Title: R & D 2001 v. Rice

State: maryland

Issuer: Maryland Supreme Court

Document:

R & D 2001, LLC, et al. v. Douglas S. Rice, et al., No. 33, September Term 2007. 
Opinion by Wilner, J.
THE MERE FILING OF A FOREIGN JUDGMENT WITH CIRCUIT COURT
CLERK DOES NOT ESTABLISH ENFORCEABILITY OF THAT JUDGMENT AND
THEREFORE WOULD NOT BAR DEBTOR FROM CHALLENGING 
ENFORCEABILITY BY REASON OF A POST-JUDGMENT ACT THAT WOULD
HAVE THE EFFECT OF DISCHARGING OR SATISFYING THE JUDGMENT.  
ACCORD AND SATISFACTION SETTLEMENT AGREEMENT SERVES TO
SATISFY A VIRGINIA JUDGMENT AGAINST SEVERAL JOINT TORTFEASORS
IN FULL, SO AS TO PRECLUDE ENFORCEMENT ACTION AGAINST A NON-
SETTLING JUDGMENT DEBTOR ONLY IF SETTLEMENT WAS ACCEPTED BY
JUDGMENT CREDITOR AS FULL SATISFACTION OF THE JUDGMENT.
   
IN THE COURT OF APPEALS 
OF MARYLAND
No. 33
September Term, 2007
_______________________________
R & D 2001, LLC, ET AL.
v.
DOUGLAS S. RICE, ET AL.
_______________________________
Bell, C.J.
Raker
Harrell
Battaglia
Greene
Wilner, Alan M. (Retired, Specially           
        Assigned),
Cathell, Dale R. (Retired, Specially            
        Assigned),
JJ.
_________________________________
Opinion by Wilner, J.
_________________________________
                         Filed:    January 4, 2008
1 At some point, R & D made a partial assignment of its judgment to the Nap
Foundation, which is also an appellant.  It does not appear that there is any divergence of
interest between R & D and Nap, so, for convenience, we shall refer to them collectively
as R & D.
2 It appears that several actions or proceedings were filed in both Howard and
Montgomery County.  First, appellants enrolled the Loudoun County judgment in the
Circuit Court for Howard County.  They then sought, in that court, a writ of garnishment,
attachment of an alleged interest that Rice had in a limited liability company, and
sequestration of that interest.  We are advised that, at some point, appellants filed a
separate action in Howard County to annul a transfer of that interest by Rice to himself
and his wife, as tenants by the entireties.  A similar action was filed in the Circuit Court
for Montgomery County – this case.  Finally, a receivership action was brought by Rice in
Montgomery County.  The receivership action has no perceived bearing on what is now
before us.
This appeal has its roots in a $2.9 million money judgment entered against four
joint tortfeasor defendants by the Circuit Court for Loudoun County, Virginia.  There is
no present contest as to the validity of that judgment.  Three of the defendants entered
into settlement agreements with the judgment creditor, appellant R & D 2001, LLC (R &
D).  
In an attempt to enforce the judgment against the only non-settling judgment
debtor, appellee Douglas Rice, R & D filed proceedings in the Circuit Court for Howard
County, Maryland, the Circuit Court for Montgomery County, Maryland, and the Circuit
Court for Fairfax County, Virginia.1  The case now resides simultaneously in this Court
and the Supreme Court of Virginia.  This appeal is from a summary judgment entered in
one of the two actions filed in the Montgomery County court.2
Appellants importuned us to grant certiorari prior to proceedings in the Court of
Special Appeals “for the sole purpose of facilitating the resolution of an appeal before the
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Supreme Court of Virginia” by certifying to that Court a question of Virginia law that was
decided by the Circuit Court for Montgomery County.  Indeed, accompanying their
petition for certiorari was a motion to certify an attached question of Virginia law.  In
their brief, however, appellants have ignored that request for certification as though never
made and instead insist that we decide ourselves not only the questions of Virginia law
they previously wanted certified but issues of Maryland law as well.  With some
reluctance, we shall do so.
BACKGROUND
This case concerns a group of men who, as active or passive investors in one or
more limited liability companies, were in the business of developing golf courses in
Virginia.  Over a period of time commencing in July, 2002, R & D, a Virginia limited
liability company supposedly controlled by David Gregory, invested $520,000 in another
limited liability company, New Broad Run Golf LLC, which was intending to develop the
Bear National Golf Course in Loudoun County, Virginia.  The four principals in New
Broad Run were Stanton Abrams, Timothy Kampa, Thomas Smyth, and Douglas Rice. 
Rice contends that Abrams and Kampa were the active participants in the project and that
Smyth and Rice were merely passive investors.  After learning that additional debt existed
on the project of which it had been unaware, R & D demanded the return of its
investment, and, when that demand was rejected, it filed suit against Abrams, Kampa,
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Smyth, and Rice in the Circuit Court for Loudoun County, alleging fraud, common law
conspiracy, and statutory conspiracy under Virginia Code, §§ 18.2-499 and 18.2-500.
When the defendants failed to produce court-ordered discovery, the court entered a
default judgment, as to liability only, against them.  In January, 2004, a trial on damages
was held before a jury, which, without distinguishing among the various counts, returned
a general verdict in favor of R & D and against all four defendants for $988,000.  Va.
