Samuel Mogavero was a semi-retired contractor who spent much of his time managing his real estate investments. One of his investments was an upscale residential
complex in Fells Point in Baltimore City known as King George House. Larry Silverstein lived at the King George House and he and Mogavero became friends. Silverstein sought Mogavero’s advice regarding several real estate investments.

Silverstein and his company, Mason Dixon Properties, Inc. were interested in purchasing and renovating a collection of older properties located across the street from the King George House. Mogavero had previously tried to purchase the property but his offer had been rejected. Silverstein asked Mogavero to arrange a meeting with the owners of the property to discuss the purchase of the property. Mogavero arranged the meeting and Silverstein’s company, Mason Dixon eventually entered into a contract to purchase the property.

Before the contract was signed, Mogavero had a conversation with Silverstein which he believed constituted a binding oral employment contract. According to an affidavit filed by Mogavero, Silverstein asked for his help on the rehabilitation project in December 1997, and asked him what he wanted in return for his help. Mogavero replied that he would help with the construction of the project in return for a 5% fee. He said that Silverstein agreed and Mogavero worked on the project until late July 1998.

In a deposition, Mogavero was asked what was said when the oral agreement was entered into. Mogavero explained that Silverstein “more or less asked me, that (sic) he needed my help, what [was] I . . . looking for. And I told him I would be looking for 5% of the contract and possibly some tax credits. . . .” He further explained that in return he would “help with the construction, . . . get him the architect, get him the contractor to do the job. . . check on the construction. . . . advise him in reference to the system and design of the architect, monitor the construction phase of the project.”

After the contract to purchase the property was signed, Silverstein hired an architect and a surveyor who were recommended by Mogavero. Mogavero also recommended a general contractor, Marlund Contracting Company, to do the construction on a fixed fee basis. Mogavero’s son was a project manager for Marlund. Silverstein began negotiations with Marlund. Between January and July 1998, Mogavero met many times with his son and other representatives of Marlund to discuss the project and to obtain a fixed price bid. Finally, on July 21, 1998, Silverstein and Mogavero met with representatives of Marlund who presented the figures and described what work it would do. The cost was to be $3 million. According to Mogavero, Silverstein accepted the proposal and directed Marlund to submit a written contract.

A few days after the meeting, Silverstein advised Mogavero and Marlund that he was putting the rehabilitation project out for bids instead of accepting a fixed fee contract from Marlund. Silverstein had not consulted with Mogavero about this decision. Mogavero took this decision as “effectively terminating my services,” and he did no further work on the project. Mogavero refused to do any further work because he felt that his status and authority had been undermined, that he should have been consulted before the decision was made to put the project out to bids, that the plans were incomplete and that other contractors could not give an accurate bid, and finally, that if the project ran over $3 million, he might be held responsible.

After taking title to the property, in September 1998 Mason Dixon entered into a written contract with another contractor to do the rehabilitation work.

Mogavero filed suit in the Circuit Court for Baltimore City, seeking damages for breach of the oral employment contract (Count I), and, in the alternative, for quantum meruit damages for the value of his services (Count II). The lower court granted summary judgment in favor of Silverstein and Mason Dixon on the grounds that the alleged oral contract was too vague and indefinite to be enforced, and that Mogavero failed to prove his damages on the quantum meruit claim. Mogavero appealed to the Court of Special Appeals.

The Court of Special Appeals upheld the lower court’s decision that the oral employment contract was too vague and indefinite to be enforceable, and that it was impossible to determine the nature and extent of the duties that Mogavero had agreed to perform. The Court stated:

“The ‘extent of duty’ problem is most vividly illustrated by what happened after July 21, 1998. There is no evidence, whatsoever, that the parties mutually agreed that Mr. Mogavero had the right to object if Silverstein changed his mind and decided to put the rehabilitation project out for competitive bids. Silverstein never promised to even consult with Mr. Mogavero if he decided not to enter into a negotiated fixed-fee contract with Marlund or if he decided to put the project out for competitive bids. .. . . the parties never reached an agreement as to what would happen if the construction cost exceeded three million dollars. The parties only agreed that Mr. Mogavero would help Silverstein ‘with the construction end of the project in return for a fee of 5% of the estimated construction contract [costs].’ Because of the vague wording of the ‘oral agreement,’ there was no basis for Mr. Mogavero to fear that he would be ‘liable’ if costs exceed three million dollars.”
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“. . . the exchange of oral promises did not spell out what authority Mr. Mogavero had in the first place to control important financial decisions such as whether to sign a fixed-fee contract with Marlund.”

With respect to Mogavero’s complaint that the job was not in a position to be put out for competitive bids, the Court stated:

“But this allegation is simply another way of saying that Silverstein made a bad business decision. . . . . it is impossible to know whether Mr. Mogavero had the right to override Silverstein’s ‘bad’ business decisions or even to be consulted before decisions of this type were made.”

The Court held that the alleged oral contract was so vague that it was impossible to tell whether Silverstein breached the contract, or whether Mr. Mogavero breached the contract when he refused to do further work after he was notified of the decision to put the project out for bids.

With respect to the quantum meruit claim, the Court held that while the facts were sufficient to prove a quasi contract or contract implied-in-law. Such a contract involves no meeting of the minds or mutual assent, but an obligation of the part of the defendant to pay for services received is implied by law. However, the Court held that Mogavero failed to prove what Silverstein gained as a result of Mogavero’s services. Because Mogavero failed to prove his damages, the Court upheld the summary judgment on Count II.

Mogavero v. Silverstein, et al., Court of Special Appeals of Maryland, No. 87, September Term 2000 (decided January 30, 2002).

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