Farmington Woods Homeowners Assn. v. Wolf

280 	284 NEBRASKA REPORTS
Finally, we note that the CFLA did not include a severabil-
ity clause when it was passed in 1992.106 “Such a clause is an
aid to interpretation, and is a declaration of the intent of the
Legislature that it would have passed the act with the invalid
parts omitted.”107
[10] The Legislature specifically found that campaign finance
limits, disclosure of the sources of funding, and the provision
of public funds were all necessary to achieve its goals in pass-
ing campaign election reform.108 The unconstitutional portions
of the CFLA are not severable from the remaining portions,
and therefore, the entire act is unconstitutional.
VI. CONCLUSION
Based upon the decision of the U.S. Supreme Court in
Bennett, the CFLA, §§ 32-1602 through 32-1613, violates the
First Amendment and is unconstitutional in its entirety.
Judgment for relator.
Wright and miller-lerman, JJ., not participating.
106 See L.B. 556 (operative Jan. 1, 1993).
107 See State ex rel. Meyer v. Duxbury, 183 Neb. 302, 310, 160 N.W.2d 88, 94
(1968).
108 See § 32-1602(2).
farmington Woods homeoWners association, inc.,
appellee, v. glen Wolf and rhonda Wolf,
husband and Wife, appellants.
817 N.W.2d 758
Filed August 3, 2012. 	No. S-11-970.
1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower
court’s granting of summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or as to the ultimate
inferences that may be drawn from those facts and that the moving party is
entitled to judgment as a matter of law.
2. ____: ____. In reviewing a summary judgment, an appellate court views the
evidence in the light most favorable to the party against whom the judgment was
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:41 AM CST

FARMINGTON WOODS HOMEOWNERS ASSN. v. WOLF 	281
Cite as 284 Neb. 280
granted, and gives that party the benefit of all reasonable inferences deducible
from the evidence.
3. Summary Judgment. Summary judgment proceedings do not resolve factual
issues, but instead determine whether there is a material issue of fact in dispute.
4. ____. Where reasonable minds differ as to whether an inference supporting the
ultimate conclusion can be drawn, summary judgment should not be granted.
5. Restrictive Covenants: Waiver. The right to enforce restrictive covenants may
be lost by waiver or acquiescence in the violation of the same. Whether there has
been such a waiver or acquiescence depends upon the circumstances of each case.
6. ____: ____. Generally, mere acquiescence in the violation of a restrictive cov-
enant does not constitute an abandonment thereof, so long as the restriction
remains of any value, and a waiver does not result unless there have been general
and multiple violations without protest.
7. Restrictive Covenants: Waiver: Proof. In order to prove a waiver of a restric-
tive covenant, a defendant must prove that a plaintiff has waived the covenant
through substantial and general noncompliance.
8. Restrictive Covenants: Intent. The enforcement of valid restrictive covenants
may be denied only when noncompliance is so general as to indicate an intention
or purpose to abandon the condition.
9. Restrictive Covenants: Waiver. The criteria for determining whether a waiver of
a restrictive covenant has occurred include, but are not limited to, whether those
seeking to enforce the covenants had notice of the violation and the period of
time in which no action was taken, the extent and kind of violation, the proxim-
ity of the violations to those who complain of them, any affirmative approval of
the same, whether such violations are temporary or permanent in nature, and the
amount of investment involved.
10. Equity: Estoppel. The elements of equitable estoppel are, as to the party
estopped: (1) conduct which amounts to a false representation or concealment
of material facts, or at least which is calculated to convey the impression that
the facts are otherwise than, and inconsistent with, those which the party subse-
quently attempts to assert; (2) the intention, or at least the expectation, that such
conduct shall be acted upon by, or influence, the other party or other persons;
and (3) knowledge, actual or constructive, of the real facts. As to the other party,
the elements are: (1) lack of knowledge and of the means of knowledge of the
truth as to the facts in question; (2) reliance, in good faith, upon the conduct or
statements of the party to be estopped; and (3) action or inaction based thereon
of such a character as to change the position or status of the party claiming the
estoppel, to his or her injury, detriment, or prejudice.
11. 	Laches. Laches occurs only if a litigant has been guilty of inexcusable neglect in
enforcing a right and his or her adversary has suffered prejudice.
12. Equity. Under the doctrine of unclean hands, a person who comes into a court of
equity to obtain relief cannot do so if he or she has acted inequitably, unfairly, or
dishonestly as to the controversy in issue.
13. Equity: Words and Phrases. Generally, conduct which forms a basis for a find-
ing of unclean hands must be willful in nature and be considered fraudulent,
illegal, or unconscionable.

