Levine v. Rendler

Smith, J., delivered the opinion of the Court. Chagrined at the failure of a developer to construct roads in a subdivision in which they had purchased lots, appellees, Norbert J. Rendler et al., sought legal redress. They sued appellants, Isaac Don Levine and Ruth N. Levine, his wife (the Levines), in the Circuit Court for Charles County. We shall here affirm a judgment of $39,500 entered in favor of those plaintiffs (the landowners) whose causes of action survived the Levines’ motions for directed verdict. 1 The subdivision, known as “Pinewood,” is located in Charles County.

It was shown that the Levines sold lots between October 19, 1965, and February 18, 1971, to various plaintiffs at prices ranging from $3,752.50 to $6,500.00. The landowners alleged in their declaration that representations were made by the Levines “or their agent, servant or employee, as the Sellers of said lot[s]” to the effect “that the road thru Pinewood Subdivision would be paved at the [Levines’] expense, in strict compliance with [Charles] County specifications so that upon completion of the paving, Charles County would agree to take over and maintain said road”; that the full purchase price for each of said lots had been paid; that the road has never been paved; and “[t]hat Charles County was prepared to make its final inspection prior to and subsequent to the paving of said road and that there were no conditions under the control of the County Commissioners other than that the said road meet the County’s specifications, which had to be met prior to the paving of said road.” ³ Richard Eric Cramer, a Charles County real estate agent called as a witness on behalf of the property owners, testified that the Levines listed the Rinewood subdivision with his firm in 1965. He further said: “I asked about the road, what were we going to tell these people about when we were going to open up the road in there, because that is the first question they asked. And then this paper was drawn up, you know, there were only a few of them made up actually, you know, most of the times he [sic] just told the people, if they questioned it, I would just hand them one of those letters, and that is about the size of it, letter discussed that he would be willing to blacktop the road according to the county specifications and that would keep the road up in such a shape that they could be used until it could be taken over by the county.” To corroborate the testimony of Cramer, a letter was produced which he identified as a copy of what he handed to prospective purchasers.

He said that after he ran out of copies of the letter he represented to purchasers that which was said in the letter. The letter read: October 1,1965 TO ALL PURCHASERS OF LOTS IN PINEWOOD SUBDIVISION: The roads in this subdivision have been built in strict compliance with County specifications, except that the double Bituminous Surface Treatment has not yet been applied. We are prepared to apply it at this time, but are informed that it is the normal policy of the Board of Commissioners to wait until a reasonable number of families reside in the subdivision before taking over the roads. This letter is therefore issued to assure that whenever the County is ready to make its final inspection for the purpose of taking the roads over, we stand prepared to give them the required double ⁴ BST, at our expense, just prior to the said final inspection.

When you construct your driveway entrance, you will have to use a corrugated metal pipe not less than 20 feet in length, and not less than 15 inches in diameter, in order to comply with the County road specifications. Very truly yours, For the Pinewood Subdivision s/ Isaac Don Levine s/ Ruth N. Levine All parties agree that the regulations of Charles County relative to construction of roads in subdivisions in effect in 1965 said: “The application of 2 inches of Bituminous Concrete is recommended and encouraged as a surface for these roadways, but in no event will less than a double Bituminous Surface treatment of less than 24' in width be accepted.” They likewise agree that effective January, 1969, that county adopted a much more comprehensive road ordinance. Under it, the “double Bituminous Surface treatment” was no longer permitted, but the application of two inches of bituminous concrete was required. The difference between the two specifications was succinctly explained by Tom W. Hall, the former engineer for Charles County, who, in the interim, had become resident maintenance engineer in that county for the State Highway Administration: “The basic difference between the old regulations specifications and the new specifications were the fact that under the new specifications the road must be blacktopped, which is layman’s word for bituminous concrete.

Under the old specifications, it was a bituminous treatment, which is a double application of tar and chips, stone chips or slag chips and that’s the difference.” ⁵ He explained that a prime coat of oil is sprayed on the gravel surface in the double bituminous surface treatment. A heavier coat of asphalt is sprayed on the highway surface after the first coat has penetrated for at least 24 hours. This is followed by a layer of “blue chip.” Then, after waiting several hours or, preferably, overnight, the same process would be repeated with a layer of heavier asphalt and another layer of “blue chip.” He further explained: “Blacktop or bituminous concrete is made in a plant, in a mix plant similar to the way that concrete is made in a plant. It is a percentage of liquid asphalt which is a heavier grade than you use in surface treatment, is mixed in a plant with a certain amount of dust, a certain amount of one-sized stone and a certain amount of another sized stone and it’s similar to the way you make cement concrete.

This is bituminous concrete and your concrete that you make buildings out of or build roads out of, is Portland cement. “Blacktop or bituminous concrete is applied with a paver. You back a truck up to a paver, dump the material into the paver and the paver spreads it and then it is rolled. Surface treatment is applied by a distributor spraying the oil and then either another machine spreading chip on top of it or spread the chips directly off the dump truck. There’s several ways that that can be done.” The present county engineer for Charles County, called as a witness by the Levines, testified that Hall’s description of the differences in processes was a fair statement.

