MARYLAND COURT OF APPEALS
Public Information Act
BOTTOM LINE: Prison warden improperly denied inmate’s request for documents under the Public Information Act by directing the inmate to resubmit the requests to individual departments within the prison’s agency.
CASE: Ireland v. Shearin, No. 26, Sept. Term, 2010 (filed Dec. 20, 2010) (Judges Bell, Harrell, Battaglia, Greene, Murphy, ADKINS & Barbera). RecordFax No. 10-1220-21, 13 pages.
FACTS: Robert Ireland, an inmate at the North Branch Correctional Institution (NBCI), sent a letter to Warden John Rowley requesting the disclosure of certain public records maintained at NBCI. Ireland requested four categories of documents, each involving different departments within NBCI.
Eleven days after Ireland sent his letter, the warden’s secretary issued a response letter, directing Ireland to make separate requests to each department.
Ireland filed a pro se complaint in the circuit court, alleging that Rowley improperly denied his request under the Public Information Act (PIA). Ireland requested damages, including punitive damages for each denial.
Bobby Shearin, Rowley’s successor at NBCI, moved to dismiss Ireland’s complaint, which the circuit court granted.
Before argument in the Court of Special Appeals, the Court of Appeals issued a sua sponte writ of certiorari and vacated the judgment of the circuit court and remanded.
LAW: Maryland’s PIA states that a “custodian shall permit a person…to inspect any public record at any reasonable time” except as otherwise provided by law. SG §10-613. An individual asserts this right to access by submitting a written application to the custodian of records, unless an exception applies. SG §10-614(a)(1). The recipient of the application must verify (1) that he or she is in fact a custodian of the record, SG §10-614(a)(3), and (2) that the document in question exists. SG §10-614(a)(4). If these two requirements are met, the custodian of records must then either grant or deny the application within thirty days of receiving the initial application. SG §10-614(b).
A grant of the application requires the custodian of records to produce the public record within 30 days of receipt of the application. SG §10-614(b)(2). A denial requires the custodian of records to immediately notify the applicant and, within ten business days, provide a written statement to the applicant giving the legal reasons for the agency’s failure to disclose and advising the applicant of his or her right for review of the denial. SG §10-614(b)(3).
The PIA reflects the need for wide-ranging access to public records, and therefore, the statute should be construed in favor of disclosure for the benefit of the requesting party. See, e.g., Hammen v. Balt. County Police Dep’t, 373 Md. 440, 457 (2003).
The PIA defines a “custodian” as someone who is the “official custodian” or “any other authorized individual who has physical custody and control of a public record.” SG §10-611(c). The “official custodian” is an “officer or employee of the State or of a political subdivision who, whether or not the officer or employee has physical custody and control of a public record, is responsible for keeping the public record.” SG §10-611(d).
Rowley served as warden of NBCI at the time of Ireland’s request. The term “warden” falls within the definition of “managing official” in the Correctional Services Article. See CS §1-101(k). Accordingly, as the individual responsible for managing NBCI, and therefore maintaining records at the institution, Rowley qualified as the official custodian of records under the PIA.
As the official custodian of records, Rowley incurred the same duties and responsibilities as a physical custodian of records under the PIA. The PIA requires an applicant to submit a written application to “the custodian [,]” §10-614(a)(1); it does not limit requests only to the physical custodian. Similarly, the definition of a custodian does not differentiate between “physical custodian” and “official custodian.” See SG §10-611(c).
The plain language of the PIA permits referral only if “the individual to whom the application is submitted is not the custodian of the public record[.]” SG §10-614(a)(3). Because Rowley is a custodian of the requested documents, he was not authorized to direct Ireland to other NBCI departments. Regardless of whether collection from another department within Rowley’s own agency would have been more expeditious or appropriate, the burden to collect and assemble the requested records falls squarely on the State rather than the applicant.
Like other statutes, the PIA involves a tradeoff in which state and local agencies incur additional expense for the benefit of a private right of access to government records. The “broad remedial purpose” of the Act places a larger burden on state agencies to organize and provide access to information at the request of any individual desirous of such records. See SG §10-612(b).
However, this burden does not obligate the custodian of records to gather the requested documents so that they will be available for inspection at a centralized location, especially if doing so would “interfere [ ] with official business.” Rather, the PIA directs each official custodian to “adopt reasonable rules or regulations that…govern timely production and inspection of a public record.” See Md.Code Regs. 12.11.02.06(B)-(C) (2010).
Rowley improperly denied Ireland’s PIA request for documents by directing Ireland to other departments within NBCI. Thus, the case was remanded to the circuit court to determine, by clear and convincing evidence, whether Rowley “knowingly and willfully failed to disclose a public record that [Ireland] was entitled to inspect” and, if so, to determine the amount of Ireland’s damages, if any. See SG §10-623(d).
COMMENTARY: Shearin argued that Ireland’s case was moot because the Division of Correction has since permitted Ireland to inspect all requested documents, except those exempt from disclosure by law.
“Ordinarily, courts will not decide moot or abstract questions, or render advisory opinions.” Creveling v. Gov’t Emples. Ins. Co., 376 Md. 72, 83 n. 3 (2003). A case is moot when “there is no longer an existing controversy between the parties at the time it is before the court so that the court cannot provide an effective remedy.” Hammen v. Balt. County Police Dep’t, 373 Md. 440, 449 (2003).
This case was not moot when Ireland maintained the right to challenge the adequacy of this later production (although not part of this appeal) and claimed damages under SG §§10-623(d)(1)3 and 10-627(b) on grounds that Rowley knowingly and willfully failed to disclose the public records which Ireland was entitled to inspect.
PRACTICE TIPS: Federal courts, interpreting the federal Freedom of Information Act (FOIA), a law with a purpose “virtually identical” to the PIA, see Police Patrol Sec. Sys. v. Prince George’s County, 378 Md. 702, 722 n. 8 (2003), have held that the applicant’s burdensome FOIA request is a consideration when determining “unusual circumstances” that allow the agency to extend normal response deadlines, see Sierra Club v. United States Dep’t of Interior, 384 F.Supp.2d 1, 31-32 (D.D.C.2004), and the FOIA requires federal agencies to make reasonable efforts to search for records, except when “such efforts would significantly interfere with the operation of the agency’s automated information system.” See 5 U.S.C. §552(a)(3)(C) (2010).
BOTTOM LINE: The trial judge erred by having alternate jurors attend the jury deliberations and by substituting two alternate jurors for two original jurors.
