Waller v. Maryland Nat. Bank, 549

CourtCourt of Special Appeals of Maryland
Citation620 A.2d 381,95 Md.App. 197
Docket NumberNo. 549,549
Parties, 20 UCC Rep.Serv.2d 492 Muriel Jennings WALLER, et al. v. MARYLAND NATIONAL BANK. ,
Decision Date01 September 1992

Page 197

95 Md.App. 197
620 A.2d 381, 20 UCC Rep.Serv.2d 492
Muriel Jennings WALLER, et al.
No. 549, Sept. Term, 1992.
Court of Special Appeals of Maryland.
Feb. 24, 1993.
Revised and Refiled April 29, 1993.

[620 A.2d 384]

Page 202

Edwin A. McCabe (Karen C. Lyons, Joseph P. Davis, III, The McCabe Group, Cambridge, MA, Daniel F. Goldstein, and Brown, Goldstein & Levy, Baltimore, on the brief), for appellants.

James R. Eyler and Gregg L. Bernstein (Marian C. Hwang, Ann M. Sheridan, and Miles & Stockbridge, on the brief), Baltimore, for appellee.

Argued before CATHELL, MOTZ and HARRELL, JJ.

Page 203


On 30 April 1987, appellants, Earthtech, Inc. (Earthtech) and its president and chief executive officer, Muriel Jennings Waller (Waller), filed a six count complaint against Maryland National Bank (MNB), appellee, in the Circuit Court for Baltimore City. The action was removed to the United States District Court for the District of Maryland on MNB's petition. Ultimately the entire action was remanded to the Circuit Court for Baltimore City on 22 July 1988.

On 4 January 1989, appellants filed an amended complaint. Several of the counts were brought by both appellants, others were brought individually. For clarity of discussion, we simply list the counts and the party or parties who brought them:

Count I: Earthtech and Waller alleged breach of contract for violation by MNB of its duty of good faith and fair dealing;

Count II: Earthtech and Waller alleged "negligent breach of contract;"

Count III: Earthtech and Waller alleged conversion;

Count IV: Earthtech alleged breach of contract, claiming a breach of alleged forbearance and workout agreements;

Count V: Earthtech alleged intentional interference with contractual and business relations; and

Count VI: Waller alleged intentional infliction of emotional distress.

On 6 February 1989, MNB filed a motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to Md.Rule 2-322(b)(2), and a motion for summary judgment under Md.Rule 2-501. On 9 May 1989, the circuit court (Ward, J.) granted MNB's motion to dismiss the claim for punitive damages under Count I and dismissed Count VI in its entirety. All other motions were denied.

MNB filed a motion for summary judgment on 22 March 1991. The circuit court (Heller, J.) in a Memorandum Opinion and Order dated 25 July 1991 granted the following

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relief: (1) MNB's motion for summary judgment was granted as to Counts I and II; (2) the motion was denied as to Counts IV and V; and (3) the motion was granted, in part, as to Count III.

On 16 January 1992, appellants filed a motion for reconsideration and MNB filed a second motion for summary judgment as to all remaining claims. On 21 February 1992, the circuit court (Hammerman, J.), after hearing argument on appellants' motion[620 A.2d 385] for reconsideration, denied the motion. The circuit court then heard arguments on MNB's second motion for summary judgment and delivered an oral opinion from the bench granting MNB's motion as to all of appellants' remaining claims. Appellants noted this appeal on 10 March 1992.


Earthtech is a Maryland corporation with technical expertise in earth measurement systems. In the early 1980s, Earthtech sought to develop two pieces of sophisticated equipment. In order to achieve this goal, Earthtech required additional working capital. On 16 February 1983, Earthtech obtained a loan from MNB for $50,000 evidenced by a Revolving Note which provided for a continuing line of credit. This Revolving Note also stated that it was payable "on demand." This note was executed by Earthtech's officers: Waller, President; John Millhiser, Vice-President; and Jeffrey Bloom, Vice-President. Each officer also personally and unconditionally guaranteed payment of Earthtech's obligations to MNB.

On 20 May 1983, Earthtech obtained a second loan for $5000 from MNB. This loan was evidenced by an Installment Note and was payable in thirty-five equal monthly installments.

The parties' relationship appeared to run smoothly until late April 1984 when Earthtech requested an additional loan from MNB to cover its May payroll. MNB denied Earthtech's request. Subsequently, during the afternoon of 30

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April 1984, Gary Tyrrell, an MNB officer, arrived at Earthtech's offices and requested that Earthtech's officers execute indemnity deeds of trust (IDOTs) on their residences in favor of MNB. Earthtech's officers were surprised and reminded Tyrrell that MNB already possessed adequate security for its loans. The officers refused to sign the IDOTs and, after much discussion, Tyrrell agreed to return the next morning in order to give the officers additional time to consider MNB's request.

