Norino Properties LLC v. Balsamo (Md. Ct of Special Appeals)

Filed: December 15, 2021

Opinion By: J. Graeff

Holding: The Court of Special Appeals affirmed the decision of the in banc Circuit Court, finding that the trial court’s dismissal with prejudice of plaintiff was an abuse of discretion, and granted plaintiff leave to amend his complaint against the defendants. The Court also held that in banc review of a dismissal with prejudice was within the notion of a “trial” under Article IV § 22 of the Maryland Constitution.

 

Facts: Plaintiff Joseph Balsamo originally filed a lawsuit in 2012 against his co-owner, Defendant John Zorzit, and their company, Balsamo and Norino Properties, LLC (the “LLC”), seeking judicial dissolution of the LLC. In 2015, the trial court entered an order denying the request for judicial dissolution, but ordering an independent account of the LLC capital accounts. In 2019, Plaintiff filed a new lawsuit against Defendant Zorzit and the defendant’s entity, Norino Properties, seeking judicial dissolution of the LLC and several other causes of action in contract, tort, and constructive fraud.

 

The defendants filed a motion to dismiss for failure to state a claim and on the grounds of res judicata, as the defendants argued that the claims in the 2019 complaint had already been decided on the merits in the prior litigation. A hearing was held on January 9, 2020 before the circuit court on the motion, which included a colloquy between Mr. Balsamo’s attorney and the court concerning additional evidence obtained during discovery that would support amendment of the complaint to plead actual fraud on the part of the defendants. In a written memorandum, the trial court dismissed plaintiff’s amended complaint with prejudice, and the plaintiff filed a motion to alter or amend the dismissal, supported by an affidavit of additional testimony that would support amendment of the complaint and would be offered at a hearing for a preliminary injunction. This motion to alter or amend was denied and the Plaintiff filed a Notice of In Banc Review with the circuit court. The court assigned three circuit court judges to the in banc panel, and that panel reversed the trial court’s dismissal of plaintiff’s amendment complaint, with thirty days leave to file a second amended complaint. An appeal was taken by the defendants to the Court of Special Appeals, alleging that in banc review was improperly granted under Article IV § 22 of the Maryland Constitution.

 

Analysis: In banc review is authorized by Article IV, § 22 of the Maryland Constitution, which provides: “where any trial is conducted by less than three Circuit Judges, upon the decision or determination of any point, or question, by the Court, it shall be competent to the party, against whom the ruling or decision is made, upon motion, to have the point, or question reserved for the consideration of three Judges of the Circuit, who shall constitute a court in banc for such purpose…” At issue before the Court of Special Appeals was whether “trial” in § 22 encompassed review of a final judgment such as a motion to dismiss with prejudice.

 

The Court reviewed prior case law involving in banc review and the definition of trial, and on balance found that a trial in the context of such review is available after “an action by which issues or questions of fact are decided” and that results in a final judgment, including a motion to dismiss a complaint with prejudice.

 

Full opinion here.