author: Lowe, J.,

text:
    RANGER INSURANCE COMPANY v. NATIONWIDE MUTUAL INSURANCE COMPANY
    [No. 49,
    September Term, 1976.]

      Decided November 4, 1976.

    The cause was argued before Moylan, Menchine and Lowe, JJ.

      Samuel S. Smalkin for appellant.

      Phillips L. Goldsborough, with whom were Howard G. Goldberg and Smith, Somerville & Case on the brief, for appellee.
   Lowe, J.,

delivered the opinion of the Court.

Appeals frequently become necessary because a party assumes that a trial judge knows as much as he does. Error occurs when the trial judge makes the same assumption.

Ranger Insurance Company (Ranger) sued Nationwide Mutual Insurance Company (Nationwide) in the Superior Court of Baltimore City. The case was tried upon an “Agreed Statement of Facts” supplemented by a minimum of testimony and evidence. The Agreed Statement of Facts hardly provided a skeleton of the case:

“AGREED STATEMENT OF FACTS
1. On July 18, 1971 Budget Rent A Car rented to one John Carr an automobile which was involved in an accident on that day at the intersection of Belvedere Avenue and Bellona Avenue in Baltimore City, Maryland, while being operated by Carr.
2. At the time of the leasing of the vehicle, the rental agreement between Budget Rent A Car and Carr provided in pertinent part: ‘Customer shall be insured under Budget’s automobile liability insurance policy, but only if customer has no other liability insurance available to customer with respect to customer’s use of the rental vehicle. Limits of liability available under Budget’s automobile liability policy shall in no event exceed the limits specified in the Financial Responsibility Laws of this State.’
3. A copy of relevant portions of said policy of automobile liability insurance issued by Ranger Insurance Company to Budget Rent A Car is attached hereto and is intended to be incorporated herein by reference.
4. At the time of the accident of July 18, 1971, there was in full force and effect a policy of automobile liability insurance issued by Nationwide Mutual Insurance Company to Carr. A copy of relevant portions of said policy of automobile liability insurance issued by Nationwide Mutual Insurance Company is attached hereto and is intended to be incorporated herein by reference.
5. The accident of July 18, 1971 was caused solely by the negligence of Carr in his operation of the automobile rented by him from Budget Rent A Car. As a result of said accident, bodily injuries and property damage have been settled by Ranger Insurance Company for the total sum of $5,000.00. Said settlement is fair and reasonable in amount.”

Neither the record nor the extracts contain a policy from Ranger to Budget. More significantly, the relevant portions (i.e., an.alleged contingent clause) are nowhere to be found. The declaration, however, alleges that such policy did exist and that it contained a contingent insured clause insuring:

“Any person or organization using a rental vehicle with the permission of the owner, but only if such person or organization has no other automobile liability insurance available to him for the limits of liability at least equal to the Financial Responsibility Limits, whether on a primary, contributory, excess, or any other basis with respect to his use of the rental vehicle.”

By contrast, the Nationwide-Carr policy is in the record and was attached to the stipulation. It contained an excess insurance clause which stated that:

“ . .. the insurance with respect to temporary substitute automobiles ... shall be excess insurance over any other valid and collectible insurance.”

Having settled the claim against Carr, after demand to defend Carr was made to Nationwide, Ranger sued Nationwide for indemnification, contending that its contingent clause prevailed over Nationwide’s excess clause, citing State Farm v. Universal Underwriters, 270 Md. 591, as authority. At trial, Ranger produced no witnesses, but did introduce two exhibits:

1. a certificate issued by the Insurance Commissioner showing that a “Special Automobile Rental Liability Policy” was filed and approved by the State Insurance Division on December 15, 1971, and
2. the automobile rental agreement between John Carr and Budget.

Nationwide then called an employee of the Insurance Division as its witness. Through him it introduced correspondence indicating that:

1. On June 4, 1971 Ranger had submitted “a Special Automobile Rental Liability Policy for filing with your office.....” There is no indication who — if anyone — was the intended insured.
2. On July 9, 1971 a letter indicating disapproval was mailed by the Insurance Division to Ranger. The reason for disapproval was the policy’s “... failure to meet the Financial Responsibility Law....”
3. Ranger responded to that disapproval by letter dated July 15, 1971. It recognized that the policy’s contingent insurance clause was one reason for the disapproval, but requested reconsideration.
4. An exchange of correspondence followed, including submission by Ranger of several registered amendments and endorsements.
5. After several endorsement proffers were rejected, the Insurance Division approved an endorsement on December 6, 1971 and the policy as a whole on December 15,1971.

The trial judge decided that, under the Financial Responsibility Law, the Legislature intended:

“ ... as a matter of public policy, that those who provide vehicles for hire must also protect the public by providing insurance coverage for those authorized to drive such rental vehicles.”

He further held that the Insurance Commissioner’s initial rejection of the policy and the several endorsements was proper because Ranger’s policy did not provide primary insurance for Budget’s customers. He held that Md. Code, Art. 66V2, § 8-101 reflected the intent of the General Assembly that such required insurance be primary insurance. That section reads:

“(a) The Department 11 shall not register any motor vehicle, trailer or semitrailer to be rented, unless and until the person owning such vehicle shall certify financial responsibility as provided by this article, and such certification has been accepted by the Department, and the Department shall suspend the registration of any such vehicle whenever the Department ascertains that such owner has failed, or is unable, to maintain such proof of financial responsibility.
(b) Certification required under this section shall cover every person using or operating a vehicle under a rental agreement and shall also cover the person owning such motor vehicle.
(c) Any person violating the provisions of this section shall be deemed guilty of a misdemeanor.”

He, therefore, concluded that Ranger could not prevail against Nationwide because:

“ . . . (1) if the policy was in force, Ranger is primarily liable, and (2) if the policy was not in force, Ranger has no standing against Nationwide in a suit for indemnification.”

Ranger does not question the judge’s alternate conclusion. Instead, Ranger disputes the holding that § 8-101 places the primary liability upon it. It further argues that the Insurance Commissioner wrongfully disapproved its policy and that it was, therefore, in force. From that premise it contends, as noted, that the contingent insured would prevail over Nationwide’s excess coverage clause. But because Ranger failed to prove that the policy it allegedly issued Budget contained a contingent insured clause, we see no way we can reach the merits of Ranger’s arguments.

For Ranger to have an enforceable claim against Nationwide it had to show, inter alia:

that Nationwide issued an insurance policy to Carr and that the policy, by its terms, covered the July 18,1971 accident;
that Ranger issued an insurance policy covering Carr and that the policy, by its terms, covered the July 18,1971 accident; and
that Ranger’s responsibility was secondary to Nationwide’s.

These prerequisites had to be more than merely alleged; they had to be proven either by evidence or by agreement between the parties. The first element was satisfied by the stipulation, in the Agreed Statement of Facts, that Nationwide insured Carr. A copy of the pertinent terms of that policy was attached to the Agreed Statement of Facts.

While it was equally important that Ranger also establish that it insured Carr, the proof of this element was less than satisfactory. The existence of such a policy was only alluded to in the Agreed Statement of Facts, Nationwide never expressly admitted that Ranger had insured Carr, and a copy of that alleged policy was neither appended to the Agreed Statement of Facts nor introduced into evidence. Nevertheless, a fact-finder could reasonably infer that Ranger had issued some policy which purported to cover Carr. But a fact-finder would not be at liberty to speculate about the contents of that policy. This is particularly true here, for the very heart of Ranger’s indemnification claim is its assertion that the policy contained a contractual absolution of responsibility to Carr and that,' by virtue of this particular clause, its responsibility to Carr was contingent upon Carr’s inability to collect insurance from Nationwide. It is, therefore, clear that Ranger must prove that its policy contained the alleged contingent insured clause.

The only evidence before the court below of the contents of any Ranger policy was the blank form policy. This policy had been approved by the Insurance Commissioner on December 15, 1971, nearly 5 months after Carr’s accident. Contrary to appellant’s contention in its brief, this policy was not appended to the Agreed Statement of Facts. Instead, it was attached to the certificate of approval from the Insurance Commissioner which was introduced at trial with the unenlightening proffer:

“MR. SMALKIN: I would also like to file, if the Court please, a certificate from the Department of Licensing and Regulations dated March 5, 1974, which goes back to the 1971 policy.
THE COURT: Do you want to file that as an exhibit? Plaintiffs Exhibit 1.”

While we have strained to infer from the Agreed Statement of Facts that some policy was issued by Ranger to Budget which purported to cover Carr, a fact-finder would go too far if he were to assume from that exhibit or its proffer, that the purported Ranger-Budget policy at the time of the accident was the same as the blank form policy approved by the Insurance Commissioner 5 months after the accident.

Absent evidence or agreement that the policy issued by Ranger contained the contingent insured clause upon which Ranger relied, the trial court’s exercise in statutory interpretation became an exercise in futility. The court may not presuppose matters of evidence that have not been proven or stipulated. Nor may it judicially notice a contract provision not in evidence since such provision is neither a self-evident nor a notorious fact. Cf. Macht v. Hecht Co., 191 Md. 98, 102; Barsallo v. Barsallo, 18 Md. App. 560, 565-567. Thus in the absence of evidence of such a provision in its policy, it is of no consequence whether Ranger’s payment on Carr’s behalf was under a valid policy, a purported policy or gratuitously under no policy at all. Ranger did not produce evidence in any form sufficient to raise the issue of whether it or Nationwide was the primary insurer against Carr’s accident.

Nor does it alter the result whether the “Agreed Statement of Facts” may have been in actuality that which it was entitled or more in the nature of a stipulation. As we pointed out in Barnes v. State, 31 Md. App. 25, 35:

¿Under an agreed statement of facts ... [t]here is no fact-finding function left to perform. To render judgment, the court simply applies the law to the facts agreed upon.”

If the judge had limited his application of the law to the facts in the Agreed Statement he could not have reached the ultimate issue because there is no statement of what Ranger’s policy had purported to cover for Budget.

If, however, the “Agreed Statement of Facts” were in reality a stipulation as to certain facts only — as it appears to have been since both parties supplemented it by the introduction of evidence — the need to provide the relevant language of the policy sued upon is equally evident.

