Appeal from the Order July 2, 2012 In the Court of Common Pleas of Westmoreland County Civil Division at No(s): 2710 of 2011
BEFORE: BOWES, DONOHUE, and MUNDY, JJ.
The instant appeals involve the application and enforceability of restrictive covenants contained in the Declaration of Covenants and deeds to property located in Wimmerton Community ("Community"), a planned community in Unity Township. The First Wimmerton Community Association, Inc. ("Association") commenced this action seeking to enjoin Sean M. Lynch and Lynn O'Hara ("Property Owners") from installing an in-ground pool and fence on their property. The trial court granted summary judgment in favor of Property Owners and denied injunctive relief to the Association. The Association appealed, and the Property Owners also appealed and challenge that portion of the trial court's holding that the restrictive covenants were applicable to their property. After thorough review, we vacate the order granting summary judgment and remand for further proceedings consistent herewith.
The record reveals the following. In 1972, the Saint Vincent Arch Abbey and Benedictine Society of Westmoreland County conveyed approximately 1, 000 acres of land contiguous to St. Vincent College to Wimmer Corporation ("Wimmer"), a 501(c)(3) land trustee. Wimmer was charged with managing, selling, and developing that property. Deposition, Fr. Edward V. Grinder, at 14. ("Grinder Deposition"). That same year, Wimmer and National Development Corporation ("NDC") entered into an agreement to develop that land as a planned community known as the "Wimmerton Community, " which was "designed to enhance the value of the land and of the area" and "to increase the quality of living standard and the quality of housing available in Unity Township." Id. at 26-7. On March 12, 1974, the entities amended their agreement because Wimmer was in the process of purchasing another 1, 000 acres from the Benedictine Society of Westmoreland County. Wimmer subsequently acquired that real estate on April 6, 1974, and the parties wanted to include the new property within the Community. The agreement recited that Wimmer and NDC wished to pursue the development of this property and conferred right of access upon NDC for purposes of studies, surveys, and test borings, and all plans were subject to Wimmer's approval. Wimmer agreed to lease other portions of the property to NDC from time to time to permit development as per the terms set forth in the agreement. The agreement also provided that Wimmer could terminate the agreement, and in that event, all drawings, maps, and other descriptive materials would become Wimmer's property.
On January 8, 1975, NDC, as the Declarant, joined by Summit Associates, a Pennsylvania limited partnership, entered into a Declaration of Covenants for Wimmerton. According to Fr. Edward V. Grinder, this document "established the rules, the covenants, by which Wimmer was willing to sell the land to individuals through the developer[, ]" and it was approved by the board of directors of Wimmer. Grinder Deposition, at 22-3. It is recited therein that the Declarant NDC, "the owner and/or lessee of real property described in Article II, " desired to create a residential community with common areas and facilities for the benefit of the community. In order to provide for the "preservation of the value, amenities, and environmental quality in said community" and for the maintenance of common areas and facilities, it desired to subject the property to covenants and restrictions. According to Fr. Grinder, the intent was that, as NDC needed more land, Wimmer would supply it, and "the covenants were to bind all of the properties involved in the Wimmerton development." Id. at 31. Exhibit A described the land expressly governed by the covenants in the Declaration. Exhibit B referred to the reserve area owned by Wimmer, which could "from time to time be annexed by the Declarant, its successors and assigns, and made subject hereto without the consent of members for a period of 20 years from the date of this instrument." Declaration, Article II, Section 4.
The Declaration also provided for the creation of an association, a nonprofit corporation imbued with the power and responsibility for maintaining the common areas and community facilities and enforcing the covenants and restrictions. It provided further that, since Wimmer as the fee owner or lessor of the property, "has a continuing interest in the preservation of the value, amenities, and environmental quality of the community, " Declaration, at 2, "the property was subject to the superior interest of Wimmer Corporation to be sold, leased, used . . . subject to the covenants and restrictions, all of which are deemed to run with the land." Id. at 3.
The parties agree that the Shenandoah Street property owned by Property Owners and which is located in Plan 7 is described in Exhibit B and included within the plan for Wimmerton Stage I. Article II, Section 4 provides that the land described in Exhibit B "may from time to time be annexed by Declarant, its successors and assigns, and made subject hereto without the consent of Members for a period of twenty (20) years from the date of this instrument[, ]" provided the annexation is in accordance with the development plan previously approved by the FHA and includes premises included within the general plan for Wimmerton Stage I. It provides further that supplemental declarations of annexation should be used to add property to the scheme of covenants.
