Mrose v. Boles

1

HELEN MROSE v. SAMUEL BOLES

No. 251-2021

Court of Special Appeals of Maryland

June 9, 2022

Circuit Court for Anne Arundel County Case No C-02-CV-17-003171

Berger, Arthur, Zarnoch, Robert A. (Senior Judge, Specially Assigned), JJ.

OPINION ^[*]

ZARNOCH, J.

Helen Mrose, appellant/cross-appellee, and Samuel Boles, appellee/cross-appellant, appear before this Court for the second time in this breach of contract action. In the first appeal, we reversed the judgment of the Circuit Court for Anne Arundel County and remanded for entry of a judgment in favor of Mrose.

On remand, Mrose filed motions requesting prejudgment interest and attorney's fees. The court awarded Mrose $10, 000 of the $41, 446 in attorney's fees that she claimed. The court denied the motion for prejudgment interest.

Both parties filed a timely appeal. Mrose presents two questions for our review:

1. Did the Circuit Court err in awarding only $10, 000 in attorneys' fees to [Mrose] upon remand, when the fees incurred for this matter by [Mrose] were over $40, 000 where it is clear that any reasonable fee award would have been far greater than $10, 000 in this case?

2. Did the Circuit Court err in denying [Mrose]'s request for prejudgment interest, where the amount in question was a sum certain and was due upon a date certain?

On cross-appeal, Boles presents one question for review:

1. Did the [Circuit] Court err when it awarded Mrose attorney's fees because the new contract that this Court had found that the parties had created did not contain a provision for attorney's fees and Mrose failed to preserve the issue?

For the reasons to be discussed, we agree with Mrose that the court erred in denying her request for prejudgment interest and abused its discretion in determining the amount of attorney's fees to be awarded. We also reject Boles's cross appeal. Accordingly, we shall reverse the order denying prejudgment interest, vacate the award of attorney's fees, and remand to the circuit court with further instructions.

BACKGROUND

The parties were formerly married and were divorced in 2015. A marital settlement agreement ("Agreement") was incorporated but not merged into the judgment of divorce.

Among other things, the Agreement provided that, if Mrose chose not to exercise an option to purchase Boles's interest in the former marital home (the "Property") within four months, the Property would be sold, with the net proceeds to be divided equally between the parties. The Agreement also included language providing for attorney's fees in the event of a breach of any provision of the Agreement:

Each party hereby waives the right to assert any claim against the other party for counsel fees or legal services rendered to him or her at any time in the past, present, or future, except as stated in this Agreement and except that if either party breaches any provision of this Agreement, or is in default thereof, said party shall be responsible for any reasonable legal fees incurred by the other party in seeking to enforce this Agreement which are awarded by a court of competent jurisdiction.

The Property was eventually listed for sale. As an inducement to accept an offer that was $150, 000 less than what Mrose wanted for the Property, Boles offered to "split the difference[.]"

In the first appeal, we summarized the facts leading up to the breach of contract action:

The Property was initially listed for $2, 500, 000 from July 2016 until the listing was taken off the market in November 2016 due to market weakness. The Property was again listed on April 21, 2017 for $2, 300, 000, but the price was reduced to $2, 150, 000 in early May.

On May 20, 2017 the parties received their first offer on the Property for $1, 950, 000. Mrose was dissatisfied with this offer and explained to Boles that she refused to sell the Property for anything less than $2, 150, 000. In regard to this specific offer, Boles agreed to split the difference between the contract price and the price that Mrose was willing to sell the house. This sale was not completed.

On June 29, 2017 a new buyer offered $1, 975, 000 for the Property. Mrose wished to negotiate for a higher price because she believed the house was worth at least $2, 150, 000, but she ultimately reduced the amount she wanted to receive to $2, 125, 000. Elizabeth Montaner, the parties' real estate agent, advised by email that they should accept the offer of $1, 975, 000 with the condition that the buyer strikes the appraisal contingency, and stated that Boles would again agree to split the difference between the contract price and what Mrose was willing to sell the house for - this time a $150, 000 difference. In response to Montaner's email, Boles stated "[t]hat sounds fine. I am in agreement." He continued, "In an effort to not loose [sic] this buyer, I have agreed to kick in the difference at the moment, and then negotiate separately with [Mrose] to split the difference in the future."

