Relating to Real Estate

In this issue:

• The Dangers in Selling or Managing Condominium Units
• Title Insurance Company's Liability Limited to Terms of Its Policy
• Environmental Enforcement and "Unilateral Orders"
• The Future of Development on Septic Systems in Maryland
• Public Did Not Acquire Rights to Use Beach on an Island in the Magothy
• Landowner Had No Express or Implied Easement Over an Old Farm Road
• Landowner Had an Easement By Necessity Even Though It Was Not Used for 90 Years
• Some of Maryland's Law of Easements
• Speaking of Real Estate: Awards, Recognition, Presentation, and Article

The Dangers in Selling or Managing Condominium Units

Having any involvement in the sale of a condominium unit is becoming more and more dangerous in Maryland. On April 30, 2012, the Maryland Court of Appeals issued an opinion in the case entitled MRA Property Management, Inc. v. Armstrong, 426 Md. 83 (2012), which involves a suit by purchasers of condominium units at Tomes Landing in Cecil County. The project was managed by MRA Property Management, Inc. for many years. The Maryland Condominium Act requires that the seller of a unit being resold provide a “resale certificate” to the purchaser which discloses any known violations of health or building codes and also contains the current condominium budget and details of any reserve accounts. In 25 resales of condominium units between 2000 and 2004, MRA issued certificates stating there were no known violations of health or building codes at the time and provided current budgets which disclosed no shortage of reserves.
In December 2004, MRA notified all owners at Tomes Landing that a special assessment was needed to correct building issues due to water and moisture penetration. A total of almost $4 million was needed for the repair work. MRA had obtained a replacement reserve study in 1999 which stated that many retaining walls were improperly constructed and repairs would be needed. The owners who bought between 2000 and 2004 sued MRA and the condominium association for violation of the Maryland Consumer Protection Act, alleging that false and misleading misrepresentations in the budgets provided to the purchasers constituted “unfair or deceptive trade practices in the sale of consumer realty.”
The trial court granted summary judgment and large damages in favor of the owners. The matter was argued before the Court of Appeals in April, 2008, but it was not until October of 2011 that a decision was issued, over three years after the argument before the Court. This is just another example of the Court of Appeals’ dereliction of its duty to render reasonably prompt decisions to litigants who appear before it.
Although an opinion was issued on October 25, 2011, that decision was withdrawn, and the matter was argued again in March of 2012. This time, the Court issued its decision in a proper time frame, on April 30, 2012. The judgment which had been granted to the purchasers was again reversed, and the matter was remanded for trial. Bear in mind that we are in 2012, and all of the plaintiffs bought their condominium units between 2000 and 2004. Now after 8 to 12 years from the time the owners purchased, the matter is being sent to the trial court for a trial and more appeals. One wonders how the plaintiff purchasers feel about the Maryland legal system.
More important, as a general matter, is the potential liability of management companies for condominiums who routinely issue resale certificates because such a certificate is needed for every resale of a condominium unit in this state. A contract for resale of a condominium unit cannot be enforced if a resale certificate is not given to the purchaser. One can expect that management companies will demand indemnification and legal defense from the condominium associations they manage because of the need for such resale certificates. One can predict many kinds of mischief arising out of this long-delayed decision in the MRA Management case.
For questions about this, please contact David Fishman at (410) 576-4234.

