Piney Orchard Community Ass'n v. Piney Pad A, LLC

NAZARIAN, J. “Men’s arguments often prove nothing but their wishes.” Charles Caleb Colton This case involves a parcel of land and covenants that, on their face, don’t apply to that parcel. The Piney Orchard Community Association, Inc. (“the Association”) seeks to overcome the omission by arguing that the historic plan for the Piney Orchard community (“Piney Orchard”) contemplated restrictions to the uses of the parcel that apply through indirect or equitable avenues. The owners of the parcel, appellees Piney Pad A, LLC and Piney Pad B, LLC (collectively “Piney Pad”), sought a declaratory judgment that the covenants did not apply, and the Circuit Court for Anne Arundel County granted Piney Pad’s Motion for Summary Judgment. The Association complains on appeal that it was wrongfully denied the opportunity to develop and submit evidence in support of its claims.

Our decision to affirm the judgment for Piney Pad is as much about summary judgment, and the burden a party bears when opposing a motion for summary judgment, as it is about covenants. I. BACKGROUND Piney Orchard is a planned community near Odenton, Maryland. It covers more than three square miles and consists of about “4,500 apartments, condominium units, townhomes, and single family homes.” The Association is “a condominium association that manages” Piney Orchard. The community includes a small retail shopping center with some commercial businesses located next to the development’s community center, indoor pools, and fitness center.

The parties describe this ²⁰⁰ part of Piney Orchard — seemingly its commercial hub — as the “Village Center,” and the property at issue in this litigation (the “Property”) sits next to it. The Property was originally part of the land owned by the Piney Orchard Master Partnership (“POMP”), but now is owned by Piney Pad. The configuration and ownership of the Property has evolved over time and it has been designated with various lot numbers over the course of many plat filings, 1 but for present purposes two undisputed details matter: 1. The Property was part of original Parcel 5; and 2.

The Property consists of the portions of original Parcel 5 now known as Lot 4RRR and Lot 9R. Portions of the broader Piney Orchard community are subject to either of two sets of covenants. The first, which POMP (as Declarant) recorded on January 10, 1990, is the “Declaration of Covenants, Conditions and Restrictions” (the “POCA Declaration”). Counsel for Piney Pad described the POCA Declaration at the hearing on the Summary Judgment ²⁰¹ Motion (the “Hearing”) as the “residential declaration.” Generally speaking, the POCA Declaration “subject[ed] the Property described on Exhibit A attached hereto to the covenants, liens, easements, conditions and restrictions set forth and established herein in order to preserve the aesthetic qualities of the community.” 2 Much of Piney Orchard is governed now by the POCA Declaration, but at the outset only then-Parcel 6 was subject to it. 3 The POCA Declaration made plain that it was a general plan, and expressly was “not intended to limit [POMP] with respect to the use or type of development or pattern of development for any particular parcel of property within Piney Orchard.” The POCA Declaration also provides that other Piney Orchard properties could be brought within its reach by “recording in the Land Records of Anne Arundel County Supplemental Declarations containing a description of such additional property and expressing an intent to subject such additional property to the terms of this Declaration and such additional covenants, liens, easements, conditions or restrictions as may be appropriate thereto[.]” In Article III, § 2, the POCA Declaration explains how its definition of “Property” can expand to encompass properties added in that manner: “Additional property may be annexed to the Property and made subject to this Declaration by the recordation of a ‘Supplemental Declaration’ containing a description of such additional property and also containing any other appropriate covenants, conditions or restrictions applicable to such property to be ²⁰² annexed.” 4 And POMP understood how to accomplish such an annexation: between 1991 and 2006, it recorded over fifty Supplemental Declarations that subjected new developments within Piney Orchard to the POCA Declaration.

