John B. Parsons Home, LLC v. John B. Parsons Foundation

REPORTED

IN THE COURT OF SPECIAL APPEALS

OF MARYLAND

No. 109

September Term, 2013

JOHN B. PARSONS HOME, LLC

v.

JOHN B. PARSONS FOUNDATION, ET AL.

Eyler, Deborah S.,
Berger,
Rodowsky, Lawrence F.
(Retired, Specially Assigned),

JJ.*

Opinion by Berger, J.

Filed: April 30, 2014

* Judge Christopher B. Kehoe did not participate in
the Court’s decision to report this opinion pursuant to
Md. Rule 8-605.1.
This case arises out of an order of the Circuit Court for Wicomico County granting

summary judgment in favor of appellee, the John B. Parsons Foundation (“the Foundation”),

against appellant, John B. Parsons Home, LLC (“JBPH”). This appeal requires us to

determine the rightful beneficiary of a trust executed by Francis C. Baker in 1964 (“the Baker

Trust”). The circuit court concluded that the Foundation is the rightful beneficiary to the

Baker Trust and, therefore, granted the Foundation’s request for declaratory judgment.

Additionally, the circuit court dismissed the Foundation’s trover and conversion claim, as

well as its accounting claim.

Manufacturers and Traders Trust Company (“M&T”) is the trustee of the Baker

Trust.1 On appeal, M&T contends that the rightful beneficiary of the Baker Trust is neither

the Foundation nor JBPH. Rather, M&T argues that the rightful beneficiary is Harrison

Enterprises (“Harrison”), the corporate parent of JBPH. Prior to awarding summary

judgment to the Foundation, the circuit court denied Harrison’s motion to intervene. M&T

asserts error in the circuit court’s failure to allow Harrison to intervene and further argues

that the circuit court erred in dismissing M&T’s claim of constructive fraud against JBPH.

On appeal, JBPH presents two issues for our review, which we rephrase and

consolidate as one issue:

1. Whether the circuit court erred in concluding that the
Foundation is the rightful beneficiary of the trust.

1
The Foundation successfully obtained judgment against M&T on the Foundation’s
breach of trust claim against M&T.
Additionally, the Foundation cross-appeals and presents one issue2 for our review:

1. Whether the circuit court erred in dismissing the
Foundation’s claim for trover and conversion.

M&T also cross-appeals and presents four issues for our review, which we rephrase and

consolidate as follows:

1. Whether the circuit court erred in failing to require
Harrison’s intervention as an indispensable party.

2. Whether the circuit court erred in granting the
Foundation summary judgment.

3. Whether the circuit court erred in dismissing M&T’s
constructive fraud claim against JBPH.

For the reasons that follow, we affirm the judgment of the Circuit Court for Wicomico

County.

FACTUAL AND PROCEDURAL BACKGROUND

The material facts of this case are not in dispute. On July 1, 1964, Francis C. Baker

established a trust (“the Baker Trust”). The trust instrument (“the Deed”) provides that, upon

the death of certain named individuals (“the trigger event”), the trust will terminate, with the

remaining proceeds distributed to three “named institutions, or [their] respective

2
In addition to its cross-appeal, the Foundation moves to dismiss M&T’s cross-appeal
for allegedly failing to file a timely notice of appeal. We deny the Foundation’s motion to
dismiss M&T’s cross-appeal for the reasons set forth more fully in Part III(A), infra.

2
successor[s].” Each of the three named institutions are charitable organizations.3 One such

institution is the “John B. Parsons – Salisbury Home for the Aged.”

At the time the Baker Trust was executed, an entity known as the John B. Parsons –

Salisbury Home for the Aged (“JBP Salisbury”) owned and operated a residential and health

care home for the elderly (“the Home”), located at 300 Lemmon Hill Lane, Salisbury,

Maryland 21801. The Home and the entity that owned the Home shared the name the “John

B. Parsons – Salisbury Home for the Aged” at the time the Baker Trust was established.4

Due to economic considerations, JBP Salisbury subsequently solicited the financial

and managerial support of J.P. Harrison, Incorporated (“J.P. Harrison”), a Pennsylvania

corporation, to run the day-to-day operations of the Home. In 1983, J.P. Harrison and JBP

Salisbury executed a lease agreement for J.P. Harrison to manage and operate the Home for

a period of five years. Included in the lease agreement was an option agreement, which

provided that, after five years, J.P. Harrison could purchase the Home from JBP Salisbury

for a purchase price of $925,000.5

3
The other two named institutions are the Peninsula General Hospital of Wicomico
County and the Trinity United Methodist Church of Salisbury, Maryland.
4
For clarity purposes, we shall refer to the elderly care facility located on Lemmon
Hill Lane as “the Home”; we shall refer to the entity that previously owned the Home, and
the Foundation’s corporate predecessor, as JBP Salisbury.
5
As part of the option agreement, JBP Salisbury agreed to finance the purchase of the
Home and accepted a purchase money deed of trust from Harrison in the amount of
$740,000.00. All principal and interest payments are to be completed on or before January
2019.

3
Specifically, the option agreement provided:

[JBP Salisbury] does hereby grant unto [J.P. Harrison
Incorporated], its heirs or assigns, an option to purchase for the
sum of Nine Hundred Twenty-Five Thousand Dollars
($925,000) the real estate more particularly described in
“Exhibit A” . . . [a]lso included with the real estate and covered
by this Option are the inventory, equipment, furnishings,
fixtures, accounts receivable, contract rights and any other
personal or business assets located on the premises and/or
regularly used by the John B. Parsons - Salisbury Home for the
Aged.

(Emphasis added).

On January 1, 1989, Harrison Enterprises (“Harrison”), on behalf of its corporate

subsidiary, J.P. Harrison, exercised the option and JBP Salisbury, therefore, conveyed the

Home to Harrison.6 The articles of sale to the conveyance provide that:

[JBP Salisbury] does hereby agree to sell, assign and transfer all
or substantially all of its property and assets to [Harrison], its
successors and assigns, as hereinafter set forth.