CASE: Grimstead v. Brockington, No. 130, Sept. Term, 2007 (filed Dec. 17, 2010) (Judges Battaglia, Greene, ELDRIDGE (retired, specially assigned) & Wilner (retired, specially assigned)) (Judges Raker (retired, specially assigned), Harrell & Rodowsky dissenting). RecordFax No. 10-1217-20, 34 pages.
FACTS: Joyce Grimstead sued Dr. McNeal Brockington for medical malpractice, alleging that Brockington negligently failed to diagnose and treat her cancer. Before the jury had been selected, the trial judge had sought an agreement from the parties that, if necessary, they would accept a verdict from five jurors. Brockington’s counsel declined to accept such a verdict, instead demanding a unanimous verdict from all six jurors.
As voir dire proceeded, the trial judge noted that Grimstead’s lawyer had peremptorily challenged the first five whites on the panel. Grimstead’s counsel then attempted to justify the exercise of each of his peremptory strikes, putting on the record his reason for each strike, but Brockington’s counsel made a Batson challenge. See Batson v. Kentucky, 476 U.S. 79 (1986).
In response to this argument, the judge found that one juror, number 263, had been unjustifiably stricken but that the other strikes had been used lawfully. The judge then seated the jury except for juror number 263, who was excluded. The next day, however, the judge, over Grimstead’s objections, seated juror number 263 as juror number four, and the other jurors were moved sequentially down the list.
During the course of the trial, alternate juror number three and juror number one were excused for cause by the court. An alternate juror was substituted for juror number one. At the close of the evidence, six jurors and two alternates remained.
The trial judge then instructed counsel that the alternate jurors were to sit in the jury room, apart from the jury, and listen to the discussion, but not to participate in the discussion. Over Grimstead’s objections, the judge sent the alternates into the jury room with the deliberating jury, explaining to them that the first six of them were the jury panel and the other two were alternates. The judge explained to the jurors that only the six will participate in the discussion and try to resolve the issues.
During deliberations the judge received a letter regarding juror number four. Juror number four was the conductor of a musical group preparing to tour Asia. The juror’s doctor had written to the judge, explaining that, in preparation for the trip to China, the juror was required to get immunization shots the following day. The doctor’s letter also indicated that the juror had a heart condition and that he should not expose himself to the type of stress from jury duty because of his damaged heart.
The following day, another note was sent indicating that the jurors could not reach a verdict. At the end of that day, defense counsel moved for a mistrial on the ground that the jury deadlocked. Counsel also revisited the issue of excusing juror number four, recalling again that juror number four was the subject of the earlier Batson challenge. The trial judge excused juror number four.
Defense counsel also reversed his position on allowing alternates to attend the jury deliberations, contending that the judge erred by allowing the alternates to attend any part of the jury deliberations. Over defense counsel’s renewed objection to substituting any members of the jury with alternates, two more jurors were also excused during deliberations for medical reasons.
The jury found for Ms. Grimstead and awarded her $500,000 for past medical expenses, $67,000 for loss of past earnings, $847,195 for loss of future earnings, $1 million for non-economic damages and $2 million for future non-economic damages. The judge reduced the jury’s non-economic damages award to $545,000, and a judgment for $1,959,195 was entered in favor of Ms. Grimstead.
Both Brockington and Grimstead appealed to the Court of Special Appeals. The Court of Special Appeals held that the circuit court erred when it allowed two alternate jurors to be present in the jury room during deliberations. Accordingly, it reversed and remanded the case for a new trial. Ms. Grimstead died before the Court of Special Appeals filed its opinion.
A petition for a writ of certiorari was filed on behalf of Ms. Grimstead. A conditional cross-petition for a writ of certiorari was filed by Brockington.
The Court of Appeals affirmed.
LAW: Grimstead argued that Brockington’s consent to the alternates’ presence in the jury room effectively waived any objections later made by Brockington to the procedure used to substitute alternate jurors for the regular jurors.
The presence of alternates during jury deliberations, and the substitution of alternates for regular jurors after deliberations have begun, are separate and distinct issues. Although Brockington’s counsel did not object to the alternate jurors being present during deliberations, he consistently objected to the mid-deliberation substitution of alternate jurors for regular jurors. Consequently, Brockington did not waive his objection to the mid-deliberation substitution of alternate jurors for regular jurors.
When this case was before both the circuit court and the Court of Special Appeals, former Rule 2-512(b) governed the procedure for alternate jurors. Effective January 1, 2008, the Rule was recodified without substantive change as Rule 2-512(f). Of particular relevance here is subsection (e)(1), which state that “[w]hen the jury retires to consider its verdict, the trial judge shall discharge any remaining alternates who did not replace another jury member.”
Those rules are applicable to civil cases. Nevertheless, Rule 4-312(f), applicable to criminal cases, contains identical language. See Rule 4-312(f)(3).
In Hayes v. State, 355 Md. 615 (1999), the Court of Appeals considered the issue of “mid-deliberation substitutions” with particular focus on the precise moment deliberations commence and the meaning of the phrase “when the jury retires to consider its verdict.”
One of the original jury members became ill after the jury had left the courtroom. The trial judge made a finding that the juror’s illness occurred before deliberations had commenced, recalled a previously discharged alternate juror, and substituted the alternate juror for the ill juror. The trial court made a factual finding that deliberations had not yet begun and allowed the alternate to deliberate. Shortly thereafter, the jury returned a conviction. The Court of Appeals reversed, holding that the judge had erred in making the substitution after the jurors had entered the jury room and closed the door behind them. Id. at 623.
Stokes v. State, 379 Md. 618 (2003), directly addressed the consequences of alternate jurors’ presence in the jury room during deliberations. The trial was conducted pursuant to Rule 4-314, which provides that if a defendant pleads not criminally responsible, a bifurcated trial on the separate issues of guilt and criminal responsibility can be held. Rule 4-314(b)(4) requires that “at least two alternate jurors, who shall be retained throughout the trial” be selected, and subsection (b)(1) states that the trial is a “single continuous trial in two stages.” If the jury returns a verdict of guilty, that same jury proceeds to determine criminal responsibility.
Sixteen jury members were selected, but at the conclusion of the guilt/innocence phase of the trial, the judge notified the jury that they were all jurors. Id. at 623. The jurors were also told that the verdict had to be unanimous and that they should “[m]ake sure that all sixteen of you agree with the verdict.” Id. at 623.
Although defense counsel objected to the inclusion of the alternate jurors in the deliberations, the judge allowed the alternates to participate in the deliberations. After several hours of deliberations, the court received a note from the jury inquiring, “Do alternates count?” Id. at 623. After some research and argument, the trial judge changed his interpretation of the rule and re-instructed the alternate jurors to act “as observers so that they’ll know what went on for the next phase of the case.” Id. at 624.
