Precedents Cited and Their Influence

• Cole v. Davis, 383 So. 3d 646 (Ala. 2023)

  The Court relied heavily on Cole to reaffirm that a party’s constructive or actual knowledge of a covenant does not automatically foreclose the relative-hardship defense. Knowledge is a factor, not a bar. Cole also clarified the ongoing role of equitable principles in covenant enforcement even where breach is clear.

• Lange v. Scofield, 567 So. 2d 1299 (Ala. 1990)

  Central to the Court’s equitable analysis, Lange holds that enforcement of covenants is governed by equity and may be denied when relief would be “inequitable and unjust.” The Court’s balancing—harm to the homeowners versus benefit of enforcement—tracks Lange’s framework.

• Tubbs v. Brandon, 374 So. 2d 1358 (Ala. 1979) and Reetz v. Ellis, 279 Ala. 453, 186 So. 2d 915 (1966)

  These cases support the proposition (cited in Cole) that a covenant breach can justify injunctive relief without proof of damages. The Court reconciled Tubbs with Lange/Cole by emphasizing that breach satisfies the “irreparable injury” element, but does not eliminate equitable balancing under the relative-hardship test.

• Grove Hill Homeowners’ Ass’n v. Rice, 90 So. 3d 731 (Ala. Civ. App. 2011) and Maxwell v. Boyd, 66 So. 3d 257 (Ala. Civ. App. 2010)

  The Supreme Court implicitly distances itself from any bright-line notion (inferred from these Court of Civil Appeals decisions) that knowledge alone bars relative hardship. After Cole, and now here, knowledge is merely one factor.

• J & M Bail Bonding Co. v. Hayes, 748 So. 2d 198 (Ala. 1999); Weaver v. Pool, 249 Ala. 644, 32 So. 2d 765 (1947); Retail Developers of Alabama, LLC v. East Gadsden Golf Club, Inc., 985 So. 2d 924 (Ala. 2007)

  These authorities define the clean-hands doctrine: it applies to willful, morally reprehensible misconduct, not mere negligence. The Court used these cases to conclude that the homeowners’ lapses—amid a confusing “one-stop” process and municipal representations—did not rise to the level barring equitable defenses.

• Stewart v. Secor Realty & Investment Corp., 667 So. 2d 52 (Ala. 1995) and Gulf House Ass’n v. Town of Gulf Shores, 484 So. 2d 1061 (Ala. 1986)

  These decisions articulate Alabama’s general rule that a property owner has no legal entitlement to a view. The Court invoked this backdrop when weighing the supposed view-protection purpose of the Silver Cay II setback, particularly given the lack of quantified harm and mixed evidence of purpose.

• Ex parte Odom, 254 So. 3d 222 (Ala. 2017); Hines v. Heisler, 439 So. 2d 4 (Ala. 1983)

  On construction of covenants: doubts are resolved against restriction; clear covenants receive effect according to their plain meaning. The Court acknowledged the setback and approval covenants are unambiguous and breached, but equitable relief is still subject to balancing.

• Dauphin Island Prop. Owners Ass’n v. Kuppersmith, 371 So. 2d 31 (Ala. 1979)

  Reinforces that the DIPOA’s failure to enforce a particular restriction does not waive future enforcement (consistent with non-waiver language in the “green sheets”). This undercut the DIPOA’s “bad precedent” justification in the hardship balance.

• Walden v. ES Capital, LLC, 89 So. 3d 90 (Ala. 2011) and Sycamore Mgmt. Grp., LLC v. Coosa Cable Co., 42 So. 3d 90 (Ala. 2010)

  Provide the four-part permanent injunction standard. The Court’s analysis emphasizes that breach can satisfy irreparable harm, but the balance of harms and public interest remain live questions.

• Merchants Bank v. Head, 161 So. 3d 1151 (Ala. 2014)

  Standard of review under the ore tenus rule; the Court explains why the trial court’s implicit rejection of relative hardship was “palpably erroneous or manifestly unjust” on this record.

• Battle v. City of Birmingham, 656 So. 2d 344 (Ala. 1995) and American Petroleum Equip. & Constr. Inc. v. Fancher, 708 So. 2d 129 (Ala. 1997)

  Attorney-fee awards are discretionary and the cross-appeal became moot after the reversal; the Court dismisses the fee appeal accordingly.

Legal Reasoning: How the Court Reached Its Decision

1. Undisputed Breach of Unambiguous Covenants

   The 90-foot setback for Lot 23 (Silver Cay II covenants) and the DIPOA pre-approval requirement (via incorporated “green sheets”) are unambiguous; the home indisputably extends ~23 feet beyond the setback and construction began without DIPOA approval.