Title Insurance Company's Liability Limited to Terms of Its Policy

In an opinion filed on February 12, 2012, the Maryland Court of Special Appeals held that an insured under a title insurance policy did not have a tort cause of action against the title agents or title insurance company for a negligently performed title search. Columbia Town Center Title Co. v. 100 Investment Limited Partnership, 203 Md. App. 61 (2012) (Kenney, J.). The insurer’s liability was limited to the terms of the policy.
The insured partnership in Columbia Town Center purchased a parcel of property that had been previously conveyed to a third party medical practice. The title insurance companies that issued policies for the property did not discover or report the medical practice's deed to the property. The partnership only learned of the prior recorded conveyance years later, after it had sold the property and the medical practice was preparing to sell the land to another purchaser. To cure any title defect in its own conveyance, the partnership negotiated the purchase of the parcel from the entity that purchased it from the medical practice.
When the medical practice learned of the conflicting sales of the property, it brought a trespass suit against the partnership in Maryland district court and received an award of nominal damages. The title insurance company also filed suit for declaratory judgment in the U.S. District Court for the District of Maryland, seeking a determination of its liability under the policy. The federal district court granted summary judgment in favor of the partnership, awarding around $200,000 in damages for the cost of purchasing the parcel and for litigation expenses in connection with the trespass suit. On appeal, the Fourth Circuit affirmed in part and reversed in part, holding that while the title insurer was responsible for reimbursing the partnership for its defense costs in the trespass suit, it had no obligation to compensate the partnership for the cost of purchasing the property. Chicago Title Ins. Co. v. 100 Inv. Ltd. P'ship, 355 F.3d 759, 766 (4th Cir. 2004) (Niemeyer, J.). The Court reasoned that under the terms of the policy, the insurer was only required to indemnify the insured for loss or damage occurring up to the time that the partnership conveyed the property. Because the partnership transferred the property by special warranty deed, it could not be liable to the purchaser for any title defect that it did not cause, and coverage under the policy ended with the conveyance. Thus, the partnership's post-sale purchase of the parcel was not a loss covered by the policy.
The partnership then brought suit against and two title companies and the title insurer in the Circuit Court for Howard County, alleging that the title companies negligently failed to discover and report the deed to the medical practice during the course of their title searches and that the insurer was vicariously liable for its agents' negligence. The circuit court initially determined that the case was barred by collateral estoppel because of the prior federal suit, and granted summary judgment in favor of the title companies and the insurer. The Court of Special Appeals reversed in an unreported opinion, concluding that the tort suit was not barred by the prior declaratory judgment action.
On remand, the circuit court found that the title companies were liable for negligence in connection with the title searches and that the insurer was vicariously liable. It entered a judgment in the amount of the costs incurred by the partnership for the purchase of the parcel.
In the second appeal, the Court of Special Appeals reversed the circuit court again, holding that the title companies could not be held liable for negligence because they did not owe any tort duty to the insured independent of the title policies. The Court reasoned that the "title insurer does not guarantee the state of the title. Instead a title insurance policy is a contract of indemnity.” Id. at 90. It observed that “conducting a title search as part of the risk assessment in issuing a title insurance policy is not the same as an attorney rendering a title opinion on which the client is going to rely.” Id. at 84. The Court concluded that “an insurer’s liability for a faulty title search ordinarily cannot be divorced from the title insurance policy.” Id. at 99. The Court referred to a policy provision expressly limiting liability to the terms of the policy. Id. at 102. Citing Maryland case law, the Court noted that “[a]ny clause in an insurance contract restricting liability or coverage will be held enforceable unless contrary to ‘the public policy of this State, as set forth in…the Insurance Code’ or another statute.” Id. at 99. Thus, the Court concluded that the title companies could not be held liable in tort for an undisclosed title defect, and the insurer could not be held vicariously liable for its agents' negligence.
Judge Meredith authored a dissenting opinion in which he opined that the title companies should be subject to a cause of action for negligence in connection with their title services. The dissent reasoned, in part, that title examination and deed preparation are "services that have historically been performed by attorneys." Id. at 106. Thus, the dissent opined that the title companies "should be held to the same duty of care that would have applied if the [partnership] had hired a licensed attorney to provide those services." Id.
For questions about this, please contact Valerie Albrecht at (410) 576-4112.

Environmental Enforcement and “Unilateral Orders”

