*1 & CREAMER, Weinberg & t/а Green Indiv. RONALD E. HELFERSTAY CHARLES et al. et al. Term, 7, September 1981.]
[No. August
Decided *2 J., argued The cause before Murphy, Smith, C. JJ. Digges, Cole, Eldridge, Rodowsky, Davidson Galbraith, Sullivan, J. Alan whom were Brendan V. with Jr., Sundermeyer Connolly, Michael S. and Williams & Preston, Jr., Whiteford, D. C. Wilbur Richard M. Natalie Whiteford, Preston, McSherry and Taylor, Trimble & brief, Johnston on the for appellants. Freishtat,
David whom Paul Mark were Sandler and Freishtat, brief, Schwartz & for appellees. Sandler on J., delivered the opinion the Court.
Eldridge, Murphy, J.,C. concurs in the and filed a concurring opinion result *3 page infra. granted
We certiorari case to resolve important this questions concerning grounds of some the for rescission of a Maryland contract under law.
Several limited partners partnership of a real estate which had invested in a land as venture known the Route — Lewis Property Partnership, brought Superior suit the Court of City against Baltimore the firm Baltimore law of Weinberg & Green partners individually, and several of its alleging negligent fiduciary duties, breach breach of contract and fraud. These allegations arose out оf the law firm’s concurrent representation the real estate limited (who partnership and of the general partner thereof is not a case). essence, partners the limited claimed & Weinberg Green’s representation general partner personally, its him in busi- relationships with Hereinafter, partners,” plaintiffs 1. collectively "lim- will be as the referred defendants, collectively, ited "Weinberg Green,” and the be referred to as will & law "the firm.” of interest and had dealings, had created a conflict
ness The limited partners. the limited in financial loss to resulted duty had had a Weinberg & Green partners alleged that general of its relations with the full extent disclose disclosure, the limited that, had it made this partner and partnership. invested in would not have partners and, under compensatory damages partners sought Weinberg & Green count, damages.2 punitive the fraud that, to the extent damages, alleging counterclaimed to have lost partnership that the law firm caused of the lim due to the failure of certain money, the loss was firm information to law to have disclosed ited have the venture to been which would have enabled profitable. suggestion judge presiding of the trial
Responding to the case, parties negotiated partial in the agreement signed on October 1979. The lim- partners agreed prejudice ited to dismiss with the fraud Weinberg count and to release & Green from all other claims relating partnership. offraud or to the real estate conspiracy counterclaim, Weinberg agreed & Green to dismiss its good negotiations” "to enter into faith settlement following pro- negligence and breach of contract counts. The agreement: in the vision was also included written agreement constitute^] "This ... the entire additional parties. There are no promises parties except expressly made those agreement.” set forth in this the fraud count agreement, Pursuant tо the settlement *4 Thereafter, the and the counterclaim were dismissed. parties negotiate remaining met three to on the times counts, meeting Weinberg & Green offered and at the third $80,000 this partners rejected in The limited settlement. court, offer, and, their counsel as found the trial opin- background, the 2. For see more extensive discussion of the factual Helferstay, case, Special Appeals ion of the Md.App. Court of in this Creamer 243, 244-252, "immediately announced his intention to seek [of rescission agreement] the settlement and acted that upon the intention day by following filing the motion for appropriate relief.” partners argued limited the that settlement agreement should be rescinded and fraud count rein the because, stated they alleged, Weinberg & Green had inten tionally made representations” "false the during negotiations which partners had induced the limited to enter into the agreement. Specifically, settlement the limitеd partners alleged during they had negotiations repeatedly stated that be in settlement would have to $275,000 range $550,000.3 the Weinberg Green, of to & how ever, negotiations during agree expressly refused those to writing or orally specific range. to settlement Nevertheless, that, limited claimed partners certain statements, had law firm caused them to understand that, though even only agreement provided settlement for "good negotiations,” faith settlement reality According was different. partners, to the limited represented that, law firm as soon the fraud as count dropped, the law firm would offer to settle for between $275,000 $550,000.4 judge $275,000 figure 3. The allegedly rep- trial indicated resented an estimate ofthe amount which if would be recovered the limited partners negligence were successful on the and breach of contract counts. $550,000
At range, represented the other end the settlement an amount partners "substantially whole”; which would have made the limited it was sufficiently an large compensate partners amount to their for losses, pay conducting actual as well as their counsel who was this litigation posedly represented fifty percent contingency larger sup- for a fee. The amount also potential theof costs of defense and loss of estimate productivity Weinberg & Green which would have resulted from a trial on the merits. partners conclusion, according The limited reached to the trial court, would more in they allegedly they repeatedly because had told the law firm that obtaining drop they not the fraud count unless be assured could they settlement than would be able to obtain as the result of a judgment negligence successful on the alone. breach contract counts But when the limited made had known these conditions and this request assurances, Instead, had law firm refused them. partners claimed, the law firm then had told that the would them reason it range not give any express either include assurances that $275,000, it would prepared settle for more than was not because was not ultimately acquiesce supposed to the settlement needs of the limited partners, rather, public but because it did wish the to think it had negotiated Then, pending. response while the fraud count was to the *5 112 was "no court found that there the trial opinion,
In an by Weinberg & misrepresentation” of intentional evidence .5 However, Weinberg find that & Green the court did Green had induced which misrepresentation” an "honest had made Weinberg & Green the belief that respondents in the — $275,000 negotiate intended to a settlement in the $550,000 range. The court further found that the limited agreement had entered into the settlement reliance The trial court upon misrepresentation. rescinding entered an order the settlement reinstating the counterclaim and the fraud counts. The trial judge based the alternative his order of rescission on grounds misrepresentation of and unilateral mistake. appealed Special Appeals Court of Weinberg & Green affirmed on the of unilateral mistake. Creamer Helferstay, Md.App.
