Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Thiel v. Goyings

Supreme Court of Michigan

July 24, 2019

MATTHEW T. THIEL and NIKOLE M. THIEL, Plaintiffs/Counterdefendants-Appellees,
v.
DAVID L. GOYINGS and HELEN M. GOYINGS, Defendants/Counterplaintiffs-Appellants. and WILLIAM TRAYWICK and MARCIA TRAYWICK, Intervening Plaintiffs/ Counterdefendants-Appellees,

          Argued On Application For Leave To Appeal March 6, 2019.

          Chief Justice: Bridget M. McCormack, Chief Justice Pro Tem: David F. Viviano, Justices: Stephen J. Markman Brian K. Zahra Richard H. Bernstein Elizabeth T. Clement Megan K. Cavanagh

         Syllabus

         Matthew T. Thiel and Nikole M. Thiel brought an action in the Allegan Circuit Court against David L. Goyings and Helen M. Goyings, requesting that the court enjoin the Goyingses' construction of a home in the Timber Ridge Bay subdivision of Watson Township and order that the modular components of the home be removed or destroyed because the home violated the subdivision's restrictive covenants prohibiting the construction of modular homes. About a month after the suit was filed, William and Marcia Traywick joined as intervening plaintiffs. The Goyingses had selected Heritage Custom Builders, Cassidy Builders, Inc., and Ritz-Craft Corporation of Michigan, Inc., to design and build their home. Those builders specialized in systems-built homes constructed using a hybrid method of homebuilding that integrated modular components into on-site, stick-built construction. Through this method, part of the Goyingses' home was stick-built on-site, and three modular components were built off-site and delivered to the lot. In total, the completed home was to be composed of about 59% stick-built construction and 41% modular components. When the Goyingses' neighbors noticed delivery of modular components to the lot, Matthew Thiel and William Traywick contacted the Goyingses to inform them that installation of the modular home would violate the restrictive covenants and that they would take legal action. The Goyingses continued with the home's construction, and the modules were attached to a foundation of the same square footage as the assembled modules. The Thiels brought the instant lawsuit and moved for summary disposition, which the trial court denied. The case proceeded to a three-day bench trial, at which the court heard testimony from the parties and from a township building official, an appraiser, and the Goyingses' builder. The court, Margaret Zuzich Bakker, J., held that the restrictive covenants did not contemplate the type of hybrid home that the Goyingses had built and that the home was "sufficiently constructed, valued, and congenial as to allow it to remain." Plaintiffs appealed. In an unpublished per curiam opinion issued on August 8, 2017 (Docket No. 333000), the Court of Appeals, Hoekstra, P.J., and Murphy and K. F. Kelly, JJ., reversed, holding that the restrictive covenants were unambiguous and that the Goyingses' home was in clear violation of those covenants. The Goyingses sought leave to appeal in the Supreme Court, and the Supreme Court ordered and heard oral argument on whether to grant the application or take other action. 501 Mich. 1030 (2018).

         In an opinion by Chief Justice McCormack, joined by Justices Viviano, Bernstein, Clement, and Cavanagh, the Supreme Court, in lieu of granting leave to appeal, held:

         Courts review restrictive covenants with a special focus on determining the restrictor's intent. Unambiguous restrictions must be enforced as written, but any uncertainty or doubt must be resolved in favor of the free use of property. In this case, the dispute was not about the definition of the word "modular"; rather, the dispute concerned how the subdivision's restrictive covenants defined a "modular home." The restrictive covenants stated, "All residences shall be stick built on site and no . . . modular home . . . will be erected on any of the Parcels unless provided for herein." A fair reading of a modifier like "modular" applies its meaning to the noun as a whole. The limiting factor is the extent to which the noun accepts the modifier. A homogenous or abstract thing often accepts the modifier wholly (a blue circle, a truthful statement); most things that exist in the real world have some degree of heterogeneity and fully accept modifiers within the bounds of reason (a red car, a friendly neighbor). And houses, like cars or people, are not just one thing. Accordingly, the most natural reading of the phrase "modular home" is a home that is mostly or generally modular. That is, a home is a modular home under the restrictive covenants if it is predominantly modular-more modular than not. If the phrase "pre-fabricated or modular home" were interpreted to include any home constructed using a modular or prefabricated component, that interpretation would render the covenant provision unenforceable because every home doubtless contains some prefabricated part. Additionally, reading the phrase "modular home" in the context of the other terms revealed that a modular home is of a kind with prefabricated homes, geodesic domes, berm-houses, mobile homes, shacks, and barns. The covenants' use of different terms also suggested an important difference between a permissible home and a prohibited one in how it comes to be built. The covenants' use of verbs like "move," "place," or "locate" suggested picking up something that already exists and plunking it down on the lot, fully formed. And a difference exists between structures that are constructed versus erected: to construct a structure evokes forming or creating that structure by putting together its parts, whereas to erect a structure connotes assembling or raising it. In this case, the Goyingses' home was not a relocated residence because each modular component was merely a raw piece of construction material delivered to the lot, and the Goyingses' home was also not a manufactured housing unit because the common understanding of that term is a mobile home. The materials, workmanship, quality, and outward appearance of the Goyingses' home were indistinguishable from a site-built home. The language of the restrictive covenants supported the trial court's finding that there is a distinction between a modular or prefabricated home and a site-built home with modular or prefabricated components. Therefore, applying the covenants to the undisputed facts found by the trial court, the Goyingses' home was not a "pre-fabricated or modular home" as the restrictive covenants use that phrase because the Goyingses' home was mainly stick-built with modular components integrated into it. The Court of Appeals erred when it implicitly held that the restrictive covenants prohibited any home that contained a module.

         Court of Appeals opinion reversed; trial court decision reinstated.

         Justice Viviano, joined by Chief Justice McCormack, concurring, agreed in full with the majority's opinion but wrote separately to explain that an alternate basis for reversal would be the Court of Appeals' erroneous conclusion that the only solution was to grant injunctive relief and order that the home be removed. The Court of Appeals based this conclusion on a case decided over 60 years ago, Cooper v Kovan, 349 Mich. 520 (1957). Cooper merely recognized that the trial court in that case went too far in an effort to craft an equitable remedy, substituting its own judgment for that of the parties; Cooper did not divest trial courts of their equitable discretion to determine whether an injunction is the proper form of relief in light of all the facts, nor did Cooper bar consideration of all equitable defenses apart from the three expressly mentioned. However, the Court of Appeals erroneously interpreted Cooper as establishing a per se rule that absent three specific circumstances, a trial court must enforce by injunction a valid restrictive covenant. Justice Viviano concludes that this reading of Cooper conflicts with caselaw prior to Cooper and with general principles of equity and that the Supreme Court should, in an appropriate future case, clarify that Cooper did not abrogate the rule long recognized by the Supreme Court that the enforcement of a restrictive covenant is a matter of the trial court's discretion.

         Justice Markman, joined by Justice Zahra, dissenting, would have held that the Court of Appeals correctly determined that the Goyingses' home was a modular home and that the home violated the subdivision's restrictive covenant prohibiting the erection of modular homes. A review of the common and ordinary understandings of what comprises a modular home-and in particular the unanimous characterizations of professionals who were familiar with such homes-compelled the conclusion that the Goyingses erected a modular home in contravention of the restrictive covenant. The covenant specified that "no . . . modular home . . . be erected on any of the Parcels . . . ." Using dictionary definitions, the covenant proscribed the "fitting together of materials or parts" to create a "place of residence" that is "constructed using standardized units." In characterizing whether a home is modular, a litany of factors, each of which may be relevant, or even sometimes determinative, must be considered, including the proportion of the home that is comprised of modular units, the nature of the modular units, and the overall relationship of the modular units to the structure itself. In this case, three modular units were manufactured in a factory; these modular units were enclosed, freestanding structures that were identified as entire and discrete rooms adorned with doors, windows, cabinets, countertops, mirrors, and lighting and plumbing fixtures. And the modules were of such size and substantiality that there could be no home without them. Thus, the home comported with the plain and ordinary understanding of what comprises a modular home, regardless of whether it achieved the majority's own standard of "predominance." Moreover, the professional characterizations supported this understanding of modularity. Every professional source, beginning with the building contracts and ending with the inspections and evaluations, characterized the home as modular: the company with which the Goyingses contracted for site improvements described the home as modular in its contract, the building-permit application described the property as modular, the building permit gave the Goyingses permission to install a modular home, the uniform residential appraisal report prepared by an appraisal company stated that the home was modular, a building system approval report from the Michigan Department of Licensing and Regulatory Affairs classified the home as modular, the manufacturer of the home described itself as a modular home manufacturer, a company that assisted with the erection of the home described it as modular, another company involved in the design process repeatedly referred to the home as modular, a township building official testified that there was "no doubt" that the home was modular, and another appraiser who was qualified as an expert witness in the area of residential real estate appraisals testified that the home was modular. These characterizations should have been given considerable weight in determining whether the home was modular. Finally, with regard to the appropriate remedy for violation of the covenant, Justice Markman agreed with the Court of Appeals that removal of the home was appropriate. When parties have freely established their mutual rights and obligations through the formation of unambiguous contracts, the law requires that courts enforce the terms and conditions contained in such contracts. The Goyingses knowingly violated the covenant by erecting a modular home, and because the home could not be made nonmodular absent its removal, the only effective remedy was the removal or dismantling of the home.

