Law Offices of Taiwo Agbaje, P.C. v. JLH Properties, II, LLC

KENNEY, J. The Law Offices of Taiwo Agbaje, P.C. (“Lessee”) appeals the Circuit Court for Prince George’s County’s grant of summary judgment to JLH Properties II, LLC (“Lessor”) in a landlord-tenant proceeding instituted pursuant to Maryland Code (1974, 2003 Repl.Vol.), § 8-101 of the Real Property Article. Lessee presents three questions for our review, which we have consolidated into the following: 1 Did the circuit court err in granting summary judgment to Lessor because genuine disputes of material fact exist concerning the amount of rent due under the lease? We answer that question in the affirmative and shall reverse the judgment of the circuit court.

FACTUAL AND PROCEDURAL HISTORY In May 2003, Lessee and Lessor entered into a three year commercial lease agreement (the “Lease”). Lessee covenant ³⁶⁰ ed to pay $600 per month in rent, and Lessor covenanted to furnish Lessee an office suite located at 14610 Main Street, in Upper Marlboro, Maryland (the “Property”). The Lease also provided, in relevant part: 7. L[essee] agrees that in case of fire or other casualty resulting in damage to the premises, they will give immediate notice thereof [to] the L[essor], who shall thereupon, with expedition and in a good and workmanlike manner, after said damage, enter upon and undertake such repair and rehabilitation, as is necessary to restore said premises to their original condition before such damages, with reasonable dispatch, provided that the necessary labor and materials are available to the L[essor] for restoring said premises to their original condition.

In the event that said demised premises are subject to repair and rehabilitation within a reasonable time, the rental herein shall be abated in the proportion that the amount of space which is not available to and usable by L[essee] as a result of such casualty and or the work and labor incidental to its rehabilitation bears to all of the space in the demised premises. In the event that said demised premises shall at any time during the demised term be totally destroyed by fire or other casualty, or shall be rendered partly untenantable, and the repair and rehabilitation of said demised premises shall be of an extent requiring more than ninety (90) days for its completion, then this Lease, at the option of either L[essee] or L[essor] may be terminated and the obligation to make rental payments thereupon shall cease as of the date of such damages or destruction. * * * 10. It is further agreed that if the rent aforesaid shall at any time be in arrears and unpaid for more than ten (10) days, a late fee of ten percent (10%) and all attorney’s fees; costs of litigation/collection or any other expense incurred in collecting unpaid rent or possession of the leased premises shall become rent which is immediately due for the purpose ³⁶¹ of this lease and will be added to the rent, should L[essee’s] failure to pay rent not be cured within ten (10) days of its receipt of written notice of any default from L[essor].... (Emphasis added.) Lessee was aware that there was some water damage to the Property, but it agreed to the Lease and commenced occupying the Property shortly afterwards.

Lessee contends, however, that, after moving in, it immediately noticed “raw waste water” seeping into the Property. Due to the problems associated with the raw wastewater seepage, including a foul odor and appearance, Lessee asserted that, after “two to three months,” the Property became one-hundred percent “[u]nusable as a law office.” As a result, Lessee claims to have contacted Lessor and demanded that the full rental be abated. Lessee ceased paying rent in September 2003, but did not request termination of the Lease, did not remove personalty from the Property, and did not return the keys to the Lessor. On April 28, 2004, Lessor filed a complaint in the District Court of Maryland for Prince George’s County seeking repossession of the Property and unpaid rent pursuant to Maryland Code (1974, 2003 Repl.Vol.), § 8-401 of the Real Property Article (“R.P.”).

The complaint was apparently dismissed because it named Taiwo Agbaje, personally, as the tenant. Subsequent to Lessor’s filing in the District Court, Lessee filed a complaint in the Circuit Court for Prince George’s County, alleging, among other things, breach of contract, intentional misrepresentation, and negligent misrepresentation (the “Breach of Contract Case”). In its complaint, Lessee alleged, in relevant part, that it had informed Lessor of the wastewater problems, that Lessor had promised to repair the problems, and that the persistent odor and damage associated with the wastewater rendered the Property unusable as a law office. Beginning in October 2003, Lessee ceased paying rent, and between October 2003 and March 2004, Lessee and Lessor agreed that no rent was due as long as the water damage persisted.

According to the complaint, instead of “repairing the plumbing problem” in March 2004, Lessor replaced the ³⁶² damaged carpet in the Property with ceramic tiles. Lessee claimed that it suffered damage as a result of Lessor’s failure to abate the water problem, including loss of business and damage to files and a filing cabinet. On June 23, 2004, Lessor filed a second complaint in the District Court properly naming Lessee as the tenant. In its amended complaint, Lessor sought $6,540 in total accrued and future rent (the “Ejectment Case”).

