Billman v. State of Maryland Deposit Insurance Fund Corp.

585 A.2d 238, 86 Md. App. 1, 1991 Md. App. LEXIS 35
CourtCourt of Special Appeals of Maryland
DecidedFebruary 4, 1991
Docket525, September Term, 1990
StatusPublished
Cited by19 cases

This text of 585 A.2d 238 (Billman v. State of Maryland Deposit Insurance Fund Corp.) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Billman v. State of Maryland Deposit Insurance Fund Corp., 585 A.2d 238, 86 Md. App. 1, 1991 Md. App. LEXIS 35 (Md. Ct. App. 1991).

Opinion

BISHOP, Judge.

This appeal is one of several related cases, each of which stems from the savings and loan difficulties that have plagued Maryland for the past several years. See, e.g., Billman v. State Deposit, 80 Md.App. 333, 563 A.2d 1110 (1989), vacated and remanded, 321 Md. 3, 580 A.2d 1044 (1990). On September 29, 1986, suit was brought by the State of Maryland Deposit Insurance Fund Corporation (MDIF), as Receiver for Community Savings & Loan, Inc., and Community Savings & Loan, Inc. (Community) against Batts Neck Corporation (BNC), the First through Sixth Batts Neck Companies, Epicenter Consolidated, Ltd., Epic Holdings, Ltd., Crysopt Corporation (Crysopt), Tom J. Bill-man (Billman) and other individuals who were former officers and directors of Community. The claims against several of the defendants were dismissed so that only BNC, the First through Sixth Batts Neck Companies, Crysopt and Billman remained. William J. Harnett filed a Motion to Intervene which was granted for the sole purpose of contesting the priority of MDIF’s judgment against Crysopt. Harnett’s claim has been dismissed.

On November 10, 1989, MDIF and Community filed a Motion for Sanctions for failure to provide discovery. The Circuit Court for Montgomery County (Joseph H. H. Kaplan, J., sitting by designation) granted the Motion for Sanctions and ruled, pursuant to Md.Rule 2-433(a), that the facts in the Complaint were deemed admitted and taken to be established and that the defendants were prohibited *6 from opposing plaintiffs’ designated claims. 1 An interlocutory order was entered against defendants on the issue of liability. The remedy was determined after a hearing on March 6, 1990, at which a final judgment was entered in favor of plaintiffs. The court ruled, inter alia, that Community was entitled to either the property or the proceeds of foreclosure sales in certain cases then pending in the Circuit Court for Queen Anne’s County, that otherwise would have been paid to the grantors of the deeds of trust. Additional facts will be included in our discussion of the questions presented.

ISSUES PRESENTED

Appellants present the following issues:

I. Whether the trial court erred in granting a default judgment in favor of MDIF as sanction for a discovery violation without a hearing on the issue of damages;

II. Whether the relief granted by the trial court was correct;

III. Whether the trial court erred in denying appellants’ motion for summary judgment on the grounds of res judicata; and,

IV. Whether the trial court erred in denying appellants’ motion for summary judgment under Md.Corps. & Ass’ns. Code Ann. § 2-419 (1985).

*7 I.

On September 29, 1989, appellees noted the depositions of Billman, Crysopt, and the First through Sixth Batts Neck Companies. The depositions were set for November 7, 1989, and included requests for production of documents, including BNC’s state income tax returns for 1985 and 1986 which had not been requested previously. 2 On November 6, 1989, one day before the scheduled depositions, appellants filed a Motion for Protective Order That Discovery Not Be Had. The trial court denied the motion and ordered that the depositions proceed as scheduled.

Appellants failed to appear for their depositions and to produce the requested documents. Appellees filed a Motion for Sanctions requesting that a judgment by default be entered against each of the appellants. After a hearing, the trial court granted the Motion for Sanctions. The trial court ruled that, pursuant to Maryland Rule 2-433(a), the facts in the Complaint were deemed admitted and taken to be established, and that Billman, Crysopt, BNC and the First through Sixth Batts Neck Companies were prohibited from opposing appellees’ designated claims. An interlocutory judgment was entered in favor of appellees on the issue of liability and a hearing was scheduled to determine the appropriate remedy.

MDIF requested the court to restore to Community the property, or the right to the proceeds of sale of that property, that Billman acquired during the “reorganization” of Community and its parent company. MDIF informed the court that it was seeking only this equitable relief and would abandon the remaining claims for relief requested in the Complaint. After the hearing on the remedy, the trial court granted the relief sought by MDIF.

*8 Appellants argue that the trial court erred in granting a default judgment in favor of appellees as a sanction for a discovery violation. Specifically, under this first issue, appellants contend A) that the trial court erred in granting a default judgment as a sanction because the deposition was noticed in bad faith and because there was no prejudice to appellees; B) that they were deprived of their constitutional right to a jury trial on the issue of damages; and, C) that they were deprived of due process by entry of a default judgment on the issue of damages. We will discuss each of these contentions seriatim.

A.

The trial court granted the default judgment in favor of MDIF pursuant to Md.Rule 2-433(a) which provides:

(a) For Certain Failures of Discovery. — Upon a motion filed under Rule 2-432(a), the court, if it finds a failure of discovery, may enter such orders in regard to the failure as are just, including one or more of the following:
(1) An order that the matters sought to be discovered, or any other designated facts shall be taken to be established for the purpose of the action in accordance with the claim of the party obtaining the order;
(2) An order refusing to allow the failing party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence; or
(3) An order striking out pleadings or parts thereof, or staying further proceeding until the discovery is provided, or dismissing the action or any part thereof, or entering a judgment by default that includes a determination as to liability and all relief sought by the moving party against the failing party if the court is satisfied that it has personal jurisdiction over that party. If, in order to enable the court to enter default judgment, it is necessary to take an account or to determine the amount of dam *9 ages or to establish the truth of any averment by evidence or to make an investigation of any matter, the court may rely on affidavits, conduct hearings or order references as appropriate, and, if requested, shall preserve to the plaintiff the right of trial by jury.

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Bluebook (online)
585 A.2d 238, 86 Md. App. 1, 1991 Md. App. LEXIS 35, Counsel Stack Legal Research, https://law.counselstack.com/opinion/billman-v-state-of-maryland-deposit-insurance-fund-corp-mdctspecapp-1991.