DeMarco v. DeMarco

Hammond, C. J., delivered the opinion of the Court. Judge Shirley Jones, sitting without a jury, gave judgment as asked by Charles A. DeMarco (Chuck) for $11,-736.40, the balance due and unpaid for his services as an architect in preparing plans for the renovation and enlargement of Hillcrest Nursing Home, Inc., all the stock of which was owned by its president, Dr. Salvatore J. DeMarco, Jr., Chuck’s cousin. The judgment was against the corporation, which did not appeal, and, Dr. DeMarco having died before trial, against his executors (his son and his widow, Elsin DeMarco, now by remarriage Elsin Andrews), and against Elsin DeMarco Andrews, individually, who have appealed. In the fall of 1965 Dr. DeMarco was recuperating from a heart attack at his home on Greenway in Baltimore.

In an effort to ease the doctor’s boredom, Mrs. DeMarco proposed to revive an earlier attempt, unsuccessful because of zoning problems, to enlarge the nursing home. She asked Chuck, who is an architect, to come to the Greenway house to talk to the doctor and her about the matter. Chuck testified that at this meeting he was hired to do the architectural work for the renovation and enlargement of the nursing home at a fee of 6 % of the cost, a fee he made lower than the standard A.I.A. fee because of the family relationship. A number of subsequent meetings were had at which Chuck and Dr. and Mrs. DeMarco were present.

The first estimate of cost was $300,-000 to $350,000. Gradually the scope and the size of the project were increased and the estimate rose to $450,000. When the bids were opened, the low bid was $584,000. Finally, the bid of the low bidder was renegotiated to $499,000, apparently because a corporate lender had tentatively agreed to lend $500,000, and Dr. and Mrs. DeMarco approved its acceptance.

Chuck attempted to arrange permanent financing, was unsuccessful, and the ³⁹⁸ work was never done. The land under the nursing home was owned by Dr. DeMarco and the plan had been that it would be conveyed to Hillcrest in return for stock and Hillcrest would mortgage the property in order to pay for the construction and attendant costs. Hillcrest had neither actual nor paper corporate meetings subsequent to its organization meeting in January 1959. Chuck knew nothing of Hillcrest’s corporate or financial status.

He dealt only with the DeMarcos. As far as he knew, he said, Hillcrest could have been insolvent. In January 1966 he handed Mrs. DeMarco an envelope and, according to her testimony, told her it contained a standard architectural form agreement and to “get Bill [Dr. DeMarco] to sign it.” The envelope also contained a letter requesting that the form be signed by both Dr. and Mrs. DeMarco and returned together with a payment on account of the final fee of $1,050. The contract never was signed and the $1,050 was not paid.

Chuck completed the design development phase of the plans in May 1966 and sent a bill to Dr. DeMarco at his home, calling for a progress payment of $7,350. Mrs. DeMarco telephoned Chuck and told him, he says, that for “tax purposes” the bill should be sent to Hillcrest. Mrs. DeMarco’s version was that she told Chuck he must look to Hillcrest for payment, not Dr. DeMarco or her. Chuck says that he thought the DeMarcos were joint owners of all their property, including Hillcrest, because the Doctor had told him that was the way to hold property, and “would have billed the Pope” if they had asked him to.

Mrs. DeMarco prepared a check on Hillcrest’s bank account from a batch of checks they kept at home (Hill-crest’s bills were not customarily paid in this fashion). Dr. DeMarco signed it and Mrs. DeMarco sent it in the amount of $7,350 to Chuck. On December 5, 1966 Chuck wrote Dr. DeMarco that the estimated construction costs had gone to probably $450,000, that he had recalculated the basis of his fee and asked for a progress payment of $5,850. At the same time he sent an invoice for that amount to Hillcrest, as Mrs. DeMarco had requested him ³⁹⁹ to do.

In April 1967 Chuck received a Hillcrest check, prepared as before, this time in the sum of