Hickory Point Partnership v. Anne Arundel County

RODOWSKY, Judge. Appellant, Hickory Point Partnership (the Partnership), owns, and contemplates completing, a relatively large residential subdivision. Development of the subdivision stalled some years ago after “final” plats had been recorded, restrictive covenants had been imposed, open space had been placed in trust and some lots had been conveyed to homeowners by reference to the plats. Presently to carry the project forward the Partnership must obtain plat approvals under current subdivision regulations.

Before undertaking to do so, however, the Partnership brought the instant declaratory judgment action to get a determination whether homeowners can prevent implementation of a development concept by successfully contending that it violates rights acquired under the earlier common scheme of development. In the circuit court and in its brief as appellant, the Partnership contended that subdivision regulations caused the homeowners to lose any rights based on a common scheme of development when those regulations operated, because of inaction on the part of the Partnership, to extinguish the previously obtained plat approvals. We shall hold that there is no merit in that contention. In its reply brief, filed by new counsel who also argued orally, the Partnership further submitted that the trial court erred by failing to specify the homeowners’ rights.

That purported issue, however, is not ripe for decision. In northern Anne Arundel County, at the eastern end of the peninsula formed by the Magothy and Patapsco Rivers, and lying north of Bodkin Creek and south of Boyd Pond, is the 67.33 acre site known as Hickory Point. In 1975 Morris M. Shuvalsky and Esther D. Shuvalsky (the Shuvalskys) owned and undertook the first development of the site. At that time the Anne Arundel County subdivision regulations were those enacted by 1969 Laws of Anne Arundel County, ¹²¹ Council Bill No. 76-69, § 2.

The relevant part was codified as § 13-113.4 of the Anne Arundel County Code (1967, Supp.1969) and provided: 1 “[Final Plat]—Subdivision Agreement “Prior to final plat approval, the subdivider shall file a subdivision agreement covering his financial obligations for all public construction and other improvements attendant to his subdivision, if not guaranteed by a public works agreement under section 13-122. If a public works agreement has not been entered into and construction has not begun within two (2) years of the final plat approval, subdivision approval will be null and void. The subdivider will then be required to conform with the subdivision regulations in effect at that time. Should there be no subdivision regulation changes during this two (2) year period, the plat would only be subject to final plat review.

For the final subdivision plat approval to remain in effect, the subdivider must be in operation under a public works agreement and be in continuous operation without interruption for not more than one (1) year at any given period of time. An appropriate notice to title examiners shall be placed on the plat as follows in the event a public works agreement is not entered into prior to final approval. A subdivision agreement permits the recording of the plat but no construction or sale of property as noted below.” In March 1975 the Shuvalskys recorded a Declaration of Restrictions “for the purpose of creating and maintaining a general scheme of development,” intending that the tract “be subject to the covenants, conditions, restrictions and reservations” set forth therein and reciting that the tract would “be subdivided into lots with streets and roads laid out, as will be shown on a Plat thereof.” The Shuvalskys further reserved to themselves and their assigns “[t]he right to waive such portion of the protective covenants ... ¹²² as they deem necessary or desirable in the best interest of the development.” The developers further declared that “[a]ll lot owners of the sub-division shall be entitled to [the] use in common with others of all communal open space and recreational areas[.]” The covenants expressly were to run with the land. Final plat approval for Hickory Point, Section One was obtained in October 1975.

Section One was presented on a vicinity plat and three detailed recorded plats, plat one (No. 3183), plat two (No. 3184) and plat three (No. 3185). In lieu of a public works agreement at that time, the Shuvalskys bound themselves to Anne Arundel County, Maryland (the County) in the sum of $245,890 to guarantee completion of Section One, on or before September 5, 1977, “in the construction of all the streets, sidewalks, roads, curbs and all other improvements therein called for by the plans there ofIT Contemporaneously with the recording of the plats, the Shuvalskys recorded a Declaration of Covenants, Restrictions, and Affirmative Obligations applicable to Hickory Point, Section One. That declaration contemplated formation of a civic association for the Hickory Point community which would take title to and maintain the open spaces and recreation areas in Section One. The covenants and restrictions of that declaration expressly were to run with the land.

Ninety percent of the lot owners had power to amend the declaration and the Shuvalskys, for themselves and their assigns, reserved “the right in [their] absolute discretion to annul, waive, change, or modify any of the restrictions, conditions or covenants contained” in the declaration. In order to simplify the factual presentation, we shall limit our description of the platted areas at Hickory Point to plats one and two. 2 The area presented on plat one lies ¹²³ south of Boyd Pond and north of Bayside Beach Road which curves to run in a northerly direction and also to form the eastern boundary of the plat one area. The plan called for a street extending northwesterly from the portion of Bay-side Beach Road on the eastern boundary of the site and ending in a cul-de-sac. The building lots were laid out in a cluster development on both sides of the proposed street.

