Andrews v. O'Sullivan

256 Md.App. 532

287 A.3d 650

Javonna ANDREWS

v.Laura O'SULLIVAN, et al.

No. 1018, 1553, Sept. Term, 2021

Appellate Court of Maryland. *

December 29, 2022

Argued by: Kellee Baker (KB Law Firm, on the brief), Greenbelt, MD, for Appellant

Argued by: Arien Parham (Troutman, Pepper, Hamilton, Sanders LLP, on the brief), Washington, D.C., for Appellee

Panel: Wells, C.J., Graeff, Arthur, JJ.

Wells, C.J.

In this consolidated appeal, appellant, Javonna Andrews, challenges a foreclosure action in which her home was sold by appellants, Laura H. G. O'Sullivan, Rachel Kiefer, Michael T. Cantrell, and Erin N. Shaffer (hereinafter "Substitute Trustees"). In her appeal, Andrews presents the following questions:

1. Did the trial court err when it allowed the foreclosure action to move forward when appellees repeatedly failed to provide the required pre-mediation documentation as required under law?

2. Did the trial court err when it failed to stay the foreclosure action until all loss mitigation options had been exhausted?

3. Did the trial court err when it failed to dismiss the foreclosure action due to affidavits provided by appellees that contained false information?

4. Did the trial court err when it failed to dismiss the foreclosure action due to appellees’ "unclean hands"?

FACTUAL AND PROCEDURAL BACKGROUND

In December 2006, Andrews executed a promissory note and deed of trust in the amount of $260,000 for the property located at 7611 Swan Terrace in Hyattsville, Maryland. In February 2018, Andrews defaulted on the loan, and the Substitute Trustees filed a foreclosure proceeding on June 12, 2019. On December 20, 2019, Andrews filed a Motion to Stay and Dismiss the Foreclosure Proceedings, Request for Discovery and Request for Hearing ("Motion to Stay"). On January 13, 2020, the circuit court issued an order setting Andrews’ motion for a hearing and staying any pending sale in the meantime. However, because of a docketing error, the Substitute Trustees were unaware of the court's order, and subsequently sold the property the following day, on January 14, 2020. At a hearing on February 11, 2020, the court vacated the sale of the house, stayed the foreclosure action, and set Andrews’ Motion to Stay in for a hearing. On April 1, 2020, the court issued an order correcting the docket entry for February 11, 2020 to stay the ratification of the sale instead of vacating the sale.

Due in part to the COVID-19 pandemic, the ratification of the sale was stayed for over a year. The court finally held a hearing on Andrews’ Motion to Stay on May 11, 2021, concluding by denying Andrews’ motion. On May 21, 2021, Andrews filed a "Motion for Reconsideration or in the Alternative Motion to Alter or Amend Judgment Pursuant to Md. Rule 2-534." On July 7, 2021, the court denied Andrews’ motion, and the denial was docketed on August 4, 2021. Andrews then filed a notice of appeal with the circuit court on September 2, 2021 (Appeal 1018). On November 15, 2021, the court ratified the sale. Andrews then filed another notice of appeal on November 23, 2021 (Appeal 1553). Additional facts will be discussed below.

DISCUSSION

I. Andrews’ Appeals are Properly Before Us

In their brief, the Substitute Trustees make several arguments urging us to dismiss both appeals. First, concerning Appeal 1018, the Substitute Trustees argue that Andrews’ notice of appeal was untimely, and we are therefore without jurisdiction.¹ And in Appeal 1553, the Substitute Trustees argue that the appeal is an "improper post-sale appeal seeking to contest pre-sale events." We disagree with the Substitute Trustees’ arguments and decline to dismiss either appeal.

As for appeal No. 1018, the Substitute Trustees contend that Andrews’ notice of appeal, filed on September 2, 2021, was not filed within 30 days of the court's denial of the Motion to Stay, as required by Rule 8-202(a).² Further, Substitute Trustees assert that Andrews’ Rule 2-534³ motion to alter or amend did not toll the time to appeal under Rule 8-202(c),⁴ because 2-534 motions are reserved for "final judgments" and the court's denial of a stay is not a final judgment. We disagree.

