Havre de Grace v. K. Hovnanian Homes, 227 A.3d 840

K. Hovnanian proposed a recoupment agreement under which it would build infrastructure on Parcel 1 and the City would reimburse costs attributable to Parcels 2 and 3 when those lots were developed. Infrastructure categories: water/sewer lines and roads.
The City Council unanimously approved the recoupment agreement on October 4, 2010 and its last paragraph stated the Council "authorized the Mayor to sign the Agreement." The Mayor refused to sign; recoupment fees were not collected.
K. Hovnanian sued to compel execution and recordation; the circuit court initially granted summary judgment to the City, this Court vacated that ruling and remanded.
On remand the circuit court held the agreement binding based on the City Council approval; the City appealed to the Court of Special Appeals.
The Court of Special Appeals reversed: it held contracting is an executive function under the Havre de Grace Charter (particularly § 70) and contracts for water/sewer and roads must be entered by the Mayor or a delegated executive official; Council approval alone did not bind the City.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Council approval alone bound the City to the recoupment agreement for water/sewer and roads	Council approval (and its authorization for the Mayor to sign) plus the parties’ meeting of the minds made a valid contract; the agreement’s adoption terms were self-executing	Contracting is an executive function; the Charter requires the Mayor (or delegated executive official) to enter such contracts, so Council approval alone is insufficient	The Court held contracting is an executive power; § 70 and related Charter provisions require mayoral (or delegated) execution for water/sewer and road contracts; Council approval alone does not bind the City
Whether the recoupment agreement could be effective as a legislative act (ordinance/resolution) without following ordinance procedures	The Council’s approval was intended to adopt the agreement and bind the City	The agreement was not enacted as an ordinance, did not follow the Charter’s ordinance process (readings, transmittal, mayoral approval/veto procedures)	The Court found it was not adopted as an ordinance and the legislative process was not used; thus it did not bind the City

Gontrum v. Mayor & City Council of Baltimore, 182 Md. 370 (1943) (municipal officers’ power to contract is limited by charter; private parties must take notice)
Cochran v. Norkunas, 398 Md. 1 (2007) (government contract formation constrained by governing procedures)
Queen Anne’s Conservation, Inc. v. County Commissioners of Queen Anne’s County, 382 Md. 306 (2004) (negotiation of contracts by local government is executive discretion)
Montgomery County v. Revere National Corp., Inc., 341 Md. 366 (1996) (executive-branch contracting constitutes exercise of executive discretion)
Inlet Assocs. v. Assateague House Condo. Ass’n., 313 Md. 413 (1988) (actions of general application establishing policy must be by ordinance)
Alternatives Unlimited, Inc. v. Board of School Commissioners of Baltimore City, 155 Md. App. 415 (2004) (reaffirming Gontrum principle that governmental contracting is governed by formal procedures)