Lampros v. Gelb & Gelb, P.C.

ADKINS, Judge. L. Chris Lampros, appellant, was sued in a circuit court outside his county of residence in an action for declaratory relief. He contends that the Circuit Court for Montgomery County lacked jurisdiction to hear the dispute due to improper venue and asks that we vacate the declaratory judgment entered against him. We agree, and so order.

FACTS AND LEGAL PROCEEDINGS Lampros' shared a law office in the District of Columbia for 35 years with, first, Joseph Gelb, and then, Gelb & Gelb (“Gelb”), appellee. This arrangement continued until August 31, 2000, when Lampros ostensibly retired from the practice of law. Both Lampros and Roger Gelb, Joseph’s son, are licensed to practice law in the District of Columbia. Neither lawyer is licensed in Maryland.

Lampros is a resident of Anne Arundel County, Maryland. Gelb is a corporation located in, and organized under, the laws of the District of Columbia. ⁴⁵⁰ On September 1, 2000, Lampros was contacted by Howard Schultz, the grandfather of Marshall Lewis, a minor who had been killed in an automobile accident. The accident occurred on August 18, 2000, in Montgomery County, Maryland. The Lewis family resides in Montgomery County.

Lampros referred the case to Gelb. On September 5, 2000, Marshall Lewis’ parents, Robert and Linda Lewis, retained Gelb to represent them on a contingent fee basis regarding their wrongful death claim. The parties contest the degree to which Lampros remained involved in the case. Liability was not contested in the wrongful death claim and litigation was avoided.

Gelb’s services for the Lewis family primarily involved identification of the amount of insurance coverage and negotiation of the settlement amount, which was somewhat complicated by the existence of three other claimants. In May 2001, a settlement was reached in which the Lewises were paid $852,589.58. When Lampros learned of the settlement, he demanded $142,098.00, which represented one-half of the contingency fee. Gelb placed the disputed $142,098.00 in its trust account and filed an action for declaratory judgment in the Circuit Court for Montgomery County.

Lampros filed a Motion to Dismiss or Transfer Action for Improper Venue. Judge Thompson denied the motion. Gelb then filed a Motion for Summary Judgment. While that motion was pending, Lampros filed an answer and counterclaim asserting three counts: breach of contract, fraud/nondisclosure of material facts, and declaratory judgment.

On May 15, 2002, Judge Woodward granted Gelb’s Motion for Summary Judgment. Gelb then filed a Motion to Dismiss Counterclaim and/or for Summary Judgment on the Counterclaim. While Gelb’s Motion to Dismiss or for Summary Judgment on the Counterclaim was pending, Lampros filed three new motions: a motion to stay the operation of the May 15 order, a renewed motion to dismiss for improper venue, and a motion to vacate the May 15 order. ⁴⁵¹ Judge Thompson granted Gelb’s motion to dismiss the counterclaim and denied Lampros’ motion to vacate; Judge Woodward denied Lampros’ motion to stay and his renewed motion to dismiss for improper venue. Lampros filed a timely appeal to this Court.

DISCUSSION I. Improper Venue Lampros argues that venue for this action was improper in the Circuit Court for Montgomery County. We agree. With limited exception, a defendant has the right not to be sued except in the county of his residence. See Eastham v. Young, 250 Md. 516, 518 , 243 A.2d 559 (1968). “The right to have a case heard in the court of proper venue is a personal privilege!.]” Howell v. Bethlehem-Sparrows Point Shipyard, Inc., 190 Md. 704, 711 , 59 A.2d 680 (1948). “The privilege of a defendant to be sued only in the county of his residence is a substantial right not to be denied except in strict compliance with the exceptions established by law.” Capron v. Mandel, 250 Md. 255, 260 , 241 A.2d 892 (1968).