The following day, 1 May 1984, Tyrrell arrived at Earthtech's offices by mid-morning and immediately presented Earthtech's officers with a letter demanding repayment of the outstanding balance on the Revolving Note. Earthtech was unable to meet this demand. As a consequence, on 9 May 1984, MNB advised Earthtech that it was also in default of the Installment Note because it included a cross default provision, which provided that a default by Earthtech under any agreement with MNB could result in default under all agreements between Earthtech and MNB. MNB, therefore, was invoking its right under the agreement to accelerate and demand payment of the outstanding principal and accrued interest of the Installment Note.

In early May 1984, Waller learned that she required an emergency hysterectomy. She entered the hospital on 8 May and underwent surgery the following day. Waller resumed active involvement in Earthtech, on a part-time basis, on 5 June 1984 and began working full-time on 11 June 1984. Appellants claim that MNB agreed to forbear from taking any action against Earthtech for the period of Waller's recovery. MNB, in contrast, claims that the forbearance agreement was contingent upon Earthtech's officers executing IDOTs on their residences in favor of MNB.

On 7 June 1984, MNB filed confessed judgment actions against Earthtech and its officers. Subsequently, Earthtech and MNB entered into a Workout Agreement. Under the Workout Agreement, Earthtech agreed to repay the full balance of the outstanding loans by mid-October 1984. In return, MNB agreed to dismiss the confessed judgment

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actions. For some reason, not clear from the record extract, the Workout Agreement was never signed by both parties, but they operated as if the agreement had full effect.

Earthtech voluntarily accelerated the repayment period and MNB was repaid in full by 21 August 1984. Approximately three weeks later, on 13 September 1984, MNB dismissed the confessed judgment actions. MNB, however, had actually been overpaid by $582.31. The overpayment was remitted to Earthtech on 12 September [620 A.2d 386] 1984. In addition, MNB did not release a $433.57 balance in Earthtech's corporate account until 26 September 1984.

We will include additional facts as necessary in our discussion of the issues presented.


Appellants present five issues and sub-issues, which we have slightly recast as follows:

I. Whether the circuit court erred in concluding that MNB was exempt from the common law duties of good faith and fair dealing in its contractual relations with appellants;

A. Whether MNB was required to exercise good faith in its performance and enforcement of the Revolving Note;

B. Whether the trial court erred in considering the Official Comment to § 1-208 of the Commercial Law Article in its decision to grant MNB's motion for summary judgment;

C. Whether Maryland's common law required MNB to exercise its discretionary right to call the Revolving Note in a commercially reasonable manner;

D. Whether the circuit court erred in refusing to consider evidence on the terms of the Revolving Note;

E. Whether there was a genuine dispute of a material fact as to whether the bank had a good faith basis for demanding immediate repayment of the Installment Note;

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II. Whether the circuit court erred in granting MNB's motion for summary judgment as to appellants' claim for negligent breach of contract;

III. Whether the circuit court erred in finding no genuine dispute of a material fact as to the existence and breach of the alleged oral forbearance agreement;

IV. Whether the circuit court erred in finding no genuine dispute of a material fact as to whether MNB breached the Workout Agreement; and

V. Whether the circuit court erred in holding that appellant Waller failed to state a claim for intentional infliction of emotional distress.

Entry of the Final Judgment

In the case sub judice, following the hearing on MNB's final motion for summary judgment on 21 February 1992, the circuit court delivered an oral opinion from the bench granting MNB's motion as to the remaining claims. At no time did the judge either direct the parties to submit a written order or inform the courtroom clerk that he would later submit such an order. Yet, the docket entry for 21 February 1992 states:

Defendant's Second Motion for Summary Judgment heard & "Granted" as to remaining Counts III, IV, and V.

Order to be filed.

The record extract contains no Order granting MNB's Second Motion for Summary Judgment. We, therefore, must face the initial question of whether this appeal was properly taken.

Ordinarily, an appeal will lie only from a final judgment. An oral opinion is not a final judgment and not subject to appeal when the court directs that a written order be submitted. Kearns v. Kearns, 78 Md.App. 461, 465, 553 A.2d 1291 (1989). In Rohrbeck v. Rohrbeck, 318 Md. 28, 566 A.2d 767 (1989), the Court of Appeals set forth the three attributes a ruling must possess if it is to constitute a final judgment:

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(1) it must be intended by the court as an unqualified, final disposition of the matter in controversy, (2) unless the court...

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