Mid-Atlantic Coop. Sols. v. Battaglia Homes, LLC
| Decision Date | 15 September 2022 |
| Docket Number | 0412-20 |
| Parties | MID-ATLANTIC COOPERATIVE SOLUTIONS, INC. d/b/a AERO ENERGY v. BATTAGLIA HOMES, LLC, et al. |
| Court | Court of Special Appeals of Maryland |
MID-ATLANTIC COOPERATIVE SOLUTIONS, INC. d/b/a AERO ENERGY
v.
BATTAGLIA HOMES, LLC, et al.
No. 0412-20
Court of Special Appeals of Maryland
September 15, 2022
Circuit Court for Harford County Case No. C-12-CV-19-000003
Graeff, Zic, Raker, Irma S. (Senior Judge, Specially Assigned), JJ.
OPINION [*]
Zic, J.
Gablers Shore, LLC ("Developer") purchased land in Harford County to build a residential community. The Developer entered into an agreement with Mid-Atlantic Cooperative Solutions, Inc. d/b/a Aero Energy ("Aero Energy"), which provided that Aero Energy had the right to install and maintain underground tank piping and distribution systems for propane to the community.
Aero Energy filed suit against lot owners Battaglia Homes, LLC, Sandy Huntington, and Daniel A. Lose and Meghan W. Lose (collectively "Appellees"), contesting that Appellees were violating the agreement and other encumbrances on the land. The Circuit Court for Harford County granted Appellees' motions for summary judgment and dismissed Aero Energy's complaint. This appeal followed.
QUESTIONS PRESENTED
Aero Energy presents one question,[1] which we have recast into four questions as follows:
1. Did the circuit court err in concluding that the UDS Agreement and Easement are not enforceable against Appellees
2. Did the circuit court err in concluding that the Easement was void for lack of adequate description of the servient estate
3. Did the circuit court err in concluding that the UDS Agreement violates the Rule Against Perpetuities
4. Does the doctrine of equitable estoppel require the UDS Agreement and Easement to be enforced as to the Battaglia Homes and Lose lots?
We hold that the circuit court did not err in concluding that the UDS Agreement and Easement are not enforceable against Appellees and that the Easement was void. We consequently need not address the third question. We do not address the fourth question as it was not preserved. We affirm the judgment of the circuit court but remand for the court to enter a declaratory judgment consistent with this opinion.
BACKGROUND
Purchasing the Development and Initial Agreements and Easements
On January 17, 2002, Gablers Shore, LLC ("Developer") purchased land in Harford County to build a residential community, known as Gablers Shore ("Development"). On October 20, 2003, the Developer executed an Indemnity Deed of Trust and Security Agreement ("IDOT"), where the Developer granted a first-priority lien to Susquehanna Bank to secure repayment of a promissory note payable to Susquehanna Bank in the amount of $6,600,000.00. The IDOT was recorded on October 23, 2003. The IDOT included numerous representations, warranties, covenants, promises, and agreements, including procedures in the event of default:
3.4. FORECLOSURE. Trustees, at the option and the request of Beneficiary, are authorized and shall have the power and duty to sell . . . and Grantor hereby consents to the passage of a decree for the sale of the Trust Property, or any part thereof, at public auction . . . and (the terms of sale being complied with) Trustees shall convey in fee simple to and at the cost of the purchaser the Trust Property so sold, free and discharged of and from all estate, right, title or interest of Grantor, its successors or assigns at law or in equity .... If one or more Leases are entered into or recorded subsequent to the recording of this Deed of Trust, or are otherwise
subordinate to this Deed of Trust, the Trustees, at the direction of Beneficiary, shall sell subject to any one or more of such tenancies that are designated and selected by Beneficiary.
On December 16, 2003, the Developer executed a Right of Way Agreement with the Baltimore Gas and Electric Company ("BGE") so that BGE could "construct, install, reconstruct, operate and maintain electric, gas and communication lines" for the Development. The Right of Way Agreement was recorded on January 9, 2004.
On June 14, 2005, pursuant to a Subdivision Agreement, Harford County granted the Developer the right to subdivide the Development into lots. The Subdivision Agreement was recorded on June 15, 2005. Various subdivision plats, which depicted the lots, easements, and open spaces, were also recorded. On October 12, 2005, the Developer executed a Right-of-Way Easement with Verizon Maryland, Inc. "to construct, operate, maintain, modify, replace and remove telecommunication and electric systems" for the Development. The easement was recorded on February 17, 2006.
