Kim v. Collington Center III

• Decision Date: 02 July 2008
• Docket Number: No. 723, Sept. Term, 2007.,723, Sept. Term, 2007.
• Citation: 952 A.2d 346,180 Md. App. 606
• Parties: Eui KIM, et al. v. COUNCIL OF UNIT OWNERS FOR COLLINGTON CENTER III CONDOMINIUM.
• Court: Court of Special Appeals of Maryland

952 A.2d 346

180 Md. App. 606

Eui KIM, et al. v.COUNCIL OF UNIT OWNERS FOR COLLINGTON CENTER III CONDOMINIUM.

No. 723, Sept. Term, 2007.

Court of Special Appeals of Maryland.

July 2, 2008.

Alyssa W. Chang, Germantown, for appellant.

Frank J. Emig, Greenbelt, for appellee.

Panel: HOLLANDER, WOODWARD, JAMES A. KENNEY, III(retired, specially assigned), JJ.

KENNEY, J.

Appellee, the Council of Unit Owners for Collington Center III("the Council"), as landlord of a commercial condominium complex located in Prince George's County, instituted repossession proceedings in the District Court for Prince George's County against Angela Trading Company, Inc.("Angela Trading"), tenant of Condominium Unit 104 ("the Unit").A default judgment of possession of the Unit was entered for the Council.

While Angela Trading's motion for a new trial was pending in the District Court, appellants, Eui Kim and Sook Ja Kim("the Kims"), as the purchasers of the Unit from Angela Trading, sought a declaratory judgment in the Circuit Court for Prince George's County that they owned the Unit.The circuit court granted summary judgment in favor of the Council.

The Kims present four questions for our review, which we have consolidated and reworded as follows:

I.Are the Kims barred from pursuing their claim to the Unit by the doctrine of res judicata?

II.Did the circuit court err in granting summary judgment in favor of the Council?

III.Did the Council have standing to challenge the validity of the deed purporting to give an interest in the condominium unit to the Kims?

For the following reasons, we shall dismiss this appeal as moot.

FACTUAL AND PROCEDURAL HISTORY

I.Facts

On October 15, 1985, Prince George's County, as landlord, entered into a 61-year lease agreement ("the Prime Lease") with Foreign Trade Zone Three Associates Limited Partnership("FTZT Associates"), as tenant, for approximately 11.8 acres of land in the subdivision known as Prince George's International Commerce Center ("the Property").That same day, pursuant to a sublease agreement ("the Sublease"), FTZT Associates leased all of its rights and interests in the Property to Harkins Associates, Inc.("Harkins Associates") for a term to "expire, unless sooner terminated, upon the expiration of the term of the Prime Lease[.]"Section 14 of the Sublease permitted Harkins Associates to develop the Property into commercial condominiums for sale to third parties, "subject to the terms of [the Prime Lease]."The Memorandum of the Prime Lease and the Sublease, signed by representatives for Prince George's County, FTZT Associates, and Harkins Associates, Inc., was recorded among the land records on November 5, 1985.

Harkins Associates established a condominium regime of twenty-six commercial units known as Collington Center III Condominium on August 3, 1987.Also on August 3, the Prime Lease and the Sublease were amended to extend the respective term of each to sixty-six years.The First Amendment to the Memorandum of the Prime Lease and the Sublease reflecting the new term was recorded.

On November 25, 1987, by a Deed and Assignment of Subleasehold Interest ("the Unit 104 Assignment Deed"), Harkins Associates assigned its interest in the Unit¹ to Angela Trading for "the term of years set forth in [the Prime Lease]."The Unit 104 Assignment Deed expressly stated that it was subject to the Prime Lease and the Sublease, and that the Unit "is a portion of the property" of which Prince George's County was the fee simple owner.It was recorded on November 27, 1987.

On July 6, 1989, Prince George's County assigned its interest in the Prime Lease to Collington Center Associates Limited Partnership("Collington Center Associates"), and, by a deed recorded on July 10, 1989, it granted its fee simple ownership of the Property to Collington Center Associates.

Collington Center Associates conveyed its fee simple ownership of the Property to the Council on May 28, 1996.By a separate agreement, Collington Center's interest in the Prime Lease and FTZT Associates' interest in the Sublease were assigned to the Council.Relevant to this case, Section 12.13 of the Prime Lease and Section 3 of the Sublease amendment provided that interests under those leases would not merge unless a written instrument effecting such a merger was executed.The Council became sublessor under the Sublease.

On August 31, 2005, Angela Trading executed a deed ("the Deed") purporting to grant to the Kims, "in FEE SIMPLE, [its] sub-leasehold estate, title and interests in and to the land and all of their interests in and to the improments [sic][,]" for "consideration of the sum of Ten and No/100 (10.00) Dollars[.]"The Deed was recorded on October 5, 2005.

