Havilah Real Prop. Servs., LLC v. Early

• Decision Date: 27 March 2014
• Docket Number: No. 0051,Sept. Term, 2013.,0051
• Citation: 216 Md.App. 613,88 A.3d 875
• Parties: HAVILAH REAL PROPERTY SERVICES, LLC v. Ronald EARLY, et al.
• Court: Court of Special Appeals of Maryland

216 Md.App. 613

88 A.3d 875

HAVILAH REAL PROPERTY SERVICES, LLC

v.Ronald EARLY, et al.

No. 0051, Sept. Term, 2013.

Court of Special Appeals of Maryland.

March 27, 2014.

Eric M. Rome (Eisen & Rome, PC, on the brief), Washington, D.C., for Appellant.

James P. Ulwick (Geoffrey H. Genth, Kramon & Graham, PA, on the brief), Baltimore, MD, for Appellee.

Panel: ZARNOCH, KEHOE, and HOTTEN, JJ.¹

ZARNOCH, J.

Appellant Havilah Real Property Services, LLC (“Havilah”) is a Maryland limited liability company engaged in the business of buying, selling, and owning real estate. Havilah filed a complaint against attorney Ronald Early and his firm, Lerch, Early & Brewer, Chtd., alleging that Early and the firm (collectively, “the Attorneys”) conspired with one of their former clients to file a frivolous lawsuit against Havilah, thereby engaging in malicious use of process. The Circuit Court for Montgomery County dismissed Havilah's complaint with prejudice, which Havilah now appeals. For the following reasons, we affirm the judgment of the circuit court.

FACTS AND LEGAL PROCEEDINGS

This case is best understood as a story of three separate but related cases.

First, in 2007, Vicky Lynn Karen and VLK, LLC ¹ (“VLK”) retained the Attorneys to represent them. On November 9, 2007, the Attorneys filed a complaint ² in the Circuit Court for Montgomery County on behalf of VLK against (1) Lamar Carlson, then a member of VLK with whom Karen was formerly romantically involved; (2) Joan Alderman, the principal of Havilah and Carlson's then-current romantic partner; (3) and Havilah (the “Maryland action”). The essence of the complaint was that Havilah, Carlson, and Alderman had tortiously interfered with VLK's business prospects by purchasing 48 properties in the District of Columbia. The complaint alleged various counts of fraud, breach of contract, breach of fiduciary duty, and interference with contractual relations, among other counts. Within a week of filing the complaint, the Attorneys filed 48 lis pendens³ on D.C. properties owned by Havilah. Havilah sought to terminate the case via motions several times, though all of its attempts were denied: (1) a motion for summary judgment filed on December 15, 2008 and argued at a hearing on January 21, 2009; (2) a motion for judgment filed on February 19; and (3) a renewed motion for judgment filed on February 25.⁴ A fourteen-day jury trial conducted from February 9 to February 27, 2009, resulted in a $10,000 jury verdict on March 10, for VLK against Carlson.⁵ Havilah was not liable on any of the counts.

While the Maryland action was pending, Havilah and Alderman filed a complaint ⁶ against VLK and Karen in the Superior Court for the District of Columbia on March 25, 2008. They alleged claims of tortious interference with prospective economicadvantage and malicious prosecution. The court later dismissed the malicious prosecution claim, holding that the filing of a lis pendens did not constitute a special injury required to sustain the claim. A twelve-day jury trial, conducted from January 9 to January 25, 2012, resulted in a verdict for Havilah and Alderman in the amount of $602,942, plus costs and interest, against VLK and Karen. Both sides filed cross-appeals ⁷ to the D.C. Court of Appeals, which are still pending as of this writing.

Finally, we come to the case before us. On May 25, 2012, Havilah filed a complaint in the Circuit Court for Montgomery County against the Attorneys. The complaint alleged that the Attorneys “knew that there was no probable cause to support” 31 of the 48 lis pendens the Attorneys had filed on Havilah-owned properties in the Maryland action. Havilah alleged that Karen and VLK's

intent was to tortiously and maliciously interfere with Havilah's business relationships in order to punish Karen's ex-boyfriend, Carlson, the then-current boyfriend of Havilah's principal, [Alderman] ... and/or, at a minimum, to use Havilah and its properties as leverage to achieve their goals with respect to Carlson, in reckless disregard of the damages those unlawful actions were likely to cause Havilah.

On October 19, the circuit court granted the Attorneys' motion to dismiss the complaint but also granted Havilah leave to amend.

