Hill v. Community of Damien of Molokai, Supreme Ct. of NM (1996)
Author: Bram

Parties: Community is the party who runs the group home; appellee Hill is the entity representing the neighborhood's home owners.

Cause of action/remedy sought: The following is an equitable action seeking removal of an injunction.

Procedural History: Trial court entered order for an injunction against appellants-defendant.  This court reverses; injunction is vacated.

Facts: AP uses property as a group home for AIDS-stricken people, and contends that use of the home as such is not a violation of the neighborhood covenant, and failure to allow them their right would be a violation of their rights under the Federal Fair Housing Act of 1988 (FHA).  APE's argue the use of the home violates a restrictive covenant. 

Community leased the residence 12/92 located in a subdivision, for use as a group home for 4 individuals w/AIDS.  ALL 4 were unrelated; each needed some in-home nursing care. 

The restrictive covenant entered into by AP's says no lot shall be used for no purpose other than as a single-family residence, nor shall any other bldg be used for anything other than incidental to a single-family residence.  The use for other purposes, but not restricted to "...rooming houses..." is expressly prohibited.

Issue(s): Under NM property law, should the interpretation of a restrictive covenant that says, "no lot shall ever be used for any purpose other than single family residence purposes," be strictly interpreted by the court to mean only the traditional family, when the residence is used as a group home for people with AIDS?

Holding: No.  The home is not used for anything other than a single-family home under the provisions of the covenant, and forcing them out would be illegal under the FHA.

Court's Rationale/Reasoning:  Court looked to the trial court's reasoning under the covenant, and found their determination was that they thought the term "single family residence" was contrary to the use of the AP's home; it felt that the group home was used more like an apartment, quasi-health care facility, or a rooming house.  This is incorrect as a matter of law.

Group home had a traditional family structure, with all residents acting as normal residents did with a disable family member.  Health-care workers didn't live there and they weren't affiliated with the Community in any way.  Community group was there to help, but not run its business out  of the home.  SC & OK Supreme Courts came to the same decision as this court: purpose of group home is to create a family atmosphere.

Family argument by Hill: these residents are not a family by definition.  But neighbors fail to check the covenant to see how family is used in it; the term "family" is not unambiguously stated, and as rule 1 states, any ambiguity is read to favor the appellant.  The city's definition of family considers a family "any group of 5 or less unrelated people living in the same dwelling. There is also strong public policy in favor of removing barriers preventing individuals w/disabilities from living in group homes in residential settings and against restrictive meanings of "families."  This is urged by Federal as well as State gov't.

Traffic argument is unconvincing.  Court quickly rushed through, and said covenant has no restrictions to this, and besides, the traffic could conceivably be the same with a married family of four there as well.

The FHA argument is also compelling for appellant.  A restriction does indeed violate the Act, as the statute describes discrimination in this context as denying or make unavailable to any person of handicap who intends to reside in a place after it is sold, rented or made available.  The court was not impressed with their discriminatory intent argument, but was with the disparate impact, in which it said that the neighbor's conduct actually or predictably resulted in discrimination or has that effect.  Limiting a covenant to able-bodied people creates a disparate effect (different in every way) to a normal living environment.

Finally, if the neighbors denied access or a refusal to accommodate to the neighborhood through its covenant, it should be forced to accommodate (not just applicable to handicapped people).

Rule: (1) if the language is unclear or ambiguous, the court will resolve the restrictive covenant in favor of the free enjoyment of the property and against restrictions.

(2) the court will not read restrictions on the use and enjoyment of the land into the covenant by implication.

(3) the court must interpret the covenant reasonably, but strictly, so as not to create an illogical, unnatural, or strained construction.

(4) the court must give words in the restrictive covenant their ordinary and intended meaning

Did court avoid issues?: No.

Dicta: No.