Eddie Opstedal took the stand

The man who created the subdivision and executed the covenant in 1976 testified at the 2023 bench trial. He said the three-car-garage provision “was not intended to be limited to garages attached to a dwelling but included detached garages,” agreed that “having two different two-car garages on the lot would violate the covenant,” and acknowledged that “some garages can be large and others can be small.”

The governing principle came from Prairie Hills Water & Development Co. v. Gross, 2002 S.D. 133: when reading extrinsic evidence of a restrictive covenant, “the real intention of the parties, particularly that of the grantor, should be sought and carried out whenever possible.” The grantor's intention, in this subdivision, was in the room.

The result: the limit counts all garages on a lot, attached and detached together. And the irony of the case is right here — on that reading, the Straatmeyers' three-stall garage, the structure that started the lawsuit, did not violate the covenant. Many of the plaintiffs' lots did.

“Boundary of said lot”

Paragraph H set a forty-foot setback from “the boundary of said lot.” The plaintiffs argued the boundary was not the lot line but the centerline of the publicly dedicated road running past each lot. The roads in the subdivision are dedicated to public use but privately maintained, each owner responsible for their share — the argument had a practical logic to it.

It failed. The circuit court held the phrase was not ambiguous and had a “legal, distinct meaning,” and that the lots “do not include roadways and the lots are established and not ambiguous.” On that reading the Straatmeyers' proposed garage would have been inside the setback — and so were numerous other structures across the subdivision.

Are sheds “buildings”?

The plaintiffs' third argument was that “sheds and other movable property” are not “buildings” and so cannot violate a setback written for buildings. The court disposed of it in a way worth noting: the argument “only relates to some of the structures the circuit court considered,” and the plaintiffs did “not dispute that several buildings within the subdivision violate the boundary limitations imposed by the covenants.”

Conceding the core to argue the edge did not help. The findings were not clearly erroneous either way.

“Residential purposes only” and a home business

The fourth ruling is the one most likely to reach an ordinary South Dakota lot. The covenant barred business activities that “require extra parking facilities,” that “result in any materials being stored outside any dwelling,” or that “in any other way interfere with the peaceful enjoyment of the premises by other lot owners.”

A plaintiff who brought leftover contracting materials home was found in violation because his “business activities . . . resulted in materials being stored outside.” That is a low bar, and it was met by a homeowner who almost certainly did not think of himself as running a business from the lot. A second plaintiff's tree-cutting operation — employees arriving daily, a bucket truck, chipper, dump trailer, pickup and skid steer — was a clearer case.

The South Dakota short-term rentals page deals with the neighbouring question of whether a residential-use clause reaches transient renting; this is the same clause doing different work.

Why the interpretive holdings outlive the covenant

The covenant itself is gone, voided as to every lot. The constructions are not. They are now published South Dakota authority on four phrases that appear in thousands of Midwestern covenants: a car-count garage limit, a setback measured to “the boundary of said lot,” the word “building,” and a residential-purposes clause with a materials-storage rider.

The drafting lesson is visible in the opinion's own sentences. The court had to say out loud that the covenant “does not define ‘car’” and does not reference size. A 1976 three-car garage and a 2020 three-car garage built to hold a recreational vehicle are not the same building, and the covenant's words could not tell them apart.

Extrinsic evidence is a wasting asset. Opstedal testified 47 years after he signed the instrument. Most covenants of that vintage no longer have a living drafter, and the next subdivision in this position will be arguing about intent with nobody left who formed it. Our South Dakota architectural review page covers how committee discretion interacts with language this open-ended.

What to watch next

The Supreme Court affirmed each interpretation without adopting a general canon for construing restrictions narrowly or broadly, which several states have. That leaves the ordinary contract rules doing all the work, and leaves the ambiguity question — “reasonably capable of being understood in more than one sense” — as the pivot on which the next covenant case turns.