8621 v. Ldg

• Decision Date: 06 June 2006
• Docket Number: No. 0058, September Term, 2005.,0058, September Term, 2005.
• Citation: 169 Md. App. 214,900 A.2d 259
• Parties: 8621 LIMITED PARTNERSHIP v. LDG, INC.
• Court: Court of Special Appeals of Maryland

900 A.2d 259

169 Md. App. 214

8621 LIMITED PARTNERSHIP v. LDG, INC.

No. 0058, September Term, 2005.

Court of Special Appeals of Maryland.

June 6, 2006.

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Maury S. Epner (Michael G. Campbell, Joseph P. Suntum, Miller, Miller & Cancy on the brief,) Rockville, MD, for appellant.

Robert E. Grant (Elsie L. Reid, Furey, Doolan & Abell, L.L.P. on the brief,) Chevy Chase, MD, for appellee.

Panel: DAVIS, SALMON and ADKINS, JJ.

ADKINS, J.

In 1989, appellant 8621 Limited Partnership (8621) and appellee LDG, Inc. (LDG) jointly purchased a parcel of Silver Spring commercial real estate, known as the Wolfe Property. The Wolfe Property lies between properties known respectively as the Chambers Parcel and the LDG Parcel. Although LDG owned and controlled the LDG Parcel, 8621 did not own the Chambers Parcel. Rather, at that time, the Chambers Parcel was owned by a partnership that is not a party to this litigation, but whose principals include several of the principals in 8621.

The plan was to subdivide the Wolfe Property into two lots, one to be owned by LDG and the other by 8621.¹ Among the terms of the Wolfe Property Joint Venture Agreement that 8621 and LDG entered into is the one that lies at the heart of this dispute—paragraph 10 regarding development of the two subdivided lots:

In the event the parties acquire the Wolfe Property, any site plan for the Wolfe Property or the LDG Parcel or the Chambers Parcel shall be done in conjunction with each other and if access from the Chambers Parcel to Fenton Street and from the LDG Parcel to Cameron Street can be reasonably provided without interfering with the development of each parcel, the site plan shall contain such access. In addition, if access from the Wolfe Property to Colesville Road or from Colesville Road to the Wolfe Property through the LDG Parcel is sought by LDG and granted, then [8621] shall be entitled to said access from their parcel to Colesville Road at no additional cost to [8621] provided such access does not interfere with the development of the LDG Parcel. (Emphasis added.)

After acquiring the Wolfe Property, 8621 and LDG jointly demolished the commercial buildings on it and used the site as a parking lot for many years. During this time, LDG's president E. Brooke Lee, III, worked together with 8621's managing partner, Richard Cohen, to successfully oppose a threatened taking of the Wolfe Property by the State of Maryland.

Eventually, 8621 and LDG subdivided the Wolfe Property into two lots, both of which are in the midst of a commercial block. These lots have direct street access only onto a heavily trafficked portion of Georgia Avenue. They have greater development potential, and therefore greater value, if another indirect route is made available to side streets surrounding that block.

LDG's lot is located adjacent to separate property owned by LDG (the LDG Parcel discussed above), which has side street access onto Colesville Road and Fenton Street. The lot allocated to 8621 is located next to the Chambers Parcel, which has side street access onto Cameron Street. Thus, in order to access Cameron Street, LDG would need to cross the 8621 lot and the adjacent Chambers Parcel. In order to access Fenton Street or Colesville Road, 8621 would need to cross the LDG lot and the adjacent LDG Parcel.

During and after the subdivision process, Lee allegedly assured Cohen that 8621 would be given access from its subdivided lot to either Fenton Street or Colesville Road. When Brooke Lee died, his brother Blair Lee became president of LDG. Under Blair Lee's management, LDG disclaimed any interest in seeking access to Cameron Street across the 8621 lot and Chambers Parcel. Moreover, LDG took the position that it was not obligated to provide 8621 access to either Fenton Street or Colesville Road across its properties.² LDG, through Blair Lee, demanded that 8621 execute deeds conveying the two subdivided lots of the Wolfe Property to the individual joint venturers in fee simple, without any access easement. 621 refused to do so.

LDG sued 8621 for declaratory and other relief, seeking an order requiring 8621 to execute a deed free and clear of any encumbrances. It also sought dissolution of the Joint Venture.

