Myers v. Kayhoe
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Steven C. Myers, et al. v. Douglas Kayhoe, et al., No. 35, September Term, 2005. CONTRACTS - CONSTRUCTION AND OPERATION - CONDITIONS CONDITIONS PRECEDENT IN GENERAL: Implied obligation of buyer to take bona fide, reasonable, and prompt action to obtain the financing specified in a financing contingency clause in contract for sale of real property did not impose an obligation on the buyer to make more than one application for financing, where the express language of the contract only required one financing application. CONTRACTS - CONSTRUCTION AND OPERATION - CONDITIONS WAIVER: Waiver of a condition precedent, whether express or implied, requires some manifestation of an intent to forgo the benefits of the condition by the party waiving the condition to the other party to the contract. JUDGMENT - ON MOTION OR SUMMARY PROCEEDING - GROUNDS FOR SUMMARY JUDGMENT: Trial court properly granted summary judgment to buyer on issue of whether real estate financing contingency clause was waived where buyers told their real estate agent they had obtained financing, but there was nothing in the record permitting an inference that the real estate agent subsequently relayed buyers comment to the sellers. CONTRACTS - CONSTRUCTION AND OPERATION - SUBJECT MATTER ATTORNEY S FEES: Buyers, as prevailing parties in litigation under real estate sales contract, were entitled to an award of reasonable attorney s fees under the contract, where the contract expressly provided that the prevailing party shall be entitled to receive reasonable attorney s fees from the other party. In the Circu it Court for Q ueen A nne s Co unty Case No. 17-C-04-010062 IN THE COURT OF APPEALS OF MARYLAND No. 35 September Term, 2005 STEV EN C . MYE RS, et al. v. DOU GLA S KA YHO E, et al. Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. Opinio n by Rak er, J. Filed: February 9, 2006 In this case, we must decide three issues arising out of a contract for sale of real estate. Appellan ts ask us to reverse the trial court s refu sal, after gran ting summ ary judgmen t to appellants in their action to recover the ir deposit, to award attorney s fees und er a provision in a sale contract providing for the award of attorney s fees to the prevailing party in a dispute under the contract. Ap pellees, in their cross-appeal, ask us to reverse the trial court s grant of summary judgment, arguing that there were remaining disputes of material fact as to whether a financing commitment contingency clause in the contract was satisfied or waived. We sha ll hold that trial court s grant of summa ry judgment to appe llants was proper, but that the cou rt failed to apply the appropriate construction of the contract provisions governing the award of attorney s fees to appellants request for fees. Accord ingly, we shall remand the case to the trial court for reconsideration of appellants claim for attorney s fees. I. On April 12, 2002, appellants, Steven M yers and Lind a Barrett, con tracted with appellees, Douglas Kayhoe an d Ruth A nn Kayho e, to purcha se residential re al property located at 351 K ehm R oad, Q ueenst own, M D.1 Paragraph 19 of the agreement further provided that it was contingent upon appellants obtaining financing in the form of a 30 year loan for $245,000 at 7% interest, and the subsequent paragraph contained the following provision relating to this financing: 1 The purchase agreement was a standard-form Maryland Association of Realtors Contract of Sale with addenda. 20. FINANCING APPLICATION AND COMMITMENT: Buyer agrees to make written application for the financing herein desc ribed within five (5) d ays from the date of Contract Acceptance. If such written financing commitment is not obtained by Buyer within thirty (30) days from the date of Contract Accepta nce, this Co ntract of Sa le shall be nu ll and void and of no further legal effect, and all deposits hereunder shall be disburs ed in ac cordan ce with the term s of this C ontract. The next paragraph specified conditions under which the requirem ents of ¶¶ 1 9 and 20 could be satisfied by alternate financing, and provided that [n]othing in this paragraph shall relieve Buyer of the obligation to apply for and diligently pursue the financing described in the Financing Paragraphs 19 and 20. The purchase agreeme nt further pro vided that a prevailing party in litigation under the agreement between buyer and seller shall be entitled to receive reasonable attorney s fees from the other party as determined by the court or arbitrator. Appellants paid a $2,000 deposit under the agreement, and the agreement provided for a closing date of June 21, 2002. The agreement expressly provided that time was not of the essence. The purchase agreement also contained an addendum provision stating that the agreement was con tingent upo n executin g a sale agreement for the purchase of appellants then current home and a successful closing on appellants home before the closing date under the agreement. At the time of the purchase agreement, appellants home was under contract for sale. Presum ably for this reaso n, the sale addendum originally did not