Finally, even if we could assume that the form policy submitted to the Insurance Commissioner on June 4, 1971 and finally approved (with endorsement U4172) on December 15, 1971, 5 months after the Carr accident, was the same as the Ranger-Budget policy presumably issued to Budget sometime prior to the accident, Ranger still may not recover.

The evidence showed that the form policy was submitted for approval to the Insurance Commissioner on June 4,1971, but not disapproved until July 9,1971. Under Md. Code, Art. 66V2, § 7-324, a policy submitted is deemed approved after 30 days if not disapproved within those 30 days. Thus, it would appear possible that the form policy had been approved by operation of law and later revoked in accordance with the Commissioner’s authority to do so under that section.

The statute provides for the circumstance where a policy has been issued by an insurer, approved by the Commissioner of Insurance, but then revoked by the Commissioner. See § 7-324 (b). The company, even if it did in fact issue a policy purporting to comply with the financial responsibility laws of the State, is statutorily bound by its act even in the event of subsequent revocation for noncompliance:

“§ 7-324. REQUIREMENTS FOR POLICY OF INSURANCE OFFERED AS PROOF.
(a) Definition; approval of Commissioner of Insurance; effect of issuance of policy or filing of certificate. — A policy of insurance, as that term is used in this subtitle, when offered as proof of financial responsibility under this subtitle, means an automobile public liability and property damage policy, issued by an insurance carrier authorized by the Commissioner of Insurance of the State of Maryland to transact business in this State. A copy of the form of the policy shall be filed with the Commissioner of Insurance who shall within 30 days approve or disapprove of the same. If the Commissioner of Insurance approves the same within such time or fails to take action for 30 days the form of policy shall be deemed approved; provided, however that the Insurance Commissioner shall not approve, and his failure to approve or disapprove shall not be deemed an approval of, a form of policy which does not meet the minimum requirements specified in this subtitle. And provided further that when a policy of insurance has been issued which purports to be under the terms of this subtitle, or when a duly authenticated certificate of the insurance carrier has been furnished to the Department or the Public Service Commission as the case may be under the terms of this subtitle, the insurance carrier shall be obligated at least to the extent of the minimum requirements of this subtitle, any provision of the policy of insurance to the contrary notwithstanding. ” (emphasis added).

The language of that section clearly contemplates the precise circumstance here provided. To bring the terms of this section into play it is sufficient that a policy was issued prior to final approval, purporting to conform to the Financial Responsibility Subtitle requirements. The very issuance of such policy purporting to so comply obligated Ranger to the minimum financial responsibility requirements. . The section concludes with a clause which disposes of Ranger’s reliance upon the contingent insured provision:

“ . .. any provision of the policy of insurance to the contrary notwithstanding.”

Whether the Legislature intended that the coverage contemplated by § 8-101, standing alone, be primary was a question the trial judge below did not have to reach. § 8-101 does not set forth standards of certification of policies by the Insurance Division. It provides that there must be proof of financial responsibility for the Department of Motor Vehicles to register, or continue the registration of, “for-rent vehicles”. A policy issued purporting to fulfill these registration prerequisites of § 8-101 by providing “proof of financial responsibility” falls under the requirements of § 7-324. Clearly the Legislature did intend that the company purporting to issue any policy offered as “proof of financial responsibility” prior to approval (or after disapproval) would b.e primarily obligated under § 7-324 (a). The statutory provision negating the effect of any policy provision to the contrary adds emphasis to the intent of the Legislature to provide protection to the public from those companies who choose to act before receiving the Insurance Division’s approval.

Furthermore, appellant’s case is premised upon a belated collateral attack upon the disapproval of the form policy by the Insurance Commissioner. Having acquiesced in that decision through negotiations which eventually resulted in a policy which eliminated the Insurance Commissioner’s grounds of disapproval, we fail to see how appellant has standing now to attack the disapproval collaterally in a suit against another insurance company. The Legislature provided an administrative remedy in the event of disagreement. See Md. Code, Art. 48A, § 242B. Appellant complains belatedly and in the wrong forum.

Judgment affirmed.

Costs to be paid by appellant.

      . The mistake of assuming that appellate judges have such knowledge is less frequent.

      2. There was no appendage as described and, as will be noted, this statement falls short of asserting that there was a policy in effect issued by Ranger and insuring Budget at the time Carr leased the vehicle.

      . The 1972 amendment to this section by Ch. 81 substituted the word “Administration” for “Department” in subsection (a).

      .
      “§ 7-324
      (b) Disapproval of policy by Commissioner of Insurance. — If within the 30 days the Commissioner of Insurance disapproves the form of policy upon the ground that it does not comply with the requirements of this sub-title, he shall give written notice thereof and his reasons therefor to the carrier and to the Department or the Public Service Commission as the case may be, and the policy shall not be accepted as proof of financial responsibility under this subtitle, provided that, if after a form of policy shall have been approved by the Insurance Commissioner, either by his failure to take formal action thereon, or otherwise, he may at any time for good and sufficient reason revoke his approval thereof, and give notice of his disapproval to the carrier and to the Department or the Public Service Commission as the case may be, and no permits shall ■ be issued by the Department or the Public Service Commission as the case may be, on the policies, after the receipt of the notice. The Department or the Public Service Commission, as the case may be, shall forthwith notify all persons operating under permits issued on the basis of the disapproved policies that the form has been disapproved and that their permits will stand revoked unless satisfactory proof of financial responsibility in a policy whose form has been approved by the Insurance Commissioner is submitted within 30 days after the date of mailing of the notice.”


source: Caselaw Access Project

author: Menchine, J.,

license: Public Domain

text:
    THE ST. PAUL FIRE AND MARINE INSURANCE COMPANY v. XAVIER ARAGONA et al.
    [No. 51,
    September Term, 1976.]

      Decided November 4, 1976.

      The cause was argued before Thompson, Menchine and Melvin, JJ.

      James M. Heffler, with whom was R. Harrison Pledger, Jr., on the brief, for appellant.

      Naji P. Maloffior appellees.
   Menchine, J.,

delivered the opinion of the Court.

The St. Paul Fire and Marine Insurance Company (St. Paul or appellant) has appealed a judgment for $310,000.00 entered against it in the Circuit Court for St. Mary’s County in favor of Xavier Aragona, Marie Aragona, his wife, and Martin Aragona (Aragonas or appellees).

The subject litigation is an offshoot of the case of Myers v. Aragona, 21 Md. App. 45, 318 A. 2d 263, cert. den. 272 Md. 746 (1974). In Myers v. Aragona, the Aragonas had recovered judgment against Mitchell Myers, an attorney at law, under a two count declaration alleging alternatively (a) that Myers was liable for the wrongful acts and breach of fiduciary duty perpetrated by his law partner, one Milton Gordon and (b) that Myers was liable because of his negligence in failing to discover that Gordon had misappropriated and stolen the monies of the Aragonas. We affirmed the judgment upon the ground that Myers was liable to the Aragonas by reason of the Uniform Partnership Act.* We found it unnecessary to decide whether Myers would have been liable by reason of negligence.

St. Paul had issued to Mitchell Myers a policy of insurance providing the following coverage:

“To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages arising out of the performance of professional services for others in the Insured’s capacity as a lawyer and caused by the Insured or any other person for whose acts the Insured is legally liable. (The performance of professional services shall be deemed to include the Insured’s acts as an administrator, conservator, executor, guardian, trustee or in any similar fiduciary capacity, but only to the extent for which in the usual attorney-client relationship the Insured would be legally responsible as attorney for a fiduciary.”

The policy of insurance contained, inter alia, the following exclusion:

“This Policy Does Not Apply:
(a) to any dishonest, fraudulent, criminal or malicious act or omission of the Insured, any partner or employee;. . .”

The Aragonas instituted suit against St. Paul on the policy issued by it, alleging that their final unpaid judgment against Mitchell Myers was within the coverage provided by the policy and that the exclusion did not apply because “The jury [in Myers v. Aragona, supra] returned a special verdict of negligence against Mitchell Myers.”

The cause was submitted in a bench trial. The trial judge agreed with the Aragonas that the judgment fell within the coverage and without the exclusion of the policy and extended judgment against St. Paul for $310,000.00 with interest from the date of entry of judgment in Myers v. Aragona, supra.

In this appeal St. Paul contends, inter alia, that coverage for the loss of the Aragonas was barred by the specific exclusion in the policy issued to Myers.

The undisputed facts are these:

The Aragonas entrusted Milton Gordon, law partner of Mitchell Myers, with large sums of money to be deposited in the law firm’s bank account for the purpose of the payment of construction loans. The “money was never used the way it was supposed to be used” but was “misappropriated and embezzled by Milton Gordon.”

St. Paul contends that the defalcation falls squarely within the policy provision excluding “any dishonest, fraudulent, criminal or malicious act or omission of the Insured, [or] any partner or employee.”

The Aragonas, acknowledging that the funds were lost through the embezzlement and defalcation of the partner Milton Gordon, claim that the loss nonetheless came within the coverage of the policy because “This [exclusionary] clause does not affect the liability of the insurer toward plaintiffs who are now seeking payment of their judgment against Mitchell Myers, the insured, because Myers was exonerated of any dishonest acts. The jury returned a special verdict of negligence against Mitchell Myers.”

The trial judge agreed that the exclusionary clause was not applicable, saying in the course of his written opinion:

“The basis of recovery in the Jury’s verdict which was taken oh a special issue and under express instructions of the Court was that the Defendant had failed to take the required action as a practicing lawyer to safeguard his clients interest. This verdict was affirmed on appeal and is no longer subject to further attack. Myers v. Aragona 21 Md. App. 45. That case determined that the proximate cause of the loss was Myers own act. Myers actions not being ‘dishonest, fraudulent, criminal or malicious’ and having been found by the Jury to be a proximate cause of the Plaintiffs loss independent of the criminal acts if any of his partner we conclude the exclusion does not apply in this case.”

We disagree with the trial judge and shall reverse.

