SAXON MORTGAGE SERVICES, INC. v. Harrison

DAVIS, Judge. On July 27, 2006, Saxon Mortgage Services, Inc., appellant, filed a complaint in the Circuit Court for Frederick County, asserting claims of conversion and negligence against Middle-burg Bank and Chesapeake Bank of Maryland (Chesapeake Bank), appellees, in relation to payment of a $140,000 check issued by Joint Insurance Association (JIA), which appellant, as a co-payee, neither indorsed nor authorized to be indorsed ²³⁴ on its behalf. Appellant’s complaint further alleged breach of contract on the part of JIA and asserted claims of conversion, fraud, intentional misrepresentation and breach of contract against Paula Harrison and Steven Siegel. On November 13, 2006, the negligence claim against Chesapeake Bank was dismissed.

On June 21, 2007, the circuit court entered default judgments against Harrison and Siegel, neither of whom are parties to this appeal. On October 4, 2007, the circuit court awarded summary judgment in favor of JIA on the breach of contract claim. In addition, on October 4, 2007, the circuit court stayed a cross claim filed by Chesapeake Bank against Middleburg Bank. On October 31, 2007, the circuit court entered an order granting appellees’ motions in limine and precluding appellant from introducing evidence at trial that appellant first disclosed after the discovery deadline.

The circuit court subsequently denied appellant’s motion for reconsideration of that decision. A bench trial on the conversion claims against appellees and the remaining negligence claim against Middleburg Bank commenced on May 6, 2008. At the close of appellant’s case-in-chief, the circuit court granted judgment in favor of appellees on all counts and denied appellant’s motion for judgment on the conversion claims. Appellant appeals from the judgments against it 1 and presents four questions for our review, which we have rephrased, reordered and consolidated as follows: 2 ²³⁵ I. Did the circuit court abuse its discretion by precluding appellant from using evidence that it first disclosed after the court-ordered discovery deadline?

II

Did the circuit court erroneously conclude that appellant, one of multiple payees of a check, had the initial burden, under § 3-420(b) of the Commercial Law Article,[ 3 ] of proving its actual interest in the proceeds of the instrument?

III

Did the circuit court err by granting appellee Middle-burg Bank’s motion for judgment on appellant’s negligence claim on the grounds that appellant failed to adduce expert testimony regarding banking industry standards? For the reasons that follow, we answer the first question in the negative and the second and third questions in the affirmative. Accordingly, we affirm the circuit court’s judgment in relation to appellant’s discovery violations but reverse the circuit court’s judgments in favor of appellees on appellant’s conversion and negligence claims. PROCEDURAL & FACTUAL BACKGROUND This case involves claims of conversion and negligence brought by a payee against a depositary bank and a payor bank in relation to the payment of a check bearing a forged indorsement.

An agreed stipulation of facts, which was jointly ²³⁶ submitted at trial by appellant and appellees, provides the following factual background: JIA provided insurance coverage on a property located at 123 Ninth Avenue in Brunswick, Maryland, pursuant to the terms of an insurance policy. Appellant was listed on the “Declarations Page” of the insurance policy as the “first mortgagee and/or loss payee.” Harrison and Siegel were named as the insureds on the insurance policy. On the same “Declarations Page,” the insurance policy also identified American General Financial Services (American General) as the “second mortgagee and/or loss payee.” Following an April 27, 2005 fire on the property, Harrison and Siegel submitted an insurance claim to JIA in relation to the fire loss. After adjusting the claim, JIA determined that it would pay the $ 140,000 policy limit for damage to the property, pursuant to the terms of the insurance policy.

Consequently, on May 13, 2005, JIA, the drawer, 4 issued a check in the face amount of $140,000, made payable to the order of “PAULA HARRISON and STEVEN SIEGEL and SAXON MORTGAGE SERVICE and AMERICAN GENERAL FINANCIAL SERVICES ITS SUCCESSORS, AND/OR ASSIGNS, ATIMA.” JIA included appellant on the check because appellant was named as the first mortgagee and/or loss payee under the insurance policy. American General was also named by JIA as a co-payee because of its status as the second mortgagee and/or loss payee under the insurance policy. The parties stipulated that the term “ATIMA” stood for the phrase, “as their interests may appear.” JIA’s adjuster, Joe Zynel, hand-delivered the check to Harrison. On May 19, 2005, the law firm of Dunlap Grubb Weaver and Whitbeck, P.C.

(the Dunlap Firm) endorsed the check and presented it for deposit to Middleburg Bank in Leesburg, Virginia, thus casting Middleburg Bank in the role ²³⁷ of “depositary bank,” as far as the subject check is concerned, from that point forward. 5 Although the stipulation of facts does not explain why the Dunlap Firm, which has never been a party to this case, endorsed the check, appellant’s opening statement at trial suggested that Harrison may have endorsed the check to an attorney at the Dunlap Firm. The Dunlap Firm also held an account at Middleburg Bank. Although appellant neither indorsed the check nor authorized any person to indorse the check on its behalf, the word “Saxon” was handwritten on the back of the check. Middle-burg Bank accepted the check for deposit, without contacting either appellant or JIA to confirm the validity of the purported indorsement.

Middleburg Bank delivered the check to its intermediary bank. The check was ultimately transferred through the Federal Reserve Bank to Chesapeake Bank, where Chesapeake Bank electronically debited $140,000 from JIA’s account. Chesapeake Bank thus became, for our purposes, the drawee, or payor, bank. 6 A sum of $140,000 was ultimately credited to the Dunlap Firm account at Middleburg Bank. Upon learning that the check was deposited and paid without appellant’s indorsement, appellant contacted JIA and requested that JIA offer appellant a replacement payment for the check.

Once JIA became aware that appellant neither indorsed nor authorized indorsement of the check and that appellant had never received any of the proceeds of the check, JIA contacted Chesapeake Bank, which informed JIA that Middleburg Bank had accepted the check as if it were fully indorsed. Chesapeake Bank refused JIA’s demand to credit its account for $140,000. JIA, in turn, declined appellant’s request for a replacement payment. ²³⁸ After appellant filed its complaint in this case, Middleburg Bank instituted an action against Harrison, Siegel and the Dunlap Firm in the Circuit Court for Loudoun County, Virginia. That action was still pending at the time of trial.

