Bland v. Hammond

SHARER, J. In this appeal we are asked to determine whether the unprofessional conduct of an attorney, resulting in the dismissal of his client’s tort action, amounted to fraud and, if so, whether the fraud was extrinsic and, thus, a basis for vacating ³⁴⁴ the judgment of dismissal. We shall hold that the conduct of the attorney did not, on the extant facts, rise to the level of extrinsic, fraud. Charlain Bland, appellant, excepts to the denial of her motion to vacate judgment by the Circuit Court for Prince George’s County. Bland raises two issues, which we have rephrased as: 1 Whether the unprofessional conduct of a litigant’s attorney, resulting in dismissal of the litigant’s suit, amounts to extrinsic fraud that would justify vacating the judgment.

For the reasons that follow, we shall affirm the judgment of the circuit court. FACTUAL and PROCEDURAL BACKGROUND The genesis of appellant’s claim against Joseph Hammond and Sylvia Hammond, appellees, is a rear-end collision that occurred in Prince George’s County on June 15, 1998. Bland was injured and incurred more than $25,000 in hospital and other medical expenses. The Underlying Litigation In July 1998, Bland retained Michael J. Graham, a member of the Maryland bar, to represent her in her tort claim.

On June 13, 2001, just two days before the expiration of the statute of limitations, Graham filed a complaint on Bland’s behalf in the Circuit Court for Prince George’s County. What, if any, effort Graham made on behalf of Bland in the interval between his having been retained, and the filing of the complaint, is not clear from the record. Thereafter, appellees, through counsel, filed a timely answer to the complaint and, on December 31, 2001, served Graham with interrogatories and a request for production of docu ³⁴⁵ ments. Bland alleges that Graham did not contact her to obtain information to answer the discovery.

Not having received the requested discovery, appellees filed a motion to compel on July 31, 2002. Again, Graham did not discuss the motion with Bland, nor did he respond to the motion. On August 27, 2002, at a pre-trial/scheduling conference, Graham signed, on behalf of Bland, a consent order agreeing to produce the requested discovery within 30 days. He did not comply with the consent order.

Bland did not attend the pre-trial conference and Graham allegedly did not advise her of what occurred at the conference. Because the discovery was still not forthcoming, appellees filed, on December 9, 2002, a motion for sanctions. Graham responded to the motion for sanctions by requesting an extension of time to provide discovery. The court took no action on the motion for sanctions, but still Graham did not comply.

By order of January 9, 2003, the court granted appellees’ motion to compel, directing Graham to provide discovery by February 15, 2003. Again, Graham did not provide the discovery, nor did he discuss with Bland the need to do so. Appellees filed a second motion for sanctions on March 7, 2003. Graham did not respond to the motion, nor did he advise Bland of its filing.

Finally, on April 9, 2003, the court dismissed Bland’s suit, without prejudice, as a sanction for not providing the requested discovery. Graham did not advise Bland of the dismissal but, on April 15, 2003, sent to Bland, by fax transmission, a draft of answers to interrogatories. Bland asserts that, throughout the period of Graham’s representation, her repeated attempts to contact him to discuss her case were unsuccessful. Ultimately, Bland conducted a personal search of the case file in the circuit court and, in December, 2004, learned that her suit had been dismissed without prejudice.

Of course, by that time, limitations on her claims against appellees had expired. She next filed a complaint with the Attorney Grievance Commission, only to learn that Graham had been suspended indefinitely by the Court of Appeals on November 5, ³⁴⁶ 2004. 2 It appears from the record that, even after having been suspended, Graham continued to mislead Bland to believe that he was still actively engaged in representing her. Bland filed a legal malpractice action against Graham in July 2005, asserting claims of breach of contract, breach of fiduciary duty, fraudulent misrepresentation, and fraudulent concealment. Graham filed an answer to the complaint, but did not timely respond to discovery.

Judgment by default was entered by the circuit court against Graham on February 22, 2006. Bland has been unsuccessful in her collection efforts and now avers that Graham is uninsured and judgment proof. The Motion to Vacate Bland filed her motion to vacate on February 23, 2006, contending that Graham’s conduct in dealing with her case constituted extrinsic fraud that entitled her to set aside the April, 2003 judgment, pursuant to Md.Code, Cts. & Jud. Proc. § 6-408 and Md. Rule 2 — 535(b).

Appellees filed a timely opposition to the motion to vacate. The circuit court, after considering the parties’ memoranda, supplemental memoranda, and argument in open court, filed a memorandum and order of court on September 26, 2006, denying appellant’s motion to vacate. This timely appeal followed. DISCUSSION We review the denial of a motion to vacate an enrolled judgment under an abuse of discretion standard.