(Emphasis added). The confirmatory deed for the articles of sale provides that “the

conveyance of the property described herein . . . constitutes all or substantially all of [JBP

Salisbury’s] remaining assets.” (Emphasis added). The confirmatory deed further provides

that JBP Salisbury conveyed “all those tracts or parcels of land situate[d] and lying in the

Town of Wicomico County.”

The January 1, 1989 bill of sale similarly provides that JBP Salisbury conveyed:

6
Despite its sale of the Home, JBP Salisbury continued to provide and pay for the
elderly with life care contracts with JBP Salisbury.

4
all that certain personal property, tangible and intangible , which
now or has been located on or about the premises of the John B.
Parsons Home on Lemmon Hill Lane in Salisbury, Maryland
including, but not limited to, all furniture, furnishings, fittings,
fixtures, shrubbery, walks, fences, equipment, machinery,
appliances, accessories, supplies, apparatus, inventory,
equipment, accounts, records pertaining to the said John B.
Parsons Home, contract rights, choses in action, good will and
any other tangible or intangible property now or formerly
located on or associated with the said John B. Parsons Home, or
which was intended to be conveyed pursuant to a certain Option
Agreement . . . .

In 1992, as part of a corporate restructuring, JBP Salisbury changed its corporate name

from JBP Salisbury to the John B. Parsons Foundation (“the Foundation”). Despite its sale

of the Home, the Foundation continues to exist as a philanthropic and charitable non-profit

organization. Among the continued philanthropic endeavors of the Foundation is the care

for the elderly.

In 1995, approximately six years after its acquisition of the Home, J.P. Harrison was

reorganized and converted to Salisbury Retirement Center, Inc. (“SRC”), which took over

responsibility of the day-to-day operations of the Home. In 2003, the Harrison entities again

restructured and reorganized. Included in the restructuring was the management of the

Home, which was transferred from SRC to appellant, John B. Parsons Home, LLC

(“JBPH”).7

7
Although Harrison owns the Home, JBPH operates and manages the Home. As
mentioned, JBPH is a corporate subsidiary of Harrison.

5
In 2003, the first trigger event occurred and, accordingly, the Baker Trust trustee 8

began making distribution payments.9 Between July 2003 and 2012, M&T, and its corporate

predecessor, made payments to JBPH in the amount of approximately $117,190.84. No

request or demand was made by JBPH for such payment and JBPH allegedly only learned

of the Baker Trust’s existence because of the distribution payments.

Upon learning of M&T’s payments to JBPH, the Foundation demanded that M&T

cease making payments to JBPH. The Foundation claimed that the Foundation, not JBPH,

was the rightful beneficiary to the Baker Trust, and that M&T was erroneously making

distribution payments to JBPH. M&T complied with the Foundation’s request pending the

outcome of the instant litigation.

On April 17, 2012, the Foundation filed a complaint in the Circuit Court for

Wicomico County.10 In its complaint, the Foundation sought declaratory relief that it was the

rightful beneficiary to the Baker Trust and demanded an accounting of all monies, gifts, or

bequests received by JBPH on behalf of JBP Salisbury since 1984. In addition, the

8
The record reflects that M&T’s corporate predecessor was the original trustee of the
Baker Trust.
9
The Baker Trust distribution payments were originally made to the now defunct
entity SRC. The record reflects, however, that JBPH ultimately endorsed and received the
funds. Accordingly, for purposes of this Opinion, we shall reference the distribution
payments as being made to JBPH.
10
The Foundation subsequently amended its complaint and filed the same on July 11,
2012. The amended complaint added a breach of trust claim against M&T, as well as a
trover and conversion claim against the defunct entity SRC.

6
Foundation alleged trover and conversion claims against JBPH, as well as breach of trust

against M&T due to M&T’s allegedly improper distribution payments to JBPH.

During the course of litigation, Harrison moved for leave to intervene as a party

defendant. In its motion, Harrison set forth the Harrison corporate structure and explained

that Harrison, not J.P. Harrison, was the entity that acquired “all or substantially all” of JBP

Salisbury’s assets by virtue of the JBP Salisbury–J.P. Harrison conveyance. Harrison,

however, only moved for permissive intervention, pursuant to Md. Rule 2-214(b) and (c).11

The Foundation opposed Harrison’s motion to intervene and argued that Harrison’s interests

were fully and adequately represented by JBPH because JBPH is the corporate subsidiary of

Harrison. The Foundation further argued that permitting Harrison to intervene would cause

unnecessary delay. On October 1, 2012, the circuit court denied Harrison’s motion to

intervene.

Subsequently, the parties filed competing cross-motions for summary judgment. On

December 14, 2012, the circuit court held a hearing on all outstanding motions, including the

cross-motions for summary judgment. During the hearing, the Foundation argued that there

could be no corporate “successor” to JBP Salisbury because the JBP Salisbury corporate

entity still exists today, albeit under a different corporate name, i.e., the Foundation. The

Foundation argued that it only transferred the real and personal property associated with the

Home, not its unknown beneficiary rights to the Baker Trust. The Foundation urged the

11
Conversely, Maryland Rule 2-214(a) provides for intervention as a matter of right.

7
circuit court to undertake a careful reading of the applicable conveyance documents in

assessing the rightful beneficiary of the Baker Trust.

On the other hand, JBPH asserted that it was the institutional “successor” to JBP

Salisbury because of its ownership of the Home and because it acquired “all or substantially

all” of JBP Salisbury’s assets, including the beneficiary rights to the Baker Trust. JBPH

argued it was the “institution” named in the Deed because the “institution” clearly referred

to the Home itself, not whichever entity happened to own the Home. The circuit court held

the matter sub curia in order to afford a careful reading of the applicable documents. In

addition, at the conclusion of the hearing, the circuit court dismissed M&T’s claim of

constructive fraud against JBPH.12

Subsequently, on February 25, 2013, the circuit court issued a memorandum opinion

granting the Foundation summary judgment on the Foundation’s declaratory judgment action.

