Goldstein & Baron Chartered v. Chesley

825 A.2d 985, 375 Md. 244, 2003 Md. LEXIS 317
CourtCourt of Appeals of Maryland
DecidedJune 11, 2003
Docket94, Sept. Term, 2002
StatusPublished
Cited by18 cases

This text of 825 A.2d 985 (Goldstein & Baron Chartered v. Chesley) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goldstein & Baron Chartered v. Chesley, 825 A.2d 985, 375 Md. 244, 2003 Md. LEXIS 317 (Md. 2003).

Opinion

WILNER, J.

The dispute that spawned this litigation arose from the sale of a parcel of land by the Estate of Dr. Erwin Rose to William Chesley. That sale produced a claim by a broker, Coldwell Banker, for a commission on the sale, an agreement by Chesley to indemnify the Estate against any liability for such a commission, and a further agreement by Chesley to alow the attorneys for the Estate, Goldstein & Baron, Chartered (G & B), to defend the claim by Coldwell Banker arid to pay the fees of G & B incurred in that defense. The claim for a commission was litigated and eventually settled. What linger with us are some procedural issues arising from separate litigation between Chesley and G & B over the indemnity agreement.

BACKGROUND

Prior to his death in July, 1987, Dr. Rose had listed the property with Coldwell Banker, agreeing to pay a 10% commission on any sale, but that agreement lapsed in March, 1987. During the period of the listing, Coldwell Banker *247 distributed literature about the property to a number of people, one of whom was Chesley. Upon Dr. Rose’s death, his sister, Rosalind Marsh, was appointed as personal representative of the Estate. Although she did not renew the listing with Coldwell Banker, that firm continued to market the property to prospective buyers in the belief that the listing remained effective. Two offers were sent to Ms. Marsh, but she did not respond to them.

At some point, Ms. Marsh retained G & B as attorneys for the Estate. In the course of that representation, Leonard Goldstein, a principal of G & B, began negotiating with Chesley and, on April 11, 1988, they concluded a written agreement for the sale of the property for $1,000,000. Although he did not believe that any commission was due to Coldwell Banker, Goldstein was aware that it might make a claim for one. To protect the Estate against such a claim, he inserted into the contract of sale the following provision:

“Seller and Purchaser hereby acknowledge and agree that no real estate commission shall be paid by Seller, and that any brokerage fee or commission resulting from this transaction shall be the sole responsibility of the Purchaser. If any claim or action is brought by any agent or broker for a commission with respect to this transaction, the Purchaser shall pay and hold harmless, defend and indemnify the Seller against all claims, costs, expenses, liability, damage or actions, including Seller’s attorneys’ fees, in connection with such claim or action.”

Goldstein promptly informed Coldwell Banker that the property had been sold. The sale was ratified by the Orphans’ Court, and closing occurred on July 8, 1988. On September 1, Coldwell Banker filed suit in the Circuit Court for Prince George’s County for a commission on the sale. The complaint was partially based on an allegation that, before he died, Dr. Rose had extended the listing agreement to May 30, 1988, and that the listing was therefore in existence when the property was sold. Goldstein notified Chesley of the lawsuit, reminded him of his obligation under the indemnity clause, and offered him the choice of obtaining his own attorney or *248 allowing G & B to conduct the defense. Chesley agreed to allow G & B to defend the action.

The case proceeded to trial in October, 1991. At the end of the plaintiffs case, the court entered judgment in favor of the Estate. Evidence had been presented that the extension agreement relied upon by Coldwell Banker was, in fact, a forgery. Aggrieved, Coldwell Banker appealed. In October, 1992, the Court of Special Appeals, in an unreported Opinion, reversed, concluding that there were certain triable issues for the jury to determine. Before the commencement of a second trial, Chesley entered into negotiations with Coldwell Banker and settled the case.

In June, 1989, while the case against Coldwell Banker was first pending in the Circuit Court, Ms. Marsh and G & B petitioned the Orphans’ Court for allowance of a fee in the amount of $175,252 for the legal services G & B had rendered. They noted that the maximum fee permitted under Maryland Code, Estates and Trust Article, § 7-601 was $125,353, based on a 10% commission on the real estate sold ($100,000 for the property sold to Chesley and $8,750 for the sale of other real estate), 10% of the first $20,000 of personalty, and 4% of the remaining personalty ($14,603), but they sought an additional $49,899 for extra and special services that G & B had rendered. In July, 1989, the court allowed the entire requested fee.

G & B began billing Chesley for its services in connection with the Coldwell Banker litigation in December, 1989. By April, 1994, G & B had billed a total of $65,811, of which Chesley paid $23,381. In August, 1995, after it became clear that Chesley did not intend to pay anything more, G & B filed suit in the Circuit Court for Prince George’s County, seeking a total of $52,675, including pre-judgment interest. G & B did not ask for a jury trial.

On November 2, Chesley filed an answer to the complaint, in which he raised a number of defenses, including an allegation that he was induced to enter into the indemnity agreement by fraudulent or negligent misrepresentations on Gold- *249 stein’s part. Chesley claimed that Goldstein had not only misrepresented Coldwell Banker’s participation in the sale but had also stated that no real estate commission would be paid by the Estate on the sale of the property, a statement that, in light of G & B’s acceptance of what Chesley regarded as a 10% commission on the sale, was false. Chesley did not pray a jury trial in his answer. A month later, however, on December 5, 1995, Chesley filed a counterclaim against G & B and a third party claim against Goldstein, based on the same allegation that Goldstein had fraudulently or negligently misrepresented that no commission would be paid by the Estate. Because Goldstein and G & B stand essentially in the same position, we shall, for convenience, refer to that pleading as a counterclaim against G & B. Chesley charged G & B with fraud, negligent misrepresentation, and legal malpractice and sought compensatory damages of $150,000, principally to cover the costs incurred in defending claims by the Estate and G & B. Attached to the counterclaim was a demand for jury trial — “Defendant, Counter Plaintiff and Third Party Plaintiff, William Chesley, [by counsel], hereby demands a trial by jury.”

In September, 1996, the court determined that Chesley’s counterclaim was barred by limitations and granted summary judgment to G & B on that claim. The basis for the court’s ruling was that Chesley became aware of the facts underlying the claim, which was filed in December, 1995, when the Court of Special Appeals filed its opinion in the Coldwell Banker appeal in October, 1992. Although it does not appear that the court ever formally struck Chesley’s demand for a jury trial, when the G & B claim was called for trial and Chesley asserted a right to a jury, the court determined that the jury trial demand, having been made more than 15 days after the answer was filed, was untimely.

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Bluebook (online)
825 A.2d 985, 375 Md. 244, 2003 Md. LEXIS 317, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goldstein-baron-chartered-v-chesley-md-2003.