Park Plus, Inc. v. Palisades of Towson, LLC

• Decision Date: 10 February 2021
• Docket Number: No. 1723,1723
• Parties: PARK PLUS, INC. v. PALISADES OF TOWSON, LLC and ENCORE DEVELOPMENT CORP.
• Court: Court of Special Appeals of Maryland

PARK PLUS, INC. v. PALISADES OF TOWSON, LLC and ENCORE DEVELOPMENT CORP.

No. 1723

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2017

February 10, 2021

Circuit Court for Baltimore County

Case No. 03-C-16-001349 OC

UNREPORTED

Meredith,^* Berger, Nazarian, JJ.

Opinion by Meredith, J.

^*Meredith, Timothy E., J., now retired, participated in the hearing of this case while an active member of this Court, and after being recalled pursuant to the Constitution, Article IV, Section 3A, he also participated in the decision and the preparation of this opinion.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

In connection with the construction of a luxury apartment building at 212 Washington Avenue in Towson, Maryland, Palisades of Towson, LLC ("Palisades") and Encore Development Corporation ("Encore"), the appellees, entered into a contract with Park Plus, Inc. ("Park Plus"), appellant, for Park Plus to furnish and install an automated parking system in the building's garage. The system was intended to automatically park cars in the 409 spaces in the garage. When a tenant or visitor entered the parking garage of the apartment building, there were four automobile bays which, in conjunction with four elevators, a complex system of sensors, dollies, sledges, and special software, would permit the operator of the vehicle to park the vehicle in one of the four bays, swipe a card, and have the vehicle transported to a designated space. The system was then supposed to automatically retrieve the vehicle upon demand. But the system did not meet the expectations of Palisades and Encore, and that eventually led to a demand for Park Plus to submit to arbitration, which Park Plus contends is barred by the statute of limitations.

Tenants began occupying the apartment building in August 2010, and glitches in the parking system occurred almost immediately. Park Plus repeatedly assured the owner of the building that all kinks would be worked out. But, on July 31, 2014, Palisades sent Park Plus a demand for the owner's grievances and claims for damages to be submitted to arbitration. Although Park Plus initially seemed agreeable to participating in arbitration, the cooperation in that regard stalled, and, on February 10, 2016, Palisades and Encore filed a petition in the Circuit Court for Baltimore County seeking an order to enforce theprovisions in their contract with Park Plus that stated "all disputes between parties shall be resolved by arbitration" and the arbitration award "shall be final and binding on the parties." The contract also stated: "This agreement to arbitrate shall be specifically enforceable."

Park Plus opposed the petition to enforce the arbitration agreement, and asserted, as its primary reason for opposition: "Petitioners have failed to bring this breach of contract action within the three (3) years required by Md. Code, Cts. & Jud. Proc. § 5-101, and have therefore failed to identify an arbitration agreement capable of enforcement."

The circuit court held multiple hearings to consider whether the arbitration agreement should be enforced. After an evidentiary hearing, and extensive briefing by the parties, the court issued a lengthy written opinion in which it concluded that the demand for arbitration was not untimely, and the petition to enforce the arbitration agreement was timely because it was filed within three years after Park Plus failed to arbitrate. The court ordered Park Plus to submit to arbitration

Park Plus noted this appeal.

QUESTION PRESENTED

Park Plus presented five questions on appeal, which we have distilled to one:¹

Did the circuit court err in granting the petition to enforce the parties' arbitration agreement?

For the reasons that follow, we answer that question "no," and we shall affirm the circuit court's order to enforce the parties' agreement to arbitrate.

FACTS AND PROCEDURAL HISTORY

The evidence in the circuit court revealed the following. On March 4, 2009, Palisades, as the owner, and Encore Development Corporation, as the "Authorized Agent" of the owner, entered into a contract with Park Plus, identified as the "Contractor," for Park Plus to

well and sufficiently furnish and provide all labor, material and equipment necessary or required to fully perform and complete an Automatic Space Maker 5-Level Parking System for the Palisades of Towson new garage and 18-story apartment building as specified herein. All work shall be performed in accordance with the generally accepted highest standards of this particular industry and shall meet all federal, state, and county building codes specific to this Automated Parking Garage equipment.