On June 30, 2004, Lessee filed a response, in which it denied liability and requested a jury trial. The Ejectment Case was removed to the Circuit Court for Prince George’s County, apparently without objection. 2 On October 15, 2004, Lessor moved for summary judgment in the Ejectment Case. Lessee opposed Lessor’s motion for summary judgment and moved to consolidate the Ejectment and Breach of Contract cases, maintaining that the two causes arose from the same factual circumstances. In support of its motion, Lessee attached, as an exhibit, its complaint in the ³⁶³ Breach of Contract Case and the affidavit of Taiwo Agbaje, the law firm’s “managing attorney.” In his affidavit, Agbaje claimed, in pertinent part: 3.

That [Lessor] is not owed any rent. 4. That on or about May 15, 2003, [Lessee] entered into a lease agreement for office space at 14610 Main Street Suite 103 with [Lessor] for $600 per month. 5. That [Lessor] received over $2000 in rent payments from [Lessee]. 6. That [Lessor] has not and did not provide a tenantable space to [Lessee] for the monies received. 7.

That beginning from the inception of the [L]ease, the [Property] repeatedly and continuously experienced waste water and raw sewage flooding for over a year which rendered the [Property] not tenantable and which problem was not repaired by the [Lessor] despite repeated notice and which caused the [Lessee] damages in excess of $50,000. 8. That this led to [Lessee] bringing a suit for damages against the [Lessor], [a] copy of which is attached hereto as Exhibit 2, and is scheduled for a jury trial before th[e] [circuit] [e]ourt in [the Breach of Contract Case.] 9. That [Lessor] is not entitled to possession because no rent is owed and [Lessor] has not provided tenantable space to [Lessee] for monies already received from [Lessee]. On November 10, 2004, Lessor filed a response to Lessee’s opposition to summary judgment.

Lessor also opposed the consolidation of the two cases, claiming that there were no common questions of fact or law. According to Lessor, the “in rem proceeding for summary ejectment concerns completely different and undisputed facts, law, and subject matter at issue in the in personam breach of contract and tort proceeding.” A hearing on Lessor’s motion for summary judgment commenced on January 7, 2005. During the hearing, Lessee did not dispute that it had continuously occupied the Property, in some capacity, since May 2003 but had not paid rent since September 2003. Rather, Lessee argued that it had notified ³⁶⁴ Lessor of the wastewater problem and that no rent was due under the Lease because the wastewater problems rendered the Property subject to repair and rehabilitation and wholly unusable.

Lessor asserted that, not only was it entitled to accrued and future rent, but also late fees, and attorney’s fees under the Lease. According to the circuit court, Agbaje’s affidavit offered in opposition to the motion for summary judgment failed to demonstrate that Lessee was entitled to rent abatement. The court opined that, in order for Lessee to claim one-hundred percent abatement, Lessee needed to formally request termination of the Lease. With regard to Lessee’s assertion that it was entitled to abate rent under the Lease, the court determined: What, in effect, would be a counterclaim or defense to the rent you have chosen instead to raise in a separate legal action.

Whatever damages you recover in the other action may offset the judgment entered in this case, but it is not [the] court’s obligation to consolidate these cases and delay the proceedings unnecessarily. In an oral opinion, the court awarded judgment of possession in favor of Lessor and awarded $9,600 in accrued rent, plus an additional $960 in late fees. A record of the January 7 hearing was not entered into the docket until January 19, 2005, when the court’s written order granting summary judgment to Lessor was also finally entered. The docket entries reflect that Lessee’s motion for consolidation was denied as “moot.” Meanwhile, on January 12, 2005, Lessee filed a “Motion for New Trial,” in which it alleged that the court erred in granting summary judgment to Lessor because there were disputes of material fact concerning whether Lessee was entitled to abate rent under the Lease.

Additionally, Lessee claimed that the court erred in not consolidating the Breach of Contract Case and the Ejectment Case. Attached as exhibits to its “Motion for New Trial” were a copy of the complaint in the Breach of Contract Case, a copy of the Lease, pictures pur ³⁶⁵ porting to show the Property in disrepair, the affidavit of Reginald McFadden, who is an experienced “handyman,” and a letter purportedly written by Lessor’s counsel, William Monks. The letter purportedly written by Monks stated, in relevant part: This office represents [Lessor] with regard to the leasehold of [Lessee] for the premises at 14610 Main Street, Suite 103, Upper Marlboro Maryland. In response to your letter of January 7, 2004, [Lessor] will not abate any further rent.