Ten months after this litigation began, the partnership that owned the Chambers Parcel sold it to an unrelated third party. A month later, 8621 counterclaimed, seeking specific performance of the access provision in paragraph 10 of the Joint Venture Agreement and a declaration that 8621 is entitled to "access from the Chambers Parcel to Fenton Street if such access can be reasonably provided without interfering with the development of the subject parcels" (Count I). Alternatively, 8621 sued for breach of the Joint Venture Agreement (Count II).

LDG moved for summary judgment on its complaint, and to dismiss or for summary judgment on 8621's counterclaims, on the ground that the access provision in the Joint Venture Agreement is an unenforceable "agreement to agree." Alternatively, LDG argued, the sale of the Chambers Parcel constituted a breach of the Agreement, and rendered performance of the mutual access clause impossible, thereby releasing LDG from any obligation it may have had thereunder.

8621 opposed the motions, arguing that the access clause is enforceable, that the Joint Venture had not run its course because no access had been provided, and that the post-lawsuit sale of the Chambers Parcel did not materially breach the Agreement or otherwise excuse LDG from liability. 8621 later amended its counterclaim to add another count seeking damages for breach of fiduciary duty, as an alternative to the declaratory and injunctive relief sought in Counts I and II.

After a hearing on LDG's motions, the Circuit Court for Montgomery County issued a written decision, concluding that the access provision of the Joint Venture Agreement "lacks material terms sufficient to create an enforceable obligation [] as to joint development or reciprocal access, i.e., it is, in short, an agreement to agree in this respect." Alternatively, even if the access provision is sufficiently definite to be enforceable, the court ruled that "the sale of what the parties have referred to as the `Chambers Parcel' constitutes a material breach of the agreement" and "renders performance of Paragraph 10, as the requirements of that paragraph are characterized by ... 8621 ... impossible[,]" which in turn "excus[ed] further performance by ... LDG."

The circuit court held that, under the Joint Venture Agreement, LDG and 8621 are required to convey the appropriate subdivided lots to each other "in fee simple absolute, free and clear of any encumbrances, in dissolution of the Wolfe Property Joint Venture." It ordered 8621 and LDG to execute and deliver deeds, and further declared that LDG is not obligated to provide information regarding its development plans, to work in conjunction with 8621 in such development, or to provide 8621 with access to Fenton Street.

8621 noted this interlocutory appeal,³ then argued to the motion court that it lacked jurisdiction to proceed on LDG's motion to dismiss the remaining breach of fiduciary duty count of 8621's counterclaim due to the pendency of this appeal. The court stayed proceedings on that counterclaim pending disposition of this appeal, without ordering 8621 to post any bond.

8621 appeals that interlocutory judgment, raising two issues:

I. Whether the access provision in the Joint Venture Agreement "`is so vague and indefinite as to be unenforceable'?

II. Whether, after LDG spurned access from 8621 LP and filed suit, its reciprocal obligation to provide access to 8621 LP was excused by the post-suit sale of the property over which the unwanted access otherwise would have been provided?"

LDG cross-appeals the denial of its motion to dismiss the damages counterclaim, and the stay without bond pending this appeal.

We shall hold that the court erred in concluding, as a matter of law, that the access provision in the Joint Venture Agreement is an unenforceable agreement to agree. In addition, we conclude that, although sale of the Chambers Parcel during this litigation prevents 8621 from performing its promise to provide LDG a side street access route across its property, a jury could conclude that 8621 was excused from that obligation by LDG's prior breach of its obligation to provide access to 8621. Summary judgment was inappropriate due to these material disputes about the meaning of the access clause and the respective performances by LDG and 8621.

DISCUSSION

I. 8621's Appeal: The Access Clause

8621 complains that the circuit court erred in focusing solely on the site planning clause in Paragraph 10 and failing to give any effect to the ensuing access clause. It posits that, even assuming arguendo that "the `site plan' clause of paragraph 10 was too indefinite to be unenforceable, the same manifestly cannot be said of the `access' clause." Most significantly, no aspect of the agreement to provide reasonable access was reserved for future agreement, and there was mutual consideration for the negotiated agreement to provide side street access in both north and south directions, in order to maximize the development potential of each subdivided lot.

LDG responds that the court correctly ruled as a matter of law that both the site planning and access provisions were "merely aspirational." In LDG's view, the access clause cannot possibly be "decoupled" from the site planning clause, either grammatically or logically. Moreover, material terms are missing from both clauses:

Nothing in paragraph 10 sets forth whether the purported joint development should be commercial, residential or mixed-use, or provide for office space, retail space, a restaurant or a movie theater of all four. There is no provision for how the parties will select a site planner or...