Case Title: Mirjafari v. Cohn

Citation: 412 Md. 475

Docket Number: 38/09

State: maryland

Court: Maryland Supreme Court

Date: 2010-02-16T00:00:00Z

Document:
Seyed Mehran Mirjafari, et al. v. Edward S. Cohn, et al., No. 38, September Term 2009
REAL PROPERTY - FORECLOSURE - APPEALS - SUPERSEDEAS BOND - BONA
FIDE PURCHASER STATUS, FOR THE PURPOSE OF DETERMINING THE
APPLICABILITY OF THE SUPERSEDEAS BOND PROVISIONS CONTAINED IN
MARYLAND RULES 8-422 AND 8-423, IS DETERMINED BASED ON THE
RELEVANT FACTS KNOWN (OR WHICH SHOULD HAVE BEEN KNOWN) BY THE
FORECLOSURE PURCHASER AT THE TIME OF THE PURCHASER’S SUCCESSFUL
BID AND SUBMISSION OF A DEPOSIT AT THE FORECLOSURE SALE.
Circuit Court for Harfo rd Coun ty
Case No. 12-C-07-000170
IN THE COURT OF APPEALS
OF MARYLAND
No. 38
September Term, 2009
                                                                             
SEYED MEHRAN MIRJAFARI, et al.
v.
EDWARD S. COHN, et al.
                                                                             
 
Bell, C.J.
Harrell
Battaglia
Greene
Murphy
Adkins
Barbera,
JJ.
                                                                             
Opinion by Harrell, J.
Murphy and Adkins, JJ., Concur.
Bell, C.J., joins judgment only.
                                                                             
Filed:  February 16, 2010
1The Trustees are Edward Cohn, Stephen Goldberg, Richard Solomon, and Richard
Rogers.
2A supersedeas bond is “[a]n appellant’s bond to stay execution on a judgment during
the pendency of the appeal.”  Black’s Law Dictionary 202 (9th ed. 2009).
3Rule 8-422, entitled “Stay of enforcement of judgment,” provides in pertinent part:
(a) Civil proceedings.  (1) Generally.  Stay of an order granting
an injunction is governed by Rules 2-632 and 8-425.  Except as
otherwise provided in the Code or Rule 2-632, an appellant may
stay the enforcement of any other civil judgment from which an
appeal is taken by filing with the clerk of the lower court a
supersedeas bond under Rule 8-423, alternative security as
prescribed by Rule 1-402(e), or other security as provided in
Rule 8-424.  The bond or other security may be filed at any time
before satisfaction of the judgment, but enforcement shall be
stayed only from the time the security is filed.
Rule 8-422(a)(1).
4Rule 8-423, entitled “Supersedeas bond,” provides:
(a) Condition of bond.  Subject to section (b) of this Rule, a
supersedeas bond shall be conditioned upon the satisfaction in
full of (1) the judgment from which the appeal is taken, together
with costs, interest, and damages for delay, if for any reason the
(continued...)
Petitioners, Maziar Mirjafari and Seyed Mehran Mirjafari (“the Mirjafaris”), owners
of the investment property at issue in this case, noted exceptions to a foreclosure sale of the
property, instituted by Respondents/Trustees (“the Trustees”),1 to a third-party purchaser,
Respondent/Intervenor, JSG Campus Hills LLC (“JSG”).  The Mirjafaris’ exceptions found
no favor in the Circuit Court for Harford County and they appealed.  The Court of Special
Appeals dismissed as moot the Mirjafaris’ appeal based on their failure to file a supersedeas
bond.2  See Maryland Rules 8-4223 and 8-4234 (2009).  The Mirjafaris contend here that no
4(...continued)
appeal is dismissed or if the judgment is affirmed, or (2) any
modified judgment and costs, interest, and damages entered or
awarded on appeal.
(b) Amount of bond.  Unless the parties agree otherwise, the
amount of the bond shall be as follows:
(1) Money judgment not otherwise secured.
When the judgment is for the recovery of money
not otherwise secured, the amount of the bond
shall be the sum that will cover the whole amount
of the judgment remaining unsatisfied plus
interest and costs, except that the court, after
taking into consideration all relevant factors, may
reduce the amount of the bond upon making
specific findings justifying the amount.