specify a date by which appellants needed to have their home under c ontract t o satisfy th e contin gency. The prospective purchase rs of appe llants home decided th ey did not wa nt to go through with the -2- sale, and appellants agreed to a release. On May 4, 2002, ap pellants and appellees executed a new addendum to the original purchase agreement, revising the sale contingency clause to specify that the contract was contingent upon appellants entering into a sale co ntract for the ir home by May 24, 2002. This addendum provided that time was of the essence with respect to the contract date.2 Appellants did not enter into a sale agreement until after May 24, 2002. On June 6, 2002, after appellants had entered into a sales contract for their home, appellants and appellees execu ted a second new addendum to the purchase agreem ent. It provided as follows: All parties agree and understand that the contract of sale dated 4/12/02 will hereby be re-enacted with revisions and all other terms and conditions will remain in full force. Buyers have revised purchase price and the contract reflects the contingency of a su ccessf ul settlem ent of th eir hom e. Appellan ts then applied for financing on the terms specified in the purchase agreeme nt with NovaStar Financial. T hey had discu ssed finan cing previo usly with NovaStar, but NovaStar informed them that it could not consider an application until it had a purchase contract. On June 6, appellants faxed a request to NovaStar for an application form. They received the application on June 12, and c ompleted and fa xed it to NovaStar later on the 12th of June. NovaStar declined appellants application after a review of the original appraisal of the property revealed that its value had be en ove rstated in the orig inal app raisal. NovaStar sent 2 The May 24, 2002, date was specified in paragraph one of the addendum, and the last sentence of paragraph one states that [t]ime is of the essence of this paragraph. -3- an email to appellants informing them of its decision to decline their application on June 24, 2002. Darlene Weingartner, appellants real estate agent, gave the following testimony at her deposition: Q: Did you ever discuss with Mr. Myers or Ms. Barrett their attempts to obtain a mortgage for the revised contract revived contract of June 6th? A: I discussed it with them when we did the revision to the contract. I asked them how what s going on with your loan and they said, We re good to go. The loan s in place . In their summary judgment motion, appellees claimed that [a]t the time of this second addendum, [appellees] had been advised by Ms. We ingartner tha t the financin g was in place. 3 Appellants did not obtain alternate financing. After the appraisal was rejected and appellants initial application denied, NovaStar offered to lend them $225,000.00. Appellees real estate agent, Karen Kilheffer, also offered to arrange financing for the appellees on the terms called for in the purchase agreement through her brokerage firm after appellee s initial application was denied. Appellants did not accept either of these offers, and 3 Appellee s, howev er, did not cite to anything in the record supporting this assertion in their summary judgment motion or in their brief before this Court. The portion of Weingartner s deposition testimony offered in support of appellees summary judgment motion does not reflect that Weingartner related appellants comment to appellees. -4- the transaction did not close. Appellees later sold the home to another buyer for less than the price in the agreement with appellants. In March 2004, appellees sued appellants in the Circuit Co urt for Queen A nne s County, claiming they had breached the purchase contract. Appellants counterclaimed for return of their security deposit, as well as attorney s fees . On cross-motion s for summary judgmen t, the Circuit Court granted summary judgment for appellants on the issue of the security deposit, but awarded no attorney s fees, basing this decision on its finding that there was a second contract between the parties that arose as a result of the June 6, 2002 addendum. Appellants and appellees both filed motions for reconsideration, which were both denied . Appellan ts noted a timely appeal to the Court of Special Appeals, and appellees noted a cross-appeal. We granted certiorari on our own initiative before decision in the Court of Special Appea ls. 388 Md. 97, 87 9 A.2d 42 (20 05). II. Appellan ts argue before this Court that the plain language of the attorney s fees provision in the purchase agreement that the prevailing party . . . shall be entitled to receive reasonab le attorney s fees from the other party as determined by the court required the court to determine what amou nt of the attorney s fees actually incurred by the appellants w ere reasonab le given the nature of the se rvices rendered, and to enter a judgment for the -5- appellants in such an amount. They claim that the trial court s refusal to award any attorney s fees was not supported by its conclusion that the June 6, 2002 addendum created a new contract rather than a modification of the original sale contract, because the