By virtue of the Declaration of Covenants, the owners of the lots acquire a "right and easement of enjoyment" in the common areas and facilities, Article IV, Section 1, but retain all responsibility for the maintenance and repair of their dwellings and appurtenances in good order, condition, and repair. The covenants required that homeowners apply to the Association's Architectural and Environmental Control Committee ("Committee") for permission to alter or make any improvement to their property, including fences and walls.
In the mid to late 1980s, NDC and Wimmer were involved in a dispute that progressed to litigation over the 1974 Amended Agreement for the development of the Community. According to Fr. Grinder, the dispute stemmed from NDC's 1984 failure to meet its contractual obligation to Wimmer to generate $100, 000 in rental income. Id. at 36. Wimmer informed NDC that its right of access to the land was terminated, and NDC sued Wimmer, claiming rights independent of the agreement. After protracted litigation, the parties entered into a Final Settlement Agreement in 1989, which Fr. Grinder signed in his capacity as President of Wimmer. In exchange for Wimmer's payment of $100, 000 and two $50, 000 promissory notes to NDC, NDC promised to deliver all of the development plans and assigned all of its rights and interest in the wastewater tap-ins for the entire development, "not just Plan 6, not just Plan 7, but all of the plans yet to be developed, " to Wimmer. Grinder Deposition, at 42.
Paragraph 8 of the settlement agreement provided that NDC would deliver the development plans and authorize its architect and engineer to deliver to Wimmer the plans and "as built" drawings for the community. According to Fr. Grinder, this language indicated that Wimmer purchased, and NDC assigned, the right to develop the property, and explained why Wimmer identified itself as NDC's successor. Id. at 43. At the time, Wimmer was the owner of all lots in Plan 7, the Plan was filed and recorded, and Wimmer was paying taxes on those lots. Id. at 66.
On January 6, 1995, Wimmer, "in its own right and as the successor to the rights of National Development Corporation" entered into a Supplemental Declaration of Annexation of Wimmerton Plan No. 7, which was subsequently recorded on January 17, 1995. The restrictive covenants appear in all successive deeds, including the deed transferring ownership from Paul Berger General Contracting, Inc. to Property Owners on August 15, 2003.
In 2009, Property Owners applied to the Committee for permission to install an in-ground pool and fence on their Shenandoah Street property located in subdivision Section 7. The application was denied without explanation. In 2011, the Committee learned that Property Owners had applied for a building permit from Unity Township to install an in-ground pool on their property. The Association notified Property Owners that no improvement or structures could be erected on their property until the plans had been submitted and approved by the Committee. Counsel for Property Owners responded that they did not intend to submit plans and specifications because an application had been submitted and denied in 2009, and it would be futile to re-submit the same request. Instead, Property Owners intended to proceed with the swimming pool.
The Association filed a complaint against Property Owners on April 26, 2011, seeking equitable relief to enforce the restrictive covenants in the Declaration governing their property and enjoin installation of the swimming pool and appurtances. The Association alleged therein that a swimming pool was an "outbuilding" prohibited under Article VIII, Section 1(k) of the Declaration of Covenants for Wimmerton dated January 8, 1975, and recorded in the Recorder of Deeds Office of Westmoreland County. Furthermore, the Property Owners' decision to go forward without approval from the Committee was allegedly a violation of the covenant contained in Article VII, Section 2 of the Declaration. On May 6, 2011, the Association filed a motion for preliminary injunction asking the court to enjoin installation of the pool and preserve the status quo pending adjudication of its claims.
On the same day the complaint was filed, Property Owners filed an application for architectural and property improvements with the Committee, requesting permission to install an in-ground pool and a retaining wall and fence connected with brick pillars. They subsequently filed an Answer and New Matter to the Association's complaint alleging that the covenants were not applicable to their property as Plan 7 was never properly annexed to the Declaration of Covenants. Alternatively, Property Owners contended that, even if the covenants were applicable, the restrictions contained therein did not prohibit installation of an in-ground ...