Washington Mut. Bank v. Homan

• Decision Date: 12 June 2009
• Docket Number: No. 1586, September Term, 2008.,1586, September Term, 2008.
• Parties: WASHINGTON MUTUAL BANK v. Susie M. HOMAN et al.
• Court: Court of Special Appeals of Maryland

974 A.2d 376

186 Md. App. 372

WASHINGTON MUTUAL BANK v. Susie M. HOMAN et al.

No. 1586, September Term, 2008.

Court of Special Appeals of Maryland.

June 12, 2009.

Robert A. Scott (Lisa M. Welsh, Ballard Spahr Andrews & Ingersoll, LLP on the brief), Baltimore, for appellant.

E. Andrew Cole (Donald N. Sperling, Stein, Sperling, Bennett, DeJong, Driscoll & Greenfeig, PC, on the brief), Rockville, for appellee.

Panel: DAVIS, MEREDITH, LAWRENCE F. RODOWSKY, (Retired, Specially Assigned), JJ.

DAVIS, J.

On January 29, 2008, appellees, Susie M. Horman and Janice T. Kruger, filed a multi-count complaint in the Circuit Court for Montgomery County against several defendants including appellant, Washington Mutual Bank. Count Three of appellees' complaint asked the circuit court to nullify a conveyance of property from Homes by New Century, LLC (HBNC), to Edward Moriarty,¹ HBNC's sole member, and declare void all subsequent interests based on this conveyance, including a deed of trust granted by Moriarty to appellant. Count Two of the complaint requested the court to issue an order to quiet title to the property by determining that appellees had superior equitable and legal title to the property over all other defendants² in the action and ordering the release of all associated liens and encumbrances.

On June 26, 2008, appellees filed a motion for partial summary judgment as to Counts Two and Three of the complaint. Appellant opposed appellees' motion and filed a cross motion for summary judgment on July 14, 2008. Additionally, on July 18, 2008, appellant filed cross claims against HBNC and Moriarty.

On August 21, 2008, the circuit court granted partial summary judgment in favor of appellees, nullifying the conveyance of property from HBNC to Moriarty and ordering HBNC to convey legal title to appellant, free and clear of any claims of the named defendants in the lawsuit. The court denied appellant's cross motion for summary judgment. Appellant appeals³ from this August 21, 2008 order, pursuant to § 12-303(3)(v) of the Courts and Judicial Proceedings Article⁴ and presents two questions for our review,⁵ which we have rephrased and reorganized as follows:

I. Did the circuit court err by granting appellees' motion for partial summary judgment when the motion was not supported by an affidavit made upon personal knowledge of the affiant?

II. Did the circuit court err by granting appellees' motion for partial summary judgment and extinguishing appellant's deed of trust to the property?

III. Did the circuit court err by granting summary judgment on appellees' quiet title claim?

IV. Did the circuit court err by denying appellant's motion for summary judgment?

For the reasons that follow, we answer the first question in the negative and the second and third questions in the affirmative. Thus, we reverse the judgment of the circuit court awarding summary judgment in favor of appellees and remand for further proceedings consistent with this opinion. As to the fourth question, we hold that the circuit court's denial of appellant's summary judgment motion is not appealable. Accordingly, we dismiss appellant's challenge to the denial of its cross motion for summary judgment.

FACTUAL & PROCEDURAL BACKGROUND

The material facts of this case are largely undisputed. On March 29, 2004, appellees entered into a contract with HBNC to purchase property located at 11222 Valley View Avenue in Kensington, Maryland (the Property), at a purchase price of $658,450. The contract obligated HBNC to build a new home on the Property and convey the Property to appellees by a settlement date of September 30, 2004.⁶ Over the course of several months past the scheduled settlement date, however, HBNC postponed the final settlement date due to purported financial problems.

On April 12, 2007, appellees filed suit against HBNC (original lawsuit) in the Circuit Court for Montgomery County, requesting that the court order specific performance on the contract. Appellees further filed a notice of lis pendens in the circuit court on the following day.⁷ On October 15, 2007, the circuit court awarded summary judgment in favor of appellees, appointing a trustee to facilitate the transfer of the Property, setting the settlement price at $556,087.33 and ordering that settlement on the Property take place within ninety days of the order.

