This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.
Opinion by MEREDITH, J.
In Appeal No. 2269, September Term, 2014, Edwin Bell and Miranda Bell ("the Bells"), appellants, argue that we should reverse a judgment entered by the Circuit Court for Carroll County in favor of Dyck-O'Neal, Inc. ("Dyck"), appellee, for the enforcement of a promissory note ("the Note"). In appeal No. 388, September Term, 2015, the Bells seek to reverse the circuit court's order that denied their motion to accept alternate security in lieu of sureties on a supersedeas bond to stay enforcement of the judgment that had been entered in favor of Dyck.
The Bells' brief listed eight issues for our review, but we have distilled the issues into the following three dispositive questions:
1. Whether the circuit court erred in granting summary judgment in favor of Dyck on its complaint to enforce the Note?
2. Whether the circuit court abused its discretion in denying the Bells' motion to stay the enforcement of the judgment in light of their offer to utilize a parcel of real property as alternate security for a supersedeas bond?
3. Whether the circuit court abused its discretion in awarding $175.00 to Dyck in counsel fees for having to respond to the Bells' motion to stay enforcement?
For the reasons that follow, we shall affirm the entry of summary judgment in favor of Dyck and the denial of the Bells' motion to stay the enforcement of Dyck's judgment. But we conclude that the trial judge erred in awarding $175.00 in counsel fees to Dyck, and we vacate that award.
FACTS AND PROCEDURAL BACKGROUND
On October 25, 2005, the Bells purchased a home at 1404 Ramblewood Drive in Emmitsburg, Maryland. They financed the purchase of the home with two purchase money loans from NVR Mortgage Finance, Inc., both of which were documented by promissory notes and secured by deeds of trust, creating a first lien in the amount of $427,020, and a second lien in the amount of $53,378.00.
The Bells made payments on the loans until August 2008, at which point, the loans fell into a default status. A foreclosure sale conducted pursuant to the first deed of trust produced revenues that were nearly sufficient to satisfy the first lien, but there was no surplus to reduce the balance due on the second lien (the deed of trust that provided security for the Note that is the subject of this litigation). The auditor's report on the foreclosure sale was ratified and confirmed by the Circuit Court for Frederick County on October 19, 2009.
The second promissory note (i.e., the Note) was endorsed without recourse by NVR Mortgage Finance, Inc., to the order of Countrywide Bank, NA, which was subsequently acquired by and known as Bank of America N.A. The Note was endorsed without recourse a second time (by Vivian Simon, VP for "Countrywide Bank, NA n/k/a Bank of America N.A."), payable to the order of Dyck.
After making a demand upon the Bells pursuant to the Note, Dyck filed suit against the Bells in the Circuit Court for Carroll County on July 25, 2011, alleging that Dyck was "the current holder of the Note," and claiming the principal sum of $51,670.51, plus interest and attorneys' fees.
The Bells vigorously contested Dyck's claim. The defenses raised by the Bells included their denial that Dyck was a holder of the Note or otherwise in possession of the original, wet-ink Note; a claim that nothing was owed on the Note (based upon the existence of a document among the records of Bank of America reflecting a zero balance on the loan account); and their denial that Dyck was licensed in Maryland as a debt collection agency at the time this suit was filed to collect on the Note.
After extensive litigation and discovery, the circuit court heard cross-motions for summary judgment on December 12, 2014. At the conclusion of the hearing, the court said: "I will hold the matter sub curia and get a written order." By order dated December 16, 2014, docketed on December 18, 2014, the court ruled in favor of Dyck, and stated:
The court entered judgment in favor of Dyck against the Bells in the principal amount of $51,670.51, plus pre-judgment interest, attorney's fees, and court costs.
On December 29, 2014, the Bells filed their first notice of appeal (which initiated Appeal No. 0226, September Term, 2014, in this Court), and also filed a paper captioned "Joint Motion for Stay of Enforcement Pending Resolution of Appeal and Class-Action Lawsuit, Request for Waiver of Bond and Request for Hearing." In the motion, the Bells sought a waiver of the appeal bond requirement "out of necessity, undue burden, financial hardship, and as a matter of law." Dyck filed an opposition, and, on January 22, 2015, the circuit court ordered that the Bells' Request for Waiver of Bond be denied "because [the Bells] have failed to show that good cause exists for waiving the requirements of a supersedeas bond. . . ." The Bells then filed a similar motion in the Court of Special Appeals, and that motion was denied on February 3, 2015.