The rule of law governing the interpretation of insurance contracts was succinctly stated by Judge Frederick J. Singley, Jr. in Govt. Employees Insurer v. DeJames, 256 Md. 717, 720, 261 A. 2d 747, 749 (1970):

“It is well settled that in interpreting insurance contracts, words are to be given their customary and normal meaning. State Farm Mut. Auto Ins. Co. v. Treas, 254 Md. 615, 255 A. 2d 296 (1969); American Home Assurance Co. v. Erie Ins. Exchange, 252 Md. 116, 248 A. 2d 887 (1969); Offutt v. Liberty Mut. Ins. Co., 251 Md. 262, 247 A. 2d 272 (1968); Harleysville Mut. Cas. Co. v. Harris & Brooks, Inc., 248 Md. 148, 151, 235 A. 2d 556 (1967), and cases there cited. Absent ambiguity the construction of the contract remains within the province of the court and Maryland has not adopted the rule, followed in many jurisdictions, that an insurance policy is to be most strongly construed against the insurer, American Cas. Co. v. Aetna Cas. & Surety Co., 251 Md. 677, 248 A. 2d 487 (1968); Mateer v. Reliance Ins. Co., 247 Md. 643, 233 A. 2d 797 (1967); Ebert v. Millers Mut. Fire Ins. Co., 220 Md. 602, 155 A. 2d 484 (1959). If the language of an insurance contract is ambiguous, however, construction is for the jury, Ebert v. Millers Mut. Fire Ins. Co., supra, 220 Md. at 610; Eagle Star & British Dominions Ins. Co. v. Fleischman, 175 Md. 433, 2 A. 2d 424 (1938); 22 Appleman, Insurance Law and Practice § 12853 (1947) at 7, and the ambiguity is to be resolved against the company which prepared the policy and in favor of the insured, American Cas. Co. v. Aetna Cas. & Surety Co., supra, 251 Md. at 684; Allstate Ins. Co. v. Humphrey, 246 Md. 492, 496, 229 A. 2d 70 (1967).”

Reaffirming Judge Singley’s summary of that rule of law, the Court of Appeals in C & H Plumbing v. Employers Mut. Cas. Co., 264 Md. 510, 512, 287 A. 2d 238, 239 (1972), made this further observation:

“Moreover, we have no right to relieve one of the parties from disadvantageous terms by process of interpretation nor may we make a new contract under guise of construction.”

C &H Plumbings, supra, involved the interpretation of the following exclusionary clause:

“3. THIS POLICY DOES NOT INSURE AGAINST:
(a) Loss caused by infidelity of an officer or employee of the insured whether such person is acting alone or in collusion with others or by infidelity of persons to whom the insured property is entrusted.” 264 Md. at 513, 287 A. 2d at 239.

The Court then cited and commented upon a text relating to exclusionary clauses concerning dishonesty:

“Richards on the Law of Insurance § 298 (5th ed. Freedman 1952) states:
‘Courts in construing and applying provisions of policies excepting from coverage loss or damage caused by the dishonesty of employees have respected the express language and denied liability on the part of the insurer.’
Id. at 987.
“In support of that proposition the author cites Hunter v. Pearl Assur. Company, 292 Mich. 543, 291 N. W. 58 (1940), and Hoffman Bros. v. Commercial Union Assur. Co., 221 App. Div. 167, 222 N.Y.S. 641 (1927), aff'd 248 N. Y. 578, 162 N. E. 531. In Hunter the court held that ‘theft’ as used in a clause excluding theft by employees included larceny by conversion. In Hoffman a public porter was engaged to carry sample cases for the insured officer who was traveling seeking orders. It was held that the porter came ‘within the class comprised by the words “employee, servant, or messenger.” ’ ” 264 Md. at 514-15, 287 A. 2d at 240.

The Court then announced its holding:

“In the view we take of this case the word ‘employee’ in the context in which it is used would be understood by the average, ordinary individual as including the persons responsible for the thievery here. He would regard them as employees after quitting time as well as during their working day.
“C & H dwells on the meaning of the word ‘infidelity’ and attempts to compare that term to the meaning of the term in certain other insurance contexts, pointing to Code (1968 Repl. Vol.) Art. 48A, § 69 (1) in which fidelity insurance is defined as ‘insurance guaranteeing the fidelity of persons holding positions of public or private trusts.’ It then goes on to examine fidelity losses.*We do not regard the point as well taken.
“Webster, op. cit., says of‘infidelity’:
i^ * * *
‘2. Breach of trust; unfaithfulness to a charge or to moral obligation; treachery; deceit; also an unfaithful act.
* * *
‘Syn. * * * perfidy.’
Random House, op. cit, defines the term as ‘unfaithfulness; disloyalty.’
“Using the common, every day understanding of the terms we are of the opinion that when persons who regularly worked for C & H stole $10,000 worth of supplies this was a ‘loss caused by infidelity of an employee of the insured.’ ”264 Md. at 517,287 A. 2d at 241.

Appellees thus state their position on this issue:

“Mitchell Myers clearly neglected his duties to his clients and in so doing, his negligence allowed substantial resulting injury to appellees. In the plain meaning of the contract of insurance, if Myers had been dishonest himself or if his partner through dishonesty had caused the injury and Myers had not been found negligent in performing his normal duties as an attorney, then and only then would the company’s exclusionary clause have been applicable, either to him directly or through his partnership relation. Defendant’s argument that
‘. . . there can be no instance where a loss is occasioned by a partner’s dishonesty if the insured does discover the dishonesty and prevent the loss.’
is circuitous. Considering the conclusion that through diligence a loss can be prevented; appellees’ claim is substantiated even though a dishonest deed had been executed, the non-negligent conduct on the part of the attorney, Myers, could have prevented the resulting injury. Therefore, negligence on the part of the insured was in fact the causal link to the loss of appellees. It is indemnification against such negligence for which malpractice insurance is purchased.”

The appellees cite only Parker v. State Farm Mut. Auto Ins. Co., 263 Md. 206, 282 A. 2d 503 (1971), to support their stated position that the exclusionary clause does not apply. Parker does not support that position. On the contrary, Parker clearly recognized that when “no ambiguity [appears] in the coverage, exclusionary, or definition clauses of the policy, . .. the insurance carrier contracted to underwrite a specific coverage and should not subsequently be expected to assume liability for a risk which it expressly excluded.” 263 Md. at 215-16, 282 A. 2d at 508.

We see no ambiguity in the subject insurance contract. Using the common, every day understandings of the terms used in the exclusionary clause we are of the opinion that the subject loss was a result of “dishonest... act... of the partner [of the Insured].” C & H Plumbing, supra, 264 Md. at 517, 287 A. 2d at 241-42.

We are persuaded that the subject loss clearly falls within the exclusionary clause and was not within the protection afforded by the policy of insurance. The fact that the insured may have been negligent in failing to discover the perfidy of his partner may indeed have been an alternate ground for his liability to the Aragonas. It did not, however, extend the insured’s coverage as to St. Paul or alter the plain and unambiguous language of the exclusionary clause.

Our ruling upon the discussed issue being dispositive of the case on appeal, we find it unnecessary to address the other contentions of the appellant.

Judgment reversed.

Costs to be paid by the appellees.

      . Then Article 73A, §§ 13-15, now codified in Corporations and Associations Article, § § 9-305,306 and 307.

      . The policy contained the following provision:

        “Action Against Company. No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all the terms of this policy, nor until the amount of the Insured’s obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.
      “Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy. Nothing contained in this policy shall give any person or organization any right to join the Company as a co-defendant in any action against the Insured to determine the Insured’s liability.
      “Bankruptcy or insolvency of the Insured or of the Insured’s estate shall not relieve the Company of any of its obligations hereunder.”

        See also Maryland Code Article 48A, § 481.


author: Thompson, J.,

text:
    CHARLIE EDWARD HARRIS, Personal Representative of the Estate of Jimmy Brinkley et al. v. MONICA C. BRINKLEY
    [No. 52,
    September Term, 1976.]

      Decided November 4, 1976.

      The cause was argued before Thompson, Menchine and Melvin, JJ.

      Myles R. Eisenstein for appellants.

      Gilbert H. Robinette, with whom were Kenneth L. Rosen and Barry J. Dalnekoff on the brief, for appellee.
   Thompson, J.,

delivered the opinion of the Court.

On February 11, 1976, the Orphans’ Court of Baltimore City found that the appellee, Monica C. Brinkley (Monica), is the posthumous illegitimate child of Jimmy Brinkley. Charlie Edward Harris, personal representative of the estate, Jack Allison Brinkley and Elizabeth Harris Brinkley, parents of the deceased, have appealed. In the language of the appellants the issues are as follows:

“1. Did the Trial Court err in permitting Georgianna Hamlin to answer questions over timely objection, in accordance with the Dead Man’s Statute, Courts and Judicial Proceedings Article, Section 9-116 and Lord Mansfield’s Rule, questions concerning transactions had with or statements made by the decedent, Jimmy Brinkley, and the alleged paternity of Monica C. Brinkley?
“2. Did the Trial Court err, in its verdict by not having sufficient evidence before it to decide whether the decedent openly and notoriously recognized Monica C. Brinkley to be his child?
“3. Did the Trial Court err, in its verdict by extending the provisions of the Estates and Trust Article, Section 1-208 to include posthumous illegitimate children?”

Jimmy Brinkley died intestate on October 11, 1974. He was unmarried. On January 8, 1975, Monica was born. Her mother, Georgianna Hamlin, filed a petition in the Orphans’ Court, as next friend, stating that Monica is the daughter of Jimmy Brinkley and requesting that her name be added to the List of Interested Parties filed by the personal representative.

At the hearing, the decedent’s mother, the appellant, Elizabeth Brinkley, testified that she had received a phone call from her son in 1974 during which he stated, “Georgianna thinks she is pregnant,” to which Mrs. Brinkley replied, “That’s your thing, you do what you want to do with it.”

Georgianna Hamlin testified that she had separated from her husband in May of 1970. Two children had been borne by her from this marriage, but one had died. Since the separation she had had no contact with her husband until April or May of 1975, when he called to speak with their child, Rosalind. They had never obtained a divorce. In May of 1972, she met the deceased and he moved into her apartment in June of that year. They continued to live together until his death. From the time Jimmy Brinkley moved into her apartment she did not engage in sexual intercourse with anyone else. During this time they maintained a joint checking and savings account. In May of 1974, she became pregnant by the decedent and gave birth to the appellee on January 8,1975.

