Lowery v. Hairston

GILBERT, Chief Judge. The Circuit Court for Talbot County dismissed Hugh H. and Beatrice R. Lowery’s specific performance suit against Waller S. Hairston, Esquire, Personal Representative of the Estate of Henry Harris, on the ground that the matter was barred by the six month statute of limitations applicable to the filing of claims against an estate. Feeling aggrieved by that decision, the Lowerys have appealed to this Court where they pose two issues: 1) Did the circuit court err in determining that the Lowerys’ option to acquire real property was a “claim” against an estate within the meaning of Md. Est. & Trusts Code Ann. § 8-103(a) and, therefore, barred by the statute of limitations? ¹⁹¹ 2) If the trial court so erred, are the Lowerys entitled to specific performance? Although we agree with the circuit court that the exercise of the option to acquire real property is a claim against an estate, subject to the time limitations imposed by Md. Est. & Trusts Code Ann. § 8-103(a), we reverse that court’s judgment that the claim was untimely.

We do not, however, decide whether the Lowerys are entitled to specific performance because the circuit court never reached the issue of the validity and enforceability of the option agreement. Since that question was not decided by the circuit court, it is not properly before us. Md. Rule 1085. The facts have been stipulated by the parties and are summarized below in chronological order.

The Lowerys in December 1980 entered into a contract of sale whereby they agreed to purchase and the decedent Harris agreed to sell a parcel of land containing 15 acres with frontage on Eastern Bay in Talbot County. Additionally, in connection with the execution of that contract of sale, Harris agreed to grant the Lowerys an option to purchase a contiguous parcel of land, consisting of “approximately 8 acres, more or less” for $3,000 per acre. Purchase was to be “from ... [Harris’s] estate or sooner if property becomes available.” A deed conveying the 15 acres was executed by Harris on February 9, 1981. On the same day Harris and the Lowerys signed an Option Agreement, which provided: “THIS AGREEMENT made this 9th day of February, 1981 by HENRY E. HARRIS, hereinafter called Optionor and HUGH H. LOWERY and BEATRICE R. LOWERY, Optionees.

In consideration of the purchase of even date by the Optionees of a part of the Optionor’s property, as shown on a Plat entitled “PART OF THE LAND OF HENRY E. HARRIS” the Optionor does hereby grant unto the Optionees the exclusive right to purchase the property re ¹⁹² served to him as shown on said plat, consisting of approximately 8 acres, on the following terms and conditions: 1. The option price is Three Thousand Dollars ($3,000.00) per acre as determined by future survey. 2. The option must be exercised within thirty (30) days after written notice to the Optionees from the Optionor or thirty (30) days after written notice to them by the Personal Representative of his estate that the Optionor has died. 3. The Optionees shall have thirty (30) days after their exercise of the option to make settlement for their purchase of said property on such terms as may be agreed upon with the Optionor or his Personal Representative.

If there is no agreement between the parties, Optionees shall pay all costs of settlement subject to adjustments for taxes and payment by them of all expenses with respect to the transfer. AS WITNESS the hands and selas [sic] of the parties hereto the day and year first above written.” The agreement was recorded among the land records of Talbot County on February 9, 1981. Following Harris’s death on July 16, 1984, Waller S. Hairston (“Hairston”), who on July 23, 1984, was appointed Personal Representative of the Harris estate, notified the Lowerys on July 25, 1984, of Harris’s death. Fifteen days later, Hugh Lowery sent Hairston a written notice of his intent to exercise the option.

The note stated, among other things, that “[a]fter a survey to determine the residue, I am willing and able to complete the sale of the remaining 5 acres + or —On September 9, 1984, one day after the thirty day period allowed for settlement under the option agreement had lapsed, the Lowerys sent another note to Hairston inquiring as to when the estate expected to settle on the remaining parcel of land. Hairston failed to respond to either note, and there were no further contacts between the parties until December 21, 1984. At that time an attorney for the Lowerys telephoned Hairston and inquired about the status of the settlement. Hairston responded ¹⁹³ that he was unwilling to settle inasmuch as the estate had not been presented with a survey plat within thirty days after the August 9, 1984, note from Lowery, nor had it received a prepared deed and settlement sheet.

The day after Christmas, the Lowerys’ attorney wrote Hairston: “... [We] are ready, willing, and able to perform ... [our] part of the agreement but you advise that you, as personal representative, are unwilling to perform. I will appreciate confirmation of your position in writing so that we can began [sic] appropriate legal action, if necessary.” Hairston replied the next day, by letter, reading in pertinent part: “At the time of your telephone call, the time to exercise the option and hold settlement had long expired without any agreement on the part of the estate to extend the time for settlement.” Hairston’s letter concluded by observing: “What I said was that I had reservations about settlement at this time, but as of this date settlement documents have never been tendered to me as personal representative of the Estate of Henry E. Harris for approval or rejection. In the absence of their presentation to me, I have to assume that such settlement documents do not exist even as of this date and time. The responsibility for presentation of settlement documents during the period of time required by the option agreement rests upon the optionee, Mr. Lowery, not upon the Estate of Henry E. Harris.” (Emphasis added.) The Lowerys’ attorney answered that the Lowerys were ready to settle for the property that was the subject of the option and were willing to bear all costs of settlement, including the survey.

The Lowerys, through counsel, restated to Hairston the basis of their claim to the optioned land and explained that they had assumed that the survey would be arranged by the person in possession of the property (Hairston), and that this further assumed that the settlement would be based on the result of the survey. The stipulated facts indicate that sometime in late January or early February 1985 the Lowerys, with Hairston’s ¹⁹⁴ permission, ordered that a survey be made of the optioned land. When the survey plat was issued, in early April 1985, the Lowerys, through their attorney, advised Hairston of the results of the survey, calculated the sales price to be $29,190, offered to prepare the deed, and indicated the funds could be obtained on three days notice of a settlement date. Hairston refused to settle, and the Lowerys on May 9, 1985, brought this action for specific performance.

The Lowerys advance two alternative reasons why they believe the trial court erred in dismissing their claim: “A) The claim requirement of Section 8-103(a) does not apply to a suit for specific performance of a real estate contract. B) Even if the claim requirement of Section 8-103(a) were applicable here, a timely claim was presented to Hairston and this suit is not barred.” I. A Claim Under § 8-103 of the Estates and Trusts Article The Lowerys contend that, upon the death of Harris, they did not have a “claim” against the estate but owned a property interest and a contract right. They assert that when they allegedly exercised the option, on August 9, 1984, their status changed from optionee to contract purchaser. They argue that, by exercising the option, they presented the personal representative with an obligation to perform a contract for the sale of real estate rather than a “claim” against the estate.

That argument is both novel and unavailing. The gist of the Lowerys’ argument is that an interest in real property is not subject to Md. Est. & Trusts Code Ann. § 8-103(a) because Title 8 of the Estate Article applies only to monetary claims concerning matters in existence at the time of death of the decedent. Title 7, on the other hand, the Lowerys assert, addresses the administration of the whole estate. That title provides, in § 7-401, the general ¹⁹⁵ powers under which the personal representative may perform his duties, including, but not limited to, the payments of claims brought under Title 8.

One of the powers enumerated in § 7-401 is: “... [The personal representative] may perform the contracts of the decedent that continue as obligations of the estate, and execute and deliver deeds and other documents under circumstances as the contract may provide.” The Lowerys maintain that their exercise of the option to buy the 8 acres of land from Harris’s estate is