Maryland Appeals Court Upholds Enforcement of Association Truck Covenant

A homeowner association restriction on trucks has been determined by a Maryland appeals court to be enforceable against the owner of a large military-style vehicle.

The 3-axle camouflaged vehicle was taller than the first story of the home and as wide as the driveway. The Maryland Court of Special Appeals agreed with the trial court that the truck covenant had not been waived by allowing other smaller Sport Utility Vehicles built on a truck chassis.  It was appropriate and reasonable to distinguish between “consumer vehicles” and a “massive army-surplus truck”.

Although the appeals court noted that restrictive covenants may become invalid and unenforceable if the original development plan has been abandoned, or the character of the neighborhood has changed so much as to defeat the purpose of the restriction, those factors were not applicable to the community of single family homes in Harford County where the over-sized military truck was parked.

The court also rejected the homeowner’s contention that suit to obtain an injunction to enforce the truck covenant could not be filed before complying with the dispute resolution procedure in the HOA bylaws.  The bylaws required notice of the alleged violation and an opportunity for a hearing before the HOA Board of Directors before imposing a fine, suspend voting rights or infringe on other rights of a homeowner.

The appeals court concluded that the right to enforce the covenants by court action was provided for in the Declaration without conditions and, therefore, the dispute resolution procedures in the HOA Bylaws did not apply.  Even if the suit was deemed to be an attempt to “infringe” on the rights of the owner, the terms of the Declaration which had no pre-conditions to litigation prevailed over the notice and hearing provisions in the Bylaws.

Although the decision in Maloney v. Fountain Glen Homeowners Association, Inc. is an “unreported” decision and, therefore, not a binding precedent, it is instructive on how courts view enforcement of homeowner association covenant restrictions.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations, and housing cooperatives in Maryland and the District of Columbia.

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Single Dwelling Covenant Not Waived By Other Structures

by Tom Schild

A covenant allowing only one dwelling to be constructed on each lot in a Baltimore County community of over 600 homes is not waived by allowing erection of other structures including pool houses, gazebos, guest houses, and sheds, according to a recent ruling of the Maryland Court of Appeals–the highest state appellate court.

At issue in Shader v. Hampton Improvement Association, Inc. was whether a “one dwelling” covenant prohibited construction of a house on each of two subdivided portions of the original lot as it existed when the covenant was first created in 1931. Although the appeals court concluded there had been a waiver of the portion of the covenant which prohibited buildings other than “private dwelling houses”, there had been no waiver of the covenant which prohibited “no more than one dwelling” on each lot.

Explaining that each clause of the covenant is severable and independent of the other restrictions, the Maryland Court of Appeals agreed with the trial court and intermediate appeals court that waiver of one clause did not constitute a waiver of other covenant restrictions.  Therefore, the “one dwelling” covenant remained enforceable to ensure the residential character of the neighborhood and a house was not allowed on each subdivided portion of the original lot.

POSTED BY:  Thomas Schild Law Group, LLC

Maryland Court Guidance on Access to Association Books and Records

by Tom Schild

Several recent Maryland appeals court decisions provide new guidance to  condominium and homeowner associations on owner inspection of association books and records.

Legal Advice and Billing Records

The Maryland Court of Special Appeals supported a Baltimore condo association’s refusal to provide a unit owner with the written legal advice of condominium attorney.  The court concluded, in 100 Harborview Drive Condominium v. Clark, that the common law and statutory attorney-client privilege — which recognizes the confidentiality of an attorney’s legal advice — pre-empts an owner’s right of inspection and copying the condominium “books and records” allowed by the Maryland Condominium Act, Section 11-116.  Based on the text and legislative history of the Condo Act, the court determined that all written legal advice is protected from disclosure, even if the owner requesting such records is the subject of the legal advice.

However, the July 2015 court decision also ruled that an attorney’s detailed billing records submitted in support of an invoice for legal services must be provided to owners, except to the extent such records include confidential information protected by the attorney-client privilege or work product doctrine.  For instance, billing records which reveal the reason for seeking legal advice, litigation strategy or the specific nature of services provided are protected from disclosure.

