Shader v. Hampton Improvement Ass'n.

LEAHY, J. Hampton is a residential community surrounding the grand Hampton Mansion and estate, a National Historic Site in Baltimore County. Since 1981, the Hampton community has been subject to restrictive covenants that operate mainly to limit residential density, preserve spacious lots, restrict development to single-family homes, and harmonize, to some extent, the appearance of homes and lots in the neighborhood. In 2004, Appellants Scott and Anna Shader (“the Shaders”) reconfigured the lots underlying their property at 606 East Seminary Avenue in Hampton to create two separately addressed properties: 606 and 606A East Seminary Avenue. They ultimately filed a declaratory judgment action in the Circuit Court for Baltimore County against the Hampton Improvement Association (“HIA”), seeking a declaration that ⁵⁹⁰ they were not prohibited from constructing a dwelling on 606A East Seminary Avenue because the HIA had waived by abandonment a restriction contained in Paragraph C of the covenants that precluded property owners from building more than one residential dwelling per lot, consistent with the original Plat filed in 1930.

In the same action, the Shaders filed a motion for summary judgment raising offensive nonmutual collateral estoppel based on a prior judgment against the HIA in Cortezi v. Duval Four-A, LLC, No. C-07-02587 (Cir.Ct.Balt.Cnty.2008) (“Duval ”). The court denied this motion and, after a bench trial, found that the HIA did not waive the covenants and could enforce the restriction against 606A East Seminary Avenue. The Shaders present two questions on appeal: I. Did the lower court err in denying the motion for summary judgment based upon the prior ruling in Duval Four-A in which it was held that the HIA had waived restriction of the one house per lot as lot was shown on the 1930 Plat by abandonment?

II

Did the lower court err when it failed to declare that the one house per lot as lot was shown on the 1930 Plat had been waived by abandonment? With regard to question one, we hold that the circuit court properly declined to apply offensive nonmutual collateral estoppel because the issues in Duval and the instant case are not identical and because application of offensive nonmutual collateral estoppel would be unfair to the HIA according to the precepts established by the Supreme Court in Parklane Hosiery Co. v. Shore, 439 U.S. 322 , 99 S.Ct. 645 , 58 L.Ed.2d 552 (1979). In response to question two, we hold that the circuit court was not clearly erroneous in finding that the HIA did not abandon Paragraph C of the covenants based on the evidence presented at trial, including testimony that the HIA has persistently enforced the restriction in dispute. We therefore affirm the judgment of the Circuit Court for Baltimore County. ⁵⁹¹ BACKGROUND A. The Hampton Covenants Before it was a National Historic Site, the Hampton Mansion and estate was privately owned by the Ridgely family since the mid-lTOOs. 1 In 1929, John Ridgely, Jr. established the Hampton Company and began developing a portion of the estate’s land.

The Hampton Company recorded Plat No. 1 of the Hampton community in 1930 (“1930 Plat”). 2 On April 6, 1931, the Company recorded a “Schedule of Restrictive Covenants and Easements” (“Covenants”), which specifies that its provisions “are to be a part of each Deed of any part of the land shown on [Plat No. 1] from the Hampton Company to any and every purchaser.” Paragraph C of the Covenants sets out the “Restrictions as to Use”: The land included in said tract except as hereinafter provided shall be used for private residence purposes only and no building of any kind whatsoever shall be erected or maintained thereon except private dwelling houses each dwelling being designed for occupation by a single family and private garages for the sole use of the respective owners or occupants of the plots upon which such garages are erected there shall not be erected or maintained on said tract of land an apartment house or house designed or altered for occupation by more than one family and no more than one dwelling may be erected on a Lot. ⁵⁹² Buildings to be used for schools churches libraries art galleries museums clubs offices and studios or for recreative educational religious or philanthropic purposes may be erected or maintained in locations approved by the company. The Covenants define “Lot” as “one unit of said tract as at present above by the recorded map of said tract” and “Building” as “one detached building.” 3 A “Plot” may “consist of a single lot or more or less than a single lot.” Paragraph H concerns the duration of the Covenants and provides that the “restrictions^] conditions!,] covenants!,] easements and agreements” shall run in perpetuity, provided, however: [T]hat at any time after December 31, 1960 any of the provisions contained in Paragraphs C D and K hereof may be cancelled or abrogated in whole or in part by the recording in the proper public Land Records of an appropriate instrument or instruments in writing executed by the then owners (not including mortgagees) of a majority in area of the land included in said tract exclusive of streets and other land then devoted to public use.... In 1939, the Hampton Company recorded a revised version of Plat No. 1 that reconfigured lots 40, 42, and 44-54 (“1939 Plat”). The Company also recorded another revised version of Plat No. 1 in 1949 (“1949 Plat”).

