Suitland Development Corp. v. Merchants Mortgage Co.

McWilliams, J., delivered the opinion of the Court. Unlike most of the litigation that works its way up to us, this case, as far as our consideration of it is concerned, begins with the final decree, which we have set forth in full. “The defendants, Merchants Mortgage Company [Merchants], a body corporate, Charles C. Hoffberger, President and Director of Mer ⁴⁵ chants Mortgage Company, Charles H. Hoffberger, Director of Merchants Mortgage Company, Leroy E. Hoffberger, Vice-President and Director of Merchants Mortgage Company, Jerold C. Hoffberger, Treasurer and Director of Merchants Mortgage Company, Morton J. Hollander, Director of Merchants Mortgage Company, Morton Silberman, Director of Merchants Mortgage Company, Harold V. Keyser, Secretary and Director of Merchants Mortgage Company, Ralph Lubow, Vice-President and Director of Merchants Mortgage Company, and Sol M. Bank, individually, having been named in the original Bill of Complaint filed herein; plaintiffs thereafter having obtained leave of Court to add as additional defendants J. Elmer Weisheit, Jr., Pacy Oletsky, and Eugene J. Silvermann, and to amend the Bill of Complaint as to defendants Ralph Lubow and Harold V. Keyser to include them individually as well as in their capacity as Officers and Directors of Merchants Mortgage Company; said additional parties defendant and Ralph Lubow and Harold V. Keyser having consented to appear and participate in the trial of this cause without formal pleading or discovery, upon the previously assigned trial date; the original defendants above named having filed formal written answers, and the parties added by amendment having answered orally in open Court at the commencement of trial adopting the written Answer filed by the original defendants other than Sol M. Bank, individually. “The above eiatitled case came on for hearing on April. 22, 1968 [all dates mentioned are in 1968] and was heard in open Court continuously from that date up to and including May 2, saving and excepting only May 1. Plaintiffs produced numerous witnesses and more than 100 exhibits. At the conclusion of the plaintiff’s ⁴⁶ case, all defendants made oral motions to dismiss under Maryland Rule 535.

The Court heard full argument on said motions from counsel for all parties and, after the determination of the said motions to dismiss heard additional argument on other motions for assessment of costs, fees, and expenses under Maryland Rule 604 b. “The Court having heard the evidence and argument of counsel, and the proceedings having been submitted and fully considered, it is, thereupon, this 6th day of May, by the Circuit Court for Prince George’s County, Maryland, in Equity, pursuant to and for the reasons set forth in its oral opinion rendered from the Bench at the conclusion of the proceedings, which said opinion is hereby incorporated by reference to the same extent as if fully set forth in this Decree, “ORDERED, ADJUDGED and DECREED as follows: “(1) The Court finds that the allegations of fraud, collusion, misrepresentation, nondisclosure, conspiracy, and wrongdoing alleged in the Bill of Complaint are unsupported by the evidence ; that the said allegations were made without substantial justification and for purposes of delay; and that the evidence produced by the plaintiffs completely vindicates each and every defendant from all the charges, allegations, and reflections upon their character and reputation contained in the Bill of Complaint. “ (2) Accordingly, the Motion to Dismiss under Maryland Rule 535 is granted and the Bill of Complaint is dismissed as to all defendants. Specifically and without limitation of the scope of the foregoing dismissal but solely for the purpose of emphasis, the Court adjudicates and denies each and every of the prayers for relief as to each of the plaintiffs, namely: ⁴⁷ “I. (a) As to Suitland Development Corporation [Suitland], the prayer that the mortgage between said plaintiff and Merchants Mortgage Company referred to in the evidence, and recorded in Liber 3195, page 382, in the Land Records of Prince George’s County, Maryland, be set aside and cancelled. “(b) The prayer that defendants be enjoined from foreclosing on said mortgage. “ (c) The prayers that plaintiffs have judgment for compensatory damages for interest, costs and expenses, and for exemplary damages, plus costs of this action. “II. (a) As to R & S Development Corporation [R & S], the prayer that the mortgage between said plaintiff and Merchants Mortgage Company referred to in the evidence, and recorded in Liber 3212, page 206, in the Land Records of Prince George’s County, Maryland, be set aside and cancelled. “(b) The prayer that defendants be enjoined from foreclosing on said mortgage. “ (c) The prayers that plaintiffs have judgment for compensatory damages for interest, costs and expenses, and for exemplary damages, plus costs of this action. “HI.

