Circuit Court LC No. 2014-002282-CH
Before: O'Connell, P.J., and Murphy and K. F. Kelly, JJ.
appeal by right an order denying their request for injunctive
relief. Plaintiffs sought to preclude defendant from renting
out a lake house for transient short-term use, arguing that
such use violated certain restrictive
covenants. The trial court found that the
restrictive covenant was ambiguous and that, as a result, the
law required free use of the property including transient
short-term rentals. Finding no such ambiguity, we
Plaintiffs filed an amended complaint for breach of the
restrictive covenants and nuisance against defendant, their
neighboring property owner, who rented out a lake house for
transient short-term use. Plaintiffs alleged that the rentals
violated the restrictive deed covenants limiting
defendant's use of the premises to "private
occupancy" and prohibiting "commercial use" of
the premises. Plaintiffs sought injunctive relief in the form
of an order enjoining any further rental activity and abating
the purported nuisance. No trial was conducted, nor does it
appear that any hearing took place. Instead, the parties
submitted the following stipulated facts to the trial court
6. Plaintiff are owners of real property located in Caledonia
Township, Alcona County, Michigan described as follows:
"Lot 4 of Doctor's Point, a subdivision recorded in
Liber 1 of Plats, Page 47, Alcona County Records, commonly
known as 6351 Oak Street, Hubbard Lake, Michigan 49747 . .
7. Defendant, as Trustee of the Cecilia L. Kaurich Trust, is
the owner of real property located in Caledonia Township,
Alcona County, Michigan as follows::
"Lot 1 and part of Lot 2 of Doctor's Point, a
subdivision recorded in Liber 1 of Plats, Page 47, Alcona
County Records, commonly known as 653 Oak Street, Hubbard
Lake, Michigan 49747 . . ."
8. The subject cottage is a two-story structure with 150 feet
of frontage on Hubbard Lake. It is approximately 2000 square
feet in size and contains four bedrooms.
9. Defendant Peasley has owned the cottage since 2009 and
Defendant has been renting it during the summer season each
year since then.
10. Defendant advertises its rental availability on-line
through a national website, www.homeaway.com, which
also serves as the medium for payment.
11. All rental agreements are between Defendant Peasley and a
single responsible signatory.
12. The renter must be at least 26 years old, and the rental
is limited to 10 guests with no pets allowed.
13. The year 2016, which is typical of the rental history,
shows 64 days booked over the four-month period of May
through August. No dates have yet been booked in September.
14. Defendants have rented and continue to rent the Peasley
Property on a short-term basis, for a minimum of two (2)
nights to seven (7) nights for each rental, with prices
ranging from $150.00 - $225.00 per night to $850.00 - $1,
700.00 per week depending upon the season, Spring May 19 -
May 21, 2016; Summer May 22nd - September 2016.
15. The Defendant's calendar for 2016 reflects rentals
for 10 different families and one business group (Leadership
Retreat). The rentals average six (6) days in length.
16. There is no rental or business office maintained on site,
no bed and breakfast service, and no other services provided
while renters [are] on site[, ] such as housekeeping or
17. Title to the Eager Property and Peasley Property
originated from a common Grantor who burdened Lots 1-9 of
Doctor's Point Subdivision with the same restrictive
covenants which are the subject of this proceeding.
18. Among the covenants and restrictions placed under the
chain of title of each of these parties' by warranty deed
dated February 26, 1946, recorded March 18, 1946 at Liber 78,
Page 432, Alcona County Records are the following:
" . . . the premises shall be used for private occupancy
only; . . .that no commodity shall be sold or offered for the
sale upon the premises and no commercial use made thereof, .
pertinent part, the restrictive covenant provided:
[T]hat the premises shall be used for private occupancy only;
that no building to be erected on said lands shall be used
for purposes otherwise than as a private dwelling and such
buildings as garage, ice-house, or other structures usually
appurtenant to summer resort dwellings are to be at the rear
of said dwellings; that such dwellings shall face the lake
unless otherwise specified; that no commodity shall be sold
or offered for sale upon said premises and no commercial use
made thereof . . . .
court recited the stipulated facts and acknowledged the
parties' arguments but then inexplicably denied
plaintiffs' request for injunctive relief.
interpretation of restrictive covenants is a question of law
that this Court reviews de novo." Johnson Family Ltd
Partnership v White Pine Wireless, LLC, 281 Mich.App.