In accordance with the terms and provisions of your lease, the rent shall be paid in advance on the first (1st) day of the month. [Lessor] has made all repairs and abated your rent in accordance with paragraph 7 of the lease. While the water damage caused by the negligence of the first floor tenant was unfortunate, the lease anticipated such maintenance issues and [Lessor] made the appropriate rent abatement in accordance with the terms and provisions of the [L]ease. Your failure to pay the January 1st rent put you in breach of the [L]ease. Should my client have to file suit to recover this rent, we will move the Court for all costs and expenses of litigation, including charges for reasonable attorney’s fees.

On January 27, 2005, the court denied Lessee’s “motion for new trial or reconsideration.” This timely appeal followed. STANDARD OF REVIEW Lessor contends that, “[b]eeause the trial court’s denial of [Lessee’s] motion for new trial was the final order under Maryland Rule 8-202(c), [Lessee’s] appeal of the gran[t] of summary judgment is not properly before the [C]ourt.” We disagree. In the instant case, Lessee filed its post-trial motion on January 12, 2005. Although the motion was entitled “Motion for New Trial,” therein Lessee claimed that the circuit court ³⁶⁶ erred in granting summary judgment to Lessor because there were genuine disputes of material fact resolved by the court at the January 7 hearing.

Lessee requested “an order granting a new trial,” and “any other relief that may be just and proper.” Accordingly, as noted by the circuit court in denying the motion, Lessee’s post judgment motion more properly should have been entitled a “Motion for New Trial and or Revision of Judgment.” In addition, we recognize that the post-judgment motion was filed before the docket sheet indicated the disposition of Lessor’s motion for summary judgment and before a written order disposing of the Ejectment Case was entered. Nevertheless, at the January 7 hearing, the circuit court indicated that it granted summary judgment in favor of Lessor, and the court’s written order granting Lessor’s motion for summary judgment is dated January 7, 2005. Pursuant to Maryland Rule 2-601, it is the responsibility of the clerk of the circuit court to promptly enter the court’s judgment in the docket. Here, the court’s judgment was not entered until January 19, 2005.

As the Court of Appeals recently explained in Tierco Maryland, Inc. v. Williams, 381 Md. 378, 400-01 , 849 A.2d 504 (2004), where a post-judgment motion is filed within ten days of the court’s judgment, but before the judgment is entered, while technically premature because of the clerk’s failure to timely enter the order, the post-judgment motion should be treated as if timely filed. Therefore, because Lessee filed a timely post-judgment revisory motion within ten days of the court’s judgment, its motion should be treated as a Rule 2-534 Motion to Alter or Amend. See Alitalia Linee Aeree Itáliane v. Tornillo, 320 Md. 192, 200 , 577 A.2d 34 (1990) (noting that, regardless of the title, a revisory motion filed within ten days of the court’s judgment “will be treated as a Rule 2-534 motion and have the same effect on appeal time”). Maryland Rule 8-202(e) provides, in relevant part, where a party files a timely Rule 2-534 motion, “the notice of appeal ³⁶⁷ shall be filed within 30 days after entry of (1) a notice withdrawing the motion or (2) an order denying a motion pursuant to Rule 2-533 or disposing of a motion pursuant to Rule 2-532 or 2-534.” The court’s order denying Lessee’s Rule 2-534 motion was entered on January 31, 2005.

Lessee filed its notice of appeal on February 7, 2005, within thirty days. Accordingly, Lessee’s appeal was timely and we may consider the merits of the circuit court’s grant of summary judgment. Maryland Rule 2—501(f) states that a court “shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.” We review “a trial court’s grant of a motion for summary judgment de novo.” Remsburg v. Montgomery, 376 Md. 568, 579 , 831 A.2d 18 (2003). See also Todd v. Mass Trans.

