Sandler v. Executive Management Plus

HOTTEN, J. Appellants, Theodore I. Sandler and Abbie L. Fields, appeal from the judgments of the Circuit Court for Montgomery County entered in favor of appellee, Executive Management Plus, in these consolidated landlord-tenant actions. 1 Appellants raise two issues, which we have combined and recast as a single issue: Whether the circuit court erred by striking appellants’ jury trial demand. ' For the reasons that follow, we shall affirm. 2 ⁴⁰² BACKGROUND On August 26, 2008, the parties entered into a one year residential lease for a single family home located at 12008 Titian Way in Potomac, Maryland. The lease contained a renewal clause. According to appellants, a “dispute arose” between the parties regarding whether appellants properly exercised the renewal clause to extend the lease for another year. Appellee, however, asserted that appellants modified the original lease, creating a counter-offer for the renewal term, which appellee did not accept.

On September 29, 2009, appellee served appellants with a “Notice to Vacate.” On November 4, 2009, in the District Court of Maryland for Montgomery County, appellee filed a “Complaint and Summons against Tenant Holding Over” (“THO”), seeking possession of the property. 3 See Md.Code (1974, 2003 Repl.Vol., 2009 Supp.), § 8-402 of the Real Property Article (“R.P.”). On November 6, 2009, in the District Court, appellants filed a “Petition in Action of Rent Escrow [and] for Injunction.” Appellants’ claim under the 1975 Rent Escrow Act alleged the presence of certain “conditions and defects in the leased premises,” including “mold, flaking paint, Building Code violations, [and] Environmental Dept, violations.” Appellants sought an “[injunction against harrassment [sic]” and damages “for breach of the covenant of quiet enjoyment or warranty of habitability in the amount of $3[,]744 x 4 Mos. Rent.” See R.P. § 8-211. See generally Neal v. Fisher, 312 Md. 685 , 541 A.2d 1314 (1988) (discussing Rent Escrow Act). ⁴⁰³ The rent escrow case came before the District Court on December 9, 2009.

Because the THO case had not been called, the District Court continued both cases to December 16, 2009. In the meantime, as we shall note below, one of the appellants asked about moving for a jury trial. On that same date, apparently after the hearing, appellant Sandler filed a written jury trial request. On December 16, 2009, the District Court sent both cases to the circuit court for jury trials.

On February 22, 2010, appellants moved to consolidate both cases, and the circuit court granted the motion on March 10, 2010, with the clerk entering the order the next day. On March 24, 2010, the consolidated cases went before another circuit court judge for a hearing on several motions and for trial. The court reversed the consolidation order and granted appellee’s motion to strike the jury trial demand. The cases each went to trial before yet another circuit court judge on May 12 and 13, 2010.

In each case, the court granted appellee’s motions for directed verdicts, which were essentially motions for judgment. 4 See Md. Rule 2-519. Appellants timely appealed both decisions, and we consolidated the appeals for our consideration. We shall recite additional facts as they relate to the issues before us. DISCUSSION I. Introduction The right to a jury trial in Maryland is afforded by Articles 5 and 23 of the Maryland Declaration of Rights. 5 See Pickett ⁴⁰⁴ v. Sears Roebuck & Company, 365 Md. 67, 89 , 775 A.2d 1218 (2001).

This Constitutional mandate is implemented by Md. Code (1974, 2006 Repl.Vol., 2009 Supp.), § 4-402(e) of the Courts and Judicial Proceedings Article (“C.J.”) 6 and Maryland Rule 3-325, which sets forth procedural requirements for a jury trial demand. On appeal, appellants claim that the circuit court erred by denying their right to a jury trial. They assert that the court’s failure to recognize their proper jury plea from December 9, 2009 was made more difficult by notational errors in the record. They further contend that “[c]umbersome, overlapping files and an effective campaign of disinformation created significant confusion during the proceedings^ and that the] flawed assumptions of fact, adopted by the Court fatally affected the proceedings in this case.” They take issue with the view that these cases involved purely equitable claims that would not warrant a trial by jury, and also complain that they were denied due process of law because the record below “was conflicted and in error.” They further maintain that “[Rotational, procedural and factual errors” combined to limit their right to be heard and to defend their right to their home.

