Hanna v. Quartertime Video & Vending Corp.

Decision Date01 September 1988
Docket NumberNo. 682,682
Citation553 A.2d 752,78 Md.App. 438
CourtCourt of Special Appeals of Maryland

Michael I. Gilbert, Baltimore, for appellant.

Michael J. Gaffney, Baltimore, for appellee.

Argued before BLOOM, ROSALYN B. BELL and WENNER, JJ.


The sole question presented here is whether an order of default and a default judgment may continue to be revised in the discretion of the court 1 until a final judgment is entered in compliance with Rule 2-602. 2 Although appellee This is an appeal from a judgment of the Circuit Court for Baltimore City in which the trial judge refused to revise a default judgment granted to Quartertime Video & Vending Corporation against Nouha Hanna. The relevant facts are few.

                contends the court's right to revise is limited by Rule 2-613(f), 3 our answer is the court may revise its order in its discretion until entry of a final judgment.   To reach the question, we need to utilize our newly granted authority to finalize the judgment under Rule 8-602(e). 4

Quartertime is in the business of placing coin-operated amusement machines in stores. It had placed machines in Hanna's store under what it called a Location Agreement. Hanna sold the store to William and Barbara Lawson, who, for reasons not pertinent here, had the machines removed and contracted with Crown Services, Inc. to replace them. Quartertime sued Hanna, the Lawsons and Crown. The Lawsons and Crown filed answers; Hanna did not. An order of default was entered against Hanna on July 8, 1987 and a default judgment in the amount of $32,496.13 was entered on September 8, 1987. On October 8, 1987, Hanna filed a motion to vacate the order of default and the default judgment, contending she had never been served and that she had a meritorious defense. At an evidentiary hearing, the trial judge held that she was properly served; that notice of default had been properly mailed; that she did have a meritorious defense, but that no fraud, mistake or irregularity "as required by Rule 2-535(b)" was shown, and she had not been diligent in proceeding.


The case has yet to be tried as to the Lawsons and Crown. An adjudication that determines the rights and This is precisely appellant's point. She says that, since the judgment is not final, it continues to be subject to revision. Hence, the trial judge in her or his discretion may revise the judgment and need not apply the more stringent requirement of fraud, mistake or irregularity to revision until 30 days after the judgment is made final. She contends that judgment may be made final either by certification under Rule 2-602(b) or the resolution of all claims by and against all parties as contemplated under Rule 2-602(a).

                liabilities of fewer than all the parties is "not a final judgment" and is subject to "revision at any time before the entry of a judgment that adjudicates all of the claims by and against all of the parties."   Rule 2-602(a)(3).   There is an exception and that occurs "if the court expressly determines in a written order that there is no just reason for delay," and directs in the order the entry of a final judgment.   Rule 2-602(b).   This simply did not occur here.   The judgment here, therefore, is an interlocutory order pending completion of the suit

This presents us with a dilemma. If the judgment is not final, we have no jurisdiction and must dismiss the case. The purpose of limiting appeals to final judgments, Md.Cts. & Jud.Proc.Code Ann. § 12-301 (1974, 1984 Repl.Vol.), is to limit piecemeal appeals--in effect, to keep litigants from running to the appellate court with each and every ruling they do not like.

On the other hand, the purpose of Rule 2-602(b) is to permit the pursuit of an appeal in those cases where to do otherwise would work an injustice. Hence, the trial judge is given an opportunity to examine the circumstances and, if he or she determines in writing that no just reason for delay is present, final judgment may be entered.

Since no such certification was requested or granted, our only alternative prior to July 1, 1988 5 would be to dismiss

                the appeal.   On that date, Rule 8-602(e) became effective.   Under that Rule, if we, as an appellate court, determine that the order appealed from is not a final judgment, but that the trial court did have discretion to enter such under Rule 2-602(b), we have alternatives to dismissal.   We may "remand the case for the lower court to decide whether to direct the entry of final judgment [553 A.2d 755] [or] enter a final judgment on [our] own initiative."   In the instant case, we note that appellee's theory of liability as to each party differs substantially.   It sued Hanna for liquidated damages and attorney's fees under the Location Agreement;  it sued the Lawsons as successors to Hanna;  and it sued Crown for malicious interference with a contract.   More significantly to us in viewing the alternatives, the question of the finality of this judgment bears no relationship to any other issue that might ultimately be appealed.   Also, uniquely, no matter what the result of the trial of the other two defendants, this issue would still be viable and in all likelihood would still be the subject of an appeal.   Under these particular circumstances, we will exercise our own initiative and enter a final judgment under Rule 8-602(e)(1).   In accordance with that exercise, we shall treat the appeal as if filed on the date of the entry of this judgment and proceed.   Rule 8-602(e)(3)


