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Huggins v. Huggins & Harrison, Inc.

Court of Special Appeals of Maryland

December 2, 2014


Page 1134

Appeal from the Circuit Court for Montgomery County. Sharon V. Burrell, JUDGE.

ARGUED BY: Alan B. Fischler (Geoffrey T. Crouse, Law Offices of Alan B. Fischler, LLC on the brief) all of Bethesda, MD. FOR APPELLANT

ARGUED BY: Robert C. Park, Jr. (Jonathan R. Wright, Linowes & Blocher, LLP on the brief) all of Bethesda, MD. FOR APPELLEE

ARGUED BEFORE: Kehoe, Arthur, Leahy, JJ. Opinion by Arthur, J.


[220 Md.App. 409] Arthur, J.

Page 1135

This case involves a dispute over a landlord's contractual right to terminate a longterm commercial lease and to require the tenants to renegotiate the terms. The tenants, appellants Thomas A. Huggins (" Thomas" ) and his company, TAH, Inc. [220 Md.App. 410] (" TAH" ), contend that the landlord has no such right; the landlord, a related family business by the name of Huggins & Harrison, Inc. (" H& H" ), contends that it does.

The Circuit Court for Montgomery County determined that the pertinent lease provision was unambiguous and, accordingly, declined to consider Thomas's and TAH's extrinsic evidence of the parties' alleged intentions at the time when they drafted the lease. The court proceeded to declare that, under the language of the pertinent provision, H& H did not have the right to terminate the lease at the time when Thomas and TAH first filed this suit, but that the right to terminate had arisen during the pendency of the suit. Thomas and TAH took this timely appeal.

Questions Presented

Thomas and TAH raise two issues on appeal, which, for clarity and concision, we restate as follows:

I. Did the circuit court err in ruling that the termination provisions of the lease were unambiguous and in excluding extrinsic evidence of the parties' alleged intentions?
II. Did the circuit court issue an improper advisory opinion concerning H& H's right to terminate the lease on the basis of events that occurred during the pendency of the litigation?[1]

Page 1136

For the reasons that follow, we find no error.

[220 Md.App. 411] The Facts

We recount the facts in the light most favorable to H& H, the party that prevailed below. Green v. McClintock, 218 Md.App. 336, 341, 97 A.3d 198 (2014); L.W. Wolfe Enters., Inc. v. Maryland Nat'l Golf, L.P., 165 Md.App. 339, 343, 885 A.2d 826 (2005).

A. The Parties

Thomas is the president of TAH. Thomas and TAH run a gasoline and service station, as well as a U-Haul franchise, at the property located at 10619 Connecticut Avenue, in Kensington, Maryland.

H& H is a Maryland corporation and is the owner and landlord of the property. Before his death in 1993, Thomas's father, Francis M. Huggins Jr., owned all of the shares in H& H. Upon Mr. Huggins's death, his shares went to his wife, Helen H. Huggins, who became H& H's president.

Mrs. Huggins transferred some of her shares to her children during her lifetime, but remained the majority shareholder until her death on November 13, 2009. Upon Mrs. Huggins's death, the remaining shares of H& H went to each of her children in equal percentages. Hence, Thomas is a shareholder of H& H, as are the other Huggins siblings: William Huggins (" William" ), Harold Huggins, Marion Coleman, Elizabeth Ann Pender, Patricia Mudgett, and Linda Huggins (via an irrevocable trust).

B. Prior Rental Agreements

Thomas has operated the gasoline and service station at the property since approximately 1986. At first, Thomas operated the station pursuant to a verbal agreement between himself and his late father. Under that agreement, Thomas paid an initial base rent of $2,500 a month. In or about 1993, that amount increased to $3,500 a month.

In 1993, a few months before Thomas's father died, he allegedly signed no fewer than three different leases for the property, none of which are fully completed and executed. [220 Md.App. 412] Thomas failed to produce a version with the original signatures affixed, and he and his sister Linda acknowledged that some of the blanks on some of the documents were filled in after their father's death. Other than Linda and Thomas, none of the Huggins siblings knew of any of the 1993 leases at that time.

The other siblings first learned of a 1993 lease some years later, when Thomas told his sister Patricia Mudgett about a potential sublease for the property. Ms. Mudgett, a realtor, informed Thomas that he could not sublease the property because he had no lease. Thomas evidently responded by showing her a lease, but he also admitted to her that he had filled in the blanks. In 2002, Ms. Mudgett and her younger brother William questioned the validity of the 1993 lease.

On May 9, 2002, Mrs. Huggins, as president of H& H, signed a formal lease for the property. The lease provided for an initial term of six years, to be followed by six successive terms of six years each (for a total of 42 years). The new lease did not prohibit Thomas from subleasing the property.

When Thomas's siblings learned of the lease, they discussed its implications with their elderly mother. As a result of those

Page 1137

discussions, Mrs. Huggins signed an affidavit stating that she had not understood the terms of the lease. In addition, she demanded that Thomas terminate the lease, which he did on June 15, 2002. William then presented Thomas with another lease, which Thomas refused to sign. Consequently, there was, at that time, no valid lease for the property.

By this time, in the early 2000s, H& H was cash poor and was struggling financially. In the summer of 2002, Helen Huggins and family members discussed this problem, and each member was encouraged to find the " highest and best use" for the property.

At about this time, William became aware that Montgomery County was undertaking a zoning study of Kensington's master plan. In light of the potential change to the plan, William explored possibilities for the property that were ...

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