The UDS Agreement and Gas Utility Easement Aero Energy is a Delaware corporation qualified to conduct business in Maryland.
Aero Energy "is in the business of designing and installing localized underground tank piping and distribution systems for propane at the request of developers who wish to add such fuel amenity to a community which is not otherwise served by a natural gas distribution system," or, in other words, an Underground Delivery System ("UDS").
On December 30, 2005, Aero Energy and the Developer entered into an Agreement for Underground Tank Piping and Supply of Propane Gas Services and Security Agreement ("UDS Agreement"). The UDS Agreement was recorded on November 18, 2013. The UDS Agreement stated, in relevant part:
B. Developer to grant and upon the request of Aero shall grant: i) an exclusive easement in perpetuity to Aero for the installation, operation, maintenance, repair and replacement of an underground distribution system for the supply of propane gas to Lots and improvements to Lots within the Development; ii) an exclusive right in perpetuity commencing December 30, 2005 of Aero to supply propane gas to Lots and improvements to Lots within the Development; and iii) an easement in perpetuity in favor of Aero to provide an area within the Development for the placement and location of propane storage tanks to supply the entire propane utility needs of the Development.
The UDS Agreement placed responsibility on the Developer to record the UDS Agreement and provide notice to purchasers:
H. The Developer further agrees to adopt and record in the form of a Declaration of Restrictions and/or other recordable instrument upon the request of and as approved by Aero, binding provisions to run with the land which compel all property owners and/or occupants for the term of this Agreement to use, utilize and pay for the propane supplied by Aero to the individual Lots, and to pay the prevailing rates and charges for propane delivered by Aero for each Lot's consumption of propane and to prohibit homes in the Development the use or consumption of any energy source such as natural gas, oil, electricity, except propane gas, to operate or energize any heating system. Provided however, electricity is permitted for use in cooking appliances, such as ovens and stoves and cleaning appliances such as dishwashers, clothes washers and dryers.
I. The Developer further agrees to provide notice to prospective purchasers of, and to those who have already purchased Lots within the Development of the requirements imposed upon each Lot owner within the Development by this Agreement.
(footnote omitted). The UDS Agreement also provided for automatic transfer of the Developer's obligations and rights:
18. Assignment of Developer's Obligations and Rights. The rights and obligations of the Developer hereunder are automatically assigned and transferred to the individual Lot owners who acquire title to the Lots in the Development. ....
23. Binding Effect. This Agreement shall be binding upon the parties hereto, and on their successors and assigns. It is specifically recognized that by taking title to a unit in the Development, each Lot owner taking title to a Lot in the Development is bound to the terms and provisions of this Agreement and agrees to the terms hereof as if incorporated into the deed transferring ownership of a lot in the Development to the designated grantee. ....
27. Recordation. This Agreement shall be executed in recordable form. This Agreement shall be recorded in the Office of the Recorder of Deeds, in and for the County in which the Development is located, and the provisions of this Agreement shall operate as a restrictive covenant binding all lands within the Development as such lands are described in the plat of record in the County in which the Development is located, recorded in Pl[a]t Book 119 at page[s] 4-6.
On March 29, 2007, to further effectuate the supply of propane to the lots, the Developer and Aero Energy entered into a Gas Utility Easement ("Easement") for "a perpetual Easement for the purpose of delivery of [p]ropane [g]as [u]tilities to residents"
of the Development and a temporary construction easement. The Easement included a reference to "Exhibit A" for a description of the property, and to "Exhibit B" for a "specific description of the Main Utility Easement Area." Exhibit A described the property as:
Lots Numbered 1 through 50 and common community open space [w]ithin the Subdivision known as River Landing at Gablers Shore as per plats thereof recorded among the plat records of Harford County, Maryland. Entire property referred to as Tax Map Reference: Map #66 Parcel 224.
Exhibit B was to include a "drawing attached," but no such drawing was recorded with the Easement.[2] The Easement also stated that "[t]he Main Utility Easement Area shall be located in the roads in the Subdivision as set forth on Exhibit A and such areas of the Subdivision's open space as are expressly described on Exhibit B." The Easement was recorded on November 18, 2013.
Early Conveyances and Foreclosure
From 2006 to 2008, the Developer transferred title to numerous lots within the Development.[3] On March 7, 2008, the Developer conveyed Lots 25, 26, 27, 28, and 29 to Hardy Credit...
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