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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 1691 September Term, 2003 _______________________________

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, ET AL. V.

JON MULLEN, ET UX.

_______________________________ Salmon, Kenney, Meredith, JJ. _______________________________ Opinion by Salmon, J. Filed: October 5, 2005

Jon and Sally Mullen (the "Mullens") are curators of property known as Knock's Folly, located in Kent County. curatorship provided agreement, the which is more fully would The Mullens' infra, funds

described donate the

that

Mullens

personally

necessary to restore and maintain Knock's Folly.

In exchange for

their gift, the Mullens were permitted to live on Knock's Folly rent and tax free, for the duration of their natural lives.1 In 1974, the Commissioners of Kent County acquired ownership of Knock's Folly. Kent County, in 1980, granted a conservation

easement to the Maryland Historical Trust ("MHT"), which is a body corporate of the Department of Housing and Community Development ("DHCD"), an agency of the State of Maryland. The easement

restricts the nature of the renovation and rehabilitation projects on the premises. State of Since 1990, Knock's Folly has been owned by the but is maintained under the care of the

Maryland

Department of Natural Resources ("DNR"). In the curatorship agreement entered into between the DNR and the Mullens, the Mullens acknowledged both the existence of the easement on the land and their obligation to obtain DNR's and MHT's permission for all renovation projects. The curatorship agreement

provided that failure to comply with any or all of its terms permitted DNR to terminate the agreement and thus cancel the Mullens' right to live at Knock's Folly.

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Sally Mullen was born in 1945; Jon Mullen is six years her senior.

Litigation commenced between the Mullens and the DNR (and others) in 2002. The details of that litigation will be set forth

below, but broadly speaking, the trial judge resolved the dispute between the parties by making four major rulings, viz. 1. That the deed of easement granted to the MHT was a valid legal restriction as a condition of the gift of Knock's Folly from the Kent County Commissioners to the DNR; The Knock's Folly property was subject to the easement under the curatorship agreement between the Mullens and DNR; The Mullens breached the terms of both the curatorship agreement and the easement when they built certain structures on Knock's Folly without the approval of either the DNR or the MHT; and Despite their agreement, the from enforcing spelled out in breach of the curatorship MHT and DNR were enjoined some, but not all, rights the Agreement.

2.

3.

4.

MHT and DNR filed an appeal; the Mullens filed a timely crossappeal.

I.

FACTUAL AND PROCEDURAL BACKGROUND

Knock's Folly is a seventeen-acre parcel of land located on Turners Creek Landing Road in Kent County. The property is a

improved by a main house composed of two adjoining structures: one and one-half story log house that was built in

1753

(approximately) and a three-story federal-style brick townhouse built at the dawn of the nineteenth century. National Register of Historic Places. The house is on the

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Knock's Folly was deeded to the Commissioners of Kent County in 1974. Kent County, in 1980, granted a conservation easement in

gross in the property to the MHT, with the goal of promoting and preserving character." "Heritage Knock's Folly's "historic, aesthetic and cultural

The easement states that the MHT is funded by the Conservation and Recreation Service and Maryland

Historical Trust."

MHT agreed when it accepted the easement to

"comply with all requirements of the Heritage Conservation and Recreation Service made pursuant to the National Historic

Preservation Act of 1966 . . . ."

Kent County, in turn, agreed

that it would not "cause, permit, or suffer" any building or other structure on the property without the consent of the MHT. The

conservation easement further provided that it was binding upon the grantor's (Kent County's) successors and assigns." On November 10, 1990, the Mullens entered into a Resident Curatorship Agreement ("Agreement") with the DNR in which they were designated as curators of Knock's Folly. Under the DNR's

curatorship program, private citizens agree to donate personally the funds necessary to restore, renovate, and maintain historic properties. In exchange, the state grants the curators tax

benefits, as well as a life estate in the premises, subject to certain conditions. The Agreement contained strict guidelines regarding

restoration and renovation work on the property.

And, the Mullens

agreed that in performing such work they would adhere to the Secretary of the Interior's "Standards for Rehabilitation and 3

Guidelines Standards").2

for

Rehabilitating

Historic

Buildings"

("the

The Agreement also contained the following clause: The [Mullens] acknowledge that the Premises are subject to a historic preservation easement held by [MHT]; they furthermore acknowledge that all restoration work they perform on the premises is subject to approval by [MHT]. (Emphasis added.) A copy of MHT's historic preservation easement was attached to the Agreement. The Agreement further provided that the Mullens

were required to contact MHT "prior to undertaking any excavation on the [p]remises" and "abide by [MHT's] recommendations . . . to mitigate anticipated disturbance" from such work "provided that such recommendations are received in writing by the Curators . . . within fourteen (14) calendar days from the date the Curators first contact [MHT]." In addition, the Mullens agreed that all restoration work would be in accordance with a detailed schedule ("the Schedule"),

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The Standards provide, among other things: 1. A property shall be used for its historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment. The historic character retained and preserved. of a property shall be

2.

