Opinion ID: 2319221
Heading Depth: 2
Heading Rank: 2

Heading: The Alleged Waiver In This Case

Text: We next review the Circuit Court's grant of ATC's motion for summary judgment. The Circuit Court, apparently at the suggestion of the parties, resolved the issue on summary judgment, concluding as a matter of law that Hovnanian had waived the condition precedent. Yet, whether subsequent conduct of the parties amounts to a modification or waiver of their contract is generally a question of fact to be decided by the trier of fact. University Nat'l Bank v. Wolfe, 279 Md. 512, 523, 369 A.2d 570, 576 (1977). See also Bio-Ramo Drug Co., 229 Md. 494, 184 A.2d 831 (1962) (reversing trial court's dismissal of claim based on non-waiver clause and remanding for determination, on the merits, as to whether condition was waived); Battista v. Savings Bank of Baltimore, 67 Md.App. 257, 507 A.2d 203 (1986) ([T]he question of waiver was one for the jury[.]). Indeed, the waiver inquiry requires resolution of many factual disputes and drawing of factual inferences. We look to the totality of a party's actions when determining whether waiver, or modification of the contract, has occurred. Waiver is the intentional relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right, and may result from an express agreement or be inferred from circumstances. Food Fair Stores, Inc. v. Blumberg, 234 Md. 521, 531, 200 A.2d 166, 172 (1964). Waiver may result from implication and usage, or from any understanding between the parties which is of a character to satisfy the mind that a waiver is intended. Canaras v. Lift Truck Services, Inc., 272 Md. 337, 360-61, 322 A.2d 866, 879 (1974). [A]cts relied upon as constituting a waiver of the provisions' of a contract must be inconsistent with an intention to insist upon enforcing such provisions. Gold Coast Mall, Inc. v. Larmar Corp., 298 Md. 96, 109, 468 A.2d 91 (1983) (quoting BarGale Industries, Inc., 275 Md. at 643, 343 A.2d at 533). Even if the relevant statements and communications of the parties are uncontested, the court must determine whether those statements (and actions) amounted to an understanding between the parties that the condition would no longer be enforceable. In this inquiry, the court looks at the party's actions both before and after the alleged breach. A party can waive a condition precedent by agreeing, in advance, to a course of action which would not otherwise comply with a contractual requirement. See, e.g., Taylor, 263 Md. at 64, 282 A.2d at 94 (What here took place was a modification of the contract ... by the very act of negotiating the notes which were different than the original agreement.). A party may also waive a condition precedent after a breach by failing to assert its remedies for that breach. See Nat'l School Studios, Inc. v. Mealey, 211 Md. 116, 131, 126 A.2d 588, 596 (1956) (It has been held in this State that one may waive the breach of the contract and later be bound by his election.) (citing Key v. Dent, 6 Md. 142 (1854) and Orem v. Keelty, 85 Md. 337, 36 A. 1030 (1897)). A party's inaction or silence is relevant, especially when that party is silent in response to a breach. See Jaworski v. Jaworski, 202 Md. 1, 10, 95 A.2d 95, 99 (1953) (He who is silent when he ought to have spoken, will not be heard to speak when he ought to be silent.). We do not mean to say that non-waiver clauses should be ignored altogether. Non-waiver clauses, although not favored by courts, must be considered by the trier of fact. The party alleging waiver must show an intent to waive both the contract provision at issue and the non-waiver clause. See, e.g., Freeman, 205 Md. at 79, 106 A.2d at 55 (Of course, if the written contract provides that it shall not be varied except by an agreement in writing, it must appear that the parties understood that this clause was waived.). Given the highly factual nature of the waiver inquiry, it is an uncommon case in which the issue can be resolved by summary judgment. In previous cases, we have reversed grants of summary judgment and remanded for resolution of the factual disputes. University Nat'l Bank v. Wolfe, 279 Md. 512, 526, 369 A.2d 570, 578 (1977) (reversing trial court's ruling, as a matter of law, that party was negligent, and remanding for factual finding regarding waiver); Bio-Ramo, 229 Md. at 501, 184 A.2d at 834 (reversing trial court's dismissal of complaint and remanding for factual finding regarding waiver). Occasionally, however, the waiver is so obvious that a ruling can be made as a matter of law. See Myers, 391 Md. at 207, 892 A.2d at 531 (affirming grant of summary judgment because [no] rational trier of fact [could] conclude that [the one statement at issue], standing alone, constituted an implied waiver); [19] DIRECTV, Inc. v. Mattingly, 376 Md. at 311, 829 A.2d at 631 (summary judgment appropriate when only evidence of modification was presentment of modified contract, without any evidence of acceptance or knowledge of the