Wiencek + Assocs. Architects + Planners, P.C. v. Cmty. Homes Hous., Inc., 0642

• Decision Date: 12 July 2016
• Docket Number: No. 0642,0642
• Parties: WIENCEK + ASSOCIATES ARCHITECTS + PLANNERS, P.C. v. COMMUNITY HOMES HOUSING, INC.
• Court: Court of Special Appeals of Maryland

WIENCEK + ASSOCIATES ARCHITECTS + PLANNERS, P.C. v. COMMUNITY HOMES HOUSING, INC.

No. 0642

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2015

July 12, 2016

UNREPORTED

Wright, Berger, Reed, JJ.

Opinion by Berger, J.

* 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.

This appeal arises out of an order of the Circuit Court for Montgomery County granting appellee's, Community Homes Housing, Inc.'s ("CHH's"), motion for judgment against appellant, Wiencek + Associates Architects + Planners, P.C., ("Wiencek") pursuant to Md. Rule 2-519. Specifically, Wiencek contends the circuit court erroneously concluded that a document executed by the parties did not constitute an enforceable contract.

On appeal, Wiencek presents one issue for our review,¹ which we rephrase as follows:

1. Whether the circuit court erred in considering parol evidence to determine if a document executed by both parties was a contract.

2. Whether the circuit court's finding that a document executed by both parties was not a contract was clearly erroneous.

For the reasons set forth below, we shall affirm the judgment of the Circuit Court for Montgomery County.

FACTUAL AND PROCEDURAL BACKGROUND

On June 1, 2011, the parties entered into an "Agreement to Redevelop and Preserve Affordable Housing" (the "HUD Agreement"). Under the terms of the HUD Agreement, Wiencek would provide professional design services to assist CHH in applying for financing and insurance from the Department of Housing and Urban Development ("HUD") in exchange for CHH's promise to hire Wiencek as the Architect for the approved project. Theexpress terms of the HUD Agreement conditions Wiencek's reimbursement of costs expended to prepare the application to HUD on the issuance of a "Firm Commitment" from HUD. Indeed, under this agreement the parties stipulated that:

If HUD declines to so issue its Firm Commitment, then all costs and expenses incurred by the Architect to produce the Firm Application Design and Construction Exhibits shall be the sole responsibility of the Architect and the Owner shall not be responsible for reimbursing the Architect for any of said costs.

In order to submit a complete application to HUD, CHH and Wiencek were under the understanding that they must provide HUD with a B108 document ("B108" or "the B108") prior to receiving a Firm Commitment. A B108 is a "Standard Form of Agreement Between Owner and Architect for a Federally Funded or Federally Insured Project." The B108 is a template document created by the American Institute of Architects used by parties to draft a contract for the services an architect will render. On February 1, 2012, CHH and Wiencek executed a B108 document and included the document in their application to HUD. The B108 outlined a project for the renovation of a five-site development totaling 300 units across Columbia, Maryland. In the B108, CHH estimated that the project would cost approximately $26,416,577.00.

Article 11 of the B108 outlined the terms of compensation that CHH would provide Wiencek. Pursuant to that article, it was represented that Wiencek would be compensated in the amount of $1,690,899.00 for providing architectural services. Payment was to be made "monthly in proportion to services performed." Notably, the B108 document made nomention of the HUD Agreement, or the parties' prior understanding that Wiencek would not be entitled to payment unless and until HUD had issued a Firm Commitment. The B108 also contained a merger or integration clause purporting to limit the scope of the agreement to the express terms of the document. The merger clause incorporated a "HUD Amendment to AIA Document B108" (the "HUD Amendment") into the scope of the B108 document.

Section 13 of the HUD Amendment provides:

The funds for this Project, including Architect's funds under this Agreement, will be provided, as the case may be, from the proceeds of a Loan from a Lender who in turn obtained a commitment for mortgage insurance from HUD . . . . Although Architect may agree to provide a greater degree of services for additional compensation, require compensation for reimbursable expenses or termination expenses, or require basic compensation in excess of that provided by the Building Loan Agreement or Capital Advance Agreement for such services, the obligation to compensate Architect for the greater degree of services or the aforesaid expenses shall not be enforceable against Owner, Lender, US Treasury, HUD or the Project; provided, however, that any entity or individual other than Owner may agree to be responsible to Architect for payment thereof and, in such case be identified below.

