Arnold Developer, Inc. v. Collins

• Decision Date: 09 January 1990
• Citation: 318 Md. 259,567 A.2d 949
• Parties: ARNOLD DEVELOPER, INC., et al. v. Maurice E. COLLINS, et ux. 80 Sept. Term 1989.
• Court: Maryland Court of Appeals

Page 259

318 Md. 259

567 A.2d 949

ARNOLD DEVELOPER, INC., et al. v. Maurice E. COLLINS, et ux.

80 Sept. Term 1989.

Court of Appeals of Maryland.

Jan. 9, 1990.

George J. Goldsborough, Jr. (Goldsborough & Tolley, both on brief), Easton, for appellants.

William M. Chaires, Annapolis, for appellees.

Argued before MURPHY, C.J., ELDRIDGE, COLE, RODOWSKY, McAULIFFE and ADKINS, JJ., and CHARLES E. ORTH, Jr., Judge of the Court of Appeals of Maryland (retired), Specially Assigned.

CHARLES E. ORTH, Jr., Judge, Specially Assigned.

I

The trial judge in the Circuit Court for Talbot County observed that "a great deal of confusion has attended this case...." A trip along the convoluted path of this case to this Court proves the accuracy of the observation. The basis of the action was a contract of sale dated 4 March 1988 for a tract of land. The contract designated Maurice E. Collins and Helen Collins, his wife, as the sellers, and Arnold Development, Inc., as the buyer. The case began by a complaint for specific performance of the contract instituted by Arnold Developer, Inc., later modified to Arnold Developer Associates, Inc., against the sellers. By counterclaim, intervention, amended complaint, and third party counterclaim, Arnold Development, Inc., Roger G. Arnold (sometimes known as Roger G. Arnold, Jr.), and Priscilla Arnold, were added as parties. Thus, those seeking to enforce the contract became variously plaintiffs, counter-defendants, and third-party plaintiffs. The sellers, resisting specific performance, became variously defendants, counter-plaintiffs and third-party defendants. The proceedings below were cluttered by a plethora of procedural maneuvers which culminated in summary judgment consisting of two orders of court, one interlocutory, the other final. The orders aggrieved, in some respect, all of the parties. Each side displayed its dissatisfaction by noting an appeal. A writ of certiorari was issued to the Court of Special Appeals on our sua sponte order before decision by that court.

II

The case is before us on summary judgment. Maryland Rule 2-501(a) authorizes any party to

file at any time a motion for summary judgment on all or part of an action on the ground that there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law.

The trial court

shall enter judgment in favor of or against the moving party if the pleadings, depositions, answers to interrogatories, admissions, and affidavits show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.

Section (e). "A material fact is a fact the resolution of which will somehow affect the outcome of the case." King v. Bankerd, 303 Md. 98, 111, 492 A.2d 608 (1985). "[A]ll inferences are resolved against the moving party." Id. Summary judgment is not proper if there is a conflict between the inferences that may be drawn. Id.

"[E]ven where the underlying facts are undisputed, if those facts are susceptible of more than one permissible inference, the choice between those inferences should not be made as a matter of law, but should be submitted to the trier of fact."

Porter v. General Boiler Casing Co., 284 Md. 402, 413, 396 A.2d 1090 (1979), quoting Fenwick Motor Co. v. Fenwick, 258 Md. 134, 138, 265 A.2d 256 (1970). "Credibility" is not an issue to be determined on summary judgment. "In granting or denying a motion for summary judgment, a judge makes no findings of fact." King v. Bankerd, 303 Md. at 111, 492 A.2d 608.

Indeed, the function of the summary judgment procedure is not to try the case or to decide issues of fact; rather the procedure merely determines whether there is a triable issue of fact.

Id. at 111-112, 492 A.2d 608. The appellate court

[i]n reviewing the grant or denial of a motion for summary judgment [is] concerned primarily with deciding whether a material factual issue exists....

Id. at 110-111, 492 A.2d 608. See cases cited in Bankerd at 110-112, 492 A.2d 608; see also DiGrazia v. County Exec. for Mont. Co., 288 Md. 437, 445, 418 A.2d 1191 (1980).