A series of pretrial proceedings disposed of various claims originally filed by appellant and the case proceeded to trial on (1) appellant’s conversion claims against Middleburg Bank and Chesapeake Bank, under the Maryland Uniform Commercial Code, and (2) appellant’s negligence claim against Middleburg Bank. Evidence was adduced establishing that, in September 2003, Harrison granted a deed of trust on the property to First Franklin Financial Corporation, a Delaware corporation, which, in turn, loaned Harrison $153,000. Appellant’s Senior Claims Representative, Paul McAllister, testified during his deposition that First Franklin Mortgage Loan Trust 2003-FF5 assigned the deed of trust and note 7 to Wells Fargo Bank’ National Association (Wells Fargo Bank), which then held the note and deed of trust in a “trust” capacity. McAllister further testified at trial that appellant was the mortgage servicer for Wells Fargo Bank and was responsible for obtaining the insurance money paid by JIA on this insurance claim.

Appellees disputed appellant’s interest in the check and the amount of damages incurred by appellant as a result of the payment on the check. Additional facts shall be discussed, as required, throughout the remainder of this opinion. LEGAL ANALYSIS I Discovery Violations & Exclusion of Evidence Appellant assigns error to the circuit court’s decision to grant appellees’ motions in limine, precluding appellant from ²³⁹ introducing, in any proceeding before the court, any reference to certain documents and information produced by appellant after July 20, 2007, the deadline by which discovery was to have been completed. Appellant further challenges the circuit court’s denial of appellant’s Motion for Reconsideration, which requested that the circuit court reconsider its ruling granting appellees’ motions in limine.

In order to address the merits of appellant’s arguments, we first review the timeline of events forming the backdrop of the discovery dispute between the parties. A Discovery Deadlines Appellant’s complaint was filed on July 27, 2006. 8 Throughout 2006, various pre-trial matters were submitted to and addressed by the court. On March 21, 2007, the circuit court entered a scheduling order requiring that discovery be completed at least seventy-five days prior to the August 21, 2007 trial date or by June 7, 2007. On May 14, 2007, the circuit court extended the discovery deadline to July 7, 2007.

In a subsequent order, the circuit court extended the discovery deadline to July 20, 2007. B Discovery Requests & Motion for Protective Order On June 6, 2007, Middleburg Bank propounded interrogatories and served a request for production of documents on appellant. On June 28, 2007, Middleburg Bank served a notice of deposition, expressing its intent to depose appellant’s corporate designee. Through these combined discovery requests, Middleburg Bank sought the disclosure of information pertaining to the following topics: 9 ²⁴⁰ 1.

The purported assignment of (a) the Adjustable Rate Note dated September 22, 2003, attached as Exhibit A to the Complaint (“Note”) and (ii) Deed of Trust dated September 22, 2003, attached as Exhibit B to the Complaint (“Deed of Trust”) to Wells Fargo Bank National Association, as Trustee (“Wells Fargo”) for First Franklin Mortgage Loan Trust 2003-FF5 (“FF Trust”); 2. All communications between [appellant] on the one hand, and First Franklin Financial Corp., Wells Fargo, and/or FF Trust, on the other, concerning the Note and/or the Deed of Trust; 3. The purported “attorney-in-fact” relationship between [appellant], on the one hand, and Wells Fargo and/or FF Trust, on the other; 4. [Appellant’s] purported status as the current “holder of the Note;” 5. All communications between [appellant], on the one hand, and defendants, Paula M. Harrison (“Harrison”) and/or Steven H. Siegel a/k/a Steven H. Seigel (“Siegel”), as well as their agents and representatives, on the other, concerning, (a) the Note, (b) the Deed of Trust, (c) any application by Harrison to refinance prior indebtedness secured by the Property (for the purported purpose of refinancing an existing Deed of Trust recorded in Liber 2110 folio 555), (d) insurance coverage for the Property, (c) the fire that occurred on or about April 27, 2005 (“Fire”) at that property located at 123 Ninth Avenue, Brunswick, Maryland (“Property”), (f) any proof of loss concerning the Fire, (g) that $140,000 JIA check dated May 13, 2005 (“Check”), (h) restoration of ²⁴¹ the Property and/or (i) breach of the Note and/or the Deed of Trust. 10. [Appellant’s] relationship or arrangement with First Franklin or FF Trust regarding the Note, the Deed of Trust, and the Complaint; and 11. [Appellant’s] purported damages, including any claim for attorney’s fees and costs.

On July 6, 2007, appellant also filed a Motion for a Protective Order, pursuant to Maryland Rule 2-403, alleging that appellant was prohibited from providing Middleburg Bank with responses to its discovery requests. Specifically, appellant argued that Middleburg Bank sought the disclosure of “private financial information about [appellant’s] customer with third parties,” information that was, according to appellant, protected under the “Gramm-Leach-Bliliey [sic] Act, 15 U.S.C. Section 6801 et. al. [sic]” 10 Appellant asked the court to enter an order “striking all discovery request [sic] for financial information related to [appellant’s] customer.” On July 16, 2007, appellant filed “[Appellant’s] Responses to ... Middleburg Bank’s First Set of Interrogatories,” in which it raised a general objection to the interrogatories “to the extent that they seek information [that] is protected by the Gramm-Leach-Bliliey Act, 15 U.S.C. Section 6801 et al.” Additionally, appellant asserted that Middleburg Bank’s interrogatory requests attempted to obtain irrelevant information “which is not likely to lead to the discovery of any admissible evidence.” Notwithstanding these objections, appellant indicated that “various employees of [appellant] has [sic] information concerning the above listed topics” and that, “[m]ore specifically,” Paul McAllister, appellant’s Senior Claims Rep ²⁴² resentative, had information or knowledge concerning appellant’s complaint. C Deposition of Appellant’s Corporate Designee On July 19, 2007, one day before the discovery deadline, appellees deposed McAllister, who testified at the deposition in his capacity as appellant’s corporate designee.

Appellant’s counsel noted that the circuit court had yet to rule on the pending Motion for Protective Order: Before—before we start with [Chesapeake Bank’s counsel and JIA’s counsel], I—the notice of deposition was only sent by Middleburg. I don’t have any objection to you asking questions. Just so that you know that we did file a motion of protective order and so we are going to object to any line of questioning regarding any private financial information which relates to the borrower Paula Harrison. So refrain from asking those questions as long as—and we also filed an objection as to any line of irrelevant questions, not that you would ask any, but just so that it would be limited to the allegations of the complaint and notice.

