Auction & Estate Representatives, Inc. v. Ashton

CATHELL, Judge. Respondent Sheila Ashton filed a claim in the District Court of Maryland, sitting in Baltimore City, against petitioner Auction & Estate Representatives, Inc. for breach of contract. The District Court found against respondent, but the Circuit Court for Baltimore City, in an appeal on the record, reversed. Petitioner filed a Petition for Writ of Certiorari in this Court, which we granted.

Because petitioner breached its contract with respondent, we shall affirm the judgment of the circuit court. We shall remand the matter, however, so that respondent’s request for attorney’s fees associated with the present appeal may be considered. I. Facts Sheila Ashton, respondent, inherited from her parents a single family residence located in Baltimore City. After initial attempts to sell the property proved unsuccessful, respondent engaged Auction & Estate Representatives, Inc., petitioner, to sell the property.

The parties entered into a contract, which was drafted by petitioner, on January 30, 1997. This contract provided in part: SHEILA ASHTONI,] hereinafter referred to as Seller(s), for good and valuable consideration, the receipt of which is hereby acknowledged, grant(s) unto AUCTION & ESTATE REPRESENTATIVES, INC.[,] hereinafter referred to as Auctioneer, the Exclusive Right and Authority to Sell and a lien thereon to secure any commissions or expenses due said auctioneer, of the Real Estate described as ... 401 Suffolk Rd[.], Baltimore 21218. Petitioner promised, for a commission of ten percent, to “use its best efforts to secure a Purchaser for the ... property” for a price of $90,000 or higher. The terms of the contract also specified the following: ³³⁶ It is mutually agreed upon between the Seller and Auctioneer that the Auctioneer shall provide all necessary equipment, personnel, contracts and forms to produce a high quality sale.

It shall be the sole responsibility of the Auctioneer to direct the efforts of all promotion, sale and closing of the above-described property and to employ the services of any other organization in these efforts. [Emphasis added.] At the auction, John Maguire was the highest bidder at $91,000, to which was added a ten percent buyer’s premium, for a total sale price of $100,100. As this bid exceeded respondent’s $90,000 minimum, the bid was accepted and Maguire’s signature was obtained on the contract of sale prepared by petitioner. Petitioner does not dispute that the contract was not accompanied by the written disclosure or disclaimer form required by Maryland Code (1974, 1996 Repl. Vol.), section 10-702(b)(l) of the Real Property Article, 1 which mandates that “[a] vendor of single family residential real property shall complete and deliver to each purchaser” a written disclosure or disclaimer form provided by the State Real Estate Commission.

Section 10-702(g) provides that any purchaser who does not receive the form “on or before entering into the contract of sale has the unconditional right, upon written notice to the vendor or vendor’s agent,” to rescind the contract within the specified period of time and demand the immediate return of the deposit. The sales contract was to be settled by April 1, 1997. Before settlement, Maguire stated that he was unsatisfied with the condition of the garage on the property and claimed he had not been afforded the opportunity to inspect the garage in advance of the sale. Maguire demanded the sale price be reduced to compensate for the anticipated repair costs to the garage roof and floor.

When his demands were not met'immediately, Maguire threatened to rescind the sales contract based on his entitlement to do so under section 10- ³³⁷ 702(g) because he never received the disclosure or disclaimer form required by the statute. Maguire ultimately asserted that if respondent reduced the purchase price by $4,000 and forgave twenty-three days of interest charges accrued in the amount of $580.29 for failure to settle by the settlement date, he would forbear his right to rescind the sales contract and proceed to closing. Respondent, under the advisement of counsel, agreed to Maguire’s terms. On May 12,1997, respondent filed an action against petitioner in the District Court for Baltimore City to recover the reduction in the purchase price and lost interest.

Respondent claimed petitioner breached its contractual agreement with respondent to provide all forms necessary in connection with the sale of the house. Respondent also sought attorney’s fees, as permitted by the contract. Petitioner filed a counter-claim against respondent for attorney’s fees. At trial, the District Court judge first noted that “the main purpose of ... section [10-702] is to provide the buyer with information that permits an informed decision whether to make an offer or if an offer was already made, and accepted, to rescind that contract.” The judge went on to find that petitioner was not required by section 10-702 to deliver the standardized form to Maguire.

Instead, because the sale contract between respondent and Maguire and the contract between petitioner and respondent contained “as is” disclaimer language, the purpose of the statute was satisfied. Judgment was entered in favor of petitioner. Respondent appealed on the record to the Circuit Court for Baltimore City. That court reversed the judgment of the District Court, holding that section 10-702 clearly and unambiguously required petitioner to provide Maguire with the standardized disclosure or disclaimer form.

In its written memorandum opinion, the court stated: Even if a substitute format were permitted, the disclaimer language used by the auctioneer does not comply with the statutory language. Contractual references to “as is” do not satisfy either the list of specific disclosures set forth ³³⁸ on the standardized form, or the alternative disclaimer language. Because [petitioner] did not provide the required disclosure form, Maguire was within his statutory rights to rescind the contract. Similarly, [respondent] was reasonable in mitigating her damages by accepting a reduced purchase price in lieu of rescission.

