Trusty v. MTGLQ Inv'rs

• Decision Date: 24 September 2021
• Docket Number: 224-2020
• Parties: TERRY L. TRUSTY, et al. v. MTGLQ INVESTORS L.P., et al.
• Court: Court of Special Appeals of Maryland

TERRY L. TRUSTY, et al. v. MTGLQ INVESTORS L.P., et al.

No. 224-2020

Court of Special Appeals of Maryland

September 24, 2021

Circuit Court for Baltimore County Case No. 03-C-18-010881

Arthur, Beachley, Battaglia, Lynne A. (Senior Judge Specially Assigned), JJ.

OPINION ^[*]

Beachley, J.

The events that led to this pro se appeal began in October 2015, with foreclosure proceedings for a residence at 9005 Forest Oaks Road, Owings Mills in Baltimore County (the "Property"). At that time, Terry L. Trusty and Ellen Trusty, appellants, occupied the Property under what they claim was a lease agreement accompanied by a contract to purchase it from the owners and mortgagors. Ensuing adjudications, resulting in three decisions by this Court, established that under the proffered lease and purchase contract, the Trustys did not have an interest affording them the right to intervene in or otherwise challenge the foreclosure, sale, or judgment of possession regarding the Property. See Trusty v. Ward, No. 2571, Sept. Term, 2015, 2017 WL 1788184, at *1-2 (Md. Ct. Spec. App. filed May 5, 2017) (affirming denial of motion to intervene), cert. denied, 456 Md. 94 (2017); Trusty v. Ward, No. 485, Sept. Term 2017 (Md. Ct. Spec. App. filed Nov. 6, 2017) (dismissing appeal), cert. dismissed, 457 Md. 683 (2018); Taylor v. Ward, No. 1432, Sept. Term, 2017 (Md. Ct. Spec. App. filed Nov. 7, 2018), 2018 WL 5877289, at *2 (dismissing appeal), cert. denied sub nom. Trusty v. MTGLQ Investors, 463 Md. 159 (2019).

On October 30, 2018, while their third appeal in the foreclosure case was still pending before this Court, the Trustys filed this separate lawsuit in the Circuit Court for Baltimore County, alleging a "fraudulent, illegal, and so far successful conspiracy to wrongfully evict" them, as "bonafide [sic] tenants," from the Property, "without conforming to the legal duties established in Maryland law." According to the Trustys, "[t]he main conspirators" were a group of entities and individuals involved in the foreclosure and judgment of possession, which includes the secured party, MTGLQ Investors L.P. ("MTGLQ"), which purchased the Property at the foreclosure sale (collectively, Appellees).^[1]

After the Trustys amended their complaint in response to Appellees' joint motions to dismiss, the circuit court dismissed their third amended complaint without leave to amend and with prejudice. In this timely appeal challenging the ensuing judgment, the Trustys present two questions:

1. Did the Circuit Court err in dismissing all 23 counts of the third amended complaint with prejudice and without leave to amend?

2. Do the allegations and evidence in this case meet the requirement to set aside the ratification of the foreclosure and the judgment for possession under [Md. Rule] 2-535?

Based on our review of the complaint and pleadings, we conclude that the Trustys set forth facts supporting claims against MTGLQ and NAAC under Md. Code (1974, 2015 Repl. Vol.), § 7-113(d) of the Real Property Article ("RP") and for conversion, alleging monetary losses after the Trustys allegedly were locked out of the Property without the notice required by law or an accounting concerning the Trustys' personal property on the premises.^[2] Although we vacate the judgment and remand for further proceedings on those two counts and the two appellees set forth above, we emphasize that the Trustys are precluded from pursuing any other claims challenging the foreclosure, sale, or conveyance of the Property. Nor may they otherwise claim a right to occupy the Property or assert any other possessory interest in it, either in this case or any other.

BACKGROUND

Throughout this action and the prior foreclosure proceedings, the Trustys have refused to accept the final adjudications ratifying the foreclosure sale and judgment of possession for this Property. Even though the Property has been sold and conveyed to MTGLQ, which then sold it to a third party, the Trustys are still seeking a judicial order conveying it to them as a remedy for their grievances against creditors of their former landlords and others who allegedly participated in the foreclosure and eviction.