Melvin Duncan, Jr., an insurance agent, testified that the decedent and Mrs. Hamlin visited his office in March of 1973. At that time the decedent told Duncan that Mrs. Hamlin was his fiancee and that he wished to obtain a life insurance policy with her as the beneficiary. At the suggestion of Duncan the decedent’s mother was named as the beneficiary; this designation was never changed.

The appellee produced several additional witnesses, friends and relatives of Mrs. Hamlin and the decedent. Each testified that Mrs. Hamlin and Jimmy Brinkley were living together prior to his death, and that they had been told by the decedent that Mrs. Hamlin was pregnant with his child.

Connie Brown was called to the stand by the appellants. She testified that she had lived with the decedent before he had moved into Mrs. Hamlin’s apartment. She knew that the decedent was living with Mrs. Hamlin up until his death, but that just before his death the decedent had asked the witness to marry him.

Dead Man's Statute

The appellant argues that under Courts and Judicial Proceedings Article, § 9-116, also known as the Dead Man’s ■statute, the testimony of Mrs. Hamlin should have been excluded. This section provides:

“A party to a proceeding by or against a personal representative, heir, devisee, distributee, or legatee, or by or against an incompetent person, may not testify concerning any transaction with or statement made by the dead or incompetent person, personally or through an agent since dead, unless called to testify by the opposite party, or unless the testimony of the dead or incompetent person has been given already in evidence in the same proceeding concerning the same transaction or statement.”

This statute does not make Mrs. Hamlin incompetent as a witness for all purposes but only in regard to transactions had with or statements made by the decedent. Stacy v. Burke, 259 Md. 390, 405, 269 A. 2d 837 (1970). The test for determining a “transaction” within the meaning of the statute was stated in Schifanelli v. Wallace, 271 Md. 177, 184, 315 A. 2d 513 (1974), citing Ridgley, Exec. v. Beatty, 222 Md. 76, 83, 159 A. 2d 651 (1960), “Whether, in case the witness testify falsely, the deceased, if living, could contradict it of his own knowledge.” A portion of Mrs. Hamlin’s testimony dealt specifically with statements made by the decedent and her dealings with him. It was erroneous to admit her testimony to these facts. See Whitehurst v. Whitehurst, 156 Md. 610, 613, 145 A. 204 (1929), dealing with testimony of an alleged spouse in regard to her marriage with the deceased. We note that after proper objection some testimony was admitted subject to exception, and there was no motion to strike the objectionable testimony; thus the objection to this testimony was waived. Md. Rule 522 d 3. Davis v. State, 189 Md. 269, 274, 55 A. 2d 702 (1947). We perceive only one objection that may have been properly preserved, which was:

“Q. Did you hold yourselves out as husband and wife?
“A. Yes, I did.
“Mr. Eisenstein: Objection at this point.
“Judge Colgan: Overruled.”

Regardless of the waivers, any error on the part of the court in admitting Mrs. Hamlin’s testimony was harmless. All the witnesses produced by the appellee testified that the decedent and Mrs. Hamlin were living together at the time Monica was conceived and that the decedent had acknowledged that the child was his. Even the appellant, Mrs. Brinkley, recited that her son had informed her Mrs. Hamlin was pregnant. Appellants’ other witness admitted that the deceased and Mrs. Hamlin were living together. In other words there was an abundance of testimony in the record to show that Monica was the daughter of Jimmy Brinkley and no evidence to refute it.

Lord Mansfield Rule

Appellant further contends that the testimony of Mrs. Hamlin and all other witnesses presented by the appellee should have been excluded under the Lord Mansfield rule. In the case of Shelley v. Smith, 249 Md. 619, 241 A. 2d 682 (1968), it was determined that Md. Code, Art. 16, § 66 F (b) relaxes the Lord Mansfield rule and applies in any case where paternity is in issue in connection with the right to inherit. That section provides as follows:

“(b) Hearing without jury; competency to testify; burden of proof. — At any time after the birth of the child, a hearing shall be held by the court in which the bill or petition is filed without a jury, unless the defendant alleged to be the father of the child elects a jury trial as hereinafter provided. Both the mother and the putative father are competent to testify, but the defendant alleged to be the putative father shall not be compelled to give evidence and the burden is upon the petitioner or complainant to establish, by the weight of evidence required in other civil cases, that the defendant is the father of the child or children in question. When any bill or petition filed under this subtitle shall allege, or the court shall determine after the commencement of proceedings thereunder, that the child’s mother was married at the time of the child’s conception; the presumption that the child is the legitimate child of her husband may be rebutted by the testimony of persons other than the mother and her husband that, at the time the child was conceived, the mother was in fact living separate and apart from her husband, and it shall not be necessary to establish the nonaccess of the husband. After the court shall have determined that the child’s mother and her husband were not living together as man and wife when the child was conceived, both the mother and her husband shall be competent to testify as to the nonaccess of the husband when the child was conceived or to any other relevant matter.”

Contrary to the assertions of the appellants, from the testimony of every witness it could only be adduced that Mrs. Hamlin was living separate and apart from her husband at the time Monica was conceived, and that she was living with Jimmy Brinkley. Concerning nonaccess, Mrs. Hamlin’s pointblank response to a question from the appellants was that she had not talked to her husband from 1972 until after Monica was born and had not had sexual relations with him since 1970. The evidence was all clearly admissible under the statute.

Estates and Trusts Article, § 1-208 (b) (3)

The order of the trial court stated that “Monica C. Brinkley qualifies as a child under the provisions of the Estates and Trusts Article, Section 1-208 (b) (3) and therefore may inherit from the decedent.” This section applies only if the father “[h]as openly and notoriously recognized the child to be his child.” Appellants contend that the evidence was insufficient for the trial court to determine this.

As we have stated previously, all the testimony was to the effect that the deceased was proud that Mrs. Hamlin was pregnant with his child and withheld that fact from no one. The credibility of these witnesses is a matter left largely to the trial judges. Herring v. Herring, 251 Md. 516, 248 A. 2d 117 (1968). We do not find their decision to be clearly erroneous. Indeed we entirely agree with it.

Appellants further contend that the wording of Estates and Trusts Article, § 1-208 (b), “a child born to parents ...” does not include posthumous illegitimate children. They recognize that Estates and Trusts Article, § 3-107 provides:

“A child of the decedent who is conceived before the death of the decedent, but born afterwards shall inherit as if he had been born in the lifetime of the decedent. No other after-born relation may be considered as entitled to distribution in his own right.”

They argue, however, that the legislature did not intend to allow posthumous illegitimate children to inherit from their father. It is clear to us that from the plain meaning of the words used in this statute the legislature did not intend any such limitation.

Motions to Dismiss the Appeal

In the brief the appellee makes two motions to dismiss the appeal. The basis for the first motion is that the record extract filed by the appellants did not set out the judgment appealed from, the verbatim texts of the pertinent statutes, nor a sufficient statement of facts; thus under Maryland Rule 1035 the appeal should be dismissed. Since the appellee has provided the appropriate material and was not prejudiced by the omissions we shall decline to dismiss the appeal on this ground. Farmer v. Jamieson, 31 Md. App. 37, 354 A. 2d 225 (1976).

The second motion to dismiss applies only to Charles Edward Harris, the personal representative of the estate of the decedent. The contention is that since the order appealed from is one which simply determines the heirs of Jimmy Brinkley, the personal representative is protected in making the distribution in accordance with an order of the court, and the appeal will in no way benefit the estate, he is not an aggrieved party. We find Webster v. Larmore, 270 Md. 351, 311 A. 2d 405 (1973) to be dispositive of this question, and will dismiss the appeal of the personal representative on the grounds stated by the appellee.

Appeal of Charlie Edward, Harris, personal representative of the estate of Jim,my Brinkley, dismissed.

Order affirmed.

Appellants Jack Allison Brinkley and Elizabeth Harris Brinkley to pay the costs.

      . Mrs. Hamlin is a party to this proceeding notwithstanding the fact that she is simply a next friend (prochein ami). Allers v. Leitch, 213 Md. 390, 131 A. 2d 458 (1957).


author: Moore, J.,

text:
    KEMP-PONTIAC-CADILLAC, INC. et al. v. S & M CONSTRUCTION CO., INC.
    [No. 56,
    September Term, 1976.]

      Decided November 5, 1976.

    The cause was argued before Moylan, Moore and Mason, JJ.

      Michael Lee Calvete, with whom were Robert F. Wood, P.C., H. David Gann and Azrael & Gann on the brief, for appellants.

      Samuel Gordon, with whom was Robert H. Haslinger on the brief, for appellee.
   Moore, J.,

delivered the opinion of the Court.

The appellee, S & M Construction Co., Inc. (S & M), instituted suit against the appellant, Kemp-Pontiac-Cadillac, Inc., upon the corporation’s confessed judgment note. Prior to trial, with leave of court, an “Amended Narr” was filed in which the corporate appellant’s president,. William G. Kemp, was also named a party defendant. The latter’s individual liability was based upon alleged fraud in providing a false financial statement which induced S & M to make the loan for which the confessed judgment note was received. Judgment in the amount of $66,500 was entered below against both defendants after a nonjury trial (Shure, C. J., presiding). This appeal seeks to challenge only the judgment against Mr. Kemp, and is based upon a single contention — that upon the evidence adduced, the lender (appellee) could not have relied upon the financial statement which was admittedly false.

Appellants are met, however, with a motion to dismiss the appeal, contained in the appellee’s brief, on grounds of noncompliance with Maryland Rule 1028 (Printed Record Extract in Civil Cases). For the reasons stated, we exercise our discretion to grant the motion.

I

Record Extract Applicable Maryland Rules

The Maryland Rules pertaining to appeals to this Court (Rules 1000-1099) include provisions for dismissal (a) by the court on its own motion and (b) by the court on motion of any party upon any one of eight grounds specified in Rule 1035, § b. These grounds include:

“5. The contents of the printed record extract do not comply with section b. of Rule 1028 (Printed Record Extract in Civil Cases).
7. The style, contents, size, format legibility or method of reproduction of a brief, appendix or printed record extract does not comply with section a. of Rule 1031 (Style and Contents of Brief).”