II.Legal Proceedings

A.District Court Proceedings

On April 14, 2006, the Council filed a complaint for breach of lease against Angela Trading in the District Court for Prince George's County, asserting that Angela Trading was in substantial violation of the Sublease for "[u]nauthorized lease to subtenant, excessive noise and disturbance[,] and creating a nuisance."²The complaint stated that, on October 13, 2005 and January 25, 2006, the Council notified Angela Trading that it was in violation of the Sublease and that the Council desired to repossess the premises.

Angela Trading did not appear at the June 13, 2006 hearing, and a default judgment of possession of the Unit was entered in favor of the Council.Angela Trading did not appeal the default judgment within the required ten day period.In a letter dated June 23, 2006, the Council's attorney notified counsel for Angela Trading that it had filed a petition for a warrant to removeAngela Trading from the Unit.

Angela Trading filed a motion for a new trial on June 26, 2006, in which it claimed that it was the tenant of the Unit and that it had not been served with the Counsel's complaint for breach of lease.Attached to it's motion, Angela Trading provided an "affidavit of non-service" signed by Eui Kim, "as principal for Angela Trading[.]"In the affidavit, Eui Kim asserted:

3.I was never served with any complaint in the above captioned case.

4.I am not in breach of the lease with [the Council] and if I was previously in breach of lease with [the Council], any such breach has been cured at this time.

(Emphasis added.)

On August 24, 2006, Angela Trading filed an amended motion for a new trial.In its supporting memorandum, filed seven days later, it explained that, "previous to the filing of [the breach of lease action], [it had] conveyed its ownership interest in [the Unit] to [the Kims.]"In the memorandum, Angela Trading argued:

Neither Angela Trading [ ], nor [the Kims] had any knowledge of the pending action for breach of lease, nor did either Angela Trading[] or [the Kims] know about the entry of judgment by default until June 26, 2006[,] when the attorney for Angela Trading[ ] and [the Kims] received a letter from [the Council's] attorney, just after the appeal period had run, advising [their]counsel that a judgment had been entered by default in favor of [the Council.]

That judgment names only Angela Trading[] as a defendant[,] and does not name [the Kims], the actual tenants pursuant to the [D]eed and assignee of the subleasehold interest.

In its conclusion, it asserted that "[the Kims], the true lessor, [have] a valid and credible defense to the alleged breaches of lease filed against Angela Trading[,]" and that "[the Council] has put [the Kims'] property interest in jeopardy and has caused [the Kims] to incur substantial legal fees[.]"

The initial hearing on the original motion for a new trial, conducted on August 30, 2006,³ was limited to whether Angela Trading had been actually served and had notice of the June 13, 2006 hearing.Another hearing on whether the proper defendant was named, the issue raised in the amended motion for a new trial, was held on December 11, 2006.

At the August 30, 2006 hearing, Bonnie Windsor, supervisor of the landlord clerks and civil clerks in the Prince George's County Sheriff's Office, testified that she mailed the complaint and summons to the Unit on April 26, 2006.Kristina Coleman, a Prince George's County deputy sheriff, testified that she served the complaint by affixing it to the front door of the Unit on April 28, 2005.Frank Carlyle, president of In The Beginning School of Arts, testified that the school subleased the Unit from Angela Trading.He stated that any mail that he received at the Unit that was addressed to Angela Trading was "store[d][ ] in the inbox for [Eui] Kim [,]" who typically retrieved the mail once a week.Eui Kim testified that he had been Angela Trading's president for thirty-five years, and that he was the owner of the Unit.He stated that he had visited the Unit in late April of 2006, but he did not see the complaint posted on the door and he did not receive the District Court's mailed notice of the June 13, 2006 hearing.At the conclusion of the hearing, the District Court stated that it did not believe Eui Kim's testimony and found that the complaint was properly served.

Angela Trading's amended motion for a new trial, in which it argued that the Kims were the proper party to the breach of lease proceedings, was heard on December 11, 2006.At that hearing, it was asserted that the Kims were the owners of the Unit, and, because they were not named as defendants in the complaint, they could not have received notice of the June 13, 2006 hearing.The Council argued that Angela Trading had acquired only a leasehold interest in the Unit and, therefore, it could not transfer fee simple title.According to the Council, the Deed was invalid because it did not comply with the Prime Lease's restriction on assignability, did not mention the Prime Lease, and purported to convey a fee simple interest, which Angela Trading did not possess.Because the Kims did not acquire an interest in the Unit, the Council...