After receiving that instruction, the alternates again joined the regular jurors in the jury room for deliberations, despite the reiteration of defense counsel’s objections. The jury then returned several not guilty verdicts, but also returned guilty verdicts on three charges. The defendant entered into a plea agreement with the State on the issue of criminal responsibility. After the defendant was sentenced, however, he appealed his conviction.
The Court of Appeals noted that, “under Maryland law…an alternate juror may not be substituted” after jury deliberations have begun because “[t]he deliberations of the regular jurors are of no concern to the alternates.” Id. at 630. Further, the court found that unlike several other states, “Maryland permits the substitution of an alternate juror only before the jury begins to deliberate on the case, and not after deliberations have commenced.” Id. at 629-630, n. 5. Accordingly, the trial court had erred by allowing the alternate jurors “into the jury room to deliberate.” Id. at 629.
The Court acknowledged that, “[a]lthough almost every court that has considered the issue of the presence of an alternate juror during deliberations has found it to be error, courts are not uniform as to the remedy.” Id. at 634. The Stokes Court, however, applied the presumptive prejudice standard, explaining: “We consider the presence of alternate jurors during the jury deliberations as sufficiently impinging upon the defendant’s constitutional right to a jury trial as guaranteed by the Maryland Constitution and Maryland Rules of Procedure to create a presumption of prejudice. Jury deliberations are private and are to be conducted in secret. The presence of alternate jurors who have no legal standing as jurors injects an improper outside influence on jury deliberations and impairs the integrity of the jury trial. Prejudice must be presumed where alternates breach the sanctity of the jury room.” Id. at 638.
In light of the opinions in Hayes and Stokes, and the unambiguous language of the Maryland rules, the trial judge erred by having the alternate jurors attend the jury deliberations and by substituting two alternate jurors for two original jurors.
COMMENTARY: Brockington filed a motion to dismiss the writ of certiorari, arguing that, because Ms. Grimstead died prior to the date when the Court of Special Appeals filed its decision, and because no personal representative had been selected when the petition for certiorari had been filed, her petition was a “nullity” that should not have been granted.
Rule 8-401(b) establishes the proper procedure for substitution before the appellate courts: “(b) The proper person may be substituted for a party on appeal in accordance with Rule 2-241.”
Rule 2-241(a) “[t]he proper person may be substituted for a party who (1) dies, if the action survives.” Rule 2-241(b) sets forth the procedure for the substitution. Subsection (c) provides that a motion to strike the substitution may be filed within 15 days after the service of the notice of substitution.
In Surland v. State, 392 Md. 17 (2006), the Court of Appeals noted that Rule 1-203(d) complements Rule 2-241 by “automatically suspending all time requirements applicable to the deceased party from the date of death to the earlier of sixty days after death or fifteen days after the appointment of a personal representative by a court of competent jurisdiction.” Id. at 30.
Moreover, Rule 1-203(d) provides that, “[b]efore or after the expiration of an extension period under this section,” a proper substitution may still be made “upon a showing of good cause” why a proper substitution was not previously made and showing that “a further extension will not unfairly prejudice the rights of any other party.”
While, under the time requirements of Rule 1-203(d), counsel for Grimstead should have proceeded more expeditiously, counsel for Brockington failed to raise any objection to Grimstead’s certiorari petition until after a personal representative had been appointed and on the same day that he was substituted. Moreover, Brockington did not allege that the delay in a substitution of a personal representative “unfairly prejudice[d]” his rights during the pendency of the appeal.
The initial notice of appeal was filed while Ms. Grimstead was still living. She had consented to an appeal of the trial court’s decision, and her attorney was following her wishes by continuing the appellate proceedings.
Under Rule 2-241(d), the Court has discretion to “take such…action as justice may require.” In light of the circumstances of this case, the motion to dismiss was denied.
DISSENT: According to the dissent, Brockington agreed to the alternates sitting in the jury room and participating if necessary, and only attempted to withdraw his consent when it became apparent that he was losing jurors that he considered favorable to his side. Under the circumstances, deviation from the requirements of Rule 2-512 is waivable and Brockington waived any objection to a deviation from the Rule by agreeing at the trial level to the procedure suggested by the trial judge.
BOTTOM LINE: Defense to foreclosure based on lender’s failure to comply with federal pre-foreclosure loss mitigation requirements must be raised prior to a foreclosure sale.
CASE: Bates v. Cohn, No. 28, Sept. Term, 2010 (filed Dec. 16, 2010) (Judges Bell, HARRELL, Battaglia, Greene, Murphy, Adkins & Barbera). RecordFax No. 10-1216-21, 25 pages.
FACTS: In February 1999, Sonja Bates purchased a residence with a $148,773 loan extended by GMAC Mortgage and guaranteed by the Federal Housing Administration (FHA). In 2007, Bates encountered difficulty paying her deed of trust note. The lender declared default on September 2, 2008. At that point in time, she was $3,072 in arrears, according to GMAC.
Between the declaration of default and notice of the foreclosure sale, GMAC and Bates were in contact on multiple occasions, beginning with the October 13, 2008 notice of default sent to her by GMAC. The notice explained four options for Bates, attached a pamphlet entitled “How to Avoid Foreclosure,” and provided telephone numbers for federal Housing and Urban Development (HUD) counselors and GMAC loss mitigation representatives.
The next month, GMAC sent another letter to Bates, informing her that her mortgage loan was in default and that without full payment, it would begin foreclosure proceedings. On November 26, 2008, Bates responded by calling a GMAC representative. She inquired about a loan modification.
On January 6, 2009, GMAC referred the matter to its Maryland foreclosure counsel, Cohn, Goldberg & Deutsch, LLC (Cohn). The firm sent a letter to Bates, explaining that the mortgage was about to be foreclosed. Cohn mailed a second letter, on January 13, 2009, reiterating to Bates that her mortgage loan matter had been referred to its office for legal action. Three days later, Cohn sent, by certified mail, a notice of intent to foreclose. Cohn filed an order, on March 13, 2009, to docket foreclosure of residential property in the circuit court.
Bates phoned GMAC again and told their representative that she remained interested in a loan modification. The representative informed her that she would have to complete and submit the financial “package” for GMAC’s analysis. GMAC records indicated that it sent to Bates such a package of forms and instructions the following day (2 April 2009); Bates denied receiving it.
Subsequently, Cohn employed a private process server to serve Bates with the order to docket and accompanying documents. After two unsuccessful attempts to serve Bates personally with these documents, the process server posted them on the front door of her home. On April 14, 2009, Cohn also sent the documents to Bates by certified mail, resulting in two additional, but unsuccessful, delivery attempts.
