Griffin v. Bierman

• Decision Date: 12 February 2008
• Docket Number: No. 79, Sept. Term, 2007.,79, Sept. Term, 2007.
• Parties: Joyce A. GRIFFIN v. Howard N. BIERMAN, et al.
• Court: Court of Special Appeals of Maryland

941 A.2d 475

403 Md. 186

Joyce A. GRIFFIN v. Howard N. BIERMAN, et al.

No. 79, Sept. Term, 2007.

Court of Appeals of Maryland.

February 12, 2008.

Deepak Gupta (Michael T. Kirkpatrick and Brian Wolfman of Public Citizen Litigation Group of Washington, DC, Philip Robinson of Civil Justice Inc. of Baltimore, and Scott Borison of Legg Law Firm, LLC of Frederick), on brief, for appellant.

Jacob Geesing (Bierman, Geesing & Ward, LLC of Bethesda), on brief, for appellees.

Brief of Public. Justice Center, Baltimore Cash Campaign, Center for Responsible Lending, Community Law Center, Legal Aid, Bureau, Inc., Maryland Cash Campaign, Maryland Consumer Rights Coalition, Inc., National Association of Consumer Advocates, National Consumer Law Center, and St. Ambrose Housing Aid Center, Inc., as Amici Curiae, for appellant.

Gregory P. Care, Francis D. Murnaghan, Jr., Appellate Advocacy Fellow Public Justice Center, Baltimore, Amici Curiae.

Argued before BELL, C.J., RAKER, HARRELL, BATTAGLIA, GREENE, ALAN M. WINNER (Retired, specially assigned), and DALE R. CATHELL (Retired, specially assigned), JJ.

HARRELL, J.

I. Facts

On 15 May 2001, Joyce Griffin and her fiancé, Herberto Tubaya, purchased a home at 70 Bar Harbor Road (the "Property") in Pasadena, Maryland. The deed was appropriately recorded among the land records for Anne Arundel County. Griffin testified that she and Tubaya took out a mortgage on the Property in March 2003, which they refinanced on 27 July 2004 with Argent Mortgage.¹ Tubaya died on 25 December 2004. Griffin and her daughter continued to live on the Property.

As a result of Tubaya's death, Griffin wanted to remove his name from the deed. On or about 23 January 2005, she spoke with a representative of Ameriquest, a company at the time affiliated with and owned by the same parent company as Argent Mortgage, who informed her that he would send someone to her house that night to sign the relevant documents. Late that evening, or possibly into the early morning hours of 24 January 2005, Griffin signed the paperwork, solely in her name, taking out a new loan. The new deed of trust extinguished the 2004 mortgage on the Property, paying off a balance of $139,315.29. The new loan was for a principal amount of $153,750.00. The adjustable rate note called for an initial rate of 7.990%, resetting on 1 February 2007. Subject to a few restrictions, the interest rate after that date would be 6.500% above the six-month London Interbank Offered Rate (LIBOR). The new deed of trust was properly recorded among the land records of Anne Arundel County. Initial monthly payments of principal and interest were set at $1,127.10. Paragraph 15 of the new deed of trust provided that "notice to [Griftin] in connection with this Security Instrument shall be deemed to have been given to [Griffin] when mailed by first class mail or when actually delivered to [Griffin]'s notice address if sent by other means." At all relevant times, Griffin resided at and received mail at the Property.

Griffin, without the financial support of her fiancé, quickly fell into default by failing to make payments on the new loan. Appellees, Howard Bierman, Jacob Gessing, Carrie M. Ward and Ralph DiPietro ("the Trustees"), were appointed as substitute trustees under the deed of trust on 15 September 2005. The Trustees docketed a foreclosure action in the Circuit Court for Anne Arundel County on 23 September 2005. The Trustees mailed concurrently to Griffin, by certified mail² and first-class mail, a letter required by Maryland Code (1974, 2003 Repl.Vol.), Real Property Article, § 7-105³ informing her that a foreclosure action "may be or has been" docketed.⁴ Mrs. Griffin did not receive either letter. The letter, sent by certified mail was returned to the Trustees marked "unclaimed." The letter sent by regular mail was not returned to the Trustees by the Postal Service. On 10 October 2005, Griffin filed a chapter 13 bankruptcy petition in the United States Bankruptcy Court for the District of Maryland. The filing of the bankruptcy petition stayed the foreclosure proceedings in the Circuit Court. Griffin voluntarily dismissed the petition in March 2006.⁵