* * * 9. New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment.

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which was a list of projects that the Mullens were expected to complete within five years of the date of signing the Agreement. The Schedule anticipated that the Mullens would contribute at least $315,047 to restore Knock's Folly. Although the Agreement

contained a clause that allowed the Mullens to make "reasonable adjustments as work progress[ed]," without DNR's prior approval, any adjustments that "substantially alter[ed] the original intent and scope of the Schedule" required the prior approval of the DNR's Supervisor of Cultural Resources Management. The Agreement also contained a termination clause that

provided that DNR could terminate the Agreement upon sixty days' notice if the Mullens failed to "comply with any and/or all of [its] terms and conditions." The relationship between the Mullens as curators and the DNR and the MHT operated smoothly for the first several years after the Agreement was signed. During this period, the Mullens

substantially completed all the restoration work required on the historic home. As the circuit court was later to find,

[d]uring the term of the Agreement, the Mullens had opportunity on occasion to seek prior approval for projects at Knock's Folly that had not been contemplated in the Schedule. On at least one such occasion regarding the alteration to an interior staircase, the Mullens submitted detailed plans and specifications to MHT, through DNR, as requested prior to initiating the project. On this occasion, the MHT Board of Trustees reviewed the staircase plans submitted by the Mullens, approved the plans, and notified the Mullen[s] in writing, through DNR, that the plans had been approved.

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. . . On numerous occasions, MHT provided the Mullens with written instructions and notifications regarding their obligations to seek MHT prior approval for projects at Knock's Folly that were outside the scope of the Schedule. . . . On September 9, 1998, Mr. Mullen met with representatives from MHT, DNR, and the Critical Areas Commission3 to discuss

construction of a pool, a brick and iron fence, and a garage. Rodney Little ("Little"), the State historic preservation officer and director of the MHT, was present at a portion of the meeting. Little approved the construction of the pool, garage, and gates4 on the condition that the gates would be built as a plain iron fence without brick posts rather than "wrought iron and brick," and as long as the MHT Easement Committee could review the final plans for the pool and the garage.5 The Mullens never submitted these plans

to MHT after the September 1998 meeting. Sometime between April and June 1999, the Mullens constructed a three-bay garage. The garage was located a short distance from It was forty-feet long, twenty-four-feet

the historic main house.

wide, and one and one-half stories in height and included an apartment on the second floor.

3 Knock's Folly bordered critical areas of the Chesapeake Bay. Therefore, any improvements on the exterior of the property had to be approved by the Critical Areas Commission.

Pictures in the record extract show two rather large brick pillars and one iron gate. Nevertheless, the parties and the trial judge refer to the structure as "the gates," and we have done so for purposes of consistency. Mr. Little, at trial, denied that he gave even conditional approval, but the trial judge found otherwise.
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Ross

Kimmel

("Kimmel"),

the

DNR

Supervisor

of

Cultural

Resources and Management, inspected the premises on June 23, 1999. At that time, construction of the garage was complete. Kimmel

noted on his report that the garage had been built, but his report did not mention the new gates. In his report, Mr. Kimmel commented

that there were no problems to be corrected at that time and that the property looked "better than ever." He did not, however,

notify the MHT immediately about the "improvements." In November 2000, Little notified the Mullens that MHT had learned about the construction of the garage and asked that the Mullens explain why they had built the structure without MHT's prior consent. Mr. Mullen responded in a letter dated November 17, 2000, in which he said that the garage was built to replace a shed that they had been using to store equipment needed to maintain the premises. He further explained that he followed the suggestions

regarding the location of the garage and its design structure given to him at a "fall" 1998 meeting.6

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The complete text of the letter was as follows: Over two years ago in the fall of 1998, I met with you, Sarah Taylor Rodgers, Charles Mazurek, Mary Owens[,] and Mike Day at Knock's Folly to work out the details regarding our swimming pool and the removal of an existing shed. The shed was used to store my tractor, mowing equipment, etc., and measured approximately 24 feet by 50 feet. It was agreed at that meeting that we could proceed with the pool construction, removal of the existing garage and put up a replacement building. It was suggested that we locate the new building between the pool and Turners Creek Road. The location of the new structure was dictated largely by the approximately 250 ft. set back requirement due to the continuous steep bank on the water side of the property. It was also determined that this location was sufficiently distant from the house as not to interfere or (continued...)

