Thornton Mellon, LLC v. Adrianne Dennis Exempt Trust
Citation | 250 A.3d 295,250 Md.App. 302 |
Decision Date | 28 April 2021 |
Docket Number | No. 104, Sept. Term, 2020,104, Sept. Term, 2020 |
Parties | THORNTON MELLON, LLC v. ADRIANNE DENNIS EXEMPT TRUST |
Court | Court of Special Appeals of Maryland |
Argued by: Geoffrey Polk of Chicago, IL (N. Tucker Meneely, Council Baradel, Kosmerl & Nolan, PA, Annapolis, MD), all on the brief, for Appellant
Argued by: William F. Steinwedel (Maryland Legal Aid Bureau, on the brief), Baltimore, MD, for Appellee
Panel: Kehoe, Arthur, Reed, JJ.
This appeal arises from a tax-sale foreclosure proceeding. Six months after a tax sale, the property owner partially completed the redemption process by reimbursing the certificate holder for all attorney's fees and expenses incurred at that time. On the following morning, before the property owner was able to complete the redemption process, the certificate holder filed a complaint to foreclose the property owner's right of redemption. The property owner subsequently paid all property taxes owed to the local government.
At issue here is whether the property owner must reimburse the certificate holder for attorney's fees and other fees incurred after the filing of the complaint. The Circuit Court for Frederick County found that the certificate holder made a series of cumulative "errors," which "impeded" the property owner's exercise of the right to redeem the property. On that basis, the court denied the certificate holder's requests to be reimbursed for attorney's fees incurred after the filing of the complaint.
The certificate holder has appealed. Because we perceive no error or abuse of discretion, we shall affirm the judgment.
Adrianne Catherine Dennis is the sole beneficiary of the Adrianne Dennis Exempt Trust. In that capacity, she owns her home, located in Walkersville, Maryland. As of early 2019, she had failed to pay property taxes that she owed to Frederick County. Consequently, those unpaid taxes became a lien on the property. Md. Code , § 14-804 (a)(1) of the Tax-Property Article ("TP").
On May 13, 2019, the Frederick County tax collector conducted a public auction under the procedures set forth in the tax-sale statute. The winning bidder, Thornton Mellon, LLC, received a certificate of sale. Thornton Mellon paid to the County the sum of $3,155.33, representing the full amount of property taxes due at the time of sale, together with interest and penalties on those taxes.
As the certificate holder, Thornton Mellon had the right to file a complaint to foreclose all rights of redemption "at any time after 6 months from the date of sale[.]" TP § 14-833(a)(1). The certificate would become void unless Thornton Mellon filed a complaint within two years of the date of the certificate. TP § 14-833(c)(1).
As the property owner, Ms. Dennis had the right to redeem the property at any time until the entry of a judgment foreclosing the right of redemption. See TP § 14-827 ; see also TP § 14-833(b). To redeem the property, she needed to pay to the County the total lien amount paid by the certificate holder at the time of the tax sale, along with any taxes, interest, and penalties that accrued after the sale. See TP § 14-828(a)(1)-(3). In addition, she needed to pay, "in the manner and by the terms required by the collector[,]" other expenses or fees for which the certificate holder might be entitled to be reimbursed. See TP § 14-828(a)(4).
Section 14-843 of the Tax-Property Article "governs the repayment of attorney's fees and other expenses paid by the [certificate] holder upon redemption of the property sold at tax sale[.]" Deinlein v. Johnson , 201 Md. App. 373, 381, 29 A.3d 714 (2011). When a property is redeemed, a plaintiff or certificate holder "may be reimbursed for expenses ... as provided in this section," but "is not entitled to be reimbursed for any other expenses ... not included in this section." TP § 14-843(a)(1)-(2). "[R]edemption is a condition precedent to the obligation to pay the statutory attorney's fees." Heartwood 88, Inc. v. Montgomery Cty. , 156 Md. App. 333, 366, 846 A.2d 1096 (2004). Thus, if no redemption occurs, "there is no entitlement to attorney's fees." Id. ; accord Deinlein v. Johnson , 201 Md. App. at 385, 29 A.3d 714.
