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Hollingsworth v. Chateau Bu-De, LLC

United States District Court, D. Maryland

December 12, 2013

JOE G. HOLLINGSWORTH, et al., Plaintiffs/Counter-Defendants,
v.
CHATEAU BU-DE, LLC, Defendant/Counter-Plaintiff. CHATEAU BU-DE, LLC, Third-Party Plaintiff,
v.
THOMAS MITCHELL, et al., Third-Party Defendants

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[Copyrighted Material Omitted]

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For Joe G. Hollingsworth, Nancy E. Hollingsworth, Plaintiffs: Demetrios G Kaouris, Ryan D Showalter, LEAD ATTORNEYS, William Wallace McAllister, Jr, Miles and Stockbridge PC, Easton, MD.

For Chateau Bu-De, LLC, Defendant, Counter Claimant, Third Party Plaintiff: Michael Gerald Rust, LEAD ATTORNEY, Armistead Griswold Lee and Rust PA, Easton, MD.

For Joe G. Hollingsworth, Nancy E. Hollingsworth, Counter Defendants: Demetrios G Kaouris, Ryan D Showalter, William Wallace McAllister, Jr, LEAD ATTORNEYS, Miles and Stockbridge PC, Easton, MD.

For Margaret Mary Daly, Trustee Under the Margaret Mary Daly Trust Agreement and Trustee Under the Hugh C. Daley Trust Agreement, ThirdParty Defendant: William Wallace McAllister, Jr, LEAD ATTORNEY, Miles and Stockbridge PC, Easton, MD.

OPINION

George L. Russell, III, United States District Judge.

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MEMORANDUM OPINION

This declaratory judgment action is before the Court on cross-motions for summary judgment seeking an interpretation of restrictive covenants established over forty years ago. The salient issue is whether Defendant/Counter-Plaintiff Chateau Bu-De, LLC's (" CBD" ) planned operation of a vineyard and winery violates the restrictive covenants, which explicitly prohibit commercial activity on the property. The Court, having reviewed the pleadings and supporting documents, finds no hearing necessary. See Local Rule 105.6 (D.Md. 2011). For the reasons outlined below, the Court will grant Plaintiffs', Joe G. Hollingsworth and Nancy E. Hollingsworth, as well as Third-Party Defendant Margaret Daly's (collectively, " Plaintiffs" ), Motion for Summary Judgment (ECF No. 55) and deny CBD's Motion for Summary Judgment (ECF No. 54) because the plain and unambiguous language of the restrictive covenants, as well as the Road Maintenance Agreement, prohibit CBD's planned activities.

I. BACKGROUND [1]

Plaintiffs Joe G. Hollingsworth and Nancy E. Hollingsworth (the " Hollingsworths" ), Third-Party Defendant Margaret Mary Daly, and Defendant/Counter-Plaintiff CBD are owners of adjacent parcels of land located in Talbot County, Maryland.

On June 26, 1967, Roy G. Brooks and Anne C. Brooks conveyed the parcels by deed to S. Stockton White, IV, as an approximately 477 1/4 acre single tract of land known as Ingleside Farm. In 1972, Mr. White subdivided sections of Ingleside Farm into four parcels, labeled " A" through " D," and thereafter sold a portion of the property, believed to be Parcel C, to Frederick R. Menke.

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On August 2, 1972, Mr. White conveyed Parcels A and B, by way of separate deeds, to Trustees Joseph A. Alexander, Jr., John W. Jackson, and H. Donald Kistler (" Alexander Deed" ) and Norton A. Higgins and Betty K. Higgins (" Higgins Deed" ) respectively. The Alexander and Higgins Deeds subjected Parcels A and B to several restrictions, which provide, in relevant part:

(b) No more than one dwelling or residence shall be erected on any one lot or parcel in any such development, or any said amendment of a Plat of " Ingleside", said dwelling or residence being restricted to a single family dwelling or residence; this restriction, however, is not to be construed as preventing the erection of a separate guest house for nonrentable use in connection with the main dwelling, if such separate guest house is constructed no more than two (2) years prior to the completion of the single family residence required herein.
(c) The land areas contained in said Parcels A and B shall be for residential use only and not for purposes of any trade or business whatsoever.
. . . .
(h) No building or other structure shall be commenced, erected or maintained, nor shall any substantial addition to or architectural change or alteration therein be made, until the plans and specifications, showing the nature, kind, shape, height, materials and location of such structure have been submitted to and approved in writing by Frederick R. Menke, his successor or successors in interest, his nominee or nominees. . . .
. . . .
(k) All of the a foregoing conditions and restrictions, being made a part of the consideration for this conveyance, shall be covenants running with the land and shall be binding upon the grantees, their heirs and assigns; and any sale, conveyance, lease or mortgage made in violation of the terms hereof shall be null and void . . . .

(CBD's Mot. Summ. J. Exs. 3-4, ECF Nos. 54-4, 54-5; Pls.' Mot. Summ. J. Exs. F-G, ECF Nos. 55-8, 55-9). The same day, Mr. Menke subjected his property, Parcel C, to the same restrictions by deed. (See CBD's Mot. Summ. J. Ex. 5, ECF No. 54-6; Pls.' Mot. Summ. J. Ex. H, ECF No. 55-10). Each of the deeds were duly recorded among the Land Records of Talbot County, Maryland.

In December 1981, Hugh C. Daly and Margaret M. Daly, successors in interest to Parcel A, and the Higgins subjected their properties to conservation easements in favor of the Maryland Environmental Trust (" MET Easements" ).[2] The purpose of the MET Easements is to preserve the scenic, agricultural, and rural nature of the properties, among other things. They provide, in pertinent part:

1. This Conservation Easement shall be perpetual. It is an easement in gross and as such is inheritable and assignable and runs with the land as an incorporeal interest in the Property, enforceable with respect to the Property by the Grantee against the Grantor and his personal representatives, heirs, successors and assigns.
2. No industrial or commercial activities, with the exception of farming and activities that can be conducted from a residential or farm building without alteration of the external appearance of the building, shall be conducted on the Property. Sale of farm products by the

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Grantor to the public shall be a permitted use.

(CBD's Mot. Summ. J. Ex. 8, at 5, ECF No. 54-9; id. Ex. 9, at 4, ECF No. 54-10).

Each parcel is also accessed by a private gravel road formerly known as Riverside Drive but currently referred to as Riverside Lane. This access subjects each parcel to a 2004 Road Maintenance Agreement that provides, in relevant part:

(a) The property owners agree to maintain Riverside Drive in its present condition as a crowned, gravel lane, approximately twelve (12) foot [sic] in width, with a top chipping of crushed stone. . . .
. . . .
2. Voting. Each property owner shall vote their individual percentage interest. Matters involving routine maintenance shall require at least a seventy-five percent (75%) vote. Matters involving substantial changes to Riverside Drive, such as upgrading, widening, or converting [it] from a private road to a public road shall require unanimous consent. However, any owner who wishes to upgrade the surface of the road only may do so at their sole ...

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