Mirjafari v. Cohn

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Seyed M ehran M irjafari, et al. v. Ed ward S. C ohn, et al., No. 38, September Term 2009 REAL PROPERTY - FORECLOSURE - APPEALS - SUPERSEDEAS BOND - BONA FIDE PURCHASER STATUS, FOR THE PURPOSE OF DETERMINING THE APPLICABILITY OF TH E SUPE RSED EAS B OND PROV ISIONS CON TAINE D IN MARYLAND RULES 8-422 AND 8-423, IS DETERMINED BASED ON THE RELEVANT FACTS KNOWN (OR WHICH SHOULD HAVE BEEN KNOWN) BY THE FORECLOSURE PURCHASER AT T HE TIME OF THE PUR CHASER S SUCCESSFUL BID AND SUBMISSION OF A DEPOSIT AT THE FORECLOSURE SALE. Circuit Co urt for Harfo rd Coun ty Case No. 12-C-07-000170 IN THE COURT OF APPEALS OF MARYLAND No. 38 September Term, 2009 SEYE D ME HRA N MIR JAFA RI, et al. v. EDW ARD S. COH N, et al. Bell, C.J. Harrell Battaglia Greene Murphy Adkins Barbera, JJ. Opinion by Harrell, J. Murphy and A dkins, JJ., Concur. Bell , C.J., join s jud gme nt on ly. Filed: February 16, 2010 Petitioners, Maziar M irjafari and Seyed Meh ran Mirjafari ( the M irjafaris ), owners of the investm ent property at issu e in this case, noted exceptions to a foreclosure sale of the prop erty, instituted by Respondents/Tru stees ( the Trustees ), 1 to a third-party purchaser, Responden t/Intervenor, JSG Campus Hills LLC ( JSG ). The Mirjafaris exceptions found no favor in the Circuit Court for Harford County and they appealed. The Court of Special Appea ls dismissed as moot the Mirjafaris appeal based on their failure to file a supersedeas bond.2 See Maryland Rules 8-4223 and 8-4234 (2009). The Mirjafaris contend here that no 1 The Trustees are Edward C ohn, Stephen G oldberg, Richard Solomon, and Richard Rogers. 2 A supersedeas bond is [a]n appellant s bond to stay execution on a judgment during the pendency of the appeal. Black s Law Dictionary 202 (9th ed. 2009 ). 3 Rule 8-422, entitled Stay of enforc ement of judgmen t, provides in pertinent pa rt: (a) Civil proceedings. (1) Generally. Stay of an order granting an injunction is governed by Rules 2-632 and 8-4 25. Except as otherwise provided in the Cod e or Rule 2-632, an appellant may stay the enforcement of any other civil judgment from which an appeal is taken by filing with the clerk of the lo wer cou rt a supersedeas bond under Rule 8-423, alternative security as prescribed by Rule 1-40 2(e), or other s ecurity as provid ed in Rule 8-424. Th e bond o r other secu rity may be filed at any time before satisfaction o f the judgm ent, but enfo rcement sh all be stayed only from the time the security is filed. Rule 8-422(a)(1). 4 Rule 8-423, entitled Supersedeas bond, provides: (a) Condition of bond. Subject to sectio n (b) of this Ru le, a supersedeas bond sha ll be conditioned upon the satisfaction in full of (1) the judgment from which the appeal is taken, together with costs, interest, and dam ages for d elay, if for any reason the (contin ued...) supersedeas bond or alternative security was required in this case because, as they allege, JSG was not a bona fide purchase r as of the d ate it paid the full purchase price. For reasons we shall explain and on the facts of this case, we hold that JSG was a bona fide purchaser, as of the date of its successful bid at the foreclosure sale, and, thus, the Mirjaf aris failure to 4 (...continued) appeal is dismissed or if the judgment is affirmed, or (2) any modified judgment and costs, interest, and damages entered or awarded on appea l. (b) Amount of bond. Unless the parties agree otherwise, the amount of the bond shall be as follows: (1) Money judgment not otherwise secured. When the judg ment is for the recovery of money not otherwise secured, the amount of the bond shall be the sum that will cov er the wh ole amount of the judgment remaining unsatisfied plus interest and costs, except that the court, after taking into consideration all relevant factors, may reduce the amount of the bond upon making specific fin dings justifying the amou nt. (2) Disposition of property. When the judgment determines the disposition of the property in controversy (as in real actions, replevin, and actions to foreclose mortgages,) or when the property, or the proceeds of its sale, is in the custody of the lower court or the sheriff, the amount of the bond s hall be the su m that will secure the amount recovered for the use and detention of th e pro perty, interest, costs, and dam ages for d