Knight v. Princess Builders, Inc.

BATTAGLIA, J. The case sub judice presents us with two issues for our resolution. The first question presented is whether a company, Princess Builders, Inc. that entered into a contract to purchase real property from the Personal Representative of an intestate estate, may pursue an appeal from an Orphans’ Court’s order directing the Personal Representative to sell the real property to one of the Estate’s heirs, Diana Knight. We hold that Princess Builders is properly considered a “party” under Maryland Code (1974, 2002 Repl.Vol.), Section 12-502 of the Courts and Judicial Proceedings Article governing such appeals. As the second issue, Ms. Knight asserts that there was no enforceable agreement between the Estate and Princess Builders after August 31, 2003 because Princess Builders failed to satisfy a contingency in the contract.

We determine that because the contingency was not drafted for Ms. Knight’s benefit, she may not use it to avoid the agreement. Facts In 2002, Mary Martha Isabella Knight died intestate while owning two parcels of real property in Anne Arundel County ³³ known as Lot 20, upon which a house was located, and an undeveloped parcel Lot 21, known, respectively, as 1612 and 1614 Severn Road, Severn, Maryland (collectively the “Property”). When two previous personal representatives were unable to dispose of the real property held by the Estate, the Orphans’ Court for Anne Arundel County appointed David R. Forrer, an attorney, as the Successor Personal Representative. The Personal Representative offered the Property for sale through a realtor and received a bid from the Respondent, Princess Builders, in which Princess Builders offered $75,000 for Lot 21, the undeveloped portion of the Property, or $145,000 for the entire Property.

The Personal Representative informed the twelve heirs of the Estate, including the Petitioner, Diana Knight, of the offer and solicited a counter-bid from them, to which Ms. Knight responded and expressed an interest. The Personal Representative instructed her to make her offer in writing. Three days later, Ms. Knight faxed a letter to the realtor offering $146,000 for both lots. In response, the Personal Representative contacted Ms. Knight and informed her that the offer had to be made in the form of a contract.

On June 5, 2003, the Personal Representative received Ms. Knight’s contract, which reaffirmed her prior offer. After he received the contract from Ms. Knight, the Personal Representative, nevertheless, entered into a contract for sale with Princess Builders for Lot 21 for the price of $75,000 and permitted the heirs to have another opportunity to attempt to purchase Lot 20. On June 6, 2003, the Personal Representative filed a Petition to Sell Real Estate requesting the Orphans’ Court’s approval of the sale, as required by a contingency contained in the contract. None of the heirs offered to purchase Lot 20.

After conferring with Princess Builders about the company’s interest in acquiring Lot 20, the Personal Representative, on June 17, 2003, filed a Supplemental Petition to Sell Real Estate to obtain the Orphans’ Court’s approval to sell both lots to Princess Builders for $145,000. ³⁴ Princess Builders’s contracts to purchase the lots contained the following contingency: This Contract is contingent on buyer obtaining a building permit for the house of buyers choice [b]y August 31, 2003 or this contract is declared null and void and of no further effect with deposit being declared null and void and refunded as well.. Thus, any Backup Contract could then become primary. Time being of the essence for Settlement date of Sept 9, 2003. On June 23, 2003, Ms. Knight filed an objection to the sale with the Orphans’ Court and requested a hearing.

In her petition, Ms. Knight alleged that she should be permitted to purchase both lots because she had submitted a higher offer than Princess Builders. Approximately six months later, on December 16, 2003, a hearing on the Petition to Sell Real Estate and Ms. Knight’s objection thereto was held. Subsequently, the Orphans’ Court issued an order directing the Personal Representative to sell the Property to Ms. Knight unless, within ten days, the Estate received an offer to purchase the Property for more than the $146,000 offer made by Ms. Knight; no such offer was received. On January 2, 2004, Princess Builders filed a Notice of Appeal to the Circuit Court for Anne Arundel County.

On May 4, 2004, the Circuit Court held a hearing, at which time the Personal Representative moved to be joined as a party because he was a party to both the contract of sale with Princess Builders and would be to that with Ms. Knight as well. 1 The Circuit Court granted the motion. During the ³⁵ hearing, testimony was taken from the Personal Representative, the realtor retained by the Personal Representative to facilitate the sale of the Property, and Ms. Knight. Thereafter, the Circuit Court issued a Memorandum Opinion in which the judge held that the Personal Representative acted in accordance with his fiduciary duties when he accepted the offers from Princess Builders rather than the contract submitted by Ms. Knight and reversed the determination of the Orphans’ Court, thereby, reinstating the contracts with Princess Builders for the purchase of both Lot 20 and Lot 21. Thereafter, Ms. Knight filed a Motion to Alter or Amend, or Revise a Judgment, wherein she challenged Princess Builders’s standing to pursue an appeal in the Circuit Court.

