Greenbriar Condominium, Phase I, Council of Unit Owners, Inc. v. Brooks

KENNEY, Judge. In this case, we are asked to consider issues of concern to both the growing number of people who live in common interest communities and to the governing authorities responsible for their operation. The fact that the parties are not strangers to this Court is unfortunate, but not surprising, as these cases often reflect an ongoing test of wills among the parties involved. Involved are several entities and documents with similar names.

Therefore, we begin by identifying the various entities and their governing documents. Greenbriar, a residential development located in Prince George’s County, was developed in four phases. The overall community association, “GCA,” has two governing documents that are pertinent to this appeal: the “GCA Declaration” and the “GCA ByLaws.” 1 GCA is not a party in the case. Clifford A. Brooks, appellee, owns a condominium unit in Greenbriar Phase I. The appellant is Greenbriar Condominium, Phase I, Council of ²⁸² Unit Owners, Inc., which we shall refer to as “Council.” 2 Council has its own governing documents that are pertinent to this appeal, which we will refer to as the “Council Declaration” and “Council By-Laws.” Council appeals an order from the Circuit Court for Prince George’s County that, inter alia, invalidated the January 15, 1999 foreclosure of Brooks’s condominium and granted Brooks reasonable attorneys’ fees for his involvement in the foreclosure proceedings after December 17, 1997.

Council presents two questions for our review: 1. Did the circuit court err in setting aside the January 15, 1999 foreclosure sale of Brooks’s property? 2. Did the circuit court err in determining that Brooks was entitled to an award of attorneys’ fees? Brooks filed a cross-appeal, presenting three questions, which we have slightly re-worded as follows: 1.

Did the circuit court err in its assessment of the amount due for 1995 and 1996 liens by failing to take into account all payments made by Brooks? 2. Did the circuit court err in finding that Brooks was not entitled to attorneys’ fees for records and amounts excluded by the court? 3. Did the circuit court err in not granting reasonable attorneys’ fees to Brooks under Maryland Rule 2-424(e)? Brooks also moved to dismiss the case, claiming that the Council’s Notice of Appeal was not timely filed.

We hold that the circuit court did not err in setting aside the January 15,1999 foreclosure sale, but for reasons set forth in the opinion, we shall remand for further proceedings. In addition, we find error in the circuit court’s award of interest ²⁸³ and attorneys’ fees. As to the issues presented in Brooks’s cross-appeal, we shall affirm the judgments of the circuit court. FACTUAL AND PROCEDURAL HISTORY This case began in 1994 when Council sought to foreclose on Brooks’s condominium unit because Brooks had failed to pay his monthly condominium charges.

That foreclosure and one subsequent were cancelled when Brooks paid Council the amount due before the respective foreclosure sales. In February 1996, Council again initiated foreclosure proceedings when Brooks failed to pay his assessment for October, November, and December 1995. A statement of indebtedness for $3,745 was filed with the circuit court. Frank Emig, Council’s current counsel, was appointed trustee for the sale of the condominium.

On May 10, 1996, the condominium was sold to Council for $2,500, subject to a first deed of trust in the amount of $16,698.26. On July 3, 1996, Brooks filed exceptions to the foreclosure sale. After a hearing, the circuit court entered an order ratifying the sale. Brooks noted a timely appeal.

In an unpublished opinion, Clifford A. Brooks v. Greenbriar Condominium, Phase I Council of Unit Owners, Inc., No. 87, September Term, 1997, 118 Md.App. 711 (filed Dec 17, 1997), this Court vacated the order ratifying the sale and remanded to the circuit court for it to “determine whether [the sale price] ‘shocks the conscience of the court.’ ” Clifford A. Brooks v. Greenbriar Condominium, Phase I Council of Unit Owners, Inc., No. 87, slip op. at 12. On remand, the circuit court, on December 8, 1999, found that its conscience was indeed “shocked.” Council was then free to readvertise and resell the condominium unit, which it proceeded to do. The events leading up to the present appeal begin at that point in time. 3 ²⁸⁴ On December 14, 1998, Brooks filed with the court a Suggestion of Satisfaction of Outstanding Liens, stating that he had “personally delivered by hand to [Emig] a cashier’s check in the amount of $3,411.00 in full satisfaction” of the underlying liens. On December 22, 1998, Council filed a response indicating that $3,411 was insufficient to satisfy the lien, and returned the check to Brooks.