A second and separate series of documents addressed and circumscribed the commercial uses of the Village Center: • On December 13, 1995, POMP recorded a Declaration of Covenants, Conditions and Restrictions (the “1995 Village Center Declaration”) for the Village Center, which had been approved by Anne Arundel County as a “planned commercial complex.” The 1995 Village Center Declaration laid out detailed limitations governing, among other things, building height, utility pipe location, parking, and signage. The Property was not included in the parcels listed as covered by this declaration. • On October 3, 1997, POMP recorded an amended and restated Declaration (the “1997 Village Center Declaration”), which was the same in substance as the 1995 Village Center Declaration. It added Lots 4RR and 6RR (which later became Lots 4RRR and 9R, the Property at issue here) by defining the subject property to include them. • On October 21, 2010, Piney Pad recorded a First Amendment to the 1997 Village Center Declaration (the “First Amendment”) that purported to “de-annex” Lots 4RR and 9 from “[t]he operation, effect, covenants, liens, easements, conditions and restrictions of the 1997 [Village Center] Declaration.” Whether the Property is subject to the 1997 Village Center Declaration is a matter of dispute. ²⁰³ On October 15, 2012, Piney Pad filed a Complaint and Motion for Summary Judgment in the circuit court, seeking a declaratory judgment that the Property was not subject to the POCA Declaration. 5 According to the Complaint, the “clear and unambiguous language of the [POCA Declaration] establishes as a matter of law that neither Lot 4RRR nor Lot 9R is subject to the [POCA Declaration].” It also pointed out that when Piney Pad first bought Lot 4RRR (at the time Lot 4RR) and Lot 9R (then Lot 9), the “Special Warranty Deeds” conveying the lots “did not contain any mention of the application of the POCA Declaration” to the Property. Although Piney Pad also argued that the First Amendment had the effect of “de-annexing” the Property from the 1997 Village Center Declaration, it did not seek any specific declaratory relief relating to that Declaration.

The Association opposed the Summary Judgment Motion. Although the Association did not dispute that the Property fell outside the group of parcels defined in the POCA Declaration, it contended that the Property had been reserved for commercial development, that Piney Pad’s attempt at de-annexation by way of the First Amendment was ineffective, and therefore that the Property still fell under the auspices of the 1997 Village Declaration. It also seemed to argue that if the court determined that the Property was no longer subject to the 1997 Village Center Declaration, the Property instead was subject to the residential requirements of the POCA Declaration. The Association cited to a handful of notations in subdivision filings over the years (by both POMP and Piney Pad) that, according to the Association, served to “put the world on notice” that the Property fell under the 1997 Village Center Declaration and the POCA Declaration.

The circuit court held a hearing on the Summary Judgment Motion on April 1, 2013. At the end of the hearing, the trial ²⁰⁴ court ruled from the bench that it would issue a declaratory judgment, and later signed an Order that stated: neither Lot 4RRR nor Lot 9R (as described in Plaintiffs’ Complaint) is subject to [the POCA Declaration, and the Association] lacks any right, now or in the future, to enforce the covenants, conditions, or restrictions set forth in the POCA Declaration against either Lot 4RRR or Lot 9R; and ... [the Association] is enjoined from asserting any claim, at law or otherwise, relating to the use, occupancy, or possession of either Lot 4RRR or Lot 9R, or any part thereof, arising out of the POCA Declaration. The Association filed a timely notice of appeal.

II

DISCUSSION The Association’s position on appeal turns not on what the POCA Declaration actually says, but on what the Association contends that the POCA Declaration meant to say. This is not a case in which the operative documents contain an ambiguity that requires us to look at the intent of the parties through extrinsic evidence — the Property is unambiguously absent from the list of parcels listed in or added to the POCA Declaration. And because neither of the Association’s two appellate theories — first, that the court should have invoked its equitable powers to bring the Property within the POCA Declaration , and second, that the Property’s “de-annexation” from the Village Declarations could not have left the Property fully unencumbered 6 — credibly stretches the POCA Declara ²⁰⁵ tion to reach the Property, the circuit court correctly granted summary judgment to Piney Pad. Of course, by removing the Property from the reach of the community’s covenants, Piney Pad and NVR may well have left the buyers of their proposed condominiums standing outside the proverbial community fence, looking longingly at the swimming pool and other benefits of community membership.

But be that as it may, we hold that the circuit court correctly issued, on the summary judgment posture, the declaratory judgment Piney Pad sought. We review de novo a trial court’s grant of a motion for summary judgment, and we construe all “reasonable inferences that may be drawn from the facts against the moving party.” Myers v. Kayhoe, 391 Md. 188, 203 , 892 A.2d 520 (2006). Maryland Rule 2-501 details both sides’ burdens: (a) Motion. Any party may make a motion for summary judgment on all or part of an action on the ground that there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law.

