Lee v. Lee (Ct. of Appeals)

Filed: January 23, 2020 

Opinion by: Judge Shirley M. Watts 

Holding: 

Docket entries not otherwise subject to shielding that are unclear, ambiguous, or unavailable to the public via the Judiciary’s online case search fail to satisfy the requirements of Maryland Rule 2-601(b)(3) and do not trigger the 8-202(a) thirty-day appeal period.

Recordation and indexing of a federal judgment creates a lien, not a new judgment.

Facts: 

In 2002, Petitioner (“Lender”) obtained a default judgment in the United States District Court for the District of Maryland against Respondent (“Borrower”), in the principal amount of approximately $140,000 plus attorney’s fees, court costs, and interest.

In June 2004, the Circuit Court for Howard County approved Lender’s Request to File Notice of Lien based on the federal judgment.  In July 2015, Lender sought and obtained a Notice of Renewed Judgment from the circuit court.

In March 2016, Borrower moved to vacate the renewed judgment and requested a hearing.  On June 2, 2016, the circuit court conducted the hearing, denied the motion, and issued a one-page order.  On June 3, 2016, the clerk stamped and mailed copies of the order and made a docket entry to the court’s case management system.  Due to a series of clerical errors, results of the Judiciary’s online case search (“Case Search”) made in the weeks following June 2 for the instant case produced unclear and confusing results, creating ambiguity as to what had been decided and when, with date fields containing entries as early as March 24 and as late as June 6.

On July 6, 2016, Borrower appealed.  The circuit court granted Lender’s motion to strike the appeal as untimely.  Borrower timely appealed.  After a remand to the circuit court to produce an accurate timeline of events, the Court of Special Appeals denied the motion to dismiss and held that the first appeal, while initially premature, had ripened.   The Court went on to reverse the denial of the motion to vacate and remand to the lower court to vacate the renewed judgment, explaining that there was nothing to renew because the lien created in 2004 became ineffective when the predicate federal judgment expired in 2014.

Lender subsequently sought and received a writ of certiorari.

Analysis: 

The main issue before the Court of Appeals was whether entry of a judgment must satisfy the requirements of both Maryland Rule 2-601(b)(2) and 2-601(b)(3) to start the thirty-day appeal period prescribed in 8-202(a).  Stated more plainly, was the date of entry of a judgment established by the act of a clerk keying it into the docketing system, or did it need to also be publicly available?

The Court began with de novo review of the trial court’s interpretation of the underlying Maryland Rules.  Because the date of an entry of a judgment is governed by 2-601(b), the Court examined that rule’s recent history and noted that the Standing Committee on Rules of Practice and Procedure in 2014 had proposed amendments to address the obsolescence of the then-current rule (requiring physical recordation on the file jacket) and lack of uniformity across the State in how clerks entered judgments.  By Rules Order of the Court of Appeals, amendments to 2-601 were adopted and became effective on January 1, 2016, notably providing that:

2-601(a)(4) A judgment is effective only when [set forth on a separate document] and when entered as provided in section (b) of this Rule.

* * * 

2-601(b)(2) Entry.  The clerk shall enter a judgment by making an entry of it on the docket of the electronic case management system used by that court along with such description of the judgment as the clerk deems appropriate. 

2-601(b)(3) Availability to the Public. Unless shielding is required by law or court order, the docket entry and the date of the entry shall be available to the public through the case search feature on the Judiciary website and in accordance with Rules 16-1002 and 16-1003.

* * * 

2-601(d) Date of Judgment.  On and after July 1, 2015, regardless of the date a judgment was signed, the date of the judgment is the date that the clerk enters the judgment on the electronic case management system docket in accordance with section (b) of this Rule. The date of a judgment entered prior to July 1, 2015 is computed in accordance with the Rules in effect when the judgment was entered.