(1980).6 petition The law firm filed a for a writ of certio then rari, arguing misrepresentation that neither nor unilateral grounds mistake furnished for rescission the settlement of agreement under the circumstances of this case.
I. the trial court rulings of discussing Before the substantive however, procedural Special Appeals, the Court of and of matter must be considered. following order taken from the appeal in this case was
of the trial court: expressions assurances, to their partners’ requests for continued why not make explanation it would skepticism any express regard firm’s to the you "Can’t promises, firm had stated: the law written oral or trying you it is we’re what understand the lines?” and "Can’t read between to tell fraud count so the the partners’ to dismiss reluctance you?” regard to the With range included in long no dollar settlement as leverage.” need agreement, "You don’t the law firm had stated: only no was there trial court stated that not 5. The intentional "pressed” partners had not misrepresentation, this but that in fact argument. order” doc appeal "collateral under the so-called 6. The was authorized (1979). Elza, 208, 406 v. Benefi See Cohen A.2d 922 trine. Clark v. (1949); 545-547, Corp., L.Ed. 1528 69 S.Ct. cial Loan 337 U.S. 86, 92, Rams, Angeles Peat & Co. v. Los day December, 1979, "[I]t is this 31st Supe- rior City Court of Baltimore ORDERED that:
1. The contracts which were executed parties 24, rescinded; on October 1979 are and
2. 24, The orders filed October dismissing 1979 the fraud count of the declaration and the counter- claim and copies all of such orders thereafter filed are stricken.”
At
argument,
oral
we
question whether,
raised the
in an
law,
action at
a trial court
power
has the
affirmatively
to
order the rescission of a contract. Although
in
raised
court,
trial
the parties did not raise this
appeal.
issue on
Nevertheless,
it is the
type matter
ordinarily
which we
address whеn it comes to our
though
attention even
not
parties. See,
raised
Sec.,
e.g.,
Dep’t of Human Res. v.
Wilson,
639, 644-645,
286 Md.
The action brought by against the law firm was at law for damages. procedural The distinctions between are, actions at law and in equity suits course, preserved still counties, this State. In the circuit courts separate equity maintain law and dockets. See Dormay Corp. Co., 145, 151, Doric 221 Md.
(1959); see generally Brown, The Law/Equity Dichotomy in (1980). Maryland, 39 Md. L. Rev. 427 City, Baltimore Superior Court is power vested with the adjudicate only law, actions at while the Circuit Court of City Baltimore has authority exclusive to hear and determine suits equity. Maryland Constitution, IV, 28, §§ Art. 29.7 IV, 28, §§ Maryland Article provide 29 of the Constitution in full: Superior
"Section 28. City, Jurisdiction of Court of Baltimore City of Common Pleas and Baltimore Court. Superior The City, Court of Baltimore the Court of Common Pleas, City and the Baltimore Court shall each have concurrent jurisdiction cases, in all concurrently, civil common Law all 114 rescind beyond authority that the of a court to dispute
It is
See,
e.g.,
J.
purely equitable.8
or cancel a contract
(5) (5th
110,
§§
Pomeroy, Equity Jurisprudence,
ed. S.
1941).
long
has
held that
Symons
Consequently,
this Court
order a contract rescinded or
power
a law court has no
85-86,
Beatty, 222 Md.
Ridgley,
cancelled.
Exec. v.
683-684,
Groh,
45 A.
(1960);
Conner v.
(1900);
& Zell
Refining
Campbell
Co. v.
