Lampros v. Gelb

• Decision Date: 03 December 2003
• Docket Number: No. 1997,1997
• Parties: L. Chris LAMPROS, v. GELB & GELB, P.C.
• Court: Court of Special Appeals of Maryland

837 A.2d 229

153 Md. App. 447

L. Chris LAMPROS, v. GELB & GELB, P.C.

No. 1997, Sept. Term, 2002.

Court of Special Appeals of Maryland.

December 3, 2003.

Stephan Y. Brennan (Charles E. Iliff & Meredith, P.C., on the brief), Pasadena, for appellant.

Albert D. Brault, James M. Brault (Brault, Graham, Scott & Brault, LLC, on the brief), Rockville, for appellee.

Argued before HOLLANDER, SONNER, and ADKINS, JJ.

ADKINS, Judge.

L. Chris Lampros, appellant, was sued in a circuit court outside his county of residence in an action for declaratory relief. He contends that the Circuit Court for Montgomery County lacked jurisdiction to hear the dispute due to improper venue and asks that we vacate the declaratory judgment entered against him. We agree, and so order.

FACTS AND LEGAL PROCEEDINGS

Lampros shared a law office in the District of Columbia for 35 years with, first, Joseph Gelb, and then, Gelb & Gelb ("Gelb"), appellee. This arrangement continued until August 31, 2000, when Lampros ostensibly retired from the practice of law. Both Lampros and Roger Gelb, Joseph's son, are licensed to practice law in the District of Columbia. Neither lawyer is licensed in Maryland. Lampros is a resident of Anne Arundel County, Maryland. Gelb is a corporation located in, and organized under, the laws of the District of Columbia. On September 1, 2000, Lampros was contacted by Howard Schultz, the grandfather of Marshall Lewis, a minor who had been killed in an automobile accident. The accident occurred on August 18, 2000, in Montgomery County, Maryland. The Lewis family resides in Montgomery County. Lampros referred the case to Gelb. On September 5, 2000, Marshall Lewis' parents, Robert and Linda Lewis, retained Gelb to represent them on a contingent fee basis regarding their wrongful death claim. The parties contest the degree to which Lampros remained involved in the case.

Liability was not contested in the wrongful death claim and litigation was avoided. Gelb's services for the Lewis family primarily involved identification of the amount of insurance coverage and negotiation of the settlement amount, which was somewhat complicated by the existence of three other claimants.

In May 2001, a settlement was reached in which the Lewises were paid $852,589.58. When Lampros learned of the settlement, he demanded $142,098.00, which represented one-half of the contingency fee. Gelb placed the disputed $142,098.00 in its trust account and filed an action for declaratory judgment in the Circuit Court for Montgomery County.

Lampros filed a Motion to Dismiss or Transfer Action for Improper Venue. Judge Thompson denied the motion. Gelb then filed a Motion for Summary Judgment. While that motion was pending, Lampros filed an answer and counterclaim asserting three counts: breach of contract, fraud/nondisclosure of material facts, and declaratory judgment.

On May 15, 2002, Judge Woodward granted Gelb's Motion for Summary Judgment. Gelb then filed a Motion to Dismiss Counterclaim and/or for Summary Judgment on the Counterclaim. While Gelb's Motion to Dismiss or for Summary Judgment on the Counterclaim was pending, Lampros filed three new motions: a motion to stay the operation of the May 15 order, a renewed motion to dismiss for improper venue, and a motion to vacate the May 15 order.

Judge Thompson granted Gelb's motion to dismiss the counterclaim and denied Lampros' motion to vacate; Judge Woodward denied Lampros' motion to stay and his renewed motion to dismiss for improper venue. Lampros filed a timely appeal to this Court.

DISCUSSION

I. Improper Venue

Lampros argues that venue for this action was improper in the Circuit Court for Montgomery County. We agree.

With limited exception, a defendant has the right not to be sued except in the county of his residence. See Eastham v. Young, 250 Md. 516, 518, 243 A.2d 559 (1968)

. "The right to have a case heard in the court of proper venue is a personal privilege[.]" Howell v. Bethlehem-Sparrows Point Shipyard, Inc., 190 Md. 704, 711, 59 A.2d 680 (1948). "The privilege of a defendant to be sued only in the county of his residence is a substantial right not to be denied except in strict compliance with the exceptions established by law." Capron v. Mandel, 250 Md. 255, 260, 241 A.2d 892 (1968). In Allender v. Ghingher, 170 Md. 156, 183 A. 610 (1936), the Court of Appeals explained:

And even though equity could be considered the proper forum, it does not follow that appellants are compelled to defend the suits beyond the county of their residence, thus depriving them of the right of trial at home where they live and are known, which in turn makes the proceedings more costly to them.... "The privilege conferred on a defendant of being sued in the county of his domicile is a valuable and substantial right which is not to be denied upon a strained or doubtful construction of a statutory exception or except in strict compliance with the law on clear and convincing proof, and all doubts are to be resolved in its favor."

