Monarc v. Aris

• Citation: 188 Md. App. 377,981 A.2d 822
• Decision Date: 05 October 2009
• Docket Number: No. 1584, Sept. Term, 2008.,1584, Sept. Term, 2008.
• Parties: MONARC CONSTRUCTION, INC. v. ARIS CORPORATION et al.
• Court: Court of Special Appeals of Maryland

981 A.2d 822

188 Md. App. 377

MONARC CONSTRUCTION, INC. v. ARIS CORPORATION et al.

No. 1584, Sept. Term, 2008.

Court of Special Appeals of Maryland.

October 5, 2009.

Gerald I. Katz (Adam J. Kwiatkowski, Owen S. Walker, Katz & Stone LLP, on brief), Vienna, VA, for Appellant.

Richard Daniels (Daniels & Daniels LLC, on brief), College Park, (Glen H. Silver, Silver & Brown, PC, on brief), Fairfax, VA, for Appellee.

Panel: DAVIS, SALMON and JAMES R. EYLER, JJ.

DAVIS, J.

Appellant, Monarc Construction, Inc. (Monarc), appeals from the grant of the Motion To Dismiss of appellees, Aris Corporation, (Aris), J. Carlos Fuentes (Fuentes) and Amalia Fernandez a/k/a Amalia Fuentes (Fernandez) by the Circuit Court for Montgomery County. The genesis of this appeal is appellant's claim for breach of a Settlement Agreement and Mutual Release (Settlement Agreement) entered into between the parties on January 31, 2005. On March 7, 2008, appellant filed suit in the Circuit Court for Montgomery County to recover damages, including attorneys' fees and costs incurred in the prosecution and collection of a judgment entered against appellees, pursuant to the Settlement Agreement between the parties.

On May 22, 2008, appellees filed a Motion to Dismiss, alleging that the Settlement Agreement merged into prior judgments obtained by appellant and that, as such, there was no legal basis for appellant's claim to attorney's fees. After a July 10, 2008 hearing on the Motion to Dismiss, the circuit court (Rubin, J.) granted appellees' Motion to Dismiss. Appellant filed a Motion to Alter or Amend Judgment, which was denied by the circuit court on August 13, 2008. Appellant filed this timely appeal and presents the following questions,¹ which we have condensed and reworded, for our review I. Did the trial court err in dismissing appellant's claim for attorney's fees, when that claim was based on a provision for attorney's fees contained in the Settlement Agreement that merged into a prior judgment of the court?

II. Did the trial court erroneously apply the doctrines of res judicata and collateral estoppel to bar appellant's claim for attorney's fees based on a judgment obtained in a Virginia state court?

For the reasons that follow, we answer the first question in the negative and decline to address the merits of the second issue. Accordingly, we affirm the judgments of the trial court's dismissal of appellant's complaint.

FACTUAL & PROCEDURAL BACKGROUND

For purposes of our review of the trial court's decision to grant appellees' Motion to Dismiss, we shall set forth the facts as averred in appellant's complaint.

On December 28, 2001, the parties entered into a subcontract agreement (the Subcontract), under which appellees agreed to perform work on the construction of the North Arcade and Spanish Ballroom at Glen Echo Park located in Montgomery County, Maryland. As a result of disputes between appellant and appellees, two suits were filed in the Circuit Court for Montgomery County. On January 31, 2005, the parties entered into a Settlement Agreement aimed at resolving their disputes. Accordingly, the parties agreed, inter alia, to dismiss the litigation.

The Settlement Agreement, however, did not signify the end of litigation between the parties. Appellant alleged that appellees failed to perform their obligations under the Settlement Agreement and sued appellees for breach of the Settlement Agreement. As a result, appellant obtained a default judgment against appellees on June 28, 2006, in the amount of $184,574.70. The June 28, 2006 order does not differentiate between compensatory damages and attorney's fees. Appellant concedes, however, that (1) the basis of the suit was appellees' breach of the Settlement Agreement, (2) the judgment included attorney's fees incurred by appellant through the date of judgment and (3) attorney's fees were recoverable under Paragraph 15 of the Settlement Agreement, which provided:

This Agreement shall be construed according to and governed by the laws of the State of Maryland, exclusive of any provisions relating to the conflicts of laws. The Parties agree and acknowledge that if any term or condition of this Agreement is breached or requires enforcement, any party may seek an appropriate remedy in a court of law. The Parties further agree and acknowledge that the Circuit Court for Montgomery County, Maryland is the correct venue and shall have sole jurisdiction to enforce this Agreement, and the Parties agree that they each submit to the personal jurisdiction of that Court as an express term and condition of this Agreement. The Parties agree and acknowledge that any party may seek the equitable remedy of specific performance of this Agreement, including any injunctions or restraining orders necessary to effectuate the terms and conditions of this Agreement. In the event that any party is required to enforce the terms or conditions of this Agreement in court, the prevailing party shall recover all costs and expenses incurred in or arising from such action, including reasonable attorney's fees.

