Shader v. Hampton Improvement Ass'n, Inc.

443 Md. 148

115 A.3d 185

Scott SHADER, et ux.

v.HAMPTON IMPROVEMENT ASSOCIATION, INC.

No. 75, Sept. Term, 2014.

Court of Appeals of Maryland.

May 27, 2015.

Jeffrey L. Forman (Bruce E. Kauffman, Kauffman & Forman, P.A., Towson, MD), on brief, for Petitioners.

Michael W. Siri and Carolyn E. Mech (Bowie & Jensen, LLC, Towson, MD), on brief, for Respondent.

Argued before: BARBERA, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, McDONALD, and WATTS, JJ.

Opinion

BATTAGLIA, J.

The attempt to enforce restrictive covenants in a community of 635 single family homes in Hampton, a residential neighborhood in Baltimore County, is at issue before us.¹ The restrictive covenants attempt to prohibit the development of more than one single family dwelling per lot.

In 2002, Anna and Scott Shader, Petitioners, purchased real property at 606 East Seminary Avenue in Hampton.² The property is composed of Lot 59, a 2.246–acre parcel, and a portion of Lot 75, a 1.457–acre parcel to the north of Lot 59 as depicted on the original 1930 Plat recorded by the Hampton Company. In 2004, the Shaders purported to subdivide their property to create an additional undeveloped parcel with a new address: 606A East Seminary Avenue. Within five years, the Shaders offered 606A for sale through real estate agents, who listed the “new” acreage as separate and buildable.

The Hampton Improvement Association (hereinafter “HIA”), Respondent, thereafter, contacted the Shaders's real estate agents by letter and noted that Paragraph C, in the Schedule of Restrictive Covenants and Easements recorded by the Hampton Company in 1931, “specifically prohibited” property owners from the “[e]rection of more than one house per deeded lot, as shown on the original [1930] Plat Map at the time the property was recorded”. (emphasis in original). Paragraph C provides:

The land included in said tract except as hereinafter provided shall be used for private residence purposes only and no building of any kind whatsoever shall be erected or maintained thereon except private dwelling houses each dwelling being designed for occupation by a single family and private garages for the sole use of the respective owners or occupants of the plots upon which such garages are erected there shall not be erected or maintained on said tract of land an apartment house or house designed or altered for occupation by more than one family and no more than one dwelling may be erected on a lot.

In late 2012, the Shaders filed a complaint for declaratory relief in the Circuit Court for Baltimore County against the HIA seeking a declaration that their property consisted of two separate buildable lots and that the restrictive covenants did not prohibit the building of a home on the second lot.³ In their complaint, the Shaders recited both the history of the restrictive covenants in the Hampton community and of their specific property:

3. Hampton was originally formed in 1930 via the recordation of a Plat by the Hampton Company, dated July 16, 1930, [ (hereinafter “1930 Plat”) ] which plat is recorded among the Land Records of Baltimore County in Plat Book 9 folio 109....

4. On April 6, 1931, The Hampton Company recorded a Schedule of Restrictive Covenants and Easements (“Covenants”) which Covenants were recorded among the Land Records of Baltimore County in Liber 866, folio 475–478....

5. Among the restrictions in the Covenants, was Paragraph C, found at Liber 866, folio 476. That covenant read as follows:

The land included in said tract except as hereinafter provided shall be used for private residence purposes only and no building of any kind whatsoever shall be erected or maintained thereon except private dwelling houses each dwelling being designed for occupation by a single family and private garages for the sole use of the respective owners or occupants of the plots upon which such garages are erected there shall not be erected or maintained on said tract of land an apartment house or house designed or altered for occupation by more than one family and no more than one dwelling may be erected on a lot.^[ [^{4 ]} 6. The word “Lot” was defined at Liber 866, folio 475 as “one unit of said tract as at present shown by the recorded map of said tract. (“Tract” or “Tract of Land” was defined on the same page as the Plat No. 1 of Hampton.)

7. On February 10, 1939, a Revised Plat of Lots 40, 42 and 44 to 54, inclusive was filed among the Land Records of Baltimore County in Plat Book 12, folio 38....

* * *

10. When the Shaders purchased the Property, it consisted of two parcels, to wit; Lot 59 and the easterly portion of Lot 75, as shown on Plat No. 1 of Hampton....