B. The Shader Property In 2002, the Shaders purchased the real property located at 606 East Seminary Avenue in Hampton from William and Theresa Valente. The property comprised two parcels: Lot 59, a 2.246-acre parcel, and the eastern portion of Lot 75, a 1.457-acre parcel north of Lot 59. Back in the late 1940s, the Hampton Company divided Lot 75 by conveying the 1.457- ⁵⁹³ acre parcel to Raymond and Louise Moore who owned a contiguous property, Lot 59. A residential dwelling remains to this day on the balance of Lot 75.

The deed conveying the 1.457-acre parcel from Lot 75 to the Moores (“1948 Moore Deed”) provided: It is expressly covenanted and agreed as a part of the consideration for this deed by the said Raymond L. Moore and Louise B. Moore his wife for themselves their heirs and assigns with the said The Hampton Company for itself its successors and assigns that at no time shall any dwelling be erected on the lot hereby conveyed. (emphasis added). The 1948 Moore Deed also expressly incorporated the agreements and restrictions contained in the Covenants and stated that the Covenants were “binding upon ... [the Hampton] Company its successors and assigns.” In 1986, following Raymond Moore’s death, the Valentes acquired the property. The Shaders later decided to reconfigure the lots they purchased from the Valentes to create two separately addressed properties.

On September 10, 2004, they executed two deeds that created two vertical properties with the addresses of 606 East Seminary Avenue, upon which the Shaders’ home is located, and 606A East Seminary Avenue. The Shaders recorded the deeds in the Baltimore County Land Records in 2004. In 2009, the Shaders listed their home on 606 East Seminary Avenue for sale and, at the same time, listed the 606A East Seminary Avenue property for sale as a buildable lot. In a letter dated September 21, 2009, copy of which was sent to Mr. and Mrs. Scott Shader, HIA President Eric Krali reminded the Shaders’ listing agents of the restrictive covenants, including the prohibition against “the erection of more than one house per deeded lot, as shown on the original Plat Map at the time the property was recorded.” More than one year later, on February 4, 2011, the Shaders initiated a quiet title action against the Hampton Company (a defunct company) and its original incorporators, seeking to ⁵⁹⁴ establish that the covenant in the chain of title for their portion of Lot 75—specifically, the covenant contained in the 1948 Moore Deed—was unenforceable. 4 When no answer was filed, the court entered an Order of Default and thereafter a Judgment of Default declaring that the covenant in the 1948 Moore Deed was void.

C. The Declaratory Judgment Action On November 7, 2012, the Shaders filed a Complaint for Declaratory Judgment against the HIA in the Circuit Court for Baltimore County, seeking a declaration that the Covenants do not prohibit the building of a home on 606A East Seminary Avenue. 1. Plaintiffs Contend the HIA Is Collaterally Estopped from Enforcing the One-Dwelling-Per-Lot Restriction The Shaders filed a motion for summary judgment on March 13, 2013, arguing that the circuit court should apply the doctrine of collateral estoppel based on the ruling in Duval. 5 The Shaders claimed that Duval precluded the HIA from re-litigating whether it waived Paragraph C of the Covenants by abandonment. In Duval, the HIA and individual homeowners in Hampton filed an action for declaratory and injunctive relief against Duval Four-A, LLC (“Duval”), a property owner in the Hampton community. The HIA sued to stop construction of a dwelling on Duval’s reconfigured lot and invoked the original configuration of the lot as it was shown on the 1930 Plat.

The circuit court observed that the revised 1949 Plat “reconfigured the lot lines for several lots, and in fact, created Lot 4A, the ⁵⁹⁵ lot owned by [Duval] and Lot 4B.” In its Order, the court included the following findings: 3. There is no evidence that any of the lot owners in Hampton ever objected to the construction of more than one house per lot as the lots were depicted on the 1930 Plat in these three other cases (Lots 18, 24, and 25). There is no evidence that the Hampton Improvement Association, Inc. ever objected. Neither the Plaintiffs, nor any of the other property owners in the subdivision sued or otherwise sought to enforce this interpretation of the covenant in these three situations, each of which involved lots oriented just adjacent to Lot 4A. 4.

