February 18, 2009 – Santa Fe Estates, Inc. and Ridgetop Road, LLC v. Concerned Residents of Santa Fe North, Inc., No. 27,856

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: February 18, 2009

NO. 27,856

SANTA FE ESTATES, INC. and
RIDGETOP ROAD, LLC,

Plaintiffs-A ppellees,
V.

CONCERNED RESIDENTS OF
SANTA FE NORTH, INC.,

Defendant- Appellant.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
James A. Hall, District Judge

Holland & Hart, LLP

Mark F, Sheridan

Santa Fe, NM

for Appellee Santa Fe Estates, Inc.
Rubin Katz Law Fim, P.C.

Frank T. Herdman

Jenny F. Kaufman

Santa Fe, NM

for Appellee Ridgetop Road, LLC

VanAmberg, Rogers, Y epa, Abeita & Gomez, LLP

Ronald J. VanAmberg
Santa Fe, NM

for Appellant

OPINION
SUTIN, Judge.
{1} 	This appeal follows our decision in Concerned Residents of Santa Fe North,
Inc. v. Santa Fe Estates, Inc. (Residents I), 2008-NMCA-042, 143 N.M. 811, 182 P.3d
794, which contains the background before the continuation of the litigation resulting
in this appeal. 	We will refer to the continued litigation resulting in this appeal as
Residents II. 	The parties in Residents II are Concerned Residents of Santa Fe North,
Inc. (Residents), Santa Fe Estates, Inc., and Ridgetop Road LLC (collectively,
Estates).
{2} 	In Residents I, we held that covenants in a settlement agreement between
Residents and Estates created restrictions with respect to Estates’ commercial property
and that Estates was to record the restrictions as restrictive covenants. 2008-NMCA-
042, ¶¶ 59-68. After Estates recorded the restrictive covenants it sought in Residents
II a declaration that Residents had no right to enforce the recorded covenants. The
district court granted partial, final summary judgment in favor of Estates because
(1) Residents “[did] not own property which could be viewed as the dominant estate”
and the covenants themselves did not create covenants in gross, and (2) the agreement
between Residents and Estates did not clearly state that Residents had a right to
enforce the covenants. The court also believed that the judge who decided Residents

1 	Residents argues that “New Mexico fully acknowledges the viability of
personal covenants in gross which are not appurtenant to real property and which are
not part of a common scheme.” 	Estates argues that “no reported New Mexico
decision recognizes restrictive covenants in gross.” 	We do not address these
arguments. 	For purposes of our decision in this opinion, we will assume, without
deciding, that covenants in gross created by contract are recognized in New Mexico.
Nothing in this opinion is intended to imply that covenants in gross are or are not
recognized in New Mexico law.
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I at the trial level ruled that the agreement did not provide for a contractual right to
enforce the covenants.
{3} 	The district court was correct. Any right of Residents to enforce the restrictive
covenants could arise only from clear provisions in the settlement agreement creating
a personal covenant in gross 1 and granting Residents the right to enforce the personal
covenants in gross. No such provision exists in the settlement agreement, and we will
not imply either a personal covenant in gross or a right to enforce the recorded
restrictive covenants. 	Thus, Residents has no right to enforce the covenants. 	We
therefore affirm the district court.
DISCUSSION
{4} 	Residents sets out three arguments to support its single point on appeal that it
has the right to enforce the covenants. 	Residents first argues that it has a right to
enforce the covenants because if it is precluded from doing so, it will have been given

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a right in Residents I to require Estates to record restrictive covenants, but it will have
no remedy. Residents calls upon the maxim in equity that there is no right without a
remedy. See Armijo v. Town of Atrisco, 62 N.M. 440, 456-57, 312 P.2d 91, 101-02
(1957) (indicating in reference to the maxim that somewhere in the vast reservoir of
equitable relief the answer may be found to resolve the difficulty in placing common
lands of the land grant in the true owners of beneficial interests). Residents’ second
argument is that because the agreement gave Residents the right to have restrictive
covenants placed on Estates’ commercial property, the agreement thereby created a
servitude burdening the commercial property and benefitting Residents with a
personal covenant in gross. 	Residents’ third argument is that if anyone has an
enforcement right, it would be Residents “since third party beneficiary rights derive
from a party to the [agreement].”
{5} 	Residents does not show in its brief in chief where it preserved these arguments
in the district court. See Rule 12-213(A)(4) NMRA (requiring, for each issue raised,
“a statement explaining how the issue was preserved in the court below”); Crutchfield
v. N.M. Dep’t of Taxation & Revenue, 2005-NMCA-022, ¶ 14, 137 N.M. 26, 106 P.3d
1273 (stating that an appellant must “specifically point out where, in the record, the
party invoked the court’s ruling on the issue”). Estates raises this preservation issue,

