Midaro Investments 2021 v. Gerzowski

CourtCourt of Special Appeals of Maryland
DecidedDecember 23, 2025
Docket1991/23
StatusPublished

This text of Midaro Investments 2021 v. Gerzowski (Midaro Investments 2021 v. Gerzowski) 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
Midaro Investments 2021 v. Gerzowski, (Md. Ct. App. 2025).

Opinion

Midaro Investments 2021, LLC v. Ari Gerzowski, et al., Nos. 1991 and 1992, Sept. Term, 2023, Opinion by Shaw, J.

PROPERTY – DEED OF TRUST FORECLOSURE – JURISDICTION – DOCTRINE OF CUSTODIA LEGIS

After the sale of real property in an action to foreclose the right of redemption under a deed of trust, but before the sale was ratified by the court, the same property was sold in a tax sale, and the tax sale purchaser obtained a judgment foreclosing the taxpayer’s right of redemption. The circuit court subsequently vacated the judgment of foreclosure in the tax sale case and voided the tax sale certificate upon a conclusion that the subject property was in custodia legis in the previously filed deed of trust foreclosure action.

“Custodia legis” means in the custody or control of the law. Voge v. Olin, 69 Md. App. 508, 512 (1986). Property that is in custodia legis precludes action in another subsequent proceeding which would affect the property’s disposition. Property is placed in custodia legis when the court appoints a trustee to sell the property. Property is not in custodia legis if the trustee is appointed by the beneficiary of the deed of trust. Because the trustee in the deed of trust foreclosure action was not appointed by the court, the property was not in custodia legis in the deed of trust foreclosure action. The circuit court erred in vacating the judgment of foreclosure in the tax sale proceeding. Circuit Court for Baltimore City Case Nos. 24-O-19-000164 & 24-C-21-005357

REPORTED

IN THE APPELLATE COURT

OF MARYLAND

No. 1991

September Term, 2023

No. 1992

(Consolidated) ______________________________________

MIDARO INVESTMENTS 2021, LLC

v.

ARI GERZOWSKI, ET AL.

______________________________________ Shaw, Nazarian, Kehoe, Christopher B. (Senior Judge, Specially Assigned),

JJ. ______________________________________

Opinion by Shaw, J. ______________________________________

Filed: December 23, 2025 Pursuant to the Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. * Albright, J., did not participate in the Court’s 2025.12.23 decision to designate this opinion for publication pursuant to Md. Rule 8-605.1. 11:52:15 -05'00' Gregory Hilton, Clerk These consolidated appeals arise from overlapping proceedings in the Circuit Court

for Baltimore City to foreclose rights of redemption in the same property. In December of

2019, the subject property, identified as 2702 Lighthouse Point East #518, Baltimore (“the

Property”), was sold pursuant to a power of sale provision in a deed of trust (“trustee’s

sale”) to Dominion Properties, LLC (“Dominion”), one of the two appellees in this matter.

In May of 2021, prior to judicial ratification of the trustee’s sale, the Property was sold at

a tax sale to Midaro Investments 2021, LLC (“Midaro”), the Appellant. On June 7, 2023,

at which time the trustee’s sale to Dominion still had not been ratified, Midaro obtained a

judgment foreclosing the taxpayer’s rights of redemption. On July 20, 2023, Midaro was

issued a fee simple deed to the Property.

Midaro subsequently filed exceptions to the notice of the unratified trustee’s sale

and moved to vacate the deed of trust foreclosure action. In support of the request for

relief, Midaro provided the court with the certificate of tax sale, the judgment foreclosing

the taxpayer’s right of redemption, and the deed to the Property. The court overruled the

exceptions, denied the motion to vacate, and issued a final order ratifying the trustee’s sale.

In the tax sale foreclosure case, the court vacated the judgment of foreclosure in favor of

Midaro.

Midaro filed an appeal in both cases, which have been consolidated in this Court.

Midaro presents three questions for our review, which we have merged into two and

rephrased: 10F

1 In appeal number 1991, Appellant presented two questions: 1. Did the circuit court err in denying Midaro’s exceptions to the trustee’s sale based on a finding that Midaro failed to “set forth with particularity the alleged irregularity in the manner or conduct of the sale”?

2. Did the circuit court err in determining that, at the time of the tax sale, the Property was in custodia legis in the deed of trust foreclosure case?

For the following reasons, we hold the circuit court did not err in denying exceptions, but

erred in concluding the Property was in custodia legis. Consequently, we vacate the orders

at issue in both cases and remand for further proceedings.

BACKGROUND

Deed of Trust Foreclosure Case

In 2006, Ari Gerzowski executed a promissory note in the amount of $371,250.00.

