UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

STAR ENTERPRISE,

Plaintiff-Appellee,

v. No. 96-2667

WOOD JOINT VENTURE,

Defendant-Appellant.

Appeal from the United States District Court

for the District of Maryland, at Greenbelt.

Jillyn K. Schulze, Magistrate Judge.

(CA-96-1360-AW)

Argued: June 2, 1997

Decided: July 8, 1997

Before MURNAGHAN and LUTTIG, Circuit Judges, and TILLEY,

United States District Judge for the Middle District of North

Carolina, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Carlton M. Green, GREEN, LEITCH & STEELMAN,

College Park, Maryland, for Appellant. Griffin Vann Canada, Jr.,

MILES & STOCKBRIDGE, P.C., Rockville, Maryland, for Appellee.

ON BRIEF: J. Stephen McAuliffe, MILES & STOCKBRIDGE,

P.C., Rockville, Maryland, for Appellee.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Appellee Star Enterprise brought this action seeking specific performance of an option to purchase land pursuant to a lease. The

magistrate granted summary judgment in favor of Star and ordered Wood

Joint Venture to convey the property to Star for the purchase price

of

$52,000. We affirm on the reasoning expressed in the magistrate's

opinion.

I.

Linda V. Wood and Texaco Inc., the original parties to the lease

in question, entered into the lease in 1964. Paragraph 2 of the

lease

provided for a fifteen year term beginning on November 1, 1964.

Paragraph 13 of the lease further provided that the lessee had the

option to extend the lease for up to three additional five year

periods.

Because the lease stated that rent was not to commence until all

governmental permits had been acquired for the construction of a gas

station, Texaco did not begin payment until September 1, 1967.

The lease was extended three times, but each extension notice was

based on a lease commencement date of September 1, 1967, rather

than the date of the original lease, November 1, 1964. Thus, the

extensions stated that they were from September 1, 1982, September

1, 1987, and September 1, 1992. Wood did not object to the extensions and continued to accept rent.

The lease was assigned twice, pursuant to Paragraph 19, which provides that "lessee may assign or sub-let the premises, or any part

thereof, provided that lessee shall remain liable to lessor for the

performance of all of the terms hereof." Paragraph 22 further provides

that the agreement "shall be binding upon and shall inure to the

bene2
fit of the parties hereto and their respective heirs, legal

representatives, and assigns." Plaintiff Star Enterprise was the second

assignee.

When Star Enterprise requested that Wood Joint Venture, the successor to Linda V. Wood, grant an exception to the lease for

construction of a convenience store on the property, Wood Joint Venture

advised Star that it considered the lease to be expired and the

tenancy

to be month-by-month. In response, on February 8, 1996, Star

notified

Wood Joint Venture that it was exercising its option to purchase

the

property pursuant to Paragraph 12 of the lease, which provides:

(12) Options to Purchase. Lessor hereby grants to lessee the

exclusive right, at lessee's option, to purchase the demised

premises, together with all structures, improvements and

equipment thereon, free and clear of all liens and encumbrances (including leases which were not on the premises at

the date of this lease) at any time during the term of this

lease or any extension or renewal thereof....

Wood Joint Venture refused to convey the property on the grounds

that the option had not been timely exercised. Star therefore

brought

this action seeking specific performance.

II.

Star argues that it exercised the option during the third five-year

extension of the lease, because each extension notice was based on

a

lease commencement date of September 1, 1967, and the last extension was from September 1, 1992 to September 1, 1997. Wood, on

the other hand, argues that the lease states that it runs from

November

1, 1964, is a fifteen year lease, and provides for only three

extensions

of five years each. Thus, Wood argues that the option could not be

exercised more than thirty years after the lease was signed, i.e., could

not be exercised after November 1, 1994.

The magistrate concluded that, regardless of whether the extensions were still in effect, Star could exercise the option to

purchase

because Maryland law permits a holdover tenant to exercise an

option

to purchase provided for in a lease unless the lease evidences an

intent
3
to the contrary. See, e.g., Straley v. Osborne, 278 A.2d 64, 68

(Md.

1971) (stating that "a holdover tenancy is on all the terms and

conditions of the original lease, including the option to purchase,

which can

be exercised during the holdover period unless a contrary intention

is

shown"). The magistrate correctly concluded that the lease in

question

indicates that a holdover tenant is permitted to exercise the

purchase

option, as Paragraph 18 provides that a holdover tenancy shall "be

subject to all other terms and conditions of this lease, in the

absence

of a written agreement to the contrary."

Similarly, we find no error in the magistrate's conclusion that

Star

Enterprise, as an assignee, obtained the right to exercise the

option.

Maryland law provides that a lessee has the right to assign absent

a

specific restriction in the lease, Julian v. Christopher, 575 A.2d

735

(Md. 1990), and Paragraph 22 of the lease in question provides that

"[t]his agreement shall be binding upon and shall inure to the

benefit

of the parties hereto and their respective heirs, legal

representatives,

and assigns."

We have read the briefs, heard oral argument, and given thorough

consideration to the parties' contentions. Finding no error in the

magistrate's opinion, we affirm on the reasoning that appears therein.

AFFIRMED

4