Accubid Excavation, Inc. v. Kennedy Contractors, Inc.

DAVIS, J. Appellant, AccuBid Excavation, Inc., appeals from a judgment by the Circuit Court for Frederick County, awarding appellee, Kennedy Contractors, Inc., $41,296.16 in attorney’s fees, in addition to attorney’s fees previously awarded. The genesis of these proceedings was a mechanic’s lien action filed by appellant, a subcontractor to appellee, in the Circuit Court for Frederick County, in conjunction with a construction project. Trial proceeded in the circuit court on appellee’s breach of contract counter-claim based on the alleged failure of appellant to perform in accordance with its construction subcontract. In 2000, at the conclusion of the trial, the court entered judgment against appellant in the amount of $78,222.20, including an award of $48,222 for appellee’s attorney’s fees, ²¹⁷ provided for under the subcontract between the parties governing attorney’s fees.

In an appeal to this Court filed by appellant from the trial court’s decision, in an unreported opinion, 1 we disallowed “interest carry charges,” thereby partially vacating and, in effect, reducing the money judgment entered against appellant. On remand, pursuant to appellee’s Petition for Additional Attorney’s Fees, filed September 24, 2002, the circuit court entered judgment on June 8, 2004, awarding appellee $14,700 in additional attorney’s fees. Appellant appealed the court’s award of these additional attorney’s fees to this Court and we vacated the award of additional fees in its entirety and remanded the case to the trial court with direction for the circuit court to revise its judgment in accordance with our unreported opinion. 2 On March 30, 2006, the trial court entered a revised judgment, pursuant to our mandate, which was recorded on April 3, 2006. On April 10, 2006, the clerk issued the Notice of Modification of Judgment, the judgment becoming enrolled as a final judgment on May 3, 2006.

On May 16, 2006, appellant filed a Plea of Tender requesting that appellee be required to accept post-judgment interest running from the June 8, 2004. Appellee filed its opposition thereto on May 31, 2006 and requested post-judgment interest dating back to the court’s first entry of judgment in June 2000, as opposed to the intermediate June 8, 2004 judgment or the March 30, 2006 final judgment. Appellee’s opposition to the Plea of Tender also requested additional attorney’s fees pursuant to the provision for attorney’s fees in the contract between the parties. After a hearing on appellee’s request for interest, the circuit court ruled that post-judgment interest would accrue as of June 27, 2000, the date of the first judgment.

Appellant, for ²¹⁸ the third time, appealed to this Court; we dismissed the appeal as premature. On remand, appellant filed a Motion to Dismiss, Alternatively, Motion for Summary Judgment with respect to appellee’s request for additional attorney’s fees on December 22, 2006. Subsequent to appellee’s opposition to the Motion, the circuit court, on May 6, 2008, conducted a hearing and denied appellant’s Motion. On June 3, 2008, the court held an evidentiary hearing to consider the amount, if any, of attorney’s fees to be awarded to appellee.

Appellee’s counsel cited the subcontract between the parties as the basis of his request for attorney’s fees. At the conclusion of the hearing, the court “clarified” that the award was “for attorney’s fees incurred basically after April 3, 2006,” which was the date the clerk recorded the final judgment. In response to further requests for clarification from appellant’s counsel, the court stated that its attorney’s fee award was not a revision to the April 3rd final judgment: I don’t think it can be.... Because what the Court of Special Appeals did was said that [sic] that [Judge Dwyer’s August 16,2006 oral order awarding post-judgment interest and reserving on attorney’s fees] is a non final order because I reserved on attorney’s fees.

That order did not touch that [April 3, 2006 final] judgment I don’t think. The court opined, “I don’t think I have any authority to award attorney [sic] fees in this, other than pursuant to the subcontract, how’s that?” The court added that, “if that subcontract [between the parties] did not, um, survive that April 3rd order then Mr. Miller’s [attorney’s fee request is] in trouble.” As noted, in a written order filed June 12, 2008, the trial judge awarded appellee $41,296.16 in additional attorney’s fees, in addition to the award of $48,222 that was included in the final judgment against appellant. This appeal followed. Appellant filed this timely appeal, presenting the following questions, which we rephrase slightly, for our review: I. Did the trial court err when it awarded additional contract-based attorney’s fee damages requested after the ²¹⁹ entry of a non-appealable and enrolled final judgment on the contract in question?

