G.E. Capital Mortgage Services, Inc. v. Edwards

KENNEY, J. Appellant/mortgagee, G.E. Capital Mortgage Services, Inc. (“GECAM”), appeals a decision by the Circuit Court for Prince George’s County denying its motion for judgment of possession, which had been filed after GECAM successfully bid for the property of appellee/mortgagor, Samuel J. Edwards, Jr., at a foreclosure sale. GECAM poses two questions on appeal, which we have reordered and rephrased as follows: I. Notwithstanding the subsequent ratification of the foreclosure sale, does the appeal present an issue of significant public importance which is likely to arise often?

II

Is a secured party entitled to enforce its right of possession pursuant to Rule 14-102 prior to ratification of the foreclosure where the secured party is the purchaser and the deed of trust- provides for the right to possession? We answer both questions in the affirmative and reverse. ⁴⁵³ FACTUAL AND PROCEDURAL BACKGROUND On October 27, 1992, Edwards refinanced Ms property at 3007 Brodkin Avenue in Fort Washington with GECAM. Edwards secured the debt with a deed of trust. When he defaulted on the loan, GECAM appointed substitute trustees and initiated foreclosure proceedings in the Circuit Court for Prince George’s County.

The foreclosure sale took place on October 6, 2000. GE-CAM was the highest bidder at the sale, and the trustees accepted its bid. On October 18, 2000, prior to ratification of the sale, GE-CAM filed a Motion for Judgment of Possession Requesting Order Prior to Ratification of Sale (the “motion”). GECAM asserted that it was the purchaser at the foreclosure and that “[o]nce the mortgagee was in default, movant was entitled to possession.” The motion specifically provides that “[i]f the sale reported herein has not been ratified by the time the motion is decided, movant requests that the Order of Possession provide that no writ of possession issue until ratification of the sale[.]” The court entered a show cause order on December 19, 2000, and held a hearing on March 2, 2001.

At the hearing, the court summarily, and without explanation, denied GECAM’s motion as “premature at this time.” The sale was ratified on March 14, 2001. GECAM timely appealed the court’s denial of its motion on April 2, 2001. Edwards has not participated in the appeal. DISCUSSION I. Mootness “A case is moot when there is no longer an existing controversy between the parties at the time it is before the court so that the court cannot provide an effective remedy.” Coburn v. Coburn, 342 Md. 244, 250 , 674 A.2d 951 (1996).

Moot cases are generally dismissed without a decision on the merits. Coburn, 342 Md. at 250 , 674 A.2d 951 . In rare instances, however, we address a moot case if it “presents ‘unresolved issues in matters of important public concern that, ⁴⁵⁴ if decided, will establish a rule for future conduct,’ or the issue presented is ‘capable of repetition, yet evading review.’ ” Stevenson v. Lanham, 127 Md.App. 597, 612 , 736 A.2d 363 (1999) (citations omitted). At present, there is apparently no longer an existing controversy, because the sale was final and all ownership rights in the property have passed.

See Janoske v. Friend, 261 Md. 358, 365 , 275 A.2d 474 (1971) (quoting Lannay v. Wilson, 30 Md. 536, 550 (1869)); Union Trust Co. v. Biggs, 153 Md. 50 , 137 A. 509 (1927); In re Denny, 242 B.R. 593 (Bankr.D.Md. 1999) (citing In re DeSouza, 135 B.R. 793 (1991)). Therefore, we must determine whether, as GECAM contends, the issue presented is “capable of repetition yet evading review.” GECAM states in its brief that motions for judgment of possession filed prior to ratification are treated differently in different circuit courts. GECAM alleges, for example, that the Circuit Courts in Prince George’s County and Calvert County will not consider a motion for possession until after ratification, whereas “[sjeveral other counties and Baltimore City use a Show Cause Order but not with a hearing, except as may arise under the circumstances of a particular case.” According to GECAM, in most cases, a sale is ratified shortly after a show cause hearing and before this Court would have an opportunity to review the denial of a motion. 1 Pursuant to Rule 14-102, which governs judgments awarding possession, and which we will discuss in more detail below, “the procedure shall be governed by Rule 2-311.” Rule 2-311 reads, in pertinent part: (a) Generally.—An application to the court for an order shall be by motion which, unless made during a hearing or ⁴⁵⁵ trial, shall be made in writing, and shall set forth the relief or order sought. (b) Response.—Except as otherwise provided in this section, a party against whom a motion is directed shall file a response within 15 days after being served with the motion, or within the time allowed for a party’s original pleading pursuant to Rule 2-321 (a), whichever is later. ...