A record extract is not required in criminal cases and was not required in civil cases in appeals to this Court until July 1, 1975, the effective date of Rule 1028. This rule is at once precise and comprehensive as to the form and content of the printed extract, the procedure to be followed by the parties in its preparation, and the penalties for its violation — including dismissal of the appeal, § i. The following specifications as to form are mandated in § a:

1) The appellant shall print the record extract either as an appendix to his brief or as a separate volume. (If printed as a separate volume, Rule 1028, § h requires that it be printed in “clear, legible type and on good paper,” 8V2 x 11 inches, 30 copies to be filed with the clerk at the time the appellant’s brief is filed.) If printed as an appendix, the brief should have the inscription, “Appellant’s Brief and Appendix.”
2) The portions printed shall be arranged in the order in which they appear in the record and shall be copied verbatim.
3) Asterisks or other appropriate devices shall be used to indicate omissions in testimony or exhibits.
4) Reference to the pages of the record and transcript shall be made and the date of filing each paper printed shall be given “at the head of the copy.”
5) Whether the extract is printed as an appendix to the brief or bound separately, there must be a Table of Contents (as provided in Rule 1031, Style and Contents of Brief) giving references to:
a. The initial pages on direct, cross and redirect examination of each witness, and
b. the initial page of each pleading, exhibit or other paper printed, each document to be identified by a descriptive phrase and also, if an exhibit, by its exhibit number.
6) The pages of the transcript, as reproduced, shall be consecutively renumbered.
7) Any photograph, document or other paper shall be included in all copies of the appendix or printed record extract but may be photographically or mechanically reduced so long as legibility is not impaired.
(8) The size, style, format and binding of the appendix or printed record extract shall be the same as those prescribed for a brief by Rule 1031, § a.

Similarly, Rule 1028, § b. dictates the content of printed record extract. It must contain “such parts of the record as may reasonably be necessary for the determination of the questions presented by the appeal.” Specifically it shall include:

“(a) The judgment appealed from, together with the opinion or charge of the lower court, if any.
(b) So much of the evidence, pleadings or other parts of the record as is material to any question the determination of which depends upon the sufficiency of the evidence, pleadings or other matter contained in the record to sustain any action, ruling, order or judgment of the lower court.
(c) Such other parts of the record as may be designated by the parties pursuant to section c. of this Rule.”

[By a separate subsection, Rule 1028, § g., provision is made for an agreed statement of undisputed facts which may be included in the printed extract as all or a part of the statement of facts in the appellant’s brief. If the facts are disputed, or if agreement upon a statement of undisputed facts is not possible, the parties may by stipulation summarize the. testimony of any witnesses or the contents of any exhibits. Such stipulation may be included in the printed extract “in lieu of the testimony and exhibits summarized therein.”]

That there shall be early communication between appellant’s counsel and counsel for the appellee in the designation of the parts of the record to be printed, is also clearly mandated. Thus Rule 1028, § c. 1. provides that the parties shall by stipulation agree on the parts of the record to be included, “whenever possible.” This provision imposes on appellant’s counsel the obligation in the first instance to contact appellee’s counsel in order to achieve agreement. If after this undertaking by appellant the parties are unable to agree, the following procedural steps are prescribed by Rule 1028, § c. 2:

(a) Appellant is required within 10 days after filing the record in this Court, to deliver to appellee a written statement of the parts of the record he proposes to print.
(b) Appellee' is required, within 10 days after that, to deliver to appellant a written statement of any additional parts of the record the appellee desires to be included.
(c) Within 10 days thereafter, appellant may deliver to appellee a statement of any additional parts of the record he proposes to include in view of the parts designated by the appellee.

As a curb upon excessive or improper record designations by the appellee, the Rule also provides that appellant may, upon 2 days’ notice, require the appellee to secure the payment of the estimated cost of printing such portions of the record designated by appellee as appellant deems not material to the questions presented. Rule 1028, § d. On the other hand, if appellee fails to secure the aforesaid payment or if, for any reason, the printed record extract does not contain a part of the record deemed material by the appellee, the latter may print such portions as an appendix to his brief. Rule 1028, § e. A statement of the reasons for printing such material must, however, be made and parties and counsel are expressly cautioned that the cost of printing “may be withheld or divided” under Rule 1082, § c. (Awarding of Costs). Finally, appellant may include in an appendix to his reply brief such additional part of the record as he deems material in view of the “matter contained in the appellee’s brief or appendix.” Rule 1028, § f. In this instance also, a statement of the reasons for its inclusion must be made and the parties and counsel are cautioned that the cost of printing it may be withheld or divided.

Severe sanctions for violations of Rule 1028, § a. (Appellant to Print) and § b. (Contents) are provided by Rule 1028, § i. With respect to both, the prescribed penalties include dismissal of the appeal. For a violation of § a., the court may make “any other appropriate order” including an order for the reprinting of an improperly printed appendix or printed extract, at the expense of counsel responsible for the violation. For a violation of § b., in addition to dismissal, the court may require that additional portions of the record be printed or otherwise furnished or make “any other appropriate order.”

These rules are to promote the orderly and effective administration of justice. They are to be read and carefully followed by appellate counsel. Whether to dismiss the appeal or not in the event of violation of the above rules, rests in the discretion of this Court. As previously indicated, the court may act sua sponte or upon motion of any party. As provided in Rule 1036, a motion to dismiss an appeal may either be filed separately or in appellee’s brief. (Oral argument on a motion to dismiss in advance of argument on the merits is not permitted unless directed by order of this Court, Rule 1037, § c.) If the motion is filed separately, time limitations are prescribed. Thus, on the grounds relied upon in the instant case, had appellee’s motion been separately filed, the time limitation would have been 10 days from the filing of appellant’s brief and appendix. Rule 1036, § c. This limitation is, of course, inapplicable if, as in the present case, the motion to dismiss is included in the appellee’s brief. In this respect, Rule 1036, § d. provides:

“A motion to dismiss may be included in the appellee’s brief. In such event the argument in support of the motion shall also be included in the appellee’s brief, .and the appellant may in a reply brief include his argument in opposition to such motion. ” (Emphasis added.)

II

Appellants Violations

We are confronted here with numerous, serious violations of the Rules above summarized:

(1) Appellants failed to seek from appellee a stipulation as to parts of the record to be included;
(2) At no time did they deliver to appellee a written statement of the parts of the record proposed to be printed;
(3) In the appendix to their brief they failed to include (a) the judgment appealed from, (b) the opinion of the lower court, and (c) sufficient portions of the transcript of the testimony to assist the court in an understanding of the issues;
(4) The table of contents merely lists “pages of transcript” without any designation of the witnesses who testified, and lists exhibits by number without any description of the exhibits themselves;
(5) With respect to such portions of the transcript as were printed, the name of the witness in one instance is omitted, the pages of the transcript were not renumbered as required nor were asterisks nor any other appropriate means employed to indicate omissions in the testimony;
(6) Perhaps the most egregious omission was appellants’ failure to print page 193 of the transcript, skipping from page 192 to page 194, without designating the omission in any way and withholding from the court the testimony of the vice president of the appellee that it was not his intention to discount the note of the corporate appellant with the Madison National Bank of Washington. The significance and seriousness of this omission becomes painfully apparent in the light of appellants’ claim that the false financial statement was not relied upon in connection with the sale of equipment to the appellant corporation, but was requested only for the purpose of discounting the note at the bank after the consummation of the transaction.

III

Decisional Law

Cases considered by the Court of Appeals and by this Court relating to record deficiencies generally fall into three categories. The first involves complete omissions of material from the record extract. See Caroline v. Reicher, 269 Md. 125, 304 A. 2d 831 (1973) where a motion for a directed verdict and the Court’s ruling thereon were not printed. Refusing to pass upon the issue of whether or not error had been committed in the direction of the verdict and in reliance upon Maryland Rule 828 b. 1. (the language of which is identical to Rule 1028 b. 1.), Judge Digges stated:

“The cases are legion in this Court in support of our authority not to decide issues not presented in conformity with this rule.” 269 Md. at 137.

See also Seek v. Winters, 270 Md. 715, 313 A. 2d 453 (1974); A. S. Abell Co. v. Skeen, 265 Md. 53, 288 A. 2d 596 (1972).

The second category represents cases where improper supplementation of the record has been attempted by the inclusion of material not admitted in the proceedings below. Community Realty Co. v. Siskos, 31 Md. App. 99, 354 A. 2d 181 (1976); Conrad v. Department of Natural Resources, 30 Md. App. 479, 352 A. 2d 904 (1976); Prince George's County v. Fahey, 28 Md. App. 312, 345 A. 2d 102 (1975). As Chief Judge Gilbert pointed out in Siskos, supra, 31 Md. App. at 102, the word “record” as employed in Rule 1028 means “the entire file, including pleadings, transcript, judgment appealed, the opinion of the trial judge or the jury charge, if there be a jury, and other allied paper writings.” The parties are not permitted to supplement the record by inserting any other matter into their record extract.

The third, and perhaps most common occurrence, is the situation presented here — where appellant fails to include material portions of the record, including the opinion of the lower court, and makes material omissions; but where the appellee has included the omitted portions in his own appendix and includes in his brief a motion to dismiss. See Farmer v. Jamieson, 31 Md. App. 37, 354 A. 2d 225 (1976); Williams v. Johnson, 261 Md. 463, 276 A. 2d 95 (1971); Bornstein v. State Tax Commission, 227 Md. 331, 176 A. 2d 859 (1962); Brown v. Fraley, 222 Md. 480, 161 A. 2d 128 (1960); Thanos v. Mitchell, 220 Md. 389, 152 A. 2d 833 (1959); Standard American Homes, Inc. v. Pasadena Building Co., 218 Md. 619, 147 A. 2d 729 (1959); Maryland Lumber Co. v. White, 205 Md. 180, 107 A. 2d 73 (1954).

