Laura Goddard v. Tyler Hockman and Emily A. Hockman

Summary

The Supreme Court of Appeals of West Virginia reviewed a dispute concerning whether property purchased at a trustee's sale was subject to covenants, restrictions, and easements created after the deed of trust. The court held that the circuit court clearly erred in finding the purchasers were not bona fide purchasers and concluded that the trustee's sale extinguished the later covenants and restrictions. The judgment was reversed and remanded with directions.

Holdings

1. An appeal from a declaratory judgment is reviewed de novo as to the legal ruling, with underlying factual determinations reviewed for clear error; review of a Rule 59(e) motion uses the standard applicable to the underlying judgment.
2. A bona fide purchaser at a regularly conducted trustee's sale under a recorded deed of trust takes the property free and clear of recorded contracts, covenants, and restrictions made by the grantor after execution of the deed of trust when neither the trustee nor beneficiary was a party to them.
3. The Stephens were bona fide purchasers of the remaining acreage; a single reference to the final plat in the trustee's notice of sale was insufficient to charge them with notice of the restrictions contained in the plat, its notes, or the declaration.
4. The lender's release of individual lots from the deed of trust did not implicitly incorporate the CIS, final plat, its notes, or the declaration into the deed of trust.
5. Respondents could not invoke the common-scheme doctrine or unity rule to obtain an easement or reinstate restrictions in the common area because their claimed rights did not exist before the trustee's sale and their deeds contained no language granting such rights.

Questions Presented

1. Whether the Stephens were bona fide purchasers at the trustee's sale and therefore acquired the remaining acreage free of covenants and restrictions recorded after the deed of trust.
2. Whether a reference to the subdivision's final plat in the trustee's notice of sale gave the Stephens notice sufficient to defeat bona fide-purchaser status.
3. Whether the lender's release of certain lots from the deed of trust implicitly incorporated the subdivision's common-area covenants and restrictions into the deed of trust.
4. Whether the common-scheme doctrine or unity rule gave respondents an enforceable easement or other interest in the common area.
5. What standard of review applies to the appeal from the denial of declaratory relief and the Rule 59(e) motion.

Disposition

reversed_and_remanded