In response, Brooks sent a letter to Council, in care of Emig, asking for the exact amount owed. One week later, on December 29, 2002, Brooks reviewed the audit and calculated that he owed an additional $162.89. Brooks went to the bank and got a bank check in that amount to send to Council. On that same day, Council filed a supplemental statement of indebtedness, indicating that Brooks now owed $31,114.64 to satisfy the lien. 4 In light of Council’s supplemental statement, Brooks deemed it “fruitless” to send the additional $162.89 check.

At the foreclosure sale on January 15, 1999, Council again purchased the condominium unit. The purchase price was for $21,600, subject to the existing deed of trust on which $13,092.77 was owed. After the sale was conducted, but that same morning, Brooks filed an emergency motion for a temporary restraining order and for preliminary injunction; four days later, he filed an emergency motion for appropriate relief. Council filed oppositions to Brooks’s motions.

On January 19, 1999, Brooks deposited $3,411 in the court’s registry. On March 5, 1999, Council filed its suggested final deficiency accounting for $11,445.62. On March 25, 1999, the circuit court filed a notice that the foreclosure would be ratified and confirmed on April 26, 1999. Brooks filed timely exceptions.

The Auditor’s Report, filed on May 14, 1999, indicated that $8,660.46 was due; both Council and Brooks filed exceptions. On May 27, 1999, the circuit court, after a hearing on the ²⁸⁵ exceptions, invalidated the sale. It found that Brooks had lawfully attempted to redeem the property when it tendered $3,411 to Council. The court also heard argument on whether Brooks owed any additional amounts and what should be the appropriate interest rate on the liens.

Council argued that interest accrued at 18% based on the Maryland Condominium Act as stated in Council’s Bylaws. Brooks countered that only 6% interest was due based on the GCA Declaration. The court agreed with Brooks, saying, “You give him the $3,411, plus the six percent as of May 10, 1996, and I’ll dismiss the foreclosure.” Because Brooks had already deposited $3,411 with the court’s registry, only the interest was outstanding. On June 4, 1999, Brooks filed a Motion for Attorneys’ Fees and Costs based on the GCA Declaration that provided that the “prevailing party shall be entitled to recover the costs of the proceedings, and such reasonable attorneys’ fees as may be determined by the court.” On June 17, 1999, Council filed an opposition to Brooks’s motion for attorneys’ fees.

On that same day, Council filed another set of exceptions to the Auditor’s Report of May 14, 1999, and a Motion to Reconsider the circuit court’s ruling of May 27, 1999. On July 6, 1999, the circuit court held a hearing concerning Council’s motion to reconsider and Brooks’s motion for attorneys’ fees. Council argued that the May 27, 1999 ruling that only 6% interest was due on the outstanding lien amount was erroneous. It contended that Brooks’s reliance on the GCA Declaration was misplaced because GCA did not institute suit against Brooks.

Rather, the lien was established and foreclosed upon by Greenbriar Condominium Phase I, Council of Unit Owners, Inc., and, therefore, Council’s, not GCA’s, governing documents applied. Council’s By-Laws state the “maximum amount permitted by law ... as permitted by Section 11-110(e) of the [Maryland Condominium] Act,” which provides for an interest rate of 18%. The court denied the motion to reconsider. In support of his motion for attorneys’ fees, Brooks argued that the GCA Declaration is the only one his deed is subject ²⁸⁶ to, and its provision for the recovery of attorneys’ fees should be applicable. “[Council] has a declaration for a plan of condominiums, but there is only one declaration of covenants, and that is the [GCA] declaration.” Council responded that it, not the GCA, was the party to the suit.

In reaching its decision, the circuit court found it important that every phase in Greenbriar pays fees to the GCA, and that, in fact, a portion of the amount for which Council was suing was for the benefit of GCA. “So [the GCA is] part and parcel of this suit, whether [it is] named or not. The funds are for the benefit of this.” Thus, the court concluded that Council’s effort to distinguish itself from the overall community association entity, was without merit: I think this is a distinction without a difference, sir. Because you can’t tell me any time when that other organization has ever filed a lien or brought a suit, and if it says that it grants attorney fees when the other side prevails, and the other side prevails in a suit brought about by the parent organization, which collects for that organization, for those funds, and then you are going to tell me that the other side, for that portion of the funds, can’t elect to have attorney fees granted, somehow or other, that doesn’t make sense. Finally, in this hearing, the court denied Brooks’s motion to award fees related to Council’s failure to admit in discovery the value of the condominium property.

The court then asked the parties to prepare a joint order setting forth its oral rulings. On July 7, 1999, the circuit court ordered the clerk to release $8,411 from the court registry to Council. Council subsequently filed a motion for a supersedeas bond and to stay further proceedings. Brooks filed a motion in opposition thereto.