In reaching its decision, the circuit court noted that it primarily relied on four documents: (1)

the Francis C. Baker Trust dated July 1, 1964; (2) the option agreement between JBP

Salisbury and J.P. Harrison dated December 29, 1983; (3) the articles of sale dated January 1,

12
There is an apparent discrepancy in the record regarding the disposition of M&T’s
constructive fraud claim. The circuit court dismissed M&T’s constructive fraud claim in an
oral ruling on the record at the conclusion of the motions hearing. Subsequently, however,
the circuit court denied M&T’s cross motion for summary judgment on M&T’s claim of
constructive fraud in a memorandum opinion. Inasmuch as the circuit court granted JBPH’s
motion to dismiss at the hearing, we will analyze the issue in terms of its dismissal of M&T’s
constructive fraud claim. Indeed, the docket sheet reflects that M&T’s claim was dismissed
pursuant to the circuit judge’s oral ruling.

8
1989; and (4) the bill of sale dated January 1, 1989. After reviewing the relevant documents,

the circuit court concluded, inter alia, that the Foundation is the rightful beneficiary of the

Baker Trust. The circuit court concluded that “the Option Agreement clearly intended to

convey the option of purchasing real, personal and business property connected with the

operation of the on-site nursing home, not the entire entity of ‘John B. Parsons Home -

Salisbury Home for the Aged.’”

Moreover, the circuit court found it “impossible to conclude that the entire entity [of

JBP Salisbury] had been sold” and found that “the documents, [when] read carefully, make

clear that [JBPH] is not the successor to [JBP Salisbury].” Instead, the circuit court

concluded that JBP Salisbury “continued to exist after the sale of the [Home],” and found,

ultimately, that “[t]he Foundation, as a matter of law, is the beneficiary of [the Baker Trust].”

The circuit court further determined that the alleged improper funds were intangible

monies and, therefore, not subject to a conversion claim. The circuit court, therefore,

dismissed the Foundation’s claims alleging trover and conversion.13 Additionally, the circuit

court dismissed the Foundation’s request for an accounting.

This timely appeal followed. We shall recite the relevant standard of review in the

applicable sections of our “Discussion,” infra.

13
We note that the circuit court granted summary judgment to the Foundation on the
Foundation’s breach of trust claim against M&T. The circuit court found that M&T is liable
because M&T “paid money to [JBPH], which was not a beneficiary of the [Baker] Trust.”

9
DISCUSSION

The central issue on appeal is whether the circuit court erred in determining the

rightful beneficiary of the Baker Trust. JBPH asserts that it is the “successor” to JBP

Salisbury because of its acquisition, ownership, and operation of the Home. JBPH further

contends that it is the beneficiary because it allegedly acquired “all or substantially all” of

JBP Salisbury’s assets, including JBP Salisbury’s unknown beneficiary rights to the Baker

Trust. The Foundation, however, argues that we need not reach the question of whether

JBPH is the “successor” because the Foundation is the same entity as JBP Salisbury, albeit

under a different corporate name. The Foundation alleges that the applicable conveyance

documents transferred only the real and personal property associated with the Home. The

Foundation further maintains it continues in existence as a philanthropic non-profit

organization that provides a multitude of philanthropic services, including the care for the

elderly. As shall be discussed more fully infra, we agree with the Foundation and, therefore,

affirm.

I. Summary Judgment

A. Standard of Review

We review a circuit court’s entry of summary judgment de novo. Rodriguez v. Clarke,

400 Md. 39, 70 (2007). “If no material facts are in dispute, we must determine whether

summary judgment was correctly entered as a matter of law.” Id. (quoting Property and

Casualty Insurance Guaranty Corp. v. Yanni, 397 Md. 474, 480-81 (2007)).

10
We are “obliged to conduct an independent review of the record to determine if there

is a dispute of material fact.” Injured Workers’ Ins. Fund v. Orient Express Delivery Serv.,

190 Md. App. 438, 450-51 (2010) (citing Wells Fargo Home Mortgage, Inc. v. Neal, 398 Md.

705, 714 (2007)). “A material fact is one that will alter the outcome of the case, depending

upon how the fact-finder resolves the dispute.” Id. at 451 (citing Berringer v. Steele, 133

Md. App. 442, 470-71 (2000) (citations omitted)). “Mere general allegations of conclusory

assertions will not suffice.” Id. (citing Beatty v. Trailmaster Prods., Inc., 330 Md. 726, 738

(1993)).

In Catalyst Health Solutions, Inc. v. Magill, 414 Md. 457, 471–72 (2010), the Court

of Appeals explained:

The standard of review for a declaratory judgment entered as a
result of the grant of a motion for summary judgment is whether
that declaration was correct as a matter of law. We have held
that [w]hile it is permissible for trial courts to resolve matters of
law by summary judgment in declaratory judgment actions, the
court must, in a separate document and in writing, define the
rights and obligations of the parties or the status of the thing in
controversy. This requirement is applicable even if the action is
not decided in favor of the party seeking the declaratory
judgment.

(Citations and internal quotation marks omitted) (alteration in original).

B. The Rightful Beneficiary of the Baker Trust

We begin our analysis with an evaluation of the plain language of the Deed to the

Baker Trust. “[A]s a general rule, the construction or interpretation of all written instruments

is a question of law for the court . . .” and, therefore, subject to a de novo review. Olde

11
Severna Park Improvement Ass’n v. Gunby, 402 Md. 317, 329 (2007) (citations omitted).

“In construing the language of a deed, the basic principles of contract interpretation apply.”

Olde Severna Park Improvement Ass’n, Inc. v. Barry, 188 Md. App. 582, 611 (2009)

(citations omitted). “These principals require consideration of ‘the character of the contract,

its purpose, and the facts and circumstances of the parties at the time of execution.’” Chevy

Chase Land Co. v. United States, 355 Md. 110, 123 (1999) (quoting Calomiris v. Woods, 353

Md. 425, 436 (1999) (citation omitted)).