55-58,
Superior
Court of Baltimore
(1979); McDaniel, 388, A. 1 Whitaker v. then, On remand will be able to obtain an order of rescission the Superior they Court as originally However, sought. had they may able to invoke provides: Rule 342 d. 1. — Special
"d. Pleas Additional Provisions. Equitable 1. On Grounds.
(a) When Allowed. he, A judgment at law in action if were obtained, against judgment would be entitled relief such on equitable grounds, may plead the facts him which entitle to such by way relief of defense. (b) Form. plea begin Such plea equitable shall the words 'for
grounds’ or similar words. (c) May Strike Out. *8 appear If it equitable plea shall to the court that such cannot be by
dealt
justice
with
parties,
a court
so as
of law
to do
the
between
the court shall order the same to be
such
stricken out on
terms as
may
to costs as
be reasonable.
10. There is some
indicаtion
our cases
a
that where
defense to a
mistake,
upon
contract is based
mutual
it
where
is contended that the
express
did
party,
plea
not
the intent of either
a
then
under Rule
predecessor
d. 1.
lie,
only
342
and its
equity
statute will not
and that
an
grant relief,
court can
Macro,
Housing
College
such as reformation.
Auth.
Pk. v.
281,
(1975);
Gitt,
275
Nydegger
572,
Md.
v.
(1915).
116 file argument replication the a
Rule 342 d. 1. and make of equity which a court would grounds upon that exist Court, Superior if The agreement.11 the settlement rescind contention, refuse partners’ the could agreed invalid, treat it as agreement to enforce the formally the court could not order the although situation, words, in such In other a rescinded or cancelled. for, nor expressly is asked remedy "the of cancellation indirectly law, granted by the but... its effects are court of § Pomeroy, supra J. 110. legal in the аction.” obtained being on the the from is vacated Although appealed order power affirma- procedural ground that a law court has no to contract, to tively proceed of a we shall order the rescission order, court’s light merits of the trial discuss the in the guidance upon in order remand findings, provide to Rule 342 event invoke d. II. held, indicated, that initially previously trial court as as misrepresentation,
an and "unintentional” such "honest” firm made regarding that which it found the law to have offer, rescinding type a for of settlement it would is a It that an unintentional "material contract. true by a misrepresentation may of fact ... warrant rescission Shulton, thereby.” Inc. of a contract induced equity 686, (1965). Rubin, Md. 212 also, See longer a., necessary Maryland it is to no Rule 11. Under aplaintiff required an responsive pleading. replication Unless file a formal to a court, pleading may, responsive but need replication to a order of the trial "a nоt be filed.” responsive filed, replication a It is a or a defense to now clear that pre- made, equitable grounds pleading d. under Rule 342 1. Under on rule, was a Ch. 547 of the Acts of "defendant” decessor statute plea grounds. position equitable Poe took file a on authorized to up plea replication equitable grounds set where a statute authorized otherwise, defense, although equitable probably not he stated an "[t]he but Pleading Poe, particular.” 1 perhaps in this defective statute is (5th 1925). Chesapeake Practice, Tiffany § Nelson v. H. Cf. 688A ed. replaced Rule 342 d. 1. Md. A. 442 When Constr. Consequently, statute, changed "party.” the word "defendant” equitable right plaintiff prior concerning make doubts defense were removed.
117
Kirsner,
52, 56,
(1950),
e.g.,
196
This Court has held that no relief from a may ordinarily prior be on the of obtained basis Gortner, terms. extra-contractual Md. Thomson 73 (1891), alia, held, A. 371 inter that a written "my packing contract for the sale of of corn” sugar could not by parol alleged prior be varied of rep- evidence verbal resentation that the corn would of the quality sample. of a (id. 480) Court): The Court said (emphasis by at regard corn, "In quality the contract simply it required 'packing be of Gortner’s ’ sugar corn, and price then the If fixed. the corn delivered com, was his packing, sugar then, fraud, in the absence of the contract was gratified, and attempt give higher or evidence, different by parol standard is an attempt to add to the terms the written instrument.” More recently, in Tuckahoe, Delmarva Drill Co. v. Md. Delmarva was hired to drill a well under a contract which disclaimed all warranties as to quality of water produced. which would be employee An of Delmarva, however, allegedly represented that he "knew right strata that get he needed in order gallons of good minute usable water.” The well produced unusable water, however, relief, and a denying suit resulted. In Judge (id. 426): Levine wrote for the Court "Here, the contract was and unambiguous clear hence, face law, its aas matter of substantive contemporaneous prom- prior of a evidence parol *10 water’ could not be admitted 'usable supply ise providing '[n]o a written to contradict quality of given concerning is specific guarantee ” water.’ of relief for precludes granting rule parol evidence preceding the contract representations unintentional also, e.g., of the contract. See the terms conflict with (1970) Melrod, 257 Md. Foreman v. may note not be varied promissory parol (unequivocal terms).12 which have not with those cases
Entirely consistent
warranty
parol promise,
a prior
the basis of
granted relief on
terms of
express
it
with
when
conflicted
representation
or
has
in which relief
been
are
cases
agreement,
those
did not conflict
parol
statement
granted where
Rubin,
Shulton,
supra,
In
Inc.
contract terms.
