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Richard C. Colandrea v. Wilde Lake Community Association, Inc., et al. No. 24, September Term, 2000 Headnote: In the case at bar, the community had a restrictive covenant that stated that no home industry could be conducted without the approval of an Architectural Committee. In respect to the Fair Housing Act, the restrictive covenant had been found to be facially neutral in a prior proceeding. The Architectural Committee denied one of the two applications for a home business submitted by the appellant. We hold that the trial court was not clearly erroneous for its determination that the Architectural Committee's decision to deny the application was reasonable. We have held, in numerous cases, that injunctive relief is appropriate for violations of private covenants. We also hold that the trial court's granting of a permanent injunction to enforce the restrictive covenant in this case was not an abuse of discretion.

Circuit Court for Howard County Case # 13-C-96-30540

IN THE COURT OF APPEALS OF MARYLAND No. 24 September Term, 2000

RICHARD C. COLANDREA

v.

WILDE LAKE COMMUNITY ASSOCIATION, INC., et al.

Bell, C. J. Eldridge Rodowsky Raker Wilner Cathell Harrell, JJ.

Opinion by Cathell, J.

Filed: November 8, 2000

Richard C. Colandrea, appellant, appealed from a decision of the Circuit Court for Howard County in favor of the Wilde Lake Community Association, Inc. (hereafter referred to as Association). Appellant alleges that the trial court erred in its ruling on the applicability of one of the Association covenants, and on its ruling that the enforcement of that covenant by the Association's Architectural Committee (hereafter referred to as Committee) was appropriate. We granted certiorari on our own motion prior to consideration by the Court of Special Appeals.1 Colandrea presents three issues, as follows: I. Whether the Circuit Court erred in rejecting Colandrea's Fair Housing Act counterclaim where it was demonstrated at trial that: (1) the Village steadfastly refused to make any reasonable accommodation for the group home; (2) the Village's enforcement of the restrictive covenant evinced certain Architectural Committee members' discriminatory intent and retaliation against Colundrea for providing housing to the disabled; and (3) the Village's selective enforcement of the restrictive covenant has a disparate impact on the disabled. II. Whether the Circuit Court erred in granting a permanent injunction which will result in the permanent closure of housing for the disabled without requiring the Village to demonstrate the four prerequisites for such relief. III. Whether the Circuit Court erred in holding that the Architectural Committee's decision to close the senior-assisted facility was reasonable, made in good faith, and was not whimsical, capricious or high-handed, where the decision was not supported by any competent evidence and in any event was a mere pretext for improper motives harbored by at least some of the Committee members. We answer each issue in the negative. The trial court neither erred nor abused its discretion. We shall affirm. Facts

We initially note that had appellant's brief contained a complete history of the litigation in respect to his efforts to maintain such facilities in the Village of Wilde Lake, we may not have granted certiorari in this case. We were led by appellant's brief to surmise that appellant's concerns in respect to the Fair Housing Act and the rights of the disabled had not previously been addressed. As we shall point out, that is not precisely the case.

