Palmetto Dunes Resort v. Brown

Palmetto Dunes Resort (Palmetto Dunes) (plaintiff) sued lot owner George Brown (defendant) to prevent Brown from constructing a house on his lot in the resort. The covenants restricted lot owners in residential areas from building without prior approval from the Palmetto Dunes Architectural Review Board, which was authorized to reject plans for “purely aesthetic considerations.” The preamble to the covenant stated that its purpose was to “assure and preserve certain high standards of aesthetics and materials . . . and to create certain procedures to enable the community to permanently control the quality of its neighborhoods.” Written building guidelines provided that board reviews were concerned with “all elements of aesthetics” and defined “major considerations” to include “(1) how the house [would] look to neighbors (2) color of stain (3) roof line (4) window treatments and exposure (5) general harmony with area and natural surroundings [and] (6) landscaping.” The guidelines also warned that it was not uncommon for the board to withhold its final approval and to make “suggestions for improvement that [its] experience [has] shown to be wise.” Despite having previously approved similar plans, the board twice rejected Brown’s plans, citing aesthetics and noting that the garage front and roofline overpowered the proposed house. When Palmetto Dunes discovered trees marked for cutting and stakes placed as if construction was imminent, it obtained a temporary order restraining Brown from starting construction on his lot. The trial court granted Palmetto Dunes’ request for a permanent injunction over Brown’s objections that the restrictive covenant subjecting his construction plans to the board’s aesthetic judgment was unenforceable and that even if it was enforceable, the board acted unreasonably in denying his plan. On appeal, Brown argued that there was a lack of objective standards to guide board decisions in the covenant, which Brown urged should be strictly construed.