Belleview Const. Co., Inc. v. Rugby Hall Community Ass'n, Inc.

• Decision Date: 01 September 1989
• Docket Number: No. 70,70
• Parties: BELLEVIEW CONSTRUCTION CO., INC. v. RUGBY HALL COMMUNITY ASSOCIATION, INC. ,
• Court: Maryland Court of Appeals

Page 152

321 Md. 152

582 A.2d 493

BELLEVIEW CONSTRUCTION CO., INC. v. RUGBY HALL COMMUNITY ASSOCIATION, INC.

No. 70, Sept. Term, 1989.

Court of Appeals of Maryland.

Nov. 30, 1990.

Milissa A. Murray, Royal G. Shannonhouse, Blumenthal, Wayson, Downs and Offutt, P.A., all on brief, Annapolis, for petitioner.

William M. Simmons and Dorothy B. McCullough, both on brief, Annapolis, for respondent.

Argued before MURPHY, C.J., ELDRIDGE, COLE, RODOWSKY, McAULIFFE and ADKINS ^*, JJ., and CHARLES E. ORTH Jr., Judge Retired, Specially Assigned.

McAULIFFE, Judge.

We are concerned here with the proper interpretation of a restrictive covenant affecting petitioner's property in the community of Rugby Hall Estates, located in Anne Arundel County. The restriction states that "only one single family dwelling for private residence purposes shall be erected on each lot." The question is whether "each lot" described in the restriction means each lot as conveyed by the developer, or each lot that thereafter may be created by any re-subdivision conforming to the subdivision and zoning regulations of the county as they exist from time to time. We hold that the former interpretation accords with the intent of the parties, whether measured solely by the four corners of the documents creating the covenant, or by those documents as supplemented by other documents of record and by information readily available to grantees, including remote grantees.

Rugby Hall Estates, located on the eastern shore of the Severn River between Ringgold Cove and Asquith Creek, was developed by Rugby Hall Estates, Inc. (the developer). The lots in the first section of Rugby Hall Estates were created by deed, before comprehensive zoning and subdivision regulations had been adopted for this portion of Anne Arundel County. By deed dated 12 January 1953, the developer conveyed two lots, by metes and bounds description, to the initial purchasers. The habendum clause of the deed stated that the property was subject to covenants, restrictions, and conditions created by a deed of restrictions dated 27 March 1952, which had been recorded by the developer. Through mesne conveyances, the lots were deeded, in 1977, to Alan and Frances Jackson (the Jacksons). The deed to the Jacksons also accomplished an adjustment of the division line between the two lots. A plat, recorded as a part of the deed, shows lot A was increased in size from 1.71 acres to 2.17 acres, and lot B was reduced from 1.54 acres to approximately 1 acre. ¹ It is lot A with which we are here concerned.

In 1982, pursuant to the provisions of the original deed of restrictions, ² a majority of the owners of the lots in Rugby Hall Estates, together with the developer, executed and recorded an "Extension and Amendment of Deed of Covenants, Restrictions, and Conditions," by which they amended in part and continued in force the original restrictions. Rugby Hall Community Association, Inc. (the association) was substituted for the developer as the party having authority to approve plans for construction, to grant variances from set-back requirements, to approve fences, and the like. The restriction that "only one single family dwelling for private residence purposes shall be erected on each lot" was retained. The Jacksons signed the deed amending and extending the restrictions.

In May of 1983, the Jacksons recorded a plat of subdivision of lot A, creating new lots A and C. New lot A, surrounding the residences earlier constructed at the rear of original lot A, contained 1.247 acres. Newly-created lot C contained .922 acres of unimproved land. On 30 June 1987, the Jacksons conveyed newly-created lots A and C together with lot B, to Belleview Construction Company, Inc. (Belleview), the petitioner.

Belleview proposed to construct a single family dwelling on newly-created lot C and, as required by the restrictive covenants, submitted plans to the association for approval. The association refused to consent to the construction of a dwelling house on lot C, on the grounds that: 1) the original and the amended covenants prohibited such construction because a dwelling had already been constructed on original lot A, from which lot C had been carved; and, 2) the proposed construction would be "contrary to the scheme of development of the community."