The Foreclosure Proceedings

In reviewing the record pertinent to this appeal, we draw on accounts of the foreclosure proceedings and the Trustys' claims set forth in our previous decisions. The per curiam opinion in the Trustys' first appeal regarding the Property recounts the outset of the foreclosure dispute:

On October 5, 2015, appellees, Carrie Ward, et al Substitute Trustees, initiated foreclosure proceedings as to a residential property owned by Paul Taylor, Jr. and Cheryl Taylor ("the Taylors") in the Circuit Court for Baltimore County. A month later, Terry L. Trusty and his wife Ellen, appellants, filed a motion to intervene in the foreclosure proceedings as defendants, either by right or by permission of the court, based on their purported "equitable, leasehold, or contract interests" in the property. Appellants, who then resided at the property, claimed that in 2008, they had entered into a lease agreement and a contract to purchase the property from the Taylors in an arrangement they claim was a "land installment contract."

Appellants also filed motions for mediation or alternative dispute resolution and to appoint a trustee to "settle" the property in equity, and, after that, a motion to stay the foreclosure sale and/or dismiss the foreclosure action, contending that appellees were not authorized to foreclose on the property. After the circuit court denied all of their motions, appellants noted [their first] appeal.

Trusty v. Ward, supra, 2017 WL 1788184, at *1.

Affirming this Court held that the Trustys did not have the right to intervene or otherwise object to or participate in the foreclosure proceedings. See id. at *1-2. We explained that under Md. Rule 2-214(a), governing intervention as a matter of right based on a claim of "interest relating to the property or transaction that is the subject of the action, "

[a]ppellants failed to provide evidence demonstrating that they had a valid ownership interest in the property. Appellants' claims of ownership pursuant to a "land installment contract" are not supported by the record. In fact, the contract between appellants and the Taylors, executed in 2008, does not satisfy the elements of a valid land installment contract pursuant to § 10-101 et seq. of the Real Property Article of the Maryland Code. Specifically, the contract did not refer to five or more subsequent payments as required by RP § 10-103(b)(7), it was never indexed and recorded in the office of the clerk of court of the county where the property is located as required by RP § 10-104, and several statutorily mandated notices were not incorporated into the agreement as required by RP § 10-103.

Instead, the record reflects that the appellants executed both a contract to purchase the property from the Taylors and a lease to rent until the sale occurred. Although the appellants took possession of the premises and made some payments to the Taylors, the sale never took place and hence there is no deed of trust transferring ownership of the property to appellants. Based on the forgoing [sic], the appellants were not entitled to intervene "as a matter of law" in the foreclosure matter. For the same reasons, the circuit court did not abuse its discretion by denying appellants' motion for permissive intervention. Because appellants failed to establish an interest in the foreclosure proceedings sufficient to give them standing to intervene, the circuit court did not err by denying their remaining motions.

Id. at *1-3 (footnote omitted).

In the ensuing proceedings, the Property was sold on September 15, 2016, to MTGLQ, the secured party holding the deed of trust. See Taylor v. Ward, supra, 2018 WL 5877289, at *2. After the circuit court ratified the sale, the Property was conveyed to MTGLQ on February 16, 2017, and that deed was recorded. See id.

In their second appeal to this Court, the Trustys challenged the denial of their exceptions to the foreclosure sale and other motions pertaining to those proceedings. See id. at *3. We dismissed that appeal and remanded for continuation of the foreclosure proceedings. See id.

On July 20, 2017, MTGLQ filed a motion for possession of the Property. See id. On August 21, 2017, the Trustys attempted to remove the foreclosure action to federal court, which concluded there was no federal question or diversity jurisdiction and remanded back to the circuit court on August 30, 2017. See id.; Ward v. Taylor, No. ELH-17-2386 (D. Md. Aug. 30, 2017). Over the Trustys' opposition, MTGLQ obtained a judgment awarding possession of the Property pursuant to Md. Rule 14-102. See Taylor v. Ward, supra, 2018 WL 5877289, at *3.

On September 11, 2017, the Trustys noted their third appeal challenging the validity of the foreclosure proceedings, including the sale and order of possession, and reasserting their claim that they hold "a valid option to purchase the property at the time of the eviction[.]" See id. at *1, *3. This Court dismissed that appeal, explaining why "the Trustys' lack of standing to intervene in the foreclosure preclude[d] consideration of the merits of any of the issues raised in th[at] appeal." See id. at *3, *5. Based on the prior adjudications, we reasoned that the Trustys' failure "to establish an interest in the foreclosure proceedings sufficient to give them standing to intervene" or "an interest that will be affected by prosecuting the appeal" effectively "render[ed] their non-party appeal impermissible." Id. at *5. "Accordingly," we held, "our prior determination that the Trustys had no right to be involved in the underlying foreclosure action mandates...