Thomas v. Rowhouses, Inc.

47 A.3d 625, 206 Md. App. 72, 2012 WL 2463936, 2012 Md. App. LEXIS 80
CourtCourt of Special Appeals of Maryland
DecidedJune 28, 2012
DocketNo. 2102
StatusPublished
Cited by11 cases

This text of 47 A.3d 625 (Thomas v. Rowhouses, Inc.) 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
Thomas v. Rowhouses, Inc., 47 A.3d 625, 206 Md. App. 72, 2012 WL 2463936, 2012 Md. App. LEXIS 80 (Md. Ct. App. 2012).

Opinion

ZARNOCH, J.

This case calls upon us to decide whether substituted service on the State Department of Assessments and Taxation (“SDAT”) under Md. Rule 2-124(o)2 is sufficient when a [75]*75corporation has forfeited its charter, has no resident agent, and the only corporate director listed in the articles of incorporation is deceased.3 In other words, when there is no one else in the corporate house left to serve, is the State the endgame recipient of service of process or do such lawsuits have no opportunity for survival? We hold that under these circumstances, service on SDAT is proper and thus, we remand the case so that the litigation may proceed in the Circuit Court for Baltimore City against the corporation. However, we also affirm the circuit court’s conclusion that service on a deceased director’s estate is not valid under Md.Code (1975, 2007 Repl. Vol.), Corporations and Associations Article (CA) § 3-515.4

[76]*76FACTS AND LEGAL PROCEEDINGS

On October 16, 2006, appellant,5 Christina Thomas, brought suit against appellees Rowhouses, Inc. (“Rowhouses”), and the Estate of Eric Patten (“the Estate”)in the circuit court,6 requesting damages due to lead paint poisoning. Thomas alleged that from 1987-1991, she resided in a property “owned and/or controlled and/or managed” by Rowhouses where she was exposed to lead paint. By the time suit was filed, Eric Patten, the corporate director whose estate is also an appellee, had died and Rowhouses had forfeited its corporate charter.7

Inexplicably, Rowhouses was not served with process through SDAT until November 5, 2009. On July 14, 2009, the circuit court issued a notification of contemplated dismissal, pursuant to Md. Rule 2-507, which prompted Thomas to file a motion to defer entry of the order of dismissal. On October 13, 2009, the court issued an Order Deferring Dismissal “to permit additional attempts of service.” The order stated: “[i]f service has not been made on the Defendant(s) by the deferral date [January 15, 2010], the clerk shall enter on the docket, ‘Dismissed for lack of jurisdiction without prejudice’ immediately as to all un-served Defendants.” The clerk never made this entry on the docket, but as later actions indicate, treated January 15, 2010 as the date of dismissal.8 On March 24, [77]*772010, Thomas filed a Request to Reissue Summons.9 On May 18, 2010, Joy Kennedy, Eric Patten’s personal representative, accepted service on behalf of the Estate. On August 19, 2010, the Estate attempted to file an answer, which the circuit court clerk rejected because the clerk regarded the case as dismissed on January 15, 2010.

On August 19, 2010, Rowhouses filed a motion to dismiss for insufficiency of service of process. On September 27, 2010, the Estate filed a motion to quash summons and vacate service. Following a hearing on October 20, 2010, the circuit court issued an order granting both motions. In an oral ruling, the circuit judge said:

[T]he clear and unambiguous language of the statute [CA Art. § 3-515] does not permit service of process upon the personal representative of the estate of a deceased director. The statute only permits service upon a surviving director. In addition, regarding service on the State Department of Assessments and Taxation!,] because a forfeited corporation is not a legal entity, the Maryland Rule 2-124(o) does not apply.

This appeal followed.

QUESTIONS PRESENTED

Thomas presents the following issues for our review:

1. Whether the trial court erred and/or abused its discretion i[n] granting Appellee Rowhouses, Inc’s Motion to Dismiss for Insufficiency of Service of Process.
2. Whether the trial court erred and/or abused its discretion in granting Appellee Estate of Eric Patten’s Motion to Quash Summons and Vacate Service.10
We answer yes to the first question and no to the second.

[78]*78DISCUSSION

I. Standard of Review

This case presents questions of statutory (and rule) interpretation, and “[w]e review a trial court’s interpretation ... through a non-deferential prism.” Polek v. J.P. Morgan Chase Bank, N.A., 424 Md. 333, 350, 36 A.3d 399 (2012) (internal citations omitted). See also State ex rel. Lennon v. Strazzella, 331 Md. 270, 273, 627 A.2d 1055 (1993) (“To interpret rules of procedure, we use the same canons and principles of construction used to interpret statutes.”) When a circuit court grants a motion to dismiss, we must determine whether the court was “legally correct in its decision to dismiss.” Menefee v. State, 417 Md. 740, 747, 12 A.3d 153 (2011).

II. Service on SDAT

A. Contentions of the Parties

Thomas contends that service on SDAT was proper because Md. Rule 2-124(o) is not limited to existing corporations. She argues that there is nothing in the plain language of its provisions preventing substituted service on SDAT in this case. Thomas also emphasizes that Rule 2-124(o) applies when a corporation has no resident agent, which is clearly the case here. In turn, appellees argue that Md. Rule 2-124(o) does not apply to a defunct corporation, but applies only to situations where an active corporation has a resident agent and that agent is not accessible for service. They also argue [79]*79that a defunct corporation is not “required” to have a resident agent. Thus, Rule 2-124(o ) did not apply.11

Appellees further contend that service upon Rowhouses cannot be achieved through SDAT, but can only be made on a surviving director-trustee of the forfeited corporation, who, at the time suit was filed, was Ival Cianchette.12 The circuit court agreed with appellees, finding that “Rule 2-124(o ) provides for substituted service in limited circumstances. And this court finds that it clearly does not apply to a defunct corporation, a forfeited corporation.”

Ordinarily, service on a corporation is governed by Md. Rule 2-124(d), which provides:

Service is made upon a corporation, incorporated association, or joint stock company by serving its resident agent, president, secretary, or treasurer. If the corporation, incorporated association, or joint stock company has no resident agent or if a good faith attempt to serve the resident agent, president, secretary, or treasurer has failed, service may be made by serving the manager, any director, vice president, assistant secretary, assistant treasurer, or other person expressly or impliedly authorized to receive service of process.13

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47 A.3d 625, 206 Md. App. 72, 2012 WL 2463936, 2012 Md. App. LEXIS 80, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-v-rowhouses-inc-mdctspecapp-2012.