Code, § 18.2-499 permits a civil recovery when two or more persons combine or concert
together for the purpose of wilfully and maliciously injuring another in his trade or
business.  That was the statutory conspiracy pled by R & D.  Section 18.2-500 permits the
court to treble damages awarded under § 18.2-499, and that is what occurred.  Following
the jury verdict and the denial of appellees’ motions for judgment N.O.V., the court
trebled the damages awarded by the jury and entered judgment against all four defendants
in the amount of $2,968,398.  A “Final Order” entering that judgment was signed on
February 20, 2004.
Rule 1.1 of the Virginia Supreme Court provides, in relevant part, that all final
judgments shall remain under the control of the trial court, subject to modification,
vacation, or suspension, for 21 days after the date of entry.  On March 11, 2004 –  the
twentieth day after entry of the final judgment – R & D entered into an “Accord and
Satisfaction” agreement with Abrams and Kampa.  The elements of that agreement,
which we shall describe in further detail later, were (1) an assignment by Abrams and a
3 All three documents referred to in the Accord and Satisfaction appear to have
been signed by the respective parties on March 11, 2004, contemporaneously with the
Accord and Satisfaction.  The Consent Order, having been reviewed by the parties, was
entered by the court on March 22.  Unless a further settlement with Rice or Smyth was
contemplated, it is not entirely clear why the final judgment had to be suspended beyond
March 22, although that is not an issue in this appeal.  In the Montgomery County case,
counsel for appellants asserted that the suspension was to allow Rice and Smyth, who had
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Delaware limited liability company that he controlled of interests that they had in other
limited liability companies to Kampa, (2) a mutual release of contract obligations by R &
D and another Delaware limited liability company (Cottages at Beacon Hill, LLC) that
arose from R & D’s purchase of 10.6 acres of land adjoining the proposed golf course, (3)
a joint and several promissory note by Abrams and Kampa in the amount of $175,000,
payable to R & D, and (4) a Consent Order, agreed to by R & D, Abrams, and Kampa and
signed by their respective counsel, that vacated the judgment entered against Abrams and
Kampa and dismissed with prejudice the actions and claims against them.  
The next day, March 12, the court signed an order suspending the judgment,
apparently to allow the parties time to review the proposed Consent Order.  On March 22,
after a brief hearing, the court signed the Consent Order, which (1) noted that an accord
and satisfaction had been reached between R & D, Abrams, and Kampa, (2) vacated the
judgment against them, (3) dismissed the claims against them with prejudice, and (4)
recited that the order would have no effect on either the claims or the judgment against
Rice and Smyth.  For whatever reason, additional suspension orders were entered on
March 22 and March 29.3  On April 12, 2004, upon expiration of the third suspension
objected to the order, to perfect an appeal. 
4 Although what occurred in Howard County is critical to one of the issues in this
appeal, the evidence of that is not coherently presented.  Some of the pleadings are in the
record extract, others are in an appendix to appellants’ reply brief.  The transcript of the
hearing was belatedly added by appellants.  Some documents are not in the record extract
or any appendix.  It appears that appellants filed a number of pleadings, including a writ
of execution, a request for a charging order that counsel later admitted was inappropriate
because Mid-Atlantic Golf/Norbeck, LLC was not a partnership, a writ of garnishment
which is not in an appendix or record extract, and a motion for sequestration pursuant to
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order, the judgment, as modified by the Consent Order, became final.  Rice and Smyth
filed an appeal to the Supreme Court of Virginia, complaining about the default
judgment, certain jury instructions, and the trebling of the damages, but, in December,
2004, they dismissed their appeal.  Just prior to the dismissal, Smyth entered a settlement
agreement with R & D, under which he paid $1,000,000 in exchange for a release and a
promise to vacate the judgment against him.  That left Rice as the only defendant not
having the benefit of an individual release or satisfaction.  Appellants acknowledge that,
in light of Smyth’s payment, the amount of the judgment was reduced by that amount, to
just under $2 million (plus accrued post-judgment interest).
In August, 2005, acting pursuant to Maryland Code, § 11-802 of the Cts. & Jud.
Proc. Article, appellants filed the judgment against Rice in the Circuit Court for Howard
County.  Alleging that Rice, a resident of that county, owned a one-third membership
interest in Mid-Atlantic Golf/Norbeck, LLC (Mid-Atlantic), a Maryland limited liability
company, appellants had a writ of execution issued against that membership interest and
filed a motion under M aryland Rule 2-648(a) to sequester it. 4  A month later, appellants
Rule 2-648(a), which, as we shall later discuss, applies only to a judgment “prohibiting or
mandating action,” and not an ordinary money judgment.  The writ of execution and writ
of garnishment had not been served on Rice prior to the hearing.  At the hearing, counsel
indicated that the purpose of the sequestration request was to seize the membership
interest itself; the garnishment was to seize any money Mid-Atlantic owed to Rice.
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filed the action now before us in the Circuit Court for Montgomery County, in which they
complained that Rice had fraudulently conveyed his interest in Mid-Atlantic to his wife
and sought to set aside that transfer. 
The Howard County action was heard and decided first, in November, 2005. 
Through counsel, Rice made clear that he was not challenging the validity of the Virginia
judgment, which he acknowledged had to be given full faith and credit.  Rice’s position
was that (1) his interest in Mid-Atlantic had been conveyed to himself and his wife,
Charlene, as tenants by the entireties, that Charlene was not a party to the Howard County
case, and that the ability of the court to enter a sequestration order against either of them
was questionable, (2) if appellants were contending that Rice had improperly conveyed
his membership interest to his wife, that issue was fact-intensive, it could not be resolved
without a trial, and it was currently pending in the Montgomery County case, (3) Mid-
Atlantic was located in Montgomery County and had no presence in Howard County, and
(4) the Accord and Satisfaction given by petitioner in Virginia served to discharge the
judgment against all defendants, including Rice, so, although the judgment was valid,
nothing was owed on it.  If nothing was owed, there was nothing to enforce.