Relying on the email agreement from Boles, Mrose signed the revised contract on June 30, 2017 to sell the Property for $1, 975, 000.

Mrose v. Boles, No. 341, Sept. Term 2019 (Md.App. October 30, 2020), slip op. at 1-2.

Based on the parties' agreement, Montaner directed the title company to divide the proceeds of the sale of the Property such that Mrose received $75, 000 more than Boles. Boles then claimed that he had made no such deal and demanded that the proceeds be split evenly.

Prior to closing, Mrose retained an attorney, who made efforts to compel Boles to comply with the agreement, to no avail. Mrose went through with the closing, under protest, and subsequently sued Boles for breach of contract. Boles countersued. Both parties requested attorney's fees.

Following a bench trial, the court denied the parties' respective claims for breach of contract and attorney's fees. With respect to Mrose's claim, the court found that email exchange was not a contract or a modification of the Agreement but was only a statement of intent. In a separate order, the court denied both parties' requests for attorney's fees. Mrose filed an appeal.

Prior Appeal

On appeal, we concluded that the circuit court erred in finding there was no contract of modification of the Agreement. We held: (1) that the parties, by email and/or by agency, "created a binding contract that modified the Agreement where Boles was to pay an additional $75, 000 of the Property proceeds" to Mrose, and (2) that "Boles breached the contract when he refused to pay the additional amount." Id. at 11. We remanded the case to the circuit court with the following mandate: "CASE REMANDED FOR ENTRY OF A JUDGMENT IN FAVOR OF [MROSE]."

Proceedings on Remand

On November 25, 2020, the circuit court entered a judgment in the amount of $75, 000 in favor of Mrose.^[1] Mrose filed a motion requesting that the judgment be revised to add prejudgment interest accruing from the date of the sale of the property. The court denied the motion and Mrose filed a motion for reconsideration.

On December 9, 2020, before the court's judgment became final, Mrose filed a motion for attorney's fees. On March 26, 2021, the court held an evidentiary hearing on Mrose's motion for attorney's fees and her motion for reconsideration of the order denying prejudgment interest.

At the hearing, Mrose submitted legal bills totaling $50, 015.19. Counsel for Mrose informed the court that he had discounted his hourly rate from $375 to $275 (which was increased at some point to $325), and that the bills had been paid. Counsel for Mrose explained that the amount of time expended on the case reflected the need to respond to "frivolous pleadings" filed by Boles, having to prepare for trial three times due to court postponements, researching the novel legal issues presented in the case, and ultimately appealing the court's ruling on the breach of contract claim. According to counsel, Mrose was undeterred by mounting legal bills. Counsel quoted Mrose as saying, "it's the principle, [Boles] made a deal, and I did what he wanted me to do, I signed that contract, I went to closing, he wouldn't pay me, and he owes me that money."

Mrose called an expert witness who testified that the attorney's fees were fair and reasonable, especially in light of the reduced hourly rate, and that there was nothing in the itemized bills that he "would characterize as frivolous or baseless that unnecessarily drove [up] the fee[.]" The expert stated that, although it might seem that "there was a lot going on for a $75, 000 dispute[, ]" it was an "unusual case" that was "hotly contested[, ]" and that "[t]here were significant legal arguments" and "a lot of pleadings" filed by both parties.

Boles objected to a bill for $4, 579.18 from Ronald Naditch, Esq. for services incurred before the closing took place and before suit was filed. After the court said that it would not consider fees incurred prior to the breach of the Agreement, Mrose withdrew Mr. Naditch's bill from her request for attorney's fees. Mrose also subtracted various other charges that Boles objected to on grounds that they were unrelated to efforts to enforce the Agreement.

In closing, Mrose ultimately requested that the court award attorney's fees in the amount of $41, 446. Boles argued that Mrose was not entitled to any relief because the parties' agreement regarding the distribution of proceeds from the sale of the Property was a "new contract" that contained no provision for attorney's fees.

Ruling from the bench, the court first declined to reconsider its order denying Mrose's request for prejudgment interest stating that it lacked authority to do so. The court then addressed the factors to be considered by a court in determining the amount of an award...