(2) Disposition of property.  When the judgment
determines the disposition of the property in
controversy (as in real actions, replevin, and
actions to foreclose mortgages,) or when the
property, or the proceeds of its sale, is in the
custody of the lower court or the sheriff, the
amount of the bond shall be the sum that will
secure the amount recovered for the use and
detention of the property, interest, costs, and
damages for delay.
(3) Other cases.  In any other case, the amount of
the bond shall be fixed by the lower court.
Rule 8-423.
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supersedeas bond or alternative security was required in this case because, as they allege,
JSG was not a bona fide purchaser as of the date it paid the full purchase price.  For reasons
we shall explain and on the facts of this case, we hold that JSG was a bona fide purchaser,
as of the date of its successful bid at the foreclosure sale, and, thus, the Mirjafaris’ failure to
5On 19 October 2006, the Mirjafaris tendered a check for the August and September
monthly payments, but the check was returned for insufficient funds.
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file a supersedeas bond rendered moot their subsequent appeal of the overruling of their
exceptions and ratification of the report of sale.
Facts
The Mirjafaris owned investment property located at 1700 Melrose Lane in Forest
Hill, Maryland.  The property consists of 2.728 acres, zoned R-3, and is improved by two
separate buildings containing a total of six rental units.  The property was purchased by the
Mirjafaris’ uncle, Mansour, in 2002 for $245,000, but was titled in the Mirjafaris’ name.
In 2006, the Mirjafaris received the proceeds of a $75,000 loan from Home Equity
Mortgage, repayment of which was secured by a note and deed of trust on the property.  The
note required monthly payments of $1050.75, beginning on 1 June 2006.  The Mirjafaris
made the initial monthly payment on time, but failed to pay the 1 July 2006 payment until 8
August 2006.  A pattern of falling behind in their monthly payments ensued.5  On 17 January
2007, the Trustees instituted, in the Circuit Court for Harford County, foreclosure
proceedings.  At the time of the foreclosure sale, the Mirjafaris were seven months in arrears.
Advertisement of the sale of the property ran once a week for three successive weeks
at the end of January and early February.  On 15 February 2007, Alex Cooper Auctioneers
conducted the foreclosure auction.  JSG was the high bidder at $250,000.  In accordance with
the advertised terms of sale, JSG delivered an $8,000 deposit to secure its bid.  A report of
6Rule 14-206, entitled “Procedure prior to sale,” states in pertinent part:
(b) Notice.  (1) By publication.  After commencement of an
action to foreclose a lien and before making a sale of the
property subject to the lien, the person authorized to make the
sale shall publish notice of the time, place, and terms of sale in
a newspaper of general circulation in the county in which the
action is pending.  “Newspaper of general circulation” means a
newspaper satisfying the criteria set forth in Code, Article 1,
Section 28.  A newspaper circulating to a substantial number of
subscribers in a county and customarily containing legal notices
with respect to property in the county shall be regarded as a
newspaper of general circulation in the county, notwithstanding
that (1) its readership is not uniform throughout the county, or
(2) its content is not directed at all segments of the population.
For the sale of an interest in real property, the notice shall be
given at least once a week for three successive weeks, the first
publication to be not less than 15 days prior to sale and the last
publication to be not more than one week prior to sale.  For the
sale of personal property, the notice shall be given not less than
five days nor more than 12 days before the sale.
Rule 14-206(b)(1).
7In this regard, the Mirjafaris argued that the advertisements were deficient in that they
failed to note: (1) the number and type of buildings on the property and the number of then-
current dwelling units; (2) the property’s zoning designation; (3) the property’s public water
and sewer access and public and private ingress and egress; (4) that the subdivision of the
property permitted development of up to 26 townhouse/condominium units; and (5) that the
(continued...)
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the sale was filed with the Circuit Court on 22 February 2007.
On 15 March 2007, the Mirjafaris, through counsel, filed in the Circuit Court
exceptions to the sale, contending that the sale should be set aside because the advertisements
for the sale of the property violated the time requirements in Maryland Rule 14-206(b)6 and
contained certain inaccuracies in their description of the property7 that affected adversely the
7(...continued)
property could be sold as individual lots.