Specifically, they rely on the circuit court’s acceptance of an incorrect jury plea date as an error which, above all others, had a fatal effect on this case and was “an incorrect and prejudicial assumption.” Appellants believe that they continue to have an interest in the “implied value of them lease” and a legal claim flowing from appellee’s actions. ⁴⁰⁵ Appellee responds that the actions sub judice are solely equitable in nature and, as a result, appellants are not entitled to a jury trial. Appellee further contends that the circuit court properly denied a jury trial for two reasons: (1) appellants’ failure to make a timely written demand for a jury trial and (2) the instant cases only seek equitable relief. Appellee also maintains that, assuming that appellants have a right to a jury trial in this case, the denial of a jury trial is harmless error because appellee moved for directed verdicts in both cases, which the circuit court granted. As such, the court’s rulings in appellee’s favor on questions of law would have taken these cases from the jury in any event.

We agree with appellee that any error in striking appellants’ jury trial demands was harmless. Accordingly, we shall affirm the judgments of the circuit court. To place this holding in context, we address the contention that the cases before us are solely equitable and do not warrant a trial by jury, then addressing the timeliness of appellants’ jury trial demands. As discussed infra, we conclude that the actions before us are not limited to claims for equitable relief and that appellants would have been entitled to a jury trial in each case provided they alleged a sufficient amount in controversy and fulfilled other prerequisites for demanding a jury trial.

We will not address appellee’s contention that appellants failed to comply with the order that they make payments to appellee pursuant to R.P. § 8-118 because it appears that appellants tendered rent payments to the circuit court.

II

Suit for Possession as Action at Law-Amount in Controversy Appellee contends that both actions are equitable in nature and, thus, do not warrant a trial by jury. With respect to the THO action, appellee insists that it merely seeks possession of the property it owns. We disagree with appellee that a litigant in a tenant holding over action would never be entitled to a trial by jury. In an appropriate case, where a tenant asserts a right to continue possession in defense of a landlord’s action seeking possession, and where the tenant also ⁴⁰⁶ makes a claim for damages that he or she might suffer as a result of an ejectment or ouster, the tenant would be entitled to a jury trial provided that the alleged damages exceeded the required amount in controversy.

The Court of Appeals’ decision in Martin v. Howard County, 349 Md. 469 , 709 A.2d 125 (1998), is instructive. In that case, Howard County filed an action to “abate” a nuisance pursuant to R.P. § 14-120, which, at the time, created a cause of action to “abate” a nuisance when one’s use of real property involved controlled dangerous substances or paraphernalia. Id. at 471-72, 709 A.2d 125 . The tenant requested a jury trial, and the case was transferred to the circuit court.

Id. at 475-76 , 709 A.2d 125 . The circuit court struck an earlier order allowing a jury trial and remanded to the District Court because the court agreed with the county that the action sounded in equity as the county sought only injunctive relief. Id. at 476 , 709 A.2d 125 . The Court of Appeals disagreed that the county’s possession action was solely equitable in nature, and instead concluded that [a]n action by or on behalf of a landlord to evict a tenant, on the ground that the tenant no longer is entitled to possession, and to restore possession to the landlord, “is historically an action at law to which the right to a jury trial has always attached in this State.” ...

It is a form of the traditional legal action of ejectment.... Since ejectment, as well as trespass out of which the action of ejectment grew, are actions at law, the constitutional right to a jury trial attaches. Id. at 481-83 , 709 A.2d 125 (citations omitted). Although the trial court action had been styled a “Complaint for Injunctive Relief,” the actual relief sought by the county was, in fact, legal in nature.

Id. at 476 , 709 A.2d 125 . The Court of Appeals distinguished actions seeking to halt certain activities on the property, instead pointing out that the nature of the remedy dictates whether the action is one at law or in equity: ⁴⁰⁷ With respect to actions against defendants who are allegedly engaging in activity constituting a nuisance, the relief sought will determine the nature of the action. If the relief requested is an order requiring the defendant to stop engaging in the activity, the action is equitable. If the plaintiff requests money damages, or if a plaintiff not in possession requests an order ousting a tenant from possession of the property, the actions are legal, and there is a constitutional right to a jury trial.

Id. at 489 , 709 A.2d 125 . The gravamen of appellee’s “Complaint and Summons against Tenant Holding Over” is that appellee “desir[ed] to gain possession of the premises[.]” This is a claim at law. Our inquiry does not end with the characterization of appel-lee’s suit for possession as a legal claim. For a party to be entitled to a jury trial, the action must involve an amount in controversy that exceeds $10,000, the threshold jurisdictional amount in effect at the time the claim was filed.

