Pines Plaza Ltd. Partnership v. Berkley Trace, LLC
431 Md. 652
| Md. | 2013Background
- Pines Plaza entered a contract to sell a shopping center to Q-C Pines Plaza, with multiple amendments and an indemnification for a broker's fee.
- To raise funds, Q-C assigned 25% interests in the contract to Berkley Investors, who funded the $200,000 additional deposit and part of the purchase price.
- Closing occurred in January 2004 but final funds were not delivered; Berkley later claimed the deal closed and that additional funds were needed.
- Crimmins Associates sued Pines Plaza for commission; judgment was entered against Pines Plaza for $196,666.66, which Pines Plaza sought to indemnify from Q-C and/or Berkley Investors.
- Circuit Court held Berkley Investors did not assume indemnification and that Pines Plaza could not forfeit the deposit; Third Amendment not binding on Berkley Investors.
- Maryland Court of Appeals affirmed in part and reversed in part, addressing assignment delegation, forfeiture, and recoupment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Berkley Investors assume Q-C's indemnity obligation? | Pines Plaza: assignment delegated indemnity to Berkley Investors. | Berkley Investors: no explicit delegation; non-delegation presumption applies. | Assignments did not delegate indemnity obligation. |
| Is the $200,000 deposit forfeitable as liquidated damages if closing is late? | Second Amendment imposed automatic forfeiture for late closing. | Delay was not a default; no clear forfeiture of the deposit. | No forfeiture of the $200,000 deposit; equity treated as non-essential. |
| Can Pines Plaza recoup or offset the indemnification against the Berkley Investors' deposit liability? | Offset should be allowed against the deposit as recoupment. | No direct indemnity claim against Berkley Investors; offset depends on contractual rights. | Pines Plaza entitled to recoupment against the Berkley Investors for the uncredited deposit. |
Key Cases Cited
- East Vedado Corp. v. E.S. Adkins & Co., 157 Md. 416, 146 A. 385 (Md. 1929) (non-delegation presumption for real estate contracts)
- Pumphrey v. Kehoe, 261 Md. 496, 276 A.2d 194 (Md. 1971) (non-delegation presumption reaffirmed)
- Petals Factory Outlet, Inc. v. EWH & Assoc., 90 Md.App. 312, 600 A.2d 1170 (Md. Ct. App. 1992) (assignment of real estate contract generally non-delegatory)
- P/T Ltd. II v. Friendly Mobile Manor, 79 Md.App. 227, 556 A.2d 694 (Md. Ct. App. 1989) (recognizes non-delegation presumption in MD contract law)
- Soehnlein v. Pumphrey, 183 Md. 334, 37 A.2d 843 (Md. 1944) (equity considerations in timing of performance)
- Langel v. Betz, 250 N.Y. 159, 164 N.E. 890 (N.Y. 1928) (real estate contract assignment generally does not imply delegation)
- Hudson Eng’g Assocs., P.C. v. Ames Dev. Corp., 228 A.D.2d 477, 643 N.Y.S.2d 677 (N.Y. App. Div. 1996) (delegation concepts in assignments discussed in MD context)