Case Title: SDC v. London Towne

Citation: 395 Md. 424

Docket Number: 94/05

State: maryland

Court: Maryland Supreme Court

Date: 2006-11-09T00:00:00Z

Document:
IN THE COURT OF APPEALS OF MARYLAND
No. 94
September Term, 2005
_________________________________________
SDC 214, LLC
v.
LONDON TOWNE PROPERTY OWNERS
ASSOCIATION, INC., et al.
__________________________________________
Bell, C.J.
       
Raker
Wilner
Cathell
Battaglia
Greene
Eldridge, John C. (Retired, Specially
 Assigned),
                  JJ.
__________________________________________
Opinion by Eldridge, J.
_________________________________________
Filed:   November 9, 2006
This case concerns the interpretation of a restrictive covenant which states that
a six-acre parcel of land in Anne Arundel County “shall be undeveloped, except for
educational facilities in conjunction with the Anne Arundel County Board of
Education.”  The disputed issue is whether the quoted language means that the Board
of Education was required to have been involved in the planning, design or
construction of the educational facilities, or, on the other hand, whether the Board’s
involvement in the use of the educational facilities is sufficient to permit such facilities
under the covenant. 
I.
The parcel of land which is the subject of this dispute is approxim ately six acres,
located in the south east quadrant of the intersection of Maryland Route 2 and
Maryland Route 214 in the Edgewater area of Anne Arundel County.  The parcel had
been part of a 1390-acre tract of land which a developer, Rose of Annapolis Limited
Partnership, intended to develop “as a mixed-use community known as South River
Colony.”
In 1988, the developer Rose of Annapolis entered into a “Development
Agreement and Declaration of Covenants, Conditions and Restrictions” with each of
several community associations representing “citizens who reside in the general
vicinity of the Property.”  The respondent London Towne Property Owners Association,
Inc., was one of these associations entering a Development Agreement and Declaration
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1
The Anne Arundel County Board of Education consists of seven members appointed by the
Governor plus a student member, and the Board is the head of the Anne Arundel County Public
School System.  The Superintendent of Schools for Anne Arundel County is appointed by the Board,
is the “executive officer, secretary, and treasurer of the county board,” is responsible for “[t]he
proper administration of the County School System,” and must in writing approve all contracts made
by the County School System.  See Maryland Code (1978, 2006 Repl. Vol.), §§ 3-108, 3-110, 4-101,
4-102, 4-201, 4-204, 4-205(c), and 4-205(d) of the Education Article.
of Covenants, Conditions and Restrictions with the developer.  Under a heading
entitled “Dwelling Units and Land Use,” the Agreement provided, inter alia, as follows
(emphasis added):
“c.  The portion of the Property consisting of approxim ately six
(6) acres and being located in the southeast quadrant of the
Maryland Route 214/Maryland Route 2 intersection shall be
undeveloped, except for educational facilities in conjunction with
the Anne Arundel County Board of Education.”1
In June 2002, the subject six-acre parcel of land was sold to the petitioner SDC
214, LLC (hereafter referred to as SDC), for $306,000.00.  Also in June 2002, SDC
entered into a lease agreement with Sojourner-Douglas College, Inc., under which SDC
was to construct and lease to the College an “Educational Center” on the six-acre
parcel.  The lease agreement provided that the land and building “shall be used for
higher education and related activities” by the College, and that the College’s “use of
the Premises is subject to the covenants and special exception conditions to educational
uses in conjunction with Anne Arundel County Board of Education.”  The term of the
lease was fifteen years, commencing thirty days after the educational facility was
constructed, with options to extend the term beyond the fifteen years.  The lease
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2
SDC is a corporation formed by, and solely owned by, Earl P. Schubert, Jr., who is a developer
with an office in Annapolis, Maryland.  Mr. Schubert had a prior relationship with Sojourner-
Douglas College, and he owns a facility used by the College in Annapolis, Maryland.
agreement also gave the College options to purchase the property either upon
completion of the building or during the first five years of the initial term of the lease.2
The primary campus of Sojourner-Douglas College is in Baltimore City,
although the College also has facilities in Anne Arundel, Prince George’s, Dorchester,
and Wicomico Counties.  In addition, the  College has a campus in the Bahamas.  The
College offers several four-year bachelor’s degree programs and a master’s degree
program.  The programs are primarily aimed at adult students who work during the day,
and, therefore, most of the courses are given in the evening.  The College’s Anne
Arundel County facility, located in the City of Annapolis, had become overcrowded.