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The Village of Wilde Lake is one of the unincorporated, planned, largely residential communities encompassed under the larger unincorporated, planned community of Columbia in Howard County. The various communities, including The Village of Wilde Lake are managed, i.e., governed, by community associations. These associations utilize covenants in the nature of contractual obligations that run with the land, in order to regulate the uses of the properties under their purview.2 The parties do not contest the existence of the restriction at issue, or that it is a covenant running with the land. The covenant at issue provides: Section 11.02. No profession or home industry shall be conducted in or on any part of a Lot or in any improvement thereon on the Property without the specific written approval of the Architectural Committee. The Architectural Committee, in its discretion, upon consideration of the circumstances in each case, and particularly the effect on surrounding property, may permit a Lot or any improvement thereon to be used in whole or in part for the conduct of a profession or home industry. No such profession or home industry shall be permitted, however, unless it is considered, by the Architectural Committee, to be compatible with a high quality residential neighborhood. The following activities, without limitation, may be permitted by the Architectural Committee in its discretion: music, art and dancing classes; day nurseries and schools; medical and dental offices; fraternal or social club meeting place; seamstress services. Colandrea owns two abutting properties, with existing dwellings, located at 10433 and 10461 Waterfowl Terrace in the Village of Wilde Lake. The Committee approved 10461 Waterfowl Terrace, but not 10433 Waterfowl Terrace, when considering Colandrea's applications to use the properties as senior-assisted living facilities.3 The decision of the Committee was, in relevant part, as follows: The properties are, of course, also subject to local and state government land use restrictions, such as zoning, environmental regulations, etc. Generally, when property is subject to both zoning and other governmental regulations, and conditions created by real property covenants, that property must satisfy the most restrictive of the regulations or conditions.
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In a previous case in the circuit court involving the same properties, No. 93-CA-21562, the (continued...)
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With respect to 10461 Waterfowl Terrace [Log No. 4432(b)], the Committee has approved the application, but only upon the following conditions, as previously explained at the February 27, 1996 meeting: .... With respect to 10433 Waterfowl Terrace [Log No. 4432(a)], the Committee disapproved the application at the February 27, 1996 meeting. Based upon the Committee's review and consideration of all the documents submitted in regard to the application, as well as the testimony at the Architectural Committee meetings on February 13 and February 27, 1996, it is the Committee's judgement that the incremental increase in the amount of traffic, congestion, noise, trash and waste, as well as parking problems attributable to an additional facility at that location, have had and would continue to have a detrimental impact on the residential character of the neighborhood, particularly in view of the unique configuration of the street and the surrounding properties. [Alterations in original.] After the decision of the Committee, appellant continued to operate and expressed his intention to continue to operate, a senior-assisted living facility at 10433 Waterfowl Terrace in spite of the Committee's disapproval of his application. In response, the Association instituted the present proceedings in the circuit court seeking injunctive relief, asking the court to enjoin the operation of the business at 10433 Waterfowl Terrace. That court, after discussing the evidence presented to it, granted injunctive relief. It discussed the evidence, in part, as follows and then granted an injunction: Michael Deets [a member and Chair of the Architectural Committee] . . . stated that numerous concerns were expressed by residents at the February 13 meeting, including issues pertaining to excessive trash, noise, traffic flow problems, parking problems, and

(...continued) circuit court in 1995 found that under the covenant, the senior-assisted living facilities required Committee approval. Because appellant had not previously sought that approval, the trial court remanded the case in order to give appellant an opportunity to apply. Had approval been granted for both properties, the present issue, at least as presented in this case, would not have arisen. When, however, the Committee failed to approve of the use of 10433 Waterfowl Terrace, the present litigation commenced.
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concerns about whether Mr. Colandrea or his mother actually resided on the property.[4] ... Mr. Deets testified that similar concerns were advanced at the February 27 meeting. One resident spoke about the possibility of medical waste and the lack of information concerning the storage of such waste; while another commented upon the issue of adult diapers and potential sewer problems. The Committee voted to approve the application for 10461 . . . and voted disapproval of the application for 10433. . . . .... The Plaintiff [the Association] produced as a witness, James Meale, a member of the Architectural Committee. . . . He described the February 13 meeting as follows: "There were a number of residents there. . . . There was some emotion certainly. I would say in general I found it to be reasoned. There were the general complaints against trash, traffic, congestion, lights shining at people's homes from the property. That the general feeling was that this was a residential neighborhood and that two (2) homes were disruptive to that neighborhood. The general comments, as I recall them, were that one (1) home would be alright, two (2) homes were too many." Mr. Meale described the February 27 meeting, as follows: "There were more people at that meeting, maybe twenty-five (25). There was more discussion, much of it along the same lines. I believe it was at this second meeting that the issue of medical waste and whether there was medical waste being discarded at the homes, was brought up. I remember there were several medical people there, who basically led that discussion. There was the same discussion of traffic congestion, emergency vehicles, feeling of lack of maintenance of the property during snow storms was brought up. The ambulance had to pull in across the street at one point." Mr. Meale stated that he believed observations of his neighbors was "accurate." He found their information credible. He stated that he voted for approval of the 10461 application and against the 10433 application. He explained his vote as follows:

This was important, we presume, because appellant was seeking approval of a "home" industry or business.
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"I am . . . have been involved with working with elderly my whole career. . . . I came in really believing that I would vote for two applications. I came to believe listening to a testimony and also looking at the history of the application process, the fact that Mr. Colandrea did not want to even apply for an in-home business and then when he was ordered to do so, delayed it . . . . I came to the conclusion that two (2) houses really did overtax the neighborhood. That in my view this was one (1) business with two (2) locations. It's advertised that way, it's still advertised that way and that the house at 10461, the one I supported, has a long driveway, which if properly used, could handle a good deal of the traffic or the visitors and the staff. That the house on the corner [10433 Waterfowl Terrace], the one I voted against, seemed to me to be on the corner of a moderately busy street, in a particularly congested area and that the obstructions on the street and to the neighbors and to the community were serious at that point and there wasn't much way to correct them because the driveway was small, one car length, relatively narrow and that two (2) houses were overtaxing the infrastructure of the area of this particular neighborhood." This Court finds the testimony of Mr. Meale regarding the Committee's reasons for denying the application of 10433 particularly persuasive. This Court finds that the decision of the Architectural Committee to disapprove the facility at 10433 was based upon concerns by the residents relating to trash, noise, parking, traffic, sewage and health. These concerns were heightened by a realization that Colandrea had been insensitive to his neighbors in the past and a further realization that it was unlikely that he would attempt to minimize any negative impact that would result in the future from a business operation being conducted in a residential neighborhood. In sum, the decision of the Committee was a reasonable, good faith exercise of discretion, based upon legitimate concerns regarding the impact of the facility upon the surrounding neighborhood. INJUNCTIVE RELIEF . . . An injunction will lie to enforce a restrictive covenant with respect to the use of the land conveyed, provided proper ground therefor exists. . . . Furthermore, the restrictive covenants provide for enforcement by means of injunctive relief. . . . The Defendant [Colandrea] contends that the Plaintiffs [Association] are not entitled to injunctive relief because the Plaintiff is unable to satisfy four criteria: (1) success on the merits, (2) the injury suffered if the injunction is granted is less than the harm that would result from its refusal; (3) irreparable injury, and (4) public interest. Maryland Commission on Human Relations v. Downey [Communications], 110 Md. App.
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493[, 678 A.2d 55 (1996)]; NCAA v. Johns Hopkins University, 301 Md. 574[, 483 A.2d 1272 (1984)]. Defendant's emphasis on these two cases is misplaced. They set forth a four pronged test for the issuance of an interlocutory injunction as distinguished from relief by means of a permanent injunction. This Court finds that injunctive relief is necessary in the instant case in order to maintain the integrity of a restrictive covenant, which was enforced by the Plaintiffs in a reasonable and fair manner. [Some citations omitted.] The trial court then addressed the remaining counts of Colandrea's counterclaim. In respect to Colandrea's Fair Housing Act claims, the trial court noted that: "Judge Sybert ruled [in case No. 93-CA21562 (see n.3 supra)] that the FHA did not relieve Colandrea from complying with the requirements of the covenants . . . . Thus, [Colandrea's] claim under the FHA, is restricted, as a matter of law, to events that occurred after he submitted an application for approval to the Committee." As to appellant's fair housing argument before this Court, he contends that "(2) the [Association's] enforcement of the restrictive covenant evinced certain Committee members' discriminatory intent and retaliation against Colandrea for providing housing to the disabled." The trial judge in the present litigation addressed those concerns in his written memorandum finding that there was no "targeting." In respect to the events occurring since the 1995 case, the trial court, addressing the FHA allegations, stated: There is no evidence to establish that the Plaintiffs "targeted" senior assisted living facilities in general, or Colandrea's facilities in particular, nor does the evidence suggest that the Plaintiffs have excluded such facilities from their community. To the contrary, the Plaintiffs approved Colandrea's application at 10461 and three additional facilities. Three out of four such applications submitted by persons other than Colandrea were approved. [Colandrea's] contention that the Plaintiffs have imposed arbitrary spacing requirements is simply not supported by the evidence. In fact, correspondence between the Committee and others indicate a contrary intent. (Plaintiff's exhibits 22, 23 and 24). In a FHA claim based upon an alleged failure to make a reasonable accommodation, [Colandrea] bears the burden of proving that the requested accommodation is (1) reasonable and (2) necessary (3) to afford handicapped persons
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equal opportunity to use and enjoy housing. Bryant Woods Inn, Inc. v. Howard County, 124 F.3d. 597 (4th Cir. 1997). . . . [5] . . . Phyllis Madachy, Administrator of Howard County Office of Aging, testified that there are presently sixty-three senior assisted housing facilities in Howard County, thirty-two of which are located in Columbia. . . . The current vacancy rate is approximately twenty-five percent. This Court finds that the approval of a facility at 10433 Waterfowl Terrace is not necessary to afford disabled persons equal opportunities in housing, in . . . light of the presence of a facility operated by Colandrea nearby, and the existence of adequate assisted living facilities located in Columbia and Howard County. All of the trial court's findings discussed, supra, are supported by evidence in the record. It is clear that the trial court also addressed appellant's FHA claims relating to the applicability of the covenant and its application in the instant case, and determined that the Act's provisions had not been violated by the Association's conduct following the circuit court's decision in the 1995 litigation. We agree. The trial court then addressed Colandrea's claim that the denial of approval for 10433 Waterfowl Terrace violated the public policy of the State. The court discussed, at some length, the testimony of Gene Heisler, Assistant Director of Licensing and Certification Administration, of the Department of Health and Mental Hygiene. Mr. Heisler, testifying on behalf of appellant, stated that it was the State's policy to promote affordable and accessible housing for the elderly and to encourage "aging in place," described as being able to stay in the home they have chosen as their health deteriorates. He also testified as to the public policy of the State, saying in relevant part: Q. Could you describe . . . the policies of the State of Maryland, with respect to