On January 2, 2000, Brooks filed a motion for attorneys’ fees in the amount of $311,305.64. Council filed a response on January 19, 2000, claiming the motion was premature until the ²⁸⁷ court signed a final order affirming its July 6, 1999 oral decisions. On September 23, 2002, the circuit court filed an order that stated: For the reasons stated by the Court at the July 6, 1999 hearing in this matter, it is, on this 23 day of September, 2002, by the Circuit Court for Prince George’s County, Maryland, ORDERED, that [Council’s] Complaint in these proceedings is hereby dismissed and the foreclosure sale of January 15,1999, invalidated; and it is further, ORDERED, that [Council’s] Motion to Reconsider Ruling of May 27, 1999, is hereby denied; and it is further, ORDERED, that [Brooks’s] Motion, pursuant to Md. Rule 2-424(e), to recover expenses, including reasonable attorney fees incurred in making proof of matter which [Council] failed to admit (Docket # 98) is hereby denied; and it is further, ORDERED, that [Council] shall pay to [Brooks] reasonable attorney’s fees for his prior appeal to the Court of Special Appeals in these proceedings, such amount to be determined following a hearing on this issue; and it is further, ORDERED, that [Brooks] shall establish his reasonable attorney fees for his involvement in these proceedings after December 17, 1997. The parties shall also establish the percent of the budget of [Council] that is paid to [GCA] for its assessments. [Council] shall be responsible for and pay to [Brooks] this percentage of [Brooks’s] attorney’s fees for his involvement in these proceedings after December 17, 1997.

The determination of these figures shall be made by the Court following a hearing on this issue; and it is further, ORDERED, that the issue of the amount of attorneys’ fees shall be deferred until the completion of any appeal of this Order; and it is further, ²⁸⁸ ORDERED, that the amount of the supersedeas bond is hereby set at $1,000.00. [Council] shall be given seven (7) days to post such bond and the effect of this Order shall be stayed during this seven (7) day period, and if such bond is timely posted, the stay shall continue in effect thereafter until the appeal is completed. On September 30, 2002, Council’s motion to post a cash bond in lieu of a supersedeas bond was granted. On October 16, 2002, Council filed this appeal, and on October 25, 2002, Brooks noted his cross-appeal. PRELIMINARY MOTIONS I. Motion to Dismiss Brooks contends that this appeal should be dismissed because Council did not note a timely appeal.

According to Brooks, “[f]inal appealable Orders sustaining Brooks’ exceptions which prayed that [Council’s] sale and resale of Brooks’ Condominium Unit be set aside were rendered from the Bench on December 8, 1998 and May 27, 1999, respectively.” Accordingly, he argues that Council’s appeal dated October 16, 2002, was untimely. A party may only appeal from a final judgment. Md.Code (1974, 2002 Repl.) § 12-301 of the Courts and Judicial Proceedings Article (“C.J.”). As explained by the Court of Appeals in Rohrbeck v. Rohrbeck, 318 Md. 28, 41 , 566 A.2d 767 (1989): If a ruling of the court is to constitute a final judgment, it must have at least three attributes: (1) it must be intended by the court as an unqualified, final disposition of the matter in controversy, (2) unless the court properly acts pursuant to Md. Rule 2-602(b), it must adjudicate or complete the adjudication of all claims against all parties, and (3) the clerk must make a proper record of it in accordance with Md. Rule 2-601.

In Doehring v. Wagner, 311 Md. 272, 275 , 533 A.2d 1300 (1987), the Court of Appeals stated that a judgment is only ²⁸⁹ final if “nothing in the trial court’s action suggested any contemplation that a further order be issued or that anything more be done.” For example, in Anderson v. Anderson, 349 Md. 294, 297-98 , 708 A.2d 296 (1998), the Court dismissed an appeal as untimely because the trial court appeared to be waiting for a domestic master to complete a child support worksheet before the ruling would be final. Similarly, the circuit court in this case asked the parties for a joint order. Give me an order on my rulings today. It has to be a joint order, and Mr. Emig, you give me the order for the money in the registry of the court.

Okay. Orders to be submitted. Let me make myself clear on that. I have ruled today on several things.

Give me an order that both of you agree to as what I just ruled on. The order was signed on September 23, 2002, and entered into the docket on September 26, 2002. Council’s appeal dated October 16, 2002, was timely, and Brooks’s motion to dismiss is denied.

