Tri-Towns Shopping Center, Inc. v. FIRST FEDERAL SAVINGS BANK OF WESTERN MD.

⁶⁵ CATHELL, Judge. “This case is an attempt to impose lender liability.” 1 TriTowns Shopping Center, Inc., appellant, appeals from a summary judgment rendered against it and in favor of First Federal Savings Bank of Western Maryland, appellee, by the Circuit Court for Allegany County (Sharer, J., presiding). Appellant presents a compound question for our review: Did the Trial Court err in granting summary judgment where there were material facts in dispute and the Appellee was not entitled to judgment in its favor as a matter of law? Standard of Review In reviewing the grant of a summary judgment motion, we are concerned with whether a dispute of material fact exists. Arnold, Developer, Inc. v. Collins, 318 Md. 259, 262 , 567 A.2d 949 (1990); Bachmann v. Glazer & Glazer, Inc., 316 Md. 405, 408 , 559 A.2d 365 (1989); King v. Bankerd, 303 Md. 98, 111 , 492 A.2d 608 (1985); Markey v. Wolf, 92 Md.App. 137, 170-71 , 607 A.2d 82 (1992). “A material fact is a fact the resolution of which will somehow affect the outcome of the case.” King, 303 Md. at 111 , 492 A.2d 608 (citing Lynx, Inc. v. Ordnance Prods., Inc., 273 Md. 1, 8 , 327 A.2d 502 (1974)). “A dispute as to a fact ‘relating to grounds upon which the decision is not rested is not a dispute with respect to a material fact and such dispute does not prevent the entry of summary judgment.’ ” Seaboard Sur.

Co. v. Richard F. Kline, Inc., 91 Md.App. 236, 242-43 , 603 A.2d 1357 (1992) (quoting Salisbury Beauty Schools v. State Bd. of Cosmetologists, 268 Md. 32, 40 , 300 A.2d 367 (1973)) (emphasis in original). We have further opined that in order for there to be disputed facts sufficient to render summary judgment inappropriate “there must be evidence on which the jury could reasonably find for the plaintiff.” Seaboard, 91 Md.App. at 244 , 603 A.2d 1357 . ⁶⁶ The Court of Appeals has also stated that “the proper standard for reviewing the granting of a summary judgment motion should be whether the trial court was legally correct.” Heat & Power Corp. v. Air Prods. & Chems., Inc., 320 Md. 584, 592 , 578 A.2d 1202 (1990) (citations omitted). The trial court, in accordance with Maryland Rule 2-501(e), shall render summary judgment forthwith if the motion and response show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. The purpose of the summary judgment procedure is not to try the case or to decide factual disputes, but to decide whether there is an issue of fact that is sufficiently material to be tried.

See Coffey v. Derby Steel Co., 291 Md. 241, 247 , 434 A.2d 564 (1981); Berkey v. Delia, 287 Md. 302, 304 , 413 A.2d 170 (1980). Thus, once the moving party has provided the court with sufficient grounds for summary judgment, [i]t is ... incumbent upon the other party to demonstrate that there is indeed a genuine dispute as to a material fact. He does this by producing factual assertions, under oath, based on the personal knowledge of the one swearing out an affidavit, giving a deposition, or answering interrogatories. “Bald, unsupported statements or conclusions of law are insufficient.” Lowman v. Consolidated Rail Corp., 68 Md.App. 64, 70 , 509 A.2d 1239 , cert. denied, 307 Md. 406 , 514 A.2d 24 (1986) (citation omitted; emphasis added). With these considerations in mind, we turn to the case sub judice.

The Facts In the 1970s and 1980s, appellee lent to appellant, in two transactions, the sums of $875,000 and $320,000. These loans were secured by mortgages and bill obligatories (notes) placed on the premises of the Tri-Towns Shopping Center, Inc., owned by appellant. On May 27, 1983, appellee agreed with appellant that the property could be conveyed to Torresdale Plaza, Inc. (Torres-dale), upon its assumption of the two mortgages. During this transaction, the mortgages were modified by a loan modifica ⁶⁷ tion agreement.

Under the terms of the various agreements, appellant was to remain liable for the repayment of the mortgage sums even though Torresdale had assumed the payment. The property was then deeded (on June 1, 1983) to Torresdale. During this transaction, appellant, with appellee’s knowledge, took back a mortgage from Torresdale, thereby becoming a junior lienholder. In September 1992, appellee caused foreclosure proceedings against the subject property to be instituted.

Thereafter, in December of 1992, appellant’s exceptions to the report of sale were upheld, and the court declined to ratify the sale. Subsequently, in June of 1993, appellee caused another foreclosure proceeding to be filed. After the sale, appellant again excepted to the report of sale. While the matter of the exceptions and the ratification of the sale was pending, appellant and appellee entered into a settlement agreement, whereby appellant “withdrew its Exceptions” and appellee “waived any deficiency claim it had or may have had [against appellant] under the terms of the mortgage.” The sale was subsequently ratified.

