DEPT. OF HOUSING AND COMMUNITY DEVELOPMENT v. Mullen

• Decision Date: 05 October 2005
• Docket Number: No. 1691,1691
• Citation: DEPT. OF HOUSING AND COMMUNITY DEVELOPMENT v. Mullen, 886 A.2d 900, 165 Md. App. 624 (Md. App. 2005)
• Parties: DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, et al. v. Jon MULLEN, et ux.
• Court: Court of Special Appeals of Maryland

886 A.2d 900

165 Md. App. 624

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, et al. v. Jon MULLEN, et ux.

No. 1691, September Term, 2003.

Court of Special Appeals of Maryland.

October 5, 2005.

Reconsideration Denied December 15, 2005.

Paul J. Cucuzzella, Asst. Atty. Gen., Annapolis (Jan M. Bryant, Asst. Atty. Gen, Crownsville, J. Joseph Curran, Jr., Atty. Gen., Baltimore, on the brief), for Appellants.

Keith A. Parsky, James A. Shrybman, Bethesda, for Appellees.

Panel: SALMON, KENNEY and MEREDITH, JJ.

SALMON, Judge.

Jon and Sally Mullen (the "Mullens") are curators of property known as Knock's Folly, located in Kent County. The Mullens' curatorship agreement, which is more fully described infra, provided that the Mullens personally would donate the funds necessary to restore and maintain Knock's Folly. In exchange for their gift, the Mullens were permitted to live on Knock's Folly rent and tax free, for the duration of their natural lives.¹

In 1974, the Commissioners of Kent County acquired ownership of Knock's Folly. Kent County, in 1980, granted a conservation easement to the Maryland Historical Trust ("MHT"), which is a body corporate of the Department of Housing and Community Development ("DHCD"), an agency of the State of Maryland. The easement restricts the nature of the renovation and rehabilitation projects on the premises. Since 1990, Knock's Folly has been owned by the State of Maryland but is maintained under the care of the Department of Natural Resources ("DNR").

In the curatorship agreement entered into between the DNR and the Mullens, the Mullens acknowledged both the existence of the easement on the land and their obligation to obtain DNR's and MHT's permission for all renovation projects. The curatorship agreement provided that failure to comply with any or all of its terms permitted DNR to terminate the agreement and thus cancel the Mullens' right to live at Knock's Folly. Litigation commenced between the Mullens and the DNR (and others) in 2002. The details of that litigation will be set forth below, but broadly speaking, the trial judge resolved the dispute between the parties by making four major rulings, viz.

1. That the deed of easement granted to the MHT was a valid legal restriction as a condition of the gift of Knock's Folly from the Kent County Commissioners to the DNR;

2. The Knock's Folly property was subject to the easement under the curatorship agreement between the Mullens and DNR;

3. The Mullens breached the terms of both the curatorship agreement and the easement when they built certain structures on Knock's Folly without the approval of either the DNR or the MHT; and

4. Despite their breach of the curatorship agreement, the MHT and DNR were enjoined from enforcing some, but not all, rights spelled out in the Agreement.

MHT and DNR filed an appeal; the Mullens filed a timely cross-appeal.

I. FACTUAL AND PROCEDURAL BACKGROUND

Knock's Folly is a seventeen-acre parcel of land located on Turners Creek Landing Road in Kent County. The property is improved by a main house composed of two adjoining structures: a one and one-half story log house that was built in 1753 (approximately) and a three-story federal-style brick townhouse built at the dawn of the nineteenth century. The house is on the National Register of Historic Places.

Knock's Folly was deeded to the Commissioners of Kent County in 1974. Kent County, in 1980, granted a conservation easement in gross in the property to the MHT, with the goal of promoting and preserving Knock's Folly's "historic, aesthetic and cultural character." The easement states that the MHT is funded by the "Heritage Conservation and Recreation Service and Maryland Historical Trust." MHT agreed when it accepted the easement to "comply with all requirements of the Heritage Conservation and Recreation Service made pursuant to the National Historic Preservation Act of 1966 . . . ." Kent County, in turn, agreed that it would not "cause, permit, or suffer" any building or other structure on the property without the consent of the MHT. The conservation easement further provided that it was binding upon the grantor's (Kent County's) successors and assigns.

On November 10, 1990, the Mullens entered into a Resident Curatorship Agreement ("Agreement") with the DNR in which they were designated as curators of Knock's Folly. Under the DNR's curatorship program, private citizens agree to donate personally the funds necessary to restore, renovate, and maintain historic properties. In exchange, the state grants the curators tax benefits, as well as a life estate in the premises, subject to certain conditions.

