Cattail v. Sass

• Decision Date: 15 September 2006
• Docket Number: No. 849, September Term, 2005.,849, September Term, 2005.
• Parties: CATTAIL ASSOCIATES, INC. v. Leonard SASS, Jr., et al.
• Court: Court of Special Appeals of Maryland

907 A.2d 828

170 Md. App. 474

CATTAIL ASSOCIATES, INC. v. Leonard SASS, Jr., et al.

No. 849, September Term, 2005.

Court of Special Appeals of Maryland.

September 15, 2006.

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Gregory J. Swain, Annapolis, for Appellant.

John A. Blondell, Glen Burnie, for Appellee.

Panel: HOLLANDER, KENNEY, and BARBERA, JJ.

KENNEY, Judge.

Appellant, Cattail Associates, Inc., appeals the decision of the Circuit Court for Anne Arundel County granting the motion for judgment of appellees Leonard Sass, Jr. and Beverly Sass ("the Sasses"), Sandra DeVor, and Theresa Sass. Cattail presents one question for our review:

Whether the Circuit Court erred in determining that specific performance of the contract was barred by the Rule Against [Perpetuities][.][¹]

For the following reasons, we shall reverse the circuit court's judgment.

FACTUAL AND PROCEDURAL HISTORY

In February 1995, Cattail entered into a contract with the Sasses, their daughter Sandra Stout,² Leonard Sass, Sr.,³ and Theresa Sass, Leonard Sass, Jr.'s, sister, for the purchase of two parcels of real property located in Anne Arundel County ("the Contract"). The Contract provided for a purchase price of $20,000. An addendum to the Contract included the following provisions:

1. PROPERTY—The Property to be sold and transferred to the Buyer is all of that improved and unimproved real property within the above described two parcels as marked on the attached map, Attachment # 1, together with all the Seller's rights and appurtenances thereto .... * * *

5. SUBDIVISION PROCESS—The Purchaser intends to subdivide the property into a number of single family residential building lots. The Seller hereby grants unto the Purchaser permission to subdivide the Property and further agrees to cooperate with and to support the Purchaser's subdivision efforts including for example signing of plans, plats, applications, covenants, and easements, all at no cost to the seller. The Purchaser will also apply for the site grading permit to cover the construction of the Public Works and Public Utilities improvements; the Seller shall also cooperate and join in this application as well, again at no cost to the Seller. The Settlement of this contract is specifically contingent on the successful completion of the subdivision which shall be evidenced by the obtaining of all the necessary approvals from Anne Arundel County (and any other State and/or Federal Government agency) that are required as discussed in this Paragraph 5. In the event the subdivision does not proceed to conclusion, and settlement fails to take place, then the Purchaser shall provide the Seller upon request, at no cost to Seller, all engineering data, tests, studies, and plats either previously provided to Purchaser or prepared by Purchaser or prepared on behalf of Purchaser with respect to the Property.

6. SETTLEMENT CONTINGENCY—Settlement on this contract is expressly contingent on the prior, or concurrent, settlement of the adjoining property owned by Claire Davison and covered under a separate Contract for Sale of Lots or Acreage dated March 10, 1994. Further, both of the two parcels of the Property under this contract must settle at the same time.

7. SETTLEMENT—Settlement on this contract shall be consummated within Forty-five (45) days after the subdivision is complete, as described in Paragraph 5 above.

* * *

10. PURCHASERS RESPONSIBILITY—The Purchaser shall be solely responsible to pursue the accomplishment of the intended residential subdivision and the obtaining of the requisite approvals in a professional, diligent, and timely manner....

* * *

12. UNFORESEEN EVENTS—If at any time during this contract, an unforeseen event or change should occur ..., which is not the fault of the Purchaser, which the Purchaser determines would make the continuation of the subdivision financially infeasible, then the Purchaser may in writing declare this contract to be null and void and the contract shall be terminated, and all deposits returned within 10 days, and neither party having any further obligation to the other....

* * *

20. TERMINATION—The parties to this contract intend that it will be binding and legally valid upon them. In order to preclude any application of the Rule Against Perpetuities which would otherwise invalidate and nullify this contract, the parties agree that this contract shall expire, unless otherwise previously terminated, on the last day of the time period legally permitted by the Rule Against Perpetuities in the State of Maryland, in which case all deposits shall be promptly returned to the Buyer.

