Hovnanian Land Investment Group, LLC v. Annapolis Towne Centre at Parole, LLC
25 A.3d 967
Md.2011Background
- Hovnanian purchased Parcels 14 and 15 in ATC's 33-acre development; CAM funding was required via a recorded Declaration.
- Purchase Agreement required ATC to record a Declaration with CAM provisions and a $1,200 annual unit fee, increasing 3% annually.
- The Declaration included Section 10.2.4, creating CAM funding via Supplemental Agreements rather than fixed amounts in the Declaration.
- A non-waiver clause stated that any modification or waiver must be in writing; the contract also allowed remedies if ATC failed to perform.
- ATC recorded an Amended Declaration; Hovnanian asserted ATC had not strictly fulfilled the CAM funding condition and sought to terminate.
- Circuit Court granted summary judgment for ATC on CAM funding, finding a waiver by conduct; Court of Special Appeals affirmed; Court granted certiorari.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can waiver occur despite a non-waiver clause? | Hovnanian argues non-waiver clause bars implied waiver. | ATC contends conduct can waive despite non-waiver clause. | Waiver may be inferred despite non-waiver clause. |
| Was the waiver of the condition precedent a question for summary judgment? | Waiver presents factual disputes; summary judgment inappropriate. | Waiver shown by conduct as a matter of law. | Summary judgment inappropriate; issue fact-dependent. |
| Did the Amended Declaration strictly fulfill the CAM condition (14(d))? | Declaration failed to provide fixed CAM mechanism; required strict fulfillment. | Declaration provides a mechanism via Supplemental Agreements; fulfills condition. | Factual disputes remain; remand for factual determination. |
| Do integration and writing clauses foreclose prior or implied waivers? | Integration clause forecloses waiver of earlier terms. | Waiver can arise from conduct despite integration clause. | Integration clause does not bar implied waiver; conduct may waive. |
| What governs the resolution of waiver in mixed-use CAM funding context? | Waiver should be determined by contract language and written forms. | Waiver can arise from party conduct and circumstances surrounding agreements. | Waiver analysis is fact-intensive; remand to resolve. |
Key Cases Cited
- Freeman v. Stanbern Constr. Co., 205 Md. 71 (1954) (non-waiver clauses may be waived by subsequent conduct)
- Bio-Ramo Drug Co. v. Abrams, 229 Md. 494 (1962) (waiver may occur despite writing requirements)
- Pumphrey v. Pelton, 250 Md. 662 (1968) (equitable estoppel can override non-waiver clauses)
- Taylor v. University Nat'l Bank, 263 Md. 59 (1971) (mutual waiver by subsequent agreements)
- Charles Burton Bldrs. v. L & S Constr. Co., 260 Md. 66 (1970) (writing requirement may be waived by conduct)
- 600 N. Frederick Rd., LLC v. Burlington Coat Factory of Md., LLC, 419 Md. 413 (2011) (modification valid despite written/formal requirements)
- Myers v. Kayhoe, 391 Md. 188 (2006) (one-off statement can be insufficient for waiver)
- DIRECTV, Inc. v. Mattingly, 376 Md. 302 (2003) (summary judgment appropriate when only modification is presented)
- University Nat'l Bank v. Wolfe, 279 Md. 512 (1977) (waiver questions factual and reviewable for factual disputes)