addendum expressly provided that all other terms and cond itions of the new co ntract wou ld remain in full force, including the attorney s fees provision. Appellees reply that the decision of the trial court on the issue of attorn ey s fees is supported by the language in the attorney s fees provision providing that the amount of fees is to be determined b y the court or the arbitrator. They contend that this language vested the trial court with unfettered discretion to determine what amount of attorney s fe es would be reasonable. Appellees argue in their cross-appeal that the trial court s grant of summary judgment in favor of the appe llants was improper be cause there was a remaining issue of material fact as to whether the contract was voided by application of the financing commitment contingency clause. They maintain that summary judgment was improper for two reasons. First, they assert it was improper because there was a rem aining issue of material f act as to whether the appellees had waived the financing contingency clause by telling th eir real estate agent that the loan s in place. Second, they claim that it was improper because a ppellants failed to make a good faith effort to obtain financing because they failed to app ly to additional lenders after their application to NovaStar was denied before the closing date and -6- before the thirty day time period to obtain a financing commitment specified in the purchase agreeme nt. III. A. Good Faith Efforts and the Financing Contingency Clause When a contract for the purchase of real prop erty contains a financing contingency clause, Maryland la w follow s the comm on law ru le and imposes an implied obligation on the buyer to take bona fide, reasonable and prompt action to obtain the financing specified in the clause. See Traylor v. Grafton, 273 Md. 649, 689, 332 A.2d 651, 675 (1975). The question presented in this case is the interaction between this implied obligation and the express req uirements im posed on the appellan ts by ¶ 20 of th e purchas e agreem ent. To resolve this question, we m ust interpret the language of ¶ 20 o f the agree ment. Under Maryland law, the interpretation of a contract, including the question of whether the language of a contract is ambiguous, is a question of law subject to de novo review . See Towson v. Conte, 384 Md. 68, 78, 862 A.2d 941, 946 (2004). We have long adhered to the objective theory of contract interpretation, giving effect to the clear terms of agreements, regard less of th e intent o f the pa rties at the time of contrac t forma tion. Id. at 78, 862 A.2d at 94 6-47 . Under the objec tive t heory: A court construing an agreement under [the objective theory] must first determine from the la nguage o f the agree ment itself what a reasonable person in the position of the parties would have meant at the time it was effectuated. In addition, when the -7- language of the contract is plain and unambiguous there is no room for construction, and a court must presume that the parties meant what they expressed. In these circumstances, the true test of what is meant is not what the parties to the contract intended it to mean, but what a reasonable person in the position of the parties w ould ha ve thou ght it me ant. Dennis v. Fire & Police Employees Ret. Sys., ___ Md. ___, ___ A.2d ___, slip op. at 18 (filed January 18, 2006) (quoting Genera l Motors A cceptanc e v. Danie ls, 303 Md. 254, 261, 492 A.2d 1306, 13 10 (1985) (internal quo tations omitted)). The resolution of the dispute between appellants and appe llees requires u s to determine the proper construction of the first sentence of ¶ 20, which provides that [b]uyer agrees to make written application for the fina ncin g as h erein desc ribed within five (5) d ays from the date of Contract Acceptance. In particular, we need to determine how many financing applications this provision obligates the buyer to make. Applying the objective theory of con tract interpretation, we conclude that the first sentence of ¶ 20 imposes an obligation on the buyer only to make one application for the financing described in ¶ 19. Give n that the sen tence doe s not contain an article directly preceding written application, a reasonable person reading this language would assume that a, the indefinite article, was intended. T he indefinite article, when used in this w ay, is synonymous with at least one. See, e.g., Abtox, Inc. v. Exitron Corp., 122 F.3d 1019, 1023 (Fed. Cir. 1997) (interpreting a similar use of the indefinite article in a patent claim to mean one or more ). We hold that appellees would only need to make one written application for -8- the financing described in ¶ 19 to discharge their express obligation under the first sentence of ¶ 20. With the issue of the proper construction of the first sentence of ¶ 20 reso lved, we turn to the issue of the interaction between the express obligations imposed on appella nts by the financing contingency clause and the common law implied obligation to take bona fide, reasonable, and prompt action to obtain the financing specified in the clause. In DistrictRealty Title Insurance Corp. v. Jack Spicer Real Estate Co., 280 Md. 422, 