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Bob Layne Contractor Inc. v. Bartel

decided: November 1, 1974.

BOB LAYNE CONTRACTOR, INC., A CORPORATION, PLAINTIFF-APPELLANT,
v.
CHARLES L. BARTEL, ET AL., DEFENDANTS-APPELLEES



Appeal from the United States District Court for the Southern District of Indiana - No. IP 70 C 371 Cale J. Holder, Judge.

Sprecher and Tone, Circuit Judges, and Perry, Senior District Judge.*fn*

Author: Sprecher

SPRECHER, Circuit Judge.

This appeal tests the propriety of the entry of a summary judgment by the district court.

I

The plaintiff, Bob Layne Contractor, Inc., is an Indiana corporation engaged in the development of residential real estate and in the construction and sale of single-family residences thereon.

On May 4, 1960, Layne platted and recorded the plat of a subdivision known as "Layne Crest Addition," an addition to the City of Muncie, Indiana, consisting of 207 lots on 50.07 acres. Recorded with the subdivision plat were "restrictions, conditions and limitations for Layne Crest Addition," drafted and adopted by Layne, which restricted "each and every lot in said addition" to "residential purposes" with not more than "one single family dwelling" on any lot. These restrictive convenants were "to run with the land and shall be binding on all parties and all persons claiming under them for a period of twenty-five (25) years from said date these covenants are recorded, after which time said covenants shall be extended automatically for successive periods of ten (10) years unless an instrument signed by a majority of the owners of the lots has been recorded, agreeing to change said covenants in whole or in part."

Finally, "enforcement shall be by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant either to restrain violation or to recover damages."

Approximately 135 lots improved with single family dwellings were sold to individual owners. During the mid-1960's plans were developed for the construction of a four-lane freeway along the northern boundary of Layne Crest. Recognizing that the freeway would render approximately 49 lots at the north end of the subdivision more suitable for commercial than residential development, Layne brought a proceeding to vacate that part of the plat of Layne Crest Addition.

No reference was made in the vacation proceedings to the restrictive covenants; none of the lot-owners were named as parties to those proceedings; and no attempt was made to seek an agreement by a majority of the lot owners to nullify the restrictive covenants.

On March 23, 1967, a judgment was entered by the Delaware County, Indiana, Circuit Court vacating the northern portion of the plat. At about the same time Layne attempted but failed to obtain from the Muncie City Council the rezoning of the property for commercial use.

On January 16, 1968, the owners of eleven lots in Layne Crest brought on behalf of themselves and the other lot owners of Layne Crest a suit in the Delaware County Superior Court to enjoin the violation by Layne of the restrictive covenants. After a trial the court on May 25, 1971, awarded the lot owners an injunction prohibiting Layne's violation of the restrictive covenants, finding that the covenants ran with the land, that they were not dissolved by Layne's vacation suit, and that they could be dissolved only by an agreement of the majority of owners or by legal action with notice to each owner.

While the injunction suit was pending, Layne in August, 1968, on his second attempt, procured rezoning of the northern part of Layne Crest by the Muncie City Council for commercial use and made some attempts to sell the northern part for development as a shopping center. Also on June 5, 1970, Layne brought this suit in the federal district court against the lot owners who were plaintiffs in the state court injunction suit and others, alleging antitrust violations and seeking damages and injunctive relief.

Layne and the antitrust defendants all filed motions for summary judgment. On July 12, 1973, the district court denied Layne's motion and granted ...


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