Middleton Development Corp v. Gust

O’Hara, J. Plaintiff real-estate developer desired to create one large lake from three small lakes then existing on the involved property. It proposed to do this by building a dam which would raise the water level. By virtue of a written agreement, dated October 1, 1965, defendants — who were the only land owners on the proposed lake besides the plaintiff — granted flowage rights over their land to plaintiff corporation in exchange for a promise to rough-grade a road around defendants’ land. Three years passed. The new lake reached a maximum water level. Plaintiff completed the construction of roads upon its property and obtained [73] final state approval of the dam and subdivision plans. During this period, it sold several lakefront lots to the public. Then plaintiff sought to complete its contractual obligation by constructing the road on defendants’ property. This defendants would not allow. At best, they asserted, plaintiff had only a reasonable time within which to perform. Too much time had elapsed. Thus, the agreement was null and void. Consequently, they (defendants) were no longer bound and were free to commence operation of a boat livery upon the new lake. At trial both parties argued as to whether operation of the boat livery constituted a breach of defendants’ agreement not to permit a public easement across their land with access to the lake. The learned trial judge found no breach of the parties’ agreement. This appeal of right by plaintiff followed. Since we do not agree with the parties’ formulation of the question on appeal, we thus state the issue: What was the intention of the parties as expressed in the written agreement? The plaintiff is a corporate real estate developer. It conceived the residential development on Lake Lochbrae. It arranged the financing. It invested some $98,000 in the project. To date, over $200,000 in residential lots have been sold to the public. As such, the public relied on plaintiff’s representation that only property owners had access to the lake. The whole purpose of this agreement was to assure the orderly development of a residential area fronting on a private lake. To this end, defendants agreed that if they subdivided their land that they would not sell more than two rows of lakefront lots and that they would restrict their property in the same manner as plaintiff. Other [74] provisions in the agreement similarly obligated defendants not to permit a public easement across this land to the lake. To permit continued operation of the boat livery would adversely affect both plaintiff and those persons to whom it sold lots. It hardly need be said that potential buyers will not pay as handsomely for property fronting on a lake to which the public has access as they will for land adjacent to a body of water without public access. Nor would operation of the boat rental facility protect the reasonable reliance of previous purchasers as to the private character of the lake. For the foregoing reasons, we reverse the trial court and direct reinstatement of the order restraining defendants from operating the boat livery. We further direct plaintiff to rough-grade a road on defendants’ property if request therefor is made within a reasonable time. Reversed. Plaintiff may tax costs. R. B. Burns, P. J., concurred.