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Reiner v. Ehrlich

Court of Special Appeals of Maryland

May 29, 2013

RANDALL REINER, ET UX.
v.
CLIFFORD EHRLICH, ET AL.

Matricciani, Berger, Moylan, Charles E., Jr. (Retired, Specially Assigned), JJ.

OPINION

Berger, J.

This case arises out of a homeowners association's denial of a request to install a new roof on a home using materials not authorized by the bylaws of the association. Upon denial of the request, the homeowners, appellants Randall and Orna Reiner ("the Reiners"), filed a complaint in the Circuit Court for Montgomery County against the appellees, the homeowners association and sixteen individual homeowners in the community. The appellees filed motions to dismiss the Reiners' complaint, or, alternatively, moved for summary judgment. After holding a hearing, the circuit court dismissed the complaint as to the individual homeowners, and entered summary judgment in favor of the homeowners association. Thereafter, the Reiners filed a motion to alter or amend the judgment, which was denied without a hearing. This appeal followed.

The Reiners present one question for review, which we have rephrased as follows:[1]

1. Whether the circuit court erred by entering summary judgment in favor of the homeowners association.
2. Whether the circuit court erred by granting the individual homeowners' motion to dismiss the complaint.
3. Whether the circuit court abused its discretion by denying the Reiners' motion to alter or amend the judgment.

For the reasons set forth below, we affirm the judgment of the Circuit Court for Montgomery County.

FACTUAL AND PROCEDURAL BACKGROUND

The Reiners own a house located in a community known as "Avenel." The Avenel community is comprised of over 900 homes in thirteen villages. The Reiners' home is located in the village of Player's Gate, where the Reiners have lived for 18 years.

The Avenel community is governed by a homeowners association ("the Association"). The appellee homeowners association contends that it is a Maryland corporation called "Avenel Community Association, Inc." The Reiners acknowledge the existence of Avenel Community Association, Inc., but contend that another association supercedes that corporate entity. The Reiners refer to this as the "Avenel Community Association, " which, in their view, is a "trust relationship between the homeowners and the fiduciaries acting for the homeowners under the Avenel-Declaration."

The original roof of the Reiners' home was made of cedar shake material. In 2010, the Reiners submitted a request to the Association for approval to install an asphalt roof. The Association denied the Reiners' request on the basis that asphalt roofs were not permitted in the village of Player's Gate. The Reiners filed a complaint with Montgomery County's Commission on Ownership Communities ("CCOC"). While that case was pending, the Reiners notified the Association -- in writing -- that they had signed a contract to install a new roof using asphalt shingles. The Association served the Reiners with a "cease and desist" notice, warning against the replacement of the Reiners' roof with asphalt shingles, or any other product not permitted by the bylaws of the Association.

The Reiners withdrew their CCOC complaint on October 5, 2011. On October 7, 2011, the Reiners filed a complaint for declaratory judgment in the circuit court for Montgomery County. The complaint named as defendants Clifford Ehrlich, Maureen Scott, David Urban, Scott Becker, Mary L. Thrasher, James Coley, Michelle Litvak, Ron Paulsen, Jonathan Brooke Halle, Kamal Tabbara, Joanne Joseph, Sandra Becker, Miriam Conley, Marilyn Danker, Frances Baker, and Barbara Bloomfield ("the individual homeowners"). The complaint alleged that each of the individual homeowners was "a homeowner in the community designated as 'Avenel.'" The Reiners made no other allegations regarding the individual homeowners or their roles in the homeowners association.

The complaint also named as a defendant "Avenel Community Association . . . a homeowners association formed under Title 11B of the Maryland Real Property Code." The Reiners sought a declaratory judgment "with respect to use of roofing materials in the homes at Avenel, " as well as declaratory relief regarding "any rules and standards" imposed and applied "throughout the Avenel community."

Two weeks later, the Reiners filed a motion for a temporary restraining order or preliminary injunction to restrain the Association from interfering with the installation of an asphalt roof. On October 25, 2011, a hearing was held. The court issued a written opinion and order denying the Reiners' request on the basis that the requisite factors for issuance of a preliminary injunction had not been satisfied.

