Justia Contracts Opinion SummariesArticles Posted in Maryland Court of Appeals
Impac Mortgage Holdings, Inc. v. Timm
In this case concerning the interpretation of an ambiguous voting provision in a corporation's charter the Court of Appeals affirmed the circuit court's grant of summary judgment in favor of Respondents, shareholders of Petitioner's Series B shares, holding that the circuit court did not err.Petitioner raised issued a series of preferred stock known as Series B and a nearly identical series of preferred stock known as Series C. Petitioner later sought to buy back the shares of both series. Owners of two-thirds of the shares of both series approved the measure, but owners of less than two-thirds of Series B did so. Petitioner argued that the approval of two-thirds of shares of both series, counted together, provided the necessary approval required by the charter provision relating to Series B shares. Respondents filed this action seeking to restore and rights and preferences of Series B shares. The circuit court found that the charter language was ambiguous and that the failure to obtain the approval of owners of two-thirds of the Series B shares doomed Petitioner's proposal to buy back those shares. The Court of Appeals affirmed, holding (1) the voting provision was ambiguous; and (2) the extrinsic evidence relating to the voting provision resolved the ambiguity in favor of separate voting by Series B shareholders. View "Impac Mortgage Holdings, Inc. v. Timm" on Justia Law
Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co.
The Court of Appeals affirmed the judgment of the court of special appeals concluding that prejudgment interest on defense costs where a party breaches its duty to defend does not fall within the exception to the "modified discretionary approach" and is within the discretion of the fact-finder.The modified discretionary approach used by Maryland courts in awarding prejudgment interest generally places the award of prejudgment interest within the discretion of the trier of fact but also recognizes exceptions where a plaintiff is entitled to prejudgment interest as a matter of right. At issue was whether prejudgment interest should be awarded as a matter of right. The Court of Appeals held (1) prejudgment interest on defense costs is left to the discretion of the fact-finder; and (2) where the jury in this case was not presented with a claim of prejudgment interest, was not instructed on the issue, and did not separately state an award of prejudgment interest in the verdict, the circuit court was not authorized to award prejudgment interest. View "Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co." on Justia Law
Mayor & City Council of Baltimore v. ProVen Management, Inc.
The Court of Appeals reversed the judgment of the court of special appeals concluding that it had jurisdiction to consider this appeal, holding that, under the circumstances, there was no right to appeal arising under statute or local law.ProVen Management, Inc. filed a petition for judicial review of the Baltimore City Department of Public Works Director's final decision in favor of the City as to ProVen Management, Inc.'s action seeking additional sums under the parties' contract. The circuit court affirmed, and ProVen appealed. The City filed a motion to dismiss, alleging that the court of special appeals lacked jurisdiction under Md. Cts. & Jud. Proc. art. 12-302(a). The court of special appeals denied the motion to dismiss. The Court of Appeals reversed, holding (1) ProVen's petition for judicial review was, in both form and substance, a petition for judicial review of an administrative agency decision arising under pertinent provisions of the Baltimore City Charter; and (2) because the Charter provided no right to appeal, the court of special appeals was required to dismiss the matter. View "Mayor & City Council of Baltimore v. ProVen Management, Inc." on Justia Law
K. Hovnanian Homes of Maryland, LLC v. Havre de Grace
The Court of Appeals affirmed the judgment of the court of special appeals holding that a developer, K. Hovnanian Homes of Maryland, LLC (Hovnanian) could not enforce an agreement against the Mayor and City Council of Havre de Grace because the Mayor or his subordinate did not execute the agreement, holding that the agreement was ultra vires and unenforceable.The agreement in this case provided that the City would impose and collect a recoupment fee in connection with the development of residential dwelling units on those properties. The City Council approved the agreement, but the Mayor refused to sign the agreement, and the City did not collect any recoupment fees. The circuit court declared that the agreement was a binding and enforceable contract. The court of special appeals reversed. The Court of Appeals affirmed, holding (1) the imposition of a fee by the City must be undertaken by the municipal legislative body known as the "Mayor and City Council of Havre de Grace" and pursuant to a duly enacted ordinance; and (2) because no such ordinance was enacted, the agreement was ultra vires and unenforceable against the City. View "K. Hovnanian Homes of Maryland, LLC v. Havre de Grace" on Justia Law
Gables Construction v. Red CoatsGables Construction, Inc. v. Red Coats, Inc.