The Environmental Protection Agency and the Maryland Department of the Environment frequently rely upon so-called “administrative orders” to enforce environmental laws. Administrative orders, in contrast to the better known judicial orders, do not require the immediate involvement of a court or jury.
An administrative order is issued by an agency official – typically the same official who decided to make the accusation of a violation. In some ways this looks like the official is acting as both the prosecutor and the judge. However, typical administrative orders cannot be directly enforced without a second step – generally a hearing before an administrative law judge.
For example, the Department of the Environment may order a company to cease the storage of a material which the Department believes is a hazardous waste. Failure to comply with the order can result in draconian fines, as much as $25,000 per day that the material remains in storage (and even larger penalties may apply for some types of violations). However, the recipient of the Order can request a hearing, and thus defer any penalties until the hearing is held.
Defendants frequently complain because the hearing is held before an administrative law judge – an official in the Office of Administrative Hearings – rather than a traditional court. There is, nevertheless, a right to a hearing.
However, EPA also has claimed the authority to issue so called “Unilateral Administrative Orders” for certain types of offenses. Unilateral orders provide a much less satisfactory method for challenging the agency’s requirements. In one of these areas, wetlands enforcement, the Supreme Court recently ruled that EPA had gone too far.
The Idaho family in Sackett v. EPA, 132 S. Ct. 1367 (2012) had deposited fill dirt on a low spot on their farm. EPA inspected the site and concluded that the low spot was a protected wetland. The Sacketts hired their own experts who concluded that the low spot was not a wetland regulated by EPA and therefore the fill was legal. EPA responded by issuing a unilateral order to the Sacketts requiring them to excavate the fill – an extremely expensive undertaking.
Here is where a unilateral order starts to enter Alice in Wonderland territory. The Sacketts asked to appeal the unilateral order. EPA responded that there was no right to appeal such an order. According to EPA, the Sacketts could not challenge the validity of the wetland determination until and unless EPA brought an action for penalties under the Order. If, in the meantime, the Sacketts did not comply, EPA would continue to access penalties of $75,000 per day.
This left the Sacketts in an incredible box. They could comply with the Order – but that meant excavating fill that the Sacketts’ experts said was perfectly legal. The alternative was to wait for EPA to act – something that could quite easily take a year or more. While waiting, EPA would access huge fines. If EPA ultimately prevailed on the wetlands issue, then the Sacketts would have, quite literally, bet their farm on the outcome.
(The Sacketts’ situation was not unusual. EPA frequently issues Unilateral Orders – or threatens to do so – as a way of forcing parties into “voluntary compliance.” Faced with the huge potential penalties, most targets comply regardless of the strength of their arguments.)
Although this process had been upheld by many lower courts, the Supreme Court struck down the use of unilateral orders in Clean Water Act cases such as wetlands enforcement. As the Court’s opinion stated, “There is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review.”
However, key to the Court’s opinion was that the Clean Water Act did not contain an express Congressional authorization of the unilateral order procedure. EPA had simply created the procedure in its regulations. EPA purported to find authority for the program in general statutory language about the importance of wetlands and strong enforcement.
The problem with this result is that there are other environmental statutes that do appear to provide express authority for unilateral orders. It is not clear whether those provisions do or do not survive the Sackett decision. Foremost among these statutes is the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), more commonly known as the Superfund Act.
CERCLA does seem to say that EPA can issue unilateral orders requiring companies to participate in cleanups and the companies cannot file immediate challenges to the orders. Instead, EPA can – as it did in the Sackett case - simply accrue penalties against the company for non-compliance until EPA is ready to provide a hearing.
The problem is especially acute in CERCLA cases because there are frequent disputes about CERCLA liability. For example, it is not uncommon for EPA to allege huge liabilities based upon 20 year old records found in the offices of a defunct disposal company. But the recipient of a unilateral order cannot challenge the accuracy of the old records until and unless EPA brings an action for penalties. Every day that the recipient delays complying with the order means exposure to thousands of dollars in additional fines. As a result, most companies end up spending the money to ‘voluntarily’ comply with the order even if the company disputes the validity of the old records.
Until and unless the Supreme Court takes up this issue, companies will continue to face this Hobson’s choice. It is crucial, therefore, to take seriously any request for information received from an environmental agency. If your response is incomplete or misinterpreted, you may never get a “day in court” to correct the record.
For questions about this, please contact Michael Powell at (410) 576-4175.

The Future Of Development On Septic Systems In Maryland

On May 2, 2012, Governor Martin O’Malley signed into law the Sustainable Growth and Agricultural Preservation Act of 2012, Chapter 149 of the Laws of Maryland of 2012 (the “2012 Act”), which significantly reduces the ability for major residential subdivisions to be constructed with on-site sewage disposal systems, commonly known as septic systems. Although the 2012 Act is believed to be one of the toughest laws in the Nation in terms of imposing State control over local land use decisions, the Maryland Department of the Environment (MDE) recently proposed new regulations that go even farther than the new law. The proposed regulations would essentially ban the use of septic systems unless home builders install expensive new equipment to remove nitrogen. This article summarizes the new law and the proposed regulations.
Background of the 2012 Act
The 2012 Act was the culmination of more than a year of efforts to pass a law to limit new residential development on septic systems in Maryland, which are one source of nitrogen to the Chesapeake Bay. When a version of the law didn’t pass last year, a task force was created to study the current and future impact of septic systems on land use patterns and smart growth. The task force met several times during the last half of 2011 and issued a report in December 2011 providing its recommendations. The task force recommendations formed the basis for the bill that became the 2012 Act. Although the original version of the bill would have added significant oversight and control over the local subdivision process to MDE and the Maryland Department of Planning (MDP), the final version reflects a compromise that retains much of that control in the local jurisdictions.

