                                PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                               No. 15-1988


NCO FINANCIAL SYSTEMS, INC., now known as EGS Financial
Care, Inc.,

                Plaintiff - Appellee,

           v.

MONTGOMERY PARK, LLC,

                Defendant - Appellant.



                               No. 15-2071


NCO FINANCIAL SYSTEMS, INC., now known as EGS Financial
Care, Inc.,

                Plaintiff - Appellant,

           v.

MONTGOMERY PARK, LLC,

                Defendant - Appellee.



Appeals from the United States District Court for the District
of Maryland, at Baltimore.   George L. Russell, III, District
Judge. (1:11-cv-01020-GLR)


Argued:   September 21, 2016                Decided:   November 29, 2016
Before GREGORY, Chief Judge, and NIEMEYER and HARRIS, Circuit
Judges.


Affirmed in part, reversed in part, and remanded by published
opinion. Judge Niemeyer wrote the opinion, in which Chief Judge
Gregory and Judge Harris joined.


ARGUED: Howard G. Goldberg, GOLDBERG & BANKS, P.C., Baltimore,
Maryland, for Appellant/Cross-Appellee.     Andrew David Levy,
BROWN   GOLDSTEIN  &   LEVY,   LLP,  Baltimore,  Maryland,  for
Appellee/Cross-Appellant.  ON BRIEF: John E. McCann, Jr., Ranak
K. Jasani, MILES & STOCKBRIDGE P.C., Baltimore, Maryland, for
Appellant/Cross-Appellee.   Joshua R. Treem, Kevin D. Docherty,
BROWN   GOLDSTEIN  &   LEVY,   LLP,  Baltimore,  Maryland,  for
Appellee/Cross-Appellant.




                               2
NIEMEYER, Circuit Judge:

     This appeal involves disputes between parties to a 12-year

commercial lease of office space in Baltimore, Maryland.                   NCO

Financial Systems, Inc., the lessee, contends that it properly

exercised a right of early termination of the lease and that,

during the course of the lease, it was overcharged for rent

based on erroneous calculations of the space’s square footage.

Montgomery Park, LLC, the lessor, contends that NCO failed to

satisfy the lease’s specific conditions for early termination

and that NCO now owes rent for the remainder of the lease term.

     The district court concluded that NCO effectively exercised

its right to terminate the lease early.              It also concluded that

NCO was not overcharged or, in any event, that its overcharge

claim    was      barred    by     Maryland’s     three-year    statute    of

limitations.

     On appeal, we reverse the district court’s ruling that NCO

effectively exercised the right of early termination, and we

affirm      its    ruling       rejecting    NCO’s     overcharge     claims.

Accordingly,      we   remand    for   further   proceedings   on   Montgomery

Park’s claim that NCO breached the lease agreement in failing to

pay rent.




                                         3
                                           I

       Beginning     on     March    15,       2003,      Montgomery    Park     leased

“approximately 106,267” square feet of office space to NCO in a

building     located       on   Washington      Park      Boulevard    in   Baltimore,

Maryland.     The base rent for the first year was $15 per square

foot, or $1,594,005 per year, which thereafter would increase as

determined     by    a    formula   tied       to   inflation.        The   rent    also

included     NCO’s   proportionate         share     of    real   estate    taxes    and

operating expenses for the common areas of the building.

       The initial term of the lease was 12 years, subject to

renewal for an additional 8 years.                  The lease, however, gave NCO

a limited right to terminate the lease after 8 years, provided

that   NCO    gave       timely   notice    and     made     timely    payment     of   a

termination fee.          More specifically, the lease provided:

            § 1.05      Limited Right of Early Termination.
       Tenant shall have a one-time, conditional right to
       terminate   this   Lease  (the  “Termination Right”),
       effective on that date which is eight years after the
       Commencement Date (the “Termination Effective Date”),
       upon Tenant's strict compliance with all of the
       following requirements: (a) Tenant shall deliver to
       Landlord (not later than ten (10) months prior to the
       Termination Effective Date (such notice deadline, the
       “Termination Notice Deadline”)) a written notice (the
       “Termination Notice”) stating that Tenant elects to
       exercise this Termination Right; and (b) Tenant shall
       pay to Landlord (50% simultaneously with delivery of
       the Termination Notice and the remaining 50% balance
       at least three (3) months prior to the Termination
       Effective Date), a termination fee (the “Termination
       Fee”) equal to ten (10) times the monthly installment
       (which will be in effect as of the Termination
       Effective    Date)    of  Rent   (including,  without

                                           4
       limitation, all Additional Rent on account of Taxes or
       Operating Expenses).    If (and only if) Tenant both
       timely delivers the Termination Notice and timely pays
       the Termination Fee as required above, then the Lease
       will be terminated effective on the Termination
       Effective Date. Tenant shall not have the right to
       terminate this Lease if it fails either timely to
       deliver the Termination Notice or timely to pay the
       Termination Fee.

       By    letter    dated     May    12,      2010,      NCO    gave      Montgomery      Park

notice that it was exercising its right of early termination,

effective      March      15,    2011.         At     the     same     time,    it     remitted

$779,964.15,        representing         50%     of    the     termination        fee,       which

§ 1.05 of the lease specified was equal to 10 months’ rent.

       On December 15, 2010, NCO remitted the second payment of

the    termination        fee,    but      the       amount       it   remitted       was    only

$697,100.55, which was $79,067.70 less than the first payment

that    it    had     made      the     previous        May.           NCO    explained       the

discrepancy, stating that it had reduced the termination fee by

the amount of a janitorial services credit described elsewhere

in the lease.         Under that provision, if NCO elected to hire its

own    janitorial      service        in     lieu      of    using      Montgomery          Park’s

service for NCO’s own leased premises -- as distinct from such

services that Montgomery Park provided for the common areas --

Montgomery Park would provide NCO with an annual allowance of up

to $1.00 per square foot per year.

       Montgomery Park responded to the discrepancy, stating that

because      NCO    had    failed       to     remit        the    second      half    of      the

                                                 5
termination fee on December 15, 2010, it had not satisfied the

specified condition for early termination and therefore had not

terminated the lease.             Montgomery Park stated that it would,

upon   NCO’s    acknowledgment          of     this    fact,   return   to     NCO    the

payments that NCO had made in May and December.

       NCO   disagreed    with        Montgomery      Park’s   position,      asserting

that    it    had     “timely     and    completely       fulfilled     all     of     the

requirements set forth in Section 1.05 of the Lease,” and it

considered      the    lease     properly        terminated.       Accordingly,        it

vacated the premises on May 31, 2011, and did not pay rent

thereafter.         Montgomery Park advised NCO that it considered NCO

to be in default of the lease for the failure to pay rent.

       In    2010,    after     NCO    had   first     provided    notice     of     early

termination, the parties discussed the alternative possibility

of reducing the size of rented space, and, in furtherance of

those discussions, Montgomery Park provided NCO with computer-

generated drawings of the building containing the leased space.

Receipt of those drawings prompted NCO to question the amount of

rent that it had been paying under the lease.                       It disputed the

calculation of “usable square feet,” which, when multiplied by a

factor of 1.12, determined “rentable square feet,” the basis for

computing the rent.           NCO contended that it should have paid rent

for only 100,800 rentable square feet instead of “approximately

106,267”     rentable     square       feet,     a    difference   of   5,467      square

                                             6
feet.   To make its claim, NCO relied on standards published by

the   Building   Owners     and   Managers    Association    (“BOMA”),    which

would exclude from “usable square feet” restrooms within NCO’s

leased space, areas holding mechanical equipment serving NCO’s

space, a 13-square-foot room holding fire protection equipment,

and an elevator lobby used by NCO within its leased space.                  NCO

also disputed the inclusion in its leased space of a 562-square-

foot area called the “Bridge.”