In Allender v. Ghingher, 170 Md. 156 , 183 A. 610 (1936), the Court of Appeals explained: And even though equity could be considered the proper forum, it does not follow that appellants are compelled to defend the suits beyond the county of their residence, thus depriving them of the right of trial at home where they live and are known, which in turn makes the proceedings more costly to them.... “The privilege conferred on a defendant of being sued in the county of his domicile is a valuable and substantial right which is not to be denied upon a strained or doubtful construction of a statutory exception or except in strict compliance with the law on clear and convincing proof, and all doubts are to be resolved in its favor.” Id. at 165-66 , 183 A. 610 (citations omitted). The legislature has provided statutory direction governing proper venue for disputes brought before Maryland courts. ⁴⁵² The general rule for venue is set forth in Md.Code (1974, 2002 Repl.Vol.) section 6-201 of the Courts & Judicial Proceedings Article (“CJ”), which states, in pertinent part (a) Civil Actions.—Subject to the provisions of §§ 6-202 ■and 6-208 and unless otherwise provided by law, a civil action shall be brought in a county where the defendant resides, carries on a regular business, is employed, or habitually engages in a vocation. In addition, a corporation also may be sued where it maintains its principal offices in the State. C J sections 6-202 and 6-203 create exceptions to the general rule stated in section 6-201, none of which apply here.

The rules as to the place where a defendant may be sued are applicable in equity as well as at law. See Eastham, 250 Md. at 518 , 243 A.2d 559 . The defendant bears the burden of proving that venue is improper. See Odenton Dev.

Co. v. Lamy, 320 Md. 33, 39 , 575 A.2d 1235 (1990). “To meet the burden of proving improper venue, the defendant must do more than merely raise a ‘bare allegation that venue was improper, unsupported by affidavit or evidence.’ ” Pacific Mortgage & Inv. Group, Ltd. v. Horn, 100 Md.App. 311, 322-23 , 641 A.2d 913 (1994) (citation omitted). Lampros’ Motion to Dismiss for Improper Venue was supported by affidavit. Lampros averred that he resides in Anne Arundel County and has resided there since 1979; he is not a resident of Montgomery County; and has “never been employed, conducted regular business or habitual avocation in Montgomery County as a continuous pursuit of some calling or profession.” Lampros contends, therefore, that proper venue for this action for declaratory judgment is in his county of residence, Anne Arundel County.

Improper venue is a mandatory defense that must be raised by preliminary motion or it is waived. See Pacific Mortgage, 100 Md.App. at 323 , 641 A.2d 913 ; see also Md. Rule 2-322(a)(“The following defenses shall be made by mo ⁴⁵³ tion to dismiss filed before the answer, if an answer is required ... (2) improper venue.... If not so made and the answer is filed, these defenses are waived”).

When a court finds that a motion to dismiss or transfer for improper venue is justified, it must either dismiss the action or transfer the action to a court having proper venue. See Md. Rule 2-322(c)(“In disposing of the motion, the court may dismiss the action or grant such lesser or different relief as may be appropriate”); Md. Rule 2-327(b)(“If a court sustains a defense of improper venue but determines that in the interest of justice the action should not be dismissed, it may transfer the action to any county in which it could have been brought”).

II

Appellee’s Arguments A. Venue Is Proper In Montgomery County Gelb contends that proper venue is in Montgomery County. It offers several arguments to support this theory. Gelb’s declaratory judgment action was filed in response to the oral claim Lampros made for one-half of the contingency fee Gelb earned through representation of the Lewises. Claiming that Lampros would bear the burden of proof in a suit to collect the legal fee, Gelb posits, it is only “nominally the plaintiff’ and Lampros is “nominally the defendant.” He argues that it would be placing “form over substance” to require Gelb to file suit against Lampros in Anne Arundel County.

This argument is unpersuasive. Gelb cannot sidestep the critical fact that it is, in fact, the plaintiff and Lampros is, in fact, the defendant. CJ section 6-201(a)states, “a civil action shall be brought in a county where the defendant resides[.]” The Code provides no specific venue provisions for ⁴⁵⁴ “nominal defendants.” The venue provisions of the Code are clear. “The privilege of a defendant to be sued only in the county of his residence is a substantial right not to be denied except in strict compliance with the exceptions established by law.” Capron, 250 Md. at 260 , 241 A.2d 892 . All doubts concerning this privilege “are to be resolved in its favor.” Allender, 170 Md. at 166 , 183 A. 610 .