See C.J. § 4-402(e)(1). 7 In Carroll v. Housing Opportunities Commission, 306 Md. 515, 517 , 510 A.2d 540 (1986), the Court of Appeals addressed the issue of whether a tenant, Ms. Carroll, had a right to a jury trial in an action brought by a public housing authority to recover possession of a rental unit. Ms. Carroll paid $76 per month as a portion of her rent, with the remainder of the rent subsidized by the United States Department of Housing and Urban Development. Id. at 517 , 510 A.2d 540 . Following an altercation between a guest of Ms. Carroll and another person, the Montgomery County Housing Opportunities Commission decided that Ms. Carroll had violated the terms of her lease by failing to control her guest.

Id. at 517-18 , 510 A.2d 540 . Ms. ⁴⁰⁸ Carroll refused to vacate the apartment, and the Housing Opportunities Commission instituted a tenant holding over action in the District Court. Id. at 518 , 510 A.2d 540 . Ms. Carroll filed a timely demand for a jury trial, claiming that the value of the continued possession of her townhouse exceeded the then-jurisdictional amount of $500.

Id. at 518 , 510 A.2d 540 . As a result, the case was transferred to the circuit court. Id. On the day of trial, the court questioned Ms. Carroll’s entitlement to a jury trial, ruled that she had failed to establish the requisite amount in controversy, and remanded the case to the District Court for a bench trial.

Id. at 519 , 510 A.2d 540 . Although Ms. Carroll documented the fair market value of her townhouse, the circuit court denied her motion for reconsideration, and Ms. Carroll appealed. Id. The Court of Appeals held that nature of the action triggered Ms. Carroll’s right to a jury trial, provided that the jurisdictional amount was met.

Id. at 521 , 510 A.2d 540 . The Court pointed out that it had ruled in Bringe v. Collins [ 274 Md. 338 ,] 346-347 [ 335 A.2d 670 ], [application for stay denied, 421 U.S. 983 , 95 S.Ct. 1986 , 44 L.Ed.2d 475 (1975) ], that “an action ... by a landlord to recover possession of his premises, is historically an action at law to which the right to a jury trial has always attached in this State.” The Court [in Bringe'] further explained that “[f]or a party in a landlord-tenant action to be entitled to a jury trial, there must either be a claim for money damages over $500.00 [the jurisdictional amount at that time] or a claim that the value of the right to possession exceeds $500.00.” Id. The Court added that Ms. Carroll’s “claim that the amount in controversy exceeds [the jurisdictional amount] establishes the claimant’s right to a jury trial unless it clearly appears that the claim is actually for less than that amount.” Id. at 522 , 510 A.2d 540 . The Court concluded that “[t]aken together, Bringe and Purvis [v. Forrest Street Apts., 286 Md. 398 , 408 A.2d 388 (1979) ] establish that the claims of the parties, for money damages or for the right to possession, determine the amount in controversy.” Id. at 523 , 510 A.2d 540 .

Refer ⁴⁰⁹ ring to federal cases that address the “amount in controversy” in questions of federal jurisdiction, the Carroll Court quoted the following with approval: The general federal rule has long been to decide what the amount in controversy is from the complaint itself, unless it appears or is in some way shown that the amount stated in the complaint is not claimed “in good faith.” In deciding this question of good faith we have said that “it must appear to a legal certainty that the claim is really less than the jurisdictional amount to justify dismissal.” Carroll, 306 Md. at 523-24 , 510 A.2d 540 (quoting Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353, 81 S.Ct. 1570 , 6 L.Ed.2d 890 (1961) (further citation omitted)). The Court of Appeals then ruled as follows: We hold, therefore, that Mrs. Carroll’s claim, that the value of her right to possession of her federally subsidized townhouse exceeds $ 500, entitles her to a jury trial unless it appears to a legal certainty that the amount in controversy does not exceed $ 500.

Id. at 524, 510 A.2d 540 . The Court then elaborated: Under the circumstances of this case, in determining the value to the tenant of remaining in possession, one must consider not simply the monthly rental Mrs. Carroll is paying for her federally subsidized townhouse but the fair market rent for comparable housing in the area. Moreover, the time period for which the tenant has a right to continued possession must be taken into account. While the lease states that the tenancy is month to month, under applicable regulations and case law, Mrs. Carroll has a right to remain in her townhouse indefinitely until the Commission can establish good cause for eviction.