Between the rear lines of the individual lots and the perimeter of plat one were 8.148 acres of open space, much of which abutted Boyd Pond. Plat two depicts an area lying south of Bayside Beach Road. The most northerly part of plat two is laid out in four lots (lots one, two, three and four of Block E) which abut a platted widening strip which, in turn, abuts the south side of Bayside Beach Road as then existing. Abutting those four lots to the south are 1.304 acres designated as a “recreation area.” The balance of 4.931 acres on plat two is marked “open space area.” Prior to approval of plat two the Shuvalskys had conveyed the 1.804 acres of recreational area to the County’s Planning and Zoning Officer “in [t]rust, to be conveyed to a citizens association in the area of ‘Hickory Point, Section 1’ community.” Contemporaneously with the recording of the plats for Section One the Shuvalskys deeded all those parcels designated as communal open space on the plats of Section One to the County “in trust, to be conveyed to the Homeowners Association in the area of ‘Hickory Point’ community[.]” Plats one and two contain legends advising, inter alia, that the recreation area is dedicated to the recreation use of the residents of the subdivision; that the land designated as open space and recreation area is for use in common for the residents of the subdivision; that subdivision of the open space land is not permitted and its use is limited to parks, conservation, recreation, gardening and similar purposes or, ¹²⁴ with county health department approval, also as a secondary septic tank location; that ownership and maintenance of the open space land shall be in common and the responsibility of the homeowners association to be established; and that no sales shall be made or building permits issued until the necessary improvements have been guaranteed by a public works agreement.

Based on preliminary plat approval, the Shuvalskys had obtained building permits to construct model homes on lots two, three and four of Block E of plat two. In January 1976 the Shuvalskys conveyed those three lots to Triad Builders, Inc. (Triad). At some point homes were constructed on the lots. In the summer and fall of 1976 Triad conveyed the improved lots to homeowners, at least two of whom obtained purchase money mortgage loans from institutional lenders. 3 Those homeowners and their mortgagees are among the appellees in this case.

In November 1976 the Shuvalskys conveyed all of their remaining interest in Hickory Point to the Partnership. More than two years after final approval of plats one and two, the Partnership, in April 1978, entered into a public works agreement, No. 27-8, and! guaranteed the perform ¹²⁵ anee, before May 15, 1980, of the public improvements reflected on those plats by posting an irrevocable letter of credit in the amount of $210,000. No work was done under public works agreement 27-8, apparently because of rising interest rates. By a recorded agreement of November 1983 the County released the Partnership from its obligations to the County under public works agreement 27-8.

The parties further agreed that the County would continue to hold in trust all recreation areas and open space designated on plat two “for the use and benefit of the owners of Lots 2, 3 and 4 [in Block E on plat two] and for such other surrounding lot owners who may have already acquired any rights thereon[.]” That provision’s recited purpose was “to provide adequate recreation and open space for the aforementioned lots, yet allow the Partnership at some future date to use any area in excess of statutory requirements toward [its] subdivision requirements” in the event the area of plats one and two was subsequently resubdivided. The Partnership also agreed to indemnify the County with respect to liability arising out of the agreement or the County’s actions thereunder. The Partnership then caused an engineering drawing to .be prepared and spread upon the land records which was intended to reflect the Partnership’s position concerning the existing subdivision status of Hickory Point. The recorded drawing did not purport to be a final plat of resubdivision approved by the Office of Planning and Zoning. 4 The Partnership also spread upon the land records a letter from an Assistant County Solicitor advising that all land covered by plats one and two, except that previously conveyed, had reverted to raw, unsubdivided status because the abrogation of public works agreement 27-8 “effectively nullified” those plats.

One of the principal differences between the ¹²⁶ engineering drawing and the plats approved in 1975 was the elimination of the 8.148 acres of open space shown on plat one. That open space was the ingress and egress to Boyd Pond by plat two lot owners on the south side of Bayside Beach Road. Apparently sensing a lack of enthusiasm among Hickory Point lot owners for the concept embodied in the engineering drawing, the Partnership filed the instant declaratory judgment action naming as defendants all known, interested persons and seeking to bind all unknown, interested persons. The Partnership sought a declaration confirming boundary lines and titles as reflected on the engineering drawing and adjudicating certain previously recorded, approved subdivision plats, including plats one and two, to be “null and void.” Because the engineering drawing contained “errors,” i.e., it did not accurately reflect the concept intended by the Partnership, an amended complaint for declaratory judgment was filed.

