Wellington v. Shakiba
| Decision Date | 02 July 2008 |
| Docket Number | No. 521 September Term, 2007.,521 September Term, 2007. |
| Parties | The WELLINGTON COMPANY, INC. PROFIT SHARING PLAN AND TRUST v. Hosein M. SHAKIBA, et al. |
| Court | Court of Special Appeals of Maryland |
Richard S. Basile (Law Office of Robert E. Ammons, PA on the brief), of Greenbelt, for appellant.
Brian S. Jablon (Adelberg, Rudow, Dorf & Hendler, LLC on the brief), Ellicott City, for appellee.
Argued before HOLLANDER, WOODWARD and James A., Kenney, III (retired, specially assigned), JJ.
In this appeal, we must determine whether a contract action to recover a debt may be brought on a deed of trust, executed under seal, that contains a covenant to pay, even though the underlying obligation is also evidenced by a promissory note, for which limitations has arguably expired.
On October 12, 2005, the Wellington Company, Inc. Profit Sharing Plan and Trust ("Wellington," the "Trust," or the "Lender"), appellant, filed a Complaint in the Circuit Court for Anne Arundel County against Hosein M. Shakiba and Roya M. Shakiba ("Borrowers"), appellees.1 Wellington alleged that it had loaned $53,000 to appellees on September 7, 2001, "evidenced by a commercial balloon note and deed of trust." Averring that appellees had defaulted on their obligation, appellant demanded judgment of $83,758.15, which included principal, penalties, and pre-judgment interest, plus $12,000 in attorney's fees. On December 14, 2005, Mr. Shakiba moved to dismiss the suit, contending that it was barred by the three-year statute of limitations set forth in Maryland Code (1974, 2002 Repl.Vol.), § 5-101 of the Courts and Judicial Proceedings Article ("C.J."). After the court denied the motion, the matter proceeded to a bench trial in February of 2007.
At the close of appellant's case, Mr. Shakiba moved for judgment. The court granted the motion, entering judgment in favor of appellees in an Order docketed April 6, 2007. This appeal followed. Wellington raises two issues, which we have rephrased slightly:
1. Whether the Deed of Trust that was the basis of the Complaint was an instrument upon which an action at law for breach of contract could be maintained for monies due and owing.
2. Whether the Note and Deed of Trust that were the basis of the Complaint were instruments under seal.
For the reasons set forth below, we shall reverse the judgment of the circuit court and remand for further proceedings.
Wellington filed a one-count suit against appellees on October 12, 2005. In relevant part, the Lender averred:
2. That the Plaintiff loaned the sum of $53,000.00 to the Defendants on September 7, 2001.
3. That said loan was evidenced by and received by a commercial balloon note and deed of trust which are marked exhibits A and B respectively and which are attached hereto and incorporated herein by reference.
4. That the deed of trust referenced herein was recorded among the land records of Anne Arundel County, Maryland.
5. That pursuant to said deed of trust and commercial balloon note, the defendants were obligated to repay said loan....
On December 9, 2005, Ms. Shakiba, through counsel, filed a "Notice of Filing of Case in Bankruptcy Court." It stated:
You are hereby notified of the filing of a Chapter 7 bankruptcy case in the Baltimore Division of the United States Bankruptcy Court for the District of Maryland and pursuant to Section 362 of the Bankruptcy Code, this action is stayed for [Ms. Shakiba]. The Bankruptcy Case No. is 04-35704 and was filed on October 25, 2004. This case was discharged on February 21, 2005.
On January 13, 2006, the court issued an Order stating:
The Court has reviewed the Bankruptcy Notice filed by [Ms. Shakiba's counsel]. As it does not appear that there is an existing bankruptcy, no stay is required. The notice was not accompanied by any schedules or other evidence indicating the debt that is the subject of this suit has been discharged.
The case shall proceed in [the] ordinary course.
As noted, Mr. Shakiba moved to dismiss appellant's suit, claiming it was barred by the three-year statute of limitations set forth in C.J. § 5-101. The court denied Mr. Shakiba's motion on January 13, 2006. The case was tried to the court on February 7, 2007.
At trial, Delbert Ashby, Trustee of the Trust, was appellant's sole witness. Mr. Ashby described the Trust as "the vehicle for retirement program [sic] for the [Wellington Company's] employees." He recalled that the Trust lent $53,000 to appellees in September 2001, reflected in a "Commercial Balloon Note" (the "Note") dated September 7, 2001, as well as a Deed of Trust, also dated September 7, 2001, secured by property located at 751 Defense Highway in Anne Arundel County (the "Property").
