Douglas J. MENNE, as Trustee of the First Supplemental Trust Agreement created by Douglas J. Menne dated 11/22/96 (as amended), Appellant, v. KEOWEE KEY PROPERTY OWNERS' ASSOCIATION, INC., Respondent.

Douglas Menne brought this declaratory judgment action against
the Keowee Key Property Owners' Association, Inc. seeking a
determination regarding the validity of a restrictive covenant
that prevents him from building an individual boat dock on his
lakefront property. The master in equity ruled the covenant was
valid and enforceable. Menne appeals. We affirm.

FACTS

Keowee Key is a gated residential community on Lake Keowee. The
community is divided into units, with each unit further divided
into multiple lots. Keowee Key, a large area comprised of over
2,200 lots, covers approximately 1,600 acres. Each unit contains
its own distinct set of restrictive covenants that apply only to
the lots within that unit.

In 1985, Menne's mother purchased from the Lake Keowee
Development Corporation Lot 24, a lakefront tract within Unit 20
of Keowee Key. Unit 20 abuts the largest cove at Lake Keowee,
informally called the Leisure Trail Cove (the "Cove").

Menne's mother purchased the property subject to a restrictive
covenant that the developer recorded in Oconee County on April
19, 1985. The covenant prohibits construction of individual boat
docks in Unit 20 and provides in relevant part as follows:

No docks or other structures of a permanent or
temporary nature shall be placed in or upon the
waters or the shoreline of Lake Keowee by any
individuals, partnership or corporation other than
Lake Keowee Development Corporation, its successors
or assigns.

The developer created the Leisure Trail, a walking path along
the edge of the Cove at Lake Keowee, for the enjoyment of all
Unit 20 property owners, including the owners of interior lots.
The developer believed the natural aesthetics of the Leisure
Trail would be better preserved by a few community boat docks, or
"cluster docks," rather than numerous individual boat docks. The
covenant maintains this appearance by preventing the construction
of individual boat docks. In lieu of individual docks, however,
Unit 20 property owners can lease boat slips from a nearby
community boat dock, the Gazebo Dock.

At the time Menne's mother purchased Lot 24 in 1985, the Cove
contained community docks in two locations, one consisting of 58
slips (the "Main Dock") and another consisting of the 18-slip
Gazebo Dock, for a total of 76 slips. At one end of the Cove is
Unit 21, which, like Unit 20, borders the Cove. At the other end
of the Cove formerly stood the Yacht Club. It housed a restaurant
and meeting area. The Leisure Trail started near the Yacht Club,
traversed Unit 20, and ended within Unit 21.[fn1] From the
time she bought the property, Menne's mother rented a boat slip
at the Gazebo Dock.

In 2000, Menne took over ownership of Lot 24 from his mother
subject to the covenant.[fn2] Menne admittedly knew when he
acquired the property that the covenant prohibited Lot 24 from
having an individual dock. He had accompanied his mother when she
purchased the property in 1985. Menne also knew the covenant
applied only to Unit 20 and did not apply to the other units in
the Cove.

In 2001, Menne contacted the Keowee Key Property Owners'
Association[fn3] and requested permission to build an
individual
boat dock on Lot 24 so he could house his three watercraft on the
lake. Menne explained that, although he continued to lease one
boat slip at the Gazebo Dock (as his mother had done), he wished
to dock more boats at Lake Keowee because, in addition to his
pontoon boat, he now owned a ski boat and jet ski used by his
children. Menne complained about having to remove his watercraft
from the lake on a daily basis. He said it cut into the amount of
"water time" that he had on the lake. He viewed the Unit 20
restriction as "neither fair, logical or legal."

The Association rejected Menne's request based on the
restrictive covenant in Unit 20. The Association noted no private
docks existed in the restricted area and it was in the process of
constructing additional community boat slips.[fn4]

Menne subsequently enlisted the help of an Ohio attorney to
negotiate with the Association about building an individual dock
on Lot 24. Menne met with the Association's general manager,
David Coe, but the Association maintained its position that the
Unit 20 covenant prevented Menne from constructing an individual
boat dock on Lot 24.

Menne thereafter filed this declaratory judgment action seeking
a determination that the Unit-20 covenant could no longer be
enforced because of a change of conditions in the area. The
master in equity reviewed the pleadings, stipulations, testimony,
and exhibits, and walked the Leisure Trail with the consent of
all parties, and concluded no radical change of conditions had
occurred that would support an invalidation of the Unit 20
restrictive covenant regarding the construction of private docks.
The master noted the Leisure Trail had retained its aesthetic
appeal despite the addition of a few community docks in the Cove.
Finally, the master ordered Menne to pay attorney fees and costs
of $56,273.25 to the Association.

LAW/ANALYSIS

I. Change of Conditions

Menne contends the master erred in failing to invalidate the
restrictive covenant based on a change of conditions.

