Legal Aid Bureau, Inc. v. Farmer

WILNER, Judge. This case began as a landlord-tenant action in the District Court. Appellants—Legal Aid Bureau, Inc. and David P. Bokow—represented the tenants, whom the landlords were seeking to evict from a mobile home park. From two judgments entered against the tenants in the District Court, appellants counseled and filed appeals to the Circuit Court for Cecil County.

Concluding that the appeals were taken in bad faith, the Circuit Court not only affirmed the District Court judgments but entered its own judgment for $960 against appellants. That judgment was entered pursuant to Md.Rule 1-341 and represented the value of the legal services rendered to the landlords in both the District and Circuit Court proceedings. ⁷⁰⁹ Appellants do not challenge—at least not directly—the disposition of the District Court appeals; they obviously have no standing in that regard. They seek to overturn only the $960 judgment entered against them. (1) Jurisdiction Appellants assume, with no objection from the landlords/appellees, that the judgment entered against them is indeed appealable to this Court.

Although we shall ultimately conclude that it is so appealable, that conclusion is not so compellingly evident as to avoid the need for some analysis. The jurisdictional question arises from the fact thiat the $960 judgment was rendered by the Circuit Court in, and as part of, a proceeding in which it was exercising a special appellate jurisdiction to review the judgments of the District Court. See Md.Code Ann.Cts. & Jud.Proc. art., § 12-401. Ordinarily, further appellate review of judgments entered in that kind of proceeding is committed exclusively to the Court of Appeals upon a timely filed petition for certiorari.

A quick summary of the relevant statutes will illustrate the problem. Md.Code Ann.Real Prop, art., § 8A-1701(f) and Cts. & Jud.Proc. art., §§ 12-401(a) and 12-403 make clear that an appeal from a judgment for repossession entered by the District Court against a mobile home park tenant goes to the Circuit Court, which, in considering that appeal, exercises a special statutory jurisdiction. Cts. & Jud.Proc. art., § 12-301 provides, in relevant part, that: “Except as provided in § 12-302, a party may appeal from a final judgment entered in a civil or criminal case by a circuit court. The right of appeal exists from a final judgment entered by a court in the exercise of original, special, limited, statutory jurisdiction, unless in a particular case the right of appeal is expressly denied by law.” Section 12-302(a), however, states that “[ujnless a right to appeal is expressly granted by law, § 12-301 does not ⁷¹⁰ permit an appeal from a final judgment of a court entered or made in the exercise of appellate jurisdiction in reviewing the decision of the District Court____” Further appellate review in those kinds of cases is provided for by §§ 12-305 and 12-307.

Section 12-305 states, in relevant part, that: “The Court of Appeals shall require by writ of certiorari that a decision be certified to it for review and determination in any case in which a circuit court has rendered a final judgment on appeal from the District Court ... if it appears to the Court of Appeals, upon petition of a party that: (1) Review is necessary to secure uniformity of decision, as where the same statute has been construed differently by two or more judges; or (2) There are other special circumstances rendering it desirable and in the public interest that the decision be reviewed.” The commitment of further appellate jurisdiction to the Court of Appeals is confirmed by §§ 12-307 and 12-308, which “allocate appellate jurisdiction between the Court of Appeals and the Court of Special Appeals.” § 12-306. Section 12-307(2) expressly vests in the Court of Appeals “[¿jurisdiction to review a case or proceeding decided by a circuit court, in accordance with § 12-305 of this article.” Consistent with that, § 12-308 provides that “[ejxcept as provided in § 12-307,” this Court has exclusive initial appellate jurisdiction over reviewable judgments of the circuit court. It is evident, then, that, unless the judgment entered by the Circuit Court pursuant to Md.Rule 1-341 has some special, collateral status, it would not be reviewable by us. The Rule states: “In any civil action, if the court finds that the conduct of any party in maintaining or defending any proceeding was in bad faith or without substantial justification the court may require the offending party or the attorney advising the conduct or both of them to pay to the ⁷¹¹ adverse party the costs of the proceeding and the reasonable expenses, including reasonable attorney’s fees, incurred by the adverse party in opposing it.” The nature of judgments entered under this Rule (or its predecessor, former Md.Rule 604b) or under the Federal Civil Rights laws ( 42 U.S.C. § 1988 ) has been before this Court and the Court of Appeals on a number of occasions, but never in this context.

