D'Aoust v. Diamond

Decision Date31 January 2012
Docket Number2011.,No. 5,Sept. Term,5
Citation36 A.3d 941,424 Md. 549
PartiesMichelle D'AOUST v. Cindy R. DIAMOND, et al.
CourtMaryland Court of Appeals

OPINION TEXT STARTS HERE

Jonathan A. Azrael (Azrael, Franz, Schwab & Lipowitz, LLC, Baltimore, MD) on brief, for Petitioner/Cross–Respondent.

Howard G. Goldberg (Robin G. Banks of Goldberg, Besche & Banks, P.C., Baltimore, MD), on brief, for Respondents/Cross–Petitioners.

Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, BARBERA, JOSEPH F. MURPHY, JR.* (Retired, specially assigned), JJ.GREENE, J.

This case stems from the judicial sale of a condominium owned by Michelle D'Aoust (Petitioner) conducted by court-appointed trustees Cindy R. Diamond and Bruce D. Brown, who were employed by the law firm of Rosen Hoover, P.A. (collectively Respondents) at the time of the sale and surrounding events in connection with the sale. Following the sale of the condominium, Petitioner filed a Complaint in the Circuit Court for Harford County alleging breach of fiduciary duty involving actual fraud and breach of fiduciary duty involving constructive fraud by Diamond and Brown in connection with the sale. The Complaint also alleged vicarious liability of Rosen Hoover, P.A. Thereafter, Respondents filed a Motion to Dismiss the Complaint, which the trial judge granted, concluding that Respondents were entitled to qualified judicial immunity for their actions in connection with the sale of Petitioner's condominium.1 The Court of Special Appeals reversed the trial judge's grant of Respondents' Motion to Dismiss with regard to Petitioner's allegations of actual fraud, remanding the case to the trial court for further proceedings on that cause of action, and it affirmed the trial judge's grant of the Motion to Dismiss with regard to the other causes of action in Petitioner's Complaint on grounds of qualified judicial immunity. We granted certiorari to answer the following questions posed by Petitioner in her petition for writ of certiorari:

(1) Does the doctrine of “qualified immunity” shield trustees appointed to make a judicial sale from liability for: [ (a) ] failing to provide the property owner with a mandatory notice of the time, place and terms of the sale “to the last known address” of the record owner, as required by Maryland Rule 14–206(b); and/or [ (b) ] making a false affidavit that they had complied with the Rule? 2

(2) Are the trustees entitled to “qualified immunity” where prior to a hearing on [Petitioner's] Exceptions to the foreclosure sale, the trustees told the [Petitioner] that the trustees were withdrawing objections to her Exceptions and would advise the court that no hearing was required because the Exceptions should be sustained; subsequently, after the hearing was cancelled at the trustees' request, the Circuit Court summarily ratified the [sale] without a hearing, the trustees did not advise the court that the sale should not have been ratified, but instead conveyed the property to the foreclosure sale purchaser without further notice to the [Petitioner]?

(3) Is the Court of Special Appeals correct in holding that the trustees are entitled to assert the defense of qualified immunity for the ministerial act of sending out a required Notice because such act is a “nested” ministerial act, “necessary to carry out a broader discretionary authority vested by the court?”

(4) Is the Court of Special Appeals correct in holding that [the trustees] are shielded from liability for constructive fraud as a matter of law” because of the doctrine of “qualified immunity?”

(5) Does the doctrine of qualified immunity protect foreclosure sale trustees who negligently deprive the property owner of a hearing on exceptions to the sale?

We also granted certiorari to answer the following question posed by Respondents in their cross-petition:

Whether the Court of Special Appeals should have considered the uncontradicted affidavits submitted by the [Respondents] (in which they denied actual knowledge that the [Petitioner] was not residing in the condominium where the notice was sent), and thus should have reviewed the trial court's Order as the granting of a motion for summary judgment, rather than the granting of a motion to dismiss since the extraneous documents were not excluded by the trial court in rendering its opinion?

For the reasons discussed more fully below, we shall affirm in part and reverse in part the judgment of the Court of Special Appeals, and we direct that court to remand the case to the trial court for further proceedings. 3 We hold that the intermediate appellate court erred in reviewing the trial judge's Order as a grant of a motion to dismiss, rather than as a grant of a motion for summary judgment. We also hold that the trial judge erred in granting, and the intermediate appellate court erred in affirming the grant of, Respondents' Motion to Dismiss on grounds of qualified judicial immunity, as that doctrine has not been adopted by this Court. We hold that the conduct of Diamond and Brown in sending notice of the Petition for Sale to the condominium address, in subsequently filing an affidavit affirming that they gave such notice, and in communicating with the hearing judge regarding Petitioner's exceptions to the sale, conduct alleged to be improper in Petitioner's Complaint, did not entitle the trustees to absolute judicial immunity as they were not judicial officers at the time the alleged acts were performed. Furthermore, we hold that Rosen Hoover, P.A. was not a judicial officer at the time of the events alleged in Petitioner's Complaint, and therefore, Rosen Hoover, P.A. is not entitled to receive absolute judicial immunity. Lastly, we hold that the concept of qualified public official immunity is inapplicable to the circumstances of this case.4 Therefore, to the extent that the trial judge granted, and the Court of Special Appeals affirmed the grant of, Respondents' Motion to Dismiss on grounds of immunity, we hold that such determinations were in error.

FACTUAL AND PROCEDURAL BACKGROUND

On April 7, 2008, Petitioner filed suit against Respondents in the Circuit Court for Harford County. Petitioner's Complaint contained the following relevant factual allegations:

2. Defendants Cindy R. Diamond and Bruce D. Brown are Petitioners and court-appointed Trustees in the [judicial sale] 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).5

6. Defendants Diamond and Brown [were] appointed Trustees to sell the Property, [located at 108 E. Seevue Court in the Hickory Hills Condominium Development,] by Order dated March 14, 2005.6 The Property was sold by the Trustee[s] at [a] public sale on May 26, 2005 for $65,000.00. There was no existing mortgage on the Property [as of] the date of Sale.

7. On August 3, 2004 ... Plaintiff notified MRA Property Management, Inc. (“MRA”), the managing agent for the Hickory Hills Condominium, that she relocated to a new address at 11010 Bowerman Road, White Marsh, Maryland 21162, and that all correspondence should be sent to her at that address.

8. On August 3, 2004, MRA sent an email to the Law Firm [Rosen Hoover, P.A.] advising that Plaintiff had a new address of 11010 Bowerman Road in White Marsh, Baltimore County....

9. As members of the Law Firm, the Defendants Diamond and Brown had actual or constructive knowledge that Plaintiff's address was 11010 Bowerman Road, White Marsh, Baltimore County, Maryland.

10. Despite [their] 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.7

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 [sale] without a hearing on September 14, 2005 ( [Order] 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 [P]roperty[,] without further notice [to] 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.

Petitioner incorporated the foregoing factual allegations into the three counts contained in the Complaint. The first count, entitled “Breach of Duty,” included the following relevant allegations:

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...

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