Markey v. Wolf

Decision Date01 September 1991
Docket NumberNo. 1309,1309
Citation92 Md.App. 137,607 A.2d 82
PartiesStephen A. MARKEY, III, et al. v. Morris WOLF, et al. ,
CourtCourt of Special Appeals of Maryland

Alfred L. Scanlan, Jr. (Stephen A. Markey, III, David R. Sonnenberg and Weinberg and Green, on the brief), Columbia, for appellants.

John F. Simanski, Jr. (Frank, Bernstein, Conaway & Goldman, on the brief), Baltimore, for appellees.

Argued before ALPERT, BLOOM and CATHELL, JJ.

CATHELL, Judge.

This case concerns the creation of a subdivision known as "Bynum Overlook" in Harford County; the imposition of a "Declaration of Covenants, Conditions, Restrictions and Easements" (declaration) for the purpose of "protecting the value and desirability of the Property and the Lots"; and a reservation by the declarant in that declaration of the power to approve building plans. 1 It also involves the effects, on this power of approval, of the grantor's advertising sign stating that the subdivision was one of "exclusive homesites" or signs posted by builder-purchasers of lots in the subdivision advertising "homes from the $160,000's."

Stephen and Tamara Markey and Wilson and Sandy Atkins, appellants, are the only couples involved in this appeal. 2 The suit was originally filed against Morris Wolf, James C. Wolf, and Sharon L. Steinberg, individually and as officers and directors of the Bynum Overlook Homeowners Association, H.M. Land Limited Partnership, M.W.W. Development Company, Terrapin Development, Inc., Leigh Homes, Inc., and Stephen Homes, Incorporated (appellees). H.M. Land Limited Partnership (Developer) is the developer of the Bynum Overlook Subdivision as well as the declarant of the declaration. Its general partners are M.W.W. Development Company and Terrapin Development. Morris Wolf is not only an officer and a director of the Homeowner's Association, he is also president of M.W.W. Development Company. Wolf signed the declaration on behalf of the general partners of the Developer. Leigh Homes, Inc. (Leigh), and Stephen Homes, Incorporated (Stephen) are home builders which purchased lots in the subdivision and subsequently built, or were to build, homes in the subdivision. However, as far as we can discern, neither Leigh nor Stephen constructed any homes belonging to the present appellants. The evidence does not indicate that the Developer was a home builder in the subdivision. Stephen and Leigh have resolved their differences with the appellants and appellants, therefore, have dismissed their appeal as to these parties. Thus, their claims against Stephen and Leigh do not directly concern us.

Procedural History

The appellants inform us in their brief that they filed a complaint on April 8, 1991, which alleged that the Developer had violated the restrictive covenants governing the subdivision and had violated its fiduciary duty to the Bynum Overlook Homeowners Association by approving the building of homes substantially smaller and less expensive than pre-existing homes in the subdivision. That original complaint, according to appellants' brief, also alleged that certain builders, including Leigh, misrepresented to prospective purchasers their intentions concerning the size and value of the homes they would build and thus conspired with the Developer to assist it in violating its fiduciary duties to the homeowners.

Thereafter, on May 1, 1991, Stephen filed an Answer and a Motion for Summary Judgment. On May 8, 1991, Morris Wolf, James C. Wolf, and Sharon L. Steinberg (hereinafter collectively referred to as Wolf) and the developer filed a motion for summary judgment. On May 17, 1991, Leigh filed a motion to dismiss the complaint and motion for summary judgment. By June 3, 1991, the plaintiffs had filed an opposition to each of the motions. On the same day, according to their brief, they filed an "amended complaint."

