Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

OT, LLC v. Harford County

United States District Court, D. Maryland

September 23, 2019

OT, LLC, et al., Plaintiffs,
v.
HARFORD COUNTY, MARYLAND, et al., Defendants.

          MEMORANDUM OPINION

          GEORGE L. RUSSELL, III UNITED STATES DISTRICT JUDGE

         THIS MATTER is before the Court on five motions: Third-Party Defendant Fidelity and Deposit Company of Maryland’s (“F&D”) Motion to Dismiss Counts I, II, and IV of the Third-Party Complaint (“Motion to Dismiss”) (ECF No. 155) and Motion to Stay Third-Party Complaint (“Motion to Stay”) (ECF No. 179); Third-Party Defendant Old Trail Partnership, LLC’s (“OTP”) Motion for Judgment on the Pleadings or, in the Alternative, for Summary Judgment (“Third-Party Motion for Judgment on the Pleadings”) (ECF No. 194); Fourth-Party OTP’s Motion for Summary Judgment (“Fourth-Party Motion for Summary Judgment”) (ECF No. 195); and Plaintiffs/Fourth-Party Defendants OT, LLC (“OT”) and Gemcraft Homes, Inc.’s (“Gemcraft”) Memorandum of Law in Opposition to Fourth-Party Plaintiff OTP’s Motion for Summary Judgment and in Support of their Motion for Summary Judgment (“Fourth-Party Cross-Motion for Summary Judgment”) (ECF No. 198). The Motions are ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2018). For the following reasons, the Court will grant the Motion to Stay; deny the two other Third-Party Motions without prejudice; and deny the Fourth-Party Motions.

         I. BACKGROUND [1]

         In 2004, OTP acquired title to the Property known as the Old Trails Subdivision and thereafter, along with Tousa Homes, Inc. (“Tousa”), sought to develop it. (3d Pty. Compl. ¶¶ 9–10, ECF No. 146). In 2005, OTP entered into a Subdivision Agreement with Defendant/Third-Party Plaintiff Harford County, Maryland (the “County”). (Id. ¶ 11). To obtain building permits, OTP and Tousa were required to sign County-approved PWAs and PWUAs and submit SWM plans to the County, which they did in 2006, and comply with the County’s Subdivision Regulations. (Id. at ¶¶ 12–14). OTP sought reapproval of the SWM plans and received new SWM permits several times thereafter, with the last set of SWM permits issued on July 1, 2015. (Id. ¶ 14). To receive the PWAs, PWUAs, and SWM permits, the County required OTP and Tousa to secure the required infrastructure improvements so that the County would not have to pay for them. (Id. ¶¶ 15–16). After procuring eleven bonds totaling approximately $2.2 million from F&D, Tousa posted the bonds in March and June 2006 to secure the PWAs, PWUAs, and SWM permits.[2] (Id. ¶ 14). In 2007 and 2008, Tousa built and sold four townhomes in the Old Trails Subdivision and, along with OTP, performed certain road and SWM work. (Id. ¶¶ 17–18). In 2008, Tousa declared bankruptcy and stopped work on the Old Trails Subdivision, and OTP ceased development efforts, without having completed the road or SWM infrastructure for the Subdivision. (Id. ¶¶ 19–20). The County did not declare defaults or call the bonds, noting “[t]he infrastructure in place at that time appeared adequate to serve the four townhomes that had been built.” (Id. ¶¶ 21–22).

         On or about August 17, 2016, Gemcraft purchased the Old Trails Subdivision from OTP via a Purchase and Sale Agreement (the “Purchase Agreement”). (4th Pty. Compl. ¶ 11, ECF No. 168; id. Ex. 1 [“Purchase Agreement”] at 20, ECF No. 168-1). Article 23.A(1) of the Purchase Agreement provides that the property was to be sold on an “AS IS; WHERE IS” basis and negated and disclaimed any representations, warranties, or guaranties of any kind or character whatsoever. (4th Pty. Compl. ¶ 12; Purchase Agreement at 20). Article 23.C (the “Indemnity Provision”) of the Purchase Agreement provided:

EFFECTIVE AS OF THE CLOSING, [Gemcraft] SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS [OTP] FROM AND AGAINST ANY LOSS, LIABILITY, DAMAGES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES) ARISING FROM OR RELATED TO ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION, ATTORNEYS’ FEES AND DISBURSEMENTS) WHICH ANY HOMEBUYER OR OTHER THIRD PARTY MAY HAVE ARISING FROM OR RELATED TO ANY MATTER OR THING RELATED TO OR IN CONNECTION WITH THE PROPERTY AND ARISING FROM AND AFTER THE CLOSING, WHETHER OUT OF PURCHASER’S USE OR OWNERSHIP OF THE PROPERTY OR CONSTRUCTION ACTIVITIES ON THE PROPERTY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY CONSTRUCTION DEFECTS, ERRORS OR OMISSIONS IN THE DESIGN OR CONSTRUCTION OF ALL OR ANY PORTION OF THE IMPROVEMENT ON OR TO SUCH LOTS, ANY PHYSICAL, ENVIRONMENTAL, OR OTHER CONDITIONS RELATING TO OR AFFECTING THE PROPERTY (COLLECTIVELY, “CLAIMS”) EXCEPT TO THE EXTENT (I) ARISING FROM A BREACH OF ANY REPRESENTATION, WARRANTY, OR COVENANT EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS EXECUTED BY [OTP] AT CLOSING, OR (II) ARISING FROM THE FRAUDULENT MISREPRESENTATION OF [OTP] OR ANY [OTP] RELATED PARTIES. THE DEFENSE BY PURCHASER REQUIRED BY THE ABOVE SENTENCE SHALL BE A FULL AND COMPLETE DEFENSE OF ALL OF THE [OTP] RELATED PARTIES DESCRIBED ABOVE AND THE DEFENSE OBLIGATION SHALL BE EFFECTIVE IMMEDIATELY AFTER A CLAIM IS TENDERED TO [Gemcraft] OR ITS SUCCESSORS OR ASSIGNS.