TP § 14-843 authorizes reimbursement for attorney's fees in different amounts depending on when the redemption occurs. A plaintiff or certificate holder "may not be reimbursed for expenses incurred within 4 months after the date of sale." TP § 14-843(b)(1)(i). When a property is redeemed more than four months after the sale, but before a complaint has been filed, the certificate holder may be reimbursed for reasonable attorney's fees "not to exceed $500." TP § 14-843(a)(3)(i)(4). When a property is redeemed after a complaint has been filed, the plaintiff may be reimbursed for attorney's fees in the amounts of either "$1,300 if an affidavit of compliance has not been filed" or "$1,500 if an affidavit of compliance has been filed[.]" TP § 14-843(a)(4)(i).2 Under the statute, those amounts are "deemed reasonable for both the preparation and filing of the action to foreclose the right of redemption." Id.
Additionally, "in exceptional circumstances" after a complaint has been filed, a plaintiff or certificate holder may be reimbursed for "other reasonable attorney's fees incurred and specifically requested by the plaintiff or holder of a certificate of sale and approved by the court, on a case by case basis[.]" TP § 14-843(a)(4)(iii).
As mentioned previously, a certificate holder may not file a complaint to foreclose the right of redemption until at least six months after the date of the sale. TP § 14-833(a). Accordingly, as both parties acknowledge, the earliest date on which Thornton Mellon could file a complaint was November 14, 2019.
On November 12, 2019, two days before the six months would expire, Ms. Dennis called the Frederick County Office of Finance to find out the amount that she would need to pay in order to redeem the property. A County employee informed her that, although the total would increase over time, she most likely would need to pay approximately $6,500 in property taxes, interest, and penalties to the County. The employee told her that, before the County would accept those payments, she needed to reimburse the certificate holder for attorney's fees and other expenses. The employee said that, once she obtained a release from the certificate holder, affirming that she had reimbursed the certificate holder for all fees and expenses incurred, she could pay the other redemption amounts to the County.3
On the same day that Ms. Dennis called the Office of Finance, she visited Thornton Mellon's website for information about the amount of fees that she would need to pay upon redemption. By email, she received an automatically generated "Invoice" stating that her "Balance ... Due" to Thornton Mellon was $779.76. That total included $500 of attorney's fees, a title search fee of $250, and postage fees of $29.76 for sending two required notices.
Two days later, on the morning of November 14, 2019, Ms. Dennis returned to Thornton Mellon's website to pay $779.76, the amount stated on the invoice. When she attempted to do so, she received a new invoice stating that the "Total Balance Now Due" was $2,000.88. That total included an additional $1,000 of attorney's fees for the preparation and filing of a complaint, $181.12 for a filing fee charged by the court, and a $40.00 fee for service of process. At that time, Thornton Mellon was not entitled to reimbursement for those additional fees, because no complaint had been filed.
Ms. Dennis promptly called Thornton Mellon's attorney, Mr. Geoffrey Polk, at his office in Chicago, Illinois. He agreed to remove the unauthorized fees. At 12:15 p.m.,4 he sent an email to the Office of Finance, with a copy to Ms. Dennis. He wrote:
Ms. Dennis then used her debit card to pay $779.76 to Thornton Mellon.5 She received an email confirming that Thornton Mellon had received her payment.
At 1:12 p.m., Mr. Polk sent an email to Ms. Dennis, with a copy to the Office of Finance. In the email, he acknowledged that Thornton Mellon had "received payment for the fees on account" for the property. The email included a link to a two-page release under Mr. Polk's electronic signature. The release acknowledged that Ms. Dennis had reimbursed Thornton Mellon "for all costs and expenses" incurred as of November 14, 2019. The release stated that it was "further understood and agreed" that Ms. Dennis would pay to the County the remaining amounts needed to redeem the property.
The release that Mr. Polk provided, however, stated that it was "expired" and thus "void." A paragraph on the first page read: On the second page, it stated:
At 2:25 p.m., a County collections specialist emailed Mr. Polk to inquire about the expiration date. The collections specialist stated that the "release he sent said it was expired" and asked Mr. Polk whether he had intended for the release to remain valid until the end of the day. Five minutes later, Mr. Polk replied: "Yes, you can allow redemption today, thanks!" Neither the collections specialist nor Mr. Polk sent a copy of these emails to Ms. Dennis. Consequently, Ms. Dennis did not receive clarification about the expiration date of the release.
At 4:09 p.m., a few minutes after the Office of Finance...
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