III

A

It is undisputed that at the time the contract was signed, Arnold Development, Inc., named in the contract as the buyer, was a defunct corporation. "The charter of the corporation or its authority to do business was forfeited on October 6, 1983 for failure to file the 1982 & 1983 corporate personal property report." The court held that the contract was null, void, and unenforceable. The basis for the holding was the conceded fact that Arnold Development, Inc., was not in existence when the contract was executed. But to reach the holding, there had to be a determination by the court that Arnold Development, Inc., was the intended buyer. Throughout the pleadings and other filings, Arnold Developer, Inc., vigorously and consistently contended that this was not so. This denial persisted although Roger G Arnold had signed the contract and two addenda thereto and each time over the signature was typed "Arnold Development, Inc." In answer to the sellers' counterclaim, Arnold Developer, Inc., disputed that Roger G. Arnold

executed the contract as representative of Arnold Development, Inc., he having intended to act and having acted in fact as the President of Arnold Developer, Inc., the contract having erroneously been drawn in the name of Arnold Development, Inc., a corporation in which Roger G. Arnold formerly held corporate office but which had been permitted to lapse and which was replaced by Arnold Developer, Inc.

The source of the deposit payment was admitted to have been the personal account of Roger G. Arnold and Priscilla Arnold, but Arnold Developer, Inc., denied that "the payment was on behalf of Arnold Development, Inc. averring that the payment was on behalf of Arnold Developer, Inc." Arnold Developer, Inc., further averred that "the contract at all times from its inception was executed on behalf of Arnold Developer, Inc. and that the misnomer Arnold Development, Inc. was the result of inadvertence on the part of all parties and was a harmless error corrected before the scheduled [date of] the contract settlement." In an objection to the motion for partial summary judgment, Roger G. Arnold and Arnold Developer, Inc., again alleged that the contract was between Arnold Developer, Inc., and the sellers, the designation of the buyer as Arnold Development, Inc., being a misstatement.

The intervening complaint by Roger G. Arnold, Priscilla A. Arnold, and Arnold Development, Inc., filed under oath, presented as facts that the negotiations leading to the contract were "between Roger G. Arnold and Maurice E. Collins and were conducted face to face." The formal contract, the complaint asserted, designated a corporation as the buyer because of Arnold's estate planning, and although the corporation designated was Arnold Development, Inc., it was intended that the corporation be Arnold Developer, Inc. Arnold Development, Inc., had been a name of a Corporation which Mr. Arnold had previously been involved with and owned wholly, but which had forfeited its Charter in 1983.

* * *

* * *

Arnold Developer, Inc. was a new Corporation started up in 1987, to replace Arnold Development, Inc.

Thus, the intervenors alleged, "[t]he intervention of a corporate entity was solely for the convenience of Mr. Arnold, and was done as an estate planning technique." No objection was ever voiced to the naming of a corporate entity. The response of the sellers to the motion to intervene and the intervening complaint stated that the intervenors "are already parties and have been for many months and many pleadings." It asserted that the intervening complaint was replete with "material inconsistencies." It strongly disputed the facts alleged in the complaint.

B

In reaching its final judgment, the trial court held, as we have seen, that the contract of sale was "null and void ab initio, and unenforceable at law or equity." The court's order to return immediately to the buyer the "earnest money" deposited pursuant to the contract flowed from the voiding of the contract. In short, the sole basis for the judgment, the foundation upon which it rested, was the decision that the contract was null and void and could not be revivified.

It is readily apparent that there was a genuine dispute as to material facts. But the judge, to all practical purpose, tried the case on the pleadings. His function on the summary judgment motion was only to ascertain whether there was a triable issue of fact, but he went far beyond that function. In declaring the contract null and void, he determined the intention of the parties with respect to the identity of the buyer, and in resolving the issues of the return of the deposit and the demands for attorney fees and costs, he determined the claims of fraud, deception, bad faith, and the contention that the proceeding was unjustified. In making these determinations he resorted to findings of fact and judged credibility. This was not his function. There were clearly triable issues of fact to be submitted to a trier of fact, not resolved as a matter of law. The judge below erred in disposing of the case by summary judgment. We reverse the judgment.

IV

If it be deemed, arguendo, that there was no dispute as to any material fact, as the sellers would have it, the court erred even then because the sellers were not entitled to judgment as a matter of law.

As we have seen,...