100 Harborview Drive Condo. Council of Unit Owners v. Clark, 2175

• Decision Date: 30 July 2015
• Docket Number: No. 2175,2175
• Parties: 100 HARBORVIEW DRIVE CONDOMINIUM COUNCIL OF UNIT OWNERS AND ZALCO REALTY, INC. v. PAUL C. CLARK
• Court: Court of Special Appeals of Maryland

100 HARBORVIEW DRIVE CONDOMINIUM COUNCIL OF UNIT OWNERS AND ZALCO REALTY, INC. v. PAUL C. CLARK

No. 2175

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2013

July 30, 2015

REPORTED

Wright, Leahy, Salmon, James P. (Retired, Specially Assigned), JJ.

Opinion by Leahy, J.

*Judge Kevin Arthur did not participate, pursuant to Md. Rule 8-605.1, in the Court's decision to report this opinion.

In the multiplex of administrative and trial court actions and appeals involving Appellee/Cross-Appellant Dr. Paul C. Clark—owner of Penthouse 4A in the 100 Harborview Drive Condominium—and Appellants/Cross-Appellees 100 Harborview Drive Condominium Council of Unit Owners ("Harborview" or "the Council") and property manager Zalco Realty, Inc. ("Zalco"), this appeal features the Maryland Condominium Act and the extent to which it compels the production of Harborview's legal and financial records.

On January 16, 2013, Dr. Clark filed a three-count complaint in the Circuit Court for Baltimore City, alleging that pursuant to the Maryland Condominium Act ("MCA"), Maryland Code (1974, 2010 Repl. Vol.) Real Property Article ("RP") §§ 11-101 et seq. and Article X of the By-laws of 100 Harborview Drive Condominium, he was entitled to examine and copy "(a) detailed billing reports or supporting documentation for [Harborview]'s legal invoices concerning Dr. Clark, his family, and the Unit; (b) written advice of legal counsel concerning Dr. Clark, his family, and the Unit; and (c) e-mails between [Harborview] and Zalco concerning the financial well-being of the Condominium." In Count I, Dr. Clark sought a permanent injunction directing Harborview and Zalco to produce the documents; in Count II, he requested specific performance on his request to inspect the documents; and in Count III, he demanded damages for failure to provide the requested documents. On March 5, 2013, Harborview and Zalco filed an answer and a counter-complaint seeking a declaratory judgment that Dr. Clark was not entitled to inspect the detailed billing reports and written advice of counsel.

Following a two-day bench trial, the circuit court rendered its decisions on October 16, 2013. The court decided, among other things, to deny Dr. Clark's request to inspect the written advice of Harborview's counsel, but entered a permanent injunction enjoining Harborview and Zalco from denying Dr. Clark's request to inspect and copy legal invoices and billing records concerning Dr. Clark, his family, and the Unit. The Court also enjoined Harborview and Zalco from refusing to provide Dr. Clark any future e-mails between Harborview and Zalco concerning the financial well-being of Harborview, and required that they comply with any future request by Dr. Clark for e-mails concerning the financial well-being of Harborview.

For the reasons that follow, we affirm the judgments of the circuit court regarding the scope and application of the Maryland Condominium Act, and hold that RP § 11-116 does not abrogate the attorney-client privilege or the work product doctrine. We also find no error on the ancillary matter of the court's exclusion of Harborview's proffered expert testimony. We are compelled, however, to vacate the court's order enjoining Harborview and Zalco from refusing to produce future e-mail correspondence, as it is not based on any showing of a likelihood of future irreparable harm.

BACKGROUND

Litigation History

Context bears special significance in this appeal wherein the request for the inspection of financial and attorney-client privileged records is made by an adversary in a series of contentious law suits and administrative actions. In our unreported opinion in an earlier related action between these parties, Clark v. Zalco Realty, Inc., No. 277, Sept. Term2012, slip op. at 2-3 (filed Apr. 24, 2013), we summarized the facts of Dr. Clark's acquisition of the property and the underlying conflict as follows:

In 2009, [Dr. Clark] learned that a penthouse unit ("the Unit") of the Harborview Building in downtown Baltimore was to be sold at auction, "as is." Appellant made a few visits to see [the Unit], the last of which was to a cocktail reception on the night before the auction. It was raining heavily, and [Dr. Clark] noticed water dripping from the ceiling into two bowls.

The next morning, [Dr. Clark] met with Gisele Rivera—the building's property manager and a Zalco employee—to discuss the leak he had seen. According to [Dr. Clark's] deposition testimony, Ms. Rivera told him that the roof was scheduled to be repaired "in the March time frame," and she showed him "books that had construction plans and schedules."

