UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

THE SPORTS AUTHORITY,
INCORPORATED,
Plaintiff-Appellant,

v.
                                                               No. 97-1833
CHESAPEAKE ASSOCIATES; RICHARD'S
CLOTHING & SPORTING GOODS,
INCORPORATED, a/k/a Dick's Clothing
& Sporting Goods, Incorporated,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Frederic N. Smalkin, District Judge.
(CA-97-830-S)

Argued: January 28, 1998

Decided: May 12, 1998

Before LUTTIG and MICHAEL, Circuit Judges, and
GOODWIN, United States District Judge
for the Southern District of West Virginia,
sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Arthur Friend Fergenson, BALLARD, SPAHR,
ANDREWS & INGERSOLL, Baltimore, Maryland, for Appellant.
Geoffrey Robert Garinther, VENABLE, BAETJER & HOWARD,
L.L.P., Baltimore, Maryland, for Appellees. ON BRIEF: Robert A.
Scott, BALLARD, SPAHR, ANDREWS & INGERSOLL, Balti-
more, Maryland, for Appellant. Gail Brashers-Krug, VENABLE,
BAETJER & HOWARD, L.L.P., Baltimore, Maryland, for Appel-
lees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

The Sports Authority, Inc. (TSA) appeals from a final judgment
entered by the district court after a bench trial in a breach of contract
case. TSA asserts that it formed an enforceable contract with Chesa-
peake Associates (Chesapeake) to purchase property either on or
before February 14, 1997, or alternatively, on February 25, 1997. The
district court ruled that no contract had been formed on or before Feb-
ruary 14 and that the statute of frauds would bar enforcement of any
contract formed on February 25. Alternatively, the district court ruled
that if the parties did form a contract on February 25, 1997, they
abandoned it three days later. We review the district court's findings
of fact for clear error and its conclusions of law de novo. Hendricks
v. Central Reserve Life Insurance Co., 39 F.3d 507, 512 (4th Cir.
1994). Because the district court's findings of fact are not clearly
erroneous and its conclusions of law are correct, we affirm.

I. Background

This case arises out of TSA's efforts to purchase property for one
of its retail stores in a shopping center developed by Chesapeake
Associates. In July 1996, TSA and Chesapeake entered into a letter
of intent for the sale of the property for $1.7 million. However, nego-
tiations proceeded at a snail's pace throughout the remainder of 1996

                     2
and into early 1997. As part of their negotiations, the parties ham-
mered out drafts of three documents: (1) a Purchase and Sale Agree-
ment (Purchase Agreement), which constituted the primary contract
for the sale of the property; (2) a Site Development Agreement,
which addressed Chesapeake's obligations to prepare the site for con-
struction by TSA; and (3) an Operation and Easement Agreement
(OEA), which contained various covenants governing the relationship
between retailers in the shopping center.1 The OEA required the
agreement not only of TSA and Chesapeake, but also of other retailers
in the shopping center, such as Giant Foods.

By January 20, 1997, closing seemed imminent. After losing
money in the prolonged negotiations, Chesapeake attempted to expe-
dite the closing in three ways. First, Robert Gothier, Sr., the managing
general partner for Chesapeake, executed a deed for the sale of the
property on January 20 and placed a copy of the deed in escrow with
Chicago Title Insurance Company. Second, Mr. Gothier executed
free-standing signature pages on January 22, which apparently were
to be attached to the three documents under negotiation in the event
of an agreement between the parties. Mr. Gothier forwarded the sig-
nature pages to Theresa McLaughlin, one of TSA's attorneys. Ms.
McLaughlin agreed to "hold the signed pages in escrow until autho-
rized by Pete Paturzo [a general partner for Chesapeake] . . . to release
same." JA 812. Finally, on January 22, Chesapeake's three general
partners each signed an affidavit (Partnership Affidavit) stating that
the Purchase and Sale Agreement had been "duly executed and deliv-
ered" and was "valid and binding." JA 1483-86. The partners for-
warded the affidavit to Chicago Title to hold for closing.

On February 7, 1997, Nicholas Milano, another of TSA's attorneys
(and Ms. McLaughlin's subordinate on the transaction), forwarded the
executed signature pages to Chicago Title in anticipation of closing.
In his accompanying letter, Mr. Milano stated: "These documents are
to be held in escrow. Do not disburse or take any action until it is con-
_________________________________________________________________
1 The parties also refer to the Operation and Easement Agreement as
the Reciprocal Easement and Operation Agreement (REA). We will uti-
lize the term "OEA" in referring to this document, except where we
quote from documentary evidence that uses the "REA" designation.