elay. (3) Other cases. In any other case, the amount of the bond s hall be fixed by the lower c ourt. Rule 8-423. -2- file a supersedeas bond ren dered mo ot their subse quent app eal of the o verruling o f their exceptions and ratification of the report of sale. Facts The Mirjafaris owned investment property located at 1700 Melrose Lane in Forest Hill, Maryland. The property consists of 2.728 acres, zoned R-3, and is improved by two separate buildings containing a total of six rental units. The property was purchased by the Mirjafaris uncle, Mansour, in 2002 for $245,000, but was titled in the Mirjafaris name. In 2006, the Mirjafaris received the proceeds of a $75,000 lo an from H ome Eq uity Mortgage, repayment of which was secured by a note and de ed of tru st on the proper ty. The note required m onthly paymen ts of $105 0.75, begin ning on 1 June 200 6. The M irjafaris made the initial monthly payment on time, but failed to pay the 1 July 2006 payment un til 8 August 2006. A pattern of falling behind in their monthly payments ensued.5 On 17 Janu ary 2007, the Trustees instituted, in the Circuit Cou rt for Harford County, foreclosure proceedings. At the time of the foreclosure sale, the Mirjafaris were seven months in arrears. Advertisement of the sale of the property ran once a week for three successive weeks at the end of January and early February. On 15 February 2007, Alex Coop er Auctioneers conducted the foreclosure auction. JSG was the high bidder at $250,000. In accorda nce with the advertised terms of sale, JSG delivered an $8,000 depos it to secu re its bid. A report of 5 On 19 October 2006, the Mirjafaris tendered a check for the August and September monthly payments, but the check was returned for insufficient funds. -3- the sale was filed with the Circuit Court on 22 February 2007. On 15 M arch 20 07, the Mirjafaris, through co unsel, filed in the Circuit Court exceptions to the sale, con tending tha t the sale shou ld be set aside b ecause the advertisem ents for the sale of the property violated the time require ments in M aryland Rule 14-206(b)6 and contained certain inacc uracies in the ir description o f the prope rty7 that affected adversely the 6 Rule 14-2 06, entitled P rocedure p rior to sale, states in pertinent p art: (b) Notice. (1) B y publication. A fter commencement of an action to foreclose a lien and before making a sale of the property subject to the lien, the person authorized to make the sale shall publish notice of th e time, place, a nd terms o f sale in a newspaper of general circulation in the county in which the action is pend ing. Newspaper of general circulation means a newspaper satisfying the criteria set forth in Code, Article 1, Section 28. A newspaper circulating to a substantial number of subscribers in a county and customarily containing legal notices with respect to property in the county shall be regarded as a newspaper of general circulation in the cou nty, notwithstanding that (1) its reade rship is n ot unifo rm thro ughou t the cou nty, or (2) its content is not directed at all segments of the population. For the sale o f an inte rest in rea l prope rty, the notice shall be given at least once a week for three successive weeks, the first publication to be not less than 15 days prior to sale and the last publication to be not more than one week prior to sale. For the sale of perso nal p rope rty, the notice shall be given not less than five days nor more than 12 days before the sale. Rule 14-206(b )(1). 7 In this regard, the Mirjafaris argued that the advertisements were deficient in that they failed to note: (1) the number and type of buildings on the property and the number of thencurrent dwelling units; (2) the property s zoning designation; (3) the p roperty s public water and sewer access and public and private ingress and egress; (4) that the subdivision of the property permitted development of up to 26 townhouse/condominium units; and (5) that the (contin ued...) -4- amount of the bids received. The Trustees opposed the exceptions, arguing that the advertising, description of the property, and sale price were adequate. On 11 June 2007, JSG, as the foreclosure purchaser, moved to intervene in the action. The Circuit Court granted the motion to intervene. The first round of hearings on the Mirjafaris exceptions were held on 17 and 20 September 2007. O n 16 Oc tober 200 