Weston v. McBerry

• Decision Date: 01 February 2006
• Docket Number: No. 13 September Term, 2005.,13 September Term, 2005.
• Parties: WESTON BUILDERS & DEVELOPERS, INC. v. McBERRY, LLC.
• Court: Court of Special Appeals of Maryland

891 A.2d 430

167 Md. App. 24

WESTON BUILDERS & DEVELOPERS, INC. v. McBERRY, LLC.

No. 13 September Term, 2005.

Court of Special Appeals of Maryland.

February 1, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Melvin J. Sykes, Baltimore (Lloyd J. Snow, Baltimore, Michael P. Darrow, Annapolis, on the brief), for Appellant.

Stephen P. Fitzgerald, LaPlata, for Appellee.

Panel: MURPHY, C.J., JAMES R. EYLER and CHARLES E. MOYLAN, JR. (retired, specially assigned), JJ.

CHARLES E. MOYLAN, JR., Judge (retired, specially assigned).

I. The Threshold Question of Mootness

The appellee, McBerry, LLC ("McBerry"), asks us to dismiss this appeal for mootness. The appellant, Weston Builders & Developers, Inc. ("Weston"), has filed a Response in Opposition. The resolution of this threshold issue ironically requires us to address issues as challenging as those raised in the main appeal itself.

On March 7, 2002, Weston and McBerry entered into a contract in which McBerry agreed to sell and Weston agreed to buy forty-six (46) building lots in Charles County. On May 25, 2004, Weston filed an Amended Complaint seeking, inter alia, specific performance of the contract. After a three-day non-jury trial in the Circuit Court for Charles County, the trial judge, on February 2, 2005, granted McBerry's motion for judgment, and on February 8, judgment was entered in favor of McBerry. Weston filed this appeal on March 4.

During the pendency of the appeal, McBerry, on October 7, 2005, deeded all 46 of the lots to Maryland Homes, PF. McBerry now claims that because the property has been sold to a bona fide third party purchaser, the relief sought by Weston can no longer be granted and that the appeal, therefore, is moot. Weston parries with the Doctrine of Lis Pendens, by virtue of which the purchaser would not have been fully protected.

Lis Pendens, Generally

Lis pendens is a common law doctrine. Literally, it is Latin for "lawsuit pending." It has given rise to the maxim Pendente lite nihil innovetur ("During the pendency of a litigation, nothing new shall be introduced."). Inloes v. Harvey, 11 Md. 519, 525 (1857). The obviously related adverbial phrase "pendente lite" is etymologically indistinguishable but, legally, enjoys far wider applicability. The two related but distinct purposes of lis pendens are revealed by definitions 2 and 3 of it in Black's Law Dictionary (7th ed. 1999):

2. The jurisdiction, power, or control acquired by a court over property while a legal action is pending.

3. A notice, recorded in the chain of title to real property, required or permitted in some jurisdictions to warn all persons that certain property is the subject matter of litigation, and that any interests acquired during the pendency of the suit are subject to its outcome.

2 J. Pomeroy, A Treatise on Equity Jurisprudence, § 632 (5th ed. S. Symons 1941), pp. 727-28, states the undergirding rationale:

[T]he law does not allow litigant parties to give to others, pending the litigation, rights to the property in dispute, so as to prejudice the opposite party. Where a litigation is pending between a plaintiff and a defendant as to the right to a particular estate, the necessities of mankind require that the decision of the court in the suit shall be binding, not only on the litigant parties, but also on those who derive title under them by alienations made pending the suit, whether such alienees had or had not notice of the pending proceedings. ... [It is upon this principle of public policy, the object of which is to prevent parties from making a conveyance pendente lite of the property or thing which is the subject-matter of the controversy and thus defeat the execution of the court's decree, that the weight of modern authority bases the doctrine of lis pendens.]

(Emphasis supplied). See also Creative Development Corp. v. Bond, 34 Md.App. 279, 284, 367 A.2d 566 (1976).

In § 633, p. 730, Professor Pomeroy sets forth the general rule of lis pendens:

"[T]he general and established rule is," using the language carefully chosen by Chancellor Kent in a leading case, "that a lis pendens—a pending suit in equity—duly prosecuted, and not collusive, is notice to a purchaser of the property in dispute from a party to the litigation, so as to affect and bind his interest by the decree; and the lis pendens begins from the service of the subpoena after the bill is filed." Wherever, therefore, an equitable suit affecting the title to a particular estate as its subject-matter has been begun by service of process, and is prosecuted in good faith, whether we say that the lis pendens is constructive notice to all the world, or regard the doctrine as necessarily resting upon a basis of expediency, the result is the same; an alienee of the subject-matter from either party during the pendency of the suit takes it subject to the rights of the other party involved in the controversy, and is bound by the decree or judgment finally rendered.

(Emphasis supplied).

