In this post, I’m asking for the public’s help in answering a question. Therefore, I’ve also added a poll feature at the bottom that allows the reader to give their answer to the question. I’m going to provide actual documents and the actual law (made simple), so that you can judge for yourself. My goal is to show the reader how this can happen to YOU, since it is happening to me and to others. I’ve heard that a person can buy their case in Howard County if they have the money, or the connections. I need YOUR help in figuring something out.
Pretend for a moment that you started a business here in Maryland with a few of your friends. That is what Governor Hogan was trying to encourage when he declared that Maryland was “open for business” and started streamlining things to make it easier for people to do. The LLC form is the most popular, so you all start one. Let’s also pretend that something goes wrong within the company, and one of your “friends” sues you on behalf of the company. Maryland law allows that by what is called a derivative lawsuit. For those who want to look it up, you can find it in the Maryland Code in the Corporations and Associations part. 4A-801(a) “Scope of Right” reads that “A member may bring derivative action to enforce a right of a limited liability company to recover a judgment in its favor..”
Your “friend”, who hired two lawyers to file the derivative lawsuit for the company, keeps at it for 18 months in court. (yes, that can and does happen). It’s the only thing that IS actually moving, because the company stopped operating within a few months of the lawsuit being filed. (In other states, derivative lawsuits stop if the member no longer represents the interest of the company, but NOT in Maryland). Nevertheless, the company “won”, and the judge awards it $49,942. You wonder what that really means, because the company stopped running, filed its final tax return for the year prior to trial, and closed its bank account.
You get this from the clerk’s office regarding the $49,942.
You see what it looks like, but you call the clerk’s office and are told not to worry because it’s correct on their system at the courthouse. They say there’s a defect in their system that made it so that they couldn’t put the WHOLE party name for the derivative lawsuit onto the Notice that their office sent out. Would you believe them at this point? Let’s suppose you do, because it’s the clerk of the circuit court (an elected official who has to take an oath for office). What can THEY really do, (you think/wonder)?
Your “friend”, however, filed bankruptcy before trial. The thing is, this “friend” and her bankruptcy lawyer is claiming in federal court that SHE won the $49,942. You know that this is preposterous, because, well, you were there and know exactly what happened. You’re confused because she says under oath that the final tax return for the company was the final one. You realize that she’s lying to her bankruptcy attorney, and is using the Notice that is the way that it is because of the alleged DEFECT. It needs to be made clear to her, and to anyone else who is looking at this. It’s not as hard to get corrected as you might think. There’s a Maryland Rule that makes it easy to do.
Rule 2-535(d) states that: “Clerical mistakes in judgments, orders, or other parts of the record may be corrected by the court at any time on its own initiative, or on motion of any party after such notice, if any, as the court orders.” You don’t want any special favors by the court, so your attorney files a Motion to Correct Clerical Error to ask that “..the Notice of Recorded Judgment, any electronic judiciary case record, and all that has flowed from this inaccuracy by corrected to reflect the proper beneficiary of this derivative action..”. Simple, right? Do you think the company lawyers agree or disagree that there is an error to be corrected?
The company’s attorneys file a response stating that there is no error, and that the judge awarded to your “friend”. (SAY WHAT NOW?) Fine, you figure that they can lie all they want to, because you know that the judge who was there for the trial will certainly straighten it (and them) out. You are waiting, and waiting, and waiting some more for your day in court. It was filed in early 2013, and you can’t figure out for the life of you why it’s taking soooo long to get a hearing. You’re busy in federal court with your “friend’s” bankruptcy concerning what happened with the company that is now gone, so it passes the time.
Finally! Your day has come, though it’s been almost TWO YEARS since your motion was filed. (isn’t the saying, “justice delayed is justice denied” Chief Judge Barbera?). You can’t help but notice that your friend’s bankruptcy dismissal seems to coincide with a hearing now being scheduled, but that must just be coincidence. The judge asks questions about his original judgment… if it gives an award to an individual, and your attorney tells him that no, it didn’t. He asks whether the clerk’s entry of case party names has always been the way that it is, to which your attorney truthfully reports that it has. So, what do you think the circuit court judge does when asked about his ruling on the motion to correct clerical error?
His ruling was to deny the motion, and that “..the judgment is going to stand just as it is.” That’s right! A supposedly wise and fair judge pronounced for everyone that he was going to enable a member of the now-gone company to continue utilizing the error. You file a Motion to Reconsider, which also gets denied. Maybe, just maybe, it wasn’t a “clerk error” after all?
You aren’t supposed to be able to do these things in courts: changing party names and changing court records to make it look like something happened that really DIDN’T happen. And yet, in the circuit courthouse that is the subject of this post (the Howard County Circuit Court and the Circuit Court Clerk), that is exactly what is allowed to happen. Your head is probably spinning right about now, because it seems unreal to you that elected officials (judges and clerks) would be able to do these sorts of things without penalty. Then, you remember a few of the stories about Maryland judges.. (click on capitalized phrases for links):
There’s THE JUDGE who thought he had the right to deflate a cleaning woman’s car tire for parking in his parking space one night.
