Robert S. Peer, Jr. v. Hajoca Corporation

Citations: 54 F.3d 773; 1995 U.S. App. LEXIS 17385; 1995 WL 311575Docket: 94-1542

Court: Court of Appeals for the Fourth Circuit; May 22, 1995; Federal Appellate Court

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Robert S. Peer, Jr. appeals the dismissal of his breach of contract complaint against Hajoca Corporation by the district court. This diversity action stems from an alleged agreement in which Peer was to construct a new office/warehouse facility for Hajoca, who would lease it for fifteen years. Peer claims he was approached by a company representative in April 1989, after which he identified potential properties and engaged in negotiations, but no written agreement was ever finalized.

In July 1990, during a meeting at a former tire plant site identified by Hajoca, Peer alleges he was instructed to acquire the land, and a representative indicated that the project was a "done deal." The Company disputes these claims. Peer asserts he invested significant resources in preparation for construction, including financing and permits, but was informed in January 1991 that the Company would not proceed with the deal.

Peer filed a two-count complaint in state court, which was removed to federal court, alleging breach of contract for $441,000 in damages and "Detrimental Reliance" for $45,000. The Company sought summary judgment, contending the claim was barred by Maryland's statute of frauds. Peer acknowledged the applicability of the statute but argued that two letters from 1989 could remove the agreement from its scope. The district court found that the letters did not meet the statute's requirements but recognized a material factual issue regarding whether the Company could be estopped from asserting the statute of frauds defense, thus denying the Company's motion for summary judgment.

Peer voluntarily dismissed Count II of the Amended Complaint, but the Company opposed the motion, requesting that the dismissal be with prejudice. The district court granted this request, allowing Peer to withdraw his motion, but when he did not respond by the deadline, Count II was dismissed with prejudice. With only Count I remaining, which had already been ruled barred by the statute of frauds, the district court concluded that Peer had no viable cause of action and dismissed the entire Amended Complaint. Peer subsequently appealed, challenging the district court's ruling that his breach of contract claim was barred by the statute of frauds.

The standard of review for summary judgment is de novo, meaning the appellate court examines the record without deference to the district court’s conclusions. Summary judgment is appropriate when no rational trier of fact could find for the non-moving party, and evidence must be viewed favorably towards the non-moving party.

Under Section 5-104 of the Maryland Code, no action can be brought on contracts regarding the sale or lease of land unless the agreement is in writing and signed. This section applies to long-term leases, such as the fifteen-year lease Peer sought to enforce. Peer implied that the statute of frauds applied, arguing that two letters from a Company vice president satisfied its requirements. However, these letters indicated that negotiations were ongoing and no final agreement had been reached, thus failing to meet the statute’s requirements. Peer conceded there was no signed formal lease agreement, and the court correctly noted that negotiations remain incomplete until a formal written agreement is executed.

The district court determined that the unsigned draft agreements did not meet the statute of frauds requirements, as the parties intended to formalize a lease but failed to do so, aligning with Maryland law. Therefore, the court's order was affirmed. Additionally, Peer's argument regarding part performance as a means to circumvent the statute of frauds was deemed meritless, as part performance applies only when seeking specific performance of an oral agreement, not in claims for monetary damages. Peer voluntarily dismissed his detrimental reliance claim, leaving only one count, which the district court dismissed based on the statute of frauds. Consequently, Peer had no viable cause of action, resulting in the proper dismissal of the case. The court affirmed the district court's order without the need for oral argument, finding that the written materials sufficiently addressed the issues.