The Circuit Court denied her motion on June 14, 2004, and Ms. Knight filed her Notice of Appeal on July 2, 2004. The Court of Special Appeals, in a reported opinion, determined that Princess Builders had standing to pursue an appeal to the Circuit Court based on its interpretation of the term “party.” Knight v. Princess Builders, Inc., 162 Md.App. 526 , 875 A.2d 771 (2005). The intermediate appellate court noted that under this Court’s prior decisions any “aggrieved party” may note an appeal to the circuit court from the orphans’ court. Ultimately, the court concluded that “a contract purchaser whose right to purchase the estate property has been adversely affected by an orphans’ court order is aggrieved and therefore has standing to appeal.” Id. at 587 , 875 A.2d at 777 .

The Court of Special Appeals also determined that the contracts between the Personal Representative and Princess Builders remained enforceable throughout the proceedings in the Orphans’ Court and Circuit Court. Moreover, the inter ³⁶ mediate appellate court concluded that because the building permit contingency in the contract between the Estate and Princess Builders was not made for Ms. Knight’s benefit, she could not use it to challenge the enforceability of the contract. Ms. Knight filed a petition for writ of certiorari with this Court and presented the following questions for our review: 1. Did the circuit court lack subject matter jurisdiction to entertain Princess Builders’s appeal from the orphans’ court decision? 2.

Was Princess Builders’s contract of sale still enforceable, or did it expire on its own terms before the hearing in the circuit court? We granted the petition and issued the writ. Knight v. Princess Builders, 389 Md. 124 , 883 A.2d 914 (2005). We hold that under Maryland Code (1974, 2002 Repl.Vol.), Section 12-502 of the Courts and Judicial Proceedings Article and this Court’s prior decisions addressing the scope of the term “party” as used therein, Princess Builders may properly be considered a party who may note an appeal from the decision of the Orphans’ Court.

Moreover, we determine that because the building permit contingency was not included in the contracts for Ms. Knight’s benefit, she may not use it to nullify the contracts between the Personal Representative and Princess Builders. Therefore, we affirm the decision of the Court of Special Appeals. Discussion Ms. Knight argues that Princess Builders was not a “party” to the proceeding before the Orphans’ Court as required by Section 12-502 of the Courts and Judicial Proceedings Article. She urges this Court to limit the definition of “party” to those persons who are named as such on the record.

Thus, Ms. Knight contends that the only “parties” to the underlying dispute concerning the sale of the Property were the Personal Representative and Ms. Knight. According to Ms. Knight, although Princess Builders was affected by the suit, it was not a “party.” ³⁷ Alternatively, Ms. Knight argues that the Circuit Court’s decision was invalid because at that time Princess Builders had no standing to file an appeal due to Princess Builders’s failure to fulfill the condition precedent of obtaining a building permit, which resulted in the termination of the contract on August 31, 2003. Conversely, Princess Builders asserts that the term “party” as used in Section 12-502 of the Courts and Judicial Proceedings Article consistently has been interpreted to include individuals and entities whose interests are implicated in the proceedings in addition to the named parties. Moreover, Princess Builders argues that the fact that it appeared and participated in the hearing before the Orphans’ Court was sufficient to imbue it with “party” status.

Princess Builders also argues that it waived the building permit condition precedent and that both parties to the contract reaffirmed their intention to enforce the contracts. Moreover, Princess Builders asserts that Ms. Knight lacks standing to enforce provisions of a contract to which she was not a party. The Personal Representative, David Forrer, contends that Princess Builders might properly be considered a “party” to the Orphans’ Court proceeding under Section 12-502 of the Courts and Judicial Proceedings Article. He notes that Princess Builders was provided with notice of the Orphans’ Court’s notice of postponement of the hearing on the sale of the Property, that it was served with a copy of Ms. Knight’s prior counsel’s Entry of Appearance and a copy of her second Request for Postponement, and that Princess Builders filed an opposition to the Request for Postponement.

Therefore, the Personal Representative concludes that Princess Builders should properly be considered a party under Section 12-502 of the Courts and Judicial Proceedings Article. Who May Properly Be Considered a Party under Section 12-502 of the Courts and Judicial Proceedinys Article Ms. Knight urges this Court to interpret “party” as used in Section 12-502 of the Courts and Judicial Proceedings Article ³⁸ to limit those individuals or entities entitled to appeal to the parties of record in the proceeding before the Orphans’ Court. Conversely, Princess Builders seeks to interpret “party” to include any person or entity detrimentally affected by a decision of the Orphans’ Court. Based on the language of the applicable statutes, their predecessors, and our relevant case-law, we conclude the Princess Builders was a proper party to pursue an appeal from the Orphans’ Court’s decision.

