Estate of Dorsey v. Kaplan Higher Educ. Corp.

Decision Date23 May 2022
Docket Number1632-2019
PartiesESTATE OF TYRENKA DORSEY v. KAPLAN HIGHER EDUCATION CORPORATION
CourtCourt of Special Appeals of Maryland

Circuit Court for Baltimore City Case No.: 24-C-18-005008

Nazarian, Leahy, Harrell, Glenn T., Jr. (Senior Judge Specially Assigned) JJ.

OPINION [*]

Leahy J.

The Estate of Tyrenka Dorsey, appellant, [1] appeals from an order of the Circuit Court for Baltimore City denying Ms. Dorsey's motion to alter or amend the court's earlier order denying her "Request for Unpaid Balance From Respondent Of Arbitration Award" ("Request") in which she requested pre-judgment interest under the judgment confirming her arbitration award.

In June of 2018, after a multi-day arbitration, an arbitrator found that appellee Kaplan Higher Education Corporation ("Kaplan") had breached an enrollment agreement with Ms. Dorsey, and the arbitrator awarded Ms. Dorsey $44, 414 due to Kaplan's breach. Ms. Dorsey filed a petition to confirm the arbitration award in the circuit court, and the court ordered judgment in Ms. Dorsey's favor in the amount of $44, 414.00, "plus post-judgment interest at the legal rate" and costs. On May 31, 2019, the clerk entered the judgment on the docket, and Kaplan sent a check for the full amount of the arbitration award, post-judgment interest, and costs.

On July 9, 2019, thirty-nine days after the clerk entered the judgment, Ms. Dorsey filed the Request in the circuit court for an award of pre-judgment interest in the amount of $3, 739.73. Ms. Dorsey presents three questions that we have combined into one: Did the circuit court err in denying Ms. Dorsey's request for pre-judgment interest?[2]

As we explain, Ms. Dorsey was not entitled to pre-judgment interest under the judgment confirming her arbitration award. To the extent that her Request sought to amend the judgment to include pre-judgment interest, it was properly denied by the court because she filed her Request, and the motion to modify, after the judgment was enrolled. Accordingly, we affirm the judgment of the circuit court.

BACKGROUND

In 2011, Ms. Dorsey entered into an enrollment agreement with TESST, a technical for-profit college formerly operated by Kaplan, to become a certified medical assistant. Ms. Dorsey successfully completed her first five courses required within the program before learning that she had failed her sixth course, "MAR150." A Kaplan administrator advised Ms. Dorsey that she would be able to retake MAR150 without additional cost, but that she would need to complete two other courses remaining in the program first.

By February 13, 2012, Ms. Dorsey had completed the other two remaining courses and was scheduled to retake MAR150 during the term beginning on March 15, 2012. Although Ms. Dorsey maintained that she had been told she would "be on break" from February 14 to March 15, Kaplan deemed Ms. Dorsey withdrawn from the program on February 16 "because she was 'not enrolled in a mod[ule]' for 14 days"[3] and terminated her financial aid. Because Ms. Dorsey had insufficient financial resources to enroll in MAR150 after Kaplan terminated her financial aid, she did not return to the program and, instead, gained employment at Johns Hopkins Hospital (albeit not as a medical assistant and at a lower salary).

Ms. Dorsey initiated arbitration with Kaplan in April of 2016 pursuant to the enrollment agreement. On June 29, 2018, after a multi-day arbitration, the arbitrator found that Kaplan had breached the enrollment agreement and awarded Ms. Dorsey: (1) $2, 414- the amount of her tax refund confiscated by the federal government as partial repayment of her financial aid; and (2) $42, 000-the amount she lost in income between 2013 and 2018 due to Kaplan's breach.

Ms. Dorsey filed a petition to confirm the arbitration award in the circuit court. On March 18, 2019, the circuit court entered an order striking the petition because it was not signed by a petitioner or an attorney. On April 30, 2019, Ms. Dorsey filed a signed version of the petition to confirm arbitration. Consequently, on May 28, 2019, the court ordered that "judgment be, and hereby is ENTERED in favor of [Ms. Dorsey] and against [Kaplan] in the amount of $44, 414.00, plus post-judgment interest at the legal rate." (Emphasis added). The court also ordered that Kaplan "pay the costs of these proceedings" and directed the clerk to close the matter. Three days later, on May 31, the clerk entered the judgment on the docket. On June 10, 2019, Kaplan sent to Ms. Dorsey by overnight courier a check in the amount of $44, 910.55-representing the full amount of the arbitration award, $95.00 for filing fees, and $401.55 for post-judgment interest.[4] The judgment was then indexed on June 21, 2019 and a notice of recorded judgment was issued on the same date.