Unbeknownst to appellees or the court, HBNC had already conveyed the Property in consideration of the sum of ten dollars to HBNC's managing member, Moriarty, by way of a quitclaim deed acknowledged on August 11, 2006-approximately eight months before appellees filed the original law suit. The quitclaim deed was accompanied by an "Affidavit of Termination of [HBNC]," in which Moriarty attested that HBNC conveyed its entire interest in the Property to Moriarty as the "sole owner" of HBNC and that, as a result of this conveyance, HBNC "has been terminated." Appellant, on the same day, extended a loan of $625,000 to Moriarty, which was secured by a deed of trust on the Property.⁸ Neither the deed of trust nor the quitclaim deed, however, was recorded in the Montgomery County land records until December 14, 2007, or (1) more than one year and four months after the deed of trust was granted to appellant and (2) more than two months after the circuit court ordered HBNC, in the original lawsuit, to convey the property to appellees.

Appellant doggedly maintains that it did not know — and had no way of knowing — of the existence of the sales contract between HBNC and appellees when Moriarty granted the deed of trust to appellant. Appellees never recorded their sales contract among the land records, nor, as noted, did they file suit against HBNC until April 12, 2007-more than eight months after appellant secured its deed of trust on the Property.

Appellees, for their part, maintain that they only became aware of appellant's deed of trust, as well as several liens and encumbrances against the Property, on December 21, 2007, when they performed a title search in preparation for the settlement scheduled to take place, pursuant to the order issued in the original lawsuit. According to appellees, at no time during the litigation of the original lawsuit did Moriarty disclose the existence of appellant's deed of trust. In addition, despite the affirmation HBNC made as to its termination in the "Affidavit of Termination of [HBNC]," discussed supra, HBNC appeared as a party in the original lawsuit.

Appellees filed the instant action against appellant, Moriarty, HBNC and other defendants asserting liens on the Property to establish appellees' superior equitable and legal title to the Property, enjoin appellant from foreclosing upon the Property, void the conveyance of the Property by HBNC to Moriarty, void any interests acquired in the Property subsequent to the conveyance of the Property from HBNC to Moriarty and release all liens and encumbrances on the Property. Particularly material to this appeal are the allegations set forth in Counts Two and Three of the complaint. Count Two was set forth as follows:

COUNT TWO

(Quiet Title)

54. [Appellees] adopt paragraphs 1-53 above as though fully set forth herein.

55. This action is brought pursuant to Md.Code Ann. Real Prop. § 14-108.

56. [Appellees] have equitable title to the Property by virtue of the Contract, dated March 29, 2004, and their Notice of Lis Pendens filed April 13, 2007.

57. Before [appellees] could purchase the Property, and without [appellees'] knowledge or consent, Defendant HBNC, through its managing member, Defendant Edward Moriarty, fraudulently transferred its entire interest in the Property to Defendant Edward Moriarty in his individual capacity as sole owner.

58. After the fraudulent transfer, Defendant HBNC and/or Defendant Edward Moriarty, encumbered the Property with various liens, encumbrances, and other matters affecting title to the Property.

59. As a result of the actions of Defendant HBNC and Defendant Edward Moriarty, and the various liens and/or encumbrances affecting title to the Property as set forth above, [appellees'] sole interest in the Property has been denied and/or is in dispute.

60. Without an order of this Court quieting title, [appellees] are unable to acquire unencumbered, good and marketable title to the Property.

61. [Appellees] have equitable title in the Property and superior lien rights to the Property pursuant to Md.Code Ann., Real Prop., § 3-201, et seq. because they entered into the Contract on March 29, 2004 to purchase the Property, and because they filed their Notice of Lis Pendens on or about April 13, 2007.

WHEREFORE, [appellees] respectfully request that this Honorable Court enter judgment to Quiet Title to the Property determining that [appellees] have superior equitable and legal title in the Property over all defendants in this action, order the immediate release of all liens/encumbrances to the Property, order the Property immediately to convey to [appellees] without any liens/encumbrances, within no later than forty[-five] (45) days from the date of the order pursuant to the terms set forth in Judge Boynton's October 15, 2007 Order in the Underlying Case, and provide for such other relief as this Honorable Court deems just and proper.

Count Three mirrored, in many respects, the relief requested in Count Two:

COUNT THREE

(Complaint to Nullify Fraudulent Conveyance — Defendant HBNC and Defendant Edward Moriarty)

62. [Appellees] adopt paragraphs 1-61 above as though fully set forth herein.

63. On March 29, 2004, [appellees] entered into the Contract with Defendant HBNC to purchase the Property.

64. On or about August 11, 2006, and without [appellees'] knowledge or consent, Defendant HBNC, through its "alter ego" and managing member, Defendant Edward Moriarty, fraudulently conveyed its entire interest in the Property to Defendant Edward Moriarty in his individual capacity as sole owner. Defendant HBNC and Defendant...