" '[a]ll
statements contained in
669, Rubin contracted
rep-
be deemed
. delivered ...
shall
any certificate ..
” Rubin
by Rubin hereunder.’
warranties
resentations and
false rep-
which included
certificates
delivered
had
of the contract.
resentations,
sought rescission
and Shulton
were
misrepresentations
that Rubin’s
The trial court found
term
Also,
that the contract
Rubin testified
unintentional.
statements,
upon
as those
all
such
which mandated that
warranties,
was not
brought, were
which suit had been
out that
pointing
After
parties.
real
between
integrated
testimony
inconsistent with
Rubin’s
was
terms,
contract,
by the contract
that he must be bound
entitled to
683-684,
that Shulton was
this Court held
id. at
may
exceptions
parol
legislature
to the
evi
create
12. We note that the
exception has been
example,
that such an
dence rule.
there is a view
For
Article
Maryland
Code,
Code
the Uniform Commercial
created
(1975),
2-315,
2-202, 2-314,
§§
Article.
2-316 of the Commercial Law
transaction,
Specifically
argued
goods
in a sale of
promise
representation
if it
or
be enforceable even
extracontractual
conflicts with
contract.
disclaimer, merger
integration
clause of a written
a
Hill, Damages
Misrepresentation,
L.
73 Colum.
See
for Innocent
however,
679, 740
governed by
Rev.
we
Because this case is not
Article
express
no view on this issue.
rescission of the contract because of the extra-contractual
Since,
contract,
had made.
in the
misrepresеntations Rubin
agreed
Rubin had
to warrant
the truth of certain
statements,
showing by
extra-contractual
Shulton of their
terms,
falsity,
conflicting
far from
with the contract
completely in
them. Id. at
accord with
McGrath,
A.2d
Chesapeake
Homes v.
rescinding
the Court affirmed decree
a contract
of sale and a
of an "innocent”
deed on
misrepresentation by
agent
buyer
the seller’s
to the
con
Because,
cerning the size of the lot to be sold.
as the Court
(249
specifically
482),
indicated
Md. at
neither the contract
any
sale nor the deed contained
metes and bounds
description of the property,
representations
the seller’s
did
not conflict with
written terms of the instruments. The
*11
parol
rule, therefore,
evidence
posed no bar to the granting
also,
relief in that
e.g.,
case. See
Realty,
Brooks v. Towson
(1960) (relief
Inc.,
granted
A.2d 431
on
showing of parol misrepresentation
not contradicting
express terms); The
Corp. Crawford,
Glendale
(1955)
148,
Thus, in involving cases unintentional or innocent pre-contractual representations, regularly this Court has adhered parol rule, to the evidence and we see no reason to depart from it here. present case, the the trial court found that Weinberg &
Green had made an oral representation, prior signing the 328, 439 Seney, In our recent in decision Martens Chevrolet v. 292 Md. are actionable misrepresentations negligent we held that noteworthy, however, tort. particular It is misrepresentation that the upon brought which suit had been in Martens did Chevrolet not contradict term of the contract which was involved hеre, case. express opinion Because the issue is not before us we no as parol preclude whether upon the evidence rule will a tort action based
settlement agreement, that it $275,000 would offer between $550,000 during settlement negotiations. The trial court also found representation that this had induced the limited partners to execute the written settlement contract. If the court had further found that the firm law had acted fraudulently, a basis for rescission of the written contract existed, would have regardless of the terms of that contract. However, the trial court found that the rep- law firm’s resentation was honest and Consequently, unintentional. pre-contractual oral representation can furnish a basis for relief to the partners only limited if the representation did vary or contradict a term of the written contract.