As forewarned, appellant’s counsel objected to deposition questioning that she characterized as being subject to the pending Motion for Protective Order. Notably, appellant’s counsel did not object when McAllister testified that (1) he was “never given a copy of the adjuster’s report of damages to know what the total amount of the damages were,” (2) he never tried to determine whether $140,000 could have rebuilt a house on the subject property and (3) he had no knowledge of any damages that his company claimed in the lawsuit. Similarly, appellant’s counsel declined to object when McAllister testified that (1) appellant was not the holder of the note but rather a “servicer” to Wells Fargo Bank, who acted in its capacity as trustee for First Franklin Mortgage Loan Trust 2003-FF5 and (2) he did not know whether a power of attorney existed between Wells Fargo and appellant as it pertained to the Paula Harrison note. ²⁴³ D Post-Discovery Deadline Disclosures On August 7, 2007, approximately eighteen days after the July 20, 2007 discovery deadline, the circuit court denied appellant’s pending Motion for Protective Order. 11 On August 8, 2007, fourteen days after the close of discovery, but four days prior to the court’s denial of the Motion for Protective Order, appellant served a copy of its Motion for Summary Judgment on the parties to this ease. 12 Appellant argued, inter alia, that summary judgment should be granted against appellees on the conversion claims and against Middle-burg Bank on the negligence claim. In support of its argument, appellant attached a notarized affidavit that was dated August 1, 2007 (twelve days after the close of discovery) and signed by Michael McCreary on behalf of appellant.

In this affidavit, McCreary attested that the value of the property decreased from $215,000 before the fire to $50,000 after the fire. McCreary further asserted that Harrison was in default of her mortgage loan, which had a payoff amount, at the time of the affidavit, of $213,034.33. In addition, McCreary attested that (1) the note and deed of trust on the Property were held by First Franklin Corporation with a corporate assignment to Wells Fargo Bank National Association, First Franklin’s trustee and (2) appellant was Wells Fargo’s attorney-in-fact. On August 13, 2007, appellant filed its opposition to summary judgment motions submitted by appellees and JIA, attaching, as an exhibit, another affidavit signed by McCreary.

This affidavit, however, was dated August 10, 2007, twenty-one days after the close of discovery and three days after the circuit court issued its order denying appellant’s Motion for ²⁴⁴ Protective Order. This second McCreary affidavit repeated much of the same information initially presented in McCreary’s first affidavit. However, rather than giving a specific figure as to the alleged debt owed on the property, the second affidavit provided that, “at the time of the fire loss on April 27, 20Ó5, the unpaid principal, interest and payments of taxes and assessments by the mortgagee as well as all foreclosure cost was over $140,000.” In addition to this second affidavit, appellant attached a signed power of attorney. Notably, this power of attorney was created on July 20, 2007, the day after McAllister testified at his deposition that he did not know if a power of attorney existed between appellant and Wells Fargo.

The power of attorney purportedly gave appellant the right to act on behalf of Wells Fargo in servicing mortgage loans. This phase of the discovery dispute timeline is critical to our analysis. In its appeal to this court, appellant repeatedly emphasizes that it waited to disclose the “supplemental discovery” until after the circuit court ruled on its pending Motion for Protective Order: The discovery deadline, according to a consent order, was July 20, 2007. The [circuit court] did not rule upon the Motion for Protective Order until August 13, 2007, which was substantially after the deadline to serve responses to the Bank’s requests.

After the [circuit court’s] denial of the Motion for Protective Order, [appellant] served supplemental discovery documents and [affidavits to the Banks which were responsive to the Bank’s requests. Appellant’s position is not supported by the record. To be sure, McCreary’s second affidavit was first disclosed after the denial of appellant’s Motion for Protective Order. However, appellant neglects to mention the existence of McCreary’s first affidavit, which was created and filed after the discovery deadline but before the court’s denial of appellant’s Motion for Protective Order.

McCreary’s first affidavit disclosed information requested by Middleburg during discovery and was ²⁴⁵ nearly identical to his second affidavit. 13 E Motions in Limine On August 15, 2007, JIA filed a motion in limine, requesting that appellant be prevented from introducing evidence regarding the mortgage debt at the time of the fire loss, a fact first disclosed by appellant in McCreary’s post-discovery deadline affidavit. On August 29, 2007, Chesapeake Bank filed a similar motion in limine. 14 Middleburg Bank’s motion in limine, filed on similar grounds, followed on October 15, 2007. Appellees repeated JIA’s objections to appellant’s post-discovery disclosure of the amount due on the mortgage and further emphasized that the power of attorney, which purportedly appointed appellant as Wells Fargo’s attorney-in-fact, should also be excluded on the grounds that it was not timely disclosed by appellant despite Middleburg Bank’s discovery requests. According to appellees, appellant was bound by the deposition testimony of McAllister, its corporate designee, and could not now remedy the deficiencies in his testimony, either as to damages or as to appellant’s relationship to Wells Fargo, the noteholder, by producing documents subsequent to the discovery deadline.

Not surprisingly, appellant opposed these motions in limine, asserting, in part, that the “delayed disclosure by [appellant] related to any information regarding the debt amount was completely due to compliance with the GrammLeach-Bliliey Act.” Appellant stressed that, once the court ruled on its Motion for Protective Order, appellant “[was] now ²⁴⁶ able to disclose such information without violating the federal statute.” In its opposition to the motions in limine filed by JIA and Chesapeake Bank, appellant added: Nonetheless, [JIA & Chesapeake Bank] fail to show how they are prejudiced by [appellant’s] showing the amount owed on the mortgage debt after discovery. Contrary to [their] belief, the measure of [appellant’s] damages does not relate to Defendant Harrison’s debt amount under the mortgage loan. The Complaint is seeking damages against [appellees] based upon the value of the Check which is $140,000, not the amount due under the Note. 15 According to appellant, McAllister’s July 19, 2007 deposition testimony was not deficient. Appellant stressed that McAllister provided appellees with names of other employees who could answer specific questions and that appellees did not “bother to schedule a deposition” of those employees or file a motion to compel discovery.

Appellant asserted that appellees were not prejudiced by the late disclosures. On October 4, 2007, the circuit court granted JIA’s motion for summary judgment against appellant, which disposed of appellant’s breach of contract claim against JIA and denied all remaining summary judgment motions. The court also scheduled a hearing on October 25, 2007, to address the merits of the various pending motions in limine. On October 9, 2007, shortly after the October 4 hearing, appellant produced what appellees characterize as “[seventy-six] pages of information concerning the account of Harrison.” Although those documents are not clearly identified in the record, appellant does not dispute this fact.