Turning next to relevant caselaw, the court cited its prior discussion (in Hiob v. Progressive Am. Ins. Co., 440 Md. 466 (2014)) of 2-601’s separate document requirement.  The Hiob court had noted the importance of the date and form of entry of a judgment in creating precision (as to the time for filing an appeal), creating certainty (so as not to create a trap for inexperienced parties), and preserving appeal rights.  The Court here went on to highlight the need to provide the public, and not just the litigants, with an unambiguous and clear indication of the date and disposition of every civil claim brought in the State’s courts.  

Accordingly, the Court held that in order to constitute an effective judgment under 2-601 and begin the 8-202(a) thirty-day appeal period, the judgment must satisfy the plain language requirements of both 2-601(b)(2) and (b)(3).  Unless shielding is required, the docket entry and date of entry shall be available to the public through Case Search.  

Applying this framework to the instant case, the court found the June 2, 2016 Order to meet the separate document requirement of 2-601(a)(1).  However, the contemporaneous Case Search returns were unclear, ambiguous, confusing, and insufficient to establish whether a judgment had been entered as required by 2-601(b)(2) and, if so, the corresponding date of entry as required by 2-601(b)(3).  Case Search failed to provide adequate notice to the public of the date of entry of judgment and the thirty-day appeal period never triggered.

Where did this leave Borrower’s “premature” notice of appeal?  The Court pointed to 8-602(f)’s instruction that a notice of appeal filed after the signing by the trial court of an order but before entry of the order on the docket shall be treated as filed on the same day as but after the entry on the docket.  Thus, although Borrower’s notice of appeal was premature when filed, it would be treated as filed immediately after entry of the judgment on the docket and appeal would proceed.

Accordingly, the Court addressed Borrower’s appeal on its merits, affirming the Court of Special Appeals.  Explaining that a money judgment establishes a debt, while a lien creates the mechanism to enforce it, the Court found Lender’s 2004 action to have created a lien against Borrower’s property in Howard County – not a new judgment.  Lender’s failure to renew the federal judgment prior to its twelve-year expiration date in 2014 extinguished the lien predicated on it.  Because nothing remained to renew, the circuit court had erred in entering a renewed judgment and in denying Borrower's motion to vacate.

The full opinion is available in PDF.

Marcia Rankin, et al. v. Brinton Woods of Frankford, LLC, et al. (Ct. of Special Appeals)

Filed: June 27, 2019

Opinion by: J. Sharer

Holding: A contract was held to be procedurally and substantively unconscionable for failing to highlight arbitration, mediation and waiver of jury trial provisions through formatting; using misleading, contradictory, and undefined terms; and including an arbitration deposit requirement and loser-pay-all provision that could preclude recourse for parties lacking financial resources. 

Facts: Plaintiff filed a negligence suit for survival and wrongful death against the Defendant, a care center where the deceased allegedly developed serious health concerns. Defendant filed a motion to compel arbitration pursuant to the admission contract. The circuit court granted the motion as to the survival claims and stayed the wrongful death proceedings. On appeal, Plaintiff argued that the admission contract was unconscionable. 

Analysis: In order to decline to enforce an arbitration agreement, a court must find both procedural and substantive unconscionability. Doyle v. Fin. Am., LLC, 173 Md. App. 370, 383 (2007). The Court held that the contract was procedurally unconscionable because it was a standard-form contract, drafted entirely by Defendant. The first paragraph misleadingly stated that the contract contains financial obligations and residents’ rights. It failed to mention that the contract also contained a waiver of a constitutional right to a jury trial. Another section of the contract stated that it was impossible to cover all important matters in that document and that additional important documents were attached as exhibits. However, no attachments were included in the record, and there were no attachments regarding arbitration, mediation, and waiver. Additionally, the mediation and arbitration provisions were simply numbered paragraphs in the same format as the other paragraphs. They were not emphasized by bold, underlined or italicized font. The failure to highlight the arbitration, mediation and waiver provisions supported a finding of unconscionability. 

