Della Ratta v. Dixon

²⁷¹ Wilner, J., delivered the opinion of the Court. On September 18, 1973, Joseph Della Ratta (appellant), William Dixon, Thomas Baldwin, and John Dixon (appellees) entered into a written agreement creating a general partnership known as OTC Associates. William Dixon, Baldwin, and Della Ratta were each to have a 30% interest in the company; John Dixon was to have the remaining 10%. The purpose of the venture was to acquire and develop certain property in the Odenton Town Center, in Anne Arundel County.

In furtherance of that aim, OTC, in fact, purchased certain real estate, borrowed $2,000,000 from Maryland National Realty Investors, Inc. (MNRI) to pay for it, and mortgaged the property to MNRI as security for the loan. The mortgage called for monthly amortization payments. The pertinent parts of the partnership agreement, in terms of this case, are found in paragraphs 5, 4, 8, and 9. Paragraph 5 merely set out the percentages noted above, according to which the profits would be divided.

Paragraph 4 dealt with capital contributions. It provided, among other things, that: (1) Each partner agreed "to contribute a percentage of all capital deemed to be necessary to the operation of the partnership business,” in accordance with the percentages set forth in paragraph 5. (2) Each partner "shall be responsible for contributing his respective percentage of any additional capital that may be deemed to be necessary to the operation of the partnership business within ten (10) days after receipt of notice of such additional capital requirement.” (Emphasis supplied.) (3) If a partner failed to contribute his respective share of additional capital contribution within the 10-day period, he "shall be in default.” (4) In the event of a default, the defaulting partner’s interest could be purchased by any of the other partners at ²⁷² a price fixed by the agreement. In the absence of such a purchase, however, the agreement provided that "any and all additional capital contributions then due shall be due and payable and the partnership shall be entitled to collect from the defaulting partner by legal process the entire amount of all additional capital contribution or contributions then due” together with interest at 8%, court costs, and reasonable attorney’s fees incident to the collection.

(Emphasis supplied.) Paragraph 8 provided that the "death, insanity, or withdrawal” of a partner shall "work an immediate dissolution of the partnership; however, the dissolution of the partnership shall not terminate the partnership but the partnership shall continue until the winding up of the partnership affairs is completed and the liquidating of the partnership assets as provided for hereinafter is completed.” Finally, paragraph 9 dealt with termination. It provided that: (1) Any partner may terminate the partnership prior to the end of the stated term [September 18,1999] by giving 30 days notice of his intention to so terminate the partnership; and (2) "In the event of a termination pursuant to this paragraph, or in the event of death, insanity or withdrawal of a partner, the remaining partners shall wind up the partnership affairs and liquidate the partnership assets” either by selling the assets and distributing the proceeds or by distributing the assets in kind. No specific time limit was set on the winding-up and liquidation process. On November 8, 1977, the partners amended the basic agreement to provide that, (1) No requirement shall be made of any of the partners for capital contributions "for any purpose other than debt service on obligations secured by liens against the property of this Partnership and real estate taxes thereon unless and until each of the partners shall otherwise agree.” ²⁷³ (2) For the period ending December 31, 1978, not more than $50,000 may be expended for partnership purposes in excess of requirements for debt service and real estate taxes without the further approval of the individual partners, and "[n]o partner shall be liable for additional capital contributions through the period ending December 31,1978, for any purpose other than for his proportionate share of debt service and real estate taxes as aforesaid and of said sum of $50,000.00.” (3) The books of the partnership "shall be restated” to provide that all sums theretofore advanced by the partners "shall be designated as capital contributions....” (4) The partners "will make such additional capital contributions to the Partnership, not later than December 31, 1977, as shall be required to bring the total restated paid-in capital of the Partnership to $135,000.00.” The amendment made no reference to any period beyond December 31, 1978.