Once Bates finally received the documents for loan modification consideration, she submitted it to GMAC, which denied her modification request because her monthly expenses exceeded her monthly income by $1,453. GMAC sent Bates a letter to that effect.
On June 3, 2009, the property was sold at public auction, pursuant to the docketed foreclosure action, to a bona fide purchaser for value. After the sale, Bates sought counsel and filed exceptions to the sale, under Rule 14-305(d), asserting that GMAC did not comply with the federal HUD/FHA pre-foreclosure loss mitigation requirements referred to in her deed of trust. The circuit court denied the exceptions and ratified the sale.
The Court of Appeals, on its initiative, issued a writ of certiorari before the intermediate appellate court decided Bates’ appeal. It affirmed.
LAW: Before a foreclosure sale takes place, the defaulting borrower may file a motion to “stay the sale of the property and dismiss the foreclosure action.” Rule 14-211(a)(1). The borrower may petition the court for injunctive relief, challenging “the validity of the lien or…the right of the [lender] to foreclose in the pending action.” Rule 14-211(a)(3)(B).
Notes by the Court of Appeals’ Standing Committee on Rules of Practice and Procedure proposed accompanying revisions to Rule 14-211(a)(3)(B) state that “[t]he failure to grant loss mitigation…in an action to foreclose a lien on owner-occupied residential property may be a defense to the right of the [lender] to foreclose in the pending action.”
Once the property is sold at foreclosure, the borrower may file a claim pursuant to Rule 14-305 only as to “exceptions to the sale.” In doing so, he or she must “set forth the alleged irregularity with particularity.”
In Greenbriar v. Brooks, 387 Md. 683 (2005), after the foreclosure sale, the defaulting condominium owner sought emergency injunctive relief under former Rule 14-209 (the precursor to Rule 14-211), claiming that he tried to bring his account current, but the lender refused improperly to accept his tender of payment. Id. at 737.
The Court of Appeals held that “prior to the sale, the debtor may seek to enjoin the foreclosure sale from proceeding by filing a motion to enjoin as provided in [Md.] Rule 14-209.” Id at 688. “Should a sale occur the debtor’s later filing of exceptions to the sale may challenge only procedural irregularities at the sale or…the statement of indebtedness.” Id.
The Court explained that: “Generally, injunctions are to be filed prior to the action which they seek to forestall. The timing of this remedy is not elective. The equities cannot be maintained—and are not intended to be maintained—after the foreclosure sale by any method other than the filing of exceptions.” Id. at 740.
Two years after Greenbriar, the Court of Appeals considered former Rule 14-209 in Wells Fargo Home Mortgage, Inc. v. Neal, 398 Md. 705 (2007). The homeowner claimed, pre-sale, that (1) the lender breached their contract, and (2) he was entitled to declaratory, or injunctive, relief. The question was whether he could advance, “as an affirmative cause of action, a State law [breach of] contract claim.” Id. at 711. In holding that such a claim is precluded, the Court of Appeals ruled that the homeowner may raise, however, “a violation of the regulations in pursuit of an injunction blocking foreclosure.” Id.
In Bierman v. Hunter, 190 Md.App. 250 (2010), after a residential property was sold at foreclosure, the homeowner/borrower filed exceptions, alleging that the loan was the product of a forged signature. Id. at 254. The Court of Special Appeals deemed the homeowner’s claim contending that her signature was forged as challenging effectively the underlying validity of the mortgage. See id. at 268-69. It held that such a challenge, under Albert v. Hamilton, 76 Md. 304 (1892) and Wilson Brothers v. Cooey, 251 Md. 350 (1968), may be raised properly by post-sale exceptions. See Bierman, 190 Md.App. at 254.
In the process, the Court of Special Appeals distinguished Greenbriar, observing that Greenbriar did not address a situation where the exception to the foreclosure sale attacked the underlying validity of the mortgage. Instead, Greenbriar set forth the appropriate procedure to forestall a foreclosure sale where the debtor admitted liability but disputed the amount claimed by the creditor. Bierman, 190 Md.App. at 254. See also Jones v. Rosenberg, 178 Md.App. 54 (2008).
In conclusion, the Court expounded that Greenbriar did not reference, and thus did not overrule or reject, the line of cases including Albert and Wilson Brothers that permit a mortgagor to challenge the underlying validity of a mortgage by filing exceptions to foreclosure sale pursuant to Rule 14-305. Accordingly, those cases remain good law. Bierman, 190 Md.App. at 254.
Unlike the mortgagors in Albert, Wilson Brothers, and Bierman, Bates was not claiming that her deed of trust was the product of fraud, and, thus, title was incapable of passing through the foreclosure proceeding. Nor did she assert that GMAC actively encouraged her to sit on her rights and await the outcome of loss mitigation or loan modification efforts that would never come to pass, such that the sale was the product of a silent fraud and title should not pass. Rather, she contended only that GMAC failed to comply with HUD loss mitigation efforts implicitly invoked in her deed of trust, which rendered the sale invalid.
Further, Albert and Wilson Brothers do not support the inference that the present rule, 14-305, grants courts “full power to hear and determine all objections to [a] foreclosure sale.” Those cases turn on interpretations of older, different, and more latitudinous versions of predecessors to Rule 14-305.
Originally, the Legislature, in Article 66, §9, under which Albert was decided, determined that equity courts enjoyed unbridled power to hear “any” exception to the sale. See Albert, 76 Md. at 308. Some years later, the Court of Appeals adopted rule-BR6. Although the scope of review remained the same under BR6 as it was under Article 66, §9, Wilson, 251 Md. at 360, Rule BR6 provided equity courts with added guidance-they were now required to consider whether a “sale was fairly and properly made.”
The present rule, 14-305, states, similar to its immediate predecessor, that: “The court shall ratify the sale if (1) the time for filing exceptions pursuant to section (d) of this Rule has expired and exceptions to the report either were not filed or were filed but overruled, and (2) the court is satisfied that the sale was fairly and properly made.” Rule 14-305(e). The rule added an important restriction, however. Exceptions are now to “set forth the alleged irregularity with particularity.” Rule 14-305(d)(1).
The scope of review is limited to exceptions alleging “irregularity,” which permits only those challenges to “procedural irregularities at the sale or…the statement of indebtedness.” Greenbriar, 387 Md. at 688. Thus, 14-305 is not as expansive as Article 66, §9 and Rule BR6.