II

Motion to Supplement Record At oral argument, we asked the parties to provide us with copies of the various governing documents. On October 20, 2003, Council provided us with: GCA’s Articles of Incorporation; GCA’s Declaration of Covenants, Conditions and Restrictions; GCA’s Supplemental Declaration of Covenants, Conditions and Restrictions; GCA’s Amended By-Laws; Council’s Articles of Incorporation; Council’s Declaration; and Council’s Amendment to By-Laws. Thereafter, on April 2, 2004, Brooks petitioned this Court to have Council’s original By-Laws included as part of the record in this case. Although we requested Council’s and GCA’s governing documents, those documents did not automatically become part of the record.

See Maryland Rule 8-414 (stating that the appellate court may order that an omis ²⁹⁰ sion in the record be corrected). Because the submissions were useful to the resolution of this case, and perhaps will be helpful to the circuit court on remand, we order that Council’s October 20, 2003 submission be included in the record and grant Brooks’s motion to include his April 2, 2004 submission as part of the record for this case. STANDARD OF REVIEW Maryland Rule 8—131(c) provides: Action tried without a jury. When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence.

It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses. In regard to the circuit court’s factual findings, we look to whether those findings were supported by “substantial evidence” in the record. Liberty Mut. Ins.

Co. v. Maryland Auto. Ins. Fund, 154 Md.App. 604, 609 , 841 A.2d 46 (2004). When “ ‘there is any competent, material evidence to support the factual findings below, we cannot hold those findings to be clearly erroneous.’ ” Cannon v. Cannon, 156 Md.App. 387, 404 , 846 A.2d 1127 (2004) (citing Shallow Run Ltd. Partnership v. State Highway Admin., 113 Md.App. 156, 174 , 686 A.2d 1113 (1996)). “Although the factual determinations of the circuit court are afforded significant deference on review, its legal determinations are not.” Liberty Mut.

Ins. Co., 154 Md.App. at 609 , 841 A.2d 46 . “Indeed, the appropriate inquiry for such determinations is whether the circuit court was ‘legally correct.’ ” Id. (citing Maryland Envtl. Trust v. Gaynor, 140 Md.App. 433, 440 , 780 A.2d 1193 (2001)).

Furthermore, trial courts are accorded broad discretion in granting equitable relief. State Comm’n on Human Rels. v. Talbot County Det. Ctr., 370 Md. 115, 127 , 803 A.2d 527 (2002). Maryland has recognized that “[f]oreclosure of mortgages after default has long been peculiarly within a court of equity’s ²⁹¹ jurisdictional powers.” 5 Plaza Corp. v. Alban Tractor Co., 219 Md. 570, 577-78 , 151 A.2d 170 (1959).

The applicable Maryland Rules and statutory authority “simply provide[ ] an expeditious and economical summary modal procedure for the exercise of an ordinary jurisdiction.” Id. See also Laney v. State, 379 Md. 522 , 842 A.2d 773 (2004); Billingsley v. Lawson, 43 Md.App. 713 , 406 A.2d 946 (1979) (for a general discussion on foreclosure proceedings in Maryland). DISCUSSION I. January 15, 1999 Foreclosure Council contends that the circuit court erred in invalidating the January 15, 1999 foreclosure sale. To support its assertion Council argues: (1) Brooks did not timely file an injunction to stay foreclosure proceedings, (2) after the foreclosure, Brooks “lost all rights to redeem the property,” and (3) Brooks’s exceptions to the sale “are without merit and do not affect the validity of such sale.” 6 Brooks counters that Council acted in bad faith in denying his right of redemption.

The Maryland Contract Lien Act (“Act”), codified at Md. Code (1974, 2003 Repl.) §§ 14-201 et seq. of the Real Property Article (“RP”), provides for the creation of a lien by contract. Payment of condominium assessments, together with interest, late charges, costs of collection, and reasonable attorney’s fees, “may be enforced by the imposition of a lien on a unit in accordance with the [Act].” RP § ll-110(d). Thus, Council was authorized to impose a lien on Brooks’s unit for condominium assessments when he failed to pay his condominium assessments. RP § 14-204 of the Act provides, in pertinent part, that “[a] lien may be enforced and foreclosed by the ²⁹² 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.” Id. at § 14-204.

Thus, the foreclosure procedures contained in Title 7 of the Real Property Article and Chapter 14 of the Maryland Rules govern a contract lien foreclosure. 1. Timeliness of Filing Injunction Council contends that, because Brooks filed an injunction to stop the foreclosure sale after it had already occurred, the request was untimely, and, therefore, the court could not have relied on it when invalidating the sale. The court, however, did not invalidate the foreclosure sale on the basis of Brooks’s Emergency Motion for Temporary Restraining Order and for Preliminary Injunction or Emergency Motion for Appropriate Relief. In fact, the court refused to rule on that motion.