      NCO commenced this diversity action against Montgomery Park

in    February      2011,    alleging       breach    of   contract,      unjust

enrichment, and fraud based on the allegation that NCO had been

overcharged for rent.        NCO also sought a judgment declaring that

the   lease   had    been   effectively       terminated    under   the   early

termination right contained in § 1.05.               Montgomery Park filed a

counterclaim, seeking a judgment declaring that the lease was

still in effect and demanding contract damages for NCO’s failure

to pay rent after May 31, 2011.

      After the completion of discovery, NCO and Montgomery Park

filed cross-motions for partial summary judgment.               NCO sought a

partial summary judgment on its claims that the premises did not

include the Bridge; that NCO had properly terminated the lease;

and that “usable square footage” should be determined according

to the standards published by BOMA.              Montgomery Park sought a

partial summary judgment dismissing NCO’s overcharge claims on

                                        7
the ground that they were barred under Maryland’s three-year

statute of limitations.

      The district court granted NCO’s motion in part, agreeing

that the leased premises did not include the Bridge and that NCO

had   effectively    exercised     the       early   termination        right.    It

denied   NCO’s    motion   on   its   overcharge        claim,     deferring     that

issue to trial of disputed facts.                It also deferred to trial

Montgomery Park’s motion claiming that NCO’s overcharge claim

was barred by the applicable statute of limitations.

      In granting a partial summary judgment to NCO on the early

termination issue, the court concluded, as a matter of law, that

the   janitorial    allowance     claimed       by    NCO    was    not   a   credit

properly applied against the early termination fee because it

was not a component of rent that defined the fee.                         Therefore,

NCO’s deduction of the allowance from the termination fee was

improper.    Nonetheless, the court found that NCO had properly

exercised its early termination option.                 Even though the court

recognized that the words of the early termination provision

“clearly    and    unambiguously      provide[d]”        that      exercising     the

option   required    “strict    compliance       with       specified     conditions

precedent,” it determined that the payment amount required was

not a condition but instead a “non-material covenant” that did

not need to be strictly satisfied.                   The court reasoned that,

while parts of the lease made full payment of the termination

                                         8
fee a condition, other phrases were less clear.                       At bottom it

held that it would be unreasonable to require NCO to correctly

calculate the termination fee in order to exercise its early

termination right.

      Following a bench trial on the overcharge claim, the court

held that “usable square feet” included the square footage of

internal restrooms, the area holding mechanical equipment, the

room holding fire protection, and the elevator lobby.                    The court

reasoned that the word “usable” was not ambiguous in the context

of the lease, and it accordingly applied the normal meaning of

that term, finding that NCO had exclusively possessed and used

the areas that BOMA would, if applied, have deemed unusable.

Additionally, the court found that NCO had had inquiry notice of

its   overcharge      claim    for    more    than   three     years    before   it

commenced     this     action,     such   that   its    claim    was    barred    by

Maryland’s three-year statute of limitations.                    The court thus

dismissed NCO’s overcharge claim by judgment dated August 19,

2015.

      Montgomery      Park    filed   this    appeal,    contending       that   the

district    court     erred   in   concluding    that    NCO    had    effectively

terminated the lease under the early termination provision, and

NCO   filed    a     cross-appeal,     challenging      the    district    court’s

denial of its overcharge claim.



                                          9
                                        II

      With     respect   to    Montgomery     Park’s   appeal,      both   parties

accept the district court’s conclusion that the lease’s early

termination provision required NCO to provide timely notice and

to pay in two equal payments a termination fee equal to 10

months’ rent.        Both parties also accept the district court’s

conclusion that, although NCO gave timely notice and made its

first payment in the correct amount, NCO failed to make the

second of these equal payments in the correct amount because it

improperly deducted $79,067.70 for a janitorial services credit.

Montgomery Park, however, challenges the court’s conclusion that

NCO had nonetheless exercised its right of early termination on

the   reasoning     that,     under   the   lease,   payment   in    the   correct

amount   was    a   covenant     with   which   strict   compliance        was   not

required.      Montgomery Park contends that payment in full was an

express condition of the option’s exercise and NCO’s attempt to

terminate early was therefore ineffective.                It argues that the

district       court’s      contrary    interpretation,        based       on    its

conclusion that the correct amount of the termination fee was

not part of the condition for early termination but merely a

non-material covenant, ignored the plain language of the early

termination provision and violated key principles of contract

construction under Maryland law.