In this case, we are dealing with an order of default and a default judgment. The order of default determines liability; the default judgment determines the relief granted. Upon entry of an order of default, the clerk is required to issue a notice advising the defendant that such an order has been entered and that the defendant may move to vacate the order within 30 days of entry. Rule 2-613(f) specifically provides that "a default judgment entered in compliance Appellee argues that the liability issue could not be subject to the discretionary revisory power of the court after the expiration of the 30 days. In other words, the solely discretionary revisory power is not available to this default judgment except as to the relief granted. On the other hand, appellant contends that if an order is subject to "revision at any time before the entry of a judgment that adjudicates all of the claims by and against all of the parties," Rule 2-602(a), an order of default continues to be subject to revision despite the provisions of Rule 2-613(f). Appellant argues that since in the instant case the order of default was not final upon entry of the judgment of default, and in fact was not final until this day, it could have been revised without reference to the more rigorous standard of fraud, mistake or irregularity.

with this Rule is not subject to the revisory power under Rule 2-535(a) except as to the relief granted."


We are faced again with determining the interplay of several Rules. We are directed to construe them to "secure simplicity in procedure, fairness in administration, and elimination of unjustifiable expense and delay." Rule 1-201(a). Since they have the force of law, 6 they are controlled by the same principles that apply to statutes. Goldston v. Karukas, 180 Md. 232, 235, 23 A.2d 691 (1942). The applicable rules of statutory construction require that, when two statutes enacted at different times cover like subject matter, but do not refer to each other, "they should be construed, if at all feasible, so as to give as full effect to each other as possible. Moreover, if the statutes are not irreconcilable, they should be construed in harmony with their respective objects." Haskell v. Carey, 294 Md. 550, 558, 451 A.2d 658 (1982).

Our view of Rules 2-602(a), 2-535 and 2-613(f) is that they are not irreconcilable if 2-535 and 2-613(f) are construed to be applicable only to final judgments. We find support in this approach in Haskell as this construction does not violate the purpose of either Rule 2-535(b) or 2-613(f). To explain, we look at the purpose of these two Rules.


In Haskell, the Court of Appeals construed two statutes: (1) the right of the court to revise a judgment under Md.Cts. & Jud.Proc.Code Ann. § 6-408 7 and (2) a prohibition against revising a judgment foreclosing the equity of redemption except on the ground of lack of jurisdiction or fraud in the conduct of the proceedings to foreclose under Article 81, § 113. The Court held the statutes to be in harmony if § 113 was read to refer only to enrolled judgments. In so construing the statutes, the Court had occasion to conclude that the "purpose of limiting a trial court's discretion to revise an enrolled judgment is to promote finality of judgment and thus to insure that litigation comes to an end." Haskell, 294 Md. at 558, 451 A.2d 658.

Just as the purposes of § 6-408 and its counterpart in the Rules (Rule 2-535) are closely linked to the finality of judgments, so too is Rule 2-613. The purpose of precluding a review of liability after the expiration of 30 days is to secure finality of the order of default, namely, to secure the expeditious handling of litigation, Rule 2-613. The distinction between revision that is purely discretionary and revision that is limited to fraud, mistake or irregularity arises at the expiration of 30 days, Rule 2-535(a) and (b). The distinction between revision of an order of default on a purely discretionary standard and revision that is limited to fraud, mistake or irregularity arises at the expiration of 30 days. Rule 2-613. Viewed from the perspective of the purpose of securing finality, the reason for the distinction between the standards in Rule 2-535 simply disappears when the judgment is not final. So too, viewed in the same perspective, the reason for the...

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    ...stated, an "order of default determines liability; the default judgment determines the relief granted." Hanna v. Quartertime Video & Vending Corp., 78 Md.App. 438, 444, 553 A.2d 752, cert. granted, 316 Md. 508, 560 A.2d 41 (1989). Thus, an order of default, as was granted in the instant cas......
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