Winternitz v. Summit Hills Joint Venture

73 Md. App.16, 532 A.2d 1089 (1987), cert. denied, 312 Md. 127, 538 A.2d 778 (1988)

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Nature of the Case

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Facts

P operated a pharmacy and convenience store under a lease that expired on January 31, 1983. P contends that D orally agreed to renew that lease and to permit him to assign it to a purchaser of his business. P sued D claiming that D breached both the renewed lease and the assignment agreement and that this resulted in a significant decrease in the sale price of his business. The following facts were presented at trial. Before the lease expired P, talked with the employees of D. P met with a Mr. Frank, a partner in D, to discuss a renewal of the lease. P informed D that he might want to sell his pharmacy business and asked if there would be any objection to his transferring the lease. P claims that D agreed to renew the lease and indicated that there would be no objection to an assignment if the assignee was financially sound. The property manager, Ms. Harris, delivered a proposed two-year lease, with a conditional option to renew for an additional eight years, the condition being that P make certain renovations to the premises by October 31, 1984. The rent for the first two years was to be $1,700 per month, subject to escalation during the optional eight-year extension. After some clarification, P said that he accepted the lease and asked when it could be signed. The lease was marked “sample.” Both P and Ms. Harris were authorized to sign the lease at that time; it was not signed. Ms. Harris told P that 'there was nobody available to sign [the lease] at that time.' She instructed P to pay the new rent rather than the existing rent. P listed the business for sale in mid-January. P found a buyer for $70,000 with the purchaser to assume the lease on the premises for two years at $1,700 per month plus an option for 8 years at rent plus CPI not to exceed 12% per yr. The contract was contingent on seller procuring lease, or the contract is null and void. The new buyer was told by Ms. Harris, that she 'foresaw no foreseeable problem' with a transfer of the lease. P called Mr. Frank and was again assured that 'as far as I know everything is okay.' Frank then informed P that he had changed his mind and intended to 'negotiate his own lease.' Frank confirmed that he would neither transfer the lease nor renew it. P was forced to renegotiate his sales contract and got purchase price of $15,000 (rather than $70,000) plus the inventory at D's cost. P sued, and the jury awarded P $45,000. The court granted judgment N.O.V., and P appealed.