At the conclusion of the hearing, the court dictated an order from the bench, which
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was later confirmed by a written Confirmatory Order for Injunction, Sequestration,
Ancillary Relief, and Order for Appointment of a Trustee.  That order, entered November
30, 2005, reflected a concern expressed by the court during the hearing over the nature of
the membership interest – what it encompassed.  The court understood that the real value
of the membership interest lay in the property owned by Mid-Atlantic, but there was no
evidence of either the identity or the value of that property.  It was not clear to the court,
therefore, what effect a sequestration of the membership interest would have on the
property underlying it.
In an attempt to enforce the judgment, to which the court was undisputedly
required to give full faith and credit, and yet deal with those issues, the order had four
principal provisions.  First, it appointed a trustee to receive and hold in trust for appellants
Rice’s one-third membership interest in Mid-Atlantic.  The trustee was to investigate and
identify all property interests encompassing that membership interest and, to that end, was
authorized to apply for further relief, including discovery, valuation, attachment, and
garnishment.  
Second, the order both enjoined and required certain conduct by Rice “or any
person.”  Rice and the unnamed “any person[s]” were enjoined from assigning or
disposing of the membership interest, and from negotiating, transferring, or disposing of
any document representing or “settling out” the membership interest or property
encompassing it, and they were affirmatively directed to disclose to the trustee the
5 In support of a motion to reconsider the grant of summary judgment in the
Montgomery County action, counsel for appellants asserted that a second, fraudulent
conveyance, action was brought in Howard County, similar to the one in Montgomery
County, to annul the conveyance of Rice’s membership interest to Charlene and himself.
Neither the docket entries in the attachment, garnishment, sequestration case nor those in
the second, fraudulent conveyance, case are in the record extract or any appendix to the
parties’ briefs.
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whereabouts of property encompassing the interest and to cooperate with the trustee in
identifying such property.  
Third, the order afforded appellants the right to pursue “appropriate action
including valuation of said property” and gave Rice the right to apply for a hearing “to
present any defense as to why said property or specific items thereof should not be
attached or subject to further jurisdiction or control of this Court.”  At any such hearing,
the order continued, the court could “determine the most appropriate disposition of the
said Membership Interest, if any, toward the Defendant’s obligation to pay the Foreign
Judgment . . . .”  Finally, the order directed the clerk to docket the order among the
judgment records, the intent being that the order would constitute a lien on the
membership interest, subject to further order of the court.  It is not clear what more, if
anything, has transpired in the Howard County case since that order was entered two
years ago.5 
In September, 2005, while the Howard County case was pending, appellants filed
in the Circuit Court for Montgomery County the action that is now before us – a petition
to set aside, as an alleged fraudulent conveyance, the transfer of Rice’s one-third
6 CL § 15-204 provides, in relevant part, that a conveyance by a person who is or
will be rendered insolvent by it is fraudulent as to creditors without regard to the
transferor’s actual intent, if the conveyance is made without fair consideration.  The terms
“insolvent” and “fair consideration” are defined in CL §§ 15-202 and 15-203,
respectively.  The first count seems to be based on § 15-204, although it does not mention
that statute.
7 CL § 15-205 provides, in relevant part, that a conveyance made without fair
consideration when the transferor is engaged or is about to engage in a business or
transaction for which the property remaining in his hands after the conveyance is an
unreasonably small capital is fraudulent as to creditors and those who become creditors
during the continuance of the business or transaction without regard to his actual intent.
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membership interest in Mid-Atlantic to himself and Charlene as tenants by the entireties. 
In contrast to the action in Howard County, they joined as defendants not only Rice, but
also Charlene and Mid-Atlantic, appellees.  
The petition contained four unnumbered counts.  The first, apparently but tacitly
invoking Maryland Code, § 15-204 of the Commercial Law Article (CL), alleged that
Rice conveyed his interest in Mid-Atlantic to Charlene on or prior to January 21, 2005,
without fair consideration, and that the transfer left Rice insolvent and unable to satisfy
the judgment against him.6  The second, based on CL § 15-205, alleged that Rice was
engaged and would continue to engage in business transactions with regard to Mid-
Atlantic and that the conveyance of his membership interest rendered the property
remaining in his possession with regard to Mid-Atlantic insufficient as to the debt owed
to appellants.7  The third count, based on CL § 15-208(b)(2), charged that Charlene was
not a member of Mid-Atlantic, that the conveyance occurred without the unanimous
approval of the other members, that it was without fair consideration to Mid-Atlantic and
8 CL § 15-208(b)(2) provides, in relevant part, that a conveyance of limited
liability company property when the company is or will be rendered insolvent by it is
fraudulent as to creditors of the company if the conveyance is made to a person not a
member, without fair consideration to the company.
9 CL § 15-207 provides, in relevant part, that a conveyance made with actual intent
to hinder, delay, or defraud present or future creditors is fraudulent as to both present and
future creditors.
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payment of his debt to appellants, and that it rendered Rice insolvent as to appellants.8 
Finally, based on CL § 15-207, appellants charged that Rice and Charlene acted with the
intent to hinder, delay, and defraud appellants as they attempted to collect the debt owed
to them.9  As relief, appellants asked that the conveyance be set aside and that the
property conveyed be attached.
