RENDERED: SEPTEMBER 28-, 2017 TO BE PUBLISHED

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MAJESTIC OAKS HOMEOWNERS APPELLANT ASSOCIATION, INC.

ON REVIEW FROM COURT OF APPEALS v. CASE NO. 2014-CA-000492 SHE:{JBY CIRCUIT COl!RT NO. 2009-CI-00873

MAJESTIC OAKS FARMS, INC., JOSEPH APPELLEES O'BRIEN. AND ASHLYN O'BRIEN

OPINION OF THE COURT BY CHIEF JUSTICE MINTON REVERSING AND REMANDING Kentucky law confirms the possibility of a defeasible easement, although the term itself appears in no reported case describing this· type of easement, which is an easement capable of termination upon the occurrence of a specified event or contingency. In this case, Majestic Oaks Homeowners Association . . (HOA) contends the defeasible easement principle applies to the easement for ingress and egress retained by its subdivision's developer, Majestic Oaks Farms (Developer), to terminate it when a majority of HOA members voted to do so, as · . allowed by the express terms of Developer's recorded subdivision plat. On discretionary review, we agree with HOA.

I. FACTUAL AND PROCEDURAL BACKGROUND. \ ln 1995, Developer began developing a residential subdivision, _Majestic Oaks Equestrian.Estates (Estates). To memorialize Developer's and fut:u_re homeowners' rights in Estates, Developer recorded with its subdivision plat a declaration of covenants, conditions, and restrictions (Original Declaration) and incorporated its terms into the homeowners' deeds to lot~ in the development.

The Original Declaration accomplished two noteworthy things.

First, the Original Declaration created Developer's easement in gross, stating, "[Developer] shall have a superior right and easement in gross [to use . Estates's private roads] ... for so long as [Developer], .its successors or assigns, . . . owns any Lot or any portion ofthe Property." The Original Dedaration defined Lot as "any Lot which is part of the Property:'' Property was defined as "Lois 1- as shown on the above referenced Plat." Additional lots could be added as part of Property, according to the following language: "[Developer] intends. to make this section containing 23 lots a part of a larger community known as [the Estates], having been developed in accordari.ce with current plan . .Subsequent additional plats will be recorded in the office of the Shelby County Clerk's Office." Second,§ 8.3 of the Original Declaration, the other section at the center of this dispute, states: Unless cancelled, altered or amended under the provisions of this paragraph, these covenantS and restrictions are to run with the land a.pd shall be binding on all parties claiming under them ... unless an instrument signed by a majority of the then owners of all lots subject to these restrictions has been recorded agreeing to change these restrictions and covenants in whole or in part. These restrictions may be cancelled, altered or amended at any time by a· 67% approval from each class of membership subject to these restrictions, but Developer shall retain the sole right to appoint the architectural approval committee until the last lot is sold.1 In 1998 and 2000, Developer e:Xpanded Estates to inciude Lots 24-59, r identified as "Sections 2 and 3," by recording a plat. The plat for Section 3 also . . identified a section of land for "Future Development," identified as "Sections 4 and 5." By this time, Estates included Lots 1-59; identified as "Sections 1-3." By March 13, 2006, Developer no longer owned any property in the Estat~s, having transferred Sections 1-3 to ihdividual homeowners within the HOA through a quitclaim deed, but tontinued to own Section 4. Section 4 did not become· part of Estates until April 2008, two years· after all of D·eveloper's then- . · existing property in the Estates was originally conveyed.

In August 2006, HOA proposed amendments to the Original Declaration to be voted on by the homeowners, proposing_two relevant changes: (1) to expand "Property" to include Lots 1-59, i.e. Seetions 1-3 of the Estates; and (2) to remove the language granting an easement in gross to Developer. The amendment to remove this language :Passed with 82% approval, well above the 7% required by the Original Declaration. 2

II. ANALYSIS.

A. Standard of Review. . "The standard of review on appeal of a summary judgment is whether the trial court con:ectly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter oflaw."3 "An appellate court need not defer to the trial court's decision on summary judgment and will review the issue de novo beca~se only legal questions and no factual findings are involved. "4 B. The Possessory Interest Granted to Developer was a Defeasible Easement in Gross that Terminated Upon a Q.reater Than 67% Vote, Sufficiently Fulfilling a Condition for Termination Stated in the Written Docum,ent Granting the Easement. .