In the decisions of the Court of Appeals and of this Court, above cited, it is well settled that the decision to grant or deny a motion to dismiss is discretionary with the appellate court. Furthermore, if the appellee elects to supply in his record extract the material omitted by the appellant, instead of exercising the option of filing a motion to dismiss and requesting that the time for filing his brief be extended, the appellate court would not ordinarily dismiss the appeal, in the absence of prejudice to appellee or a deliberate violation of the Rule. It would instead impose the cost of printing the omitted material on the appellant, regardless of the outcome of the case. Farmer v. Jamieson, supra, 31 Md. App. at 47; Bornstein v. State Tax Commission, supra, 227 Md. at 335. In Domstein, however, the Court of Appeals made it plain that more drastic action might be taken, “if the omissions on the part of the appellant were deliberate and intended to violate or evade the rule, even where the material is supplied.” There, the Court, in an opinion by Judge Henderson, went on to point out that the material omitted by the appellants from their record extract, but supplied by the appellee, was reasonably necessary for the determination of at least some of the questions presented. Finding that the case was one in which dismissal of the appeal would be warranted, the Court added, 227 Md. at 336-37:

“The matter is one within the discretion of the Court. In this instance we think that the case may better serve as a warning than as an example, and have therefore decided not to dismiss the appeal. ... Yet we think we should make it clear that we propose to deal summarily hereafter with cases where the record extract is so inadequate or so slanted in favor of the appellants’ contentions as to be seriously misleading.”

The instant case is one which, in our judgment, should serve as an example rather than as a warning. The violations of Rule 1028, previously recounted, were numerous and serious. In particular, the omission of a critical portion of a principal witness’ testimony could not, as we have stated, be viewed as accidental. We grant the motion to dismiss.

We also observe, for such solace as it may afford appellants’ counsel, that his contention that the evidence did not show reliance upon the false financial statement (the sole contention made on appeal) would be unavailing. The trial court made a clear finding that the appellee had relied upon the financial statement and we could not say that this ruling was clearly erroneous, if indeed it was erroneous at all. Maryland Rule 1086.

Appeal dismissed; appellants to pay the costs.

      . The corporate financial statement included 1.6 acres of commercial property in Connecticut. This was, however, in the personal ownership of William G. Kemp and was not the property of Kemp-Pontiac-Cadillac, Inc. The asset value ascribed to it was $49,000.

      . Appeals to the Court of Appeals are governed by Rules 800-899 and are practically identical.

      . As Judge Prescott, later Chief Judge, said of counterpart Rule 828 in McIntyre v. Byrne, 217 Md. 71, 74, 141 A. 2d 692 (1958): “The Rule is clear, definite and certain; there is little excuse for having an attorney’s compliance therewith questioned, much less to have it closely challenged. The substantial rights of litigants to have judgments and decrees reviewed upon appeal should not be jeopardized by the possibility of failing to comply, or reluctance to comply, with a Rule so easy to follow.”

      . Another important obligation first to be discharged by appellant is to order, in writing, from the court stenographer, a transcript of the testimony, within 10 days after filing the order for appeal. Rule 1026, § a. 2.

      . The amendments to Rule 1036, effective January 1, 1976, omit any reference to § 5 of Rule 1035 b. This inadvertence has been corrected, effective January 1, 1977 3:20 Md. R. 1127 (Sept. 29,1976).

      . Appellants were represented by out-of-state counsel in the proceedings below and at oral argument in this Court. The appearance of Maryland counsel was also entered on their behalf. There appears, however, to have been no participation by Maryland counsel in the appellate process except for receipt of notices. We question the advisability, from a professional viewpoint, of local counsel’s limited association with the case in this Court.


text:
    FLORENCE MITCHELL RAND v. ROBERT C. RAND
    [No. 59,
    September Term, 1976.]

      Decided November 5, 1976.

      The cause was argued before Thompson, Menchine and Melvin, JJ.

      John T. Bell, with whom were Frank S. Cornelius, Elbert JR. Shore, Jr. and Bell & Cornelius on the brief, for appellant — cross-appellee.

      Allen J. Katz and George W. Young, Jr. for appellee — cross-appellant.
   Menchine, J.,

delivered the opinion of the Court.

A decree passed by the Circuit Court for Montgomery County on March 17, 1971, inter alia, required Robert C. Rand (Robert) to pay $250.00 monthly for the support and maintenance of a minor child, Virginia Rand (Virginia) and to pay $75.00 monthly as alimony to Florence Rand (Florence).*

On August 7, 1975, Florence filed a petition to increase child support. On September 11,1975, Robert filed a petition for modification of alimony. The petitions were referred to a Domestic Relations Master pursuant to Sixth Circuit Rule S74.b.(ii).

The petitions were consolidated and heard together by the Master on October 27,1975. The Master’s report detailed his findings of fact and recommended that the court pass an order: (a) requiring Robert to pay $480.00 monthly for the support and maintenance of the minor child of the parties and (b) terminating the payment of alimony by Robert to Florence subject to reconsideration upon future showing of need and a substantial change of the financial circumstances of the parties. Exceptions to the Master’s report were filed by both Florence and Robert. Both sought further hearing in the Circuit Court for Montgomery County.

On December 9, 1975, the chancellor passed the following order:

“The Court has read and considered the plaintiffs and defendant’s Exceptions to the Report of the Domestic Relations Master. The Court has further considered the report itself with accompanying exhibits and has generally reviewed the two files. Exceptions to the findings of a Master will not be sustained except in the case of clear error or unless he misapplies the law.
‘Exceptions to a report of an auditor or Master will not be sustained unless his findings of fact from the evidence are clearly erroneous or unless he misapplies the law in his findings of fact.’ Bris Realty Co. vs. Phoenix Savings and Loan Association, 238 Md. 84.
‘A Masters finding of fact from the evidence are prima facie correct and they are not to be disturbed unless determined to be clearly erroneous.’ Bar Association vs. Marshall, 269 Md. 510.
“The Court finds no clear error or misapplication of the law in this case and it is therefore, this 9th Day of December, 1975, by the Circuit Court for Montgomery County, Maryland,
“ORDERED that the Exceptions filed by the plaintiff and defendant are hereby overruled and that the request for a hearing in open court is denied and it is further
“ORDERED that the defendant’s counsel promptly prepare an Order in accordance with the findings of the Domestic Relations Master.”

A subsequent order of the Circuit Court for Montgomery County passed on January 6,1976, reads as follows:

“ADJUDGED, ORDERED and DECREED, that the Plaintiff, Robert Collona Rand, pay to the Defendant, Florence Mitchell Rand, for support and maintenance of the minor child of the parties, namely, Virginia Rand, the sum of Four Hundred Eighty Dollars ($480.00) per month, commencing and accounting from September 1, 1975, and a like sum on the first day of each succeeding month, pending further order of this Court; and, it is, further,
“ORDERED, that the payment of alimony by the Plaintiff to Defendant shall be, and the same is hereby, terminated; however, the Court shall retain continuing jurisdiction for reconsideration thereof upon showing of a need and a substantial change in the financial circumstances of the parties, and it is, further
“ORDERED, that in all other respects the Decretal Order of March 17, 1971, will remain in full force and effect, except as hereby provided for and modified.”

Both Florence and Robert have appealed. Both attack the chancellor’s refusal to grant a hearing in the circuit court.

Rejection of Requested Hearing
Sixth Circuit Rule S74.Í.4. reads as follows:
“HEARING BEFORE THE COURT.
Upon the filing of exceptions pursuant to this section, the proceedings shall be referred to the Court. The Court shall then rule upon the exceptions on the record, unless it shall determine that a hearing is required, in which event the Court shall refer the proceedings and the exceptions to the Assignment Office for the scheduling of a hearing on the exceptions and the notification of counsel.”

Florence’s initial attack is more basic than Robert’s. Pointing out that Maryland Rule l.f.l. prohibits local rules that are inconsistent with the Maryland Rules, she contends that Sixth Circuit Rule S74.Í.4. is in conflict with Maryland Rule 321.d. Maryland Rule 321.d reads as follows:

“d. DISPOSITION.
The court may decide demurrers and motions (except motions for a new trial or for judgment n. o. v.) without a hearing unless a party requests a hearing at the time or within fifteen days after the demurrer, motion or reply is filed. A request for hearing shall be in writing and may be either a separate pleading, or incorporated in the body of the demurrer, motion or reply at the end thereof under an appropriate heading.” (Emphasis added.)

The issue, in short, raised in the first prong of Florence’s attack, requires determination as to whether Rule 321.d was intended to encompass exceptions to the report of a Master and thus to confer a right to a court hearing upon timely application therefor. We think that it was not.

The antiquity of the office of Master is the subject of lengthy explication in Townshend v. Duncan, 2 Bland 45 (1828), in the course of which it was said at 55-57:

“In England, the officers called masters in Chancery are assistants and associates to the Chancellor; and two of them at a time, by turns, usually sit with him in Court. They have the power to administer oaths, take affidavits, and acknowledgments of deeds, recognizances, &c. 1 Harri. Prac. Chan. 73. It is the duty of a master to execute the orders of the Court upon references made to him by it, acting either in exercise of its original jurisdiction, or under the authority of any Act of Parliament. The heads of reference that may be made to a master are almost as numerous as the matters subject to the jurisdiction of the Court.
“In general, there is no question of law or equity, or disputed fact, respecting which a master may not be called upon to make a report,....
“If, however, a master is directed to ascertain a particular fact, he ought himself to draw the conclusion from the evidence before him, and not merely to state the circumstances. Lee v. Willock, 6 Ves. 605.”

In Miller, Equity Procedure (1897) § 555, page 653, it is said:

“ ‘A master in chancery is an officer of the court who acts as an assistant to the chancellor.... In Maryland the office at one period existed under the inherent jurisdiction of the court of chancery, independently of statute. Masters may now also be appointed under the constitutional provision that “the judge or judges of any court may appoint such officers for their respective courts as may be necessary.” ’ ”

The nature and effect of the report of a Master was succinctly stated by Judge J. Dudley Digges, speaking for the Court of Appeals, in Bar Assn. v. Marshall, 269 Md. 510, 516, 307 A. 2d 677, 680 (1973):

“Previous opinions of this Court have discussed the importance to be attached to the findings of fact in a master’s report by the ultimate trier of fact. In those cases we have said that although the report is only advisory, the court should give full consideration to it, particularly with respect to the credibility of witnesses, where the testimony is conflicting. And, the master’s findings of fact from the evidence are prima facie correct and they will not be disturbed unless determined to be clearly erroneous.”