In addition, the testimony was undisputed that in some 30 instances in the subdivision, the Plaintiffs and their predecessors have permitted lot owners in Hampton to erect and maintain buildings other than single family dwellings and garages on their lots in violation of the very same covenant which they seek to enforce in this action. (footnote omitted). The court determined that because “the Plat presently in effect portrays this Defendant’s property as a separate lot, designated Lot 4A, the construction of Defendant’s dwelling, as planned, will not frustrate the original intent or purpose of the covenants,” which was to limit the density of homes in Hampton. Based on these findings, the court held that “the Plaintiffs and their predecessors, with regard to the proposed dwelling construction planned by the Defendant, have waived the right to seek to enforce the provisions of Paragraph C of the Covenants by abandonment” and that “Paragraph C of the Covenants does not preclude or prohibit construction of the dwelling contemplated by the Defendant, and the Defendant may construct a house on Lot 4-A.” In a footnote, the court included the following instruction: The decision in this matter is limited to the facts of this case.

This Court specifically does not conclude that the covenants are ‘void.’ This Court specifically does not conclude that the waiver defense would apply in any other action to enforce covenants in the future. ⁵⁹⁶ On April 10, 2013, a motions judge denied the Shaders’ motion, stating: First, I do not feel that “collateral estoppel” is able to be applied here.... [This doctrine] require[s] the placing of one face plate over another to see if the issues are the same and if the parties are fundamentally the same so as to be bound by a prior decision. There is nothing in the Shader motion that would allow me to see the face plate of the actual controversy before [the Duval court] and the decision by [the Duval court] as to the structures or buildings to which it refers as a violation of what covenant or issue presented. Second, the Response ... makes an important distinction between the erection of houses as opposed to other sheds or buildings, the fact that there is argued not to have been an abandonment of covenants for Plat # 1, differences that may exist between the covenants, and application of the covenants as to different plats. That all means that a significant amount of additional facts needs to be gone through by the court before summary judgment or any judgment would be able to be entered.

A nonjury trial commenced on May 15, 2013, at which time the Shaders renewed their motion for summary judgment. 6 During argument on the Shaders’ motion, the HIA countered with a disparate case, arguing that the court must also consider the prior ruling in Cully v. Hampton Improvement Ass’n, Inc., No. 91CG-655 90/284 (Cir.Ct.Balt.Cnty.1992). Five years after purchasing Lot 10, a three-acre parcel in the Hampton subdivision, David and Carol Cully subdivided their lot to create Lot 10, a two-acre parcel upon which their home was located, and Lot 10A, a vacant one-acre parcel. The Cullys then sought permission from the HIA to construct a house on Lot 10A. When the HIA denied their request, the Cullys filed a declaratory judgment action in the Circuit Court for Baltimore County seeking a declaration that Paragraph C of the Covenants was void or waived.

The Cullys argued, ⁵⁹⁷ inter alia, that the construction of homes on nearby lots created by the revised 19B9 Plat operated as a waiver of Paragraph C of the Covenants. In surveying the evidence adduced at trial, the circuit court found: There was testimony from a number of owners in the subdivision ... that the Association always attempted to work with the home owners in matters involving such matters as fences and the enclosure of porches. They also testified that they were always careful to insist on prior approval for any major structural changes and they never permitted the building of an additional house on a lot. There was further testimony that the Architectural Committee is quite active and takes a flexible, practical approach to requests from members of the Association to make changes to their property.

Accordingly, the Cully court concluded that the HIA did not waive Paragraph C of the Covenants based on the testimony presented that the HIA continued to enforce the Covenants. 7 The court decided, therefore, that the Covenants prohibited the construction of a home on Lot 10A. Returning to the matter at bar, following trial, the court denied the Shaders’ motion for summary judgment in a Memorandum Opinion dated June 4, 2013. 8 The court recognized that Plaintiffs were invoking the doctrine of offensive nonmutual collateral estoppel by claiming that the prior ruling against the HIA in Duval estopped the Defendant HIA. The court concluded, however, that because the issues in Duval and the issues in the Shaders’ action were not identical, the threshold requirement of collateral estoppel was not met. Specifically, the court explained: ⁵⁹⁸ While the issues are clearly related, the Shaders’ property consists of one “original” lot and a portion of another lot that were joined in one parcel.

