Palermo v. Allen - 91 Ariz. 57, 369 P.2d 906

In Palermo v. Allen, 91 Ariz. 57 (1962), the Supreme Court of Arizona addressed a dispute regarding the enforceability of restrictive covenants on real property [1]. Key Facts The original owner of the land, Helena J. Cowperthwait, owned two tracts in Pima County, Arizona, totaling approximately 140 acres [2]. Over a 19-year period, she sold off various large parcels—never consisting of less than 10 acres—to different purchasers [2, 3]. During this time, Cowperthwait did not lay out lots, dedicate streets, or record a subdivision plat, map, or master declaration of restrictions [3, 4]. Instead, she executed individual deeds with varying terms: her first conveyance contained no restrictions; some subsequent deeds (such as those to Duncan and Gay) contained residential restrictions and reversionary clauses; and others (such as those to Griffin, Farness, and Nielsen) contained residential restrictions but lacked reversionary clauses or uniform enforcement mechanisms [2, 4, 5]. In 1937, Cowperthwait and Duncan entered into an agreement modifying his restrictive covenant to allow for paying guests or a private school [2]. The plaintiffs, who were subgrantees of a portion of the Griffin tract, filed a declaratory judgment action to quiet title against 308 defendants who owned other parcels within the original tracts [4]. The contesting defendants argued that the residential restrictions in the Griffin deed ran with the land as part of a general development scheme designed to benefit all landowners in the area [3, 4]. The plaintiffs contended that the restrictions were merely personal covenants between Cowperthwait and Griffin, and were therefore unenforceable by neighboring owners [3, 4]. Main Issues The central legal issue was whether the restrictive covenants imposed by the common grantor were intended to run with the land for the mutual benefit of subsequent purchasers, or if they were personal restrictions meant to benefit only the original grantor [3]. Court's Analysis and Final Outcome The Supreme Court of Arizona ruled in favor of the plaintiffs, reversing the trial court's judgment [6]. The court emphasized that for restrictive covenants to run with the land and be enforceable inter sese (between purchasers), there must be a mutual, joint intent of both the grantor and grantees to establish a uniform plan of restrictions [3, 7, 8]. In this case, the deeds contained no reference to a general plan, failed to describe any dominant tenement, and contained no agreement by Cowperthwait to restrict her remaining lands [8, 9]. Additionally, the court noted that Cowperthwait's prior modification of the Duncan deed demonstrated her retained personal power to release or modify the covenants, which is strongly indicative of a personal covenant rather than a general plan [5, 9]. Because there was no joint intent or writing clearly expressing that the restrictions were for the benefit of the neighborhood, the court held that the restrictions in the Griffin deed were purely personal covenants to Cowperthwait [6]. Consequently, the court remanded the case with directions to enter judgment in favor of the plaintiffs, clearing their title of the neighboring owners' claims [6]. Case Details: Case ID: palermo-v-allen Docket: 91 Ariz. 57, 369 P.2d 906 For more AZ HOA transparency resources visit https://azhoawatch.org Legal & Accuracy Notice - azhoawatch.org is operated by Hound LLC, a homeowner-run project, not a law firm. Nothing in this video is legal advice or creates an attorney-client relationship. We analyze public court, ADRE, OAH, and related public records and may express opinions. Not affiliated with any court, ADRE, or the OAH. Read the full Legal & Terms: https://azhoawatch.org/legal