7, the Mirja faris initial attorney filed a mo tion to withdraw his appearance, which the Circuit Court granted. At the resumption of the hearings on 12 December 2007, the Mirjafaris requested a continuance because they had retained new counsel only ten days prior. The Court denied the motion for continuance. The hearings proc eede d, with th e Mirjaf aris new counsel, and conclud ed th e nex t day. On 13 December 2007, the Circuit Court entered an order overruling the Mirjafaris exceptions and ratifying the 15 February 2007 sale of the property to JSG. At the close of the Circuit C ourt s oral ruling, coun sel for JSG inquired of the Circuit C ourt whe ther it would [im]pose a requirement for an appeal bond. The judge asked counsel for the Mirjafaris if he wished to add ress the matter, but he declined. Our search of the reco rd did not disclose any subsequ ent requests by the Mirjafaris or their counse l to the Circuit Court to determine the amount of a bond, consider alternative security, or stay ratification of the sale. On 21 December 2007, the Mirjafaris moved to alter or amend the judgment and for 7 (...continued) property could be sold as individual lots. -5- a new trial. The motions were denied. The Mirjafaris, with yet again new (pre sent) coun sel in tow, no ted timely an appeal to the Court of Special Appeals, presenting the following issues for consideration: (1) Did the [C]ircuit [C ]ourt err in permitting the [M irjafaris ] former counsel to withdraw from the case and in denying a motion for a continuance? (2) Did the [C]ircuit [C ]ourt err in considering [JSG s] appraisal and in concluding that the sale price was fair? (3) Did the [C]ircuit [C]ourt err in concluding that the description of the property in the advertisement was adequate? (4) Did the [C]ircuit [C]ourt err in finding that there was no tender or other payment sufficient to stop the sale? While the appeal was pending in the Court of Special Appeals, on 19 June 2008, JSG settled on the sale o f the prope rty, paid the balance of the auction purchase price, and re corded its new deed. As of that date, the Mirjafaris still had not posted a supersedeas bond or alternativ e secur ity in any am ount. On 25 June 2008, JSG moved to dismiss the appeal on the ground th at the Mirja faris had not posted a supersedeas bond or alternative security. The Court of Special Appeals denied the mo tion to d ismiss, w ithout p rejudice , permitting JSG to renew its motion for dismissal in its brief. JSG, filing a joint brief with the Trustees, accepted the invitation and included there a motion to dismiss the appeal as moot based on the Mirjafaris failure to post a supersedeas bond. The Mirjafaris opposed dismissal, contending that the appeal was not moot as no bond was required because JSG was not a bona fide purchaser. Specifically, the -6- Mirjafaris argued tha t bona fide purchaser status is determined at the time the purchase money is paid and the deed is conveyed, rather than at the time of the foreclosure sale, and that, through its participation as intervenor in the Circuit Court exceptions hearings conducted subsequent to the sale, JSG acquired notice of the alleged defects in the foreclosure proceedings before it settled on the sale. The intermediate appellate court heard oral argument on the appeal on 4 December 2008. On 5 January 2009, the panel of the Court of Special Appeals issued its reported opinion in which it granted JSG s motion to dismiss the Mirjafaris appeal as moot based on their failure to post a supersedeas bond or othe r security. Mirjafari v. Cohn, 183 Md. App. 701, 963 A.2 d 247 (20 09). The in termediate a ppellate court held e xplicitly that the status of a foreclosure purchaser, as bona fide or not, is determ ined as of th e time of the auction sale, not at the time of the excep tions hearing or ratification by the circuit court, or when legal title passes to the foreclosure purchaser. Id. at 709, 963 A.2d at 252. The court noted that, if the rule were otherwise, lenders would be discouraged from foreclosing on delinquent mortgages. Id. Likewise, bidders would be discouraged from participating in foreclosure actions and, subsequently, from protecting their bid by participating in exceptions hearings before the circu it court. Id. On 19 February 2009, the Mirjafaris filed with this Court a petition for writ of certiorari, which we gra