The court found in favor of respondent and entered a judgment awarding her $4,580.29 plus attorney’s fees, which totaled $4,568.30, and costs of $460. 2 Petitioner noted an appeal to the Court of Special Appeals. Because the decision by the circuit court was an appeal from the final judgment of the District Court, however, any further appeal was governed by Maryland Code (1973,1998 RepLVol.), sections 12-307(2) and 12-305 of the Courts & Judicial Proceedings Article. 3 The Court of Special Appeals transferred ³³⁹ the matter to this Court by its own motion pursuant to Maryland Rule 8-132. See Morris v. Gregory, 339 Md. 191, 194 , 661 A.2d 712, 714 (1995). Petitioner filed a Petition for Writ of Certiorari before this Court, which we granted on February 10,1999.

II

Discussion and Analysis Petitioner’s main contention on appeal is that it, as an auctioneer, was not required by section 10-702 to provide the standardized disclosure or disclaimer form provided for in that statute because auctioneers are not regulated by the Real Estate Commission, the entity charged with creating and disbursing the form. Alternatively, petitioner argues that the District Court properly found that it had substantially complied with the statute by disclaiming any warranties concerning the property. Respondent argues that she never has contended section 10-702 applies to auctioneers in their capacity as auctioneers. Instead, she states, because she as the seller was obligated under the statute to provide the standardized form, petitioner assumed her obligation to provide the form to a buyer when it specifically contracted to “provide all necessary ... forms to produce a high quality sale.” Legislative intent and the effect of section 10-702, respondent suggests, is irrelevant with regard to petitioner’s breach of contract in failing to provide the standardized disclosure form.

We agree with respondent and shall affirm. 4 The real matter at issue in this case is the express written contractual agreement between petitioner and respon ³⁴⁰ dent. More specifically, we must evaluate the effect of petitioner’s promise to “provide all necessary ... forms to produce a high quality sale” as the entity with the exclusive right and authority to sell the Suffolk Road property. Before we turn to the contract itself, we first note that Maryland has long adhered to the law of objective interpretation of contracts. See Calomiris v. Woods, 353 Md. 425, 435 , 727 A.2d 358, 363 (1999); Adloo v. H.T. Brown Real Estate, Inc., 344 Md. 254, 266 , 686 A.2d 298, 304 (1996); Maryland v. Attman/Glazer P.B. Co., 323 Md. 592, 604 , 594 A.2d 138, 144 (1991); Cloverland Farms Dairy, Inc. v. Fry, 322 Md. 367, 373 , 587 A.2d 527, 530 (1991); Aetna Cas. & Sur. v. Insurance Comm’r, 293 Md. 409, 420 , 445 A.2d 14, 19 (1982).

Under this principle, the clear and unambiguous language of an agreement will not give way to what the parties thought the agreement meant or was intended to mean. See Adloo, 344 Md. at 266 , 686 A.2d at 304 ; GMAC v. Daniels, 303 Md. 254, 261 , 492 A.2d 1306, 1310 (1985); Board of Trustees v. Sherman, 280 Md. 373, 380 , 373 A.2d 626, 629 (1977). “Where the language of the contract is unambiguous, its plain meaning will be given effect. There is no need for further construction.” Aetna Cas. & Sur., 293 Md. at 420 , 445 A.2d at 19 . See also Devereux v. Berger, 253 Md. 264, 269 , 252 A.2d 469, 471 (1969); Sands v. Sands, 252 Md. 137, 143 , 249 A.2d 187, 191 (1969).

An ambiguity arises when the language of the contract is susceptible of more than one meaning to a reasonably prudent person. See Calomiris, 353 Md. at 436 , 727 A.2d at 363 ; Beckenheimer’s, Inc. v. Alameda Assocs. Ltd. Partnership, 327 Md. 536, 547 , 611 A.2d 105, 110 (1992); Heat & Power Corp. v. Air Prods. & Chems., Inc., 320 Md. 584, 596 , 578 A.2d 1202, 1208 (1990) (citing Trucks Ins. Exch. v. Marks Rentals, Inc., 288 Md. 428, 433 , 418 A.2d 1187, 1190 (1980)).

We recently summarized a court’s task in interpreting a contract: “[A court must djetermine 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. In addition, when the language of the contract is plain and ³⁴¹ unambiguous there is no room for construction, and a court must presume that the parties meant what they expressed. In these circumstances, the true test of what is meant is not what the parties to the contract intended it to mean, but what a reasonable person in the position of the parties would have thought it meant. Consequently, the clear and unambiguous language of an agreement will not give away to what the parties thought that the agreement meant or intended it to mean.” Calomiris, 353 Md. at 436 , 727 A.2d at 363 (quoting GMAC, 303 Md. at 261 , 492 A.2d at 1310 ).

Interpretation of a written contract ordinarily is a question of law for the court. See Calomiris, 353 Md. at 434 , 727 A.2d at 362 ; JBG/Twinbrook Metro Ltd. Partnership v. Wheeler, 346 Md. 601, 625 , 697 A.2d 898, 911 (1997); Suburban Hosp., Inc. v. Dwiggins, 324 Md. 294, 306 , 596 A.2d 1069, 1075 (1991). As we stated recently in Calomiris, 353 Md. at 434 , 727 A.2d at 362 , “the determination of ambiguity is one of law, not fact, and that determination is subject to de novo review by the appellate court.” Because this case involves the interpretation of the written contract between petitioner and