Maicobo Investment Corporation v. Von Der Heide

• Decision Date: 15 July 1965
• Docket Number: Civ. No. 15418.
• Citation: 243 F. Supp. 885
• Parties: MAICOBO INVESTMENT CORPORATION (a District of Columbia Corporation) v. Nomita VON DER HEIDE and Amalia de M. Riggs, and Carl M. Freeman and Ellis M. Jones.
• Court: U.S. District Court — District of Maryland

243 F. Supp. 885

MAICOBO INVESTMENT CORPORATION (a District of Columbia Corporation) v. Nomita VON DER HEIDE and Amalia de M. Riggs, and Carl M. Freeman and Ellis M. Jones.

Civ. No. 15418.

United States District Court D. Maryland.

July 15, 1965.

Allen A. Sperling, Silver Spring, Md., for plaintiff.

D. Heyward Hamilton, Jr., Baltimore, Md., for defendants Von Der Heide, Riggs and Jones.

Franklin G. Allen and Robert B. Barnhouse, Baltimore, Md., for defendant Freeman.

THOMSEN, Chief Judge.

The several defendants have moved to dismiss portions of the amended complaint in this case and for a summary judgment with respect to other portions. The facts relied on in support of or in opposition to the motions for summary judgment are matters of record in a previous State court proceeding. The issues will be more clearly understood if those facts and the facts alleged in the amended complaint are stated first.

Facts

Under date of August 6, 1960, plaintiff (Maicobo) and two of the defendants herein, Nomita Von Der Heide and Amalia de M. Riggs (Von Der Heide and Riggs) entered into an agreement whereby those defendants agreed to sell and Maicobo agreed to buy "the Von Der Heide property of approximately 315 acres on Maryland Route 97 North of Olney with frontage on both sides of Georgia Avenue and one side of Laytonsville Road", in Montgomery County, Maryland, for a total price of $775,000, of which $300,000 was to be paid at the date of conveyance and the balance of $475,000 was to be a first deed of trust assumed by the purchaser.

A title report on the property ordered by Maicobo after the execution of the sales contract indicated that the property consisted of 273 acres rather than 315 acres, and further indicated the existence of rights of way owned by others over approximately 20 acres of the property.

Maicobo delivered the $25,000 deposit required by the contract and made timely tender of further performance, but with a reduction in the total purchase price proportionate to the reduction in acreage. Von Der Heide and Riggs refused to settle on the basis of any reduction in the purchase price, contending that the sale was a sale in gross; on the day appointed for settlement they tendered a deed for the property in exchange for the consideration specified in the contract, but Maicobo refused to settle on that basis.

On April 1, 1962, Maicobo filed a bill of complaint for specific performance against Von Der Heide and Riggs in the Circuit Court for Montgomery County, Maryland, sitting as a Court of Equity. The bill alleged the facts set out above, described the property in detail, and prayed that Von Der Heide and Riggs be directed to execute and deliver to Maicobo a good and sufficient deed for the property in exchange for a purchase price "reduced proportionately to the reduction in the size of the premises as described in the contract between the parties", and for such other and further relief as the nature of the case might require. An answer was duly filed, the case came on for trial, and evidence was taken before Judge Shook, who entered a decree dismissing the case, after finding that the contract between the parties introduced in evidence "represents a sale in gross, is free of ambiguity and, therefore, parole evidence to vary its terms is inadmissible and the Solicitor for the Plaintiff having stated to the Court that unless the Plaintiff was permitted to introduce proffered evidence which the Court held to be inadmissible he could not proceed with the prosecution of the plaintiff's cause".

Maicobo entered an appeal to the Court of Appeals of Maryland on May 9, 1963, but never filed any supersedeas bond or similar undertaking. The appeal was docketed in the Court of Appeals and was duly briefed and argued.

On November 20, 1963, while the case was being held sub curia by the Court of Appeals, Von Der Heide and Riggs entered into a contract of sale of the property to Carl M. Freeman, one of the defendants herein. On January 15, 1964, while the case was still sub curia, Von Der Heide and Riggs filed a motion under Maryland Rule 835 b (7) to dismiss the appeal as moot. The motion alleged the agreement with Freeman, a copy of which was attached to the motion, alleged that the settlement thereunder was scheduled for that day (January 15), and alleged that no supersedeas bond had ever been filed by Maicobo. The allegations of the motion were supported by an affidavit of appellee Riggs. On the next day, January 16, Ellis M. Jones, also a defendant herein, made an affidavit, of which the original was sent to the Court of Appeals and a copy to counsel for Maicobo. In the affidavit Jones stated that he was the settlement attorney named in the contract of sale from Von Der Heide and Riggs to Freeman, and that on January 15, 1964, the sellers and the buyer appeared at his office, "the sellers delivered a duly executed, special warranty deed for the property", and "the purchaser tendered the purchase price in cash as called for in said contract, together with the notes and deed of trust securing the same for the full balance of the purchase price named."

