has defined a radical change as a change which would create an inconsistent scheme, or a deviation in benefit from that of the grantee to that of the grantor. Flamingo Ranch Estates, Inc. v. Sunshine Ranches Homeowners, Inc., 303 So. 2d 665, 666 (Fla. 4th DCA 1974). Here, the changes would mutually benefit the grantor and the grantee. The benefit to the grantee is exemplified in a letter written to the homeowners which provided that the proposed changes would result in a more aesthetic…
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Nelle v. Loch Haven Homeowners' Ass'n, Inc., 413 So. 2d 28 (Fla. 1982)…cessary to allow enforcement. More recently, however, courts have begun to require that the reserved power be exercised in a reasonable manner so as not to destroy the general plan. Flamingo Ranch Estates, Inc. v. Sunshine Ranches Homeowner’s, Inc., 303 So. 2d 665 (Fla. 4th DCA 1974); Johnson v. Three Bays Properties # 2, Inc., 159 So. 2d 924 (Fla. 3d DCA 1964). Reading this reasonableness requirement into the reservation of power to modify undercuts the grantor’s unfettered control and provides the mutual bu…
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Critchlow v. Williamson, 450 So. 2d 1153 (Fla. 4th DCA 1984)…reconcile inconsistencies in a contract in a manner that renders the contract meaningful. Royal Continental Hotels, Inc. v. Broward Vending, Inc., 404 So. 2d 782 (Fla. 4th DCA 1981); Flamingo Ranch Estates, Inc. v. Sunshine Ranches Homeowners, Inc., 303 So. 2d 665 (Fla. 4th DCA 1974). It is also an elementary principle of contract construction that a reasonable interpretation of a contract is preferred to an unreasonable one. Excelsior Ins. Co. v. Pomona Park Bar & Package, 369 So. 2d 938 (Fla.1979). In this…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Johnson v. Three Bays Props. #2, Inc., 159 So. 2d 924 (Fla. 3d DCA 1964)