One Thousand Fleet Ltd. Partnership v. Guerriero

• Decision Date: 01 September 1996
• Docket Number: No. 54,54
• Parties: ONE THOUSAND FLEET LIMITED PARTNERSHIP v. John GUERRIERO et al. ,
• Court: Maryland Court of Appeals

Page 29

346 Md. 29

694 A.2d 952

ONE THOUSAND FLEET LIMITED PARTNERSHIP v. John GUERRIERO et al.

No. 54, Sept. Term, 1996.

Court of Appeals of Maryland.

June 12, 1997

Neil J. Ruther, Baltimore, for appellant.

Harry Levy, Robert B. Schulman, Andrew H. Levine, Schulman, Treem, Kaminkow & Gilden, P.A., Baltimore; Gerald R. Walsh (Gerald R. Walsh, P.A.; Richard B. Stofberg, Law Offices of Arthur Drager, all on briefs), Baltimore, for appellees.

Argued before BELL, C.J., and ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI, RAKER and WILNER, JJ.

RAKER, Judge.

This appeal involves the torts of malicious use of process and abuse of process. We must decide whether Appellant One Thousand Fleet Limited Partnership may maintain suit for malicious use of process and abuse of process against Appellees John Guerriero, Richard Ingrao, and the Little Italy Community Organization based on lawsuits filed by Ingrao and the Little Italy Community Organization challenging the zoning modification and issuance of building permits for a real estate development project undertaken by Appellant in Baltimore's Little Italy neighborhood. The Circuit Court for Baltimore City dismissed Appellant's two-count complaint against Appellees. We shall affirm.

The Parties

Appellant One Thousand Fleet Limited Partnership ("Fleet") is a Maryland limited partnership engaged in real estate development in Baltimore City. Appellee John Guerriero is a property owner in Baltimore's Little Italy neighborhood. Appellee Richard Ingrao is also a property owner in Little Italy and, at the time of most of the events in question here, was president of the Little Italy Community Organization ("Community Organization"). The Community Organization, also an appellee, is a non-profit corporation formed to further the interests of the residents and businesses of the Little Italy neighborhood.

The Project

In the summer of 1992, Fleet began negotiations to purchase an abandoned furniture warehouse, the Bagby Furniture building, located at 509-521 South Exeter Street in Baltimore City. Fleet intended to convert the building to an apartment building containing fifty-seven apartments. The Community Organization initially supported the project. In a letter dated March 15, 1993, Ingrao, on behalf of the Community Organization, wrote a letter to Fleet's predecessor ¹ informing Fleet that "[t]he community overwhelmingly approved the conversion of the building into 56 apartment units." ² The letter contained certain Community Organization demands concerning parking, the height of the building, the management of the property, and the zoning modifications that Fleet would be required to obtain.

On April 1, 1993, Fleet reached an agreement of sale with the owners of the Bagby Furniture building to purchase the building for one million dollars. In order to develop the property as an apartment building, it was necessary to obtain a rezoning of the property from heavy industrial to a residential classification. The Mayor and City Council of Baltimore approved the zoning change on July 2, 1993. Fleet also applied for conditional use authority from the Board of Municipal and Zoning Appeals ("the Board") of the City of Baltimore. Conditional use authority from the Board was necessary in order to use the building as apartments. The Board approved the conditional use authority on November 30, 1993.

After it cleared the zoning hurdles, Fleet sought and received financial commitments for the project from various federal, state, and local entities. As a condition of state and local funding, Fleet was required to reserve ten apartment units in the planned residential facility for persons of moderate income. Fleet alleges that at this point the Community Organization's support for the project evaporated. According to Fleet, the public financing was discussed at several public meetings and opposition to the project became intense. Fleet alleges in its complaint that racism motivated the opposition and that at one of the meetings, Guerriero stated that he opposed the project because "it would attract residents of African-American descent" to the neighborhood; Guerriero suggested that a lawsuit should be filed to prevent further development of the project. Fleet further alleges that at this meeting, Guerriero also offered to fund a lawsuit to stop the project, although he did not wish to have his name associated with the lawsuit.

On April 5, 1995, counsel for Guerriero sent a letter to Glenn Charlow of the Manekin Corporation, the Bagby Furniture Company's realtor. In the letter, Guerriero offered to purchase the property for $300,000 cash. The record does not reflect whether Mr. Charlow responded, but Guerriero's offer apparently was not accepted as Fleet ultimately succeeded in purchasing the building for the agreed upon one million dollars.

