Baltimore Street v. Stewart

• Decision Date: 07 July 2009
• Docket Number: No. 0828, September Term, 2008.,0828, September Term, 2008.
• Citation: 975 A.2d 271,186 Md. App. 684
• Parties: BALTIMORE STREET BUILDERS v. Thomas G. STEWART.
• Court: Court of Special Appeals of Maryland

975 A.2d 271

186 Md. App. 684

BALTIMORE STREET BUILDERS v. Thomas G. STEWART.

No. 0828, September Term, 2008.

Court of Special Appeals of Maryland.

July 7, 2009.

Fred M. Lauer, (on brief), Baltimore, for appellant.

Donna M.B. King, (on brief), Towson, for appellee.

Panel: SALMON, GRAEFF, CHARLES E. MOYLAN, JR. (Retired, Specially Assigned), JJ.

SALMON, J.

Baltimore Street Builders, LLC filed a petition to establish and enforce a mechanic's lien in the Circuit Court for Baltimore City. The petition was accompanied by a proposed show cause order and named Thomas G. Stewart ("Stewart") as the defendant.

The petition alleged that Baltimore Street Builders, LLC (hereinafter "BSB") entered into a contract with Stewart to construct an addition to an existing building that Stewart owned. The work contracted for was intended for residential use. According to the petition, during the course of the construction work, BSB was directed by Stewart to furnish and install additional labor and materials, which resulted in the issuance of change orders that increased the contract price to a projected total cost of $363,780.07. Stewart paid BSB $183,418.60 but failed to pay the $180,361.47 balance.

Attached to the petition was the contract signed on February 25, 2006, by Stewart and by one Robert Lenkey, on behalf of BSB.

A show cause order was issued by the circuit court on March 12, 2008. It required Stewart to show cause "by filing a counter-affidavit or verified answer on or before the 23rd day of April, 2008, why a lien for the amount claimed should not attach upon the land described in the petition." The petition and the show cause order were served upon Stewart on April 3, 2008.

Stewart, pro se, attempted to file an answer to the petition and show cause order on April 23, 2008. His attempt, however, was rebuffed by the clerk of the circuit court because his answer was not accompanied by a certificate of service.

On April 29, 2008, BSB filed a motion asking the court to issue an interlocutory order granting BSB a mechanic's lien, based upon the fact that Stewart had not filed a response to the petition. On May 4, 2008, Stewart, by counsel, filed an answer to the petition, supported by an affidavit. Stewart also filed on the same date a motion for additional time to file an answer to the petition to establish and enforce the mechanic's lien and a motion to dismiss or, in the alternative, a motion for summary judgment. This last mentioned pleading was supported by a memorandum of law.

Four days after Stewart's pleadings were filed, on May 8, 2008, a hearing was held in the circuit court concerning the petition to enforce the mechanic's lien. At the conclusion of the hearing, the judge delivered an oral opinion in which she ruled that because BSB had no home improvement license it had no right to enforce the contract or to establish a lien based upon that contract. A written order was promptly signed dismissing the petition. BSB then filed this appeal in which it raises three questions, which we have reordered:

1. Did the Circuit Court err by finding as a matter of fact and law that [a]ppellant was not a licensed contractor, as required by the Maryland Home Improvement Commission?

2. Did the Circuit court err by not giving [a]ppellant 30 days to request a trial on [a]ppellant's Petition to Establish and Enforce Mechanic's Lien?

3. Did the Circuit court err in denying [a]ppellant's motion for an interlocutory Order?

I.

In the affidavit filed on May 4, 2008, Stewart swore that the following facts were true: 1) that prior to signing a home improvement contract with BSB he dealt with Robert Lenkey; 2) Lenkey told Stewart that he owned Harbour House Builders, LLC [Harbour House] and that Harbour House would be the entity that would enter into a contract with him; 3) on the day the contract was signed, Lenkey told Stewart that another company he owned, BSB, would perform the home improvement work on Stewart's property; 4) after the contract was signed, Stewart learned that BSB did not come into existence until March 9, 2007, which was, according to Stewart's affidavit, "near the expiration of Robert and Barbara Lenkeys' work on my property."; 5) work on Stewart's property began in "Mid-January 2006" and was completed in "June 2007," 6) the work performed on his property by Lenkey and/or BSB was deficient in numerous respects; 7) after the contract was executed, at some unspecified time, Stewart learned that "Robert Lenkey, Barbara Lenkey and BSB [were] not licensed as home improvement contractors [with] the Maryland Home Improvement Commission."