THE JUDGE who violated someone’s civil rights by ordering his deputy to use a stun gun on him.
THE JUDGE who flashed his judge badge in a restaurant, claiming to be untouchable by the law after becoming loud and obnoxious when his advances to a female patron were rebuffed.
And then there is Judge Pamela White, notorious for her nasty demeanor, who finally got tagged by the Judicial Disabilities Commission (who incidentally, seems to think she is above-the-law with them too)
What can you do? If you are a law-abiding citizen, the law provides that you have the right to appeal the decision of the circuit court judge to the Court of Special Appeals (COSA) for most cases. Sucks that you have to do it, and many people won’t because of how much it costs to get an attorney to do it. On the other hand, what choice do you have? This isn’t a complicated case where there are multiple issues. The company won, but people are doing something fishy to make things appear different than how they really are/were. Most of the COSA judges were once circuit court judges, so they must be more experienced and will be able to make things right, right? (Yes, I realize that you didn’t realize you needed to be concerned with a judge’s potential error. You didn’t question that at the lower court level).
You do the appeal with the COSA. You have two issues you want to address: effects of bankruptcy on derivative lawsuits, and the clerical error part. Your briefs get filed, the other side responds (minus one of the attorneys), and you wait for the decision. You know that there’s NO WAY that the COSA can condone the error staying in place, because the court order made it quite clear that the company won. It’s up in the air for how they will decide on the bankruptcy issue, but the clerical error part is cut and dry. The decision comes… an “unreported opinion”. Did the COSA reverse the decision of the circuit court judge on the clerical error part, yes or no?
Here’s that decision:
You notice right away that they don’t refer to 2-535(d) at all, and instead talk about 2-535(b) (which you said nothing about to anyone). Wrong Rule altogether, and it doesn’t apply. (DID you even read what you had in front of you?) It’s confusing on one hand, but clear on the other. Quite curiously, the COSA says that the Notice that the clerk’s office issued was somehow “silent”. (Had no idea that clerk Notices could be allowed to contain errors or omissions. Should all clerk Notices be disregarded then as unreliable?) They say that the company DID get the judgment (well, duh), but that just because the company’s name wasn’t on the Notice for what the clerk did doesn’t mean that it isn’t really there.
SAY WHAT NOW?
(Note: admittedly, it is not a secret to the judges in Howard County, the Maryland Judiciary in Annapolis, and other folks that I was tracking the reversal rate of the circuit court judges on this website. You can read the full post on that HERE. In other words, they aren’t really happy with me.)
You had faith in the COSA to make what was wrong, RIGHT. The law is the law, after all, as are the Rules. But despite the COSA making clear that the judgment went to the company (yeah, thanks), it declined to reverse that portion of the circuit court judge’s actions as it pertained to the clerical error. But, didn’t the opinion actually imply or say that there WAS an error though? Could it be that the COSA rules incorrectly on purpose to try to protect lower court judges… judges who may aspire to one day sit on that court, or be re-elected? You file a Motion to Reconsider with the COSA, and it is denied. Advisors (legal friends) say that since the COSA made it clear, the only real concern was the potential use of the judgment incorrectly in a real-life scenario. Like garnishing bank accounts or wages, and selling off property. As luck would have it, your “friend” had filed to do just that in Baltimore City! And as luck would have it, you have been fighting it there and you appealed that decision as well.
The COSA would have the opportunity to see an instance of the incorrect recording of judgment play out, though it was in a different jurisdiction. You file your brief there, the other side responds (again insisting that the judgment belongs to a person), and you wait for the answer. You’re much more confident, largely (and ironically) because of the COSA’s first decision. Do you think the decision reversed the circuit court’s decision?
Here’s the current status: a Petition for Writ has been filed with the Court of Appeals. (actually, there are two, but one is for the bankruptcy issue in terms of the affects of being in bankruptcy on a derivative lawsuit in Maryland). Seeing as this is an actual case that is flowing through the Maryland court system, I’m uploading a copy of the Petition here for everyone to see and read. I’m doing it so that people can be aware of what happens in the courts here in Maryland and in particular the Howard County Circuit court and clerk office. Along my journey, I have met many people in the legal and local activism arenas who have looked at all of this either in disbelief that it can happen, or belief because they have had their own similar experiences with what they consider to be unlawful changes orchestrated or condoned by the Administrative Judge Gelfman. Along my journey, I have come to learn many things about the way that things REALLY work in Howard County- things that surprised me. As I sort through the documents to see what’s the real story… I will be writing about it here. I think that many of the citizens are going to be surprised. Well, some of them…
So, you tell me: do you think the judiciary was “bought” or are there that many judges who don’t comprehend the issue about something as simple as proper party names? I know MY answer, because I simply cannot fathom that this many judges would not know or be able to read the law. Because if THAT is the case, Maryland has an even larger problem…
Take care with YOUR cases, and be ready to go further than you ever thought you’d need to. I think it appropriate to place this image here as a reminder:
PLEASE CAST YOUR VOTE: