A party alleging equitable estoppel must demonstrate:

The District Court found that:

The Circuit Court disagreed, holding that a party's silence does not give rise to a claim of equitable estoppel when the party has no duty to speak. The loan agreement provided that certain events of default existed automatically, that State Street was not required to accept cures, and that it could take such action as it deemed advisable once an event of default existed. If a party acts inconsistently when implementing the terms of its agreement, a court may hold that the agreement is modified by a course of actual performance, even if the agreement expressly provides that it can only be modified by a written agreement between the parties.

The Circuit Court examined State Street's conduct and found that:

Gaia asserted that the monthly statements provided by State Street's loan servicer amounted to a misrepresentation that State Street would not collect the accrued interest. The statements tracked the accrued interest as a line item, but made no mention of the accrued interest being due and it was not added to the loan's total balance. The Circuit Court held that, even if the monthly statements were misleading by not stating that an event of default had occurred or that the accrued interest would become due, a sophisticated real estate developer represented by counsel in its loan agreement negotiations would know that the plain language of the agreement would dictate whether an event of default had occurred and whether or when accrued interest would be payable.

Finally, on the question of equitable estoppel, the Circuit Court held that, even if Gaia had been able to establish that it relied on State Street's misrepresentation or concealment, its claim would fail as it could not show detrimental reliance by continuing with the project. A party cannot show justifiable reliance by alleging that it was induced to perform an existing legal obligation.

The implied covenant of good faith and fair dealing stops a party from doing something that prevents the other party from receiving the benefits of their agreement. In order to find a breach of the implied covenant, the actions of one party must violate an obligation that the parties are presumed to have intended. However, the implied covenant cannot be used to imply an obligation that is inconsistent with the other terms of the contract. The Circuit Court disagreed with the District Court's finding that State Street violated the implied covenant of good faith and fair dealing by failing to provide a reason for its decision to require Gaia to pay the accrued interest. The Circuit Court found that it could not have been intended for Gaia to receive a waiver of the accrued interest or receive specific notice because these obligations conflicted with the express terms of the loan agreement. Gaia could not have a reasonable expectation that State Street would forgo its right to collect the accrued interest when State Street had not expressly waived that right.

Equity may intervene to prevent a party from suffering a substantial forfeiture because of a minor or technical breach of an agreement. The Circuit Court disagreed with the District Court that Gaia's obligation to pay the accrued interest was a forfeiture. The parties agreed that Gaia could earn a waiver of the accrued interest by meeting the deadlines set out in the agreement. Because Gaia failed to meet those deadlines, it failed to earn the waiver. Nor were Gaia's breaches immaterial because the agreement contained a provision that time was of the essence, thereby making all deadlines material. Gaia did not, therefore, suffer a forfeiture caused by a trivial breach.