nted, see Mirjafari v. Cohn, 408 Md. 487, 970 A.2d 89 2 (2009), to consider potentially two issues: -7- (1) Whether the time of determining bona fide purchaser status is to be determ ined at the tim e of the suc cessful bid at a foreclosure sale or at the time the foreclosure purchase price is paid? (2) Whether a foreclosu re purchas er who d oes not settle on his purchase until fourteen months after the foreclosure sale, long after an appeal has been noted and long after the date required by the Terms of Sale, and by the time of settlement has notice of the defects in th e sale and th e judicial proceedings, is a bona fide purchaser? The M irjafaris conte nd that the C ourt of Sp ecial App eals erred in d ismissing as m oot their appeal because JSG was not a bona fide purchaser, thus excusing the normal requirement of posting a supersedeas bond. T hey urge further that we consider th e merits of th eir contentions below and reverse the Circuit Court s ratification of the foreclosure sale.8 As it had in the Court of Special Appeals, JSG filed with this Court, on 14 May 2009, a motion to dismiss the c ase as mo ot based o n the M irjafaris failure to file a supersedeas bond or other security. We deferred action on the motion to dismiss pending oral argument. We now affirm the Court of Special Appea ls s grant of J SG s m otion to dismiss the Mirjafaris appeal for failure to file a supersedeas bond or o ther secu rity. Analy sis In Baltrotsky v. Kugler, 395 Md. 468, 910 A.2d 1089 (2006), we noted that Maryland decisional law speaks clearly on the qu estion of the mootnes s of appe llate challeng es to 8 Due to the nature of our holding here, coupled with the limited scope of the questions presented in the Mirjafaris petition for writ of certiorari, we do not reach the merits of the Mirjafaris contentions regarding alleged defects in the foreclosure proceedings. -8- ratified foreclosure sales in the absence of a supersedeas bond to stay the judgment of a trial court. Id. at 474, 910 A.2d at 1093. The general rule is that the rights of a bona fide purchaser of mortgaged property would not be affected by a reversal of the order of ratification in the abs ence o f a bon d havin g been filed. 9 Id.; Pizza v. Walter, 345 Md. 664, 674, 694 A.2d 93, 97 (1997), mandate withdrawn, 346 Md. 315, 697 A.2d 82 (1997) (withdrawing by joint motion pursuant to settlement ag reement)); Lowe v. Lowe, 219 Md. 365, 368, 149 A.2d 382, 384 (1959); see also Leisure Campground & Country Club Ltd. P ship v. Leisure Estates, 280 Md. 220, 223, 372 A.2d 595, 598 (1977). As a consequence, an appeal becomes moot if the property is sold to a bona fide purchaser in the absence of a supersedeas bond because a reversal on appeal w ould have no effect. Baltrotsky, 395 Md. at 474, 910 A.2d at 10 93; Pizza, 345 M d. at 674, 69 4 A.2d a t 97; see also Lowe, 219 Md. at 369, 149 A.2d at 3 84-8 5. Th e rule operate s ev en th ough the purc hase r may know tha t a claim is being asserted against ratification. Leisure Campground, 280 Md. at 223, 372 A.2d at 598; see also City of Hagerstown v. Long Meadow Shopping Center, 264 Md. 481, 497, 287 A.2d 24 2, 250 (1972). The rule is intended to encourag e non-party individuals or entities to bid on foreclosure sale proper ties, as bidders justifiably would be reluctant to purchase a foreclosure property with out assuran ce in the fo rm of som e security that their investmen ts 9 A bona fide purchaser, in the case of a foreclosure sale, is a purchaser who takes the property without notice of defects in the foreclosure sale. Baltrotsky, 395 Md. at 474-75, 910 A.2 d at 1093; see also Pizza, 345 Md. at 674, 694 A.2d at 98. -9- will be protected from subsequent litigation by recalcitrant m ortgagors s eeking to re tain their proper ty. Baltrotsky, 395 M d. at 475, 91 0 A.2d a t 1094; see also Leisure Campground, 280 Md. at 223, 372 A.2d at 1098. Likewise, the rule protects lenders w ho have s ucceede d in foreclosure but who, without operation of the rule, could not enjoy [their] success until the new action was fully litigated, all the while bearing the lost interest income. Baltrotsky, 395 Md. at 476, 910 A.2d at 1094. Thus, [t]he law is c lear that [mo rtgagors] m ay not litigate the validity of the foreclosure at the expense of others; the posting of security is required on [the mortgagor s] part to protect the purchasers and lender