Shader v. Hampton Improvement Ass'n
115 A.3d 185
Md.2015Background
- In 2002 Scott and Anna Shader bought property in Hampton, MD consisting of Lot 59 and part of Lot 75 as shown on the original 1930 Plat; in 2004 they reconfigured and recorded a parcel as 606A E. Seminary Ave. and marketed it as a buildable lot.
- Hampton Improvement Association (HIA) enforces a 1931 recorded Schedule of Restrictive Covenants (Paragraph C) which, inter alia, limits use to private single-family dwellings and states no more than one dwelling may be erected on a lot as shown on the 1930 Plat.
- HIA objected when Shaders attempted to sell/build on 606A; Shaders sued for declaratory relief seeking a ruling that (a) 606A is a separate buildable lot and (b) Paragraph C does not prohibit a second dwelling.
- Shaders moved for summary judgment relying on a prior unappealed judgment in Duval (Cortezi v. Duval-Four) in which a trial court found HIA had waived enforcement of Paragraph C by abandonment as to a reconfigured lot; Shaders argued collateral estoppel (offensive non-mutual) barred HIA.
- Trial court denied both parties’ summary judgment motions; after trial it found HIA had not abandoned the specific clause prohibiting more than one dwelling per original 1930 lot but had permitted other non-dwelling accessory structures in violation of a separate clause.
- The Court of Special Appeals affirmed; the Court of Appeals granted certiorari and affirmed: it declined to adopt offensive non-mutual collateral estoppel and held (1) Duval’s issues were not identical to the Shaders’ and (2) waiver by abandonment of the accessory-building clause did not waive or render unenforceable the clause limiting one dwelling per original lot; clauses are severable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether offensive non-mutual collateral estoppel (use of Duval) bars HIA from relitigating enforceability of Paragraph C | Shaders: Duval’s unappealed finding that HIA waived enforcement by abandonment precludes HIA from relitigating Paragraph C here | HIA: Maryland has not adopted offensive non-mutual collateral estoppel; Duval’s facts differ | Court: Declined to adopt doctrine here and, even assuming it existed, Duval’s issues were not identical and estoppel does not apply |
| Whether HIA waived Paragraph C by abandonment because it allowed numerous covenant violations (accessory buildings) | Shaders: Allowing many violations shows intent to abandon entire Paragraph C including one-dwelling restriction | HIA: Violations were of non-dwelling accessory clause; HIA enforced one-dwelling restriction when attempts to increase residential density arose | Court: No clear-error finding of waiver of one-dwelling clause; HIA consistently enforced that restriction |
| Whether waiver of one clause in Paragraph C voids or waives the remainder of Paragraph C (severability) | Shaders: Allowing accessory structures shows abandonment of entire Paragraph C | HIA: Different clauses serve different purposes; enforcement of dwelling-density clause preserved neighborhood character | Court: Clauses are severable; waiver of accessory-building clause does not void the one-dwelling restriction |
| Whether Duval’s limited, fact-specific ruling binds HIA here | Shaders: Duval judgment was unappealed and should bind HIA | HIA: Duval involved different lot-creation facts (1949 Plat revision) and Judge Cahill limited his ruling to Duval’s facts | Court: Duval is factually distinguishable; its limited scope does not estop HIA here |
Key Cases Cited
- Standard Fire Ins. Co. v. Berrett, 395 Md. 439 (discusses collateral estoppel and ultimate fact determination)
- Burruss v. Bd. of Cnty. Comm’rs of Frederick Cnty., 427 Md. 231 (declined to apply offensive non-mutual collateral estoppel in Maryland)
- Rourke v. Amchem Products, Inc., 384 Md. 329 (purpose of res judicata/collateral estoppel to prevent multiple lawsuits and inconsistent decisions)
- Colandrea v. Wilde Lake Cmty. Ass’n, Inc., 361 Md. 371 (issue preclusion requires that issues were actually litigated and essential to prior judgment)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (Supreme Court analysis of policy concerns for offensive non-mutual collateral estoppel)
- City of Bowie v. MIE Properties, Inc., 398 Md. 657 (discusses waiver/abandonment and changed relevant circumstances in covenant enforcement)