The purchase and lease of the subject six-acre parcel was specifically intended to
alleviate this overcrowding problem.
Shortly after SDC’s purchase of the six-acre parcel and the lease to the College,
SDC by letter dated July 9, 2002, informed the London Towne Association of the plan
“to construct an educational facility for Sojourner-Douglas College on the [six-acre]
site,” and that “[t]he proposed use is in conjunction with and has been approved by the
Anne Arundel County Board of Education.”  Although the President of the London
Towne Association acknowledged in writing the receipt of the letter, the Association
did not comment on the proposed facility.
In November and December 2002, SDC applied to Anne Arundel County for a
-4-
3
See, Code (1978, 2006 Repl. Vol.), § 4-205(d) of the Education Article, providing that a contract
made by the Public School System “is not valid without the written approval of the county
superintendent.”
building permit and a “Zoning Certificate of Use” with regard to the six-acre parcel and
the planned educational facility.  Subsequently, both applications were granted.
On September 8, 2003, the College and the Anne Arundel County Public School
System entered into a contract for the parties to “work collaboratively to enhance the
educational experiences of students from both institutions” and to “cooperate” with
regard to several matters.  The contract was signed by an official of the College and by
the Anne Arundel County Superintendent of Schools.3  Under the contract, among other
things, the College agreed, both at its Annapolis campus and at the planned facility to
be constructed on the six-acre parcel, to provide tutoring and other assistance for
suspended or expelled public school students, to make space available at both campuses
for the Public School System’s “Alternate Education Programs” and “student academic
intervention programs,” to “provide access to textbooks and other educational materials
for students in teacher training programs,” and to make College facilities available to
the Public School System.  The Anne Arundel County Public School System, inter alia,
agreed to “provide opportunities in its schools for [College] student teachers to get
field experience,” and to “select and refer [public school] students for participation in
[College] educational programs.”
During 2003, some opposition to the planned educational facility arose in some
of the communities in the general vicinity of the proposed facility.  On October 14,
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2003, the London Towne Property Owners Association and John Yannone, a resident
property owner in the South River Colony community, filed in the Circuit Court for
Anne Arundel County a complaint for a declaratory judgment and an injunction.  SDC
was named as the only defendant.  The complaint asserted that the proposed building
and use of the six-acre parcel was prohibited by the restrictive covenant stating that the
parcel “shall be undeveloped, except for educational facilities in conjunction with the
Anne Arundel County Board of Education.”  The complaint alleged that, although the
“Board of Education may utilize some of the facilities to be erected on the site,” the
“primary use of the Property shall be college educational programs operated by a
private entity independent of the Anne Arundel County Board of Education.”
After the filing of an answer and some discovery, the case was tried before the
Circuit Court on May 21, 2004.  An officer of the London Towne Property Owners
Association and the plaintiff John Yannone testified on behalf of the plaintiffs.
Dr. Charlestein Fairley, an official of the College, and Earl P. Schubert, Jr., the owner
of SDC, testified on behalf of the defendant, and numerous exhibits were introduced
into evidence.
The only testimony directly relating to the relationship between the College and
the Anne Arundel County Public School System was by Dr. Fairley, the Director of the
College’s Anne Arundel County facilities.  After pointing out that the College located
in Anne Arundel County in 1993, and after describing the College’s general nature and
programs, Dr. Fairley testified as follows:
-6-
“Q.
* * *  What relationship or is there an existing
relationship with the Anne Arundel County public school systems
between the college - - or a relationship between the college and
the school system?
“A.
Yes.  There is both a formal and informal relationship.
