Overmyer v. Lawyers Title Ins. Corp.

* Gilbert, J., delivered the opinion of the Court. In this appeal, Daniel H. Overmyer a/k/a D. H. Overmyer and/or Dan H. Overmyer, seeks to reverse a judgment of the Circuit Court for Baltimore County (Proctor, J.) in which Lawyers Title Insurance Corporation was awarded monetary damages against Overmyer in the amount of ¹⁷⁹ $59,752. 1 The judgment was entered after a hearing on an attachment on original process. Md. Rule G55. Overmyer poses a tetrad of questions to us, asserting that an affirmative answer to any one of them requires a reversal of the judgment.

Before we undertake to discuss the issues raised in this case, it is necessary to set forth briefly the scenario giving rise to the appeal. B & E Sales Company obtained, in the Circuit Court for Baltimore County, on May 7, 1971 (Jenifer, J.), a monetary decree against D. H. Overmyer Co., Inc., because Overmyer, Inc., breached, as landlord, a lease with B & E Sales. The decree provided that Overmyer, Inc., was to pay B & E Sales $7,749.99 and, in addition thereto, Overmyer, Inc., was directed to pay B & E Sales “.., $1,400.00 per month beginning as of May 1, 1971, . .. and the balance to be paid thereafter on the first day of each succeeding month beginning June 2,1971, and up to and including February 1, 1976.” 2 Apparently, Overmyer, Inc., decided to sell the Baltimore County warehouse, the lease to which, we infer, brought about the litigation with B & E Sales. The property was sold tb A group of individuals, which included among its number Daniel H. Overmyer.

Lawyers Title was engaged to insure the title of the purchasers. The title company discovered the unsatisfied judgment of B & E Sales against Overmyer, Inc. Seemingly, after some preliminary discussion, the title company agreed to issue a policy provided that Overmyer, Inc., and Daniel Overmyer, individually, would indemnify the title company against any loss it might incur if the B & E Sales’ judgment was not paid pursuant to its terms. ¹⁸⁰ In February, 1974, Lawyers Title was advised by a letter from counsel for the property owners that the judgment was in default and that the judgment creditor was threatening to execute upon the judgment and seek a sheriffs sale of the property. The title company satisfied the judgment creditor by paying to it $52,752 and receiving from the creditor an assignment of its judgment against Overmyer, Inc. Lawyers Title, on August 21, 1974, filed against the appellant Overmyer a narr in assumpsit, together with a motion for summary judgment, an affidavit in support of the motion, various exhibits, an attachment on original process, an affidavit in support of the attachment, and a bond. The sheriff of Baltimore County was instructed to attach and “leave where found” Overmyer’s undivided one-tenth (1/10) interest in the property known as 7636 Canton Center Drive.

Notice of the proceedings was sent to Overmyer by certified mail, return receipt requested, but it was twice returned, once marked “refused addressee not home to receive” and the other time simply “unclaimed.” When the second attempted service was unsuccessful, counsel for the title company caused to be sent by ordinary mail, addressed to what appears to be a home address in New York State, and to a business address in New York City, copies of the pleadings together with all allied papers. On the same date, December 9,1974, Perry Raabe, Esq., one of the attorneys for the title company, in response to a telephone call to the Overmyer residence, received a telephone call from Overmyer. In the course of the ensuing conversation, Overmyer was advised of the pending litigation. Eighteen days later, Lawyers Title moved for the entry of a judgment nisi and it was entered on the same day, December 27,1974.

Overmyer, on January 10, 1975, filed a motion to strike the judgment nisi assigning as reasons that: (1) there had been no bona fide effort to serve him; (2) the entry of the judgment nisi eighteen (18) days after the telephone notice was “... inequitable and improper and constituted surprise, irregularity and mistake, ...” depriving Overmyer of his opportunity to raise a meritorious defense; (3) the “notice” to ¹⁸¹ Overmyer of the time to plead recited that he had 60 days in which to answer and that a shortening of that period was a surprise, mistake or irregularity; (4) that he had a meritorious defense which he was denied by reason of the judgment nisi', and (5) that the total amount of the judgment should have been for an amount less than $10,000. An order directing Lawyers Title to show cause why the judgment nisi should not be stricken was issued. Before that reply was forthcoming, Overmyer filed a paper writing titled “Answer” in which he asserted as a “first defense” the general issue plea in assumpsit. He also embodied in the “Answer” a first, second, and third affirmative defense going to the merits of the title company’s claim.

