Oakhampton Ass'n v. Reeve

BISHOP, Judge. Appellees, Richard H. Reeve, Rennert Smelser, M.D., and E. Gordon Leatherman (the “Owners”), filed a complaint for declaratory judgment and collateral relief in the Circuit Court for Baltimore County against appellant, Oakhampton Association, Inc. (the “Association”). The Owners alleged that the Association did not have the right to adopt and implement a parking assignment program and sought, inter alia, declaratory and injunctive relief. After a hearing on motions for summary judgment filed by the Owners and the Association, the circuit court granted the Owners’ motion.

The Association filed a motion to alter or amend judgment, which the trial court denied, whereupon the Association filed a timely notice of appeal to this Court. ⁴³¹ Issues The Association presents the following questions: Did the trial court err, as a matter of law, by holding the defendant homeowner association to a standard applicable only to the condominium form of ownership, and by doing so, did the court improperly reform the express contractual relationship between the parties? a. Did the trial court err by applying only condominium law regarding “exclusive” and “non-exclusive” easements and ignoring express contract provisions of the declaration and applicable law? b. Did the trial court err by requiring unanimous consent of all of the members of the defendant association to an amendment to the declaration due to the “lack of specificity” in the original declaration on the subject of parking uses in the common areas? Facts This argle-bargle (from the Scotch—argy-bargy, to argue, wrangle, haggle) was precipitated by the following undisputed facts (based upon the parties’ agreed statement of facts included in the Association’s brief pursuant to Rule 8-501(g)).

The Association is a Maryland homeowner association, as that term is defined in the Maryland Homeowners Association Act, Md.Real Prop.Code Ann. § 11B-I01(g) (Supp.1993). Pursuant to the terms of a Declaration of Covenants, Conditions, and Restrictions (the “Declaration”) dated September 25, 1980 and recorded among the Land Records of Baltimore County, the Association subjected all lots within the Oakhampton Subdivision (the “Subdivision”) to certain covenants, conditions, and restrictions as set forth in the Declaration. The Association’s documents also include the Articles of Incorporation, establishing the Association as an incorporated entity, the By-Laws, and the First Amendment to the By-Laws. Pursuant to deeds dated August 26, 1982, September 17, 1982, and June 15, 1983 and recorded among the Land Records of Baltimore County, the Association conveyed lots in the ⁴³² Subdivision to Rennert M. Smelser, Richard H. and Edwina Reeve, and E. Gordon and Lorraine Leatherman, respectively.

Pursuant to a First Amendment to the Declaration dated December 2, 1989 and recorded among the Land Records of Baltimore County, the members of the Association amended the Declaration with respect to restrictions on family day care homes and the leasing of dwellings. Pursuant to the Declaration and a deed by Oakhampton, Inc., the Subdivision’s developer, the Association owns all of the common areas and facilities of the Subdivision, defined in Article I, Section 2 of the Declaration as those recreation amenities and facilities, roadways (excluding roadways which are dedicated [for] the public use where such dedication has been accepted by the appropriate governmental authorities), walkways, parking areas and open spaces erected and/or located within the Property; it being the intention of the Declarant that except for dedicated roadways and except for the individual Lots set out on the Plat, the entire Property shall be deemed “Common Area and Facilities.” In late 1990, the Association instituted a parking assignment program for all of the parking areas in the Subdivision. On November 13, 1991, in the case of Reeve et al. v. Oakhampton Association, Inc., Case No. 91-CG-1010, in the Circuit Court for Baltimore County, the trial court concluded that the Association did not have the power to make a legally binding assignment of parking spaces absent an amendment to the Declaration. In December 1991, the members of the Association proceeded to amend the Declaration.

The terms of the Declaration require the execution and acknowledgement of two-thirds of the members of the Association to effect such an amendment. Pursuant to a Second Amendment to the Declaration, dated March 24, 1992 and recorded among the Land Records of Baltimore County, the members of the Association amended Article IV of the Declaration to add Section 5, which reads: ⁴³³ Assigned Parking. Any provision in this Declaration to the contrary notwithstanding, the Association’s Board of Directors shall have the power to adopt, and promulgate among the membership in writing, reasonable rules and regulations regulating the use of parking areas including, but not limited to, the power to assign the use of parking spaces to individual Members/Owners. The Second Amendment to the Declaration was executed and acknowledged by the required two-thirds of the members.

