Royal Investment v. Wang

• Decision Date: 04 December 2008
• Docket Number: No. 2311, September Term, 2007.,2311, September Term, 2007.
• Citation: 183 Md. App. 406,961 A.2d 665
• Parties: ROYAL INVESTMENT GROUP, LLC, et al. v. Don C. WANG.
• Court: Court of Special Appeals of Maryland

961 A.2d 665

183 Md. App. 406

ROYAL INVESTMENT GROUP, LLC, et al. v. Don C. WANG.

No. 2311, September Term, 2007.

Court of Special Appeals of Maryland.

December 4, 2008.

Amy C.H. Grasso and Maury S. Epner (Miller & Canby, Ctd, on the brief), for appellant.

Adam M. Spence (Spence & Buckler PC on the brief), of Towson (Quinn O'Connell, Jr., Desiree C. Hensley on the brief), Washington, for appellee.

Argued before WOODWARD, GRAEFF, MOYLAN, and CHARLES E., JR., (Retired, Specially Assigned), JJ.

GRAEFF, J.

This lawsuit arises from a dispute between Don C. Wang, appellee, and Sean Shahparast, the sole member of Royal Investment Group, LLC, (collectively, "Royal"), appellants, over their negotiations for Royal to purchase from Mr. Wang a house and real property located at 5281 Goldsboro Road in Montgomery County ("the Property"). Negotiations broke down, and the parties did not proceed to settlement. After Mr. Wang advised Royal that the contract was terminated and that Royal had no authority to enter the Property, Royal proceeded to demolish the existing home on the Property, and, during the ensuing lawsuit, Royal spent over $700,000 to build a new home on the Property.

After a seven day bench trial, the circuit court rejected Royal's request for specific performance on the real estate contract and issued a declaratory judgment, finding that Royal breached the contract when it failed to proceed to settlement pursuant to the terms of an addendum dated June 16, 2005. It further found Royal liable for trespass, and it denied Royal's claim for unjust enrichment stemming from improvements to Mr. Wang's property.

Upon learning of the circuit court's order, Mr. Shahparast went to the Property and removed cabinets he had installed from the Property. As a result of these actions, the circuit court held Royal, through its President, Mr. Shahparast, in constructive civil contempt. The court imposed a sanction of incarceration, subject to a purge provision of $75,000, the replacement value of the removed cabinets.

On appeal, Royal presents five issues for our review, which we have rephrased as follows:

1. Did the trial court err in finding that the June 16 addendum to the contract for the Property satisfied the Statute of Frauds?

2. Did the trial court err in denying Royal's claim for restitution for improvements made to the Property?

3. Did the trial court err in finding Royal liable for trespass?

4. Did the trial court err in finding Mr. Shahparast in contempt?

5. Did the trial court err in awarding Mr. Wang $179,907.60, in attorney's fees?

For the reasons set forth below, we affirm the judgments of the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND

On November 23, 2001, Mr. Wang, the owner of the Property, received a notice informing him that Montgomery County had condemned the house located on the Property and found it unfit for human habitation due to multiple housing code violations. The letter included a list of violations that needed to be repaired before the condemnation notice would be lifted. Following receipt of this letter, Mr. Wang vacated the house on the Property.

On January 23, 2002, the Department of Housing and Community Affairs sent Mr. Wang a second letter directing him "to either correct all deficiencies listed in the Condemnation Notice, or demolish the dwelling...." The evidence indicated that the rooms in the Property were filled with trash, which was piled up almost to the ceiling.

In 2004, Mr. Wang decided to sell the Property. Mr. Wang made $18,000 a year, and he needed money. On December 7, 2004, Royal offered Mr. Wang $680,000 to purchase the Property but, due to multiple offers, the offer was raised to $700,000. On December 16, 2004, the parties entered into a contract, which required a $25,000 deposit and provided a settlement date of February 22, 2005. The contract further provided that time was of the essence and that, if either party defaulted by failing to perform "any act" in the contract by a prescribed date, the non-defaulting party, upon written notice to the defaulting party, could declare the contract null and void. Pursuant to the contract: "Once signed, the terms of this Contract can only be changed by a document executed by all parties." An addendum signed on the same day provided that the Property would be sold in "as is" condition, and that "[t]he property shall be delivered free and clear of trash and debris and broom clean."