alike. Id. Summ arizing recen tly the dangers of permitting extended litigation without requiring the filing of a supersedeas bond, in Poku v. Friedman, 403 Md. 47, 939 A.2d 185 (2008), we stated: If ratified foreclosure sales could be overturned long after the ratification in the absence of the filing of a supersedeas bond and the granting of a stay, the title to any property where any prior conveyance in the chain of title came out of a mortgage foreclosure sale could b e questione d even if the foreclo sure sale occurred a year in the past, or ten years, or fifty years. In such a scenario, lenders would become reluctant to lend money secured by such properties, buyers migh t become reluctant to buy such prop erties, and title insu rers reluctant to insure title to such properties. T he genera l marketab ility of title to property could be severely affected. Id. at 54 n.7, 939 A.2d at 188-89. The general rule requiring the filing of a supersedeas bond or a lternative secu rity has but two exceptions: (1) the occasion of unfairness or collusion between the purchaser and the trustee, and (2) when a mortgagee or its affiliate purchases the disputed property at the -10- foreclosure sale. Baltrotsky, 395 Md. at 475, 910 A.2d at 1093; Pizza, 345 Md. at 674, 694 A.2d at 98; Leisure Campground, 280 Md. at 223, 372 A.2d at 598; see also Sawyer v. Novak, 206 Md. 80, 88 , 110 A.2d 517 , 521 (1955). The Mirjafaris do not contend that JSG and the Trustees engaged in collusion10 or that JSG was an affiliate of the mortgagee, Home Equity Mortgage. Thus, they do not mainta in that the filing of a supersedeas bond was excused under the exceptions noted in the cases. Rather, they argue that JSG is not a bona fide purchaser entitled to the protection afforded by a supersedeas bond or other security in the present case because it had notice of the alleged defects in the foreclosure sale (due to its presence and participation in the exceptions hearing) prior to settling on the property and paying the purchase price in full, the point at which, according to the M irjafaris, bona fide purcha ser statu s is deter mined proper ly. If JSG is not a bona fide purchaser, as the Mirjafaris allege, it is not protected by the requirement of a supersedeas bond, and, therefore, the Mirjafaris appeal should not have been dismissed as moot. JSG counters, and the Court o f Special A ppeals held , that bona fide purchaser status is determined based on the relevant facts known (or which should have been known) as of the date the successful bid is made, and that JSG did not have notice of any alleged defects prior to making its successful bid. 10 In their Opposition to JSG s Motion to Dismiss Appeal, filed with the Court of Special Appeals, the Mirjafaris argued that the collusion exception applied in the present case, claiming that John Gonzalez, the principal of JSG, and Stephen Goldberg, one of the Trustees, have had prior business dealings. The Mirjafaris make no such contention bef ore this Court. -11- We have stated previously that [b]ona fide purchaser status extends only to those purchasers without notice of defects in title, or in this case, defects in the foreclo sure sale. Pizza, 345 M d. at 674, 69 4 A.2d a t 98 (emph asis added ); see also Baltrotsky, 395 Md. at 47475, 910 A.2d at 1093. Likewise, in Poku, we noted that [a]t present, title in the bona fide purchaser at a foreclos ure sale at least is protected partially by the necessity for the filing of a supersedeas bon d in order for a mortgagor to stay the proceedings subsequent to the ratification of a foreclosure sale. Poku, 403 Md. at 54 n.7, 939 A.2d at 188-89 (e mphasis added). In addition, in describing the exceptions to the supersedeas bond requirement, we have noted that the exceptions c oncern actions or statuses of the parties at the foreclosure sale. Baltrotsky, 395 Md. at 47 5, 910 A .2d at 1093 ; Pizza, 345 Md. at 674, 694 A.2d at 98. Thus, as noted by the Court of Specia l Appe als here , see Mirjafari, 183 Md. App. at 709, 963 A.2d at 252, our p rior decisions imply that the status of a foreclosure purchaser, as bona fide (or not) based on know ledge of d efects in the foreclosure sale, is determined as of the time of the successful foreclosure sale, not at the time of the exceptions hearing or ratification by the circuit court, or w hen legal title passes to the foreclosure purchaser