Campbell v. Lake Hallowell Homeowners Ass'n

¹⁴¹ SMITH, J. The appellants, Brian and Elizabeth Campbell, are former residents of the Lake Hallowed community in Olney, Maryland. The appellee is the Lake Hallowed Homeowners Association. 1 The Association filed suit against the Campbells in the Circuit Court for Montgomery County, asking that the court enjoin them from parking their car on their front or back lawns and from keeping a basketball hoop in the front portion of their property. The court granted the injunction and ordered the Campbells to pay the Association $12,500.00 in attorney’s fees. ISSUES In this appeal, the Campbells ask this Court to set aside the injunction and the award of attorney’s fees.

They argue, in essence, that: I. The trial court erred in determining that the Association properly adopted the “Revised Architectural Control Guidelines” and properly passed the corporate resolution authorizing its recovery of attorney’s fees, II. The trial court erred in failing to determine that the Association had waived the restrictions on parking and basketball hoops by failing to enforce them consistently, III. The trial court denied the Campbells due process of law by (A) failing to determine that they were improperly denied access to the Association’s books and records, (B) permitting the Association to re-open its case in order to present additional documentary evidence, (C) permitting the Association to call as a rebuttal witness a person who had not been sequestered, and (D) accepting the testimony of a witness who lied, ¹⁴² IV. The trial court erred in failing to determine that the Association acted in bad faith and with unclean hands when it filed suit against the Campbells, and V. The trial court erred in determining that the “Declaration of Covenants, Conditions and Restrictions,” which created the Association and the restrictions in question, applied to the Campbells’ property.

We find partial merit in the Campbells’ first argument and therefore vacate the award of attorneys’ fees. We shall dismiss as moot that portion of the appeal that pertains to the injunction. FACTS The Lake Hallowell community is a planned community that consists of single family and town homes that were built by various developers during the 1980s. A “Declaration of Covenants, Conditions and Restrictions” for the community was filed in the Land Records Office for Montgomery County in December of 1988.

The Declaration addressed, inter alia, property rights, membership and voting rights, property maintenance and assessments, and architectural controls. It included the following provisions: ... Every Townhouse Lot shall be entitled to not more than two automobile parking spaces which shall be as near and convenient to said Lot as reasonably possible. The Association may permanently assign at least one automobile parking space for each Lot.... ...

No baby carriages, tricycles, bicycles, mopeds, motorcycles, or other articles of personal property shall be deposited, allowed or permitted to remain on any Townhouse Lot, except in the enclosed rear yard. The Association may ¹⁴³ impound any such articles and make a charge for their return. In addition, the Declaration stated that the Board of Directors of the Association may appoint Architectural Committees of not less than three, nor more than five, persons to enforce the architectural controls of each community. These committees shall be charged with the duty of enforcing the following architectural controls, to wit: no building, storage shed, fence, wall or other structure, or exterior painting, shall be commenced, erected or maintained, upon the Properties, nor shall any exterior addition to or change or alteration therein be made until the plans and specifications showing the nature, kind, shape, height, materials, color and location of the same have been submitted to and approved in writing as to harmony of external design and location in relation to surrounding ‘ structures and topography by the Architectural control committee of the community in which the structure exists....

The Declaration provided: ... The Association, or any owners, shall have the right to enforce, by any proceeding at law or in equity, all restrictions, covenants, conditions, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration.... The Campbells purchased their town home in the Lake Hallowell community in 1990. The home had a single-car garage and a parking pad.

