Justia Contracts Opinion Summaries

The Board of County Commissioners of Cecil County voted to grant a water services and wastewater franchise to two related companies, after which it approved an agreement providing for the sale and transfer to the companies of county-owned water and wastewater facilities. County residents filed petitions for judicial review of the decisions. The circuit court granted the Board's motion for summary judgment on the issue of its right to award the franchise agreements and ultimately concluded that the Board had a right to sell the county-owned property. The residents appealed, arguing that Md. Code Ann. art. 25, 8(a) prohibits the Board from conveying the property. At issue was whether Md. Code Ann. art. 25, 8(a) prohibited the Board from selling facilities that will continue to provide essential services to county citizens. The Court of Appeals affirmed, holding that the Board was not prohibited from entering into the asset purchase agreements at issue.

After lobbying for legislation authorizing collective bargaining for its members, the Maryland Transportation Authority Police Lodge #34 of the Fraternal Order of Police, Inc. (FOP) struck a written memorandum agreement with the Maryland Transportation Authority (MTA), in which the MTA agreed to fund a multi-million take-home vehicle (THV) program provided the bills were withdrawn and no collective bargaining legislation covering the MTA was passed that session. When a new governor took office, he declined to continue funding for the THV program. The FOP sued on theories of breach of contract and promissory estoppel. The circuit court granted MTA's motion to dismiss, finding that the agreement was unenforceable and violated the state's collective bargaining laws. The court of special appeals reversed. The Court of Appeals reversed the judgment of the appellate court and remanded the case with instructions to affirm the judgment of the circuit court, holding that because the legislature did not expressly authorize the MTA and its employees to bargain collectively at the time the agreement was executed, the agreement was unenforceable.

Claimant filed a claim against Government Insurance Company ("GEICO") for uninsured/underinsured motorist coverage after sustaining serious injuries as a result of a car accident. At issue was whether the coverage provisions of the GEICO policy entitled claimant to underinsured motorist benefits under the policy. The court held that claimant was not entitled to uninsured/underinsured coverage where Exclusion number 4 in the GEICO insurance policy was authorized by section 19-509(f)(1) of the Insurance Article, Maryland Code, 1997, 2006 Repl.Vol., and was applicable to the facts of this case.

Respondent filed a complaint against petitioners alleging that petitioners had breached their agreement to pay the "Advisory Fee" that respondent earned while acting as petitioners' broker in the sale of petitioners' real property. At issue was whether the seller of real property was entitled to refuse to pay an agreed upon fee to the broker who represented seller on the ground that the broker was a "dual agent." The court held that it was questionable whether there was any legally sufficient evidence of dual agency; and if there was any evidence, the jury was entitled to decide as a matter of fact that a dual agency did not exist. The court also held that there simply was no evidence of any other material fact that respondent had a duty to disclose but did not. Therefore, the court affirmed the jury award of damages to respondent.

Beka Industries, Inc. ("BEKA") sued the Board of Education of Worcester County ("County Board") alleging claims that arose from a written contract dispute between BEKA and the County Board when BEKA was dissatisfied with the methods and amounts of the County Board's payment for its work. The court considered several issues on appeal and held that a new trial was warranted where the County Board was precluded from presenting evidence on its recoupment claim and BEKA may have been awarded impermissible "delay damages" under the contract. The court also reversed the intermediate appellate court's holding that the County Board's governmental immunity was not waived unless and until BEKA proved that there was a funding mechanism to satisfy a judgment for money damages rendered against the County Board. Accordingly, court affirmed in part, reversed in part, and remanded the case to the intermediate appellate court with direction to remand to the circuit court for a new trial.

Petitioner filed a breach of contract claim against its former employee claiming that the employee violated the terms of her employment agreement by breaching the duty of loyalty and by breaching a non-solicitation clause which was included in the contract. The employee filed a counterclaim alleging that petitioner withheld her bonus in violation of the Maryland Wage Payment and Collection Law, Md. Code Ann., Labor and Employment section 3-501. At issue was whether an employee who breached her duty of loyalty could seek certain of the provisions of the contract which she breached. Also at issue was whether a party could recover attorneys' fees pursuant to a contract provision that provided reimbursement of fees incurred when a third party retained and paid counsel and the party did not pay attorneys' fees, nor had any obligations to pay attorneys' fees. The court held that the employee's breach of duty of loyalty did not result in forfeiture of her rights under the fee shifting provision of the non-solicitation clause where the clause presented divisible rights and obligations from the remainder of the contract. The court also held that the employee was entitled to attorneys' fees under the fee shifting provision where she prevailed under the terms of the contract and the breach did not result in the forfeiture of her rights.

Petitioner 600 North Frederick Road, LLC, owner of one parcel of a three-parcel tract of land in Montgomery County, appealed the judgment from the Court of Special Appeals that affirmed the judgment of the circuit court. In that case, the court held that Petitionerâs predecessor in interest and the owner of one of the other parcels could modify bilaterally an earlier declaration executed and recorded by a single predecessor-owner at the time when all three parcels were under single ownership. The modification now limits Petitionerâs development rights on its later-acquired parcel, notwithstanding that two earlier declarations provided that any purported modification required the consent of the owner(s) of all three parcels. The court also ruled that the revised declaration applied not only to any third-party developer of the restricted parcel, but to Petitioner as owner of the proposed-for-development restricted parcel. Petitioner claims that because the original declaration required expressly the consent of the owner(s) of all of the parcels, an attempt to modify the agreement in a writing executed by less than all of the owners is ineffective, and the revised declaration is invalid and unenforceable. Respondent Burlington Coat Factory of Maryland, LLC, the assignee-leaseholder on one of the parcels, argued that two parties to a tripartite agreement may modify that agreement in writing, provided that the modifications do not prejudice the non-signatory party. The Supreme Court, on review of the record, held that the modifications in the revised declarations in this case were valid and enforceable absent a showing of prejudice by the non-consenting parcelâs owners. Furthermore, the Court held that the restrictions contained in the revised declaration apply not only to third-party developers of the restricted parcel, but also to Petitioner as owner. The Court affirmed the appellate courtâs decision, and remanded the case to the circuit court for further proceedings.