Turpin v. Watts

David and Karen Watts (defendants) owned adjoining lakefront lots in a specified subdivision (lots 3 and 4). Lot 3 had a residence on it, and lot 4 was unimproved. The lots were subject to a restrictive covenant requiring that any building be located a certain distance from the lakeshore (the setback). The setback restriction was widely violated in the subdivision. In 1975, William and Ann Turpin (plaintiffs) became interested in purchasing lot 3 from the Watts. The Turpins negotiated to purchase the lot with improvements, furnishings, a boat, and other items for $52,000. The close of escrow was deferred until April 1976 while the Turpins moved into town from another area. In March 1976, William observed house-construction stakes on lot 4 that were “entirely too close” to the setback line. William confronted David, who replied that he could not build any further back on lot 4. William advised David to change his style of house. According to William, David did not offer to rescind the sales transaction but merely offered to pay for the Turpins’ moving costs. In contrast, David testified that he offered to cancel the real estate contract, pay William back, and cover the Turpins’ costs to move back home. The Turpins rejected David’s offer. Thereafter, the Turpins sued the Wattses to enforce the setback restriction. At the time of the lawsuit’s commencement, the Wattses had constructed about 75 percent of their house. The house, when fully constructed, would block 3.9 percent of the view available to lot 3. The cost of razing and reconstructing the Wattses’ house in conformity with the setback restriction would be about $39,000. The trial court found generally for the Wattses and refused to enter an injunction. The Turpins appealed.