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amount of the bids received.  The Trustees opposed the exceptions, arguing that the
advertising, description of the property, and sale price were adequate.  On 11 June 2007,
JSG, as the foreclosure purchaser, moved to intervene in the action.  The Circuit Court
granted the motion to intervene.
The first round of hearings on the Mirjafaris’ exceptions were held on 17 and 20
September 2007.  On 16 October 2007, the Mirjafaris’ initial attorney filed a motion to
withdraw his appearance, which the Circuit Court granted.  At the resumption of the hearings
on 12 December 2007, the Mirjafaris requested a continuance because they had retained new
counsel only ten days prior.  The Court denied the motion for continuance.  The hearings
proceeded, with the Mirjafaris’ new counsel, and concluded the next day.
On 13 December 2007, the Circuit Court entered an order overruling the Mirjafaris’
exceptions and ratifying the 15 February 2007 sale of the property to JSG.  At the close of
the Circuit Court’s oral ruling, counsel for JSG inquired of the Circuit Court whether it
would “[im]pose a requirement for an appeal bond.”  The judge asked counsel for the
Mirjafaris if he wished to address the matter, but he declined.  Our search of the record did
not disclose any subsequent requests by the Mirjafaris or their counsel to the Circuit Court
to determine the amount of a bond, consider alternative security, or stay ratification of the
sale.  On 21 December 2007, the Mirjafaris moved to alter or amend the judgment and for
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a new trial.  The motions were denied.
The Mirjafaris, with yet again new (present) counsel in tow, noted timely an appeal
to the Court of Special Appeals, presenting the following issues for consideration:
(1) Did the [C]ircuit [C]ourt err in permitting the [Mirjafaris’]
former counsel to withdraw from the case and in denying a
motion for a continuance?
(2) Did the [C]ircuit [C]ourt err in considering [JSG’s] appraisal
and in concluding that the sale price was fair?
(3) Did the [C]ircuit [C]ourt err in concluding that the
description of the property in the advertisement was adequate?
(4) Did the [C]ircuit [C]ourt err in finding that there was no
tender or other payment sufficient to stop the sale?
While the appeal was pending in the Court of Special Appeals, on 19 June 2008, JSG settled
on the sale of the property, paid the balance of the auction purchase price, and recorded its
new deed.  As of that date, the Mirjafaris still had not posted a supersedeas bond or
alternative security in any amount.  
On 25 June 2008, JSG moved to dismiss the appeal on the ground that the Mirjafaris
had not posted a supersedeas bond or alternative security.  The Court of Special Appeals
denied the motion to dismiss, without prejudice, permitting JSG to renew its motion for
dismissal in its brief.  JSG, filing a joint brief with the Trustees, accepted the invitation and
included there a motion to dismiss the appeal as moot based on the Mirjafaris’ failure to post
a supersedeas bond.  The Mirjafaris opposed dismissal, contending that the appeal was not
moot as no bond was required because JSG was not a bona fide purchaser.  Specifically, the
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Mirjafaris argued that bona fide purchaser status is determined at the time the purchase
money is paid and the deed is conveyed, rather than at the time of the foreclosure sale, and
that, through its participation as intervenor in the Circuit Court exceptions hearings
conducted subsequent to the sale, JSG acquired notice of the alleged defects in the
foreclosure proceedings before it settled on the sale.
The intermediate appellate court heard oral argument on the appeal on 4 December
2008.  On 5 January 2009, the panel of the Court of Special Appeals issued its reported
opinion in which it granted JSG’s motion to dismiss the Mirjafaris’ appeal as moot based on
their failure to post a supersedeas bond or other security.  Mirjafari v. Cohn, 183 Md. App.
701, 963 A.2d 247 (2009).  The intermediate appellate court held explicitly that “the status
of a foreclosure purchaser, as bona fide or not, is determined as of the time of the auction
sale, not at the time of the exceptions hearing or ratification by the circuit court, or when
legal title passes to the foreclosure purchaser.”  Id. at 709, 963 A.2d at 252.  The court noted
that, if the rule were otherwise, lenders would be discouraged from foreclosing on delinquent
mortgages.  Id.  Likewise, bidders would be discouraged from participating in foreclosure
actions and, subsequently, from protecting their bid by participating in exceptions hearings
before the circuit court.  Id.