Under South Carolina law, a party may bring a declaratory
judgment action to invalidate a restrictive covenant based on a
change of conditions.[fn5] The party bringing the action
bears the burden of proof by the preponderance of the
evidence.[fn6]

In an action for a declaratory judgment, "affirmative relief
may be granted against a restrictive covenant where there is such
a change in the character of the neighborhood as to render the
enforcement of the covenant valueless to the covenantee and
oppressive and unreasonable as to the covenantor."[fn7] A
party seeking to annul a restrictive covenant must show the
change of conditions represented so radical a change that the
original purpose of the restrictive covenant can no longer be
realized.[fn8] Even if, however, a change of conditions has
occurred and inflicts a hardship upon the servient estate, equity
will enforce a restrictive covenant if it "remain[s] of
substantial value."[fn9]

Since Menne's mother purchased Lot 24 in 1985, the Cove has
changed. When she purchased Lot 24, the Cove contained 76
community boat slips - 18 slips at the Gazebo Deck and 58 slips
at the Main Dock. In 1992, the Association built a 24-slip
cluster dock off the Leisure Trail, increasing the total number
of boat slips to 100. Like the Gazebo Dock, this cluster dock
accommodates property owners who could not build individual docks
on the lake because they purchased property along the Leisure
Trail. This particular cluster dock was built for Unit 21
property owners. In 1996, the Association added 12 slips to the
Main Dock, increasing the total number of slips in the Cove to
112. In 2001, the Association
built a 20-slip cluster dock off the Leisure Trail called the
Tall Ships Dock. These additional slips, combined with the 2-slip
Fordco Dock that had been in the Cove for an indeterminate number
of years, brought the total number of slips near the Leisure
Trail in the Cove to 134 overall.

The Association also has plans for future development. It has
submitted an application to Duke Energy Corp. to build another
cluster dock comprised of 14 slips next to the Main Dock at the
beginning of the Leisure Trail.

The Yacht Club was razed and replaced with a town house
development called Sunrise Pointe between 2001 and 2003. The
developer of Sunrise Pointe built an 8-slip cluster dock and has
already submitted a proposal to increase the dock to 12 slips.
Sunrise Pointe is not located on the Leisure Trail and is not
governed by the Association, but it is within the Cove. The old
2-slip Fordco Dock near the Sunrise Pointe property is slated to
be removed, however.

The purpose of the Unit 20 covenant is to preserve the
aesthetics of the Leisure Trail that runs along the Cove and
crosses Unit 20. The developer believed prohibiting individual
docks along the Unit 20 shoreline would best preserve the Leisure
Trail. By building community docks, the Leisure Trail would
remain open along the Unit 20 shoreline and Unit 20 property
owners would still have access to the lake. To this end, the
original purpose of the Unit 20 covenant can and continues to be
realized.

As of this date, the Leisure Trail enjoys an open shoreline
within Unit 20. No individual boat docks have been added to the
Unit 20 shoreline and there have been no violations of the
covenant since it was recorded. Although community docks have
been built elsewhere in the Cove, no community docks have been
added to the Unit 20 shoreline since Menne's mother purchased Lot
24. Consequently, there has been little change to the aesthetics
of the Leisure Trail within Unit 20, let alone a radical change
warranting the invalidation of the Unit 20 covenant at issue
here.

Moreover, the Association's enforcement of the Unit 20 covenant
is not oppressive to Menne. Because Menne currently leases two
boat slips from the Association at the Gazebo Dock, two of his
three watercraft are already housed on the
Page 566
lake. Thus, even if there was a radical change of conditions
within Unit 20, we do not believe the fact that Menne cannot
house additional boats or other watercraft on the lake places
such an exorbitant burden on him that the Unit 20 covenant should
be invalidated.

II. Evidence of Changes Outside the Restricted Area

Menne argues the master erred in failing to consider evidence
of changed circumstances outside the restricted area.

To invalidate restrictive covenants based on a change of
conditions, the changed conditions must occur within the
restricted area, i.e., within the area where the covenants
apply.[fn10] In Flinkingshelt v. Johnson,[fn11] our
supreme court explained the relevant area must end somewhere and
different conditions naturally will exist outside the restricted
zone:

It is obvious that any restricted area, whether it be
residential or industrial, must have a demarcation
line; it must end somewhere. Where the restricted
area ends, other unrestricted development will or may
foreseeably occur. To hold that commercial
development in an unrestricted area adjoining a
restricted area would allow the lifting of the
residential restrictions as to property adjoining or
in the vicinity of the unrestricted area, would be to
expose all restrictions to eventual invalidation. It
would remove the sanctity of long standing, long
respected contractual agreements and place them at
the whim of parties not privy to the
agreements.[fn12]

Here, Unit 20 is considered the restricted area because the
covenant at issue applies only to the lots within Unit 20 and
prohibits those lot owners from building individual boat docks on
their property. The alleged change of conditions in the other
units of the Cove is irrelevant to the determination of whether
the Unit 20 covenant should be invalidated because of changed
conditions.
Page 567

III. Alleged Ambiguity of the Restrictive Covenant

Menne asserts the master erred in concluding the language of
the restrictive covenant is clear and unambiguous.