The Shaders then sought to re-eonfigure the lot line between these two parcels. In this manner, the Shaders argue that they have two buildable lots. [The court’s] ruling in the Duval matter is specifically tied to a revision in the subdivision plat that was filed in 1949 that reconfigured some of the original lot lines and created at least two new lots, including Lot 4-A. [The court’s] decision related narrowly to this portion of the Hampton subdivision.... For these reasons, the court denied the Shaders’ motion for summary judgment. 2. Plaintiffs Assert the HIA Abandoned Paragraph C of the Covenants At trial, the Shaders argued that the existence of various buildings throughout the neighborhood demonstrated that the HIA had abandoned Paragraph C of the Covenants.

Pictures exhibiting these structures were admitted into evidence. Mrs. Shader recounted, for example, that when she viewed 610 East Seminary Avenue, the property included a house, a pool house, and a guesthouse with two bedrooms, a living space, a kitchen, and a bathroom. Scott Shader provided similar testimony about observing violations of the Covenants; specifically, that “there are out buildings, there are detached garages, there are very large sheds, there are gazebos, there are guest houses.” He had also observed violations of Paragraph D of the Covenants, which requires unattached garages to be within 50 feet of a residence. The Shaders had counted on creating a separate lot; as Mrs. Shader explained, “we really believed ... we would have the one piece of property to sell with the house and the other piece of property to sell for development or to put a house on so that would help us in our retirement.” When asked during cross-examination whether she was told that the Covenants existed, she stated, “I’m sure when we signed the paperwork at the round table and hundreds of papers are tossed at you, ⁵⁹⁹ we signed something, yes.” Mrs. Shader testified that the real estate agent and the information supplied by the Valentes, the previous owners, led her and her husband to believe that reconfiguration of the property would be possible.

Two HIA representatives also testified. Anna Von Lunz, a lifetime resident of Hampton and member of the HIA’s architectural review committee, opined that the HIA, formed in the 1950s by John Ridgely, Jr., is a successor to the Hampton Company. She testified that the HIA has interpreted Paragraph C of the Covenants to prohibit more than one residential dwelling on one platted lot and that the purpose of the Covenants is to “protect[ ] the density and the character and the landscape of the community.” Ms. Von Lunz explained that when homeowners planned to build on their property, the HIA would send a letter explaining the Covenants to the homeowners or their realtors. When asked what the HIA does with regard to the construction of a pool house or shed, Ms. Von Lunz explained that “it wasn’t considered a second residential dwelling on a platted lot.” She believed the residential character of the neighborhood has remained the same, stating that “[p]eople drive through that community just because of the pleasure of going through a community that has open spaces and homes that are well designed and fit on the lots and aren’t overcrowded.” When asked what would happen if the Covenants were abandoned, she responded that the result would “look like a downtown Towson subdivision” and “take all that open space away in front of the watershed.” Dwight Kines, the current president of the HIA, described the neighborhood as “[Ijarge lots, open spaces, quiet.

It is a great place to live.” He testified that the HIA has maintained and enforced the position that there can be no more than one residential dwelling per lot. When asked whether the structures identified by the Shaders violated Paragraph C, Mr. Kines answered “absolutely not ... because none of these were dwellings, residential dwellings.” He stated that “[t]he difference is that we are talking [about] a residential dwelling here and not a pool house or gazebo or a guest house or a ⁶⁰⁰ garage.” If the Covenants were no longer in force, he believed that “it would increase the density significantly.” After hearing all of the evidence presented at trial, the circuit court found that the “Hampton Company intended Paragraph C of the Covenants to be an enforceable restrictive covenant, to run with the land, and to create a uniform general scheme or plan of development.” The court determined that the Shaders had constructive notice of the Covenants at the time they purchased the property, and noted that the covenant contained in the 1948 Moore Deed specifically prohibited the construction of a home on the conveyed eastern portion of Lot 75. 9 Finding the HIA did not waive Paragraph C of the Covenants by abandonment, the court explained: Although the Shaders were able to show numerous instances of violations based on the construction of separate structures on properties throughout the community, they were unable to demonstrate construction of a second residence on a single lot. Rather, the evidence demonstrates that the HIA has consistently taken action to enforce the restriction in the Covenants that requires “no more than one dwelling may be erected on a Lot.” The court observed: “Maryland law holds that restrictive covenants may be abandoned in part without resulting in a wholesale abandonment of all restrictive Covenants,” citing King v. Waigand, 208 Md. 308, 313 [ 117 A.2d 918 ] (1955). Accordingly, it determined that “violations of the portion of the covenant prohibiting the construction of buildings other than residential dwellings does [sic] not necessarily mean that the restriction on building more than one residence per lot has been abandoned.” The court found that the evidence demonstrated the HIA has continually enforced the one-house-per-lot restriction, which has “allowed Hampton to remain a ⁶⁰¹ neighborhood of large, single family properties, with low population density.” The circuit court held that Paragraph C of the Covenants prohibits the construction of a home on 606A East Seminary Avenue.