282 	284 NEBRASKA REPORTS
14. Evidence: Appeal and Error. Generally, the control of discovery is a matter for
judicial discretion, and decisions regarding discovery will be upheld on appeal in
the absence of an abuse of discretion.
Appeal from the District Court for Douglas County: James t.
gleason, Judge. Reversed and remanded with directions.
Jason M. Bruno and Thomas D. Prickett, of Sherrets, Bruno
& Vogt, L.L.C., for appellants.
Larry R. Forman and Ryan Baldridge, Senior Certified
Law Student, of Hillman, Forman, Childers & McCormack,
for appellee.
heavican, c.J., Wright, connolly, stephan, and miller-
lerman, JJ.
stephan, J.
The issue in this appeal is whether a homeowners’ associa-
tion may enforce a covenant prohibiting “business activities of
any kind whatsoever” against homeowners who have operated
a daycare in their home for a period of 12 years. We conclude
that the covenant is generally enforceable, but that the district
court erred in granting summary judgment in favor of the
homeowners’ association because there are genuine issues of
material fact with respect to an affirmative defense raised by
the homeowners.
I. BACKGROUND
In December 1994, a “Declaration of Covenants, Conditions,
Restrictions and Easements for Farmington Woods in Douglas
County, Nebraska” (declaration), was filed with the Douglas
County register of deeds. The declaration is applicable to all
lots in the Farmington Woods subdivision. The declarant was
listed as R.S. Land, Inc., and the declaration was signed by
Ronald E. Smith as president of R.S. Land. Included in the
declaration was a restrictive covenant providing that “no busi-
ness activities of any kind whatsoever shall be conducted on
any Lot.”
In November 1998, Glen Wolf and Rhonda Wolf purchased
a lot in Farmington Woods and subsequently built a home.

FARMINGTON WOODS HOMEOWNERS ASSN. v. WOLF 	283
Cite as 284 Neb. 280
Ralph Marasco was their real estate agent, and because he was
selling other lots in the subdivision, the Wolfs believed that
Marasco owned all of the lots. The Wolfs told Marasco and
their homebuilder that they intended to operate a daycare from
the new home, and neither told them a daycare would not be
allowed on the property. Marasco has no legal relationship with
R.S. Land or Smith.
The Wolfs both testified that they did not read the declara-
tion, but they acknowledge its 1994 filing. The declaration pro-
vided that after either 10 years or the “closing of eighty (80%)
percent of the lots to independent third party homeowners,” the
right to enforce the covenants would transfer to the Farmington
Woods Homeowners Association, Inc. (FWHOA). In approxi-
mately 2000, the FWHOA formed and became the enforcer of
the covenants. The Wolfs continued to operate their daycare
from and after 2000.
In 2010, the Wolfs and one of their neighbors became
involved in a dispute regarding drainage on their respective
properties. The neighbor filed a complaint with FWHOA,
alleging the Wolfs were violating the covenant prohibiting
business activities by operating a daycare. Through its attorney,
FWHOA gave written notification to the Wolfs that operating
a daycare violated the covenant. FWHOA then filed suit to
enjoin the Wolfs from operating the daycare.
After the complaint and answer were filed, both parties
moved for summary judgment. At a hearing on the motions,
FWHOA presented evidence that the “no business activities”
covenant was in effect in 1994 and that the Wolfs purchased
their lot subject to the covenant in 1998. Evidence was also
offered that showed FWHOA’s unwritten policy was to act
on an alleged covenant violation only after a complaint had
been filed. No complaint had been filed with respect to the
Wolfs’ or any other homeowners’ business activities prior to
the 2010 complaint. The Wolfs presented evidence that at least
two members of FWHOA were aware as early as 1998 that
the Wolfs operated a daycare out of their home. The Wolfs
also presented evidence that at least one member of FWHOA
knew of the operation of another daycare in Farmington Woods