The motion shall be supported by affidavit if it is (1) filed before the day on which the adverse party’s initial pleading or motion is filed or (2) based on facts not contained in the record. (b) Response. A response to a written motion for summary judgment shall be in writing and shall (1) identify with particularity each material fact as to which it is contended that there is a genuine dispute and (2) as to each such fact, identify and attach the relevant portion of the specific document, discovery response, transcript of testimony (by page and line), or other statement under oath that demonstrates the dispute. A response asserting the existence of a ²⁰⁶ material fact or controverting any fact contained in the record shall be supported by an affidavit or other written statement under oath. “The purpose of summary judgment is to determine whether there are facts in dispute that must be resolved through a more formal resolution process, such as a trial on the merits.

Thus, in order to defeat a motion for summary judgment, the party opposing the motion must present admissible evidence demonstrating the existence of a dispute of material fact.” Hines v. French, 157 Md.App. 536, 549 , 852 A.2d 1047 (2004) (emphasis added) (citations omitted). And as we explained in Hines , “[i]f there is no dispute of material facts, then our role is to determine whether the trial court was correct in granting summary judgment as a matter of law----‘The standard of appellate review of a summary judgment is whether it is “legally correct.” ’ ” 157 Md.App. at 549-50 , 852 A.2d 1047 (quoting Eng’g Mgmt. Servs. v. Md. State Hwy. Admin., 375 Md. 211, 229-30 , 825 A.2d 966 (2003) (citations omitted)).

Moreover, it is wholly appropriate for a trial court to grant a declaratory judgment at the summary judgment stage: The standard of review for a declaratory judgment entered as a result of the grant of a motion for summary judgment is ‘whether that declaration was correct as a matter of law.’ Olde Severna Park Improvement Ass’n, Inc. v. Gunby, 402 Md. 317, 329 [ 936 A.2d 365 ] (2007) (citations omitted). We have held that ‘... it is permissible for trial courts to resolve matters of law by summary judgment in declaratory judgment actions,’ Megonnell v. United Services, 368 Md. 633, 642 [ 796 A.2d 758 ] (2002). Long Green Valley Ass’n v. Bellevale Farms, Inc., 205 Md. App. 636, 651-52 , 46 A.3d 473 (2012), aff'd, 432 Md. 292 , 68 A.3d 843 (2013). The Association raises a number of arguments that it claims should have defeated summary judgment, 7 most ardently (and ²⁰⁷ most frequently) claiming that the circuit court should have invoked its equitable powers to bring the Property within the POCA Declaration’s reach.

As part of this argument, the Association contends that the trial court should have looked to extrinsic evidence, and it claims that the trial court ignored disputes of fact that precluded summary judgment. In response, Piney Pad argues that the Association did not produce evidence that could overcome the Summary Judgment Motion. It also counters the Association’s claim that the circuit court could (or should) have found the existence of an implied negative reciprocal easement, particularly given the lack of any ambiguity in the POCA Declaration. A. Absent An Ambiguity In The Covenant, The Trial Court Was Correct Not To Consider Extrinsic Evidence As To Its Scope.

Courts consider extrinsic evidence to construe contracts only when the language is ambiguous. Newell v. Johns Hopkins Univ., 215 Md.App. 217, 235 , 79 A.3d 1009 (2013), cert. denied, 437 Md. 424 , 86 A.3d 1275 (2014). This rule applies to land covenants as well — as the Court of Appeals explained in Dumbarton Imp. Ass’n, Inc. v. Druid Ridge Cemetery Co., 434 Md. 37 , 73 A.3d 224 (2013), “[t]he language ²⁰⁸ of [a] restrictive covenant is the first source to which we must look in an effort to uncover the intent of the covenanting parties; if the language of the covenant is unambiguous, it is the only source to which we look, except to confirm the plain meaning of the covenant.” Id. at 53 , 73 A.3d 224 (emphasis added); see also Point’s Reach Condo.

Council v. The Point Homeowners Ass’n, 213 Md.App. 222, 255 , 73 A.3d 1145 (2013). Point’s Reach is the most recent in a long line of cases that have grappled with a seemingly simple problem: what to do when a member of a development or community claims that it falls beyond the reach of covenants to which the remainder of the community is subject, because that member ostensibly has been treated differently from the rest of the community in some way — set apart in originating documents, for example. In Point’s Reach, a group of condominium owners located within a residential development sought a declaratory judgment that they were not subject to the development’s declaration of restrictions and that they did not have to belong to (or pay dues to) the development’s homeowners’ association. The declaration of restrictions only brought residential (ie., non-condominium) owners specifically within its purview, but it also suggested (without stating plainly) that every owner of any property in the development had to join the homeowners’ association.