Although appellees raised a number of defenses in their answer, the only one
pressed in an ensuing motion for partial summary judgment was accord and satisfaction. 
Their argument was that, by virtue of Virginia Code, § 8.01-443, the Accord and
Satisfaction agreement between R & D, Abrams, and Kampa served to satisfy the
judgment, so that nothing more was owed on it.  Appellants responded, in part, by
claiming that appellees were barred by res judicata from raising that defense.  The res
judicata argument proceeded from the Consent Order entered by the Loudoun County
court, which, as noted, specified that the order would have no effect on the claims or
judgment against Rice.  When Rice dismissed his appeal to the Virginia Supreme Court,
appellants said, that order became final and settled the issue of whether the judgment was
discharged as to him.  That argument also served as the underpinning for a cross-motion
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for partial summary judgment that the Virginia judgment was valid and subsisting. 
Although there was some argument by appellants that Rice was collaterally estopped from
raising the accord and satisfaction defense based on what occurred in Howard County, the
argument was somewhat fleeting, and no claim was made that res judicata applied to the
Howard County decision.
After hearing argument on the cross-motions, the court concluded, as a matter of
law, that the accord and satisfaction entered into by R & D, Abrams, and Kampa served to
satisfy in full the judgment against all four defendants and that, as a result, Rice’s liability
under that judgment had been discharged.  Accordingly, it entered an order in July, 2006,
granting appellees’ motion for partial summary judgment and declaring that the
outstanding amount of the Loudoun Count judgment had been fully satisfied.  Although
the motion was labeled as one for partial summary judgment, the effect of the court’s
ruling was to deny all relief to appellants, and the order entered judgment for appellees on
all claims.  
The court confirmed that ruling in September, 2006, when it denied appellants’
motion to reconsider the ruling.  In a memorandum opinion, the court held that the
controlling Virginia law with respect to the effect of the accord and satisfaction was
Virginia Code, § 8.01-443 and not § 8.01-35.1, as contended by appellants.  Section 8.01-
35.1, the court held, applied only to pre-judgment settlements.  Although recognizing that
the accord and satisfaction agreement did not “purport to accept the settlement in ‘full and
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final satisfaction’ of the judgment” and was not intended to release Rice or Smyth, the
court nonetheless held as a matter of law that it had that effect. The court also rejected
appellants’ argument that appellees were collaterally estopped from raising the accord and
satisfaction defense because they had not raised it in connection with the enrollment of
the Virginia judgment in Howard County.
As we indicated, appellants noted an appeal to the Court of Special Appeals and
then asked, in a petition for certiorari, that we take the case in order to certify to the
Virginia Supreme Court the question of which Virginia statute applied.  Regrettably, in
light of the fact that appellants have effectively withdrawn that request, we granted the
petition.
DISCUSSION
Appellants present two issues in their brief – whether the Montgomery County
court erred (1) in applying § 8.01-443, rather than § 8.01-35.1, of the Virginia Code in
concluding that the accord and satisfaction between R & D, Abrams, and Kampa served
to satisfy in full the Loudoun County judgment, so as to preclude any enforcement action
against Rice, and (2) in not giving preclusive effect under the doctrines of collateral
estoppel, res judicata, and finality of judgment to the enrollment of the Loudoun County
judgment in Howard County and the writ of execution and Confirmatory Order entered by
that court.  We shall deal with the second question first.
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Effect of Proceedings in How ard County
The proceedings in the Circuit Court for Howard County fall into two categories. 
First, acting pursuant to the Maryland Uniform Enforcement of Judgments Act, Maryland
Code, §§ 11-801 through 11-807 of the Cts. & Jud. Proc. Article (CJP), appellants filed
the judgment of the Circuit Court for Loudoun County with the Clerk of the Howard
County Court, thereby giving it “the same effect and [] subject to the same procedures,
defenses, and proceedings for reopening, vacating, staying, enforcing, or satisfying as a
judgment of the court in which it is filed.” § 11-802(b).  As we indicated in Legum v.
Brown, 395 Md. 135, 142-43, 909 A.2d 672, 676-77 (2006), those statutes, along with a
1790 Federal statute, 28 U.S.C. § 1738, serve to implement the Constitutional
requirement that each State give full faith and credit to the final judgments of its sister
States.  Having so filed the Virginia judgment, appellants then sought, by various
methods, to enforce it – as noted, they filed a writ of garnishment and sought to attach
and sequester Rice’s interest in Mid-Atlantic.  
Appellants claim that both the filing of the judgment with the clerk and the
Confirmatory Order entered by the Howard County Court settled the question of the
validity of the Virginia judgment and thereby barred appellants from contesting it by
raising an accord and satisfaction defense in Montgomery County.  Appellees disagree
with that position on the merits and also contend that appellants are themselves barred
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from even raising that issue on appeal because they failed to raise it timely in the Circuit
Court.  Appellees note that, when they argued the effect of the accord and satisfaction
below, appellants’ only res judicata/collateral estoppel response was that appellees had
failed to present that defense in the Loudoun County court when that court considered the
Consent Order.  Not until they filed a motion for reconsideration of the partial summary
judgment did they argue the preclusive effect of the orders entered in Howard County. 
Appellees contend, in other words, that appellants are barred from complaining that
appellees are barred.