Ms. Dorsey filed a "Request for Unpaid Balance from Respondent of Arbitration Award" on July 21, 2019-39 days after the judgment was entered. In her Request, Ms. Dorsey sought an additional $3, 739.73 in interest from June 28, 2018 through May 28, 2019-the period between the date on which the arbitration award was issued and the date on which the court's judgment was entered. Ms. Dorsey characterized this as "a total of 11 months of post interest." Ms. Dorsey acknowledged in her Request that she had already received $44, 910.55 from Kaplan.

The court denied Ms. Dorsey's Request on August 19, 2019. The court's "Order Denying Amendment To Judgment" provided, in relevant part, that "the [R]equest will be denied because the judgment based on the arbitration award has already been entered." On August 27, Ms. Dorsey filed a "Motion to Alter or Amend" the court's denial of her Request for unpaid balance. In an order entered on September 23, 2019, the court found "no reason to reconsider the prior order[, ]" and denied the motion to alter or amend. Ms. Dorsey noticed an appeal on October 17, 2019.

DISCUSSION

Ms Dorsey maintains that the circuit court erred by failing to grant her Request for post-award, pre-judgment interest, and by failing to grant her motion to alter or amend. She contends that the court's denial of her Request was not a final order, and that the Court's denial of her motion to alter or amend the court's denial "has no statements of findings based on law and evidence." Ms. Dorsey also avers that Kaplan exhibited bad faith and "refused to abide by their binding arbitration agreement with [her] triggering the accrual of post-award, pre-judgment interest[.]"

Kaplan responds that Ms. Dorsey is not entitled to pre-judgment interest. Kaplan points out that the arbitration award "explicitly did not award pre-judgment interest," and that the arbitration agreement provides only that "[a]ny award rendered by the arbitrator may be entered in any court having competent jurisdiction." Kaplan asserts that it paid Ms. Dorsey the post-judgment interest to which she was entitled and that the circuit court was well within its discretion to deny her Request for pre-judgment interest. We agree.

Although Ms. Dorsey states in her Request that she is seeking "a total of 11 months of post interest," her Request is, more accurately, one for pre-judgment interest because she seeks interest for the period between the date of the arbitration award and the circuit court's order confirming the judgment. (Emphasis added). In contrast to post-judgment interest, which Maryland Rule 2-604(b) explicitly requires on a money judgment, [5]Maryland Rule 2-604(a) dictates that, "[a]ny pre-judgment interest awarded by a jury or by a court sitting without a jury shall be separately stated in the verdict or decision and included in the judgment." There is thus a "distinct difference between pre-judgment interest which is a part of damages and interest on a judgment which does not constitute part of the damages." Md. State Highway Admin. v. Kim, 353 Md. 313, 327 (1999) (quoting Austin v. State, 831 S.W.2d 789, 791 (Tenn.App. 1991)).

Ms. Dorsey did not appeal the circuit court's entry of judgment confirming the arbitration award. Rather, she appeals the circuit court's orders denying her Request for pre-judgment interest under the court's enrolled order. Our review of a trial court's order concerning the award of pre-judgment interest is mixed, as Maryland law provides factual and procedural requirements for an award of pre-judgment interest.[6] Nationwide Prop. & Cas. Ins. Co. v. Selective Way Ins. Co., 473 Md. 178, 189 (2021). Under Maryland Rule 8-131(c), we review the court's decision "on both the law and the evidence." We "will not set aside the judgment of the trial court on the evidence unless clearly erroneous[.]" Id.

Here, we are only reviewing whether the trial court decided correctly that its enrolled judgment did not include pre-judgment interest, and not whether the court should have awarded pre-judgment interest because, as we will address shortly, the Request was filed more than 30 days after the judgment was entered. Accordingly, we review the court's interpretation of its order de novo, see United States v. Spallone, 399 F.3d 415, 423 (2d Cir. 2005), and we construe the court order in the same manner as other written documents and contracts, Taylor v. Mandel, 402 Md. 109, 125 (2007). If the language of the order is clear and unambiguous, we will, considering the context in which the words are used, give effect to their plain and usual meaning. Id.

Ms Dorsey claims, essentially, that she is entitled to pre-judgment interest as a matter of right. However, pre-judgment interest "as a matter of right is the exception rather than the rule[.]" Ver Brycke v. Ver Brycke, 379 Md. 669, 702 (2004). Pre-judgment interest is "allowable as a matter of right when the obligation to pay and the amount due had...

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