An easement "is an incorporeal hereditament to which corporeal property is rendered subject."5 In other words, it is the right to use the land owned by · ) a Coomer v. CSX Transp., Inc., ·319 S.W;3d 366, 370 (Ky. 2010) (citing Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996)). .

easement in gross and an easement appurtenant is that in the first there is I not, and in the second there is, a dominant tenement to which it is attached."7 "An express easement is created by a written grant with .the formalities of a. deed."8 ·There is no question in this case that whatever ri~t Developer has 1n the real property it conveyed to HOA of an express easement in gross. And· the disagreement between the parties. rests on whether that express ea~ement in gross is legally capable of termination and whether HOA actually terinihated it.

A defeasible easement is one that "terminate[s] upon the occurrence of a given event. "9 "[A]n easement may be expressly subject to termination by the servient owner upon the ·occurrence ·of a specified event or contingency." id "Where an easement has been created until the happening of a specific event. or contingency, the easement will terminate ipso facto on the happening of the specified event or contingency."11

But two cases confirm the existence of defeasible_easements in Kentucky;l2 In Kenner, the Court stated: The doctrine is well-settled at common law that no· freehold or fee-· simpl~ estate can be destroyed by the breach or non..:performance of a condition subsequent ... This common-law rule does not apply, however ... to the creation of mere easements. [A]n incorporeal. hereditament is not created at common law by livery of seizin; and whenever the breach of~ subsequent condition happens in an estate or grant of this character the estate terminates without any entry. 13 Ascertained from the language above, this Court recognized the existence of defeasible easements in Kentucky in Kenner.

In Otter, the entire discussion of the Court centered on whether an . . f easement purporting to end when a water storage tank owner "remove[d] said tank" ended when the owner simply replaced the tank. 14 The Court could not have even entertained this discussion had it not·assu~ed the recognition of defeasibl~ easements in Kentucky. So acc~rding to Kenner and Otter, Kentucky recognizes the existence of defeasible easements, easem~nts ending upon the occurrence of a given event. Although this dispute involves. two s"-uch events, termination of the easement upon vote of the individual homeowner members of the HOA conclusively decides this matter. ·

i2 Kenner v. American Contract Co., 72 Ky. 202 (Ky. 1872); Louisville Chair & Furniture ·Co. v. Otter, 294 S.W. 483 (Ky. 1927).

"In the case of an ex:press easement ... the terms of [an easement] determine the rights and liabilities of the parties."is "[B]ecause [the] contract created the easement, that contract also defines the extent of the easement."16 A trial court "commit[s] an error when it [goes] outside the easement agreement to ascertain extraneously its mean.lng and effect, because the result [is] an inferpretatic~n of the instrument incorisistent with the clear and definite language employed in it."17 Taking these rules together, the extent of Developer's rights as to its easement is confined by the very language it chose in retaining that easement.

, The Onginal Declaration states, "These restrictions may be cancelled, altered or amended at any time by a 67% approval from each class of membership subject to these restrictions, but [Developer] shall retain the sole right to appoint the architectural approval committee until the last lot is sold." No dispute exists as to the procedural validity of the vote itself-both parties agree · that the vote was conducted properly. So, because the existence .of Developer's easement is limited by its granting language in the Original Declaration, and

is.sawyers v. Beller, 384 S.W.3d 107, 111 (Ky. 2012) (citing Tex. E. Transmisswn Corp. v. Carman, 314 S.W.2d 684, 687 (Ky.· 1958)).

because HOA validly abided by the procedure necessary to remove that easement, HOA extinguished .

Developer's easement. .