426, 373 A.2d 952, 955 (197 7), we held that [a]s a g eneral rule, im plied terms of a contract are utilized only in order to supply the place of a missing express term ; therefore, where an ex press term exists, it negatives an implied, inco nsistent term re lating to the same aspect of the c ontract. The application of this holding resolves the issue before us. In District-Rea lty, we applied this principle concerning the relation between express and implied terms to a dispute over a title insurance contract. Spicer contracted to purchase real prop erty, which he intended to finance with the proceeds of a deed of trust loan on the prop erty. Id. at 424, 373 A.2d at 953-54. The mortgage company that made the loan conditioned the granting of the loan upon its obtaining a first lien on the pro perty. Id. at 424, 373 A.2d at 954. As a result, Spicer provided the mortgage company with an interim binder issued by Distric t-Realty. Id. Afterwards, Spicer obtained a combination mortgagee-owner title insuran ce polic y from D istrict-Re alty. Id. at 424-25, 373 A.2d at 954. When, after settlement, Spicer s atto rney absconded with the $8,000.00 he was to pay to the vendor of -9- the property, Spicer initiated an action to recover this amount under its title insurance policy with District- Realty. Id. at 425, 3 73 A.2 d at 954 . The trial court, after a bench trial, ruled in favor of Spicer, concluding that, even though the title insurance p olicy did not ex pressly cover settlement, there was an implied obligation under the policy to give Spicer clear title, and that this implied obligation was breached because the attorney s failure to deliver the funds to the vendor after settlement caused a vendor s lien to arise on the property. Id. at 425-26, 373 A.2d at 954-55. We reversed the judgment of the trial court, holding that the court erred in concluding that there was such an implied obligation under the title insuran ce polic y. Id. at 426, 373 A.2d at 955. We began by holding that the interim b inder prov ision was in corporated into the title insurance contract between Spicer and D istrict-Re alty. Id. Then, we applied the general rule discussed above concerning the relation between express and implied contract terms and held that there w as no imp lied obligation under the title in surance co ntract to provide title free of vendor s liens, because the interim binder provision excluded coverage for ven dor s lie ns. Id. at 426-29, 373 A.2d at 955-56. Applying the rule concerning the relation between express and implied contract terms we employed in District-Rea lty to the present case, we hold that, to the extent that the implied obligation to take bona fide, reasonable, and prompt action to obtain the financing specified in a financ ing conting ency clause in a real estate sale contract w ould und er the facts of this case impose an obligation on appellants to make more than one bona fide and -10- reasonab le application for a finan cing com mitment, this obligation to make more than one such application is negated by the express provision in the first sentence of ¶ 20 that, as we held supra, imposes an obligation o n the appe llants only to make one such application.4 As we held in District-Rea lty, an express term negates an implied, inconsistent term relating to the same aspect of the contract. Id. at 426, 373 A.2d at 95 5. The im plied obliga tion to take bona fide, reasonable, and prompt action to obtain the financing specified in a financing contingency clause, to the extent it imposes an obligation to make more than one bona fide, reasonab le written application for a financing commitment, is inconsistent with the first sentence of ¶ 20, which obligates appellants only to make one such application. Therefore, following District-Rea lty, it is negated by the express pro vision con tained in the f irst sentence of ¶ 20. Our interpretation of the financing contingency clause is similar to the treatment of real estate contra ct financing contingen cy clauses in other jurisdictions. In Stevens v. C liffs 4 It is important to note two things con cerning the scope of this holding . First, we no te that we need not, and do not, pass judgment on whether the implied duty to take bona fide, reasonable, and prompt action to obtain the financing specified in a financing contingency clause would have obligated appellants to make more than one application if ¶ 20 were excluded from the purcha se agreem ent. Secon d, we em phasize tha t the express provision in the first sentence of ¶ 20 negates the implied obligation to take bona fide, reasonable, and prompt action to obtain the financing specified in the purchase agreement only to the extent that it imposes an obligation inconsistent with the obligation imposed by the express provision. Thus, the e xpress pro vision doe s not nega te the implied obligation to the extent that it imposes an obligation on the appellants to make a bona fid e, reasonab le effort to obtain the financ ing specifie d in ¶ 19 o f the purch ase agreem ent via the written application for a financing commitment contemplated by ¶ 20. -11- at Princeville Associates, 684 P.2d 965 (H aw. 1984), the Supreme