Subsequently, the individual homeowners filed a motion to dismiss the Reiners' complaint for declaratory judgment, as well as a motion for sanctions. The homeowners contended that the Maryland Rules expressly prohibited the filing of a complaint against individual homeowners in a homeowners association. The Association also filed a motion to dismiss the Reiners' complaint, or alternatively, a motion for summary judgment. The Association contended that there is no entity known as "Avenel Community Association, " and that the proper entity is "Avenel Community Association, Inc." Additionally, the Association maintained that its denial of the Reiners' request to install an asphalt roof was immune from judicial review pursuant to the business judgment rule.

The circuit court held a hearing on the motions on January 3, 2012. The trial judge dismissed the complaint as to the individual homeowners on the basis that they were not proper parties under the Maryland Rules. Additionally, the trial court granted the motion for sanctions.

The trial court also considered the Association's motion, which it treated as a motion for summary judgment. At the hearing, the Reiners presented an affidavit from the general manager of the Association. The affidavit provided that the "entity that governs the affairs of the community known as 'Avenel' is the 'Avenel Community Association, Inc., " which is "governed by and pursuant to Maryland law and its Articles of Incorporation; its recorded Protective Land Use Standards, Declaration of Covenants, Conditions and Restrictions (as well as amendments and supplements thereto); Bylaws; and Architectural Guidelines and Architectural Review Process (and amendments and supplements thereto)."

The Reiners also submitted certain exhibits that were attached to the Association's motion and affidavit. These exhibits included the Association's: (1) Articles of Incorporation filed with the State of Maryland State Department of Assessments and Taxation; (2) Bylaws; (3) Declaration of Covenants, Conditions and Restrictions; and (4) Declaration of Protective Land Use Standards.

Article XI of the Association's Declaration of Covenants, Conditions and Restrictions (hereinafter, the "Avenel-Declaration") provides in part:

It shall be prohibited for any Owner or Vacant Lot Owner to undertake (1) any construction, which term shall include, in addition to the actual erection of a dwelling and its appurtenances, any staking, clearing, excavation, grading, or other site work, (ii) any landscaping, plantings or removal of plantings or removal of plants, trees or shrubs, or (iii) any modification, change or alteration of a Lot or Residential Unit, whether functional or decorative, except in strict compliance with this Article XI, and until the approval of either the New Construction Committee, Modifications Committee or Control Committee, as applicable, has been obtained.

Article XI of the Avenel-Declaration also contained provisions establishing a modification committee, which is responsible for considering requests for modifications, alteration, or additions to existing homes:

Section 2. Modifications Committee. Subject to Section 3 below, the Modifications Committee ("MC") shall have exclusive jurisdiction over modifications, additions, or alterations made on or to existing Residential Units and the Lawn and Garden Areas appurtenant to such residential Units. The MC shall also be responsible for enforcing the Use Restrictions set forth in Article XII of this Declaration. The MC shall consist of at least three (3) and no more than five (5) members, all of whom shall be appointed by the Board of Directors. The MC may promulgate and amend Modification Standards as well as Application and Review Procedures. Such modification Standards shall be in addition to, and not in lieu of, the Design and Development [Guidelines] established by the NCC [i.e., the new construction Committee established by Section 3], which such design and Development Guidelines shall be followed by the MC. All reasonable costs incurred by the MC in reviewing and approving applications submitted to the MC shall be the responsibility of the applicant. Unless expressly waived by the MC, all applications for Review submitted to the MC shall be accompanied by a review fee of One Hundred Fifty Dollars ($150.00) or such other sum established by the MC.

The affidavit of the Association's general manager explained that these provisions prohibit owners from "altering or changing the roof style of their home without prior approval from the Association."

The Avenel-Declaration also contained a provision regarding roofing materials that may be used by homeowners. The provision, which was dated December 4, 2006 (the "2006 Roof Specifications"), indicated that asphalt roofs were expressly prohibited, subject to certain exceptions:

Asphalt roofs are expressly prohibited unless used by the builder as part of the original roof of your home or as part of the original roofs of other homes within your village, as outlined below.

The roofing materials listed as available options for homes in Player's Gate ...


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