                    3
firmed by me in writing that you are authorized to do so." JA 964. Mr.
Milano claims that he did this at Pete Paturzo's instruction.

Although TSA and Chesapeake were making progress, TSA and
Giant Foods could not reach an agreement on the OEA because of a
dispute over the issue of sidewalk sales. TSA refused to sign the OEA
unless the OEA contained a provision prohibiting the parties to the
OEA from having sidewalk sales. Giant Foods refused to agree to this
condition. At first glance, this dispute might seem like a minor one;
representatives of TSA, however, clearly did not view the sidewalk
sales issue as minor. In fact, Len Weiselberg of TSA told Pete Paturzo
of Chesapeake on February 13 or 14 that the deal was"dead" because
of the failure to reach an agreement on this issue. Shortly thereafter,
Chesapeake began negotiations with Dick's Sporting Goods for sale
of the property.

However, sometime between February 22 and 25, TSA and Chesa-
peake resumed negotiations after Mr. Weiselberg informed Mr.
Paturzo of local zoning ordinances that TSA believed would prevent
Giant from conducting sidewalk sales. The parties dispute whether,
during a conversation on February 25, they orally agreed to close the
transaction on March 4; regardless, TSA's lawyers proceeded to set
a March 4 closing date.

In the meantime, Mr. Gothier of Chesapeake reached an oral agree-
ment with Dick's Sporting Goods on February 28 to sell the property
for $200,000 more than TSA had offered to pay. Mr. Gothier con-
tacted Mr. Weiselberg and demanded an additional $250,000 for the
property. For a second time, Mr. Weiselberg told Mr. Gothier that the
deal was "dead" and that Chesapeake could sell its property else-
where. Although Mr. Weiselberg did not write a letter to that effect
or return the signature pages, Mr. Gothier did write a letter to Mr.
Weiselberg confirming that the deal was dead. On March 7, however,
TSA demanded performance under the Purchase Agreement, which
led to the filing of the instant suit.

II. Discussion

TSA challenges the district court's conclusion that Chesapeake and
TSA did not enter into a binding contract before February 14, 1997.

                    4
TSA argues that execution of the deed, signature pages, and Partner-
ship Affidavit clearly constituted an objective manifestation of Chesa-
peake's intent to be bound by the draft purchase agreement. TSA also
argues that the dispute over sidewalk sales involved a condition pre-
cedent to TSA's performance, not a material contractual term that
would indicate the absence of a meeting of the minds. We find that
the district court's conclusion that Chesapeake and TSA did not enter
into a binding contract before February 14, 1997, is not clearly erro-
neous. First, there is ample evidence to support the district court's
finding that there was no meeting of the minds before February 14,
1997. Second, there is ample evidence to support the district court's
finding that the deed, signature pages, and Partnership Affidavit were
executed in anticipation of an agreement expected to be reached in the
future, not an agreement that had already been reached. Third, there
is ample evidence to support the district court's finding that the issue
of sidewalk sales concerned a material contractual term, not a condi-
tion precedent. Accordingly, we affirm.

Under Maryland law, "one of the essential elements for formation
of a contract is a manifestation of agreement or mutual assent by the
parties to the terms thereof; in other words, to establish a contract the
minds of the parties must be in agreement as to its terms." Safeway
Stores, Inc. v. Altman, 296 Md. 486, 489, 463 A.2d 829, 831 (1983)
(citations and internal quotations omitted). Conversely, "[t]he failure
to agree on . . . an essential term of a contract may indicate that the
mutual assent required to make . . . a contract is lacking." Klein v.
Weiss, 284 Md. 36, 63, 395 A.2d 126, 141 (1978) (citations omitted).
"It is essential that the minds of the parties be in agreement on terms
in order for a contract to be established." Marmott v. Maryland Lum-
ber Co., 807 F.2d 1180, 1184 (4th Cir. 1986) (citing Klein v. Weiss,
284 Md. 36, 395 A.2d 126, 141 (1978)), cert. denied, 482 U.S. 929
(1987).

