DeLeon Enterprises, Inc. v. Zaino

• Decision Date: 01 September 1991
• Docket Number: No. 1242,1242
• Citation: 92 Md.App. 399,608 A.2d 828
• Parties: DELEON ENTERPRISES, INC. v. Beverly ZAINO, Personal Representative of the Estate of Sophie Kramer aka Sophie Kramer Roth, et al. Beverly ZAINO, Personal Representative of the Estate of Sophie Kramer aka Sophie Kramer Roth, et al. v. GARY HART & ASSOCIATES, LTD., et al. ,
• Court: Court of Special Appeals of Maryland

Page 399

92 Md.App. 399

608 A.2d 828

DELEON ENTERPRISES, INC. v. Beverly ZAINO, Personal Representative of the Estate of

Sophie Kramer aka Sophie Kramer Roth, et al.

Beverly ZAINO, Personal Representative of the Estate of Sophie Kramer aka Sophie Kramer Roth, et al. v. GARY HART & ASSOCIATES, LTD., et al.

No. 1242, Sept. Term, 1991.

Court of Special Appeals of Maryland.

July 2, 1992.

Certiorari Denied October 23, 1992.

William M. Ferris (Lynn T. Krause and Krause & Ferris on the brief), Annapolis for appellant, Deleon.

Leonard Z. Bulman, Annapolis, for appellee, Beverly Zaino, etc.

John F. Robbert (Hyatt & Peters on the brief), Annapolis, for appellees, Gary Hart and Terry Black.

Argued before MOYLAN, BISHOP and MOTZ, JJ.

BISHOP, Judge.

This action involves two appeals and one cross appeal from judgments of the Circuit Court for Anne Arundel County (Martin A. Wolff, J.). The first appeal is between appellant DeLeon Enterprises, Inc. ("DeLeon") and appellees Beverly Zaino, individually and as Personal Representative of the Estate of Sophie Kramer, a/k/a Sophie Kramer Roth, Kramer Associates, et al. ("Kramers"). DeLeon appeals the decision of the Circuit Court denying its request, as the purchaser, to require the Kramers, the sellers, to specifically perform a contract for the sale of land.

The second appeal is between appellants Kramers and appellees Gary Hart & Associates, Ltd. ("Hart") and Terry Black ("Black"). The Kramers appeal the decision of the Circuit Court ordering them to pay $4,100 attorney's fees to Hart and Black. Cross-appellants Hart and Black claim the award was inadequate.

FIRST APPEAL

Issues Presented

Appellant DeLeon asks the following questions:

I. Given Maryland's unflinching adherence to the objective law of contracts, may a trial judge vary the terms of an unambiguous, integrated contract by resorting to extrinsic evidence of what one party to the contract claims to have actually intended?

II. May a trial court refuse to enforce a contract because of a unilateral mistake by one of the parties to the contract?

III. May a trial court refuse to enforce specifically a contract for the sale of real estate because, in the view of the trial judge, the contract represents a bad deal?

Statement of Facts

Appellees listed the subject property, commonly known as 185 Green Street, Annapolis, Maryland ("the property") for sale with Steffey Realtors, Inc. The multiple listing service (MLS) described the property as "185 Green Street" "L[ot] S[ize] 25' X 60'" "2 Units" "2B[ed] R[ooms]."

In 1967 Edward and Sophie Kramer acquired the property and additional properties by a deed which included three parcels of land and premises. The deed was recorded in the Land Records of Anne Arundel County at Liber 2071, Folio 305. Parcel No. 3, which includes the property, is 25' X 135'. The description of Parcel No. 3 in the deed refers to "the building known as 185 Green Street," "the dwelling known as 185 Green Street," and "Known as 185 Green Street and intended to be that portion of the conveyance from ... Sarles and wife to Rosa Maggio by deed dated October 8, 1936 ... Liber F.A.M. No. 154, Folio 591...." The rear of Parcel No. 3 abuts with the rear of other properties known as 111-115 Main Street forming an "L" shape. There are two structures on Parcel No. 3. Fronting on Green Street is a structure containing two apartments and bearing the house number 185. To the rear of this structure, about mid-span of Parcel No. 3, is a fence. Beyond the fence is a second structure that connects with the back of a structure located on the 113 Main Street property. The second structure bears the house number 185 1/2 and is used as a kitchen and for storage by Fran O'Brien's Restaurant which occupies 113 Main Street.

Terry Black, a realtor for Gary Hart & Associates, alerted DeLeon that the property was for sale. DeLeon, whose father was a title attorney for most of his adult working life and whose brother is a real estate Settlement Officer, personally went to the tax office to obtain the liber and folio number; investigated tax information and maps and the land records; obtained a copy of the deed found at Liber 2071, Folio 305 dated April 15, 1967; and viewed the property on several occasions.