Overmyer further answered the motion for summary judgment. Lawyers Title responded to the show cause order on February 14, 1975, and the case was set for hearing. Notice of the hearing date was mailed to counsel “.. . around September 15th or 20th .. ..” Three days before the hearing, that is, on October 17, 1975, Overmyer requested a “continuance or postponement” on the ground that he had another case scheduled for trial in Toledo, Ohio, on the same day, October 20, 1975. Judge H. Kemp MacDaniel refused to postpone the case, and the matter reached Judge Proctor on October 20, 1975.

Overmyer again requested a postponement. Judge Proctor denied it. After hearing brief testimony, a judgment nisi was entered in favor of the title company on the debt [short note]. Following the overruling of a motion for a new trial, judgment absolute was recorded on November 3,1975.

Overmyer argues that Judge Proctor erred in four respects in entering the judgment. We shall consider each contention as posed. I. “The Judgment of Condemnation Absolute was improperly entered because it was founded on a Judgment of Condemnation Nisi entered without proper prior notice to the Defendant.” ¹⁸² Subtitle G of the Md. Rules prescribes the procedure to be followed in seeking an attachment on original process. Such a procedure is available whenever the plaintiff has a matured or unmatured ex contractu or ex delicto claim against a person who, inter alia, is a non-resident owning property or credits within this State.

Md. Rules G40, G40a, G41a. Upon the filing of a declaration, affidavit in support thereof, documentary evidence of the claim, a bond to the State in an amount equal to the claim, and instructions to the sheriff as to the description and location of the property to be attached, Md. Rule G42, the court may issue an order directing the attachment. Md. Rule G44. The writ is served by the sheriff by posting a copy of the writ upon the property of the defendant.

Md. Rule G46. All the above were caused by Lawyers Title to be accomplished. At issue, here, is whether there was compliance with Md. Rule G48. That rule provides: “In addition to the writ of attachment, the clerk shall issue a writ of summons to the defendant.

Where the defendant cannot 'be served with the j writ of summons, and has not. voluntarily appeared, the plaintiff shall make reasonable efforts to ascertain the actual whereabouts of the defendant and to bring to the knowledge of the defendant that an attachment on original process is pending against him. A judgment of condemnation nisi shall not be entered until the plaintiff shall satisfy the court by affidavit that he has notified the defendant or has made a bona fide effort to locate and notify him.” An affidavit made by Perry Raabe, Esq., recited in detail the efforts made to effect service upon Overmyer. Mr. Raabe narrated in his affidavit the gist of his telephone conversation with Overmyer. We think the affidavit discloses that the attempts to serve Overmyer were bona fide and that the trial court properly so held.

Overmyer next asseverates that the “notice” to him of the suit contained a caveat that he had sixty (60) days in which ¹⁸³ to answer, and that the entry of the judgment nisi prior to the expiration of sixty (60) days was error. The notice to plead read: “You are hereby notified that an Attachment on Original Process proceeding, or law suit, has been filed against you by Lawyers Title Insurance Corporation, Plaintiff in the above-entitled proceedings, in the Circuit Court for Baltimore County, State of Maryland, to recover on the causes of action therein stated and attached hereto, pursuant to Rules G40-61, Maryland Rules of Procedure and related laws. You must plead or answer the Declaration, or law suit alleging the causes of action, within sixty (60) days from the date of delivery noted upon your Return Receipt to this Notice, or else Judgment by Default may be entered against you. This Notice and Service is made pursuant to Rules G48, G51(a), 307(d)(8) and 107(a)(2) and (b), Maryland Rules of Procedure, and pursuant to Article 75, Sections 78, 94-100, Annotated Code of Maryland (1957 Ed., 1969 Rpl.