21. SELLER'S WARRANTIES—The persons, both jointly and individually, entering into this contract represent and warrant as follows, unless otherwise specifically indicated in this contract:

(1) That they are the only owners of the Property and that they have the unrestricted right to enter into this contract,

(2) That there are no letters of intent or understanding, contracts of sale, leases, or other similar documents pertaining to the Property, other than this agreement,

(3) That there are no civil or criminal suits, claims, actions, condemnation, liens, or actions pending in any court pertaining to or otherwise affecting this Property, nor does the Seller have any knowledge of any proposed action or claim.

According to Cattail, it made various efforts to pursue its subdivision plan over the ensuing years. In a letter dated July 18, 2000, counsel for Cattail informed the parties that Cattail intended to settle "within the next thirty (30) to forty-five (45) days." The letter also stated that Cattail had determined that Faye Sass, the wife of Leonard Sass, Sr., owned an interest in one of the lots. Because she was not a party to the Contract, Cattail stated that "it will be necessary to obtain her consent in joinder to the Contract." In a letter dated January 2, 2001, and addressed to all the parties to the Contract, counsel for Cattail again stated that Faye Sass, who was not a party to the Contract, owned an interest in the property. The letter stated that counsel had enclosed "an appropriate form" by which she could become a party to the Contract, and requested that the parties "have the document signed and witnessed and returned to our office."

James Muzik, a Cattail principal, testified at trial that the company was "getting very close" to completing its subdivision plan in 2002. He stated: "We wanted to make sure that this property wasn't a thorn in our side. So we decided to settle on that first and get it out of the way." To that end, Cattail informed the Sasses and DeVor in a letter dated December 19, 2002, that it wished to move forward with settlement. The letter stated in its entirety:

I represent Cattail Associates, Inc., with regard to the above referenced contract.

At this time, my client has decided to waive all contingencies set forth in the contract that have not been previously satisfied and proceed to settlement. To that end, the date for settlement is hereby set as Friday, January 3, 2003, at 10:00 a.m. at my office in Annapolis. If you are unavailable on this date and at that time, please let me know at once; otherwise, my client will be present as noted and ready to fulfill its obligations under the contract and proceed with settlement.

You will receive no further notice of the settlement date. Failure to attend settlement will be seen as a breach of your obligations under the contract and my client [will] have no choice but to take the appropriate action to enforce its rights.

The letter was sent by certified mail, and the three addressees accepted delivery on December 26, 2002.

Cattail's counsel sent a similar letter to Theresa Sass. In a response by telephone, and later by letter, she informed Cattail that she had sold her interest in one of the parcels to the Sasses on October 24, 2002. She stated that the Sasses had agreed to "undertake any and all obligations pursuant to the Contract of Sale, dated February 1995, between the parties and Cattail Associates, Inc." She was of the opinion that she was no longer "involved in this dispute."

Muzik testified at trial that he appeared at counsel's office on December 26, 2002, but neither the Sasses, DeVor, or Theresa Sass attended the scheduled settlement. He also stated that Cattail had not received a response to its letter from the Sasses and DeVor prior to that date.

On March 26, 2003, Cattail brought suit in the Circuit Court for Anne Arundel County against the Sasses, DeVor, and Theresa Sass. In its complaint, Cattail sought specific performance of the Contract. It also brought a breach of contract claim against the Sasses and DeVor, and a negligent misrepresentation claim against Theresa Sass.

The case went to trial on April 22, 2005. At the close of Cattail's case, the Sasses, DeVor, and Theresa Sass moved for judgment. They asserted that the Contract was unenforceable for want of a necessary party, and based on the doctrine of laches. Alternatively, they argued that, if the Contract was enforceable on its face, they could not have settled because the contingencies had not been satisfied. In addition, Theresa Sass argued that she had made only a special warranty, that she had validly assigned her interest in the property, and that Cattail had waived its claims against her.

The defendants also contended that the Contract was unenforceable because it violated the rule against perpetuities. The court agreed. It found that, because the Contract provided for settlement only after certain conditions in the control of a third party are satisfied, the Contract violates the rule against perpetuities. The court granted the motion for judgment, "deny[ing] the specific performance and all of the other relief sought."

On April 29, 2005, Cattail moved for a new trial, or, in the alternative, to alter or amend judgment. The court denied the...