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Falls Garden Condominium Association, Inc. v. Falls Homeowners Association, Inc.

Court of Special Appeals of Maryland

November 1, 2013

FALLS GARDEN CONDOMINIUM ASSOCIATION, INC.
v.
THE FALLS HOMEOWNERS ASSOCIATION, INC.

Zarnoch, Berger, Moylan, Charles E., Jr. (Retired, Specially Assigned), JJ.

OPINION

MOYLAN, J.

From 1985 through 2008, the appellant, Falls Garden Condominium Association, Inc. ("Falls Garden"), believed, erroneously, that it held title to sixty-five parking spaces adjacent to one of the buildings in its complex on Clearwind Court in the Summit Ridge area of Baltimore County. Falls Garden used and maintained thirty-nine of those parking spaces exclusively for that period. The parking spaces were actually owned by a neighboring residential community, the appellee, The Falls Homeowners Association, Inc. ("The Falls"). After The Falls asserted its ownership rights over the parking spaces in 2009 by installing signs threatening to tow unauthorized users and by painting curb markers, Falls Garden filed a declaratory judgment action in the Circuit Court for Baltimore County on December 9, 2010, claiming it had obtained ownership of the parking spaces by adverse possession or, alternatively, that it had obtained an easement over the parking spaces by prescription or by necessity. The Falls filed a counterclaim for trespass.

As the trial date approached, the parties attempted to negotiate a settlement. On August 17, 2011, attorneys for both parties executed a letter of intent that stated it was "meant to memorialize certain aspects of a formal Settlement Agreement and separate Lease to be entered into between [Falls Garden] and [The Falls]." The Falls drafted a proposed lease but Falls Garden refused to execute it. On December 20, 2011, The Falls filed a motion to enforce the terms of the letter of intent as a settlement agreement. Falls Garden opposed the motion. On April 18, 2012, Judge Mickey J. Norman held a hearing and granted The Falls's motion.

Falls Garden has appealed Judge Norman's order. Falls Garden contends that Judge Norman erred in interpreting the letter of intent as a binding settlement agreement and in failing to hold a full evidentiary hearing before granting The Falls's motion. We find no error and we shall affirm Judge Norman's decision.

Facts and Proceedings

The factual dispute giving rise to this litigation is not material to the issues presented on appeal. Instead, we are concerned with the litigation itself. As we have noted, Falls Garden filed its complaint seeking a declaratory judgment on December 9, 2010. The Falls filed an answer and counterclaim on February 14, 2011. The original trial date was May 27, 2011. At a settlement conference on May 12, 2011, the parties made progress toward a settlement but attorneys for The Falls did not have the requisite authority to settle the case on that day. The parties filed a joint motion for a continuance, which was granted. Trial was rescheduled for August 17, 2011. The parties made further progress at a second settlement conference on August 11, 2011. On August 15, 2011, the parties filed a second joint motion for a continuance, noting that they had reached an agreement in principle but needed "more time to memorialize the terms of the agreement which includes the preparation of a lease for a term of 99 years." The motion also predicted that such agreement would be drafted and executed within ninety days, at which point the parties would file a motion to dismiss the complaint and counterclaim with prejudice.

Between August 11 and August 18, 2011, attorneys for both parties continued to negotiate via e-mail. These negotiations resulted in a "Letter of Intent" dated August 17, 2011.[1] We reproduce here the text of the Letter of Intent, in full:

This Letter of Intent dated this 17th day of August, 2011, is meant to memorialize certain aspects of a formal Settlement Agreement and separate Lease to be entered into between Falls Garden Condominium, Inc. ("Falls Garden") and The Falls Homeowners Association, Inc. ("The Falls").
The proposed Lease will contain the following provisions:
1. The term of the Lease will be 99 years, with The Falls as Lessor and Falls Garden as Lessee;
2. The property to be leased will be 24 parking spaces on the east side of Clearwind Court;
3. The 24 parking spaces will start at the island closest to Falls Garden Condominium Building #1 (6927-6933 Clearwind Court) on the northerly end of Clearwind Court and run continuously southerly toward Ten Timbers Lane;
4. The rent will be $20.00 per month per parking space;
5. The parking spaces shall be maintained, repaired and replaced by Falls Garden;
6. Falls Garden shall be responsible for any real estate taxes assessed against the 24 parking spaces;
7. Falls Garden shall carry insurance in amounts reasonably requested by The Falls for liability and property damage;
8. Falls Garden shall indemnify The Falls with respect to any claims occurring on the 24 parking spaces;
9. The Lease shall contain the usual and customary provisions regarding dates and methods of payment, provisions for default and breach, severability, signs, quiet enjoyment, waiver, and the like.

The proposed Settlement Agreement will contain the following provisions:

1. The case filed by Falls Garden Condominium, Inc. against The Falls Homeowners Association, Inc., and the counterclaim filed by The Falls, in the Circuit Court for Baltimore County, Civil Case ...

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