Mikolasko v. Schovee

THIEME, Judge. This appeal by Eric J. Mikolasko and J.J.M., Inc., is from a judgment of the Circuit Court for Howard County that granted declaratory and injunctive relief requested by the appellees, Thomas Randolph Schovee, et al., property owners in the Chapel Woods II subdivision. The effect of the judgment was to thwart the appellants’ plans to resubdivide certain lots within the subdivision. . Statement of Facts Chapel Woods II is a residential subdivision in Clarksville, Howard County, Maryland.

The developer, J.J.M. Partnership, was given approval for the subdivision by Howard County in November 1989. J.J.M., Inc., is the general partner of ⁶⁹ J. J.M. Partnership, and Eric J. Mikolasko is the vice president of J.J.M., Inc. The developer recorded a revision plat for the subdivision in the Howard County land records on April 20, 1990. The developer also recorded the “Chapel Woods II Declaration of Covenants, Easements, Conditions and Restrictions” (the Declaration) in the same land records on November 20, 1989. The Declaration contained a statement that it was to be deemed part of a general scheme of development; a description of the land use restrictions and covenants to be applied to the subdivision; and, in an attached exhibit, a description of the property to be covered by the Declaration.

The property described included Lots 1-5 and Lots 8-25 on the subdivision plat. These lots were between three and six acres in size. Lot 6 was not owned by the developer and is not at issue in this case. Lot 7, a land parcel of some 50 acres, was retained by the developer.

Lot 8 was owned by the appellant Eric Mikolasko, individually. The appellees are a group of seven couples who purchased lots in Chapel Woods II from the developer between September 1989 and June 1991. Apparently, each agreement of sale between the developer and the purchasers included a copy of the Declaration, and each deed incorporated the Declaration by reference. Nevertheless, each appellee-purchaser who provided evidence claimed to have been led to believe, by a variety of factors, that Lot 7 was part of the common development scheme of Chapel Woods II.

In 1995, appellant Mikolasko submitted to the Howard County Subdivision Review Committee a proposal for a new subdivision called Chapel Woods III. The plan depended on the merger of Lots 7 and 8 and their resubdivision into nine one-acre lots on which residential dwellings would be built, with large parts of the remaining property being placed into an irrevocable conservation easement. Statement of the Case On December 21, 1995, the appellees filed a six-count complaint in the Circuit Court for Howard County. The six counts were as follows: ⁷⁰ I. Request for declaratory judgment declaring that Lot 7 is subject to the covenants and restrictions contained in the Declaration by means of an implied negative reciprocal easement; II.

Request for declaratory judgment declaring that Lot 8 is subject to the covenants and restrictions contained in the Declaration; III. Request for declaratory judgment declaring that section 4.1.1.(b) of the Declaration prohibits the subdivision of any lot presently part of Chapel Woods II; IV. Request for declaratory judgment declaring that the proposed merger and resubdivision of Lots 7 and 8 violate the Declaration; V. Request for ex parte and interlocutory injunctions prohibiting the proposed merger and resubdivision of Lots 7 and 8; VI. Request for a permanent injunction prohibiting the proposed merger and resubdivision of Lots 7 and 8.

On the same day, the' appellees filed a motion for partial summary judgment on counts II-IV of the complaint. On January 3, 1996, the appellees abandoned count V. On February 5, 1996, the appellants filed an opposition to appellees’ motion, a cross-motion for summary judgment, and a request for a hearing. A hearing on the motions was held on March 29, 1996, when the appellants also filed a motion to dismiss with prejudice, based on the fact that Howard County had given approval to the Chapel Woods III project and a plat had been recorded. By a memorandum and order of May 30, 1996, the court denied the appellants’ motions for summary judgment and dismissal, and granted the appellees’ motion for summary judgment on count II and on counts III and IV with regard to Lot 8 only, i.e., the court ruled that “the Declaration prohibits construction of more than one residential dwelling on any one Lot, including Lot 8 (as it existed at the time the Declaration was recorded).” ⁷¹ On April 30, 1997, a bench trial began.

By a memorandum opinion and order dated November 25, 1997, and in part reiterating its order of May 30, 1996, the court found in favor of the appellees and granted their requests with regard to counts I-IV and VI. This appeal was timely noted on December 22, 1997. Questions Presented The appellants ask the following questions: I. Did the trial court err, as a matter of law, in imposing a reciprocal negative easement on Lot 7 where the blanket declaration of restrictions and covenants for the Chapel Woods II community specifically burdens only Lots 1-5 and 8-25?