Instead, the court invalidated the sale on the basis of the exceptions to the foreclosure sale that Brooks filed. Council’s first contention fails. 2. Right to Redeem Council’s second contention is that Brooks lost his right to redeem the property once it was sold at foreclosure. It is true that even though the jurisdiction of equity may not become complete until the filing of the report of sale, the right of redemption is “divested by [a] valid foreclosure sale.” Butler v. Daum, 245 Md. 447, 453 , 226 A.2d 261 (1967) (emphasis added). “[U]nless satisfactory proof is shown before final ratification that the sale should be set aside ... all rights of the mortgagor[ ] ... are deemed to have ceased to exist as of the date of sale.” Id.

In Maryland, “a tender of the amount due will prevent a foreclosure sale, since the mortgagor has an unqualified right to redeem.” Better v. Williams, 203 Md. 613, 618 , 102 A.2d 750 (1954). The court invalidated the foreclosure sale based on its determination that, prior to the sale, Council wrongly refused to accept Brooks’s tender of $3,411 to satisfy the assessment debt. The court stated: ²⁹³ And you know what that figure stands for, that is the assessment debt, $3,411, that is the assessment debt, and that’s the point that the Court of Special Appeals sent this back, because had he paid the $3,411 at that time there would have been no sale. * * * If he paid that amount at that time, there may be something else he owes beyond that point for having done something else, but that’s the point at which that sale was made, and if he cleans that up, if he offered that amount at the time that the sale was made, what was owed, that should have stopped all of this. Because the court set aside the sale, Council’s claim that the court erred in allowing Brooks the right to redeem his property after it was sold does not accurately reflect the circuit court’s decision.

Rather, the issue becomes whether the sale was properly set aside. 3. Exceptions Council’s third contention is that the court erred in invalidating the foreclosure sale based on Brooks’s exceptions to the sale. Council argues generally that the filed exceptions are without merit and should not have affected the foreclosure sale. Pursuant to Md. Rule 14—305(d), [a] party, and, in an action to foreclose a lien, the holder of a subordinate interest in the property subject to the lien, may file exceptions to the sale.

Exceptions shall be in writing, shall set forth the alleged irregularity with particularity, and shall be filed within 30 days after the date of a notice issued pursuant to section (c) of this Rule or the filing of the report of the sale if no notice is issued. Any matter not specifically set forth in the exceptions is waived unless the court finds that justice requires otherwise. As explained in Gordon on Maryland Foreclosures, 1081 (4d. 2004), “The rules relating to ratification were summarized one hundred twenty years ago[.]” ²⁹⁴ “The contract of sale in such cases being one between the court, as vendor, and the purchaser, it is never regarded as consummated until it has received the sanction of the court. Wagner v. Marshall, 6 Gill, 100 .

All objections therefore to the sale on the ground of error, mistake, or misrepresentation, either in regard to the terms or manner of sale; or in regard to the nature and character of the interest in the property decreed to be sold, are open for such consideration before final ratification; and when such objections are made the court will either ratify or set aside such sale as equity and good conscience may required”] Bolgiano v. Cooke, 19 Md. 375 [1863]. Id. The opponent of the sale has the burden of proving to the court that the sale was invalid and unfair. Ten Hills Co. v. Ten Hills Corp., 176 Md. 444, 449 , 5 A.2d 830 (1939); J. Ashley Corp. v. Burson, 131 Md.App. 576, 582 , 750 A.2d 618 (2000).

A “ ‘ “court will not set aside [a foreclosure] sale merely because it brings loss and hardship upon the mortgagor.” ’ ” J. Ashley Corp., 131 Md.App. at 583 , 750 A.2d 618 (citations omitted). “ ‘ “It is essential to the prompt administration of justice that the rule be inviolably observed that no court shall set aside a foreclosure sale merely because of harmless errors or irregularities ... or for any slight or frivolous reasons not affecting the substantial rights of the parties.” ’ ” Id. (citations omitted). Brooks filed ten exceptions to the January 15, 1999, foreclosure sale: 1. [Council] and Trustee Emig fraudulently deprived [Brooks] of his right of redemption by demanding excessive and unlawful payments as a condition of redemption. 2. [Council] and Trustee Emig fraudulently deprived [Brooks] of his right of redemption by failing, prior to initiating foreclosure proceedings, to demand of [Brooks] a lawful payment necessary for him to exercise his right of ²⁹⁵ redemption; this despite specific request from [Brooks] for such demand. 3. Trustee Emig breached his fiduciary duty to [Brooks] and to the Court by his blatant acts of gamesmanship to the consistent detriment of [Brooks] and short term benefit of [Council], and by his conflicting roles and loyalties as both trustee for the protection of all with equitable rights (including [Brooks]) and as counsel to [Council] and to its Managing Agent. 4.