The Sustainable Growth and Agricultural Preservation Act of 2012
The 2012 Act authorizes local jurisdictions to adopt growth tier area designations that determine where residential subdivisions can be made and whether septic systems may be installed. The law establishes four “Tiers” with various growth restrictions applicable to each Tier. Tier I consists of mapped locally designated growth areas and priority funding areas served by public sewerage systems. Tier II areas are mapped locally designated growth areas or areas that are planned to be served by public sewerage systems and in the municipal growth element. All major subdivisions in a Tier II area must be served by a public sewer, but minor subdivisions may be served by septic systems.
Tier III areas are not planned for sewerage service, not dominated by agricultural or forest land, and not planned or zoned for land protection or conservation. The term “dominated by agricultural or forest land” is not defined. Tier III areas are (1) municipal corporations not served by a public sewerage system; (2) rural villages; (3) mapped locally designated growth areas; or (4) areas planned and zoned for large lot and rural development. Major and minor subdivisions in a Tier III area may be served by septic systems. Major subdivisions in Tier III may not be approved unless the local planning board has held a public hearing and recommended approval of the major subdivision.
Tier IV areas are also not planned for sewerage services. They are: (1) areas planned or zoned by a local jurisdiction for land protection or conservation; (2) areas dominated by agricultural lands or other natural areas; or (3) rural legacy areas, preservation areas, or areas subject to conservation easements with a governmental entity. Tier IV growth areas are restricted to minor subdivisions unless the subdivision and zoning requirements in a local jurisdiction’s Tier IV areas result in an actual overall yield of not more not than one dwelling unit per 20 acres as verified by MDP.
Local jurisdictions have until December 31, 2012 to adopt the growth tiers and to change their definitions of major and minor subdivisions, provided that any new definition of a minor subdivision does not exceed seven new lots. Although the adoption of growth tiers is technically voluntary, a local jurisdiction may not authorize a residential major subdivision served by septic systems, community sewerage systems, or shared systems until the local jurisdiction adopts growth tiers.
The focus of attention for future development decisions will be the Tier III areas. One issue will be how the local jurisdictions define areas “dominated by agricultural or forest land” through their mapping process. Landowners, developers, builders, consultants and attorneys should closely monitor the local mapping process and the local implementation of the tiers.
Projects may be grandfathered from the new law if they have: (1) filed a submittal for preliminary plan approval by October 1, 2012; (2) applied for a percolation (perc) test by July 1, 2012 and submit for preliminary plan approval within 18 months of perc approval; or (3) in jurisdictions that do not provide year-round perc testing, provide certain documentation of site planning in anticipation of perc tests by July 1, 2012, submit an application for a perc test in the next available perc season, and submit for preliminary plan approval within 18 months of perc approval. All projects must obtain preliminary plan approval by October 1, 2016. To take advantage of these grandfathering provisions, property owners will need to quickly assess whether impacted property can qualify.
Proposed New Regulations
Five days before the 2012 Act was signed into law, MDE announced proposed new regulations that would require almost all new septic systems and some replacement systems to incorporate best available technology (BAT) for removal of nitrogen. Under the proposed regulations, septic systems must incorporate BAT in connection with any new construction in either the Chesapeake Bay or Atlantic Coastal Bays Watersheds or in any watershed of a nitrogen impaired body of water. BAT must also be used in any replacement septic system to serve a property in either the Chesapeake Bay critical area or the Atlantic Coastal Bays critical area. Furthermore, the new regulations would require that all new and existing BAT systems be maintained and operated for the life of the system through one of the following measures: (1) a responsible management entity established by MDE or a local government; (2) the implementation of a renewable operating permit system; or (3) a service contract between the property owner and a certified service provider. The proposed regulations also require each BAT system to be inspected at least annually.
Some lawmakers have criticized the proposed regulations as attempting to do an end-run around the legislature. The proposed regulations were published in the Maryland Register on June 1, 2012. Although no public hearing on the draft regulations has yet been scheduled, MDE is accepting comments until July 15, 2012.
Conclusion
The recent legislation and proposed new MDE regulations will significantly limit the development of residential subdivisions on septic systems in Maryland. It is important to consult promptly with attorneys and consultants about whether particular projects can qualify for grandfathering by the deadlines. Interested parties should also engage with local jurisdictions during the mapping process to help ensure that it is done correctly.
For questions about this, please contact Margaret M. Witherup (410) 576-4145, Jonas A. Jacobson (410) 576-4007, or Victor A. Kwansa (410) 576-4029.
Editor’s note: This article originally appeared in the Bar Bulletin on June 15, 2012 and is republished with permission from the Maryland State Bar Association, Inc.

