Priority Trust, LLC v. Aliceanna Group

WRIGHT, J. On June 28, 2007, appellant, Priority Trust, LLC (“Priority Trust”) filed a complaint in the Circuit Court for Baltimore City, seeking to eject appellees, The Aliceanna Group, 1 from the property at 1822 Aliceanna Street, Baltimore, Maryland (“Property”). Priority Trust, the ground rent owner of the Property, alleged that appellees, the leasehold owners, had not paid ground rent. Thus, Priority Trust sought recovery of the Property and damages in the amount of $5,000.00. On May 7, 2008, the court entered a default judgment for possession of the Property against appellees and, on August 13, 2008, Priority Trust filed a request for a writ of possession.

A writ of possession was subsequently issued. On February 13, 2009, appellees filed a motion for relief from judgment of possession, 2 pursuant to Maryland Code (1974), § 8-402.2(c)(2) of the Real Property Article (“RP”). Priority Trust filed a response arguing, in part, that “Maryland Rule 2-535 ... preclude^] the relief sought by [appellees].” After hearing the matter on May 14, 2009, the circuit court granted appel-lees’ motion. On May 19, 2009, Priority Trust filed a motion for reconsideration, which the court denied.

On June 22, 2009, the court held another hearing “to determine the amount necessary to pay the ground rent, arrears and all costs [to be] awarded.” On July 14, 2009, the court ordered appellees to pay Priority Trust the redemption amount of $1,972.00 within 30 days. This appeal followed. ¹¹⁵ Questions Presented Priority Trust asks: 1) Did the trial court err in ruling that Appellees had the absolute right to obtain relief from the enrolled judgment, pursuant to [RP] Section 8-402.2(b)(2)(i) and (ii)[ 3 ] ... without having to comply with or satisfy the requirements of Maryland Rule 2-535(b)? 2) Did the trial court err in ruling that Appellees were not required to commence an independent equitable proceeding to obtain relief from the enrolled judgment? For the reasons that follow, we affirm the circuit court’s judgment. Facts During the May 14, 2009, hearing on appellees’ motion for relief from judgment of possession, Priority Trust argued: [PRIORITY TRUST]: What the statute does, Your Hon- or—and—and the key language of the statute is that word that—words that it uses.

It give [sic] them the right to commence a proceeding to seek relief from the judgment. And the use of those words “relief from the judgment,” have very specific meanings in the Maryland Law Encyclopedia and in CJS with regard to this subject. It’s—it’s clear that the use of the words, “relief from Judgment,” or “relief against the judgment,” is applicable to a separate equ[it]able proceeding in which a second lawsuit is filed seeking relief from a judgment that was entered in a prior lawsuit. THE COURT: Well, do you have—do you have any—I don’t think any of the case law you cited to me specifically holds that with respect to the—the, the specific issue here which is relief from a judgment in an ejectment suit in a ground rent.

Does it? ¹¹⁶ [PRIORITY TRUST]: No. We’ve have [sic] not been able to find— THE COURT: There is no case on point. [PRIORITY TRUST]: No cases on point specifically with regard to relief from a judgment in an ejectment act. THE COURT: So really it’s, I guess your construction of what the words of 8-8-402.2 ... mean in terms of commences a proceeding. I mean I guess what’s [sic] you’re saying is that because the Maryland Rules condition and regulate proceeding in all actions in Maryland Courts, therefore, it has to under some rule. And the rule that is naturally applicable is Rule 2-535.

And therefore, the proceeding to the motion to obtain relief from the judgment has to comply with the pre-conditions of Rule 2-535. And this motion doesn’t comply with the preconditions of Rule 2-535 and therefore, it is without merit. That’s what your argument I think is. Isn’t it? [PRIORITY TRUST]: Essentially, I think that’s correct Your Honor.

What we are saying is that under the Real Property Article that permits the commencement of this proceeding, the only way it can be done in the ejectment act, which is the case [ ] which is before the court at the present time, is under Maryland Rule 2-535. So if relief from the judgment is available in this action, it is only available pursuant to Maryland Rule 2-535, which requires fraud, mistake or irregularity, and an additional requirement that it’s in good faith and without lack of due diligence or want of negligence on the part of the moving party. THE COURT: Well, have—has anybody ever held that? [PRIORITY TRUST]: There’s— THE COURT: Any of the other Judges of this Court? [PRIORITY TRUST]: Not that I’m aware of. I don’t know if this particular issue has ever come up.

Most of the cases ¹¹⁷ dealing with relief from judgment or relief against judgment are quite old. They’re from the 1800s. THE COURT: But nobody ever really said how do you— how does one in the words of the statute commence a proceeding to obtain a relief from the judgment. [PRIORITY TRUST]: That’s correct. The only way to do it in the ejectment action is under Rule 2-535.

That’s the only procedural [....] The court then heard argument from appellees’ counsel, but did not find it helpful. Thereafter, the court stated: ... I have to tell you the way I see it. The way I see it is I don’t think Rule 2-535 applies here.

I think this is a statutory right that the lessee—I’m sorry—the lessee has been given. And I don’t think, it doesn’t make sense to me. And I realize we could say, well, this leaves a vacuum. If, if I’m construing the statute correctly, this leaves a vacuum.

Because there isn’t any specific Rule that applies here. But I think it give [sic] the tenant the absolute right to get relief within the six month period. And I don’t think the Court of Appeals in my view has promulgated a Rule that specifically regulates the procedure. So it’s an odd situation.

It’s a gap. But if I were to say that this is conditioned by the requirements of Rule 2-535, then anytime the motion was filed after the 30-day period, one would have to show—and that’s what you argue. One would have to show all of the prerequisites of Rule 2-535; mistake, fraud, or irregularity. And that doesn’t seem to me to make any sense at all; that that would be really I thin[k] in derogation of the right that this statute gives—gives the tenant.

After the court provided its reasoning, the following took place: [PRIORITY TRUST]: Just your—one—one thing, Your Honor. With regard to 2-535, the Court of Appeals has ¹¹⁸ said in no uncertain terms that Maryland Rule 2-535 is the only mechanism by which a court can deal with an enrolled judgment. And I—I think that was set forth in the memorandum. There—there are several cites.

And essentially that it comes through as being crystal clear that in the action in which the judgment was entered, the only, the only mechanism, the only procedural mechanism is—is that particular rule. THE COURT: Well, I understand their [sic] saying that as a general matter. But I guess what I’m saying is, I don’t rule—I don’t read that as applying to in essence that statutory right of redemption—maybe that’s, I don’t want to cause confusion in the record by applying that term to it but that—that in essence what it is, that the statutory right of redemption that this, that 8-402.2[ (c) ](2), grants to the tenant. I don’t think that it conditions that.

So I respectfully disagree, and I’m going to grant the motion. Now, of course that’s conditioned on the tenant paying the ground rent arrears and all cost awarded. After a hearing on June 22, 2009, the court determined that appellees had to pay Priority Trust the redemption amount of $1,972.00 within 30 days. Discussion Priority Trust argues that “the trial court erred, as a matter of law, in granting the [appellees’] motion ... for relief from the enrolled judgment” pursuant to RP § 8-402.2.