No one has claimed in this alleged case that parol promise to settle the underlying lawsuit for a sрecific range of dollars is consistent with the language of original Moreover, view, contract. in our no such claim validly could be made. Assuming arguendo that there is some ambiguity in the written contractual promise to "good undertake faith settlement negotiations,” no reasonable interpretation of phrase is consistent with the parol promise by claimed the law firm to settle for a specific range of dollars. The partners’ limited own evidence concerning negotiations leading to the written showed that all persons recognized involved the inconsistency between a settlement for a figure dollar range claimed and the wording of the written contract. Furthermore, remedy rescission, upheld by both below, courts reflects the understanding alleged *12 representation oral to settle for a specific dollar range con tradicted the written agreement; settlement otherwise, there would have purpose beеn no in rescinding the written contract. Finally, the written agreement settlement con tained the following provision: negligent misrepresentation which does contradict a term of a contract parties. connection, between the Misrepresentation, W. compare Hill, In Damages this for Innocent (Second) supra, Torts, § with Restatement 552C and Prosser, (4th 1971). Torts 620 ed. see, e.g., 14. But Education, Mont. Co. Council v. Bd. of 349-355, (1976). constitute[s] . . . the entire agreement "This parties. There are no additional of the agreement parties except expressly those made promises agreement.” in this forth set expressly clause excludes all quoted above collateral
promises. clear, therefore, rep- or alleged promise that the oral
It is monetary specific firm for a resentation the law to settle of the written settlement range contradicted the terms no representation oral furnishes Consequently, contract. contract. basis for relief from the written III. discussed, ground previously upon
As the alternate court held should be trial settlement mistake, prin- rescinded was that of unilateral under the ciples of Baltimore v. DeLuca-Davis Md. ground upon This was the which the Court Special Appeals upheld judge. light the trial of the however,
findings judge, of the trial unilateral mistake giving furnishes no basis for not effect to the written agreement. A. (47 Special Appeals
The Court of
stated
this case
266):
App.
granted upon proof
Md.
"That rescission
doubt,
longer
of a
if it
open
unilateral mistake is no
general
ever was.” If
rule
intended to be a statement
State,
Appeals
position
Special
of the Court
actually contrary to that rule. The law in this State is clear
fraud,
conduct,
that,
intentional, culpable
absent
such as
influence,
ordinarily
duress
undue
a unilateral mistake is
has
general
not a
for relief from a contract. This
rule
consistently
variety
been
adhered to in a
of situations.
Pattersоn,
Very early, in Woodv.
In Boyle
Fair,
333, 134
v. Md.
State
A. 124
Boyle claimed that
in signing
thought
a deed she had
merely
she was
clearing
grantee,
title for the
and did not
know that she was relinquishing her own future
interest
Walsh,
Court,
the land. Judge
writing for the
declined relief
(150
stating
Md. at
emphasis supplied):
"There can be no doubt
power
equity
of the
give
relief where there is a
party,
mistake
one
accompanied by fraud or other inequitable conduct
”
part
on the
party.
of the other
Adding that "the facts constituting
charged
the fraud
must
certainty
set forth with
particularity,”
id. at
Boyle
Court denied
relief
duty
because "there was no
resting
purchaser
[Boyle]
to advise
legal
effect which
would flow
from her execution of the deed of
and no
intentional misrepresentation
Id. at 342.
charged...
.”
also,
(1938);
See
e.g.,
Stone,
653, 197
Gross v.
A. 137
Boyle
15. The
recover on
Court stated that
would have been entitled to
misrepresentation
the
to her claim.
attached
innocent
but for laches which had
misrepresentation
with an
involved did not conflict
express
contract,
рarol
term of the
so the
evidence rule would not have
precluded
ground.
part
opinion, supra.
relief on this
See
II of this
*14
(1913);
Hesson, 121
Ray v. Bros., case, Eurice & Inc. in In that William G. point. much under which it had relief from a contract sought to obtain Ray according Mr. Mrs. promised to build a house & under claimed that it had been specifications. certain Eurice performed that the contract was to the mistaken belief from those set according specifications to a set of different granted trial court had forth in the written contract. The Hammond, relief, writing for Judge and this Court reversed. Court, mistake, made that the if had beеn first noted (201 125): all, at was unilateral Md. at held "If we assume the view as to mistake Gontrum, in . .. was an Judge effect the mistake consisted, one. in opinion unilateral It Court, thinking it was Corporation the Eurice assenting specifications, to its own while form it Ray If there was assenting specifications. to the mistake, legal such a result the Court found to follow, we think does not follow.” (ibid.): general Court then stated the rule clear, fraud,
"The law is absent duress or mutual mistake, having capacity one reads and understand written document who it, or, signs having it read to reading without it or him, law, it, signs signature is bound his An integrated agreement may least. not be varied mistake, by parol nor where there is no mutual parties place their own interpretation on its meaning or intended meaning.” "[njeither Because fraud nor duress are in (ibid.), the case” the Court held that the unilateral mistake as to the contract terms furnished no for rescission.