We, from the very beginning in 1993, established a relationship in
conjunction with the Board of Education.  Our early childhood
education majors do their practice teaching in the Anne Arundel
County public schools.  The Anne Arundel public schoolteachers
serve as cooperating or mentoring teachers.  We have a person on
staff currently, Dr. Eleanor Harris, who is a retired Anne Arundel
County administrator and principal, who supervises this process.
“We also collaborate with the Board of Education on
proposal developm ent.  We serve as a resource for them, and they
for us.  We’ve opened our facility to the Board of Education to be
used.  They have come over and examined and looked at the kind
of facilities that we have.  Because we hold classes from 6:00 until
10:00 in the evening, our classroom space is open.  So, we’ve made
that available to them.
“We also provide speakers for them, when requested.  We
provide resources, and they to us.
“Q.
All right.
“A.
Some of it - - well, many of the teachers teach in our
general education program.  And we’ve also provided help to some
of their staff without college degrees obtain a college degree.”
* * *
“Q.
Dr. Fairley, with regard to student teaching, is that a
formalized program?
“A.
Yes.  Yes, it is a formalized program.  It is - - we have a
manual.  We have job descriptions for the cooperating teachers.
We have job descriptions for our supervising teacher.  We have
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goals and objectives that students are to attain during this process.
It’s all spelled out.  We pay a small fee to the cooperating teacher
for having our students in the classroo m.”
* * *
“Q.
* * *  Now there are employees of the public school
system who are seeking advanced degrees or seeking degrees
through your program.  Is that correct?
“A.
Yes.  We’ve always had them, yes.
“Q.
And are there members of the public school staff who
teach at Sojourner Douglas?
“A.
Yes.
“Q.
Now prior to entering into this lease, did you make an
attempt to formalize a relationship with the county public school
system?
“A.
Yes, we did.  We worked out a memorandum of
understanding, which took under consideration the activities that
we were engaged in together.”
Dr. Fairley went on to point out that the provision of services and facilities to the Anne
Arundel County Public School System, at the six-acre Edgewater location, would
commence “[w]hen the new building is constructed.”
Thereafter, the Circuit Court filed an order denying the plaintiffs’ request for
injunctive relief and filed a written declaratory judgment.  The Circuit Court held that
there was no violation of the restrictive covenant, as the proposed building constituted
an educational facility and that it was “in conjunction with the Anne Arundel County
-8-
4
The parties have also informed us that the individual plaintiff, John Yannone, who had been a
resident of the Smith River Colony community, has sold his home and has moved away from the
area.  Accordingly, the only plaintiff with standing to continue the challenge to the development of
(continued...)
Board of Education.”  The Circuit Court stated:
“Based on Dr. Fairley’s testim ony, it is undoubtedly clear that
the College and the Board of Educatio n have a longstanding
relationship of working together to educate individuals in Anne
Arundel County.  In light of their relationship, this Court concludes
that the College has been working ‘in conjunction with’ the Board
of Education, as that phrase is used in Section 1(A)(i)(C) of South
River Colony’s Declaration of Covenants, in the establishment of
its new educational facility upon the South River Colony Prop erty.
Therefore, this Court concludes that the Defendant’s proposed use
of the South River Colony Property does conform with South River
Colony’s Declaration of Covenants.”
The plaintiffs noted an appeal to the Court of Special Appeals.  They also
requested the Circuit Court to issue a temporary injunction so that construction of the
facility on the six-acre parcel would not commence pending appellate proceedings.  The
Circuit Court denied the request for an injunction pending appeal.  The plaintiffs
neither challenged this denial in the Court of Special Appeals nor sought from the
appellate court an injunction pending appeal.  Consequently, construction of the facility
began, and the parties have informed us that construction has been completed, that the
facility is being used by the College, and that a public charter school, chartered and
funded by the Anne Arundel County Board of Education, is located in the building.  See
Maryland Code (1978, 2006 Repl. Vol.), §§ 9-101 through 9-110 of the Education
Article, relating to the “Maryland Public Charter School Program.” 4  
-9-
4
(...continued)
the six-acre parcel appears to be the London Towne Property Owners Association which was a party
to the 1988 Agreement.  In addition, we have been informed that the College has given SDC notice
that the College will exercise its option to purchase the property.