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and Residents, in its reply brief, addresses the issue by quoting the following from a
memorandum it filed in the district court in support of its response to Estates’ motion
for summary judgment.
The question is not whether [Residents] has a benefit, the question is
whether [Residents] established a contractual right, whether it benefits
by that right or has obtained that right for charitable purposes for the
benefit of others is of no consequence. [Residents] does not need to own
property which is benefited or which is the dominant estate relating to
the covenants. 	Covenants, assuming they are easements, can be “in
gross” and do not have to be attached to a dominant estate. [Residents]
is the entity that entered into the Settlement Agreement and is the entity
that has the right to enforce the Settlement Agreement. Whether there
are third party beneficiaries who would have a similar right of
enforcement 	is 	another 	question. 	[Residents] 	believes 	that 	its
enforcement rights are clear.
Further, Residents states that the hearing in the district court on the issue “focused on
whether Residents could have a right of enforcement because it did not own land
which could benefit from the covenants.” Residents also states that the district court
framed the issue as, “Residents did not, and apparently could not, create covenants in
gross which it can enforce.”
{6} 	As for Residents’ first argument based on the maxim in equity that there is no
right without a remedy, we agree with Estates that this theory was not argued in the
district court. Residents therefore did not preserve it, and we will not consider it on
appeal. See Brown v. Trujillo, 2004-NMCA-040, ¶ 39, 135 N.M. 365, 88 P.3d 881

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(“We do not review arguments that are raised for the first time on appeal.”).
{7} 	As for Residents’ third argument, which is based on Section 2.6, Comment (e)
of the Restatement (Third) of Property: Servitudes (2000), relating to contracts that
create a servitude benefitting third parties, Residents has not indicated where,
specifically, it raised the argument in the district court or whether that court addressed
this issue. We agree with Estates that this third argument cannot be raised for the first
time on appeal. See Brown, 2004-NMCA-040, ¶ 39.
{8} 	Residents’ second argument was adequately preserved. The argument is that
the settlement agreement created restrictive covenants that burdened Estates’ interest
in its commercial property and ran with the land to bind Estates’ successors, while at
the same time the settlement agreement created personal covenants in gross in favor
of Residents. 	Essentially, Residents’ logic is that since Residents had the right to
require Estates to create and record restrictive covenants, while it was known that
Residents owned no benefitted property, the covenants had to be considered in gross
and personal and therefore enforceable. The district court addressed issues of whether
the agreement created covenants in gross and whether the agreement clearly and
unambiguously established a contract right in Residents to enforce the restrictive
covenants. We, therefore, choose to address Residents’ second argument.

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Standard of Review
{9} 	The parties agree that the standard of review in this appeal is that the appeal
from the grant of the motion for summary judgment presents a question of law that
this Court reviews de novo. 	Montgomery v. Lomos Altos, Inc., 2007-NMSC-002,
¶ 16, 141 N.M. 21, 150 P.3d 971.
Right to Enforce Covenants
{10} 	Residents now seeks to enforce, as the “covenantee,” against Estates, as the
“covenantor,” the restrictive covenants ultimately recorded by Estates as ordered by
the court in Residents I. 	This creates two twists involving servitudes created by
restrictive covenants. One twist is that Estates, as developer, contrary to the usual
case, is not the creator of the covenants and the covenantee. Cf. Montoya v. Barreras,
81 N.M. 749, 751, 473 P.2d 363, 365 (1970) (stating, in a case involving a developer’s
declaration of restrictive covenants for a subdivision, that “[h]istorically, restrictive
covenants have been used to assure uniformity of development and use of residential
area to give the owners of lots within such an area some degree of environmental
stability”). As argued by Estates in Residents I, Estates did not intend the settlement
agreement to have the effect of creating the covenants or to have the covenants
binding on Estates. The covenants were forced upon Estates by the result in Residents