[Dr. Clark] won the auction for the property, and the Council had its property management contractor, Zalco Realty, prepare a resale certificate as required by [RP] § 11-135(c). The document certified that the Council had no knowledge "that any alteration or improvement to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, by laws, or rules or regulations," see [RP] § 11-135(a)(4)(ix), and no knowledge "of any violation of the health or building codes with respect to the unit," see [RP] § 11-135(a)(4)(x). The certificate further stated that there were no "capital expenditures approved by [the Council] planned at the time of the conveyance which are not reflected in the current operating budget disclosed" to [Dr. Clark], see [RP] § 11-135(a)(4)(iv), (vi).

In the wake of a large snowstorm in 2010, the water leak in the Unit worsened. A mold expert tested the Unit for spores and recommended that it be vacated. [Dr. Clark] began remediation efforts in the summer, but they proved unsuccessful because water continued to leak in through the building's roof.

On October 20, 2010, Dr. Clark filed suit against Harborview and Zalco alleging that they had engaged in fraudulent misrepresentation and unfair or deceptive trade practices, and seeking $5 million in damages. That complaint was resolved on summary judgment in favor of Harborview and Zalco on February 23, 2012. This Court affirmed the judgment of the Circuit Court for Baltimore City on April 24, 2013.

During the interval between his purchase of the Unit and the October 20, 2010, complaint, Dr. Clark filed a number of administrative complaints related to his Unit. Following a noise complaint from downstairs neighbors and a January 19, 2010, "cease and desist" letter from Harborview advising Dr. Clark to have his child play in the downstairs recreation area or invest in soundproofing, Dr. Clark filed a complaint with the U.S. Department of Housing and Urban Development, alleging familial status housing discrimination against Harborview. That complaint, dated January 28, 2010, was dismissed for lack of probable cause. In February, the complaint was referred to the Maryland Commission on Human Relations, which, after investigation, also made a finding of no probable cause on August 17, 2010.

Dr. Clark filed three complaints with the Baltimore City Health Department during the months of May and June 2010, alleging the presence of mold in his Unit and contamination from pigeon droppings. These complaints were ultimately dismissed following evidentiary hearings. On June 15, 2010, Dr. Clark also filed a complaint against Harborview in the Maryland Office of the Attorney General, Consumer Protection Division. The complaint, alleging that Harborview failed to properly maintain the common elements of the building, was later withdrawn.

On May 8, 2013, Dr. Clark filed another complaint against Harborview in the Circuit Court for Baltimore City, along with a Petition for Order of Arbitration and Stay of Action. In his complaint for specific performance, negligence, breach of contract, and breach of fiduciary duty, Dr. Clark alleged, inter alia, that Harborview failed to retain a reasonable repair and replacement reserve fund and breached its duty to remediate damagecaused to his Unit from water infiltration and mold contamination. Dr. Clark demanded, and the circuit court ordered, arbitration of that complaint. Harborview appealed, contending that the circuit court erred by not finding that Dr. Clark had waived his right to arbitration because he improperly split his claims (arising from the same facts) by litigating to judgment less than all of his legal theories in a prior action before bringing the subject suit. In an unreported opinion, Harborview v. Clark, No. 1314, Sept. Term 2013 (filed April 8, 2015), we affirmed the judgment of the circuit court.¹

While Dr. Clark's first appeal to this Court was pending, and prior to filing the case underlying the second appeal, the events leading to the instant appeal were developing.

The Present Case

The opening act was Dr. Clark's November 20, 2012, request, sent by letter through counsel, to examine and copy Harborview's books and records relating to the financial welfare of the Condominium, including "all of the Condominium's legal bills from October 2009 through the present[.]" The letter advised that Dr. Clark had entered into a common interest agreement with James W. Ancel, Sr., the owner of Penthouse 4C at 100 Harborview Drive. Penthouse 4C, LLC, whose sole member is James W. Ancel, Sr., had filed a complaint (similar to, though entirely separate from this appeal) on April 8, 2011,requesting the production of books and records pursuant to RP § 11-116. That complaint went to arbitration, and on January 5, 2012, the arbitration panel found, among other things, that RP § 11-116 "provides unit owners with a broad right to inspect the books and records of the Condominium[,]" including "any written advice of legal counsel if the requesting unit owner is the subject of that advice."² Dr. Clark's November 20, 2012, letter to Harborview cited the Penthouse 4C, LLC arbitration award as binding precedent, and further instructed that "the Council may not redact the Condominium's legal bills unless one of the limited circumstances set forth in §...