Section 12-502 of the Courts and Judicial Proceedings Article provides in relevant part: (a) In general; exception in Harford and Montgomery counties.—(l)(i) Instead of a direct appeal to the Court of Special Appeals pursuant to § 12-501 of this subtitle, a party may appeal to the circuit court for the county from a final judgment of an orphans’ court. (ii) The appeal shall be heard de novo by the circuit court. (iii) The de novo appeal shall be treated as if it were a new proceeding and as if there had never been a prior hearing or judgment by the orphans’ court. (iv) The circuit court shall give judgment according to the equity of the matter.

Md.Code (1974, 2002 Repl.Vol.), § 12-502(a) of the Courts and Judicial Proceedings Article. At the outset we note that in Rome v. Lowenthal, 290 Md. 33, 34 , 428 A.2d 75, 76 (1981), we determined that Section 12-502 of the Courts and Judicial Proceedings Article, which authorizes a de novo appeal to the circuit court from an orphans’ court ruling, must be read in conjunction with Section 12-501 of the Courts and Judicial Proceedings Article because the two statutes delineate complementary mechanisms by which review of an orphans’ court’s decision may be sought. Section 12-501 of the Courts and Judicial Proceedings Article provides in pertinent part: (a) In general.—A party may appeal to the Court of Special Appeals from a final judgment of an orphans’ court. Md.Code (1974, 2002 Repl.Vol.), § 12-501(a) of the Courts and Judicial Proceedings Article.

In both Sections, there is refer ³⁹ ence to a “party” appealing, but there is no definition of “party” included in the Subtitle. The statutes governing appeals from decisions of the orphans’ courts prior to the recodification of 1957 delimited the term “party” to those individuals and entities “who may deem himself aggrieved by such decree.” See, e.g., Md.Code (1951), Art. 5 § 64; Md.Code (1939), Art. 5 § 64; Md.Code (1924), Art. 5 § 64; Md.Code (1888), Art. 5 § 58; Md.Code (1862), Art. 5 § 40; Md.Code (1860), Art 5 § 39; 1818 Md. Laws, Chap. 204. As we noted in Webster v. Larmore, 270 Md. 351 , 311 A.2d 405 (1973), modified on other grounds by Piper Rudnick LLP v. Hartz, 386 Md. 201 , 872 A.2d 58 (2005), when the statute was revised and recodified in 1957, the qualifying language defining “party” as the individual or entity “aggrieved” by an orphans’ court’s decision was omitted “presumably as surplusage.” Webster, 270 Md. at 353 , 311 A.2d at 406 . We concluded that “[t]he omission in no way attenuates the teaching of our earlier cases.” Id.

Therefore, we may derive some guidance from examining our prior opinions analyzing the predecessor statutes to the presents incarnations as Sections 12-501 and 12-502 of the Courts and Judicial Proceedings Article. In 1777, the General Assembly enacted the first statute establishing orphans’ courts in the counties for the probate of estates, both testate and intestate. 1777 Md. Laws, Chap. 8. As part of that first enactment, the General Assembly provided a means for individuals to obtain judicial review of a decision of the orphans’ courts: That it shall and may be lawful for all and every person or persons, who think themselves aggrieved by such decree or judgment, to appeal therefrom, within sixty days after the award or rendition thereof, to the general court, or chancellor of this State, at his, her or their election, provided that bond be given with good security to prosecute the said appeal with effect, and within thirty days after the appeal entered, and to pay such costs and damages as shall be adjudged on the hearing such appeal, or attachment or execution may issue as if no such appeal had been made. ⁴⁰ 1777 Md. Laws, Chap. 8, section 11. Twenty-one years later, the General Assembly repealed the prior act, and enacted a new statutory scheme that provided: In case the adjudication of any orphans court, to whom any such will or codicil, respecting personal property, or appointing an executor, either before or after it shall be exhibited for probat, shall be against the said will or codicil, it shall not be received for probat in any other county; provided nevertheless, that either party conceiving him or herself aggrieved by the decision of the said court, relative to the probat, may, within three days after such decision, enter an appeal to the court of chancery, or the general court of the shore whereon such orphans court is held, and the said appeal shall stay further proceedings of the orphans court, provided an attested copy of the whole proceedings, under the seal of the office, be filed in the said chancery court, or general court, within sixty days thereafter. 1798 Md. Laws, Chap. 101, section 11.