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I. The other twist is that it is not residential lot or tract owners in the development that
are seeking to enforce covenants; instead it is a non-profit corporation that owns no
affected property and that purports to act for unspecified property owners who have
no say in management of the corporation’s business.
{11} 	The circumstances here do not fit neatly in the various cases and treatises that
Residents cites in support of its position. See, e.g., Lex Pro Corp. v. Snyder Enters.,
Inc., 100 N.M. 389, 391, 671 P.2d 637, 639 (1983); Cypress Gardens, Ltd. v. Platt,
1998-NMCA-007, ¶ 15, 124 N.M. 472, 952 P.2d 467; Waikiki Malia Hotel, Inc. v.
Kinkai Props. Ltd. P’ship, 862 P.2d 1048 (Haw. 1993); Powell on Real Property §§
60.01[2], 60.04[1] (2000); Restatement (Third) of Property: Servitudes § 2.6.
{12} 	The law of this case as established in Residents I is that the covenants constitute
a burden on the commercial property owned by Estates and run with the land, such
that the covenants are binding on Estates’ successors. Residents I did not expressly
decide in whose favor an appurtenant benefit was granted. It seems evident that the
recorded covenants created appurtenant benefits in favor of owners of lots or tracts yet
to be identified. See Montoya, 81 N.M. at 751, 473 P.2d at 365 (“Restrictions as to
the use of land are mutual, reciprocal, equitable easements in the nature of servitudes
in favor of owners of other lots within the restricted area, and constitute property

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rights which run with the land.”); see also Shaff v. Leyland, 914 A.2d 1240, 1244
(N.H. 2006) (“An appurtenant burden is created when the obligation or promise is
enforceable only against the owner or occupier of [the] particular parcel of land upon
which the restriction is placed. An appurtenant benefit is created when the right to
receive the performance of a covenant . . . [is] held only by the owner or occupier of
[the] particular unit or parcel meant to be benefitted by the restriction.” (alterations
in original) (internal quotation marks and citations omitted)). 	For the reasons that
follow, we reject the notion that the settlement agreement created appurtenant benefits
or personal covenants in gross in favor of Residents or otherwise gave Residents a
right to enforce the recorded covenants.
{13 } 	While the issue before us does not involve whether the settlement agreement
created and required recordation of restrictive covenants, we think that general rules
relating to agreements restricting the free use of property are instructive in construing
the provisions of the settlement agreement. These general rules require clear language
in the agreement and do not permit creation of restrictions by implication. See 20 Am.
Jur. 2d Covenants, Conditions, and Restrictions §§ 170, 241 (2008) (stating that
agreements restricting the free use of property “will not be aided or extended . . . to
grant rights to persons in whose favor it is not clearly shown such restrictions are to

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apply”; that “[c]ovenants and agreements restricting the free use of property are not
favored by the law and will be strictly construed against limitations upon such use”;
that “[s]uch restrictions will not be aided or extended by implication”; and that
“[b]roadly speaking, a suit for equitable enforcement of a restrictive covenant is
maintainable only by one for whose benefit the covenant is intended, and is not
enforceable by one who has no right or interest in the land for the benefit of which the
restriction has been imposed” (footnotes omitted)); Hill v. Cmty. of Damien of
Molokai, 1996-NMSC-008, ¶ 6, 121 N.M. 353, 911 P.2d 861 (stating that “if the
language is unclear or ambiguous, we will resolve the restrictive covenant in favor
of the free enjoyment of the property and against restrictions” and that “we will not
read restrictions on the use and enjoyment of the land into the covenant by
implication”).
{14} 	No provision of the settlement agreement clearly gives Residents any right in
regard to the covenants beyond what Residents I determined. No provision clearly
created a personal covenant in gross or gave Residents a right of its own to enforce
recorded covenants. 	We therefore do not accept Residents’ argument that the
recorded covenants had to be personal covenants in gross by virtue of the fact that
Residents owned no property. The argument relies, at most, on implication and not

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on clear contract language. Nor do we accept the argument that a right to enforce the
recorded covenants exists through some necessary implication simply because the
court in Residents I enforced a contract right in Residents to require Estates to create
and record restrictive covenants. 	We therefore hold that the settlement agreement
neither created a personal covenant in gross in favor of Residents nor gave Residents
a right to enforce the recorded covenants.
CONCLUSION
{15} 	We affirm the district court’s summary judgment in favor of Estates.
{16} 	IT IS SO ORDERED.
__________________________________
JONATHAN B. SUTIN, Judge
WE CONCUR:
____________________________________
CYNTHIA A. FRY, Chief Judge
____________________________________
MICHAEL D. BUSTAMANTE, Judge