Restrictive covenants are a bureaucratic reality in the world of design professionals. However, in the legal realm, restrictive covenants and their prospective enforcement or relief therefrom are governed by equitable principles. In its recent decision in, Dendy v. Ryan, 2025 WL 3684707 (Ala. Dec. 19, 2025), the Alabama Supreme Court clarified the application of the “clean hands doctrine” as it relates to a party seeking equitable relief from restrictive covenants.
Dendy involves a residential construction dispute between James Ryan, Jim Durbin, Eric Newman, Todd Carroll, Gail Kappler, and the Architectural Committee of the River Pointe Subdivision (“AC”) and Michael W. Dendy and Dendy Investment Group, LLC (the “Dendy Defendants”) concerning two residential properties constructed in the River Pointe Subdivision located in Guntersville, Alabama. In early 2021, the Dendy defendants submitted completed construction plans for homes on Lots 7 and 8, which the AC approved. Rather than building the approved homes, however, the Dendy Defendants materially altered the designs and proceeded to construct houses that did not conform to the approved plans. They never submitted revised or complete amended plans for approval. Despite repeated notice from the AC that the construction was unapproved and noncompliant, the Dendy Defendants continued building.
The River Pointe Plaintiffs filed suit seeking a declaratory judgment and injunctive relief. At trial, the Judge determined Dendy Defendants knowingly violated the restrictive covenants, and the structures under construction bore no resemblance to the approved plans. The Court ordered the Dendy Defendants either to build strictly in accordance with the previously approved plans or to submit completed plans for new approval; failing that, they were ordered to remove the unapproved structures. The trial court denied post-judgment motions, and the Dendy Defendants appealed.
On appeal to the Alabama Supreme Court, the Dendy Defendants argued primarily the trial court erred by enforcing the restrictive covenants through injunctive relief without applying the “relative-hardship test,” which allows a court, in equity, to deny an injunction if the hardship to the violator would be greatly disproportionate to the benefit of enforcement. The Dendy Defendants cited Cole v. Davis, 383 So. 3d 646, 654 (Ala. 2023) which held a party’s knowledge of a restrictive covenant does not automatically bar application of the relative hardship test.
The Alabama Supreme Court distinguished its prior holding in Cole. The Court held a court may still deny the relative-hardship defense pursuant to the clean hands doctrine when the violator’s conduct constitutes willful and morally reprehensible misconduct. The Court concluded the evidence supported the trial court’s implicit determination the Dendy Defendants had unclean hands. The record showed they intentionally obtained approval for one set of plans and then deliberately built entirely different structures, continued construction after being told to stop, and took the position approval of one plan allowed them to build anything they wished. Those actions, the Court held, amounted to willful misconduct sufficient to bar application of the relative-hardship test.