Provider of additional payment pursuant to paragraph 13 of this Amendment, if any.

N/A

Representatives from both Wiencek and CHH testified that they executed the B108 document because it was a necessary component of the "standard HUD checklist" that must be competed in order to obtain HUD guaranteed financing. Moreover, the parties declined to incorporate the payment terms of the HUD Agreement into the B108 agreement becausethey understood that in order to obtain HUD approval, the B108 could not be contingent on HUD granting said approval. Although the B108 agreement makes no mention of the terms of the HUD agreement, a letter from Wiencek's counsel to CHH suggests that the parties understood Wiencek's payment to be contingent on HUD approval.

After the parties executed the B108 document, the Firm Commitment Application was submitted to HUD. In a letter dated June 29, 2012, HUD declined to issue a Firm Commitment for the project. HUD refused to guarantee the loan made to finance the project because under the proposal CHH intended to increase rent by 110%. Following HUD's failure to issue a Firm Commitment, Wiencek demanded payment pursuant to the B108 document. CHH, however, refused to pay, claiming that it was the parties' understanding that CHH would have no duty to pay unless and until HUD issued a Firm Commitment.

Subsequently, on April 17, 2014, Wiencek filed a four-count complaint alleging that CHH breached the contract. Count one of Wiencek's complaint alleged that CHH breached the B108 by not paying for the architectural services rendered. Count two of the complaint alleged that CHH breached the HUD Agreement by failing to make best efforts to obtain a Firm Commitment from HUD. Counts three and four, respectively, sought recovery on theories of quantum meruit and unjust enrichment. Over the course of May 4-6, 2015, the court held a bench trial on the merits of Wiencek's breach of contract claims. At the conclusion of Wiencek's case-in-chief, CHH made a motion for judgment on counts one and two of Wiencek's complaint. The court granted CHH's motion for judgment with regard tocount one. At the conclusion CHH's case, the trial court rendered judgment in favor of CHH on the remaining counts.

This timely appeal followed. Notably, in the present appeal, Wiencek only challenges the grant of CHH's motion for judgment with respect to count one of its complaint. Additional facts will be discussed as necessitated by the issues presented.

DISCUSSION

I. Standard of Review

This appeal is raised in the context of the trial court granting CHH's motion for judgment. A motion for judgment is governed by Maryland Rule 2-519 which provides:

(a) Generally. A party may move for judgment on any or all of the issues in any action at the close of the evidence offered by an opposing party, and in a jury trial at the close of all the evidence. The moving party shall state with particularity all the reasons why the motion should be granted. No objection to the motion for judgment shall be necessary. A party does not waive the right to make the motion by introducing evidence during the presentation of an opposing party's case.

(b) Disposition. When a defendant moves for judgment at the close of the evidence offered by the plaintiff in an action tried by the court, the court may proceed, as the trier of fact, to determine the facts and to render judgment against the plaintiff or may decline to render judgment until the close of all the evidence. When a motion for judgment is made under any other circumstance, the court shall consider all evidence and inferences in the light most favorable to the party against whom the motion is made.

Md. Rule 2-519.

Wiencek contends that we are to review the grant of a trial court's motion for judgment under the de novo standard. In the context of a jury trial, the second sentence of Md. Rule 2-519(b) applies so as to prevent the judge from usurping the role of the fact finder. See e.g., C & M Builders, LLC v. Strub, 420 Md. 268, 291 (2011) ("When, as here, a defendant moves for judgment based on . . . the legal insufficiency of plaintiff's evidence, a trial judge must determine if there is 'any evidence, no matter how slight, that is legally sufficient to generate a jury question.'" (quoting Tate v. Bd. of Educ., 155 Md. App. 536, 544-45 (2004)). In an action tried by the court, however, the first sentence of Md. Rule 2-519(b) is operative, which allows the court to "proceed, as the trier of fact, to determine the facts and to render judgment." Md. Rule 2-519.

To understand the rationale of this rule, it is critical to understand the burdens of proof borne by the parties. The colloquial term "burden of proof" can properly be disentangled to encompass two similar yet distinct burdens, namely, the burden of production, and the burden of persuasion. The burden of production "is satisfied by making out a prima facie case . . . [which includes] the duty of going forward with evidence at the beginning." James B. Thayer, The Burden of Proof, 4 Harv. L. Rev. 45, 69 (1890). Stated differently, if the burden of production is not satisfied, it "means that the evidence...