Under Greenbriar, after a foreclosure sale, “the debtor’s later filing of exceptions…may challenge only procedural irregularities at the sale or…the statement of indebtedness.” Greenbriar, 387 Md. at 688. Such procedural allegations may charge that “the advertisement of sale was insufficient or misdescribed the property, the creditor committed a fraud by preventing someone from bidding or by chilling the bidding, challenging the price as unconscionable, etc.” Id.
Thus, given the limitations of Rule 14-305, a homeowner/borrower ordinarily must assert known and ripe defenses to the conduct of a foreclosure sale prior to the sale, rather than in post-sale exceptions. A lender’s failure to comply with pre-sale loss mitigation requests is one such defense, which must be raised ordinarily pre-sale in an effort to prevent the sale from occurring.
Rule 14-211 allows homeowners to prevent a foreclosure sale by challenging, among other things, the “right of the [lender] to foreclose.” Rule 14-211(a)(3)(B). The Committee notes state that the failure to grant loss mitigation “may be a defense to the right of the [lender] to foreclose in the pending action.” 2010 Committee Note to Rule 14-211(a)(3)(B). A reasonable construction of this language (and its placement within Rule 14-211) indicates that a lender’s failure to comply with loss mitigation requirements goes to its right to foreclose, rather than its procedural handling of the sale.
As a result, a homeowner, who wishes to use the lender’s failure as the basis of his or her claim, must do so through Rule 14-211’s pre-sale injunctive relief apparatus.
COMMENTARY: The deed of trust provides that the “[l]ender may, except as limited by regulations issued by the Secretary [of HUD] in the case of payment defaults, require immediate payment in full of all sums secured by this Security Instrument.”
Most of the pertinent regulations are encapsulated, discussed, or cross-referenced in 24 C .F.R. §203.355, which is also known as the Loss Mitigation Program. As the Secretary of HUD makes clear, in a letter explaining this program, “participation…is not optional.” HUD, Loss Mitigation Program-Comprehensive Clarification of Policy and Notice of Procedural Changes, Mortgagee Letter 00-05 (2000). Indeed, “HUD…measure[s] and advise[s] [lenders] of their loss mitigation performance,” 24 C.F.R. §203.605(b)(1), with unsatisfactory marks possibly “result[ing] in the loss of incentive compensation and other benefits,” Mortgage Letter 00-05. Consequently, as soon as three monthly payments are due and unpaid, lenders are required to consider certain loss mitigation options, like a loan modification or pre-foreclosure sale. See id.
Aside from their active participation in the program, however, lenders are given great discretion regarding how loss mitigation efforts should proceed – “lenders must evaluate each defaulted loan and consider all loss mitigation techniques to determine which, if any, are appropriate (24 CFR 203.605).” Id. Moreover, a lender’s obligations are lifted “if a borrower fails to respond to repeated contacts,” so long as the lender “clearly [made] aggressive efforts to reach [the defaulting] borrower…well in advance of the 90 day deadline.” Id.
PRACTICE TIPS: Although an allegation of fraud, with respect to the procedure of the sale, may be asserted properly in a post-sale exception, whether an allegation of fraud regarding the underlying mortgage or deed of trust likewise may be raised post-sale is a related, but distinct, question which the Court of Appeals has not yet addressed under the more restrictive version of Rule 14-305.
BOTTOM LINE: There was substantial evidence from which the Board of Appeals could determine that property owner’s use would produce non-inherent adverse effects sufficient to warrant denial of her application for a special exception to operate a landscape contractor’s business.
CASE: Montgomery County v. Butler, No. 27, Sept. Term, 2010 (filed Dec. 16, 2010) (Judges Bell, HARRELL, Battaglia, Greene, Murphy, Adkins & Barbera). RecordFax No. 10-1216-20, 42 pages.
FACTS: Melody Butler operates a landscape contracting business under the name Butler Landscape Design, at 21020 Peach Tree Road, in Montgomery County. The real property on which the business operates, which Butler owns, is a 2.68-acre lot improved with a single-family residence. The lot is in an area zoned in the “Rural Density Transfer” zone.
Pursuant to the County Code, landscape contracting is not permitted as of right in the RDT zone, but may be allowed with the grant of a special exception. See Montgomery County Code, §59-C-9.3(c).
Butler established her business without obtaining the requisite special exception first. After Montgomery County’s Department of Permitting Services issued Butler a notice of violation, she filed an application for a special exception to operate a landscape contractor’s business.
The property is rectangular, measuring 170 feet along its sole street frontage, Peach Tree Road, as well as the rear of the lot; 682 feet along its northern side; and, 695 feet on the southern side. All of the abutting lots on either side of Butler’s property also having Peach Tree Road as their sole street access, are approximately of similar size and shape to Butler’s lot, and each lot contains an occupied residence. The neighborhood is predominantly rural in development character, and all of the lots are zoned as RDT.
A gravel driveway on Butler’s property extends from Peach Tree Road, forms a loop in front of the residence, and then runs along the northern side of the lot, forming a second loop behind the house, where Butler stores and loads contracting equipment and supplies. The edge of the driveway is approximately twenty-two feet from the northern property line, and lies about forty-two feet from Cora Weeks’s residence.
The company operates year round, with the busiest periods from March through May and October through December. During these busy seasons, the company employs seven people, working six days a week and arriving on those days at approximately 7 a.m. When employees arrive for work, they load the trucks with the stock and equipment stored on-site and then drive to the location of the work to be performed, after which departure there is little activity on-site until the end of the day. The employees return the trucks to the lot by approximately 6:00 p.m. No customers visit the property, and all office-bound work is done off-site.
Butler’s truck fleet consists of five trucks and two off-road utility vehicles. All vehicles are kept on the property and are picked up and returned each day. In her special exception application, Butler stated that she plans to erect a prefabricated shed behind the residence in which to store the vehicles, tools, and other equipment. Butler hoped to pave the existing gravel driveway in its present location. She also planned to install additional screening for noise-reduction purposes and white pine trees along the southern property line.
The County zoning hearing examiner recommended that the application be denied, which the Montgomery County Board of Appeals (the Board) adopted. The circuit court reversed the Board’s decision.
The Court of Appeals, which issued a writ of certiorari prior to a decision by the Court of Special Appeals, reversed.
LAW: Montgomery County’s zoning power derives exclusively from the Regional District Act, Art. 28, §§8-101. Pan Am. Health Org. v. Montgomery County, 338 Md. 214, 217 (1995). §8-104 of Art. 28 authorizes generally the District Councils in Montgomery and Prince George’s Counties to amend their zoning regulations “from time to time.” Specifically addressing special exceptions, §8-110(a) authorizes a district council, in its zoning regulations, to “provide that the board of zoning appeals…in appropriate cases…may either grant or deny, upon conditions…special exceptions…in harmony with the[ ] general purposes and intent [of the zoning regulations].”
