Court Decisions

In In the Matter of Annapolis Neck Peninsula Federation, et al. (August 9, 2016), the Circuit Court for Anne Arundel County agreed with the arguments of the developer, QW Properties, LLC, represented by RMG Chairman Ben Rosenberg and partner Andy Baida, and held that there is no statutory right to seek judicial review of a decision by the City of Annapolis Building Board of Appeals denying an appeal from a City agency's approval of the developer's forest conservation plan.

In an opinion issued July 6, 2016, Bob Smith Automotive Group, Inc., et al. v. Ally Financial, Inc., the Court of Special Appeals affirmed judgment in favor of RMG’s client, Ally Financial, Inc. The Court upheld the Circuit Court's decision that Ally had properly demanded payment of more than $13 million of floor-plan financing which Ally had extended to the plaintiff auto dealerships. The Court of Special Appeals also adopted the reasoning of its earlier opinion in Waller v. Maryland National Bank, 95, Md. App. 197 (1993), vacated on other grounds, 322 Md. 375 (1993), and held “that the duty of good faith and fair dealing does not preclude the holder of an unambiguous demand note from demanding immediate payment.” RMG attorneys Benjamin Rosenberg, David Wyand, Andrew Baida and Stuart Cherry represented Ally.

In Glenham Community Association v. Board of Municipal and Zoning Appeals and Two Farms, Inc. (May 9, 2016), the Circuit Court for Baltimore City affirmed a decision by the Baltimore City Board of Zoning and Municipal Appeals approving the conditional use application of Two Farms, Inc. to construct a Royal Farms gasoline service station and convenience store. Andrew Baida and Caroline Hecker represented Two Farms.

In Bel Air Plaza Limited Partnership v. Ross Dress for Less, Inc., Chief Judge Catherine C. Blake of the United States District Court for the District of Maryland granted summary judgment in favor of RMG's client, Bel Air Plaza Limited Partnership, an affiliate of Hill Management Services, Inc. Benjamin Rosenberg and Harris W. Eisenstein successfully argued that Ross Dress for Less, Inc. was solely responsible for repairing damage to the flooring within the premises its leases from Bel Air Plaza Limited Partnership. The District Court also awarded RMG’s client its legal fees and expert witness expenses pursuant to the fee-shifting provision in the lease between the parties. The District Court's opinion is available here, and the opinion and order awarding fees is available here.

In United States of America, ex rel. Joseph M. Hedley and Fred A. Rauch, III v. Abhe & Svoboda, Inc. (February 1, 2016), Judge Richard D. Bennett of the United States District Court for the District of Maryland granted the plaintiffs’ post-judgment motion and revived a qui tam lawsuit arising out of a $10 million contract for the cleaning and repainting of the Severn River Bridge. Gerard P. Martin, Harris W. Eisenstein, and co-counsel in St. Louis, Missouri are handling the case on behalf of the plaintiffs.

In Twin Arch Crossing Homeowners Association, Inc. v. Town of Mount Airy, Maryland, Maryland v. Full Property, LLC (January 12, 2016), Benjamin Rosenberg, David Wyand, and Harris W. Eisenstein represented Full Property, LLC.  The HOA-plaintiff sought to compel the Town to assume ownership of private roads within a residential community developed by Full Property. The Town filed a third-party complaint against Full Property, claiming that the developer had agreed to indemnify the Town for the HOA’s claims.  The Circuit Court for Carroll County granted summary judgment in favor of Full Property, LLC.  The Court agreed with Full Property and the Town that the Court lacked authority to compel the Town to take ownership of the private roads, which rendered the Town’s indemnity claim against Full Property moot.

In Viveros v. Landcrafters, LLC, decided on December 16, 2015, Andy Baida convinced the Maryland Court of Special Appeals to reverse the trial court's dismissal of his client's worker's compensation claim and remand the case for a trial. The trial court dismissed the claim on the ground that the record of the proceedings before the Workers' Compensation Commission was not timely transmitted to the trial court. The appellate court reversed, holding that there was substantial compliance with the Maryland Rule governing submittal of the record and that a delay in transmitting a portion of the record resulted in no prejudice.

Gerard P. Martin acted as co-counsel for Ford Motor Company in Paice, LLC and the A.S. Abell Foundation v. Ford Motor Company, decided on July 24, 2015. Paice, LLC (“Paice”) and the A.S. Abell Foundation (“Abell”) sued Ford in the United States District Court for the District of Maryland, alleging that Ford’s hybrid technology infringes on a number of United States Patents that Paice claims it holds. In partial response to the suit brought against Ford, Ford filed 25 actions before the Patent Trial and Appeals Board (PTAB) challenging the validity of the claimed Paice patents. The United States District Court then stayed the patent infringement suit pending the disposition of the PTAB actions, which could result in the patents being invalidated. Paice and Abell requested that the stay be lifted and filed a Motion for Preliminary Injunction asking the court to enjoin Ford from proceeding in the PTAB actions because of an alleged violation of an earlier Arbitration Agreement between Paice and Ford. Following a hearing in the District Court, that injunction was denied. The Patent Office will now be able to decide if it made any errors in the original grant of the Patents to Paice, which could result in complete dismissal of the underlying infringement suit.