"[W]here the language imposing restrictions upon the use of
property is unambiguous, the restrictions will be enforced
according to their obvious meaning."[fn13]

The Unit 20 restrictive covenant provides as follows:

No docks or other structures of a permanent or
temporary nature shall be placed in or upon the
waters or the shoreline of Lake Keowee by any
individuals, partnership or corporation other than
Lake Keowee Development Corporation, its successors
or assigns.

The Association is the successor of the Lake Keowee Development
Corporation. Thus, the Association can build docks on Lake
Keowee, while individual Unit 20 property owners, such as Menne,
cannot. We conclude the language is clear and unambiguous.

IV. Weight of the Testimony

Menne next contends the master erred in giving the testimony of
his witness, real estate appraiser Luke Fields, less weight than
the testimony of the Association's witness, local realtor Dan
Suddeth, regarding the value of Menne's lakefront property with
and without a dock.

"The credibility of testimony is a matter for the finder of
fact to judge."[fn14] "Because the appellate court lacks the
opportunity for direct observation of the witnesses, it should
accord great deference to trial court findings where matters of
credibility are involved."[fn15] Nothing in the record
persuades us to overturn the master's view of the evidence.

Moreover, we find no error in the master's determination that,
even if Menne's lot would be worth more with an individual dock,
this would not justify the invalidation of the restrictive
covenant where there is no radical change in the restricted area
and the covenant still retains substantial value to the
residential community.

V. Complaints by Other Residents

Menne argues the master erred in excluding evidence of other
residents' complaints about the addition of more community docks
within the Cove.

The admission or exclusion of evidence is within the sound
discretion of the trial court, whose ruling will not be reversed
on appeal absent an abuse of discretion.[fn16] "An abuse of
discretion occurs when the ruling is based on an error of law or
a factual conclusion that is without evidentiary
support."[fn17] "To warrant reversal based on the admission
or exclusion of evidence, the appellant must prove both the error
of the ruling and the resulting prejudice. . . ."[fn18]

Menne offered several letters from Unit 21 property owners who
objected to the addition of boat slips to the Unit 21 community
dock, a dock that lies outside the restricted area. Menne argued
the letters showed the Association had notice of changed
conditions due to continued expansion within the Cove. The master
excluded the letters as hearsay and irrelevant. We find no abuse
of discretion in this instance. The only pertinent evidence of
changed conditions is of those changes occurring within the
restricted area, i.e., Unit 20.

VI. Motion to Amend the Pleadings

Menne asserts the master erred in denying his motion to amend
his pleadings to include causes of action for misrepresentation
and estoppel.

The master denied Menne's motion under Rule 15(b), SCRCP to
amend his pleadings to conform to the evidence, finding the
evidence had not established either cause of action. Menne argued
the Association had represented Keowee Key as being a complete
community that was already developed. He further argued the
covenant prohibited the addition of any docks, even by the
Association. Menne's interpretation of the covenant is clearly
not supported by the evidence. Moreover, because Menne admitted
the Association never told him that additional community docks
would not be built within Unit 20 or elsewhere in the Cove, there
is no evidence establishing either misrepresentation or equitable
estoppel.[fn19]

VII. Attorney Fees

Menne lastly argues the master erred in ordering him to pay
$56,273.25 in attorney fees and costs to the Association.

As a general rule, a party may not recover attorney fees absent
a contract or statute.[fn20] "When there is a contract, the
award of attorney□ fees is left to the discretion of the trial
judge and will not be disturbed unless an abuse of discretion is
shown."[fn21]

"There are six factors to consider in determining an award of
attorney□ fees: 1) nature, extent, and difficulty of the legal
services rendered; 2) time and labor devoted to the case; 3)
professional standing of counsel; 4) contingency of compensation;
5) fee customarily charged in the locality for similar services;
and 6) beneficial results obtained."[fn22] An award of
attorney fees will be affirmed on appeal if there is sufficient
evidentiary support in the record for each factor.[fn23]

In this case, the "Amended and Restated Declaration of
Protective Covenants of Keowee Key"[fn24] authorize the
Association to recover attorney fees in the event it is
successful in the defense of the provisions of the
Declaration.[fn25] The master thoroughly examined the factors
that determine an award of attorney fees and concluded the
evidence supported an award of $56,273.25 to the Association. The
record fully supports the master's findings.

AFFIRMED.

AFFIRMED.

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