Stouter v. Bailey

• Decision Date: 01 September 1988
• Docket Number: No. 430,430
• Citation: Stouter v. Bailey, 545 A.2d 98, 76 Md.App. 391 (Md. App. 1988)
• Parties: Doris Lee STOUTER v. James Theodore BAILEY, et al. ,
• Court: Court of Special Appeals of Maryland

Page 391

76 Md.App. 391

545 A.2d 98

Doris Lee STOUTER v. James Theodore BAILEY, et al.

No. 430, Sept. Term, 1988.

Court of Special Appeals of Maryland.

Aug. 5, 1988.

Paula M. Junghans and Miriam L. Fisher (Melnicove, Kaufman, Weiner, Smouse & Garbis, P.A., on brief), Baltimore, for appellant.

Hillel Abrams, Silver Spring, for appellees.

Argued before BISHOP, ALPERT and POLLITT, JJ.

BISHOP, Judge.

Pursuant to Md. Rule 1029, ¹ Doris Stouter (Stouter) brings this expedited appeal from the Order of the Circuit Court for Frederick County which fixed the amount required for James Bailey (Bailey) to exercise his right of redemption regarding his 96-acre tract of property purchased at a tax sale by Stouter. Stouter asks whether under Section 14-845(b) of the MD TAX-PROP. CODE ANN. (1986, 1987 Cum.Supp.), she is entitled to be compensated by Bailey for the value of improvements she made to the property after the date she was served with a copy of Bailey's motion to set aside her deed.

FACTS

The parties' Agreed Statement of Facts provides:

On November 10, 1980, the Collector of Taxes (the Treasurer of Frederick County) sold to the [appellant], Mrs. Doris Lee Stouter ("Stouter"), for non-payment of taxes [on] the property which is the subject matter of this case. On January 18, 1982, Stouter filed a bill of complaint to foreclose the equity of redemption in the property. On April 13, 1982, the Circuit Court for Frederick County entered a final decree foreclosing the equity of redemption; a deed to the property was executed by the Treasurer of Frederick County (the "deed") and recorded the same day.

On December 7, 1982, James Theodore Bailey, Robert Pendelton Bailey, and Lulu Bailey Sween, as Substitute Trustees of the Estate of Philip L. Culler ("Baileys"), the substituted defendants, filed a motion to vacate the final decree and to set aside the deed to Stouter. This motion was personally served on Stouter on December 9, 1982. After numerous preliminary pleadings, the motion came up for hearing on January 31, 1985.

By order dated February 2, 1985, the Circuit Court denied the motion to vacate the final decree, and the Baileys appealed. The Court of Special Appeals, in Bailey v. Stouter, ² 65 Md.App. 180, 502 A.2d 1125 (1986), reversed and remanded, and, on June 6, 1986, the Circuit Court vacated its decree of April 13, 1982, and declared the deed void.

During the period from December 9, 1982, through June 6, 1986, Stouter claims to have made certain repairs and improvements to the property which are the subject matter of this appeal.

Stouter received copies of all pleadings and correspondence as and when filed, mailed, and received.

Baileys' motion to redeem the property was scheduled for a hearing on October 27, 1986. Prior to the hearing, the Baileys filed a motion in limine, seeking to prohibit testimony with respect to improvements claimed to have been made by Stouter after December 9, 1982, being the date on which Stouter was personally served with Baileys' motion to vacate the final decree and set aside her deed to the property in question. On March 6, 1987, the Circuit Court filed its opinion, and, on May 18, 1987, the Court issued its order granting the motion in limine and certifying its order as a final order.

That order of the Circuit Court was appealed to the Court of Special Appeals, and, by order dated December 23, 1987, this Court dismissed the appeal for lack of jurisdiction. Stouter v. Bailey, et al., No. 1198 (September Term, 1987).

Prior to [the] hearing in the Circuit Court, Stouter moved for reconsideration of the Court's ruling on Baileys' motion in limine. Stouter's motion for reconsideration was denied, and Baileys' motion for redemption came up for hearing on April 11, 1988. The parties stipulated as to improvements made by Stouter prior to December 9, 1982, and, by final order dated April 25, 1988, the Court set the amounts necessary for redemption. An appeal was noted by Stouter on May 4, 1988.

* * *

THE LAW

Under Maryland Tax-Property Article, § 14-808, the collector of taxes for a county or municipal corporation is authorized to sell property on which the tax is in arrears. Section 14-827 gives an owner or other person with an estate or interest in the property the right to redeem the property by paying to the collector the amount required for redemption at any time until the right of redemption has been finally foreclosed. If the property is redeemed, the holder of the certificate of sale is entitled to be reimbursed for expenses actually incurred in preparing for or in proceeding to foreclose the right of redemption. § 14-843. In addition, the holder is entitled to be reimbursed for those fees and taxes paid in regard to the property, which are specified in § 14-843.