At the October 25, 2007 hearing on the pending motions in limine, the circuit court heard argument from counsel and granted appellees’ motions in limine: ²⁴⁷ I quite frankly don’t know what’s going on with this case. When I look at all of the, that’s happened, I am disturbed by the timing of things____ This suit was filed by [appellant] in July of 2006. The trial date was originally scheduled for August 21 st, 200[7], The original discovery cutoff date pursuant to the scheduling order would have been in June, some time in the very beginning of June 2007. [¶]... ] Counsel working with each other knew that they weren’t gonna be able to get things done by that time and issued a consent motion to extend the deadlines to July 20th, all of which is appropriate and is reasonable. What the Court is being asked to do today is to say, to grant a motion in limine to prevent [appellant] from introducing an affidavit of Michael McCleer—McCreery (phonetic), dated August 10th, 2007 and the substance of those facts which apparently differ from his testimony given at deposition the day before the discovery [deadline].[ 16 ] The limited power of attorney dated July 20th, 2007, which could not have, if it was produced on July 20th, it must have been, since it was just created on July 20th it had to be created and then faxed or something over to the parties and then the documents produced October 9th, which includes the representations of counsel that that includes information regarding the attorney’s fees and, and an additional loan, loan agreements, that documentation and including, I certainly agree that attorney’s fees accrue up until the day of trial.

However, [appellant] knew what they’d spent so far. That should have been disclosed prior to the discovery cutoff date, and it is more the substance and the timing of the affidavit of Mr. McCreery (phonetic) and after being produced as the corporate designee that is troubling to the Court. [Appellant] had an obligation to produce people with the information that is legitimately requested. [¶]... ] therefore, I’m gonna grant the motion in limine filed by both [appellees]. ²⁴⁸ The circuit court later clarified that its ruling extended only to the following: [The] [affidavit of Michael McCreery (phonetic) including the substance of the facts contained in those documents, the limited power of attorney dated July 20th, and the 76 pages of documents produced on October 9th, 2007, any additional information or documents not disclosed by [appellant] prior to July 20th, 2007. Anything that existed prior to that date, that all comes in. Just granted the motion as to those items[.] (Emphasis added). 17 An order was entered memorializing this ruling on October 31, 2007.

The order reflected that, along with the aforementioned documents, appellant was barred from “[introducing in any proceeding before this Court evidence contrary to the testimony of its corporate designee Paul McAllister.” F Motion for Reconsideration Appellant subsequently filed a Motion for Reconsideration, on November 8, 2007, arguing that the court’s order granting appellees’ motions in limine penalized appellant for complying with a federal statute and was overbroad. As to the breadth of the order, appellant contended that, because the order excluded the substance of all facts contained in McCreary’s August 10 affidavit, the court succeeded in also excluding facts that were, according to appellant, either timely disclosed, consistent with McAllister’s deposition testimony or never requested by appellees. Specifically, as to the portion of McCreary’s affidavit that stated that the foreclosure at the time of the fire loss was over $ 140,000, appellant asserted that this fact had never been requested by appellees. 18 Appellant ²⁴⁹ further asserted that under the holding of Taliaferro v. State, 295 Md. 376 , 456 A.2d 29 (1983), the discovery sanction of precluding McCreary’s affidavit in its entirety was inappropriate, because, according to appellant, the delay in disclosure was due to the court’s pending disposition of the Motion for Protective Order. Subsequent to the filing of appellant’s Motion for Reconsideration, but prior to any ruling on that motion, a Scheduling Order dated November 13, 2007 extended the discovery deadline in the case to March 22, 2008.

Appellant filed an amended Motion for Reconsideration, in which it alleged that, in light of the new discovery deadline, appellant’s disclosures were, in fact, timely; consequently, appellees suffered no prejudice. Appellees jointly filed a motion to strike all provisions of the scheduling order, other than the provision setting the May 6-7, 2008 trial date. On December 17, 2007, in two separate orders, the circuit court granted appellees’ motion to strike the extended discovery deadline and denied appellant’s Motion for Reconsideration. G Trial McAllister testified on behalf of appellant at trial.

During his direct examination, appellant’s counsel attempted to elicit testimony regarding the extent of damages owed to appellant as a result of the fire. McAllister was permitted to testify, over the objections of opposing parties, that appellant, as the mortgage servicer for the first lienholder of the property, was responsible for obtaining insurance money paid by JIA on the insurance claim. However, the circuit court sustained objections to his testimony as to “how” appellant was injured by the facts of this case. The circuit court noted on the record that it sustained the objection to this testimony on the grounds ²⁵⁰ provided by appellees’ counsel, namely, that such testimony would be “inconsistent with prior testimony” and was excluded by the motion in limine.

McAllister subsequently testified that he recalled stating, during his deposition, that he did not know if there were any damages. When appellant’s counsel asked, “When you were answering that question at the time of the deposition ... did you mean to testify that [appellant] did not incur any damages?”, the circuit court sustained objections to the question and ruled: “[McAllister] said he didn’t know [if appellant sustained any damages]. Not whether they had any [damages] or not. So and in light of my, my ruling on the lim—in limine motion, sustain.” McAllister was permitted, however, to testify that he had, at the deposition, identified the name of an individual working for appellant who had a “better idea” about the damages incurred in this case.

After further objections were lodged by appellees, the following colloquy took place: [APPELLANT’S COUNSEL]: Okay. Your Honor, we have our opportunity to clarify his deposition testimony. [THE COURT]: As to what issue? [APPELLANT’S COUNSEL]: As to the issue as [sic] damages. [THE COURT]: I’d clarify, however I ruled in limine after the deposition that there would not be ... [APPELLANT’S COUNSEL]: Any inconsistent testimony. However, what these, these questions— [THE COURT]: And he said he didn’N- [APPELLANT’S COUNSEL]:—lead to— [THE COURT]:—know of any damages at the time of deposition. [APPELLANT’S COUNSEL]: Total damages. If I can have him review the, the actual question that was asked.

This is not inconsistent with his testimony. He was, he did not know of any total damages. [MIDDLEBURG’S COUNSEL]: Well, now wait— [THE COURT]: So wait— ²⁵¹ [MIDDLEBURG’S COUNSEL]:—this is unfair. I asked him the question do you have knowledge, Mr. McAllister, of the damages that your company claims in this lawsuit? Answer: Total damages?

No sir. Question: Any damages? Answer: No sir. [APPELLANT’S COUNSEL]: Your Honor, the following question is, the following testimony is that he identified someone at Saxon with the information. At that time he did not have personal knowledge of what the total damages of— [THE COURT]: [Appellant’s counsel], I have already ruled on this issue.

I will sustain that objection. I know you’ve raised it again so you’ve preserved it for the record. On redirect examination, appellant’s counsel asked McAllister if he knew of any property damage from the fire or if any repairs were made on the property after the fire. Objections to both questions were sustained by the court on the grounds that any such knowledge would be either based on hearsay or beyond the scope of redirect.