II

Did the trial court err in granting post judgment interest to accrue from the date of the first judgment entered in this case, even though that judgment amount has since been subject to multiple reductions due to appeals taken to this Court? For the reasons that follow, we answer appellant’s first question in the affirmative and the second question in the negative and accordingly affirm, in part, and vacate, in part, the judgments of the Circuit Court for Frederick County. FACTUAL BACKGROUND 3 On November 15,1996, appellee entered into a contract with the owner and developer of the New Market Food Lion Shopping Center, Lionheart, to construct a grocery store for its principal tenant, Food Lion, at that location. According to that contract, appellee was to serve as general contractor for the Project.

The contract provided that time was “of the essence,” and that appellee had to “achieve Substantial Completion” of its work “not later than 210 days from the date of commencement.” The contract defined the “date of commencement” as “ten days after the issuance of all required building permits or a Notice to Proceed from the Owner, whichever occurs last.” Three and a half months later, on February 26, 1997, appellee entered into a “lump sum” subcontract with appellant, in which the latter agreed, inter alia, to widen Route 144 and complete on-site paving and water and sewer utility work. Appellant also agreed to furnish all labor materials, tools, fees, taxes, insurance, permits, licenses and all miscellaneous costs to achieve Site Work requirements in accordance with plans and specifications prepared by Lionheart’s engineering consulting firm, Loiderman Associates. Inc. (Loiderman). Appel ²²⁰ lant then entered into a contract with Frederick County for on and off-site utility installation on the Food Lion Project.

Appellant obtained the subcontract with appellee through a competitive bidding process, which required appellee to provide potential bidders with documents (bid documents), prepared by Loiderman. Based on the bid documents, appellant submitted a bid, which was accepted by appellee and the parties then entered into the subcontract, in which appellant stated that it had “visited the site and [was] familiar with the existing conditions.” It also represented that it had “reviewed the plans and specifications and that said plans and specifications [were] complete and/or sufficient to provide a complete operating system.” It further stated that, “with exception of design changes,” it could “complete the project with no additional cost to Contractor.” And it agreed that it would not “be entitled to any extras or change orders resulting from ‘insufficient information’ to complete its portion of the work.” On October 16, 1997, eight months after appellant began work on the Project on March 13,1997, according to appellant, the location of the “edge of existing paving” was exposed when “excavation for the subgrade of the road widening was initiated.” It was at this time, appellant claims, that the true “subsurface condition” of the road was revealed and it was discovered that those conditions were different from what was depicted in the bid documents provided by appellee. The next day, a Frederick County inspector noted in his “Daily Log” that the “[ejxisting shoulder [of Route 144] has approx [sic] 2 to 5. [inches] of tar & chip surface.” The inspector, having observed that “[t]here appears to be a discrepancy in the plans as to what surface is to be removed,” wrote that “Frederick County will not accept tar & chip shoulder as main line travel area.” Appellant, accordingly, requested a “change order” from appellee for additional compensation for what it claimed was an increase in the amount of paving necessary to complete the project over what was set forth in the bid documents. In a letter dated October 28, 1997, Keith Flannagan, appellee’s project manager, denied the ²²¹ request, stating that, after consulting with its engineer, appel-lee believed that “the plans adequately cover[ed][the] area and that no additional cost [was] justified.” Flannagan further wrote: “It is my understanding that your firm has left this site until this question has been answered.

Please continue on this work as per our contract to avoid impacting our schedule.” The letter concluded that it was to be considered as “notification to [appellant] to continue this work as required by our contract.” Rather than resume working, appellant wrote a letter to appellee, dated November 7, 1997, advising appellee that it was “willing to perform any additional work as long as we are provided drawings which illustrate what is to be done” and that it “never agreed to do additional work outside of the scope outlined in the contract documents and drawings to satisfy County Requirements.” The letter continued, “Until [it was] provided with a red line revision to the plan,” it would “proceed with the” plans as drawn, which, as indicated in the Frederick County inspector’s report, would not meet Frederick County standards. Additionally, delays, the result of rainy weather which required appellee to apply “soil cement” to the ground to facilitate paving in wet conditions, were a further source of conflict between appellee and appellant. Apparently responding to a letter appellee had received from appellant on November 17, 1997, appellee, on the same day, sent a letter stating that, because appellant had implied in its letter that it was “not going to install the right of way work on the” Project “in accordance with the directives issued ... by Frederick County” and had “refused to mobilize on the right of way work after being given the required notice to do so,” it was terminating its subcontract with appellant. Thereafter, appellee entered into a subcontract with a different excavating company, which in turn, subcontracted the work to a third excavating company.