Vol.), and Courts and Judicial Proceedings, Article (1974 Vol.), Section 6-103, 6-301 and 6-304, annotated [sic] Code of Maryland.” We perceive no merit in Overmyer’s contention. 4 Poe’s Pleading and Practice § 554 (6th ed. H. Sachs 1975) [hereinafter referred to as Poe (Sachs)] and 2 J. Poe, Pleading and Practice in Courts of Common Law § 554 (5th ed. H. Tiffany 1925) both state that an attachment proceeding consists of two distinct parts, one, the attachment, and the other, a suit against the non-resident styled the “short note case.” When a defendant appears, he does so in the “short note case,” not in the attachment. It is apparent from the record that Overmyer did, under the guise of an “answer,” file a general issue plea, in addition to his “affirmative defenses,” and, thus, appeared and put the matter at issue before the trial court.

Moreover, the fact that the judgment nisi had been entered prior to Overmyer’s ¹⁸⁴ appearance did not jeopardize appellant because in a hearing resulting from appellant’s motion to strike the judgment nisi, the hearing judge, while denying the motion, nevertheless ordered that “.. . no Judgment of Condemnation Absolute be entered until after a hearing on the merits.” Such an order had the practical effect of retaining appellee’s lien while simultaneously assuring appellant that no further action would be taken thereon until after a trial on the merits. Moreover, we think appellant misreads the notice requirements of the Md. Rules. The notice of suit is directed to the short note case, not the attachment. 4 Poe (Sachs) § § 554-58. See also 2 J. Poe, Pleading and Practice in Courts of Common Law § § 554-58 (5th ed.

H. Tiffany 1925). In the instant case, Overmyer did not enter his appearance within the prescribed time, and the title company, having fully complied with Rule G48, was entitled to the entry of a judgment nisi. Such a judgment is án inchoate lien which operates to condemn specific property and render it liable to future execution and judicial sale, after successful trial, the obtaining of a judgment of condemnation absolute and the issuance of a writ of fieri facias thereon. 4 Poe (Sachs) § 690. A judgment nisi is a specific lien, and should final judgment be obtained, the lien relates back to the time when the property was attached and eliminates subsequent claims and liens from priority.

Id. Of course, if the plaintiff does not prevail at trial, the attachment fails. 4 Poe (Sachs) § 556; Philbin v. Thurn ex rel. Cook, 103 Md. 342, 351 , 63 A. 571, 574 (1906); Randle v. Mellen, 67 Md. 181, 188 , 8 A. 573, 575 (1887). Overmyer also assails the constitutionality of the Maryland procedure for attachment on original process as it was applied in the case now before us.

He bottoms his argument on the Due Process Provisions of the 14th Amendment, pointing out that the Supreme Court of the United States has “carefully articulated” the proper test to be applied “. .. with regard to instances where pre-judgment attachment of a debtor’s property is involved.” The Court, in Fuentes v. Shevin, 407 U. S. 67 , 92 S. Ct. 1983 , 32 L.Ed.2d ¹⁸⁵ 556 (1972), struck down replevin procedures in use in Florida and Pennsylvania after noting that in neither State was the debtor offered a pre-deprivation of property hearing. 407 U. S. at 90 . Similar holdings relative to pretrial disposition were handed down by the Court in Bell v. Burson, 402 U. S. 535 , 91 S. Ct. 1586 , 29 L.Ed.2d 90 (1971); Sniadach v. Family Finance Corp., 395 U. S. 337 , 89 S. Ct. 1820 , 23 L. Ed. 2d 349 (1969). The fallacy in Overmyer’s position is that unlike Fuentes, Sniadach or Bell , there has been, in this case, no deprivation of property prior to a judicial hearing. At best, an attachment, an inchoate lien, was laid upon the one-tenth interest Overmyer had in the realty that was the subject of the title