Das v. Das, 133 MdApp. 1, 15, 754 A.2d 441 (2000). Abuse of discretion occurs “where no reasonable person would take the view adopted by the [trial] court,” or when the court acts “without refer ³⁴⁷ ence to any guiding rules or principles.” It has also been said to exist when the ruling under consideration “appears to have been made on untenable grounds,” when the ruling is “clearly against the logic and effect of facts and inferences before the court,” when the ruling is “clearly untenable, unfairly depriving a litigant of a substantial right and denying a just result,” when the ruling is “violative of fact and logic,” or when it constitutes an “untenable judicial act that defies reason and works an injustice.” Id. at 15, 754 A.2d 441 . In particular, fraud, which appellant alleges, must be proven by clear and convincing evidence. Id. at 17, 754 A.2d 441 .

The circuit court in the case sub judice found that appellant “simply laid out facts to suggest negligence, and attempts [by Graham] to conceal [his] negligence. This is not extrinsic fraud as contemplated by the applicable case law or facts.” We agree, and hold that the conduct of appellant’s attorney does not fall within the definition of extrinsic fraud as contemplated by established Maryland law. Revisory Power The issue before us brings into play the revisory power of the trial court, the authority for which is found in the parallel provisions of Maryland Code, Courts and Judicial Proceedings, § 6-408 and Md. Rule 2-535 that establish a 30 day revisory window. 3 After the 30 day revisory period has passed, a circuit court can vacate or revise an enrolled judgment only upon a showing of fraud, mistake, irregularity, or the failure of the court to perform a duty required by statute or rule. Md. Rule 2 — 353(b).

The purpose of the rule is to ³⁴⁸ ensure the finality of judgments. See Das, supra, 133 Md. App. at 17-18 , 754 A.2d 441 . The Maryland cases are legion that recognize the principle that there must be a definite and foreseeable end to litigation, and that ordinarily judgments should not be vacated after the passage of the 30-day review period. Fleisher v. Fleisher Co., 60 Md.App. 565, 568 , 483 A.2d 1312 (1984).

Nonetheless, we also recognize that in exceptional cases, judgments may be vacated or revised when specific criteria are met. Id. The rules of finality apply to all final judgments, including those entered by default. See Das, supra, 133 Md.App. at 17-18 , 754 A.2d 441 , (citing Maggin v. Stevens, 266 Md. 14, 16 , 291 A.2d 440 (1972)).

The terms “fraud,” “mistake,” and “irregularity,” as applied in Md. Rule 2-535 and its predecessor, Md. Rule 625(a), have been thoroughly defined by the opinions of this Court and the Court of Appeals. “Fraud,” “mistake,” and “irregularity” are to be “narrowly defined and strictly applied.” See Autobahn Motors, Inc. v. Baltimore, 321 Md. 558, 562 , 583 A.2d 731 (1991) (citing Andresen v. Andresen, 317 Md. 380, 389 , 564 A.2d 399 (1989)) (quoting Platt v. Platt, 302 Md. 9 , 485 A.2d 250 (1984)). Negligence or Fraud? Appellant asserts that Graham’s conduct went beyond mere negligence or legal malpractice and rose to the level of fraud. Appellees respond that Graham’s handling-or non-handling-of Bland’s case was nothing more than traditional legal negligence, and not a fraud upon either Bland or the court.

Appellees argues that [ajppellant’s attempt to dress up her attorney’s malpractice by calling it “fraud” lacks substance. The case was dismissed because of Graham’s failures to comply with court orders-not because a fraud was perpetrated on her or the court. That Graham did not inform Appellant of the court rulings, including the fact that the case had been dismissed as a result of his malpractice, may constitute a breach of counsel’s duties owed to a client and violation of the Rules of ³⁴⁹ Professional Conduct; however, it does not amount to the type of fraud sufficient to set aside a judgment. An attorney is held to the Rules of Professional Conduct, including Rule 1. 1, which requires that “A lawyer shall provide competent representation to a client.

Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” In turn, Rule 1.4, Communication, requires: (a) A lawyer shall: (1) promptly inform the client of any decision or circumstance with respect to which the client’s informed consent ... is required by these Rules; (2) keep the client reasonably informed about the status of the matter; (3) promptly comply with reasonable requests for information; (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. Graham’s violations of those duties to Bland are abundantly clear. Deviation from the Rules of Professional Conduct does not necessarily form the basis for a finding of legal malpractice. Md. Rules of Professional Conduct, Scope (20).