All of the excavation work for the Food Lion Project, including the widening of Route 144, was approved by a Frederick County inspector on February 5, 1998. ²²² On January 2,1998, appellant filed a complaint for breach of contract and a petition to establish and enforce a mechanic’s lien in the Circuit Court for Frederick County. In its complaint and petition to establish mechanic’s lien, appellant contended that appellee wrongfully terminated it, and that appel-lee’s “refusal to render payment to appellant” constituted a “breach of the agreement between the parties.” As a result, appellant claimed that it was entitled to “damages for wrongful termination, lost profits and consequential damages.” In response, on April 8, 1998, appellee filed a counter-claim against appellant for breach of contract and negligence. In its counter-claim, appellee maintained, among other things, that pursuant to its subcontract with appellant, “appellant was to undertake any and all work to supply any all [sic] materials necessary to widen and overlay a portion of Maryland Route 144.” Appellee further asserted that, after it requested that appellant “perform the widening and overlay work as required by the Contract,” appellant “repudiated the contract” and refused “to proceed with the road widening ... thereby anticipatorily breaching its contract with appellee.” As a result, appellee claimed $160,000 in damages plus, pursuant to the terms of its contract with appellee, “reasonable attorneys [sic] fees.” Following a bench trial, in rendering its findings, the circuit court stated that it did “not find the contract has any hidden conditions, any ambiguous terms, anything that would justify a change order as was requested by [appellant] in this case.” The court also stated that it was “convinced” that appellant was responsible for any delays in completing the Food Lion Store, that appellant had refused to proceed with the subcontract and that, consequently, appellant had anticipatorily breached its subcontract with appellant. Having found appellant in breach of the subcontract, the court granted judgment against appellant in the amount of $80,000.

The court also found that the parties had previously stipulated to the fairness and reasonableness of attorney fees and, accordingly, awarded appellee $48,222 in attorney’s fees, resulting in a total judg ²²³ ment in favor of appellee and against appellant in the amount of $78,222. Appellant filed an appeal to this court and we affirmed in part, but reversed the court’s award of “interest carry” damages and remanded the case, directing that damages be adjusted in a manner consistent with our opinion. Upon remand, on June 8, 2004, the court awarded appellee $14,700 in additional attorney’s fees. The June 8, 2004 award was appealed and, in an unreported opinion dated November 16, 2005, we vacated the award, reversing that portion of the order dated June 4, 2004, which had awarded attorney’s fees in the amount of $14,700 and remanded for revision of the judgment in accordance with our opinion.

On November 30, 2005, Thomas Pank, President of appellant, forwarded a check in the amount of $53,746.86 to counsel for appellee. The letter accompanying the check stated: “Below is full payment for the judgment based on the Opinion recently received by me from the Maryland Court of Special Appeals.” Appellant’s check in the amount of $53,746.86 did not include post-judgment interest that appellee asserted that it was owed. Appellant’s explanation for remitting its check in the amount of $53,746.86 was that, by doing so prior to the December 15, 2005 Mandate, the tender of its check prevented post-judgment interest from accruing. Appellee refused to accept the $53,746.86 check as payment in full and thereafter made written and verbal requests that appellant withdraw its conditional tender and provide confirmation that the $53,746.86 check was not tendered as “payment in full.” When appellant failed to comply with appellee’s request, the latter advised appellant that it would not accept appellant’s tender of payment because, in its view, post-judgment interest automatically applies to all judgments regardless of whether post-judgment interest is specifically mentioned in the judgment and, under Maryland law, the post-judgment interest, sub judice, began to accrue on June 27, 2000.

On March 30, 2006, the trial court entered a final judgment in favor of appellee and against appellant in the amount of ²²⁴ $53,746.86, in accordance with the mandate issued by this Court. That judgment included an award of attorney’s fees in the amount of $48,222, which were presented in appellee’s case-in-chief and awarded in the first judgment in June 2000. The March 30, 2006 judgment was entered on the court docket by the clerk on April 3, 2006. No amended complaint or post-judgment motions were filed by appellee pursuant to Maryland Rules 2-534 and 2-535 (Motion to Alter or Amend Judgment; The Trial Court’s Revisory Power).

