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

Court of Appeals of Maryland

January 27, 2015

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

Argued: December 9, 2014

Circuit Court for Baltimore County, Maryland Case No. 03-C-10-013994

Barbera, C.J., Harrell, Battaglia, Greene, Adkins, McDonald, Watts, JJ.

OPINION

BATTAGLIA, J.

"The way humans hunt for parking and the way animals hunt for food are not as different as you might think." Tom Vanderbilt, Traffic: Why We Drive the Way We Do 145 (2008).

Hunting and gathering spaces for parking a car not only consumes much of our personal time, but can also exacerbate tensions between neighboring communities, as in the present case. This appeal arises out of the execution of a letter of intent in settlement of litigation originating out of a contest over ownership of parking spaces situated between two entities, The Falls Homeowners Association (hereinafter "The Falls") and Falls Garden Condominium Association (hereinafter "Falls Garden"), both located in Baltimore County, Maryland.

At the end of 2010, Falls Garden, an association comprised of a cluster of condominiums located in the Summit Ridge area, filed a Complaint for Declaratory Judgment in the Circuit Court for Baltimore County asking for a determination that it was the owner of thirty-nine of sixty-seven parking spots that are located between its condominiums and the townhouses that are a part of The Falls, an association comprised of 112 townhomes. Falls Garden alleged that starting in 1985 and continuing through 2008, it believed that it held title to all sixty-seven parking spaces, but discovered in 2009 that it did not, in fact, own title to the spaces. It argued that, during the twenty-plus years, it obtained title to thirty-nine parking spaces through adverse possession as a result of its exclusive use and maintenance of those parking spaces, or in the alternative, that it obtained an easement by prescription or by necessity. Falls Garden asserted that, in 2010, The Falls began interposing ownership rights to all of the parking spaces by posting prohibitory towing signs and painting curb markers.[1] The Falls answered the Complaint and denied Falls Garden's claims, as well as counterclaimed, alleging trespass.

As the trial date approached, the parties attempted to negotiate a settlement agreement. In a joint motion to continue the trial date, they requested a second settlement conference, stating that they had attended a settlement conference before Judge Edward P. Murphy and "made progress in the discussion but reached a point which exceeded the authority given to the corporate designee" of The Falls. As another trial date drew near, a second settlement conference was held, whereupon the parties filed another joint motion to continue the trial date, which included the following:

2. On August 15, 2011, the parties came to an agreement in principal regarding this dispute, however the parties need more to time [sic] memorialize the terms of the agreement which includes the preparation of a lease for a term of 99 years.
3. The parties believe that said agreement will be drafted and properly executed no later than 90 days from the date of this Motion. Once the agreement is properly executed the parties will file a Motion to Dismiss the Complaint and Counter-claim with prejudice.

In the following days, counsel for The Falls and Falls Garden exchanged emails, culminating in the parties executing a Letter of Intent. Problems arose, and The Falls filed a Motion to Enforce Settlement Agreement to implement the Letter of Intent. The Motion to Enforce professed that, in accordance with the Letter of Intent, The Falls successfully obtained the requisite votes of the members of its Association[2] and, thereafter, sent a proposed lease to Falls Garden's counsel by email for "review, comment and execution". Falls Garden did not respond to the email containing the proposed lease, according to the Motion, and, subsequently, disavowed the Letter of Intent by inquiring about "returning to pre-litigation status."[3] Falls Garden responded to the Motion, asserting that the Letter of Intent was not enforceable and that it objected to terms included in the proposed lease.

The Letter of Intent, in its entirety, recited:
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, ...

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