The articulation of these defenses and responses is more complex than the answer
to them.  We start with the fact that the filing with the clerk of a final judgment entered by
a court of record of a sister State pursuant to CJP § 11-802 is largely ministerial.  A copy
of the judgment is filed with the clerk, who thereafter must treat it “in the same manner”
as a judgment of his or her own court.  CJP § 11-802(a)(2).  The filing simply enrolls or
“domesticates” the foreign judgment in the Maryland county, and allows it, subject to
such defenses as may properly be raised, to be enforced in the county.  As appellees made
clear throughout, they never contested the validity of the Virginia judgment or asserted
that Maryland should not give full faith and credit to it.  Their argument, from the
beginning, has been that, because of the accord and satisfaction, the valid judgment had
been satisfied and was therefore no longer enforceable.  
The statute recognizes a distinction between the filing of the judgment and its
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enforcement.  Section 11-804 expressly permits the court to stay enforcement of the
judgment for various reasons, including “any ground on which enforcement of a judgment
of the court of this State would be stayed, . . . .” § 11-804(b).  That distinction has also
been recognized in our case law.  See Smith Pontiac v. Mercedes Benz, 356 Md. 542, 562,
741 A.2d 462, 472-73 (1999), where, after noting that some defenses challenge the
validity of the foreign judgment while others accept the validity of the judgment and
challenge only its enforcement, we concluded:
“The distinction between recognition and enforcement applies
in the instant case.  Smith did indeed domesticate its Florida
District judgment by filing under Maryland’s [Uniform
Enforcement of Foreign Judgments Act].  While this Court
must recognize this judgment as a valid Maryland judgment,
this Court also may inquire into post-judgment defenses in
order to determine the extent to which it is enforceable.”
See also Guinness PLC v. Ward, 955 F.2d 875 (4 th Cir. 1992), as discussed in Smith
Pontiac.
In recognition of this distinction, which proceeds from the statute itself, it is clear
that the mere filing of the Loudoun County judgment with the Clerk of the Circuit Court
for Howard County does not establish the enforceability of that judgment and therefore
would not bar appellees, under any notion of res judicata, collateral estoppel, or finality
of judgment from challenging its enforceability by reason of a post-judgment act that
would have the effect of discharging or satisfying the judgment.  We thus turn to that
prong of appellants’ claim or issue preclusion argument.
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The doctrine of claim preclusion, or res judicata, “bars the relitigation of a claim if
there is a final judgment in a previous litigation where the parties, the subject matter and
causes of action are identical or substantially identical as to issues actually litigated and as
to those which could have or should have been raised in the previous litigation.”  Board
of Ed v. Norville, 390 Md. 93, 106, 887 A.2d 1029, 1037 (2005).  See also Alvey v. Alvey,
225 Md. 386, 390, 171 A.2d 92, 94 (1961) and Lizzi v. WMATA, 384 Md. 199, 206-07,
862 A.2d 1017, 1022 (2004).  The doctrine embodies three elements: (1) the parties in the
present litigation are the same or in privity with the parties to the earlier litigation; (2) the
claim presented in the current action is identical to that determined or that which could
have been raised and determined in the prior litigation; and (3) there was a final judgment
on the merits in the prior litigation.  
Issue preclusion, or collateral estoppel is a somewhat allied doctrine, but it looks to
issues of fact or law that were actually decided in an earlier action, whether or not on the
same claim.  We have articulated the doctrine thusly: “When an issue of fact or law is
actually litigated and determined by a valid and final judgment, . . . the determination is
conclusive in a subsequent action between the parties, whether on the same or a different
claim.”  Janes v. State, 350 Md. 284, 295, 711 A.2d 1319, 1324 (1998); Murray
International v. Graham, 315 Md. 543, 547, 555 A.2d 502, 504 (1989).  
Both doctrines hinge, in part, on there having been a final judgment in the earlier
litigation, and therein lies the problem with appellants’ argument.  Their action in Howard
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County was to attach or sequester Rice’s alleged one-third interest in Mid-Atlantic and to
garnish any moneys due him by reason of that interest.  An attachment is implemented by
a writ of execution that is levied by the sheriff against specific property of a judgment
debtor.  See Maryland Rules 2-641 and 2-642.  Unless the property is released from the
levy, it may be sold at a public sale, and the net proceeds, to the extent of the judgment
lien, will be paid to the judgment creditor.  A garnishment is used to attach property of the
judgment debtor that is in the possession of a third party.  The procedure for garnishing
property, other than wages or a partnership interest subject to a charging order under Rule
2-649, is set forth in Maryland Rule 2-645.  The end result, if the judgment creditor is
successful, is that any property found to belong to the debtor is turned over to the creditor. 
Sequestration is an ancient equitable remedy initially designed to enforce equity
decrees mandating or prohibiting specific conduct.  Although in some jurisdictions it
apparently has been expanded to include the enforcement of money judgments as well, in
Maryland it remains limited to injunctive-type judgments.  Maryland Rule 2-648(a)
provides that “[w]hen a person fails to comply with a judgment prohibiting or mandating
action, the court may order the seizure or sequestration of property of the noncomplying
person to the extent necessary to compel compliance with the judgment and, in
appropriate circumstances, may hold the person in contempt pursuant to Rules 15-206 and
15-207.”  (Emphasis added).  The Rule continues that, if the person fails to comply with a
judgment mandating conduct, the court may direct that the act be performed by some
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other person appointed by the court, and, if the mandate is for the payment of money, the
court may enter a money judgment to the extent of the amount owed.”  The Loudoun
County judgment sought to be enforced in Howard County was a “money judgment,” as
defined in Rule 1-202(p), and not a judgment prohibiting or mandating action.  It did not
order Rice to do, or refrain from doing, anything.