Public Did Not Acquire Rights To Use Beach On An Island In The Magothy

In Clickner v. Magothy River Association, Inc., 424 Md. 253, 35 A.3d 464 (2012), the Court of Appeals held that although the public could acquire prescriptive rights over a privately owned beach adjoining an inland waterway, under the facts of the case the public did not acquire such rights. The Court held that because the beach was unimproved and “in a general state of nature” the presumption was that the public’s use was with permission. When the plaintiffs could not overcome this presumption, they were unable to establish that their use was adverse or that they had a prescriptive easement.
The property that was the subject of the Clickner case is a seven-acre island known as Dobbins Island, which is in the Magothy River. When it was surveyed in 1769 it was 12 acres, and it was then granted to William Gambrel by patent. The island was conveyed to George Dobbin and his family in the 1850s, it was subsequently conveyed to Dutchship Island, LLC, and finally David and Diana Clickner (the Appellants) bought Dobbins Island in 2003. The Clickners planned to build a house on the island, but until now it has been unimproved.
On July 10, 2008, six individuals and the Magothy River Association, on behalf of themselves and the general public, filed a complaint in the Circuit Court for Anne Arundel County which sought to establish a public right “to continue to use the island as they have used it in the past.” At a hearing, witnesses testified that over the years people used Dobbins Island for picnicking, mooring, sunbathing, and swimming, but none of them was ever given permission to use the island. Many assumed that the land was available for public use because there were not any 'No Trespassing' signs on it until the Clickners posted some in 2006. In that year, the Clickners obtained a permit and constructed a 1,200 foot fence along the shoreline above mean high tide.
The trial court issued a Memorandum Opinion and Order dated May 7, 2010 which held that the public had not obtained an easement through implied dedication, custom, or public trust, but that the public had met the requirements necessary to establish a prescriptive easement. Therefore, the judge ordered the Clickners to remove the fence that interfered with the public easement.
The Clickners appealed. The Court of Appeals issued a writ of certiorari on its own initiative and reversed the order of the Circuit Court for Anne Arundel County.
There are three elements for a prescriptive easement – adverse, exclusive, and continuous for at least 20 years. The “adverse” requirement means that the use of the easement must be without license or permission of the landowner. The “exclusive” requirement typically means “the right should not depend for its enjoyment upon a similar right in others, and that the party claiming it exercises it under some claim existing in his favor, independent of all others.” SeeCox v. Forrest, 60 Md. 74 (1883). However, in the context of a public easement, the Clickner court held that “[t]he use need not be exclusive to the individual, but exclusive to the public as a whole in the sense that the public used the property in common under a claim of right, without seeking permission from the owner or otherwise subordinating its use to the owner’s will.”
Although not mentioned in the Clickner case, in order to satisfy the requirement that the use be “uninterrupted and continuous” for 20 years, the easement need not be used every day, but “the claimant must exercise the right more or less frequently according to the nature of the use to which enjoyment may be applied.” SeeTurner v. Bouchard, 202 Md. App. 428 (2011).
Key to the trial court’s holding that the public had a prescriptive easement was the court’s application of the general presumption of adverse use. The court then determined that the Clickners had failed to meet their burden to show that the public use of the beach was by permission (which would have nullified the adversity requirement). Therefore, the trial court found that all of the requirements for a prescriptive easement were met.
The Court of Appeals acknowledged the rule stated in Cox v. Forrest and in many subsequent cases that if someone has used a right of way for 20 years, it is presumed that such person has a claim of right to it. However, the Court cited the “woodlands exception” to this rule, which is that “when an easement is claimed on land that is unimproved or in a general state of nature, there is a legal presumption that the use is by permission of the owner.” The Court determined that the beach on Dobbins Island was “in a general state of nature” and thus subject to the woodlands exception.
Appellants were not able to carry the burden to show that the use by the public was not permissive. Under Maryland law, “[a]s a general rule, permissive use can never ripen into a prescriptive easement.” Instead, the Court held that the public’s use was under a license. This means that the public could not be considered trespassers when they used the beach. However, the Clickners were free to revoke the license, and they had done so. Therefore, the Court of Appeals reversed the order of the trial court and denied the public any right to the beach on Dobbins Island.
For questions about this, please contact Ed Levin (410) 576-1900.
Editor’s Note: This article was part of an article that appeared in the Daily Record on May 14, 2012. The author wishes to thank Cheri Wyron Levin for her editorial advice and suggestions on this article.