On March 30, 2006, the trial judge, in accordance with our Mandate, entered a revised judgment in the amount of $53,746.86. On May 16, 2006, appellant filed a Plea of Tender requesting that appellee be required to accept the sum of $53,746.36 plus accrued interest of $8,010.42, which amount represented interest at the rate of ten percent per annum from June 4, 2004 until the date of appellant’s tender of payment dated November 30, 2005. In response, appellee filed its Response to Plea of Tender and Motion for Award of Post-Judgment interest to collect the full amount of the judgment plus post-judgment interest from the original date of judgment. Additionally, in its Response to Plea of Tender and Motion for Award of Post-Judgment Interest, appellee sought attorney’s fees in connection with appellee’s attempts to collect the total amount due on the judgment.

Accordingly, the judgment became final and enrolled thirty days thereafter, on May 3, 2006. On May 31, 2006, appellee filed its Response to Plea of Tender and Motion for Award of Post-Judgment Interest, in which it opposed appellant’s Plea of Tender, sought post-judgment interest dating back to the original June 2000 judgment and requested additional post-judgment attorney’s fees. On December 22, 2006, appellee filed a Motion to Dismiss, Alternatively, for Summary Judgment with respect to its request for attorney fees, arguing that, contractually-based attorney’s fees form part of the prevailing party’s damages claim, which then merge into a final judgment, unlike attorney’s fees awarded pursuant to statute, which are collateral in nature. After appellee opposed appellant’s Motion, the parties, on May 6, 2008, appeared ²²⁵ before the trial judge, who heard oral arguments and denied appellant’s Motion.

The court’s verbal order was subsequently reduced to writing and filed on May 19,2008. On August 16, 2006, during a motions hearing on appellant’s Plea of Tender and appellee’s Response to Plea of Tender and Motion for Post-Judgment Interest, the trial judge, agreeing with appellee’s position as to the accrual date for post-judgment interest, denied appellant’s Plea of Tender and granted appellee’s Motion for Post Judgment Interest, but reserved on the issue of appellee’s request for additional attorney’s fees incurred in connection with appellee’s attempts to collect the full amount of the judgment plus post-judgment interest. On September 14, 2006, the court entered an Order reflecting the trial judge’s ruling that appellant pay appellee the principal amount of $53,746.36 plus post-judgment interest at the rate of ten percent per annum from June 27, 2000, the original date of judgment. Appellant appealed the post-judgment interest award to this Court; we dismissed the appeal as premature in an unreported opinion issued June 14, 2007, in light of the fact that the court had not ruled on appellee’s request for attorney’s fees.

AccuBid Excavation Inc. v. Kennedy Contractors, Inc., No. 1573, September Term, 2006 (filed June 14, 2007) (AccuBid III). On June 3, 2008, the circuit court elicited testimony and heard oral argument on appellee’s request for attorney’s fees. At the hearing, appellee’s counsel identified the parties’ subcontract as the legal basis in support of its request for attorney’s fees. The following transpired at the hearing: THE COURT: First as to the contract entered today as Defendant’s Exhibit 6, there was no need for a witness on the stand, and actually Article 14, we’re not going to take, we wouldn’t take parole evidence on it or anything of that nature.

It says what it says, and I read it to say that the contractor in this case, uh, [appellee] is entitled to reasonable attorneys [sic] fees as may be expended with respect to basically enforcing and collecting the judgment or anything for any breech [sic] of the contract and, therefore, I don’t find any need for any person on the stand. ²²⁶ I do find that based upon both Mr. Clapp and Ms. McBride’s testimony that the bills introduced are fair, reasonable and necessary for the prosecution of this case, particularly the, uh, part about post judgment interests, and that the fees incurred and the hourly rates expended by Mr. Miller and Ms. Peeples are fair and reasonable even when they increased. The amount I find is proven for purposes of this is the 42,667.98 as found on Defendant’s Exhibit Number 3, however, from that as conceded by the moving party here, uh, [appellee], you have to deduct the 127.82 and also from Defense Exhibit Number 1, the January 6 building [sic], billing, which I have of 916.50, the February billing, which I have as 133.50, the March 6 billing, which I have as 87.50, and the April 6 billing, which I have as 306.50 noting that there’s a separate thing for a triple seal of order and that’s completely different, and I’m not even sure where that goes. I have, therefore, if my math is correct, correct added those four numbers together, came up with attorneys [sic] fees of 1444 during that period, which I find are not appropriate to be awarded in this case. Not that the work wasn’t done, not that it was not fair and reasonable, but I have trouble with that concept that those were fees incurred between the mandate and this Court, um, following the mandate entering the revised judgment.

