Fowler v. Fitzgerald

570 A.2d 866, 82 Md. App. 166, 1990 Md. App. LEXIS 44
CourtCourt of Special Appeals of Maryland
DecidedMarch 6, 1990
Docket598-600, September Term, 1989
StatusPublished
Cited by6 cases

This text of 570 A.2d 866 (Fowler v. Fitzgerald) 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
Fowler v. Fitzgerald, 570 A.2d 866, 82 Md. App. 166, 1990 Md. App. LEXIS 44 (Md. Ct. App. 1990).

Opinion

WILNER, Judge.

The principal dispute in this case involves an issue that has plagued the Court of Appeals and its Standing Committee on Rules of Practice and Procedure for more than a decade: what, if any, limits there should be on fees paid to an auctioneer who, on behalf of a trustee or sheriff, conducts a forced sale of real property.

The underlying facts here are not in dispute. In 1987, three judgments were entered against Claude and Delores Goldsmith in the Circuit Court for St. Mary’s County. One, in the amount of $51,980, was in favor of John Fowler and Fred Pumphrey; the second, in the amount of $11,250, was in favor of John and Tracy Fowler; and the third, also in the amount of $11,250, was in favor of Emmet and Virginia Potter. On November 10, 1987, the sheriff levied execution on certain real property owned by the Goldsmiths. That *168 property — lots 140, 141, and 142 Shenandoah Drive — was already subject to two mortgage liens.

Before any sale of the property could take place, the Goldsmiths filed a petition in bankruptcy, thereby staying further proceedings. In September, 1988, the Bankruptcy Court approved a stipulation of settlement allowing the sheriffs sale to proceed, subject to the following conditions:

(1) ' The judgment creditors would bid at least $105,000 for the property, including the two mortgage liens;

(2) The Goldsmiths would receive $9,309 out of the proceeds of sale as their claimed exemption of equity “after payment of or credit to purchaser for the first and second liens on the subject properties but prior to any distribution of proceeds to [the judgment creditors]”;

(3) The judgment creditors would reduce their claims to $45,000, in the aggregate; and

(4) Any funds received at the sheriffs sale in excess of the two liens, the debtors’ exemption, and the judgment creditors’ liens in the amount of $45,000 would be paid to the bankruptcy estate.

With the bankruptcy stay lifted, the execution sale took place on November 3, 1988. Although a deputy sheriff was in attendance, in accordance with a general policy of the sheriff an auctioneer, William J. Fitzgerald, actually conducted the sale. Prior to the sale, counsel for the judgment creditors announced that the property was subject to the two mortgage liens which, at the time, had an aggregate balance of $83,768. According to the sheriff, 10 people appeared at the sale, three of whom submitted bids. The high bid was $27,000, which came from John and Tracy Fowler.

In due course, the sheriff filed his report of sale and proposed distribution. The Report of Sale showed the high bid to be “$27,000 over and above the first and second mortgages totaling $83,768.54 — effective total sale price $110,768.54.” The proposed distribution showed a total sales price of $110,768. From that, the sheriff deducted a Sheriffs fee of $250, an auctioneer’s fee of $4,430, and advertising expenses of $88, leaving $106,000 for distribu *169 tion. Pursuant to the stipulation filed in the bankruptcy proceeding, the first $88,768 would go to the two mortgage lienholders, the Goldsmiths would get the next $9,309, and the balance of $12,923 would be applied against the $45,000 claim of the judgment creditors. It is evident from these documents, and was confirmed at oral argument, that the Fowlers, as successful bidders, did not in fact assume the mortgage debt but took the property subject to it.

On December 16, 1988, John Fowler filed a petition to establish a different distribution. He proposed to show the gross sales price as $27,000, to credit against that price the $88 advertising cost, a $210 sheriffs fee, and the $9,309 due to the Goldsmiths, and to have the balance of $17,393 credited against the judgments. Aside from a $40 difference in the sheriffs fee, the only significant difference between Fowler’s proposal and the sheriff’s was the auctioneer’s fee, which Fowler proposed to eliminate entirely.

At a hearing held on the petition, Fowler asserted that (1) if an auctioneer’s fee was proper at all, it should not come out of the funds received by the sheriff, for then the creditors rather than the debtors would be paying it, and (2) given the actual work done by the auctioneer, the fee was far too high. The evidence offered and taken at the hearing concerned the second complaint. Mr. Fitzgerald testified to the services he performed:

“Well, I stood in front of the courthouse steps. I mingled around the crowd who was there and were the serious bidders and who was not serious bidders. I proceeded to read the announcement in the local newspaper that showed the sale was going to take place, and the legal description, and the balance of the ad. And, I conducted the sale of the property on the courthouse steps.”

There was no indication that Mr. Fitzgerald did any other work in connection with the sale. There is nothing to suggest that he searched out any potential bidders. He said that he spent “probably half an hour to an hour” on the matter that day. As noted, only three people entered bids.

*170 The fee of $4,430 derived from the sheriffs policy of paying auctioneers 4% of the gross sales price received in sales of real property. That policy was established in 1987 by a sergeant in the sheriffs office, who was instructed by the sheriff to “set up a policy for auctioneers for the judicial system.” The sergeant contacted three auctioneers in the county, all of whom agreed to serve as auctioneers in sheriffs sales. He recounted: “I asked them what the fee for auctioneers was, and all three agreed this was the fees they were receiving, and we accepted those fees, four percent real estate and ten percent on personal property.” No one other than the three auctioneers was consulted. Effective September, 1987, the sergeant continued, the sheriffs policy was to employ an auctioneer for every sheriffs sale and to pay the agreed-upon scale. That is what the sheriff agreed to pay Mr. Fitzgerald.

Mr. Fowler offered evidence from a Michael Whitson, who described himself as a title abstractor who also worked as an auctioneer. Whitson opined that a reasonable fee for the work performed by Mr. Fitzgerald would be between $75 and $250. This was based on about 12 auctions he had conducted in St. Mary’s County and on his review of courthouse records of other sales. Because Mr. Whitson had never conducted a sheriff’s sale, however — his auctioneering experience being solely with foreclosure sales — the court struck his opinion testimony and ultimately entered an order ratifying the sheriff’s report. The $250 sheriff’s fee was approved based on a finding that the total sales price was $110,768, rather than $27,000, and the auctioneer’s fee was approved based on the sheriff’s practice of paying 4% of the total sales price. In this appeal, Mr. Fowler continues to challenge both fees.

I. Sheriffs Fee

Whether the sheriff’s fee should be $250 or $210 depends entirely on whether the sales price is to be regarded as $110,768 or only $27,000. Md.Cts. & Jud.Proc.Code Ann. § 7-402 sets the fees collectible by a sheriff. Subsec *171

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In the Matter of Dory
244 Md. App. 177 (Court of Special Appeals of Maryland, 2019)
Maddox v. Cohn
20 A.3d 153 (Court of Special Appeals of Maryland, 2011)
Goldberg v. Frick Electric Co.
770 A.2d 182 (Court of Appeals of Maryland, 2001)
Pizza v. Walter
694 A.2d 93 (Court of Appeals of Maryland, 1997)
91st Street Joint Venture v. Goldstein
691 A.2d 272 (Court of Special Appeals of Maryland, 1997)
Bunn v. Kuta
674 A.2d 26 (Court of Special Appeals of Maryland, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
570 A.2d 866, 82 Md. App. 166, 1990 Md. App. LEXIS 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fowler-v-fitzgerald-mdctspecapp-1990.