Financial Records and Delinquency Reports

Separately, in the May 2015 “unreported” case of Brown v. Commission on Common Ownership Communities,  the Maryland Court of Special Appeals upheld the decision of the Montgomery County Commission on Common Ownership Communities (CCOC) that a condominium had complied with the books and records provisions of the Condominium Act by providing financial records as kept in the ordinary course of business and it did not have to create new documents which re-format its existing financial records.  (An “unreported” appellate decision may not be relied on as precedent in other similar cases).

The CCOC decision upheld by the appeals court also ruled that the books and records provision of the Condo Act requires that, on request,  condominium unit owners must be provided with assessment delinquency reports without redaction of the names of delinquent owners.  That portion of the CCOC decision was not contested in the court appeal.

Confidentiality Agreements

Completing the trilogy of  recent rulings regarding access to books and records, the Court of Special Appeals ruled in August 2015 that a person entitled to inspect and copy corporate records may be required to sign a confidentiality agreement which prohibits disclosing the information to third parties.

Referring to a Maryland court case from 1898 regarding stockholder rights to inspect the books of a business corporation, the court interpreted the statutory right of inspection to allow use of a confidentiality agreement to protect against disclosure and misuse of confidential documents and information.  Although the financial records in Hogans v. Hogans Agency, Inc. involved a business corporation, the ruling is also instructive with regard to providing access to the books and records of condominium and homeowner associations.

Based on this new judicial guidance regarding access to books and records, association boards and managers may be able to avoid inspection disputes by adopting, or amending, a written policy for owner inspection and copying of association records.

POSTED BY: Thomas Schild Law Group, LLC

More on Pit Bulls—Maryland Appeals Court Affirms Strict Liability

by Tom Schild

The Maryland Court of Appeals on August 21 affirmed its April 26 ruling that owners of pit bulls and property owners who have the right to control the presence of pit bulls are strictly liable for injuries caused by such dogs,  However, the court did modify its earlier decision so it does not apply to mixed breed pit bulls.

In its April 26 decision in Tracey v. Solesky, the court ruled that property owners who know, or have reason to know, of the presence of a pit bull on their property are liable for injuries caused by such dogs, whether or not they know a particular dog has a history of vicious propensities.  The court concluded that pit bulls are inherently dangerous animals.

According to the appeals court August 21 decision, the strict liability standard for injuries caused by pit bulls “simply requires that those who possess them or permit them on their property take reasonable steps to assure that they do not run loose or otherwise are in a position to injure people”.

The appeals court decision has been widely criticized for its conclusion that pit bulls are inherently dangerous, for applying a different standard of liability to one  breed of dog, and for making landlords and others with the right to control the presence of pit bulls on their property strictly liable for injuries caused by such dogs.

In response to the appeals court decision, the Maryland General Assembly considered several bills regarding liability for injuries caused by dogs during its recent Special Session.  Although the House and Senate passed similar versions of legislation, the differences in the two versions were not resolved before the General Assembly adjourned until January 2013 without enacting any dog bite legislation.

With the appeals court standing by its April 26 ruling to impose strict liability on pit bull owners and property owners, legislation regarding dog bite liability is expected to be considered again during the regular 2013 legislative session.

Faced with greater potential liability for pit bull bites, some landlords reportedly are terminating leases of tenants who have pit bulls and some dog owners are surrendering their pit bulls to animal shelters.  And, some condominium, homeowner association and coop boards are considering a ban on pit bulls.

Pit Bull Legislation Stalls

by Tom Schild

After considering several bills regarding liability for injuries caused by dogs, the Maryland General Assembly has adjourned until January 2012 without enacting any dog bite legislation.

During the recent Special Session, the Senate and House passed different versions of legislation which would impose dog bite liability on landlords and others who have the right to control the presence of dogs on their property only where there is knowledge of a particular dog’s presence and vicious propensity.  This would have restored the negligence standard of liability modified by a recent appeals cout decision with respect to injuries caused by pit bulls and mixed breed pit bulls.

For dog owners, the proposed dog bite legislation would have extended the strict liability standard to injuries caused by all breeds of dogs, with a few exceptions for specific circumstances.

After passing casino legislation, the General Assembly adjourned on August 15 without taking final action on the dog bite bills.

