When Matthew and Shannon Campbell moved to Stonegate three years ago with their two small children, they thought they had found their "ideal home in the country"--a sylvan view of lush green woodlands and the mountains. And to assure the view, the Campbells and some of the other families who bought the three-bedroom, colonial duplexes paid the developer premiums of up to $1,000 to live next to the woodlands, which they were told was school property.

"It was a pleasant place to take the kids and show them the birds and rabbits," recalled Matthew Campbell, a 37-year-old lawyer who commutes to his job in Rockville. "We were away from the congestion of Washington, the traffic jams, the swarms of people and it seemed all so quiet and peaceful."

But one morning Campbell and his wife looked outside their window and saw bulldozers leveling their sylvan view. When the construction was completed, the trees were torn down and the mountain view was gone. In their place were 162 apartment units, illuminated at night by floodlights that glared into the two-story, aluminum-sided Stonegate houses, where once fireflies had twinkled.

So 19 of the young homeowners of Stonegate went to court, accusing the the builder, Ryland Group Inc. of Columbia, of fraudulent sales practices.

Recently, those families reached an out-of-court settlement in which, according to court documents, Ryland agreed to pay more than $60,000.

Francis B. Burch Jr., the attorney for Ryland, said, "Ryland homes feels they have done nothing wrong. This case is a private matter between us and those families and we choose not to talk about it."

According to court records filed in Montgomery County, this story began in the fall of 1979 and spring of 1980 when a Ryland sales represenative told prospective buyers the woods were owned by the Frederick city schools. Waverly Elementary School was nearby and the Ryland sales represenative insisted the school system had no plans to develop the land.

The sales represenative, who had been a bank teller before she started selling homes, used a map displaying the school and the nearby woodlands in her sales pitch, the court records stated.

But the land adjacent to the Stonegate homes, which were selling for $45,000 to $60,000, was privately owned and public records showed that the builders of the apartment complexes filed construction plans as early as August 1979. Construction began in June of 1980.

At one point, Campbell said, residents went to the Ryland sales office at Stonegate in an attempt to discourage new buyers with signs reading, "When Ryland Lied. . . Our Dreams Died," They also held yard sales for a "Stonegate legal defense fund" and repeatedly went before Frederick city planners to see that other city residents were not misrepresented.

As a result of the homeowners' efforts, Campbell said, many real estate firms in Frederick now go to great pains to show prospective buyers "what's next door" and what plans, if any, there are for development of the adjacent property.