The Underlying Law Suits

The Community Organization and Ingrao filed four lawsuits against the Board and the Mayor and City Council of Baltimore. ³ The lawsuits challenged the Board's extension of the conditional use authority, the City's issuance of the building permit, and the City's rezoning of the Bagby Furniture building. Fleet was not named as a defendant in any of the four lawsuits filed by Gerald R. Walsh, counsel for the Community Organization and Ingrao. Fleet sought to intervene in these four actions and to consolidate the cases. The circuit court (Rombro, J.) granted Fleet's motion to intervene and ordered the cases consolidated. The court also agreed to shorten the time to file pleadings and motions, finding that the lawsuits could jeopardize Fleet's financing if allowed to run their normal course.

On June 8, 1995, the circuit court dismissed all four lawsuits, concluding that the Community Organization and Ingrao lacked standing to assert the claims contained in the four actions. The Community Organization and Ingrao appealed to the Court of Special Appeals. Ultimately, on December 5, 1995, the appeals were dismissed by the Court of Special Appeals for lack of prosecution.

The Present Lawsuit

On April 24, 1995, Fleet filed a one-count complaint against Guerriero, Ingrao, and the Community Organization alleging abuse of process. On June 26, 1995, Fleet filed an amended complaint, adding a count of malicious use of process. The complaint alleged that the Community Organization and Ingrao, at the direction of Guerriero and with his financial backing, filed suits in order to prevent Fleet from completing its project and that the lawsuits were misused to facilitate Guerriero's purchase of the property at a reduced price.

The Community Organization and Ingrao filed a two-count counterclaim. In the first count, the Community Organization and Ingrao challenged the Board's issuance of a building permit because they contended that the conditional use permit, on which the building permit was premised, was invalid. The second count alleged defamation based on a letter Fleet sent to Administrative Judge Joseph H.H. Kaplan dated May 10, 1995, that allegedly accused Appellees of racism.

All parties moved to dismiss. The circuit court (Steinberg, J.) granted the motions of Guerriero, the Community Organization and Ingrao "for the reasons set forth in that motion, which this Court hereby adopts, and the additional fact that the underlying litigation which serves as the predicate for the malicious use of process cause of action is currently on appeal before the Court of Special Appeals of Maryland." Judge Steinberg entered final judgment in favor of Guerriero, the Community Organization, and Ingrao. See Maryland Rule 2-602.

Fleet appealed to the Court of Special Appeals. This Court granted certiorari before consideration by that court.

I.

Despite the similarity in language, "[a]buse of process, malicious use of process, and malicious prosecution are essentially different and independent torts." R. GILBERT & P. GILBERT, MARYLAND TORT LAW HANDBOOK § 5.3, at 54 (1992). In Maryland, the term "malicious use of process" means malicious prosecution of a civil claim. "Malicious prosecution" in Maryland applies to criminal charges, but otherwise shares the same elements as malicious use of process. S. SPEISER, ET AL., THE AMERICAN LAW OF TORTS § 28:20, at 114 (1991, 1996 Supp.). "Abuse of process," on the other hand, is a distinct tort. Abuse of process in Maryland can apply to either civil or criminal charges. With these basic concepts in mind, we turn to the elements of malicious use of process and abuse of process under Maryland law.

A. Malicious Use of Process

This Court in Walker v. American Security Co., 237 Md. 80, 87, 205 A.2d 302, 307 (1964), described the tort of malicious use of process:

[A]ctions for malicious prosecution and malicious use of process are concerned with maliciously causing criminal or civil process to issue for its ostensible purpose, but without probable cause.... Actions for malicious prosecution and malicious use of process have the same essential elements and are often referred to as being essentially synonymous with most of the cases referring to malicious prosecution as arising out of a criminal proceeding and malicious use of process as arising out of a civil proceeding.

This Court has long recognized that "[s]uits for malicious prosecution are viewed with disfavor in law and are to be carefully guarded against." North Pt. Constr. Co. v. Sagner, 185 Md. 200, 206, 44 A.2d 441, 444 (1945). Public policy requires that citizens be free to resort to the courts to resolve grievances without fear that their opponent will retaliate with a malicious use of process lawsuit against them. See Owens v. Graetzel, 149 Md. 689, 694-95, 132 A. 265, 267 (1926).

The cause of action for malicious use of process has five elements and all must co-exist to maintain the action. Keys v. Chrysler Credit Corp., 303 Md. 397, 407, 494 A.2d 200, 205 (1985). First, a prior civil proceeding must have been instituted by the defendant. Second,...