To prove covenants were abandoned, landowner must show change to the neighborhood “of a radical and permanent nature” resulted from ignoring covenants

by Hannah Dankbar and Gary Taylor

Moore v Wolitich
Wyoming Supreme Court, January 15, 2015

The residents of Milatzo Subdivision in Cheyenne, Wyoming filed a complaint against Jennifer Moore who ran Silly Bear Daycare for operating a daycare out of her home in the subdivision. The district court found that the daycare violated the protective covenants of the subdivision. Moore appealed.

The covenants in question were adopted on June 27, 1979 and state: “[n]o lot shall be used except for residential purposes,” and that “[n]o residential lot shall be used as a business.” In September 2012 Jennifer Moore began operating Silly Bear Daycare out of her home that was purchased earlier in the year. In October 2012 multiple residents in the subdivision filed a complaint. The Moore’s did not contest the finding that they were running a business; rather, the Moores advanced two arguments on appeal: (1) that the covenants had been abandoned and were therefore unenforceable, and (2) that the activities of the other landowners left them with “unclean hands” and therefore unable to enforce the covenants.

Abandoned covenants.  Under Wyoming caselaw, to find that a covenant has been abandoned the violations of that covenant that have been acquiesced to by the subdivision’s landowners “must be so substantial as to support a finding that the usefulness of the covenant has been destroyed, or that the covenant has become valueless and onerous to the property owner.”  The abandoned covenants must also result in a change to the neighborhood “of a radical and permanent nature.”  To prove their point the Moores cited other covenant violations that take place in the subdivision, including numerous trailers, sheds, boats, unregistered vehicles and other items on various properties throughout the subdivision in violation of the covenants.  The Moores also pointed to a babysitting business and an identity theft victim assistance business being run from homes in the subdivision, as well as parking numerous business-associated vehicles and trailers at other homes.  The covenants also create a Building and Covenants Committee to resolve issues and violations, but the committee does not exist.

The Wyoming Supreme Court disagreed that these activities amounted to abandonment of the covenants.  The evidence presented at district court was that the other business activities were occasional or incidental, and not the type of substantial, routine, and permanent business activities that would change the nature of the neighborhood.  Moreover, the Moores failed to produce evidence concerning how long the trailers, sheds, and other items of concern had been present, or how they impacted the neighborhood in a way that was “so great, or so fundamental or radical as to neutralize the benefits of the restrictions to the point of defeating the purpose of the covenants.”

Doctrine of “unclean hands.”   The court found that the Moore’s were aware of the covenants when they bought the home and signed the covenants.  They did not consult an attorney or their neighbors in the subdivision to determine whether the covenants had been abandoned.  They were aware of the covenants and flagrantly ignored them by opening the daycare.  The Supreme Court affirmed the district court’s finding that the equities of the case weighed against the Moores for this reason.

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