Roman v. Sage Title Grp., LLC
Citation | 229 Md.App. 601,146 A.3d 479 |
Decision Date | 27 September 2016 |
Docket Number | Sept. Term, 2014,No. 40,40 |
Parties | Robert Roman v. Sage Title Group, LLC |
Court | Court of Special Appeals of Maryland |
Argued by: Ronald A. Baradel (N. Tucker Meneely, Council, Baradel, Kosmerl & Nolan PA, on the brief) Annapolis, MD., for Appellant
Argued by: Steven M. Klepper (John A. Bourgeois, Kramon & Graham PA, Baltimore, MD and Deborah M. Whelihan, Jordan, Coyne & Savits LLP, Fairfax, VA, for Appellee
Panel: Woodward, Berger, Friedman, JJ.*
Woodward
, J.
This appeal arises from the Circuit Court for Baltimore County, where appellant, Robert Roman, filed claims for conversion and negligence against appellee, Sage Title Group, LLC (“Sage Title”). Roman is a bridge lender, providing “interest-only” loans to real estate developers to finance acquisition, construction, and renovation of properties that are to be sold or refinanced. Sage Title is a real estate title company that conducts residential and commercial closings. In his complaint, Roman alleged that Kevin Sniffen, Sage Title's branch manager for the Baltimore City office, converted $2,420,000 of Roman's funds that had been deposited into Sage Title's escrow account to facilitate financing for two real estate projects. Roman alleged that Sage Title was vicariously liable for Sniffen's conversion, and that Sage Title was directly negligent in allowing Sniffen to disburse Roman's funds, held in escrow, without Roman's permission.
After a three-day jury trial, the circuit court granted Sage Title's motion for judgment on the negligence claim on the grounds that expert testimony was required to establish Sage Title's standard of care. The court allowed the conversion claim to go to the jury, which found in favor of Roman in the amount of $2,420,000. Following the jury verdict, Sage Title filed a motion for judgment notwithstanding the verdict (“JNOV”), which the court granted on the grounds that the allegedly converted funds were commingled with other funds in Sage Title's escrow account, and thus the conversion claim was barred as a matter of law.
On appeal, Roman presents two questions for our review, which we have slightly rephrased:
For the reasons set forth below, we answer the first question in the affirmative and the second question in the negative, thus reversing in part and affirming in part the judgment of the circuit court.
The background for this case is set forth in the background section of the circuit court's Memorandum Opinion and Order:
(Footnotes omitted).
The trial court entered its Memorandum Opinion and Order on February 28, 2014, granting Sage Title's JNOV motion on the grounds that Roman's money was commingled with other money in Sage Title's escrow account, and thus Roman “cannot bring a conversion claim.” As a result, the court vacated the judgment in favor of Roman and ordered that judgment be entered in favor of Sage Title. Roman filed his notice of appeal on March 21, 2014. Additional facts will be set forth below as necessary to resolve the questions presented.
and 2–532 govern motions for judgment and JNOV, respectively. The standard for reviewing the grant of a motion for judgment under Rule 2–519 is the same for reviewing the grant of a JNOV motion under Rule 2–532 : we review the grant of both motions de novo . UBS Fin. Servs., Inc. v. Thompson , 217 Md.App. 500, 514, 94 A.3d 176 (2014), aff'd , 443 Md. 47, 115 A.3d 125 (2015). In doing so, we view the evidence and the reasonable inferences to be drawn from it in the light most favorable to the non-moving party, and, uphold the grant of the motion “only when the evidence and permissible inferences permit only one conclusion with regard to the ultimate legal issue.” See
Roman argues that the trial court erred in granting Sage Title's JNOV motion on the conversion claim, because the jury was presented with sufficient evidence to support the verdict in Roman's favor. According to Roman, the monies at issue in this case were “sufficiently identifiable” to allow the conversion claim to proceed, because the monies were held in Sage Title's escrow account for a particular purpose, and Sage Title's detailed records kept track of the escrow account's deposits and disbursements. Roman claims that, because funds in escrow accounts “belong to the funds' original owners,” even if such accounts include other funds, that money is sufficiently segregated and identifiable to allow for a conversion claim, given escrow account rules. According to Roman, even though no Maryland decision “squarely addresses the conversion of money” held in escrow, this Court should look to the Court of Appeals's language referring to the “conversion” of clients' funds held in attorneys' escrow accounts in a variety of attorney grievance cases. Roman also urges this Court to look at cases in other jurisdictions where courts have allowed conversion claims for money that is used for a specific purpose.
Roman next claims that, even if his funds were commingled with other funds, his conversion claim is valid, because his money should have been segregated in a separate escrow account, and thus the conversion occurred before the funds were commingled. Roman concludes that a defendant in a conversion claim should not be able to “skirt liability with a ‘commingling’ defense if that defendant was the cause of the money being wrongfully commingled in the first place.”1
Sage Title responds that the trial court correctly granted its JNOV motion on the conversion claim, because commingled funds cannot be the subject of conversion. Sage Title claims that, although there is an exception for “specific segregated or identifiable funds,” such exception is narrow and not applicable when the monies are commingled with other funds. According to Sage Title, the monies in question here were “doubly commingled,” because they were commingled with other funds from the same projects, as well as with the funds for all of Sage Title's Baltimore clients. Sage Title disputes Roman's reliance on the attorney grievance cases, because those cases, (1) “interpret Maryland Rules of Professional Conduct, not the common law of conversion,” and (2) concern attorney escrow accounts, which have particular rules that do not apply to Sage Title's escrow account. Sage...
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