Saul Holdings Limited Partnership v. Seracare Life Sciences, Inc.
Filing
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MEMORANDUM ORDER DENYING 33 Motion for Reconsideration of 32 Order on Motion for Judgment, Order on Motion for Judgment on the Pleadings. Signed by Judge Theodore D. Chuang on 2/23/2015. (kns, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
SAUL HOLDINGS LIMITED
PARTNERSHIP,
Plaintiff,
v.
Civil Action No. TDC-14-1444
SERACARE LIFE SCIENCES, INC.,
Defendant.
MEMORANDUM ORDER
Presently pending before the Court is a Motion for Reconsideration, ECF No. 33, filed by
Plaintiff Saul Holdings Limited Partnership (“Saul”) pursuant to Federal Rule of Civil Procedure
54(b), in which Saul requests that the Court reconsider its Order denying in part Saul’s Motion
for Judgment on the Pleadings as to its Complaint for Declaratory Relief. Specifically, Saul
seeks reconsideration of the Court’s decision to decline to determine whether Defendant
SeraCare Life Sciences, Inc. (“SeraCare”) is required to fulfill the remaining obligations under a
commercial lease to occupy property owned by Saul (“the Lease”) until the resolution of the
question “whether SeraCare is entitled to equitable relief due to an honest mistake in interpreting
the notice deadline” in the Lease. Mem. Op. at 14, ECF No. 31.
Rule 54(b) provides that any action “that adjudicates fewer than all the claims . . . may be
revised at any time before the entry of a judgment adjudicating all the claims.” Fed. R. Civ. P.
54(b); see Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1469–70 (4th Cir.
1991). Motions to reconsider interlocutory orders under Rule 54(b) are generally not held to the
strict standards of Rule 59(e) and 60(b), which apply only to motions to reconsider final
judgments. See Am. Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505, 514–15 (4th Cir. 2003).
Although the precise standard for Rule 54(b) motions is unclear, when deciding such a motion,
“[t]he ultimate responsibility . . . is to reach the correct judgment under the law.” Id. at 515.
Saul’s argument for reconsideration is that Maryland case law never presented to the
Court during the original briefing and hearing on the Motion for Judgment on the Pleadings,
specifically, Creamer v. Helferstay, 448 A.2d 332 (Md. 1982), is controlling authority on the
issue whether equitable relief might be available to SeraCare. Specifically, Saul focuses on
language in Creamer stating that, “in the absence of intentional, culpable conduct such as fraud
or duress, [the Court of Appeals of Maryland] has consistently refused to relieve a party of his
contractual obligations based upon that party’s unilateral mistake concerning the meaning of a
term or requirement of the contract.” Id. at 341. The Creamer court also stated:
The rule precluding relief based upon unilateral mistake, absent intentional,
culpable conduct by the nonmistaken party, has often been applied in situations
such as the instant case, where the alleged mistake relates to the meaning of a
term of the contract.
Id. at 340.
Relying on that language, Saul argues that Creamer precludes SeraCare from receiving
equitable relief for an honest mistake in interpreting the notice provision deadline. See Pl.’s Mot.
Reconsideration at 2, ECF No. 31. This argument fails for several reasons. First, the court in
Creamer addressed whether a unilateral mistake could justify a specific remedy: rescission of the
contract. In its most lucid statement of the “general rule in Maryland,” the Creamer court stated
that, “absent intentional, culpable conduct, such as fraud, duress, or undue influence, a contract
ordinarily will not be rescinded for unilateral mistake.” Creamer, 448 A.2d at 344. In that case,
the court ruled that a party that had signed a settlement agreement providing that the parties
would engage in “good faith” negotiations was not entitled to rescission of the agreement
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because of mistaken reliance on an oral representation that it interpreted to be an understanding
that the other party was committing to offer between $275,000 and $550,000. Id. at 338, 344. In
the present case, SeraCare does not seek rescission of the Lease; instead, it seeks equitable relief
from a deadline to exercise a lease option that was arguably difficult to discern from the
language of the lease amendment. Def.’s Resp. to Pl.’s Mot. Judgment Pldgs, at 12 & n.5, ECF
No. 19. Moreover, unlike in Creamer, this case does not involve a mistake arising from an
interpretation of parol evidence. See Creamer, 448 A.2d at 338-39. Of the other cases cited by
the Creamer court and referenced by Saul in its Motion, see Pl.’s Mot. Reconsideration at 3,
several also involve mistakes traceable to parol evidence. See, e.g., Glass v. Doctors Hosp., 131
A.2d 254, 261–62 (Md. 1957); Ray v. Eurice, 93 A.2d 272, 278 (Md. 1952). None address
conditions for the exercise of a lease option. Creamer, 448 A.2d at 340-41. Thus, Creamer and
its related cases are distinguishable on multiple grounds.