On 19 February 2009, the Mirjafaris filed with this Court a petition for writ of
certiorari, which we granted, see Mirjafari v. Cohn, 408 Md. 487, 970 A.2d 892 (2009), to
consider potentially two issues:
8Due to the nature of our holding here, coupled with the limited scope of the questions
presented in the Mirjafaris’ petition for writ of certiorari, we do not reach the merits of the
Mirjafaris’ contentions regarding alleged defects in the foreclosure proceedings.
-8-
(1) Whether the time of determining bona fide purchaser status
is to be determined at the time of the successful bid at a
foreclosure sale or at the time the foreclosure purchase price is
paid?
(2) Whether a foreclosure purchaser who does not settle on his
purchase until fourteen months after the foreclosure sale, long
after an appeal has been noted and long after the date required
by the Terms of Sale, and by the time of settlement has notice of
the defects in the sale and the judicial proceedings, is a bona
fide purchaser?
The Mirjafaris contend that the Court of Special Appeals erred in dismissing as moot their
appeal because JSG was not a bona fide purchaser, thus excusing the normal requirement of
posting a supersedeas bond.  They urge further that we consider the merits of their
contentions below and reverse the Circuit Court’s ratification of the foreclosure sale.8  As it
had in the Court of Special Appeals, JSG filed with this Court, on 14 May 2009, a motion
to dismiss the case as moot based on the Mirjafaris’ failure to file a supersedeas bond or
other security.  We deferred action on the motion to dismiss pending oral argument.  We now
affirm the Court of Special Appeals’s grant of JSG’s motion to dismiss the Mirjafaris’ appeal
for failure to file a supersedeas bond or other security.
Analysis
In Baltrotsky v. Kugler, 395 Md. 468, 910 A.2d 1089 (2006), we noted that “Maryland
decisional law speaks clearly on the question of the mootness of appellate challenges to
9A bona fide purchaser, in the case of a foreclosure sale, “is a purchaser who takes the
property without notice of defects in the foreclosure sale.”  Baltrotsky, 395 Md. at 474-75,
910 A.2d at 1093; see also Pizza, 345 Md. at 674, 694 A.2d at 98.
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ratified foreclosure sales in the absence of a supersedeas bond to stay the judgment of a trial
court.”  Id. at 474, 910 A.2d at 1093.  The general rule is that “the rights of a bona fide
purchaser of mortgaged property would not be affected by a reversal of the order of
ratification in the absence of a bond having been filed.” 9  Id.; Pizza v. Walter, 345 Md. 664,
674, 694 A.2d 93, 97 (1997), mandate withdrawn, 346 Md. 315, 697 A.2d 82 (1997)
(withdrawing by joint motion pursuant to settlement agreement)); Lowe v. Lowe, 219 Md.
365, 368, 149 A.2d 382, 384 (1959); see also Leisure Campground & Country Club Ltd.
P’ship v. Leisure Estates, 280 Md. 220, 223, 372 A.2d 595, 598 (1977).  As a consequence,
“an appeal becomes moot if the property is sold to a bona fide purchaser in the absence of
a supersedeas bond because a reversal on appeal would have no effect.”  Baltrotsky, 395 Md.
at 474, 910 A.2d at 1093; Pizza, 345 Md. at 674, 694 A.2d at 97; see also Lowe, 219 Md. at
369, 149 A.2d at 384-85.  The rule operates “even though the purchaser may know that a
claim is being asserted against ratification.”  Leisure Campground, 280 Md. at 223, 372 A.2d
at 598; see also City of Hagerstown v. Long Meadow Shopping Center, 264 Md. 481, 497,