The contention that exceptants to the report of a Master have a per se right to present evidence de novo to the court by reason thereof was considered and rejected in Bris Realty v. Phoenix Svgs. & Loan Assn., 238 Md. 84, 208 A. 2d 68 (1965), wherein it was said at 88, et seq. [69]:

“(I). The refusal of the chancellor to permit the appellants to take testimony before him on the exceptions. The record shows that the exceptions, as filed by the appellants to the special master’s report, were general in form and failed to point out any finding of fact not supported by the testimony before the master, or any law misapplied by him to such facts in arriving at his allowance or disallowance of the respective claims.
“The appellants take the position that as to matters contained in those parts or paragraphs of the master’s report to which they have generally excepted, they had the right to present testimony before the court de novo, citing Egerton v. Reilly, 1 G. & J. 385, and Worthington v. Hiss, 70 Md. 172, as authority. These two cases furnish no such authority. In Egerton, this Court merely held that the lower court erred in referring a matter to an auditor before preliminary pleadings had brought the case to issue; and in Worthington, the appeal was from a decree remanding a case to an auditor with specific instructions to state an account upon principles laid down in the opinion accompanying the decree. Both sides appealed from the directions given to the auditor and no procedural question with respect to testimony either before the auditor or before the court was raised, and nowhere does it appear that the trial court, in hearing exceptions to the auditor’s account before its remand, heard any testimony. The appellants also cite, Sewell v. Sewell, 218 Md. 63, for the proposition that a master is not a judicial officer and therefore the court cannot delegate its judicial function to a nonjudicial officer. The short answer to this is that the Sewell case dealt with testimony taken before an examiner, not a master. The powers and duties of examiners and masters are not coextensive. The former merely records testimony for perusal of the court, see Miller, Equity Procedure, p. 262, et seq., whereas the latter, properly called an auditor and master, is an adviser of the court, makes findings, reports to the court and suggests the nature and propriety of the decree. Miller, op. cit., p. 654.
“The cases of Maryland Lumber Co. v. White, 205 Md. 180, Pinkston v. Higham, 224 Md. 513, and Alexander v. Hergenroeder, 226 Md. 559, all dealing with reports of masters in chancery, clearly indicate our view that a master’s findings are prima facie correct. When exceptions to auditor’s reports are filed, they should point out the particular error or errors objected to and general exceptions cannot be considered. Miller, op. cit., p. 643; Scrivener v. Scrivener, 1 H. & J. 743; Young v. Omohundro, 69 Md. 424. We believe this is equally true of exceptions to a master’s report. One of the purposes of seeking the advice and recommendations of an auditor and master is to conserve the time of the court. If claimants had the right to offer new or additional testimony before the court, not only would there be no saving of the court’s time but, perhaps, the whole structure of the auditor’s and master’s report would be worthless, thus requiring a remand and revision. Exceptions to a report of an auditor and master will not be sustained unless his findings of fact from the evidence are clearly erroneous, or unless he misapplies the law to his findings of fact. Alexander v. Hergenroeder, supra.

In the light of the nature and effect of the Master’s report and the conservation of the court’s time sought to be achieved by initial reference to him, we perceive no inconsistency between Sixth Circuit Rule S74.Í.4. and Maryland Rule 321.d. As we see the latter Rule, the Court of Appeals did not intend to bring within its purview exceptions to the reports of a Master. That conclusion is buttressed by the circumstance that the Maryland Rules of Procedure make specific provision by Rule 910 for Juvenile Masters and the procedures to be followed when exceptions are taken in juvenile causes. As to Masters generally, however, no particular procedure has been prescribed by general rule. In view of this, most of the several Judicial Circuits of Maryland have adopted disparate local rules relating to the appointment and use of Masters, with some of them prescribing differing procedural courses to be followed when exceptions to Masters’ reports are filed.

We assume that the Court of Appeals is aware of those differing local rules because Maryland Rule 1, § f. provides that they shall be forwarded to that Court and to the State Court Administrator.

Accordingly, we see no illegality or impropriety in the enactment of a local rule leaving to the discretion of the trial court the question whether a court hearing upon the exceptions is necessary or desirable.

This Court has made plain, of course, that a local rule will not be permitted to demean or defeat the State’s interest as parens patriae of minors or to lessen the obligation of the courts carefully to review cases in which their welfare is or may be threatened. In Ellis v. Ellis, 19 Md. App. 361, 366, et seq., 311 A. 2d 428, 431 (1973), we said:

“After all, it has been long established that the State, under our form of government, stands in its relationship to minors as parens patriae. See Thistlewood v. Ocean City, 236 Md. 548; also 67 C.J.S. Parens Patriae 624. And rule or no rule, parties in child custody cases are entitled to have the carefully and intelligently exercised judgment of the Chancellor, as distinguished from that of the Master’s alone. Without having at least reviewed the testimony and evidence adduced at the hearing before the Master, the Chancellor clearly was in no position to fulfill his judicial obligation to the parties. Nor is this Court in a position properly to discharge its function since in a case involving custody of a child, when our appellate review of a Chancellor’s action is invoked, we do not merely review the findings and order of the Chancellor but must review the evidence before the Chancellor and make an independent assessment of it. We cannot here review the facts before the Chancellor because there were none. Deckman v. Deckman, 15 Md. App. 553. Moreover, the Chancellor did not even have the benefit of any so-called ‘findings’ of the Master (see Bris Realty v. Phoenix, supra), a requirement which the local rule does not compel in child custody cases, although a ‘finding’ as well as a ‘recommendation’ is required of a Master for Juvenile Causes. See local Rule 925.”

We shall next address ourselves to the common contention of both Florence and Robert that the denial of a court hearing was an abuse of discretion under local Rule S74.

The factual posture of the subject case is markedly different than Ellis v. Ellis, supra. In Ellis, after observing that:

“. . . the Chancellor routinely and automatically adopted, without any knowledge of the status, circumstances and living conditions of the parents, the recommendation of the Master that custody of the child be taken from the mother and awarded to the father[,]”

we declared:

“Under the circumstances, we see no other recourse than to remand the case to the Circuit Court for Prince George’s County with directions that the appropriate Chancellor in that court reconsider the order of January 30, 1973, in light of the now available testimony and evidence adduced at the hearing before the Master, Domestic Relations Causes, and issue such further order as the evidence and testimony would dictate to be in the best interest and welfare of the infant child of the parties.” 19 Md. App. at 367-68, 311 A. 2d at 431.

In the subject case, on the other hand, the Master’s Report of six pages made lengthy and explicit findings of fact in explanation of his recommendation. Moreover, the Master attached to that report numerous exhibits introduced by the parties at the hearing, including: (a) documents purporting to detail the income and expenses of Florence and Robert; (b) documents purporting to detail the costs of college attendance for Virginia; (c) the 1974 income tax return of Florence. Furthermore, portions of the testimony of Florence and Robert deemed by the parties to be of importance to their respective appeals were incorporated as appendices in their briefs to this Court.

We are persuaded, accordingly, that the record before this Court is such that we are able objectively to review: (a) the exercise of the chancellor’s discretion in the denial of a hearing upon the exceptions pursuant to the Sixth Circuit Rule S74; and (b) whether the chancellor’s ultimate decision was clearly erroneous.

Exercise of Discretion Under Sixth Circuit Rule S7b

The court order of December 9, 1975 (upon which the ultimate order appealed from was founded) makes clear that the chancellor had (1) read and considered the Master’s report; (2) read and considered the exceptions to that report; (3) seen and considered the exhibits relating: (a) to the income and expenses claimed by both parties; and (b) to the cost of college attendance by Virginia.

In short, the chancellor had access to and presumably considered all evidence presented by the parties upon the issues of a right to alimony by Florence and the cost of college attendance by Virginia.

At no point did the exceptions filed by Florence allege that additional evidence was essential to full consideration of the issues by the chancellor. Her complaints were that the Master (a) had not properly weighed the evidence; (b) had made mathematical errors in calculations; (c) should have required the husband to pay a greater amount “because of his greater earning power”; (d) failed to recognize “the wife was not forced to contribute to the support of the other children attending college during the marriage of the parties”; and (e) ignored preliminary college expenses totaling $1,235.00.

Similarly, the exceptions by Robert failed to allege that additional evidence was desired or necessary for decision. His plaint, in brief, was merely that the Master’s recommendation was unfair.

Under such circumstances, the evidence available to and examined by the chancellor clearly permitted him to pass objective judgment upon the recommendation of the Master. We perceive no abuse of discretion in his denial of a court hearing upon the exceptions.

Child Support

Florence contends that the amount required for the maintenance and support of Virginia is $668.44 monthly. She contends as well that “the mother is chargeable with the duty of support only to the extent that the father is incapable.” The Master, supported by substantial and persuasive evidence, found that the amount required was $520.00 monthly. His finding is prima facie correct. We cannot say his finding, concurred in by the chancellor, was clearly erroneous. Bar Assn. v. Marshall, supra.

Florence’s contention that as the mother she is but contingently obligated to contribute to the support of her minor child is unsound under the circumstances of this case. She is employed with a substantial annual income. See Article 72A, § 1; Melson v. Melson, 151 Md. 196, 206, 134 A. 136, 139-40 (1926). See also Article 46 Maryland Declaration of Rights.

Robert, conceding that the sum of $520.00 monthly is a reasonable amount for the support and maintenance of Virginia during the period of her college attendance, contends that the amount of $480.00 monthly required to be paid by him is an undue burden upon him under the evidence submitted to the Master.

It is not disputed here that Florence’s gross income exceeds $16,000.00 per year and that Robert’s gross income exceeds $27,000.00 per year.

The Master found that Florence’s net income was $832.20 monthly and pointed out that her financial statement showed a monthly need of $640.00 for her own support. Robert contends that the finding as to net income was erroneous and was in fact more than $100.00 per month higher. Florence’s income tax return fully supports Robert’s contention. The Master’s finding was clearly erroneous as to the net income of Florence. It was in fact not less than $940.00 and left a balance after personal living expenses of not less than $300.00 monthly.

The Master found that Robert’s net income was $1,488.10 monthly. There was substantial evidence to support the finding. Robert’s financial statement indicated a monthly need of $996.00 for his own support. He thus was left with a balance of $492.10 that we shall round to $500.00 monthly.

