## Facts

- A 466-acre parcel in Prince George’s County was annexed into the City of Bowie in the mid-1980s.
- In 1986, the then-owner recorded a Declaration of Covenants limiting development of the property to 14 enumerated uses; the covenants had no fixed termination date.
- An Annexation Agreement executed contemporaneously contemplated development of a “science and technology, research and office park,” with anticipated University of Maryland involvement.
- MIE Properties, Inc., as successor in title, leased space on the property in 2001 to a dance studio.
- The City sued in 2002 to enjoin the dance studio as violating the covenants; MIE counterclaimed for a declaration that the covenants were unenforceable due to changed circumstances and raised defenses including waiver, contract zoning, and nonjoinder.

## Issues

1. What standard governs a challenge to the continuing enforceability of restrictive covenants lacking an express duration term: whether changed circumstances render the covenants’ purpose obsolete, or whether there is a “reasonable probability” the purpose can be accomplished within a reasonable time?
2. Whether the City waived enforcement by acquiescing in other allegedly inconsistent uses.
3. Whether enforcement of the covenants and the annexation-related agreement constituted illegal contract zoning by a municipality without zoning authority.
4. Whether the action should be dismissed for failure to join allegedly necessary parties (including entities associated with the University of Maryland).

## Decision

- The Court of Appeals of Maryland reversed the intermediate appellate court and remanded with instructions to affirm the circuit court’s judgment.
- The court held the restrictive covenants remained valid and enforceable because no radical change in circumstances had occurred that rendered their purpose obsolete.
- The court upheld the injunction barring operation of the dance studio as a use not permitted by the covenants.
- The court rejected waiver by acquiescence because MIE did not meet its burden to show a clear, intentional relinquishment of the City’s enforcement rights.
- The court rejected the contract-zoning defense, concluding the City was enforcing private covenants it had the right to enforce, not bargaining over zoning classifications.
- The court held nonjoinder did not require dismissal where the purportedly necessary party had knowledge of the litigation and participated at trial, supporting excusal of joinder on the record presented.

## Legal Principles

- Restrictive covenants without an express duration remain enforceable unless, after the passage of time, changed circumstances have so substantially altered conditions that the covenants’ purpose is rendered obsolete.
- A “reasonable probability” formulation is not the governing test where state precedent requires an obsolescence inquiry tied to substantial (radical) change.
- The party asserting waiver by acquiescence bears the burden of proof and must show a clear and intentional relinquishment of the right to enforce.
- A municipality lacking zoning authority does not commit illegal contract zoning by enforcing land-use limits through restrictive covenants it is entitled to enforce.
- Nonjoinder of an assertedly necessary party may be excused when that party knows of the litigation affecting its interests and nevertheless does not join, as evidenced by participation at trial.

## Conclusion

The court enforced long-running annexation-related restrictive covenants and sustained an injunction against an unpermitted use, holding that absent substantial, purpose-defeating change, such covenants remain enforceable; it also rejected defenses of waiver, illegal contract zoning, and dismissal for nonjoinder on the facts shown.


City of Bowie v. MIE Properties, Inc., 398 Md. 657, 922 A.2d 509 (Md. 2007)