The proposed contract submitted by DeLeon, was prepared by Black on a Gary Hart & Associates contract form. After negotiations on the purchase price, the Kramers accepted the contract for the price of $85,000. The contract described the property as "situate and lying in County Anne Arundel Subdivision 110 Liber 2071 Folio 305 State of Maryland being the property known as 185 Green Street Lot 32 Block 17 Section 0291...." The Lot, Block, and Section refer to the tax map. The contract contained an integration clause.

On or about the day of settlement, the Kramers became aware of the discrepancy between dimensions of the property they intended to sell, as identified in the listing agreement, and the dimensions of the property DeLeon intended to buy, as allegedly identified in the deed description of Parcel No. 3, and refused to close.

DeLeon filed suit against the Kramers for breach of contract and sought specific performance. The trial court found that the language of the contract was ambiguous with respect to the dimensions of the property and, therefore, admitted parol evidence of the intention of the parties. It found that there was no meeting of the minds as to the description of the property and held the contract unenforceable. In addition, the trial court held that even if the language of the contract was not ambiguous, specific performance should be denied. A mistake on the part of the Kramers would result in the Kramers losing double the size of the property they intended to sell for less than half of its value. The difference in the $85,000 purchase price and $250,000 value of the property claimed by DeLeon would result in a windfall to him. DeLeon appeals from that judgment.

Discussion

I.

DeLeon contends that the trial judge was clearly erroneous in concluding the contract was ambiguous and abused his discretion by looking outside the four corners of the contract to arrive at this conclusion. We disagree and hold that the trial court was not clearly erroneous when it found the language of the contract ambiguous and admitted extrinsic evidence.

Specific performance must be based on a valid and enforceable contract. Washington Homes, Inc. v. Baggett 23 Md.App. 167, 173, 326 A.2d 206 (1974) cert. denied, 273 Md. 720 and 723 (1975). Although such a contract is a prerequisite, it is not sufficient to entitle a party to specific performance. Brooks v. Towson Realty, Inc., 223 Md. 61, 69-70, 162 A.2d 431 (1960).

A contract entirely valid at law will not necessarily be enforced specifically by a court of equity.... "Facts that are not sufficient to invalidate a contract and that may nevertheless be sufficient to induce the refusal of a decree for specific enforcement are commonly segregated under such headings as mistake, innocent misrepresentation, unconscionable contract, inadequacy of consideration, harshness, oppression, sharp practice, overreaching, as well as hardship."

Id.

To grant specific performance there must be a meeting of minds. This requires that the contract be clear, certain, and definite in all its essential and material terms. Klein v. Weiss, 284 Md. 36, 63, 395 A.2d 126 (1978). A description of the land sufficient to enable the court to identify and locate the parcel of land definitely and with certainty is an essential term in a contract for the sale of land. Maryland State Housing Co. v. Fish, 208 Md. 331, 334, 118 A.2d 491 (1955) (quoting Helmik v. Pratt, 153 Md. 685, 690, 139 A. 559 (1927)). See also Martin v. Michaels, 259 Md. 346, 349-50, 269 A.2d 833 (1970).

We begin our discussion of the contract in the case sub judice with a review of the applicable rules of construction. General rules of construction of contracts apply to contracts for the sale of realty. Kasten Constr. v. Rod Enterprises, 268 Md. 318, 301 A.2d 12 (1973). "The cardinal rule in the construction and interpretation of contracts is that effect must be given to the intention of the parties, unless it is inconsistent with some principle of law[.]" Id. at 328, 301 A.2d 12 (citations omitted).

For the purpose of contract interpretation, Maryland applies the theory of 'objective law' of contracts. Id. (quoting Slice v. Carozza Properties, Inc., 215 Md. 357, 368, 137 A.2d 687 (1958)). This theory holds that the written language embodying the terms of an agreement will govern the rights and liabilities of the parties, irrespective of the subjective intent of the parties at the time the parties enter into the contract, if the language of the contract is clear and unambiguous, and free of fraud, duress, or mistake. Kasten, 268 Md. at 328, 301 A.2d 12 (citing Ray v. Eurice, 201 Md. 115, 93 A.2d 272 (1952)). Under these conditions the intent of the parties is determined by an objective test, namely, the meaning a reasonable person would attribute to the plain language of the contract. Kasten, 268 Md. at 328, 301 A.2d 12 (citing Slice, 215 Md. at 368, 137 A.2d 687).

Where the language of the contract is ambiguous and not clear, and doubt arises from the writing itself as to what the parties meant by the language employed, extraneous evidence of what the parties intended may be admitted to assist the court in determining the agreement of the parties. Missler v. Anne Arundel County, 271 Md. 70, 80, 314 A.2d 451 (1974); Hardy v. Brookhart, 259 Md. 317, 326-27, 270 A.2d 119 (1970). "This in no way controverts the principle that the written language ... alone will govern the rights of the parties ... if that language is, on its face, clear and unambiguous." Missler, 271 Md. at 80, 314 A.2d 451.

In addition, Maryland employs the following rule of construction when interpreting contracts.

"It is a fundamental rule of...