Havilah's amended complaint, filed October 31, included additional allegations as to what the Attorneys knew at the time the 31 lis pendens were filed in the Maryland action. For example, Havilah alleged that the Attorneys knew that “Carlson was Karen's business partner and ex-lover” and that “Karen remained obsessed with Carlson, and clandestinely observed him and Alderman on occasion.” Havilah also alleged that the Attorneys knew that VLK “ had no funds to purchase any of the 31 properties and was no longer actively engaged in acquiring real estate.” Instead, according to Havilah, VLK and Karen sought “to stop Havilah from selling the properties so they could extort money from Havilah and thereby share in the profits despite the fact that they had done no work that would justify any payment.” Ultimately, according to Havilah, the Attorneys “expressed no hesitation and willingly agreed to participate in, and further, Karen's and VLK's malicious and tortious goal to harm Havilah and its business interests, and thereby punish Carlson and Alderman.” Havilah sought at least $980,301 in compensatory damages.

The Attorneys filed a motion to dismiss, or, in the alternative, for summary judgment on November 28, which the circuit court considered at a hearing on February 27, 2013. At the beginning of the hearing, the judge stated “I believe that I actually remember parts of this case, certainly not much of it, but I remember this of Ms. Karen's case. And I remember that they were buying properties there in Anacostia near the stadium.... [B]ut I do have some familiarity with the underlying case here in the State of Maryland. And I actually have some memory of it.” ⁸ The Attorneys emphasized that Havilah could not establish that there was a lack of probable cause to initiate the Maryland action because the circuit court had “denied three dispositive motions in that lawsuit.” They also argued that the complaint was deficient because there was “no proof of actual malice ... [and] no proof of independent harm.” Havilah conceded that it had not alleged actual malice in the complaint and argued that “the malice is imputed by acting outside the box, knowing the facts, and taking actions not justified by the facts.”

In an oral ruling, the court found that

[T]he court has considered the defendant's motion to dismiss the amended complaint. And there is only that one count of conspiracy to commit a malicious prosecution. The court is not satisfied that there's been the appropriate showing in the pleadings to justify that matter going forward. And that's kind of by admission of counsel.... And the court for the reasons articulated in the argument, I don't believe there's been a sufficient preliminary setting forth of facts for one, there are no specific facts to show that the attorney acted with malice, bad intent, or out of personal interest. I think the—he has to do that to overcome the qualifying privilege....

I find that Havilah really can't establish—even the element of lack of probable cause required support in the conspiracy claim against the attorneys. In this case, the court actually has already talked about it in argument here, heard the case, denied a motion for summary judgment, a motion for directed verdict at the close of the plaintiff's case, and a motion for directed verdict at the close of the case as a whole in this case. There was certainly more than probable cause to go forward....

The court dismissed the complaint with prejudice in a written order filed on March 4, 2013. Havilah timely filed this appeal. Additional facts will be discussed below.

QUESTIONS PRESENTED

Havilah raises five issues ⁹ on appeal, which we have reordered and reworded as:

I. Did the circuit court err when it found there was probable cause to bring the Maryland action?

II. Did the circuit court err when it concluded that Havilah's allegations of “imputed malice” were insufficient?

III. Does Maryland or D.C. substantive law apply when evaluating Havilah's claim of special injury?

IV. Did the circuit court err when it concluded that the filing of a lis pendens is not a special injury?

V. Did the circuit court err when it found that Havilah's suit is barred by collateral estoppel?

Because our answer of “no” to the first two questions conclusively disposes of the appeal, we decline to reach the remaining issues. We therefore affirm the judgment of the circuit court.

STANDARD OF REVIEW

When reviewing a motion to dismiss, an appellate court must determine “whether the trial court was legally correct” in concluding that the “alleged facts and permissible inferences” of a complaint “nonetheless fail to afford relief to the plaintiff.” Sprenger v. Public Serv. Comm'n of Md., 400 Md. 1, 21, 926 A.2d 238 (2007). The reviewing court must “assume the truth of, and view in a light most favorable to the non-moving party, all well-pleaded facts and allegations contained in the complaint, as well as all inferences that may reasonably be drawn from them.” Parks v. Alpharma, Inc., 421 Md. 59, 72, 25 A.3d 200 (2011) (Quotations omitted). The court is confined to “the universe of facts pertinent to the court's analysis of the motion” and focuses on “the four corners of the complaint and its incorporated supporting exhibits, if any.” Id. (Quotations omitted).

DISCUSSION

Havilah alleged only one count in its complaint: conspiracy to commit malicious use of process. Because “no action in tort lies for conspiracy to do something unless the acts actually done, if done by one person, would constitute a tort,” we must determine whether Havilah adequately pled that the Attorneys committed the alleged tort of malicious use of process. See Alleco Inc. v. Harry & Jeanette Weinberg Foundation, Inc., 340 Md....