Court of Hawaii addressed the issue of whether a real estate buyer had used due diligence in attempting to obtain financing. The real estate contract in Stevens contained a financing contingen cy clause that, like the clause in the instant case, expressly indicated that a single application for financing was sufficient to discharge the buyer s obligation to seek to obtain the financing specified in the con tract. Stevens, 684 P.2d at 969 n.2.5 The Stevens court held that, under this clause, the buyers discharged their obligation by making one good faith application for financing. Id. at 971. Although the buyers in Stevens did attempt to obtain additional financing, the court expressly held as a matter of la w that the b uyers were n ot obligated to apply to alterna te lenders. Id.; see also Fallah v. Hix, 702 N.Y.S.2d 352, 353 (N.Y. App. Div. 2000) (holding that buyer who made only one application for financing exercised due diligence in seeking financing under real estate sale co ntract becau se the con tract did not re quire the [b uyer] to apply to more than one len der ). By contrast, cases that have held that the implie d duty to take bona fide, reasonable, and prom pt ac tion to ob tain t he fi nancing spec ified in a f inan cing contingency c lause may 5 The contract language in Stevens specifying the buyer s obliga tion to apply for financing read as follows: If Buyer requires financing, he shall, within ten (10) days after receiving notice of Seller signing this Contrac t, apply to one or more lending institutions suggested by the Seller for such loan or to any other lending institution and, on request, promptly sign and deliver all doc uments and diligently take all steps necessary to obtain such lo an. Stevens, 684 P.2d at 969 n.2 (e mphasis added ). -12- not be satisfied simply by making one application for financing are distinguishable from the instant case and from Stevens, as the financing contingency clauses in these cases did not contain express language indicating the number of applications for financing that the buyer was obligate d to ma ke. See, e.g., Betnar v. Rose, 536 S.W.2d 719, 720, 723-24 (Ark. 1976) (holding that there was an issue of material fact as to whethe r buyers mad e reasonab le efforts to obtain financing under provision o f escrow agreeme nt providing that the Es crow D eposit is to be refu nded back to [buyer] if a loa n can not b e obtaine d, w here the b uyer made one application for financing and was rejected, and there was evidence that other lenders were willing to lend to the buyer); Fry v. George Elkins Co., 327 P.2d 905, 906-07 (Cal. Ct. App. 1958) (upholding trial court finding that buyer failed to make a good faith attempt to ob tain refinancing of loan encumbering property despite having made two applications for the specified refinancing, where the relevant contract provision provided that [t]he completion of this escrow is subject to bu yer being able to refin ance [the loan encu mbe ring the p rope rty] to $20,000.00 at 5% per annum, ma turing over a period of 2 0 years ). In reliance on our holding that the appellants were obligated to make only one bona fide, reasonab le application for the fina ncing spe cified in ¶ 19 , the trial court s grant of summary judgment in favor of the appellants on the issue of whether appellants discharged their obligations under the financing contingency clause was correct. The standards for our review of a trial court s grant of summa ry judgment are well-settled; we briefly review them here. The question of whether a trial court s grant of summary judgment was proper is a -13- question of law subject to de novo review on app eal. Livesay v. Baltimore, 384 Md. 1, 9, 862 A.2d 33, 38 (2004). In reviewing a grant of summary judgment under Md. Rule 2-501, we independ ently review the record to determine whether the parties properly generated a dispute of material fact and, if not, whether the moving party is entitled to judgment as a matter of law . Id. at 9-10, 862 A.2d at 38 . We review the record in the light mo st favorab le to the nonmoving party and construe any reasonable inferences that may be drawn from the facts ag ainst the movin g party. Id. at 10, 862 A.2d at 38. Applying these standards to the instant case, we conclude that there were no remaining issues of material f act with resp ect to whe ther the app ellants had f ailed to fulfill the ir obligations under t he fina ncing c onting ency clau se. As a preliminary m atter, we ho ld, as did the trial court, that the June 6th adde ndum created a n ew contract, as the original con tract was void for failure of a condition preced ent. The May 4th addendum m ade the appellants obligation to go through with the purchase contingent upon their entering into a contract for the sale of their then-current home by May 24th. As appellants did not enter into such a contract by May 24th, time was of the essence with respect to this portion of the contract, and appellees were not responsible for appe llants failure to e nter into such a contract, the sale contract entered into on April 12th was void for failure o f a con dition p recede nt. See Kimm v. Andrews, 270 Md. 601, 