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LLC v. Triangle General Contracting, Inc.

Court of Special Appeals of Maryland

June 29, 2017


          Circuit Court for Queen Anne's County Case No. 17-C-15-020318

          Eyler, Deborah S., Beachley, Shaw Geter, JJ.


          Eyler, Deborah S., J.

          In 2013, a commercial property at 111 Scherr Lane in Grasonville ("the Property") was sold at foreclosure to 111 Scherr Lane, LLC ("the LLC"), the owner of the Property, and Edward Gills, the sole member of the LLC, the appellants. Thereafter, in the District Court of Maryland for Queen Anne's County, two actions for replevin were filed against the LLC and Gills to recover personal property stored at the Property. One action was filed by appellee TECO, Inc. ("TECO"), an electrical contracting company owned by the prior owners of the Property and their family members; and the other was filed by appellee Triangle General Contractors, Inc. ("Triangle"), a lessee of the prior owners.[1]The cases were consolidated for trial and the District Court granted writs of replevin in favor of TECO and Triangle. After the writs were executed, resulting in the recovery of some, but not all, of the appellees' property, the cases were converted to actions for detinue and transferred to the Circuit Court for Queen Anne's County.

         The circuit court bifurcated the claims, which were separately tried to the court. In TECO's case, the court entered a final judgment of possession in its favor for property recovered under the writ and for certain property that had not been recovered; and entered judgment in TECO's favor for $9,856.40 for the value of other property that was not recovered. The judgment was entered against the LLC and Gills, jointly and severally. In Triangle's case, the court issued a judgment of possession in favor of Triangle for property recovered under the writ and entered a judgment against the LLC for $59,119 for items not recovered.

         Gills and the LLC noted this appeal, presenting five questions for review, which we have rephrased and reordered:

I. Did the circuit court err or abuse its discretion by determining that the personal property had not been abandoned?
II. Did the circuit court err or abuse its discretion by entering judgments for possession and money judgments in detinue for personal property that was not in the possession of Gills and the LLC when the replevin action was commenced?
III. Did the circuit court err or abuse its discretion by awarding damages in favor of Triangle based upon the replacement value, instead of the market value, of the personal property?
IV. Did the circuit court err or abuse its discretion by entering judgments for possession and for damages against Gills and the LLC for property that was listed as recovered on the schedule of replevied items?
V. Did the circuit court abuse its discretion by entering judgment against Gills personally for actions he took on behalf of the LLC?

         For the following reasons, we answer these questions in the negative and shall affirm the judgments of the circuit court.


         The Property consists of a fenced, commercial lot improved with a modular home. In 2004, Josiah Tice ("J. Tice") and Joan Tice, his wife, purchased the Property. They did not live on the Property, but used it to store equipment for TECO, a family-owned electrical contracting business. Dennis Jay Tice ("D. Tice"), their son, is an owner and the general manager of TECO. TECO's equipment was stored in seven trailers parked on the Property.

         In late 2006 or early 2007, J. Tice entered into a verbal lease agreement with Jack Leone on behalf of his company, Triangle. Pursuant to that agreement, Triangle began storing its contracting supplies in two trailers parked on the Property and paying $50 per month in rent to J. Tice.

         On July 16, 2013, substitute trustees on an indemnity deed of trust securing the elder Tice's mortgage on the Property filed an order to docket foreclosure in the circuit court. Two months later, on September 17, 2013, the Property was sold at a foreclosure sale to Gills, for $94,000. J. Tice and D. Tice were present at the foreclosure sale, having hoped to purchase it on behalf of TECO.

         Gills planned to use the Property in connection with his seafood business. After the foreclosure sale, he contacted members of the Tice family several times and asked them to remove their belongings from the Property. At that time, Gills was unaware that any of the trailers belonged to Triangle.

         The foreclosure sale was ratified on December 13, 2013. On February 5, 2014, Gills went to settlement, having assigned the contract of sale to his wholly-owned LLC. A substitute trustee's deed was executed that day conveying the Property to the LLC. Thereafter, Gills padlocked the gates to the Property and posted "No Trespassing" signs.

Five days later, on February 10, 2014, Gills wrote to J. Tice as follows:
I am writing this letter to inform you that you have 10 days to remove your stuff from [the Property]. The [P]roperty is now legally owned by my LLC. The courts [sic] ratification took place weeks ago. I have talked to you by phone on several occasions to no avail. I need to move on with my plans for the [P]roperty. I will dispose of the stuff if you have not removed it within 10 days of the writing of this letter. To access the [P]roperty you must call [me] at [phone number] anytime. I am close and can be there in a moment.
Thank you,
Ed Gills, for [the LLC]

         In the days that followed, D. Tice, along with TECO employees, went to the Property several times to remove the TECO equipment stored there. He brought with him a trailer and a skid steer.[2] According to D. Tice, two snowstorms and a rain storm made it impossible for him to remove all of TECO's personal property within the ten-day period imposed by Gills. On Friday, February 20, 2014, Gills told D. Tice that he could enter the Property a final time the following day to remove the trailer and the skid steer, but that "everything else was his [i.e., Gills's] and [D. Tice] couldn't have it." On Saturday, February 21, 2014, D. Tice went to the Property. Gills was present, along with the Sheriff, and permitted D. Tice to take the two items, but nothing else. At that time, the seven TECO-owned trailers remained on the Property, as did some of their contents.