Attached to Stewart's affidavits were various exhibits that demonstrated, inter alia, that neither the Lenkeys or BSB have ever had a home improvement license; the exhibits also showed that, according to the records of the Maryland State Department of Assessment and Taxation, BSB did not come into existence until March 9, 2007, which was a little over a year after BSB's contract with Stewart was signed.

II. The May 8, 2008 Hearing

At the beginning of the hearing, counsel for BSB pointed out that there was a "legal issue" that was presented for the first time in Stewart's motion to dismiss and/or motion for summary judgment. BSB's counsel said that he and counsel for Stewart, because of this new issue, were "requesting the court ... to postpone the interlocutory hearing, so that we could resolve [the legal issues] through a hearing on the summary judgment motion or [the] motion to dismiss." The court inquired of counsel for BSB whether he wanted a five minute recess to talk to opposing counsel while the court considered another matter. To this, BSB's counsel said (ambiguously) "fine—the time for me to respond to the motion hasn't passed yet." The court next advised counsel that it was going to decide the motion to dismiss and/or motion for summary judgment first, and that it was necessary for her to do so in order to decide whether or not to grant BSB's petition to establish a mechanic's lien. Counsel for BSB did not object; instead, he said that he understood the court's position, and after some further colloquy, a short recess was called while the court directed its attention to another case.

After the just mentioned interlude, counsel for BSB admitted to the court that his client had never had a home improvement license. BSB's counsel proffered, however, that James Kunkel,¹ a 50% owner of BSB, held "a home improvement license through a company called Stonehenge International [,] Incorporated...." According to counsel's proffer, Stonehenge International, Inc. ("Stonehenge") did work on Stewart's home inasmuch as Mr. Kunkel, as a representative of Stonehenge, "acted as the construction management company on the project." Counsel for BSB also proffered that his clients (at some unspecified time) contacted the Home Improvement Commission and based on that contact "were led to believe that they were operating properly, because one of the principals in their company held a home improvement license."

Counsel for BSB further proffered that: 1) BSB had a federal tax identification number that was issued to it in 2005; 2) BSB filed an income tax return in 2006, and 3) Mr. Kunkel was listed on the tax returns as a 50% member² of BSB, a "Limited Liability Company." BSB also introduced into evidence a complaint against BSB, which was filed by Stewart with the Home Improvement Commission. According to BSB's counsel, the complaint with the Home Improvement Commission was significant because Stewart said in that complaint that before the project commenced, Robert Lenkey introduced Stewart "to his [Mr. Lenkey's] partner Jimmy Kunkel (who has a business that operates in Maryland under the name of `Stonehenge International')".

III.

BSB makes several arguments in its opening brief in support of its claim that the circuit court erred in granting summary judgment against it. First, it claims that "the circuit court erred as a matter of law when it found that appellant was not a license[d] contractor when performing the contract with appellee." Under the argument just mentioned, BSB, citing Antigua Condominium Asso. v. Melba Investors Atlantic, Inc., 307 Md. 700, 719, 517 A.2d 75 (1986) and Worsham v. Ehrlich, 181 Md.App. 711, 722, 957 A.2d 161 (2008), makes the following statement:

the trial court here treated the motion as one for summary judgment by allowing matters outside the pleading into evidence [on] the day of the hearing on Appellant's Show Cause Order. Since the trial court treated the motion as one for summary judgment, it must provide the parties with a reasonable opportunity to present, in a form suitable for consideration on summary judgment, additional pertinent material.

The rule BSB cites is well established and the reason for it "is because a non-moving party may be prejudiced if a trial court treats a motion to dismiss as a motion for summary judgment by considering matters outside the pleadings, but does not give the non-moving party a reasonable opportunity to present material that may be pertinent to the court's decision as required by Maryland Rule 2-501." Worsham, 181 Md.App. at 722-23, 957 A.2d 161.

We agree with BSB that the circuit court did treat the motion as one for summary judgment. After all, the facts as set forth in the complaint indisputably stated a cause of action upon which relief could be granted. It was only by looking outside the pleading, more specifically by looking at the affidavit signed by Stewart, that the court had a basis to rule that BSB could not enforce the contract because it had no home improvement license.

BSB maintains that the court erred in failing to give it a reasonable amount of time to respond to the summary judgment motion. Stewart answers by pointing out (correctly) that BSB failed to state in its opening brief what else it would have presented to the circuit court if it had been granted more time.

The failure to...