Anderson v. Joseph

200 Md.App. 240

26 A.3d 1050

Alda A. ANDERSON

v.Nero JOSEPH, et al.

No. 554

Sept. Term

2010.

Court of Special Appeals of Maryland.

July 11, 2011.Reconsideration Denied Sept. 13, 2011.

Alda A. Anderson, Las Vegas, NV, for appellant.Erwin R.E. Jansen, Washington, DC, for appellee.Panel: GRAEFF, HOTTEN, JAMES A. KENNEY, III (Retired, Specially Assigned), JJ.GRAEFF, J.

This appeal involves the division of proceeds from a trustee's sale of property located at 2309 Sheridan Street, in Hyattsville, Maryland (the “Property”). It addresses the authority, and the impact, of one cotenant obtaining a mortgage on jointly owned property without the consent of the other cotenant.

Alda A. Anderson, appellant, owned the Property as a tenant in common with Nero Joseph, appellee, who took out a $49,552.79 loan on the Property without her consent. After the sale of the Property, the trustee proposed a distribution schedule that deducted this loan from the proceeds prior to determining the 50% share of each of the parties. Ms. Anderson contends that this was improper, and that the loan should have been deducted only from Mr. Joseph's share of the proceeds. On appeal, she challenges the order of the Circuit Court for Prince George's County denying her Exception to the Trustee's Report of Sale.

For the reasons set forth below, we reverse, in part, the judgment of the circuit court.¹

FACTUAL AND PROCEDURAL BACKGROUND

This is the second time this Court has addressed claims involving the Property. In our prior unreported opinion, Joseph v. Anderson, No. 2792, Sept. Term 2006, slip op. 1–6 (filed Apr. 15, 2008), we set forth the facts leading up to the first appeal. In 1989, Ms. Anderson purchased the Property and gifted a 50% interest in the Property to her brother, Terrence Anderson. Terrence's wife, Drucilla Anderson,² subsequently was added to the deed, sharing Terrence's 50% interest. The half interests were held as tenants in common.

In 2002, Terrence died. At some point thereafter, Drucilla sought to refinance the mortgage and transfer her half interest in the Property to her son, Nero Joseph. When Ms. Anderson received the closing documents from the title company, she saw that the new deed was in the name of Mr. Joseph only. Ms. Anderson contacted the title company and/or the bank to add her name to the new deed. When she was advised that adding her name to the deed would delay refinancing, and that the mortgage could not be paid without the refinancing, Ms. Anderson agreed to sign the deed provided that Mr. Joseph, immediately after the closing, would sign a quitclaim deed to put her name back on the title. After closing, however, Mr. Joseph refused to sign the quitclaim deed.

On June 23, 2005, Ms. Anderson filed, in the Circuit Court for Prince George's County, a request for declaratory and other relief, asking that the court reinstate her interest in the Property and order its sale in lieu of partition. Following a bench trial on December 7, 2006, the circuit court issued an order declaring that the title to the Property be held half in the name of Ms. Anderson and half in the name of Mr. Joseph, as tenants in common. The court declined to order a sale in lieu of partition, opting instead to give the parties the opportunity to explore the issue. On April 15, 2008, this Court affirmed the judgment of the circuit court in an unreported opinion.

On May 27, 2008, Ms. Anderson filed a Motion for Sale and Appointment of Trustee, asserting that Mr. Joseph refused to list the Property for sale and had collected rent and insurance money on the Property without paying any profits he made to her. She requested that the court: (1) order a sale in lieu of partition; (2) require Mr. Joseph to render an accounting as to monies collected from rent and other sources and pay 50% of any profits he made to her; and (3) award Ms. Anderson reasonable legal fees and costs.

On July 15, 2008, the court appointed Erwin R.E. Jansen, Esquire, as trustee to sell the Property and “divide the monies resulting from the sale ... among the parties according to their respective rights.” Pursuant to the court's order, Mr. Jansen sold the Property by private sale on January 8, 2009.

On March 25, 2009, Mr. Jansen filed a Trustee's Report of Sale, indicating that the Property had been sold for $275,000, and the cash due to sellers was $95,240.47. In his report, Mr. Jansen also indicated that Luis F. Gomez, Jr., on behalf of the law firm Tomes & Salter, LLC, had contacted him regarding a lien it had against the property in the amount of $18,985.02. Mr. Jansen noted that Mr. Joseph and Mr. Gomez had agreed to resolve the lien, which was for unpaid attorney's fees, in exchange for Mr. Joseph's payment of $12,000 to Tomes & Salter, LLC.