Id. at 258 , 73 A.3d 1145 . We found that this conflict created an ambiguity, and we permitted the homeowners’ association to introduce extrinsic evidence about the intent of the parties. Id. at 259 , 73 A.3d 1145 . Our analysis in Point’s Reach reviewed Turner v. Brocato, 206 Md. 336 , 111 A.2d 855 (1955), Schovee v. Mikolasko, 356 Md. 93 , 737 A.2d 578 (1999), and Roper v. Camuso, 376 Md. 240 , 829 A.2d 589 (2003), cases that addressed similar questions (and that we will discuss shortly).

We ultimately concluded in Point’s Reach that the homeowners’ association had rebutted any presumption that the condominium owners were not a part of that declaration and restrictions. 213 Md.App. at 274 , 73 A.3d 1145 . We pointed out that the development “was held and sold in phases”; that the parties intended to create a ²⁰⁹ plan and “general scheme of development” in which property owners paid dues “for the common good of the community”; and that the condominium buildings “were intended to be a part of the general scheme of development.” Id. at 274 , 73 A.3d 1145 . Finally, purchasers of both the single-family lots and the condominium units had “actual notice that every lot owner in [the development] would be required to belong to the [homeowners’ association] and pay the dues it assessed.” Id. (emphasis added).

The homeowners’ association supported this finding with testimony from owners of both the single-family lots and the condominium units. Id. The three cases discussed at length in Point’s Reach presented different takes on the same question, and Schovee explained in detail the doctrine of negative implied reciprocal easement. That doctrine states something of a fairness principle: a grantor who sells parcels to others as part of a common development scheme is subject to the same restrictions he imposed on the other lots, even if the restrictions are not in the grantor’s deed, if the buyers understood the grantor was subject to the restrictions too: when a common grantor develops land for sale in lots, pursues a course of conduct indicating an intention to follow a general plan or scheme of development with respect to the land, and imposes substantially uniform restrictions on the lots conveyed, those same restrictions may be enforced against the land retained by the common grantor if that land is found to be part of the general plan of development and the buyers purchased their lots with that understanding. 356 Md. at 99-100 , 737 A.2d 578 .

In Schovee , the original owner of an exclusive community sought to subdivide a lot within the community. He asserted that the lot was not included in the original declaration imposing restrictions on property within the community, and the other property owners within the community tried to stop him. These owners testified at trial that when they came to the community as potential buyers, the real estate broker (in ²¹⁰ some cases the owner himself) had represented to each of them that the lot at issue was part of the subdivision, and they were led to believe the lot would be subject to the same covenants and restrictions as were their own. Id. at 101-02 , 737 A.2d 578 .

The trial court determined that the owner’s conduct fell within the doctrine of implied negative reciprocal easement: as the common grantor of the lots, he established a common scheme of development and represented to buyers that the lots in question “would be part of the common scheme,” id. at 103 , 737 A.2d 578 , and could not be subdivided further. We reversed, holding that that the buyers failed to rebut a presumption that only the land specifically included in the declaration would be subject to its terms. Mikolasko v. Schovee, 124 Md.App. at 66, 82, 720 A.2d 1214 (1998). The Court of Appeals affirmed our decision and, after surveying the doctrine in detail, determined that it did not apply because the declaration at issue “establish[ed] with virtually unimpeachable clarity,” 356 Md. at 113 , 737 A.2d 578 , that the owner did not intend to subject the lot to the restrictions imposed elsewhere in the subdivision, and that the purchasers of other lots knew (“at least constructively,” id., as the Court put it) that it was excluded.

The Schovee opinion analyzed Turner, 206 Md. 336 , 111 A.2d 855 , at some length. 356 Md. at 109-11 , 737 A.2d 578 . In Turner , the Court of Appeals held that the defendants’ lot was part of (and subject to the restrictions within) a development and that the developer had intended to bind all land in the development. Turner relied on extrinsic evidence that ranged from promotional efforts and advertisements to language in the deeds and testimony of other buyers that, as the Schovee Court put it, “confirmed an intent to include all of the land within the 47-acre tract under the restrictions.” 356 Md. at 111 , 737 A.2d 578 . Following Turner and Schovee, the Court of Appeals had occasion to revisit the doctrine again in Roper v. Camuso, 376 Md. 240 , 829 A.2d 589 (2003), but with an interesting twist.