The sale was not fairly conducted in that: (a) the advertisement required excessive interest (16%) on sale price in light of current market interest; (b) the resale was premature and based upon unlawful demands; (c) the sale was not well attended; and (d) the sale price was preset by Trustee with an eye toward establishing minimum amount Trustee believed necessary to avoid the fate of the first sale, and not toward “a view to obtain as large a price as might, with due diligence and attention, be fairly and reasonably obtainable under the circumstances.” * * * 5. The sale price at foreclosure is so grossly inadequate as to shock the conscience. 6. The sale price is so grossly inadequate and when combined with irregularities in the original sale and in the resale constitutes a constructively fraudulent sale. 7. The resale was premature in that the provisions of Maryland Rule 14-205 were not complied with prior to the resale. 8.

The instant resale is precluded by the equitable considerations underlying Maryland Rule 14-205 (to wit: that after hearing the Court “fix the amount of the debt”, and ²⁹⁶ “provide a reasonable time within which payment may be made” before resale). * * * 9. The resale was not duly authorized by [Council’s] Board of Directors. * * X 10. [Council] lacks clean hands. Because it appears that the circuit court essentially relied on the first and second exceptions in invalidating the sale, we will address only those excéptions. Brooks argued that Council was obliged to accept his good faith tender and that it sought to avoid the tender by claiming “excessive” amounts due in its supplemental statement of indebtedness.

Therefore, the court should invalidate the foreclosure sale. The circuit court agreed, finding that Brooks had attempted in good faith to exercise his right of redemption when he tendered $3,411 to satisfy the lien for the unpaid and accelerated 1995 and 1996 condominium fee assessments to Council, and that Council had wrongly refused to accept this tender. Black’s Law Dictionary 1193 (7th ed. 1999) defines tender as “[a]n unconditional offer of money or performance to satisfy a debt or obligation. The tender may save the tendering party from a penalty for nonpayment or nonperformance or may, if the other party unjustifiably refuses the tender, place the other party in default.” It is similarly explained in American Jurisprudence Second to mean an unconditional offer of payment consisting in the actual production, in current coin of the realm, of a sum not less than the amount due on a specific debt or obligation.

Tender of payment is an offer to perform, often by paying money, coupled with a present ability of immediate performance, which, were it not for the refusal of cooperation by the party to whom tender is made, would immediately satisfy the condition or obligation for which tender is made. 74 Am. Jur. 2d Tender § 1 (2003). That text continues: ²⁹⁷ The purpose and object of tender is to enable the other party to accept the money and close the transaction and thus relieve the party making the tender from further liability on the debt or obligation. One of the effects of an unjustifiable refusal of a sufficient, bona fide tender is to place the refusing party in default, and to permit the tendering party to exercise his remedies for breach of contract; this may be one of the legitimate purposes the tenderer may seek to accomplish by his tender.

Id. at § 2. In explaining an effectual tender, American Jurisprudence Second explains: The amount offered by the debtor to his creditor must be at least equal to the whole amount then due or accrued on the debt or obligation to constitute an effectual tender.... Generally, a tender must include everything to which the creditor is entitled, and a tender of any less sum is nugatory and ineffective as a tender. It must include interest due, costs then due or accrued, and attorneys’ fees to which the creditor has become entitled by force of the agreement of the parties, as by commencement of suit or otherwise.... [I]f a debtor requests of a creditor a statement of the balance owing on his account, the creditor being in sole possession of that information, and the creditor either neglects or refuses to disclose the correct amount owing, the debtor’s tender of what he believes, in good faith, is owing is deemed sufficient, even if it is a smaller amount than that actually owed.

Id. at § 20. See also Allan Manley, Annotation, Creditor’s Failure to Disclose Correct Amount Due as Affecting Sufficiency of Debtor’s Tender of Amount which Debtor Believes to be Due, but which is Less than Amount Actually Due, 82 A.L.R.3d 1178 , § 2 (1978). Maryland courts have recognized these general principles and have considered what constitutes a sufficient tender. In Kent Building & Loan Co. v. Middleton, 112 Md. 10, 13-14 , 75 A. 967 (1910), the refusal to accept a tender of a mortgage ²⁹⁸ pay-off was raised, as in this case, by exceptions to the ratification of sale.