(Emphasis added).

When satisfaction of the June 28, 2006 judgment by appellees was not forthcoming, appellant recorded the judgment in the Circuit Court for Fairfax County, Virginia, a county in which appellees Fuentes and Fernandez owned real property. Appellant then instituted suit against Fuentes and Fernandez in the Fairfax County Circuit Court, seeking an order from that court decreeing the sale of the real property owned by Fuentes and Fernandez in order to satisfy the judgment obtained in Montgomery County. Appellant also sought attorney's fees in that Fairfax County litigation. On December 20, 2007, the Fairfax County Circuit Court issued a decree ordering a judicial sale of appellees' property to satisfy appellant's judgment lien. The initial decree, which included an award of attorney's fees incurred by appellant in its effort to enforce the June 28, 2006 judgment, was later modified to remove the attorney's fees award, upon the filing of appellees' motion to vacate and/or reconsider the decree of sale in the Fairfax County Circuit Court arguing, inter alia, that (1) appellant had failed to provide notice in its complaint that it would seek attorney's fees and (2) that the June 28, 2006 Montgomery County judgment did not provide for attorney's fees. Appellees, on February 21, 2008, remitted payment in satisfaction of the judgments against them in the amount of $211,739.11, an amount which reflected the principal due on the judgment plus accrued interest, court costs and commissioners' fees.

Thereafter, in an attempt to recover attorneys' fees and related costs incurred by appellant after the date of the original June 28, 2006 Maryland judgment, appellant filed the instant suit in the Circuit Court for Montgomery County. On May 22, 2008, appellees responded by filing a Motion to Dismiss, which recited the procedural history relevant to the June 28, 2006 Montgomery County judgment and the December 20, 2007 Fairfax County judgment and asserted that, as a matter of law, the Settlement Agreement merged into the prior judgments, such that appellant's suit on the Settlement Agreement could not be brought for purposes of recovering additional attorney's fees. Appellant, in response, filed its opposition to the Motion to Dismiss. During the course of the hearing on appellees' Motion to Dismiss on July 10, 2008, the trial court questioned the parties as to the rule of merger and the effect of the Fairfax County Circuit Court's ruling on appellant's attorney's fees claim. On July 10, 2008, by way of order entered on July 17, 2008, the circuit court granted appellees' Motion to Dismiss.

Appellant subsequently filed a Motion to Alter or Amend Judgment, pursuant to Maryland Rule 2-534, focusing principally on what appellant perceived to be an issue raised sua sponte by the trial court, pertaining to the preclusive effect of the Virginia court's ruling on appellant's subsequent endeavor to recover attorney's fees. On August 13, 2008, the circuit court denied appellant's Motion to Alter or Amend Judgment. This timely appeal followed. Additional facts will be set forth, as necessary, throughout the remainder of our discussion.

STANDARD OF REVIEW

Although appellant's brief is not entirely clear on this point, appellant appears to attack both the circuit court's July 10, 2008 order granting appellees' Motion to Dismiss appellant's complaint and the August 13, 2008 order denying its Motion to Alter or Amend Judgment.

We review de novo a trial court's granting of a motion to dismiss. Gasper v. Ruffin Hotel Corporation of Maryland, Inc., 183 Md.App. 211, 226, 960 A.2d 1228 (2008), cert. granted, Ruffin Hotel v. Gasper, 408 Md. 149, 968 A.2d 1064 (2009). In that review, "we must assume the truth of the well-pleaded factual allegations of the complaint, including the reasonable inferences that may be drawn from those allegations." Adamson v. Correctional Medical Services, Inc., 359 Md. 238, 246, 753 A.2d 501 (2000) (citations omitted). Ultimately,

"dismissal is proper only if the alleged facts and permissible inferences, so viewed, would, if proven, nonetheless fail to afford relief to the plaintiff." In sum, because we must deem the facts to be true, our task is confined to determining whether the trial court was legally correct in its decision to dismiss.

Adamson, 359 Md. at 246, 753 A.2d 501 (internal citations omitted).

By contrast, in an appeal, as in the case sub judice, in which a party files a Motion to Alter or Amend Judgment pursuant to Maryland Rule 2-534, we review an order denying such motion under an abuse of discretion standard. Wells v. Wells, 168 Md.App. 382, 394, 896 A.2d 1082 (2006) (citing, inter alia, Benson v. State, 389 Md. 615, 653, 887 A.2d 525 (2005)); Prince George's County v. Hartley, 150 Md.App. 581, 586, 822 A.2d 537 (2003) (citations omitted).

Moreover,

an appellate court will...