On June 28, 2013, the Shaders filed a timely notice of appeal. DISCUSSION We first address whether the Shaders may raise the Duval decision in their declaratory judgment action to collaterally estop the HIA from litigating whether it waived Paragraph C of the Covenants by abandonment. After concluding that collateral estoppel does not apply, we explain why the circuit court did not err in refusing to declare that the HIA waived Paragraph C of the Covenants by abandonment. I. Collateral Estoppel The Shaders contend the circuit court erred in denying their motion for summary judgment in which they argued the Duval judgment collaterally estopped the HIA from defending against the allegation that it waived Paragraph C of the Covenants by abandonment.

First, the Shaders claim that the issues in Duval and the underlying case are identical and that the circuit court erred in concluding they are not. Second, the Shaders argue the Duval decision mandated judgment in their favor under the doctrine of offensive nonmutual collateral estoppel. We disagree. A. Standard of Review Although we generally apply an abuse of discretion standard when reviewing a circuit court’s denial of a motion for summary judgment in favor of further proceedings, Hous.

Auth. of Balt. City v. Woodland, 438 Md. 415, 426 , 92 A.3d 379 (Md.App.2014), (citing Metro. Mortgage Fund, Inc. v. Basiliko, 288 Md. 25, 29 , 415 A.2d 582 (1980)), this deferential standard of review does not extend to the court’s post-trial denial of the Shaders’ motion for summary judgment raising ⁶⁰² the legal issue of collateral estoppel. See Presbyterian Univ.

Hosp. v. Wilson, 99 Md.App. 305, 313-15 , 637 A.2d 486 (1994), aff'd, 337 Md. 541 , 654 A.2d 1324 (1995). We explain. In Basiliko, supra, 288 Md. at 26 , 415 A.2d 582 , the Court of Appeals addressed the narrow question of whether an appellate court may review a denial of a pretrial motion for summary judgment other than for abuse of discretion. In this case, the Metropolitan Mortgage Fund sued the Basilikos for breach of written guaranty agreements.

Id. Metropolitan filed three motions for summary judgment, which the circuit court denied. Id. at 26-27 , 415 A.2d 582 . After a bench trial, the circuit court concluded that the Basilikos did not sign the agreements and therefore entered judgment in the Basilikos’ favor.

Id. at 27 , 415 A.2d 582 . This Court affirmed, and the Court of Appeals granted certiorari to address the scope of appellate review. Id. The Court explained that although a court “cannot draw upon any discretionary power to grant summary judgment,” a court ordinarily has discretion to defer ruling on a pretrial motion for summary judgment until later in the proceedings or to deny the motion in favor of a trial on the merits, even if all technical requirements for summary judgment are met. 10 Id. at 27-28 , 415 A.2d 582 (citations ⁶⁰³ omitted) (internal quotation marks omitted).

The Court expounded: Thus, while ... [the Maryland Rule for Summary Judgment] states that when a movant is entitled to judgment as a matter of law, the court should render judgment forthwith, this does not mean that entry of judgment may not be delayed until after a trial on the merits, should, in the court’s mind, the promotion of justice require it. It is our view that an appellate court should be loath indeed to overturn, on a very narrow procedural ground, a final judgment on the merits entered in favor of the party resisting the summary judgment motion.... To turn the tables in this manner would be nothing short of substituting a known unjust result for a known just one. Id. at 28-29 , 415 A.2d 582 (internal citations omitted).

