Marriott Corp. v. Village Realty & Inv. Corp., 1079

• Decision Date: 13 March 1984
• Docket Number: No. 1079,1079
• Citation: 58 Md.App. 145,472 A.2d 510
• Parties: MARRIOTT CORPORATION v. VILLAGE REALTY & INVESTMENT CORPORATION, et al. Sept. Term 1983.
• Court: Court of Special Appeals of Maryland

Page 145

58 Md.App. 145

472 A.2d 510

MARRIOTT CORPORATION v. VILLAGE REALTY & INVESTMENT CORPORATION, et al.

No. 1079 Sept. Term 1983.

Court of Special Appeals of Maryland.

March 13, 1984.

Burton A. Schwalb, Washington, D.C., with whom were Schwalb, Donnenfeld, Bray & Silbert, Washington, D.C., Francis E. Yeatman and Bradshaw, Thomas & Yeatman, Silver Springs, on the brief, for appellant.

John R. Young, West Palm Beach, Fla., with whom were Hamilton, James, Merkle & Young, West Palm Beach, Fla Janet S. Zigler and Brault, Graham, Scott & Brault, Washington, D.C., on the brief, for appellees.

Argued before WILNER, GARRITY and ALPERT, JJ.

WILNER, Judge.

Marriott Corporation (Marriott), which is headquartered in Maryland, purchased a tract of land in Orlando, Florida (the Barley tract), knowing that one or more Florida real estate brokers intended to claim a commission or finder's fee on the transaction. Marriott did not believe that it was liable for any such commission or fee, but if there was to be a fight about the matter, Marriott desired to have the bout scheduled in a Maryland arena.

No doubt anticipating, but without waiting for, an action by the Florida brokers, Marriott sought defensively to litigate the issue here through a declaratory judgment proceeding filed in the Circuit Court for Montgomery County.

The Declaration named as defendants four Florida residents: Village Realty & Investment Corporation (Village), Fred J. Eisler (Eisler), Earl A. Hollis, Inc. (Hollis), and Dean Chapman (Chapman). It alleged that: (1) Marriott contracted to purchase the Barley tract on September 17, 1982, and closed the transaction December 10, 1982; (2) the defendants claim a commission from Marriott on that transaction, but it is not certain "which [of them] will institute suit, whether they will do so together, and when or where they will do so"; and (3) Marriott "is entitled to a resolution of such claims with respect to all interested parties in order to avoid the lingering threat and the risk of conflicting claims." As relief, Marriott asked for a declaratory judgment that it did not agree to pay a commission to any of the defendants and that it is not "otherwise liable" to the defendants for any commission.

The four defendants responded with a motion raising preliminary objection based on lack of in personam jurisdiction. The court granted that motion and dismissed Marriott's Declaration. This appeal is from that action.

It is undisputed that none of the Florida defendants maintains an office in Maryland, employs agents in Maryland, or regularly engages in business here. The sole nexus of any of them with this State and the sole basis of jurisdiction posited by Marriott is this:

(1) Eisler is an agent for Village.

(2) Chapman is an agent for Hollis.

(3) Village and Hollis were "cobrokers" with respect to the Barley tract.

(4) In April, 1982, William Gilbert, a Marriott official, was in Florida negotiating the purchase of land in West Palm Beach. While there, he happened to meet Eisler and casually mentioned to him Marriott's interest in purchasing land in the Orlando area. After a telephone conversation with Chapman, Eisler suggested to Gilbert the Barley tract, with which Gilbert was already familiar. On April 14, Eisler called Gilbert and offered to bring him some additional information regarding the Barley tract; Gilbert suggested that Eisler simply mail the material--that personal delivery was unnecessary. Nonetheless, on April 20, Eisler came to Gilbert's office in Maryland and gave to Gilbert an aerial photograph and a proposed land use plan for the Barley tract.

(5) At that meeting, which was the only contact that any of the defendants had in Maryland, Eisler informed Gilbert that if Marriott purchased the tract, Eisler would look to Marriott for a commission, to which Gilbert responded that Marriott would not pay any such commission.

Upon this slender reed, Marriott asserts Maryland jurisdiction over the Florida defendants through what the defendants characterize as a "bad marriage" between the Maryland "long arm" statute (Md.Code Ann.Cts. & Jud.Pr. art., § 6-103) and the State Declaratory Judgment Act (Cts. & Jud.Pr. art., §§ 3-401--3-415).