364, 389; 761 N.W.2d 353 (2008), citing Terrien v
Zwit, 467 Mich. 56, 60-61, 648 N.W.2d 602 (2002).
Supreme Court has confirmed that restrictive covenants are
contracts with a particular value:
Because of this Court's regard for parties' freedom
to contract, we have consistently supported the right of
property owners to create and enforce covenants affecting
their own property. Such deed restrictions generally
constitute a property right of distinct worth. Deed
restrictions preserve not only monetary value, but aesthetic
characteristics considered to be essential constituents of a
family environment. If a deed restriction is unambiguous, we
will enforce that deed restriction as written unless the
restriction contravenes law or public policy, or has been
waived by acquiescence to prior violations, because
enforcement of such restrictions grants the people of
Michigan the freedom freely to arrange their affairs by the
formation of contracts to determine the use of land. Such
contracts allow the parties to preserve desired aesthetic or
other characteristics in a neighborhood, which the parties
may consider valuable for raising a family, conserving
monetary value, or other reasons particular to the parties.
[Bloomfield Estates Improvement Ass'n, Inc v City of
Birmingham, 479 Mich. 206, 214; 737 N.W.2d 670 (2007)
(citations and quotation marks omitted).]
terms of restrictive covenants, our Supreme Court has
recognized "two essential principles, which at times can
appear inconsistent. The first is that owners of land have
broad freedom to make legal use of their property. The second
is that courts must normally enforce unwaived restrictions on
which the owners of other similarly burdened property have
relied." O'Connor v Resort Custom Builders,
Inc, 459 Mich. 335, 343; 591 N.W.2d 216 (1999). These
types of cases are, therefore, decided on a case-by-case
construing restrictive covenants, the overriding goal is to
ascertain the intent of the parties. Where the restrictions
are unambiguous, they must be enforced as written."
Johnson, 281 Mich.App. at 389 (citations omitted).
"[T]he language employed in stating the restriction is
to be taken in its ordinary and generally understood or
popular sense, and is not to be subjected to technical
refinement, nor the words torn from their association and
their separate meanings sought in a lexicon."
Borowski v Welch, 117 Mich.App. 712, 716-717; 324
N.W.2d 144 (1982). Our Supreme Court has cautioned against
judicial over-stepping when interpreting restrictive
The dissent justifies its amending from the bench by
asserting that "[t]he absence of a definition in the
restrictive covenants" of the terms "commercial,
industrial, or business enterprises" leaves these terms
ambiguous, and thus "opens the terms to judicial
interpretation." We find this to be a remarkable
proposition of law, namely, that the lack of an explicit
internal definition of a term somehow equates to ambiguity-an
ambiguity that apparently, in this case, allows a court free
rein to conclude that a contract means whatever the court
wants it to mean. Under the dissent's approach, any word
that is not specifically defined within a contract becomes
magically ambiguous. If that were the test for determining
whether a term is ambiguous, then virtually all contracts
would be rife with ambiguity and, therefore, subject to what
the dissent in "words mean whatever I say they
mean" fashion describes as "judicial
interpretation." However, fortunately for the ability of
millions of Michigan citizens to structure their own personal
and business affairs, this is not the test. As this Court has
repeatedly stated, the fact that a contract does not define a
relevant term does not render the contract ambiguous. Rather,
if a term is not defined in a contract, we will interpret
such term in accordance with its "commonly used
meaning." [Terrien, 467 Mich. at 75-76
(citations and footnotes omitted).]
terms "private occupancy only" and "a private
dwelling, " coupled with the prohibition against
"commercial use" in the restrictive covenant are
clear and unambiguous and defendant is prohibited from