On March 13, 2015, the Bells filed a second motion to stay enforcement of Dyck's judgment in the circuit court. By order entered April 2, 2015, the court not only denied the second motion to stay, but also ordered that the Bells were "barred from filing in this action any further motions seeking a stay of the enforcement of the judgment and waiver of the bond," and the court also ordered that the Bells "shall tender $175.00 as reasonable attorney's fees to [Dyck] . . . within 10 calendar days." The Bells' motion to alter or amend this order was denied. On May 1, 2015, the Bells filed an additional notice of appeal (which initiated Appeal No. 388, September Term, 2015, in this Court), directed at the order that had been entered April 2, 2015 (denying the stay of enforcement). One of the Bells' arguments in this appeal is that the circuit court abused its discretion when it entered the award of counsel fees.
After Dyck instituted action to enforce the judgment against real property owned by the Bells in Taneytown, the Bells filed a "Motion to Quash Writ of Execution for Real Property and Request for a Hearing," which Dyck opposed. On June 17, 2015, the circuit court ordered that the Bells' motion to quash writ of execution for real property was denied, but their motion to post a bond was granted, as follows: "Defendants may file a bond in the amount of $114,508.35 — which represents the sum of the final judgment, plus pre-judgment interest at the per diem rate of $11.8478, post-judgment interest at the rate of 10% per day, and costs awarded in the Final Judgment in the form of corporate surety. . . ." On June 26, 2015, the Bells filed a "Motion to Alter and Amend the Court's Order of June 17, 2015 and Request a Hearing," arguing, in part, that the Taneytown parcel of property was assessed for tax purposes at $127,800, and a Sheriff's appraisal of $127,000, which was adequate security for payment of the judgment that had been (erroneously) entered in favor of Dyck. The motion to alter or amend was opposed by Dyck, and was denied by the court on July 14, 2015. The Bells noted another appeal on July 23, 2015, which was docketed as No. 1165, September Term 2015. On August 4, 2015, the trial judge denied appellant's March 9, 2015 motion to vacate writs of garnishment and request for a hearing. On August 12, 2015, the Bells filed a third notice of appeal, and that appeal was addressed in Appeal No. 1165, September Term, 2015. On May 17, 2016, this Court filed an unreported opinion affirming the circuit court's denial of the Bells' motion to quash writs of execution for real property. 2016 WL 2944107.
STANDARD OF REVIEW — SUMMARY JUDGMENT
We review a circuit court's grant of summary judgment de novo. Standard Fire Ins. Co. v. Berrett, 395 Md. 439, 450 (2006). Maryland Rule 2B501(a) provides: "Any party may make a motion for summary judgment on all or part of an action on the ground that there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law." Once the moving party files a motion that complies with Rule 2-501(a), the nonmoving party must file a response that identifies with particularity any fact in dispute, supported by evidence that controverts the factual assertions made in the motion. Rule 2-501(b). Mere conclusory denials are not legally sufficient to defeat a properly supported motion for summary judgment. To survive a motion for summary judgment, "the party opposing summary judgment `must do more than simply show there is some metaphysical doubt as to the material facts,'" and instead must present "evidence upon which the jury could reasonably find [in his favor]." Beatty v. Trailmaster Prods., Inc., 330 Md. 726, 738B39 (1993) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). "On a motion for summary judgment, the evidence, including all inferences therefrom, is viewed in the light most favorable to the nonmoving party." Jones v. Mid-Atl. Funding Co., 362 Md. 661, 676 (2001) (citations omitted). But, if there is no genuine dispute of any material fact, Maryland Rule 2-501(f) provides:
The Bells contend that material facts remain in dispute, which made the circuit court's entry of summary judgment erroneous. With respect to the legitimacy of the debt represented by the Note, they focus on three primary areas of dispute. First, the Bells contend that the Note that is in the possession of Dyck is not the original wet ink instrument that they signed. Second, the Bells contend that the Note was paid in full as a consequence of the foreclosure sale of the real property known as 1404 Ramblewood Drive. Third, the Bells assert that Dyck was not licensed by the State of Maryland as a debt collection agency. We will address each of the alleged disputes in turn.
