Mount Vernon v. Branch

• Decision Date: 14 September 2006
• Docket Number: No. 399, September Term, 2005.,399, September Term, 2005.
• Citation: 170 Md. App. 457,907 A.2d 373
• Parties: MOUNT VERNON PROPERTIES, LLC v. BRANCH BANKING AND TRUST COMPANY t/a BB & T.
• Court: Court of Special Appeals of Maryland

Page 373

907 A.2d 373

170 Md. App. 457

MOUNT VERNON PROPERTIES, LLC v. BRANCH BANKING AND TRUST COMPANY t/a BB & T.

No. 399, September Term, 2005.

Court of Special Appeals of Maryland.

September 14, 2006.

Troy C. Swanson, Bel Air, for appellant.

Dennis P. McGlone (G. Brooks Liswell, Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, on brief), Baltimore, for appellee.

Panel DAVIS, EYLER, JAMES R., MEREDITH, JJ.

MEREDITH, J.

Mount Vernon Properties, LLC ("Mount Vernon" or appellant) appeals a summary judgment granted by the Circuit Court for Baltimore City in favor of Branch Banking and Trust Company ("BB & T" or appellee). Mount Vernon is a mortgage lender and the drawer of a check drawn on its account at BB & T, made payable to Classic Title Company ("Classic") in the amount of $32,993, for a real estate closing. Mount Vernon gave possession of the check to Ernie Francis, who engaged in a series of transactions that resulted in Mount Vernon having its BB & T account debited for the $32,993 check, but not receiving the mortgage lien it expected. In the transactions at issue, Francis evidently took the $32,993 check, drawn by Mount Vernon and payable to Classic, to BB & T, the drawee of the check, and exchanged it for a teller's check drawn by BB & T, payable to the same payee in the same amount.

The issue at the heart of this appeal is whether BB & T was entitled to judgment that, as a matter of law, BB & T properly charged Mount Vernon's account for $32,993.¹ Because there are genuine disputes of fact that are material to the resolution of the liability issues raised by Mount Vernon in three of the four counts in the complaint, we shall vacate the judgment of the circuit court on the counts of strict liability under the Maryland Commercial Code, breach of contract, and negligence, and remand the case for further proceedings. We shall, however, affirm the judgment of the circuit court on the count alleging breach of the duty of good faith and fair dealing because no such independent cause of action exists in Maryland. Because we are remanding the case for further proceedings, we need not address the other questions raised by the parties.

Facts and Procedural Background

With the notable exception of the nature of the role that Francis played in these transactions and the nature of Francis's relationship with Mount Vernon, the facts are straightforward and undisputed. During January 2004, Mount Vernon was approached by Ernie Francis about lending money to Thomas Jackson to enable Jackson to buy property. Francis appears to have represented himself as an agent of ASMC, LLC, a mortgage broker unrelated to Mount Vernon. Mount Vernon agreed to provide short term financing to Jackson.

On April 6, 2004, Mount Vernon drew a check on its account at BB & T in the amount of $32,993 (the "Mount Vernon Check"). The Mount Vernon Check was made payable to Classic, the title company that was handling the settlement on Jackson's real estate purchase. Under circumstances that are not made clear in the documents in the record, Mount Vernon gave the check to Francis to deliver to Classic. Mount Vernon alleged in the complaint: "Plaintiff gave the [Mount] Vernon Check to Francis to deliver to Classic Title who was to conduct the closing on the Property [being purchased by Jackson]." Although BB & T argues that Francis must have been either an impostor for the payee or an employee of Mount Vernon, neither party filed any affidavit or other evidentiary material that clarified the circumstances under which Francis came into possession of the Mount Vernon Check.

Mount Vernon is the only party involved in this case that had an account at BB & T; neither Classic, nor Francis, nor ASMC had a banking relationship with BB & T. In an affidavit, Classic's president stated that Francis had no authority to indorse the BB & T Check on behalf of Classic, but the affidavit made no mention of the Mount Vernon Check that was used to acquire the BB & T check.

There is little dispute, however, regarding what Francis did with the Mount Vernon Check that was payable to Classic. Rather than deliver the check to Classic, Francis instead took the check to a BB & T branch office, apparently forged the indorsement of Classic on the check, and exchanged the Mount Vernon Check for a "teller's check" drawn by BB & T (the "BB & T Check") payable to Classic in the same amount as the Mount Vernon Check ($32,993).² BB & T charged Mount Vernon's account for $32,993.