Similarly, in Rossi v. Douglas, (1953), a party to a that, lease claimed when it, he exeсuted he was mistaken concerning the meaning of a particular relief, term. declining Judge Chief Sobeloff for the Court (203 199): restated general rule Md. at "There is no claim here of fraud or duress or mistake, mutual and it is well established that in the absence of these having features one capac- *15 ity to understand a it, written document who reads or, without reading it or having him, it read signs to it, is bound his signature____Williston says that if even an illiterate executes a deed under a mistake
as contents, to its he is bound both at law and in equity if he did not require it to be read himto or object its explained. This everywhere is the rule.” And in Glass v. Hospital, Doctors 44, 131 (1957), Dr. signed Glass agreement an releasing the Doctors " * * * * * * accounts, contracts, actions, Hospital from 'all * * * whatsoever, and claims demands law or in promises, ” * * By plain meaning, Md. at its this equity 213 sought Dr. had language particular excluded the claim Glass Nonetheless, he had tried to show interpose at trial. the release through parol evidence that he had not intended again for the Judge to exclude that claim. Hammond wrote (ibid): Court, stating clearly justified in
"We think the Chancellor was refusing to hear extrinsic evidence as to what he appellant intended the release to mean or what broadly, thought it was intended to cover. Stated law, parol the rule is that as a matter of substantive vary, alter or contradict evidence is inadmissible to
125 unambiguous complete, is writing or fraud, mistake valid, no accident where claimed.” (1969), 569, Pernell, Md. 255 McLain v. mistakenly lawyer had he his that
McLain swore only prop signed pertained had thought that a release he that held injury. The Court personal not to erty damage and showing had been no relief there there be no since could in Chertkof fraud, mistake. And or mutual accident16 (1968), Md. A.2d Harry C. Weiskittel 22 L.Ed.2d 89 S.Ct. cert. 394 U.S. denied accordance perform refused to Chertkof thought he agreement oral "apol meant in the "exoneration” the word had parties indicаted that the ogy,” though the record even in the the exoneration "would agreed open court that Id. 552. The Court judgment....” form and a of a release was mis unilateral mistake held Chertkof s reliance on him from the settlement placed, to relieve and refused agreement. demonstrate, in in-
As foregoing cases the absence duress, tentional, as culpable conduct such fraud or consistently of his has refused relieve a obligations upon that unilateral party’s contractual based concerning requirement of a term meaning mistake out, Moreover, to do point contract. as the cases departure objec- represent major otherwise would from *16 theory tive of contracts. 127,
Thus, Eurice, involving Ray supra, in at the terms a construction concerning unilateral mistake of contract, Hand in Judge Court Learned quoted "accident,” according Story, merely 16. The term inevita- includes "not casualty, Providence, major, technically ble or act of vis оr what is called force; events, misfortunes, losses, or irresistible but such acts or unforeseen omissions, any negligence in the equity as are not the result of misconduct or (5th 1849). party.” will Story, Equity Jurisprudence § I J. 78 Thus ed. grant instrument, relief to one who other or has lost a bond or sealed land, legatee inadvertently lost a title or deed to or has been to a who — paid. Story, supra, § § See 78 126 York,
Hotchkiss v. National City Bank
287,
of New
200 F.
(S.D.N.Y.
(2d
1911),
aff'd, 1912), aff'd,
F. 664
Cir.
U.S.
34 S.Ct.
Finally, integration where there has an been agreement, those who executed it will'not be allowed to their place interpretation own on what it means or was intended to mean. The test such is objective subjective.” case and not See also v. Harry Chertkof C. Weiskittel supra, 251 Md. (Rev. 552; Williston, §§ 1 S. Contracts Ed. S. 1936); Thompson Contracts, Williston & G. Restatement of 19, 20, §§ 71, 501 and Applying comments thereto. approach to Eurice’s claim that it should not be bound objective it meaning signed, Judge the contract had (201 126): Hammond wrote for the Court Md. at [Eurice], then, "It does not lie in the mouth of say that it only intended be bound to build according specifications. First, to its its claimed immaterial, intent is agreed writing where has
127 unambiguous intent to clearly expressed to a clearly Next, may vary not contrary. it And, finally, it by parol. written intent expressed meaning on the interpretation its own put it executed.” has agreement of the written parties to the view consistently adhered haveWe language objective meaning of by the should be bound 290 Kapneck, v. year, in Bernstein Just last their contracts. sought to to party a a release 452, Md. 430 contractual terms consequences the written avoid had bodily injuries unknown which expressly covered argued develop. might in the future developed to be extended mistake should doctrine of mutual that the of the not know sides did cover the situation where both refusing In to extend injuries suffered. extent of the situation, the Court this of mutual mistake to cover doctrine (290 460): Md. at Digges opinion Judge in an stated law, parol evidence a matter of substantive "[A]s vary, or contra ordinarily is alter inadmissible release, contract, complete that is including dict of'fraud, accident unambiguous, the absence Pernell, 255 Md. McLain v. or mutual mistakе.’ (1969) 416, (emphasis in 569, 572, 258 A.2d original).” (id. 462):
And later on the intention inquiry "[T]he focuses knowledge gained to the contract and not on parties Long ago, it was subsequent to its execution. derived intention is resolved this that an individual meaning usual case from by the words chosen normally ascribe to the would and not agreement, to memorialize their parties indicating parties 'what the evidence from other or intended thought meant Sherman, 280 Md. mean.’ Board of Trustees event, A.2d from evidence certainly garnered not to be intent is *18 indicating party that one to an unambiguous disparate contract alone a had intent. McLain v. Pernell, Butler, 7, supra, Peters v. (1969).” A.2d 602-03 bar, In the acceptance case of the limited partners’ argu- similarly ment represent would an extension of the unilateral mistake doctrine which would be inconsistent prior objective with our cases and the theory that, contracts. The cases in this Court are clear absent fraud, influence, or party’s duress undue а unilateral mis- take or concerning meaning requirements the of the terms contract, of a will relief, not furnish a for basis and the objective meaning will be held to the of the terms.