II

Did the trial court err in finding that the property owners had shown the grantor’s intent to burden Lot 7 with the restrictions applicable to Lots 1-5 and 8-25 by clear and convincing evidence?

III

Does Chapel Woods III comply with a general scheme of development for single family homes where new lots are the same price and subject to virtually the same restrictions on use as the restrictions on the lots in Chapel Woods II?

IV

Did the trial court err in finding that additional building lots were prohibited by the Chapel Woods II Declaration? V. Did the trial court err in enjoining the merger and subdivision of Lots 7 and 8 into Chapel Woods III after Howard County had already approved the merger and subdivision? To questions I and II, we answer, yes. To question IV, we answer no.

To question V, we answer no with regard to Lot 8. We decline to answer question III. ⁷² Standard of Review When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses. Md. Rule 8-131.

In this particular type of case, we have held that, since “the intention to establish a uniform scheme or plan of development is a question of fact ... ” the chancellor’s findings will not be set aside “ ‘on the evidence unless clearly erroneous’ after giving due regard to the opportunity of the chancellor ‘to judge the credibility of the witnesses.’ ’ ” Furthermore, the appellate Court will not “reverse the chancellor’s conclusions from the facts found by him if within the provisions of the applicable law unless they are clearly in error.” Bernui v. Tantallon Control Committee, 62 Md.App. 9, 14 , 488 A.2d 186 (1985) (quoting Steuart Transportation Co. v. Ashe, 269 Md. 74, 89 , 304 A.2d 788 (1973)) (citation omitted). Doctrine of Implied Reciprocal Negative Easements In McKenrick v. Savings Bank of Baltimore, 174 Md. 118 , 197 A. 580 (1938), the Court of Appeals listed the following principles of the doctrine of the implication of reciprocal negative easements based on a finding of a uniform or common or general plan or scheme of development: That one owning a tract of land, in granting a part thereof, may validly impose upon the part granted restrictions upon the use thereof, for the benefit of the part retained, and upon the part retained for the benefit of the part granted, or upon both for the benefit of both; that, where the covenants in the conveyance are not expressly for or on behalf of the grantor his heirs and assigns, they are personal and will not run with the land, but that, if in such a case it appears that it was the intention of the grantors that the ⁷³ restrictions were part of a uniform general scheme or plan of development and use which should affect the land granted and the land retained alike, they may be enforced in equity; that covenants creating restrictions are to be construed strictly in favor of the freedom of the land, and against the person in whose favor they are made; and that the burden is upon one seeking to enforce such restrictions where they are not specifically expressed in a deed to show by clear and satisfactory proof that the common grantor intended that they should affect the land retained as a part of a uniform general scheme of development. Id. at 128 , 197 A. 580 . The leading Maryland case applying these principles is Turner v. Brocato, 206 Md. 336 , 111 A.2d 855 (1955), in which several subdivision lot owners sought to enforce a noncommercial use restriction against a lot not expressly bound by the restriction.

The Court of Appeals found that the whole subdivision was subject to a general development scheme, basing that conclusion on the following evidence: restrictions imposed in the majority of the deeds; testimony of lot owners concerning their belief that the whole community was restricted; a sign, placed on the lot in question at the entrance to the community, identifying it as a restricted community; and the mention of the community restrictions in the contracts of sale and representations of salesmen. Id. at 349-50 , 111 A.2d 855 . From the finding of a general plan, the Court was able to imply a noncommercial use restriction on a lot, even though the deed to the lot did not contain the restrictions. The trial court in the instant case applied factors 1 derived from Turner to imply a reciprocal negative easement ⁷⁴ prohibiting resubdivision and the building of more than one residential dwelling on Lot 7, which was not expressly encumbered.

In most such cases, the finding of a uniform development plan is the critical issue. See Restatement (Third) of Property: Servitudes § 2.14 cmt. f (Tentative Draft No. 1, 1989). Yet, in the case sub judice, in its Memorandum Opinion the trial court stated it “has no difficulty finding that the intended purpose of the Declaration and [the appellants] was to create a common scheme of development.” Here, rather, the more crucial question is “the threshold determination made in Turner — that the parcel of land at issue was part of the development for which the general scheme was established.” Bern ui, 62 Md.App. at 16 , 488 A.2d 186 . Determining Which Property Is Part of the Uniform Development Plan The trial court concluded that Lot 7 was included in the common development scheme.

