Scott v. Seek Lane Venture, Inc.
| Decision Date | 01 September 1991 |
| Docket Number | Nos. 1017 and 1096,s. 1017 and 1096 |
| Citation | 91 Md.App. 668,605 A.2d 942 |
| Parties | Catherine F. SCOTT v. SEEK LANE VENTURE, INC., et al. Catherine F. SCOTT v. Harry P. FERNANDEZ, et al. , |
| Court | Court of Special Appeals of Maryland |
Gary D. Rosch, Bethesda, for appellant.
Jeffrey Van Grack (Tamara A. Stoner and Raymond B. Via, Jr. on the brief), Rockville, for appellee, Seek Lane.
Patrick C. McKeever (James J. Demma and Miles & Stockbridge on the brief), Rockville, for appellee, Fernandez.
Argued before BLOOM, FISCHER and HARRELL, JJ.
These cases, which have been consolidated for purposes of this appeal, arise from the entry of an order partially setting aside the foreclosure of an equity of redemption and of ex parte injunctions by the Circuit Court for Montgomery County (Messitte, J.). In case number 1017, appellant raises the following issues for our consideration:
I. Whether we have jurisdiction to address the issue of the interlocutory injunction entered in case number 1017 when appellant failed to file a notice of appeal;
II. Whether the circuit court has jurisdiction to enter ex parte injunctions against appellant after a final judgment foreclosing the right of redemption has been entered; and,
III. Whether the circuit court erred in reopening an enrolled final judgment, which foreclosed the right of redemption, when appellant failed to provide a defunct corporation with sufficient notice of the foreclosure action.
Appellee seeks to raise one issue for our review:
IV. Whether individual members of a homeowners association were entitled to notice of the tax sale.
In appeal number 1096 the following issues are presented for our consideration:
I. Whether the interlocutory injunction entered by the circuit court may be appealed when appellant has not filed an answer in the cause wherein the injunction was issued;
II. Whether the circuit court erred in denying appellant's motion to dismiss the appellees' declaratory judgment suit;
III. Whether the circuit court has jurisdiction to enter ex parte and interlocutory injunctions against appellant after a final judgment foreclosing the right of redemption has been entered; and,
IV. Whether the circuit court abused its discretion in enjoining appellant until the issues raised in the declaratory judgment suit are fully adjudicated.
On 5 October 1985 1, Seek Lane Venture, Inc., (hereinafter Seek Lane Venture), a developer of real property, had its corporate charter forfeited by the State of Maryland for failure to file corporate personal property tax returns. As a result of Seek Lane Venture's additional failure to pay county real property taxes, a tax sale was held. On 9 June 1986 appellant, Catherine F. Scott (hereinafter Scott), purchased at tax sale various parcels of real property, including one described as follows:
Parcel B, Block F, "Long Branch View" per plat thereof recorded in Plat Book 127 at Plat 14873 among the Land Records of Montgomery County, Maryland, containing 2.86 acres, more or less, and designated as Tax Account No. 13-501-2415878.
Long Branch View is a subdivision originally subdivided and developed by Seek Lane Venture. Parcel B contains the common areas of the Long Branch View subdivision adjacent to Lots 3 through 34 of that subdivision. Within Parcel B is located, in addition to underground public utility easements, a storm water management easement, and open space associated with the single-family, residential building lots, a private street (denominated Seek Court) and vehicle parking to serve the homes that were constructed on the adjacent lots. Seek Court was the sole vehicular access for the residential lot owners to gain access to the public street nearest the subdivision. The subdivision plat was recorded among the land records of Montgomery County in 1984.
In 1983 and 1984, during the time of Seek Lane Venture's valid corporate existence, it recorded in Montgomery County a Declaration of Covenants, Conditions and Restrictions, and a modification pertaining to the subdivision. 2 These documents indicated that Seek Lane Venture intended to convey ownership of the common areas of the subdivision to a homeowners association (arguably appellee Seek Court Homeowners Association, Inc., although the Declaration does not explicitly name that association as such).
The Declaration also contained references to easements. Seek Lane Venture apparently conveyed to the various lot owners of the subdivision easements "of enjoyment in and to the Common Area, including an easement for the use and enjoyment of the private streets and parking lots and walkways within the Common Area." These easements were apparently intended to be appurtenant to, and pass with the title of, every lot in the subdivision, subject to certain rights of an unidentified association (again, arguably Seek Court Homeowners Association, Inc., although this was not explicitly stated).