A. The Authenticity of the Bells' Signatures on the Note
In their brief, the Bells maintain that one or both of the Bells' signatures on the Note was forged. They argue: "Dyck's use of facial fraud and forgery would permit the Bells all defenses that would challenge a default debt purchaser's holder status as a matter of law." In support of this contention, Mr. Bell testified at his deposition that his signature on the Note was forged. He testified that the signature on the document Dyck possessed "is not my signature," and he asserted that Dyck is "not in possession of the original [Note]. . . . [T]hat's not our note." Mr. Bell also contends that Countrywide/Bank of America, as a "sub-servicer," did not have the legal right to assign the note. At the second hearing on cross-motions for summary judgment, trial counsel for Mr. Bell asserted: "[T]he Note that [Dyck-O'Neal] is attempting to present to this Court as the basis for this alleged debt . . . is not a valid one. It is a forged document." The Bells filed (in support of their opposition to Dyck's motion for summary judgment) two copies of the allonge containing the endorsement, urging the court to note a difference in the appearance of the copies of the allonge. Mrs. Bell acknowledged at her deposition that the differences in the appearance of the two versions could possibly be explained by one version being the original and the other a copy, but the Bells contend that their assertion that their signatures on the Note were forged should have precluded summary judgment.
Although the Bells made conclusory allegations that the Note was a fraudulent document, the circuit court concluded that the dispute was not material to Dyck's claim.
At Miranda Bell's deposition, counsel for Dyck elicited the following testimony:
Mr. Bell testified similarly at his deposition, confirming that he and his wife had borrowed $53,378 and signed a promissory note in that amount, but denying that the document shown to him by Dyck's counsel was the original document he signed:
As the deposition testimony reflects, the Bells do not dispute that they borrowed $53,378 to help finance the purchase of the Ramblewood property, that they obtained financing from NVR Mortgage Financing, Inc., and signed a promissory note in that amount in 2005, which fell into default in August 2008 when they ceased making the required monthly payments. They do not contend that the substantive content of the Note proffered by Dyck is different from the content of the promissory note they signed in any respect except the appearance and color of their signatures and the addition of purported endorsements. Although the circuit court initially denied a motion filed by Dyck because of the dispute regarding the signatures, the court eventually concluded that the dispute did not bar summary judgment.
Between the dates when Dyck filed its motions for summary judgment, Dyck filed a motion in limine, asking the court to apply § 3-305(c) of Maryland Code (1975, 2013 Repl. Vol.), Commercial Law Article ("Comm."), to preclude the Bells from asserting that some party other than Dyck was the holder of the Note. Section 3-305(c) provides:
In support of its motion in limine, Dyck argued that the Bells (who were the obligors under the pertinent instrument) could not assert that some other party had a superior right to claim possession of the Note unless the Bells joined that party in the litigation. Dyck noted that it had been over five years since the Bells had defaulted on the Note, and no other party had made a demand or claimed to be the holder of the original Note. And, at the hearing on Dyck's first motion for summary judgment on January 25, 2013, Dyck's counsel had produced in court, for examination by the judge, the document that Dyck contends is the original wet ink Note.
By order entered January 14, 2014, the circuit court granted Dyck's motion in limine, ruling: "Insofar as [Ms. Bell] seeks to challenge Dyck-O'Neal's Noteholder status, Defendant Bell is attempting to assert defenses or claims of other parties, which she cannot do without joining those parties to this action. Therefore, Defendants [Bell] shall be excluded from presenting any defenses, evidence, and testimony that challenge [Dyck's] noteholder status."
After the court granted the motion in limine, Dyck renewed its motion for summary judgment. Dyck argued that the dispute relative to the alleged blue pen signatures was not material because the court had resolved the controversy regarding Dyck's noteholder status. In further support of its motion for summary judgment, Dyck pointed out that Comm. § 3-308(a) requires a party denying the validity of a signature to specifically plead the denial. Section 3-308 provides:
See also Maryland Rule 2-323(f), which provides:
Although the Bells made general references in their Answer to fraud and false representations, they did not include a negative averment specifically denying that the signatures on the Note proffered by Dyck were invalid. Nor did they include such a negative averment in their Amended Answer filed by counsel on February 19, 2013. No other paper filed by the Bells in this case falls within the categories of "pleadings" allowed under Maryland Rule 2-302.
In granting Dyck's renewed motion for summary judgment, the circuit court did not specify which of Dyck's arguments the court was accepting for the proposition that the dispute regarding signatures was not material to the outcome of the case. Because either Comm. § 3-308 or Comm. § 3-305(c) would have supported a conclusion that the signature dispute was not material, we will not disturb the court's ruling on this point.