Before its amendment in 1986, Section 14-833, provided that a person who holds a certificate of sale from a tax sale, or his heirs or assigns, may at any time after one year and a day from the date of sale ³, petition the circuit court to foreclose all rights of redemption in the property. If the right of redemption is foreclosed, the holder of the certificate becomes the holder of the property in fee simple. § 14-844. The judgment on behalf of the holder may be set aside, however, on the ground of lack of jurisdiction or fraud in the conduct of the proceeding to foreclose. Bailey v. Stouter, 66 Md.App. 180, 502 A.2d 1125 (1986); see Kaylor v. Wilson, 260 Md. 707, 711, 273 A.2d 185 (1971). In Monumental Ent. v. City of Baltimore, 26 Md.App. 24, 33, 337 A.2d 176 (1975) ⁴ we stated the rule thus:

It is plain, accordingly, that a final decree foreclosing rights of redemption is conclusive except when lack of jurisdiction is shown or there was fraud in the conduct of the proceedings to foreclosure. This was emphasized by the Court of Appeals in Hardisty v. Kay, 268 Md. 202, 299 A.2d 771, when it declared at 208 :

We think the legislature has been explicit in its language and clearly expressed its intention that a final decree is conclusive and no application shall thereafter be entertained unless it falls within the exempted categories.

In Bailey, supra, we reversed the circuit court and vacated the decree of foreclosure because of a jurisdictional deficiency. We remanded the case for further proceedings. The reasoning underlying our decision in that case is relevant to our disposition of the case sub judice.

At the time Stouter sought to foreclose the right of redemption, the property was owned by James T. Bailey and Philip R. Bailey as trustees of the estate of Philip L. Culler. Both James and Philip were Maryland residents residing near Leonardtown, Maryland (Hollywood and Bushwood, respectively). Nonetheless, Stouter did not have subpoenas issued for James and Philip to the Maryland addresses listed in the county tax records. ⁵ Instead, she issued a summons for James at a Washington, D.C. address and for Philip at an address in Frederick. James' summons was sent by registered mail and it was returned undelivered. The summons for Philip was returned non est with a notation indicating that there was no one by that name at that address. Stouter then proceeded to rely upon notice by publication as to them as well as various other defendants. ⁶ In reviewing her actions we concluded:

We do not know why appellee chose to ignore the Leonardtown address shown in the tax record. In her brief she asserts that trial counsel's search of the court records revealed "newer, more current addresses for the surviving trustees." There is nothing in the record to support that assertion; indeed, in light of trial counsel's naming of Pearl as a defendant and his use of the birth names of Lulu, Alice, and Janice [the grandchildren], the diligence of his search of the court records is questionable. Even assuming that counsel initially acted in good faith, in the reasonable belief that he had discovered more current addresses, the reasonableness of that belief vanished when the notice mailed to James in the District of Columbia was returned undelivered and the summons sent to Philip in Frederick was returned non est--"no one heard of this subject at this address." At that point, it was incumbent upon him, at the very least, to try the Leonardtown address. He had no right to continue to ignore that address and simply assume that their whereabouts were unknown. Publication is not the preferred method of giving notice to a Maryland resident. It is to be used only when personal service proves beyond the plaintiff's ability to effect, and the record simply does not show that the [sic] have been the case here.

66 Md.App. at 189, 502 A.2d 1125 (footnote omitted). Based upon the foregoing conclusion, we held that "the court had 'neither the right nor the power' to proceed against their interest in the property" and that the decree of foreclosure was "jurisdictionally deficient". 66 Md.App. at 192, 502 A.2d 1125.

The circuit court, on remand, declared the decree void. This activated § 14-845(a), ⁷ which provides:

Amount required to redeem.--If the judgment of the court foreclosing all rights of redemption is set aside, the amount required to redeem is the amount required by this subtitle, and in addition, the reasonable value, at the date the judgment is set aside, of all improvements made on the property by the purchaser and the purchaser's successors in interest.

Stouter argues that the fact she had notice of Bailey's motion to vacate her deed is of no consequence and accordingly, she is entitled under § 14-845(a), to the "reasonable value ... of all improvements" as of June 6, 1986, the date her deed was set aside. Bailey responds that the term "purchaser", as used in § 14-845(a), applies only to "bona fide purchasers" without notice of an adverse claim to the title, and therefore Stouter's notice of his intention to redeem the property prevents her from recovering any money for improvements made after that date.

The...