The district court determined that the OEA embodied material con-
tractual terms, and reasoned that without the parties' agreement on the
OEA, "there could be no meeting of the minds for the sale of this
property." JA 501. After considering the evidence adduced at the
bench trial, the district court found that the parties had not reached an
agreement on the OEA until February 25th at the earliest. Volumi-
nous evidence in the record supports the district court's finding. We

                     5
need not review all such evidence here because two components of
this evidence adequately depict the negotiation and revision process
that persisted through January and most of February.

First, the time sheets and billing summaries of Theresa McLaughlin
and Nicholas Milano, TSA's attorneys, demonstrate the parties' diffi-
culties in reaching an agreement. Excerpts of Ms. McLaughlin's and
Mr. Milano's time sheets and billing summaries appear below:

          January 3, 1997 -- [Theresa McLaughlin] "Extensive revi-
          sions to OEA; work on exhibits; numerous and extensive
          telephone conferences with all parties re due diligence, OEA
          and closing documents; draft memo re OEA." JA 1509.

          January 4, 1997 -- [Theresa McLaughlin]"Work on exhib-
          its to OEA; work on site development agreement revisions;
          work on purchase agreement revisions . . . ." JA 1509.

          January 7, 1997 -- [Theresa McLaughlin]"Numerous tele-
          phone conferences with all parties re revisions to OEA . . . ."
          JA 1509.

          January 10, 1997 -- [Theresa McLaughlin] ". . . work on
          issues related to OEA." JA 1510.

          January 14, 1997 -- [Theresa McLaughlin] ". . . telephone
          conference with Bob Cherry re revisions to OEA." JA 1510.

          January 17, 1997 -- [Theresa McLaughlin] "Telephone
          conference with Pete Paturzo re status of agreements. . . ."
          JA 1511.

          January 21, 1997 -- [Theresa McLaughlin] "Work on OEA
          issues; numerous telephone conferences with Pete Paturzo
          re open issues; draft letter re revised agreements .. . ." JA
          1511.

          January 23, 1997 -- [Theresa McLaughlin] "Numerous and
          extensive work on finalizing OEA, and other exhibits. . . ."
          JA 1512.

                    6
January 24, 1997 -- [Theresa McLaughlin] "Extensive
work on issues relating to wetlands; numerous and extensive
telephone conferences with developer, Maryland attorney
and others re same; work on OEA revisions . . . ." JA 1512.

January 25, 1997 -- [Theresa McLaughlin] "Revise OEA,
purchase agreement and site development agreement; work
on title and survey issues; work on all exhibits to all agree-
ments; draft letters to all parties re same; mark up OEA for
comment to Bob Cherry." JA 1512.

January 29, 1997 -- [Nicholas Milano]"Extensive work
finalizing Purchasing Agreement with clarification of
Exhibit A the legal description, Exhibit B-1 permitted
exceptions, need for finalization of OEA to be attached as
exhibit, . . . . Telephone call to all parties to remind them
of time frame and need for comments especially those of
Bob Cherry from Giant." JA 1513.

January 30, 1997 -- [Nicholas Milano]"Review the com-
ments of Mr. Sax, revise the OEA to reflect these com-
ments." JA 1386, 1513.

January 31, 1997 -- [Nicholas Milano]"Telephone call
from Pete Paturzo and Bob Gothier of RVG. They provided
me with extensive list of comments from Giant and RVG to
the OEA." JA 1387, 1514.

February 3, 1997 -- [Theresa McLaughlin] "Work on mat-
ters relating to OEA; telephone conference with Len Weisel-
berg re numerous issues; work on insurance issues;
telephone conference with Peter Cook re insurance issues in
OEA." JA 1514.

February 3, 1997 -- [Nicholas Milano]"Telephone call
with Pete Paturzo, developer on the property and review
thirteen objections from Giant to the OEA. Narrow objec-
tions and inform him that we cannot insert any provisions
that the lease will dominate the OEA. Telephone call with
Len Weiselberg of TSA." JA 1514.

          7
February 4, 1997 -- [Nicholas Milano]"Return call to Pete
Paturzo informing him that TSA cannot agree to a provision
allowing the lease to rule the OEA. Certain items still
remain to be resolved." JA 1388, 1514.

February 6, 1997 -- [Nicholas Milano]"Continued negotia-
tions of OEA." JA 1390, 1515.

February 7, 1997 -- [Theresa McLaughlin] "Work on
issues concerning closing statement, OEA and other mat-
ters." JA 1515.