The evidence the court relied on for that proposition included the following facts: the inclusion of Lot 7 on the community plat and its meeting the basic acreage requirement of the community; Lot 7’s frontage being nearly identical to the other lots of the community; representations made by the appellants and their agents concerning the inclusion of Lot 7 in the community; advertisements posted in the locale of the community, as well as maps and other promotional materials, all showing the community demarcated by a bold, black line, which included Lot 7. The Declaration, which was properly recorded and was incorporated by reference into each of the deeds of the appellees, however, contains a different description of the property to be included in the community: ⁷⁵ Section 2.1: “The Property shall contain twenty-four (24) residential lots (“Lots”).... ” Section 1.13: “ ‘Property’ means that parcel of land described in Exhibit A attached hereto and made a part hereof.” Exhibit A: “Description of the Property: Lot Nos. 1 through 5 (inclusive) and 8 through 25 (inclusive) as shown on a plat entitled ‘Chapel Woods II, Lots 1-25’.... ” Lot 7 is not included under the Declaration. (We will not address the apparent inconsistency between the number of lots mentioned in section 2.1 and those enumerated in Exhibit A. Both of the parties maintained and the court below in its Memorandum Opinion found that Lot 7 was expressly not covered by the Declaration.) Common Development Scheme and the Declaration The question then becomes: What is the relationship between the common development scheme and the Declaration? As the trial court saw it, the Declaration was but a piece of evidence as to the existence and extent of the common development scheme: “In addition to the testimony of the various witnesses, the documentary evidence, including but not limited to the Declaration, supports the Court’s conclusions that there was a common scheme of development for Chapel Woods II.” Yet in the court’s Order, Lot 7 is made “subject to the covenants and restrictions set forth in the Declaration,” and to nothing more.

On the one hand, the Declaration exclusively supplies the covenants and restrictions that make up the burdens of the common scheme. On the other hand, the court extended the burdens of the common scheme beyond the properties expressly outlined in the Declaration. In examining the court’s reasoning, we are reminded of a case similar in several respects to the present case: In the case sub judice, the chancellor found that the parcel of land upon which appellant’s house was being built is not subject to the restrictive covenants. He added, however, that there is a general plan of development for the commu ⁷⁶ nity, that the “basic plan covers the lots in ... [the community] that are not covered by the restrictive covenants,” and that “the plan basically is the covenants, even though the covenants don’t apply____” In support, the chancellor relied upon the facts that most of the lots in the community were subject to the restrictive covenants, and that everyone in the community adhered to them.

Bernui, 62 Md.App. at 14-15 , 488 A.2d 186 (alterations in original). We come to the same conclusion in this case that we reached in Bernui : ‘We hold that as a matter of law, these facts do not establish that the parcel of land at issue is governed by the restrictions of a general scheme.” Id. at 15 , 488 A.2d 186 . Maryland Case Law In Turner , the Court of Appeals dealt with a situation in which there was no recorded declaration or plan that might guide a determination of whether' a general development scheme existed and, more important for our purposes, which properties would be included in it. That there was a general plan of development and that the lot, in question was part of the subdivision were factual determinations that were based on a variety of evidence.

The facts considered in concluding that a general plan was in place were mentioned above. Before the Court addressed that question, it made a preliminary conclusion concerning whether the lot in question was a part of the Poplar Hill subdivision: We think it clear that the finger of land was a part of Poplar Hill and a part of Section C. It was part of the tract [the developer] bought. It was shown as part of the development on all of the plats. The sign advertising Poplar Hill as a restricted residential development stood for twenty years on this very lot.

The evidence of the case seems to leave no doubt that it was always regarded by those who dealt with the property as a part thereof. The fact that it was unnumbered [on the revised subdivision plat] would not seem to be decisive. The argument that the finger of land was not intended as, and was not in fact, part of the ⁷⁷ development because it faces Falls Road, is difficult to maintain in the face of the fact that lot eighty-eight, on which stands the gatehouse [for the whole subdivision], is on Falls Road and was sold for residential purposes early in the development, and is so used today. Turner, 206 Md. at 345 , 111 A.2d 855 (citation omitted).