Landowner Had No Express Or Implied Easement Over An Old Farm Road

Gregg Daniel Bacon, the appellant in Bacon v. Arey, 203 Md.App. 606 (2012), owned two acres of land in Sandy Spring, Montgomery County and wanted the Circuit Court for Montgomery County to declare that he had an easement over an old farm road to reach a public road. He claimed the right to either an express easement or an easement by implication. The trial court declined to grant the relief that Bacon requested after considering four amended complaints that he filed, and the Court of Special Appeals affirmed.
No Easement Existed
The Court held that Bacon did not have an express easement because there was no language in the deed to him indicating that there existed an ingress/egress easement serving his property. The fact that other deeds between the parties to the litigation included reference to the Farm Road was not sufficient to create an express easement for Bacon’s property.
Additionally, the Court determined that Bacon had not alleged facts necessary to establish an easement by necessity. In order to create an easement for necessity, a landowner must plead that all of the properties in dispute had a common owner at one time, how the properties were divided, and that ingress and egress over the alleged easement was necessary at the time of the division of the property. Because Bacon did not make these allegations in any of his amended complaints, the trial court properly dismissed his action.
Statute of Limitations
Bacon’s amended complaints also contained allegations of tort and constitutional claims. Both the trial court and the Court of Special Appeals dismissed these claims because, among other reasons, they were barred by the applicable statute of limitations. On January 11, 2001 a plat was recorded that had the effect of terminating the use of the farm road to the north as a means of ingress and egress to and from the property that Bacon acquired. Bacon recorded the deed to his property on October 1, 2002, and the Court held that he was then on constructive notice of everything in the land records that affected his property. It also found that no exceptions applied, such as the discovery rule, fraudulent concealment, or the continuing harm theory. Therefore, the statute of limitations for the tort and constitutional claims that Bacon alleged expired on October 1, 2005, and the statute of limitations for the slander of title claim expired on October 1, 2003. Because Bacon’s original complaint was not filed until June 9, 2006, it was not timely.
Surveyor’s Duty of Care
Finally, the Court of Special Appeals considered Bacon’s claim that the surveyor, MHG Group, had violated a duty of care to Bacon by not preparing an accurate survey. MHG Group had been hired by another defendant who owned property adjacent to Bacon’s. The Court of Special Appeals stated “a surveyor of a disputed boundary line does not owe a duty of care to a non-reliant third party adjacent landowner. A surveyor, therefore, cannot be held liable to such a plaintiff.” Quoting Carlotta v. T.R. Stark & Associates, Inc., 57 Md. App. 467, 472 (1984). The Court pointed out that a Georgia case reached a contrary result, but it did so because Georgia has a statute pursuant to which registered land surveyors assume responsibility to the public for the accuracy of the work that they certify. Maryland has no such law. Therefore, the Court found that MHG Group owed no duty of care to Bacon.
For questions about this, please contact Ed Levin (410) 576-1900.
Editor’s Note: A portion of this article was part of an article that appeared in the Daily Record on May 14, 2012. The author wishes to thank Cheri Wyron Levin for her editorial advice and suggestions on this article.

Landowner Had An Easement By Necessity Even Though It Was Not Used For 90 Years

In Purnell v. Beard & Bone, LLC, 203 Md.App. 495, 38 A.3d 534 (2012), the Court of Special Appeals held that the owner of 51 acres of landlocked land in Worcester County had a 12 foot wide easement by necessity – six feet of width through the land of one neighbor and six feet of width through the land of another. The Court, which affirmed the order of the Circuit Court for Worcester County, found that this easement had been created in 1918 and that, although it had never been used, it was still in place.
At one time Orlando Harrison and George A. Harrison had owned all of the three parcels. On July 19, 1918 they divided the property and transferred one parcel (the northern parcel that fronted on Evans Road) to the predecessor of Cantwell and another parcel (the southern parcel that fronted on Evans Road) to the predecessor of the Purnells. The Harrisons retained the property that Beard & Bone now owns. The Purnell deed was recorded immediately before the Cantwell deed was recorded. Although the Purnell and Cantwell deeds caused the Beard & Bone property to be landlocked, neither deed contained an express reservation of an easement to Evans Road.
In 1929 the Harrisons transferred the Beard & Bone property to Harrisons’ Nurseries, Inc. That business gained access to a road through other property (the Widgeon property), until permission for that was denied. Timber that had been cut on the Beard & Bone property had been removed through the Widgeon property “about ten years” before the case was filed. The testimony at trial was that no one had ever accessed the Beard & Bone property through the Cantwell or Purnell properties. Also, there was testimony that the Purnell property had no trespassing signs on it and chains blocking access to Evans Road. Before Bone & Beard acquired it, the property had been most recently used for timber and hunting.
Bone & Beard bought the property at auction in 2007. The seller of the property had advised all potential purchasers that the property was landlocked. Shortly thereafter, Bone & Beard filed a complaint to quiet title and for declaratory judgment in the Circuit Court for Worcester County.
The trial court held in favor of Bone & Beard, establishing a 12 foot wide easement that extended to Evans Road, with half of the easement extending through each of the Purnell and Cantwell properties. After an appeal by the Purnells, the Court of Special Appeals affirmed.
The Court of Special Appeals stated the rules governing whether an implied easement by necessity exists. The intention of the parties at the time when the easement is created is of paramount importance. There is a public policy that favors the full use of land and that parties do not intend to render land unfit for occupancy. It is more difficult to find an implied easement by necessity in a reservation (that is, an easement in favor of the grantor of a deed over the land of the grantee) than in a grant (that is, an easement in favor of the grantee over the remaining land of the grantor).
One of the requirements for an easement by necessity is that in the past the land for the benefit of which the easement is claimed and that over which the easement is claimed belonged to the same person. Another requirement is that the easement must be necessary, both at the time of severance and at the time of the exercise of the easement.
The Purnells claimed that no easement existed through their property. They argued that their deed was recorded before the Cantwell deed, so that at the time the Purnell deed was recorded the Harrisons owned the Beard & Bone property and the Cantwell property. Therefore, the Harrisons had access to Evans Road through part of their own property. Hence, there was no necessity to have an easement through the Purnell property. The Circuit Court rejected this argument, reasoning that the Purnell and Cantwell conveyances were essentially simultaneous and the fact that the Purnell deed was recorded first was merely happenstance. The Court of Special Appeals agreed with the reasoning of the trial court on this.
The Purnells further claimed that if an easement had been created over their property, it had been extinguished by adverse possession or by abandonment due to non-use. Neither of these arguments prevailed. The trial court held that the Purnells could not adversely possess property or an easement openly, notoriously, or in a hostile manner while claiming that the interest of another party did not exist. The Court of Special Appeals stated that the time period for adverse possession did not begin to run until Beard & Bone asserted a right to use the easement. The case for abandonment also failed because it requires proof of an intention to abandon and the existence of some act, and the Purnells were not able to prove that Beard & Bone had taken any specific act to abandon the easement.
Finally, the Court of Special Appeals dismissed the possibility that the claims of Beard & Bone to the easement were barred by laches because it found that there was no evidence of any negligence or unreasonable delay on the part of Beard & Bone or its predecessors in title in that the easement was not needed prior to Beard & Bone’s purchase of the property in 2007. The Court stated, “There is nothing in the record that would support a conclusion that Beard & Bone, or their predecessors, slept on their rights, vis a vis, the easement.”
For questions about this, please contact Ed Levin (410) 576-1900.
Editor’s Note: This article was part of an article that appeared in the Daily Record on May 14, 2012. The author wishes to thank Cheri Wyron Levin for her editorial advice and suggestions on this article.

