Century I Condominium Ass'n v. Plaza Condominium Joint Venture

ADKINS, Judge. This appeal involves one of several skirmishes in a seemingly endless war between the principal appellants and cross-appellees, Century I Condominium Association, Inc. and Pyramid Condominium Association (appellants) on the one hand, and the principal appellee and cross-appellant Plaza Condominium Joint Venture (Plaza) on the other. The war concerns appellants’ opposition to Plaza’s construction and use of an eighteen-story condominium in Ocean City. 1 This particular engagement involves appellants’ disagreement with an order of the Circuit Court for Worcester County (Eschenburg, J.) dismissing their appeal from the Ocean City Board of Zoning Appeals which had rejected ¹¹¹ their attempt to appeal from the issuance of a building permit. Plaza, for its part, takes issue with the trial court’s refusal to apply Md.Rule 1-341 sanctions against appellants.

In this court, Plaza also seeks Rule 1-341 sanctions with respect to appellants’ appeal. Background Plaza applied to the Ocean City Planning and Zoning Commission for site plan approval of its proposed condominium. On June 1, 1983, the commission approved the site plan, but recommended that Plaza obtain a conditional use permit for off-site parking and a height exception. Plaza appealed those recommendations to the zoning administrator and the Board of Zoning Appeals.

On June 30 the administrator decided that Plaza did not need a conditional use permit. At the same time, the board granted the height exception. The commission appealed the former determination to the board. Appellants questioned the height exception by filing a bill for declaratory and injunctive relief in the Circuit Court for Worcester County.

In August the board rejected the commission’s appeal concerning the off-site parking. No one appealed from that decision. On January 31, 1984, appellants dismissed their height exception case with prejudice. On February 15, 1984, the zoning administrator issued a building permit to Plaza.

It contained the height and parking exceptions. Appellants responded with a double salvo. They filed another declaratory judgment action in the Circuit Court for Worcester County in which they attacked the off-site parking exception and the administrative conclusion that no conditional use permit was required. And they appealed the issuance of the building permit to the Board of Zoning Appeals on essentially the same grounds.

In April the board dismissed the appeal, determining that the issuance of the building permit was not an appealable act. Appellants appealed to the circuit court. In the meantime, a motion to dismiss the declaratory judgment action had been filed. On June 29 Judge Eschenburg granted the ¹¹² motion, later explaining that he did so because appellants had “failed to timely and properly exhaust their administrative remedies” [emphasis in original].

Appellants appealed to this court. Still pending in the circuit court, of course, was this case — appellants’ appeal from the board. Judge Eschenburg dismissed that on October 2, 1984, holding that the appellants’ “appeal of the underlying zoning decisions of the ... Board of Zoning Appeals have [sic ] not been timely or properly appealed to this Court” and that “[t]he issues raised by [appellants] in this case are substantially identical to the issues raised by the same parties before the same court known as Century I Condominium Association, Inc. et al. v. Plaza Condominium Joint Venture ... which issues were previously briefed extensively to this Court ... and ruled upon in favor of [appellees] on June 29, 1984____” He held that those issues were barred by res judicata because of the June 29 decision.

On the same date, without explanation, Judge Eschenburg also denied Plaza’s Rule 1-341 motion for assessment of counsel fees against appellants. Once again, appellants appealed to this court. As we have seen, Plaza also appealed from the denial of its Rule 1-341 motion. On March 16, 1985, in an unreported per curiam decision, we affirmed Judge Eschenburg’s June 29, 1984, judgment.

Century I Condominium Association, Inc. et al. v. Plaza Condominium Joint Venture, No. 999, Sept. Term, 1934 (filed March 16, 1985). 2 Because we conclude that the March Century I decision is res judicata as to the merits of appellants’ appeal, we shall dismiss the appeal. Md.Rule 1035 b.8. We shall affirm Judge Eschenburg’s denial of Rule 1-341 sanctions below, but impose a portion of the Rule 1-341 relief Plaza seeks in this court. ¹¹³ Res Judicata Appellants argue that the basic issue in this case is whether the issuance of a building permit is appealable to a Board of Zoning Appeals. We see the issue somewhat more narrowly; it is whether the specific building permit issued to Plaza in February 1984 was appealable to the board.

But in any case, this is the very issue that we have recently resolved in the companion Century I appeal just cited. 3 Because that decision disposed of the substantive issues in this case, it is effectively res judicata as to it, except for the Rule 1-341 questions addressed below. Res judicata or estoppel by judgment bars a second suit between the same parties and their privies if the same cause of action has been finally decided on the merits in a prior action. Alvey v. Alvey, 225 Md. 386, 390 , 171 A.2d 92 (1961). The appeal before us now involves the same parties’ appeal from the same building permit involved in the companion case.

Although the issues of the two appeals are phrased differently, the essence of both appeals is a collateral attack on the earlier height and conditional use exception decisions. This is apparent upon examination of the pleadings in each case, the memoranda of law submitted below, and the briefs filed here. Moreover, we have held that a cause of action is the same for res judicata purposes when the evidence necessary to sustain a judgment for the plaintiff in the second action would have supported a judgment for him in the former. Jack v. Foster Branch Homeowners Ass’n, No. 1, Inc., 53 Md.App. 325, 334 , 452 A.2d 1306 (1982).