B. The Bells' Assertion that Evidence Exists to Support a Claim that the Note had Been Paid
The Bells contend that there is a second genuine dispute of fact as to whether the Note has been paid in full. In support of this contention, the Bells offered a letter dated December 4, 2012, sent by Bank of America, N.A., to the Bells, which Edwin Bell attached as Exhibit A to his motion for summary judgment. The letter displays the following language at the bottom of the stationery: "This communication is from Bank of America, N.A., the servicer of your home loan" and states, in pertinent part:
As Exhibit B to his motion for summary judgment, Mr. Bell attached another document from Bank of America, N.A., dated March 26, 2013, which stated:
The loan history statement reflects that it relates to a loan in the original principal amount of $53,344.82, that the first monthly payment was received by Bank of America on December 29, 2005, and the last "regular payment" was received by Bank of America on August 18, 2008. The final line entry on the statement states: "08/04/2009 PRINCIPAL ADJUST. 51,670.51," reducing the principal balance to ".00."
On the basis of these documents received from Bank of America, N.A., the Bells contend that the Note was paid in full, and nothing more was owed on the Note. They cite, inter alia, Comm. § 3-602, which provides:
But these documents do not create a genuine dispute of whether the Bells paid off the Note before it was transferred to Dyck.
At a point during the litigation when the Bells were proceeding pro se, Mr. Bell conducted a video-recorded de bene esse deposition of Vivian Simon, the Vice President of Asset Recovery and Property Preservation for Bank of America, N.A., who signed the allonge endorsing the Note to the order of Dyck. Ms. Simon described her function as "the handling of unsecured debt and selling it to third party vendors." During her de bene esse deposition, Ms. Simon provided the following testimony:
The Bells presented no other evidence of prior payment. They produced no copies of checks, wire transfers, receipts, releases, or confirmations of payments made by them or on their behalf to Bank of America, N.A. Mr. Bell conceded during his deposition that there were no sale proceeds from the foreclosure sale that could be applied to the second deed of trust and note. Uncontroverted testimony from Ms. Simon established that the document showing a zero balance owed to Bank of America, N.A., simply reflected "an internal accounting principal adjustment" as a consequence of the Note being sold to Dyck. Ms. Simon's testimony left no doubt that the Note was not paid in full before it was assigned to Dyck:
We conclude that there was no genuine dispute regarding whether the Bells paid the Note in full before it was assigned to Dyck by Bank of America, N.A.
C. The Bells' Contention that Dyck's Judgment was Void for Failure to Comply with Maryland Law Regulating Collection Agencies
The Bells contend that Dyck was not licensed in Maryland as a debt collection agency at the time it filed this suit, and therefore, the judgment entered in Dyck's favor is void, citing our holding in Finch v. LVNV Funding, LLC, 212 Md.App. 748, 764 (2013) (a "judgment entered in favor of an unlicensed debt collector constitutes a void judgment as a matter of law").
In this case, the Bells focus on the bonding requirements and the regulations governing the location at which a collection agency is licensed to engage in debt collection practices. The Bells maintain that, although Dyck had been issued a Maryland license on February 2, 2011, with an expiration date of January 27, 2013, to provide debt collection services from its offices located at 3214 W. Park Row, Arlington, Texas — which was the address shown on the face of Dyck's complaint in this case — the company had made a change in the address shown on its bond shortly before filing this suit on July 25, 2011, and no longer had a bond that expressly covered operations at 3124 West Park Row. The Bells argued that the mismatch between office addresses as shown on the license and the required bond had the legal effect of voiding Dyck's license, thereby causing Dyck to be unlicensed at the time it filed this debt collection action against them.
For that reason, the Bells contend that Dyck "did not possess a valid license supported by a requisite bond at the time it filed the debt collection complaint against the [the Bells]." They note that Maryland Code, (1992, 2014 Repl. Vol.), Business Regulation Article ("Bus. Reg."), § 7-304(a) requires an applicant for a debt collection agency license to execute a surety bond, and Bus. Reg. § 7-305(a) states: "A license authorizes the licensee to do business as a collection agency at only 1 (one) place of business." The Bells contend that, because Dyck failed to comply with these requirements, the court could not enter any judgment against them, and therefore, under Finch, the judgment entered against the Bells in this case was void as a matter of law.
In their brief, the Bells argue: "Dyck was not properly licensed at West Park Row because Dyck previously transferred its bond, required for a valid license, to a different address." The Bells contend:
But the Maryland Department of Labor, Licensing and Regulation did not support the Bells' assertion that Dyck's license became void as a result of the relocation of one of its branch offices. In response to the Bells' allegations that Dyck's license became void during July 2011, Dyck pointed to a letter from Gordon M. Cooley, the Deputy Commissioner of the Department of Labor, Licensing and Regulation, who rejected the Bells' voidness argument for reasons explained in the letter dated May 8, 2014:
Our review of our records reveals:
In light of the determination by the Deputy Commissioner of the Department of Labor, Licensing and Regulation that Dyck "held the requisite license for the address in question and also provided the requisite surety bond," we conclude that (a) there was no genuine dispute as to any material fact relative to Dyck's licensure, and (b) the circuit court did not err in granting summary judgment in favor of Dyck in this case.