                                        10
      NCO contends that the district court “correctly analyzed

the language of the lease to conclude that matching precisely

Montgomery Park’s calculation of the termination fee was not a

condition precedent to NCO’s exercise of its option.”                             Relying

on      Beckenheimer’s          Inc.     v.        Alameda      Associates        Limited

Partnership,      611    A.2d     105    (Md.      1992),      it   asserts    that      the

inadequate payment of the termination fee was a breach of a

covenant, not the failure to satisfy a condition, and that the

district court therefore properly applied principles of equity

to   conclude     that   NCO     effectively         terminated       the   lease   early

under    §    1.05,   even      though    it       did   not   pay    the   full    early

termination fee.

      Under Maryland law, which applies in this diversity case,

when the terms of an option impose conditions on its exercise,

those    conditions      must    be    exactly      matched     for    exercise     to    be

effective.       See Elderkin v. Carroll, 941 A.2d 1127, 1133 (Md.

2008).       In determining whether an option has been exercised, the

Elderkin court articulated a three-part test to be applied.                              Id.

at 1135.        First, a court must evaluate whether the exercise

exactly matched the terms specified by the offer.                             Second, if

the match is not exact, the court must consider whether any

variance is covered by a number of highly specific exceptions,

none of which applies to the present case.                          Finally, the court

must determine whether any breach was of a covenant or of a

                                              11
condition.      Id.     The determination of whether requirements for

exercising an option are conditions or covenants is a question

“of construction dependent on the intent of the parties to be

gathered from the words they have employed.”                       Chesapeake Bank of

Md. v. Monro Muffler/Brake, Inc., 891 A.2d 384, 391 (Md. Ct.

Spec. App. 2006) (quoting Chirichella v. Erwin, 310 A.2d 555

(Md. 1973)).       The Chesapeake Bank court noted that conditions

are   indicated    by   words         and   phrases      such     as    “if,”    “provided

that,” and “when.”         Id.

      Applying     these    principles            to   the   lease      before    us,     the

language   could      hardly     be    more    clear     that     §    1.05     reveals    an

intent to impose two conditions on the exercise of the right of

early termination: (1) that the lessee give 10 months’ notice

prior to the specified early termination date; and (2) that the

lessee   make     payment      --     in    two    equal     installments        --   of    a

“termination fee” defined to equal 10 months’ rent.                              As § 1.05

states, the right to early termination can be exercised only

“upon strict compliance” with the two requirements.                                And the

lease    then    uses    language           indicative       of    a    condition       when

describing how early termination can be effected.                                The lease

states that termination will be effective “[i]f (and only if)

Tenant both timely delivers the Termination Notice and timely

pays the Termination Fee as required above.”                           (Emphasis added).

And thereafter, it makes unmistakably clear that the lease is

                                             12
imposing    conditions       by     stating      the    obverse       --     that    early

termination is not exercised “if [Tenant] fails either timely to

deliver the Termination Notice or timely to pay the Termination

Fee.”     (Emphasis added).          Applying Maryland law, which provides

that the use of the word “if” is indicative of a condition, we

therefore conclude that § 1.05 of the lease imposes conditions,

as it uses “if” three different times when referring to the two

requirements    and,    on    one    of   those      occasions,       uses    “if”    with

“only     if”   to     emphasize       the       conditional        nature      of     the

requirements.

        In short, we conclude that the lease unambiguously imposes

two     conditions    on     NCO’s    exercise         of     its   right     of     early

termination     --     timely       notice     and     timely       payment     of    the

termination fee.        Because NCO undisputedly failed to make full

payment    of   the    termination        fee,    it    did     not    satisfy       those

conditions and therefore did not successfully exercise the right

of early termination.