In each instance, so far, the judgment was entered by a circuit court in an action over which it had original trial jurisdiction. Even in that setting, however, the precise nature of such judgments has not been altogether clear. In Simmons v. Perkins, 302 Md. 232 , 486 A.2d 1192 (1985), the Court held that a judgment entered against a party under the Rule for filing a frivolous motion in the proceeding could not be immediately appealed under Cts. & Jud.Proc. art., § 12-303(3)(v) as an order for “the payment of money.” In Yamaner v. Orkin, 310 Md. 321 , 529 A.2d 361 (1987), the Court held that such a judgment was also not immediately appealable under the “collateral order doctrine.” The principal basis for that conclusion was that a judgment under Rule 1-341 against a party to the underlying litigation “will almost always fail to meet [the] requirement” of the collateral order doctrine that “there be a serious risk of irreparable loss of the claimed right if appellate review is deferred until after final judgment.” 310 Md. at 326 , 529 A.2d 361 . The notion, then, was that the award of attorneys’ fees would, in fact, be reviewable in an appeal taken after the circuit court proceeding had been concluded.

Indeed, in n. 7 at 327, 592 A.2d 361 , the Court cautioned that “[w]e indicate no opinion on the appealability under the collateral order doctrine of a sanctions order which is directed to counsel,” observing that, where sanctions are directed only to counsel, “it has been held that the order might escape review after final judgment if the parties settled.” (Emphasis added.) In Dent v. Simmons, 61 Md.App. 122 , 485 A.2d 270 (1985), we considered whether a circuit court could enter a ⁷¹² judgment under the Rule more than 30 days after it had entered final judgment in the underlying action and while the judgment in that underlying action was pending appeal in this Court. We concluded that the circuit court could enter such a judgment because it “raised legal issues collateral to the main cause of action” which would “not affect the subject matter of the appeal” from the judgment in the underlying action. Id., 130 , 485 A.2d 270 . The Court of Appeals reached essentially the same conclusion with respect to an award of counsel fees under 42 U.S.C. § 1988 in County Exec., Prince Geo’s Co. v. Doe, 300 Md. 445 , 479 A.2d 352 (1984), and in Md.-Nat’l Cap.

P. & P. Comm’n v. Crawford, 307 Md. 1 , 511 A.2d 1079 (1986). In Doe , the Court observed, in [300 Md.] n. 4 at 451, 479 A.2d 270 , that “under 42 U.S.C. § 1988 , a claim for an attorney’s fee, while an integral part of the remedy under 42 U.S.C. § 1983 , is viewed as a collateral matter from the § 1983 action; thus the claim for an attorney’s fee may be brought following a final judgment in a § 1983 action.” It would seem from these cases that judgments of this, type have been regarded as collateral to the underlying action for some purposes but not for others. They are somewhat of a hybrid and, when entered by a circuit court in a proceeding under Cts. & Jud.Proc. art., § 12-401, do not fall neatly into our jurisdiction under §§ 12-301 and 12-308 or that of the Court of Appeals under §§ 12-305 and 12-307. Yet, unless we are to conclude that such judgments are absolutely unreviewable, which we are unwilling to do, we must fit them in one place or the other.

In making this decision, we believe, as did the Court in Yamaner , that a distinction needs to be drawn between a judgment entered against a party to the action and one entered against counsel. We address here only the latter situation, the one actually before us. We conclude that, for purposes of appellate jurisdiction, a judgment entered by the circuit court against the attorney is sufficiently collateral to the underlying action as to fall within our bailiwick. We reach that conclusion for several reasons. ⁷¹³ We first observe that, although a judgment under Rule 1-341 must emanate from an underlying civil action and often, as here, is predicated on the very bringing of that action, it is not necessarily tied to the merits or the eventual outcome of the underlying action.