On January 21, 1964, appellant Maicobo, through its then counsel, filed an answer to the motion to dismiss the appeal, claiming that the motion was not timely filed, and "that to permit the filing of the Motion at this point, with the appeal on its merits having long since been briefed and argued, would deny the Appellant any opportunity of inquiring into the genuineness of the alleged mootness; the Appellant would be denied cross examination, discovery, and oral argument". He alleged that the record on appeal "is completely silent on any matters bearing on the alleged mootness. What `record' there is consists entirely of self-serving affidavits and papers, seen for the first time by the Appellant upon receipt of the Motion to Dismiss". The answer further claimed that Freeman was not a bona fide purchaser. Authorities were cited in support of both positions taken by Maicobo.

Notwithstanding those arguments the Court of Appeals entered the following order:

"Upon consideration of the motion filed by the appellees in this cause, together with the exhibits filed therewith, having been read and considered, and it appearing from the same that this cause has become moot, it is, thereupon, this 13th day of February, 1964, by the Court of Appeals of Maryland, ordered, that the appeal in this cause be and the same is hereby dismissed, with costs to be paid by the appellant."

Thereupon counsel who had represented Maicobo up to that time withdrew his appearance, and Maicobo's present counsel entered his. He promptly filed a petition to reconsider and vacate the dismissal of the appeal and for stay of the mandate, contending that the motion to dismiss had been granted in error, in that the Court of Appeals had power to affect the purpose of the suit by its decision, and the matter was therefore not moot. He argued:

"The case was apparently dismissed because, no stay of execution having been obtained by the posting of a supersedeas bond, appellees were able to make a valid conveyance of the property to a third party, and, with the property no longer in the hands of the appellees, it was the opinion of the Court that, regardless of the merits of the appeal, appellant could no longer get the remedy it wanted, namely specific performance.

"Appellant respectfully contends that, although it was not entitled to a stay of execution without posting a supersedeas bond, it nevertheless could not be stripped of certain rights it had under the doctrine of lis pendens, and because of those rights the appeal could not become moot through a conveyance pendente lite."

Counsel supported his argument by a discussion of many decisions in Maryland and elsewhere, but did not claim or argue that the dismissal was obtained by fraud. The motion to reconsider and vacate was denied by the Court of Appeals.

The Proceedings Herein

Shortly thereafter Maicobo filed its original complaint in this Court against Von Der Heide and Riggs, based upon the alleged breach of the contract of sale between the parties and claiming $300,000 damages. Later, on its claim that it had just learned or become aware of certain facts, Maicobo was granted leave to file and filed an amended complaint, which added Freeman and Jones as defendants. It contains three counts:

Count I alleges in paragraphs 1-6 substantially the same facts alleged in the bill of complaint filed in the Circuit Court for Montgomery County, and summarized in the first three paragraphs under the heading "Facts" in this opinion. Count I then alleges:

"As a result of the wrongful refusal of defendants Von Der Heide and de M. Riggs to settle on the contract, plaintiff has sustained damages in the amount of three hundred thousand dollars ($300,000)."

Count II re-alleges paragraphs 1-6 of Count I, alleges the proceedings in the Court of Appeals of Maryland, set out above, and then alleges and demands as follows:

"13. The January 15, 1964 settlement of the sales contract between defendants Von Der Heide and de M. Riggs, vendors, and defendant Freeman, vendee, at which defendant Ellis M. Jones was settlement attorney, and the conveyance thereunder, were not fully performed as of such date, but were conditioned in fact and in law upon a successful termination of the aforementioned litigation pending in the Maryland Court of Appeals, and were completed and made absolute only after such termination.

"14. The defendants did deliberately and knowingly act in concert to effect and did effect the aforementioned conditional and incomplete settlement, for the specific purpose of representing same as a completed and unconditional settlement and conveyance and to thereby wrongfully use same as the basis of a motion to dismiss the appeal then pending in the Maryland Court of Appeals.

"15. By virtue of the aforementioned incomplete settlement and

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