The Association’s Board of Directors eventually appointed an Architectural Committee as contemplated by the Declaration, and in 1993 the Committee established the first “Architectural Guidelines.” In 1998, the committee revised the guidelines. Copies of the “Revised Architectural Guidelines” were mailed to every member of the Association. The stated objective of the revised guidelines was to “increase resident awareness of and understanding of the [Declaration], and to ¹⁴⁴ help maintain a uniform and architecturally sound appearance for the Lake Hallowell Community.” The revised guidelines set forth, inter alia, the following: Recreation and play equipment includes permanent and semi-permanent equipment including the following: swing sets, gymnastic sets, volleyball nets, portable or collapsible basketball backboards, jungle gyms, etc. Recreational equipment must be located in the rear yard or with properties with limited rear yard, in areas that cannot be seen from the street. The only exception is for basketball backboards that can be erected in front yards to allow use of existing paved driveways.

Recreational equipment is not to be erected on streets, sidewalks, and/or common community areas. Basketball hoops are permitted in single family homes only ... Meanwhile, in 1994, a corporate resolution regarding attorneys’ fees was passed and filed with the Declaration in the Land Records Office. The resolution stated that it was: RESOLVED AND ADOPTED this 10th day of January, 1994, that should the Lake Hallowell Homeowner’s Association, through its Board of Directors, act against a homeowner to compel compliance by that homeowner with any rule, regulation, By-Law, Article or Covenant, the Lake Hallowell Homeowner’s Association shall be entitled to seek and recover from the homeowner all costs, including, but not limited to, attorney’s fees for compelling the homeowner’s compliance with any rule, regulation, By-Law, Article or Covenant.

FURTHER RESOLVED that the Lake Hallowell Homeowner’s Association may seek to enforce this rule in any court of competent jurisdiction. ¹⁴⁵ In March of 2001, through a routine inspection of the community, the Association learned that the Campbells were regularly parking a car on a parking lot designated for visitor parking. The Association’s Community Manager sent a letter to the Campbells, instructing them: “Please park your car on your own property. Do not use the visitor spaces.” The Campbells thereafter moved the vehicle to the street in front of their home. That street was a County-designated fire lane.

In July of 2001, another routine inspection of the community was conducted and the Association learned that the car was then parked in a fire lane. It also learned that the Campbells had placed a portable basketball hoop in their driveway. The Community Manager sent another letter to the Campbells, this one stating: A) Please remove the basketball hoop, they are not allowed on town home property. I have enclosed the page of the rules and regulations, and highlighted the language that makes this abundantly clear.

B) Please park your car on your property. Do not use the visitor spaces. Do not park on the street, this is a Fire Lane. In the event one of your neighbors calls the police non emergency numbers for a Fire Lane violation the ticket is at least $500.00.

(Emphasis added.) There followed a flurry of e-mails and letters between the Campbells, the Community Manager, and counsel for the Association concerning the legal bases of the Association’s demands. The Campbells pointed out in e-mails that they owned three cars but their garage and parking pad could accommodate only two. The Association suggested that the Campbells park their extra car on a public roadway just outside the community, as did some other community residents who had more than two cars. At some point in August of 2001, apparently dissatisfied with the responses received from the Association, the Camp-bells parked their third car on their front lawn.

Mr. Campbell admitted at trial that he knew it was “absurd” to park the car ¹⁴⁶ on the lawn. He explained: “[W]e felt like we weren’t getting any type of response from the Association and what we had to do is follow their directions, park our car on our property per their directions[,] in order” to get clarification as to where they could properly park. After several weeks and several more e-mails and letters between the Campbells and the Community Manager, the Campbells moved the car from their front lawn. Within a few weeks, however, they parked it there again.

On September 12, 2001, the Association filed suit against the Campbells in the circuit court seeking, inter alia, an injunction prohibiting them from parking the car on their lawn. The Association also requested an award of attorneys’ fees. The court immediately granted a temporary restraining order against the Campbells. It set a hearing date of October 1, 2001.

The Campbells did not comply with the temporary restraining order 2 , and at the October 1 hearing the court ¹⁴⁷ issued a preliminary injunction directing that “the defendants Brian Campbell and Elizabeth Sayles Campbell shall remove the vehicle being kept on the Defendants’ lawn ... and that all vehicles under their control be placed in a designated parking [area].” The court determined that another hearing should be held to