Putting aside the inappropriateness of sequestration as a means of enforcing the
Loudoun County judgment, the Confirmatory Order entered by the Howard County court
did not purport to decide whether appellants were entitled to have the alleged interest of
Rice in Mid-Atlantic applied to the judgment, and it therefore was clearly not a final
judgment.  That Order did no more than freeze the situation by precluding Rice or any
other person from disposing of or jeopardizing the interest until the court could sort out,
through a trial, who owned the interest and whether appellants were entitled to have it
applied to their judgment.  A trustee was appointed to take control of the interest and
investigate and ascertain its nature.  
Although, as noted, the parties have not favored us with any indication of what, if
anything, further has occurred in the Howard County court with respect to that action, it
seems evident from the Confirmatory Order itself that further proceedings were
contemplated and would, indeed, be necessary before any definitive ruling could be made
with respect to whether Rice had an interest that was subject to attachment, garnishment,
or sequestration.  Because no final judgment was entered on that issue, no ruling entered
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in Howard County, including the Confirmatory Order, could suffice to support a claim of
either res judicata or collateral estoppel.  The Circuit Court for Montgomery County
therefore did not err in allowing appellees to argue that the Loudoun County judgment
had been satisfied by reason of the accord and satisfaction.
Effect of Accord and Satisfaction
To determine whether the March, 2004 settlement agreement entered into by R &
D, Abrams, and Kampa, captioned Accord and Satisfaction, served to satisfy the
judgment and thereby preclude any enforcement action against Rice, it is necessary to
look at the nature of that agreement in light of the two Virginia statutes.  We have already
given a skeletal outline of the agreement, but its terms have meaning only if put in
context, and that requires an identification and examination of the relevant interests and
entities.  Unfortunately, the record extract and appendices, in addition to their other
substantial shortcomings, fail to indicate what some of those interests are.  No definitive
findings seem to have been made by any of the courts, and the only explanation we have
for some of these facts come from verified allegations by Rice.
As best we can tell, the dramatis personae are as follows:
(1)  Broad Run Golf, LLC (Broad Run) is a Maryland limited liability
company (LLC), whose members are Kampa, Rice, and Smyth, each with a one-third
interest.  The entity in which R & D made its investment is identified as New Broad Run
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Golf LLC, in which Abrams, Kampa, Rice, and Smyth were the principals, but we are
unable to find an explanation of when that entity was created or what, if any, connection
it had to Broad Run.  As noted, Broad Run (or New Broad Run) intended to develop the
Bear National Golf Course.
(2) Mid-Atlantic is a Delaware LLC whose members are Broad Run, which
had a 55% interest, and STP-Beacon Hill, a Massachusetts LLC (Beacon Hill), which
owned the remaining 45%. 
(3) Beacon Hill, also a Massachusetts LLC, was, until March, 2004, owned
by Abrams (99%) and his son (1%). 
(4) New STP-Beacon Hill LLC (New Beacon Hill) is a Delaware LLC that
owns the Beacon Hill Golf Course in Loudoun County.  Its sole member is Mid-Atlantic.  
(5) Cottages at Beacon Hill (Cottages) is a Delaware LLC.  The members
were Abrams, Kampa, Rice, and Smyth.
(6) R & D 1, LLC (R & D 1) and R & D 2001, LLC (R & D) are Virginia
LLCs, of which Gregory is allegedly the managing member.  Who owns them is not clear. 
R & D was the plaintiff in the Loudon County case.
(7) NAP Foundation (NAP) is a Virginia non-stock, not for profit
corporation of which Gregory is trustee and president.  At some point, not clear from the
record, R & D assigned part of its Loudoun County judgment to NAP.
It appears that, in the Fall of 2002, New Beacon Hill owned a 340-acre tract of
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land in Loudoun County, which it proposed to develop as a golf course.  As best we can
tell, this was a different golf course than the Bear National Golf Course being developed
by Broad Run or New Broad Run.  The tract consisted of two parcels, one of
approximately 330 acres and one of 10.6 acres.  Rice contends that the 330-acre parcel
was to be used for the golf course and the 10.6-acre parcel was to be used for a clubhouse
and some cottages intended as amenities to the golf course.  In November, 2002, just prior
to the closing of a $10.5 million construction loan to be used to finance development of
the golf course, Abrams, on behalf of New Beacon Hill, deeded the 10.6-acre parcel to
Cottages.  It is alleged that he did so without the knowledge of Rice or Smyth who, as
noted, together owned two-thirds of Mid-Atlantic, which, in turn, was the sole member of
New Beacon Hill, and without any authority. 
In January, 2003, the lawsuit that produced the judgment at issue here was filed by 
R & D.  In November, 2003 – while that suit was pending – Abrams, with the
concurrence of Smyth and Rice, caused Cottages to convey the 10.6-acre parcel to R & D
1, which put Abrams in control of it.  That, according to Rice, severely restricted the
ability of New Beacon Hill to develop the amenities necessary for a private golf course
and thus to sell the course.  