Mr. Jansen requested that the court ratify the sale, approve his Trustee's fees, and assign the monies to be distributed by the Trustee to each party. Pursuant to Mr. Jansen's report, the proceeds would be distributed as follows: (1) $46,364.37 to be issued to Ms. Anderson; (2) $34,364.37 to be issued to Mr. Joseph; (3) $12,000 to be issued to Tomes & Salter, LLC; and (4) $2,511.73 to be issued to Mr. Jansen. Attached to the Trustee's Report of Sale was a certificate of service indicating that a copy of the report was mailed on March 23, 2009, to Ms. Anderson, Mr. Joseph, and Mr. Luis F. Gomez, Jr., Mr. Joseph's previous counsel.

On July 24, 2009, Ms. Anderson filed an Exception to the Trustee's Report of Sale, asserting that she did not receive information regarding the sale of the Property until July 20, 2009. She noted that the form attached to the Trustee's Report of Sale indicated a payment of $49,533.23 to Bank of America from the sale of the proceeds,³ but she was unaware of any encumbrance on the Property other than the first mortgage of approximately $103,000.00. She argued that, because the Property was in the sole name of Mr. Joseph since early 2005, she had no knowledge of the encumbrance on the Property, and if Mr. Joseph did encumber the Property without her knowledge or authorization, “he should be totally and solely obligated ... to repay that debt.” Ms. Anderson further asserted that she had not received a copy of Mr. Jansen's expenses and fees. She requested that she be provided further information regarding the Bank of America loan prior to court approval of the Trustee's Report of Sale.

On October 5, 2009, Ms. Anderson filed a Motion to Show Cause, noting that she had been advised that her Exception to the Trustee's Report of Sale would not be heard until the Trustee filed a response, but Mr. Jansen had refused to file a response. She asserted that Mr. Jansen had “breached his fiduciary duty” to her by: (1) failing to keep her fully informed regarding the sale of the Property; and (2) failing to respond to her exception to his report, which denied her access to the proceeds of the sale of the Property. Ms. Anderson requested that the court: (1) order Mr. Jansen to show cause why he should not be removed as trustee and reimburse her for any loss, including interest on the sale proceeds and legal fees; (2) review her exception to the report and enter an order increasing her portion of the net proceeds by one-half of the payment to Bank of America; (3) order Mr. Jansen and Mr. Joseph to pay her legal fees in the amount of $2,500; and (4) order Mr. Joseph to pay her $1,000 “for his failure to disclose his responsibility for the Bank of America debt,” which caused a delay in the distribution of the sale proceeds.

On October 7, 2009, Mr. Joseph filed an answer, asserting that he had obtained the Bank of America loan to make necessary repairs to the basement of the Property following a “massive flood.” He contended that Ms. Anderson “knew about the damage[ ] to the basement from her mother-in-law, who was a close friend of my older sister,” but she never offered assistance or requested to “come and view the damage herself.” Mr. Joseph indicated that he had informed Mr. Jansen of the Bank of America loan and had provided him with receipts for the repairs to the basement, and he requested that the court review the receipts if it considered Ms. Anderson's exceptions. Mr. Joseph asserted that he was not responsible for Ms. Anderson's legal fees.

On November 17, 2009, Ms. Anderson filed a reply to Mr. Joseph's answer. She argued that, even if Mr. Joseph did use the loan to repair flood damage to the property, she should not be obligated for the repairs because “she knew nothing of any alleged damage or the loan and [Mr. Joseph] made the alleged expenditure for his and hi[s] mother's benefit.” She again requested that the court: (1) find Mr. Joseph solely liable and responsible for the Bank of America loan; (2) recalculate the proceeds from the sale of the Property to require Mr. Joseph to repay the loan out of his portion of the proceeds; and (3) order Mr. Joseph to pay her legal fees in the amount of $2,500, in addition to any additional fees and expenses incurred as a result of Mr. Joseph's actions.

On December 10, 2009, Mr. Joseph filed a letter with the court, addressing the allegations in Ms. Anderson's Motion to Show Cause and reply. Mr. Joseph reiterated that he took out the Bank of America loan to repair damage caused by flooding in the basement, and he provided Mr. Jansen with receipts for such repairs. He requested that the court consider several attached documents, which included, inter alia, the following: (1) pictures of the flooded basement; (2) a local newspaper article regarding the flood; and (3) a letter from the purchaser of the property acknowledging the “excellent” condition of the basement, as well as the new appliances in the kitchen and basement.

On February 2, 2010, the court held a hearing on Ms. Anderson's motions. Ms. Anderson testified that the only correspondence she had received from Mr. Jansen regarding the Property was a letter notifying her that the court had...