These facts were all considered relevant in including the property in the common scheme, given that no recorded document, not even the plat in this case, specified the extent of the scheme. In Gnau v. Kinlein, 217 Md. 43 , 141 A.2d 492 (1958), property owners brought an action against subdividers to enforce the restrictions imposed in the straw man, dedication deed on the property retained by the subdividers. The Court affirmed the chancellor’s alternative finding of a common development scheme based on “the language of the deeds and the [other, extrinsic] evidence before him.... ” Id. at 50, 141 A.2d 492 . On the question of how the covenants ran and which property was bound by the covenants, the Court concluded: The language used in the [dedication] deed states expressly that the restrictions were to be binding upon the [subdividers] and their grantees, and the heirs and assigns of both, and “upon all of the land included in said tract”; and that no transfer is to be other than subject to the said restrictions which are to “run with and bind the land and each and all of the above mentioned lots.... ” The restrictions, further, expressly are to be “kept and performed by and inure to the benefit of and be enforceable by all and every person ... at any time owning or occupying said land ...” or any part of it.

We have no difficulty in concluding that the [subdividers] intended to and did bind themselves, and every part of the land in [the subdivision] owned by them at any time, fully to the restrictions. Id. (elisions in original). Thus, in determining which property was bound, the Court had exclusive recourse to the dedication deed. ⁷⁸ In Steuart, the Court was presented with a case in which subdividers had recorded a subdivision plat, a declaration of covenants (“dedicatory supplement”), and deeds for the first two grants out, which incorporated the plat and the declaration.

The difficulty arose from the fact that the deeds of later original grantees and purchasers from original grantees did not contain the incorporation of the subdivision plat and declaration. The Court was asked to affirm the implication of the covenantal restrictions to three contiguous, commonly-owned lots, which were being used in a proscribed fashion. The lots in question were clearly identified and included in the plat and the declaration. Steuart, 269 Md. at 75, 79, 100 , 304 A.2d 788 .

To a large extent, the Court relied on the evidence of the plat and declaration in affirming the finding of a uniform development plan: [T]he effect of the plat and dedicatory supplement (Document # 2) of Subdivision No. 2, when taken together, indicates a uniform general plan of development. The supplement described the restrictions and servitudes which the [subdividers] intended to apply to Subdivision No. 2 and purchasers of the lots in that subdivision were bound by the restrictions if they purchased with notice of them. Id. at 89 , 304 A.2d 788 . The Court, following Turner , did recite that “extrinsic” evidence could be considered.

But in Steuart , where there were recorded documents establishing a uniform development plan, the extrinsic evidence was supplementary: “The record indicates that when one looks at the land involved in both Subdivisions Nos. 1 and 2 ... one observes that the plan as shown on the respective plats and supplements was actually carried out.” Id. at 90 , 304 A.2d 788 (emphasis added). And the conclusion of the Court with regard to notice to the offending property owners did not depend on such extrinsic evidence: “In our opinion, the chancellor properly ruled that the appellants had constructive notice of the restrictions applicable to the lots in Subdivision No. 2 by the recordation of the supplement, the plat and the Bury deed.” Id. at 91, 304 A.2d 788 (emphasis added). ⁷⁹ In Bemui, we addressed a case in which the trial court had found that a lot, which was not subject to the declaration of covenants, was nevertheless subject to the covenant-like restrictions arising from a general scheme of development. On reversing that decision, we emphasized that “[t]he declaration of covenants detailed the property subject to the restrictions,” and that the lot in question was not part of that property. Bernui, 62 Md.App. at 19 , 488 A.2d 186 .

Bernui presented a somewhat different issue than the case sub judice. There the lot in question was after-acquired property. Id. at 16-17 , 488 A.2d 186 . Yet, Bernui may still be read for the principle that property not included in a subdivision, as evidenced by a recorded declaration of covenants, will not be found to be part of a general scheme of development.

Effect of Recorded Declaration of Covenants on Determination of Property Included Neither party has cited, nor have we been able to find, a Maryland case that deals with the question of whether contemporaneously-owned property not included in a written and recorded declaration of covenants, which declaration exactly describes the property to be encumbered and benefitted, may be included in a general scheme of development and thus encumbered by the scheme’s restrictions. The dearth of authority may be explained by the fact that the presence of a recorded declaration of covenants connotes a common development scheme