The lower court sustained the exceptions and gave the dealer 30 days to renew the tender before the property could be sold. The Court of Appeals affirmed, stating: “As a mortgagee has no right to make the sale after a lawful tender of the amount due, the sale, when made, may be excepted to by the party authorized to redeem the mortgage and who made the tender.” Id. at 17 , 75 A. 967 . In Wolf v. Oldenburg, 154 Md. 353 , 140 A. 494 (1928), the Court of Appeals opined in a mortgage case that a bona fide attempt at tender was sufficient to preserve the right of redemption. In Platsis v. Diafokeris, 68 Md.App. 257 , 511 A.2d 535 (1986), the appellants argued that, because appellee demanded an excessive amount above what was due, the argument of insufficient tender was waived.

Appellants in Platsis conceded that “their tender was insufficient both as to amount and because it was conditional.” Id. at 263 , 511 A.2d 535 . Nevertheless, they argued that “tender is excused where the creditor has clearly indicated that he is unwilling to accept what is due in discharge of the debt.” Id. In that case, we said: Appellants’ only tender was insufficient because it was less than the full amount due on the note and also because it was conditional; it was not, therefore, a valid or effective tender which relieved appellants of liability for costs, interest, or attorney’s fees. On the other hand, the amount appellee demanded to discharge fully that note, because based upon a faulty premise, i.e. that the note provided for interest computed on a base principal amount of $29,000.00, rather than on $25,000.00 as appellants contended, was greater than that actually due and, as later events proved, was excessive.

Furthermore, the demand was firm: appellants’ efforts, through counsel, to resolve the dispute met with no success. Moreover, the confluence of the faulty premise, based on an ambiguity in the note drafted by appellee, and the firmness of appellee’s reliance on that premise make patent, as the trial judge found, that “no agreement [could] be reached as to the balance due until the conflict as to the base debt subject to interest [was] re ²⁹⁹ solved.” We think it apparent from the record that appellee would not have accepted any tender less than the amount of his demand, not even one in the amount ultimately found by the court to be due. Consequently, in view of the firmness of appellee’s demand with regard to what was required to discharge the note it would have been a “futile gesture” for appellants to have tendered even the actual amount due. Id. at 267-68 , 511 A.2d 535 (citations omitted).

Courts in other jurisdictions have reached similar conclusions. See Ford Motor Credit Co. v. Goings, 527 P.2d 603, 607-08 (Okla.Ct.App.1974); Agostini v. Colonial Trust Co., 44 A.2d 21, 23 (Del.Ch.1945); Graves v. Burch, 26 Wyo. 192 , 181 P. 354, 356 (Wy.1919); Downing v. Plate, 90 Ill. 268 (1878). In summarizing those decisions, it has been said that “where a creditor appears intentionally to have grossly overstated the amount due on an obligation, a debtor’s good-faith tender of an amount less than the amount actually due is a sufficient tender.” Allan Manley, Annotation, Creditor’s Failure to Disclose Correct Amount Due as Affecting Sufficiency of Debtor's Tender of Amount which Debtor Believes to be Due, but which is Less than Amount Actually Due, 82 A.L.R.3d 1178 , § 5a (1986). That annotation continues: In some cases, the debtor and creditor both understand clearly the components of the claim the creditor asserts, and they agree as to the amount of each component, but the debtor contends that one particular component, such as attorneys’ fees, or other court costs, is not correctly owing to the creditor.

Where tender was in an amount less than the actual amount owing, but where tender was made in good faith, and for what the debtor believed was the entire amount owing, a creditor demanding a much larger amount through error of law has been held to have waived insufficiency of tender, where no objection was made on the basis of what was actually tendered being insufficient under a correct legal interpretation. Id. at § 5b. Council argues that, because the circuit court had not yet determined the amount Brooks owed to Council and it was ³⁰⁰ uncertain as to the expenses and attorneys’ fees from the first sale that it would be able to recover, it was justified in requesting $31,114.64 and not accepting a tender less than that amount. Furthermore, Council claims that the demand, later determined incorrect by the court, should not have affected the sale because an incorrect statement of mortgage debt does not constitute grounds for setting aside a foreclosure sale.