The Court therefore held: [A] denial (as distinguished from a grant) of a summary judgment motion, as well as foregoing the ruling on such a motion either temporarily until later in the proceedings or for resolution by trial of the general issue, involves not only pure legal questions but also an exercise of discretion as to whether the decision should be postponed until it can be supported by a complete factual record; and we further hold that on appeal, absent clear abuse (not present in this case), the manner in which this discretion is exercised will not be disturbed. Id. at 29 , 415 A.2d 582 ; see, e.g., Woodland, supra, 438 Md. at 426-27 , 92 A.3d 379 ; Dashiell v. Meeks, 396 Md. 149, 164-65 , 913 A.2d 10 (2006). Later, in Presbyterian University Hospital, supra, 99 Md. App. at 313-15 , 637 A.2d 486 , this Court declined to extend the Basiliko holding to review a denial of a summary judgment motion that raised the purely legal issue of personal jurisdiction. In this case, the plaintiff filed a lawsuit against the defendant-hospital, located in Pittsburgh, PA, in the Circuit Court for Baltimore City.

Id. at 309, 637 A.2d 486 . The hospital filed a motion to dismiss for lack of personal jurisdic ⁶⁰⁴ tion, which the circuit court denied. Id. The court also denied the hospital’s motion for summary judgment, again raising lack of personal jurisdiction.

Id. at 310 , 637 A.2d 486 . The jury ultimately found in favor of the plaintiff, and the hospital appealed. Id. The plaintiff then filed a motion to dismiss the appeal, arguing that review of a denial of summary judgment after final judgment is prohibited or, alternatively, that review is limited to whether the court abused its discretion under Basiliko.

Id. at 311, 637 A.2d 486 . After reviewing the facts and holding of Basiliko , which we classified as a “garden-variety factual dispute,” we concluded: [I]t is clear that the reach of Basiliko is limited; it was intended to apply to those cases in which there are factual controversies—in which the ultimate results would be determined by resolution of facts. Where the material facts are genuinely disputed, summary judgment must be denied; where they are not, the trial court in its discretion may still defer or deny a summary judgment motion. Where, however, a motion for summary judgment is based upon a pure issue of law that could not properly be submitted to a trier of fact, as such, to resolve, the conclusion in Basiliko that the denial of a summary judgment will not be reviewed on appeal is inapplicable.

The trier of fact, whether it be a jury or a judge sitting in that capacity, could not determine the issue of personal jurisdiction, as raised in this case. Id. at 311-14, 637 A.2d 486 . Accordingly, we denied the motion to dismiss and identified the standard of review as “whether the trial court was legally correct.” Id. at 315 , 637 A.2d 486 . The Court of Appeals affirmed: We ... agree with the Court of Special Appeals’s recognition that to the extent that the issue of personal jurisdiction is a question of law, it is not properly submitted to the trier of fact to resolve.

We therefore find nothing to preclude our review of the issue. Presbyterian Univ. Hosp. v. Wilson, 337 Md. 541, 549 , 654 A.2d 1324 (1995). ⁶⁰⁵ Applying the rationales of Basiliko and Presbyterian University Hospital to the instant case, we find that it was within the motions court’s discretion to deny the Shaders’ motion for summary judgment before trial, and that it was also within the circuit court’s discretion to defer, as it did, ruling on the motion until after the factual support for the motion came into full relief following trial. The Shaders’ motion for summary judgment, however, raised the legal doctrine of collateral estoppel, and whether this doctrine should be applied is ultimately a question of law for the court.

Therefore, we examine de novo the court’s legal determination of whether collateral estoppel should apply based on the court’s sustainable findings of fact. B. Identity of the Issues The doctrine of collateral estoppel precludes a party from re-litigating a factual issue that was essential to a valid and final judgment against the same party in a prior action. Welsh v. Gerber Prods., Inc., 315 Md. 510, 516 , 555 A.2d 486 (1989). Maryland has adopted a four-pronged test that must be satisfied in order to apply collateral estoppel: 1.

Was the issue decided in the prior adjudication identical with the one presented in the action in question? 2. Was there a final judgment on the merits? 3. Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication? 4. Was the party against whom the plea is asserted given a fair opportunity to be heard on the issue?