The approval was not unanimous, because the Owner-members voted in the negative. On June 15, 1992, a majority of the Board of Directors of the Association adopted a parking assignment program by a document styled “Rule Relating to Assigned Parking” (the “Rule”). In July 1992, the Association informed its members of the Second Amendment to the Declaration and of the Rule. The Rule took effect July 8, 1992, and the Owners filed the instant action a week later.

In addition to the agreed statement of facts supra, the following excerpts from the Declaration are relevant: WHEREAS, Declarant intends to convey individual Lots located within the Property, together with improvements to be constructed thereon, subject to certain protective covenants, conditions, restrictions, reservations, liens, and charges as hereinafter set forth; NOW, THEREFORE, Declarant hereby declares that the Property shall be held, sold and conveyed subject to the following easements and restrictions, for the purpose of enhancing the value, desirability and attractiveness of the Property. These easements, covenants, restrictions, conditions, charges and liens shall run with the Property (i.e., the land) and shall be binding on all parties having or acquiring any right, title or interest in the Property or any part thereof, shall inure to the benefit of each Owner thereof, and shall be binding upon the Property, to the end that such easements, covenants, restrictions, conditions, charges and ⁴³⁴ liens shall run with, bind and burden the Property in perpetuity, except as hereinafter limited. * * ' * * * * ARTICLE IV PROPERTY RIGHTS Section 1. Members’Easements of Enjoyment. Every Member shall have a right and easement of enjoyment in and to the Common Area and Facilities and such easement shall be appurtenant to and shall pass with the title to every Lot, subject to the following provisions: (g) the rights of the Owners of the Lots to perpetual easements over and upon any of the Common Area and Facilities for such portions of their buildings that may overhang or otherwise encroach upon any of the Common Area and Facilities, for support, for the purpose of necessary repairs and maintenance, for the maintenance of reasonable appurtenances to their buildings and for reasonable ingress and egress to and from any buildings through and over the Common Area and Facilities.

Section 2. Rights Not Subject to Suspension. Notwithstanding anything in this Declaration to the contrary, the Association shall have no authority to suspend, either temporarily or permanently, any of the rights created in Paragraphs (f) and (g) of Section 1 of this Article for any reason whatsoever. ❖ * X # * * ARTICLE X EASEMENTS # * . * * # # Section 3. Easement for Streets, etc. Any and all streets, walkways, roadways, sidewalks, and/or the like which are owned by the Association shall be subject to nonexclusive easements for ingress, egress and regress for the ⁴³⁵ benefit of all Members of the Association, the Declarant, their respective heirs, personal representatives and assigns and all other persons claiming under any of them.

ARTICLE XI MISCELLANEOUS Section 1. Amendment. ... [T]his Declaration may be amended by an instrument executed and acknowledged by two-thirds (2/3) of the Class A members of the Association, which instrument shall be recorded among the Land Records for Baltimore County, Maryland.... After the hearing on the motions for summary judgment, the trial court issued an opinion, which reads in relevant part: This Court’s research reveals that no Maryland case law exists on this subject. This Court surveyed the treatment this issue has received in other jurisdictions and found several Illinois cases that were of assistance.

In order to determine if certain grants divested owners of their property rights, the Illinois courts make a distinction between nonexclusive and exclusive easements. Illinois has defined a non-exclusive easement as “where the percentage of common ownership appurtenant to each condominium unit remains constant, the unit owner’s undivided interest in the common elements is not diminished by the grant to a third party of a nonexclusive use of, or easement over, the common areas.” ... An exclusive easement is a grant that results in the “unit owner [being] precluded from using a portion of the common elements to which he previously had access.” ... .. . This Court is convinced that the assignment of parking spaces to the homeowners at Oakhampton was a grant of an exclusive easement because it “fully precluded” other owners from using the spaces previously available to them.

This improperly divested the Plaintiffs of a portion of their property. ⁴³⁶ This Court finds that the Defendant cannot exercise this right by amendment absent the consent of each homeowner to release his or her right to the common property. To effect the assignment of parking spaces requires unanimity. While the Association could have reserved the right to assign parking spaces, there is no such power reserved in the original condominium declaration. This Court finds that because the right to promulgate rules and regulations on parking uses of the common areas was not explicitly reserved in the original declaration, no subsequent amendment can divest the owners of their property rights without unanimity.

Discussion The Association argues that the trial court erred when it granted the Owners’ motion for summary judgment because: (1) the Declaration, as the operative