In March, 2004, Abrams and Kampa entered into the settlement agreement with R
& D.  As noted, that agreement had four elements to it.  The first element was designed to
remove Abrams and Mid-Atlantic entirely from any interest in or control over the golf
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course being developed by Beacon Hill.  That was to be accomplished by (1) an
assignment by Abrams and Beacon Hill of their interests in Mid-Atlantic, the sole
member of New Beacon Hill., to Kampa, so that Mid-Atlantic would thereafter be owned
55% by Broad Run and 45% by Kampa, (2) an assignment by Abrams to Kampa of all
interest Abrams had in New Beacon Hill and the golf course, (3) a release by Abrams to
Kampa of all interests Abrams had in any contracts related to the golf course, and (4)
Abrams’s resignation as a manager of New Beacon Hill.  The Assignment recited that its
express intent was that Abrams and Mid-Atlantic would no longer have any ownership or
other interest in New Beacon Hill or the golf course being developed by New Beacon
Hill.  It stated that the substitution of Kampa for Abrams was intended to “help facilitate
the future development of the [Beacon Hill] Golf Course and the financial status of [New
Beacon Hill], both of which are potential assets that may help generate future revenues to
repay the judgment.”
The second element was a mutual release of contract obligations between Cottages
and R & D 1 and concerned the November, 2003, conveyance of the 10.6-acre parcel
from Cottages to R & D 1.  The release recited that the contract leading to that
conveyance contained certain post-closing obligations, which it did not define, and it
purported to confirm the conveyance but release each entity from those post-closing
obligations.  The release noted that Rice and Smyth, two of the members of Cottages,
were not signing the release and stated that R & D 1 accepted the consequences.  The
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third element was a promissory note from Abrams and Kampa to R & D for $175,000,
together with 12% annual interest, due March 1, 2005.  That note has not been paid and,
according to Rice, was never intended by the parties to be paid.  Finally, there was the
Consent Order setting aside the judgment against Abrams and Kampa.
Appellants contend that the settlement agreement, captioned Accord and
Satisfaction, was merely in the nature of a joint tort-feasor release and is governed by Va.
Code, § 8.01-35.1.  That statute deals with the situation in which “a release or a covenant
not to sue is given in good faith to one of two or more persons liable in tort for the same
injury.”  In that event:
(1) The release or covenant not to sue “shall not discharge any of the other
tort-feasors from liability for the injury . . . unless its terms so provide; but any amount
recovered against the other tort-feasors or any one of them shall be reduced by any
amount stipulated by the covenant or the release, or in the amount of the consideration
paid for it, whichever is the greater”;
(2) “In determining the amount of consideration given for a covenant not to
sue or release for a settlement which consists in whole or in part of future payment or
payments, the court shall consider expert or other evidence as to the present value of the
settlement consisting in whole or in part of future payment or payments”;
(3) The release or covenant not to sue “shall discharge the tort-feasor to
whom it is given from all liability for contribution to any other tort-feasor”; and
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(4) A tortfeasor who enters into such a release or covenant not to sue “is not
entitled to recover by way of contribution from another tort-feasor whose liability for the
injury . . . is not extinguished by the release or covenant not to sue, nor in respect to any
amount paid by the tort-feasor which is in excess of what was reasonable.”
Appellees view § 8.01-35.1 as applicable only to pre-judgment settlements in the
form of releases or covenants not to sue.  An accord and satisfaction, they urge, is not a
release or covenant not to sue.  The statute governing an accord and satisfaction, they
contend, where consideration is paid by one judgment debtor on a judgment entered
jointly and severally against more than one judgment debtor, is Va. Code, § 8.01-443. 
That statute permits a judgment creditor to bring actions on the judgment against any or
all of the judgment debtors, jointly or severally, and “no bar shall arise as to any of them
by reason of a judgment against another, . . . until the judgment has been satisfied.” 
Section 8.01-443 further provides:
“If there be a judgment against one or more joint wrongdoers,
the full satisfaction of such judgment accepted as such by the
plaintiff shall be a discharge of all joint wrongdoers, except as
to the costs; provided, however, this section shall have no
effect on the right of contribution between joint wrongdoers
as set out in § 8.01-34.”
(Emphasis added).  
Appellees argue that the consideration stated in the “accord and satisfaction”
between R & D, Abrams, and Kampa, and the accompanying assignment, mutual release,
promissory note, and consent order, was accepted by R & D as a full satisfaction of the
10 The distinction, as explained in Shortt v. Hudson Supply & Equipment Co., 60
S.E.2d 900, 903 (Va. 1950) was that a release was “an immediate relinquishment or
discharge of the covenantor’s right of action, whereas a covenant not to sue is merely a
promise not to prosecute a suit against the covenantee, and is enforceable only by the
latter.”
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judgment, and, for that reason, discharged Rice as well.  In making his own settlement,
for $1,000,000, they claim, Smyth was simply an unwise volunteer; he, too, had been
discharged by the accord and satisfaction.  
The two statutes express different, but entirely consistent, principles.  As pointed
out in Hayman v. Patio Products, Inc., 311 S.E.2d 752, 755 (Va. 1984), under Virginia
common law, “a release of, or an accord and satisfaction with, one of several joint tort-
feasors operated as a release of all” even if the agreement provided otherwise.  A
covenant not to sue one joint tortfeasor did not have that effect, however; it did not
release the other joint tortfeasors.  See also Perdue v. Sears, Roebuck and Co., 694 F.2d
66 (4th Cir. 1982).10  
As initially enacted in 1979, § 8.01-35.1 applied only to covenants not to sue, but,
as subsequently amended, it now applies to both kinds of instrument and thus, for these
purposes, treats them the same.  A good faith settlement with a joint tortfeasor, whether
by release or covenant not to sue, does not release the other joint tortfeasors unless the
release or covenant so provides, but it does protect them by reducing their liability to the
extent of the consideration paid by the settling tortfeasor or the amount provided in the
release or covenant, whichever is greater, and by discharging them from liability for
11 See Hayman, supra, 311 S.E.2d 752, 755; also Dacotah Marketing and
Research, L.L.C. v. Versatility, Inc., 21 F. Supp. 2d 570, 575 and n.9 (E.D. Va. 1998).