The amended complaint recited that the Partnership “has decided not to develop Hickory Point as originally contemplated on Plats [one, two and others] and seeks to clarify its rights under the law to own, use and possess the property shown on those plats free and clear of any right, title, claim or interest of the Defendants.” Included in the relief sought by the Partnership was a declaration that, in effect, all of the land shown on plat one was “unsubdivided open acreage” owned by the Partnership and “unencumbered by any claim of the Defendants.” The identical declaration was sought as to the following land on plat two: “(1) Lot 1, Block E, (2) The roadbed for Point Lookout Court, and (3) A widening strip and roadbed for relocated Bayside Beach Rd., except that portion of the widening strip lying between existing Bayside Beach Road and Lots 2, 3, and 4, Block E ¹²⁷ Items (2) and (3) were required to be deeded to the County as a condition to the approval of the contemplated development of Plat [two].” Furthermore, the Partnership stated in its amended complaint that it did not seek to treat as unsubdivided open acreage “[tjhe recreation-area, open space and Lots 2, 3, and 4 on Plat [two].” The circuit court entered a declaratory judgment adjudicating that “1. The rights acquired by the property owners of Hickory Point Subdivision to the open space, recreational areas, roadways, road beds, and other improvements, designs, and plans on Plats [one, two and others] by virtue of their purchase of real property after the filing of those Plats precludes this Court from declaring the Plats null and void; “2. The property owners have the right to prohibit the development of the property referenced in Plats [one, two and others] in any way inconsistent with their rights under the Plats; and “3. Plats [one, two and others] remain in full force and effect and are not null and void with respect to the individual property owners of Hickory Point Subdivision.” The Partnership appealed and we issued the writ of certiorari prior to consideration of the appeal by the Court of Special Appeals.

The legal position of those lot owner defendants who participated in the circuit court and before this Court is that grantees of lots in Hickory Point acquired “rights” because of recorded plats, the imposition of restrictive covenants and the deeds to the County, in trust. They cite, for example, Boucher v. Boyer, 301 Md. 679 , 484 A.2d 630 (1984) and Whittington v. Mann, 211 Md. 199 , 126 A.2d 617 (1956) where particular parcels were held to have rights of way over specific courses by reference to subdivision plats. We have also enforced specific restrictive covenants against conduct violative, or imminently violative, of the covenants’ ¹²⁸ restrictions. See Turner v. Brocato, 206 Md. 336 , 111 A.2d 855 (1955); Steuart Transp.

Co. v. Ashe, 269 Md. 74 , 304 A.2d 788 (1973). Rights of those types, whether considered to be rights in real estate, contract rights, or some combination of both, whether considered to be corporeal, incorporeal or some combination of both, and whether legally or equitably enforceable, or both, we shall refer to simply as “Property Rights.” The Partnership’s case in the circuit court proceeded on the theory that § 13-113.4, by operation of law, abrogated any and all Property Rights which a lot purchaser may have acquired in any part of Hickory Point outside that purchaser’s lot if the Property Rights were in whole or in part dependent upon reference to a previously recorded subdivision plat. This result was said to be produced by the language: “If a public works agreement has not been entered into and construction has not begun within two (2) years of the final plat approval, subdivision approval will be null and void.” 5 Here, as to plats one and two, the developer neither entered into a public works agreement nor began construction within two years of final plat approval. Under those circumstances “subdivision approval” became null and void.

Section 13-113.4 stated the consequence to be that “[t]he subdivider will then be required to conform with the subdivision regulations in effect at that time.” The terms of the ordinance indicate no design directly to extinguish Property Rights of lot purchasers which might have arisen after final subdivision approval and prior to the expiration of the two ¹²⁹ years. To construe § 13-113.4 as the Partnership initially sought would be contrary to the purpose underlying subdivision regulation which is to protect both the community as a whole and individual purchasers in the subdivision. See Board of County Comm’rs v. Gaster, 285 Md. 233, 246-47 , 401 A.2d 666, 673 (1979) (quoting from 4 A. Rathkopf, The Law of Zoning and Planning ch. 71, § 2, at 71-6 to -7 (4th ed. 1979)); E. Yokley, Yokley’s Law of Subdivisions ch. 1, § 2, at 2 (2d ed. 1981). Thus, the circuit court was correct in entering a declaratory judgment adverse to the Partnership insofar as the declaratory judgment rejected the extreme position advanced by the Partnership in the circuit court.

Beyond that limited declaration, however, this action does not present issues which are ripe for adjudication. In order for issues of claimed deprivation of Property Rights to arise, there must first be one or more features of a new plan of subdivision, approved or imminently to be approved under the current regulations, which differ from one or more features of a nullified subdivision plat, of the restrictive covenants or of the trust deeds. That kind of deviation could arise because it is required by current regulations or because current regulations give the Partnership an option and the Partnership opts for the deviation. Here, there has been no resubmission to the County’s subdivision process much less any