It can, and occasionally does, arise from a variety of acts or omissions on the part of counsel during the proceeding that may have little or no bearing on the eventual decision in the case—the filing of pleadings, discovery, or other papers that the court finds to be without substantial justification, for example. Even where, as here, the judgment is predicated on a finding by the court that the action itself is so devoid of merit as to be brought in bad faith or without substantial justification, the validity of that determination is not dependent upon the validity of the underlying disposition. As we made clear in Dent v. Simmons, supra, 61 Md.App. 122 , 485 A.2d 270 , the fact that a court rejects the proposition advanced by counsel and finds it to be without merit does not mean that the proposition was advanced without substantial justification or in bad faith. There would be no inconsistency whatever in an appellate court affirming the judgment in the underlying action and reversing a Rule 1-341 judgment as an abuse of discretion.

In that sense, the Rule 1-341 judgment against the attorney is clearly collateral to the underlying judgment. The collateral quality of this kind of judgment certainly makes it eligible for inclusion under §§ 12-301 and 12-308, rather than under §§ 12-305 and 12-307. That it should be so included, as a matter of both statutory construction and jurisprudential imperative becomes clear when we consider the effect of not so including it. If a judgment of this type entered against counsel is not appealable to us under §§ 12-301 and 12-308, it may well be the only kind of money judgment for which an appeal of right to some appellate court would not exist.

Indeed, even beyond the mere non-appealability as of right, if counsel were left solely to seeking discretionary review in the Court of Appeals under the exacting standards of § 12-305, these ⁷¹⁴ judgments, as a practical matter, might be immune from any appellate review. The baleful consequences of that are not difficult to imagine. For these reasons, we believe that a judgment under Md.Rule 1-341 rendered against an attorney by a circuit court is appealable to this Court under Cts. & Jud.Proc. art., §§ 12-301 and 12-308, even when emanating from a proceeding conducted by the circuit court under § 12-401. This, of course, in no way diminishes the prerogatives of the Court of Appeals.

Should that Court find sufficient merit in a petition for certiorari filed by the lawyer, whether or not in conjunction with a petition seeking review of the underlying judgment in the District Court appeal, it can, if it chooses, review the judgment against the lawyer either before or after a decision by this Court. See § 12-307(1). (2) The Facts Raymond and Pamela Surbaugh own a mobile home. At some point in 1983 or 1984, they leased a lot in the Mill Creek Mobile Home Park (then known as the Sun Valley Trailer Court) on which they parked their home.

Despite the clear requirement of Maryland law that rental agreements in mobile home parks be in writing (see Md. Code Ann. Real Prop, art., §§ 8A-101(i), 8A-201(3), 8A-202), the rental agreement between the Surbaughs and the landlord was an oral one, from month to month. The rent, of $195, was due on the first of the month. For the first couple of years, there seem to have been no problems between landlord and tenants, although we gather that the Surbaughs did not always pay their rent by the first of the month. The original landlord apparently allowed a five-day grace period.

At some point, the park was sold to the current landlords—the Farmers—who began insisting oh strict compliance. On October 2, 1986, they filed an action in District Court for repossession of the lot, claiming an arrearage of two months rent. That action was voluntarily dismissed by the landlords at trial on October 15 upon payment of the arrearage by the Surbaughs. On ⁷¹⁵ November 3, 1986, the Farmers filed another action, claiming $235 for November.

How they computed that amount is unexplained. At trial on November 12, judgment by consent was entered for $195 plus $13 costs, but execution was stayed for several weeks. The judgment was eventually paid. The same thing occurred in December; the action was filed December 9, judgment for $195 plus costs was entered December 17, execution was stayed, and the judgment was eventually paid.

The landlords sued again in January; this time the action was dismissed for failure of anyone to appear, as the tenants paid what was due before trial. At the end of April, Mrs. Surbaugh called Mrs. Farmer and told her that, because of an unexpected automobile repair bill, the May rent would be late. In fact, she tendered the $195 rent on May 9, but the landlords refused to accept it. Three days earlier, they had filed another action in District Court, seeking both repossession and judgment for the amount due.

At trial on May 20, in open court, the Surbaughs, represented by appellants, again tendered the $195 due, plus $13 in court costs, and, once again, the landlords refused to accept it. This time, the court entered judgment for possession and for the rent and court costs, without any right of redemption. The next day, through appellants, the Surbaughs filed an appeal to the Circuit Court and a motion to stay execution of the judgment without bond. The motion