H Propriety of Circuit Court’s Ruling on Motions in Limine & Motion for Reconsideration Appellant discusses the holding of the Court of Appeals in Taliaferro, supra, and argues that the circuit court abused its discretion when it precluded the use of information disclosed by appellant subsequent to the discovery deadline. Appellant further argues that, even if the circuit court properly granted appellees’ motions in limine, the scope of the in limine order was “unjustifiably broad” and prevented appellant from adducing evidence as to its damages in this case. We disagree with appellant on both counts. The circuit court granted appellees’ motions in limine on the grounds that appellant’s post-discovery disclosures should have been made available to appellees, in response to Middleburg Bank’s discovery requests, prior to July 20, 2007, the discovery deadline that was agreed upon by the ²⁵² parties and established by court order.

We review the granting of a motion in limine for discovery violations under an abuse of discretion standard. Lowery v. Smithsburg Emergency Med. Serv., 173 Md.App. 662, 674 , 920 A.2d 546 (2007) (citing Heineman v. Bright, 124 Md.App. 1, 7 , 720 A.2d 1182 (1998)). Trial judges are entrusted with a “large measure of discretion” in applying sanctions for discovery violations.

Id. (citations omitted). 19 In exercising its discretion to apply discovery sanctions, a trial court must consider five factors outlined in Taliaferro : whether the disclosure violation was technical or substantial, the timing of the ultimate disclosure, the reason, if any, for the violation, the degree of prejudice to the parties respectively offering and opposing the evidence, whether any resulting prejudice might be cured by a postponement and, if so, the overall desirability of a continuance.[ 20 ] 295 Md. at 390-91 , 456 A.2d 29 . See also Lowery, 173 Md.App. at 672 , 920 A.2d 546 ; Heineman, 124 Md.App. at 8 , 720 A.2d 1182 . While these factors frequently overlap and “do not lend themselves to a compartmental analysis,” Taliaferro, 295 Md. at 391 , 456 A.2d 29 , we shall use these factors as an analytical framework within which we shall address specific arguments raised by appellant. ²⁵³ i Technical v. Substantial Violation Appellant concedes that the production of McCreary’s affidavit and other “supplemental discovery” occurred after the July 20, 2007 discovery deadline.

Appellant contends, however, that its post-deadline disclosures represent “technical” violations of the discovery rules, because the November 13, 2007 order, which “extended” the discovery deadline to March 22, 2008, rendered appellant’s disclosures “technically” within the discovery period. The discovery provisions of that scheduling order, however, were stricken by the court in December 2007. Appellant’s argument on this point is without merit. There can be little doubt that appellant’s belated disclosures were material and relevant to appellees’ ability to prepare a defense as to the amount of damages actually suffered by appellant.

Middleburg’s discovery requests asked appellant to disclose the type of information contained in McCreary’s affidavits. Moreover, it was in McCreary’s affidavits that appellant first disclosed any evidence regarding the current amount of debt owed on the property. Prior to the discovery deadline, however, appellant never identified McCreary as an individual with knowledge pertaining to Middleburg’s discovery requests. Apart from deposing McAllister, who was identified by appellant as its corporate designee and the person with knowledge and information pertaining to Middleburg’s discovery requests, it is unclear how appellees would have been able to obtain such information prior to the discovery deadline.

In light of the substance of these disclosures, appellant’s violation of the discovery deadline cannot be said to be merely technical. u Reasons for Belated Discovery Appellant stresses that its timely filed Motion for Protective Order was not ruled upon by the circuit court until August 7, ²⁵⁴ 2007. According to appellant, it believed that disclosure of financial information relative to Harrison, the mortgagor on the property, was prohibited by the federal borrower privacy statute. Appellant further contends that it “served its additional discovery responses and information to all [appellees] after the result of the [court’s] ruling on [appellant’s] Motion for Protective Order.” As the preceding timeline of events delineates, we cannot credit the reason proffered by appellant in its attempt to justify its discovery violations. McCreary’s first affidavit was filed before the court ruled on the Motion for Protective Order.

The contents of McCreary’s second affidavit mirrored those of his first affidavit. Appellant, therefore, cannot be said to have waited until the court’s disposition of its Motion for Protective Order before disclosing the substance of McCreary’s second affidavit. Appellant has provided us with no other reason explaining its motives in delaying disclosure of McCreary’s affidavits. In light of the record in this case, we are constrained to reject appellant’s argument on this point and conclude that appellant’s delay in disclosure was unjustified.

See Hossainkhail v. Gebrehiwot, 143 Md.App.- 716, 726, 795 A.2d 816 (2002) (observing that the court may grant “little weight” to an appellant’s unsupported explanation for a discovery delay); Lowery, 173 Md.App. at 676-77 , 920 A.2d 546 (observing that, notwithstanding attempts to justify late disclosure, information was available to appellants before discovery deadline and could have been provided to appellees). We further observe that appellant’s counsel represented to the circuit court, both in its opposition to Middleburg Bank’s motion in limine and at the October 25, 2007 hearing on the motions in limine, that appellant deliberately delayed disclosing seventy-six pages of financial documents pending a resolution of various summary judgment motions. Specifically, in its opposition to the motions in limine, appellant stated: “[T]his court scheduled a dispositive motion hearing on Oct. 4, 2007, which possibly could have resolved all issues without trial and ²⁵⁵ therefore, disclosure of additional information (including updated attorney’s fees and bills, tax statements and disclosure of borrower’s social security number) was delayed until the Court enforced a ruling on the dispositive motions.’ ” (Emphasis added). Appellant cannot deliberately disregard discovery orders because it anticipates the results of future summary judgment proceedings.

This delay was unjustified and unreasonable. “If scheduling orders are to be permitted to be treated in such a casual fashion, why bother with them?” Naughton v. Bankier, 114 Md.App. 641, 653 , 691 A.2d 712 (1997). iii Timing of Disclosure, Degree of Prejudice & Curative Postponement The discovery period in this case was first extended, by court order, from June 7, 2007 to July 7, 2007. Another extension set the discovery deadline for July 20, 2007. Middleburg’s discovery requests were served in June of 2007. McAllister’s deposition was conducted on July 19, 2007.

Appellees subsequently became apprised of the contents of McCreary’s first affidavit on or around August 3, 2007, approximately fourteen days after the close of discovery. McCreary’s second affidavit was filed along with appellant’s oppositions to the summary judgment motions on August 13, 2007, approximately twenty-four days after the close of the discovery and six days following the circuit court’s denial of appellant’s Motion for Protective Order. The seventy-six pages of financial documents, disclosed by appellant on October 9, 2007, were made available to appellees over two months after the discovery deadline. [ 5 ] It was not until November 13, 2007 that trial in the matter was scheduled for May 2008. However, the absence of a set trial date, in and of itself, does not necessarily equate with lack of prejudice.