287 A.2d 242, 250 (1972).
The rule is intended to encourage non-party individuals or entities to bid on
foreclosure sale properties, as bidders “justifiably would be reluctant to purchase a
foreclosure property without assurance in the form of some security that their investments
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will be protected from subsequent litigation by recalcitrant mortgagors seeking to retain their
property.”  Baltrotsky, 395 Md. at 475, 910 A.2d at 1094; see also Leisure Campground, 280
Md. at 223, 372 A.2d at 1098.  Likewise, the rule protects lenders who have succeeded in
foreclosure but who, without operation of the rule, “could not enjoy [their] success until the
new action was fully litigated, all the while bearing the lost interest income.”  Baltrotsky, 395
Md. at 476, 910 A.2d at 1094.  Thus, “[t]he law is clear that [mortgagors] may not litigate
the validity of the foreclosure at the expense of others; the posting of security is required on
[the mortgagor’s] part to protect the purchasers and lender alike.”  Id.  Summarizing recently
the dangers of permitting extended litigation without requiring the filing of a supersedeas
bond, in Poku v. Friedman, 403 Md. 47, 939 A.2d 185 (2008), we stated:
If ratified foreclosure sales could be overturned long after the
ratification in the absence of the filing of a supersedeas bond
and the granting of a stay, the title to any property where any
prior conveyance in the chain of title came out of a mortgage
foreclosure sale could be questioned even if the foreclosure sale
occurred a year in the past, or ten years, or fifty years.  In such
a scenario, lenders would become reluctant to lend money
secured by such properties, buyers might become reluctant to
buy such properties, and title insurers reluctant to insure title to
such properties.  The general marketability of title to property
could be severely affected.
Id. at 54 n.7, 939 A.2d at 188-89.
The general rule requiring the filing of a supersedeas bond or alternative security has
but two exceptions: (1) the occasion of unfairness or collusion between the purchaser and the
trustee, and (2) when a mortgagee or its affiliate purchases the disputed property at the
10In their Opposition to JSG’s Motion to Dismiss Appeal, filed with the Court of
Special Appeals, the Mirjafaris argued that the “collusion” exception applied in the present
case, claiming that John Gonzalez, the principal of JSG, and Stephen Goldberg, one of the
Trustees, “have had prior business dealings.”  The Mirjafaris make no such contention before
this Court.
-11-
foreclosure sale.  Baltrotsky, 395 Md. at 475, 910 A.2d at 1093; Pizza, 345 Md. at 674, 694
A.2d at 98; Leisure Campground, 280 Md. at 223, 372 A.2d at 598; see also Sawyer v.
Novak, 206 Md. 80, 88, 110 A.2d 517, 521 (1955).
The Mirjafaris do not contend that JSG and the Trustees engaged in collusion10 or that
JSG was an affiliate of the mortgagee, Home Equity Mortgage.  Thus, they do not maintain
that the filing of a supersedeas bond was excused under the exceptions noted in the cases.
Rather, they argue that JSG is not a bona fide purchaser entitled to the protection afforded
by a supersedeas bond or other security in the present case because it had notice of the
alleged defects in the foreclosure sale (due to its presence and participation in the exceptions
hearing) prior to settling on the property and paying the purchase price in full, the point at
which, according to the Mirjafaris, bona fide purchaser status is determined properly.  If JSG
is not a bona fide purchaser, as the Mirjafaris allege, it is not protected by the requirement
of a supersedeas bond, and, therefore, the Mirjafaris’ appeal should not have been dismissed
as moot.  JSG counters, and the Court of Special Appeals held, that bona fide purchaser
status is determined based on the relevant facts known (or which should have been known)
as of the date the successful bid is made, and that JSG did not have notice of any alleged
defects prior to making its successful bid.
-12-
We have stated previously that “[b]ona fide purchaser status extends only to those
purchasers without notice of defects in title, or in this case, defects in the foreclosure sale.”
Pizza, 345 Md. at 674, 694 A.2d at 98 (emphasis added); see also Baltrotsky, 395 Md. at 474-
75, 910 A.2d at 1093.  Likewise, in Poku, we noted that “[a]t present, title in the bona fide
purchaser at a foreclosure sale at least is protected partially by the necessity for the filing of
a supersedeas bond in order for a mortgagor to stay the proceedings subsequent to the
ratification of a foreclosure sale.”  Poku, 403 Md. at 54 n.7, 939 A.2d at 188-89 (emphasis
added).  In addition, in describing the exceptions to the supersedeas bond requirement, we
have noted that the exceptions concern actions or statuses of the parties at the foreclosure
sale.  Baltrotsky, 395 Md. at 475, 910 A.2d at 1093; Pizza, 345 Md. at 674, 694 A.2d at 98.
