Shallow Run Ltd. Partnership v. State Highway Admin.
| Decision Date | 27 December 1996 |
| Docket Number | No. 646,S,646 |
| Citation | 686 A.2d 1113,113 Md.App. 156 |
| Parties | SHALLOW RUN LIMITED PARTNERSHIP v. STATE HIGHWAY ADMINISTRATION. ept. Term 1996. |
| Court | Court of Special Appeals of Maryland |
Paul A. Hackner (Klos & Hackner, P.A., on the brief), Annapolis, for Appellant.
C. Robert Loskot, Assistant Attorney General (J. Joseph Curran, Jr., Attorney General, on the brief), Baltimore, for Appellee.
Argued before MOYLAN, WENNER and CATHELL, JJ.
Shallow Run Limited Partnership, appellant, appeals from a judgment rendered by the Circuit Court for Howard County (Sweeney, J., presiding) directing the specific performance of a land acquisition contract in favor of the State Highway Administration, appellee (sometimes hereinafter referred to as the State or SHA). Appellant presents two questions, one with multiple parts:
1. Did the Circuit Court err by ordering specific performance of a contract in which a material term was vague and uncertain?
2. Did the Circuit Court err by granting specific performance of a contract for the purchase of property which the Appellee/contract purchaser had previously condemned:
A. Was the contract enforceable after the parties failed to settle within the three month deadline contained in the contract?
B. Did SHA's conduct constitute a waiver of its right to enforce the contract?
C. Was specific performance barred under the doctrine of judicial estoppel?
D. Would specific performance of the contract violate the statutory prohibition against abandonment of a condemnation after property is taken by SHA?
Appellee entered into negotiations with appellant for the purpose of acquiring 18.591 acres of a larger tract containing approximately 29.691 acres. The acquisition by the State of the 18.591-acre parcel apparently left the remaining parcel "land-locked," i.e., without access to road frontage, at least for a temporary period. To address the status of the landlocked parcel, certain easement provisions were included in the subsequent documentation, i.e., the option or contract. 1 The option or contract contained provisions requiring appellant to settle within ten days 2 and to provide clear title to the State at that time. The contract also provided that the State could take immediate possession of the property. Other provisions required that the deal be consummated within ninety days.
The property was encumbered by mortgages exceeding the anticipated purchase price of the property, and, therefore, appellant was required to obtain a release of liens for the subject property. It was unable to do so within the ten-day period, and the parties continued to attempt to effectuate settlement. During this period, the subject of condemnation came up. The State alleges that it was in the context of a "friendly condemnation." 3 Appellant claims otherwise.
After the "quick take" condemnation 4 was instituted, the State deposited into court the amount of its appraisal of the subject property, which was $13,000 less than the amount it had agreed to pay under the option contract. This appraisal was procedurally required. The condemnation action then continued.
The sums deposited were withdrawn by appellant and subsequently used, at least in part, to facilitate a release of the interests of the various lienholders. After appellant was able to provide clear title, the State requested that appellant fully perform pursuant to the terms of the contract option. Appellant refused and insisted that the contract had been terminated when the State filed the condemnation action and asserted further that the State was required to proceed and conclude its condemnation action. The State then instituted the instant case for specific performance of the option contract.
We shall further discuss the relevant facts as we address the respective questions.
Appellant asserts that the provisions in the option contract in respect to its retention of an ingress/egress easement to the "landlocked" property are so vague and uncertain as to make the entire agreement unenforceable. In its answer to the complaint below, appellant denied generally the allegations of the complaint but made no special answer claiming that the easement provision was vague and uncertain and that the contract was unenforceable for that reason. Appellant did assert the following special defenses:
11. Plaintiff's action is barred by laches.
12. Plaintiff has failed to state a claim upon which relief may be granted.
13. Plaintiff is precluded from this action by waiver.
14. Those who signed the Option Contract on behalf of Defendant, lacked the capacity and were without authority to bind Defendant.
15. Plaintiff is precluded from pursuing this claim because of a pending condemnation action which by law may not be dismissed.