On June 12, 1991, the trial judge granted Stephen's, Wolf's and the developer's motions for summary judgment. On June 18th, Leigh filed a motion to dismiss the amended complaint. Stephen filed a motion to dismiss the amended complaint on June 20th. Thereafter, on June 24, 1991, the appellants filed a second amended complaint. According to appellants' brief, at a hearing on July 19, 1991, the trial judge again granted summary judgment for Stephen, Wolf and the developer and dismissed the second amended complaint as to them. Finally, on July 31, 1991, the court entered a summary judgment and dismissal of the case against Leigh. 3

The trial court's July 31, 1991, memorandum opinion states that the trial court adopted the reasoning set forth in its June 12, 1991, opinion as to all defendants except Leigh. The June 12, 1991, opinion was in reference to the original complaint. It could not have been in reference to the second amended complaint, which had not been filed as of June 12th, and the trial judge could not have relied on the first amended complaint because, as he later stated when he rendered his July 31st opinion, he was unaware that the first amended complaint had been filed. Having been informed by the appellants that the amended complaints added only claims for punitive damages and a prayer for a jury trial, the trial court then rendered a summary judgment for all of the appellees except Leigh for the same reasons given in its June 12th opinion. The July 31st opinion thus applied only to Leigh, except to the extent it adopted the June 12th opinion as to the other appellants.

We note that when appellants' counsel informed the trial court that the function of the amended complaints was to provide for punitive damages and for a jury trial, that was incorrect. There are several important factual modifications that occurred between the original complaint and the second amended complaint.

The original complaint incorrectly alleged that the Association was charged with enforcing the building restrictions contained in the declaration. The second amended complaint correctly alleges that the developer is charged with enforcing those restrictions. Appellants further added in paragraph 14 of the second amended complaint an allegation that in approving the plans of Stephen and Leigh, Wolf and the developer had violated their fiduciary duties to appellants. Additionally, the second amended complaint includes a provision added to count one--that the developer owed a fiduciary duty to the appellants to exercise architectural control, so as not to injure the value of appellants' property. This provision was conspicuously absent from the original complaint, which based this count solely on an alleged breach of fiduciary duty by the officers and directors of the Homeowner's Association--the alleged duty being to enforce the covenants. Not only were these additions in the second amended complaint absent from the original and first amended complaints, they are conspicuously not included in the version of the second amended complaint found in the extract.

Furthermore, the amended complaint and second amended complaint contain an entirely new count, "Breach of Restrictive Covenant," that was absent from the original complaint. It is also absent from the copy of the second amended complaint contained in the extract. The second amended complaint also added prayers for punitive damages and asked the court to impose a constructive trust on the proceeds of all sales of lots and/or homes where houses of less than 1,800 square feet are built.

It is clear that when the appellants' counsel informed the trial court that the amended complaints concerned punitive damages and jury trial rights, he was not fully or correctly informing the court of the full scope of the amendments. Thus, the reasons given on June 12th by the trial court could not have addressed all of these new matters introduced in the amended complaints as they were not brought to the attention of the court.

The inference we glean from the record is that the court would not have proceeded as it did absent the representations made by appellants' counsel that the amendments concerned only a punitive damage prayer and/or a jury trial request.

In any event, we hold that, because the count for breach of covenant was not before the trial court when he rendered his June 12th opinion and because he merely adopted that opinion upon the representation of appellants that the amendments contained no substantive changes, appellants have failed to preserve for our review any objections they may have as to the effect of the trial court's ruling upon that count.

Facts

Each party furnished a separate statement of facts which differ in certain respects. We shall try to simplify the factual situation by summarizing the statements. 4

Bynum Overlook is a land subdivision created by the developer. The developer did not construct or build houses in the subdivision. It caused the declaration to be recorded and initially advertised on the property with a sign that the subdivision was one of "Exclusive Homesites." 5 No evidence was presented below that the developer ever defined "Exclusive Homesites" in any manner.

The developer sold several of the lots to builders, including Leigh, Stephen, and others. Rylea Builders, not a party to this suit, subsequently erected a sign or signs on the lots in the subdivision advertising its business. One or more of these signs stated "Single Family Homes from $160,000." Other builders may have attached their sign to either the sign of Rylea Builders or to the developer's sign. That is not clear.

The complaints allege generally that the signs at the entrance to the community and certain statements caused the appellants to believe that this subdivision would be built up with homes costing $160,000 or more. They allege on appeal that one such statement, from a salesman of Rylea, was that the developer had told the salesman that the development would consist of medium to larger scale homes of 2,000 square feet, that several plans for houses less than...

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