Second, consideration of subsequent Maryland case law reveals that these distinguishing
factors are not immaterial. In the Maryland Court of Appeals cases addressing the specific
situation at issue in this case, whether a lessee should be held strictly to the requirements for
exercising a lease option, the court did not adhere to the strict rule in Creamer.
In
Beckenheimer’s, Inc. v. Alameda Associates Limited Partnership, 611 A.2d 105 (Md. 1992), the
Maryland Court of Appeals concluded that equitable relief can be available to excuse the
mistaken failure to comply with certain requirements relating to the exercise of an option,
depending on the nature of the requirement. See id. at 113–14; see also Elderkin v. Carroll, 941
A.2d 1127, 1134–35 (Md. 2008) (noting exceptions to the general rule that an option holder must
literally match all terms in order to exercise its right). Because such a rule is incompatible with
the cited language in Creamer, it is apparent that the Maryland Court of Appeals views the
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exercise of an option in a lease as a scenario distinct from rescission of a contract. Notably,
Beckenheimer’s and Elderkin, the leading cases on whether equitable relief is available to excuse
the failure to meet all conditions for exercising a lease option, do not reference Creamer at all,
further indicating that the Maryland Court of Appeals does not consider Creamer to be
controlling on this issue.
Third, Creamer itself identifies at least one exception to the general rule that rescission
based on a unilateral mistake is available only upon a showing of intentional, culpable conduct.
The court noted that rescission could be available based on a clerical error, such as when a bid
was submitted with an incorrect figure and “the party not in error should have suspected the
existence of a mistake.” Creamer, 448 A.2d at 343 (discussing Baltimore v. DeLuca-Davis
Constr. Co., 124 A.2d 557, 562–66 (Md. 1956)). Although a factually different situation, this
example reveals that Creamer should not be read as establishing an inflexible rule applicable to
all scenarios. See Creamer, 448 A.2d at 344 (“[A] contract ordinarily will not be rescinded for
unilateral mistake.” (emphasis added)). Moreover, it is noteworthy that the court in Chesapeake
Bank of Maryland v. Monro Muffler/Brake, Inc., 891 A.2d 384 (Md. Ct. Spec. App. 2006), in
the context of a lease option renewal, adopted a rule that arguably contradicts the holding in
DeLuca-Davis by concluding that equitable relief is not available for missing a lease renewal
deadline because of a clerical error in recording the deadline. Id. at 400. This divergence again
illustrates that Maryland courts do not necessarily treat claims for rescission of a contract based
on mistake in the same manner as claims for relief from strict compliance with requirements for
the exercise of a lease option.
Thus, in ruling on the Motion for Judgment on the Pleadings, the Court correctly focused
on case law applicable to the specific situation of failure to comply with all requirements to
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exercise a lease option, including Elderkin, Beckenheimer’s, Chesapeake Bank, and persuasive
authority such as Duncan v. G.E.W., Inc., 526 A.2d 1357, 1365 (D.C. 1987). For the reasons
discussed above, consideration of Creamer does not provide a basis to alter the Court’s analysis
that Maryland law does not preclude the possibility of equitable relief based on a mistaken
interpretation of a requirement for exercising a lease option.
See Mem. Op. at 11–14.
Accordingly, the Motion for Reconsideration is DENIED.
Date: February 23, 2015
/s/
THEODORE D. CHUANG
United States District Judge
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