On November 7, 1978, appellant wrote to his co-partners William Dixon and Thomas Baldwin (but not to John Dixon) a letter "under the terms of Paragraph 9 of the Partnership Agreement... providing you with thirty (30) days written notice that it is my desire and intention to terminate the Partnership.” The letter concluded, "You gentlemen, as remaining Partners, have the option to liquidate the Partnership assets by following either of the procedures stated in Paragraph 9 (a) or Paragraph 9 (b).” 1 Notwithstanding this letter, appellant continued to contribute, in monthly amounts of $3,307.50, his percentage share of the additional capital needed to defray the debt service requirements of the partnership. This ceased, however, in May, 1979; no further contributions were made by appellant thereafter, either with respect to debt service or other expenses of the partnership, and, whether ²⁷⁴ coincidentally or not, no payments on the mortgage were made in June or July, 1979. On July 19, 1979, MNRI declared a default on the loan and demanded immediate payment of the accelerated principal and accrued interest. Appellant commenced this action on June 11, 1979, with a bill of complaint in the Circuit Court for Anne Arundel County seeking an order declaring a dissolution of the partnership, ordering an accounting, winding-up, and termination of the partnership, appointing appellant to conduct the winding-up and termination, and restraining appellees from interfering with the partnership property or with appellant in his winding-up and termination of the partnership.

Appellees answered the bill, asserting that they had actively sought buyers for the partnership property in an effort to wind up the partnership, but had been unsuccessful. They also filed a counterclaim seeking multiple forms of relief. They referred to appellant’s obligation under the 1977 amendment to contribute a 30% share toward the restated capital of $135,000, and alleged a deficiency on his part of $6,909.16. 2 They also noted his obligation to contribute toward not more than $50,000 of the general expenses of the partnership for the period ending December 31, 1978, and alleged his failure to make that contribution. Finally, they referred to his duty under the 1973 agreement to contribute a monthly sum of $3,307.50 toward the partnership’s debt service obligation and claimed a default in that as well, thereby causing the partnership to become in default of its obligation.

By these "willful and wrongful” failures, they claimed, appellant had "breached his fiduciary duties as a general partner.” Upon these allegations, they asked the court to (1) order a winding-up of the partnership affairs, (2) appoint them, as remaining partners, to conduct the winding-up, (3) require appellant to contribute his proportional share "for other ²⁷⁵ partnership expenses which have been incurred, and will be incurred during the period required for winding up the partnership affairs,” (4) enjoin appellant from interfering with the partnership property or with the winding-up of partnership affairs, (5) award appellees "ancillary damages for any losses they may have suffered as a result of [appellant’s] wrongful acts and breach of fiduciary duties,” and (6) grant other relief as the case may warrant. Following the counterclaim, cross motions for partial summary judgment were filed. Appellees’ motion, as viewed by the court, asked for an order requiring appellant to contribute his proportionate share of debt service requirements, a judgment of $26,460 for the eight-month existing deficiency in those debt service contributions (June, 1979, through January, 1980), and an order requiring appellant to contribute his proportionate share of other partnership expenses. After hearing argument of counsel, the court granted part of the partial relief sought by appellees.

On January 29, 1980, it entered an order designating appellees to wind up the affairs of the partnership and recording a judgment against appellant for $26,460. Although finding that appellant had a continuing obligation to contribute his share of the debt service requirements, it issued no order requiring such payments in the future, as requested by appellees. Nor did the court consider the question of appellant’s obligation to contribute toward the other (non-debt service) expenses of the partnership, finding the matter to be in dispute. Nothing was said about ancillary damages, and no accounting was ordered.

No injunctions of any kind were issued. Appellant has appealed from this partial summary judgment, arguing that the court erred in entering a monetary judgment in advance of an accounting and in excluding him from participation in the winding-up process. Interesting as these questions might be, they are not properly before us. ²⁷⁶ Maryland Rule 605a provides: "Where more than one claim for relief is presented in an action, whether as an original claim, counterclaim, cross-claim, or third-party claim, the court may direct the entry of a final judgment upon one or more but less than all of the claims only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates less than all the claims shall not terminate the action as to any of the claims, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims.” Clearly, more than one claim for relief is presented in this action.

Under the counterclaim, appellees’ "possible recoveries are more than one in number and not mutually exclusive.” Diener Enterprises, Inc. v. Miller, 266 Md. 551, 556 (1972), quoting from Barron and Holtzoff, 3 Federal Practice and Procedure, Rules Ed., § 1193, p. 28. Just as clearly, less than all of the claims have been resolved by the partial summary judgment from which this appeal is taken; and it is evident that no express determination of the kind mentioned in Rule 605a has been made by the court. Appellant seeks to avoid the consequences of Rule 605a, at least with respect to the recording of a money judgment against him, by relying on Md. Ann. Code, Courts article, § 12-303 (c) (5). 3 Section 12-303 permits a party to appeal from certain types of "interlocutory orders entered by a ²⁷⁷ circuit court in a civil case,” among which is "(c) An order... (5) For the sale, conveyance or delivery of real or personal property or the payment of money... .’’(Emphasis supplied.) His contention, simply stated, is that the recording of a partial summary judgment for money damages is "an order for the payment of money,” and thus is immediately appealable under the statute, notwithstanding the Rule.

