Ahmad v. Eastpines Terrace Apartments, Inc.

WOODWARD, J. On November 28, 2007, appellant, M. Abraham Ahmad, filed a complaint in the Circuit Court for Montgomery County against appellees, Eastpines Terrace Apartments, Inc. (“East-pines”), Metamorphosis Limited Partnership (“Metamorphosis”), and Mehahmad Enterprises, Inc. (“Mehahmad”). 1 The complaint included claims (1) against Eastpines and Metamorphosis for breach of contract for failing to reimburse appellant ³⁶⁴ for payments made on behalf of those corporations; (2) against Eastpines, Metamorphosis, and Mehahmad for unjust enrichment; and (3) against Metamorphosis for an accounting. 2 At the conclusion of appellant’s case, during a bench trial, the trial court granted appellees’ motion for judgment on these three claims. Appellant presents four questions on appeal, which we have combined and rephrased: 3 I. Did the trial court err in ruling that the statute of limitations barred appellant’s claim for breach of contract?

II

Did the trial court err in ruling that the statute of limitations barred appellant’s claim for unjust enrichment?

III

Did the trial court err in denying appellant an accounting? For the reasons stated herein, we shall affirm the judgment of the circuit court. BACKGROUND This appeal arises from a series of business transactions between family members. Eastpines was established in 1977 with appellant’s father, Mehdi Ahmad, as the sole shareholder.

Eastpines soon thereafter purchased the Eastpines Terrace Apartments complex in Riverdale, Maryland. Mehahmad, which was organized in 1978, purchased commercial property ³⁶⁵ located in Prince George’s County with capital from appellant’s parents. In 1984, appellant, appellant’s brother, M. Jaffar Ahmad (“Jaffar”), and appellant’s sister, Linda Man-souri, acquired an interest in Stanton Partners (“Stanton”), which owned property at 600-602 Maryland Avenue NE in the District of Columbia (the “Maryland Avenue property”). In 1986, appellant and Jaffar purchased Metamorphosis, which owned property at 1630 Florida Avenue NW, also located in the District of Columbia (the “Florida Avenue property”).

In 1989, the parties consummated a transaction commonly known as a “1031 Exchange.” 4 Under the terms of the exchange, Eastpines transferred Eastpines Terrace Apartments to a third party known as RFI Associates (“RFI”). RFI then delivered to Eastpines the deeds to Stanton’s Maryland Avenue property and Metamorphosis’s Florida Avenue property. RFI also transferred $1,150,000.00 in cash to Stanton and Metamorphosis. Eastpines also received 100% ownership in Stanton and 99% of Metamorphosis.

The remaining 1% of Metamorphosis was owned by appellant. At the conclusion of the 1031 Exchange, Eastpines owned the Maryland Avenue property, the Florida Avenue property, 100% of Stanton, and 99% of Metamorphosis. Between August 1989 and November 1995, appellant purportedly provided both direct and indirect financial support to Eastpines and Metamorphosis. Appellant thereafter stated to his father that he wanted to be reimbursed for these payments to Eastpines and Metamorphosis.

After a series of discussions regarding repayment, appellant’s father signed the following document on June 25, 2000 (“the 2000 Acknowledgment”), in his individual capacity and on behalf of Eastpines, Stanton, and Metamorphosis: The undersigned, Mehdi Ahmad, Eastpines Terrace Apts., Inc., Stanton Partners and Metamorphosis Limited ³⁶⁶ Partnership, hereby affirm, jointly and severally, their debt in the principal amount of One Hundred Seventy One Thousand Eight Hundred Dollars and Sixteen Cents that have been accrued since May Nineteen Hundred Ninety One in accordance with the attached schedule to [appellant] and bear an interest rate of Nine percent per annum compounded daily until paid. Moreover, the above-enumerated debtors waive any bar imposed by the Statute of Limitations for collection of the principal or the interests [sic] accrued thereon; and agree, jointly and severally, to reimburse [appellant] for cost of collection or defense of any claims arising from this document, if necessary. [Appellant] hereby is authorized to collect any monies received from refinancing, conveyance, sale or transfer of assets of Mehdi Ahmad, Eastpines Terrace Apts., Inc., Stanton Partners, Metamorphosis Limited Partnership, or rents received from these properties or purchases made from the proceeds of these properties. Additionally, Mehdi Ahmad, Eastpines Terrace Apts., Inc. Stanton Partners, and Metamorphosis Limited Partnership hereby forever release [appellant] and entities and properties that he has an interest in from all claims, demands, accounting, causes of action, damages, breach of trust or fiduciary duties from any action that [appellant] has performed for the indebted parties. (Emphasis added).

After appellant did not receive any repayment under the 2000 Acknowledgment, he wrote a letter on September 22, 2003, to Mansouri demanding, among other things, that he receive reimbursement for his payments to Metamorphosis. Appellant attached a copy of the 2000 Acknowledgment and stated that he would file suit if the matter could not be resolved. Appellees’ counsel replied with a letter dated October 15, 2003, which stated that appellant’s claims were barred by the statute of limitations and that appellant’s father did not recall executing the 2000 Acknowledgment. Appellees’ counsel also requested that appellant provide documentary evidence of the asserted debt.