5
The initial judgment of the Court of Special Appeals simply provided that the Circuit Court’s
judgment was “reversed.”  The plaintiffs then filed in the Court of Special Appeals a “Motion for
Clarification and/or Reconsideration,” requesting that the appellate court’s judgment be modified
to provide, inter alia, that the Circuit Court be required to order the removal of the building and the
restoration of the property “to its undeveloped condition.”  The Court of Special Appeals declined
to make this requested modification but did, on “the Court’s own motion,” amend its judgment by
adding the language providing for Circuit Court Orders consistent with the appellate court’s opinion.
Since construction has been completed and the building is being used by both the College and
the Public School System, including the public charter school, it is not clear what type of further
orders were contemplated by the Court of Special Appeals.
The Court of Special Appeals, in an unreported opinion, reversed the judgment
of the Circuit Court and remanded the case to the Circuit Court “for the entry of orders
consistent with this [the Court of Special Appeals’] opinion.”5  Although
acknowledging that both Dr. Fairley’s testimony and the September 2003 contract
between the College and the Anne Arundel County Public School System “describe[]
a general working relationship between the College and the Board [of Education],” the
Court of Special Appeals determined that this relationship was not “sufficient to bring
the proposed South River [Colony] development within the use permitted by the
covenant.”  The intermediate appellate court was of the view that, to satisfy the
condition in the restrictive covenant, the Anne Arundel County Board of Education was
required to have been involved in the planning, design or construction of the physical
facilities.  The appellate court thus noted that the September 2003 contract between the
College and the Board of Education “is clearly directed at the development and
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maintenance of worthwhile educational programs, not at the development of physical
facilities.”  In its conclusion, the Court of Special Appeals emphasized “that the Board
[of Education] took no part in the site plan or layout of the property . . . .”
SDC filed a petition for a writ of certiorari which this Court granted.  SDC v.
London Towne, 390 Md. 90, 887 A.2d 655 (2005).  The respondents did not file a
cross-petition for a writ of certiorari.
II.
Several recent opinions of this Court have discussed the principles controlling
the interpretation and application of restrictive covenants.  See, e.g., Lowden v. Bosley,
___ Md. ___, ___ A.2d ___ (2006); Miller v. Bay City Property Owners Association,
393 Md. 620, 903 A.2d 938 (2006); Roper v. Camuso, 376 Md. 240, 829 A.2d 589
(2003); Stansbury v. Jones, 372 Md. 172, 202-203, 812 A.2d 312, 330 (2002); County
Commissioners v. St. Charles, 366 Md. 426, 784 A.2d 545 (2001); Belleview v. Rugby
Hall, 321 Md. 152, 157, 582 A.2d 493, 495 (1990).  
Where the language of the instrument containing a restrictive covenant is
unambiguous, a court should simply give effect to that language “unless prevented from
doing so by public policy or some established principle of law.”  Miller v. Bay City
Property Owners Association, supra, 393 Md. at 637, 903 A.2d at 948 (internal
quotation marks omitted).  If, however, the language of the instrument is ambiguous,
current Maryland law requires a court to apply “a reasonably strict construction when
construing covenants.”  County Commissioners v. St. Charles, supra, 366 Md. at 447,
-11-
784 A.2d at 557.  The “reasonab ly strict construction” rule has been explained as
follows (Belleview v. Rugby Hall, supra, 321 Md. at 157-158, 582 A.2d at 495):
“If the meaning of the instrument is not clear from its terms, ‘the
circumstances surrounding the execution of the instrument should
be considered in arriving at the intention of the parties, and the
apparent meaning and object of their stipulations should be
gathered from all possible sources.’
* * *
“If an ambiguity is present, and if that ambiguity is not clearly
resolved by resort to extrinsic evidence, the general rule in favor
of the unrestricted use of property will prevail and the ambiguity
in a restriction will be resolved against the party seeking its
enforcement.”