612-15, 313 A.2d 466, 472-74 (1974) (where time is of the essence with respect to a condition precedent, general rule is that contract is no longer viable unless failure of the condition is due to the conduct of the party not seeking to enforce the contract). -14- Thus, as the parties d o not dispu te that they intend ed to be bound by the June 6th addendum, it gave rise to a second contract for sale, and was not simply a modification of the original contract. With this preliminary matter clarified, we turn to the summary judgment motion itself. The facts that appellees pointed to in their opp osition to the appellants summ ary judgment motion all tended to show that appellan ts failed to act to obtain alterna te financing after their initial application to NovaStar was rejected bec ause of the low app raisal. Appellees did not point to any facts that w ould give rise to an inference that appellants acted in bad faith or acted unreason ably with resp ect to their initial application to NovaStar. Given our holding that the financin g continge ncy clause did not place an y further obliga tion upon the appella nts, it follows that the undisputed facts in the case estab lish that appe llants discharg ed their obligations under the financ ing con tingenc y clause. Accordingly, the trial court s grant of summary judgmen t to appellants on this issue was prop er, as the app ellants were entitled to judgment as a matter of law. The financing contingency clause created a condition precedent to the appellan ts obligation to go throug h with the purchase of the proper ty. See Traylor, 273 Md. at 68 8, 332 A .2d at 674-7 5. When appellants f ailed to obtain a written financing commitment for the financing described 3 0 days after the June 6th acceptanc e date, desp ite having fulfilled their obligations under the financing contingency clause to obtain such financing, the condition precedent was not satisfied, appellants no longer had any obligation -15- to co mplete th e purcha se of the p rope rty, and were entitled to the return of their deposit by the express terms of ¶ 20. B. Waiver of the Financing Contingency Clause In addition to arguing that appellants failed to fulfill their implied obligation under the financing contin gen cy clause to make a good faith effort to seek the specified financing, appellants argue that appellants waived the financing contingency clause by telling appellants real estate age nt, that the loan s in place. We reject this argument because the record does not contain any evidence tending to show that the agent ever related th e subs tanc e of t his comm ent to the a ppellees , dire ctly or indirectl y. It is well-establish ed as a gen eral rule that the parties [to a contract] by their conduct may waive the requ iremen ts of [th e written contrac t]. Questar v. Pillar, 388 Md. 675, 686, 882 A.2d 288, 294 (2005) (alterations in original) (quoting University Nat l Bank v. W olfe, 279 Md. 512, 522, 369 A.2d 570, 576 (1977)). A perf ormance conditio n cre ated by a financing contingen cy clause in a real estate sale contract may be waived by the party for whose benefit the condition was made. Traylor, 273 Md. at 688, 332 A.2d at 674-75. Waiver, in general, is the intentional relinquishment of a known right, or such conduct as warrants an inferen ce of the re linquishm ent of such right, and may result from an express agreement or be inferred from circumstances. Creveling v. GEICO, 376 Md. 72, 96, 828 A.2d 229, 243 (2003) (quoting Food F air v. Blumberg, 234 Md. 521, 531, 200 A.2d 166, 172 (1964) (citations omitted)). A waiver of a contractual provision must be clearly established -16- and will not be in ferred f rom eq uivoca l acts or la nguag e. Questar, 388 Md. at 687, 882 A.2d at 294. Canaras v. Lift Truck Services, Inc., 272 Md. 337, 322 A.2d 866 (1974), is instructive on the waiver issue pre sented in the case sub judice. Canaras involved a dispute over an employment contrac t. Id. at 339, 322 A.2d at 867. The employment contract at issue provided for a one year term of emplo yment co mmen cing on Dece mber 1 , 1971. Id. at 34041, 322 A .2d at 86 8. The contract also contained a renewal option, which, if exercised, would give rise to an addition fiv e year term of employm ent. Id. at 341, 322 A.2d at 868. The renewal option provided that the renewal would be effected automatically unless the employee was given written notice of the employer s intention not to exercise the option at least nine fu ll month s prior to Nove mber 1 , 1972. Id. Because of reluctance on the part of the employer to e nter into the contract, it was not executed until May 18, 1972, after the time period specified in the renewal provision for the employer to notify the employee o f its intention not to exercise the renewal option had ex pired. Id. at 341-42, 322 A.2d at 868-69. The emp loyee, Canaras, argued that the employer, Lift-Truck, had waived the provision in the contract permitting it to avoid being bound to the additional five year term by executing the contra ct after the tim e for prov iding written notice of its in tention not to renew had pa ssed. Id. at 357, 332 A.2d at 877. We rejected Canaras implied waiver argumen t. Id. In discussing the requirements for finding of an implied waiver, we drew on Williston, who said that a waiv er may result from implication and usage, or from any -17- understanding between the parties which is of a character to satisfy the mind that a waiver is intended. 