Zachair, Ltd. v. Driggs

762 A.2d 991, 135 Md. App. 403, 2000 Md. App. LEXIS 198
Court of Special Appeals of Maryland·Decided November 30, 2000·No. 2865, Sept. Term, 1999·Published·Cited by 20 cases

Opinion

*408 ALPERT, Judge.

In this appeal, we are asked to resolve a long-standing dispute involving a 424-acre tract of land in Prince George’s County known as Hyde Field, on which both an airport and a sand and gravel mining operation are located. In the course of this resolution, we address interesting problems concerning, inter alia, punitive damages and the conversion of mining products.

PARTIES

The appellant and cross-appellee is Zachair, Ltd. (“Zachair”), the current owner of the property. Zachair was formed by Dr. Nabil Asterbadi for the purpose of acquiring Hyde Field at a foreclosure auction. The former owner, Washington Executive Airpark Limited Partnership (“the LP”), had purchased Hyde Field in 1988. To effectuate that purchase, the LP had given notes, totaling nearly $4,000,000.00 and apparently secured by deeds of trust, to Nationsbank 1 and to the previous owner of the property.

The appellees and cross-appellants are John Driggs (“Driggs”) and The Driggs Corporation (“TDC”). Driggs owned and controlled Washington Executive Airport, Inc. (“WEA”), which was the sole general partner of the LP. Thus, Driggs controlled the LP that owned Hyde Field. The LP contracted with WEA to operate the airport, and WEA in turn subcontracted the job to Freedom Air, Inc. 2 The LP contracted with Southern Maryland Sand and Gravel Corporation (“Southern”), which was also owned and controlled by Driggs, to run the mining operation. In 1992, Southern was replaced as mining vendor by TDC, another corporation owned and controlled by Driggs.

*409 FACTS

Dr. Asterbadi was an amateur pilot who took flying lessons at Hyde Field. He eventually became interested in buying the property. Asterbadi initiated discussions with Driggs in 1991, but Driggs was not interested in selling.

Asterbadi subsequently learned from TDC’s in-house counsel, James Berard, that both Driggs and the LP were in bankruptcy proceedings in the United States Bankruptcy Court for the District of Maryland and that the LP’s notes to Nationsbank and the previous owner were in default. Unbeknown to Driggs, Asterbadi began negotiations later in 1991 to purchase the notes. In 1994, Asterbadi finally purchased the notes for $500,000.00. Asterbadi eventually foreclosed on the deeds of trust and an auction was held on November 3, 1994. Zachair was the high bidder at the auction, purchasing the property for $1,500,000.00.

Zachair presented evidence at trial that established that Driggs and the various entities he controlled threw a number of obstacles in the path of Zachair’s acquisition of Hyde Field. In particular, Zachair presented evidence that, after Asterbadi purchased the notes from Nationsbank and the previous owner of Hyde Field, the LP filed a motion in connection with its bankruptcy proceedings to establish that the note were invalid, then appealed from the denial of the motion, in this way, the LP delayed the foreclosure auction.

Zachair also presented evidence that Jeffrey Frost—who was then counsel for Driggs, counsel to TDC, a member TDC’s board of directors, and a member of WEA’s board of directors—attended the auction along with two of Driggs’s friends, Charles Shapiro and Bruce Jaffe. The men disrupted the auction by raising numerous objections.

The evidence indicated that, after Zachair purchased the property at auction, Driggs, TDC, and the LP filed exceptions in the Circuit Court for Prince George’s County to have the *410 sale set aside. 3 WEA and TDC réfused to vacate the property and continued to conduct airport and mining operations and to reap the profits therefrom, turning over only a little more than $3,000.00 in mining profits to Zachair.

Even after the exceptions to the sale were denied and the sale was ratified on February 3, 1995, WEA and TDC refused to vacate the property, and an eviction was scheduled for March 17, 1995. On that date, TDC filed an emergency motion to stay the eviction on the ground that an appeal to this Court had been noted from the ratification of the sale. An appeal bond was never filed, however, and the eviction was rescheduled for, and earned out on, March 29,1995.

The evidence indicated that Southern, which held a mining permit issued by the Bureau of Mines of the Maryland Department of the Environment, and which allowed TDC to use the permit to mine Hyde Field, refused to permit Zachair to use the permit and refused to consent to a transfer of the permit to Zachair. In order to obtain the permit, Zachair had to file a declaratory judgment action in the Circuit Court for Baltimore City to establish that Southern’s consent to the transfer was not necessary. 4 The declaratory judgment action was not resolved until February of 1996, and Southern then appealed the decision to this Court. The appeal was ultimately dismissed, and the permit was transferred to Zachair.

Upon the LP’s application at the time it acquired Hyde Field, the Prince George’s County Council, acting as the District Council, had granted a special exception to its zoning ordinance, allowing surface mining at Hyde Field. 5 After the eviction, the LP, through Jeffrey Frost, sought to withdraw the application and to thus abolish the special exception. A Zoning Hearing Examiner for the District Council denied the *411 LP’s attempt, and the LP appealed—unsuccessfully—to the District Council.

In October of 1997, Zachair filed suit against: Driggs; TDC; Southern; WEA; and Charles Shapiro and Bruce Jaffe, the two men who, with Frost, attended the foreclosure auction. The LP was not named in the suit, apparently because it was bankrupt when the suit was filed. The suit sought compensatory and punitive damages in connection with the various acts that impeded and delayed Zachair’s acquisition and operation of Hyde Field. It contained counts against various combinations of the defendants for trespass, conversion, tortious interference with contractual or economic relations, breach of contract, unjust enrichment, fraud, malicious use of process, abuse of process, and conspiracy.

A jury trial was held in the Circuit Court for Prince George’s County (Platt, J. presiding) in October of 1999. Before the case went to the jury, Zachair voluntarily dismissed the counts for trespass, breach of contract, unjust enrichment, and fraud. Further, Zachair voluntarily dismissed WEA and Southern from the case because the testimony established that they were “basically defunct.” The case against Shapiro was stayed due to Shapiro’s bankruptcy.

The remaining counts against Driggs, TDC, and Jaffe then went to the jury.

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Zachair, Ltd. v. Driggs, 762 A.2d 991, 135 Md. App. 403, 2000 Md. App. LEXIS 198 (Md. Ct. App. 2000).

762 A.2d 991 (Zachair, Ltd. v. Driggs) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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