Repayment of the note was secured by a deed of trust on the Property, which included a

1. Did the Circuit Court for Baltimore City err in finding that Appellant failed to “set forth with particularity the alleged irregularity in the manner or conduct of the sale” when the basis of Appellant’s Exception to Sale was that the Appellant had a Judgment Foreclosing Right of Redemption and the Foreclosure Sale continued for several years and was not timely ratified by the Circuit Court for Baltimore City?

2. Did the Circuit Court for Baltimore City err in entering an Order Overruling Appellant’s Exceptions to Sale and Denying Motion to Vacate Foreclosure action based on its finding that the subject Property was in custodia legis?

In appeal number 1992, Appellant presented one question: 1. Did the Circuit Court for Baltimore City err in vacating Appellant’s Judgment Foreclosing Right of Redemption, voiding Appellant’s Tax Sale Certificate, and dismissing Appellant’s Tax Sale Foreclosure based on its finding that the subject Property was in custodia legis?

2 power of sale provision. U.S. Bank National Association (“U.S. Bank”), the second

appellee in this matter, was subsequently assigned the deed of trust.

On January 28, 2019, a substitute trustee appointed by U.S. Bank filed an Order to

Docket foreclosure of the deed of trust in the circuit court. The substitute trustee filed a

report of sale on December 18, 2019, stating the Property was sold to Dominion. On March

2, 2020, the court issued an order denying ratification of the sale on grounds that the

Property was not properly identified in the report of sale.

Three days later, Governor Larry Hogan declared a State of Emergency due to the

COVID-19 pandemic. Thereafter, the Supreme Court of Maryland issued an

Administrative Order suspending residential foreclosures, tax sales, and evictions.

On October 23, 2020, Dominion filed a motion for abatement of interest and real

property taxes accrued from March 2, 2020, until such time as the trustee’s sale was

ratified. As grounds for the motion, Dominion asserted the delay in ratification was

attributable to neglect by the substitute trustee as well as the moratorium on foreclosure

actions.

The substitute trustee filed an Exemption from Foreclosure Moratorium on March

1, 2021. The court denied the request for an order to proceed, stating that the declaration

did not include the requisite averments needed to comply with the administrative order

lifting the moratorium. On June 1, 2021, the substitute trustees filed an amended

declaration of exemption from the foreclosure moratorium. On September 3, 2021,

Dominion filed a request for the court to review the file for ratification, and on November

3 23, 2021, Dominion filed a second line requesting review. The court issued an order to

proceed on January 28, 2022.

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

Related

Simard v. White
859 A.2d 168 (Court of Appeals of Maryland, 2004)
Quillens v. Parker
908 A.2d 674 (Court of Special Appeals of Maryland, 2006)
YIVO Institute for Jewish Research v. Zaleski
874 A.2d 411 (Court of Appeals of Maryland, 2005)
Minh-Vu Hoang v. Hewitt Avenue Associates, LLC
936 A.2d 915 (Court of Special Appeals of Maryland, 2007)
Dampman v. Litzau
274 A.2d 347 (Court of Appeals of Maryland, 1971)
Canaj, Inc. v. Baker and Division Phase III
893 A.2d 1067 (Court of Appeals of Maryland, 2006)
White v. Simard
831 A.2d 517 (Court of Special Appeals of Maryland, 2003)
Lust v. Kolbe
356 A.2d 592 (Court of Special Appeals of Maryland, 1976)
Voge v. Olin
518 A.2d 474 (Court of Special Appeals of Maryland, 1986)
Zorzit v. 915 W. 36th Street, LLC
12 A.3d 698 (Court of Special Appeals of Maryland, 2011)
United States Life Insurance v. Wilson
18 A.3d 110 (Court of Special Appeals of Maryland, 2011)
Burson v. Capps
102 A.3d 353 (Court of Appeals of Maryland, 2014)
Granados v. Nadel
104 A.3d 921 (Court of Special Appeals of Maryland, 2014)
Devan v. Bomar
123 A.3d 686 (Court of Special Appeals of Maryland, 2015)
Hood v. Driscoll
135 A.3d 909 (Court of Special Appeals of Maryland, 2016)
Rouse v. Archer
131 A. 753 (Court of Appeals of Maryland, 1926)
Nationwide Prop. & Cas. v. Selective Way
248 A.3d 1044 (Court of Appeals of Maryland, 2021)
Buckey v. Snouffer
10 Md. 149 (Court of Appeals of Maryland, 1856)
Tucker v. Specialized Loan Servicing, LLC
83 F. Supp. 3d 635 (D. Maryland, 2015)
County Commissioners v. Clarke
36 Md. 206 (Court of Appeals of Maryland, 1872)

Cite This Page — Counsel Stack

Bluebook (online)
Midaro Investments 2021 v. Gerzowski, Counsel Stack Legal Research, https://law.counselstack.com/opinion/midaro-investments-2021-v-gerzowski-mdctspecapp-2025.