Ordinarily, “the court gives effect to the intention of the parties, gleaned from the text

of the entire instrument, unless that would violate a principle of law.” Gunby v. Olde

Severna Park Improvement Ass’n, 174 Md. App. 189, 242 (2007) (citations omitted). “The

intention of the grantor is a question of fact, and the surrounding circumstances . . . must be

analyzed in order to truly understand an unexpressed intention.” Id. (citation omitted). “The

‘true test’ of what was meant by the language of the deed is what a reasonable person in the

position of the parties would have thought it meant.” Goss v. C.A.N. Wildlife Trust, Inc., 157

Md. App. 447, 459 (2004) (citations and internal quotation marks omitted).

“We construe a deed without resort to extrinsic evidence, if the deed is not

ambiguous.” Id. at 243. In “interpreting a deed whose language is clear and unambiguous

on its face, the plain meaning of the words used shall govern without the assistance of

extrinsic evidence.” Drolsum v. Horne, 114 Md. App. 704, 709 (1997). We also consider

the language of the deed “in light of the facts and circumstances of the transaction at issue

12
as well as the governing law at the time of conveyance.” Chevy Chase, supra, 355 Md. at

123.

Turning to the instant case, JBPH asserts the straightforward proposition that, when

it allegedly acquired “all or substantially all” of the Foundation’s assets by virtue of the

conveyance, JBPH became the rightful beneficiary of the Baker Trust. Specifically, JBPH

alleges that it is the institutional “successor” to JBP Salisbury and, therefore, is the rightful

beneficiary of the Baker Trust. The Foundation, however, argues that it only transferred the

real and personal property associated with the Home. As such, the Foundation argues that

it did not transfer its unknown beneficiary rights to the Baker Trust. Indeed, the Foundation

is still the same entity, carrying on the same charitable activities, that existed at the time the

Baker Trust was created. Therefore, according to the Foundation, there can be no corporate

“successor.”

As discussed supra, the Deed provides, in relevant part, that the trust shall be paid to

the three “named institutions, or [their] respective successor[s],” including the “John B.

Parsons-Salisbury Home for the Aged.” (Emphasis added). Critically, the Foundation

continues to operate under the same corporate entity as JBP Salisbury (albeit under a

different corporate name), which is the same entity named in the Deed. Although the

Foundation divested itself of its ownership rights in the Home (and the personal property

associated with the Home), the Foundation did not relinquish or transfer its rights to the

13
unknown Baker Trust.14 Indeed, a careful evaluation of the documents associated with the

JBP Salisbury–J.P. Harrison conveyance reflects that only the real and personal property

associated with the Home was conveyed.

First, the articles of sale provide that JBP Salisbury conveyed “all or substantially all

of its property and assets . . . as hereinafter set forth.” (Emphasis added). The qualifying

words “as hereinafter set forth,” therefore, limit the conveyance to the property listed in the

articles of sale. Paragraph nine of the articles of sale specifies that the conveyance is for

“. . . all of [JBP Salisbury’s] interest in land in Wicomico County . . . .” (Emphasis added).

Thus, the words of “as hereinafter set forth” clearly limit the conveyance to the real and

personal property associated with the Home.

JBPH, however, argues that the language of the confirmatory deed to the articles of

sale makes clear that “the conveyance of the property described herein by [JBP Salisbury]

constitutes a conveyance of all or substantially all of [JBP Salisbury’s] remaining assets.”

(Emphasis added). JBPH further alleges that neither the confirmatory deed nor the articles

of sale “contain[] any words of limitation or restriction.” We disagree. Critically, each of

14
At oral argument, JBPH repeatedly asserted that JBP Salisbury did not retain any
assets when it transferred the Home to Harrison. The record, however, belies JBPH’s
contention. Indeed, in its answers to interrogatories, the Foundation specifically indicated
that, after the transfer of the Home, JBP Salisbury “retained ownership of all of its financial
assets, such as bank accounts, investment accounts, [and] rights as beneficiary under any
trusts . . . .” (Emphasis added). Despite JBPH’s assertion to the contrary, the Foundation
expressly noted that it retained financial assets and trust beneficiary rights.

14
these documents expressly contain words of limitation. Specifically, the confirmatory deed

limits the conveyance to the “property described herein,” namely, “all those tracts or parcels

of land . . . in the Town of Wicomico County.” (Emphasis added). As discussed above, the

articles of sale limit the conveyance to the real property described “as hereinafter set forth,”

namely all of JBP Salibury’s “interest in land in Wicomico County . . . .”

Moreover, the articles of sale clearly limit the transfer to the real property associated

with the Home. Md. Code (1975, 2007 Repl. Vol.), § 3-115 of the Corporations and

Associations Article (“C.A.”) provides that:

The assets of the transferor, including any legacies which it
would have been capable of taking, transfer to, vest in, and
devolve on the successor to the extent provided in the articles
without further act or deed.

C.A. § 3-115(b)(1). (Emphasis added). Thus, pursuant to C.A. § 3-115(b)(1), we need only

review the articles of sale to determine whether any “legacies,” such as the Baker Trust, were

transferred to JBPH. As discussed supra, however, the articles of sale provide only for the

transfer of the real property associated with the Home, specifically, “. . . all of [JBP

Salisbury’s] interest in land in Wicomico County . . . .” (Emphasis added). Accordingly,

pursuant to the articles of sale, JBP Salisbury did not convey its rights to the Baker Trust.

JBPH also makes much ado about the term “choses in action” contained in the bill of

sale and claims that “choses in action” clearly contemplates trust beneficiary rights. B LACK’S

L AW D ICTIONARY defines a “chose in action” as: “1) A proprietary right in personam, such

as a debt owed by another person, a share in a joint-stock company, or a claim for damages

15
in tort; 2) The right to bring an action to recover a debt, money, or thing; or 3) Personal

property that one person owns but another person possesses, the owner being able to regain

possession through a lawsuit.” B LACK’S L AW D ICTIONARY (9th ed. 2009). We conclude that

none of JBPH’s proffered definitions of “choses in action” applies to unknown trust

beneficiary rights such as the rights to the Baker Trust.15 Indeed, the B LACK’S L AW

D ICTIONARY definition clearly includes an in personam right to bring a claim or action.

Although a “chose in action” is certainly a property right, see, e.g., Hoffman Chevrolet, Inc.

v. Washington Cnty. Nat. Sav. Bank, 297 Md. 691, 701 n.4 (1983), we hold that the

beneficiary rights of the Baker Trust are not “choses in action.” 16

JBPH further relies on C.A. § 1-101 for the proposition that it is the corporate

“successor” to JBP Salisbury and, therefore, entitled to the Baker Trust distributions. C.A.

§ 1-101(bb)(4) defines a corporate successor as, inter alia, a “vendee, lessee, or other

transferee in a transfer of assets.” A “transfer of assets” means “to sell, lease, exchange, or

otherwise transfer all or substantially all of the assets of a corporation.” C.A. §1-101(cc).

As mentioned supra, however, JBP Salisbury did not transfer “all or substantially all” of its

assets; rather, JBP Salisbury transferred “all or substantially all” of its assets specifically

15
JBPH claims that “choses in action” means “[u]nrealized rights under trusts, wills,
and the like.”
16
Even if the beneficiary rights to the Baker Trust are a “chose in action”--which we
do not believe to be the case--we are still be unable to circumvent the inescapable conclusion
that the only property conveyed to JBPH was the real, personal, and business property
associated with the Home itself.

16
relating to the real and personal property associated with the Home. Indeed, the Foundation’s

continued corporate existence belies JBPH’s argument that it is the “successor” to JBP

Salisbury. If JBP Salisbury had truly transferred all of its assets, it would not--and could not-

-continue to exist as a charitable organization.

Both parties rely on The Wesley Home, Inc. v. Mercantile-Safe Deposit and Trust Co.,

265 Md. 185 (1972). In Wesley Home, the Court of Appeals considered the proper

beneficiary under a trust. Id. at 189-190. The trust provided that, upon termination of the

trust, distribution payments were to be made to “The Anchorage of Baltimore City,” (“the

Anchorage”) a charity that provided services and accommodations to merchant seamen

staying in the city of Baltimore. Id. at 190-91. Subsequently, due to economic

considerations, the Anchorage conveyed to the YMCA all of its assets “of every kind”

including all assets “to which it may be entitled under any existing will already probated” and

“any gifts, legacies or devises which may be given or left to [the Anchorage] by will or at any

future time.” Id. at 191. Despite its sale of all of its assets and operational services to the

YMCA, the Anchorage never officially terminated as an organization. Id. at 193. Instead,

the Anchorage continued to exist for the purpose of avoiding complications in any will or

legacy payments. Id.

In 1955, following years of general decay of the Anchorage building, as well as the

dwindling need for merchant seamen services, the branch ceased operations. Id. at 192.

Subsequently, upon the happening of a trigger event, the trustee filed a complaint “seeking

17
a determination as to which of the various claimants were entitled to take and in what

amounts.” Id. at 190. The Court of Appeals ordered that the trust distributions be paid to the

surviving corporate entity, the Anchorage, but the Anchorage was then directed to transmit

the funds to the YMCA. Id. at 204. Critically, the Court concluded that the settlor’s intent

was to benefit merchant seamen, but that the settlor never “intended to require the Anchorage

to maintain its [ownership of the premises], or to otherwise operate forever as it did at the

time of [the settlor’s] death.” Id. The Court in Wesley Home, therefore, concluded that the

Anchorage was the rightful beneficiary, but that its receipt of distribution payments should

inure in favor of the YMCA. Id.

A critical distinction between Wesley Home and the instant case is that in Wesley

Home, unlike here, the Anchorage transferred all of its assets, including its right to legacies

and endowments. Id. at 191. Nevertheless, the Court still directed that the distribution

payments be paid to the Anchorage first because of its ongoing corporate existence. Id. at

204. Indeed, the Anchorage continued to exist solely as a “skeletal” organization. Id.

Nevertheless, the Court still concluded that the Anchorage was the rightful beneficiary. Id.

In the instant case, the Foundation continues to exist as a philanthropic non-profit

organization that provides a multitude of philanthropic services, including the care for the

elderly. Indeed, Wesley Home supports the Foundation’s contentions and demonstrates that

a surviving corporate entity is the rightful beneficiary when it is named in the trust instrument

and carries on the same philanthropic objectives. The plain language of the Baker Trust

18
demonstrates that the purpose of the Trust was to benefit the elderly, a noble purpose still

being carried out today by the Foundation. Indeed, the Foundation continues to carry on its

original charitable purposes and one such purpose is the care for the elderly.

JBPH also cites the case of Inasmuch Gospel Mission, Inc. v. Mercantile Trust Co.

of Baltimore, 184 Md. 231 (1945). In Inasmuch Gospel, the settlor devised certain

beneficiary rights in a trust to Inasmuch Gospel Mission (“the mission”). Id. at 233-34. The

trustee filed an action seeking a determination of the proper beneficiaries of the trust due to

legal challenges from other beneficiaries. Id. at 234. Prior to the execution of the trust,

however, the mission was adjudicated bankrupt. Id. at 236. The Court of Appeals observed

that:

It is also held that a bequest to a charitable institution does not
lapse merely because there are some changes in the institution,
as long as its general purposes are kept in view by those in
control and the institution continues to function in its customary
manner. The mere fact that a charitable or educational
institution, to which a bequest has been given, is under a
different ownership and management from that which the
testator knew does not cause a forfeiture of the bequest,
especially when the change in operation is for the purpose of
insuring continued existence of the institution.

Id. at 239 (citations omitted). The Court further noted, however, that “[t]he mission

corporation has never been dissolved, but on the contrary is actively engaged in the

benevolent work for which it was organized.” Id. at 240.

JBPH’s reliance on Inasmuch Gospel is misplaced. Indeed, the Court there found the

mission’s continued existence as persuasive, especially the mission’s continued existence

19
engaging in its “benevolent work.” Id. Similarly, the Foundation here continues on in

existence as a charitable organization and continues in its philanthropic objectives. As such,

Inasmuch Gospel supports the Foundation’s argument that it is the rightful beneficiary to the

Baker Trust because of its continued existence carrying out its “benevolent work.”