Depending upon the issue before the court in the case of the hour, appellate opinions fluctuate between looking to 1) notice to prospective purchasers and 2) the control of the courts over property while litigation is pending as the undergirding purpose of lis pendens. Both, of course, are part of the raison d'etre, and the emphasis will shift from one to the other depending on the analytic need of the moment. 5 Herbert T. Tiffany, The Law of Real Property, § 1294 (3rd ed. 1939), offered its take on the generative purpose:

The doctrine of lis pendens by which one purchasing land from a party to a pending litigation concerning such land takes subject to the results of such litigation, is properly based, it would seem, not on the theory that such purchaser has notice of the adverse claim, but rather on the principle that, pending the litigation, a party thereto cannot transfer his rights in the land to others, so as to prejudice another party to the litigation, since otherwise the decision might be utterly ineffectual.

Maryland is one of a handful of states that recognize lis pendens in its common law form. Janice Gregg Levy, Comment, "Lis Pendens and Procedural Due Process: A Closer Look After Connecticut v. Doehr," 51 Md. L. Rev. 1054, 1087 (1992). Albeit without expressly using the phrase "lis pendens" (at least in noun form), the Court of Appeals nonetheless applied the doctrine as early as 1823 in Tongue v. Morton, 6 H. & J. 21, 23-24:

And upon principle, it would seem fit that persons who come into the possession of the land pendente lite, claiming title to it under the parties to the bill,... should stand in the same predicament with those whom they represent in point of interest, on the ground that their condition cannot be better than that of those under whose authority they have obtained the possession.

(Emphasis supplied).

The Court of Appeals referred to lis pendens by name in Feigley v. Feigley, 7 Md. 537, 563 (1855), and, as of Inloes v. Harvey, 11 Md. at 524-25 in 1857, it was quoting fully from 1 Joseph Story, Equity Jurisprudence, § 406.

"Ordinarily, it is true, that the decree of a court binds only the parties and their privies in representation or estate. But he who purchases during the pendency of a suit, is held bound by the decree that may be made against the person from whom he derives title. The litigating parties are exempted from taking notice of the title so acquired; and such purchaser need not be made a party to the suit. Where there is a real and fair purchase without any notice, the rule may operate very hardly. But it is a rule founded upon a great public policy, for otherwise, alienations made during a suit might defeat its whole purpose; and there would be no end to litigation. And hence arises the maxim, pendente lite nihil innovetur; the effect of which is, not to annul the conveyance, but only to render it subservient to the rights of the parties in litigation. As to the rights of these parties, the conveyance is treated as if it never had any existence; and it does not vary them."

(Emphasis supplied).

In the intervening 150 years, the Court of Appeals has routinely recognized and applied the doctrine of lis pendens. Applegarth v. Russell, 25 Md. 317, 320-21 (1866); Hall v. Jack, 32 Md. 253, 264-65 (1870); Stockett v. Goodman, 47 Md. 54, 60 (1877); Sanders v. McDonald, 63 Md. 503, 509 (1885); Taylor v. Carroll, 89 Md. 32, 36, 42 A. 920 (1899); Walzl v. King, 113 Md. 550, 556, 77 A. 1117 (1910); Rupp v. Rogers, 118 Md. 534, 85 A. 774 (1912); Corey v. Carback, 201 Md. 389, 403-04, 94 A.2d 629 (1953). See also Price v. McDonald, 1 Md. 403, 412 (1851).

In the last 30 years, this Court has also consistently applied the doctrine. Creative Development Corp. v. Bond, 34 Md.App. 279, 283-85, 367 A.2d 566 (1976); Amabile v. Winkles, 34 Md.App. 435, 439, 367 A.2d 58 (1977); Angelos v. Maryland Casualty Co., 38 Md.App. 265, 268, 380 A.2d 646 (1977); Kirkpatrick v. Gilchrist, 56 Md.App. 242, 248 n. 2, 467 A.2d 562 (1983); Fiol v. Howard County Board of Appeals, 67 Md.App. 595, 603-04, 508 A.2d 1005 (1986); Permanent Financial Corp. v. Taro, 71 Md.App. 489, 492-95, 526 A.2d 611 (1987), cert. granted, 311 Md. 193, 533 A.2d 670 (1987), appeal dismissed, January 26, 1988; Warfel v. Brady, 95 Md.App. 1, 7-8, 619 A.2d 171, cert. denied, 331 Md. 88, 626 A.2d 371 (1993).

The truly definitive analysis of lis pendens in Maryland, however, had to await the opinion by Judge Bell (now Chief Judge Bell) for the Court of Appeals in DeShields v. Broadwater, 338 Md. 422, 432-42, 659 A.2d 300 (1995). The Court of Appeals discussed, inter alia, two of the key requirements for the attachment of the doctrine, both of which have been indisputably satisfied by Weston in the case before us. The lis pendens doctrine, at least in Maryland, applies exclusively to proceedings involving real property. Judge Bell explained, 338 Md. at 435, 659 A.2d 300.

Lis pendens has no applicability...