Accordingly, the value of this potential flow of future federal rent subsidies is a critical factor. In oral argument before the circuit court, Mrs. Carroll’s attorney estimated that the fair market rent for comparable housing in Montgomery County was “certainly ... $ 400 or $ 450 a month.” With her motion for reconsideration, Mrs. ⁴¹⁰ Carroll submitted portions of the Federal Register in which the federal Department of Housing and Urban Development published standards for calculating “Fair Market Rent” and tables of fair market rents for various areas. The “Fail-Market Rent” listed in those tables for a two bedroom unit in the Washington Metropolitan Statistical Area (which includes Montgomery County) for the period from September 1983 to September 1984 was $ 414. Id. at 525-26 , 510 A.2d 540 (footnote omitted).

In Purvis v. Forrest Street Apartments, 286 Md. 398 , 408 A.2d 388 (1979), the Court of Appeals discussed the issue of whether a party had demonstrated the requisite amount in controversy—then $500. The Court stated that the “value of the right to possession of the premises, if it can be ascertained, should be considered along with the plaintiffs initial monetary demand[.]” Purvis, 286 Md. at 403 , 408 A.2d 388 . We note that R.P. § 8-601 states that “[a]ny party to an action brought in the District Court under this title in which the amount in controversy meets the requirements for a trial by jury may, in accordance with this subtitle, demand a trial by jury.” Moreover, R.P. § 8-118(a) provides that “[i]n an action under § 8-401 [Failure to pay rent], § 8-402 [Holding Over], or § 8-402.1 [Breach of Lease] of this title in which a party demands a jury trial, the District Court immediately shall enter an order directing the tenant or anyone holding under the tenant to pay all rents as they come due during the pendency of the action” into a rent escrow account. Therefore, the Real Property Article provides a tenant with the ability to request a jury trial in a THO matter.

Simply, as the Court of Appeals stated in Martin, 349 Md. at 489 , 709 A.2d 125 , “[i]f the plaintiff requests money damages, or if a plaintiff not in possession requests an order ousting a tenant from possession of the property, the actions are legal, and there is a constitutional right to a jury trial.” See also Mulchansingh v. Columbia Mgmt., Inc., 33 Md.App. 304, 309 , 364 A.2d 78 (1976) (quoting Bringe, 274 Md. at 347 , 335 A.2d 670 ) (“For a party in a landlord-tenant action to be entitled to a jury trial, there must either be a claim for money damages over [the ⁴¹¹ jurisdictional amount] or a claim that the value of the right to possession exceeds [the jurisdictional amount].”) In the THO action before us, appellants’ written demand for a jury trial, dated December 9, 2009, does not reference an amount. See Carroll, 306 Md. at 518 , 510 A.2d 540 (tenant’s demand for jury trial claimed amount in controversy in excess of $500). It is not clear whether appellants otherwise substantiated their assertion that an amount in controversy exceeded $10,000, and appellants do not assert on appeal that they have demonstrated an amount in controversy in the THO case. Nevertheless, the amount in controversy may “ ‘otherwise be ascertained,’ ” inasmuch as appellants sought the continuation of their possession under a renewed lease for one year.

See Purvis, 286 Md. at 403 , 408 A.2d 388 (quoting Agnew v. Dorman, 1 Fed.Cas. 211, 212 (Fed. Case No. 100) (C.C.Md. 1838)) Federal decisions addressing a party’s burden of demonstrating an “amount in controversy” are instructive. In Pollokoff v. Maryland National Bank, 288 Md. 485, 491 , 418 A.2d 1201 (1980), the Court of Appeals stated that “[w]hen we expand beyond our decisions in a search for guidance in the application of ‘amount in controversy’ to the facts presented ... we look to the federal cases.” Cf. Higgins v. Barnes, 310 Md. 532, 543 , 530 A.2d 724 (1987) (recognizing that “Maryland courts have traditionally relied on federal courts’ interpretations of analogous rules as persuasive authority”); accord McDermott v. BB & T Bankcard Corp., 185 Md.App. 156, 167 , 968 A.2d 1096 (2009). For example, in Lewis v. Verizon Communications, Inc., 627 F.3d 395, 397 (9th Cir.2010), the court stated that “when the complaint does not contain any specific amount of damages sought, the party seeking removal under diversity [or a jury trial in the circuit court as in the case sub judice ] bears the burden of showing, by a preponderance of evidence, that the amount in controversy exceeds the statutory amount.” With respect to the THO action, we conclude that at the commencement of the THO action, appellants’ claim of entitlement to continued possession under a lease, the terms of which included more than three monthly ⁴¹² rent payments in excess of $3,700, demonstrated an “amount in controversy” to justify a trial by jury. 8 See Purvis, 286 Md. at 403-04 , 408 A.2d 388 .