The rules “are not designed to be a basis for civil liability.” Id. However, the Court of Appeals has found that in some circumstances, such as fee-sharing agreements, violation of a rule may be evidence of a breach of the applicable standard of care. In Post v. Bregman, 349 Md. 142, 168 , 707 A.2d 806 (1998) the Court, holding that Rule 1.5(e) constitutes a supervening statement of public policy to which fee-sharing by lawyers are subject, said: [T]he enforcement of Rule 1.5(e) is not limited to disciplinary proceedings. It may extend to holding fee-sharing agreements in clear and flagrant violation of Rule 1.5(e) ³⁵⁰ unenforceable, for, following the observation of the California court in Scolinos v. Kolts, supra, 37 Cal.App.4th at 640, 44 Cal.Rptr.2d 31 , it would indeed be at least anomalous to allow a lawyer to invoke the court’s aid in enforcing an unethical agreement when that very enforcement, or perhaps even the existence of the agreement sought to be enforced, would render the lawyer subject to discipline.

As with negligence generally, deviation from the standard of care expected of an attorney may be malpractice. In order to recover based on legal malpractice, the claimant must establish: “(1) the attorney’s employment; (2) his neglect of a reasonable duty; and (3) that such negligence resulted in and was the proximate cause of loss to the client.” Kendall v. Rogers, 181 Md. 606, 611 , 31 A.2d 312 (1943); Pickett, Houlon & Berman v. Haislip, 73 Md.App. 89, 96 , 533 A.2d 287 (1987); Glasgow v. Hall, 24 Md.App. 525, 529 , 332 A.2d 722 (1975). In the final analysis, there can be little doubt that Graham’s failures in his representation of Bland amount to negligence and legal malpractice. The core question is whether Graham’s actions, and inactions, amount to fraud and, if so, whether the fraud was extrinsic so as to justify the setting aside of an enrolled judgment.

Fraud Maryland’s strong public policy favoring finality and conclusiveness of judgments can be overcome only by a showing “ ‘that the jurisdiction of the court has been imposed upon, or that the prevailing party, by some extrinsic or collateral fraud, has prevented a fair submission of the controversy.’ ” Schwartz v. Merchants Mortg. Co. 272 Md. 305, 309 , 322 A.2d 544 (1974) (quoting Pico v. Cohn, 91 Cal. 129, 133 , 25 P. 970 (1891)). The Court of Appeals has noted that “[t]he negligence or mistakes of the agents and counsel of the complaining party, are not sufficient to justify a court in striking out an enrolled judgment or decree.” Wooddy v. Wooddy, 256 Md. 440, 453 , 261 A.2d 486 (1970). ³⁵¹ Only extrinsic fraud will justify the reopening of an enrolled judgment; fraud which is intrinsic to the trial itself will not suffice. See Tandra S. v. Tyrone W., 336 Md. 303, 315 , 648 A.2d 439 (1994); Oxendine v. SLM Capital Corp., 172 Md.App. 478 , 915 A.2d 1030 (2007).

Fraud is extrinsic when it actually prevents an adversarial trial, but is intrinsic when it is employed during the course of the hearing or trial which provides the forum for the truth to appear. See Manigan v. Burson, 160 Md.App. 114 , 862 A.2d 1037 (2004). Intrinsic fraud is not a ground upon which an enrolled judgment may be vacated. In determining whether extrinsic fraud exists, “the question is not whether the fraud operated to cause the trier of fact to reach an unjust conclusion, but whether the fraud prevented the actual dispute from being submitted to the fact finder at all.” Hresko v. Hresko, 83 Md.App. 228, 232 , 574 A.2d 24 (1990), (citing Fleisher, supra, 60 Md.App. at 571 , 483 A.2d 1312 ).

The keystone definition of extrinsic fraud was provided by the United States Supreme Court in United States v. Throckmorton, 98 U.S. 61, 65-66 , 25 L.Ed. 93 (1878): Where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practised on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority assumes to represent a party and connives at his defeat; or where the attorney regularly employed corruptly sells out his client’s interest to the other side,-these, and similar cases which show that there has never been a real contest in the trial or hearing of the case, are reasons for which a new suit may be sustained to set aside and annul the former judgment or decree, and open the case for a new and a fair hearing. Maryland courts have firmly adhered to the Throckmorton definition of extrinsic fraud. See Oxendine, supra, 172 Md. App. at 492-93 , 915 A.2d 1030 (citing Schwartz, supra, 272 ³⁵² Md. at 309, 322 A.2d 544 ; Das, supra, 133 Md.App. at 18 , 754 A.2d 441 ; Fleisher, supra, 60 Md.App. at 571 , 483 A.2d 1312 ). There are notably few instances in Maryland jurisprudence where a judgment has been vacated on the basis of extrinsic fraud.

In Fleisher , this Court affirmed the trial court’s grant of appellee’s motion to vacate based on a finding of extrinsic fraud. There, we reasoned that the appellant’s self-serving and devious actions served to prevent appellees from