Yousef v. Trustbank Sav., F.S.B.

• Decision Date: 01 September 1989
• Docket Number: No. 581,581
• Citation: Yousef v. Trustbank Sav., F.S.B., 568 A.2d 1134, 81 Md.App. 527 (Md. App. 1989)
• Parties: Jamil H. YOUSEF, et al. v. TRUSTBANK SAVINGS, F.S.B. ,
• Court: Court of Special Appeals of Maryland

Page 527

81 Md.App. 527

568 A.2d 1134

Jamil H. YOUSEF, et al. v.TRUSTBANK SAVINGS, F.S.B.

No. 581, Sept. Term, 1989.

Court of Special Appeals of Maryland.

Feb. 2, 1990.

Argued before ALPERT, WENNER and FISCHER, JJ.

WENNER, Judge.

Upon this appeal, appellants, Jamil H. Yousef, et al., ¹ urge us to reverse an order of the Circuit Court for Montgomery County which dismissed, with prejudice, appellant's amended complaint against appellee, Trustbank Savings, F.S.B., because the court held that the amended complaint failed to state a claim upon which relief could be granted.Md.Rule 2-322(b)(2).²Appellant contends that:

I.The circuit court erred when it dismissed with prejudice Count V for failure to state a claim arising in contract.

II.The circuit court erred when it dismissed with prejudice Count VI for failure to state a claim arising in negligence.

III.The circuit court erred when it dismissed with prejudice Count VII for failure to state a claim arising in civil conspiracy.

We shall affirm the judgment of the circuit court because we find appellant's contentions to be utterly without merit.

Facts

This appeal arises out of a complex commercial litigation involving nine defendants.Appellee, Trustbank Savings, F.S.B., formerly Dominion Federal Savings & Loan Association, was implicated in only three of the eight counts in the amended complaint, namely, Count V, Breach of Contract; Count VI, Negligence; and Count VII, conspiracy.We shall attempt to summarize those facts which are pertinent to our resolution of the issues raised by appellants.

Jamil H. Yousef is the general partner of Island Plaza Limited Partnership, a Maryland limited partnership.³The events which precipitated this litigation arose out of appellants' purchase of the Island Plaza Shopping Center, located in Prince George's County.

In September, 1985, Arthur S. Bildman and several partners (hereinafter the "Bildman Limited Partnership") purchased a parcel of land in Prince George's County upon which they developed the Island Plaza Shopping Center (hereinafter the "shopping center").Financing for the project was obtained from appellee.⁴The Bildman Limited Partnership gave appellee a promissory note for $3.6 million dollars, secured by a second deed of trust on the shopping center.In October, 1986, the loan was increased to $4.68 million dollars.

In November, 1986, appellants became a tenant in the shopping center.At the time appellants became a tenant, they were told by an agent of the owners that the shopping center was for sale.Subsequently, appellants met with Bildman and his associate, Jerry Wolman, to discuss the possibility of purchasing the shopping center.During those discussions, Bildman and Wolman (hereinafter "the Sellers") provided appellants with a schedule which listed the shopping center tenants, indicated that the shopping center was 91 percent leased and calculated the monthly rental income from the tenants to be $45,450.The Sellers assured appellants that the monthly rental income from the tenants was sufficient to pay the operating expenses of the shopping center, including the payments on the mortgage.

Based upon the representations of the Sellers, on November 17, 1986, appellants entered into a contract with the Bildman Limited Partnership to acquire its limited partnership interests and to purchase the shopping center for $5.35 million dollars.Under the terms of the contract, the Sellers warranted leases for a minimum of 95 percent of the rental space in the center.The contract was contingent on appellants obtaining financing.

At the suggestion of the Sellers, appellants applied to appellee for permission to assume the existing loan on the shopping center.On December 8, 1986, appellants received a letter of commitment (hereinafter the "Commitment Agreement") from appellee granting approval of the assumption of the loan.The Commitment Agreement required that the shopping center leases be satisfactory to appellee, and that the leases represent no less than 85 percent of the net rentable area of the shopping center.

Settlement was held on December 17, 1986.At settlement, appellant paid appellee a fee of $50,000 for permitting the existing loan on the shopping center to be assumed by appellants.Appellants also paid a fee of $1,950 to appellee for the legal expenses appellee had incurred in having all of the relevant documents reviewed, including the shopping center leases.And, of course, the Bildman Limited Partnership interests were transferred to the individual appellants.

