AI Case Brief
Generate an AI-powered case brief with:
đź“‹Key Facts
⚖️Legal Issues
đź“šCourt Holding
đź’ˇReasoning
🎯Significance
Estimated cost: $0.001 - $0.003 per brief
Full Opinion
PRESENT: All the Justices
AUDREY LEA HAISFIELD and
LAUREL RIDGE, LLC
v. Record No. 012881
KENNETH R. LAPE, TRUSTEE
OF THE KENNETH R. LAPE LIVING TRUST and
BARBARA GSAND LAPE, TRUSTEE
OF THE BARBARA GSAND LAPE LIVING TRUST
OPINION BY
JUSTICE DONALD W. LEMONS
November 1, 2002
KENNETH R. LAPE, TRUSTEE
OF THE KENNETH R. LAPE LIVING TRUST and
BARBARA GSAND LAPE, TRUSTEE
OF THE BARBARA GSAND LAPE LIVING TRUST
v. Record No. 020092
AUDREY LEA HAISFIELD and
LAUREL RIDGE, LLC
FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY
Paul M. Peatross, Jr., Judge
In this consolidated appeal, we consider whether a “line-
of-sight” or “view” easement * renders title to the property at
issue unmarketable, thereby justifying the buyers’ refusal to
close the transaction.
I. Facts and Proceedings Below
On February 14, 2000, Audrey Lea Haisfield and Laurel
Ridge, LLC (collectively, “Haisfield”) entered into a land sale
*
The trial court and the parties have used interchangeably
the terms “line-of-sight easement,” “view easement” and
“restrictive covenant.”
contract (“Purchase Agreement”) with Kenneth R. Lape, Trustee of
the Kenneth R. Lape living trust and Barbara Gsand Lape, Trustee
of the Barbara Gsand Lape living trust (collectively, the
“Lapes”). The Purchase Agreement was for the sale of
approximately 99 acres in Albemarle County owned by the Lapes
and referred to as Laurel Ridge Farm (“Laurel Ridge”). Laurel
Ridge was once part of a larger piece of land that encompassed
approximately 148 acres owned by the Lapes known as Oakmont
Farm. In 1994, the Lapes conveyed approximately 48 acres
(“Oakmont”) of Oakmont Farm to Dr. Hamilton Moses, III and
Alexandra G. Moses (the “Moseses”). At the time of the Purchase
Agreement, Oakmont Farm was two separate parcels: Oakmont, owned
by the Moseses and Laurel Ridge, owned by the Lapes.
The Purchase Agreement required Haisfield to deposit
$50,000 with McLean Faulconer, Inc., a real estate firm, as an
earnest money deposit to be held in escrow. Further, the
Purchase Agreement provided that “[s]hould Purchaser default
and/or breach this [Purchase Agreement], the Seller shall be
entitled to retain the earnest money deposit of $50,000.00 as
liquidated damages in lieu of all other remedies provided at law
or in equity against the Purchaser.”
A closing date of June 30, 2000 was set. On June 29, 2000,
through an agent, Haisfield notified the Lapes that the chain of
title to Laurel Ridge contained a restrictive covenant that
2
rendered title to the property unmarketable. The line-of-sight
easement, discovered by Haisfield just prior to closing, was
found in the 1994 deed conveying Oakmont to the Moseses from the
Lapes. In part, the Oakmont deed contained the following
covenant:
[F]or a period of thirty (30) years from
the date of this deed [May 3, 1994], no
building shall be built on the current
Albemarle County Tax Map Parcel 111-5A
[Laurel Ridge] . . . which may be visible
from the main residence (Oakmont) located
on the property conveyed by this deed.
Haisfield gave the Lapes 60 days pursuant to Paragraph 14
of the Purchase Agreement to cure the defect created by the
Moseses’ line-of-sight easement. Further, she maintained that
she was justified in refusing to close the transaction and was
entitled to the return of her $50,000 earnest money deposit if
the defect was not cured. Paragraph 14 states the following:
At settlement Seller shall convey the
Property to the Purchaser by a general
warranty deed containing English covenants
of title, free of all encumbrances,
tenancies, and liens (for taxes and
otherwise), but subject to such
restrictive covenants and utility
easements of record which do not
materially and adversely affect the use of
the Property for residential purposes or
render the title unmarketable. . . . If
the examination reveals a title defect of
a character that can be remedied by legal
action or otherwise within a reasonable
time, Seller, at its expense, shall
promptly take such action as is necessary
to cure such defect. If the defect is not
3
cured within 60 days after Seller receives
notice of the defect, then Purchaser shall
have the right to (1) terminate this
Contract, in which event the Deposit shall
be returned to Purchaser, and Purchaser
and Seller shall have no further
obligations hereunder[.] . . .
The Lapes disagreed that the line-of-sight easement rendered
title to Laurel Ridge unmarketable, and efforts between the
parties to reach a settlement in the matter were unsuccessful.
Consequently, on July 28, 2000, the Lapes filed a motion
for judgment claiming that Haisfield breached the Purchase
Agreement and claiming the $50,000 earnest money deposit plus
interest as liquidated damages for the breach. Subsequently,
Haisfield filed a grounds of defense and counterclaims against
the Lapes maintaining that the Lapes failed to deliver
marketable title and asking the court to return to her the
$50,000 earnest money deposit.
