P.C. Real Estate Inv. v. BayVanguard Bank

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P.C. REAL ESTATE INVESTMENT, LLC v. BAYVANGUARD BANK

No. 276-2023

Court of Special Appeals of Maryland

January 23, 2024

UNREPORTED ^[*]

Circuit Court for Baltimore County Case No. C-03-CV-22-004349

Ripken, Albright, Kenney, James A., III (Senior Judge Specially Assigned), JJ.

OPINION

Ripken, J. Appellant, P.C. Real Estate Investment, LLC ("P.C. Real Estate") filed suit in the Circuit Court for Baltimore County for declaratory judgment, breach of contract and related counts against Appellee, BayVanguard Bank ("BayVanguard"). BayVanguard filed a preliminary motion to dismiss P.C. Real Estate's complaint. P.C. Real Estate then filed an opposition to the motion to dismiss, as well as an amended complaint. BayVanguard, likewise, moved to dismiss the amended complaint. Following a hearing, the circuit court ruled in favor of BayVanguard, dismissing P.C. Real Estate's amended complaint. P.C. Real Estate noted this timely appeal. For the reasons to follow, we shall affirm.

ISSUES PRESENTED FOR REVIEW

P.C. Real Estate presents the following questions for our review, which we have consolidated and rephrased as follows:^[1]

I. Whether the circuit court considered matters outside of the pleadings and thereby converted BayVanguard's motion to dismiss into a motion for summary judgment.

II. Whether the circuit court erred in its interpretation of the parties' email communications.

FACTUAL AND PROCEDURAL BACKGROUND

In January of 2010, P.C. Real Estate executed a note and a deed of trust in favor of Madison Federal Savings and Loan ("Madison" or "predecessor bank") secured by eight properties. Pursuant to the deed of trust, upon the sale of any of the properties, Madison could demand all proceeds of any such transaction. P.C. Real Estate engaged in discussions with Madison in 2018 regarding modifying the loan to provide for partial release values for the eight properties under the deed of trust. These discussions were not resolved prior to February of 2020 when Madison merged with BayVanguard, the surviving entity. BayVanguard assumed Madison's assets, including the loan.

In the following months, P.C. Real Estate contacted BayVanguard to pursue the discussions it had with the predecessor bank in 2018 regarding the establishment of a schedule of partial releases for the properties. On June 11, 2020, Patrick Hudson ("Hudson"), from P.C. Real Estate, emailed ("Hudson email") Timothy Prindle ("Prindle"), the President of BayVanguard, informing BayVanguard that one of the properties, 125 N. Luzerne Avenue ("Luzerne Avenue") was going to be sold. The Hudson email also indicated that the predecessor bank had agreed to consider partial repayment amounts from the proceeds of the sale. In the Hudson email, Hudson further requested "an opportunity to review [P.C. Real Estate's] entire portfolio." On June 30, 2020, Prindle forwarded P.C. Real Estate's request via email to Jeffrey Collier, ("Collier") the Senior Vice President of BayVanguard, designating him to handle the issue for the bank.

P.C. Real Estate sold Luzerne Avenue on July 15, 2020, and BayVanguard accepted a partial payoff in the amount of $65,000, which was the 2018 appraisal value. Collier then sent Hudson an email ("Collier email") on July 31, 2020, regarding the payoff amounts for the remaining seven properties, stating in relevant part:

Mr. Hudson, Based on the current outstanding balance on the loan ($634,636), the payoffs of each property securing the loan at this time is as follows:

2810 E. Baltimore Street

$123,119

2413 E. Fayette Street

$83,392

3207 Esther Place

$83,392

125 S. Highland Avenue

$103,318

32 N. Decker Avenue

$78,632

2937 Pulaski Highway

$75,394

2922 E. Fayette Street

$87,389

Total

$634,636

There was no response to the Collier email. Approximately two years later, in April of 2022, P.C. Real Estate received an offer for the sale of 2810 E. Baltimore Street ("Baltimore Street"), another property secured by the loan. Hudson forwarded his business partner, Charles Lamasa ("Lamasa"), the Collier email, which included a partial payoff amount from Baltimore Street in the amount of $123,119. Hudson added in his email to Lamasa that "we have made many payments since this initial schedule[.]" In response, Lamasa asked Hudson, "[h]ave you ever confirmed with Collier that we can get partial releases for the properties as the mortgage provides differently? . . . Was there an agreed upon payoff?" Hudson replied, "this is the banks indication it should now be lower." Later that day, Lamasa asked Hudson via email "to verify the payoff for 2810 E Baltimore St. The list you sent me has changed since the last time I dealt with the bank." Hudson wrote back, "hopefully they stick with the program." Two days after this email correspondence, on April 18, 2022, Hudson emailed Collier the following:

Good morning, Jeff. My partner, Charles Lamasa, recently received an offer for 2810 Baltimore St and would like to confirm the payoff. Many payments have been made on the loan since this determination but in order to accommodate a sale and hopefully avoid a lengthy process, an acknowledgement of $123,119 would be appreciated.