Thereafter, in April of 1994, appellant brought suit against appellee alleging in two counts that appellee (1) tortiously interfered in appellant’s mortgage (the junior lien) arrangements with Torresdale and (2) denied appellant its rights as a junior lienholder to have access to the property when appellant sought to make needed repairs, the lack of which resulted in a deterioration of the property to appellant’s detriment as a junior lienholder. Only the second count is at issue here. Before the circuit court, appellee filed a motion for summary judgment, alleging that the claim was barred by res judicata. Appellee’s affidavit provided: First Federal neither committed any act to inhibit TriTowns or Marsh [appellant’s president] from effecting necessary repairs and maintenance to the Shopping Center nor prohibited Tri-Towns or Marsh from enforcing the obligations of Torresdale, Tri-Towns, and/or Marsh to effect ⁶⁸ such necessary repairs and maintenance to the Shopping Center.

Marsh’s affidavit, in his corporate capacity, in response, provided: That First Federal Savings Bank of Western Maryland prohibited me from entering upon the property of TriTowns Shopping Center, Inc., for making any repairs to the property, including an offer made by me to inspect roofs on the buildings which were leaking at the time. On August 30, 1995, the trial court granted appellee’s motion for summary judgment as to appellant’s second count. Count one was dismissed by stipulation of the parties. The Preclusive Effect of the Foreclosure Action The exceptions filed by appellant in the final foreclosure proceeding indicated that the appellee: 1____ [F]ail[ed] to account for or disclose any credit for rental payments due and payable by tenants of [appellant,] which have in fact been paid to [appellee]. 3. [Appellant] is the holder of a [junior] Mortgage on the property.... 4.

Torresdale Plaza, Inc., had agreed to convey the subject property to [appellant] in lieu of foreclosure.... 5.... Torresdale Plaza, Inc., forwarded to ... [appellant] a copy of correspondence from [appellee] ... prohibiting the transfer of title [to appellant].... Thereafter, appellant and appellee filed a “Withdrawal of Exceptions/Waiver of Deficiency Claims.” It provided that the exceptions were withdrawn by appellant and that appellee waived its right to seek a deficiency decree against appellant. In relevant part, the pleading noted that: 8. [Appellant] ... filed Exceptions to the Report of Sale---- ⁶⁹ 10. [Appellant] hereby withdraw[s its] Exceptions to the Report of Sale and consents] to the immediate Ratification of the Sale as set forth in the Order attached hereto and made a part hereof. [Emphasis added.] As we have previously noted, the only issue that is left for us to resolve is the correctness of the trial court’s granting of the summary judgment as to Count II, which asserted that appellee denied appellant its rights as a junior lienholder during the pendency of the foreclosure proceedings.

Appellant, in essence, alleged that because appellee denied entry to appellant for it to make repairs, the property had deteriorated and, therefore, it brought less at the sale and appellant was thereby deprived of access to a possible surplus. The Law The trial judge granted appellant’s Motion for Summary Judgment without rendering an opinion. Accordingly, we will address, as needed, the grounds alleged by appellee in its Motion for Summary Judgment as that motion related to Count II. Appellee first alleged that the instant case was barred by res judicata.

It further alleged that the action was barred by reason of the settlement reached and filed in the foreclosure action, that it owed no duty to appellant that was susceptible to breach, and that appellant failed to join all necessary parties. In its affidavit, appellee averred, among other things, that it applied the rental income from the property towards its maintenance. In its memorandum below, appellee asserted, in respect to the res judicata argument, as it does here, the holding of the Court of Appeals in Fairfax Sav., F.S.B. v. Kris Jen Ltd. Partnership, 338 Md. 1 , 655 A.2d 1265 (1995), in which the Court of Appeals reversed this Court’s reversal of the trial court’s res judicata finding. Upon our review of Kris Jen, and a comparison of the facts of this case with Kris Jen, we conclude that the instant case is barred by the res judicata effect of the foreclosure proceeding.

We shall affirm. ⁷⁰ Fairfax Savings F.S.B. v. Kris Jen Limited Partnership In 1988, Kris Jen Limited Partnership (Kris Jen), the mortgagor, borrowed $3,200,000 from Fairfax Savings, F.S.B. (Fairfax) for the purpose of constructing townhouses. The loan was secured by a deed of trust and the personal guarantee of the principals of Kris Jen. In 1989, Fairfax, the mortgagee, notified Kris Jen that the loan was in default and subsequently commenced foreclosure proceedings.

The property was sold at foreclosure and when the report of sale was made, Kris Jen objected (excepted) to the ratification of the sale. Thereafter, Kris Jen notified the trial court that it had no objection “in the [foreclosure] proceedings” to the ratification of the sale. Id. at 5 , 655 A.2d 1265 (brackets in original). Fairfax objected to the withdrawal of Kris Jen’s exceptions and sought a court order that would have resolved the exceptions in its favor.

The court permitted Kris Jen to withdraw its exceptions and ratified the sale without resolving the issues. While these proceedings were underway, Kris Jen filed a separate suit against Fairfax that was still pending when the report of sale was ratified. This second suit was the subject of the appeal. The Court of Appeals first summarized the allegations proffered by Kris Jen in its second amended complaint 2 as “options escrow” allegations, “default inducing” allegations, and “workout agreement” allegations.

The workout agreement allegations also included assertions that Fairfax had breached a “fiduciary” duty to Kris Jen, breached a duty of good faith and fair dealing, and been negligent in performing its obligations under the workout agreement. The Court also classified other types of allegations in the complaint as “agreement denial” allegations, which Kris Jen asserted gave rise to defamation allegations on the part of Kris Jen’s general partner. ⁷¹ The Court of Appeals noted that two of the allegations that the trial court had found to be barred by res judicata were: “they [Kris Jen] are not permitted in this action to assert ... that the price obtained at