In Redox Power Systems, LLC v. Paul Faulkner (June 1, 2015), an Arbitration Panel before the FORUM, dismissed a domain name Complaint, filed pursuant to the Uniform Domain Name Dispute Resolution Policy (UDRP). David Wyand and Andrew Baida represented the Respondent, and successfully argued that the Panel should dismiss the UDRP Complaint because the case involved a complex business dispute that was outside the scope of the UDRP policy. The Panel’s Decision is available by clicking here.

Co-chair of RMG's Creditors' Rights group, Louis J. Ebert, was successful in opposing the confirmation of a plan of reorganization filed in the US Bankruptcy Court for the District of Maryland. The plan provided for treating the client’s second priority mortgage lien as an unsecured claim on the grounds that the value of the collateral was less than the claim of the first mortgage lender. Rather than risk the dismissal of the case, the debtor offered a settlement which involved converting our client’s unsecured claim to a fully secured claim. The result of this settlement is that instead of receiving very small payments over a period of 12 years, paying at most 3 cents on the dollar, the client will be contractually entitled to receive payment in full on its claim with 5 ½% interest, by monthly installments and a balloon after 5 years.

In a case referred by counsel for the plaintiff, Andy Baida persuaded the Court of Appeals of Maryland in Harbor Hospital v. Norfleet (January 20, 2015) not to disturb a $21 million jury verdict in favor of the plaintiff for injuries resulting from a hospital's negligence.

In Sullivan v. QW Properties, LLC (December 9, 2014), the Court of Special Appeals affirmed a decision by the Circuit Court for Anne Arundel County that the City of Annapolis Board of Appeals' denial of a residential planned development application was arbitrary and capricious. RMG Chairman Ben Rosenberg and partner Andy Baida represented the developer, QW Properties, LLC.

In Robert B. Yoe, et al. v Branch Banking and Trust Company (November 12, 2014), the United States Court of Appeals for the Fourth Circuit affirmed the dismissal by the United States District Court for the Northern District of West Virginia of claims asserted against RMG client BB&T by the heirs of Harry W. Yoe under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and for common law fraud. The District Court held that the heirs’ complaint did not state a claim under RICO and that the fraud claims were barred by the statute of limitations. The heirs appealed the dismissal of only the fraud claims. The Fourth Circuit agreed with the District Court’s conclusion that the statute of limitations expired before the heirs asserted the fraud claims. William Hallam and lawyers from Jackson Kelly, PLLC represented BB&T in the District Court. Mr. Hallam and Andrew Baida were co-counsel with Jackson Kelly, PLLC in the Fourth Circuit.

In Bob Smith Automotive Group, Inc., et al. v. Ally Financial, Inc. (September 8, 2014), the Circuit Court for Talbot County entered judgment in favor of RMG’s client, Ally Financial Inc. after a four-week bench trial before Judge Karen Murphy Jensen, specially assigned. The plaintiffs sought damages against Ally of more than $20 million, alleging that Ally improperly demanded payment of more than $13 million of floor-plan financing, which Ally had extended to the plaintiff auto dealerships. The Court dismissed all of the plaintiffs’ tort claims at the conclusion of the trial and entered judgment in favor of RMG’s client on the remaining breach of contract claims in a 31-page written opinion filed on September 8, 2014. RMG attorneys Benjamin Rosenberg, David Wyand, Andrew Baida and Stuart Cherry represented Ally.  Click here to read the article in The Daily Record.

In Jones v. Pohanka Auto North, Inc., et al., decided on September 2, 2014, Gerry Gaeng and Jim Crossan successfully defended Maryland car dealers from claims by consumers that the dealerships violated Maryland’s Credit Grantor Closed End Credit Provisions (“CLEC”). The plaintiffs filed a putative class action complaint alleging that the dealerships sold and financed debt cancellation agreements that did not comply with CLEC and sought statutory penalties, including the forfeiture of all interest and fees collected during the life of the loans, against the dealerships. The United States District Court for the District of Maryland granted the dealerships’ motion to dismiss. The court agreed with the dealerships that because the CLEC’s language became part of the contract, as a matter of law, there was no violation of CLEC unless the dealership refused to honor the statutory language incorporated into the contract. Because there was no such refusal by the dealerships, the dealerships could not be liable for breach of contract or violation of the CLEC statute. Click here to view the opinion.

In a probate matter being administered by the Orphans’ Court for St. Mary’s County and as a result of a trial before a three-judge panel on August 12, 2014, Stuart A. Cherry successfully prosecuted a petition to allow a claim on behalf of one of the estate’s creditors. This victory came after the estate attempted to disallow the claim in full.

On August 5, 2014, Chief Judge Cecelia G. Morris of the United States Bankruptcy Court for the Southern District of New York entered an order granting a motion to lift the automatic stay imposed by 11 U.S.C. Section 362 filed by Gerard J. Gaeng and Stuart A. Cherry on behalf of one of RMG’s clients. Obtaining the lifting of the bankruptcy stay permits RMG’s client to maintain a lawsuit in the United States District Court for the District of Maryland that RMG filed against the debtor prior to the debtor filing for bankruptcy relief.

In Tal-Dor Partners, LLC v. Clear Channel Outdoor, Inc. and NextMedia Outdoor, Inc., decided by the Court of Special Appeals on July 24, 2014, David Wyand successfully defended a claim by a landowner that a billboard lease was invalid and unenforceable. The Court of Special Appeals affirmed summary judgment granted by the Circuit Court for Dorchester County, rejecting claims that the billboard lease did not adequately describe the property, that the billboard lease had to be recorded to be enforceable, and that the billboard lease constituted an invalid subdivision.

In an arbitration proceeding and multi-pronged litigation that concluded in July 2014 in the Circuit Court for Baltimore City, Ben Rosenberg, Andy Baida and Harris Eisenstein obtained judgments totaling almost $2,000,000 on behalf of RMG’s client, William Glazer, against Glazer-Kennedy Insider’s Circle, LLC, a special purpose entity formed by a Chicago-based private equity fund to acquire Mr. Glazer’s business.

In Thompkins v. Mountaineer Investment, LLC, decided on June 23, 2014, Gerry Gaeng and Andy Baida were the principal drafters of the Brief of Amici Curiae filed in the Maryland Court of Appeals on behalf of the Maryland Bankers Association and a group of national and regional financial institutions arguing against plaintiffs’ theories of assignee liability. In Thompkins, the plaintiffs claimed that the lender on their second-mortgage loan charged closing fees in excess of those permitted under Maryland’s Secondary Mortgage Loan Law (SMLL). Arguing that Maryland’s Uniform Commercial Code and common law created assignee liability, plaintiffs sought statutory penalties for the SMLL violations, including the forfeiture of all interest and fees collected during the life of the loan, against the assignee who had purchased the loan. The Court of Appeals rejected plaintiffs’ contentions and held that a borrower could not sue the assignee of a paid-off mortgage loan for violations of the SMLL that were allegedly committed by the lender at the loan closing.  Click here to read the opinion.

In Denburg & Low, P.A. v. Reservoir Limited Partnership (November 2013), Ben Rosenberg and Andy Baida successfully argued before the Maryland Court of Special Appeals that their client could not be sued for damages by an accounting firm which discovered mold in the building space it had leased when the firm rescinded the lease prior to taking possession by cashing a check returning the security deposit and prepaid rent.

In Brault Graham, LLC v. Law Offices of Peter G. Angelos, P.C. (May 2013), the Court of Special Appeals held that a law firm represented by Ben Rosenberg, Andy Baida, and Stuart Cherry was entitled to recover the reasonable value of the legal services which the law firm had provided to former clients in a complex medical malpractice case for approximately five years prior to being discharged.

In Wrightson v. Ashburn, decided on April 5, 2013, Andy Baida and Stuart Cherry persuaded the Maryland Court of Special Appeals to overturn multiple verdicts returned by a jury based on claims arising out of a contract which the plaintiff alleged she had entered into with their clients. The total amount awarded the plaintiff at trial was $1,015,000. On appeal, the court reversed all judgments with the exception of a judgment for $315,000 against one of the clients based on a breach of contract claim, which the court vacated and remanded to the trial court for the entry of a judgment for $80,000.

Gerry Gaeng successfully represented several national financial services companies in a consolidated appeal of eighteen class-action and individual consumer lawsuits that was decided by the United States Court of Appeals for the Fourth Circuit.

The cases were brought by borrowers who alleged that their second-mortgage loans were made in violation of Maryland’s Secondary Mortgage Loan Law (“SMLL”). Representing financial service companies who had purchased plaintiffs’ loans, Gaeng successfully argued in the United States District Court for the District of Maryland that the cases should be dismissed because there is no assignee derivative liability for SMLL violations committed by the original lenders.

When the dismissals were appealed, Gaeng again argued for defendants in the Fourth Circuit, which affirmed the dismissals and ruled that even if the borrowers could have stated claims for derivative liability against the loan purchasers under state or federal law, the claims would be barred by the applicable statutes of limitations. Click here to read the Opinion.

Gerry Gaeng and Andy Baida successfully represented several national financial services companies in multiple consolidated appeals of consumer lawsuits that were recently decided by Maryland’s Court of Appeals. The cases were brought by borrowers under Maryland’s Secondary Mortgage Loan Law (“SMLL”) against companies who had purchased the mortgage loans. Plaintiffs alleged that the lenders who made the loans violated the SMLL by failing to provide a disclosure form and by charging multiple closing fees, and argued that the purchasers of the loans should be liable for the lender’s violations. The Court of Appeals agreed with defendants that the lenders had not violated the SMLL. It held that the disclosure form was not required unless the mortgage loan is for commercial purposes, and that the charging of multiple loan origination fees does not violate the SMLL as long as the aggregate of the fees is within the statute’s 10% cap. The Court of Appeals also rejected plaintiffs’ claims that the purchasers of the loans could be liable for failing to provide loan documents to borrowers who requested them long after the loan had been paid off. Click here to read the opinion.