Thus, as noted by the Court of Special Appeals here, see Mirjafari, 183 Md. App. at 709, 963
A.2d at 252, our prior decisions imply that the status of a foreclosure purchaser, as bona fide
(or not) based on knowledge of defects in the foreclosure sale, is determined as of the time
of the successful foreclosure sale, not at the time of the exceptions hearing or ratification by
the circuit court, or when legal title passes to the foreclosure purchaser upon payment of the
full purchase price.  As long as the foreclosure purchaser is unaware of defects in the
foreclosure proceedings at the time of its successful bid and provides valuable consideration
at that time, it is protected as a bona fide purchaser.  Despite the Mirjafaris’ contentions to
the contrary, a foreclosure purchaser’s status as bona fide does not depend necessarily (and
especially in the present case) on the timing of payment of the balance of the purchase
11In this regard, the Mirjafaris rely heavily on Westpark, Inc. v. Seaton Land Co., 225
Md. 433, 450, 171 A.2d 736, 743 (1961), in which we stated that “one who purchases the
equitable title to real estate is not protected as a bona fide purchaser where he receives notice
of a prior equity before he acquires legal title . . . or where he receives notice before he has
paid all or substantially all of the purchase price.”  Id. at 450, 171 A.2d at 743 (internal
citations omitted).  The Mirjafaris fail to acknowledge, however, that Westpark did not
involve a judicial sale, but rather the competing interests in a conventional contract sale
between a contract purchaser and a party with a prior right of first refusal, of which the
purchaser knew (or its agent should have known), prior to signing the contract.  Westpark is
inapposite to the present case.
In addition, the M irjafaris grasp for support in Grayson v. Buffington, 233 Md. 340,
196 A.2d 893 (1964), wherein we held that the defendants, purchasers of certain real
property, did not enjoy bona fide purchaser status because they possessed actual knowledge
of a prior conveyance “before they accepted a conveyance of the property or paid the
purchase price.”  Id. at 344, 196 A.2d at 896.  In that case, “[a]t the time of settlement, no
written contract had been entered into by [the parties to the sale], so that either side was at
liberty not to consummate the sale.”  Id. at 342, 196 A.2d at 895.  In the present case,
however, at the time of the foreclosure sale and prior to its participation at the exceptions
hearings wherein it acquired knowledge of the alleged defects in the foreclosure proceedings,
JSG submitted an $8,000 deposit and became obligated to pay the remainder of the purchase
price.  Thus, Grayson is distinguishable.
Finally, the Mirjafaris direct our attention to Empire Properties, LLC v. Hardy, 386
Md. 628, 873 A.2d 1187 (2005), and Legacy Funding LLC v. Cohn, 396 Md. 511, 914 A.2d
760 (2007), in which we discussed the foreclosure sale purchaser’s right to possession of the
property prior to the time he or she pays the full purchase price, to support their argument
that payment of the full purchase price also is the proper time to determine bona fide
purchaser status.  Neither case suggests such a proposition as the Mirjafaris’ contend, and
we decline to broaden significantly their scope from addressing entitlement of a purchaser
to possession of property to the proper time for determination of bona fide purchaser status
in a foreclosure context.
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price.11  See Sawyer, 206 Md. at 89, 110 A.2d at 521 (noting that the “mere fact that the deed
was not executed until after the appeal was taken would not show collusion, or reflect upon
the bona fide character of [the foreclosure purchaser’s] purchase”).
-14-
Adopting the Mirjafaris’ contention that bona fide purchaser status, for determination
of whether an appeal bond or security is required to stay the effect of the judgment ratifying
the report of sale, is determined at the time of settlement would undercut the purpose of the
supersedeas bond requirement, namely, to encourage bidding at foreclosure sales.  See Poku,
403 Md. at 54 n.7, 939 A.2d at 188-89; Baltrotsky, 395 Md. at 475-76, 910 A.2d at 1094.
If a bidder could bid successfully at a foreclosure sale and submit oftentimes a relatively
significant deposit, only to lose their bona fide purchaser status because the mortgagor files
exceptions to the foreclosure sale prior to settlement, bidding would be discouraged
significantly.  See Poku, 403 Md. at 54 n.7, 939 A.2d at 188-89; Baltrotsky, 395 Md. at 475-
76, 910 A.2d at 1094.  In addition, bidders would be hesitant understandably to participate
in exceptions hearings and protect their bids if newly alleged flaws in the foreclosure process
(or subsequent flaws in the judicial process) adduced in the hearings could strip away their
bona fide purchaser status.  See Poku, 403 Md. at 54 n.7, 939 A.2d at 188-89; Baltrotsky, 395
Md. at 475-76, 910 A.2d at 1094.  Thus, in order to further the policy behind the supersedeas
bond stay requirement to promote bids at foreclosure sales and protect bidders from
prolonged litigation at their risk and expense, we hold that bona fide purchaser status for this
purpose is determined based on what is known, or reasonably knowable, by the bidder as of
the date of the successful bid at the foreclosure sale.