284 	284 NEBRASKA REPORTS
sometime between 2000 and 2010 and took no action to
enforce the “no business activities” covenant. In addition, the
Wolfs presented evidence that a number of home-based busi-
nesses had operated “openly and notoriously” in Farmington
Woods, with no action by FWHOA. And, finally, the Wolfs
presented evidence that the president of FWHOA had operated
businesses from his home since 2000, with the knowledge of at
least one other FWHOA member, and that no action was taken
to enforce the “no business activities” covenant against him
prior to 2010.
The district court granted summary judgment in favor of
FWHOA, finding that the Wolfs had at least constructive
knowledge of the “no business activities” covenant. Without
detailed analysis, the district court determined that the Wolfs’
defenses had no basis as a matter of law. The Wolfs filed this
timely appeal.
II. ASSIGNMENTS OF ERROR
The Wolfs assign, restated, that the district court erred in
(1) finding their operation of a home daycare violates the “no
business activities” covenant; (2) failing to apply the defenses
of waiver, estoppel, and laches; (3) failing to find FWHOA
was barred from receiving relief by the doctrine of unclean
hands; (4) failing to hold FWHOA in contempt for discov-
ery violations; and (5) granting FWHOA’s motion for sum-
mary judgment.
III. STANDARD OF REVIEW
[1,2] An appellate court will affirm a lower court’s granting
of summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from those
facts and that the moving party is entitled to judgment as a
matter of law.1 In reviewing a summary judgment, an appel-
late court views the evidence in the light most favorable to the
party against whom the judgment was granted, and gives that
1 In re Estate of Cushing, 283 Neb. 571, 810 N.W.2d 741 (2012); Doe v.
Board of Regents, 283 Neb. 303, 809 N.W.2d 263 (2012).

FARMINGTON WOODS HOMEOWNERS ASSN. v. WOLF 	285
Cite as 284 Neb. 280
party the benefit of all reasonable inferences deducible from
the evidence.2
IV. ANALYSIS
1. enforceability of covenant
against daycare
The Wolfs argue that their daycare does not violate the “no
business activities” covenant because its operation does not
infringe on the neighborhood. We rejected a similar argument
in Southwind Homeowners Assn. v. Burden,3 decided during
the pendency of this appeal. In that case, we held that opera-
tion of an in-home daycare violated a covenant which provided
that “‘[n]o business activities of any kind whatsoever shall
be conducted on any Lot’” in the residential subdivision.4
We reasoned that the covenant was unambiguous and found
that the residents were operating their home-based daycare in
violation of the terms of the covenant. The language of the
covenant at issue in this case is identical to the covenant we
held to be enforceable in Southwind Homeowners Assn., and
it is undisputed that the Wolfs are operating a daycare busi-
ness from their home. Thus, the Wolfs are in violation of the
covenant unless there is merit to one or more of their affirma-
tive defenses.
2. affirmative defenses
[3,4] In their answer, the Wolfs alleged that FWHOA was
barred from enforcing the covenant by the doctrines of waiver,
estoppel, laches, and unclean hands. In disposing of these
affirmative defenses, the district court found that “there is no
question of fact relating to whether or not the defendants were
prejudiced by the delay in bringing this action” and that “as
a matter of law” the defenses did not exist. In reviewing the
district court’s order, we are mindful that summary judgment
2 Doe v. Board of Regents, supra note 1; Alsidez v. American Family Mut.
Ins. Co., 282 Neb. 890, 807 N.W.2d 184 (2011).
3 Southwind Homeowners Assn. v. Burden, 283 Neb. 522, 810 N.W.2d 714
(2012).
4 Id. at 524, 810 N.W.2d at 716.

286 	284 NEBRASKA REPORTS
proceedings do not resolve factual issues, but instead determine
whether there is a material issue of fact in dispute.5 Where rea-
sonable minds differ as to whether an inference supporting the
ultimate conclusion can be drawn, summary judgment should
not be granted.6
(a) Waiver
[5-8] In Pool v. Denbeck,7 this court recognized that the right
to enforce restrictive covenants may be lost by waiver or acqui-
escence in the violation of the same. Whether there has been
such a waiver or acquiescence depends upon the circumstances
of each case.8 Generally, “mere acquiescence in the violation
of a restrictive covenant does not constitute an abandonment
thereof, so long as the restriction remains of any value, and
. . . a waiver does not result unless there have been general and
multiple violations without protest.”9 Thus, in order to prove a
waiver, a defendant must prove that a plaintiff has waived the
covenant through substantial and general noncompliance.10 The
enforcement of valid restrictive covenants may be denied only
when non-compliance is so general as to indicate an intention
or purpose to abandon the condition.11
[9] The criteria for determining whether a waiver of a restric-
tive covenant has occurred include, but are not limited to,
whether those seeking to enforce the covenants had notice
of the violation and the period of time in which no action
was taken; the extent and kind of violation; the proxim-
ity of the violations to those who complain of them; any
affirmative approval of the same; whether such violations
5 Conley v. Brazer, 278 Neb. 508, 772 N.W.2d 545 (2009); Sweem v.
American Fidelity Life Assurance Co., 274 Neb. 313, 739 N.W.2d 442
(2007).
6 Sweem, supra note 5; Riesen v. Irwin Indus. Tool Co., 272 Neb. 41, 717
N.W.2d 907 (2006).
7 See Pool v. Denbeck, 196 Neb. 27, 241 N.W.2d 503 (1976).
8 See id.
9 20 Am. Jur. 2d Covenants, Etc. § 229 at 755 (2005).
10 21 C.J.S. Covenants § 75 (2006).
11 Id.

