D'Aoust v. Diamond

MATRICCIANI, J. On April 7, 2008, appellant, Michelle D’Aoust, filed a complaint in the Circuit Court for Harford County, naming as defendants appellees Cindy Diamond, Bruce Brown, and Ro-sen Hoover, P.A. 1 Appellees filed a motion to dismiss on June 26, 2008, which the court granted on September 29, 2009. Appellant filed a timely notice of appeal on September 30, 2009. Questions Presented Appellant presented three questions for our review, which we have consolidated, as follows: Did the trial court err when it granted appellees’ motion to dismiss? For the reasons set forth below, we answer yes.

Therefore, we reverse the judgment of the trial court and remand this case for further proceedings. Background On April 7, 2008, appellant sued appellees in the Circuit Court for Harford County. Her complaint contained the following relevant factual allegations: ²⁰⁰ 2. Defendants CINDY R. DIAMOND and BRUCE D. BROWN are Petitioners and court-appointed Trustees in the case styled Diamond, et al. v. D’Aoust, Case No. 12-C-05-364, in the Circuit Court for Harford County (“the Petition for Sale”). 6.

Defendants Diamond and Brown appointed Trustees to sell the Property by Order dated March 14, 2005. The Property was sold by the Trustee at public sale on May 26, 2005 for $65,000.00. There was no existing mortgage on the Property at the date of Sale. 9. ... [T]he Defendants Diamond and Brown had actual or constructive knowledge that Plaintiffs address was 11010 Bowerman Road, White Marsh, Baltimore County, Maryland. 10. Despite its knowledge, the Defendants Diamond and Brown, as members of the Law Firm and as Trustees, on May 10, 2005 directed the Notice of the Sale of Plaintiffs Property to the Property address, rather than 11010 Bower-man Road. 11.

Likewise, the Defendants Diamond and Brown caused the Notice of Intention to Create a Lien to be posted on the Property, and did not serve or mail a copy of said Notice to Plaintiff at her address at 11010 Bowerman Road. 12. As a result of the failure of Defendants Diamond and Brown to send Notice of the Sale to Plaintiff at 11010 Bowerman Road, Plaintiff did not know that her Property was sold on May 26, 2005. Had Plaintiff been advised of the sale by notice at 11010 Bowerman Road, she would have taken steps to prevent the Sale by paying the condominium lien, and/or would have attended the sale to bid on the Property. 14. On or about July 5, 2005, Plaintiff filed exceptions to the sale in the Circuit Court for Harford County. 15.

A hearing on Plaintiffs exceptions was scheduled for August 31, 2005. ²⁰¹ 16. Prior to the hearing, Defendant Cindy Diamond told Plaintiff that the Trustees were withdrawing objections to the exceptions and would advise the Court that no hearing was required because the exceptions should be sustained. 17. Defendants Diamond and Brown subsequently withdrew objections to the exceptions but did not advise the Court that the exceptions should be sustained and the sale not ratified. 18. The Court ratified the exceptions without a hearing on September 14, 2005 (filed October 3, 2005).

Although Defendants Diamond and Brown knew that the Court’s ratification was ordered without knowledge that the sale had been made without adequate notice to Plaintiff, the Defendants did not advise the Court, but instead conveyed the property without further notice of Plaintiff, to the party who purchased it at the public sale, with the intent of depriving Plaintiff of obtaining reconsideration of the September 14, 2005 ratification order. Based on the forgoing facts, appellant alleged two counts. Count one, entitled “Breach of Duty,” incorporated the forgoing allegations and added: 21. In proceeding with a judicial sale of Plaintiffs Property, Defendants Diamond and Brown owed a fiduciary duty to Plaintiff to conduct the proceedings in accordance with Maryland law and the Maryland Rules of Procedure, including without limitation, Maryland Rule 14—206(b)(2). 22.