upon payment of the full purchase pr ice. A s long as the foreclosure purchaser is unaware of defects in the foreclosure proceedings at the time of its successful bid and provides valuable consideration at that time, it is protected as a bona fide purchase r. Despite the Mirjafaris c ontentions to the contrary, a foreclosure purchaser s status as bona fide does not depend necessarily (and especially in the present case) on the timing of payment of the balance of the purchase -12- price.11 See Sawyer, 206 Md. at 89, 110 A.2d at 521 (noting that the mere fact that the deed was not execu ted until after the appeal was taken would not show collusion, or reflect upon the bona fide character of [the forec losure purchaser s] purch ase ). 11 In this regard, the Mirjafaris re ly heavily on Westpark, Inc. v. Seaton Land Co., 225 Md. 433, 450, 171 A.2d 736, 743 (1961), in which we stated that one who purchases the equitable title to real estate is not protected as a bona fide purchaser where he receives notice of a prior equity before he acquires legal title . . . or where he receives notice before he has paid all or substantially all of the purchase price. Id. at 450, 171 A.2d at 743 (internal citations omitted). The Mirjafaris fail to acknowledge, however, that Westpark did not involve a judicial sale, b ut rather the c ompeting interests in a conven tional contrac t sale between a contract purchaser and a party with a prior right of first refusal, of which the purchaser knew (o r its agent sho uld have kno wn), prior to signing the c ontract. Westpark is inapposite to the present case. In addition, the M irjafaris grasp for support in Grayson v. Buffington, 233 Md. 340, 196 A.2d 893 (1964), wherein we held that the defendants, purchasers of certain real prop erty, did n ot en joy bona fide purchaser status because they possessed actual knowledge of a prior conveyance before they accepted a conveyance of the property or paid the purchase price. Id. at 344, 196 A.2d at 89 6. In that case , [a]t the time of settlement, no written contract had been entered into by [the parties to the sale], so that either side was at liberty not to consummate the sale. Id. at 342, 196 A.2d at 895. In the present case, however, at the time of the foreclosure sale and prior to its participation at the exceptions hearings wherein it acquired k nowled ge of the a lleged def ects in the foreclosure proceedings, JSG submitted an $8,000 deposit and became obligated to pay the remainder of the purchase price. T hus, Grayson is distinguishable. Finally, the M irjafaris direct ou r attention to Empire Properties, LLC v. Hardy, 386 Md. 628, 873 A.2d 1187 (2005), and Legacy Funding LLC v. Cohn, 396 Md. 511, 914 A.2d 760 (2007), in which we discussed the foreclosure sale purcha ser s right to possession of the property prior to the time he or she pays the full purchase price, to support their argument that payment of the full purchase price also is the proper time to determine bona fide purchaser status. Neither case suggests such a proposition as the Mirjafaris contend, and we decline to broaden significantly their scope from addressing entitlement of a purchaser to possession of property to the proper time for determination of bona fide purchaser status in a foreclo sure contex t. -13- Adopting the Mirjafaris contention that bona fide purchaser status, for determination of whether an appea l bond or se curity is required to stay the effect of the judgment ratifying the report of sale, is determined at the time of settlement would undercut the purpose of the supersedeas bond req uirement, namely, to encourage bidding at forec losure s ales. See Poku, 403 Md. at 54 n.7, 939 A .2d at 188-8 9; Baltrotsky, 395 Md. at 475-76, 910 A.2d at 1094. If a bidder co uld bid suc cessfully at a foreclosure sale a nd subm it oftentimes a relatively significant deposit, only to lose their bona fide purchaser status because the mortgagor files exceptions to the foreclosure sale prior to settlement, bidding would be discouraged sign ifica ntly. See Poku, 403 M d. at 54 n.7, 93 9 A.2d a t 188-89; Baltrotsky, 395 Md. at 47576, 910 A.2d a t 1094. In addition, bidders would be hesitant understan dably to participa te in exceptions hearings and protect their bids if newly alleged flaws in the foreclosure process (or subsequent flaws in the judicial proce ss) adduce d in the hea rings