11. On September 10, 2004, the Shaders reconfigured the two parcels and recorded deeds to that effect....

12. The Shaders have a home on the lot known as 606 E. Seminary Avenue and wish to either build a house on Lot 606A East Seminary Avenue or sell 606A East Seminary Avenue as a buildable lot.

13. The HIA has communicated to the Shaders that the Covenants prevent them or their successors in title from building 606A East Seminary Avenue....

The Shaders alleged, specifically, that Paragraph C had been abandoned by the HIA due to numerous violations of Paragraph C that occurred in the other lots in Hampton:

14. Over the years, numerous homes have been built in Hampton which violate the Covenants in numerous ways. For example:

a) There are several instances where due to lot re-configurations (similar to the Shader lot re-configuration) homes have been built such that there are more than one home on a given Lot as Lot was defined in the 1930 Plat.

b) There are numerous Lots on which buildings other than single family dwellings and private garages have been constructed and maintained.

The HIA timely filed an answer, not only denying the Shaders's allegations, but also affirmatively defending that the Shaders's claims were barred by laches and the statute of limitations.

The Shaders, thereafter, moved for summary judgment, arguing that they were entitled to judgment as a matter of law as a result of a prior judgment entered against the HIA in Cortezi, et al. v. Duval Four–A, LLC, No. C–07–002587 (Cir.Ct.Balt.Cnty.2008) (“Duval ”), in which, they alleged, Paragraph C was not enforced:

2. The issue in this case (whether the covenants found at Liber 866, folio 475–478 are still enforceable or whether they have been abandoned) has already been decided as a matter of fact by this Court in a prior case (Cortezi, et al. v. Duval–Four, LLC, Case No. C–07–002587).

3. Hampton Improvement Association, Inc. was a party plaintiff in Cortezi.

4. The findings of this Court in the Cortezi case were not appealed.

The HIA filed its own motion for summary judgment⁵ and opposed the Shaders's summary judgment motion, alleging that they could not avail themselves of the Duval judgment because offensive non-mutual collateral estoppel⁶ had not been recognized in Maryland, as well as that genuine issues of material fact existed regarding whether the HIA had actually waived Paragraph C. Judge John F. Fader II, retired from the Circuit Court of Baltimore County, sitting as a motions judge, denied both motions for summary judgment:

First, I do not feel that “collateral estoppel” is able to be applied here.... [This doctrine] require[s] the placing of one face plate over another to see if the issues are the same and if the parties are fundamentally the same so as to be bound by a prior decision. There is nothing in the Shader motion that would allow me to see the face plate of the actual controversy before [the Duval court] and the decision by [the Duval court] as to the structures or buildings to which it refers as a violation of what covenant or issue presented. Second, the Response ... makes an important distinction between the erection of houses as opposed to other sheds or buildings, the fact that there is argued not to have been an abandonment of covenants for Plat # 1, differences that may exist between the covenants, and application of the covenants as to different plats. That all means that a significant amount of additional facts needs to be gone through by the court before summary judgment or any judgment would be able to be entered.

A non-jury trial was held before Judge Kathleen G. Cox of the Circuit Court for Baltimore County, at which time the parties renewed their motions for summary judgment.⁷ In a memorandum opinion, Judge Cox also denied both motions for summary judgment and ultimately denied the Shaders's request for declaratory relief. The court, first, denied the HIA's motion for summary judgment:

The Court does not believe that the claim is barred by limitations simply because the Shaders received a letter that placed them on notice of [the] Covenants. The Shaders' claim did not ripen until they intended or sought to take action that was arguably barred by the Covenants. The Covenants arguably constitute a continuing restriction on the use of the property. In the context of the present dispute, one basis for the Shaders' claim for relief is that the HIA has abandoned the right to enforce the Covenants, based upon other neighborhood development. Thus the status of enforceability, to some extent, remains in a state of flux. The Shaders filed for declaratory relief concerning the continued viability of the Covenant governing construction of a second residence. Given this declaratory posture, the claim is not time barred. Accordingly, the HIA's Motion for Summary Judgment is denied.

(citation omitted).

Judge Cox then turned to the Shaders's collateral estoppel argument in their motion for summary judgment and recognized that it required an application of offensive non-mutual collateral estoppel, but determined that the Duval case dealt with different and distinct issues than the instant case:

The Shaders' argument requires application of the doctrine of non-mutual offensive collateral estoppel to the Duval ruling. Non-mutual offensive collateral estoppel requires four determinations:

1. Was the issue

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