The record indicates no apparent padding of the personal expenses of the parties. Under such a condition we conclude from the above that the chancellor was clearly erroneous in requiring Robert to pay $480.00 monthly for Virginia’s support and maintenance. We think the proper assignment of parental responsibility for her support in this case fairly can be made on the basis of the net monies remaining available to the parties after expenses, namely $500.00 monthly as to Robert; $300.00 monthly as to Florence. Otherwise stated, we conclude that Robert should be burdened with five-eighths of Virginia’s maintenance and support. In terms of dollars monthly this would be: 5/8 X 520.00 = $325.00 monthly.

Florence’s Claim for Counsel Fees

The petition of Florence to increase child support included a claim for a counsel fee under Article 16, § 5A. Neither the Master nor the chancellor addressed that claim. It was neither granted nor denied. The allowance of counsel fees under § 5A is a matter directed to the discretion of the trial court. Jackson v. Jackson, 272 Md. 107, 321 A. 2d 162 (1974). We think it is appropriate for the chancellor to consider the issue upon remand without comment or discussion by this Court.

Order reversed in part and remanded for the passage of an order not inconsistent with this opinion.

The costs to be equally divided.

      . Decree affirmed as to parts here pertinent in Rand v. Rand, 13 Md. Ap$. 574,284 A. 2d 271 (1971).

      . Rule S74.b.(ii) reads as follows:
      “The Court in its discretion, shall direct the Clerk to refer to the Domestic Relations Master actions in which a hearing has been requested, including but not limited to the following. A bill or petition:
      (ii) for modification of existing orders or decrees to increase or decrease the amount of alimony or child support, or to change the custody of minor children or provisions for child visitation;. . .”

      . Florence does not on this appeal contest the termination of alimony.

      . First Judicial Circuit Rule 505;
      Second Judicial Circuit Rule 513;
      Third Judicial Circuit Rule S 3;
      Fifth Judicial Circuit Rule 502;
      Sixth Judicial Circuit Rule S74 as to Domestic Relations Masters; Rule 513 as to Special Masters;
      Seventh Judicial Circuit Rule S80 as to Domestic Relations Masters; Rule 513 as to Special Masters;
      Eighth Judicial Circuit Rule 571D as to Domestic Relations Masters; Rule 571E as to Masters generally.

      . Robert does not contest the appropriateness of college attendance by Virginia.

      . Florence filed a financial statement indicating an income about one-half of that sum. She retreated from that position during her testimony, conceding a wage of $16,000.00 annually.


author: Melvin, J.,

text:
    PATRICIA DIETRICH HESS et al. v. RITA V. CHALMERS et al.
    [No. 68,
    September Term, 1976.]

      Decided November 5, 1976.

    The cause was argued before Thompson, Menchine and Melvin, JJ.

      Stephen N. Abrams, with whom were Fred B. Goldman and Fodiman, Goldman & Greenfeig on the brief, for appellants — cross-appellees.

      Clarence M. Thomas, with whom were Savage, Jones, Tingle & Schwartzman, P.A., on the brief, for appellees — cross-appellants.
   Melvin, J.,

delivered the opinion of the Court.

The primary question for decision in this appeal is whether the Circuit Court for Baltimore County (Raine, J.) correctly applied the doctrine of res judicata in granting the appellees’ (respondents’ below) motion for summary judgment. A second question to be decided is the correctness of Judge Raine’s ruling denying appellees’ motion for counsel fees, that question being the subject matter of appellees’ cross-appeal.

In 1963 Helen Lee Dietrich and her husband, George, conveyed a number of parcels of land located in Baltimore County, Baltimore City, and Anne Arundel County to a corporate straw party. The parcels were immediately reconveyed to Helen Dietrich for life with full powers of disposition, except by will, with remainder to her two daughters (the appellants here) and her husband, George. In 1968, in settlement of a marital dispute, George released all his rights in the property. Helen then exercised her powers of disposition by a blanket deed conveying all the parcels to a straw party. The property was immediately reconveyed to Helen, vesting in her absolute ownership of all the property covered by the 1963 conveyances. In 1971, Helen died. By her will, dated December 12, 1968, she devised the land here in question to the appellants and three others in equal shares.

In 1974, appellants filed a bill of complaint in Anne Arundel County seeking to have themselves declared vested with title as remaindermen to the property located in Anne Arundel County. After a hearing, Judge James L. Wray filed a memorandum opinion and decree on 20 May 1974. The opinion in effect declared that the 1968 straw conveyances vesting absolute title in Helen validly divested the appellants of any interest they held as remaindermen by virtue of the 1963 conveyances. The appellants appealed to this Court on August 19, 1974. As to Judge Wray’s decree of 20 May 1974, the appeal was dismissed as being filed too late. Hess v. Chalmers, 27 Md. App. 284 (1975).

While the appeal was pending, appellants on 7 November 1974 filed their bill of complaint in the instant proceedings in the Circuit Court for Baltimore County against the same parties (appellees here) who were respondents in the Anne Arundel County case. With the exception that the bill concerned only the Baltimore County property covered by the 1963 conveyances, it was in other respects virtually identical to the bill of complaint previously filed in Anne Arundel County. In each bill the relief sought was that the appellants “be declared to be the lawful remaindermen” of the property covered by the 1963 conveyances in the respective counties. Each bill raised the single legal issue of the validity of the 1968 conveyances which divested them as remaindermen and placed absolute ownership in their mother, Helen.

The appellees answered the Baltimore County bill of complaint and moved for summary judgment alleging that the Anne Arundel County decree was res judicata as to all issues then before the court. After a hearing held on 18 November 1975, the motion was granted. In his oral opinion, Judge Raine said:

“. . . [T]here doesn’t seem to me to be any dispute as to any relevant facts, so that I would believe that the Respondents here would be entitled to a summary decree on the facts themselves, but in addition I believe that the doctrine of res judicata constitutes an absolute bar when Judge Wray and the Circuit Court for Anne Arundel County dismissed the Bill of Complaint and his decision remained undisturbed.
It was between the same parties, it presented the same issues, it involved the identical deeds, and the mere fact that he was taking jurisdiction there because of some of these properties being located in Anne Arundel County and this Court gets into it because of properties being located in Baltimore County, the law is the same and the facts are the same, so I am going to grant the motion for summary decree and dismiss the Bill of Complaint.”

We hold that Judge Raine was right for the right reasons. Lebrun v. Marcey, 199 Md. 223 (1952), Davis v. Frederick County Board, 25 Md. App. 68 (1975). See also U.S. v. Memphis Cotton Oil Corporation, 288 U. S. 62 (1933).

At the conclusion of the hearing on the motion for summary judgment and after the chancellor had announced his decision to grant the summary judgment, cross-appellants orally moved for an award of counsel fees “under Rule 604b”. No mention of the subject had been previously made. We quote in its entirety that portion of the transcript dealing with the motion for counsel fees.

“MR. THOMAS: May I make one statement? I would like to file a motion —
THE COURT: When you have made a sale get up and walk away.
MR. THOMAS: This is something entirely different. I want to make a motion under Rule 604B for allowance of a counsel fee because of the frivolous nature of bringing this action and the pursuit of this action. I would like leave to do it by written motion.
THE COURT: I am not going to grant it because I am persuaded that the frivolity was not intentional. I don’t think that there was a basis for a cause of action, but if I had to award counsel fees in all such cases that's all I would do.
(End of Hearing.)”

The written order of the chancellor granting the motion for summary judgment and denying the motion for counsel fees was filed on December 23, 1975. In the meantime, no further pleading was filed concerning the matter.

In Maryland it is well settled that counsel fees are rarely awarded by the court and then only in special circumstances. Erie Insurance Exchange v. Lane, 246 Md. 55, 227 A. 2d 231 (1966); Beane v. Prince George's County, 20 Md. App. 383, 315 A. 2d 777 (1974).

Rule 604 b provides a narrow exception to this rule:

“b. Bad Faith Unjustified Proceeding Delay.
In an action or part of an action, if the court finds that any proceeding was had (1) in bad faith, (2) without substantial justification, or (3) for purposes of delay, the court shall require the moving party to pay to the adverse party the amount of the costs thereof and the reasonable expenses incurred by the adverse party in opposing such proceeding, including reasonable attorneys’ fees.” (Emphasis added).

The plain meaning of the rule is that to award counsel fees under it the court must first make a finding that the proceeding is brought “. . . (1) in bad faith, (2) without substantial justification, or (3) for purposes of delay”. Once such a finding is made, the application of the rule becomes mandatory. Waters v. Smith, 277 Md. 189 (1976). Unless such a finding is made, counsel fees may not be awarded under it.

Cross-appellants argue that Judge Raine’s remark, “I don’t think there was a basis for a cause of action . . was a finding by him, within the context of Rule 604 b, that the “proceeding was had .. . without substantial justification”; therefore, it became his mandatory duty to award counsel fees. We do not agree. We think the chancellor’s remark, coupled as it was with the further remark, “but if I had to award counsel fees in all such cases, that’s all I would do”, was merely recognition by him that, within the context of the rule, “without substantial justification” should not be interpreted to mean that the winning party is entitled to counsel fees simply because his opponent misconceived the legal basis upon which he sought to prevail. We do not interpret Judge Raine’s remark as a finding that the Baltimore County proceeding was “without substantial justification” within the meaning of Rule 604 b so as to require an award of counsel fees.

Nor do we find that the chancellor was clearly erroneous in not making such a finding in the circumstances. The proceeding in Baltimore County was filed at a time when the validity of the Anne Arundel County decree of 20 May 1974, was pending on appeal in this Court. Although the correctness of that decree is not before us, we think the legal issue decided by Judge Wray was not so easy of resolution as to justify a finding that the bill of complaint was “without substantial justification”. Indeed, Judge Wray characterized the issue as “[m]ore difficult” than a subsidiary issue in the case that he found “[e]asy to decide”. Had the appellants prevailed in their Anne Arundel County suit with respect to the Anne Arundel County property, it would not, in our judgment, have been unreasonable for them to bring a similar proceeding in Baltimore County to establish in that county their title as remaindermen to the Baltimore County property as well, citing as a basis therefor the Anne Arundel County decree. The fact that they may have been overly confident of their position on appeal and filed the Baltimore County bill of complaint while the appeal was pending, does not mean that it was done “without substantial justification” within the meaning of Rule 604 b.

Decree of 23 December 1975 affirmed.

Costs to be paid by appellants and cross-appellees.

      . Nor did we decide its correctness in Hess v. Chalmers, 27 Md. App. 284.