III

Rent Escrow Action—Damages Claims In regard to appellants’ complaint for damages for breach of the covenant of quiet enjoyment and warranty of habitability in the rent escrow action, we conclude that appellants would have been entitled to a jury trial. Assuming that the jury demand was timely made, we disagree with appellees and the circuit court judge who struck the jury trial demand on the basis that appellants were not entitled to allege entitlement to damages for “breach of the covenant of quiet enjoyment or warranty of habitability[.]” The purpose of the rent escrow provision of the Real Property Article is set forth in R.P. § 8-211(a), which reads: (a) The purpose of this section is to provide tenants with a mechanism for encouraging the repair of serious and dangerous defects which exist within or as part of any residential dwelling unit, or upon the property used in common of which the dwelling unit forms a part. The defects sought to be reached by this section are those which present a substantial and serious threat of danger to the life, health and safety of the occupants of the dwelling unit, and not those which merely impair the aesthetic value of the premises, or which are, in those locations governed by such codes, housing code violations of a nondangerous nature. The intent of this section is not to provide a remedy for dangerous conditions in the community at large which exists apart from the leased premises or the property in common of which the leased premises forms a part.

As noted, appellants’ complaint not only sought an injunction for the correction of “conditions and defects on the leased ⁴¹³ premises,” but also claimed “damages ... for breach of the covenant of quiet enjoyment or warranty of habitability!"..]” In their reply brief, appellants complain that the circuit court erred by “disput[ing] the validity of Tenants’ claims because of the form proffered by the [District] [C]ourt.” Indeed, during the hearing on the motion to strike the jury demand, the motions court essentially disregarded appellants’ damages claim. The motions court explained that appellants’ rent escrow claim was solely based in equity by stating, in essence, that such damages claims were not cognizable under R.P. § 8-211. The court stated its view that the District Court form pleading was wrong, elaborating that the rent escrow claim was “intended to provide equitable relief ... and there is nothing in the statute that provides for a private cause of damages in terms of its relief.” The court went on to pronounce that “the statute will always trump a form.” The motions court erred in its conclusion. This Court has pointed out that [i]n Maryland, generally, in the absence of an actual or constructive eviction, a tenant will have a claim for damages caused by conduct by the landlord that strikes at the essence of its obligations under the lease....

Thus, there may be a breach of the covenant of quiet enjoyment even when the tenant remains in possession of the premises.... The scope or magnitude of the interference necessary to constitute a breach of the covenant of quiet enjoyment must be such as goes to the essence of what the landlord is to provide.... If that is proven, a breach of the covenant of quiet enjoyment will be established and the tenant may recover damages incurred by the breach, ie., the difference in value between what the tenant in fact received and what he would have received, absent the breach. Nationwide Mut.

Ins. Co. v. Regency Furniture, Inc., 183 Md.App. 710, 734, 963 A.2d 253 (2009) (citations omitted). The Court of Appeals has noted that “ ‘the thrust of the State’s rent escrow statute is to provide tenants with additional judicial remedies in support of a limited, implied warrant of ⁴¹⁴ habitability! J ” Pak v. Hoang, 378 Md. 315 , 327 n. 4, 835 A.2d 1185 (2003) (quoting 62 Op.

Att’y Gen. 523 (Md.1977)). The District Court pleading forms are consistent with the Real Property Article, and the circuit court erred in stating otherwise. The Court of Appeals has observed: Maryland Rule 3-303(a) requires that, “as far as practicable, all pleadings [filed in the District Court] shall be prepared on District Court forms prescribed by the Chief Judge of the District Court.” Rule 3-303(c) permits a plaintiff to state as many separate claims as the party has, regardless of consistency, and section (e) of the rule