The Court held that the contract was substantively unconscionable because it did not provide criteria for the selection of mediators or scheduling and timing details for mediation. It did not address allocation of fees or costs of mediation. The arbitration provisions lacked clarity and were conflicting. The arbitration process would be consistent with the “American Arbitration Associate (sic)”. The terms “Arbitration Committee” and “subcommittee of three” were not defined; the latter was used only once. The word “binding” is used for the first and only time in section D of the clause. The last two paragraphs of section D present conflicting terms: the first paragraph states that the losing party can submit the matter to a state court. The next paragraph states that the “judgement” shall not be appealable; this is the first and only time the term “judgment” is used. Defendant is a sophisticated party, and these errors and ambiguities support a finding of unconscionability. Furthermore, there is no guidance on any estimated range of fees and costs, in addition to a loser-pays-all provision. A party who cannot pay the $1,000 arbitration deposit may have to forgo arbitration. These clauses could preclude recourse for a party lacking financial resources.

The circuit court had held that the admission contract was not unconscionable, but provided no factual support for its finding. See Henry v. Gateway, Inc., 187 Md. App. 647, 658 (unconscionability issues are often fact-intensive and the burden is on the party opposing arbitration). On appeal, Plaintiff also argued that the circuit erred in granting the motion based on its finding of apparent agency theory; the Court agreed. 

Full opinion available in PDF. 

D2L Ltd. v. Biggs (Maryland. U.S.D.C.)

 Filed: August 22, 2019

Opinion by: Blake, J.

Holding: Plaintiff’s lawsuit for breach of a noncompetition agreement in Maryland against out of state defendants was dismissed for lack of personal jurisdiction as the Defendant had little contact with Maryland, did not conduct but a small percentage of business with Maryland customers, and no evidence was offered that the Defendant had induced Plaintiff’s former employee to breach his obligations under the noncompetition agreement.

Facts: Plaintiff is a “global cloud software company” incorporated in Maryland and headquarted in Canada. Kevin Biggs, a California resident and former employee, was sued by Plaintiff on the basis of Plaintiff’s allegations that Biggs had violated his non-solicitation agreement with Plaintiff. This agreement provided a consent to suit in Maryland provision. After leaving his employment with Plaintiff, Biggs began working for Defendant OneLogin, a Delaware corporation with its principal place of business in California, which also provides cloud-based services. Plaintiff advised OneLogin of the non-solicitation agreement, and subsequently alleged that OneLogin induced and materially benefited from Biggs' breach of the agreement.

 

Analysis: A state court may exercise personal jurisdiction under the 14^th amendment on an out-of-state defendant if the defendant had “minimum contacts” with the forum sufficient to put the defendant on notice that he might be sued in the forum in the future. Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). A court may exercise personal jurisdiction over a defendant based on general or specific jurisidiction.

 

The plaintiff has the burden to show that the court could exercise general jurisdiction over the defendant by demonstrating that the defendant’s contacts with the state are “continuous and systematic” making the defendant essentially at home in the forum state. Daimler AG v. Bauman, 571 U.S. 117, 127 (2014).

 

Three factors are considered to determine specific personal jurisdiction over a defendant (where the present lawsuit arises out of the defendant’s prior contacts with Maryland): “(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities within the State; (2) whether the plaintiff’s claims [arose] out of those activities; and (3) whether the exercise of personal jurisdiction is constitutionally reasonable.” Universal Leather LLC v. Koro AR SA, 773 F.3d 553, 559 (4^th Cir. 2014). 

 

The Court found that it lacked general jurisdiction over the Defendant. The Defendant was neither organized under the laws of Maryland, nor was its principal place of business in Maryland. 

 

As for specific jurisdiction, the Court found that the Defendant only conducted a nominal amount of business in Maryland – one percent of its revenue and one to two percent of its total solicitation was derived from Maryland. Moreover, the Court found that none of these contacts were specifically connected to the allegations of breach of contract or tortious interference made by the Plaintiff.

