FISCHER ORGANIZATION, INC. v. Landry's Seafood Restaurants, Inc.

DAVIS, J. Appellant, The Fischer Organization, Inc., filed suit against appellee, Landry’s Seafood Restaurants, Inc., in the Circuit Court for Prince George’s County. The four-count complaint, alleging breach of contract, quantum meruit, promissory es: toppel, and fraud in the inducement, was filed on August 12, 1999. Appellee filed its answer on October 22, 1999. From January 10-11, 2001, a bench trial was conducted (Thomas Smith, J.) and, on February 14, 2001, the parties submitted post-trial memoranda summarizing the arguménts and evidence adduced at trial.

The trial court rendered a judgment in favor of appellee on March 15, 2001. Appellant filed this timely appeal on March 22, 2001, wherein it presented three questions, which we rephrase for clarity as follows: I. Did the trial court commit reversible error by rendering a judgment in favor of appellee on appellant’s claim for breach of contract?

II

Did the trial court commit reversible error by rendering a judgment in favor of appellee on appellant’s claim for unjust enrichment? ⁶⁹ III. Did the trial court commit an abuse of discretion when it deemed portions of a deposition transcript of appel-lee’s designated representative inadmissible? We answer the above questions in the negative and, therefore, affirm the judgment of the trial court. FACTUAL BACKGROUND This appeal stems from a brokerage dispute.

Appellant is a real estate brokerage firm whose President is Benson J. Fischer, a duly licensed real estate broker in the State of Maryland. Appellee is a Texas corporation that owns and operates a number of restaurants throughout the country. In 1996, appellee acquired Bayport Restaurants, Inc. (Bayport), in accordance with the terms of a merger. At the time, one of Bayport’s wholly-owned subsidiaries, Take-Away/King Shopping Center, Inc. (Take-Away), leased commercial premises located at King Shopping Center, in Prince George’s County, from King Associates Limited Partnership (King Associates).

At or about the time of the merger, Take-Away ceased paying rent to King Associates, with approximately fifteen years remaining under the terms of the lease. Consequently, King Associates declared appellee, the parent company of Take-Away, in default under the lease for failure to pay rent and abandonment of its business operations. Appellee’s right to possession of the premises was terminated shortly thereafter. On November 18, 1996, King Associates filed a lawsuit against Take-Away and appellee for breach of Take-Away’s lease.

Because fifteen years remained on the lease, appellee faced potential liability in the amount of $700,000, reflecting total base rent and “build-out” rent remaining due over the balance of the lease term. In addition to the approximately $700,000 owed on the remaining lease term, appellee faced liability arising out of obligations to pay common area maintenance costs and real estate taxes. ⁷⁰ Meanwhile, Fischer learned of Take-Away’s abandoned properties in Prince George’s County, 1 while driving through the area on a routine survey of possible vacancies. Appellant approached appellee and offered its services to locate replacement tenants for the vacancies, in order to help mitigate appellee’s liability as guarantor under the lease. On October 8, 1996, appellant sent appellee a proposed commission agreement, whereby appellee would pay appellant a four percent brokerage commission “of the aggregate value of the entire lease term, including any fixed increases, renewals[,] or expansions of the [l]ease,” for “procuring a client that leases or purchases the property ... on terms acceptable to [appellee].” (Commission Agreement.) Appellee accepted the proposed agreement in mid-November, limiting its duration to six months and adding the following paragraph, to which appellant agreed: It is expressly agreed and understood that this Letter Agreement is contingent upon [appellee] retaining and being able to transfer its rights in and to the Lease, Leased Premises!,] and personal property located thereon.

In the event that [appellee] is unable to transfer its rights to the real and personal property which is the subject of this agreement at closing, this [a]greement shall be null and void and all parties shall be relieved of liability hereunder. At the same time, Fischer was engaged in negotiations with Morton Bender, general partner in King Associates, whereby King Associates would pay appellant a brokerage commission equal to four percent of the aggregate value of any lease transaction consummated between King Associates and a suitable replacement tenant. According to appellant, all parties were made aware of both brokerage agreements; however, both Bender and appellee’s representative, Matt Dillick, denied at trial that either was aware of appellant’s other commission agreement. Indeed, Bender testified that, had he known ⁷¹ of appellee’s agreement with appellant, he would not have entered into an agreement with appellant.

Appellant then located Rejnaj of King Shopping Center, a franchisee of the Popeye’s fast food chicken chain, as a possible replacement tenant for the shopping center. On December 2, 1996, appellant prepared a Letter of Intent between appellee and Rejnaj, setting forth the terms of the proposed tenancy, including an additional guarantee of $50,000 from Popeyes Limited Partnership II (PLP II). According to appellee, the letter provided, among other things, for monthly rent “in amounts less than those owed by [appellee] to [King Associates] in its lease, an extremely limited guarantee from an unknown entity, and no “key” money for the leasehold improvements, restaurant equipmentf,] and other personal property left in the space of which Rejnaj would take control.” In addition, appellee claims, it would have had to guarantee Rejnaj’s obligations. For all of these reasons, appellee found the proposal unacceptable and, as a result, rejected it in a letter to appellant dated December 16, 1996.

That letter stated, in relevant part: In response to your letter dated December 16, 1996, please re-read your proposal. You have not brought us a thirty year lease but rather a one year lease with [twenty-nine] option years. There are no guarantees and you have not removed us from the lease. We are interested in pursuing this arrangement but will not pay $78,000 in commission for this type of deal.