Admin., 373 Md. 149, 154 , 816 A.2d 930 (2003); Beyer v. Morgan State Univ., 369 Md. 335, 359 , 800 A.2d 707 (2002); Schmerling v. Injured Workers’ Ins. Fund, 368 Md. 434, 443 , 795 A.2d 715 (2002). “The trial court will not determine any disputed facts, but rather makes a ruling as a matter of law. The standard of appellate review, therefore, is whether the trial court was legally correct.” Williams v. Mayor of Baltimore, 359 Md. 101, 114 , 753 A.2d 41 (2000). When reviewing a grant of summary judgment, we first determine whether a genuine dispute of material fact exists “and only where such dispute is absent will we proceed to review determinations of law.” Remsburg, 376 Md. at 579 , 831 A.2d 18 . “In so doing, we construe the facts properly before the court, and any reasonable inferences that may be drawn from them, in the light most favorable to the non-moving party.” Id. at 579-80 , 831 A.2d 18 . “Finally, [i]n reviewing [the circuit court’s] decision to grant a motion for summary judgment, we evaluate ‘the same material from the record and decide[ ] the same legal issues as the circuit court.’ ” Campbell v. Lake Hallowell Homeowners ³⁶⁸ Ass’n, 157 Md.App. 504, 518-19 , 852 A.2d 1029 (2004) (quoting Crews v. Hollenbach, 126 Md.App. 609, 624 , 730 A.2d 742 (1999)) (alterations in Campbell).

We “uphold the grant of a summary judgment only on the grounds relied on by the trial court.” Ashton v. Brown, 339 Md. 70, 80 , 660 A.2d 447 (1995). DISCUSSION I. Before considering Lessee’s arguments, we consider whether there is a final judgment in this case. At the January 7, 2005 hearing, the court declined to address Lessor’s requests for interest and attorney’s fees, stating that the issues were “still pending.” Real Property § 8-401 permits a landlord to recover late fees, but there is no provision that permits the court to award litigation costs or attorney’s fees. The Lease provided that rent was to include all attorney’s fees and litigation costs incurred in collecting unpaid rent.

We are persuaded, however, that, despite the characterization of such damages as rent, attorney’s fees and costs were not recoverable in this case. We explain. In University Plaza Shopping Ctr., Inc. v. Garcia, 279 Md. 61 , 367 A.2d 957 (1977), the Court of Appeals considered whether costs incurred by a landlord to adapt the premises for a tenant’s use and which the lease defined as “rent” could be collected by the landlord in a summary ejectment proceeding. The court noted that “rent” is not defined by statute, but is generally defined as “payment for the tenant’s use, possession and enjoyment of land.” Id. at 65-66 , 367 A.2d 957 .

Citing Theatrical Corp. v. Trust Co., 157 Md. 602 , 146 A. 805 (1929), and Feldmeyer v. Werntz, 119 Md. 285, 289 , 86 A. 986 (1913), the Garcia Court noted that the payment of taxes, insurance premiums, and required improvements could be considered rent depending upon the parties’ agreement. In the context of a commercial lease, the Court held that “charges which may be definitely ascertained, paid by the tenant, and going to his use, possession and enjoyment of rental commercial premises, are rent if such was the intention of the parties.” Id. at 67 , ³⁶⁹ 367 A.2d 957 . The Court determined that the work performed in adapting the rented property for the tenant’s use was rent and could be collected in a summary ejectment proceeding. More recently, in Shum v. Gaudreau, 317 Md. 49 , 562 A.2d 707 (1989), the Court of Appeals again considered what types of damages could be recovered by a landlord in a summary ejectment proceeding.

In that case, a landlord prevailed in an ejectment proceeding and was awarded possession of the property and one month’s rent. Approximately one month later, the landlord filed a breach of contract action against the tenant, seeking recovery for damages to the property and costs incurred for maintenance services both before and after the tenant’s departure. The lease at issue required the tenant to return the property in the same condition as when it was received and defined “rent” to include all “repairs and renovations to the leased premises” that the landlord incurred in returning the property to its original condition. Id. at 64-65 , 562 A.2d 707 .

In the breach of contract case, the tenant argued that, because the definition of rent in the lease included repair costs, the landlord could have recovered those costs in the ejectment proceeding. And, because the landlord failed to seek those damages in the ejectment proceeding, the doctrine of res judicata precluded recovery in the breach of contract case. The Shum Court determined that, generally, contract damages could not be sought in a R.P. § 8-401 ejectment proceeding. According to the Court, the resolution of “possible complexities of proof’ as to contract damages would be inimical to the purpose of the ejectment statute, to provide a speedy repossession of the premises and a straightforward calculation of damages.

Shum, 317 Md. at 60 , 562 A.2d 707 . The Court then went on to consider the situation where the lease defined contract damages as rent. Relying upon the definition of “rent” in Garcia , the Shum Court determined that only those repairs and maintenance costs that could fairly be attributed to the tenant’s “use, possession and enjoyment” could be collected in a summary ejectment proceeding. Id. at 64 , 562 A.2d 707 .

Therefore, the costs associated with improv ³⁷⁰ ing the property for the tenant’s use were collectable in the ejectment case, and the landlord’s claim in the breach of contract case to those damages