He agreed that it “[wjould ... be fair to say then under the old regulations they encouraged asphalt but you could get by with double surfaced treatment.” Hall, the former engineer, testified that the cost of preparation of the road is identical for both methods of surface treatment, but that the cost of bituminous concrete ⁶ is about double the cost of bituminous surface treatment. He explained that the bituminous surface treatment will last approximately three to five years, but the bituminous concrete will last 15 to 20 years. Robert H. Portzen, an expert called on behalf of the landowners, testified that the cost of completion of the roads in the subdivision with a double bituminous surface treatment would be $29,171.00, while the cost of completing those roads with bituminous concrete would be $30,875.00. Nicholas J. Scarpa, the present county engineer for Charles County, gave an estimate that the cost of construction of roads in this subdivision with bituminous concrete would be $46,680.00.

From this, with the statement of Hall that the cost of bituminous concrete is about double the cost of bituminous surface treatment, the Levines reason that “[t]he cost of said double Bituminous Surface Treatment would have been (in 1973) approximately $20,000.00, the maximum amount which under Plaintiffs’ theory of law — the enforcement of Defendants’ agreement — Plaintiffs could have hoped to recover.” To reach this conclusion there are certain assumptions that must be made. One would be that $23,340.00 (one-half of $46,680.00) would be approximately $20,000.00, and it would be further necessary to assume the correctness of both estimates. Otherwise, one must assume that Scarpa, called as a witness by the Levines, erred in his estimate of $46,680.00 for construction with bituminous concrete or that Hall, a witness for the property owners, erred in his estimate that the cost of such construction with bituminous concrete would be about double the cost of construction with the bituminous surface treatment. The case was tried in the circuit court and argued to us upon the assumption of all parties that the representations by the Levines or their agents to the landowners survived execution and delivéry of the deed to each of the various parties plaintiff.

Two contentions are advanced to us. The first is that the trial judge erred in refusing to grant the motion of the Levines for a directed verdict on the grounds of legal ⁷ impossibility of performance. The second contention concerns instructions to the jury and is in two parts. It is claimed (a) that the jury should have been instructed on the theory of legal impossibility of performance of the agreement because of the change in road specifications, and (b) that the jury should have been instructed, as requested by the Levines, “[o]n the provision in [the Levines’] agreement that a reasonable number of families had to reside in the subdivision before [the Levines] were required to hard-surface the roads, so as to permit the jury to consider whether in fact a reasonable number of families resided in the subdivision, a condition precedent to the requirement to hard-surface the roads.” I The Levines put two strings in their bow on the issue of impossibility of performance: (a) that change in the law made performance legally impossible, and (b) that the change in the law, with increased costs, has made performance of the obligation virtually different from what was reasonably contemplated by the parties to the contract when they entered into the contract.

The Levines misconstrue the doctrine of impossibility of performance. It was discussed for this Court by Judge Delaplaine in State v. Dashiell, 195 Md. 677 , 75 A. 2d 348 (1950): “It is a general rule of the common law that when the impossibility of performance arises after the formation of the contract, the failure of the promisor to perform is not excused. This rule was founded on the theory that if the promisor makes his promise unconditionally, he takes the risk of being held liable even though performance should become impossible by circumstances beyond his control. The unjust consequences of this general rule gave rise to certain exceptions.

One of these is that a contractual duty is discharged where performance is subsequently prevented or ⁸ prohibited by a judicial, executive, or administrative order, in the absence of circumstances showing either a contrary intention or contributing fault on the part of the person subject to the duty. Wischhusen v. American Medicinal Spirits Co., 163 Md. 565, 572 , 163 A. 685 ; Fast Bearing Co. v. Precision Development Co., 185 Md. 288 , 44 A. 2d 735 ; 2 Restatement, Contracts, sec. 458. But an order which interferes with the performance of the contract is not an excuse if the circumstances surrounding the formation of the contract are such as to indicate that the possibility of such interference was recognized and the risk of it was assumed by the promisor.” Id. at 689. More recent discussion consistent with the above is to be found in Baldi Constr.

Eng’r v. Wheel Awhile, 263 Md. 670, 673 , 284 A. 2d 248 (1971); Kahn v. Brown, 255 Md. 652, 656-57 , 259 A. 2d 61 (1969); and Acme Markets v. Dawson Enterprises, 253 Md. 76, 89-90 , 251 A. 2d 839 (1969). It is the position of the Levines that their “express agreement [was] to hard-surface the roads in Pinewood Subdivision with the Blue Chip method, in conformity with the 1965 road specifications,” and that this “was rendered impossible by the 1969 change in road specifications, and as a matter of law, [the Levines] should not be held to that agreement.” They rely upon Wischhusen v. Spirits Co., 163 Md. 565 , 163 A. 685 (1933), and Acme Moving & Storage v. Bower, 269 Md. 478 , 306 A. 2d 545 (1973). Wischhusen involved a contract by a distiller with an expert in the manufacture