Relating to Real Estate

The August 22, 2017 decision by the Court of Special Appeals is yet another chapter in the epic saga of Flora Lipitz et al. v. William A. Hurwitz, No. 113, Sept. Term, 2016, 2017 WL 3599677 (Md. Ct. Spec. App. Aug. 22, 2017) relating to a house on Blendon Road in the Caves Valley Country Club development in Baltimore County.  The case has previously been to the Court of Special Appeals, 207 Md. App. 206 (2012), and then to the Court of Appeals, 435 Md. 273 (2013), which remanded the case for a hearing.  On remand, summary judgment was granted to Hurwitz, and this appeal followed that decision.  In Lipitz v. Hurwitz, No. 113, Sept. Term, 2016, 2017 WL 3599677 (Md. Ct. Spec. App. Aug. 22, 2017) the Court of Special Appeals reversed the Circuit Court for Baltimore County and remanded the case for yet further proceedings, so we may not have heard the last of this contest.

The case relates to a contract for sale of a property in the Caves Valley development, and the effort of Hurwitz to cancel the contract he had to buy the property because the sellers had not delivered the homeowner association (“HOA”) documentation to him.  Hurwitz’s claim was upheld by the circuit court and previously by the Court of Special Appeals even though (i) he owned other properties in the same development, (ii) already had all of the HOA documents, and (iii) in a contemporaneous sale of another property he owned in the development, he affirmed to the buyer of that other property that he had all of the HOA documents and was delivering them to that buyer.  The current episode of the case relates to whether Hurwitz was equitably estopped from walking away from the contract even though the seller, Lipitz, had not herself delivered the HOA documents to Hurwitz.

In its 2013 opinion, the Court of Appeals found that, contrary to what one might suppose, the fact that a home buyer already possessed the HOA documentation would not prevent that buyer from cancelling based on the grounds that the statute requires that the seller deliver the HOA papers to the buyer.  The buyer’s possession of the same papers is not relevant under the statute, and the fact that the buyer got them from another party at the time of the contract doesn’t prevent the buyer from cancelling under the Maryland HOA Act (as ridiculous as this decision seems to be).  The Court of Appeals tried to explain why the result was not absurd, but its reasoning is not convincing.  And the fact that Hurwitz already owned property in the same development and was simultaneously selling it to a third party to whom Hurwitz affirmed that he delivered all of the HOA documents still, by itself, didn’t work to prevent Hurwitz from cancelling his contract to purchase the Lipitz house.  This is a real head scratcher, but the Court of Appeals partially redeemed itself in 2013 by saying that Hurwitz may have been equitably estopped from cancelling, and it devoted a number of pages to a discussion of equitable estoppel.

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In the current chapter, the Court of Special Appeals finds that the case needs to go back yet again, this time for trial on the issue of whether or not Hurwitz is equitably estopped from cancelling.  It would seem obvious that the sellers will at trial on remand introduce evidence regarding Hurwitz’s actions regarding the sale of other property he owned in the same development.  The amount of time already devoted (and to be devoted) to what seems to be obvious is in some ways astounding.

For questions, please contact David Fishman (410) 576-4234.  This article appeared in TheDaily Record, Baltimore, Maryland online and in the print edition on November 20, 2017.