See Warehime v. Dell, 124 Md.App. 31, 49 , 720 A.2d 1196 (1998). Indeed, the discovery deadline was scheduled by the court to precede the deadline for all ²⁵⁶ dispositive summary judgment motions. By delaying the disclosure of information until appellant filed or responded to the summary judgment motions, appellant deprived appellees of information upon which they may have relied in support of their case for or against summary judgment. Moreover, Maryland Rule 2-412(d) provides that, upon notice and subpoena by a party seeking to depose a corporation, a corporate party shall designate one or more persons to testify on its behalf during depositions requested by an opposing party and that the “persons so designated shall testify as to matters known or reasonably available to the organization.” Appellees both refer to the decision of the United States District Court for the District of Columbia in Rainey v. Am.

Forest & Paper Ass’n, Inc., 26 F.Supp.2d. 82, 94 (D.D.C.1998), wherein the Rainey Court held that, under Federal Rule of Civil Procedure 30(b)(6), the federal counterpart to Maryland Rule 2-412(d), “a corporation cannot later proffer new or different allegations that could have been made at the time of the 30(b)(6) deposition” of the corporation’s designee, unless it can prove that the information was neither known nor accessible at the time. We decline to address whether Maryland Rule 2-412 should be construed consistent with the reasoning in Rainey in all instances. 21 However, we agree that appellant was on notice to prepare its designee to be able to give responsive answers on its behalf. See Wilson v. Lakner, 228 F.R.D. 524, 528 (D.Md.2005) (“There can be no question that [Rule 30(b)(6)] imposes a ‘duty to prepare the designee[ ] ... [that] goes beyond matters personally known to the designee or to matters in which that designee was personally involved.’ ”) (citations omitted). McCreary’s affidavits presented new informa ²⁵⁷ tion about the extent of the mortgage debt on the property, which was relevant in determining the extent of appellant’s injury when it was prevented from recovering the insurance proceeds. 22 There is an element of unfairness inherent in allowing appellant to disclose this information after the deposition of its corporate designee and the closure of discovery, when the opposing parties have justifiably relied on the corporate designee’s deposition in developing their litigation strategies.

Finally, in opposing appellees’ motions in limine, appellant indicated that it would suffer little prejudice if the court excluded the contents of McCreary’s affidavits. Specifically, appellant argued to the court that appellees “failed to show how they are prejudiced by [appellant’s] showing the amount owed on the mortgage debt after discovery,” because, [c]ontrary to [appellees’] belief, the measure of [appellant’s] damages does not relate to Defendant Harrison’s debt amount under the mortgage loan. The Complaint is seeking damages against [appellees] based upon the value of the Check which is $140,000, not the amount due under the Note. Notwithstanding the fact that this statement ignores that appellees may have chosen to present an alternative theory of damages in this case, appellant’s statement further had the effect of informing the court that the content of McCreary’s affidavit, at least as it pertained to the amount owed on the mortgage, was not relevant to appellant’s case. ²⁵⁸ Because the discovery violation was both unjustified and substantial in nature, and in light of the prejudice to appellees and lack of prejudice to appellant, we conclude that the circuit court did not abuse its discretion in either granting appellees’ motions in limine or denying appellant’s Motion for Reconsideration.

The circuit court was evidently troubled at the nature, substance and the timing of McCreary’s August 10 affidavit and other subsequent disclosures, including the power of attorney produced one day after McAllister testified at his deposition that he was unaware of any power of attorney relationship between appellant and Wells Fargo as it pertained to the Harrison note. 23 The circuit court was clearly persuaded that appellant lacked a meritorious reason justifying its discovery violations. As we have explained, it cannot be credibly argued that appellant’s disclosure was delayed because the court had yet to rule on its Motion for Protective Order. In light of the foregoing discussion, we affirm the circuit court’s order. I Scope of In Limine Order Appellant next argues that, even if the circuit court properly exercised its discretion in granting appellees’ motions in limine, the “language of the In Limine Order was unjustifiably broad because it included facts not subject to any discovery violation.” Specifically, appellant argues that the order “precluded [appellant] from introducing any facts indicated in the Affidavit of Michael McCreary....” Appellant continues: The Affidavit included a broad range of documents and facts which were not subject to even an arguable discovery violation, such as the following: 1) a statement that the subject mortgage loan amount was greater than the Check ²⁵⁹ amount of $140,000.00 (this fact was not requested by [appellees] through discovery); 2) a copy of the corporate assignment which was attached to the Complaint; 3) a statement that [appellant] has the right to collect all mortgage and insurance payments related to the subject mortgage (this fact was disclosed within the discovery deadline and consistent with deposition testimony); 4) evidence of the value of the Property before the fire loss in January 2005 ($215,000.00) and the value of the Property after the fire loss in January 2006 ($50,000.00) (also disclosed at the deposition prior to discovery deadline).

Appellant contends that, as a result of the court’s ruling, it was precluded from introducing any evidence relating to the above-mentioned matters, even though they were not, according to appellant, “subject to any discovery violation [sanction].” We see it otherwise. Initially, we observe that the circuit court’s order specifically precluded use of appellant’s post-discovery disclosures and the substance of the facts contained therein, provided that those facts were not initially disclosed prior to the discovery date. The court further precluded introduction of evidence contrary to the testimony of appellant’s corporate designee, Paul McAllister. 24 As for any “statement that the subject mortgage loan amount was greater than the Check amount of $140,000.00,” this fact was first disclosed in McCreary’s post-deadline affidavits and we have held that the circuit court did not abuse its discretion in disallowing use of this evidence. Furthermore, in regard to appellant’s allegation that it was unjustifiably precluded by the “overbroad” order from introducing evidence as to the decrease in the property’s value after the fire, appellant does not address whether it attempted to introduce such evidence at trial and was prevented from doing so by the court.

To be sure, the court did not permit appellant to explain “how” appellant was injured in this case. ²⁶⁰ This ruling, however, was consistent with the court’s in limine order, in light of McAllister’s deposition testimony reflecting that McAllister knew nothing about appellant’s claimed damages in this case. More importantly, McAllister did offer testimony at his deposition regarding the alleged decrease in the value of the property after the fire. 25 Appellant, for its part, neglected to introduce that evidence at trial. 26 We further observe that appellant never proffered, in response to the court’s rulings, that McAllister would testify to any of the matters that appellant now alleges the circuit court erroneously prevented appellant from addressing. See, generally Smirlock v. Potomac Development Corp., 235 Md. 195, 203 , 200 A.2d 922 (1964) (“[A] proffer is the appropriate method by which to preserve for appellate review questions with regard to evidence which is not admitted and the nature of which is not apparent from the question to which an objection may be sustained.”) (Citations omitted). In addition, as Chesapeake Bank points out, a copy of the promissory note was, in fact, introduced as a trial exhibit by Chesapeake Bank, as an attachment to various excerpts from McAllister’s deposition testimony.