         BEFORE THE ENTIRE BENCH

          OPINION

          McCormack, C.J.

         David and Helen Goyings designed and built a retirement home on a lakefront lot. Their neighbors insist that the Goyingses violated the subdivision's restrictive covenants that bar "pre-fabricated or modular home[s]" (along with mobile homes, berm-houses, geodesic domes, shacks, and barns) and that they must tear it down.

         After a three-day bench trial, the trial court found no cause of action and dismissed the case. But the Court of Appeals concluded that the trial court erred when it held that the covenants "did not contemplate a home of the type built by Defendants." The Court of Appeals reasoned that the Goyingses' home unambiguously fit the commonly understood definition of "modular" but never construed the disputed term used in the covenants- "modular home." The panel reversed and held that the trial court should have granted judgment in the neighbors' favor and ordered the Goyingses to tear down their new home.

         We disagree. We reverse the Court of Appeals and affirm the trial court's dismissal of the case.

         I. FACTS AND PROCEDURAL HISTORY

         Timber Ridge Bay is a subdivision on the shores of Big Lake in Allegan County. Fourteen of the sixteen residential parcels within the subdivision are subject to Timber Ridge Bay's "Declaration of Restrictions, Covenants and Conditions," which was drafted by the developer and recorded with the county register of deeds in December 2006. At the time of trial, four homes had been built in the subdivision that were subject to these deed restrictions, covenants, and conditions.[1] Three of those belong to the Thiels, the Traywicks, and the Goyingses, respectively. The fourth homeowner has not joined in this litigation.

         As relevant here, the covenants provide:

COVENANTS, RESTRICTIONS AND CONDITIONS
Section 1. Establishment of Restrictions. In order to provide for congenial occupancy of the Premises, and for the protection of the value of the Parcels therein, the Parcels 1-14 shall be subject to the limitations set forth below:
* * *
B. Building and Use Restrictions.
* * *
3. Relocated Residences. No residences, including modular, manufactured, mobile or prefabricated homes, may be moved from a location outside the Premises and placed or located within a Parcel within the Premises.
4. Manufactured Housing Units. No manufactured homes, whether classified as a mobile home, modular home, or otherwise, and no prefabricated homes shall be permitted on any Parcel in the Premises, regardless of which building codes are applicable to said homes.
* * *
C. Residential Dwelling Restrictions
* * *
4. Miscellaneous Provisions. The height of any building will not be more than four (4) stories. If any portion of a level or floor within a residence is below grade, all of the level or floor shall be considered a basement level. All residences shall be stick built on site and no geodesic dome, berm house, pre-fabricated or modular home, mobile home, shack or barn will be erected on any of the Parcels unless provided for herein.

         The third sentence of § 1.C.4 is the source of the plaintiffs' complaint: the plaintiffs contend that the defendants' home violates the prohibition against erecting a "prefabricated or modular home."