On December 22, 2004, Mr. Wang signed an addendum to the contract that was drafted by Royal. The addendum provided that: (1) Mr. Wang would remove all trash from the house by January 21, 2005; (2) settlement would occur on April 29, 2005; and (3) Royal would be permitted to perform "any repair/construction at buyer's risk & expense." Royal believed that this language gave it the right to demolish the home and begin construction of a new home prior to settlement, whereas Mr. Wang believed the clause allowed only minor cosmetic repairs. The addendum further provided that, "[i]f the buyer does not go to the scheduled settlement 4/29/05, then all repair/construction belong to the seller." This addendum, as well as each subsequent addendum, stated that it was ratified as part of the contract and "[a]ll other terms of the contract remain in full force and effect." Mr. Wang failed to remove the trash from the house within thirty days as required by the addendum.

Mr. Shahparast mailed Mr. Wang a letter dated January 24, 2005, expressing concern because the trash had not been removed from the house, and he had hired contractors who could not begin work because of the trash. As a result of this letter, on February 11, 2005, the parties executed another addendum providing as follows: (1) the price would be lowered to $660,000; (2) the settlement date was extended to July 30, 2005; and (3) Mr. Shahparast assumed responsibility for removing the trash from the house. Mr. Shahparast attempted to schedule contractors to work on the Property, but, he claimed that, because an inoperative car was left on the Property, the contractors refused to begin work due to the potential liability if they damaged the car. Royal sought to modify several items of the contract in order "not to null and void" the contract.

On March 8, 2005, the parties executed another addendum with the following terms: (1) the price of the Property was reduced to $625,000; (2) Mr. Wang was to remove the car by March, 17, 2005, and "time is [of] the essence"; (3) settlement changed to August 3, 2005; and (4) Royal would assume responsibility for removing the trash. The addendum provided: "All other of the terms of the contract remain in full force and effect." Mr. Wang failed to remove the car by the agreed upon date because he was unable to locate the title to the car.

In a letter dated June 9, 2005, Mr. Shahparast wrote to Mr. Wang's real estate agent expressing frustration that Mr. Wang had breached his obligation under the contract to remove the car from the Property by March 3, 2005. Royal advised that "until Mr. Wang agrees to pay for our loss of time and 30% increase in construction cost Royal Investment Group will not release him for the breach of his obligation under the term of December 12, 2004, and the latest addendum of March 08, 2005." The letter further advised that Royal was willing to release Mr. Wang from his breach under the following conditions:

1. Settlement date of no later than December 16, 2005, or soon after the car is remove [sic] and seller is able to schedule all contractors.

2. Contract price to be reduced to $600,000.

3. Removal of the car by no later than June 18, 2005. (Time is being of the essence).

In response to this letter, Mr. Wang's agent contacted Mr. Wang and encouraged him to follow through on the contract. On June 16, 2005, with Mr. Wang at her office, Mr. Wang's agent spoke with Mr. Shahparast on the phone. Mr. Wang's agent testified that, during this conversation, the parties agreed to new terms, including a reduction in the contract price and an August 31, 2005, settlement date.¹ Pursuant to this agreement, Mr. Wang signed another addendum to the contract ("the June 16 addendum") setting out the terms agreed upon during the phone conversation. The addendum provided as follows:

It is understood by the phone conversation between the buyer and [Mr. Wang's] agent, Alice Wang (not related), the following terms are agreed:

(1) reduce the contract price to $600,000

(2) settlement date to August 31, 2005, (Wednesday)

(3) The car on the lawn (drive way) of the property to be removed by the seller by 8:00 PM, June 18, 2005 (Saturday)

Mr. Wang's agent informed Mr. Shahparast's agent that Mr. Wang signed the addendum, and she faxed the addendum to Mr. Shahparast's agent.

That same day, after borrowing money from his real estate agent, Mr. Wang had the car towed off the Goldsboro property. Mr. Wang's agent called Mr. Shahparast's agent, informing her that Mr. Wang had removed the car, and Mr. Shahparast's agent told Mr. Wang's agent that Mr. Shahparast signed the addendum, but she did not have a copy of it yet. Mr. Wang never received a signed copy of this addendum. Mr. Shahparast stated in a deposition that he never signed the June 16 addendum, but a signed, undated copy of the addendum was later discovered in the possession of the title company.²

On June 18, 2005, Royal requested that the settlement date be changed to December 15, 2005. He sent a proposed addendum that delayed settlement until December but stated that "[a]ll other terms in the amended addendum dated June 16, 2005, remain in full force." Mr. Wang agreed to extend the settlement date to December only if Royal would pay the $1,750 in property taxes that were due in September, as well as interest on the proceeds of the sale as if "we settle[d] on August 31st as the buyer told me on 6/16."³ Royal refused to pay the Property taxes and interest. On August 4, 2005, Mr. Wang...