12 Because we are called upon to construe a Virginia statute, we make these
pronouncements with somewhat less assurance than if we were interpreting a Maryland
statute.  Obviously, it is for the Virginia Supreme Court ultimately to determine the scope
of § 8.01-35.1. At this point, we are aware of no precedential Virginia case on the issue.
We do note that the case law generally under versions of the Uniform Contribution
Among Tortfeasors Act does not draw such a clear line between pre-judgment and post-
judgment settlements.  It is not infrequent that joint tortfeasor releases of one kind or
another are given in situations in which the plaintiff has recovered a judgment against one
joint tortfeasor but not against another, and, subject to differing rules governing
contribution, courts have applied the statute to those situations.  See Trieschman v. Eaton,
224 Md. 111, 119, 166 A.2d 892, 896 (1961).
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contribution to the settling tortfeasor.  We see nothing in the statute to suggest that it is
limited to pre-judgment settlements, as averred by appellees, and that it cannot apply
when one of several persons jointly and severally liable on a judgment effects a
settlement of that person’s liability under the judgment.  The obvious thrust of the statute,
confirmed by the courts that have interpreted it, was to promote settlements,11 and that
goal would seem to be as applicable to settling liability under joint and several judgments
as to settling pre-judgment claims against alleged joint tortfeasors.  We therefore do not
agree that § 8.01-35.1 applies only to pre-judgment settlements.12
The underlying premise of § 8.01-35.1, however, is that, in the post-judgment
context, the consideration paid by the settling judgment debtor does not, and is not
intended to, satisfy the judgment in full, for if that were not the case, the provisions
preserving but reducing the liability of the other judgment debtors would be meaningless. 
The function of the statute seems to be to allow a plaintiff, before or after judgment, to
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enter into settlements with one or more defendants or judgment debtors without affecting
the plaintiff’s right to proceed against the others for the balance of what is owed, or
believed to be owed.  That is also the law in Maryland.  As this Court pointed out in
Trieschman v. Eaton, supra, 224 Md. 111, 119, 166 A.2d 892, 896 (1961), neither an
unsatisfied judgment held against one tortfeasor nor the partial satisfaction of a judgment
against one tortfeasor serves to discharge other tortfeasors liable for the same harm.
Section 8.01-443 is entirely consistent with that view.  The first part of it permits a
plaintiff to pursue to judgment claims against any or all joint wrongdoers, jointly,
severally, and successively, until the judgment has been satisfied.  That pursuit ends,
however, when a judgment against one or more joint wrongdoers is fully satisfied; the
“full satisfaction of such judgment accepted as such by the plaintiff shall be a discharge
of all joint wrongdoers, except as to the costs.”  (Emphasis added).  That carries forth the
well-established common law view that there can be but one satisfaction of the same
wrong.  The Revisor’s Note to § 8.01-443 confirms that the statute was intended to make
clear that “discharge of all joint tort-feasors, except as to costs, occurs only when one of
multiple judgments has been fully satisfied and has been accepted as such by the
plaintiff.”  (Emphasis added).  The Revisor’s Note continues that “‘[s]atisfaction’ is
determined by case law and in an appropriate situation would include, besides full
payment, an accord and satisfaction or a covenant not to sue supported by consideration.”
The issue, then, is not which statute applies; they both may apply.  The question is
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whether the March, 2004 agreement, captioned and later referred to as an accord and
satisfaction, actually constituted, and was accepted by R & D as, a full satisfaction of the
judgment against Abrams, Kampa, Rice, and Smyth.  If so, Rice was discharged; if not,
he remains liable, subject to the credits required by § 8.01-35.1.
The Circuit Court resolved that issue on summary judgment, and, on this record,
that was error.  There are material facts in genuine dispute.  That the parties referred to
the agreement as an accord and satisfaction is certainly relevant in determining their
intent, but it is not dispositive, especially when the Consent Order contemplated by the
agreement, and upon which the agreement was expressly contingent, very clearly states
that it “shall have no effect” on either the claims or the judgment against Rice and Smyth. 
Also bearing significantly on whether R & D “accepted” the accord and
satisfaction as a full satisfaction of the judgment is the statement in the assignment by
Abrams and Beacon Hill that the removal of Abrams was intended to facilitate the
development of the Beacon Hill golf course and the financial status of New Beacon Hill,
“both of which are potential assets that may help generate future revenues to repay the
judgment.”  (Emphasis added).  That is certainly an indication that R & D did not regard
the judgment as fully satisfied.  Obviously, Smyth did not believe that the judgment was
fully satisfied, as he paid $1,000,000 to secure his own release from it. 
There is no independent evidence in this record to indicate what value R & D
placed on either the assignment of Abrams’s interests, which were to Kampa, not R & D,
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or on the mutual release of contract rights relating to the conveyance of the 10.6-acre
parcel.  The only monetary consideration referenced in the settlement agreement was an
unsecured promissory note for $175,000 that has not been paid.  On this record, it cannot
properly be determined, as a matter of law, that the accord and satisfaction constituted,
and was accepted by R & D as, a full settlement of the judgment.
JUDGMENT OF CIRCUIT COURT FOR MONTGOMERY
COUNTY REVERSED; CASE REMANDED TO THAT
COURT FOR FURTHER PROCEEDINGS; COSTS TO BE
PAID BY APPELLEES.