         When the Goyingses built their new home on a lakefront lot, they selected Heritage Custom Builders, Cassidy Builders, Inc., and Ritz-Craft Corporation of Michigan, Inc., to design and custom-build it. These builders specialize in system-built homes constructed using a hybrid method of homebuilding that integrates modular components into traditional, on-site, stick-built construction. The Goyingses custom-designed their home (including the modular components) using a computer-aided design program. They also selected the interior colors and finishes for the carpet, flooring, backsplashes, and countertops.

         The majority of the home would be stick-built on-site. This included the entire lower-level walkout basement, garage, roof gables, roofing, front porch, stone columns, deck, and other portions of the home. But three modular components would be built off-site and delivered to the lot. Together these components matched the dimensions of the foundation and would be delivered on trailers, lowered into place using cranes, and secured to the foundation. From there, the components-described at trial as "just . . . raw piece[s] of construction material"-would require on-site construction to be incorporated into the home and to make the home habitable. After delivery of the system-built components, the general contractor would go on to install a furnace, water heater, plumbing, drain lines, and duct work throughout the entire home and complete the on-site construction to incorporate the modular components. All told, the completed home would be composed of about 59% stick-built construction and 41% modular components.

         The Goyingses began to build. They dug the basement, poured the foundation, and began on-site construction of the lower level. But the neighbors took notice when the Goyingses' custom-designed modular components (which were to make up the bulk of the ground-floor living space) arrived on trucks. That same day, the plaintiffs intervened- Mr. Thiel called the defendants to tell them that installation of the modular home on their parcel would violate the covenants. The Goyingses brushed off the objection, telling Mr. Thiel that a crane was scheduled to install the components the next morning and that they intended to move forward with construction. Mr. Traywick e-mailed the Goyingses to warn that the property owners would take legal action.

         All the same, the crane arrived, and over the next two days it moved the modular components into place so that they could be incorporated into the site-built structure. The modules were attached to a foundation of the same square footage as the assembled modules. They completed the home construction with on-site stick-building to install plumbing, an electrical system, a furnace, shingles, a garage, gables, a porch, and a deck and finished the basement.

         Plaintiffs Matthew and Nikole Thiel sued 10 days later, asking the Allegan Circuit Court to halt construction and order the modular components removed or destroyed. About a month after that, the Traywicks joined as intervening plaintiffs.

         After the trial court denied the plaintiffs' combined motion for summary disposition, the case proceeded to a three-day bench trial. The court heard testimony from the Goyingses, the Traywicks, and the Thiels, as well as three other witnesses: a township building official, an appraiser, and the Goyingses' builder. The Court also received de bene esse deposition testimony from the attorney who drafted the restrictive covenant in 2006, Zachary Bossenbroek.

         The parties do not dispute any of the trial court's factual findings. The court determined that the "home meets all of the standards and specifications of a stick-built home." It found that systems-building was a hybrid method of construction similar to modular construction but ultimately determined that "systems built" homes and "modular" homes occupied discrete categories. It found that the testimony was uncontroverted that the overall quality of the Goyingses' home would equal or surpass that of homes that are stick-built on-site. The completed home would be indistinguishable from a stick-built home in material quality and workmanship because the modules were constructed out of the same materials as a stick-built home and the construction methods used in the factory were the same as those used to build a home on-site. The home was subject to the same residential building codes as a stick-built home. And the builder affixed the modules to the foundation just as it would a framed, stick-built home.

         The court also found that the home's hybrid construction would not be visible. It would be visually attractive, and, from appearances, "it [would be] unlikely that anyone would know that the home had been built anywhere but on the property." The court also determined that although the plaintiffs believed "that knowledge that the construction of the home involved three modules would reduce the value of the other homes in the area," they did not present any evidence from an "appraiser, expert or other witness to support their belief."

