Randolph Hills, Inc. v. Shoreham Developers, Inc.

Singley, J., delivered the opinion of the Court. The appellant, Randolph Hills, Inc. (RHI) is no stranger to this Court. 1 By August of 1961, RHI had acquired a tract of some 65 acres in Montgomery County and in June of 1962, realizing that about half of the tract was likely to be condemned for a school site, contracted to sell a 32.61 acre parcel to Shoreham Developers, Inc. (Shoreham) for $351,000.00. On the same day, Shoreham entered into a contract with Perlmutter Bros., Inc. (Perl-mutter), 2 under which Shoreham agreed to pay Perl-mutter $162,000.00 to develop the 32.61 acre tract as 108 lots, subject to the proviso that the $162,000.00 figure would be reduced by $4,750.00 for each lot less than 108. The Perlmutter agreement was usually characterized as the “finishing contract.” 3 For reasons not important here, Perlmutter experienced considerable delays in performing its contract.

Morris Perlmutter, a principal in both RHI and Perl-mutter, after attempting to persuade Shoreham to abandon the whole project, finally refused to make settle ¹⁸⁵ ment under the sales agreement. In August 1964, Shore-ham and Theodore N. Lerner, one of its officers, sought specific performance by RHI and Perlmutter. The bill of complaint was dismissed below at the end of the plaintiff’s case. In Shoreham v. Randolph Hills, 248 Md. 267 , 235 A. 2d 735 (1967), we reversed the order of dismissal and remanded the case for trial.

In May 1968, a decree was entered against RHI, directing it to specifically perform the sales agreement. In February 1969, RHI conveyed the 32.61 acre parcel to Shoreham. The difficulties between RHI and Shoreham were far from ended, however. In September 1969, Shore-ham and Lerner brought a new action in equity in the Circuit Court for Montgomery County, joining RHI, Perlmutter, as well as Saul, Louis and Morris Perlmutter, and the trustees named in deeds of trust securing notes given by Shoreham to RHI and Perlmutter at the February 1969 closing.

The bill of complaint after two amendments contained seven “Counts.” 4 The first Count sought a cancellation of the $162,000.00 note given by Shoreham to Perlmutter at the closing and of the deed of trust securing the note. Count II sought a cancellation of the deed of trust securing the $162,000.00 note on the theory that it constituted a cloud on title. Count III asked a reformation of the $162,000.00 note and of a note for $301,000.00 given RHI to the end that interest would not commence to run on either until 21 months after Perlmutter commenced to develop the 32.61 acre parcel as contemplated by the finishing contract. Count IV claimed damages for the breach of the Perlmutter contract.

Count V sought the imposition of a constructive trust on $16,752.30 which RHI had received for a right of way for a sewer across part of the 32.61 acre tract subsequent to the 1962 contract but prior to the 1969 closing. Count VI sought to ¹⁸⁶ have Shoreham exonerated from any liability on a $30,-000.00 road construction contract on which RHI allegedly obligated Shoreham, without its knowledge or consent. Count VII sought to impose a constructive trust on $43,700.00, being part of an award of $50,000.00 as consequential or severance damages attributed to the tract of land not taken in condemnation, of which the 32.61 acres was a part, received by RHI after the execution of the contract but prior to closing. 5 Only Counts I, II, V and VII (the latter having been added by a later amendment) survived RHI’s demurrer. Summary judgment was entered for Shoreham on Counts I and II, because Perlmutter’s refusal to perform the finishing contract was not disputed, 6 but was denied on Counts V and VII.

RHI’s motion for summary judgment on all four Counts was denied. The order granting Shore-ham’s motion for summary judgment directed that the case go to trial on Counts V and VII. At trial on Counts V and VII, Shoreham offered no testimony, and the chancellor limited the evidence to be offered by RHI to the question of expenses incurred in connection with the payment received for the right of way and the recovery of severance damages, which RHI found it impossible to prove. As a consequence, a decree was entered, which provided in part for the payment by RHI to Shoreham of the $16,752.30 claimed in Count V and the $43,700.00 claimed in Count VII, with interest in each case, and costs.

It is from this portion of the decree that the appeal was taken. RHI says that there are five reasons why the decree should be reversed. We shall consider them in the order presented. ¹⁸⁷ (i) It was error for the lower court to limit the issues upon trial of Counts V and VII without complying with Maryland Rule 610 d 4. On 24 March 1971, the chancellor had entered a memorandum and order granting Shoreham’s motions for summary judgment on Counts I and II, denying the motions as regards Counts V and VII and directing that the case go to trial on Counts V and VII.