Any knowledge of relevant facts on the part of JSG as of the time of its successful bid,
12The Mirjafaris argue that JSG cannot be a bona fide purchaser because its failure to
pay the purchase price in full within ten days after ratification of the sale violated the
advertisement’s terms of sale.  The advertisement stated that “[i]f the purchaser . . . fails to
go to settlement within ten (10) days of ratification of the sale, the Substitute Trustee may,
in addition to any other available legal remedies, declare the entire deposit forfeited and
resell the property at the risk and cost of the defaulting purchaser.”  (Emphasis added).  Thus,
assuming the advertisement’s terms of sale were binding on JSG and that violation of such
would constitute grounds for reversing ratification of the sale (an issue on which we do not
pass judgment today), the language of the advertisement is non-compulsory, granting the
Trustees the discretion to permit consummation of a sale beyond the ten day limit.  As noted
earlier, no claims of collusion between the Trustees and JSG are advanced before us.
13The Mirjafaris contend that JSG knew of the defect in the advertisement, namely,
that it did not describe fully or accurately the property, before it bid on the property, relying
on Gonzalez’s testimony that he did not comprehend fully the nature of the property upon
initial review of the advertisement and visual inspection of the property.  In its oral findings
of fact, however, the Circuit Court found that “there was legally sufficient notice from the
notice that was published [because] [i]t gave the Deed reference, it gave the plat reference,”
and that the advertisement “would give any potential buyer, bidder at the auction, more than
enough information to find out about the property, and as indicated, it certainly could be
easily located from the ad.”  This finding resolves the question of whether JSG had notice
of any deficiency in the advertisement as of the making of its bid, and we have been given
no sufficient reason to disturb the finding.
14In oral argument, the Mirjafaris posed the rhetorical question of what amount of
(continued...)
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and the giving of valuable consideration, namely, the $8000 deposit,12 could have been
proved at the exceptions hearings.  Because nothing was found by the Circuit Court to
disqualify JSG,13 it is a bona fide purchaser for purposes of determining applicability of the
supersedeas bond requirement to stay the ratification of the foreclosure sale.  As such, under
the Poku, Baltrotsky, and Pizza line of cases, the Mirjafaris were required under Rules 8-422
and 8-423 to post a supersedeas bond in order to secure their right to pursue appellate
review.14  Their failure to do so rendered their appeal moot.
14(...continued)
bond or other security should they have been required to post, $8,000 (JSG’s deposit) or
$250,000 (the winning bid).  The record does not present the question of the proper amount
of the supersedeas bond required in this case because at no point during the proceedings did
any of the parties request that the Circuit Court confront the issue of the bond amount,
consider alternative security, or stay the proceedings, other than JSG’s general inquiry to the
court as to whether it would “[im]pose a requirement for an appeal bond.”  At noted supra,
upon JSG’s inquiry, the Circuit Court asked counsel for the Mirjafaris if he wished to address
the question of an appellate bond at that time, but he declined.  Likewise, the Court of
Special Appeals did not determine the appropriate amount of the supersedeas bond here.
Because the question is not properly before us, we express no opinion as to the appropriate
amount of the supersedeas bond required to have been posted by the Mirjafaris.
-16-
JUDGMENT OF THE COURT OF
SPECIAL 
APPEALS 
AFFIRMED;
C O S T S  
T O  
B E  
P A I D  
B Y
PETITIONERS.
Chief Judge Bell joins the judgment only.
IN THE COURT OF APPEALS
OF MARYLAND
No. 38
September Term, 2009
                                                                             
SEYED MEHRAN MIRJAFARI, et al.
v.
EDWARD S. COHN, et al.
                                                                             
 
Bell, C.J.