Furthermore, while the court sustained an objection to the introduction of a certified copy of the corporate assignment from First Franklin Mort ²⁶¹ gage Loan Trust to Wells Fargo Bank, appellant has not explained how the court’s error in precluding that document, if any, harmed appellant. The court ultimately allowed McAllister to testify as to the contents of that document and excerpts of McAllister’s deposition testimony, in which he testified as to the contents of that document, were also admitted as a defendant’s exhibit at trial. Finally, appellant’s assertion that it was precluded from introducing “a statement that [appellant] has the right to collect all mortgage and insurance payments related to the subject mortgage” is not supported by the record. McAllister testified, over the opposing parties’ objections, that appellant was the servicer for the first lienholder in this case and was responsible for obtaining insurance money paid by JIA on the insurance claim.

The parties also stipulated to the fact that appellant was named as the loss payee and mortgagee under the insurance policy. Accordingly, we perceive no error. II Motions for Judgment—Conversion At the close of appellant’s case-in-chief, the circuit court granted judgment in favor of appellees on appellant’s conversion claims and denied appellant’s motion for judgment on appellant’s conversion claims. Additionally, the circuit court granted judgment in favor of Middleburg Bank on appellant’s negligence claim.

We address each of appellant’s challenges to these judgments seriatim. A Standard of Review Maryland Rule 2-519(a) provides that “[a] party may move for judgment on any or all of the issues in any action at the close of the evidence offered by an opposing party, and in a jury trial at the close of all the evidence.” Maryland Rule 2-519(b) provides: ²⁶² When a defendant moves for judgment at the close of the evidence offered by the plaintiff in an action tried by the court, the court may proceed, as the trier of fact, to determine the facts and to render judgment against the plaintiff or may decline to render judgment until the close of all the evidence. When a motion for judgment is made under any other circumstances, the court shall consider all evidence and inferences in the light most favorable to the party against whom the motion is made. Unlike in a jury trial, a trial judge in a bench trial considering a Rule 2-519 motion for judgment “is not compelled to make any evidentiary inferences in favor of the party against whom the motion for judgment is made.” Bricker v. Warch, 152 Md.App. 119, 135-36 , 831 A.2d 453 (2003).

Accordingly, [appellate review] of the decision of the trial court on the evidence is governed by the “clearly erroneous” standard set out in Rule 8-131(c)[ 27 ] and the trial judge is “allowed to evaluate the evidence as though he [or she] were the jury, and to draw his [or her] own conclusions as to the evidence presented, the inferences arising therefrom and the credibility of the witnesses testifying.” Id. (citations omitted). A trial court’s factual findings are not clearly erroneous as long as they are supported by any competent material evidence in the record. See Figgins v. Cochrane, 403 Md. 392, 409 , 942 A.2d 736 (2008) (citations omitted).

However, “ ‘ “[t]he clearly erroneous standard for appellate review in [Maryland Rule 8-131(c)] does not apply to a trial court’s determinations of legal questions or conclusions of law based on findings of fact.” ’ ” L.W. Wolfe Enterprises, Inc. v. Maryland Nat’l Golf, L.P., 165 Md.App. 339, 344 , 885 A.2d 826 ²⁶³ (2005) (citations omitted). Rather, “ ‘where the order involves an interpretation and application of Maryland statutory and case law, [appellate courts] must determine whether the lower court’s conclusions are “legally correct” under a de novo standard of review.’ ” Id. (quoting Walter v. Gunter, 367 Md. 386, 392 , 788 A.2d 609 (2002)). B Appellees’ Motions for Judgment on Conversion Claims At the close of appellant’s case-in-chief, appellees moved for judgment on appellant’s conversion claims, arguing, inter alia, that appellant had failed to prove damages on the conversion counts.

Appellees stressed that appellant was only one of four payees named on the instrument of the check and emphatically maintained that appellant had adduced no evidence at trial proving the degree of its actual interest in the proceeds of the check. Appellant countered that, under § 3-420(b) of the Maryland Uniform Commercial Code, the damages in a conversion claim are presumed to be the amount payable on the instrument. C.L. § 3-420 provides, in pertinent part: (a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.

An action for conversion of an instrument may not be brought by (i) the issuer or acceptor of the instrument or (ii) a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or a co-payee. (b) In an action under subsection (a), the measure of liability is presumed to be the amount payable on the instrument, but recovery may not exceed the amount of the plaintiffs interest in the instrument ²⁶⁴ (Emphasis added). Appellant contended that, by producing the converted check, it was entitled to the presumption that the measure of damages was $140,000, or the amount payable on the check. Thus, appellees had the burden, according to appellant, of rebutting that presumption by establishing that appellant was entitled to less than that amount.

The parties also made various alternative arguments. Chesapeake Bank, for example, asserted that, even if appellant correctly interpreted C.L. § 3-420(b), appellees had sufficiently rebutted the statutory presumption by highlighting the deposition testimony of McAllister, wherein he stated that he had no knowledge of any damages incurred by appellant. Appellant argued that the “Declarations Page” in the insurance policy designated appellant as the first loss payee and American General as the second loss payee, evincing an intent to give appellant an interest in the policy senior to that of American General, another co-payee on the check. Appellant also argued that, because the three other co-payees validly endorsed the check, they “endorsed away their interests and so as a practical matter the check was negotiable only upon the endorsement of [appellant],” such that “at the time that it was presented to Middleburg Bank for negotiation the interest was owned by [appellant].” The circuit court granted appellees’ motion for judgment on the conversion counts, rejecting appellant’s interpretation of C.L. § 3^20(b): I have no evidence of damages.

None. And 4, ah, 3-420(b) makes it clear, and I’m gonna read from the comment that there does need, there is a presumption that the amount of damages, that the amount of [sic] is the amount of the check, but it’s different in the case of co-payees. And I’m reading right from the official comment. The but clause in subsection B, I will note it doesn’t refer back to 3-420, but that is the section it’s referring to, addresses the problem of conversion actions, which is what we have here against Middleburg and against Chesapeake in multiple payee checks. ²⁶⁵ (Emphasis added).