Defendants Diamond and Brown breached their fiduciary duty owing to Plaintiff by failing to send Notice of Sale of Plaintiffs Property to her last known address, i.e., 11010 Bowerman Road, White Marsh, Maryland 21162, as required by § 14203(a) of the Real Property Article (Maryland Contract Lien Act). 23. Defendants Diamond and Brown further breached their fiduciary duty and committed actual fraud by filing a false or incorrect Affidavit in the Petition for Sale case stating that they had sent Notice of the Sale of Plaintiffs Property to her at her last known address. ²⁰² Count two of appellant’s complaint, entitled “Constructive Fraud,” added the following allegations: 27. The failure of Defendants Diamond and Brown to provide notice to Plaintiff in accordance with Maryland law and the Maryland Rules of Procedure amounts to constructive fraud under the doctrine of Jannenga v. Johnson, 243 Md. 1 , 220 A.2d 89 (1966). 28. Defendants Diamond and Brown further committed constructive fraud in not advising the Court that they had failed to give Plaintiff a proper notice of the sale of her condominium unit, but instead conveying the unit to the purchasers.

Appellees filed a “Motion to Dismiss” on June 26, 2008, which incorporated a memorandum of law and two exhibits in the form of affidavits from Diamond and Brown. Appellees’ motion argued that they were entitled to the defense of judicial immunity and that the court should therefore dismiss appellant’s complaint, with prejudice. Appellees’ incorporated memorandum of law argued that “Diamond and Brown were not personally aware that Plaintiff had changed her address and no longer resided at the Property,” citing Diamond and Brown’s affidavits to that effect. Appellant responded to the motion, to which appellees replied, in turn.

The trial court issued a memorandum opinion and order on August 21, 2009. The court began its opinion by noting that “[a] motion to dismiss serves the same function as the now defunct demurrer” and that in rendering its decision, “[t]he court is required to accept as true all well-pleaded material facts in the declaration and exhibits thereto, as well as any reasonable inferences that may be drawn there from [sic].” The court further noted that its “decision on a motion to dismiss a complaint does not pass on the merits of the claim; it merely determines the Plaintiffs right to bring the action,” and that “[t]o withstand a motion to dismiss for failure to state a claim, a party need only allege facts that, if proven, would entitle them to relief.” ²⁰³ The court cited Merryman v. Bremmer, 250 Md. 1 , 241 A.2d 558 (1968), and Lurman v. Hubner, 75 Md. 268 , 23 A. 646 (1892), for the proposition that where there is a judicial sale of property, the court itself is a vendor and any trustee appointed to make the sale is an agent of the court for that purpose. Thus, the court reasoned: “As a general rule, judicial officers are immune from civil actions if the action in question that was performed by the judicial officer was discretionary and not ministerial and within the jurisdiction of the officer’s authority,” citing Rice v. Dunn, 81 Md.App. 510 , 568 A.2d 1125 (1990), and the more recent case of Tucker v. Woolery, 99 Md.App. 295 , 637 A.2d 482 (1994). The trial court concluded its opinion with the following analysis: In the present case, Diamond and Brown did nothing to exceed the scope of their authority as trustees.

They sold the property in a manner that they believe complied with the court’s order and the court ratified the sale. Even assuming that they could have or should have known of a different address to notify Ms. D’Aoust this in and of itself does not mean that they did anything beyond the scope of their authority which would lead to their losing the qualified immunity that they have as trustees and to justify them being held personally liable through the Plaintiff. For this reason the court believes that the Defendants’ Motion for Summary Judgment should be granted. (Emphasis added) Shortly after referring to appellees’ motion as one for “summary judgment,” the court’s opinion concluded that “the Defendants’ Motion to Dismiss should be GRANTED.” (Italic emphasis added.) The order that accompanied it, however, once again indicated that it was granting “Defendants’ cross motions for summary judgment.” The court amended its judgment on September 29, 2009, and entered an order granting appellees’ motion to dismiss as to all parties.

Appellant noted her appeal the next day, on September 30, 2009. ²⁰⁴ Discussion I. Procedural Posture Our first task in unraveling the issues of this appeal is to determine whether to treat the court’s order as a dismissal or as a summary judgment. We begin with Maryland Rule 2-322(c), which provides: If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 2-501, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 2-501. Our treatment is guided by the Court of Appeals’ decision in Converge Servs. Group, LLC v. Curran, 383 Md. 462 , 860 A.2d 871 (2004), in which the court explained the metamorphosis of a motion to dismiss to a motion for summary judgment: [I]f a trial court treats a motion to dismiss as a “speaking demurrer” under Md. Rule 2-322(c) and considers “matters outside the pleading” (see [Paul V. Niemeyer & Linda M. Schuett, Maryland Rules Commentary,] 206-207 [ (3d ed. 2003) ], explaining that Rule 2-322(b) serves the same function as the common law demurrer but also permits a “speaking demurrer”) the trial court must treat (and is presumed to have treated) the Rule 2-322(b) motion as a motion for summary judgment under Md. Rule 2-501.