(a) As to Warbling Meadows, Inc. [Warbling Meadows], the prayer that the mortgage between said plaintiff and Merchants Mortgage Company referred to in the evidence and re ⁴⁸ corded in Liber 3434, page 282, in the Land Eecords of Montgomery County, Maryland, be set aside and cancelled. “(b) The prayer that defendants be enjoined from foreclosing on said mortgage. “ (c) The prayers that plaintiffs have judgment for compensatory damages for interest, costs and expenses, and for exemplary damages, plus costs of this action. “IV. (a) As to Beltway-Penn Construction Company, Inc. [Beltway-Penn], the prayer that the mortgage between said plaintiff and Merchants Mortgage Company referred to in the evidence, and recorded in Liber 3276, page 438, in the Land Eecords of Prince George’s County, Maryland, be set aside and cancelled, “(b) The prayer that defendants be enjoined from foreclosing on said mortgage. “ (c) The prayer that plaintiffs have judgment for compensatory damages for interest, costs and expenses, and for exemplary damages, plus costs of this action. ⁴⁹ corporate plaintiffs, by and through the individual plaintiffs, Reuben Schwartz and Beulah Schwartz, and that the said Reuben Schwartz and Beulah Schwartz are the real plaintiff parties in interest, the motions of the defendants to require all the said plaintiffs to pay to them the amount of the costs of this proceeding and the reasonable expenses incurred by the defendants in opposing this proceeding, including reasonable attorneys fees pursuant to Maryland Rule 604 b, is granted, as prayed in the respective answers heretofore filed by the defendants and renewed orally in open Court at the conclusion of the Court’s ruling on the merits under Maryland Rule 535. Counsel for the defendants are granted leave within ten days from the date of this Decree to file a Petition to fix the amounts that the plaintiffs shall be required to pay to the respective defendants under Maryland Rule 604 b, setting forth in detail the costs and reasonable expenses incurred and the services of the respective counsel involved. ⁴⁸ “ (3) The Court finds and specifically declares that each of the said mortgages above referred to is a valid and binding obligation on the part of the respective mortgagors and each of said mortgages, according to the uncontradicted evidence, is and has been in default. The Court having found as aforesaid that the instant proceedings were brought without substantial justification . and for purposes of delay by the four ⁴⁹ “(4) The corporate plaintiffs, Suitland Development Corporation, R & S Development Corporation, Warbling Meadows, Inc., Beltway-Pen n Construction Company, Inc., and the individual plaintiffs, Reuben Schwartz and Beulah Schwartz, shall pay the costs of this proceeding.” (Emphasis added.) On 13 May Suitland, R & S, Warbling Meadows and Beltway-Penn filed an appeal “from the order entered * * * on May 6.” Apparently because the court signed and filed another order on 6 May they thought it prudent, on S June, to file an amended order for an appeal “from the final decree entered in this action on May 6.” (Emphasis added.) In passing it might be noted that the “amended order” was not filed within the 30 days from the date (and filing) of the “final decree.” Maryland Rule ⁵⁰ 812 a.

On 14 June, the chancellor, Bowie, J., passed an order requiring Suitland, R & S, Warbling Meadows, Beltway-Penn and Reuben and Beulah Schwartz to show cause, on or before 9 July, “why judgments should not be entered against them, pursuant to ordering paragraph No. S of the Final Decree entered herein on May 6, for reasonable expenses” (emphasis added) in favor of the appellees, $35,000 of which represented counsel fees. On 28 June the Schwartzes moved to quash the order as to them on the ground that they were not nor had they been parties to the action. On 1 August, however, before the motion raising preliminary objection (filed 28 June) had been heard, Suitland, R & S, Warbling Meadows, Beltway-Penn “as well as Reuben Schwartz and Beulah Schioartz (who appear pursuant to Maryland Rule 124 c)” (emphasis added) in answer to the order of 14 June stated that the final decree of 6 May “is without statutory authority,” that “said decree is contrary to the substantive law” of the state, that “there was no evidentiary or factual basis” in respect of lack of substantial justification or of delay, and that the Schwartzes were not parties. On 12 August, after a hearing in open court, Judge Bowie entered five “judgments nisi.” They are evidenced only by docket entries, the first of which we have set forth in full; the other four, being substantially the same, are abstracted only: “1968, August 12th: Judgment Nisi entered in favor of the Defendants, Merchants Mortgage Company, Charles C. Hoffberger, Charles H. Hoffberger, Le Roy E. Hoffberger, Jerold C. Hoffberger, Morton J. Hollander, Morton Silberman, Harold Y. Keyser, Ralph Lubow and J. Elmer Weisheit, Jr., and against the Plaintiffs, Suitland Development Corporation, R & S Development Corporation, Warbling Meadows, Inc., Beltway-Penn Construction Company, Inc., Reuben Schwartz and Beulah Schwartz, for ⁵¹ legal services of Jerrold V. Powers, in the amount of Eight thousand and 00/100 ($8,-000.00) Dollars, for services of Melvin J. Sykes, in the amount of Nine thousand two hundred twelve and 50/100 ($9,212.50) Dollars and for miscellaneous expenses in the amount of Four Hundred ninety four and 74/100 ($494.74) Dollars or for a total judgment of Seventeen thousand seven hundred seven and 24/100 ($17,707.24) Dollars with interest from date and costs.” “1968, August 12th: Judgment Nisi entered in favor of * * * [J. Elmer Weisheit, Jr. for the services of Edward C. Covahey, Jr. for $4,240.] “1968, August 12th: Judgment Nisi entered in favor of * * * [Sol M. Bank for the services of Philip Shinberg for $5,600, the services of Martin S. Becker for $1,085, and for miscellaneous expenses of $98, totaling $6,783.] “1968, August 12th: Judgment Nisi entered in favor of * * * [Pacy Oletsky for the services of David Freishtat for $3,535, and for miscellaneous expenses of $135, totaling $3,670.] “1968, August 12th: Judgment Nisi entered in favor of * * * [Eugene J. Silverman for the services of Leonard S. Jacobson for $2,660, and for miscellaneous expenses of $56.50, totaling $2,716.50.]” On 23 August counsel for appellants filed an order directing the clerk to enter the appeals “filed on April 11, 1 May 13 and June 6 as dismissed for the reason that said appeals were prematurely noted.” Immediately thereafter Suitland, the other three corporations “as well as Reuben ⁵² Schwartz and Beulah Schwartz (who appear pursuant to Maryland Rule 124 c)” filed a motion to set aside the “Final Decree of this court entered herein on the 12th day of August” (emphasis added) alleging that the Interlocutory Decree of 6 May was “contrary to law and to the evidence,” that the assessment of attorneys’ fees was improper and that the Schwartzes “were not parties to this action nor were they otherwise amenable to the decree in question.” As the conclusion of argument on the motion in open court on 19 September, Judge Bowie held that the decree of 6 May “was a final decree; it determined all the rights of the parties.” He said