On May 10, 1994, appellant filed a motion for summary judgment that, as relevant to this question, asserted: "The option contract ... should be disregarded as a matter of law for failure of express conditions precedent." In the affidavit in support of this motion, appellant asserted that the provision of an easement by the State was one of the conditions precedent 5 (as was the ten-day settlement period and the three-month delivery of deed and title period). The State opposed the granting of the motion for myriad reasons, including: "[P]aragraphs (D)(1) [the easement provision], (D)(2) [the ten-day settlement provision], and (E) [the three-month period for delivery of marketable title] are not conditions precedent...." The trial court denied appellant's summary judgment motion by written Memorandum and Order dated June 29, 1994. The court made no separate finding on the easement issue.
Ultimately, the trial court, in its final judgment, addressed the matter of the easement, as well as the other matters appellant claimed were conditions precedent. 6 It stated:
Shallow Run also argues that the contract contains conditions precedent which were not fulfilled and that, as a result, the contract is not enforceable. Shallow Run argues that those conditions required that (1) S.H.A. provide easement access to Shallow Run for ingress and egress to the rear parcel and front parcel; (2) that the State settle within ten (10) days of its acceptance of the Option, on the condition that Shallow Run provided good and marketable fee simple title to the front parcel; and (3) that Shallow Run deliver good and marketable fee simple title to S.H.A. within three months of acceptance of the Option.
As to the providing of an easement for egress and ingress, this was not a condition precedent. This obligation was an ongoing one to be effectuated by the State. There is no indication that the State will not provide the easement needed in a timely fashion.
The ten-day provision is not a condition precedent, but was inserted at the request of Shallow Run's agents for Shallow Run's benefit. The ten-day provision was never viewed by Shallow Run prior to the filing of the instant litigation as a condition precedent. Indeed, Shallow Run's representatives were acting throughout the course of the pre-litigation history in full understanding that an enforceable contract existed. Shallow Run did have an obligation to deliver good and marketable fee simple title to S.H.A. within three months of acceptance of the Option. This was not a condition precedent to the contract's enforceability but an obligation that Shallow Run could not or would not comply with. It is just such an obligation that a specific performance action can seek to enforce.
It should also be noted that the time provisions in the contract were in many respects put into the contract more as goals than mandates. The actions of the parties to the contract prior to the initiation of the condemnation litigation demonstrate an intent to continue to work to fulfill the terms of the contract, regardless of the specific wording as to time limit. S.H.A. has consistently wanted to do this deal, and it appears that Shallow Run's representatives also did, at least from May to September, 1992. Even if the time provisions at issue were viewed differently, the actions of the parties clearly waived any time mandate that Shallow Run now relies on.
Laches in bringing this matter has been raised by Shallow Run. The Court rejects this. While S.H.A.'s approach to enforcing its rights under the contract was at times confused and haphazard, the Court does not believe that there has been any inequitable delay or substantial prejudice to Shallow Run from S.H.A.'s somewhat plodding efforts to enforce its rather clear contract rights.
The trial court found that the easement provision, as stated in the contract, was not intended to be a condition precedent to settlement but rather a continuing obligation of the State. We agree. Moreover, there was evidence that the parties knew of the initial proposed location of the easement and that the State had the right to change that location. Mr. Gorsuch, an employee of the State Highway Administration and "team leader" for the Western Region (team leaders were previously called Assistant Chiefs of Right of Way), 7 testified that he initially had a conversation with a contract purchaser of the Shallow Run property, Mr. Bean. 8 In his initial discussion with Mr. Bean, the subject of easement access to the "landlocked" parcel came up. Mr. Gorsuch
told him [Mr. Bean, that] I thought there wouldn't be a problem getting an easement, I would have to get a plat prepared to show where we would probably allow an easement to be....
....
... I told him that I thought we could get an ingress and egress easement over that property....
....
Q. What does ingress and egress mean to you?
....
A. They could put a driveway, whatever they needed, for access to the rear property.... I specifically put in for an eighty foot wide easement....
Mr. Gorsuch then discussed the initial conversation he had with Mr. Stultz, president and...
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