Appellant replied by letter dated November 11, 2003, in which he disputed appellees’ counsel ³⁶⁷ argument that the bar of the statute of limitations applied to the monies due to appellant. In a letter dated December 12, 2003, appellees’ counsel repeated his request for documents to support any debt owed to appellant and restated his belief that appellant’s claim was barred. Appellant countered with a letter to appellees’ counsel dated December 18, 2003, in which he stated “that it appears to me that we cannot resolve my issues with your clients amicably and litigation is becoming inevitable.” Approximately four years later on November 28, 2007, appellant filed a complaint in the Circuit Court for Montgomery County alleging, inter alia, that appellees breached the 2000 Acknowledgment and were unjustly enriched. Appellant also requested that Metamorphosis “fully and completely account for the funds that it has received and disbursed over the last twelve years.” 5 A four day bench trial was held from June 1 through June 4, 2009.

At the close of appellant’s case, appellees made a motion for judgment under Maryland Rule 2-519. Appellees argued, among other things, that appellant’s claim for a breach of contract was barred by the statute of limitations, because appellant did not file suit until November 2007, which was well outside the three-year limitations period for breach of contract actions. Additionally, appellees asserted that the 2000 Acknowledgment did not constitute a perpetual waiver of the statute of limitations, and even if it did, most jurisdictions have held that such an agreement is void on public policy grounds. Similarly, appellees contended that appellant’s claim for unjust enrichment was barred by the statute of limitations.

With regards to the accounting, appel-lees stated that the whole point of the 1031 Exchange was for the Florida Avenue property to go to Eastpines and that Metamorphosis had no assets. ³⁶⁸ The trial court first granted appellees’ motion as it related to the breach of contract and unjust enrichment counts and gave the following rationale for its ruling: [Tjhere is a threshold problem. And that is the statute of limitations. ... And there is a reason that the statute of limitations or in equity the doctrine of laches exists. And that is that it’s human behavior that over the course of time memories fade, records disappear.

That to allow a claim to be brought indefinitely would disadvantage someone, most likely the person against whom the claim is made. So the law devised this doctrine, the statute of limitations or as a matter of common law the doctrine of laches in equitable cases, in order to prevent that. To provide a reasonable period of time in which a claim can be made. Here we have in 2000, I think it was July 25th of 2000 [actually June 25]....

We have what’s been variously characterized as a note or agreement of some sort executed by the senior Mr. Ahmad. And it purports to recognize an indebtedness on behalf of various entities. And to agree to a repayment. And it also purports to waive the statute of limitations with regard to those debts.

I don’t read the document ... as being a perpetual waiver of limitations or even purporting to be a perpetual wavier of the statute of limitations, but rather as purporting to be a waiver of the statute of limitations up until that point. Of course, that was 2000 and the limitations would have run again, even were this note to be found valid. And the senior Mr. Ahmad indicates that, you know, if I were to believe his testimony, that it wasn’t explained to him, that he didn’t know that that’s what he was signing, that there was some misrepresentation to him. I don’t reach that level of fact finding.

Because what I do find is even if it were a valid note that limitations would have run as to it. If it were to be construed as being a future perpetual waiver of limitations, I think that that would not be enforce ³⁶⁹ able in Maryland. I think that would be [ ] against public policy. And I think there’s a good reason for that.

If you could perpetually waive the statute of limitations then every note would automatically have a clause in it with a perpetual waiver of the statute of limitations and we’d be back where we started from. And I think that that is just simply not the law. So I do find that the claim with regard to the note, as well as the unjust enrichment claim, is barred by the statute of limitations. The trial court then granted appellees’ motion with respect to appellant’s request for an accounting of Metamorphosis: There remains [ ] the accounting against Metamorphosis.

But once again, looking at the evidence that’s been presented, the only suggestion of an asset by Metamorphosis was a property that was, by testimony, gated [sic] away, as I understood it, as part of a 1081 exchange. That whether ultimately a deed was recorded or not, it appears that equitable title was transferred. There’s been no evidence to suggest that there are any assets remaining in Metamorphosis. And while [appellant] may be a one percent owner, he appears to be a one percent owner of nothing.

So I don’t find that there has been a satisfaction of the elements required to order an accounting. After judgment was entered in favor of appellees, appellant filed a timely notice of appeal. DISCUSSION Standard of Review Rule 2-519(a) allows a party to “move for judgment on any or all of the issues in any action at the close of the evidence offered by an opposing party[.]” Under Rule 2 — 519(b), “[w]hen a defendant moves for judgment at the close of the evidence offered by the plaintiff in an action tried by the ³⁷⁰ 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.” We review a trial court’s granting of a motion for judgment under Rule 2-519 in accordance with Rule 8-131(c). Cattail Assocs., Inc. v. Sass, 170 Md.App. 474, 486 , 907 A.2d 828 (2006).