Therefore today and, Mr. Miller, you’re going to have to prepare the judgment on this or the order on this, because I don’t really have it, I come up with a judgment for attorneys [sic] fees in favor of [appellee] and against [appellant] in the amount of the 41,296.16. And, Mr. Miller, how long will it take you to have an order on that? MR. MILLER: Your Honor, I’ll certainly with a courtesy, run that order by, uh, Counsel here, but certainly today or tomorrow.

THE COURT: Okay, and if not you’ll be both back here Friday at 2:00, which is just a status conference and I have ²²⁷ it, I know you’re going to want to appeal, and that’s fíne, I just say please don’t appeal until it’s final. Yes, sir, Mr. Stevens? MR. STEVENS: For clarity, Your Honor, um, are you directing Mr. Miller to prepare a new judgment or are you revising the judgment for attorney’s fees that’s already in this case?

THE COURT: I don’t think there is any judgment for attorney’s fees in this case. MR. STEVENS: The, the underlying judgment in this case includes an award of 48,222.50? THE COURT: And you have the— MR.

MILLER: That’s close enough. MR. STEVENS: For, for attorneys [sic] fees. THE COURT: I’m confused, because I thought that underlying judgment in this case is only the 53,000, and that’s— MR.

MILLER: It is, which— MR. STEVENS: There’s 48,000 of that— THE COURT: Is there 48,000 of that? MR. STEVENS:—for fees.

THE COURT: I didn’t even—48. MR. MILLER: Yes, I—Your Honor, it’s, it’s— THE COURT: I think that judgment should clarify. The, the order from Mr. Miller should be clear that the, this award, let me put it this way, that judgment, all I did on that judgment was take the opinion to the Court of Special Appeals, subtract what they told me to subtract out, and enter an order.

I did not go back to figure out how they came up with— MR. STEVENS: Right. THE COURT:—the 53,000, and I’m not going to—so I think that this order should clarify that this is for attorneys [sic] fees incurred basically after April 3rd, 2006. MR.

STEVENS: Under the subcontract? ²²⁸ THE COURT: Pursuant to the subcontract. Pursuant to what’s been entered today as Defense Exhibit Number 6 entered today. I don’t know the, I say it that way because I know it’s in here before, but I don’t under, know under what number it is. MR.

STEVENS: Um-hum. So the Court’s not revising the judgment that already includes interest, I mean attorneys [sic] fees? THE COURT: I don’t think, that judgment, that judgment I entered on April 3rd was for $53,000 some dollars plus post judgment interests and costs. At the conclusion of the hearing, the trial judge awarded appellee $41,296.16 in attorney’s fees for legal services rendered from December 2005 through the date of the hearing.

The court’s oral ruling was reduced to a written order dated June 4, 2008 and recorded on June 12, 2008. The court’s ruling had previously been reserved by Order signed September 12, 2006 and docketed September 14, 2006, in the amount of $41,296.16. Appellant’s Notice of Appeal was filed on June 27, 2008. The attorney’s fees sought by appellee and awarded by the trial court were only those attorney’s fees incurred from December, 2005 through June, 2008.

Thus, the court awarded appellee $41,296.16 in additional attorney’s fees, in a separate judgment. On June 27, 2008, appellant timely appealed the circuit court’s award of attorney’s fees. ANALYSIS I Appellant initially contends that this Court’s March 30, 2006 Order constituted a final judgment, adjudicating all controversies between the parties arising out of the subcontract. Because appellee failed to appeal or otherwise challenge this final judgment, maintains appellant, the March 30, 2006 Order “clearly and unequivocally” established the amount of the final judgment, “which included $48,222 for attorney’s fees.” Summarizing its version of the procedural background, appellant relates in its brief to this Court: ²²⁹ There is no dispute that Judge Stepler’s original June 2000 judgment awarded [appellee] damages under the subcontract for attorney’s fees in the amount of $48,222.