 

The alternative theory offered by the Plaintiff was that Defendant had “encouraged,” “actively and wrongfully induced,” and “accepted the benefits of Biggs’ breach” of the agreement at issue in the case. However, the Court found that these general allegations lacked sufficient specificity as to when the solicitation happened, which employees were solicited, and where those employees were located.

 

Moreover, the Court denied the Plaintiff’s motion for jurisdictional discovery, as the Court concluded that the information sought by the Plaintiff would not provide additional facts to establish personal jurisdiction over the Defendant.

 

As a result, the Court concluded it lacked jurisdiction over the Defendant and dismissed the Plaintiff’s action against the Defendant.

 

Full opinion available in PDF.

Pinner v. Pinner (Ct. of Appeals)

Filed: March 3, 2020

Opinion by: Booth, J.

Holding: Defendant’s filing of a single lawsuit in Maryland, without further connection to the forum, did not place Defendant on notice she might be sued in a separate, though related, action by Plaintiff, and therefore such litigation violated the 14^th amendment due process clause.

Facts: Plaintiff is the son of the defendant. Both parties are residents of North Carolina. Defendant had filed a prior action in Maryland on behalf of her late husband against various Asbestos Entities for her late husband’s death due to exposure to asbestos while working in Maryland.  Plaintiff was not included in the proceedings until it his ability to intervene was barred by the statute of limitations, and Defendant received a settlement as a result of that litigation that was not deposited in her late husband’s Estate, nor was any portion of it paid to Plaintiff. 

 

Subsequently, Plaintiff filed a separate action in Maryland for his alleged share of the asbestos settlement, alleging that the Defendant was negligent and breached a fiduciary duty as personal representative of her late husband’s Estate. Defendant failed to file a responsive pleading, and Plaintiff sought and obtained a default judgment for $99,856. Defendant appealed on the grounds that the trial court lacked personal jurisdiction over her to enter a judgment.

 

Analysis: A state court may exercise personal jurisdiction under the 14^th amendment on an out-of-state defendant if the defendant had “minimum contacts” with the forum sufficient to put the defendant on notice that the might be sued in the forum in the future. Beyond Systems, Inc. v. Realtime Gaming Holding Co., 388 Md. at 1, 22 (2005). Three factors are considered to determine specific personal jurisdiction over a defendant (where the present lawsuit arises out of the defendant’s prior contacts with Maryland): “(1) the extent to which the defendant has purposefully availed [herself] of the privilege of conducting activities within the State; (2) whether the plaintiff’s claims arise out of those activities directed at the State; and (3) 

whether the exercise of personal jurisdiction would be constitutionally reasonable.” Id. At 26.

 

The Court held that the Defendant’s prior asbestos litigation was the sole contact of the Defendant with Maryland. No evidence was offered that the Defendant had actively participated in hearings or depositions in Maryland, or that she had even traveled at all to Maryland during the six year period the case was litigated. Moreover, the Court found that the present dispute involved issues arising under North Carolina law, between North Carolina residents, where the injury to Plaintiff arose in North Carolina. As to the second factor, the Court found that a breach of a fiduciary duty under North Carolina law is tenuously connected to the original asbestos litigation. 

 

As to the third factor, the Court noted that numerous specific considerations come into play with constitutional reasonableness such as: “the burden on the defendant; the interests of the forum State; the plaintiff’s interest in obtaining relief; the interstate judicial system’s interest in obtaining the most efficient resolution of controversy; and the shared interest of the several states in furthering fundamental substantive social policies.” Examining these considerations, the Court found that overall there was no efficiency in litigating North Carolina-based claims between North Carolina residents in a Maryland court, and that the Maryland court system had no interest in adjudicating such claims.

 

As a result, the Court concluded that the Maryland trial court lacked jurisdiction over the Defendant.

 

Full opinion available in PDF.