For all of the foregoing reasons, we affirm the circuit court’s award of summary

judgment to the Foundation.

II. Trover and Conversion

In its cross-appeal, the Foundation claims that the circuit court erred in dismissing its

claims alleging trover and conversion. We disagree.

In Lasater v. Guttmann, 194 Md. App. 431, 446-47 (2010), we described the two

elements of conversion as follows:

Conversion is an intentional tort, consisting of two elements, a
physical act combined with a certain state of mind. It is . . . any
distinct act of ownership or dominion exerted by one person [i.e.
the defendant] over the personal property of another [i.e. the
plaintiff] in denial of his [or her] right or inconsistent with it.
The act of ownership for conversion can occur either by initially
acquiring the property or by retaining it longer than the rightful
possessor [i.e. the plaintiff] permits.

(Internal citation and quotation marks omitted).

“The general rule is that monies are intangible and, therefore, not subject to a claim

for conversion.” Allied Inv. Corp. v. Jasen, 354 Md. 547, 564 (1999) (citations omitted).

“An exception exists, however, when a plaintiff can allege that the defendant converted

specific segregated or identifiable funds.” Id. (citations omitted). Nonetheless, when funds

20
are co-mingled, the monies lose their “separateness” and, therefore, are not subject to a claim

of conversion. Lassater, supra, 194 Md. App. at 447.

We agree with the circuit court’s assessment that the Foundation failed to allege in its

cross-claim that the distribution payments were ever “specific, segregated or identifiable

funds.” Further, there was no allegation in the cross-claim that the payments were not

subsequently commingled by JBPH. Indeed, although the Foundation argues that this case

was inappropriately dismissed due to the lack of specific allegations regarding whether the

funds were commingled, a period of approximately nine years passed from the

commencement of the distribution payments until 2012. As such, the circuit court did not

err in concluding that the passage of nine years inevitably resulted in the commingling of the

funds.

Assuming arguendo that the trial court was incorrect in concluding that the funds

were commingled, and not subject to a claim of conversion, we conclude that reversal would

nevertheless result in double recovery in favor of the Foundation.

We recognize:

the general principle that a plaintiff is entitled to but one
compensation for her loss and that satisfaction of her claim
prevents further action against another for the same damages.
This rule is equitable in nature and the purpose of the rule is to
prevent double recovery and, thus, unjust enrichment.

Underwood-Gary v. Mathews, 366 Md. 660, 667 (2001) (internal citations omitted). Indeed,

“double recovery for the same harm is not permissible.” Id. at 669.

21
In the instant case, M&T was already adjudicated liable to the Foundation for breach

of trust in the amount of $117,190.84, the same amount that M&T allegedly improperly

distributed to JBPH. The circuit judge concluded that M&T “breached [its] fiduciary duty”

by making payments to JBPH and, therefore, the Foundation is “entitled to have [M&T]

restore the funds . . . as though the breach had not occurred.” Clearly, if the Foundation

prevailed in its trover and conversion claim against JBPH, the Foundation would recover

damages for the same alleged harm as its breach of trust claim against M&T. Indeed, the

$117,190.84 judgment represents the improper distribution payments made to JBPH. Any

contrary determination would permit the Foundation double-recovery. We, therefore, affirm

the circuit court’s dismissal of the Foundation’s trover and conversion claim.

III. M&T Claims

We now turn to the issues presented by M&T in its cross-appeal. We shall consider

each of M&T’s contentions in turn. We shall first, however, address the Foundation’s

pending motion to dismiss M&T’s cross-appeal.

A. The Foundation’s Motion to Dismiss M&T’s Cross-Appeal

The Foundation moves to dismiss M&T’s cross-appeal, pursuant to Maryland Rule

8-603(c). Specifically, the Foundation alleges that M&T failed to timely file its notice of

appeal and failed to adequately demonstrate good cause to excuse its alleged noncompliance.

The Foundation, therefore, maintains that we should dismiss M&T’s cross-appeal as

untimely.

22
Maryland Rule 8-202 sets forth the applicable timing provisions regarding notice of

appeals. Md. Rule 8-202(a) provides, in relevant part:

Except as otherwise provided in this Rule or by law, the notice
of appeal shall be filed within 30 days after entry of the
judgment or order from which the appeal is taken.

Md. Rule 8-202(a). One exception to the rule, however, is embodied in Md. Rule 8-202(e),

which provides that:

If one party files a timely notice of appeal, any other party may
file a notice of appeal within ten days after the date on which the
first notice of appeal was filed or within any longer time
otherwise allowed by this Rule.

Md. Rule 8-202(e).

Turning to the instant case, judgment was entered in favor of the Foundation on

February 27, 2013. Accordingly, either JBPH or M&T had 30 days within which to file a

notice of appeal. On March 27, 2013, JBPH timely filed its notice of appeal. Applying Md.

Rule 8-202(e), M&T had ten (10) days from March 27 with which to file its notice of appeal.

The record reflects that M&T filed its notice of appeal on April 4, 2013, well-within the 10-

day filing requirement. As such, the Foundation’s motion to dismiss is denied.

B. Intervention

M&T’s central claim in its cross-appeal is that the circuit court erred in denying

Harrison’s motion to intervene or, alternatively, that we must require Harrison’s intervention

as a necessary party. Specifically, M&T claims that “[u]nless and until [Harrison] is made

a party to th[is] case, the circuit court did not and does not have jurisdiction to proceed

23
further in its consideration of the issues.” M&T asks us to remand this case with an order

requiring that Harrison be permitted to intervene and allowing for a determination on the

competing motions for summary judgment with Harrison’s participation. The Foundation

and JBPH both argue that Harrison’s rights are fully and adequately represented by JBPH.