could strip away their bona fide purcha ser statu s. See Poku, 403 Md. at 54 n.7, 939 A .2d at 188-8 9; Baltrotsky, 395 Md. at 475-76, 910 A.2d at 1094. Thus, in order to further the policy behind the supersedeas bond stay requireme nt to promo te bids at fore closure sales and protec t bidders from prolonged litigation at their risk and expense , we hold th at bona fide purchaser status for this purpose is determined based on what is known, or reasonably knowable, by the bidder as of the date of the successful bid at the foreclosure sale. Any knowle dge of rele vant facts on the part of JSG as of the time of its successful bid, -14- and the giving of valuable co nsideration, n amely, the $80 00 depo sit,12 could have been proved at the exceptions hearings. Because noth ing was f ound by the C ircuit Court to disqualify JSG,13 it is a bona fide purchaser for purposes of determining applicability of the supersedeas bond requirement to stay the ratification of the foreclosure sale. As such, under the Poku, Baltrotsky, and Pizza line of cases, the Mirjafaris were required under Rules 8-422 and 8-423 to post a supersedeas bond in o rder to secu re their right to p ursue app ellate review.14 Their failure to do so ren dered their a ppeal mo ot. 12 The Mirjafaris argue that JSG cannot be a bona fide purchaser because its f ailure to pay the purchase price in full within ten days after ratification of the sale violated the advertisement s terms of sale. The advertisem ent stated that [i]f the purc haser . . . fails to go to settlement w ithin ten (10) days of ratification of the sale, the Substitute Trustee may, in addition to any other available legal remedies, declare the entire deposit forfeited and resell the property at the risk and cost of the d efaulting p urchaser. (E mphasis added). Thus, assuming the advertisement s terms of sale were binding on JSG and that violation of such would constitute grounds for reversing ratification of the sale (an issue on which we do not pass judgmen t today), the langu age of the advertisement is non-compulsory, granting the Trustees the discretion to permit consummation of a sale beyond the ten day limit. As noted earlier, no claims of collusion between the Trustees and JSG are advanced before us. 13 The Mirjafaris contend that JSG knew of th e def ect in the a dvertisemen t, nam ely, that it did not describe fully or accurately the p roperty, before it bid on the property, relying on Gonzalez s testimony that he did not comprehend fully the nature of the property upon initial review of the advertisement and visual inspection of the property. In its oral findings of fact, how ever, the C ircuit Court f ound that there was legally sufficient notice from the notice that wa s publis hed [b ecause ] [i]t gav e the D eed ref erence , it gave th e plat ref erence , and that the adv ertisement would give any potential buyer, bidder at the auction, more than enough information to find out about the property, and as indicated, it certainly could be easily located from the ad. This finding resolves the question of whether JSG had notice of any deficiency in the advertisement as of the making of its bid, and we have been given no sufficient reason to disturb the finding. 14 In oral argument, the Mirjafaris posed the rhetorical question of what amount of (contin ued...) -15- JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED; C O ST S T O B E P A I D BY PETITIONERS. Chief Ju dge Bell joins the judg men t only. 14 (...continued) bond or other security should they have been required to post, $8,000 (JSG s deposit) or $250,000 (the wi nning b id). The record does not present the question of the proper amount of the supersedeas bond required in this case because at no point during the procee dings did any of the parties request that the Circuit Court confront the issue of the bond amount, consider alternative security, or stay the proceedings, other than JSG s general inquiry to the court as to whether it would [im]pose a requirement for an appeal bond. At noted supra, upon JSG s inquiry, the Circuit Court asked counsel for the Mirjaf aris if he w ished to address the questio n of an appella te bond at that tim e, but he decline d. Likewise , the Court of Special Appeals did no t determine the approp riate amount of the sup ersedeas bond here. Because the question is not properly before us, we express no