         4th Pty. Compl. ¶ 13; Purchase Agreement at 21). Article 23.D of the Purchase Agreement is entitled “NO CONTINUED RESPONSIBILITY FOR DEVELOPMENT” and states that OTP would, “FROM AND AFTER THE CLOSING . . . HAVE NO RESPONSIBILITY FOR . . . PAYING ANY COST OR PERFORMING ANY OBLIGATION IN CONNECTION WITH THE DEVELOPMENT OF THE PROPERTY OR THE CONSTRUCTION OF . . . OTHER IMPROVEMENTS ON THE PROPERTY.” (4th Pty. Compl. ¶ 14; Purchase Agreement at 22). On October 13, 2016, Gemcraft transferred its interest in the Subdivision to OT, as anticipated and allowed by Article 25.1 of the Purchase Agreement, and with it, Gemcraft’s obligations under the Purchase Agreement. (4th Pty. Compl. ¶¶ 15–16). OT closed on the Subdivision Property the same day. (Id. ¶ 18).

         Thereafter, the County told OT that it was the County’s practice, based on the County Code and Regulations, to require owners who purchase a subdivision with partially completed infrastructure to post new bonds, enter into new PWAs and PWUAs, and obtain new SWM permits. (3d Pty. Compl. ¶ 24). In response, OT demanded that the County call the bonds Tousa posted in 2006. (Id. ¶ 25). The County did not and has not called the bonds. (Id. ¶ 27).

         On September 21, 2017, OT and Gemcraft sued the County, two State Delegates- Patrick L. McDonough and Richard K. Impallaria-and four County Officials-Barry Glassman, Billy Boniface, Melissa Lambert, and Joseph J. Siemek (collectively, the “County Officials”)-alleging, primarily, violations of federal civil rights laws. (Compl., ECF No. 1). On December 21, 2017, Shades and Springs, Inc. and Ajaz A. Khan joined OT and Gemcraft in filing an Amended Complaint. (Am. Compl., ECF No. 40). The County eventually asked F&D’s parent company, Zurich American Insurance Company (“Zurich”), about the status of the bonds and was told that they were “cancelled.” (3d Pty. Compl. ¶ 26). On March 15, 2018, Zurich further informed the County that the bonds were “no longer in force and effect” and that F&D would have defenses if the County called the bonds. (Id.).

         On August 30, 2018, the County and the County Officials (collectively, the “County Parties” filed a Third-Party Complaint against F&D and OTP. (ECF No. 146). In their Third-Party Complaint: the County asserted a claim for express indemnity against F&D (Count I); the County Officials asserted a claim for implied indemnity against F&D (Count II); the County Parties asserted a claim for express and implied indemnity against OTP (Count III); and the County Parties asserted a claim for declaratory judgment against F&D and OTP (Count IV). (3d Pty. Compl. ¶¶ 28–48).

         On September 26, 2018, F&D filed its Motion to Dismiss. (ECF No. 155). On October 9, 2018, the County Parties filed an Opposition. (ECF No. 160). On October 17, 2018, F&D filed a Reply. (ECF No. 166). On December 21, 2018, F&D filed its Motion to Stay. (ECF No. 179). On January 3, 2019, the County Parties filed an Opposition. (ECF No. 183). On January 14, 2019, F&D filed a Reply. (ECF No. 184). On February 19, 2019, OTP filed its Third-Party Motion for Judgment on the Pleadings or, in the Alternative, for Summary Judgment. (ECF No. 194). On March 13, 2019, the County Parties filed an Opposition. (ECF No. 201). On April 4, 2019, OTP filed a Reply. (ECF No. 207).

         On October 29, 2018, OTP filed its Fourth-Party Complaint, alleging contractual indemnity (Count I) and declaratory judgment (Count II) against OT and Gemcraft. (4th Pty. Compl. ¶¶ 27–34). On February 19, 2019, OTP filed its Fourth-Party Motion for Summary Judgment. (ECF No. 195). On March 12, 2019, OT and Gemcraft filed an Opposition and Cross-Motion for Summary Judgment. (ECF No. 198). On April 4, 2019, OTP filed a Reply. (ECF No. 208). To date, the Court has no record OT and Gemcraft filed a Reply.

         II.DISCUSSION

         A. Mo ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.