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The MHT inspected the new garage and gates and, in a January 25, 2001, letter to DNR said: [T]he scale, design, and materials are not appropriate for the site, and therefore in violation of Standard #9 of the Secretary of the Interior's Standards for the Rehabilitation of Historic Properties [and that the] new construction would not have been approved even if it had been submitted for review in accordance with the terms of the easement. On February 9, 2001, DNR directed the Mullens to "raze and remove" the garage and gates because they were in violation of the MHT easement. During the next eleven months, the parties were unable to resolve their difference concerning the "improvements." On January 10, 2002, DNR wrote a letter to the Mullens

notifying them that the Agreement would be terminated if the unauthorized improvements were not cured within sixty days. The parties attended a meeting in the spring of 2002 to attempt to settle disputed matters. The "raze and remove" deadline was extended until June 1, 2002. The DNR offered to resolve the

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(...continued) detract. The suggestion was made that a metal building was not desirable and I should construct a wooden structure incorporating design features compatible with the old house. I have taken great pains to follow your guidelines: 1. beaded siding was used to match the cabin 2. roof pitch and dormers to reflect the period 3. exterior proportions fitting with the period. Sally and I are saddened to find that our efforts to do the right and honorable thing at Knock's Folly continues to find disapproval within the Trust.

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matter "on the condition that Mullens either raze and remove the garage, or take off one bay from the garage and move the remaining structure to one of three alternative locations." rejected the offer. The Mullens filed a complaint in the circuit court against DNR, Department of Housing and Community Development (DHCD),7 and Governor Parris Glendening on May 10, 2002. Plaintiffs sought to The Mullens

enjoin the defendants from (1) removing any new structures on Knock's Folly, (2) disturbing the Mullens in the quiet enjoyment of their life estate on Knock's Folly, or (3) terminating the

Agreement.

In their complaint, the Mullens contended that they First, the deed of

were entitled to an injunction for two reasons.

easement granted to the MHT had been "extinguished" by the doctrine of merger in 1990, when the owner of the servient estate (the State of Maryland to the use of the DNR) and the grantee (MHT, an agency of the State of Maryland) of the easement became one and the same. Second, even if the easement granted to the MHT was still legally valid, the Mullens did obtain prior approval of the MHT before it commenced construction of the garage and gates. On the same date that they filed their complaint asking for an injunction, the Mullens filed a "Motion for Declaratory Judgment," in which they framed the question to be resolved as: Does MHT possess the approval authority over work done at the Subject Property based on the easement that they were granted in 1980?

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MHT is a body corporate of DHCD.

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The court was asked to answer that question in the negative and declare that the easement granted by Kent County to the State of Maryland-MHT, was subsequently extinguished by merger when Kent County conveyed [Knock's Folly] in fee simple to the State of Maryland-DNR. DNR and DHCD both filed answers to the Mullens' verified complaint and plaintiffs' "motion" for declaratory judgment. DNR

also filed a counterclaim for declaratory judgment in which it asked the court to declare: 1. "[T]he MHT Deed of Easement is a valid legal restriction as a condition of the gift of Knock's Folly from the Commissioners of Kent County to DNR"; "[T]he MHT Deed of Easement is a valid legal restriction as part of DNR's agreement to accept a gift of land under State law"; "Knock's Folly is subject to the terms of the MHT Deed of Easement under the Mullens' Curatorship Agreement with DNR"; "[T]he Mullens are required to obtain the approval of MHT for all restoration work on the Premises under their Curatorship Agreement with DNR"; "[B]y executing the Curatorship Agreement, the Mullens waived their right to challenge the validity of the MHT Deed of Easement"; and "[B]y executing the Curatorship Agreement, the Mullens waived their right to challenge their acknowledgment that all restoration work is subject to approval by MHT."

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3.

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Governor Glendening, by counsel, filed a motion to dismiss the complaint and the declaratory judgment action filed against him. 10

He asserted that the Mullens had failed to state a claim for which relief could be granted as to him. The Mullens opposed the motion,

but the court subsequently granted it. The Mullens filed a motion for summary judgment on August 30, 2002. Movants requested, among other things, that the court find

that MHT's easement was extinguished by merger when the State acquired title to Knock's Folly in 1990. DNR and DHCD filed an

opposition to the Mullens' motion, as well as a joint motion for summary judgment on September 19, 2002. In their joint motion, the defendants asked the court to rule that they were entitled to a declaration of all the rights requested of the court in DNR's counterclaim for declaratory relief. The Mullens subsequently

filed a motion to strike DNR's and DHCD's opposition and their joint motion for summary judgment because, purportedly, the

opposition and motion were filed untimely. On September 30, 2002, the court denied the Mullens' motion to strike and granted DNR's and DHCD's joint motion for summary judgment regarding DNR's counterclaim for declaratory relief. The

court declared that Knock's Folley was subject to the MHT easement. The court also declared, inter alia, that the Mullens waived their right to "challenge their acknowledgment that all restoration work at Knock's Folly was subject to approval by MHT" when they signed the Curatorship Agreement.8

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The motion for summary judgment filed by the Mullens was denied.

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II. A. A bench Trial

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