If a party fails to file a response required by this section, the court may proceed to rule on the motion. (f) Hearing—Other motions.—A party desiring a hearing on a motion, other than a motion filed pursuant to Rule 2-532, 2-533, or 2-534, 2 shall so request in the motion or response under the heading “Request for Hearing.” Except when a rule expressly provides for a hearing, the court shall determine in each case whether a hearing will be held, but it may not render a decision that is dispositive of a claim or defense without a hearing if one was requested as provided in this section. In this case, the motion was uncontested. Pursuant to Rule 2-311(0, the court has the discretion to determine whether a hearing is necessary on a motion.

According to GECAM, however, the Circuit Court of Prince George’s County always requires a hearing on motions for judgment of possession instead of evaluating each case to determine whether a hearing is warranted. In other words, the court has abrogated the discretion provided to it pursuant to the Rule. As recognized by the Court of Appeals, the failure to exercise discretion is, itself, an abuse of discretion. See Merritt v. State, 367 Md. 17, 27 , 785 A.2d 756 (2001) (and cases cited therein).

In light of the delay that naturally occurs when a hearing is set, we agree with GECAM that, by the time a hearing is held and a motion is denied, the time lor ratifying the foreclosure ⁴⁵⁶ sale might be near or have passed. Pursuant to Rule 14-305(e): The court shall ratify the sale if (1) the time for filing exceptions pursuant to section (d) of this Rule has expired and exceptions to the report either were not filed or were filed but overruled, and (2) the court is satisfied that the sale was fairly and properly made. If the court is not satisfied that the sale was fairly and properly made, it may enter any order that it deems appropriate. Exceptions must be filed within thirty days after the date of a notice of sale or the filing of the report of sale.

Rule 14-305(d)(1). In cases such as this one, where no exceptions were filed, ratification could occur quite quickly. Consequently, sales might frequently be ratified before we are able to address the merits of the denial of a motion for judgment of possession. Therefore, we are persuaded that the issue is “capable of repetition yet evading review,” and will address the merits of the case.

II

Was the Motion Properly Denied We review a court’s denial of a motion for judgment of possession for abuse of discretion. See Billingsley v. Lawson, 43 Md.App. 713, 726-27 , 406 A.2d 946 (1979) (citing Rule 637, the predecessor to Rule 14-102). Rule 14-102 reads as follows: (a) Generally. Whenever the purchaser of an interest in real property at a sale conducted pursuant to these Rules is entitled to possession, and the person in actual possession fails or refuses to deliver possession, the purchaser may file a motion requesting the court to enter a judgment awarding possession of the property.

Except as otherwise provided in this Rule, the procedure shall be governed by Rule 2-311. (b) Service. The motion shall be served on the person in actual possession and on any other person affected by the motion. If the person was a party to the action that resulted in the sale or to the instrument that authorized the sale, the motion may be served in accordance with Rule 1-321.

Otherwise, the motion shall be served in accordance ⁴⁵⁷ with Rule 2-121, and shall be accompanied by a notice advising the person to file a response to the motion within the time prescribed by sections (a) and (b) of Rule 2-321 for answering a complaint. To invoke the rule, the purchaser must show that (1) the property was purchased at a foreclosure sale, (2) the purchaser is entitled to possession, and (3) the person in possession fails or refuses to relinquish possession. Here, it is undisputed that GECAM bought the property at a foreclosure sale. Although Edwards did not contest the motion, we can also assume that he refused or failed to relinquish possession of the property.

Otherwise, there would be no need for the motion. The question then becomes whether, under such circumstances, GECAM was entitled to possession before ratification. GE CAM’s argument turns on the interpretation of Rule 14-102. It argues that nothing in the Rule forbids a purchaser who is entitled to possession from requesting a judgment awarding possession.

When we interpret the Maryland Rules, we use the same rules and canons as we would in construing a statute. Pickett v. Sears, Roebuck & Co., 365 Md. 67, 78-79 , 775 A.2d 1218 (2001). Our goal in interpreting the Rules is to determine and effectuate the intent of the drafters. See Mayor and City Council of Baltimore v. Chase, 360 Md. 121, 128 , 756 A.2d 987, 991 (2000). “To this end, we begin our inquiry with the words of the statute and, ordinarily, when the words of the statute are clear and unambiguous, according to their commonly understood meaning, we end our inquiry there also.” Chesapeake and Potomac Telephone Co. of Maryland v. Director of Finance for Mayor and City Council of Baltimore, 343 Md. 567, 578 , 683 A.2d 512 (1996). “If persuasive evidence exists outside the plain text of the statute, we do not turn a blind eye to it.” Adamson v. Correctional Medical Servs., Inc., 359 Md. 238, 251 , 753 A.2d 501 (2000) (citing Kaczorowski v. Mayor of Baltimore, 309 Md. 505, 514 , 525 A.2d 628, 632 (1987)).

Moreover, “[e]ven where the language of the rule is plain and unambiguous, ... we may ⁴⁵⁸