In May of 2022, without having received such acknowledgement or any other response from any representatives from BayVanguard, P.C. Real Estate contracted to sell Baltimore Street for $225,000. P.C. Real Estate indicated in its pleadings that it "reasonably anticipated" that BayVanguard would accept the partial payment amount of $123,119 previously contemplated in the 2020 Collier email. BayVanguard subsequently demanded and obtained the full proceeds from the sale and applied the proceeds to the loan balance.

Thereafter, in October of 2022, P.C. Real Estate filed a lawsuit against BayVanguard alleging that the email correspondence between the parties constituted a legally binding contract to modify the provisions of the deed of trust. In other words, P.C. Real Estate asserted that BayVanguard was contractually obligated to accept the payoff values provided to them in the Collier email dated July 31, 2020. BayVanguard subsequently moved to dismiss, and P.C. Real Estate filed a response. P.C. Real Estate then filed an amended complaint in January of 2023, with added allegations regarding a second property, 125 S. Highland Avenue, for which P.C. Real Estate wanted BayVanguard to apply the 2020 partial payoff value indicated in the Collier email. BayVanguard moved to dismiss the amended complaint for failure to state a claim. BayVanguard argued that the Collier email was not a valid loan modification. P.C. Real Estate filed a response and added a supplemental response with assertions based on Collier's Deposition ("Collier Deposition"). The supplemental response quoted portions of the Collier Deposition but did not include the transcript.^[2]

In March of 2023, the circuit court held a hearing on BayVanguard's motion to dismiss the amended complaint and heard arguments from counsel for both parties. The circuit court held another hearing ten days later to issue its ruling on the motion to dismiss.^[3] The circuit court granted BayVanguard's motion to dismiss on the basis that the Collier email from July 31, 2020 did not constitute a valid and enforceable contract or amendment to the previous deed of trust. Additional facts will be included as they become relevant to the issues.

DISCUSSION

I. The Circuit Court Did Not Convert BayVanguard's Motion to Dismiss Into a Motion for Summary Judgment.

A. Parties' Contentions

P.C. Real Estate argues that the circuit court erred in failing to convert the motion to dismiss into a motion for summary judgment because it considered matters outside of the pleadings. According to P.C. Real Estate, the court considered material outside of the complaint in ruling on the motion to dismiss related to "the issue of acceptance of the contract" and "time elements of the loan." Moreover, P.C. Real Estate asserts that had the circuit court properly converted the motion to dismiss into a motion for summary judgment, both parties would have had the opportunity to submit evidence on any disputed issue and introduce the "crucial" Collier Deposition. In response, BayVanguard argues that the motion to dismiss did not convert into a motion for summary judgment. BayVanguard further contends that the Collier Deposition transcript was not considered by the circuit court and thus, should not be considered by this Court on appeal.

B. Standard of Review

The standard of review for a grant of a motion to dismiss is whether the trial court was legally correct. Grier v. Heidenberg, 255 Md.App. 506, 520 (2022). As such, "We review the grant of a motion to dismiss de novo." Sutton v. FedFirst Financial Corp., 226 Md.App. 46, 74 (2015) (citation omitted). "In reviewing the grant of a motion to dismiss, we must determine whether the complaint, on its face, discloses a legally sufficient cause of action." Clark v. Prince George's County, 211 Md.App. 548, 557 (2013) (quoting Fioretti v. Md. State Bd. of Dental Exam'rs, 351 Md. 66, 71 (1998)). This analysis requires us to "presume the truth of all well-pleaded facts in the complaint, along with any reasonable inferences derived therefrom." Fioretti, 351 Md. at 72. Moreover, "[i]n reviewing the dismissal of a complaint on a motion to dismiss, we look only to the allegations in the complaint and any exhibits incorporated in it[.]" Worsham v. Ehrlich, 181 Md.App. 711, 722 (2008) (internal quotation marks and citation omitted).

"The well-pleaded facts setting forth the cause of action must be pleaded with sufficient specificity; bald assertions and conclusory statements by the pleader will not suffice." RRC Northeast, LLC v. BAA Maryland, Inc., 413 Md. 638, 644 (20...