E-Alert Case Updates

Restrictive Covenant Dating from 1913 deemed Unambiguous and still Applicable

Dumbarton Improvement Association, Inc. et al. v. Druid Ridge Cemetery Company, et al.
No. 128, September Term 2010 (Maryland Court of Appeals, August 22, 2013)
by Eric M. Leppo, Associate
Semmes, Bowen & Semmes (www.semmes.com)

In this recently issued opinion by the Court of Appeals, the Court reversed the decision of the Court of Special Appeals, and held that a restrictive covenant on a parcel of real property dating to 1913 was unambiguous and that changed demographics and circumstances did not render the covenant unenforceable.

In 1999, Druid Ridge Cemetery Company (“Druid Ridge”) entered into a land sale contract agreeing to sell 36.21 acres of the approximately two hundred (200) acres that it owned as part of its cemetery operation. Druid Ridge, LLP sought to purchase the property in order to develop it into fifty-six semi-detached residences adjacent to Park Heights Avenue. Local neighborhood associations, including Dumbarton Improvement and Long Meadow Neighborhood Association, as well as owners of certain burial lots opposed development of the property. They filed suit in the Circuit Court for Baltimore County seeking a declaration that the residential development would violate restrictive covenants contained in the 1913 deed which conveyed the cemetery property to Druid Ridge.

While the Cemetery was originally incorporated in 1896, it fell into insolvency and the Court had to appoint receivers in 1910. On March 17, 1913, a deed transferred two hundred (200) acres of real property from the receivers to Druid Ridge. The deed contained a covenant/restriction requiring the property to be “maintained and operated as a cemetery.” Dumbarton at *5 (quoting 1913 deed). The Court noted that since the 1913 deed was executed, the cemetery remained largely unchanged. While six (6) parcels were sold to nearby residents or businesses between 1921 and 1989, each was smaller than one (1) acre.

Plaintiffs challenged the proposed developed, arguing in Circuit Court that the covenant requiring the land to be maintained and operated as a cemetery continued in force and effect. They argued that the restrictive covenant was clear and unambiguous because the language, “said property,” undoubtedly referred to all the property being transferred by the deed. The Cemetery and Developer argued that the covenant was ambiguous as to the extent of the covenant’s intended enforceability. They also argued, alternatively, that, the circumstances had radically changed since the covenant was imposed, and the “changed circumstances” have rendered the restrictive covenant ineffective. They cited the growing population of Pikesville and Baltimore County in general, the increasing commercial presence, and rising land values.

The Baltimore County Circuit Court found in favor of the Cemetery and developer holding that the covenant’s language was ambiguous and that changed circumstances in the area of the cemetery rendered the covenant unenforceable. The Court of Special Appeals affirmed the Circuit Court’s ruling, finding that the sale and development could move forward.

The Court of Appeals, however, reversed. In an opinion written by Judge Bell, the Court held that the restrictive covenant contained in the 1913 Deed was clear and unambiguous. The Court noted that the Deed described all two hundred (200) acres being conveyed both by its surveyed relationship to neighboring property and its recorded history. It further noted that there was not more than one interpretation of the language “maintained and operated as a cemetery.”

The Court also held that while residential restrictions and/or covenants may become unenforceable due to the changing character of a neighborhood, Whitmarsh v. Richmond, 179 Md. 523, 529, 20 A.2d 161, 164 (1941), that such was not to be the case here. Specifically, the Court stated that “there is no nexus between the demographic and economic changes presented by the respondents and the purpose of the covenant as revealed by its express language.” Dumbarton at *24.