This issue rests on whether "judgment," as used in Rule 2-534, means a final judgment, i.e., a judgment that disposes of all issues, or an appealable interlocutory order, i.e., an order that while not "final," is still appealable pursuant to Md. Code, Cts. and Jud. Proc. ("CJP") § 12-303.⁵ First, we note that Rule 1-202(o) defines "judgment" as "any order of court final in its nature entered pursuant to these rules." In that respect, "judgment" does not equate to the "final judgment" addressed in Rule 2-602.⁶

Additionally, in Tierco Maryland, Inc. v. Williams , 381 Md. 378, 849 A.2d 504 (2004), the Supreme Court of Maryland (at the time called the Court of Appeals of Maryland)⁷ noted that the phrase, "the judgment" in Rule 2-534 refers to the "particular judgment to which the motion is directed." Id. at 398, 849 A.2d 504. The Court continued: "The conclusion we draw from the plain language of these rules is that entry of final judgment as to all claims of all parties in a civil case is not necessarily a requirement for the filing of post-judgment motions." Id. Further, in Doe v. Sovereign Grace Ministries, Inc. , this Court stated that under Rule 8-202(c), when a Rule 2-534 post-judgment motion has been filed within ten days "of the entry of an otherwise final judgment (or the entry of another appealable order ), the time for filing a notice of appeal is tolled[.]" 217 Md. App. 650, 668, 94 A.3d 264 (2014) (emphasis added). We also stated that "[t]he tolling effect of Rule 8-202(c) does not apply to a motion for reconsideration of a non-appealable interlocutory order[.]" Id. at 669, 94 A.3d 264 (emphasis added). Taken together, these cases clearly show that a "final judgment," as contemplated by Rule 2-602, is unnecessary to toll the time in which to file a notice of appeal, as long as a 2-534 motion contests an appealable interlocutory order.

We are persuaded that the circuit court's denial of Andrews’ Motion to Stay was an appealable interlocutory order by virtue of CJP § 12-303(3)(iii). That provision states that a party may appeal from an interlocutory order entered by a circuit court in a civil case where the court refuses to grant an injunction. In Huertas v. Ward , 248 Md. App. 187, 207, 241 A.3d 1 (2020), we noted that "a request to stay a foreclosure sale, i.e., to prohibit parties from selling a property, was a request for an injunction. Accordingly, the order was immediately appealable to the extent that it denied his request for injunctive relief." (Internal citations omitted). Further, the Supreme Court of Maryland has held that, on an appeal from the ratification of the foreclosure sale (the final judgment), one cannot litigate issues pertaining to the stay.

[P]rior to the sale, the debtor may seek to enjoin the foreclosure sale from proceeding by filing a motion to enjoin as provided in [the Maryland Rules]. Should a sale occur, however, the debtor's later filing of exceptions to the sale may challenge only procedural irregularities at the sale or the debtor may challenge the statement of indebtedness by filing exceptions to the auditor's statement of account.

Thomas v. Nadel , 427 Md. 441, 444, 48 A.3d 276 (2012) (citing Greenbriar Condo. v. Brooks , 387 Md. 683, 688, 878 A.2d 528 (2005) (explaining that, prior to the foreclosure sale, the debtor had the right to file a motion to enjoin the sale under Rule 14-209, but that after the sale went forward, an injunction was not permissible to overturn the sale, nor were exceptions to the sale filed under Maryland Rule 14-304 appropriate to "upset retroactively a sale properly held"), superseded by Rule as stated in Thomas v. Nadel , 427 Md. 441, 444 n.5, 48 A.3d 276 (2012) ).

Consequently, we shall treat the denial of the motion to stay a foreclosure proceeding as an order final in nature. Thus, Andrews’ filing of the Rule 2-534 motion tolled the time for her to file a notice of appeal until the court docketed its order denying her Rule 2-534 motion on August 4, 2021. Her notice of appeal filed on September 2, 2021, was thus timely and Appeal 1018 is properly before us.

The Substitute Trustees also urge dismissal of appeal No. 1553,⁸ stating that it is a "post-sale appeal seeking to challenge the denial of a Rule 14-211 motion, which is conclusively not allowed." (Emphasis in original). The Substitute Trustees cite Thomas , where the Supreme Court of Maryland stated that, in a foreclosure action, following a sale of the property, "the debtor's later filing of exceptions to the sale may challenge only procedural irregularities at the sale or the debtor may challenge the statement of indebtedness by filing exceptions to the auditor's statement of account." 427 Md. at 444, 48 A.3d 276. However, this proposition does not mean that a failure to limit an appeal to procedural irregularities is a basis for dismissal. Rather, it is a basis for concluding that the appellant has not asserted a substantive challenge to the ratification of the sale—and thus, to rule in the appellee's favor on the merits. Here, Andrews filed a timely notice of appeal contesting the denial of her Motion to Stay and subsequent Rule 2-534 motion. The fact that the court ratified the sale of the house⁹ does not prevent us from reaching the merits of her appeal. Therefore, Appeal 1553 also does not warrant dismissal.

II. MERITS

Andrews challenges the validity of the foreclosure proceedings. Her challenges are grounded in her assertions that: the appellees "repeatedly failed to provide the required pre-mediation documentation as required under the law"; all loss-mitigation options had not been exhausted; the appellees provided affidavits containing false information; and the court failed to recognize the "unclean hands" of the Substitute Trustees. We will address each in turn.

1. The Circuit Court Did Not Abuse its Discretion...