         Finally, on the basis of testimony from the plaintiffs and de bene esse deposition testimony from the covenants' drafter, the court determined that the purpose of the covenants was to protect the value of the parcels by maintaining a consistent standard of aesthetics, quality, and value for all homes built within the subdivision. The covenants prohibited manufactured homes, mobile homes, and modular homes on the basis of the assumption that such homes" 'are not typically going to be of a standard and of esthetic [sic] appeal as what a stick built home would be . . . .' "

         The trial court held that although the restrictions, covenants, and conditions in the deed might not seem to be ambiguous in their wording, the covenants did not contemplate a home like the Goyingses built, which does not fit neatly into either the modular or stick-built category. Therefore, the court concluded that, reading the covenants as a whole and resolving all doubts in favor of the free use of the property, the Goyingses' home conformed to the intent of the drafter. It held: "While an entirely modular, premanufactured or prefabricated home cannot be moved onto the properties located within Timber Ridge Bay, the home designed by [the Goyingses] is sufficiently constructed, valued, and congenial as to allow it to remain. A systems-built home of similar value, construction and congeniality shall be allowed on the Timber Ridge Bay properties."

         The Court of Appeals reversed. The panel believed that the trial court incorrectly read an ambiguity into the covenant, reasoning that "the restrictive covenant was not rendered ambiguous for failure to specifically define 'modular.'" Thiel v Goyings, unpublished per curiam opinion of the Court of Appeals, issued August 8, 2017 (Docket No. 333000), p 6. The panel also concluded that the defendants' "tortured use of the term 'systems built'" did not require a different result because "the trial court correctly concluded that the two terms [modular and systems-built] were synonymous."[2] Id. at 4. The panel held that "[t]he restriction should have been accorded its ordinary and generally understood or popular sense, without technical refinement." Id.

         And then the panel did just that. It chose a dictionary definition of "modular": "1. of or pertaining to a module or a modulus. 2. composed of standardized units or sections for easy construction or flexible arrangement: a modular home; a modular sofa. . . ." The Random House Dictionary of the English Language: Second Unabridged Edition. But the panel then based its holding only on the isolated definition of "modular" without ever construing the relevant covenant term "modular home." And given the definition of modular, the panel concluded that the "defendants' home was in clear violation of the unambiguous restrictive covenant . . . ." Thiel, unpub op at 6. The house had to come down.

         The defendants sought leave to appeal in this Court. We ordered oral argument on the application, directing the parties to file supplemental briefs addressing

(1) whether the defendants' home is a "modular home" as defined by Timber Ridge Bay's "Declaration of Restrictions, Covenants and Conditions"; and (2) if so, whether the violation was a technical violation that did not cause substantial injury, Cooper v Kovan, 349 Mich. 520, 530 (1957). [Thiel v Goyings, 501 Mich. 1030, 1030 (2018).]

         II. DISCUSSION

         A. LEGAL BACKGROUND

         Negative covenants are grounded in contract. Stuart v Chawney, 454 Mich. 200, 210; 560 N.W.2d 336 (1997). Therefore, the interpretation of restrictive covenants is a question of law that this Court reviews de novo. Terrien v Zwit, 467 Mich. 56, 60-61; 648 N.W.2d 602');">648 N.W.2d 602 (2002). This means that we review the legal issue with fresh eyes, without any required deference to the courts below.

         Courts review restrictive covenants with a special focus on determining the restrictor's intent. "[W]e are not so much concerned with the rules of syntax or the strict letter of the words used as we are in arriving at the intention of the restrictor, if that can be gathered from the entire language of the instrument." Tabern v Gates, 231 Mich. 581, 583; 204 N.W. 698 (1925). We determine the intended meaning of the chosen language by reading the covenants "as a whole rather than from isolated words" and must construe the language "with reference to the present and prospective use of property . . . ." Donnelly v Spitza, 246 Mich. 284, 286; 224 N.W. 396 (1929); see also Seeley v Phi Sigma Delta House Corp, 245 Mich. 252, 253; 222 N.W. 180 (1928) ("The 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."). And we enforce unambiguous restrictions as written. Bloomfield Estates Improvement Ass'n, Inc v Birmingham, 479 Mich. 206, 214; 737 N.W.2d 670 (2007). Thus, we consider challenges to restrictive covenants in a contextualized, case-by-case manner.

