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Old Frederick Rd., LLC v. Wiseman

Court of Special Appeals of Maryland

September 4, 2013

OLD FREDERICK RD., LLC, ET AL.
v.
JOHN H. WISEMAN

Woodward, Zarnoch, Rodowsky, Lawrence F. (Retired, Specially Assigned), JJ.

OPINION

Zarnoch, J.

What started out as an everyday contract dispute turned into a bewildering contest involving two rival contracts, one representing the parties' actual agreement and the other a fake created to benefit its maker. This tale of deception began when appellant Old Frederick Rd., LLC (the "LLC"), through its sole and managing member, appellant Vincent S. Serio, engaged appellee John H. Wiseman to manage the construction of a house on Old Frederick Road in Ellicott City. After finishing the project, Wiseman filed a claim in the Circuit Court for Howard County for money he contended was still owed under contract. Serio defended the suit with a second competing contract and argued that Wiseman already had been paid under that agreement. The trial court was faced with deciding which contract represented the actual terms of the parties' agreement. The court concluded that Serio's document was the phony contract, which he created to try to avoid the terms of the real agreement.

Wiseman prevailed on a request for a mechanic's lien against the constructed property and on his contract claim against the LLC and Serio. Additionally, the court required the LLC and Serio to jointly and severally pay $13, 393.30 in attorney's fees because of Serio's frivolous defense against Wiseman's claims. The LLC and Serio filed a limited appeal, asking this Court to find that the circuit court erred in its judgment for attorney's fees against Serio in his individual capacity.[1] For the reasons set forth below, we affirm the court's decision to hold Serio personally liable for the judgment awarding attorney's fees.

FACTS AND LEGAL PROCEEDINGS

Serio is the sole and managing member of Old Frederick Rd., LLC, which he apparently created to build and sell a single family home. The LLC planned for construction of the house located at 8906 Old Frederick Road in Ellicott City to begin sometime in July of 2009. At that time, Serio, as managing member of the LLC, entered into a contract with Wiseman for his services to manage the construction of the house.

After the construction was completed, in August 2010, Wiseman filed a complaint in the circuit court. He alleged that he was still owed $7, 609.56. Wiseman first sued to establish and enforce a mechanic's lien, for unjust enrichment, and for breach of contract. The mechanic's lien was sought only against the LLC and the other two counts named the LLC and Serio. Serio answered the Complaint contending that Wiseman submitted a sham contract, and he attached to his Answer what he claimed was the true agreement.

Before the trial on the merits, Wiseman amended his Complaint twice. The final iteration contained four counts. He amended the mechanic's lien action to add Serio as a party because he had become the property's owner.[2] Wiseman also retained his breach of contract claim against Serio and the LLC. He further added a count against both parties for attorney's fees under Md. Code (1974, 2010 Repl. Vol.), Real Property Article ("RP"), § 9-303[3] and a count for attorney's fees against Serio under Md. Rule 1-341.[4]

A bench trial was held in December 2011. Wiseman introduced a copy of a contract and Serio introduced what he said were the two originals of a rival contract. Although Wiseman did not object to the admission of Serio's contracts, Wiseman's copy was entered into evidence over Serio's objection that the contract was not an original. Each party contended his respective contract represented the agreement between the LLC and Wiseman. Suspiciously, the differences dealt almost exclusively with payment terms. Both contracts were three-pages long. The first pages were identical except for the dates. Wiseman's agreement was dated July 7 and Serio's was July 16. The second page contained the payment terms. The second page of Wiseman's agreement read:

ESTIMATE

4. The estimated total cost for the Builder/Consultant to perform the above delineated work will be $12, 000.00. Upon the execution of this Agreement, a fee of $4, 000.00 is required. Upon the issuance of a Howard County Framing inspection, another payment of $4, 000.00 will become payable and due. Upon the issuance of the Final Inspection and Use and Occupancy Permit from Howard County, a balance of $4, 000.00 will become due and payable.
5. The Builder/Consultant had estimated the above fee based on an estimated building time of 90 work days from the time of the excavation of the foundation.
6. All permits and associated fees are the responsibility of the Owner.
7. All costs to purchase any materials and payment for the work performed for the Owner by any contractor, distributor, or engineer, but not limited to the aforementioned, are to be paid by the Owner.

The second page of the agreement that Serio presented to the court contained several differences. The following is a reproduction of the second page with the differences emphasized.

ESTIMATE PAYMENT

4. The estimated total cost for the Builder/Consultant to perform the above delineated work will be $12, 000.00 $8, 000.00. Upon the execution of this Agreement, a fee of $4, 000.00 is required. Upon the issuance of a Howard County Framing inspection, another final payment of $4, 000.00 will become payable and due. Upon the issuance of the Final Inspection and Use and Occupancy Permit from Howard County, a balance of $4, 000.00 will become due and payable.
5. The Builder/Consultant had estimated the above fee based on an estimated building time of 90 240 work days from the time of ...

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