On 5 April 2006, the Trustees again sent Griffin § 7-105 notices, via certified mail and first-class mail, regarding the revitalized foreclosure proceeding. On 19 April 2006, the Trustees mailed Griffin, again via both first-class and certified mail, the notice required by Maryland Rule 14-206(b)(2)⁶ informing Griffin of the time, date (2 May 2006), and location of the public foreclosure sale.⁷ This notice also was mailed to the Property address, addressed to "Occupant," via certified and first-class mail. The certified letter addressed to Occupant was returned to the Trustees "unclaimed." The trial court found that Griffin did not receive any of these notices. None of the regular mailings were returned to the Trustees. On 1 May 2006, the certified letter dated 5 April 2006 was received by the Trustees from the Postal Service marked "unclaimed."

The Property was sold at auction on 2 May 2006 to Elizabeth A. Strasnick for $223,000. Ms. Griffm did not attend the sale. The trial court found that she first was informed of the foreclosure sale, after it occurred, when Strasnick posted notice on the door of the house on the Property informing Griffin that Strasnick had purchased the Property. On 17 May 2006, 15 days after the foreclosure sale, the 19 April 2006 certified mail letter was returned to the Trustees marked "unclaimed."

It was conceded that the Trustees took no additional actions to notify Griffin of the pendency of the sale after receiving the returned "unclaimed" certified letters. It also is without dispute that the Trustees complied with Maryland statutory law and this Court's rules regarding notice requirements in the foreclosure process.

Griffin contacted an attorney and filed exceptions to the foreclosure sale. After hearing testimony and argument, the Circuit Court issued an Order and Memorandum Opinion on 1 November 2006 refusing to set aside the foreclosure sale. The sale was then ratified. Griffin filed a timely appeal to the Court of Special Appeals, arguing that the foreclosure process violated her right to due process of law for lack of notice. Before the intermediate appellate court could decide the appeal, we issued a Writ of Certiorari, on our initiative, to consider whether the Circuit Court was correct in denying Griffin's exceptions to the foreclosure sale.

II. Standard of Review

Maryland Rule 8-131(c) states:

When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.

This rule has "been consistently interpreted to require that appellate courts accept and be bound by findings of fact of the lower court unless they are clearly erroneous." Ryan v. Thurston, 276 Md. 390, 392, 347 A.2d 834, 835 (1975); see also Schade v. Md. State Bd. of Elections, 401 Md. 1, 33, 930 A.2d 304, 322 (2007). "The deference shown to the trial court's factual findings under the clearly erroneous standard does not, of course, apply to legal conclusions." Nesbit v. Gov't Employees Ins. Co., 382 Md. 65, 72, 854 A.2d 879, 883 (2004). We, instead, review de novo the trial court's legal conclusions. Goff v. State, 387 Md. 327, 337-38, 875 A.2d 132, 138 (2005).

III. Analysis

The veneer of Griffin's challenge to the foreclosure sale is that her right to due process of law, guaranteed by the Fourteenth Amendment to the United States Constitution and Article 24 of the Maryland Declaration of Rights,⁸ was violated, in application, by the failure to receive advance notice of the sale. Although Griffin firmly maintains that her constitutional objections are in the form of an "as-applied" challenge, but necessarily, her arguments embrace, as well, a facial challenge to the Maryland foreclosure notice scheme.⁹ A finding in Griffin's favor would compel an obligation requiring that a foreclosing mortgagee provide proof of actual notice to the mortgagor. Because such a ruling would have such a profound effect on the notice foreclosure scheme, Griffin's challenge first must be treated as a facial challenge.

"An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprize interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950). The method of giving notice to affected parties must be such "as one desirous of actually informing the absentee might reasonably adopt to accomplish it. The reasonableness and hence the constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected. . . ." Mullane, 339 U.S. at 315, 70 S.Ct. at 657.

The "constitutionality of a particular procedure for notice is assessed ex ante, rather than post hoc." Jones v. Flowers, 547 U.S. 220, 231, 126 S.Ct. 1708, 1717, 164 L.Ed.2d 415 (2006). "The proper inquiry is whether the state acted reasonably in selecting means likely to inform persons affected, not whether each property owner actually received notice." Weigher v. City of New York, 852 F.2d 646, 649 (2d Cir.1988). There is no cookie cutter paradigm for determining the constitutionality of a particular procedure designed to convey notice. "[D]lle process is flexible and calls only for such procedural protections as the particular situation demands. Procedures adequate under one set of facts may not be sufficient in a different situation." Dep't of Transp. v. Armacost, 299 Md. 392, 416,...