FARMINGTON WOODS HOMEOWNERS ASSN. v. WOLF 	287
Cite as 284 Neb. 280
are temporary or permanent in nature; and the amount of
investment involved.12
Viewed in the light most favorable to the Wolfs, the record
shows that FWHOA (1) was aware of the Wolfs’ daycare by at
least 2000 and took no action to enforce the “no business activ-
ities” covenant until 2010; (2) knew sometime after 2000 but
prior to 2010 of another daycare in the neighborhood and took
no action to enforce the “no business activities” covenant; (3)
knew as early as 2000 that its president was operating a busi-
ness from his home but took no action to enforce the covenant;
and (4) should have known of the existence of other “openly
and notoriously” operated business operations in the neighbor-
hood, yet took no action to enforce the covenant. The evidence
also shows that from its inception, FWHOA’s unwritten policy
has been to take action to enforce an alleged covenant violation
only when it receives a complaint, formal or informal. And the
evidence further shows that no complaint of business activity
was made to FWHOA prior to the instant one.
Whether waiver occurred depends on consideration of all
these relevant facts. And based on these facts, we cannot con-
clude as a matter of law that waiver did not occur. Thus, there
are genuine issues of material fact on the issue of waiver which
precluded summary judgment as to this defense.
(b) Estoppel
[10] The Wolfs also alleged that FWHOA is estopped from
enforcing the covenant against them. The elements of equi-
table estoppel are, as to the party estopped: (1) conduct which
amounts to a false representation or concealment of material
facts, or at least which is calculated to convey the impression
that the facts are otherwise than, and inconsistent with, those
which the party subsequently attempts to assert; (2) the inten-
tion, or at least the expectation, that such conduct shall be
acted upon by, or influence, the other party or other persons;
and (3) knowledge, actual or constructive, of the real facts. As
to the other party, the elements are: (1) lack of knowledge and
12 Pool, supra note 7, 196 Neb. at 34, 241 N.W.2d at 507. Accord Hoff v.
Ajlouny, 14 Neb. App. 23, 703 N.W.2d 645 (2005).

288 	284 NEBRASKA REPORTS
of the means of knowledge of the truth as to the facts in ques-
tion; (2) reliance, in good faith, upon the conduct or statements
of the party to be estopped; and (3) action or inaction based
thereon of such a character as to change the position or status
of the party claiming the estoppel, to his or her injury, detri-
ment, or prejudice.13
Here, the Wolfs argue that a genuine issue of material fact
exists on their defense of equitable estoppel because they
“relied, in good faith, upon the inaction, silence, and active
condoning of the daycare by the FWHOA.”14 They assert
that FWHOA cannot now enforce the covenant against them
because it did not do so previously and the Wolfs relied to
their detriment on FWHOA’s inaction. But even if FWHOA’s
inaction can be considered conduct which amounts to a false
representation or concealment of material facts, the record
does not support any reasonable inference that the Wolfs
lacked knowledge of or the means of discovering the truth.
The Wolfs purchased their lot subject to the declaration, and
thus at all times, they were operating their daycare with at
least constructive knowledge that it violated the “no business
activities” covenant. There also is no evidence that the Wolfs
detrimentally changed their position or status in reliance on
FWHOA’s nonenforcement of the covenant. Rather, the Wolfs
benefited from the long period of nonenforcement. We find
there is no genuine issue of material fact on the affirmative
defense of estoppel.
(c) Laches
[11] The Wolfs also alleged that FWHOA is barred from
enforcing the covenant by the doctrine of laches. The defense
of laches is not favored in Nebraska.15 Laches occurs only if a
litigant has been guilty of inexcusable neglect in enforcing a
right and his or her adversary has suffered prejudice.16
13 See Olsen v. Olsen, 265 Neb. 299, 657 N.W.2d 1 (2003).
14 Brief for appellant at 16.
15 Dutton-Lainson Co. v. Continental Ins. Co., 271 Neb. 810, 716 N.W.2d 87
(2006).
16 See id.