Montgomery County’s zoning ordinance is codified in Chapter 59 of the County Code. Pursuant to §59-C-9.3(c), landscape contracting is a use allowed in an RDT zone only with the grant of a special exception, unless established as a legal nonconforming use. Section 59-G-1.2 sets forth the requirements that the Board must find by a preponderance of the evidence before any special exception may be granted and states that “[t]he fact that a proposed use complies with all specific standards and requirements to grant a special exception does not create a presumption that the use is compatible with nearby properties and, in itself, is not sufficient to require a special exception to be granted.” §59-G-1.2(2). Further, §59-G-1.2.1 instructs that the Board, in acting on each special exception application, “must consider the inherent and non-inherent adverse effects of the use on nearby properties and the general neighborhood at the proposed location.”
“[I]nherent adverse effects” as those involving “the physical and operational characteristics necessarily associated with the particular use, regardless of its physical size or scale of operations,” and “non-inherent adverse effects” are those involving “physical and operational characteristics not necessarily associated with the particular use, or adverse effects created by unusual characteristics of the site.” §59-G-1.2.1
While “[i]nherent adverse effects alone are not a sufficient basis for denial of a special exception,” “non-inherent adverse effects, alone or in conjunction with inherent adverse effects, are a sufficient basis to deny a special exception.” Montgomery County Code §59-G-1.2.1.
Butler argued that §59-G-1.2.1 of the County Code must be read in context and harmony with the holding in Schultz v. Pritts, 291 Md. 1 (1981), and its progeny from which it was derived. Truck noise, she claimed, is an inherent adverse effect from a landscape contractor’s business whenever proposed and, therefore, such noise does not undercut the presumption of compatibility enjoyed by a proposed special exception use by virtue of its inclusion in the zoning ordinance.
There is a notion that a special exception is in a certain context “prima facie compatible,” or, stated differently, that the use for which a special exception may be allowed by a zoning regulatory scheme is “presumptively compatible” generally with other uses permitted as of right in the same zone. See, e.g., Creswell v. Baltimore Aviation Serv., Inc., 257 Md. 712, 719 (1970).
The first Maryland case that appeared to discuss such a presumption is Montgomery County v. Merlands Club, Inc., 202 Md. 279 (1953), where the Court of Appeals considered the refusal by the Board of Appeals of Montgomery County to grant a special exception for a private recreational club. The Court stated that the purpose of the special exception provisions were “to delegate to the Zoning Board a limited authority to permit enumerated uses which the legislative body finds in effect prima facie properly residential, absent any fact or circumstance in a particular case which would change this presumptive finding.” Id. at 287.
The Court of Special Appeals has concluded that “[t]he presumption in favor of a [special exception] derives from the legislative policy determination that such a use is permissible.” E. Outdoor Adver. Co. v. Mayor of Baltimore, 146 Md.App. 283, 308 (2002). Nevertheless, the use remains only permissible conditionally and each applicant must prove actually, to the satisfaction of the or future other properties in the neighborhood.
Perhaps the presumption of compatibility stems from a judicially-created inference assigned to the legislative body’s decision to allow, in its zoning regulations, certain uses in certain zones by grant of a special exception. See MANDELKER, LAND USE LAW §6.56. That is, inherent in the essence of a special exception is a legislative determination that certain uses will be permissible, notwithstanding the likelihood of adverse effects naturally associated with such uses. See RATHKOPF, THE LAW OF ZONING AND PLANNING §61:8; People’s Counsel for Baltimore County v. Loyola College in Maryland, 406 Md. 54 (2008).
Another presumption—possibly working in tandem with the presumption of compatibility—is the more general presumption “that zoning regulations reasonable in substance and reasonably applied do, or are presumed to, promote the public safety, health, morals, welfare and prosperity. Rockville Fuel & Feed Co. v. Bd. of Appeals of the City of Gaithersburg, 257 Md. 183, 187 (1970).
The local legislature determines that the potential for adverse affects may not be so tangible in every case as to warrant prohibition of the use in the zone or zones; rather, an applicant should be given the opportunity to satisfy an administrative decision-maker that in his case, such potential does not rise to the level of so likely or actual incompatibility as to rebut the presumption. Because the allowance of a special exception use is part of a comprehensive zoning regulatory scheme that is itself accompanied by the presumption that it promotes public safety, health, and morals, it stands to reason that this broader presumption accompanying the zoning ordinance itself generates the specific presumption of compatibility associated with the inclusion in the ordinance of those uses that may be allowed through the grant of special exceptions.
It is also reasonable to infer that the presumption of compatibility accompanying the local legislative decision to allow in its zoning ordinance the potential for certain uses in certain zones only through the grant of a special exception, being a part of the general presumption that zoning ordinances are presumed to be in the general welfare, has roots sunk in the police power. See Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926); Wakefield v. Kraft, 202 Md. 136, 141 (1953).
While this case was the Court of Appeals’s first opportunity to consider squarely the extent to which a local government, in enacting its zoning ordinance, is permitted to legislate standards for consideration of special exception applications different than discussed in Schultz and its progeny, the conclusion that it may do so is consistent with other opinions. For example, in Gotach Center for Health v. Board. of County Commissioners of Frederick County, 60 Md.App. 477 (1984), an applicant for a special exception argued that the Frederick County Zoning Board applied improperly the standard for evaluating the adverse impacts of the proposed use as set forth in Schultz when the zoning ordinance directed the Board to apply the standard in Gowl v. Atlantic Richfield Co., 27 Md.App. 410 (1975) (which Schultz overruled).
The Court stated: “All that Schultz seems to say is that, absent some clear legislative direction to the contrary, if a particular kind of impact is required to be taken into account in considering a special exception, the impact is to be measured by the test enunciated in Schultz and not by that stated in Gowl. We see no reason, however, why a county legislative body cannot adopt a Gowl-type standard in the ordinance itself, if it chooses to do so.” Gotach, 60 Md.App. at 485.
In addition, the County Code supplies definitions for “inherent adverse effects” and “non-inherent adverse effects,” subjects upon which the case law is generally silent.
An applicant for a special exception “does not have the burden of establishing affirmatively that his proposed use would be a benefit to the community. If he shows to the satisfaction of the Board that the proposed use would be conducted without real detriment to the neighborhood…he has met his burden.” Schultz, 291 at 11.