opinion as to the appro priate amount of the supersedeas bond required to have been posted by the Mirjafaris. -16- IN THE COURT OF APPEALS OF MARYLAND No. 38 September Term, 2009 SEYE D ME HRA N MIR JAFA RI, et al. v. EDW ARD S. COH N, et al. Bell, C.J. Harrell Battaglia Greene Murphy Adkins Barbera, JJ. Concurring Opinion by Murphy, J. which Adkins, J., joins. Filed: February 16, 2010 I agree with the majority s holding that JSG was a bona fide purchaser, as of the date of its successful bid at the foreclosure sale, and, thus, the Mirjafaris failure to file a supersedeas bond ren dered mo ot their subse quent app eal of the o verruling o f their exception s and ratifica tion of the re port of sale. I write sepa rately, howev er, to emphas ize that in the c ase at bar, at no point in time p rior to dismissa l of their app eal did Petitioners ever request that the Circuit Court exercise its discretion to (1) enjoin the foreclosure,1 (2) establish th e amoun t of a super sedeas bo nd, (3) orde r other reaso nable alternative sec urity, or (4) stay enforc ement of the judgm ent pendin g appeal. 2 Nor did Petitioners request that the Court of Special Appeals enter an order staying the judgment of the Circ uit Court. 3 Moreover, on the record before us the Circuit Court would have been clearly erroneous in finding that JSG was not a bona fide purchaser. Under these circum stances , Petition ers app eal wa s prope rly dismiss ed. I am concerned that the majority opinion will be misinterpreted as imposing an absolute requirement that a timely appeal noted by the victim of an equity stripping scheme m ust be dism issed whe never he o r she is unab le to comp ly with the secu rity provisions established by the Circuit Court -- regardless of how strongly the evidence indicated that the foreclosure sale purchaser was not entitled to bona fide purchaser 1 See Md. Rule 14-209(b), and Wells Fargo v. Neal, 398 Md. 705, 922 A.2d 538 (2007 ). 2 See M d. Rule 2-632 . 3 See M d. Rule 8-425 . status. 4 In 2005 and in 2008, the General Assembly enacted legislation to protect mortgagors from falling victim to the deceitful practices of certain foreclosure consultants. Effective May 26, 2005, §7-311(e) of the Real Property Article (RP) provided: A BONA FIDE PURCHASER FOR VALUE OR BONA FIDE LENDER FOR VALUE WHO E NTERS INTO A TRANSA CTION WITH A HOMEOWNER OR A FORECLOSURE PURCHASER WHEN A FORECLOSURE CONSULTING CONTRACT IS IN EFFECT OR DURING THE PERIOD WHEN A FORECLOSURE RECONVEYANCE MAY BE RESCINDED, WITHOUT NOTICE O F THOSE FACTS, RECEIVES GOOD TITLE TO THE PROPERTY, FREE AND CLEAR OF THE RIGHT OF THE PARTIES TO THE FORECLOSURE CONSULTING CONTRACT OR THE RIGHT OF THE HOMEOWNER TO RESCIND THE 4 In Blondell, et al. v. Turover, 195 Md. 251, 72 A.2d 697 (1950), this Court stated: The law requires reasonable diligence in a purchaser of real property to ascertain any defect of title. . . . When a purchaser has notice of a fact which casts doubt upon the validity of his title, the rights of innocent persons must not be prejudiced as a result of his negligence. . . . In determining whether a purchaser had notice of any prior equities or unrecorded interests, so as to preclude him from being entitled to protection as a bona fide purchaser, the rule is that if he had knowledge of circumstances which ought to have put a person of ordinar y prudence on inquiry, he will be presumed to have made such inqu iry and will be c harged w ith notice of all facts which such an investigation would in all probability have disclosed if it had been properly pursued. Id. at 257, 7 2 A.2d at 699. -2- FORECLOSURE RECONVEYANCE. In 2008, that provision was eliminated when the General Assembly enacted the Protection of Ho meowners in F oreclosure Act (PH IFA). 5 The case at bar do es not require that we determine why the General Assembly repealed RP § 7-311(e), but I am persuaded that the Court of Special Appeals or this Court will soon be requested to make that determination. I would not dismiss the appeal of a party making that request, provided that the party has also requested the various forms of post-judgment relief that were never reques ted in the case at b ar. Judge Adkins has authorized me to state that she joins in this concurring opinion. 5 In 2008, the provisions of RP § 7-311 were transferred to RP § 7-312. -3-

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