        The district court expressed a concern that reading the

requirement of full payment as a condition to early termination

would be potentially unreasonable as it would require NCO to

properly calculate the termination fee.                       Following this vein,

NCO argues that it satisfied the requirement of payment even

though it did so in the wrong amount, because paying the proper

amount was not part of the condition.                       It asserts that because

                                          13
the calculation of the termination fee could be difficult, any

inadequate payment, regardless of its cause, must therefore be

excused as the failure to satisfy a covenant, not treated as the

failure to satisfy the condition.                    The flaw in this argument is

its underlying assumption that the calculation of the amount of

the termination fee was somehow at issue.                            But it never was.

When     NCO     paid     the      first       50%    installment,           it     remitted

$779,964.15, and Montgomery Park never expressed any reservation

or disagreement with the accuracy of that amount.                                 Similarly,

the    second    installment        differed         only      because     NCO     made    the

decision, as it explained, to set off against that amount the

janitorial services credit, as if it were rendering an account,

not paying a specifically defined fee.                            It thus reduced the

second    installment       to   $697,100.55,           contrary     to    the     condition

that    required       payment     of    the     defined       fee    in    equal    parts.

Because NCO’s underpayment derived not from any miscalculation

but    from    NCO’s     deliberate        decision       to      offset    an    unrelated

payment,       any      concerns        about     the       posited        difficulty       of

calculation are irrelevant.

       In sum, the clear and unambiguous language of the lease

agreement       made    payment     in     full      of     the    termination       fee    a

condition, and NCO failed to satisfy it.




                                            14
                                          III

        Because NCO failed effectively to exercise its right of

early termination, the lease continued in force after March 15,

2011,    and     Montgomery     Park   is      thus   entitled     to   pursue      its

counterclaim against NCO for breach of the lease agreement for

failing to pay rent.           In response to this conclusion, NCO argues

that Montgomery Park’s claim for rent should be barred by the

equitable doctrine of election of remedies because, after the

district court found that NCO had properly exercised its early

termination option, Montgomery Park pursued the unpaid balance

of the termination fee, rather than refusing that remedy in the

hope    that    a   favorable    holding    on    appeal   would     enable    it   to

pursue the unpaid rent.

       The     doctrine   of    election    of    remedies,       however,    has   no

application here because Montgomery Park did not have multiple

remedies     available    from    which     to   choose    when    it   pursued     the

balance of the termination fee.                  To interpret the doctrine as

NCO urges would force claimants to forego the only remedy made

available to them by the court in hopes of obtaining a favorable

result on appeal.          This harsh interpretation is inconsistent

with Maryland law.

       Maryland law recognizes that “[t]he doctrine of election of

remedies is quite technical and should not be lightly employed

by a court.”        Surratts Assocs. v. Prince George’s Cnty, 408 A.2d

                                          15
1323, 1330 (Md. 1979).          Moreover, the doctrine is available only

“where there are two or more coexistent remedies available to

the litigant at the time of election which are repugnant and

inconsistent.”           Shoreham   Developers,        Inc.     v.    Randolph   Hills,

Inc., 305 A.2d 465, 472 (Md. 1973) (emphasis added) (quoting 25

Am. Jur. 2d, Election of Remedies §§ 10-12 (1966)).

      In this case, when Montgomery Park pursued the balance of

the termination fee, the district court had already found that

NCO   had    validly      exercised     its    right    to     terminate   the    lease

early.      At that point, Montgomery Park had no remedy other than

claiming the balance of the termination fee that NCO had failed

to remit.         Because Montgomery Park did not have two or more

coexistent remedies from which to make an election, the doctrine

has no applicability.