5 Williston, L AW OF C ONTRACTS § 678 ( 3d ed. 1 961), quoted with approval in Canaras, 270 M d. at 360-61 , 322 A.2d at 879. Follo wing this, the C ourt explain ed its rationale for rejecting Canaras s waiver argument, noting that [t]here was no evidence offered that at the time the contract came to be executed or thereafter the principals of Lift Truck made any statements to Canaras, nor is there any evid ence of a ny conduct o n their part from which it could be said tha t there was a n intentiona l relinquishm ent of the rig hts [under the renewal option]. Canaras, 272 Md. at 361-62, 322 A.2d at 879. Similar reasoning resolves the waiver issue in the present case. Appellees waiver argument rests solely on ev idence that a ppellants told Ms. Weinga rtner, their real esta te agent, that the loan s in place. Thus, in the absence of any evidence tending to show that Ms. Weingartner subsequently relayed this statement to appellees, no rational trier of fact could conclude that there was an express agreement between the parties to waive the financing contingency clause, because no such agreement could have been reached without some manifestation on the p art of appellants to the appellees. Nor, following Canaras, could any rational trier of fact conclude that appellants statement to Ms. Weingartner, standing alone, constituted an implied waiver, as this likewise would have required some manifestation on the part of appellants to the appellees, without which there could be no understanding between the parties th at the appella nts intended to relinquish th e right to avoid their contractual obligations if they could not obtain f inancin g. See also Bargda le -18- Indus. v. Robert R ealty, 275 Md.638, 645, 343 A.2d 529, 534 (1975) (holding that acceptance of a mortgage commitment for less than the amount specified in the contract was a waiver of that condition and a manifestation by the promissor to forego the benefit of that condition (emphas is added)). Therefore, the grant of summary judgment in favor of the appellants on the waiver issue w as proper. C. Attorney s Fees We now tu rn to the final issu e, the trial court s denial of the appellants claim for attorney s fees. Contract provisions providing for awards of attorney s fees to the prevailing party in litigation under the contrac t genera lly are valid and en forcea ble in M aryland. See, e.g., Atlantic v. Ulico, 380 Md. 285, 316, 844 A.2d 460, 477 (2004). Even in the absence of a contract term limiting recovery to reasonable fees, trial courts are required to read such a term into the contract and examine the prevailing party s fe e reque st for rea sonab leness. Id. at 316, 844 A.2d at 478. The party requesting fees has the burden of providing the court w ith the necess ary inform ation to d etermin e the rea sonab leness o f its requ est. Id. The trial court s determination of the reasonableness of attorney s fees is a factual determination within the sound discretio n of the court, an d will n ot be ov erturne d unles s clearly err oneou s. Id. In the case sub judice, the trial court committed an error of law b y failing to award appellants any reasonable attorney s fees. Although the determination of reasonableness of attorney s fees is left to the discretion of the trial court, the trial court did not have discretion to refuse to aw ard fees alto gether. Th e attorney s fee s provision in the parties contract -19- plainly states that the p reva iling party shall be entitled to receive reasonable attorney s fees from the other party (emphasis added). Under the trial court s disposition of the case, appellants were the prevailing parties in the litigation under the contract, and w ere therefore entitled them to recover their legal expenses, to the extent the fees charged were reasonable. The trial court s legal conclusion that the June 6th addendum gave rise to a new contract, although c orrect, does n ot justify its refusal to award appellan ts reasonab le attorney s fees. The June 6 add endum p rovided tha t all other term s and con ditions will remain in full force from the original purchase agreement, save the revised purchase price and the revised contingency clause relating to the sale of the appellants current residence. Con sequ ently, the contract that arose as a result of the June 6th addendum included the same provision relating to the a ward of attorney s fees a s did the orig inal contract o f April 12, 2002. Therefo re, that a second contract arose as a result of the June 6th addendum does not provide grounds for the trial court s dec ision not to aw ard reason able attorney s f ees to appellants. JUDGMENT OF THE CIRCUIT COURT FOR QUEEN ANNE S COUNTY AFFIRM ED IN PART AND REVERSED IN PAR T. CASE REMANDED TO THAT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS TO BE PAID BY APPELL EES. -20-
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