Relying on Pacific Mortgage & Investment Group, Ltd. v. La Guerre, 81 Md.App. 28, 33 , 566 A.2d 780 (1989) (quoting Md. Perm. Ld. & Bld. Soc. v. Smith, 41 Md. 516, 522 (1875)), Council argues that, “ ‘[i]f the statement [of debt] is erroneous in not showing the true balance due upon the mortgage, it is open to correction, when the account may be stated by the auditor; but furnishes no reason for setting aside the sale.’ ” We believe Council’s reliance on Pacific Mortgage is misplaced. The holding in Pacific Mortgage is “that when a petition to foreclose a mortgage pursuant to an assent to a decree is filed, stating simply that the mortgage is in default, such petition is sufficient to sustain the foreclosure proceeding so long as any one of the provisions of the mortgage, the violation of which can constitute a default under the terms of the mortgage, is in default.” Id. at 40-41, 566 A.2d 780 .

In that case, it was conceded that the mortgaged properties were not insured as required by the mortgage. Therefore, there remained a default that permitted the foreclosure. In this case, Brooks, as he was entitled to do, sought to cure the alleged default prior to the sale and thereby stop the foreclosure proceedings. To require that Brooks pay almost ten times more than that for which the lien had been established, and approximately four times more than that which was later reflected in the auditor’s report, was effectively a denial of the right to redeem.

Moreover, Council could not legally assert a right to attorneys’ fees and costs from the first foreclosure proceeding. In Queen City Perpetual Building Assoc. v. Price, 53 Md. 397 ³⁰¹ (1880), the Court found that when a mortgage proceeding is void, the party effecting the sale bears all the costs and expenses. The Court stated: But where, as in this case, the mortgagee becomes the purchaser at his own sale, the sale being void, he acquires no rights, either legal or equitable, by means of the sale. In such case, the parties stand as they did before the ineffectual form of sale; and all the costs and expenses attending such ineffectual sale must be borne by the mortgagee, as the consequence of an unauthorized proceeding.

Id. at 401 . Brooks followed the procedures outlined in the Maryland Rules to invalidate a foreclosure sale. He filed exceptions to the sale, based on what he alleged to be an incorrect assessment of what was claimed due by Council. In his effort to cure the default and discharge the lien, he relied on the auditor’s statement from the invalidated first sale, which reflected that the amount outstanding was $3,411.

The court agreed with Brooks. It determined the underlying debt to be that which had been determined by the auditor, plus interest and costs. 7 The $31,114.64 alleged to be due by Council was rejected. THE COURT: And you know what that figure stands for, that is the assessment debt, $3,411, that is the assessment debt, and that’s the point that the Court of Special Appeals sent this back, because had he paid the $3,411, at that time there would have been no sale. And that’s what the auditor says it was.

I am looking at it, assessment debt $3,411. MR. EMIG: That’s correct, Your Honor, but at the time of the sale it was over-it was $5,400. THE COURT: At the time of the sale that I am talking about, which is the sale that took this to the Court of Special Appeals, the assessment debt was $3,411. ³⁰² MR.

EMIG: The underlying assessment debt. THE COURT: There may be something that will come along later, but that would have cleaned up what was owed at that time. The circuit court was not clearly erroneous in its determination that Brooks had attempted a good faith tender when he submitted to Council $3,411 and, when the tender was refused, sought clarification from Council on the amount due. Council’s refusal letter indicated that Council was unwilling to accept any amount less than $31,114.64, which included attorneys’ fees for the prior invalid foreclosure proceeding.

This was sufficient to support a finding that tendering the additional $162.89, which Brooks had calculated was due since the last sale, would be a futile gesture. A Interest Next, Council contends that the court erred in determining that the applicable annual interest rate was 6% rather than 18%. Council argues that its “governing documents allow 18% interest per annum, which is the maximum amount allowed by Real Property Article § 11-110.” The circuit court, however, calculated interest at 6%, pursuant to GCA’s governing documents. Council argues that the court’s reliance on GCA’s Declaration and Bylaws was incorrect. a.

Governing Documents In determining whether Council’s or GCA’s governing documents are controlling, we begin by considering Brooks’s deed, which conveys to him: Unit numbered 179 in a Horizontal Property Regime known as “GREENBRIAR CONDOMINIUM-PHASE I” [Council] established by a Condominium Declaration dated November 11, 1974 and recorded November 14, 1974 in Liber 4435 at folio 682 [Council Declaration] as amended by an Amended Declaration dated December 17, 1974 and recorded in Liber 4446 at folio 767, and as shown on a Plat of Condominium Subdivision entitled “GREENBRIAR ³⁰³ CONDOMINIUM-PHASE I” [Council] recorded in Plat Book W.W.W. 90 at Plats 50 through 57 inclusive as amended by a Plat of Correction recorded in Plat Book WW.W. 90 as Plat 47, among the Land Records of Prince George’s County, Maryland, together with the facilities and other appurtenances to said Unit, which Unit and appurtenances have been more specifically defined in the