In this version of the statute, the General Assembly first defined the class of individuals entitled to appeal a decision of the orphans’ courts as those “aggrieved” by the decision of the court. In 1802, the General Assembly once again revised the statutory scheme governing the review of decisions of the orphans’ courts, stating: And be it enacted, That any person who may conceive him or herself aggrieved by a judgment, decree, decision or order of the orphans court, may appeal to the county court of the county where such judgment, decision or order, may be made, and that on such appeal the county court shall have the same power, jurisdiction and authority, that the general court or chancery court would have had on an appeal to either of those courts under the original act; Provided nevertheless, that nothing herein contained shall be construed to affect the right of appeal from the orphans court to the court of chancery or general court ... as allowed by the act to which this is a supplement. ⁴¹ 3802 Md. Laws, Chap.101, section 3. Through this legislation, those people “aggrieved” by the actions of the orphans’ courts regarding the probate of an estate could seek judicial review in what would become the circuit courts of the State of Maryland, then denoted as the county courts, as an alternative to taking an appeal to either the Court of Chancery or the General Court. In 1818, the General Assembly combined the prior statutes regarding the alternative avenues of appealing from the orphans’ courts into a single statute in an effort to better regulate the appeals from the orphans’ courts.

Chapter 204 of the Maryland Laws of 1818 provided in pertinent part: Sec. 1. Be it enacted, by the General Assembly of Maryland That in all decrees, orders, decisions and judgments, hereafter to be made by any orphans court of this state, the party or parties who shall deem him, her or themselves, aggrieved by such decree, order, decision or judgment, may appeal to the court of appeals of this state, provided such appeal be made within thirty days after such decree, order decision or judgment. 2. And be it enacted, That if upon an appeal being entered, the parties shall mutually agree and enter their assent in writing, to be filed by the register of the orphans court, that the appeal shall be made to the county court, the orphans court shall direct a transcript of the proceedings to be transmitted by the register to the county court, whose decision shall be final. 1818 Md. Laws, Chap. 204. The first opportunity we had to address the scope of the term “party” under this statute occurred in 1837 in Stevenson v. Schriver, 9 G. & J. 324 (1837).

In that case, Elizabeth Stevenson, the widow of the decedent, Josias Stevenson, Jr., filed a petition in the Orphans’ Court for Baltimore City asserting that she was a creditor of the estate of her late husband because he had not invested her non-marital property for her benefit as he had promised. The Orphans’ Court ⁴² ordered the estate to pay the debt. The creditors and heirs of Josias Stevenson appealed to this Court. We determined that under Chapter 204 of the Maryland Laws of 1818, whereby “a party deeming himself aggrieved by the decree, order, or decision of the Orphans Court, may appeal to the court of Appeals,” the term “party”: in this section of the Act of Assembly, is not used in a technical sense, necessarily importing a litigant before the court, in the proceedings in which the decree, or order passed, at the time of or antecedently to its passage; but may also mean one on whose interests the decree or order has a direct tendency to operate injuriously, and who, after its passage may appear in court and claim the privilege of appeal.

Many, if not most of the orders of the Orphans court, are wholly ex parte, and yet the right to appeal has never been denied to him who has sustained injury thereby. Id. at 335 . Based on our interpretation of 1818 Maryland Laws, Chapter 204, we concluded that the creditors and legatees had the right to appeal the decision of the Orphans’ Court because the order “ha[d] direct tendency to operate injuriously” with respect to their interests in the estate. Id. at 335 .

We reached a similar conclusion in Dorsey v. Warfield, 7 Md. 65 (1854). In Dorsey , the will of the decedent, Fielder Warfield, was submitted to the Orphans’ Court for Howard County for probate in 1847. Id. at 72 . Five years later, Eleanor Warfield filed a caveat to the will and sought to have the probate of the will revoked because she alleged that the will was the product of fraud and undue influence.

Id. The personal representative responded by denying all of the grounds of the caveat. The Orphans’ Court upheld the objection to the will. Rebecca Dorsey, one of the legatees under the will, filed an appeal with this Court, although she did not participate in the proceeding.

Id. at 73 . Reversing the decision of the Orphans’ Court, we held that “there can be no doubt of this case being properly before us, inasmuch as there is not, nor can there be, any question as to the right to appeal ⁴³ of Rebecca Dorsey, who is directly interested in the decision of the orphans court.” Id. at 75 . In 1860, the General Assembly revised and re-enacted the statute governing the right to appeal from orphans’ courts’ decisions, which provided: In all decrees, orders, decisions and judgments made by the Orphans’ Court, the party who may deem himself aggrieved by such decree, order, decision or judgment, may appeal to the Court of Appeals; Provided, such appeal be made within thirty days after