         It is a bedrock principle in our law that a landowner's bundle of rights includes the broad freedom to make legal use of her property. O'Connor v Resort Custom Builders, Inc, 459 Mich. 335, 343; 591 N.W.2d 216 (1999). Restrictive covenants are at once in tension with and complementary to this right: deed restrictions allow landowners to preserve the neighborhood's character. And the failure to enforce the deed restriction thus deprives the would-be enforcer of a valuable property right. Bloomfield Estates, 479 Mich. at 214. But enforcing a restriction beyond the restrictor's intent deprives the landowner of an even more fundamental property right-his right to legal use of his own property.

         Weighty interests are at stake, but the balance tilts in favor of the right to control one's own land. Unambiguous covenants must, of course, be enforced as written, but any uncertainty or doubt must be resolved in favor of the free use of property. Stuart, 454 Mich. at 210.

         B. THE RESTRICTIVE COENANTS

         This is not a dispute about the definition of the word modular. On that point, we agree with the plaintiffs-there is a generally understood definition of modular, and it's a lot like the definition the Court of Appeals used. It's also not a dispute about whether modular homes are nice. The Goyingses' home certainly seems to be, but that's beside the point. This isn't a dispute about the facts at all-the parties do not challenge the trial court's factual findings. The dispute is about how the covenants define a modular home- that is, when does a home with modular components cross the line and become a modular home? How do we know a "modular home" when we see one?

         1. THE TERM "PRE-FABRICATED OR MODULAR HOME" MUST BE DEFINED IN CONTEXT OF THE RESTRICTIVE COVENANTS

         The record sets up a continuum between an entirely stick-built home on one side and an entirely modular one on the other. The trial court ruled that the covenants prohibited only entirely modular homes. The defendants suggest that the most natural reading prohibits a home that is mostly modular. The Court of Appeals didn't engage the question but concluded that the Goyingses' home was "in clear violation of the unambiguous restrictive covenant" even so. Thiel, unpub op at 6. And the plaintiffs have suggested that the defendants' home is modular by any definition or, when pressed, that a home is modular if its footprint is modular or if the "meat" of it is modular (and, they say, the defendants' home fits both definitions).

         This interpretive dispute raises the question: how modular does a home need to be to be a modular home? But it is not a question to answer in the abstract; rather, its answer is grounded in the text of the covenants.

         a. TERMS OF THE COVENANTS

         The restrictive covenants state, "All residences shall be stick built on site and no . . . modular home . . . will be erected on any of the Parcels unless provided for herein." The Court of Appeals concluded that "modular" means "1. of or pertaining to a module or a modulus. 2. composed of standardized units or sections for easy construction or flexible arrangement: a modular home; a modular sofa. . . ." The Random House Dictionary of the English Language: Second Unabridged Edition. Every modern dictionary we consulted provides about the same definition. The trial court did not find that the term had a specialized meaning here. And although all homes are, to some extent, built with standardized units for ease of construction-two-by-fours are all two inches by four inches; drywall sheets all come in standardized sizes-we also recognize that the parties have accepted that the "units" in this litigation are the three modules delivered by truck and lowered by crane. We assume for the sake of argument that those modular components, although custom-designed, were to some extent "standardized" for ease of construction. The definition of "modular" on its own is unambiguous.

         But, of course, a modifier is just an abstraction until it acts on a noun-the question is when a home is modular. Stringing together bare definitions would mean that a "modular home" could be defined as "a dwelling that is composed of standardized units or sections for easy construction or flexible arrangement." This definition doesn't advance the ball much. Even though we agree on the meaning of "standardized units or sections," the definition begs the same question: how much of the home must be "composed of" these standardized units for it to be a modular home under the covenants? Or, again, how modular must a modular home be?

         Grammar helps. When an adjective modifies a noun, we implicitly understand it to modify the whole noun. And what it means to modify the whole noun depends on the noun. So an "orange trapezoid" probably describes a solid-colored geometric shape. A "mean, orange cat" describes a grumpy feline with orange fur, no matter that its eyes might be white and its paws might be black, because we understand that cats are not often monochromatic.[3] If we want to modify less than the whole noun, or express the modification in finer detail, we might employ an adverb to modify the adjective-a bright orange cat, or a partly orange cat.