In the course of his memorandum, in speaking of Count V, the chancellor said: “Under the circumstances reflected in the file, it would be clearly inequitable for the vendor to retain the proceeds from this right of way sale merely because he still held the legal title. However, there are affidavits and counter-affidavits in the file in regard to this transaction and the Court is, therefore, persuaded that there must be a hearing to determine the net amount due to the equitable owner, as any expenses in connection with this transaction must be deducted from the gross sale price, as same may be proven at the trial as a damage item.” Turning to Count VII, Judge Shure said: “While the plaintiffs are equitable owners, as aforesaid, and clearly entitled to participate in said consequential damages, nevertheless Summary Judgment will not be granted at this time as to Count VII. As in Count V, a trial will be necessary to determine the net amount due the equitable owners.” Seemingly, Judge Shure intended to comply with the mandate of Maryland Rule 610 d 4. Rule 610 deals generally with summary judgment procedure; 610 d with the proceedings to be had on a motion for summary judgment, and 610 d 4 provides: ¹⁸⁸ “If on the motion judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, a party shall not be limited at the trial to the facts stated in his affidavit.

But in such case, the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in the controversy, and direct such further proceedings in the action as justice may require. Upon the trial of the action the facts so specified shall be deemed established, and the trial shall be conducted accordingly.” It would appear from the text of the memorandum that Judge Shure intended to follow the mandate of the Rule applicable when “. . . judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary . . .” but failed to incorporate a finding of “. . . the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in the controversy . . .” in his formal order. RHI makes much of the fact that it was error for the court to limit the issues at trial without entering the order contemplated by Rule 610 d 4.

Under other circumstances, this point may be well taken, since it has been long established that the language of a memorandum or opinion cannot be imported in an order or decree save in cases where the order or decree is ambiguous, Alleghany Corp. v. Aldebaran Corp., 173 Md. 472, 478-479 , 196 A. 418 (1938) ; Greif v. Teas, 156 Md. 284, 295 , 144 A. 231 (1929) ; Miller, Equity Procedure § 261, at 326 (1897). However, Shoreham’s liminal response to this contention is that the question does not ¹⁸⁹ plainly appear to have been tried and decided below and cannot be considered here, Rule 885. In October 1971, Shoreham filed a motion for the entry of an order limiting issues and RHI responded opposing the entry of such an order. No order was entered on Shoreham’s motion nor does it appear to have been denied.

Some weeks later, RHI filed a memorandum opposing “. . . the Order orally stated by the Court in Chambers in limiting issues.” It cannot be fathomed from the record what this “oral order” was and it was certainly never entered on the docket. We can only assume that it may have been an oral repetition of the provisions of the 24 March 1971 memorandum. What really happened was that RHI became so engrossed in its strenuous opposition to the substance of the order that it failed to make the point that the order was deficient in form. While its right to appeal from the substance of the order was carefully preserved, the right to challenge the form was not.

(ii) Apart from the procedural defect, it was error for the lower court to limit the trial on Counts V and VII to a single issue on one element of damages, in view of the genuine dispute between the parties as to other material facts. The arguments advanced by RHI are focused on Count V on the one hand, and Count VII, on the other. As to Count V, it is not disputed that Glenmont Hills Associates, the owner of an adjacent tract, paid RHI $16,752.30 and that RHI conveyed to Washington Suburban Sanitary Commission a right of way over a portion of the 32.61 acre parcel in May of 1966 when Shore-ham was, or was later determined to be, the equitable owner of the parcel. RHI says the disputed fact is whether it was paid for the right of way itself or was reimbursed for the expenses to which it had been put in delineating the right of way. ¹⁹⁰ We find nothing in the record to support this contention.

Nathan Brisker, the principal of Glenmont Hills, said in an affidavit filed in support of Shoreham’s motion for summary judgment, that he paid $16,752.30 for the conveyance. Saul Perlmutter, in an opposing affidavit, said that it was to defray expenses. On deposition, he said he had not participated in the negotiations and did not “. . . recall exactly what it [the payment] was for.” Morris Perlmutter, on deposition, said that Brisker’s payment was “to let him hook up to the sewer,