The Foundation further alleges that no party argued intervention as a matter of right in the

proceedings before the circuit court and that, therefore, this argument is not preserved for our

review.17 In response, M&T maintains that intervention as a matter of right is a jurisdictional

question and, therefore, may be raised at any time, including by us sua sponte.

Maryland Rule 8-131(a) provides that an appellate court normally will not decide an

issue “unless it plainly appears by the record to have been raised in or decided by the trial

court.” Univ. Sys. of Maryland v. Mooney, 407 Md. 390, 400 (2009) (citing Maryland

Rule 8-131(a)). The Court of Appeals has regularly stated that “the primary purpose of

Rule 8–131(a) is to ensure fairness for all parties in a case and to promote the orderly

administration of law.” Elliott v. State, 417 Md. 413, 434 (2010) (quoting State v. Bell,

334 Md. 178, 189 (1994)).

Turning to this case, the record reflects that M&T never argued that Harrison should

be permitted to intervene in the proceedings before the circuit court. In fact, no party

objected to the circuit court’s denial of Harrison’s motion to intervene. Indeed, M&T cannot

17
JBPH similarly argues that M&T failed to argue this issue below and, therefore,
waived any right to appellate review.

24
now cry foul over the failure to include Harrison as an indispensable party when M&T failed

to raise the issue below.

Assuming arguendo that we may sua sponte require Harrison’s intervention as an

indispensable party, as M&T alleges, we decline to exercise that discretion.18 Indeed,

remanding this case for the sole purpose of including Harrison would result in unnecessarily

protracted litigation, delay the administration of justice, and result in further costs. Critically,

Harrison’s interests are already fully and adequately represented by JBPH. Harrison,

therefore, is not an indispensable party and not entitled to intervene as a matter of right.

Specifically, Maryland Rule 2-214(a) governs intervention as a matter of right and

provides that:

Upon timely motion, a person shall be permitted to intervene in
any action: (1) when the person has an unconditional right to
intervene as a matter of law; or (2) when the person claims an
interest relating to the property or transaction that is the subject
of the action, and the person is so situated that the disposition of
the action may as a practical matter impair or impede the ability
to protect that interest unless it is adequately represented by
existing parties.

(Emphasis added).

18
M&T cites the case of United Slate & Tile & Composition Roofers v. United
Brotherhood of Carpenters & Joiners, 185 Md. 32 (1945), for the proposition that we are
vested with the sua sponte authority to require intervention of an indispensable party. Our
reading of United Slate, however, supports only the unremarkable conclusion that when
indispensable or necessary parties are not joined in an action, the court is vested with the
authority to dismiss the action. Id. at 37.

25
The four requirements that a party moving for intervention as of right must

demonstrate are as follows: (i) the application for intervention must be timely; (ii) the

applicant must have an interest in the subject matter of the action; (iii) the disposition of the

action must at least potentially impair the applicant’s ability to protect its interest; and (iv) the

applicant’s interest must be inadequately represented by the existing parties. Chapman v.

Kamara, 356 Md. 426, 443 (1999) (emphasis added). “Failure to satisfy any one of the four

requirements for intervention, as laid out above, is sufficient to warrant denial of a motion

to intervene as of right.” Envtl. Integrity Project v. Mirant Ash Mgmt., LLC, 197 Md. App.

179, 190 (2010).

Clearly, the fourth prong of the Chapman factors is fatal to M&T’s argument. Indeed,

a careful evaluation of the corporate structure of the Harrison entities demonstrates that

Harrison is more than adequately represented by JBPH. Specifically, JBPH is the corporate

subsidiary of Harrison and is responsible for the day-to-day operations of the Home.

Although Harrison owns the Home and the real-estate associated with the Home, JBPH

operates the day-to-day operations of the Home. Clearly, were JBPH to prevail in this case,

the benefits of the Baker Trust would naturally flow to Harrison as the corporate parent of

JBPH. Indeed, JBPH acknowledges in its brief that Harrison need not be a party to this

proceeding because Harrison’s rights are fully and adequately represented by JBPH.19

19
We further question the propriety of M&T asserting appellate rights on behalf of
Harrison when Harrison failed to appeal the denial of its motion seeking permissive
(continued...)

26
M&T further asserts that joinder of Harrison as a necessary party is mandatory

pursuant to Md. Code (1974, 2013 Repl. Vol.), § 3-405 of the Courts & Judicial Proceedings

Article (“CJP”). CJP § 3-405 provides that: “If declaratory relief is sought, a person who has

or claims any interest which would be affected by the declaration, shall be made a party.”

§ CJP 3-405(a) (emphasis added). The principal issue in this case is determining whether the

Foundation was entitled to the Baker Trust distribution payments and whether M&T erred

in making the payments directly to JBPH. As JBPH correctly observes, the circuit court was

tasked with determining whether the Foundation carried its burden of persuasion in its

declaratory judgment action. The circuit court was not tasked with determining which

corporate entity within the Harrison corporate umbrella might be entitled to the Baker Trust

distributions if JBPH were to prevail. Moreover, the disputed trust distributions were made

to JBPH, not Harrison. Although Harrison owns the real estate within the Harrison corporate

umbrella, JBPH is the entity responsible for the operation and management of the Home.

Ultimately, we hold that this issue is not properly preserved for our review and further

conclude that, even if it were preserved for our review, Harrison’s rights are fully and

19
(...continued)
intervention. Even JBPH notes that Harrison is “prepared to espouse in full the submissions
of JBPH” and is not asserting its own rights to be included in the litigation.

27
adequately represented by JBPH.20 Accordingly, the circuit court did not err in failing to

require Harrison’s intervention.

C. The Foundation Is Entitled to Summary Judgment

M&T next contends that the circuit court erred in awarding summary judgment to the

Foundation. M&T argues that there are sufficient disputes of material fact rendering

summary judgment inappropriate. In an effort to allege disputes of material fact, M&T

advances a bevy of hypothetical questions it considers unanswered disputes of material fact.

JBPH argues that M&T failed to allege any disputes of material fact in the proceedings

before the circuit court. As such, JBPH argues that M&T’s latent claim of disputed material

facts is not preserved for our review. We agree with JBPH.