Another section of the Declaration specifically addressed the parking rights of the various lot owners. It provided:
Section 3. Parking Rights. Ownership of each Lot shall entitle the Owner or Owners thereof to the use of not more than two (2) automobile parking spaces, which shall be as near and convenient to said Lot as reasonably possible, together with the right of ingress and egress in and upon said parking area.
These provisions of the Declaration notwithstanding, Seek Lane Venture never conveyed Parcel B to appellee, Seek Court Homeowners Association, Inc.
During the time when Parcel B was being sold at tax sale, and a Certificate of Sale was issued to Scott, Seek Court Homeowners Association, Inc., which consisted of the various lot owners in the subdivision, erroneously believed that it was the owner of Parcel B. It paid liability insurance on the property and performed all required maintenance. In 1988, it even granted an easement to the local cable network, which provided that the cable system would be installed:
across the common areas of Seek Court Townhouses, lots 3-39, Parcel B, Block F, being the property designated as being owned by the Homeowners Association as shown on Plat of Subdivision entitled "Long Branch View" Montgomery County, Maryland, and recorded among the Plat records of Montgomery County, in Plat Book 127, Plat No. 14873.
Eventually, Scott filed a Complaint to Foreclose the Right of Redemption on the property she purchased at the tax sale. Seek Lane Venture was the record owner, since it had never conveyed Parcel B as apparently intended by the Declaration. Scott attempted to serve by mail notice of its suit to foreclose the equity of redemption on Seek Lane Venture, even though she was aware that it was a defunct corporation. Scott addressed the notice to a post office box in Silver Spring, Maryland, which she maintained was the last known address of Seek Lane Venture as disclosed by "a search of the public Land Records." The notice was returned as "undeliverable." Scott's attorney filed an affidavit of service in the circuit court to that effect. No notice was sent to any individual lot owner in the subdivision, the Seek Court Homeowners Association, Inc. or any of the previous directors, officers, or stockholders of Seek Lane Venture. Although in March of 1988 Scott had contacted the Maryland Department of Assessments & Taxation, seeking a "corporate abstract" of Seek Lane Venture 3, she did not inquire as to whether any departmental records might disclose who the resident agent had been, what the principal office address of the corporation had been, or the names and addresses of the officers or directors as last revealed by any corporate tangible personal property tax returns or the articles of incorporation. Scott did give notice by publication to Seek Lane Venture, First Maryland Savings and Loan, Inc.'s mortgage trustees, the State of Maryland Insurance Fund Corporation, and generally "all persons that have or claim to have any interest" in the subject property. To no one's surprise, we are sure, no responses were received to the notice by publication.
On 7 December 1989, the circuit court entered an order foreclosing Seek Lane Venture's right of redemption in favor of Scott. This order provided that Scott's title was "free and clear of all alienations and descents of the property occurring before this judgment as provided in said Code, and all encumbrances on the property, except ... easements to which the property is subject, and of which the Plaintiff herein [appellant, Scott] had actual [or] constructive notice at the time of sale." Subsequently, a deed conveying Parcel B to Scott was executed by the tax collector.
After Scott recorded the deed to Parcel B, she sent a letter, through her counsel, to each of the thirty-two homeowners in the Long Branch View subdivision, which provided, in part:
As Purchaser at the tax sale, which was subsequently approved by the Circuit Court for Montgomery County, Ms. Scott now owns the street and parking area, as well as the open space surrounding the townhouse units. As owner of this area, she has the right to restrict use of this property in any manner. This would include, but not necessarily be limited to, the rental of parking spaces to various owners and the possible restriction of use of the private street.
On 5 December 1990, Seek Court Homeowners Association, Inc., (hereinafter "the Association") petitioned the Circuit Court for Montgomery County to set aside the enrolled final judgment that had foreclosed the right of redemption. The Association argued that Scott knew, or should have known, that the Association had an interest in the property at issue and failed to give notice of the sale either to it or to the individual homeowners. The individual homeowners were not permitted by the circuit court to be parties to this action.
On 11 March 1991, the circuit court determined that Scott did not provide proper service upon Seek Lane Venture, a defunct...
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