The phrase “detriment to the neighborhood” implies necessarily that the Board’s task is to determine if there is or likely will be a detriment to the surrounding properties. It is for the zoning board to ascertain in each case the adverse effects that the proposed use would have on the specific, actual surrounding area. See id.; Loyola College, 406 Md. at 95.
Before the hearing examiner, evidence was received regarding the relative narrowness of both Butler’s lot and the surrounding lots in the neighborhood, including Weeks’s lot. Because of this narrowness, the northern edge of Butler’s property comes within twenty-two feet of Weeks’s property line and forty-two feet of her residence.
Further, the configuration of the uses on Butler’s lot and the location of the driveway was such that trucks would need to back up as much as 130 feet from the driveway loop to the open storage area (accompanied by their beeping sound when operated in reverse). Many trees in the row of white pine trees bordering the property had lost lower branches, compromising their effectiveness for noise attenuation purposes. Butler’s lot is not forested otherwise.
Thus, there was substantial evidence from which the Board could determine reasonably that Butler’s actual and proposed use would produce non-inherent adverse effects sufficient to warrant denial of the application for the special exception.
Accordingly, the judgment of the circuit court was reversed.
COMMENTARY: One treatise has described the origins of the special exception as a land use regulatory device: “The creators of zoning designed a simple system. In principle, they believed that one ought to be able to look at a map and determine from that map exactly what could be done on a particular piece of property. Some uses do not fit so neatly into a map, however. Certain uses may tend to generate excessive traffic, or attract a large number of people to the area, thereby creating noise or other pollutants. Similarly, the proposed special use exception may have a detrimental effect on the value of other properties in the area or may create a higher potential for accidents or other adverse effects on the public health or safety.” DEEMS, A PRACTICAL GUIDE TO WINNING LAND USE APPROVALS AND PERMITS, Ch. 2, §2.05[a].
The treatise continues: “With traditional zoning, there were only two ways to address putting these uses into residential areas-either designating [them] as permitted uses in all residential zones OR granting ‘spot’ zones for such uses at appropriate locations in residential neighborhoods. Clearly allowing such uses on every lot in a residential area was never an attractive alternative, and the early drafters of zoning legislation sought a simpler and more elegant solution.” Id.
The Court of Appeals stated: “The special exception adds flexibility to a comprehensive legislative zoning scheme by serving as a ‘middle ground’ between permitted uses and prohibited uses in a particular zone. A permitted use in a given zone is permitted as of right within the zone, without regard to any potential or actual adverse effect that the use will have on neighboring properties. A special exception, by contrast, is merely deemed prima facie compatible in a given zone.” Loyola College, 406 Md. at 71.
PRACTICE TIPS: The General Assembly, and even local legislative bodies, may legislate “around” or even abrogate non-constitutional holdings of the Court of Appeals regarding the interpretation of their legislative enactments, provided vested rights are not impaired and relevant and proper procedures are observed and, in the case of a local legislature, it has been delegated the authority to act in the particular legislative arena. See State Admin. Bd. of Election Laws v. Calvert, 272 Md. 659, 668 (1974).
MARYLAND COURT OF SPECIAL APPEALS
Statute of frauds
BOTTOM LINE: E-mail communications between purchaser and supplier concerning the terms of their contract were legally sufficient to satisfy the statute of frauds and its merchants’ exception.
CASE: MEMC Electronic Materials, Inc. v. BP Solar International, Inc., No. 1517, Sept. Term, 2009 (filed Dec. 3, 2010) (Judges EYLER, J., Kehoe & Kenney (retired, specially assigned)). RecordFax No. 10-1203-00, 44 pages.
FACTS: BP Solar International, Inc., a manufacturer of solar energy products, makes solar panels that are used to convert sunlight into electricity. MEMC Electronic Materials, Inc. is in the business of selling wafers, polysilicon, and other silicon raw feedstock.
In 1996, BP purchased silicon powder from MEMC, previously a waste by-product of MEMC’s polysilicon production process, in order to determine whether the silicon powder, inexpensive at the time, could be used to lower manufacturing costs.
The powder proved useful in reducing costs, and it created a competitive advantage for BP. Consequently, in 1997, the parties entered into a written, one and a half page sales agreement for the purchase of silicon powder for a two-year period running from April 1, 1997, through March 30, 1999. The agreement required MEMC to supply BP with four tons of silicon powder per month at a price of $3/kilogram. Over the two-year period, BP sent purchase orders confirming quantity, price, shipping, and other details, and MEMC sent the appropriate invoices.
In March 1998, the parties extended this agreement through December 31, 2000. The extension increased the amount of silicon powder to ten tons/month at a price of $3.25/kg., beginning January 1, 1999, and continuing through the end of the contract.
Between 2001 and 2004, the parties entered into less formal supply agreements that were generally consummated through and documented by e-mail exchanges. Each time, after agreement, the parties would follow the usual sequence of purchase orders, invoices, and contractual performance.
Ultimately, anticipating imminent shortages in the market for silicon feedstock supplies, BP recognized a need to secure long term contracts for the supply of silicon powder. As a result, Pat Barron, BP’s Frederick warehouse manager, was authorized to arrange a long term supply contract with MEMC.
On August 4, 2004, Barron e-mailed Sanjeev Lahoti, MEMC’s product manager, requesting a “quotation (e-mail is fine) for 300 tons of powder per year for calendar years 2005 through 2007. Upon receipt, BP Solar will forward our purchase agreement for these quantities.” Lahoti’s September 17 response stated that BP wanted to commit 150 tons of powder per year for the next 3 years. The pricing for 2005 would be $3.50/kg. Pricing for 2006 and 2007 would be negotiated in October of the previous year.
On September 27, Barron and Lahoti discussed, via telephone, the arrangement or contemplated arrangement. In an e-mail later the same day to Bill Poulin, plant manager at BP’s Frederick plant, on which Lahoti was copied, Barron described this conversation, stating that Lahoti indicated that the 150 tons was essentially the minimum available for each calendar year 2005-2007 and that Lahoti anticipated the available quantity of powder will be larger (especially in 2005) but that he did not want to quote a figure higher than their budgeted targets. The e-mail further stated that Lahoti confirmed BP’s “right of first refusal” for all quantities of powder they produce and that pricing could be negotiated during MEMC’s visit in October.
In his responsive e-mail the following day, Lahoti stated, “I agree with Pat’s comments below. I look forward to meeting you and Pat during our visit.” Two weeks later, Barron e-mailed Lahoti asking for confirmation on price.
