416 F.Supp.3d 517
D. Maryland2019Background
- Plaintiff Byron W. Martz and developer Day Development Co., L.C. (DDC) entered into related agreements: a 2003 Consulting Services Agreement (2003 CSA) for the "Domiciliary Care Parcel" and a 2005 amendment (2005 ACSA) for the "Commercial Parcel," both tying Martz's compensation to approvals and to either a sale or development, or to a payment date of January 1, 2015.
- The parcels were transferred to Southlawn Lane Properties, L.L.C. (affiliated with DDC) in 2005; neither parcel was sold or developed before January 1, 2015.
- The court previously granted summary judgment on liability for breach of contract in Martz's favor (Counts I & II), leaving damages and related claims for trial.
- At bench trial parties disputed valuation, whether legal impossibility excused payment (road/permit issues for the Commercial Parcel), and whether unjust enrichment could supply relief where the contracts did not specify compensation for the exact circumstances.
- The court found the development company breached, rejected the impossibility defense, allowed an unjust enrichment remedy because the contracts were silent as to compensation in these circumstances, and calculated restitution based principally on the parties' 50% compensation scheme and expert appraisals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether developer was required to pay by Jan. 1, 2015 / breached contract | Martz obtained required approvals; contracts fix payment no later than Jan. 1, 2015 | Market/other conditions prevented sale or build; thus payment not due | Court reaffirmed prior summary judgment: condition precedent satisfied; developer breached by failing to pay by Jan. 1, 2015 |
| Whether legal impossibility (no permit due to incomplete road) excuses payment for Commercial Parcel | Obligation to pay by Jan. 1, 2015 applies irrespective of road; developer could have sold parcel | Road prevented permits and marketability, making performance impossible | Court rejected impossibility defense; sale was a viable option and contracts required payment by 2015 |
| Whether unjust enrichment claim is barred by existing contract | Contracts do not specify compensation when developer retained parcels without selling or obtaining permits, so unjust enrichment available | Contract governs subject matter; no quasi-contractual recovery | Court allowed unjust enrichment because the express contracts did not fully address compensation in the present circumstances |
| Remedy and measure of recovery | Restitution equal to 50% of the parcels' appreciation in value, reflecting the parties' agreed 50% formula | Challenged valuations and argued no or lesser recovery | Court awarded restitution of $1,941,250 (50% of appreciation: $1,391,250 for domiciliary parcel; $550,000 for commercial parcel), using defendant-retained appraiser's 2013 valuation and the parties' 50% scheme |
Key Cases Cited
- Kasten Constr. Co., Inc. v. Rod Enters., Inc., 268 Md. 318 (Md. 1973) (plain and unambiguous contracts are enforced as written)
- John L. Mattingly Const. Co., Inc. v. Hartford Underwriters Ins. Co., 415 Md. 313 (Md. 2010) (contract ambiguity standard)
- Sy-Lene of Washington, Inc. v. Starwood Urban Retail II, LLC, 376 Md. 157 (Md. 2003) (contract ambiguity principles)
- Rocks v. Brosius, 241 Md. 612 (Md. 1966) (multiple instruments may be read together to ascertain contract terms)
- Acme Moving & Storage Corp. v. Bower, 269 Md. 478 (Md. 1973) (defense of impossibility when a necessary governmental permit cannot be obtained may apply only if the risk was unforeseeable and not assumed)
- Janusz v. Gilliam, 404 Md. 524 (Md. 2008) (unjust enrichment may proceed where express contract does not fully address the subject matter)
- Hill v. Cross Country Settlements, LLC, 402 Md. 281 (Md. 2007) (elements and equitable balancing for unjust enrichment)
- Maryland Cas. Co. v. Blackstone Inter. Ltd., 442 Md. 685 (Md. 2015) (restitution measure based on value of services or benefits conferred)