         In the same way, the most natural reading of the phrase "modular home" is a home that is mostly or generally modular.[4] And because we understand that a "home," like a cat, is a heterogeneous object, a mobile home would still be a mobile home under these covenants even if it had a custom-built, handcrafted porch. It takes more than standardized roof trusses to make a prefabricated house. A brick house needn't have a brick roof. And so on.

         Courts seek to find a fair reading of contract language-not a strict one-because strict constructionism destabilizes the whole enterprise of contract law. Scalia & Garner, Reading Law: The Interpretation of Legal Texts (St. Paul: Thomson/West, 2012), pp 39-41 and 355-358. Brittle, hyperliteral interpretations make agreements fragile and impractical. These covenants show why: if we interpreted "pre-fabricated or modular home" to include any home constructed using a modular or prefabricated component, we would render the covenant provision unenforceable. Every home in the neighborhood doubtless contains some prefabricated part-the Traywicks have a prefabricated basement wall system, and, as the circuit court found, any modern home is constructed using prefabricated components like "trusses, foundation, cabinets, etc." Courts do not enforce deed restrictions when the would-be enforcer has unclean hands. "It is the policy of the courts of this State to protect property owners who have not themselves violated restrictions in the enjoyment of their homes and holdings . . . ." Carey v Lauhoff, 301 Mich. 168, 172; 3 N.W.2d 67');">3 N.W.2d 67 (1942) (quotation marks and citation omitted). We reject such extreme readings for good reason-this sort of cartoonish strict constructionism would read the restrictive covenants out of existence.

         b. CONTEXT OF THE COVENANTS

         If the words of the covenant are the foundation, the surrounding text is the framing that gives structure and defines inside from outside. Words "should not be construed in the void, but should be read together to harmonize the meaning, giving effect to the [agreement] as a whole." G C Timmis & Co v Guardian Alarm Co, 468 Mich. 416, 421; 662 N.W.2d 710 (2003), quoting Gen Motors Corp v Erves (On Rehearing), 399 Mich. 241, 255; 249 N.W.2d 41 (1976) (opinion by Coleman, J.). The plaintiffs' complaint is grounded in § 1.C.4, which provides miscellaneous residential dwelling restrictions:

4. Miscellaneous Provisions. The height of any building will not be more than four (4) stories. If any portion of a level or floor within a residence is below grade, all of the level or floor shall be considered a basement level. All residences shall be stick built on site and no geodesic dome, berm house, pre-fabricated or modular home, mobile home, shack or barn will be erected on any of the Parcels unless provided for herein. [Emphasis added.]

         The other terms in the list alongside modular home are contextually important. Under the doctrine of noscitur a sociis, a thing is known by the company it keeps. Koontz v Ameritech Servs, Inc, 466 Mich. 304, 318; 645 N.W.2d 34 (2002). And so a modular home is of a kind with prefabricated homes, geodesic domes, berm-houses, mobile homes, shacks, and barns.

         We know that the covenants proscribe modular homes, along with these others like them. But the restrictive covenants also prescribe certain characteristics for homes in the neighborhood. This no-modular-home provision sits among several other requirements for residential dwellings. And these are also contextually meaningful: a compliant home will meet minimum square footage requirements (1400 square feet for a one-story residence, 1800 for a one and one-half story residence, and 2400 for a two-story residence) and be constructed using "[a]cceptable exterior materials," which "include cedar, brick, vinyl, aluminum, field stone, drivit and any other material considered to be a premium building component," and all construction must be done by residential homebuilders licensed by the state of Michigan.

         c. THE REST OF THE COVENANTS

         Finally, the meaning of the term "modular home" in the restrictive covenants as a whole is important. The restrictive covenants refer to modular homes two other times. When a document repeatedly uses a term or phrase, we assume that it carries the same meaning throughout. See 11 Williston, Contracts (4th ed), § 32:6, p 709 ("Generally, a word used by the parties in one sense will be given the same meaning throughout the contract in the absence of countervailing reasons."); Robinson v Lansing, 486 Mich. 1, 17; 782 N.W.2d 171 (2010) (applying the canon of consistent usage to statutory language).

         Section 1.B.3 includes modular homes as one subset within the category of relocated residences. That provision, titled "Relocated Residences," provides:

No residences, including modular, manufactured, mobile or prefabricated homes, may be moved from a location outside [Timber Ridge Bay] and placed or located within a Parcel within [Timber Ridge Bay].

         Similarly, § 1.B.4, titled "Manufactured Housing Units," provides: "No manufactured homes, whether classified as a mobile home, modular home, or otherwise, and no prefabricated homes shall be permitted . . . ." (Emphasis added.) Thus, as used in these sections, a "modular home" can be relocated and can be considered a subset of "manufactured homes" or "manufactured housing units."[5]

         This too: in each instance, the restrictive covenants use a pattern of specific verbs to refer to modular homes and their peers-the covenants state that modular, manufactured, mobile, or prefabricated homes may not be moved, placed, located, or erected within a parcel in Timber Ridge Bay.[6] In contrast, the covenants refer to construction when discussing allowed structures.[7] The covenants' use of different terms suggests an important difference between a permissible home and a prohibited one in how it comes to be built- which makes sense given that the covenants require that all residences be "stick built on site." Using verbs like move, place, or locate suggests picking up a thing that already exists and plunking it down on the lot, fully formed.

         A closer question is whether there is a meaningful difference between a structure that is constructed versus erected. The two words, though rough synonyms, have distinct undertones.[8] To construct evokes forming or creating a structure by putting together its parts. To erect connotes assembling or raising a structure.

         This reading makes sense in the context of the restrictive covenants: a geodesic dome can be purchased in a kit and assembled, as can a berm house.[9] And the term "barn- raising" calls to mind the framed walls of a barn or shack pulled upright with ropes. Similarly, some modular construction requires mere assembly (e.g., a triple-wide trailer or an entirely modular home) or to be set up or raised (e.g., a manufactured home). The trial court recognized this distinction: "[A]n entirely modular, premanufactured or prefabricated home cannot be moved onto the properties located within Timber Ridge Bay . . . ." (Emphasis added.)

         d. THE PURPOSE OF THE COVENANTS

         Finally, even an unambiguous term must be construed relative to the drafter's intent. Tabern, 231 Mich. at 583. The restrictive covenants' stated purpose is "to provide for congenial occupancy of the Premises, and for the protection of the value of the Parcels therein . . . ."

         e. A DEFINITION

         With this text and context, we can put the pieces together to determine where the restrictor intended to draw the line. First, the covenants categorically bar landowners from moving or placing relocated residences or manufactured homes onto a parcel. These categorical restrictions apply to any structure that may be considered, without substantial further construction, to be a home or residence upon delivery.

         The covenants also impose construction and design standards beyond these categorical restrictions. We agree with the trial court that, at a minimum, an entirely prefabricated, manufactured, or modular home cannot be placed on or moved to a lot in Timber Ridge Bay. But the language of the covenants imposes a more stringent standard than the trial court found. A fair reading of a modifier like "modular" applies its meaning to the noun as a whole. The limiting factor is the extent to which the noun accepts the modifier. A homogenous or abstract thing often accepts the modifier wholly (a blue circle, a truthful statement); most things that exist in the real world have some degree of heterogeneity and fully accept modifiers within the bounds of reason (a red car, a friendly neighbor). And houses, like cars or people, are not just one thing.

         The most natural reading of the prohibition in § 1.B.4 against "modular home[s]" and "prefabricated homes" is to prohibit homes that are mostly modular or prefabricated. That is, a home is a modular home under the restrictive covenants if it is predominantly modular-more modular than not.

         The covenants enforce construction standards from the opposite side, too: homes in the subdivision must be stick-built on-site. The stick-built requirement forecloses the loophole for the 33% modular, 33% prefabricated, and 34% site-built franken-home. In short, a home must be predominantly stick-built on-site, and a home built using predominantly modular construction cannot be erected in Timber Ridge Bay. These are, of course, questions of fact for the jury or fact-finder.

         And the covenants suggest that in close cases a court has other tools.[10] It may consider whether the home otherwise complies with building standards of the neighborhood and whether the home threatens the "congenial occupancy" or "value of the Parcels" in the subdivision.[11]

         2. THE GOYINGSES' HOME IS NOT A "PRE-FABRICATED OR MODULAR HOME" UNDER ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.