Nominal or not, a defendant’s privilege to be sued in his or her home county can only be denied in accordance with the exceptions provided in CJ sections 6-202 and 6-203. Our review of those statutes reveals no exceptions applicable to this case. Our judicial system affords plaintiffs significant rights. Plaintiffs decide whether to file suit, whom to sue, the specific claim(s) to litigate, when to file suit, and, in most cases, where to sue.

Defendants’ rights are more limited. Defendants have the right not to be forced to defend in courts distant from their home or place of business. Gelb’s attempt to create a new category of party, the “nominal defendant,” would, if this Court so held, eviscerate the defendants’ right to a court of proper venue as defined by CJ section 6-201(a). Gelb further argues that venue is proper in Montgomery County because this contract action arose from an underlying tort action having a strong nexus to Montgomery County, and that this Court should view Lampros’ position “in the context of the claim he is asserting.” Illustrative of the nexus, Gelb posits, hypothetically, that Lampros would be forced to defend in Montgomery County if the Lewises filed an action there to contest the legal fees generated by the wrongful death action.

The crux of this argument is Gelb’s contention that Lampros was engaged in “a regular business, [was] employed, or habitually engage[d] in a vocation” in Montgomery County when he allegedly took this Montgomery County case. These arguments fail because they are founded upon faulty application of the case law. Gelb cites Pacific Mortgage & Inv. Group, Ltd. v. Horn, 100 Md.App. 311 , 641 A.2d 913 (1994), for the proposition that “[i]t ⁴⁵⁵ is not necessary for a defendant to maintain an office or have his or her principal place of business in a certain county in order for the defendant to carry on a regular business in that county.” Id. at 324 , 641 A.2d 913 (citing Dodge Park, Inc. v. Welsh, 237 Md. 570, 572-73 , 207 A.2d 503 (1965))(emphasis added).

In Pacific Mortgage , we held that [a] Maryland resident that regularly provides credit to Baltimore City residents, places mortgage liens on property in Baltimore City, and buys and sells these mortgage liens has done more than merely transacted business in Baltimore City but has, in fact, carried on a regular business in Baltimore City. Venue in this case is proper in Baltimore City. Id. (emphasis added).

Dodge Park concerned a suit filed in Montgomery County to recover damages from three lawyers whose office was in Prince George’s County. See Dodge Park, 237 Md. at 571 , 207 A.2d 503 . The defendants moved to dismiss for improper venue on the grounds that they all lived in and maintained their office in Prince George’s County, and that all the actions complained of took place in that county. See id.

The Court of Appeals held that venue was proper in Montgomery County because the defendants were habitually engaged in the practice of law there. See id. at 573 , 207 A.2d 503 . Key to the holdings in Pacific Mortgage and Dodge Park were the courts’ findings that the defendants were in “regular business” and “habitually engaged” in the practice of law, respectively. The Dodge Park Court explained that “ ‘regular business or habitual avocation or employment ... inelude[s] the continuous pursuit of some calling or profession, such as is ordinarily engaged in as a. means of livelihood or for the purpose of gain or profit.’ ” Id. at 572 , 207 A.2d 503 (citation omitted). “[T]he making of a single transaction with another person in the line of a particular business [does not] constitute a carrying on of that business” as contemplated by the venue statute.

State v. Shipley, 98 Md. 657, 661 , 57 A. 12 (1904). ⁴⁵⁶ In furtherance of its contention that Lampros cannot maintain both that he is entitled to his fee for services rendered to the Lewises and that he did not consent to jurisdiction in Montgomery County, Gelb argues that “when an attorney undertakes to represent a client in a particular county, then for purposes of that case the attorney