         Meanwhile, Leone was still unaware that the Property had been foreclosed upon. He continued to pay $50 per month in rent. On March 12, 2014, J. Tice contacted Leone, who was in Florida, and told him that the Property had changed ownership. Leone immediately called Gills to inquire about retrieving Triangle's personal property. Gills told Leone that Triangle's trailers and the equipment inside them now belonged to him (Gills).

          A. District Court Proceedings on Replevin Actions

         More than two months later, on June 2, 2014, Triangle filed an action for replevin against Gills, the LLC, and the substitute trustee in the District Court seeking return of its personal property and damages of $25,000. It alleged that two trailers-a 1986 Williams Office trailer ("Williams Trailer") and a 1988 Strick trailer ("T-44 Trailer")-belonging to Triangle were stored on the Property and that "approximately ninety (90) items or pieces of construction equipment" were stored in the trailers. Triangle attached to its complaint a four-page handwritten inventory of the contents of the T-44 Trailer.

         On June 26, 2014, TECO filed an action for replevin against Gills and the LLC in the District Court seeking return of its personal property and damages of $29,500. It alleged that TECO owned "approximately 200 items of personal property . . . stored in trailers" on the Property.[3] TECO attached as an exhibit to its complaint a list of assets stored on the Property, including "7 . . . Box Trailers and their contents."

         The cases were consolidated for trial on September 26, 2014. In TECO's case, J. Tice testified consistent with the above stated facts. D. Tice testified that the seven TECO trailers had been on the Property since 2006/2007. The trailers contained various electrical supplies and tools, many of which had been acquired in 1998 when TECO purchased the assets of Simpson Electrical Co., Inc. A copy of the Bill of Sale reflecting that acquisition was introduced into evidence. D. Tice had marked with asterisks the items on the list that he knew were on the Property as of February 20, 2014. Those items included the seven trailers, a forklift, and various tools. He also testified that a "sea container" was on the Property.[4]

         D. Tice explained that when the foreclosure proceedings were commenced, he and his father still hoped that the family and/or TECO would be able to maintain title. They attended the foreclosure sale, but were outbid by Gills. Thereafter, they did not remove TECO's trailers from the Property because they understood that the sale was not yet finalized. They also believed they might be able to enter into an agreement with Gills to continue storing the trailers on the Property.

         After receiving the February 10, 2014 letter from Gills, however, D. Tice took steps to remove TECO's property from the Property. He brought machinery onto the Property to remove some of the items. During the 10-day period, there were two snowstorms and a rainstorm, however, and as a result, he was unable to move very many items. He was "scheduled" to go to the Property on Friday, February 20, 2014, to "get some more stuff," but Gills prohibited him from doing so. The following day, Gills permitted D. Tice to enter the Property to remove a "two axle trailer, skid steer, [and] a van that we had loaded, and the truck that we had towed it in there with." He was not permitted to load any additional items.

         In Triangle's case, Leone testified that Triangle had stored two trailers on the Property since 2007: the Williams Trailer, which was 8 feet by 32 feet, and the T-44, which was a 40-foot box trailer. The T-44 Trailer was filled with "heavy construction tools and equipment, power tools, . . . building records." Leone identified an inventory of items in the trailers that he had prepared when he loaded them in 2007. He had not removed any items since then. He had added a few items to the trailers over the years and had updated the inventory list to reflect that. The inventory was admitted into evidence ("T-44 Inventory").

         Leone had not been to the Property for at least a year, possibly two or more years. He had not received any notice that a foreclosure proceeding was commenced. He had continued to pay rent to the Tices every month since 2007 until he learned of the change in ownership.

         On March 12, 2014, Leone received a phone call from J. Tice advising that the Property had "changed hands." Leone immediately called Gills, told him that two trailers on the Property belonged to Triangle, and asked about getting them back. Gills responded that the trailers and their contents had been "abandoned per the sheriff" and that he (Gills) had "disposed of it." Leone informed Gills that he had asked his employee to drive by the Property that morning and that his employee had observed Triangle's trailers on the Property and also had observed someone "taking stuff out of the large trailer." Gills asked Leone what was in the trailers. Leone described the items that were contained in the trailers, which included "rough-sawn black walnut." Gills replied, "oh, is that what that wood was?" Leone explained that black walnut is very expensive and that he wanted it back. Gills reiterated that the trailers and their contents were "abandoned property" that "belong[ed] to [him] now."

          Leone flew back to Maryland from Florida and, on March 22, 2014, went to the Property. He was able to enter the Property and he observed both of his trailers, as well as some of the trailers owned by TECO.[5] He took photographs and a video of the trailers, some of which were introduced into evidence. The trailers were open and their contents had been disturbed. Leone noticed that some of the tools that had been stored inside the T-44 Trailer were now inside the TECO trailers.