Under this standard, we accord no deference to a trial court’s legal conclusions, which we review de novo. Id. Under Rule 8-131(c), however, “we must consider the evidence in the light most favorable to the prevailing party and decide not whether the trial judge’s conclusions of fact were correct, but only whether they were supported by a preponderance of the evidence.” City of Bowie v. MIE Props., Inc., 398 Md. 657, 676 , 922 A.2d 509 (2007) (quotations omitted). L Did the trial court err in ruling that the statute of limitations barred appellant’s claim for breach of contract?

Appellant argues that the trial court improperly determined that his breach of contract claim was barred by the statute of limitations, because, according to appellant, the parties agreed to a prospective waiver of the limitations period in the 2000 Acknowledgment. Appellant maintains that the waiver of the statute of limitations was not just retrospective, as the trial court ruled, because the “specific waiver language would be meaningless if the waiver was only designed to be retroactive.” Appellant also contends that the waiver in the 2000 Acknowledgment is a tolling agreement, which is valid in Maryland. Appellant concludes that the suit was timely filed. 6 ³⁷¹ Appellees reply that the trial court correctly concluded that the statute of limitations barred appellant’s breach of contract claim. Appellees maintain that the trial court properly determined that the 2000 Acknowledgment did not contain a perpetual waiver of the limitations period, because it did not specifically employ prospective language.

According to appel-lees, the acknowledgment of indebtedness only restarted the limitations period in June 2000, which had expired by the time appellant filed his suit in November of 2007. Finally, appel-lees contend that, even if the waiver in the 2000 Acknowledgment was construed to be perpetual, such waiver is invalid as against public policy. Analysis “A civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced.” Maryland Code (1974, 2006 Repl. Vol), § 5- ³⁷² 101 of the Courts & Judicial Proceedings Article (“C.P.”). “[T]he purposes of statutes of limitation are to provide adequate time for a diligent plaintiff to bring suit as well as to ensure fairness to defendants by encouraging prompt filing of claims.” Fairfax Sav., F.S.B. v. Weinberg & Green, 112 Md.App. 587, 612 , 685 A.2d 1189 (1996) (alteration in original) (quotations omitted).

We have previously stated that “the Maryland cases make clear that a statute of limitations is designed to protect a potential defendant from ‘surprise’ actions which inhibit his ability to fashion a defense because of the litigation’s temporal distance from the disputed occurrence.” Reed v. Sweeney, 62 Md.App. 231, 235 , 488 A.2d 1016 , cert. denied, 303 Md. 471 , 494 A.2d 939 (1985). The trial court determined that the 2000 Acknowledgment was a contract between the parties. “The interpretation of a contract is a legal question subject to de novo review.” Thomas v. Capital Med. Mgmt. Assocs., LLC, 189 Md.App. 439, 454 , 985 A.2d 51 (2009) (quotations omitted). “Maryland follows the objective theory of contract interpretation, which focuses on the written text: the construing court’s task is to determine from the language of the agreement itself what a reasonable person in the position of the parties would have meant at the time it was effectuated.” Id.

(quotations omitted). The Court of Appeals has stated: The rules of contract interpretation are well-settled.... “Maryland adheres to the principle of the objective interpretation of contracts.” The court will “ ‘giv[e] effect to the clear terms of the contract regardless of what the parties to the contract may have believed those terms to mean.’ ” “Thus, our search to determine the meaning of a contract is focused on the four corners of the agreement.” “[EJffect must be given to each clause so that a court will not find an interpretation which casts out or disregards a meaningful part of the language of the writing unless no other course can be sensibly and reasonably followed.” Clancy v. King, 405 Md. 541, 556-57 , 954 A.2d 1092 (2008) (alterations in original) (citations omitted). ³⁷³ The case sub judice involves the meaning of the first two sentences of the 2000 Acknowledgment, which state: The undersigned, Mehdi Ahmad, Eastpines Terrace Apts., Inc., Stanton Partners and Metamorphosis Limited Partnership, hereby affirm, jointly and severally, their debt in the principal amount of One Hundred Seventy One Thousand Eight Hundred Dollars and Sixteen Cents that have been accrued since May Nineteen Hundred Ninety One in accordance with the attached schedule to [appellant] and bear an interest rate of Nine percent per annum compounded daily until paid. Moreover, the above-enumerated debtors waive any bar imposed by the Statute of Limitations for collection of the principal or the interests [sic] accrued thereon; ... The plain language of the first sentence acknowledges the amount of the debt, the time period of the debt’s accrual, and the rate of interest due on the debt.

The second sentence makes clear the effect of the first sentence, to wit, that the bar imposed by the statute of limitations has been waived on the principal and “the interests [sic] accrued thereon.” See Jenkins v. Karlton, 329 Md. 510, 531 , 620 A.2d 894 (1993) (“Maryland law has long recognized that acknowledg[ ]ment of a debt barred by limitations removes the bar to pursuing the remedy.”). Notably absent from the 2000 Acknowledgment is any explicit language relating to a perpetual duration for the waiver. Without the inclusion of such express language, an agreement cannot