The agreement obligated Park Plus to "provide a 12-month warranty from the date of handover as long as the date of handover is no more tha[n] six (6) months after completion of installation." The total contract price for the parking system was $6,391,500.00, to be paid in installments at various stages of completion of the project. The agreement provided in Section 11.4: "No payment shall be deemed or construed to constitute a waiver of any rights of the OWNER nor shall it release the CONTRACTOR from any obligations under this Contract."

In Article 7, the agreement provided that all disputes "shall be resolved by arbitration." Article 7 was captioned "RESOLUTION OF DISPUTES," and stated (in its entirety):

7.1 Any disputes between the OWNER and the CONTRACTOR relating to the execution or progress of the WORK or the interpretation of the Contract Documents shall be referred initially to the ARCHITECT or ENGINEER. The ARCHITECT'S or ENGINEER'S decision shall bebinding upon the parties in 7 matters relating to artistic effect. In all other matters, it shall be binding upon the parties unless a demand for arbitration under Paragraph 7.2, below, is made within 30 days after a decision was rendered.

7.2 Subject to Paragraph 7.1, above, all disputes between parties shall be resolved by arbitration. This agreement to arbitrate shall be specifically enforceable. The award rendered by the arbitrators shall be final and binding on the parties.

Park Plus contends that it completed the installation work required by the contract and "handed over" the system to Palisades on July 31, 2010. During an evidentiary hearing conducted after Palisades filed its petition to enforce arbitration, the following exchange occurred between counsel for Park Plus, and Gary Astrup, a Vice President of Park Plus:

[BY COUNSEL]: So, a question of clarification then, the date that you provided was the end of July of 2010 for hand over[;] at that time could the residen[ts] of Palisades of Towson operate the system to park their vehicles without assistance?

[THE WITNESS]: Yes, they could.

In its opinion rendered after evidentiary hearings, the circuit court summarized what happened after Park Plus "handed over" the system to Palisades and tenants began moving into the apartment building in late August 2010:²

Problems with the automated parking system arose almost immediately. According to . . . [Georgia Glattly, the property manager for the Palisades,] the Palisades experienced problems since the residents began using the automated parking system . . . in late August 2010. The Palisades experienced many different types of mechanical malfunctions which caused difficulties in parking and retrieving vehicles in the garage. As a result of these difficulties, the Palisades had to call cabs to take residents who could not access their vehicles to work. . . . [T]he Palisades had to continue to work with Park Plus to resolve the on-going "glitches" which prevented residents from parking or retrieving their vehicles.

Because of these on-going problems Park Plus personnel remained on site until September 2011, in order to monitor the system and fix problems as they arose. In fact, Park Plus was given a free apartment so that a representative could remain on site until the system was "stable." . . . [A] significant number of defects were discovered over an extended period of time throughout 2011 and extending into 2012.

An e-mail dated January 11, 2011, from Ryan Astrup (a Director of Park Plus, and Gary Astrup's brother) to various representatives of Palisades acknowledged:

There have been some temporary glitches along the way during this initial activation stage mostly attributed to electronic connections; these glitches rise [sic] sporadically as the system has a chance to settle in with more users using the system, and as they arise we are there to locate and correct these. Some have been more difficult to resolve than others, but we assure you that this period will pass. One of the major causes are the laser and reflector tolerances, and when slightly off-mark, the system enters a safe-mode until a technician can confirm safe-working operation. Heavier or lighter vehicles, longer or shorter vehicles all have a bearing on the fluctuating causes: this is normal and a this [sic] period of resolve is expected.

On August 12, 2011, Gary Astrup sent an e-mail to Ms. Glattly in which he stated: "Let me reassure you that Park Plus is completely and will continue to be committed to resolving all of your concerns with the Auto Park."

But, the circuit court found: "In August of 2011, tenants were moving out of the building because of the problems with the automated parking system, and said they would not renew their leases. . . . Into September of 2011, the problems continued and Park Plus continued its efforts to fix the problems. . . . On September 29, 2011, two shuttles collided while one shuttle was delivering a car to a stall and another shuttle was retrieving a car."

The court noted that, on October 6, 2011, "Gary Astrup sent an email to [representatives of Palisades] that stated: 'As you are aware the warranty period for the...