Developer argues that HOA's ability to amend the Original :peclaration is . confined to "restrictions," and not "covenants and restrictions," per the language used in § 8.3 of the Original Declaration. And Developer argues that the term easement does not fit under the ~mbrella of either "covenants" or "restrictions." :alack's Law Dictionary, specific to property law~ defines affirmative covenant ~s ".[an] agreement that real property will be used in a certain way."18 An ~a.sement constitutes a covenant because an" easement, as stated earlier, is an interest that can be created by an agreement and that· allows a landowner to use lan,d that he or she does own for a specific purpose. So an easement falls under the covenants umbrella in the Original Declaration.

To Developer's point, it is· true ~at this Court would. be hard-pressed to refer to any easement, besides a negative easement, as a restriction. But the language of§ 8.3 of the Original Declaration, in adc:Ution to interpretative canons, supports our conclusion that an easement falls under the restrictions · umbrella of the Original Declaration.

The applicable section,§ 8.3, begins by stating, "Unless cancelled, altered or amended under the provisiOns of this paragraph, these covenants and restrictions shall be binding.... " This opening1anguage implies nothing less than covenants, and thus: easements, are amendable. The language of§ 8.3 ,

is Black's Law Dittionacy (10th ed. 2014). also states, " ... unless an instrument signed by a majority of the then owners of all lots subject to these restrictions has been recorded agreeing to change these restrictions and covenants in whole or in part." Again, this language implies that covenants are amendable.

The section then describes an amendment-voting process: "These restrictions may be cancelled, altered.or amended at any time by a 67% approval from each class of membership subject to these restrictions, but Developers shall retain the sole right to appoint the architectural approval . . committee until the last lot is sold." We read this language more as 13- description of the amendment process than as a .limitation on what can be amended, considering the entirety of the section.19 Even more in· support of this reading is the .discussion of Developer's "sole right to appoint the architectural approval committee .... " If Developer truly intended to restrict application of the amendment process only to. "restrictions," it would not have ineluded, in the same sentence, a discussion of Developer's "rights~" ' .

Developer's rights including the use of the easement. Additionally, § 8.3 is. located uri.der Art. VIII - General Provisions in a document entitled "Declaration of Covenants, Conditions and Restrictions." So this amendment provision seemingly generally applies to the .ability of HOA to amend covenants, conditions, and restrictions.

Lastly, this Court follows the contract interpretation canon historically known. by the useful Latinism, con~a proferentem.: ·When interpreting contracts susceptible to two meanings, we construe ambiguity. against the drafter, ' '

Developer in this case. 20 If Developer wanted its easement to be indefeasible, it could have simply included a provision stating, ."Nothing in this document will ~ow tile amendment, alteration, or extinguishment of Developer's easement:" This would have prevented anyone from arguing that Developer's easement is ·amendable, and thus, terminable.

So Developer's defeasible easement terminated upon a vote by tl).e membership of HOA, in accordance with the Original Declaration. The trial ' '

court improperly granted summary judgment to Developer and the panel of the Court of Appeals improperly affirmed the trial court. We hold from these facts that HOA was entitled to judgment as a matter of law and the trial court erred when it failed to grant HOA's summaryjudgment motion.

III. CONCLUSION.

We reverse the holding of the Court of Appeals and remand this case to ·the trial court with directions to enter summary judgment in favor of Majestic Oaks Homeowners Association.

Minton, C.J.; C~.:mningh~, Hughes, Keller, Venters and Wright, JJ., sitting. All concur. VanMeter, J., not sitting.

Robinson Salyers, PLLC Brad Keeton Matthew Kuhn William M. Lear Jr Stoll Keenon Ogdon, PLLC

COUNSEL FOR_APPELLEE, MAJESTIC OAKS FARMS, INC.: Paul Anton Zimlich Paul A. Zimlich, PLLC COUNSEL . FOR APPELLEES, JOSEPH .

O'BRIEN AND. ASHLYN O'BRIEN: . .

Austin Hays Austin Hite Hays, PLLC.

John B. Baughmam Baughman Harp, PLLC.