The evidence necessary to sustain appellants’ attack on the building permit related back to the 1983 zoning actions. When Judge Eschenburg decided (and we affirmed in No. ¹¹⁴ 999) that those actions could no longer be attacked because the effect was untimely, that precluded any further challenge to the permit. In short, appellants’ claim in this case is the same as their claim in that case, when the same evidence test is applied. Our March 16 decision in that case is, therefore, res judicata as to this case.

Alvey, 225 Md. at 390 , 171 A.2d 92 . No petition for certiorari was filed in that case; the decision is now final. Accordingly, we dismiss appellants’ appeal nostra sponte pursuant to Md.Rule 1035 b.8. 4 Rule l-Sjl This brings us to the problem of Rule 1-341. It arises in two aspects.

The first is presented by Judge Eschenburg’s denial of Plaza’s request for $14,062 in attorneys’ fees and out-of-pocket expenses incurred in defending this case in the Circuit Court for Worcester County and before the Board of Zoning Appeals. The second is presented by Plaza’s motion for an award of $8,654.35 in fees and expenses incurred in connection with the appeal to this court. Neither below nor here have appellants challenged the reasonableness of the amounts claimed. The question, therefore, is only whether fees and costs should be awarded under Rule 1-341.

That rule provides: In any civil action, if the court finds that the conduct of any party in maintaining or defending any proceeding was in bad faith or without substantial justification the court may require the offending party or the attorney advising the conduct or both of them to pay to the adverse party the costs of the proceedings and the reasonable expenses, including reasonable attorney’s fees, incurred by the adverse party in opposing it. ¹¹⁵ As we pointed out in Blanton v. Equitable Bank, National Association, 61 Md.App. 158, 161 , 485 A.2d 694 (1985), before Rule 1-341 sanctions may be applied, one or both of two predicates must exist. They are “bad faith” and “lack of substantial justification.” We turn first to the proceedings below and consider whether either or both of these predicates have been established. Ordinarily, a trial judge faced with a Rule 1-341 motion should make an explicit determination as to the existence of these factors. See Hess v. Chalmers, 33 Md. App. 541, 545 , 365 A.2d 294 (1976) (construing former Md.Rule 604 b).

Judge Eschenburg did not do so. He merely penned on Plaza’s motion: Motion in so far as it applies to attorney [sic ] fees is denied. The remainder of the motion is made moot by virtue of the Courts [sic] order granting the Motion to Dismiss. See last paragraph of said Order. 5 Undeterred by this lack of explication, Plaza insists that appellants’ maintenance of the instant case demonstrated “lack of substantial justification and bad faith.” We have held that this phrase also encompasses the maintenance of a proceeding for purposes of harassment and delay.

See Blanton, 61 Md.App. at 162 , 485 A.2d 694 . As to bad faith and delay, it is Plaza’s view that [appellants have] tried to delay the ultimate resolution of the issues underlying this appeal for the sole purpose of stalling construction and occupancy of Plaza Condominium. [Their] efforts at protracting this litigation are ¹¹⁶ designed to prejudice Plaza Condominium by clouding and hindering attempts to sell any condominium units during the upcoming summer season. Cross-appellants’ brief at 19. From this they argue bad faith.

Maybe so; had Judge Eschenburg so concluded as a matter of fact, we might have agreed. See Pharmakinetics Laboratories, Inc. v. Comptroller, 63 Md.App. 619, 623 , 493 A.2d 408 (1985). In any event, we would have something to review. But because there is no definite indication of the judge’s views of the facts, there is no opportunity for the application of the clearly erroneous rule.

Feldstein v. Segall, 198 Md. 285 , 81 A.2d 610 (1951). Nor do we find deliberate delay and consequent bad faith as a matter of law as appellants suggest. These factors involve questions of intent and as such, generally, require a factual determination. See DiGrazia v. County Executive, 288 Md. 437, 445, 453-54 , 418 A.2d 1191 (1980).

We do not say they can never be determined as a matter of law, but we decline to do so on this record. Actually, the significant aspect of the allegation of delay involves the fact that appellants waited until early 1984 to object to the zoning actions taken in the summer of 1983. During much of this period, however, appellants’ 1983 declaratory judgment action was pending. It was only after the dismissal of that suit that the 1984 building permit issued.

Thus, it was arguably at this point that appellants were first faced with a clear fait accompli as to Plaza’s authorization to build. They then moved quite promptly to file two separate appeals. The fact that they moved in two parallel lines at approximately the same time does not necessarily establish either delay or bad faith. Once this case was brought, the record does not show that its progress was slowed by improper dilatory tactics.

It was disposed of in the circuit court less than six months after the issuance of the administrative decision from which the appeal was taken. And while it is true that appellants ¹¹⁷ pursued this case after the June 29, 1984, dismissal of their declaratory judgment action, that fact alone does not demonstrate unjustifiable delay or bad faith. Since that dismissal was on appeal, the issue was still open. Absent a final determination of that issue, appellants were justified in maintaining parallel actions, lest they forfeit all claims therein by voluntary dismissal.

While it is true that the events in question might have been the result of deliberately delaying tactics, they also might have been the result of bad judgment or mistaken legal advice. In any event, the factual circumstances do not mandate a choice, as a matter