B. Notwithstanding refusing above-discussed cases grant relief meaning because unilateral mistakes over the terms, of contract that argue under this Court’s decision in Baltimore v. DeLuca-Davis they are entitled to rescission of the settlement Both contract. the trial court the Court Special Appeals However, also relied this case. principles set forth in application DeLuca-Davis have no alleged unilateral concerning mistake meaning language in a contract. DeLuca-Davis, a bid on municipal construction a
project extremely as the a low result of clerical error the bidder. The bidder became aware of this error after all opened, City provi- bids had been but Baltimore Charter sion prohibited company from its withdrawing bid. How- evеr, the company promptly City, requesting notified the either to bid the accompanying correct the or return it and City responded accept bond. The that it intended to original bid. The bidder then filed a bill in equity seeking rescission, granted reformation and the trial court Court, appeal opinion by former. On in an Judge remedy Hammond, proper was not the that reformation held circumstances,17 might be had. that rescission but under Williston, Judge Hammond commented contracts, theory of objective "leader of the had for a may be critical of the rule that rescission Nevertheless, Williston unilateral mistake. .. . * * '* afford recognizes ... some cases mis- for the doctrine unilateral countenance take, executory and the the contract is still while afford put quo, statu parties can be * * *. has been most Recission rescission price was bid frequently sought where *19 byor processes because of erroneous arithmetical on a Relief the items bаsed mistake. omission of other in of this and has been allowed several cases them, kinds, In some of at though denied in others. least, in error party the would seem that mistake, in existence of a suspected should have the clearly should which case rescission and restitution ” Co., supra, Baltimore v. DeLuca-Davis be allowed.’ Contracts, 526, Williston, 5 S. quoting at (Rev. 1937). § Thompson Ed. S. Williston & G. rule, consisting of general The Court a next summarized conditions, in these circum- granting four rescission (id. 527): stances at
"1, grave consequences the must mistake be of such that the as made or offered enforce contract unconscionable; 2, the mistake must would be contract; 3, relate to a material feature of mistake must not have come about because duty culpable positive legal violation of a or from improper the error because 17. held that reformation was Court and, mistake, than a mutual the bid was the result of a unilateral rather of reformation importantly, never the name because "a court will more parties unless there is or act make contract for rewrite contract or understanding clear, satisfying and bar- convincing proof mutual of a accurately expressed.” v. DeLuca-Davis gain has Baltimore not been 518, 524, A.2d 4, the negligence; other must be put statu to the he quo extent that suffers no serious preju- except dice the loss of his bargain.” case, In present partners argue should be rescinded under Green, hand, & four-prong Weinberg test. on the other argues that test four-prong was not satisfied. In our view, however, it is four-prong immaterial whether the test was satisfied. entirely DeLuca-Davis did not set forth general new rule that of a always rescission obtained for unilateral mistakes whenever the four enunci- ated conditions are met. DeLuca-Davis, repeatedly emphasized Court
the nature of
arithmetic,
the error involved was purely
mechanical
Moreover,
аnd clerical. See 210 Md. at
Williston,
quoted
that,
§
at
supra
while
"
recognition
'this
of a unilateral mistake
aas
defense is
”
objective theory
contracts,’
inconsistent with the
"[tjhere
nevertheless
are
many
numerous cases in
states
granted
that have
contractors cancellation of bids
based
material,
clerical,
palpable, bona fide mistakes.”