                                          IV

      In    its   counterclaim,         NCO    contends      that    Montgomery    Park

misrepresented       or    misstated      in    the    lease    the    usable-square-

footage portion of the total space for which NCO paid rent.                         The

lease used 94,881 as the number of “usable square feet” and then

applied     to    that    number    a   factor    of     1.12    to    calculate    the

“rentable square feet” of 106,267 square feet.                           The rentable

square footage was then used to determine the rent.                        NCO argues

that 94,881 overstated the usable square footage of the premises


                                          16
because it included internal restrooms, areas holding mechanical

equipment    serving   NCO     space,    a    room    holding     fire       protection

equipment,    and    the   elevator      lobby       used    by   NCO      within    its

offices.      NCO   argues    that   those      areas   should       not     have   been

included in the total number of usable square feet, as they were

not “usable” under standards published by the Building Owners

and Managers Association or BOMA.              When those areas are excluded

from “usable square feet,” NCO contends, the “rentable square

footage” becomes 100,800, instead of the leases’ provision of

“approximately 106,267,” a difference of 5,467 square feet.                           In

furtherance    of   this     argument,    NCO    introduced       at     trial      parol

evidence     from   several      witnesses       who        testified      that     they

understood the lease to be measuring “usable square feet” under

the standards published by BOMA.

     Even though the district court heard the parol evidence at

trial, it did not apply the BOMA standards to define “usable”

because it found that the term “usable,” “in the context of the

agreement, [was] unambiguous,” and therefore it could not use

parol evidence to overcome the unambiguous contract terms.                           See

Sy-Lene of Wash., Inc. v. Starwood Urban Retail II, LLC, 829

A.2d 540, 544 (Md. 2003).         In addition, the court noted that the

lease’s integration clause suggested that the parties were not

relying on a technical meaning not defined in the lease.                              The

court   concluded,     “using    its     own    common       sense     and    everyday

                                         17
experience as a finder of fact[,] . . . that the term ‘usable’

means to use, occupy, or possess.”           And when it applied that

meaning to the facts, it found that NCO “certainly possessed and

occupied and used exclusively the bathroom areas, the mezzanine

area, and as well the valve room.”          In addition, it noted that

NCO’s use and possession of the bathrooms was further evidenced

by NCO’s taking over the janitorial services for the bathroom

areas of which it had exclusive use.

     We conclude that the district court did not err in its

construction of the lease and that its finding that the disputed

areas were used and possessed exclusively by NCO was not clearly

erroneous.     When these disputed areas are included in the usable

square   feet,    as   the   court    concluded,    the   lease   did   not

misrepresent     or    misstate      that   the    premises   constituted

“approximately 106,267” rentable square feet. *

     NCO argues that this conclusion is erroneous because it

ignores the parol evidence NCO offered to show that BOMA should

be consulted to supply the meaning of “usable” in the lease.


     * NCO also argues that the inclusion of some 562 square feet
for the area called the Bridge was improper. The district court
agreed, ruling that the Bridge’s square footage should not have
been included in the definition of the leased premises. But the
court also ruled that in the context of a 106,000-square-foot
premises, the Bridge area was not material, especially in light
of the lease’s use of “approximately 106,267” square feet, as
well as the testimony of NCO’s witnesses that 562 square feet
was not material. We agree with the district court’s ruling.


                                      18
This argument, however, misunderstands the court’s position on

that evidence.        The district court, in fact, received the parol

evidence as to the BOMA standards during trial but concluded not

to use it in light of the court’s conclusion that the term

“usable” was unambiguous.         This was not error.              See Sy-Lene, 829

A.2d at 544.

     At bottom, we conclude that the district court did not err

in concluding that NCO was properly charged for “approximately

106,267” square feet.           In reaching this conclusion, we do not

address NCO’s claim that the district court erred in applying

Maryland’s three-year statute of limitations as an alternative

basis for denying NCO’s overcharge claim.

                                      *     *      *

     For   the   reasons    given,         we    reverse    the    district   court’s

ruling    that   NCO    satisfied         the    lease’s    conditions     for   early

termination;     we    affirm   its       ruling       rejecting   NCO’s   overcharge

claims;    and   we    remand   for       further      proceedings    on   Montgomery

Park’s claim that NCO breached the lease agreement by failing to

pay rent after May 31, 2011.

                                                                   AFFIRMED IN PART,
                                                                   REVERSED IN PART,
                                                                        AND REMANDED




                                            19