Francis next took the BB & T Check to Wachovia Bank, where he apparently again forged Classic's indorsement. Presumably at Francis's request, Wachovia deposited the check into ASMC's Wachovia account. On April 14, 2004, Wachovia issued to Francis an "official check" in the amount of $27,666 (the "Wachovia Check"), again payable to Classic, and $5,327 remained in ASMC's account at Wachovia.

Francis next delivered the Wachovia Check in the amount of $27,666 to Classic, and Jackson's purchase of the property settled. It appears, however, that Francis caused the mortgage documents to be altered to make ASMC, rather than Mount Vernon, the mortgagee of the property which Mount Vernon had understood it was financing for Jackson. As a result of Francis's actions, when the Jackson settlement was concluded, Mount Vernon had been charged $32,993, ASMC had $5,327 of Mount Vernon's funds in its account at Wachovia, and Jackson owed $27,666 on a mortgage to ASMC, rather than to Mount Vernon.

Mount Vernon filed suit against BB & T alone, seeking to recover the amount of its check ($32,993) plus prejudgment interest, and asserting four alternative theories in four counts: strict liability under the Maryland Commercial Code, breach of contract, negligence, and breach of the duty of good faith and fair dealing. BB & T answered the complaint by filing a "Motion to Dismiss or in the Alternative for Summary Judgment." Mount Vernon filed a "Cross Motion for Summary Judgment and Response to Defendant's Motion to Dismiss or in the Alternative for Summary Judgment."

After the parties filed additional papers, the circuit court granted summary judgment in favor of BB & T. The circuit court subsequently denied Mount Vernon's Motion to Alter or Amend Judgment. Mount Vernon appealed.

Analysis

I. The standard of review

Our task in reviewing the grant of a motion for summary judgment is to conduct a de novo review of the motion and response to determine whether they "show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law." Maryland Rule 2-501(f). We summarized the standard for appellate review of a court's grant of summary judgment in Meeks v. Dashiell, 166 Md.App. 415, 426-27, 890 A.2d 779, cert. granted, 393 Md. 245, 900 A.2d 751 (2006), in which we stated:

When a motion court grants a motion for summary judgment, we first review the record to determine whether there was a genuine dispute as to any material fact. In making that assessment, all facts, including all reasonable inferences therefrom, must be viewed in a light most favorable to the non-moving party. Teamsters v. Corroon Corp., supra, 369 Md. [724, 728, 802 A.2d 1050 (2002)]. Unless the dispositive facts are free from genuine dispute, the motion court must deny the motion. Frederick Road v. Brown & Sturm, 360 Md. 76, 93-94, 756 A.2d 963 (2000); Pittman v. Atlantic Realty, 359 Md. 513, 537-39, 754 A.2d 1030 (2000). "In reviewing the propriety of [a judgment granting] a summary judgment motion, we cannot consider evidence or claims asserted after the motion court's ruling." Mayor and City Council of Baltimore v. Ross, 365 Md. 351, 361, 779 A.2d 380 (2001). See also Flaherty v. Weinberg, 303 Md. 116, 139 n. 9, 492 A.2d 618 (1985) (appellate court disregards documents that were not before the court at the time of the ruling on the demurrer "[r]egardless of the persuasiveness of the documents"). Cf. Maryland Rule 2-501(f) ("The court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.") (emphasis added).

The Court of Appeals similarly explained in Matthews v. Howell, 359 Md. 152, 161, 753 A.2d 69 (2000):

The purpose of the summary judgment procedure is not to try the case or to decide the factual disputes, but to decide whether there is an issue of fact, which is sufficiently material to be tried. [Citations omitted.] In reviewing the grant of a summary judgment motion, we are concerned with whether a dispute of material fact exists and, if not, whether the movant is entitled to judgment as a matter of law.

See King v. Bankerd, 303 Md. 98, 111, 492 A.2d 608 (1985)("A material fact is a fact the resolution of which will somehow affect the outcome of the case.").

As we explain below, because there is a genuine dispute as to a material fact — namely, the role that Francis played in the scheme — we conclude that the circuit court improperly granted summary judgment on the counts of strict liability under the Maryland Commercial Code, breach of contract, and negligence. Mount Vernon contends that Francis was neither an "impostor" of Classic nor an employee of Mount Vernon, while BB & T asserts the exact opposite. Because, as we explain below, the outcome of each of these three counts in Mount Vernon's complaint depends upon whether Francis was, or was not, either an impostor of Classic or an employee of Mount Vernon, Francis's role and relationship to Mount Vernon are disputed material facts, and summary judgment should not have been entered for BB & T. We also note that the facts surrounding BB & T's acceptance of the check on which Classic's indorsement was forged were not sufficiently developed in the record for the court to rule as a matter of law...