II. Appellant's Motions for a Stay of the Enforcement of the Judgment
In Appeal No. 388, the Bells contend that the circuit court abused its discretion in denying their motion for a stay of execution of the judgment. We are satisfied that the circuit court did not abuse its discretion in denying the motion.
STANDARD OF REVIEW — SUPERSEDEAS BOND
A court abuses its discretion "`where no reasonable person would take the view adopted by the [trial] [c]ourt . . . or when the court acts without reference to any guiding principles.'" Aventis Pasteur, Inc. v. Skevofilax, 396 Md. 405, 418 (2007) (quoting Wilson v. John Crane, Inc., 385 Md. 185, 198 (2005) (alterations and ellipsis in Wilson).
A stay pending appeal is governed by Maryland Rules 8-422 through 8-424. Maryland Rule 8-422(a) provides, in pertinent part:
Maryland Rule 8-423 ("Supersedeas Bond") provides:
Under Maryland Rule 1-402(e), an appellant may offer other assets as security pending the outcome of the appeal:
In Baltrotsky v. Kugler, 395 Md. 468, 476B77 (2006), the Court of Appeals explained:
Pursuant to Md. Rule 1-402(e), the Bells urged the court to approve as "alternative security" a lien against certain real property owned by the Bells on Church Lane in Frederick County. In their brief, the Bells argue that, "[b]y operation of law, [Dyck] had alternate security with Church Lane Properties effective December 2014. Without explanation, the trial court denied the [Bells'] proposed alternate bond." The Bells maintain that it was an abuse of discretion for the circuit court judge not to accept the judgment lien against Church Lane Properties as alternate security.
Dyck responds in its brief that, although its judgment, when indexed, provided a lien against the judgment debtors' real property pursuant to Maryland Code, (1973, 2013 Repl. Vol.), Courts & Judicial Proceedings Article, § 11-402(b), the Bells were nevertheless "required to post a bond in the full amount of the judgment because the proposed security in the form of real property did not provide Appellee with any more security than what Appellee already holds."
In O'Donnell v. McGann, 310 Md. 342 (1987), the Court of Appeals explained that decisions regarding the appropriate security for an appeal bond are committed to the discretion of the court:
In McGann, 310 Md. at 344B45, the Court of Appeals considered "the nature and extent of the discretionary authority of trial and appellate courts of this State to stay the execution of a money judgment, and more particularly the authority of those courts to approve a supersedeas bond in an amount less than the amount of the judgment." The Court held: A[T]he inherent power of trial and appellate courts to fix the terms and conditions for the stay of execution of judgments has not been circumscribed by rule or statute so as to limit the discretion of the court to modify the penalty of a supersedeas bond required for the stay of execution of a money judgment." Id. at 345.
We perceive no abuse of discretion in the judge's refusal to approve alternate security for the supersedeas bond.
III. Attorney's Fees
At the time the circuit court denied the Bells' second motion to stay enforcement of the money judgment in the circuit court, by order entered April 2, 2015, the court not only denied the second motion to stay, but also ordered that the Bells "shall tender $175.00 as reasonable attorney's fees to [Dyck] . . . within 10 calendar days." Although the court did not elaborate on the basis for the award of attorney's fees, we infer that the court was awarding a sanction pursuant to Maryland Rule 1-341 for the Bells having filed a repetitive motion that the court deemed non-meritorious.
Maryland Rule 1-341(a) provides:
In DeLeon Enterprises, Inc. v. Zaino, 92 Md.App. 399, 414B15 (1992), we reviewed the Court of Appeals's case law describing the two standards of appellate review applicable to a judgment entered under Rule 1-341:
Accord Major v. First Virginia Bank-Central Maryland, 97 Md.App. 520, 530 (1993) ("The trial judge must make explicit findings of fact that a proceeding was maintained or defended in bad faith and/or without substantial justification.").
When the circuit court entered the order requiring the payment of $175.00 in attorney's fees, the court failed to set forth a finding that the "conduct of [the Bells] in maintaining or defending any proceeding was in bad faith or without substantial justification." In the absence of such a finding, we must vacate the award.
Bus. Reg. § 7-305, entitled "Scope of license; multiple licenses authorized," provides:
Despite that concession on January 9, 2014, Mrs. Bell, arguing pro se at the hearing on Dyck's renewed motion for summary judgment on December 12, 2014, asserted again that Dyck was "not licensed at 3214 West Park Road."