FARMINGTON WOODS HOMEOWNERS ASSN. v. WOLF 	289
Cite as 284 Neb. 280
Even if FWHOA is guilty of inexcusable neglect, an issue
we do not decide, the Wolfs have not been prejudiced. They
argue enforcement of the covenant prejudices them because
if the daycare is shut down, they could lose a large portion of
their income and could be forced out of their home. But this
argument focuses on what prejudice would occur in the future
if the covenant were enforced, which is not the appropriate
legal timeframe.
Laches does not result from the mere passage of time, but
from the fact that during the lapse of time, circumstances
changed such that to enforce the claim would work inequita-
bly to the disadvantage or prejudice of another.17 Here, there
is no evidence that in the 12 years preceding enforcement
of the covenant, circumstances changed such that to enforce
the covenant would prejudice the Wolfs. Rather, the Wolfs
benefited from the long period of nonenforcement. We con-
clude there is no genuine issue of material fact on the defense
of laches.
(d) Unclean Hands
[12,13] Under the doctrine of unclean hands, a person who
comes into a court of equity to obtain relief cannot do so if
he or she has acted inequitably, unfairly, or dishonestly as to
the controversy in issue.18 Generally, conduct which forms a
basis for a finding of unclean hands must be willful in nature
and be considered fraudulent, illegal, or unconscionable.19
Although there is evidence that FWHOA knew of other viola-
tions of the “no business activities” covenant but did not seek
to enforce it, there is no evidence to support a reasonable
inference that FWHOA’s failure to do so was so inequitable or
unfair that it should deny it from seeking relief in this court.
As noted, FWHOA is not equitably estopped from enforcing
17 Id.; Fritsch v. Hilton Land & Cattle Co., 245 Neb. 469, 513 N.W.2d 534
(1994).
18 Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007).
19 Richardson v. Anderson, 8 Neb. App. 923, 604 N.W.2d 427 (2000). See,
also, State on behalf of Pathammavong v. Pathammavong, 268 Neb. 1, 679
N.W.2d 749 (2004).

290 	284 NEBRASKA REPORTS
the covenant against the Wolfs. In addition, FWHOA presented
evidence that its failure to enforce the covenant was based
upon its policy of not acting until a complaint was filed. On
these facts, no reasonable fact finder could find that FWHOA
is barred by the doctrine of unclean hands, and the district
court did not err in granting FWHOA summary judgment on
this defense.
3. discovery violation
During 	discovery, 	the 	Wolfs 	served 	interrogatories 	on
FWHOA. One interrogatory asked FWHOA to “set forth the
name and address of each and every person or resident that
currently conducts any business activities within Farmington
Woods, and include the type of business activity conducted by
each.” FWHOA’s answer, which was verified by its president,
was “None other than Rhonda Wolf Daycare.”
During the president’s deposition, however, he admitted that
he had operated businesses out of his home from approximately
2000. The Wolfs also obtained evidence “from other sources
showing numerous other business activities within Farmington
Woods that the FWHOA either knew or should have known
about.”20 The Wolfs therefore filed an application for contempt
and a motion for sanctions, asking the district court to sanction
FWHOA for its answers to the interrogatories. The court took
evidence on the motion and ultimately overruled it.
[14] Generally, the control of discovery is a matter for judi-
cial discretion, and decisions regarding discovery will be upheld
on appeal in the absence of an abuse of discretion.21 FWHOA’s
president clarified in his deposition that when he answered the
interrogatory, he answered it in light of FWHOA’s policy to
not seek out covenant violations, but instead to act only when
a complaint was filed. In light of this explanation, the district
court did not abuse its discretion in neither finding FWHOA in
contempt nor imposing sanctions.
20 Brief for appellant at 23.
21 Schropp Indus. v. Washington Cty. Atty.’s Ofc., 281 Neb. 152, 794 N.W.2d
685 (2011); Podraza v. New Century Physicians of Neb., 280 Neb. 678,
789 N.W.2d 260 (2010).

FARMINGTON WOODS HOMEOWNERS ASSN. v. WOLF 	291
Cite as 284 Neb. 280
V. CONCLUSION
We affirm the district court’s order to the extent it found
that the Wolfs’ daycare violated the “no business activities”
covenant and to the extent it granted summary judgment on the
defenses of estoppel, laches, and unclean hands. But as to the
Wolfs’ affirmative defense of waiver, we reverse the district
court’s grant of summary judgment and remand the cause with
directions to conduct further proceedings not inconsistent with
this opinion.
reversed and remanded With directions.
mccormack, J., not participating.