Miletich v. Citimortgage, Inc., 010919 MDSCA, 1875-2017

Docket Nº:1875-2017
Opinion Judge:Wright, J.
Party Name:ALEXANDER MILETICH v. CITIMORTGAGE, INC.
Judge Panel:Wright, Arthur, Zarnoch, Robert A., (Senior Judge, Specially Assigned), JJ.
Case Date:January 09, 2019
Court:Court of Special Appeals of Maryland
 
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ALEXANDER MILETICH

v.

CITIMORTGAGE, INC.

No. 1875-2017

Court of Special Appeals of Maryland

January 9, 2019

Circuit Court for Anne Arundel County Case No. C-02-CV-16-001622

Wright, Arthur, Zarnoch, Robert A., (Senior Judge, Specially Assigned), JJ.

OPINION [*]

Wright, J.

This case arises out of an action for declaratory judgment filed by Citimortgage, Inc., appellee, against Alexander Miletich, III, appellant, as personal representative of the estate of Reiko Miletich, 1 in the Circuit Court for Anne Arundel County. Specifically, appellee requested that the court declare a mortgage, granted to Reiko Miletich by Richard Miletich2 on April 23, 1998, to have been satisfied and released. On November 1, 2017, the circuit court issued an order declaring that "the mortgage in favor of Reiko Miletich . . . was satisfied, released, and is of no further force or effect." Appellant appeals the court's order and presents the following questions for our review, which we have reworded for clarity:3

1. Whether the circuit court erred in finding that appellee's action for declaratory judgment was not barred by the statute of limitations, nor by laches?

2. Whether the circuit court erred in admitting documents created by a third party under the business records exception to the hearsay rule, in admitting testimony related to Richard Miletich's bankruptcy, or in considering certain documents not admitted into evidence?

3. Whether the circuit court erred in finding that appellee met its burden of proof to establish that appellant's loan was satisfied?

BACKGROUND

On April 23, 1998, Reiko Miletich provided Richard Miletich with a $90, 000.00 loan to facilitate his purchase of property located at 7 Leeward Court, Annapolis, Maryland, 21043. To secure the loan, Richard Miletich provided Reiko Miletich with a mortgage on the property.4 On May 31, 2005, Richard Miletich refinanced the property with a loan from C&F Mortgage Corporation ("C&F Mortgage") in the amount of $160, 000.00, and in return provided C&F Mortgage with a deed of trust to secure the loan.5 On August 23, 2010, C&F Mortgage assigned its interest in the property to appellee.

The loan from C&F Mortgage was intended to be used, in part, 6 to pay off the amount due to Reiko Miletich for her mortgage, so that C&F Mortgage's lien would have first priority. The parties dispute that Reiko Miletich's lien was ever satisfied. On May 13, 2016, appellee filed a complaint seeking a declaratory judgment that Reiko Miletich's mortgage was satisfied and released.7 At trial, neither party contested the fact that a certificate of satisfaction8 for Reiko Miletich's loan had not been filed, nor the fact that the check allegedly containing payment for Reiko Miletich's lien could not be produced. However, the parties presented opposing views on whether the lien had been satisfied.

Appellee averred that there was sufficient evidence for the circuit court to conclude that Reiko Miletich's lien had been satisfied. Appellee presented a handwritten note from Reiko Miletich to C&F Mortgage stating that a payment of $101, 609.51 would satisfy her lien on the property and release any related claims that she may have. According to testimony from the records custodian of Annapolis One Title, [9] Richard Miletich requested that the check for Reiko Miletich be sent to his address. In conjunction with this request, a disbursement statement from Annapolis One Title showed that $101, 609.51 was disbursed to Reiko Miletich on June 7, 2005, 10 and a United Parcel Service ("UPS") shipment receipt from the same date revealed that a package was sent from Annapolis One Title to Richard Miletich. The records custodian also testified that he was sure that the check to Reiko Miletich had been cashed. He explained that he knew this because he reconciled Annapolis One Title's bank statements each month to make sure there were no discrepancies between money received and money distributed. Separately, as further evidence that the lien had been paid, appellee produced a copy of the inventory report that appellant filed in the Register of Wills for Anne Arundel County on July 21, 2017, wherein appellant listed $0 in mortgages due to Reiko Miletich's estate.