Pat Perusse Realty Co. v. Lingo, 249 Md. 33, 45 , 238 A.2d 100 (1968); accord Wash. Suburban Sanitary Comm’n v. TKU Assocs., 281 Md. 1, 18-19 , 376 A.2d 505 (1977). In this case, the first and third prongs of the test are at issue. “[F]or the doctrine of collateral estoppel to apply, the probable fact-finding that undergirds the judgment used to estop must be scrutinized to determine if the issues raised in that proceeding were actually litigated, or facts necessary to resolve the pertinent issues were adjudicated in that action.” ⁶⁰⁶ Colandrea v. Wilde Lake Cmty. Ass’n, Inc., 361 Md. 371, 391-92 , 761 A.2d 899 (2000) (citing Burkett v. State, 98 Md.App. 459, 466 , 633 A.2d 902 (1993)).

The Shaders contend that the issues in Duval are identical to the issues presented here. But the Duval case involved a lot—Lot 4-A—that was created more than 50 years prior by the Hampton Company as shown on the 1949 Plat. Accordingly, the circuit court distinguished Duval from the instant case: While the issues are clearly related, the Shaders’ property consists of one “original” lot and a portion of another lot that were joined in one parcel. The Shaders then sought to re-configure the lot line between these two parcels .... [the court’s] ruling in the Duval matter is specifically tied to a revision in the subdivision plat that was filed in 1949 that reconfigured some of the original lot lines and created at least two new lots, including Lot 4-A. [The court’s] decision related narrowly to this portion of the Hampton subdivision, and he found that the HIA had abandoned its right to seek to enforce any Covenant to restrict construction of a dwelling on Lot 4-A. However his Memorandum Opinion expressly noted that it did not involve a broad determination of the viability of the covenants within the subdivision____ Under these circumstances, there are subtle but distinct differences between the issues addressed in the Duval decision and those presented in this matter ...

Underscoring the circuit court’s conclusion that the issues decided in both cases were not identical was the Duval court’s declaration that its ruling was limited to the case before it. 11 ⁶⁰⁷ We find that the circuit court correctly determined that the issues presented in Duval and the case sub judice were not identical. C. Mutuality of Parties and the Doctrine of Offensive Nonmutual Collateral Estoppel The Shaders argue that their use of nonmutual collateral estoppel should not be considered offensive, given that their position is defensive in nature, or, alternatively, that this Court is permitted to and should apply the doctrine of offensive nonmutual collateral estoppel in this case. The question, then, is whether a plaintiff in an action for declaratory judgment, often a posture that is substantively defensive, may raise the claim of nonmutual collateral estoppel and if so, whether the claim considered defensive or offensive. In accordance with Parklane Hosiery Co. v. Shore, 439 U.S. 322 , 99 S.Ct. 645 , 58 L.Ed.2d 552 (1979), Burruss v. Board of Commissioners of Frederick County, 427 Md. 231 , 46 A.3d 1182 (2012), and Culver v. Maryland Insurance Commissioner, 175 Md.App. 645 , 931 A.2d 537 (2007), 12 we hold that regardless of whether the action is one for declaratory judgment, a plaintiff who invokes nonmutual collateral estoppel against a defendant does so offensively, and may proceed so long as raising the ⁶⁰⁸ prior case against the defendant(s) in the action does not offend the Parklane factors.

Traditionally, collateral estoppel required a mutuality of parties; that is, “in a second suit between the same parties ... any determination of fact, which was actually litigated in the first case, is conclusive in the second case.” Sterling v. Local 438, 207 Md. 132, 140-41 , 113 A.2d 389 (1955) (emphasis added) (citing Le Brun v. Marcey, 199 Md. 223, 226 , 86 A.2d 512 (1952)), cert. denied, 350 U.S. 875 , 76 S.Ct. 119 , 100 L.Ed. 773 (1955). Over time, courts have modified the mutuality requirement in order to apply collateral estoppel when one or both of the parties were neither a party nor in privity with a party in the previous litigation. Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 322 , 91 S.Ct. 1434 , 28 L.Ed.2d 788 (1971); Pat Perusse Realty Co., supra, 249 Md. at 36-40 , 238 A.2d 100 .

The Court of Appeals has cautioned: This principle [of nonmutual collateral estoppel] ... is almost as simple in concept as it is difficult in application. Conceptually, there will be instances in which a party who has had the benefit of a full and fair adjudication of an issue should be bound by that adjudication, even in a subsequent proceeding involving a different party. The difficulty is, however, that there are many situations where application of the doctrine of nonmutual collateral estoppel would be manifestly unfair. Welsh, supra, 315 Md. at 517 , 555 A.2d 486 .

