Huggins v. Huggins & Harrison, Inc.

103 A.3d 1133, 220 Md. App. 405, 2014 Md. App. LEXIS 145
CourtCourt of Special Appeals of Maryland
DecidedDecember 2, 2014
Docket1702/13
StatusPublished
Cited by23 cases

This text of 103 A.3d 1133 (Huggins v. Huggins & Harrison, Inc.) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Huggins v. Huggins & Harrison, Inc., 103 A.3d 1133, 220 Md. App. 405, 2014 Md. App. LEXIS 145 (Md. Ct. App. 2014).

Opinion

ARTHUR, J.

This case involves a dispute over a landlord’s contractual right to terminate a long-term commercial lease and to require the tenants to renegotiate the terms. The tenants, appellants Thomas A. Huggins (“Thomas”) and his company, TAH, Inc. *410 (“TAH”), contend that the landlord has no such right; the landlord, a related family business by the name of Huggins & Harrison, Inc. (“H & H”), contends that it does.

The Circuit Court for Montgomery County determined that the pertinent lease provision was unambiguous and, accordingly, declined to consider Thomas’s and TAH’s extrinsic evidence of the parties’ alleged intentions at the time when they drafted the lease. The court proceeded to declare that, under the language of the pertinent provision, H & H did not have the right to terminate the lease at the time when Thomas and TAH first filed this suit, but that the right to terminate had arisen during the pendency of the suit. Thomas and TAH took this timely appeal.

Questions Presented

Thomas and TAH raise two issues on appeal, which, for clarity and concision, we restate as follows:

I. Did the circuit court err in ruling that the termination provisions of the lease were unambiguous and in excluding extrinsic evidence of the parties’ alleged intentions?
II. Did the circuit court issue an improper advisory opinion concerning H & H’s right to terminate the lease on the basis of events that occurred during the pendency of the litigation? 1
For the reasons that follow, we find no error.

*411 The Facts

We recount the facts in the light most favorable to H & H, the party that prevailed below. Green v. McClintock, 218 Md.App. 336, 341, 97 A.3d 198 (2014); L.W. Wolfe Enters., Inc. v. Maryland Nat’l Golf L.P., 165 Md.App. 339, 343, 885 A.2d 826 (2005).

A. The Parties

Thomas is the president of TAH. Thomas and TAH run a gasoline and service station, as well as a U-Haul franchise, at the property located at 10619 Connecticut Avenue, in Kensington, Maryland.

H & H is a Maryland corporation and is the owner and landlord of the property. Before his death in 1993, Thomas’s father, Francis M. Huggins Jr., owned all of the shares in H & H. Upon Mr. Huggins’s death, his shares went to his wife, Helen H. Huggins, who became H & H’s president.

Mrs. Huggins transferred some of her shares to her children during her lifetime, but remained the majority shareholder until her death on November 13, 2009. Upon Mrs. Huggins’s death, the remaining shares of H & H went to each of her children in equal percentages. Hence, Thomas is a shareholder of H & H, as are the other Huggins siblings: William Huggins (“William”), Harold Huggins, Marion Coleman, Elizabeth Ann Pender, Patricia Mudgett, and Linda Huggins (via an irrevocable trust).

B. Prior Rental Agreements

Thomas has operated the gasoline and service station at the property since approximately 1986. At first, Thomas operated the station pursuant to a verbal agreement between himself and his late father. Under that agreement, Thomas paid an initial base rent of $2,500 a month. In or about 1993, that amount increased to $3,500 a month.

In 1993, a few months before Thomas’s father died, he allegedly signed no fewer than three different leases for the property, none of which are fully completed and executed. *412 Thomas failed to produce a version with the original signatures affixed, and he and his sister Linda acknowledged that some of the blanks on some of the documents were filled in after their father’s death. Other than Linda and Thomas, none of the Huggins siblings knew of any of the 1998 leases at that time.

The other siblings first learned of a 1993 lease some years later, when Thomas told his sister Patricia Mudgett about a potential sublease for the property. Ms. Mudgett, a realtor, informed Thomas that he could not sublease the property because he had no lease. Thomas evidently responded by showing her a lease, but he also admitted to her that he had filled in the blanks. In 2002, Ms. Mudgett and her younger brother William questioned the validity of the 1993 lease.

On May 9, 2002, Mrs. Huggins, as president of H & H, signed a formal lease for the property. The lease provided for an initial term of six years, to be followed by six successive terms of six years each (for a total of 42 years). The new lease did not prohibit Thomas from subleasing the property.

When Thomas’s siblings learned of the lease, they discussed its implications with their elderly mother. As a result of those discussions, Mrs. Huggins signed an affidavit stating that she had not understood the terms of the lease. In addition, she demanded that Thomas terminate the lease, which he did on June 15, 2002. William then presented Thomas with another lease, which Thomas refused to sign. Consequently, there was, at that time, no valid lease for the property.

By this time, in the early 2000s, H & H was cash poor and was struggling financially. In the summer of 2002, Helen Huggins and family members discussed this problem, and each member was encouraged to find the “highest and best use” for the property.

At about this time, William became aware that Montgomery County was undertaking a zoning study of Kensington’s master plan. In light of the potential change to the plan, William explored possibilities for the property that were consistent with the goal of “highest and best use.”

*413 C. The Current Lease Documents

On October 16, 2002, Thomas and H & H (through his mother, Mrs. Huggins) executed temporary lease documents that would apply until the parties could reach a final determination about the property. The parties signed the documents in anticipation of a trip to Europe that Mrs. Huggins planned to take for several months in late 2002.

The temporary lease provided that if Mrs. Huggins did not return from her trip, Thomas would have a six-year lease with the option to renew the lease for two successive leasehold terms of six years each, “and for an additional leasehold term thereafter of two [] years in duration.” Under this lease, Thomas would have no right to sublease the property. On the other hand, if Mrs. Huggins did return, the lease provided that it would terminate automatically on May 31, 2003.

After Thomas’s mother returned safely from her trip, the parties signed an extension of the October 2002 lease, effective May 31, 2003, so that negotiations could continue.

On August 27, 2003, Thomas (individually and as president of TAH) and Helen Huggins (as president of H & H) signed an addendum.

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103 A.3d 1133, 220 Md. App. 405, 2014 Md. App. LEXIS 145, Counsel Stack Legal Research, https://law.counselstack.com/opinion/huggins-v-huggins-harrison-inc-mdctspecapp-2014.