At the dispositive motions hearing on December 14, 2012, all parties agreed that there

were no material facts in dispute. Indeed, prior to the hearing, M&T moved for summary

judgment, thereby indicating that there were no disputes of material fact.21 Moreover, on

appeal, both the Foundation and JBPH agree that there are no disputes of material fact and

that this case is ripe for summary judgment purposes. Because no disputes of material fact

20
JBPH argues that including Harrison as a party may have facilitated a cleaner
resolution of this case. Nonetheless, simply because it may have been preferable to include
Harrison as a party defendant does not mean that Harrison was an indispensable or necessary
party.
21
Assuming arguendo that this issue is somehow preserved, none of the proffered
“disputes of material fact” are, in fact, material to the resolution of the claims in this case.

28
were advanced before the circuit court, we will not address M&T’s claims without the

benefit of the circuit court’s assessment of the merits (or lack thereof) of those claims.

D. The Circuit Court Did Not Err in Dismissing M&T’s Constructive Fraud Claim

M&T’s final contention of error is that the circuit court erred in dismissing its claim

for affirmative relief against JBPH. In its cross-complaint, M&T alleged constructive fraud 22

against JBPH. Specifically, M&T alleges that JBPH instructed M&T to change the name of

the payee of the trust distribution payments from “John B. Parsons – Salisbury Home for the

Aged” to “Salisbury Retirement Center, Inc. T/A John B. Parsons Home.” As such, M&T

claims that JBPH fraudulently withheld information concerning the rightful beneficiary of

the Baker Trust and/or deliberately misrepresented the same. JBPH, however, argues the

circuit court correctly dismissed M&T’s constructive fraud claim because M&T failed to

plead with the requisite particularity needed to prevail on a motion to dismiss. We agree with

JBPH.

“We review the grant of a motion to dismiss as a question of law.” Shenker v.

Laureate Educ., Inc., 411 Md. 317, 334-35 (2009) (citations omitted). “In considering a

dismissal, we inquire whether the well-pleaded allegations of fact contained in the complaint,

taken as true, reveal any set of facts that would support the claim made.” Id. (citations

omitted). “A court must assume the truth of all well-pleaded relevant and material facts as

22
During the course of litigation, M&T occasionally sounded its cross-claim in terms
of unjust enrichment.

29
well as all inferences that reasonably may be drawn therefrom, and order dismissal only if

the allegations and permissible inferences, if true, would not afford relief to the plaintiff, i.e.,

the allegations do not state a cause of action.” Id. (citations omitted). “Any ambiguity or

uncertainty in the allegations bearing on whether the complaint states a cause of action must

be construed against the pleader.” Id. (citations omitted). “Mere conclusory charges that

are not factual allegations need not be considered.” Id. (citations omitted). “Th[e] Court

views all well-pleaded facts and the inferences from those facts in a light most favorable to

the plaintiff, the non-moving party.” Id. (citations omitted). We review only “the four

corners of the complaint and its incorporated supporting exhibits, if any.” Forster v. Office

of Pub. Defender, 426 Md. 565, 604 (2012) (citation omitted). Ultimately, “[o]ur goal, in

reviewing the trial court’s grant of dismissal, is to determine whether the court was ‘legally

correct.’” Parks v. Alpharma, Inc., 421 Md. 59, 72 (2011) (citations and internal quotations

omitted).

We have previously explained that constructive fraud is:

a breach of legal or equitable duty which, irrespective of the
moral guilt of the fraud feasor, the law declares fraudulent
because of its tendency to deceive others, to violate public or
private confidence, or to injure public interests. Neither actual
dishonesty of purpose nor intent to deceive is an essential
element of constructive fraud.

Scheve v. McPherson, 44 Md. App. 398, 406 (1979) (citations and quotation marks omitted).

In the instant case, M&T’s cross-claim complaint contains no more than conclusory

allegations against JBPH. See RRC Ne., LLC v. BAA Maryland, Inc., 413 Md. 638, 644

30
(2010) (“The well-pleaded facts setting forth the cause of action must be pleaded with

sufficient specificity; bald assertions and conclusory statements by the pleader will not

suffice.”). Moreover, M&T failed to specifically delineate any of the elements necessary to

prevail in a case of constructive fraud. Critically, M&T did not even allege that JBPH owed

M&T any duty, let alone how any duty was allegedly breached.23 Clearly, there is an absence

of any particularized facts necessary to withstand a motion to dismiss for failure to state a

claim.24

In sum, we hold that the circuit court did not err in concluding that the Foundation is

the rightful beneficiary of the Baker Trust. We further hold that the circuit court properly

dismissed the Foundation’s claims alleging trover and conversion. Finally, we hold that the

23
The only reference to any duty JBPH may have owed M&T was contained in the
last paragraph of M&T’s cross-claim, which stated that JBPH “has breached its duty . . . by
not making proper inquiry regarding these payments.”
24
Moreover, JBPH maintains that it is the entity that is entitled to receive the Baker
Trust distribution payments. Indeed, JBPH requested that M&T change the name of the
payee of the distribution payments from “John B. Parsons-Salisbury Home for the Aged” to
“Salisbury Retirement Center, Inc. t/a John B. Parsons Home.” This is consistent with the
position JBPH took throughout the course of the dealings between the parties, i.e. that it was
the rightful beneficiary of the Baker Trust. As such, the trial court did not err, as a matter of
law, in dismissing M&T’s constructive fraud claim against JBPH.

31
circuit court did not err in denying Harrison the right to intervene or in dismissing M&T’s

claim alleging constructive fraud against JBPH.

JUDGMENT OF THE CIRCUIT COURT FOR
WICOMICO COUNTY AFFIRMED. COSTS 25%
BY APPELLANT; 25% BY APPELLEE/CROSS-
APPELLANT JOHN B. PARSONS FOUNDATION;
AND 50% BY APPELLEE/CROSS-APPELLANT
MANUFACTURERS AND TRADERS TRUST
COMPANY.

32