Md. Rule 2-322(c); Dual v. Lockheed Martin, Inc. [Corp.], 383 Md. 151 [161], 857 A.2d 1095, 1100 (2004) (No. 115, September Term 2003) (filed Sept. 13, 2004); see Oak Crest Village, Inc. v. Murphy, 379 Md. 229, 239 , 841 A.2d 816, 822 (2004) (observing that the trial court treated a motion to dismiss as “one for summary judgment” under Md. Rule 2-322(c)). Unless the court states to the contrary, it is presumed to have considered also the factual allegations presented by the movant in its exhibits attached to the so-called motion for dismissal. ²⁰⁵ In this case, it is unclear whether the trial court considered the factual allegations presented in the exhibits attached to appellees’ motion. Certain portions of the court’s opinion indicate that it definitively treated the motion as one to dismiss, which would imply that it excluded the evidence in appellees’ affidavits, while other portions of the opinion clearly refer to a motion for summary judgment. Regardless of whether the court contradicted itself when it issued an order dismissing appellant’s claims rather than granting summary judgment, we will consider the court’s order as one dismissing the action.

To the extent that the trial court relied on the evidence outside the pleadings, that was done in the alternative. The court held that, “[e]ven assuming that [Diamond and Brown] could have or should have known of a different address to notify Ms. D’Aoust this in and of itself does not mean that they did anything beyond the scope of their authority which would lead to their losing the qualified immunity that they have as trustees and to justify them being held personally liable through the Plaintiff.” Thus, the court concluded that appellant’s allegations would necessarily fail as a matter of law, even under the facts alleged. Furthermore, appellant nowhere argues that to do so was erroneous, and both parties consistently refer to the motion and order as dismissals. For these reasons, we shall consider the court’s order as a motion to dismiss and review it according to the following framework: When considering on appellate review the grant of a motion to dismiss a complaint for failure to state a claim upon which relief may be granted, a court must assume the truth of, and view in a light most favorable to the non-moving party, all well-pleaded facts and allegations contained in the complaint, as well as all inferences that may reasonably be drawn from them, and order dismissal only if the allegations and permissible inferences, if true, would not afford relief to the plaintiff, i.e., the allegations do not state a cause of action for which relief may be granted.

Upon appellate ²⁰⁶ review, the trial court’s decision to grant such a motion is analyzed to determine whether the court was legally correct. We will uphold the dismissal only if the alleged facts and permissible inferences, so viewed, would, if proven, nonetheless fail to afford relief to the plaintiff. McHale v. DCW Dutchship Island, LLC, 415 Md. 145, 155-156 , 999 A.2d 969 (2010) (internal citations and quotation marks omitted).

II

Analysis A. The History of Immunity This case centers on the common law of immunity, an ancient feature of the common law that exists in two main forms: [T]he Court has distinguished between the qualified and narrower immunity for discretionary acts generally accorded to public officials, and absolute judicial immunity, which, unlike qualified immunity, applies regardless of the nature of the tort and even where the suit against the judge alleges that he acted in bad faith, maliciously or corruptly. Parker v. State, 337 Md. 271, 285, 653 A.2d 436 (1995) (citations omitted). In Parker , Judge Eldridge addressed the doctrine of absolute judicial immunity in great historical detail. “The principle that judicial officers should be immune from all civil liability for their judicial acts has been part of the common law since very early days.” 337 Md. at 277 , 653 A.2d 436 . English courts recognized the doctrine as early as 1607, and “by the seventeenth and eighteenth centuries, a broad concept of absolute civil immunity for judicial acts had been firmly established at common law.” Id. at 277, 279 , 653 A.2d 436 .

Carrying on that common law tradition, the Supreme Court’s 1872 decision in Bradley v. Fisher, 80 U.S. 335 , 13 Wall. 335 , 20 L.Ed. 646 (1872), “recognized that ‘in all countries where there is any well-ordered system of jurisprudence’ judges had been granted immunity from liability ‘for acts done by them in the exercise of their judicial functions....’” Parker, 337 Md. at ²⁰⁷ 280 , 653 A.2d 436 (citing Bradley, 80 U.S. at 347 , 13 Wall, at 347, 20 L.Ed. at 649 ). In Maryland, “[t]he common law principle of absolute judicial immunity for judicial acts has neither been abrogated nor been modified[.]” Parker, 337 Md. at 283 , 653 A.2d 436 (emphasis added). By contrast, certain acts of the Maryland legislature supersede the common law of public official immunity, most notably title twelve, “Immunity and Liability,” of the State Government Article, Maryland Code (1984, 2009 RepLVol.). But where there is no legislation, the common law doctrine survives as the default rule of law.

