Graeff, Kehoe, Moylan, Charles E. Jr. (Retired, Specially Assigned), JJ.
This case arises from a real estate transaction between Prime Venturers, appellant, and David and Cheryl Leupens (the "Leupens"), in which Prime Venturers agreed to convey approximately three acres of land, located at 6704 Ridge Road in Sykesville (the "Property"), to the Leupens, and the Leupens agreed to reconvey to Prime Venturers 1.68 acres when Prime Venturers obtained subdivision approval. The Leupens initially obtained a loan using only the parcel not affected by the Repurchase Agreement (the "Agreement") with Prime Venturers, but they subsequently refinanced their loan, this time using the entire three acres as security. OneWest Bank Group, LLC ("OneWest"), appellee, is the beneficiary of the Refinance Deed of Trust.
On April 7, 2010, Prime Venturers filed suit in the Circuit Court for Carroll County against OneWest and the Leupens. Prime Venturers sought a declaration of its right to an unconditional release of OneWest's mortgage lien on 1.68 acres of the Property and an order directing that the Property be reconveyed to it in accordance with the Agreement. Prime Venturers also sought damages from OneWest for disparagement of title, tortious interference with contractual relations, and breach of its statutory obligation to release its mortgage lien on the Property. OneWest subsequently filed a counterclaim seeking a declaration that it was entitled to enforce its lien on the Property as a first-priority lien.
Both parties filed motions for summary judgment. After a hearing, the court granted summary judgment in favor of OneWest, declaring that OneWest was entitled to enforce its lien on the entire property as a first-priority lien.
On appeal, Prime Venturers raises three questions for our review, which we have consolidated and rephrased, as follows:
1. Did the trial court err in denying partial summary judgment to Prime Venturers by way of declaratory and injunctive relief, and in granting summary judgment in favor of OneWest, because Prime Venturers' right to reacquire certain land, reserved in a previously executed and recorded agreement, had priority over OneWest's interests under a subsequent deed of trust?
2. Did the trial court err in finding that it lacked equitable authority to subordinate OneWest's interests under a subsequent deed of trust to Prime Venturers' interest under a previously executed and recorded agreement, which reserved the substantive right of Prime Venturers to reacquire certain deeded property from its grantee for minimal additional consideration?
For the reasons set forth below, we shall reverse the judgment of the circuit court.
FACTUAL AND PROCEDURAL BACKGROUND
On July 30, 2003, Prime Venturers and the Leupens executed two instruments relating to the conveyance of the Property, which consisted of 3.1477 acres of land improved by a residential dwelling. One instrument was the Agreement, which indicated that, at some point prior to July 30, 2003, the parties had executed a contract for the sale of the Property.The other instrument was a deed of conveyance (the "Deed").
The Agreement set forth the terms of the Leupens' obligation to reconvey a portion of the Property. It provided, in pertinent part, as follows:
WHEREAS, [the Leupens] wish to purchase the dwelling, together with a parcel of land containing 1.4629 acres surrounding same . . .; and
WHEREAS, the parcel which the [Leupens] wish to purchase has not yet been formally subdivided through the process set forth by the Bureau of Development Review for Carroll County, Maryland; and
WHEREAS, in order to accomplish the objectives of [Prime Venturers] and [the Leupens], the parties hereto have agreed that [Prime Venturers] shall sell unto [the Leupens] the entire tract, subject to the provisions set forth herein, whereby [the Leupens] will agree to cooperate with [Prime Venturers] during the subdivision process, and at such time as the property has been formally subdivided, reconvey unto [Prime Venturers], the portion of the property, as shown on the attached EXHIBIT 'A', for the sum of ONE DOLLAR ($1.00), provided that such subdivision and reconveyance is at no cost or expense to [the Leupens], and for reasons therefor, this Addendum is now executed.
NOW, THEREFORE, THIS ADDENDUM TO CONTRACT OF SALE WITNESSETH, that in consideration of the premises, the underlying Contract of Sale, and other mutual covenants and agreements, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. The parties have settled on the underlying Contract of Sale for the entire 3.1477 acres of land, more or less, and [Prime Venturers] has executed a Deed for same, intended to be recorded among the Land Records of Carroll County prior hereto.
2.[The Leupens] agree to take the title to said 3.1477 acres, subject to their agreement, by the execution hereof, to reconvey to [Prime Venturers], the portion of said property, approximately 1.6848 acres, for ONE DOLLAR ($1.00), at such point in time as [Prime Venturers] is able to record a subdivision plat through the proper authorities of Carroll County, Maryland, for the remainder of said property, said plat to contain no more than five (5) additional building lots.
5. [The Leupens] further agree that they will make their lender, or any subsequent lender of theirs financing the subject property, aware of the contents of this Agreement, and will provide such assurances to [Prime Venturers] as necessary that any such lender will agree, upon [Prime Venturers'] request, to release the portion of the property intended to be reconveyed unto [Prime Venturers], from any mortgage or deed of trust covering the subject property, for no consideration.
9. The provisions and covenants set forth in this Agreement shall remain in full force and effect for a period of ten (10) years after the date of settlement on the underlying Contract of Sale. Should [Prime Venturers] not be able to complete a subdivision plat in recordable form, and have same approved by the appropriate governmental authorities and recorded among the Land Records of Carroll County no later than ten (10) years after settlement, the terms and provisions hereof shall be void and of no further effect. . . .
11. The provisions set forth herein shall survive settlement on the entire tract, and shall not be deemed to be merged in a deed of conveyance from [Prime Venturers] to [the Leupens].
(Emphasis added). The Agreement was signed by Prime Venturers' president and general partner, Richard L. Hull, as well as by the Leupens, and the instrument was notarized.
The second instrument executed by the parties on July 30, 2003, was the Deed. It provided:
That for and in consideration of the sum of THREE HUNDRED THIRTY THOUSAND DOLLARS and 00/100 ($330, 000.00), and other good and valuable considerations, the receipt of which is hereby acknowledged, the said Grantor [Prime Venturers] does grant and convey to the said DAVID V. LEUPEN and CHERYL L. LEUPEN, HUSBAND AND WIFE, as Tenants by the Entirety, their assigns, the survivor of them and the survivor's personal representatives and ...