The Court of Appeals held that where a waiver of subrogation precludes liability to an injured party, a third-party defendant does not fall within the definition of a "joint tortfeasor" under the Maryland Uniform Contribution Among Joint TortFeasors Act (UCATA), Md. Code Cts. & Jud. Proc. 3-1401, and there is no statutory right of contribution.After a fire damaged a building, the owner, Upper Rock II, LLC, sued Red Coats, Inc. Red Coats filed a third-party claim against Gables Construction, Inc. (GCI) seeking contribution under the UCATA. Prior to construction, Upper Rock and GCI entered into a contract, which included a waiver of subrogation, requiring Upper Rock to transfer all risk of loss for fire-related claims to the insurer rather than holding GCI liable. Upper Rock and Red Coats settled. GCI moved for summary judgment, arguing that because it was not liable to Upper Rock, it was not a joint tortfeasor under the UCATA. The motion was denied. A jury concluded that Red Coats was entitled to contribution from GCI. The Court of Appeals reversed, holding that GCI could not be liable to Upper Rock because the waiver of subrogation prevented liability, and without liability to the injured party, the UCATA does not provide for a right to contribution. View "Gables Construction v. Red CoatsGables Construction, Inc. v. Red Coats, Inc." on Justia Law
Credible Behavioral Health v. Johnson
In this case involving the appropriate standard of review in an appeal on the record from the district court to the circuit court and the interpretation of a promissory note the Court of Appeals reversed the circuit court's judgment after applying the clearly erroneous standard to the district court's interpretation of the promissory note, holding that the circuit court applied the incorrect standard of review and erred in its interpretation of the promissory note.Petitioner offered a tuition loan program to its employee, and Respondent, a former employee of Petitioner, participated in this program until he was fired. Petitioner brought this action against Respondent seeking repayment of his debt. The district court entered judgment for Respondent. The circuit court affirmed, finding that the district court was not clearly erroneous in its interpretation of the promissory note. The Court of Appeals reversed, holding (1) a circuit court, in hearing an appeal on the record from the district court, reviews the district court's factual determinations for clear error and its legal conclusions de novo; and (2) the circuit court erred in construing the promissory note to require repayment only in situations where an employee quits. View "Credible Behavioral Health v. Johnson" on Justia Law
Cushman & Wakefield of Maryland, Inc. v. DRV Greentec, LLC
The Court of Appeals affirmed the judgment of the Court of Special Appeals affirming the judgment of the circuit court granting summary judgment in favor of Respondent in this action brought by Petitioners seeking to collect real estate brokerage commissions allegedly due after the tenant of the property exercised its option to renew a lease that Petitioners had procured for a prior owner, holding that the lower courts’ judgments were correct.Specifically, the Court of Appeals held (1) even if Petitioners qualified as third-party beneficiaries, that only gave them the right to sue whomever was liable; (2) because Respondent was not a party to the lease its assignors also were not parties; and (3) in the assignment of the lease the assignors had expressly rejected any obligations of the lease, and therefore, Respondent was not liable. View "Cushman & Wakefield of Maryland, Inc. v. DRV Greentec, LLC" on Justia Law
C&B Construction, Inc. v. Dashiell
In this breach of contract case stemming from the failure to pay for labor and materials provided by a construction subcontractor (Petitioner) to a general contractor through six construction contracts, the Court of Appeals affirmed the judgments of the circuit court and the court of special appeals in favor of Respondents.The Court of Appeals held (1) where there has been an invocation of the Maryland Construction Trust Statute, there must be a showing that the statute applies to the contracts in dispute; (2) Md. Code Real Prop. 9-204(a) contains a requirement that the contracts be subject to the Maryland Little Miller Act or the Maryland Mechanics’ Lien Statute; and (3) Petitioner failed to demonstrate that the protections afforded by the Maryland Construction Trust Statute were applicable. View "C&B Construction, Inc. v. Dashiell" on Justia Law
Young Electrical Contractors, Inc. v. Dustin Construction, Inc.
The award of summary judgment in favor of the general contractor against the subcontractor in this case based on a pay-if-paid clause was improper because the pay-if-paid clause did not apply to the issues in this case.Pay-if-paid clauses make the project owner’s payment of the general contractor a condition precedent of the general contractor’s obligation to pay the subcontractor. Thus, the pay-if-paid clause can relieve the general contractor of liability to the subcontractor even where the subcontractor has fully performed its part of the subcontract. Here, Subcontractor sued General Contractor for breach of contract relating to a construction project. The circuit court granted summary judgment to General Contractor, concluding that, under Virginia law, a pay-if-paid provision in the subcontract applied to the damages sought. The Supreme Court reversed and remanded the case, holding (1) the pay-if-paid clause did not necessarily apply to the costs at issue in this case; and (2) the other provision relied upon by the circuit court did not create a condition precedent for payment of subcontractors. View "Young Electrical Contractors, Inc. v. Dustin Construction, Inc." on Justia Law
Christian v. Maternal-Fetal Medicine Associates of Maryland, LLC
At issue was what findings a court must make in order to require attorney’s fees to be paid to an adverse party who was subjected to proceedings that were brought in bad faith or lacked substantial justification and what the appropriate means are for calculating attorney’s fees when a court determines that a party’s complaint includes claims that have substantial justification and claims that lack substantial justification.Respondents prevailed in having the trial judge dispose of Petitioner’s claims after the close of the evidence. The hearing judge found no substantial justification for each of Petitioner’s claims against Respondents and awarded $300,000 in attorney’s fees to Respondents. The court of special appeals vacated the circuit court’s judgment, concluding that there was substantial justification as to some of Petitioner’s claims. The Court of Appeals affirmed, holding that the hearing judge (1) did not commit clear error in finding no substantial justification for the claims brought by Petitioner; but (2) abused his discretion in assessing $300,000 in attorney’s fees against Petitioner without articulating how he calculated his fees. View "Christian v. Maternal-Fetal Medicine Associates of Maryland, LLC" on Justia Law