If appellant’s position is a correct one, Rule 605a would be virtually meaningless. The Court of Appeals has made clear that if an appeal is allowed under § 12-303 (or its predecessor statutes), it may be taken without regard to the provisions or conditions of Rule 605a. The Rule, in other words, does not serve to preclude or limit an appeal permitted by the statute. See Funger v. Mayor of Somerset, 244 Md. 141 (1966); also Washington Homes, Inc. v. Baggett, 23 Md. App. 167 (1974), cert. den. 273 Md. 723 (1975).

In light of the statutory preeminence, the potential emasculation of the Rule from appellant’s theory becomes clear. The money judgment appealed from here related only to the period from June, 1979, to January, 1980. Presumably, additional judgments could be entered for each month after January on one or more of the several continuing claims, and separate appeals could be taken from each such judgment. The entire purpose of the Rule, of preventing piecemeal appeals and thereby avoiding the confusion, delay, and expense of having multiple appeals in the same case (see Durling v. Kennedy, 210 Md. 549 (1956)) would be wholly frustrated.

We would get parts of cases and parts of issues, partial judgments on claims that might ultimately be offset by judgments not yet entered on counterclaims. The entry of partial summary judgment, rather than serving to expedite disposition of the case, may create an entirely opposite effect. It is not pragmatism alone that leads us to reject appellant’s position, however. It is rather a matter of statutory construction.

The term at issue is "an order for the payment of money.” It is a term that is clear enough in most contexts, but not in the one before us. As to whether it includes a simple ²⁷⁸ judgment for money damages, it requires construction; and it is, to that extent, ambiguous. Thus, we must look for the legislative intent, and, in this instance, we must look for that intent in the legislative history of § 12-303. The roots of § 12-303 are deep; they wander back into the early development of English common law and chancery practice and spring from one of the many differences between those parallel judicial systems, that pertaining to the right of appeal.

Much of the relevant early history, in both England and Maryland, was summarized by Chancellor Bland in his first reported decision, Ringgold’s Case, 1 Bland 5 (1824), and there is no need to repeat it all. Some discussion, however, is appropriate. At "common law” — i.e., prior to any statutory intervention — appeals were allowed only from judgments rendered by courts of law, and then only if the judgments were final ones. See, for example, Boteler & Belt v. State, 7 G. & J. 109, 113 (1835); also Ringgold’s Case, supra, 1 Bland at 8; Toland v. Sprague, 12 Pet.

(U.S.) 300 (1838); Drowne v. Stimpson, 2 Mass. 441 (1807); Joslyn v. Sappington, 1 Tenn. (1 Overt.) 222 (1805); Smart v. Clift, 2 Ky. (Ky. Dec.) 327 (1804).

No appeal was permitted from orders or decrees of a court of equity, whether final or interlocutory. Ringgold’s Case, supra, at 12. It was not, as Bland notes, until 1662 that "after having been much opposed, zealously debated, and maturely considered, [it] was finally settled and admitted to be as much a constitutional right to appeal from a decision of the High Court of Chancery, as from a Court of common law.” Id. at 12. The right of appeal from equity decrees was specifically conferred in Maryland by Act of the Provincial Assembly.

See Act of 1718, ch. X; Act of 1720, ch. XX; Act of 1721, ch. XIV. The 1721 Act stated: "That from and after the end of this present session of assembly, it shall and may be lawful for any person or persons that shall conceive themselves aggrieved by any decree of the chancery court, to have an appeal to the governor and council ²⁷⁹ of this province for the time being, wherein each member shall have a full voice.” 4 Notwithstanding these statutes, law and equity did not remain in parity for very long. The very nature of equity practice and equity remedies demanded different rules, particularly with respect to interlocutory orders. Certain types of equitable orders, if not immediately appealable, could create manifest injustice to a party.

Bland mentions some of these in Ringgold’s Case (p. 13): an