Builder violated contract 3 developer had 'handshake' pact

July 16, 1993|By Dennis O'Brien | Dennis O'Brien,Staff Writer

A Circuit Court judge yesterday ruled that a Potomac developer was guilty of breach of contract in 1988 and ordered him to pay two prominent county developers $1.2 million.

Judge Martin A. Wolff ruled that Warren Halle must pay Ernest J. Litty, a Millersville developer, and W. Calvin Gray Jr., a Severna Park developer, due to a "handshake agreement" reached by the three in May 1988.

The agreement called for the two county developers to turn over to Mr. Halle their share of a proposed 193-unit housing development near Annapolis in exchange for $1.2 million.

Yesterday's decision pleased the two Anne Arundel developers, who had sought the award in a suit filed in 1991 after repeated requests for the cash were ignored.

"I think you could say that right now we're very happy," Mr. Gray said.

Mr. Halle declined to comment, other than to say he was "disappointed" with the decision.

Mr. Halle's attorney, Joel L. Katz, said he would appeal to the Maryland Court of Special Appeals.

An appeal would delay payment of the money for at least 10 months, said Charles Obrecht, the plaintiff's attorney.

Judge Wolff said he found Mr. Litty and Mr. Gray's account of why they turned over their interest in the development, Aisquith Farms, easier to believe than Mr. Halle's version.

Both sides agreed that the three men met May 9, 1988, in Mr. Gray's Severna Park office and that Mr. Gray and Mr. Litty agreed to turn over their interests in the property.

The meeting was held about five months after the three decided to jointly purchase the land.

Mr. Litty and Mr. Gray testified that they turned it over because Mr. Halle had assured them of a series of payments totaling $1.2 million. That, they said, was better than the financial risks inherent in a $3 million housing development.

"He said that he wanted to do it himself and didn't want his own construction companies competing, in a competitive bidding situation, with other companies for the work," Mr. Gray said.

But Mr. Halle testified that Mr. Litty and Mr. Gray were to be paid only if Mr. Litty used his influence with former County Executive O. James Lighthizer to win approval to record the 193-home subdivision in county land records within 18 months.

Judge Wolff said he had trouble believing that 18-month deadline was agreed to by all three parties.

"The 18 months may have been in the defendant's mind, but I don't think it was part of the agreement that was evidenced by the handshake," Judge Wolff said in announcing his decision.

In the three-day trial, Mr. Halle had tried to convince the court that there was sufficient reason to believe Mr. Litty had significant clout with the Lighthizer administration.

Mr. Litty showed an ability to quickly set up meetings with key county department heads when work on another of Mr. Halle's housing projects, Seven Oaks, was slowing down, Mr. Halle testified.

Mr. Litty often bragged about his connections with Mr. Lighthizer, Mr. Halle said, and once showed up in the same car with the county executive for a party at Mr. Halle's Potomac home.

On another occasion, Mr. Litty took Mr. Lighthizer for a flight over the Eastern Shore in Mr. Halle's helicopter, Mr. Halle said.

"He said that he could get things done, and he showed that he could," Mr. Halle said.

Mr. Litty has acknowledged that he worked as a fund-raiser for Mr. Lighthizer and considers him a friend.

"I don't see anything wrong with that," he said.

The judge said it was difficult to believe Mr. Litty had such clout with the county administration.

"If all they had to do was use a little clout, which they supposedly had, they would have used it and gotten the development through in 18 months," Judge Wolff said.

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