Equitable Relief: One seeking Equity MUST do Equity
How about this longstanding maxim: “One maxim of equity is that a litigant going into equity must go with clean hands, and another is that he who seeks equity must do equity.” Davis v. Verandah at Lake Grady Homeowners Association, Inc., 48 Fla.L.Weekly D142a (Fla. 2d DCA 2022) quoting Engebretsen v. Engebretsen, 11 So.2d 322, 329 (Fla. 1942). When you read it, it is hard to disagree with it, right? It just makes sense.
In Davis, the 2007 plat for a subdivision was recorded by a developer. The developer subsequently advertised its subdivision as a deed-restricted community. The plaintiffs were interested in purchasing a lot in this subdivision and communicated with the developer that it would be a deed-restricted community. The plaintiffs received a copy of a land sale contract and signed a homeowner’s association (HOA) disclosure acknowledging receipt of the declaration of covenants, conditions, and restrictions (also known as CCRs).
In 2008, the developer and plaintiffs planned to close on a lot. The title agent, however, noted the declaration of covenants, conditions, and restrictions had not been recorded. The developer explained they would be recorded and that the plaintiffs signed off on receipt of the covenants, conditions, and restrictions. Closing on the lot occurred with parties agreeing the developer would record the covenants, conditions, and restrictions post-closing, which occurred. The warranty deed further stated it was subject to covenants, restrictions, easements, etc.
The plaintiffs lived on the property for 10 years without challenging the application of the covenants, conditions, and restrictions to their lot. In 2018, the plaintiffs decided to sell their lot and asked the HOA to remove the covenants, conditions, and restrictions from their lot. The plaintiffs contended, for the first time, the lack of recordation of the covenants, conditions, and restrictions prior to closing invalidated them with respect to their lot.
The plaintiffs filed a lawsuit seeking declaratory relief that the covenants, conditions, and restrictions were unenforceable as to their lot in addition to a quiet title action to obtain title free from the covenants, conditions, and restrictions. The HOA filed a counterclaim to enforce the covenants, conditions, and restrictions.
After competing motions for summary judgment, the trial court granted the HOA’s motion for summary judgment deeming the plaintiff’s lot subject to the covenants, conditions, and restrictions. The plaintiffs appealed. And lost.
An action for quiet title is an equitable action. “Having come to this court in search of equity, the [plaintiffs] must abide by the rules governing equitable relief—that ‘he who seeks equity must do equity.’” Davis, supra.
The problem for the plaintiffs was that they didn’t do equity:
Based upon the record before us, the [plaintiffs] do not come to the table with clean hands where they fail to acknowledge that the 2008 deed conveying the property to the [plaintiffs] clearly indicates that the property would be burdened by the CCRs [covenants, conditions, and restrictions]. In his deposition, Mr. Davis testified that before he and his wife purchased their lot, they acknowledged that the subdivision was to be deed-restricted and that their property had CCRs attached to it. He admitted to receiving the CCRs unsigned and stated that his “expectation was that the draft covenants [he] reviewed encumbered the property at the time of closing.” Until early 2018, he believed the CCRs encumbered his lot and ran with the land, and therefore he accepted them when he received the deed. He acknowledged that he received the Association disclosure form stating his lot was subject to the CCRs. He was never told the CCRs were recorded before closing, and he could not “recall” his title agent asking him if he wanted to delay the closing. Against this backdrop, we focus upon the [plaintiffs’] arguments.
The main infirmity with this argument is that the deed clearly indicates the property was bound by CCRs. The deed states, in relevant part, that [developer] conveyed the lot “subject to covenants, restrictions, easements of record and taxes for the current year.” The language is clear.…Consequently, the deed clearly indicates that the CCRs bind the property.
The fact that the CCRs were recorded after the sale is immaterial because the parties intended for the lot to be encumbered by the CCRs that were to be recorded. The property was conveyed subject to the same CCRs discussed by the parties for two months prior to the sale, and the [plaintiffs] have not cited any precedent that requires CCRs to be recorded prior to sale in order to bind the parties.
Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.