Judge Dwyer later awarded, more expressly under the same subcontract, another $41,296.16. The later award is barred by this Court’s March 30, 2006 Order of final judgment, which resolved all claims arising from the Subcontract, including attorney’s fees. [Appellee’s] subcontract damages merged into the Judgment. This Court, on any remand, did not provide for additional attorney’s fees within its mandate governing any remand and no party sought to modify or amend this Court’s March 30, 2006 Order of final judgment. Therefore, all claims arising out of the Subcontract were merged into the March 30,2006 Order of final judgment.

Appellee, for its part, counters that appellant’s failure to satisfy its obligations under the original judgment is the sole reason it continued to incur attorney’s fees subsequent to the date of the original judgment. It was appellant that prolonged the final resolution of this case, insists appellee, by failing and refusing to pay the full amount of the judgment plus post-judgment interest at the legal rate from the date of the original judgment. Because appellant attempted to pay appellee less than what appellee was rightfully owed, appellee continues, it was forced to incur additional attorney’s fees in its attempt to collect the full amount owed by appellant. In addition to appellant’s refusal to pay post-judgment interest, according to appellee, these attorney’s fees were incurred as a result of appellant’s subsequent premature appeal of the circuit court’s ruling on post-judgment interest.

In summarizing its position, appellee asserts that the award of attorney’s fees is proper because it was forced by appellant to incur those fees when appellant refused to pay the full amount of the judgment owed. Because the attorney’s fees incurred by it in conjunction with the collection of its judgment in no way relate to its damage claim on the merits and were not incurred as a part of prosecuting the merits of the underlying breach of contract action between appellee and appellant, posits appellee, the doctrine of merger does not ²³⁰ apply. But for appellant’s challenge to appellee’s claim for the post-judgment interest, which it believes it was rightfully owed from the date of the original judgment dated June 27, 2000, appellee never would have incurred the additional attorney’s fees to enforce the terms of the subcontract. Finally, citing the “express terms” of the subcontract between the parties, appellee maintains that the subject fees clearly fall within the definition of attorney’s fees “as may be expended.” The pertinent language of Article XIV of the subcontract provides: In the event of default by the Subcontractor under any of the terms and provisions hereof and should the Contractor employ an attorney to enforce any provision hereof or to collect damages for breach of this Subcontract or to recover on the bond referenced above, the Subcontractor and his surety shall pay to the Contractor such reasonable attorney’s fees as may be expended with respect thereto.” (Emphasis added).

Like most jurisdictions in the United States, Maryland follows the “American rule” on attorney’s fees, according to which a party in a compensatory damages action may recover attorney’s fees only if (1) permitted by statute or (2) provided for in a contract between the parties. Hess Constr. Co. v. Bd. of Education of Prince George’s County, 341 Md. 155, 160 , 669 A.2d 1352 (1996); Long v. Burson, 182 Md.App. 1, 25-26 , 957 A.2d 173 (2008); Chang v. Brethren Mut. Ins.

Co., 168 Md.App. 534, 551-52 , 897 A.2d 854 (2006). If an exception to the rule does not apply, then “each party to a case is responsible for the fees of its own attorneys, regardless of the outcome.” Friolo v. Frankel, 403 Md. 443, 456 , 942 A.2d 1242 (2008). Appellee’s claim for attorney’s fees is based solely on the contractual provision excerpted supra. Appellee makes no claim that its request for attorney’s fees is authorized by statute or other exception to the rule.

As appellant points out, we have previously held in cases involving the recovery of statutorily-permitted or rules-based attorney’s fees that the recovery of attorney’s fees presents a ²³¹ matter collateral to or independent from the merits of the action. See, e.g., Mullaney v. Aude, 126 Md.App. 639, 649-53 , 730 A.2d 759 (1999); Dent v. Simmons, 61 Md.App. 122, 129-30 , 485 A.2d 270 (1985); Maryland Nat’l Capital Park & Planning Comm’n v. Crawford, 59 Md.App. 276, 303 , 475 A.2d 494 (1984). On the other hand, attorney’s fees recoverable pursuant to a contract are “ ‘part of the damage’s claim.’ ” G-C P’ship v. Schaefer, 358 Md. 485, 488 , 749 A.2d 823 (2000) (quoting Mattvidi Assocs. Ltd. P’ship v. NationsBank of Virginia, 100 Md.App. 71 , 78 n. 1, 639 A.2d 228 (1994)).