Moreover, like contractual provisions generally, restrictive covenants should be
interpreted reasonably and should not be given interpretations leading to unreasonable
results.  Miller v. Bay City Property Owners Association, supra, 393 Md. at 636, 903
A.2d at 947 (pointing out that restrictive covenants are now interpreted under a
“‘reasonableness rule’”); County Commissioners v. St. Charles, supra, 366 Md. at 447,
784 A.2d at 557 (same); Martin v. Weinberg, 205 Md. 519, 527, 109 A.2d 576, 579
(1954) (restrictive covenants should be given “a fair and reasonable construction”).
See also, e.g., Fister v. Allstate, 366 Md. 201, 219, 783 A.2d 194, 205 (2001) (Courts
“avoid interpreting contract language . . . in a manner that is void of a commonsensical
perspective”); Forbes v. Harleysville Mutual, 322 Md. 689, 704-705, 589 A.2d 944,
951 (1991) (One party’s interpretation of a contract “would be a particularly
-12-
unreasonable construction” leading to results inconsistent with public policy); Canaras
v. Lift Truck Services, 272 Md. 337, 357, 322 A.2d 866, 877 (1974) (“An interpretation
which makes a contract fair and reasonable will be preferred to one which leads to
either a harsh or unreasonable result”).
In the present case, neither side has taken the position that the restrictive
covenant is ambiguous.  Furthermore, neither side at the trial before the Circuit Court
presented any extrinsic evidence relating to the intent underlying the restrictive
covenant when the original developer and the community associations entered into the
1988 agreements.
SDC contends that the September 2003 contract between the College and the
Anne Arundel County Board of Education, as well as the present use of the educational
facility by the Board of Education, “clearly” satisfies the “except” clause in the
restrictive covenant, and that nothing more is required by the language “in conjunction
with the Anne Arundel County Board of Education.”  (Petitioner’s brief at 10).  SDC
argues that the Court of Special Appeals, by “focusing on the planning and construction
of the proposed facility,” has inserted words into and has rewritten the restrictive
covenant. (Ibid.).  SDC points out that, under the Court of Special Appeals’
construction of the covenant, “the Board of Education would be prohibited from using
the property as a public school facility, even in a case where the Board had purchased
the property and occupied and used it exclusively.”  (Id. at 11).  Although arguing that
the restrictive covenant is clear, SDC alternatively submits that, if the covenant were
-13-
ambiguous, SDC should nevertheless prevail under the “reasonably strict construction”
principle because no extrinsic evidence regarding the intent of the covenant was
presented at trial.
The London Towne Property Owners Association, relying on the word
“Development” in the title of the 1988 Agreem ent, and the phrase “shall be
undeveloped” in the restrictive covenant, argues that the “except” clause in the
covenant must be interpreted to mean “unless the owner, in conjunction with the Anne
Arundel County Board of Education, developed educational facilities.”  (Respondents’
brief at 11-12, emphasis added).  The words “development” or “develop,” according
to the London Towne Association, mean “‘the act of converting a tract of land into an
area suitable for residential or business uses’” or “‘the conversion of raw land into an
area suitable for residential or business uses.’”  (Ibid., quoting selective dictionary
definitions).  The London Towne Association maintains that, since the Board of
Education played no role in planning and design discussions for the physical facility
or the construction of the facility, the Court of Special Appeals correctly held that there
was no compliance with the restrictive covenant.  (Id. at 14).
We agree with SDC’s argumen t.  The plain language of the restrictive covenant
does not require that the Anne Arundel County Board of Education must have been
involved in the planning, design or construction of the building.  The agreement to use
the educational facility, or after construction the actual use of the facility, in
conjunction with the Board of Education, fully satisfies the clause in the restrictive
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covenant setting forth the exception.  The trial court’s findings of fact, that the
educational facility was “in conjunction with” the Board of Education, are well-
supported by the evidence.