The Note, executed by appellees, matured on May 1, 2002. It was received in evidence and provided, in part:
1. BORROWERS PROMISE TO PAY. FOR VALUE RECEIVED, the undersigned, Hosein M. Shakiba and Roya M. Shakiba (hereinafter referred to as the "Borrowers") promises to pay to The Wellington Company Inc., Profit Sharing Plan and Trust (hereinafter referred to as the "Lender") or order, the principal sum of FIFTY THREE THOUSAND ($53,000.00) DOLLARS. The principal and interest payments of this Note shall be due and payable as follows: (1) Interest will be charged on unpaid principal until the full amount of principal has been paid. I will pay interest at a yearly rate of 18.000%[;] (2) the interest rate required is the rate I will pay both before and after any default described in section 3[;] (3) commencing on November 1, 2001 (the "Commencement Date"), interest and principal payments in the amount of SEVEN HUNDRED NINETY FIVE DOLLARS AND NO CENTS ($795.00) shall be paid monthly on the first (1st) day of each month until May 1, 2002, the maturity date; and (4) at the Maturity Day of May 1, 2002, the remaining principal sum and any unpaid interest shall be due and payable.
2. Late Charges. The interest and principal payments of this Note are due and payable on the first (1 st) day of each month. If the Lender has not received the full monthly interest payment by the end of the fifth (5th) calendar day after payment is due, Lender may collect a late charge in the amount of FIVE (5%) PERCENT of the overdue amount of each payment.
3. Default and Acceleration. If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. In the event of default in payment of this Note, then the entire principal sum thereon shall at once become due and payable, without notice, at the option of the holder of this Note. Failure to exercise this option shall not constitute a waiver of the right to exercise such option in the event of any subsequent default.
4. Collection. If this Note is forwarded to an attorney for collection after maturity hereof (whether by demand, acceleration, declaration, extension, or otherwise), the Borrower shall pay on demand all costs and expenses of collection including attorneys' fees of FIFTEEN (15%) PERCENT of the unpaid balance of the Principal Amount then outstanding. * * *
WITNESS the following hand and seal.
WITNESS/ATTEST
_________________ [Signature]
_________________
Hosein M. Shakiba—Borrower
WITNESS/ATTEST
_________________ [Signature]
_________________
Roya M. Shakiba—Borrower
(Emphasis added.)
Appellant also introduced in evidence the notarized Deed of Trust, which provided, in part:
DEED OF TRUST
THIS DEED OF TRUST ("Security Instrument") is made on this 7th day of September, 2001. The grantors are Hosein M. Shakiba and Roya M. Shakiba ("Borrowers"). The trustee is Delbert M. Ashby, Anne Arundel County, Maryland ("Trustee"). The beneficiary is The Wellington Company Inc., Profit Sharing Plan and Trust which is organized and existing under the Laws of Maryland, and whose address is 2579 Rutland Road, Davidsonville, MD 21035 ("Lender").
Borrower owes Lender the principal sum of FIFTY THREE THOUSAND ($53,000.00 DOLLARS).
This debt is evidenced by Borrower's note dated the same date as this Security Instrument ("Note"), which provides for monthly payments, with the full debt, if not paid earlier, due and payable on May 1, 2002
This Security Instrument secures to Lender: (a) the repayment of the debt evidenced by the Note, with interest, and all renewals, extensions and modifications of the Note; (b) the payment of all other sums, with interest, advanced under paragraph 7 to protect the security of this Security Instrument; and (c) the performance of Borrower's covenants and agreements. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in Anne Arundel County, Maryland:
[See Schedule A Attached]
which has the address of 751 Defense Highway, Davidsonville, Maryland 21035 UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:
1. Payment of Principal and Interest: prepayment and Late Charges. Borrower shall promptly pay when due the principal of and interest on the debt evidenced by the Note and any prepayment and late charges due under the note.
Paragraph 21 of the Deed of Trust set forth the Lender's remedies upon the Borrowers' default. It provided that, as a remedy for default, the Lender "may invoke the power of sale and any other remedies permitted by applicable law."
In addition, appellees signed the Deed of Trust under seal, as follows:
BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any rider(s) executed by Borrower and recorded with it.
[Signature] ________________ (Seal)
Hosein M. Shakiba—Borrower
[Signature] ________________ (Seal)
Roya M. Shakiba—Borrower
Mr. Ashby testified that Mr. Shakiba made payments to appellant until March 15, 2002. He claimed that appellees were in default, and that $115,510.85 was due and owing,...
To continue reading
Request your trial
-
Daughtry v. Nadel
...Deed of Trust [or a mortgage], as contracts, and to obtain a remedy at law—monetary damages." Wellington Co., Inc. Profit Sharing Plan & Tr. v. Shakiba , 180 Md. App. 576, 591, 952 A.2d 328 (2008).12 Although a motion for a deficiency judgment pursued within a foreclosure proceeding was sub......
- Royal Investment v. Wang
-
Willis v. Bank of Am. Corp.
...Is the contract a specialty? (2) Is the cause of action "on" the specialty? Wellington Co., Inc. Profit Shar. Plan and Trust v. Shakiba, 180 Md. App. 576, 952 A.2d 328, 343 (2008). "'Whether a particular action is on a sealed instrument must depend on the character of the action; in order t......
-
Hart v. Pac. Rehab of Md., P.A.
...and elsewhere by judicial decision denotes a legal instrument under seal." See also The Wellington Co., Inc. Profit Sharing Plan & Trust v. Shakiba, 180 Md. App. 576, 601-02, 952 A.2d 328, 342 (2008); Allied Funding v. Huemmer, 96 Md. App. 759, 766, 626 A.2d 1055 (D. Md. 1993); Attorney Gen......