Appellant, in response, argued that there was not sufficient evidence to conclude that Reiko Miletich's lien was satisfied. Specifically, appellant contended that since the check allegedly containing payment to Reiko Miletich could not be located, and since no certificate of satisfaction was ever filed, there was not conclusive evidence for the circuit court to determine that Reiko Miletich received funds to satisfy her lien on the property. Finally, appellant asserted that appellee's claim was barred by either the statute of limitations or by laches, as C&F Mortgage made its loan to Richard Miletich nearly twelve years prior to the date on which suit was filed.

At the conclusion of the trial, the circuit court found that there was "no doubt" that the check was cashed, and that the request for declaratory relief was not barred by the statute of limitations or laches because the disposition of Reiko Miletich's estate was "still ongoing." The court subsequently issued an order on November 1, 2017, in which it granted relief in favor of appellee and ordered "that the mortgage in favor of Reiko Miletich . . . was satisfied, released and is of no further force or effect as of May 31, 2005[.]" Appellant appeals the circuit court's order to this Court.

Additional facts will be included as they become relevant to our discussion below.

STANDARD OF REVIEW

Md. Rule 8-131(c) governs the scope of appellate review for non-jury trials. Specifically, the Rule states: When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.

This Court has further explained the standard of review for non-jury trials as follows: [U]nder the clearly erroneous standard, this Court does not sit as a second trial court, reviewing all the facts to determine whether an appellant has proven his case. Our task is limited to deciding whether the circuit court's factual findings were supported by substantial evidence in the record: The appellate court must consider evidence produced at the trial in a light most favorable to the prevailing party and if substantial evidence was presented to support the trial court's determination, it is not clearly erroneous and cannot be disturbed.

Although the factual determinations of the circuit court are afforded significant deference on review, its legal determinations are not. The clearly erroneous standard for appellate review in [Md. Rule 8-131(c)] . . . does not apply to a trial court's determinations of legal questions or conclusions of law based on findings of fact. Instead, . . . where the order involves an interpretation and application of Maryland statutory and case law, our Court must determine whether the lower court's conclusions are "legally correct" under a de novo standard of review.

L.W. Wolfe Enterprises, Inc. v. Maryland National Golf, L.P., 165 Md.App. 339, 343-44 (2005) (internal citations and quotations omitted).

DISCUSSION

I.

Appellant avers that appellee's request for declaratory judgment should be barred by both the statute of limitations and by laches. First, appellant claims that the three-year statute of limitations established by Md. Code (1973, 2013 Repl. Vol.), Courts & Judicial Proceedings ("CJP") § 5-101 applies to this suit. Appellant asserts that the three-year period began to run on May 31, 2005, the date on which Reiko Miletich's loan was settled. Since appellee did not bring its request for declaratory relief until May 13, 2016, appellant contends that the request should be barred by the statute of limitations. Finally, appellant argues that even if appellee is seeking equitable relief, such that laches would apply, appellee's claim should still be barred because the appellee failed to file the suit during the same three-year period.

In response, appellee relies on Md. Code (1974, 2010 Repl. Vol), Real Property Article ("RP") § 7-106(c)11 and contends that the right of an interested party to prove payment of the lien should be "co-extensive with the [m]ortgagee's right to enforce a lien." Since appellant, in his capacity as personal representative of Reiko Miletich's estate would have until April 1, 2040, to enforce the mortgage, appellee argues that its right to prove payment should exist at least until that date. Appellee concludes that regardless of whether its...

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