Some Of Maryland’s Law Of Easements

As the summaries of the three cases on easements above demonstrate, there are a large number of reported cases concerning easements. We thought that it would be helpful to set forth some quotes from the Maryland Court of Appeals and the Maryland Court of Special Appeals about easements that were set forth in Bacon v. Arey, No. 2339, September Term, 2010 (Md. Ct. Sp. App. March 29, 2012), and a summary of the three points necessary to establish a prescriptive easement, as set forth in Turner v. Bouchard, 202 Md.App. 428 (2011).
Easements Generally
As Judge Ellen Hollander writing for the Court of Special Appeals stated in Sharp v. Downey, 197 Md. App. 123, 159 (2010), cert. granted, 419 Md. 646 (2011), “we recently explained the ‘basic legal principles governing easements.’” “An easement is broadly defined as a nonpossessory interest in the real property of another[.] An easement involves the privilege of doing a certain class of act on, or to the detriment, of another’s land, or a right against another that he refrain from doing a certain class of act on or in connection with his own land[.]”
Judge Hollander also wrote in Sharp:

...[T]here are several ways to create an easement. “An easement may be created by express grant, by reservation in a conveyance of land, or by implication.” An express easement, whether by grant or reservation, must be created by a written memorandum that satisfies the Statute of Frauds; and “a right[] of way created by deed” must satisfy “‘the mode and manner prescribed by the recording statutes.’” . . . “An express easement by reservation often arises when a property owner conveys a portion of his property to another, which would otherwise render the retained part inaccessible, so the reservation permits a right-of-way.” In contrast, an easement by implication “‘may be created in a variety of ways, such as by prescription, necessity, the filing of plats, estoppel and implied grant or reservation where a quasi-easement has existed while the two tracts are one.’”

Express Easements
In Kobrine v. Metzger, 380 Md. 620, 636 (2004), the Court of Appeals explained:

[A]n easement by express grant or reservation may be created only “in the mode and manner prescribed by the recording statutes.” Although no words of inheritance are necessary, the instrument must contain “the names of the grantor and grantee, a description of the property sufficient to identify it with reasonable certainty, and the interest or estate intended to be granted.” . . . [W]e limited that requirement to rights of way created by deed and held that a right of way, otherwise sufficiently described, could validly be created by a memorandum that complied with the Statute of Frauds, i.e., a writing signed by the party to be charged or that party’s authorized agent.

In interpreting an instrument creating an express easement, the Court of Appeals outlined the following procedure:

“In construing the language of a deed, the basic principles of contract interpretation apply. The grant of an easement by deed is strictly construed. . . . The extent of an easement created by an express grant depends upon a proper construction of the conveyance by which the easement was created. . . . “The primary rule for the construction of contracts generally–and the rule is applicable to the construction of an easement–is that a court should ascertain and give effect to the intention of the parties at the time the contract was made, if that be possible.” . . .”