This case, initiated by Colandrea via his corporation, Bryant Woods Inn, Inc., challenged on Federal Housing Act grounds Howard County's refusal to approve zoning for one of the subject properties of the instant case so as to accommodate an assisted living facility for up to fifteen residents. Colandrea's claims were rejected by the United States District Court for Maryland and the United State's Court of Appeals (4th Cir.).
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assisted living homes for elderly persons with disabilities? A. Well, the policies . . . envisions a system of regulation where individuals are given their choice of where that they want to live. Also, the policies are to promote the affordable and accessible housing for the elderly. Also, to encourage the concept of aging in place . . . . Their [sic] some of the policies that we advocate. .... A. My opinion is, that the relief sought by the association is contrary to the policies of the State, in that prospective residents would be denied a choice of going into that home, so in affect, you would diminish the choices that people have for assisted living facilities. On re-cross-examination, Mr. Heisler testified: Q. But, it's not the public policy of the State of Maryland, that some specific address on a specific street should be an assisted living facility or not or how big it should be, is it? A. No, that's not the idea. The idea is that people have choices as to where they want to live. The court initially noted that this issue had already been resolved against Colandrea in the 1995 litigation when Judge Sybert had found the covenant at issue to be "facially neutral." Moreover, the trial court, in the instant case, noting the large number of senior assisted-living facilities in the area and the high vacancy rate for such units, independently found that "the Plaintiffs' conduct as it relates to the Colandrea application was reasonable and did not violate public policy of the State of Maryland." Additionally, in its fashioning of injunctive relief, the trial court created a remedy that fully comported with the State's "aging in place" preferences, one of the State's "public policy" concerns. The trial court concluded by finding that there had been no interference with appellant's contractual relationships; that there had been no evidence presented showing any adverse impact upon Colandrea's

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"contractual relations or how he was damaged as a result." The court then enjoined appellant from "admitting any new residents or filling any vacancies, as they may occur, at the senior assisted-living facility . . . at 10433 Waterfowl Terrace . . . ." RESOLUTION We shall address, as necessary, the issues resolved by the trial court. We shall note the standard of review applicable in this case, then discuss the legal nature of restrictive covenants in general, and the one at issue in particular. First, we address appellant's FHA issues. I. Fair Housing Act In prior Case No. 93-CA-21562, The Columbia Association, Inc. v. Richard C. Colandrea (Colandrea I), the Circuit Court for Howard County rendered a finding against the appellant in the case at bar. In relevant part, that trial court stated in 1995: The Plaintiffs' Complaint seeks an injunction ordering the Defendant to cease and desist operation of the Senior Assisted Housing facilities at 10461 and 10433 Waterfowl Terrace [the identical properties at issue in the case sub judice] . . . . Mr. Colandrea operates the Bryant Woods Inn, Inc. out of two residences in the Village of Wilde Lake. . . . The Plaintiffs argue that the operation of these facilities violates express terms of the restrictive covenants governing the properties, and contend that the activities therefore require prior approval from the Wilde Lake Architectural Review Committee. . . . Moreover, the Defendant has filed a Counter-Claim which alleges that the actions of the Plaintiff violate the provisions of the Fair Housing Act, 42 U.S.C.

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