Poku v. Friedman

• Decision Date: 10 January 2008
• Docket Number: No. 50, Sept. Term, 2007.,50, Sept. Term, 2007.
• Citation: 939 A.2d 185,403 Md. 47
• Parties: Richard Atta POKU v. Alvin E. FRIEDMAN et al.
• Court: Court of Special Appeals of Maryland

939 A.2d 185

403 Md. 47

Richard Atta POKU v. Alvin E. FRIEDMAN et al.

No. 50, Sept. Term, 2007.

Court of Appeals of Maryland.

January 10, 2008.

Scott C. Borison (Legg Law Firm, LLC, Frederick, Peter A. Holland, Benjamin C. Carney, The Holland Law Firm, P.C., Annapolis), on brief, for petitioner.

Kenneth J. MacFadyen (Friedman & MacFadyen, P.A., Baltimore, Robert H. Hillman, Magazine & Hillman, P.C., Rockville), on brief, for respondents.

Phillip Robinson, Civil Justice, Inc., Baltimore, amici curiae.

Argued before BELL, C.J., RAKER, HARRELL, BATTAGLIA, GREENE, ALAN M. WILNER, (retired, specially assigned) DALE R. CATHELL, (retired, specially assigned), JJ.

CATHELL, J.

In October of 2000, Richard Atta Poku, petitioner, executed a Deed of Trust encumbering property in Howard County Maryland. By assignments and merger the secured party became Washington Mutual Bank, a federal savings association. Thereafter, petitioner refinanced the indebtedness five separate times with three different lending institutions, including an entity known as Washington Mutual Home Loans, Inc. (apparently a different institution than Washington Mutual Bank). The other institutions involved in petitioner's five refinancings were: Chase Manhattan Mortgage Corporation, and First Nationwide Mortgage Corporation. For each of the five refinancings, petitioner availed himself of or agreed to use the services of the same loan broker, Service 1st Mortgage, Inc., and the same settlement entity, Advance Settlement Agency, Inc.¹

The first of these refinancings involved Washington Mutual Home Loans, Inc. As stated, petitioner and the various institutions used Service 1st Mortgage, Inc. as the mortgage broker and Advance Settlement Agency, Inc. as the settlement entity. When the first refinancing was completed, no payoff was made from the refinancing proceeds to Washington Mutual Bank as to its original debt. Less than six (6) months after the first refinancing using Washington Mutual Home Loans, Inc. as the lender, petitioner again refinanced the property using Chase Manhattan Mortgage Corporation as the lender. Apparently, the indebtedness owed to Washington Mutual Home Loans, Inc., was paid off during this refinancing as it executed a Certificate of Satisfaction as to its loan which was filed. The original creditor (via assignment), Washington Mutual Bank, however, again received no proceeds and its indebtedness was neither paid nor, accordingly, released. Again the settlement was handled by Advance Settlement.

The Chase Manhattan (1st) loan was then refinanced by a loan from First Nationwide Loan, which indebtedness was later refinanced by a Chase Manhattan (2nd Chase) loan. The second Chase Manhattan indebtedness was subsequently refinanced by another Chase Manhattan (3rd Chase) loan. During all of the refinancings, the services of the same loan broker and settlement agency were used. During none of these transactions was the original indebtedness to Washington Mutual Bank paid off and that failure was apparently not brought to the attention of petitioner because the same settlement entity was used for all the transactions. It was proffered that the money that should have been used to pay off Washington Mutual Bank, was "embezzled" by the settlement entity. At oral argument it was suggested that the person responsible for the failure to pay off the Washington Mutual Bank loan is now in prison.

Eventually, Washington Mutual Bank attempted to collect on the indebtedness owed it by petitioner and notified petitioner of the "open" status of the loan. More than eight months later, only after petitioner failed to pay off the loan despite being notified that it was due, did the Bank foreclose on the Deed of Trust.

In March of 2005, the property was sold at foreclosure sale to 8 Metree Way, LLC for the purchase price of $200,000. Thereafter, petitioner, acting pro se, sought to enjoin the proceedings but the request for injunction was later withdrawn by an attorney that then represented him.²

Later, in July of 2005, petitioner, through counsel, filed exceptions to the foreclosure sale. Both Washington Mutual Bank and the purchaser at the foreclosure sale filed responses to the exceptions. A hearing was held on the exceptions and responses over a year later. The petitioner was given a full opportunity to argue his exceptions and in fact did testify at that hearing. The exceptions were overruled and the sale was ratified on August 3, 2006. Petitioner then filed an appeal to the Court of Special Appeals and, in addition, filed a request for a stay of the proceedings with both the Circuit Court and the Court of Special Appeals. The order of the trial court conditionally denied the stay, advising the petitioner and his counsel, that the request for a stay was denied "except to the extent that" a supersedeas bond was posted. No request was ever made by the petitioner for the trial court (or the Court of Special Appeals) to set the amount of the supersedeas bond nor has any appropriate bond ever been filed with any court.³

The Court of Special Appeals also denied petitioner's request for a stay and he filed a petition for certiorari in respect to that denial of stay with this Court, which was denied.

During the period of time of these various proceedings the purchaser at the foreclosure sale, resold the premises to Kimberly Miller who apparently is the present owner.

Ultimately the Court of Special Appeals dismissed the appeal itself because of the failure of petitioner to file a supersedeas bond or to even to ask for the setting of the amount of a supersedeas bond. We then granted his resulting petition for certiorari at 400 Md. 647, 929 A.2d 889 (2007).

Petitioner presents three questions in his brief:⁴

"1. Whether a lender may foreclose on a home when it had exclusive possession and control of the funds to pay off the mortgage?⁵

"2. Whether a homeowner may be denied the right to appeal when he has made every effort to obtain a stay pending appeal?⁶

"3. Whether a homeowner's appeal of the Circuit Court's ratification of foreclosure sale is moot because of the sale, when the Circuit Court's decision might be relied upon for collateral estoppel or res judicata in other proceedings?"

At oral argument it was conceded by petitioner that he understood that at this point in the proceedings, in the present posture of the case, the Court does not have the power to take any action that would result in the return to him of the subject property. The following exchange occurred between the Court and petitioner's counsel:

"Court: . . . you're not asking this Court to take any action that would give the exact home and house back to your client?

[Petitioner's Counsel]: I don't think you can.

[The Court]: ... you agree that this Court can't render a decision that would give him his house back?

[Petitioner's counsel]: That's right."

Mootness

Maryland Rule 8-422(a)(1) "Civil proceedings[,]" provides in relevant part that "an appellant may stay the enforcement of any other civil proceeding from which an appeal is taken by filing with the clerk of the lower court a supersedeas bond under Rule 8-423." Maryland Rule 8-423(b)(2) "Disposition of property[,]" provides in relevant part, that

"When the judgment determines the disposition of property in controversy (as in . . . actions to foreclose mortgages,) or when . . . the proceeds of its sale, is in the custody of the lower court . . . the amount of the bond shall be the sum that will secure the amount recovered for the use and detention of the property, interest, costs, and damages for delay."

The petitioner never sought to have the trial court judge determine the amount that would secure the foreclosure price of $200,000 by determining anticipated interest accrual, costs of sale, the costs of holding the...