In the context of the restrictive covenant in the 1988 Agreem ent, the general
requirement that the six-acre parcel be “undeveloped” simply indicates that there
should be no structures such as residences, commercial buildings, other buildings, etc.,
on the parcel.  The exception is for an educational facility “in conjunction with” the
Board of Education.  The presence of an educational facility on the parcel falls within
this exception as long as there is involvement by the Board of Education, regardless of
whether the facility was “planned” in conjunction with the Board of Education, or
“designed” in conjunction with the Board, or “constructed” in conjunction with the
Board, or to be “used” in conjunction with the Board.  Under the language of the
covenant, an educational facility used by both the College and the Anne Arundel
County Public School System is an “educational facilit[y] in conjunction with the Anne
Arundel County Board of Education.”
The London Towne Association and the Court of Special Appeals would insert
in the “except” clause of the restrictive covenant the word “developed,” and they would
define the word “developed” to mean the planning, design or construction of the
building.  Nevertheless, “it is not the province of this Court to supply a missing” word
or phrase in a restrictive covenant, Sowers v. Holy Nativity Church, 149 Md. 434, 442,
131 A. 785, 788 (1926).  See also Markey v. Wolf, 92 Md.App. 137, 152, 607 A.2d 82,
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90 (1992).  Moreover, there is no more reason to insert the narrowly defined word
“developed” in the restrictive covenant’s  clause than there is to insert the word “used.”
In fact, the heading of that section of the 1988 Agreem ent, which includes the
restrictive covenant, contains the words “Land Use” but does not contain the word
“develop.”
In addition, even if the word “developed” were inserted into the key language
of the restrictive covenant, there is no good reason for confining its meaning to the
planning, design or construction of the physical facility.  A perusal of dictionary
definitions discloses that the term “develop” has various meanings and connotations,
depending upon the context.  See, e.g., Webster’s Third New International Dictionary,
Unabridged, at 618 (1981).  The Court of Special Appeals at one point in its opinion
seemed to recognize this when it stated that the September 2003 contract between the
College and the Board of Education “is clearly directed at the development and
maintenance of worthwhile educational programs, not at the development of physical
facilities.”  (Emphasis added).  If the restrictive covenant had said “educational
facilities developed in conjunction with the” Board of Education, the language could
reasonably have referred to various educational programs.  An “educational facility”
is more than simply bricks, mortar, and the other physical attributes of a building.
Furthermore, as pointed out by SDC, the interpretation of the restrictive covenant
by the London Towne Association and the Court of Special Appeals could lead to
unreasonable consequences.  Suppose, for example, that upon completion of the
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6
It may be noteworthy that the six-acre parcel is adjacent to property containing several
public school facilities controlled by the Anne Arundel County Board of Education.
educational facility on the six-acre parcel, the College had decided against using the
facility, but the Board of Education had decided that the facility would be appropriate
for and needed for a public school, and the Board had purchased the property from SDC
to use as a public school.  Under the Association’s and the Court of Special Appeals’
interpretation, the Board of Education’s use of the property for a public school would
violate the restrictive covenant because the Board had not been involved in the
planning design, or construction of the physical facility.6  Also, if the London Towne
Association’s request to demolish the existing facility were granted by the Circuit
Court, SDC could re-build on the six-acre parcel the identical facility for use by the
College, as long as SDC consulted with the Board of Education with respect to the
planning, design, and construction of the new facility.  Such an interpretation of the
covenant does not comport with common sense.
It is undisputed that the facility on the six-acre parcel is an “education al”
facility.  It is also undisputed that, pursuant to contract, the Anne Arundel County
Board of Education has agreed to use the facility and is in fact using the facility.
Consequently, the facility complies with the requirement that it shall be “in conjunction
with the Anne Arundel County Board of Education.”
JUDGMENT OF THE COURT OF SPECIA L
AP P EALS 
REV E R S E D  
A N D  
C A SE
REMANDED TO THE COURT OF SPECIAL
APPEALS WITH DIRECTIONS TO AFFIRM
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THE JUDGMENT OF THE CIRCU IT COURT
FOR ANNE ARUNDEL COUNTY.  COSTS
IN THIS COURT AND IN THE COURT OF
SPECIAL APPEALS TO BE PAID BY THE
LONDON TOWNE PROPERTY OWNERS
ASSOCIATION, INC.