Implied Easements by Necessity
In Stansbury v. MDR Dev., LLC, 390 Md. 476, 489 (2006), the Court of Appeals discussed the requirements for creation of an implied easement by necessity:

The prerequisites to the creation of an easement by necessity can be summed up in three parts: (1) initial unity of title of the parcels of real property in question; (2) severance of the unity of title by conveyance of one of the parcels; and (3) the easement must be necessary in order for the grantor or grantee of the property in question to be able to access his or her land, with the necessity existing both at the time of the severance of title and at the time of the exercise of the easement.

As to the first prerequisite–unity of title–“‘the dominant and servient estates must at some point have belonged to the same person.’” Sharp, 197 Md. App. at 169 (quoting Rau v. Collins, 167 Md. App. 176, 186 (2006)). As to the third prerequisite–necessity–the “necessity must arise at the time of the initial grant of the property, and cannot be established by a subsequent necessity. And, a way of necessity exists only so long as the necessity itself remains. Therefore, the necessity must be continuous, beginning at the time that the dominant and servient properties are subdivided.” Sharp, 197 Md. App. at 169-70.
Prescriptive Easements
In Turner v. Bouchard, 202 Md.App. 428 (2011), the Court of Special Appeals set forth the following three elements of prescriptive easements:
1. Adverse.
The “adverse” requirement means that the use of the easement must be without license or permission of the landowner. The failure of the landowner to protest the use of an easement may be acquiescence, not permission.
2. Exclusive
The Court of Special Appeals held in Turner that the “exclusive” requirement means “the claim of user must not depend on the claim of someone else,” citing Shuggars v. Brake, 248 Md. 38, 45 (1966). In Shuggars, the Court of Appeals said, “Even though a claimant may not have been the only user, it is sufficient if he used the way under a claim of right independently of others.”
3. Uninterrupted and Continuous for 20 Years.
In order to satisfy the requirement that the use be “uninterrupted and continuous” for 20 years, the easement need not be used every day, but “the claimant must exercise the right more or less frequently according to the nature of the use to which enjoyment may be applied.”
For questions about this, please contact Ed Levin (410) 576-1900.

Speaking of Real Estate: Awards, Recognition, Presentation, and Articles

AWARDS / RECOGNITION
Gordon Feinblatt was recently listed as a Leading Firm (Band 2) by Chambers and Partners in the area of Real Estate. David Fishman (Senior Statesman), Ed Levin (Band 1), and Tim Chriss (Band 2) were listed by Chambers individually.
David Fishman and Ed Levin were notified that they will be listed in The International Who's Who of Real Estate Lawyers 2012 and The International Who's Who of Business Lawyers 2013.
PRESENTATIONS
Searle Mitnick was a moderator at the "Multifamily Summit" sponsored by Bisnow on June 26, 2012 at the Four Seasons Hotel in Baltimore.
Ed Levin will be a panelist on "Issues Confronted by Local Counsel Opinions" at the ABA Business Law Section Annual Meeting at the Chicago Marriott Downtown on August 5, 2012. Ed will also make a presentation to the ABA BLS Legal Opinions Committee at its meeting in Chicago on the recently completed Real Estate Finance Opinion Report of 2012 by the legal opinions committees of the ABA Real Property Section, the American College of Real Estate Lawyers (ACREL), and the American College of Mortgage Attorneys (ACMA).
ARTICLE
Ed Levin wrote "Committees Release the Real Estate Finance Opinion Report of 2012 (née the Annotated Real Estate Finance Opinion," which was published in the ABE Real Property, Trust and Estate Law Section eReport (June, 2012) at http://www.americanbar.org/newsletter/publications/rpte_e_report_home/june_2012.html.
WORKGROUP ON TAXATION OF INDEMNITY DEEDS OF TRUST
Ed Levin was named by the Director of the Maryland State Department of Assessments and Taxation to serve as a member of the workgroup to study the impacts of imposing the recordation tax on indemnity mortgages and deeds of trust as provided under Chapter 2 of the first Special Session of 2012 of the Maryland General Assembly (Senate Bill 1302).
TESTIMONY IN FEDERAL COURT
On July 13, 2012, Danielle Zoller testified in the United States District Court for the District of Maryland, Northern Division, on behalf of Poppleton Development I, LLC in connection with Poppleton I's breach of contract action against the City of Baltimore. The Court granted a preliminary injunction to Poppleton I, thus preventing the City from terminating Poppleton I's Land Disposition and Development Agreement for a project in West Baltimore. In his opinion given from the bench, Judge Richard D. Bennett stated that Gordon Feinblatt LLC is "one of the top law firms in the City of Baltimore, known for experience in real estate transactions."