At another point, the Court in explained DeLuca-Davis legally justifiable when it is to relieve a bidder of his obli- (id. gation emphasis supplied): *20 legally justifiable is "[I]t when a equity court of clear, by satisfied cogent and convincing proof that honest, error, clerical or mechanical not the gross result of or culpable negligence, made the bid that of the in form only bidder but in not actual substance, intent or gain and the of the party other would be if advantage unconscionable were taken of the only mistake and the loss would be that of the bargain if the were mistake nullified. In such cir- cumstanсes, blundering the bidder be relieved equity in of obligation by his created law his bid deposit ....” Inc., Ruff, 62,Md. K. also, County v. John Baltimore See 375 A.2d Fathers, 526, 154 v. Pallottine in Hill Co. Finally, of land to for the sale a contract a on from the contract sought relief containing gravel deposits by alleged induced of unilateral mistake the content, which statements gravel the concerning statements 531-533). (220 relief, In denying Md. at proved to be untrue on Baltimore v. appellant’s reliance rejected this Court the was dis that DeLuca-Davis pointing DeLuca-Davis out involved, alia, a mis "palpable inter tinguishable because take, nature, of ... the bid computation of in the a clerical submitted,” The went 534, emphasis supplied. id. at type to would not lie the of hold rescission (ibid.): by appellant, saying unilateral mistake made any event, "In think the mistake in instant we of only possibilities case went to the commercial in risk exploiting question, the tract a parties of the fairly contemplation within the bargain.” within the realm apply only It is clear that the of DeLuca-Davis principles clerical, in mistake is an honest one of a situations where the To DeLuca-Davis a give mechanical or technical nature. departure application represent broader substantial would intentional, Maryland, from the absent general rule influence, fraud, undue culpable conduct such as duress or ordinarily for unilateral mis- will be rescinded limited type partners take. The mistake made contemplation case, of the being the risk was also "within the instant bargain.” matter parties In addition and within the realm contract, evidence expressly shows that settlement ifying but the law firm uncontradicted terms of the covered leading during negotiations the execution spec- partners to include a term agreement, wanted $550,000 range, $275,000 to in the would be offered a settlement only negotiate refused, agreeing consistently instead expressed his fear рartners repeatedly good faith. Counsel for the agreement, range expressed in the were if no to his clients that $275,000. substantially than might less the amount offered well be might be contemplated the settlement limited less thus the risk that $275,000. than *21 the case at bar was not mechanical or clerical. Therefore relief under the principles set forth in DeLuca-Davis is unavailable to the limited partners.19
C. Under the contract terms relevant to the instant controversy, the partners were entitled to no more from Weinberg & Green than "good faith nego- settlement tiations.” Whether or not there was a breach of promise this by Weinberg & Green was not decided the trial court and is not before us on appeal. light of the evidence and the trial court’s finding that intentional, there was no culpable conduct part on the Green, of Weinberg & the limited partners are not entitled to have the contract rescinded on they mistakenly believed that & Weinbеrg Green had promised something other than to engage in "good faith settlement negotiations.”
IV. Although the evidence and trial judge’s findings furnish no basis for according relief from the settlement agreement, upon remand the limited partners should, they desire, if be allowed to invoke Rule 342 d. 1. and present additional evidence in light of the standards set forth opinion. event, course, See Rule 871 Ina. the law firm will present also be entitled to additional evi- Furthermore, dence. issues addition to misrepresentation raised, unilateral mistake such as the meaning of the term "good faith negotiations,” whether the firm law breached this promise, contractual situations, Whether bidding DeLuca-Davis is further limited to such case, as involved not, not, in that is a matter which we need and do reach in this case. *22 obligations from their relieving thereby agreement. settlement under Special Court of
Judgment of vacated, case Appeals that Court with remanded to judg- vacate the to instructions of Superior Court ment of the City and remand the Baltimore Court Superior to the case City proceedings for Baltimore opinion. this not inconsistent with costs. pay Respondents C.J., concurring: Murphy, below must be judgment
I with the Court that the agree sitting Superior in the judge, vacated. The trial law, equity no City possessed action at Baltimore an to rescind jurisdiction and was therefore without powers disposing appeal, I of the go contract. would no further in future course of on remand not to shackle the preferring judge’s with the trial characterization litigation and honest being as unintentional misrepresentation — in this regard judge’s Whether the trial conclusion one. predicate a sufficient erroneously supply he found — influenced a desire rescinding the contract was is, course, prob- negotiations future facilitate more than I no need to do here simply lematical best. see quo to the judgment parties return the status vacate the agreement. occupied prior to the aborted contractual