D'aoust v. Diamond

• Decision Date: 10 March 2011
• Docket Number: No. 1708,2009.,Sept. Term,1708
• Citation: 13 A.3d 43,197 Md.App. 195
• Parties: Michelle D'AOUSTv.Cindy R. DIAMOND, et al.
• Court: Court of Special Appeals of Maryland

197 Md.App. 195

13 A.3d 43

Michelle D'AOUST

v.Cindy R. DIAMOND, et al.

No. 1708

Sept. Term

2009.

Court of Special Appeals of Maryland.

Dec. 29, 2010.Reconsideration Denied March 10, 2011.

Jonathan A. Aznel (Azrael, Gam & Franz, LLP, on the brief), Baltimore, MD, for Appellant.Howard G. Goldberg (Robin G. Banks, Goldberg, Besche & Banks PC, on the brief), Baltimore, MD, for Appellee.Panel: WOODWARD, MATRICCIANI, JAMES P. SALMON (Retired, Specially Assigned), JJ.MATRICCIANI, J.

On April 7, 2008, appellant, Michelle D'Aoust, filed a complaint in the Circuit Court for Harford County, naming as defendants appellees Cindy Diamond, Bruce Brown, and Rosen Hoover, P.A.¹ Appellees filed a motion to dismiss on June 26, 2008, which the court granted on September 29, 2009. Appellant filed a timely notice of appeal on September 30, 2009.

Questions Presented

Appellant presented three questions for our review, which we have consolidated, as follows:

Did the trial court err when it granted appellees' motion to dismiss?

For the reasons set forth below, we answer yes. Therefore, we reverse the judgment of the trial court and remand this case for further proceedings.

Background

On April 7, 2008, appellant sued appellees in the Circuit Court for Harford County. Her complaint contained the following relevant factual allegations:

2. Defendants CINDY R. DIAMOND and BRUCE D. BROWN are Petitioners and court-appointed Trustees in the case styled Diamond, et al. v. D'Aoust, Case No. 12–C–05–364, in the Circuit Court for Harford County (“the Petition for Sale”).

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6. Defendants Diamond and Brown appointed Trustees to sell the Property by Order dated March 14, 2005. The Property was sold by the Trustee at public sale on May 26, 2005 for $65,000.00. There was no existing mortgage on the Property at the date of Sale.

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9. ... [T]he Defendants Diamond and Brown had actual or constructive knowledge that Plaintiff's address was 11010 Bowerman Road, White Marsh, Baltimore County, Maryland.

10. Despite its knowledge, the Defendants Diamond and Brown, as members of the Law Firm and as Trustees, on May 10, 2005 directed the Notice of the Sale of Plaintiff's Property to the Property address, rather than 11010 Bowerman Road.

11. Likewise, the Defendants Diamond and Brown caused the Notice of Intention to Create a Lien to be posted on the Property, and did not serve or mail a copy of said Notice to Plaintiff at her address at 11010 Bowerman Road.

12. As a result of the failure of Defendants Diamond and Brown to send Notice of the Sale to Plaintiff at 11010 Bowerman Road, Plaintiff did not know that her Property was sold on May 26, 2005. Had Plaintiff been advised of the sale by notice at 11010 Bowerman Road, she would have taken steps to prevent the Sale by paying the condominium lien, and/or would have attended the sale to bid on the Property.

14. On or about July 5, 2005, Plaintiff filed exceptions to the sale in the Circuit Court for Harford County.

15. A hearing on Plaintiff's exceptions was scheduled for August 31, 2005.

16. Prior to the hearing, Defendant Cindy Diamond told Plaintiff that the Trustees were withdrawing objections to the exceptions and would advise the Court that no hearing was required because the exceptions should be sustained.

17. Defendants Diamond and Brown subsequently withdrew objections to the exceptions but did not advise the Court that the exceptions should be sustained and the sale not ratified.

18. The Court ratified the exceptions without a hearing on September 14, 2005 (filed October 3, 2005). Although Defendants Diamond and Brown knew that the Court's ratification was ordered without knowledge that the sale had been made without adequate notice to Plaintiff, the Defendants did not advise the Court, but instead conveyed the property without further notice of Plaintiff, to the party who purchased it at the public sale, with the intent of depriving Plaintiff of obtaining reconsideration of the September 14, 2005 ratification order.

Based on the forgoing facts, appellant alleged two counts. Count one, entitled “Breach of Duty,” incorporated the forgoing allegations and added:

21. In proceeding with a judicial sale of Plaintiff's Property, Defendants Diamond and Brown owed a fiduciary duty to Plaintiff to conduct the proceedings in accordance with Maryland law and the Maryland Rules of Procedure, including without limitation, Maryland Rule 14–206(b)(2).

22. Defendants Diamond and Brown breached their fiduciary duty owing to Plaintiff by failing to send Notice of Sale of Plaintiff's Property to her last known address, i.e., 11010 Bowerman Road, White Marsh, Maryland 21162, as required by § 14203(a) of the Real Property Article (Maryland Contract Lien Act).

23. Defendants Diamond and Brown further breached their fiduciary duty and committed actual fraud by filing a false or incorrect Affidavit in the Petition for Sale case stating that they had sent Notice of the Sale of Plaintiff's Property to her at her last known address.

Count two of appellant's complaint, entitled “Constructive Fraud,” added the following allegations:

27. The failure of Defendants Diamond and Brown to provide notice to Plaintiff in accordance with Maryland law and the Maryland Rules of Procedure amounts to constructive fraud under the doctrine of Jannenga v. Johnson, 243 Md. 1, 220 A.2d 89 (1966).

28. Defendants Diamond and Brown further committed constructive fraud in not advising the Court that they had failed to give Plaintiff a proper notice of the sale of her condominium unit, but instead conveying the unit to the purchasers.

Appellees filed a “Motion to Dismiss” on June 26, 2008, which incorporated a memorandum of law and two exhibits in the form of affidavits from Diamond and Brown. Appellees' motion argued that they were entitled to the defense of judicial immunity and that the court should therefore dismiss appellant's complaint, with prejudice. Appellees' incorporated memorandum of law argued that “Diamond and Brown were not personally aware that Plaintiff had changed her address and no longer resided at the Property,” citing Diamond and Brown's affidavits to that effect. Appellant responded to the motion, to which appellees replied, in turn.

The trial court issued a memorandum opinion and order on August 21, 2009. The court began its opinion by noting that “[a] motion to dismiss serves the same function as the now defunct demurrer” and that in rendering its decision, “[t]he court is required to accept as true all well-pleaded material facts in the declaration and exhibits thereto, as well as any reasonable inferences that may be drawn there from [sic].” The court further noted that its “decision on a motion to dismiss a complaint does not pass on the merits of the claim; it merely determines the Plaintiff's right to bring the action,” and that “[t]o withstand a motion to dismiss for failure to state a claim, a party need only allege facts that, if proven, would entitle them to relief.”

The court cited Merryman v. Bremmer, 250 Md. 1, 241 A.2d 558 (1968), and Lurman v. Hubner, 75 Md. 268, 23 A. 646 (1892), for the proposition that where there is a judicial sale of property, the court itself is a vendor and any trustee appointed to make the sale is an agent of the court for that purpose. Thus, the court reasoned: “As a general rule, judicial officers are immune from civil actions if the action in question that was performed by the judicial officer was discretionary and not ministerial and within the jurisdiction of the officer's authority,” citing Rice v. Dunn, 81 Md.App. 510, 568 A.2d 1125 (1990), and the more recent case of Tucker v. Woolery, 99 Md.App. 295, 637 A.2d 482 (1994).

The trial court concluded its opinion with the following analysis:

In the present case, Diamond and Brown did nothing to exceed the scope of their authority as trustees. They sold the property in a manner that they believe complied with the court's order and the court ratified the sale. Even assuming that they could have or should have known of a different address to notify Ms. D'Aoust this in and of itself does not mean that they did anything beyond the scope of their authority which would lead to their losing the qualified immunity that they have as trustees and to justify them being held personally liable through the Plaintiff. For this reason the court believes that the Defendants' Motion for Summary Judgment should be granted.

(Emphasis added)

Shortly after referring to appellees' motion as one for “summary judgment,” the court's opinion concluded that “the Defendants' Motion to Dismiss should be GRANTED.” (Italic emphasis added.) The order that accompanied it, however, once again indicated that it was granting “Defendants' cross motions for summary judgment.”

The court amended its judgment on September 29, 2009, and entered an order granting appellees' motion to dismiss as to all parties. Appellant noted her appeal the next day, on September 30, 2009.

Discussion

I. Procedural Posture

Our first task in unraveling the issues of this appeal is to determine whether to treat the court's order as a dismissal or as a summary judgment. We begin with Maryland Rule 2–322(c), which provides:

If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 2–501, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 2–501.

Our treatment is guided by the Court of Appeals' decision in Converge Servs. Group, LLC v. Curran, 383 Md. 462, 860 A.2d 871 (2004), in which the court explained the metamorphosis of a motion to dismiss to a motion for summary judgment:

[I]f a trial court treats a motion to dismiss as a “speaking demurrer” under Md. Rule 2–322(c) and considers ...