Appellant responded in a letter, also dated December 16, 1996, stating, in relevant part: The [brokerage] provision clearly states that a four percent commission shall be due and payable for the total aggregate value of the entire Lease Term. A guarantee, or lack of guarantee, has absolutely nothing to do with the aggregate value of the Lease, [and] therefore should not be calculated to increase or decrease the commission value. During this time, litigation between King Associates and appellee continued. On March 15, 1997, King Associates filed ⁷² a Motion for Summary Judgment and, on April 8, 1997, appellee filed an opposition thereto, noting that it had “retained [appellant] to attempt to relet the premises.” In its motion, appellee argued that it should benefit from any mitigation of damages “[i]f ... it is discovered that [King Associates] would benefit from future lease payments from the Popeye’s franchisee in excess of those which it could have expected from [appellee] but for [appellee’s] offer of surrender of the premises.” Appellant made no effort to remove the objectionable provisions in the Rejnaj Lease, nor did it engage in further negotiations in an attempt to incorporate terms that would be acceptable to appellee; rather, it approached King Associates to negotiate the Rejnaj Lease based on the original Letter of Intent.

On May 1, 1997, King Associates and Rejnaj entered into a lease agreement that was, according to appellant, “substantially based upon the terms of the Letter of Intent prepared by appellant” — the same terms to which appellee had objected. King Associates paid appellant a commission on January 26, 1999 and later sought reimbursement from appel-lee as part of its litigation seeking damages arising out of Take-Away’s abandonment of the premises. On January 27, 1999, appellant transmitted its first invoice to appellee, reminding appellee that it owed appellant a brokerage commission of $44,940. Appellee never paid appellant, thus the basis of the breach of contract claim filed in the trial court.

STANDARD OF REVIEW The judgment of a trial court will not be set aside unless clearly erroneous or legally incorrect. Md. Rule 8-131(c). If, in considering the evidence produced at trial in the light most favorable to the prevailing party, an appellate court determines that there is sufficient evidence to support the judgment of the trial court, it will not be disturbed. “Moreover, if there is any competent, material evidence to support the factual findings below, we cannot hold those findings to be clearly erroneous.” Mayor of Rockville v. Walker, 100 Md. App. 240, 256 , 640 A.2d 751 (1994). ⁷³ DISCUSSION I Appellant contends that appellant was entitled to a commission pursuant to the terms of the Commission Agreement, as it located a replacement tenant who was “ready, willing!,] and able to lease the premises on terms acceptable to appellee.” Appellee, on the other hand, responds that the proposal was unacceptable and, as a result, it was not liable for the commission. Agreeing with appellee, the trial court found that appellant’s “[b]reaeh of [cjontract claims fail for non-compliance with the [Commission] Agreement with [appellee].” For the reasons discussed below, we concur with the trial court and conclude that, pursuant to the terms of the Commission Agreement, appellee’s dissatisfaction with the Rejnaj Lease discharged its obligation to appellant.

The general rule controlling a real estate broker’s entitlement to a commission is located in Md.Code (1996 Repl.Vol.), Real Prop. (R.P.) § 14-105: In the absence of [a] special agreement to the contrary, if a real estate broker employed to ... lease, or otherwise negotiate an estate ... procures in good faith a ... lessee . .. and the person procured is accepted by the employer and enters into a valid, binding and enforceable written contract, in terms acceptable to the employer ... the broker is deemed to have earned the customary or agreed commission. It is undisputed that, in the case sub judice, a special agreement did exist and, therefore, its terms governed appellant’s entitlement to such a commission. See, e.g., DeFranceaux Realty Group, Inc. v. Leeth, 283 Md. 611 , 391 A.2d 1209 (1978) (holding that an appellate court is to look “to the terms of the contract between the parties in determining the right of the broker to receive commissions”).

When the terms of an agreement are clear and unambiguous, a court will give effect to the general connotation of the terms. Wells v. Chevy Chase ⁷⁴ Bank, F.S.B., 363 Md. 232, 251 , 768 A.2d 620 , (2001)(quoting Rothman v. Silver, 245 Md. 292, 296 , 226 A.2d 308 (1967)). Turning to the terms of the Commission Agreement, it is clear that appellee agreed to pay appellant a four percent brokerage commission in exchange for appellant’s procurement of a replacement tenant that would be acceptable to appellee. In the event appellant failed to find an adequate replacement, however, appellee would not be liable for the commission.

Moreover, because appellee did not transfer its rights to the property to Rejnaj, in violation of the added paragraph to that effect, the terms of the agreement were not satisfied. This analysis of the agreement echoes that of the tidal judge, who determined that appellee “rejected the [Rejnaj] Lease for sound business reasons” and, as a result, the agreement “between [appellant] and [appellee] was null and void and both [p]arties [were] relieved from liability thereunder.” Moreover, the trial court found that appellant, by entering into two agreements — one with appellee and another with King Associates — was merely covering its bases, reasoning that “[i]f the Rejnaj lease transaction was an assignment or sub-lease, by [appellee], [appellee] would pay the fee. If the Rejnaj lease transaction was with [King Associates], the Landlord would pay the fee.” At trial, appellee presented Dillick, its Director of Real Estate, who testified that appellee had at least three concerns regarding the Rejnaj proposal. First, according to Dillick, the terms of the proposal stated that Rejnaj would have been obligated to pay $3,750 per month during the first five years of its lease.

Under its lease with King Associates; however, appellee was obligated to pay $4,411.30, which would have left appellee with a continuing monthly obligation in the amount of $661.30. 2 Second, Rejnaj provided a guarantee of only $50,000 ⁷⁵ from PLP II, an entity unknown to appellee. This guarantee would only provide assurances for one year of the entire