2. Clean Hands: Knowledge Is Not a Bar; Willful, Morally Reprehensible Conduct Is Required

   Despite the homeowners’ prior experience on the Island, the totality of circumstances did not show willful, morally reprehensible misconduct. The record showed:

   • A longstanding “one-stop” Town–DIPOA application process that remained in effect (no written termination) and was inconsistently administered by both entities.
   • Town personnel policies included collecting plans for DIPOA; the permit clerk may have told the builder the Town would forward materials.
   • Confusion was exacerbated by staff turnover and a system transition at the Town during the relevant period; the DIPOA checkbox on the Town form was left unchecked.
   • Once notified, the homeowners largely complied with the stop-work order, installing only delivered doors/windows to avoid loss, and later sought a variance with neighbor consents. There was no concealment of construction; DIPOA officers observed progress before issuing the stop-work order.

   Against that backdrop, the Court held the clean-hands doctrine did not bar equitable defenses. Negligent noncompliance is not enough; equity reserves the bar for willful, morally culpable conduct.

3. Relative-Hardship Balancing

   With the defense available, the Court weighed harms:

   • Hardship to the Englunds: Tearing down and rebuilding to the same construction stage would exceed $200,000; DIPOA’s proposed redesign would reduce the home by roughly 700 square feet and eliminate a bedroom/bath, with an estimated $300,000–$350,000 value loss; a two-story fix would be costlier and impractical given the owners’ age; the structure had deteriorated during litigation.
   • Benefits to DIPOA/Neighbors:
     • Setback purpose was unclear. DIPOA witnesses “supposed” it preserved views; defendants suggested historical shoreline safety. No quantified diminution in value was offered; one immediate neighbor consented after negotiating a deck extension, and DIPOA’s own architectural committee recommended granting a variance.
     • Views are not a freestanding legal right under Alabama law. A view can be protected by properly framed covenants, but here the lack of concrete proof of harm and the ambiguity of purpose diminished the enforcement benefit.
     • Enforcement/precedent benefit: DIPOA’s non-waiver clauses preserve future enforcement; generalized fears of “bad precedent” carry little weight where the other side faces extreme, documented hardship and where Town–DIPOA coordination lapses contributed to the violation.

   Result: The homeowners’ hardship was considerably disproportionate to any benefit of strict injunctive enforcement. Equity therefore denied the injunction, consistent with Lange and Cole.

4. Other Issues Pretermitted or Moot

   Because the relative-hardship defense was dispositive, the Court did not reach the “changed neighborhood” defense or the homeowners’ counterclaim seeking compelled enforcement against neighbors. The DIPOA’s attorney-fee cross-appeal was dismissed as moot.

5. Justice Cook’s Special Concurrence

   He underscored that restrictive-covenant disputes are fact-intensive. The Court is not holding that view-protective covenants can never be enforced; rather, on this record, enforcement benefits were too insubstantial compared to the homeowners’ hardship.

Impact: What This Decision Means Going Forward

• No bright-line bar based on knowledge. After Cole and now this case, Alabama courts will not deny the relative-hardship defense simply because the violator knew of the covenant. Associations must marshal concrete evidence of willful, morally culpable behavior to invoke clean hands as a bar.
• Breach is not the end of the analysis. While breach can establish irreparable harm for injunctive purposes, courts will still weigh the balance of hardships. Associations should expect to prove specific, measurable benefits of enforcement (e.g., appraisals quantifying damages, safety, drainage, or other tangible harms), not just generalized appeals to uniformity or slippery-slope fears.
• View-protection requires clarity and proof. Alabama recognizes no inherent right to a view. If view preservation is the objective, draft covenants to say so expressly, tie them to objective metrics (view corridors, height planes, datum references), and be prepared to offer appraisal evidence of harm when litigating.
• Process matters—and can mitigate “willfulness.” A municipal–HOA “one-stop” regime that confuses applicants can weigh against a finding of willful misconduct, particularly if both entities contributed to the breakdown (unchecked forms, inconsistent pickup/review, unclear signage, timing problems).
• Non-waiver clauses curb the “precedent” argument. Covenants that preserve enforcement despite past non-enforcement weaken the claim that denying an injunction “sets a bad precedent,” especially when the homeowner’s hardship is severe.
• Practice implications for HOAs/POAs:
  • Adopt written, objective variance standards (e.g., factors, burden of proof, evidence required).
  • Monitor municipal permit lists proactively and coordinate via formalized data-sharing; memorialize any change to “one-stop” protocols by written notice.
  • Document the original purpose of covenants and maintain historical files; ambiguity erodes enforcement weight.
  • When denial rests on community-wide interests (views, uniformity), commission expert analyses to quantify impact.
• Practice implications for owners/builders:
  • Always obtain HOA/POA approvals even if municipal staff suggest forwarding plans; municipal and HOA approvals are distinct.
  • If a violation is alleged, stop work promptly and engage in transparent mitigation (variance requests, neighbor accommodations, protective measures for delivered materials) to preserve equitable defenses.
  • Be prepared to quantify hardship with detailed cost estimates and valuation impacts.