The court quoted directly from the following paragraph in Official Comment 2 to C.L. § 3-420(b): The “but” clause in subsection (b) addresses the problem of conversion actions in multiple payee checks. Section 3-110(d) states that an instrument cannot be enforced unless all payees join in the action. But an action for conversion might be brought by a payee having no interest or a limited interest in the proceeds of the check. This clause prevents such a plaintiff from receiving a windfall.

An example is a check payable to a building contractor and a supplier of building material. The check is not payable to the payees alternatively. Section 3-110(d). The check is delivered to the contractor by the owner of the building.

Suppose the contractor forges supplier’s signature as an indorsement of the check and receives the entire proceeds of the check. The supplier should not, without qualification, be able to recover the entire amount of the check from the bank that converted the check. Depending upon the contract between the contractor and the supplier, the amount of the check may be due [1] entirely to the contractor, in which case there should be no recovery, [2] entirely to the supplier, in which case recovery should be for the entire amount, or [3] part may be due to one and the rest to the other, in which case recovery should be limited to the amount due to the supplier. (Emphasis added).

Ultimately, the court compared the hypothetical scenario discussed in Official Comment 2 to the facts of this case and concluded that appellant, as a co-payee on the check, was required, at the outset, to prove its actual interest in the proceeds of the check: Other than we have a few more parties than just the building contractor and the building supplier, that’s the situation that we have here. I have no idea what anybody’s interest is in the proceeds and I note that I did grant a motion in limine on the deposition responses of Mr. McAllister. There could have been other ways to try to prove what other people’s interests were, but that was not done. I ²⁶⁶ don’t know in this instance what the damages were.

They might have been 100—they probably were—but the Court cannot guess or speculate as to the possible damages and that, I mean it’s just word for word right out of the comment that there is no proof of what, what the interest is. Therefore I don’t find an [sic], damages are an essential part of any cause of action and the Defendant has no obligation to prove damages. It’s the Plaintiffs obligation to prove each and every element of, of an offense and there just—of, of a charg—of a count. And there’s just no evidence of that.

(Emphasis added). i C.L. § 3-420(b) The specific provision of C.L. § 3-420 that we are called upon by appellant to construe is subsection (b), which provides: In an action under subsection (a), the measure of liability is presumed to be the amount payable on the instrument, but recovery may not exceed the amount of the plaintiffs interest in the instrument. Appellant asks us to hold that C.L. § 3-420(b) establishes a rebuttable presumption that the measure of liability is the amount payable on the check and that this rebuttable presumption applies equally in conversion cases involving single or multiple payees. This issue appears to be one of first impression in Maryland. 28 Accordingly, resolving appellant’s ²⁶⁷ claim requires us to construe various provisions of the Maryland Uniform Commercial Code. The Court of Appeals reiterated the principles that inform this process of statutory analysis: Although we are directed by the General Assembly to construe the Uniform Commercial Code in a manner which “makes uniform the law among the various [states]” adopting it, Md. Code (1975), Commercial Law Art., §§ 1-102(1), -102(2)(c), we nonetheless utilize, in interpreting the Code, the same principles of statutory construction that we would apply in determining the meaning of any other legislative enactment.

These well settled principles require ascertainment of the legislative intent, and if, as is the case here, construction becomes necessary because the terminology chosen is not clear, then we must consider not only the significance of the literal language used, but the effect of our proposed reading in light of the legislative purpose sought to be accomplished. Unlike most state statutory enactments, the U.C.C. is accompanied by a useful aid for determining the purpose of its provisions'—the official comments of the Code’s draftsmen. While these comments are not controlling authority and may not be used to vary the plain language of the statute, they are an excellent place to begin a search for the legislature’s intent when it adopted the Code. . Messing v. Bank of Am., N.A., 373 Md. 672, 684-85 , 821 A.2d 22 (2003) (quoting Jefferson v. Jones, 286 Md. 544, 547-48 , 408 A.2d 1036 (1979) (citations omitted)). “[W]e begin our inquiry with the words of the statute, and, when the words of the statute are clear and unambiguous, according to their commonly understood meaning, we ordinarily end our inquiry there also.” Comptroller of the Treasury v. Kolzig, 375 Md. 562, 567 , 826 A.2d 467 (2003) (citing Chesapeake & Potomac Tel.

Co. v. Dir. of Fin. for ²⁶⁸ Mayor & City Council of Baltimore, 343 Md. 567, 578-79 , 683 A.2d 512 (1996)). Additionally, we “construe a statute as a whole so that no word, clause, sentence, or phrase is rendered surplusage, superfluous, meaningless, or nugatory.” Moore v. State, 388 Md. 446, 453 , 879 A.2d 1111 (2005) (citing Comptroller v. Phillips, 384 Md. 583, 591 , 865 A.2d 590 (2005)). The plain and unambiguous language of the first clause, or “presumption clause,” of C.L. § 3-420(b) establishes that, in a conversion action brought under § 3-420(a), the measure of liability is presumed to be the amount payable on the instrument. C.L. § 1-201(31) defines the terms “presumption” and “presumed” as follows: Subject to additional definitions contained in the subsequent titles of this article which are applicable to specific titles or subtitles thereof, and unless the context otherwise requires, in Titles 1 through 10 of this article: (31) “Presumption” or “presumed” means that the trier of fact must find the existence of the fact presumed unless and until evidence is introduced which would support a finding of its nonexistence. 29 (Emphasis added).

The term “presumed” in C.L. § 3-420(b) thus refers to a rebuttable presumption, which is “[a]n inference drawn from certain facts that establish a prima facie case, which may be overcome by the introduction of contrary evidence.” Black’s Law Dictionary 1224 (8th Ed. 2004). Rebuttable presumptions shift the burden of proof to the opposing party, where it remains until that party produces the quantum of evidence required to sufficiently rebut the presumption. See Maryland Rule 5-301(a) (establishing that, unless otherwise provided by statutes or the Maryland Rules, a presumption in all civil actions “imposes on the party against whom it is directed the burden of producing evidence to rebut ²⁶⁹ the presumption” until “the party introduces evidence tending to disprove the presumed fact”). Nothing in the language of the qualifying clause, or “but” clause, of C.L. § 3-420(b) indicates that this rebuttable presumption only applies to conversion claims involving a single payee.

Rather, the “but” clause modifies or limits the preceding “presumption” clause by providing that “recovery may not exceed the amount of the plaintiffs interest in the instrument.” Thus, the “but” clause reinforces that the presumption established in the preceding clause is not a conclusive, or irrebuttable, presumption of law, but rather, one that may be rebutted by evidence that the plaintiff in a conversion claim is not entitled to the full amount payable on the