changes). Despite the parties' respective contentions that the undisputed facts require judgment in their respective favor, as a matter of law, we do not see this case as falling within the unusual category in which waiver is determined upon cross-motions for summary judgment. In reviewing the grant of ATC's motion for summary judgment, we review the record in the light most favorable to Hovnanian, the non-moving party. See John L. Mattingly Constr. Co. v. Hartford Underwriters Ins. Co., 415 Md. 313, 325, 999 A.2d 1066, 1073 (2010), and cases cited therein. Under this standard of review, we must give Hovnanian the benefit of any reasonable inferences that may be drawn from the [well-pleaded] facts[.] Rhoads v. Sommer, 401 Md. 131, 148, 931 A.2d 508, 518 (2007). Summary judgment is thus appropriate only if there is no genuine dispute as to any material fact and [ ] the party in whose favor judgment is entered is entitled to judgment as a matter of law. Md. Rule 2-501. Under this standard, it is at least a permissible inference that Hovnanian did not waive the condition precedent. The record certainly demonstrates that Hovnanian had some disagreement or need for clarification on a number of issues regarding the CAM fees, including what was included in those fees and how they would be collected. In granting summary judgment for ATC, the Circuit Court limited the import of those communications through factual inferences. These determinations are not appropriate at the summary judgment stage. The same rules apply with respect to Hovnanian's motion for summary judgment against ATC. Hovnanian, arguing against waiver, insists that no facts [] demonstrated waiver of the non-waiver clause in particular. Hovnanian thus argues that the trial court, and the intermediate appellate court, collapse[d] the analysis into a single inquiry and ignore[d] whether a separate waiver of the non-waiver clause occurred. Hovnanian avers that the only evidence on the issue of waiving the non-waiver clause is that [Hovnanian] and ATC scrupulously observed the formality of amending the Purchase Agreement in writing, and the parties amended the Purchase Agreement in writing on each of the three occasions they agreed to modify its terms. We disagree. The waiver of the non-waiver clause need not be explicit and independent from the underlying waiver; rather, waiver of that clause may be implied from the very actions which imply waiver of the condition precedent, as our previous cases demonstrate. See, e.g. Freeman, 205 Md. 71, 106 A.2d 50 (in contract with written modification clause, oral waiver of contract conditions was valid even though there was no separate waiver of modification clause); Taylor, 263 Md. 59, 282 A.2d 91 (party waived both no recourse clause and formal writing requirement by signing later agreements with full recourse); Charles Burton Builders, Inc. v. L & S Constr. Co., 260 Md. 66, 271 A.2d 534 (1970) (project owner waived contract's writing requirement and provision regarding extra work by requesting and accepting that extra work; no separate or explicit evidence of waiver of writing requirement). [20] It is only necessary that the trier of fact consider the non-waiver clause in its deliberations. Hovnanian also argues that the integration clauses contained within the formal amendments to the Purchase Agreement foreclose a finding of any oral or implied waiver. [21] Maryland law generally recognizes the validity and effect of integration clauses. See, e.g., Pumphrey v. Kehoe, 261 Md. 496, 505, 276 A.2d 194, 199 (1971) (an integration clause, although not absolutely conclusive, is indicative of the intention of the parties to finalize their complete understanding in the written contract[.]); Kasten Constr. Co. v. Rod Enterprises, Inc., 268 Md. 318, 301 A.2d 12 (1973) (courts generally should not look beyond the contract to evidence of prior statements or agreements, especially when contract contains integration clause). The last integration clause here was contained in the June 27, 2007 amendment, which, by reaffirming the original contract, purported to be a complete summary of the prior agreements, conditions, [and] undertakings between the parties[.] (Emphasis added). As Hovnanian argues, such an integration clause can be seen as wiping clear any prior oral or implied agreements that were not included in the contract. But there is evidence of waiver occurring after this last integration clause. As ATC describes, Hovnanian continued its silence regarding the alleged breach of Section 14(d) for six months, and allegedly took multiple actions that reaffirmed the existence of the contract, including paying $100,000 to extend the closing date from November 1, 2007 to February 1, 2008. A trier of fact could reasonably conclude that Hovnanian's later silence about the condition precedent, coupled with actions indicating it considered the condition fulfilled, constituted a modification or waiver of the condition after the last integration clause.