Appeals Court Ruling–Strict Liability for Pit Bulls

The proposed dog bite legislation was in response to the April 26 ruling of the Maryland Court of Appeals–the highest state appellate court–that both the owner of a pit bull dog (or pit bull mixed breed) and a landlord or other person with the right to control the presence of such dogs would be strictly liable for all injuries caused by such dogs whether or not there was any knowledge that a particular dog had a history of being vicious. Concluding that pit bulls are inherently dangerous animals, the court decision in Tracey v. Solesky changed the long-established common law (i.e. court-made law) liability standard for pit bull owners and property owners.

The  appeals court stated that the new strict liability standard applies to any new claims arising after the date of its decision.  Faced with greater potential liability for pit bull bites, some landlords reportedly began terminating leases of tenants who had pit bulls and some pit bull owners surrendered their dogs to animal shelters.  Condominium, homeowner association and coop boards began consideration of a ban on pit bulls and pit bull mixed breeds.

On May 25, the Court of Appeals was asked to reconsider its decision.  This created  uncertainty whether the ruling would remain effective as of April 26 if it was not modified on reconsideration.  In response to a legislator’s inquiry as to the status of the court ruling, a Maryland Assistant Attorney General issued an opinion letter on July 10 advising that, in her opinion, the new liability standard announced by the Court of Appeals was not yet in effect because the court ruling was not a final decision, so long as the request for reconsideration was pending.  But, that letter also indicated it was uncertain if the court would agree with her opinion and urged private parties to consult their own legal counsel for advice.

The court decision has been widely criticized for its conclusion that pit bulls are inherently dangerous, for applying a different standard of liability to one breed of dog, and for making landlords and others with the right to control the presence of pit bulls on their property strictly liable for injuries caused by such dogs.

Legislation Proposed to Overturn Court Ruling

In response to criticism of the appeals court ruling by animal rights advocates, landlords, the Community Associations Institute, and insurance companies, the Maryland General Assembly acted quickly during its August special session to consider legislation to overturn the court ruling while the request for court reconsideration was still pending.

On behalf of the Community Associations Institute, I attended the House Judiciary Committee hearing to explain the special problems of condos, HOAs and coops in banning, identifying and removing pit bulls and mixed pit bull breeds.  Unlike landlords which can readily ban pit bulls and evict tenants who violate pet restrictions, it is far more difficult, time-consuming and costly for a community association to ban certain breeds of dogs and have prohibited dogs removed from the community.  The final House version of the legislation included an amendment to make clear that condominiums, homeowner associations, and housing cooperatives are not subject to the strict liability standard.

With the support of animal rights groups, the Senate and House passed bills to generally extend the strict liability standard to owners and keepers of all dogs, with a few exceptions for veterinarians, police and military personnel, and other specified circumstances.

With the support of organizations representing landlords, community associations, insurance companies and animal rights advocates, both the Senate and House-passed versions overturn the strict liability standard for property owners and restores the common law liability standard for property owners which was in effect prior to the court ruling in Tracey v. Solesky Under the negligence standard, a landlord, condominium, homeowners association, housing cooperative or other person with control over the presence of a dog can still be liable for injuries caused by a dog where there is knowledge of the dog on the property and knowledge of its vicious propensities.

No Dog Bite Legislation Enacted

Although similar (but different) versions of dog bite legislation was introduced, considered,  and passed by the Maryland Senate and House in less than a week during the special legislative session, the differences were not resolved and no new law was approved by the General Assembly.  The entire topic of dog bite liability is expected to be revisited again during the regular January 2013 legislative session….when the legislative dogfight will continue.

 

Pit Bull Liability…Revisited

by Tom Schild

The Maryland Court of Appeals has been asked to reconsider its April ruling that owners of pit bulls and landlords are strictly liable for injuries caused by this breed of dog.  As a result, there is uncertainty whether the Court’s decision is final and binding. 

In response to the court ruling, a joint House-Senate legislative task force was appointed to develop possible Maryland legislation to address issues raised by the court opinion.  Some have proposed extending the strict liability standard to all breeds of dogs to address uncertainty whether a particular dog is a pit bull or mixed breed pit bull.  Others have suggested eliminating the strict liability standard for landlords and community associations. 

Because the Court of Appeals could revise its decision, no legislative action is expected until the court ruling  becomes final.