The Agreement contained strict guidelines regarding restoration and renovation work on the property. And, the Mullens agreed that in performing such work they would adhere to the Secretary of the Interior's "Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings" ("the Standards").² The Agreement also contained the following clause:

The [Mullens] acknowledge that the Premises are subject to a historic preservation easement held by [MHT]; they furthermore acknowledge that all restoration work they perform on the premises is subject to approval by [MHT].

(Emphasis added.)

A copy of MHT's historic preservation easement was attached to the Agreement. The Agreement further provided that the Mullens were required to contact MHT "prior to undertaking any excavation on the [p]remises" and "abide by [MHT's] recommendations . . . to mitigate anticipated disturbance" from such work "provided that such recommendations are received in writing by the Curators . . . within fourteen (14) calendar days from the date the Curators first contact [MHT]."

In addition, the Mullens agreed that all restoration work would be in accordance with a detailed schedule ("the Schedule"), which was a list of projects that the Mullens were expected to complete within five years of the date of signing the Agreement. The Schedule anticipated that the Mullens would contribute at least $315,047 to restore Knock's Folly. Although the Agreement contained a clause that allowed the Mullens to make "reasonable adjustments as work progress[ed]," without DNR's prior approval, any adjustments that "substantially alter[ed] the original intent and scope of the Schedule" required the prior approval of the DNR's Supervisor of Cultural Resources Management.

The Agreement also contained a termination clause that provided that DNR could terminate the Agreement upon sixty days' notice if the Mullens failed to "comply with any and/or all of [its] terms and conditions."

The relationship between the Mullens as curators and the DNR and the MHT operated smoothly for the first several years after the Agreement was signed. During this period, the Mullens substantially completed all the restoration work required on the historic home. As the circuit court was later to find,

[d]uring the term of the Agreement, the Mullens had opportunity on occasion to seek prior approval for projects at Knock's Folly that had not been contemplated in the Schedule. On at least one such occasion regarding the alteration to an interior staircase, the Mullens submitted detailed plans and specifications to MHT, through DNR, as requested prior to initiating the project. On this occasion, the MHT Board of Trustees reviewed the staircase plans submitted by the Mullens, approved the plans, and notified the Mullen[s] in writing, through DNR, that the plans had been approved.

. . . On numerous occasions, MHT provided the Mullens with written instructions and notifications regarding their obligations to seek MHT prior approval for projects at Knock's Folly that were outside the scope of the Schedule. . . .

On September 9, 1998, Mr. Mullen met with representatives from MHT, DNR, and the Critical Areas Commission³ to discuss construction of a pool, a brick and iron fence, and a garage. Rodney Little ("Little"), the State historic preservation officer and director of the MHT, was present at a portion of the meeting. Little approved the construction of the pool, garage, and gates⁴ on the condition that the gates would be built as a plain iron fence without brick posts rather than "wrought iron and brick," and as long as the MHT Easement Committee could review the final plans for the pool and the garage.⁵ The Mullens never submitted these plans to MHT after the September 1998 meeting.

Sometime between April and June 1999, the Mullens constructed a three-bay garage. The garage was located a short distance from the historic main house. It was forty-feet long, twenty-four-feet wide, and one and one-half stories in height and included an apartment on the second floor.

Ross Kimmel ("Kimmel"), the DNR Supervisor of Cultural Resources and Management, inspected the premises on June 23, 1999. At that time, construction of the garage was complete. Kimmel noted on his report that the garage had been built, but his report did not mention the new gates. In his report, Mr. Kimmel commented that there were no problems to be corrected at that time and that the property looked "better than ever." He did not, however, notify the MHT immediately about the "improvements."

In November 2000, Little notified the Mullens that MHT had learned about the construction of the garage and asked that the Mullens explain why they had built the structure without MHT's prior consent. Mr. Mullen responded in a letter dated November 17, 2000, in which he said that the garage was built to replace a shed that they had been using to store equipment needed to maintain the premises. He further explained that he followed the suggestions regarding the location of the garage and its design structure given to him at a "fall" 1998 meeting.⁶ The MHT inspected the new garage and gates and, in a January 25, 2001, letter to DNR said:

[T]he scale, design, and materials are not appropriate for the site, and therefore in violation of Standard # 9

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