Belleview then sued the association in the Circuit Court for Anne Arundel County, seeking declaratory and injunctive relief. Judge A. Chester Goudy, Jr. entered judgment in favor of the association, declaring that the restrictive covenants were valid, and that the clear meaning of the restriction of "only one single family dwelling ... on each lot" applied to the lots as conveyed by the developer. Thus, he held that although an owner might lawfully subdivide an original lot in accordance with county regulations, that did not create a right to construct an additional dwelling prohibited by the restrictive covenants. Belleview appealed, and the Court of Special Appeals affirmed the judgment in an unreported opinion. We granted Belleview's petition for certiorari, and we affirm.

The original and extended covenants are covenants running with the land. They were recorded in a separate instrument, and were referred to in deeds subsequently executed by the developer. They are, by their terms, enforceable by the developer, the association, or any lot owner. The covenants were clearly established as part of a general plan of development for this community. A preliminary paragraph of the original Deed of Covenants recited:

AND WHEREAS 'The Developers' intend to sub-divide a certain portion of said tract of land into lots for sale to the public, which said portion is hereinafter particularly described, but subject however to certain covenants, conditions and restrictions to run with the land and to be binding alike upon the developers and purchasers, their successors, assigns, heirs, executors and administrators.

The deed further provided that "all lots of ground sold out of the ... tract shall be subject to the [described] covenants, conditions, and restrictions...." The developer reserved the right to change or modify the lot lines or method of subdivision of unsold lots without the consent of purchasers, provided the change did not immediately affect the right of any purchaser.

As originally written, the requirement that "only one single family dwelling ... shall be erected on each lot" was qualified by the clause "without the written permission of 'THE DEVELOPERS.' " When the covenants were amended and reimposed in 1982, the qualifying clause was removed.

In construing covenants, "[i]t is a cardinal principle ... that the court should be governed by the intention of the parties as it appears or is implied from the instrument itself." Live Stock Co. v. Rendering Co., 179 Md. 117, 122, 17 A.2d 130 (1941). The language of the instrument is properly "considered in connection with the object in view of the parties and the circumstances and conditions affecting the parties and the property...." Levy v. Dundalk Co., 177 Md. 636, 648, 11 A.2d 476 (1940). This principle is consistent with the general law of contracts. See Anne Arundel County v. Crofton Corp., 286 Md. 666, 673, 410 A.2d 228 (1980) (court, in construing agreement, must first determine from the language of the agreement itself, what a reasonable person in the position of the parties would have meant at the time the agreement was effectuated). If the meaning of the instrument is not clear from its terms, "the circumstances surrounding the execution of the instrument should be considered in arriving at the intention of the parties, and the apparent meaning and object of their stipulations should be gathered from all possible sources." Live Stock Co. v. Rendering Co., supra, 179 Md. at 122, 17 A.2d 130.

If an ambiguity is present, and if that ambiguity is not clearly resolved by resort to extrinsic evidence, the general rule in favor of the unrestricted use of property will prevail and the ambiguity in a restriction will be resolved against the party seeking its enforcement. Martin v. Weinberg, 205 Md. 519, 526, 109 A.2d 576 (1954); Himmel v. Hendler, 161 Md. 181, 187, 155 A. 316 (1931); Guilford Ass'n Inc. v. Beasley, 29 Md.App. 694, 699, 350 A.2d 169, cert. denied, 277 Md. 735 (1976). The rule of strict construction should not be employed, however, to defeat a restrictive covenant that is clear on its face, or is clear when considered in light of the surrounding circumstances.

The courts seem to have generally recognized that there is no public policy against a fair and reasonable construction, in the light of surrounding circumstances, of restrictions designed, in general, to accomplish the same beneficial purposes as zoning.

Martin v. Weinberg, supra, 205 Md. at 527, 109 A.2d 576.

The courts, it would seem, are under a duty to effectuate rather than defeat an intention which is clear from the context, the objective sought to be accomplished by the restriction and from the result that would arise from a different construction.

Guilford Ass'n Inc. v. Beasley, supra, 29 Md.App. at 700, 350 A.2d 169. See also Lake Barrington Shore Homeowners v. May, 196 Ill.App.3d 280, 143 Ill.Dec. 107, 109, 553 N.E.2d 814, 816 (1990) (rule of strict construction in favor of free use of property not applied to defeat obvious purpose of...