On November 9, 2004, Barron e-mailed Lahoti concerning purchase orders for the 2005 and 2006 shipments of silicon powder. He stated: “BP has submitted to MEMC  purchase orders…for silicon powder to cover calendar years 2005 and 2006. We are not limiting the quantities we would purchase as we will take all the powder that is available under our agreement of right-of-first-refusal. However, I had to put a quantity on the purchase order so I used the same volume that we have been receiving this year. We would also like to give MEMC a purchase order for our 2007 requirements. Does that work for you?”
Following this series of e-mail conversations, MEMC shipped nearly 224 tons of silicon powder during 2005. The last shipment occurred on December 30, 2005. In late February 2006, BP contacted MEMC because it had not received any shipments since December. Upon inquiry, BP was informed that MEMC was experimenting with ways to recycle its silicon powder in its process, and therefore, it had only minimal excess powder. In essence, MEMC advised BP that it should not rely on further shipments.
BP sued MEMC for breach of contract. BP filed four amended complaints. Prior to trial, MEMC moved for summary judgment, arguing that as a matter of law, the parties had never reached the clear meeting of the minds necessary to form a contract. The motion was denied.
At the close of BP’s case, and at the close of all evidence, MEMC moved for judgment. These motions were also denied. The jury found that the parties entered into a contract by which MEMC was obligated to supply BP with silicon powder for the years 2005-07. The jury further found that MEMC breached this contract. Consequently, it awarded damages in the amount of $8,849,447 as partial cover damages that resulted from MEMC’s failure to supply BP with silicon powder in 2007.
MEMC appealed to the Court of Special Appeals, which affirmed.
LAW: CL §2-201(1) sets forth the Statute of Fraud, which effectively requires a writing that (1) is sufficient to indicate a contract for sale of goods of $500 or more between the parties; (2) is signed by the party against whom enforcement is sought; and (3) contains a quantity term.
The rule also provides an exception for merchants, which states that a writing in confirmation of the contract and sufficient against the sender that is received by a party who has reason to know of its contents satisfies the requirements of the statute against the receiving party unless written notice of objection is given within ten days of receipt. CL §2-201(2).
MEMC argued that there was no writing that satisfied the Statute of Frauds pertaining to the 2007 calendar year.
With respect to quantity, there was evidence that the parties agreed to a specific quantity or a minimum quantity with a right of first refusal of output or an agreement to buy output. The jury was instructed as to the relevant contract principles, including considerations relevant to an output contract. After reviewing all of the documents and testimonial evidence, the jury determined that the parties entered into a three-year contract that covered the 2007 calendar year. MEMC did not raise any issue regarding the initial jury instructions or the verdict sheet. As a result, MEMC’s argument that the Statute of Frauds was unsatisfied because there was no contract that could be confirmed in writing failed. The jury determined there was a contract. Thus, the issue was whether there was a legally sufficient confirmatory writing.
Maryland law recognizes that a series of communications can satisfy the Statute’s requirements. See Tatum v. Richter, 280 Md. 332, 335-36 (1977). In addition, e-mail communications can amount to a sufficient writing under the Statute. See CL §1-201(46). In that regard, if so intended, a typed name is a sufficient signature as an agent of the party against whom enforcement is sought. See id. §1-201, cmt. 39.
Furthermore, the purpose of the Statute is to avoid fraud—not to prevent enforcement of legitimate transactions. See Collins v. Morris, 122 Md.App. 764, 773-74 (1998). “Therefore, if after a consideration of the surrounding circumstances, the pertinent facts and all the evidence in a particular case, the court concludes that enforcement of the agreement will not subject the defendant to fraudulent claims, the purpose of the Statute will best be served by holding the note or memorandum sufficient even though it is ambiguous or incomplete.” Salisbury Bldg. Supply Co., 162 Md.App. at 162. Thus, even an incomplete writing can be sufficient so long as the court is satisfied that enforcement of the agreement will not advance a fraudulent claim.
The last requirement is that the writing contain a quantity term. Though the verdict sheet did not reveal the precise terms of the contract that the jury found, it was evident that the e-mails support a finding of a specific minimum quantity (150 tons) with a right of first refusal of output or an agreement to buy output. In either event, MEMC was obligated to make its output available to BP.
Lahoti’s September 17, 2004 e-mail committed MEMC to 150 tons/year for three years. Thereafter, Baron’s e-mail clarifying the proposal as to quantity stated that 150 tons was the minimum amount of silicon powder available for 2005-07, and that BP held a right of first refusal for all excess quantities produced. Lahoti responded with an e-mail which served as confirmation of the terms by stating that he agreed with Baron’s comments. Thus, taken together, these e-mails represented the parties’ reciprocal agreement that MEMC would make its output available to BP and would supply a minimum amount.
Finally, the e-mail dated September 27 from Barron to Lahoti and Poulin satisfied the merchants’ exception. That e-mail, especially in light of Lahoti’s September 28 reply, served as the required confirmatory e-mail under the exception. Thereafter, neither Lahoti nor any agent of MEMC sent written notice of objection within ten days as required by the Statute. Consequently, the September 27 e-mail satisfied the merchants’ exception to the Statute.
In sum, the printed e-mails constituted a sufficient writing under the Statute. Therefore, the Statute of Frauds did not bar BP’s claim as to the year 2007.
Accordingly, the judgment of the circuit court was affirmed.
COMMENTARY: During his deposition, Barron discussed his understanding of the terms of the alleged contract. Six weeks after his deposition, Barron submitted an errata sheet pursuant to Rule 2-415(d), which purported to supplement and explain certain statements made during his deposition.
At trial, MEMC sought to impeach Barron’s direct testimony with statements made during his deposition that were later changed by his errata sheet. The trial court sustained BP’s objection, and MEMC was not permitted to conduct live cross-examination of Barron concerning that portion of the original transcript which was the subject of the errata sheet. Later, however, the court allowed MEMC to play the original deposition testimony, so long as it also contemporaneously presented relevant portions of Barron’s errata sheet.
Thus, although excerpts of Barron’s original deposition testimony were ultimately admitted, he was never subject to live cross-examination concerning the alleged inconsistencies between that testimony and the errata sheet. However, while the court should have permitted MEMC to cross-examine Baron about the contents of his original deposition and errata sheet, the court’s actions were not so prejudicial as to warrant reversal.
PRACTICE TIPS: CL §2-305(1)(b), which provides that where the parties to a contract cannot agree on a price, the price must amount to a reasonable price at the “time for delivery,” serves as a gap-filler and is not intended to trump the existence of an agreement between the parties. See Havird Oil Co. v. Marathon Oil Co., 149 F.3d 283, 290 (4th Cir. 1998).