February 7, 1997 -- [Nicholas Milano]"Continue revision
to the OEA after discussions with Pete Paturzo." JA 1391,
1515.

February 10, 1997 -- [Nicholas Milano] "Telephone call
from Ann Kemp Esq. Attorney at Nations to inform her of
pending changes to OEA. Telephone call with Pete Paturzo
[redacted] to clarify 4 remaining issues for final agreement
on the OEA." JA 1392, 1515.

February 11, 1997 -- [Theresa McLaughlin] "Review
numerous revisions to REA; telephone conference with cli-
ent re same." JA 1515.

February 11, 1997 -- [Nicholas Milano]"Continued revi-
sions to OEA for closing. . . . . Telephone call to Lee Sax
to inform him that changes are occurring to the OEA and
need for his client's approval." JA 1393, 1516.

February 12, 1997 -- [Theresa McLaughlin] "Numerous
conferences with client re OEA revisions; review revisions
to OEA." JA 1516.

February 12, 1997 -- [Nicholas Milano]"Letter from Bill
Cherry demanded final wording to be inserted in the OEA.
Discuss [redacted] with Len Weiselberg and send to Debbie
Stear. This mandate is the only way in which Giant will sign

          8
          OEA. . . . Conference call from Bob Gothier and Pete
          Paturzo regarding their requirement to have new documents
          sent to them before closing for review. Prepare new final
          documents and have sent to Chicago Title, Dave Carey, Esq.
          and Bob Gothier. Telephone call from Lee Sax, Esq.,
          regarding his problems with pending changes." JA 1394,
          1516.

          February 14, 1997 -- [Nicholas Milano]"Telephone call to
          Pete Paturzo Re: last issue involving cash registers. . . .
          Telephone call to Cathy Jenkins re: her forwarding a copy
          of all signature pages to this office and review of documents
          she has." JA 1396, 1517.

          February 21, 1997 -- [Nicholas Milano]"Draft letter
          requesting return of all closing documents sent to CTIC in
          escrow. Telephone call to Cathy Jenkins, Esq. reading this
          issue. Return call from Cathy Re; OEA document. Send fol-
          lowup letter demanding return of this document." JA 1398.

Second, Len Weiselberg, TSA's Real Estate Manager, testified that
the parties' difficulties in reaching an agreement resulted in the break-
down of negotiations on February 14, 1997.2

In light of the parties' obvious, and abundant, difficulties in reach-
ing an agreement on material contractual terms, the district court was
not clearly erroneous in finding that Chesapeake's January 22, 1997,
execution, and placement into escrow, of a deed, free-standing signa-
ture pages, and Partnership Affidavit, did not represent objective
manifestations of Chesapeake's intent to enter into a binding contract
on that date.3 In Maryland, as in other jurisdictions, the test of con-
_________________________________________________________________
2 Mr. Weiselberg testified that TSA's senior management was con-
cerned about the OEA's sidewalk sales provision, and that the parties
could not agree on it as of the evening of February 13, 1997. JA 339. Mr.
Weiselberg also testified that on February 14, 1997, he had a telephone
conversation with Pete Paturzo of Chesapeake, in which he informed Mr.
Paturzo that "we cannot go forward with this transaction . . . the deal is
dead." JA 340.
3 January 22, 1997, represents the date by which all three of these
instruments had been executed and transferred either to Chicago Title or
TSA's attorneys.

                     9
tract formation is objective, but it is not abstract. "A party's intention
will be held to be what a reasonable person in the position of the other
party would conclude the manifestations to mean." Beckenheimer's
Inc. v. Alameda Assoc. Ltd. Partnership, 327 Md. 536, 547, 611 A.2d
105, 110 (1992) (citations omitted); Slice v. Carozza Properties, Inc.,
215 Md. 357, 368, 137 A.2d 687, 693 (1958) (citations omitted); Ray
v. William G. Eurice & Bros., Inc., 201 Md. 115, 127, 93 A.2d 272,
279 (1952) (citations omitted).

