Cottman v. State, Department of Natural Resources

Morton, J., delivered the opinion of the Court. The State of Maryland, through its Department of Natural Resources (Department), leased some 190 acres of land in Montgomery County, Maryland, to the appellant, William W. Cottman, III, for the purpose of permitting him to farm ³⁸¹ the acreage. The term of the lease was for the period November 1, 1976, to October 31, 1977, and contained the following provision: "This lease will continue in effect from month to month after the expiration of the above term. This lease may be terminated upon thirty (30) days written notice by either party.” Without serving any formal written termination notice on the appellant, the Department thereafter invited the submission of bids from members of the public to determine who would lease the 190 acres upon the expiration of appellant’s lease.

Appellant submitted a bid, but a lease was awarded to another bidder effective July 1, 1978. Appellant then brought suit against the Department in the Circuit Court for Anne Arundel County alleging breach of the lease. The Department’s demurrer to appellant’s bill of complaint was sustained. Appellant appealed to this Court and we reversed the action of the circuit court in sustaining the Department’s demurrer.

See Cottman v. Dep’t of Nat. Resources, 44 Md. App. 224 (1979). Thereafter, formal written notice of termination was sent by the Department to appellant on December 28, 1979. The case came on for trial on the merits in June, 1980.

The trial judge found that the Department had breached its lease to appellant by entering into the lease with a third party without having first given appellant written notice of termination. The trial judge then went on to say: "However, since at the time the Department breached the lease it was for a month-to-month tenancy terminable on 30 days notice, the Court holds that the damages properly allowed for such a breach are limited to those damages which could reasonably be expected during the 30 day notice period. Since the Court finds as a matter of fact that the Complainant had no crops planted at the time of the breach, and would not have planted crops until several months thereafter, the Court holds ³⁸² that the Complainant suffered no damages from the breach of the lease.” In this appeal appellant presents the single issue: "Was the trial court correct in limiting damages to the thirty (30) day notice period required by the lease vice the two year period between the unlawful ejectment and when the required written notice was given in late December, 1979?” In support of his contention that the trial judge erred in limiting damages to the thirty day notice period, appellant refers us to the following language in Impala Platinum v. Impala Sales, 283 Md. 296, 330 (1978): "In this State three rules are followed which limit the recovery of unrealized profits: (1) a plaintiff must show that a breach by the defendant was the cause of the loss; (2) damages may not be awarded unless, when the contract was executed, the defendant could have reasonably foreseen that the loss of profits would be a probable result of a breach; and (3) lost profits may not be recovered unless they can be proved with 'reasonable certainty,’ ....” Appellant argues that "at the time the contract was executed, Appellee DNR could have reasonably foreseen that if it unlawfully ejected Appellant from the property, that Appellant would suffer a financial loss, or as this rule is stated in the alternative, the losses arose naturally from the breach of the contract