A party can invoke nonmutual collateral estoppel either offensively or defensively. “Offensive use of nonmutual collateral estoppel occurs when a plaintiff seeks to foreclose a defendant from relitigating an issue the defendant has previously litigated unsuccessfully in another action against a different party,” whereas “[defensive use of nonmutual collateral estoppel occurs when a defendant seeks to prevent a plaintiff from relitigating an issue the plaintiff has previously litigated unsuccessfully in another action against a different party.” Id. at 517 n. 6, 555 A.2d 486 (citing United States v. Mendoza, 464 U.S. 154 , 159 n. 4, 104 S.Ct. 568 , 78 L.Ed.2d 379 (1984)). ⁶⁰⁹ Courts have not applied offensive nonmutual collateral estoppel as willingly as defensive nonmutual collateral estoppel. In Parklane Hosiery Co., supra, 439 U.S. at 329-31 , 99 S.Ct. 645 still the leading case on point, the Supreme Court identified several reasons (hereinafter “Parklane factors”) why courts should treat offensive and defensive nonmutual collateral estoppel differently. First, as a matter of judicial economy, defensive collateral estoppel incentivizes plaintiffs to join in the first action, whereas offensive collateral estoppel does not. Id. at 329-30 , 99 S.Ct. 645 . “Since a plaintiff will be able to rely on a previous judgment against a defendant but will not be bound by that judgment if the defendant wins, the plaintiff has every incentive to adopt a “wait and see’ attitude, in the hope that the first action by another plaintiff will result in a favorable judgment.” Id. at 330 , 99 S.Ct. 645 .

Second, offensive nonmutual collateral estoppel may be unfair to the defendant for several reasons: (1) “[i]f a defendant in the first action is sued for small or nominal damages, he may have little incentive to defend vigorously, particularly if future suits are not foreseeable;” (2) “the judgment relied upon as a basis for the estoppel [may be] inconsistent with one or more previous judgments in favor of the defendant;” and (3) “the second action [may] afford]’ ] the defendant procedural opportunities unavailable in the first action that could readily cause a different result.” Id. at 330-31 , 99 S.Ct. 645 . The Supreme Court concluded: The general rule should be that in cases where a plaintiff could easily have joined in the earlier action or where, either for the reasons discussed above or for other reasons, the application of offensive estoppel would be unfair to a defendant, a trial judge should not allow the use of offensive collateral estoppel. Id. at 331 , 99 S.Ct. 645 . Maryland courts have embraced the Supreme Court’s rationale in Parklane.

See Rourke v. Amchem Prods., Inc., 384 Md. 329, 349-50 , 863 A.2d 926 (2004); Burruss v. Bd. of Cnty. Comm’rs of Frederick Cnty., 427 Md. 231, 252 , 46 A.3d 1182 ⁶¹⁰ (2012). In Rourke, the Court of Appeals first discussed the offensive use of nonmutual collateral estoppel, albeit briefly, in the context of applying full faith and credit to a Virginia judgment. Rourke, supra, 384 Md. at 349-51 , 863 A.2d 926 .

In doing so, the Court noted that Maryland had not yet formally applied offensive nonmutual collateral estoppel and recapitulated Parklane’s analysis of the doctrine. Id. at 349-50 , 99 S.Ct. 645 . In applying full faith and credit to a Virginia judgment, the Court of Appeals was required to apply Virginia law, which had not adopted offensive nonmutual collateral estoppel. Id. at 350-52 , 99 S.Ct. 645 .

Accordingly, the Court held that collateral estoppel could not be applied because there was no mutuality of the parties. Id. at 352 , 99 S.Ct. 645 . In Burruss, supra, 427 Md. at 241, 244 , 46 A.3d 1182 the Board of County Commissioners of Frederick County appointed a nine-member charter board to draft and present a charter to Frederick voters pursuant to Article XI-A, § 1A of the Maryland Constitution. The petitioners submitted a petition, purportedly signed by 2,915 registered voters, seeking Board membership via special election.

Id. at 244, 46 A.3d 1182 . The Board declined to hold a special election after concluding that the petition did not contain a sufficient number of valid signatures under section 6-203 of Maryland’s Election Law Article. Id. The petitioners then filed a petition for judicial review in the Circuit Court for Frederick County, seeking a declaratory judgment