As illustrated above, the evidence adduced before the district court
showed that the parties were still negotiating the terms of the Pur-
chase Agreement on January 22. Therefore, when the deed, signature
pages, and Partnership Affidavit were executed and placed in escrow,
the Purchase Agreement itself was not even finalized.4 Furthermore,
evidence adduced before the district court showed that TSA's attor-
neys understood that Chesapeake's execution of the documents repre-
sented a time-saving device rather than an indication that negotiations
had been finalized. Ms. McLaughlin and Mr. Milano both testified
that Chesapeake executed the signature pages and placed them into
escrow in order to expedite the closing; that is, in order "to save a day
or so." JA 274-76; 44-45. Thus, they continued to"revise" and "final-
ize" the Purchase Agreement after Chesapeake's January 22 actions.5
Having found that the parties continued to negotiate and revise mate-
rial contractual terms throughout January and most of February, the
district court was not clearly erroneous in finding that Chesapeake's
_________________________________________________________________
4 On January 25, 1997, for example, Ms. McLaughlin faxed a "revised
Purchase and Sale Agreement" to Dave Carey, Chesapeake's attorney. In
her cover letter, Ms. McLaughlin expressed her belief that the newly
revised Purchase and Sale Agreement represented its"final form." JA
842. Mr. Milano echoed this hope four days later. On January 29, 1997,
after performing "[e]xtensive work finalizing[the] Purchase Agreement,"
JA 1513, Mr. Milano faxed a revised version of the Agreement to Chesa-
peake. In his handwritten cover note, Mr. Milano predicted that the fur-
ther revised document represented its "final form." JA 943.
5 Significantly, while Ms. McLaughlin's and Mr. Milano's time sheets
and billing summaries include numerous references to"revising" and "fi-
nalizing" the OEA and Purchase Agreement, none of their January and
February time sheets or billing summaries contains any reference to
modifying or amending an existing contract.

                     10
January 22 execution, and placement into escrow, of free-standing
signature pages, a copy of the deed, and Partnership Affidavit did not
manifest its intent to be bound by the draft Purchase Agreement on
that date.

Chesapeake should not have executed the Partnership Affidavit
until the parties had actually reached the agreement referenced in the
Affidavit. Furthermore, experienced attorneys should not have facili-
tated the premature execution, transmittal, and maintenance of the
Affidavit. But the evidence adduced at the district court revealed that,
within the context of this transaction, Chesapeake's execution of the
Affidavit simply represented an attempt to expedite the closing, rather
than an indication that an agreement had been reached.

TSA also argues that the dispute over sidewalk sales involved a
condition precedent to TSA's performance, not a material contractual
term that would indicate the absence of a meeting of the minds. As
support for this argument, TSA cites language in the proposed Pur-
chase Agreement that referred to execution of the OEA, which was
to contain the sidewalk sales provision, as a condition precedent to
TSA's obligation to perform under the contract. The district court did
not err in concluding that the issue of sidewalk sales was a material
one that prevented formation of a contract. The proposed Purchase
Agreement at best is ambiguous about whether entry into the OEA
was really a condition precedent. First, the third paragraph of the Pur-
chase Agreement refers to the OEA as "a part of" the Purchase Agree-
ment and indicates that the terms and conditions of the Purchase
Agreement are "subject to" the OEA. Second, the language in the Pur-
chase Agreement cited by TSA refers to executing the OEA at clos-
ing, not reaching agreement on the OEA, as the condition precedent.
There is ample evidence that the parties viewed agreement on the
OEA as material to agreement on the entire contract.

Finally, TSA argues that even if no contract was formed prior to
February 14, 1997, the parties reached a new oral agreement on Feb-
ruary 25, 1997.6 Even if the parties did reach a new oral agreement
on February 25, we agree with the district court that this agreement
_________________________________________________________________
6 We do not reach the issue of abandonment of the alleged February 25
contract as it is unnecessary to the disposition of this appeal.

                    11
would be unenforceable because of the statute of frauds. The statute
of frauds provides that contracts for the sale of land are unenforceable
unless they are in writing and signed by the parties to be charged. See
Pyles v. Goller, 109 Md. App. 71, 88, 674 A.2d 35, 43 (Md. Ct. Spec.
App. 1996). The alleged oral agreement on February 25 fails to sat-
isfy this requirement.

However, TSA argues that its claim is not barred by the statute of
frauds because it is relying on the written signature pages executed on
January 22, not the oral February 25 agreement. As discussed above,
no contract was formed in January. Because no contract existed, TSA
may not use the January 22 signature pages to satisfy the statute of
frauds for the alleged February 25 agreement. Accordingly, the judg-
ment of the district court is affirmed.

AFFIRMED

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