Subsequently, in January, 1987, appellants discovered that the shopping center was only 50 percent leased and that some of those listed as tenants did not exist.Moreover, appellants learned that the revenue generated from rental income was not sufficient to pay the operating expenses and to cover the mortgage payments to appellee.Consequently, appellants filed suit against nine defendants, including appellee.As we noted earlier, the three counts of appellants' amended complaint which involved appellee, seesupra n. 2, were dismissed with prejudice by the trial court upon appellee's motion to dismiss.⁵

Standard of Review

When we are called upon to review the propriety of the grant or denial of a motion to dismiss, we must determine whether "when all well-pleaded material facts in the complaint and any exhibits thereto, as well as any reasonable inferences that may be drawn therefrom are taken as true, a set of facts is alleged, which, if proven, would entitle the plaintiff to relief."MacGill v. Blue Cross, 77 Md.App. 613, 621, 551 A.2d 501, cert. denied, 315 Md. 692, 556 A.2d 673(1989).We are then required to view the well-pleaded facts in the light most favorable to the appellant.Berman v. Karvounis, 308 Md. 259, 264, 518 A.2d 726(1987).Even then, we will consider only allegations of fact and the inferences deducible from them, and not "merely conclusory charges."Id. at 265, 518 A.2d 726.

I.

Appellant first contends that the circuit court erred when it dismissed with prejudice Count V of the amended complaint for failure to state a claim arising in contract.We find no error.

In order to survive a motion to dismiss, a complaint for breach of contract must "allege with certainty and definiteness facts showing a contractual obligation owed by the defendant to the plaintiff and a breach of that obligation by the defendant."Continental Masonry v. Verdel Construction Co., 279 Md. 476, 480, 369 A.2d 566(1977)(emphasis in original).In the case sub judice the contract at issue is the Commitment Agreement.The Commitment Agreement was a contract between appellee and appellants, by which the appellee agreed to permit the appellants to assume the $4.68 million dollar loan originally made by appellee to the Bildman Limited Partnership.⁶

Appellants assert that their contract with appellee was breached because the appellee failed properly to review the shopping center leases for validity and enforceability.In other words, appellants assert that in reviewing the shopping center leases the appellee was obligated to see to it that the leases were satisfactory to the appellants, because the appellee knew, or should have known, that the appellants would rely upon appellee to do so.In making this assertion, the appellants rely upon a clause in the Commitment Agreement which provides: "Borrower shall provide Lender copies of leases representing not less than eighty-five percent (85%) of the net rentable area, which leases must be satisfactory to Lender in all respects."Appellants' reliance upon that provision of the Commitment Agreement, is, to put it mildly, misplaced.We point out to appellants that the provision requires that the leases be satisfactory in all respects to the lender, that is, to the appellee.Inasmuch as the appellants were permitted to assume the existing loan on the shopping center, we infer that the leases were satisfactory in all respects to the appellee.There is nothing in the record to indicate that they were not.A provision such as the one relied upon by the appellants is purely and simply for the protection of the lender, it is not for the protection of the borrower.The fact that the appellants were required to pay for the legal expenses incurred by the appellee in having the leases reviewed does not change that result.⁷

As we see it then, the contract between the parties was that, subject to approval of the shopping center leases by the appellee, the appellants would be permitted to assume the existing loan on the shopping center.Inasmuch as the appellants were permitted to assume the existing loan on the shopping center, there was no breach of contract by the appellee.Moreover, we observe that, in their amended complaint, the appellants failed to allege that the appellee had agreed to review the leases for the benefit of the appellants.For all of these reasons, we hold that the circuit court properly dismissed Count V of the appellants' amended complaint for failure to state a claim for breach of contract.

II.

The appellants also contend that the circuit court erred when it dismissed with prejudice Count VI of the amended complaint for failure to state a claim arising in negligence.We disagree.

A claim of negligence requires the existence of four elements: (1) a duty owed to the plaintiff by the defendant; (2) a breach of that duty by the defendant; (3) a legally cognizable causal relationship between the breach of duty and the harm suffered; and (4) damages suffered by the plaintiff.Jacques v. First National Bank of Maryland, 307 Md. 527, 531, 515 A.2d 756(1986).

In the case sub judice, the appellants contend, as we have already seen, that the duty owed to them arose out of the appellee's obligations under the Commitment Agreement.Where, as here, the alleged breach of duty creates a risk of economic loss only, tort liability may be imposed based upon...