Harrell
Battaglia
Greene
Murphy
Adkins
Barbera,
JJ.
                                                                             
Concurring Opinion by Murphy, J.
 which Adkins, J.,  joins.
                                                                             
Filed:   February 16, 2010
1 See Md. Rule 14-209(b), and Wells Fargo v. Neal, 398 Md. 705, 922 A.2d 538
(2007).  
2 See Md. Rule 2-632.  
3 See Md. Rule 8-425.  
I agree with the majority’s holding “that JSG was a bona fide purchaser, as of the
date of its successful bid at the foreclosure sale, and, thus, the Mirjafaris’ failure to file a
supersedeas bond rendered moot their subsequent appeal of the overruling of their
exceptions and ratification of the report of sale.”  I write separately, however, to
emphasize that in the case at bar, at no point in time prior to dismissal of their appeal did
Petitioners ever request that the Circuit Court exercise its discretion to (1) enjoin the
foreclosure,1 (2) establish the amount of a supersedeas bond, (3) order other reasonable
alternative security, or (4) stay enforcement of the judgment pending appeal. 2  Nor did
Petitioners request that the Court of Special Appeals enter an order staying the judgment
of the Circuit Court.3  Moreover, on the record before us the Circuit Court would have
been clearly erroneous in finding that JSG was not a bona fide purchaser.  Under these
circumstances, Petitioners’ appeal was properly dismissed.  
I am concerned that the majority opinion will be misinterpreted as imposing an
absolute requirement that a timely appeal noted by the victim of an equity stripping
scheme must be dismissed whenever he or she is unable to comply with the security
provisions established by the Circuit Court  -- regardless of how strongly the evidence
indicated that the foreclosure sale purchaser was not entitled to bona fide purchaser
4 In Blondell, et al. v. Turover, 195 Md. 251, 72 A.2d 697 (1950), this Court stated:
The law requires reasonable diligence in a purchaser of
real property to ascertain any defect of title. . . .  When a
purchaser has notice of a fact which casts doubt upon the
validity of his title, the rights of innocent persons must not be
prejudiced as a result of his negligence. . . .   In determining
whether a purchaser had notice of any prior equities or
unrecorded interests, so as to preclude him from being entitled
to protection as a bona fide purchaser, the rule is that if he had
knowledge of circumstances which ought to have put a person
of ordinary prudence on inquiry, he will be presumed to have
made such inquiry and will be charged with notice of all facts
which such an investigation would in all probability have
disclosed if it had been properly pursued.
Id. at 257, 72 A.2d at 699.  
-2-
status. 4 
In 2005 and in 2008, the General Assembly enacted legislation to protect
mortgagors from falling victim to the deceitful practices of certain “foreclosure
consultants.”  Effective May 26, 2005, §7-311(e) of the Real Property Article (RP)
provided:
A BONA FIDE PURCHASER FOR VALUE OR BONA FIDE
LENDER 
FOR 
VALUE 
WHO 
ENTERS 
INTO A
TRANSACTION 
WITH 
A 
HOMEOWNER 
OR 
A
FORECLOSURE PURCHASER WHEN A FORECLOSURE
CONSULTING CONTRACT IS IN EFFECT OR DURING
THE PERIOD WHEN A FORECLOSURE RECONVEYANCE
MAY BE RESCINDED, WITHOUT NOTICE OF THOSE
FACTS, RECEIVES GOOD TITLE TO THE PROPERTY,
FREE AND CLEAR OF THE RIGHT OF THE PARTIES TO
THE FORECLOSURE CONSULTING CONTRACT OR THE
RIGHT OF THE HOMEOWNER TO RESCIND THE
5 In 2008, the provisions of RP § 7-311 were transferred to RP § 7-312.
-3-
FORECLOSURE RECONVEYANCE.
In 2008, that provision was eliminated when the General Assembly enacted the
Protection of Homeowners in Foreclosure Act (PHIFA).5  The case at bar does not require
that we determine why the General Assembly repealed RP § 7-311(e), but I am persuaded
that the Court of Special Appeals or this Court will soon be requested to make that
determination.  I would not dismiss the appeal of a party making that request, provided
that the party has also requested the various forms of post-judgment relief that were never
requested in the case at bar.  
Judge Adkins has authorized me to state that she joins in this concurring opinion.