Canewood Homeowners Association, Inc., brings this appeal from an October 23, 2015, Order of the Scott Circuit Court granting judgment in favor of Wilshire Investment Properties LLC; Proturf Lawn & Landscaping LLC, Proturf: Lawn & Landscape, an unregistered partnership of Donald G. Wilshire and Charles Helms, Jr., Donald G. Wilshire, and Charles Helms, Jr., and the court's order of November 5, 2015, denying appellant's Kentucky Rules of Civil Procedure (CR) 59 motion. We reverse and remand.
In early 1994, Canewood Subdivision was created in Scott County, Kentucky, by Canewood LLC, (Developer). On March 2, 1994, Developer and the owner of the property to be developed filed in the office of the Scott County Clerk a Declaration of Covenants, Conditions, Restrictions, Reservations and Easements Pertaining to Canewood Subdivision Unit 1-A Section 1 (Master Declaration) for the purpose of establishing and creating "a residential subdivision with provisions for the common use, enjoyment and maintenance of the Golf Course, Common Areas and Landscape Areas." Master Declaration at 1. The term "Golf Course" was defined as including "any recreational facilities erected for the common use and enjoyment of the `Owners,' including, without limitation, a clubhouse, pool and any other ancillary facilities or structures provided for such purpose." Master Declaration at 3. The Master Declaration also called for the formation of Canewood Homeowners Association, Inc. (HOA).
On December 10, 2007, Developer recorded a Declaration of Reciprocal Easements and Restrictions (Reciprocal Restrictions). The Reciprocal Restrictions provided that it was designed to "restrict the uses to which the Clubhouse Lot may be used and to provide for the integrated use of the Golf and Swimming Facilities and the Clubhouse Lot." Reciprocal Restrictions at 1. Relevant to this appeal, the Reciprocal Restrictions specifically limited the Clubhouse Lot's use to a restaurant. And, the Reciprocal Restrictions provided that only the Developer, the HOA, or the owner of the Clubhouse Lot could enforce the restrictions contained therein.
Also, by deed recorded December 10, 2007, Developer conveyed to Wilshire Investment Properties, LLC (Wilshire) a .367-acre lot which included a structure known as the Clubhouse (Clubhouse Lot). Wilshire intended to operate a restaurant open to the public on the Clubhouse Lot. The deed conveying the Clubhouse Lot to Wilshire described the property as follows:
It appears that the .367-acre Clubhouse Lot was comprised solely of property from the Golf Course as defined in the Master Declaration of March 2, 1994. The Clubhouse Lot is immediately adjacent to the Golf Course and the swimming facility. Both the Golf Course and the swimming facility properties were retained by the Developer in 2007. There is no dispute that the Developer intended in 2007 for the Clubhouse Lot to be subject to the Reciprocal Restrictions and for the use of the Clubhouse Lot to be integrated with the golf course and swimming facility.
On January 1, 2014, Developer and the HOA entered into a Memorandum of Lease which provided that Developer would lease Canewood's Golf Course to the HOA for a period of five years. Shortly thereafter, by deed executed January 23, 2014, the Developer conveyed to Wilshire additional property that expanded the acreage of the Clubhouse Lot. On the same date, January 23, 2014, the Developer and Wilshire also executed a Readopted, Amended and Restated Declaration of Reciprocal Easements and Restrictions (Readopted Restrictions). The Readopted Restrictions expanded the uses of the Clubhouse Lot to include: (1) restaurant, (2) retail establishment, (3) bed and breakfast, (4) tourist or historic attraction, (5) offices and, (6) residence. However, the Readopted Restrictions provided that only the Developer or Wilshire could enforce the restrictions upon the Clubhouse Lot. It should be emphasized that the HOA was not a party to the Readopted Restrictions and neither the HOA nor Wilshire were parties to the Reciprocal Restrictions filed by the Developer in 2007. Immediately after the recording of the Readopted Restrictions, the Developer also conveyed certain property identified as Lot 1 and containing the swimming facility to the HOA by deed also dated January 23, 2014.
In May 2014, the HOA sent a notice letter to Wilshire stating it believed a lawn and landscaping business was being operated from the Clubhouse Lot in violation of the Reciprocal Restrictions and the Readopted Restrictions. Then, on July 9, 2014, the HOA filed a complaint against Wilshire in Scott Circuit Court. Inexplicably, the Developer was not named a party to this action.
Appellees filed an answer on August 4, 2014. For over ten months, this action was dormant and no discovery was taken. On June 23, 2015, HOA filed a motion for summary judgment. On July 24, 2015, appellees filed a motion for judgment on the pleadings. In their motion, appellees argued that the Reciprocal Restrictions from 2007 upon the Clubhouse Lot were effectively rescinded by the adoption of the Readopted Restrictions in 2014 and that the HOA ratified the Readopted Restrictions by its execution of the January 23, 2014, deed. Appellees further argued that under the Readopted Restrictions, the HOA was not empowered to enforce the use restrictions appurtenant to the Clubhouse Lot; rather, only the Developer and Wilshire possessed such authority under the terms of the Readopted Restrictions.
By order entered October 23, 2015, the circuit court agreed with appellees and granted the motion for judgment on the pleadings. The circuit court specifically stated:
Order at 4-5. Thus, the circuit court concluded that the HOA "relinquished" its right to enforce the restrictions upon the Clubhouse Lot by its execution of the January 23, 2014, deed and the court effectively agreed with appellees that HOA lacked standing to enforce the 2014 Readopted Restrictions. This appeal follows.
