Kunda v. Morse (Ct. of Spec. Appeals)

Filed: August 31, 2016

Opinion By: Reed

Holding: The procedural rule requiring a plaintiff to plead their damages with particularity, having been amended during the course of the litigation, does not require the plaintiff awarded more damages than pled to accept the lesser amount to avoid reversal on appeal.

Facts: The parties had entered into a purchase agreement for a business operated by the Defendant, Kunda, requiring the Plaintiffs to pay a total of $846,950, with a portion bank-financed and the remainder owner-financed.  After entering into the agreement, the parties amended the agreement to alter the payment schedule.  The Plaintiffs paid $200,000 to Kunda, but then failed to timely make certain payments due to Kunda, but not before the period to cure the failure had run.  Kunda, however, re-entered the property and evicted the Plaintiffs, and essentially took back over operations of the store.  The Plaintiffs responded with a lawsuit, alleging breach of contract, and seeking damages in the amount of $102,600.

At trial, the Plaintiffs won a verdict of $200,000, but did not amend their complaint to conform to the verdict.  The defendant did not file a motion to reduce the judgment to the amount of the complaint, but instead appealed the enrolled judgment.

Analysis: The Court first reviewed the contract claims of the parties.  The Court determined that the trial court did not err in finding that Kunda, rather than the Plaintiffs, was in breach of the agreement among the parties, based on the factual findings of the trial court that the Plaintiffs still had time to cure the failure to make timely payments, and therefore Kunda breached by evicting them and taking over the operation of the business.

The Court then had to address the other issue raised by Kunda, namely that the judgment entered in the Plaintiffs' favor exceeded the amount demanded in their Complaint.  The Complaint's damage amount was calculated based on the amount of inventory alleged to have been wrongfully taken by Kunda at the eviction, however, the judgment entered in the Plaintiffs' favor was based on the Plaintiffs' demand that Kunda refund the $200,000 previously paid by the Plaintiffs prior to the breach of the contract.

At the time that the Plaintiffs filed their action, the predecessor rule for pleading damages was in force.  Prior Rule 2-305 provided that a plaintiff was required to demand specific damages, in order to put a defendant on notice of the amount of the claim.  In the event that the amount of damages proven at trial did not correspond to the complaint, a plaintiff was required to amend their complaint promptly after judgment was entered on the docket.  A defendant was also permitted to move to reduce a judgment to the amount in the complaint if a plaintiff failed to properly amend a complaint to conform with a higher award.

However, the Maryland Rules were amended in 2012.  Among the changes was a change to Rule 2-305, which provided that a plaintiff whose damages exceeded $75,000 would simply so indicate, and if less, plead the specific amount for purposes of determining appropriate state trial court jurisdiction.  The issue for the Court was whether the new or prior Rule applied in the present case, as judgment in the case was entered in 2014.  The Court concluded that parties have no vested interest in procedural rules, and that justice was served in applying the current pleading requirement under Rule 2-305.

Therefore, because neither party had made post-judgment motions to adjust the complaint or judgment, the Court affirmed the judgment amount entered by the trial court, reasoning that the amount of damages was in fact supported by evidence adduced at trial, irrespective of the amount of damages specified in the Complaint.

The full opinion is available in PDF.