Id. at 165-66, 183 A. 610 (citations omitted).

The legislature has provided statutory direction governing proper venue for disputes brought before Maryland courts. The general rule for venue is set forth in Md.Code (1974, 2002 Repl.Vol.) section 6-201 of the Courts & Judicial Proceedings Article ("CJ"), which states, in pertinent part

(a) Civil Actions.—Subject to the provisions of §§ 6-202 and 6-203 and unless otherwise provided by law, a civil action shall be brought in a county where the defendant resides, carries on a regular business, is employed, or habitually engages in a vocation. In addition, a corporation also may be sued where it maintains its principal offices in the State.

CJ sections 6-202 and 6-203 create exceptions to the general rule stated in section 6-201, none of which apply here. The rules as to the place where a defendant may be sued are applicable in equity as well as at law. See Eastham, 250 Md. at 518,

243 A.2d 559.

The defendant bears the burden of proving that venue is improper. See Odenton Dev. Co. v. Lamy, 320 Md. 33, 39, 575 A.2d 1235 (1990)

. "To meet the burden of proving improper venue, the defendant must do more than merely raise a `bare allegation that venue was improper, unsupported by affidavit or evidence.'" Pacific Mortgage & Inv. Group, Ltd. v. Horn, 100 Md.App. 311, 322-23, 641 A.2d 913 (1994) (citation omitted).

Lampros' Motion to Dismiss for Improper Venue was supported by affidavit. Lampros averred that he resides in Anne Arundel County and has resided there since 1979; he is not a resident of Montgomery County; and has "never been employed, conducted regular business or habitual avocation in Montgomery County as a continuous pursuit of some calling or profession." Lampros contends, therefore, that proper venue for this action for declaratory judgment is in his county of residence, Anne Arundel County.

Improper venue is a mandatory defense that must be raised by preliminary motion or it is waived. See Pacific Mortgage, 100 Md.App. at 323,

641 A.2d 913; see also Md. Rule 2-322(a)("The following defenses shall be made by motion to dismiss filed before the answer, if an answer is required ... (2) improper venue.... If not so made and the answer is filed, these defenses are waived").

When a court finds that a motion to dismiss or transfer for improper venue is justified, it must either dismiss the action or transfer the action to a court having proper venue. See Md. Rule 2-322(c)("In disposing of the motion, the court may dismiss the action or grant such lesser or different relief as may be appropriate"); Md. Rule 2-327(b)("If a court sustains a defense of improper venue but determines that in the interest of justice the action should not be dismissed, it may transfer the action to any county in which it could have been brought").

II.

Appellee's Arguments

A. Venue Is Proper In Montgomery County

Gelb contends that proper venue is in Montgomery County. It offers several arguments to support this theory. Gelb's declaratory judgment action was filed in response to the oral claim Lampros made for one-half of the contingency fee Gelb earned through representation of the Lewises. Claiming that Lampros would bear the burden of proof in a suit to collect the legal fee, Gelb posits, it is only "nominally the plaintiff" and Lampros is "nominally the defendant." He argues that it would be placing "form over substance" to require Gelb to file suit against Lampros in Anne Arundel County.

This argument is unpersuasive. Gelb cannot sidestep the critical fact that it is, in fact, the plaintiff and Lampros is, in fact, the defendant. CJ section 6-201(a)states, "a civil action shall be brought in a county where the defendant resides[.]" The Code provides no specific venue provisions for "nominal defendants." The venue provisions of the Code are clear.

"The privilege of a defendant to be sued only in the county of his residence is a substantial right not to be denied except in strict compliance with the exceptions established by law." Capron, 250 Md. at 260, 241 A.2d 892. All doubts concerning this privilege "are to be resolved in its favor." Allender, 170 Md. at 166, 183 A. 610. Nominal or not, a defendant's privilege to be sued in his or her home county can only be denied in accordance with the exceptions provided in CJ sections 6-202 and 6-203. Our review of those statutes reveals no exceptions applicable to this case.

Our judicial system affords plaintiffs significant rights. Plaintiffs decide whether to file suit, whom to sue, the specific claim(s) to litigate, when to file suit, and, in most cases, where to sue. Defendants' rights are more limited. Defendants have the right not to be forced to defend in courts distant from their home or place of business. Gelb's attempt to create a new category of party, the "nominal defendant," would, if this Court so held, eviscerate the defendants' right to a court of proper venue as defined by...