Smalley v. Stowe Mountain Club, LLC

Summary

The Vermont Supreme Court considered whether restrictive covenants in a 1959 deed applied to land within 200 feet of the plaintiff's property that was transferred among affiliated corporate entities and developed as part of a golf course. The court held that the deed did not create a general resort-free buffer zone, but that the phrase "sold and conveyed" was ambiguous as applied to the inter-corporate transfers. It reversed summary judgment and remanded for further discovery and proceedings concerning the transfers, the parties' intent, and the defendant's affirmative defenses.

Holdings

1. The 200-foot restriction was intended to run with the land and was enforceable by Smalley as part of the deed's residential covenant scheme.
2. The 1977 corrective deed did not extinguish the 200-foot restriction.
3. The deed did not prohibit resort activity on land retained by the grantor within 200 feet of Smalley's property; it applied only to land within that area that was sold and conveyed.
4. The deed was ambiguous as to whether transfers lacking a real change in ownership or control and involving alleged nonmonetary consideration constituted a sale and conveyance triggering the restriction.
5. Summary judgment for Smalley was improper because the defendant's evidence raised genuine issues of material fact concerning the nature of the transfers, the parties' intent, and its affirmative defenses; additional discovery was warranted.

Questions Presented

1. Whether the restrictive covenant requiring land within 200 feet of Smalley's property to be subject to the deed restrictions ran with the land and was enforceable by Smalley.
2. Whether the 1977 corrective deed extinguished or failed to preserve the 200-foot restriction.
3. Whether the deed unambiguously created a resort-free 200-foot buffer zone or instead restricted resort use only on land that was sold and conveyed within that area.
4. Whether the 2003 and 2004 intercorporate transfers constituted a sale and conveyance triggering the restrictive covenant.
5. Whether the defendant's evidence concerning the nature of the transfers and its affirmative defenses raised genuine issues of material fact requiring additional discovery and precluding summary judgment.
6. Whether the trial court exceeded the proper scope of injunctive relief.

Disposition

reversed_and_remanded