See Parker, 337 Md. at 283 n. 7, 653 A.2d 436 (“The Maryland Declaration of Rights, Art. 5, provides that ‘the Inhabitants of Maryland are entitled to the Common Law of England’ except to the extent that the common law has been changed by the legislature or by this Court.”). As to qualified immunity, Tucker v. Woolery, 99 Md.App. 295 , 637 A.2d 482 (1994), extended our ruling in Rice v. Dunn, 81 Md.App. 510, 515 , 568 A.2d 1125 (1990), that “judicial officers”—such as the district court commissioner in Rice—are entitled to qualified immunity from suit. The Tucker opinion drew upon the common logic and purpose underlying the two separate strains of immunity, as well as persuasive opinions from federal and sister state jurisdictions, and held: [Tjrustees, of course, are not judges. We are nevertheless convinced that they are entitled to some degree of immunity.

As the Supreme Court explained in Briscoe v. LaHue, 460 U.S. 325, 335 , 103 S.Ct. 1108, 1115 , 75 L.Ed.2d 96 (1983), “the common law provided absolute immunity from subsequent damages liability for all persons—governmental or otherwise—who were integral parts of the judicial process.” The State of Maryland adopted the common law of England with the enactment of Article 5 of the Declaration of Rights. “When judicial immunity is extended to officials other than judges, it is because their judgments are ‘functionally] comparable]’ to those of judges-that is, be ²⁰⁸ cause they, too, ‘exercise a discretionary judgment’ as part of their function.” Antoine v. Byers & Anderson, Inc., [508] U.S. [429, 436], 113 S.Ct. 2167, 2171 , 124 L.Ed.2d 391 (1993) (holding that court reporters are afforded no discretion in transcribing court proceedings and therefore are not entitled to judicial immunity for failing to produce transcripts in timely fashion). 99 Md.App. at 299-300 , 637 A.2d 482 . B. Scope and Discretion As intimated by the forgoing authorities, immunity “protects both judges and legislators, so long as their acts are ‘judicial’ or legislative in nature and within the very general scope of their jurisdiction.” Mandel v. O’Hara, 320 Md. 103, 107 , 576 A.2d 766 (1990) (citing Prosser & Keeton on Torts, § 132, 1056-57 (5th ed. 1984); Restatement (Second) of Torts § 895D, comment c, at 412 (1977)). Thus, we applied the following three-part test to the court’s appointed trustees in Tucker to determine whether they were entitled to qualified immunity: 1. Whether the act was performed by a judicial officer. 2.

Whether the act was discretionary rather than ministerial. 3. Whether the act was within the jurisdiction of the officer. 99 Md.App. at 300-301 , 637 A.2d 482 . All of appellant’s allegations stem from appellees’ actions undertaken as trustees in a judicial sale of real estate. Maryland Code (1974, 2010 Repl.Vol.), § 14-204(a) of the Real Property Article (“RP”), provides that a contractual lien “may be enforced and foreclosed by the party who obtained the lien in the same manner, and subject to the same requirements, as the foreclosure of mortgages or deeds of trust on property in this State containing a power of sale or an assent to a decree.” The manner and requirements of such a sale are set forth in RP §§ 7-105 et seq.

In such a judicial sale, “[t]he court itself is the vendor, the trustee being merely the agent of the court ²⁰⁹ to carry into effect the order of court directing the sale, and upon final ratification of the sale by the court the contract of purchase becomes complete.” Merryman, 250 Md. at 8 , 241 A.2d 558 (citing Lurman v. Hubner, 75 Md. 268, 23 A. 646 (1892)). 2 See McCann v. McGinnis, 257 Md. 499, 505, 263 A.2d 536 (1970) (citing Warfield v. Dorsey, 39 Md. 299, 307 (1874)) (“The court is the vendor in the case of a sale under the power contained in a mortgage, just as it is a vendor in any other chancery sale.”). Appellant does not dispute that, as