         More recently, Leone had driven by the Property and seen that Gills had modified the Williams Trailer, "incorporat[ing it] into some kind of structure on the [P]roperty as part of the seafood market." A sign for Gills's business was attached to the Williams trailer.

         Gills testified that when he purchased the Property, it looked like a "junk yard." There were "[l]ogs, piles of debris, brush, tires" all over. He began cleaning it up, but did not remove any items "that [weren't] [his]." Beginning a few weeks after the foreclosure sale, he called J. Tice "at least six or seven times" to try to make arrangements for the TECO trailers and other property to be removed. J. Tice said he would "talk with his son and . . . get back to [Gills]," but never followed through. J. Tice's girlfriend arranged to have a truck body that belonged to her towed from the Property.

         After the LLC took possession of the Property, Gills wrote the February 10, 2014 letter. He left the Property unlocked during the 10-day period. He had several "amiable" conversations with D. Tice during that period and saw him on the Property multiple times loading items into a van and otherwise removing TECO's property. At the expiration of the 10-day period, Gills let D. Tice remove a loaded van and the skid steer, but otherwise excluded him from the Property. Gills believed that the TECO property was considered abandoned as of that date.

         Thereafter, Gills began "remov[ing] everything that wasn't nailed down[,] . . . pil[ing] it all up into dumpsters and [having] the scrap people come and take it away." He had contracted with Schultz & Son, a local scrap metal company, for that purpose. He scrapped at least four trailers and a lot of other "junk" that was inside the trailers.

         According to Gills, when he was served in the two replevin actions in June 2014, the only items belonging to Triangle or TECO left on the Property were the Williams Trailer, which Gills had converted to use for his business; the T-44 trailer; a sea container; a 28-foot trailer; wooden poles; and some other items that had been stored inside the trailers. Gills spent more than $1,100 improving the Williams Trailer by adding a floor, a ceiling, and walls; wiring it for electricity; installing a light fixture; and painting it. He raised the trailer up on cinder blocks next to the loading dock on the Property.

         On cross-examination, Gills testified that he could not recall how much he had been paid by the scrapyard for the items he removed from the Property, but it was more than $1,000. He was paid by weight, after certain deductions for transportation costs and disposal of items that could not be scrapped.

         At the conclusion of the hearing, the court held the matter sub curia and directed the parties to return on October 17, 2014, for it to issue its ruling. A week before that happened, however, TECO and Triangle filed a motion to admit additional evidence, attaching an affidavit by D. Tice. He averred that following the September 26, 2014 trial, he drove to 101 Drummer Drive in Grasonville, a property owned by Gills, and saw a Case Model 580 forklift parked there. He checked the serial number on the identification plate and determined that it was the forklift owned by TECO that was included in the inventory list entered into evidence at trial. In his testimony, Gills had not identified the forklift as an item of property remaining in his possession.

         The District Court granted the motion to reopen and, on October 17, 2014, held an evidentiary hearing. D. Tice testified consistent with his affidavit. He stated that the forklift had been present at the Property between February 10, 2014, and February 20, 2014. When asked why he did not remove the forklift during that 10-day period, he responded that its battery was dead.

         Gills testified that he had had the forklift towed from the Property to a repair shop sometime after February 20, 2014. He replaced the transmission, engine, tires, hydraulic system, carburetor, fuel tank, fuel valves, condenser wires, and spark plugs. He had not mentioned the fork lift in his prior testimony because "it's not a trailer." He maintained that his testimony about the items that were present on his Property when the replevin actions were filed otherwise was accurate.

         On cross-examination, Gills was asked about the items presently stored in the trailers that remained on the Property. Gills recalled seeing "screws and washers and bolts and junk," some "hand tools and shovels," a "lot of hoses," two ladders, and "some cords." He also had seen the "wood" Leone had testified about, apparently referring to the black walnut. Everything else had been scrapped or taken to the dump.

         TECO and Triangle also introduced into evidence a Schultz & Son record showing four payouts for scrap to Gills totaling $14,368. The first payout was made on March 25, 2014, in the amount of $5,351.60 for 54,820 pounds of metal. That ticket reflected deductions for disposal of ten truck tires and other trash. The second payout was made on April 29, 2014, in the amount of $6,916.40 for 59,880 pounds of metal. That ticket reflected deductions for disposal of more than 50 truck tires and 2 passenger tires, as well as trash disposal. The last two payouts were made on June 9 and 10, 2014, totaling $2,100 for 9,600 pounds of metal.

         At the conclusion of the hearing, the parties submitted post-trial memoranda. The appellants argued that Triangle and TECO abandoned their property when they left it on the Property and did not return to reclaim it in the months following the foreclosure sale and thereafter. They argued, moreover, that an action for replevin only may be brought against a party in possession of the personal property and that the evidence showed that at the time the suit was initiated, the only personal property in the possession of Gills and the LLC were three trailers and some items inside them. On this basis, Gills and the LLC asked the court to grant judgment in their favor as to the remaining personal property claimed by TECO and Triangle. Gills and the LLC ...

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