Deborah S., Arthur, Wilner, Alan M. (Senior Judge, Specially
case concerns Md. Rule 2-651, the so-called "wild
card" provision for collecting judgments. A
judgment-creditor asked the Circuit Court for Baltimore
County to employ Rule 2-651 to enter a charging order against
the corporate interest of a recalcitrant judgment-debtor. The
court entered the charging order, and the debtor appealed. We
Spencer and Steven Burnett were divorced in the Circuit Court
for Baltimore County in 2010. In connection with the divorce,
the court granted Spencer a monetary award of $3.7 million.
This Court affirmed the judgment in an unreported opinion.
Burnett v. Burnett, No. 2855, Sept. Term 2010 (Ct.
Spec. App. Apr. 19, 2012).
3, 2012, the clerk docketed two money judgments in favor of
Spencer and against Burnett. The judgments, in the amounts of
$912, 500.00 and $1, 612, 500.00, appear to represent unpaid
portions of the monetary award.
alleges that Burnett resisted payment, apparently preferring
to have interest accrue at the post-judgment rate of 10
percent per annum than to satisfy his obligations to his
ex-wife. Spencer claims that, in his efforts to resist
payment, Burnett filed a bankruptcy petition, which was
dismissed as a bad-faith filing.
November 3, 2014, Spencer obtained writs of garnishment of
wages on Burnett's employer, CAEI Inc., and on
Burnett's bank. Three days later, on November 6, 2014,
Spencer filed a motion for ancillary relief under Rule 2-651.
motion for ancillary relief was directed to CAEI, a
Subchapter S corporation in which Burnett is the majority
owner. In the motion Spencer asked the court to
"charg[e]" Burnett's "equity
interest" "with the payment of all amounts due and
owing" on the judgments.
response, CAEI and Burnett filed a number of dilatory papers
- a motion for a more definite statement from CAEI; from
Burnett, a motion to quash, alleging defects in service.
December 9, 2014, apparently unaware of the motion for a more
definite statement and the motion to quash, the circuit court
granted the motion for ancillary relief. Its orders
"charged" Burnett's "equity
interests" in CAEI "with the payment of all amounts
due" on the two judgments against him. In addition, the
orders "enjoined" Burnett and CAEI from
"transferring any assets by way of dividend, loan or
otherwise" to Burnett. Instead, the orders required that
"any distributions payable or any other money that is or
becomes due to" Burnett "by reason of his corporate
stock shares in CAEI" "be directed" to
and CAEI moved for reconsideration. After some motions
practice and communications among the court and counsel,
Burnett and Spencer reached an agreement on February 9, 2015,
which was embodied in a consent order that was signed by the
court on March 16, 2015, and docketed on March 25, 2015.
Under the consent order, Burnett could join in CAEI's
motion for reconsideration, which was to be heard on February
10, 2015, but he withdrew his objections to service and his
motion for reconsideration of the court's original
charging orders of December 9, 2014. The consent order gave
Burnett until February 26, 2015, to elect his exemptions, if
any, from Spencer's action to collect on her judgment,
but the order made no other provision for registering
substantive challenges to the relief that the court had
February 10, 2015, the day after Burnett and Spencer reached
the agreement that became the consent order, the circuit
court conducted a hearing on CAEI's motion for
reconsideration. At the hearing, Mr. Burnett's counsel
joined the company in arguing for the amendment of some
aspects of the December 9, 2014, orders. In an order signed
by the court on February 19, 2015, and docketed on March 9,
2015, the court amended its earlier order in two respects:
(1) it permitted CAEI to reimburse Burnett for legitimate
business expenses incurred on CAEI's behalf; and (2) it
permitted CAEI both to make and to forgive loans to Burnett,
provided that the company gave advance notice to
accordance with the agreement that became the consent order
between Burnett and CAEI, Burnett claimed several exemptions
on February 26, 2015. At the same time, Burnett filed what he
called "a motion to release property from levy"
under Md. Rule 2-643(c). In that motion Burnett asked the
court to release the "levy" on his corporate
interest. He contended that a charging order could reach only
partnership, and not corporate, interests.
order dated April 21, 2015, the circuit court denied
Burnett's motion to release property from levy. The clerk
made a ...