The current action was brought at the expiration of an agreement between "Nathan Rappaport" and the Mayor and City Council of Ocean City, entered into in September of 1966. The agreement was drafted by the Attorney for the City, and so the ordinary construction would be resolved against the City. Only the factual issue of whether the respective parties executed their responsibilities as outlined in the Agreement would be a question for the finder of fact, should the Court decide it to be necessary.
The stated purpose of the agreement was twofold: stated as “establishing an equitable basis upon which Mayor and City Council will receive an annual fee from the said Mr. Rappaport, his heirs and assigns, for as long as they occupy the said premises.” and that “a newer or more modern building..would be in the best interests of the welfare of the people of Ocean City and vacationers.” It was acknowledged that Rappaport had continuously occupied the property for 54 years at the time of drafting, and that he had voluntarily made an annual contribution to the Ocean City Fire Company in excess of what city taxes would be, so those facts are not at issue.
Bills titled “in lieu of taxes” were submitted for payment for a few years and payments sent. After four years, the bills received were actual Ocean City tax bills, assessed on the land, and Rappaport's heirs and assigns continued to pay those as they came due, as well as county and state real estate taxes since the early 1970’s. The property's name, for tax purposes, is “Rapoport Property e/s Boardwalk”.
The 25 year Agreement also granted the option of renewal for an additional term, at the end of the initial term on the condition that the property be maintained. After the initial 25 year term of the contract having then occupied the property for eighty years, Rappaport's heirs wished to exercise their option of renewal, and the Municipality, which had drafted the contract, asserted that the option to renew lay only with the city. The Court, granting summary judgement for the Rappaport heirs, held that the option lay with Rappaport, and that, as the property was being well maintained, the only condition for renewal, that option could be exercised. Rappaport's heirs continued to pay property taxes to the City as well as to the County, and State as billed. A current tax bill is below this analysis.
Per the agreement, the property at issue is one which the “municipality does not claim to own in fee simple but is on land over which the Mayor and City Council have jurisdiction.” No basis for this jurisdiction is cited. Arguably, this would be a factual question, however the failure to document the basis for jurisdiction is clearly an ambiguity that should be strictly construed against the drafter.
Item 4. of the agreement indicated that “the Mayor and City Councill (sic.) shall, commencing with the year 1967 and during each complete calendar year until the expiration of this Agreement, issue to the said Mr. Rappaport an annual license permit.”
No such annual license permit was ever issued. Therefore, the City had not fulfilled the condition precedent to granting any rights or privileges to Rappaport, his heirs or assigns. The City could not reasonably claim that property was occupied with its permission or that permission was granted, as Rappaport was not responsible for issuance of any license permit, and such issuance was beyond his control. The City drafted the agreement and per their own actions it should be held that their failure to issue any such permit was a violation of the agreement on its face. It was their responsibility, as drafter and as the party asserting that it had responsibility to exercise control over the land “over which the Mayor and City Council have jurisdiction,” and they abrogated any responsibility they asserted.
Upon exercise of the option to renew the agreement, the city continued to fail in its obligation to issue the stated license permits, They failed to do so for the second 25 year period. As a result of the City's failure to comply with its responsibilities as stated in the Agreement, Mr. Rappaport, his heirs and assigns have now occupied the premises, without “benefit” of any “license permit” from the City (which has never issued any) for 105 years now rather than the 54 years stated in the 1966 Agreement.
Item 5 indicates that “rights and privileges” are granted to Mr. Rappaport, that they shall continue for 25 years, with a possible additional 25 years and that the agreement shall be void fifty years from the date of its signing. It does not clarify what those rights or privileges are other than the right to exercise an option to renew the agreement at the end of 25 years. It does state an obligation to pay a sum billed in lieu of taxes and an obligation to maintain the building in good condition. Again, this failure in clarity should be construed strictly against the drafter.
On its face, the only privilege a reasonable person could find from the agreement would be the privilege of continued occupancy per issuance of the annual license permit. Since the municipality NEVER followed through on its contracted responsibility to issue annual license permits, the only “rights and privileges” that could have been granted to Rappaport were not in fact granted by the City or anyone else and no “rights and privileges” can reasonably be considered to exist – as none exist, none can possibly lapse at the end of the contract period.