In the October 23, 2015, order, the circuit court recited that it was granting Wilshire's motion for judgment on the pleadings. However, the circuit court's order clearly demonstrates that it considered matters outside the pleadings. When matters outside the pleadings are considered by the circuit court, we must treat it as a motion for summary judgment. Waddle v. Galen of Kentucky, Inc., 131 S.W.3d 361 (Ky. App. 2004). Summary judgment is proper where there exists no genuine issue of material fact and movant is entitled to judgment as a matter of law. CR 56; Waddle, 131 S.W.3d 361. And, to defeat a properly supported motion for summary judgment, the opposing party must present at least some affirmative evidence demonstrating a genuine issue of material fact. Waddle, 131 S.W.3d 361; Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky.1991). Given that the summary judgment involves no fact finding, our review of the circuit court's decision is de novo. 3D Enterprises Contracting Corp. v. Louisville and Jefferson Cnty. Metro. Sewer Dist., 174 S.W.3d 440 (Ky. 2005).
The HOA contends that the circuit court erred by rendering summary judgment that concluded that the HOA "relinquished" the right to enforce the use restrictions upon the Clubhouse Lot by execution of the January 23, 2014, deed. For the following reasons, we agree with the HOA.
It is uncontroverted that the Reciprocal Restrictions were executed and filed by the Developer only in 2007 and that these restrictions specifically limited the use of the Clubhouse Lot to a restaurant:
Under the Reciprocal Restrictions, the HOA was expressly empowered to enforce covenants or restrictions thereunder:
Some seven years thereafter, in 2014, the Developer and Wilshire executed the Readopted Restrictions as to the Clubhouse Lot, Golf Course, and swimming facility. Under the Readopted Restrictions, the uses of the Clubhouse Lot were expanded to:
However, the Readopted Restrictions specifically provided that only the Developer or Wilshire was entitled to enforce the use restrictions upon the Clubhouse Lot:
Again, we note that the HOA was not a party to the Readopted Restrictions, nor is there any explanation in the record why they were excluded, given the HOA had leased the golf course from the Developer on January 1, 2014.
The Readopted Restrictions were filed of record "immediately prior" to the filing of the deed dated January 23, 2014, from the Developer to the HOA, conveying certain real property designated as Lot 1 and known as the swimming facility. The deed was tendered as part of a settlement in late 2013 between the parties arising from litigation in Fayette Circuit Court between the HOA, Developer, Wilshire and others. Unfortunately, we cannot determine the relevance of the terms of the settlement to this case as it is not part of the record below or on appeal. However, the Deed to the HOA was from the Developer only and appellees are not parties to this deed. Instrumental to this appeal is the following language contained in the January 23, 2014, deed of conveyance from the Developer to the HOA:
The circuit court interpreted the above language as manifesting the HOA's ratification of the terms of the Readopted Restrictions and by so doing relinquishing the HOA's right to enforce restrictions upon the Clubhouse Lot that it had been granted in 2007. We believe the circuit court's interpretation of the January 23, 2014, deed was overly broad and erroneous as a matter of law.
It is well-established that the interpretation of a deed presents an issue of law. Phelps v. Sledd, 479 S.W.2d 894 (Ky. 1972). The terms of a deed are generally given their ordinary meaning, and a deed must be interpreted as a whole. Id.; C.W. Hoskins Heirs v. Boggs, 242 S.W.3d 320 (Ky. 2007).
Under the plain language of the January 23, 2014, deed, the HOA, as grantee, agreed to accept and abide by the Readopted Restrictions as to Lot 1, the lot conveyed thereunder. The precise terms of the January 23, 2014, deed read that the "Grantee [HOA] . . . hereby agrees to accept, hold, use, and abide that Portion of Lot 1 in compliance" with the Readopted Restrictions. By such terms, the HOA did not, however, agree to accept or abide by the Readopted Restrictions as to any other lot, in particular the Clubhouse Lot, nor did it agree to nor was it a party to the Readopted Restrictions generally. The language of the January 23, 2014, deed clearly manifested the parties' intent that Lot 1 (the swimming facility) be bound by the Readopted Restrictions, and this interpretation is consistent with the purpose of the January 23, 2014, deed which was to convey Lot 1, with any appurtenant restrictions thereon, to the HOA.
Hence, under the terms of the January 23, 2014, deed, the HOA agreed to abide by the Readopted Restrictions as to Lot 1 only and nothing more. The HOA did not surrender its rights under the 2007 Reciprocal Restrictions to enforce the use restrictions on the Clubhouse Lot especially since it was not a party to the Readopted Restrictions. To conclude otherwise would completely undermine the entire restrictive scheme for the development from its creation which was to promote a residential subdivision in conjunction with the use and enjoyment of a golf course. In other words, the entire development was premised upon the facilitation of a golf course community. When reviewing restrictive covenants like those set out in this case, an important factor in determining what was intended by the parties is the general scheme or plan of the development and the attending circumstances. Colliver v. Stonewall Equestrian Estates Assoc., Inc., 139 S.W.3d 521 (Ky. App. 2004). At all times during the history of this development, its focus was to be a residential golfing community. Given that the golf course was leased by the Developer to the HOA on January 1, 2014, prior to the adoption of the Readopted Restrictions, we believe the development scheme provided for the HOA to retain the right to enforce the use restrictions on the Clubhouse Lot.
The circuit court erred as a matter of law by interpreting the January 23, 2014, deed otherwise and entry of summary judgment based upon the language of the deed was improper. For this reason, we reverse the circuit court's summary judgment in favor of appellees and remand for additional proceedings on the HOA's amended complaint below.
For the foregoing reasons, the Order of the Scott Circuit Court is reversed and remanded for proceedings consistent with this opinion.