A trial was held without a jury on May 24, 2001. Evidence
was submitted by both parties, and the court conducted a view of
the property. In a letter opinion dated June 14, 2001, the
trial court held that the line-of-sight easement did not
materially or adversely affect the use of the Laurel Ridge
property for residential purposes nor did it render title
unmarketable under the terms of the Purchase Agreement.
The trial court granted judgment in favor of the Lapes
against Haisfield in the amount of $50,000 with interest, but
4
refused any award of attorneys’ fees to the Lapes. From this
judgment, Haisfield appeals the trial court’s holding that she
was in breach of the contract and the judgment entered. The
Lapes appeal the denial of attorneys’ fees.
II. Analysis
The plain language of paragraph 14 of the Purchase
Agreement requires the seller to convey the property by a
general warranty deed containing English covenants of title free
of all encumbrances but subject to such restrictive covenants
and utility easements of record “which do not materially and
adversely affect the use of the Property for residential
purposes or render the title unmarketable.” In this appeal, we
are only concerned with the marketability of title. In the
interpretation of this provision of the Purchase Agreement, we
are guided by an oft-cited principle of contract interpretation:
Words that the parties used are normally
given their usual, ordinary, and popular
meaning. No word or clause in the contract
will be treated as meaningless if a
reasonable meaning can be given to it, and
there is a presumption that the parties have
not used words needlessly.
D.C. McClain, Inc. v. Arlington County, 249 Va. 131, 135-36, 452
S.E.2d 659, 662 (1995).
The plain meaning of paragraph 14 is that, if a particular
restrictive covenant or utility easement does render the title
unmarketable, the seller will have failed to perform in
5
accordance with its terms unless the defect is remedied within a
reasonable time. While it is true that paragraph 14 of the
Purchase Agreement operates as a waiver of objection to certain
easements or restrictive covenants, a restrictive covenant that
renders title unmarketable is not one of them. If the line-of-
sight easement constitutes a restrictive covenant that renders
title unmarketable, and the defect is not removed within a
reasonable time, Haisfield is entitled to terminate the contract
without penalty.
In Madbeth, Inc. v. Weade, 204 Va. 199, 202, 129 S.E.2d
667, 669-70 (1963), we stated:
A marketable title is one which is free
from liens or encumbrances; one which
discloses no serious defects and is
dependent for its validity upon no doubtful
questions of law or fact; one which will not
expose the purchaser to the hazard of
litigation or embarrass him in the peaceable
enjoyment of the land; one which a
reasonably well-informed and prudent person,
acting upon business principles and with
full knowledge of the facts and their legal
significance, would be willing to accept,
with the assurance that he, in turn, could
sell or mortgage the property at its fair
value.
However, not all liens and encumbrances render a title
unmarketable. In Sachs v. Owings, 121 Va. 162, 170, 92 S.E.
997, 1000 (1917) (internal citations omitted), we held that:
A vendee cannot elect to rescind and
treat the contract as rescinded on the
ground that the title is not a marketable
6
title because there are encumbrances on the
land purchased, if they are of such
character and amount that he can apply the
unpaid purchase money to the removal of the
encumbrances. This can be done where the
amount of the encumbrance is definite, does
not exceed the unpaid purchase money due, is
presently payable (as was the case with the
delinquent tax lien in the instant case),
and its existence is not a matter of doubt
or dispute, or the situation is not such
with respect thereto as to expose the vendee
to litigation on the subject.
See also Davis v. Beury, 134 Va. 322, 338, 114 S.E. 773, 777
(1922).
In this case, the amount of the encumbrance is not
definite, such as a tax lien or judgment lien. The line-of-
sight easement acts as a building restriction upon the property
much like the building restrictions found to render title
unmarketable in Scott v. Albemarle Horse Show Ass’n, 128 Va.
517, 104 S.E. 842 (1920). In Scott, we agreed with the
purchaser’s assertion that the building restrictions in the
tendered deed were not in compliance with the terms of the
contract and rendered title unmarketable. Id. at 529-30, 114
S.E. at 846. Finally, the line-of-sight easement in this case
is not an “open, visible, physical [e]ncumbrance of the property
[that] must have been taken into consideration in fixing the
price of the property . . . .” Riner v. Lester, 121 Va. 563,
572, 93 S.E. 594, 597 (1917). In Riner, we stated that:
7
where the circumstances and the conduct of
the parties show that the existence of an
open, visible, physical [e]ncumbrance of the
property must have been taken into
consideration in fixing the price of the
property, the purchaser can neither refuse
to complete the purchase nor require an
abatement of the [purchase] price.
Id.
The line-of-sight easement in this case is clearly an
encumbrance upon the property restricting its use in such a
manner as to render the title unmarketable. The existence of
the easement is not an open, visible, physical encumbrance of
the property that might have been considered in the
establishment of a purchase price. The existence of a
restrictive covenant that renders title to the property
unmarketable is not excepted under the provisions of paragraph
14 of the Purchase Agreement. Under these circumstances,
Haisfield was not in breach of the Purchase Agreement by
refusing to close the transaction. The trial court erred in
holding that Haisfield was in breach and ordering the payment of
$50,000 in liquidated damages plus interest. Because we hold
that Haisfield was not in breach of the Purchase Agreement, it
is unnecessary to resolve the issue of attorneys’ fees presented
in the Lape’s separate appeal, and we will dismiss the appeal.
With respect to Haisfield’s appeal, we will reverse the judgment
8
of the trial court and enter final judgment in favor of
Haisfield.
Record No. 012881, Reversed and final judgment.
Record No. 020092, Dismissed.
9