It is important to note at the outset, and to keep firmly in mind throughout, that the issue before us in this appeal is not whether Marriott would ultimately be entitled to a declaratory judgment, i.e., whether if all parties were properly before the court, it would be appropriate for the court to declare their respective rights through the entry of a declaratory judgment. The question is strictly one of whether a Maryland court has in personam jurisdiction over the four Florida defendants.

As a preface to the consideration of that question, we note first that the Declaratory Judgment Act does not purport, and is not effective of itself, to confer in personam jurisdiction over nonresident parties. To the extent that it permits the adjudication of disputes prior to an actual transgression of a party's rights or status, the Act may perhaps be regarded as extending the subject matter jurisdiction of the circuit courts; but it does not serve to extend the court's reach over persons who are not otherwise properly subject to its authority.

Marriott concedes that jurisdiction over the defendants in this case arises, if at all, from the "long arm" statute--s 6-103--and the due process constraints that underlie it. There is no other basis of in personam jurisdiction. The initial focus, then, is on that statute. As the Court of Appeals pointed out in Geelhoed v. Jensen, 277 Md. 220, 224, 352 A.2d 818 (1976):

"Application of the long arm statute is a two-step process. First, it must be determined whether the statute purports to authorize the assertion of personal jurisdiction. And secondly, it must be determined whether an exercise of jurisdiction permitted by the statute violates the Due Process Clause of the Fourteenth Amendment."

See also Mohamed v. Michael, 279 Md. 653, 370 A.2d 551 (1977).

Section 6-103(a) provides that "[i]f jurisdiction over a person is based solely upon this section," which in this case it is, "he may be sued only on a cause of action arising from any act enumerated in this section." (Emphasis supplied.) Subsection (b) then lists six types of acts or activity from which Maryland jurisdiction may arise. It provides, in relevant part, that "[a] court may exercise personal jurisdiction over a person who, directly or by an agent ... (1) Transacts any business or performs any character of work or service in the State." ¹ Marriott contends that the "negotiations" conducted between Eisler and Gilbert in Maryland on April 20, 1982, suffice to constitute the transaction of business or performance of work or service in this State under § 6-103(b)(1).

The defendants' initial response to this argument is that by virtue of the emphasized language in § 6-103(a), ante, § 6-103(b) has no application to the case and can therefore afford no basis of jurisdiction. Section 6-103(a) permits jurisdiction "only on a cause of action arising from" an act enumerated in subsection (b); and upon this record, they say, Marriott has no cause of action arising from anything that transpired between Eisler and Gilbert. If there is a cause of action, they argue, it is theirs, not Marriott's.

That argument, we think, overlooks the proper function of the Declaratory Judgment Act, and is a bit too simplistic. The purpose of that Act, as stated in § 3-402, is "to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations," and to that end § 3-403(a) permits a circuit court to "declare rights, status, and other legal relations whether or not further relief is or could be claimed." As pointed out in Davis v. State, 183 Md. 385, 388, 37 A.2d 880 (1944), the primary purpose of the Act "is to relieve litigants of the rule of the common law that no declaration of rights may be judicially adjudged unless a right has been violated, and to render practical help in ending controversies which have not reached the stage where other legal relief is immediately available."

If the other jurisdictional prerequisites are met, a declaratory judgment proceeding may be brought defensively in anticipation of other litigation. Section 3-409(a) makes that clear when, with an exception not relevant here, it permits the granting of a declaratory judgment

"if it will serve to terminate the uncertainty or controversy giving rise to the proceeding, and if:

(1) An actual controversy exists between contending parties;

(2) Antagonistic claims are present between the parties which indicate imminent and inevitable litigation; or

(3) A party asserts a legal relation, status, right, or privilege and this is challenged or denied by an adversary party, who also has or asserts a concrete interest in it." (Emphasis supplied.)

The fact that Eisler's activity in Maryland would give Marriott no cause of action for damages or for traditional equitable relief does not, therefore, end the inquiry under § 6-103. If, as alleged, and indeed as ultimately became manifest through actions instituted against Marriott in Florida, ² "imminent and inevitable litigation" was indicated as the result of "a legal relation, status, right, or privilege" asserted by one party and "challenged or denied" by the other, Marriott would have a cause of action cognizable under the Declaratory Judgment Act "to settle and afford relief from uncertainty and insecurity with respect to" the controversy. It matters not, for purposes of § 6-103, that, after considering all of the relevant circumstances, the court would ultimately decline to enter a declaratory judgment. ³ Insofar as § 6-103 is concerned, the relevant inquiry is whether the court has authority to entertain the action in the first instance, not what its ultimate decision might be. ⁴

If the controversy...