In G-C P’ship , a case involving issues of appealability, the Court of Appeals dismissed an appeal from a trial court’s judgments as to contract damages filed before the court ruled on a claim for contractually-based attorney’s fees, id. at 487-89 , 749 A.2d 823 , where the merits of the case involved a breach of a guaranty agreement and the request for fees was based on a provision for attorney’s fees in that agreement obligating the guarantors to pay for “ ‘all legal and other expenses paid or incurred in enforcing the Guaranty.’ ” Id. at 486 , 749 A.2d 823 . In so holding, the Court of Appeals reversed our decision in that case, where we (1) cited to Mattvidi Assocs. Ltd. P’ship, supra, for the proposition that “ ‘attorney’s fees pursuant to a contractual provision are part of [the prevailing party’s] damage claim,’ ” but (2) nonetheless concluded that such fees could be awarded because the court could exercise discretion under Maryland Rule 8-602(e)(l)(C) to enter a final judgment on its own initiative. G-C P’ship, 385 Md. at 487-88, 869 A.2d 837 .

This holding, stated the Court of Appeals, was erroneous: Rule 8-602(e)(l)(C) is not applicable to the circumstances of the instant matter. The circuit court did not have discretion to direct the entry of a final judgment pursuant to Rule 2-602(b) based on the summary judgment rulings made on June 19, 1998. This is because the counsel fees that were awardable pursuant to the contract form part of the claim for breach of contract, but they had not been determined when the 1998 appeal was noted. Rule 2-602(b) may not be used to certify as final only part of a claim. ²³² Id. at 488, 869 A.2d 837 (citations omitted and emphasis added).

Appellant asserts that, because appellee’s attorney’s fees claim was contract-based, the doctrine of merger prevented appellee from seeking additional contract-based attorney’s fees once final judgment was entered on appellee’s breach of contract claim, which, according to appellant, occurred when the circuit court’s March 30, 2006 order, following three successive appeals to this Court, was entered on April 3, 2006. This, according to appellant, distinguishes the case sub judice from those involving claims for attorney’s fees authorized by statute, which are generally considered “collateral” to the merits of the action. We agree with appellant’s argument. We explain.

The rule of merger is defined by the Restatement (Second) of Judgments § 18 (1982) as follows: When a valid and final personal judgment is rendered in favor of the plaintiff: (1) The plaintiff cannot thereafter maintain an action on the original claim or any part thereof, although he [or she] may be able to maintain an action upon the judgment; and (2) In an action upon the judgment, the defendant cannot avail himself [or herself] of defenses he [or she] might have interposed, or did interpose, in the first action. Although we are unaware of any Maryland case addressing the specific factual and procedural scenario presented here, i.e., an entry of judgment on the merits of a breach of contract claim followed by a post-judgment request for attorney’s fees based on provisions of the same contract, 4 Maryland’s appel ²³³ late courts have recognized that, under the rule of merger, “a simple contract is merged in a judgment or decree rendered upon it, and that all its powers to sustain rights and enforce liabilities terminated in the judgment or decree.... ” Jackson v. Wilson, 76 Md. 567, 571, 25 A. 980 (1893) (citation omitted). 5 See also United Book Press v. Md. Composition Co., 141 Md.App. 460, 474 , 786 A.2d 1 (2001) (citing Restatement (Second) of Judgments § 18, cmt. a (1982) for the proposition that “a claim merges into a judgment obtained with respect to that claim” and holding that, while a cause of action on a contract between the appellant and a third party merged into the judgment against the third party, a separate cause of action between the appellant and another party, based on a separate contract, did not merge into the judgment). Moreover, other jurisdictions have determined that, once a contract has been merged into the judgment, post-merger attempts to collect attorney’s fees authorized only by the merged contract cannot be sustained. In Production Credit Assoc, of Madison v. Laufenberg, 143 Wis.2d 200 , 420 N.W.2d 778, 779 (1988), a creditor claimed that it was entitled to post-judgment attorney’s fees based on the provisions of its loan agreement with the debtors, which provided, in pertinent part, that the creditor was authorized to pay for certain expenses from the debtors’ account, including the following: Except where and to the extent prohibited by applicable law, promptly pay or reimburse [the creditor] for all ex ²³⁴