In ²¹¹ that case, Ms. Roper sought to enforce community covenants against Ms. Camuso, a neighbor whose property fell expressly within them. (The twist: Ms. Roper ultimately took the position that her property was not bound by the community’s covenants, because they were not recorded simultaneously with her deed from the developer.) Ms. Roper built a fence along the common boundary with Ms. Camuso that violated the community’s covenants, and ignored letters from the community’s “Architectural Control Committee” asking her to remove it. Id. at 244 , 829 A.2d 589 . Not to be outdone, Ms. Camuso planted a row of sixty-five Leyland Cypress trees that Ms. Roper then claimed encroached on her property.

When Ms. Camuso did nothing to cure the problem upon Ms. Roper’s request, Ms. Roper took matters into her own hands and pruned the branches of the trees on both sides of the property. Id. at 244-45 , 829 A.2d 589 . Ms. Camuso filed suit for damages and Ms. Roper counterclaimed, seeking (among other things) a declaration that the trees violated the community’s covenants (along with injunctive relief). Id. at 245 , 829 A.2d 589 .

A jury found in favor of Ms. Camuso and the trial court dismissed Ms. Roper’s counterclaim, holding that she lacked standing to enforce the covenants against Ms. Camuso because her property was not subject to the covenants in the community. We affirmed, reasoning (relying on Schovee) that the doctrine of implied negative reciprocal easements did not apply to Ms. Roper because she was not a purchaser who asked a court “to exercise its equitable powers to impose the covenants upon a lot within the subdivision that has not been subjected expressly to the covenants.” Id. at 249 , 829 A.2d 589 . The Court of Appeals disagreed. The Court explained first, in keeping with Turner , that “the initial purpose for which the doctrine [of implied negative reciprocal easements] was developed was to provide redress for owners of lots burdened by covenants who purchased their lots believing that the common grantor intended all subsequent lots sold to be subject to the same restrictions.” Id. at 269, 829 A.2d 589 .

The Court did not view Ms. Roper’s status — a resident not subject to the ²¹² covenants — as prohibiting her from seeking to enforce the doctrine. Id. It found sufficient evidence to support a finding that the developer intended for a common plan of development to exist, and therefore that Ms. Roper could enforce the relevant covenants reciprocally. Id. at 270-71 , 829 A.2d 589 .

The Court looked to Schovee for the test: “whether (1) there was a general plan of development, and (2) if so, the retained land was intended to be part of the development.” Id. at 261, 829 A.2d 589 (citing Schovee, 356 Md. at 106 , 737 A.2d 578 ). The Court also addressed the presumptions that apply in the inquiry, and the burden on the party trying to impose the restrictions (in our case, the Association): [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 ... 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 261-62, 829 A.2d 589 (quoting McKenrick v. Savings Bank, 174 Md. 118, 128 , 197 A. 580 (1938)). It concluded that Ms. Roper had produced sufficient evidence “to support the conclusion that a common plan of development existed and was intended to exist by the grantor,” and that her land “was intended to be a part of that community and thence subject to, and reciprocally able to enforce, the [community’s] covenants.” Id. at 270-71, 829 A.2d 589 . Notably, though, the evidence on which the Court relied was extrinsic to the deed itself.

Preliminarily, it found that Ms. Roper’s deed was ambiguous— although the deed provided that it was “ ‘[s]ubject to covenants and restrictions of record,’ no covenants or restrictions were recorded concurrently with the deed [from the developer to Ms. Roper].” Id. at 244 , 829 A.2d 589 . And that ambiguity in scope justified looking to extrinsic evidence, which established that Ms. Roper’s property was subject to the community’s restrictions: ²¹³ • Ms. Roper testified that she believed her property was subject to the covenants. 8 • The Architectural Review Committee contacted Ms. Roper on at least two occasions informing her that she was not in compliance with the covenants, thereby expressing “an unambiguous assumption” that she was subject to the covenants. • No evidence in the record indicated that the developer intended to exclude Ms. Roper’s lot from the