Title: Wildwood Medical v. Montgomery County

State: maryland

Issuer: Maryland Supreme Court

Document:

Wildwood Medical Center, L.L.C. v. Montgomery County, Maryland, No. 125, September
Term 2007
HEADNOTE: Filing of opinion and issuance of mandate in Court of Special Appeals,
following the death of the member of the panel who facially authored the majority opinion,
was a nullity.  The case thus remained pending and undecided in the intermediate appellate
court at the time the Court of Appeals granted a petition for writ of certiorari filed by
Wildwood Medical Center, L.L.C. under the impression that the Court of Special Appeals
finally decided the case.  As such, the matter properly is before the Court of Appeals on its
merits pursuant to Maryland Rule 8-131(B)(2).  Regarding the merits, no recordation or
transfer tax was due to Montgomery County upon the transfer of title to real property from
a partnership of co-owning individuals to a limited liability company composed of the same
individuals.
Circuit Court for Mo ntgomery C ounty
Civil Case No. 262295  
IN THE COURT OF APPEALS OF
MARYLAND
No. 125
September Term 2007
Wildwood Medical Center, L.L.C.
v.
 
Montgomery County, Maryland
Bell, C. J.
Harrell
Battaglia
Greene
Eldridge, John C. (Retired, 
specially assigned)
Raker, Irma S. (Retired,
specially assigned)
Cathell, Dale R. (Retired,
specially assigned),
JJ.
Per Curiam
Cathell, J. joins judgment only
Filed:   August 22, 2008
1 The questions presented in the County's brief in the Court of Special Appeals were:
I.  When property is titled in the names of individuals, rather
than in the name of the partnership, does a transfer of that
property to a limited liability company qualify for an exemption
from transfer and recordation taxes?
II.  Did the tax court and the circuit court fail to adhere to the
longstanding judicial tenet that tax-exemption statutes are to be
strictly construed in favor of the taxing authority, which resulted
in an erroneous expansion of an exemption that conflicts with
the prohibition against judicial legislation?
The questions as reframed in Wildwood’s responsive brief in the Court of Special Appeals
were:
I.  Was the Maryland Tax Court correct in allowing appellee
exemptions from transfer and recordation taxes upon the
recordation of the subject deed, in accordance with §§12-108(y)
and 13-405(c) of the Tax-Property Article, as appellee was a
(continued...)
Wildwood Medical Center, L.L.C., Appellee in the Court of Special Appeals and
Petitioner here, requested on April 28, 2004, a refund of certain real property recordation and
transfer taxes it had paid upon presentation of a deed for recordation, under protest, to
Montgomery County, Maryland, Appellant below and Respondent here.  That request, after
a hearing, ultimately was denied by the County.  Petitioner took an appeal to the Maryland
Tax Court.  The Maryland Tax Court (a State administrative agency) granted Wildwood's
request for the refund on June 3, 2005.  From that final administrative agency action, the
County filed a Petition for Judicial Review  with the Circuit Court for Montgomery County.
The Circuit Court affirmed the decision of the Tax Court.  Montgomery County then filed
a Notice of Appeal to the Court of Special Appeals.1
1(...continued)
Maryland general partnership?
II.  Was title to the property, that is described in what is referred
to in these proceedings as the subject deed, vested in the general
partnership at the time of transfer so that the appellee should be
granted exemptions from transfer and recordation taxes?
-2-
On March 8, 2007, the intermediate appellate court filed a reported opinion vacating
the judgment of the Circuit Court and remanding the case for further proceedings.  Before
the mandate of the Court of Special Appeals was issued, however, the County Attorney’s
Office sent a letter suggesting that the court “consider revising its decision before the
mandate issues” and made several suggestions for changes it urged were necessary or
appropriate.
The opinion was recalled before the mandate issued.  Ultimately, another purported
opinion (on reconsideration) was filed on October 31, 2007.  A mandate for this new opinion
issued on the same date.  Thereafter, Wildwood filed with us a Petition for Writ of Certiorari,
which we granted on February 13, 2008.  Wildwood Medical v. Montgomery County, 403
Md. 304,  941 A.2d 1104 (2008).  The sole question for which we issued a writ of certiorari
based on Wildwood's petition was:
Whether the Maryland Tax Court and the Circuit Court for
Montgomery County, Maryland . . . were both correct in
allowing appellant exemptions from transfer and recordation
taxes upon the recordation of the subject deed, in accordance
with §§12-108(y) and 13-405(c) of the Tax-Property Article, as
appellant’s predecessor entity held the title to the subject
property as a general partnership.
-3-
Because the material facts do not appear to be disputed, we shall incorporate a recitation of
them into our analysis of the question presented, as necessary.  We shall reach and answer
in the affirmative this question, but only after some explanation of the serendipitous reasons
the matter properly is before us on the merits.
I.
The panel assigned to hear and decide the County's appeal in the Court of Special
Appeals consisted of Judges Theodore G. Bloom, Mary Ellen Barbera, and James A. Kenney,
III.  Following oral argument, the panel filed a purported reported opinion, with a dissent,
on March 8, 2007.  Judge Bloom, writing for himself and Judge Barbera, would have vacated
the judgment of the Circuit Court and remanded the case for entry of a judgment reversing
the decision of the Tax Court.  Judge Kenney, in dissent, would have affirmed the Circuit
Court's judgment.
As noted previously, before the mandate issued, counsel for Montgomery County
wrote to the panel pointing out reasons why the erstwhile majority opinion required, in
counsel's view, certain corrections or  revisions.  In effect, limited reconsideration was sought
by the nominal victor in the intermediate appellate court proceeding.  The court apparently
agreed because the reported opinion was recalled before a mandate issued.
Before a revised majority opinion in the Court of Special Appeals could be filed,
Judge Bloom passed away; however, before he died, we are informed that he approved
changes in a "new" draft majority opinion.  We know this because the title page of the
2 The relevant language on the title page of the October 31, 2007 opinion was:
Bloom, J., participated in the hearing and conference of this
case, participated also in the decision and adoption of this
opinion, which he authored, and approved the requested
changes, but died prior to the date on which the revised opinion
was filed.
-4-
reported opinion (on reconsideration), filed on October 31, 2007 (after Judge Bloom's
passing), said so.  176 Md. App. 731, 934 A.2d 484 (2007). 2  Judge Kenney's dissent also
was filed concurrently.  The mandate issued on the same day the opinions were filed.
The parties did not question before this Court or the Court of Special Appeals the
effect of Judge Bloom's death before a final opinion was filed below and a mandate issued.
Because this factor, however, bears on the jurisdictional basis upon which we accepted the
case, the parties' omission in this regard is no impediment to our consideration of the
discovered "problem."
Section 1-403 of the Courts & Judicial Proceedings Article of the Maryland Code
(1973, 2006 Repl. Vol.) provides as to the Court of Special Appeals:
Title 1.
Court Structure and Organization
*     *     *
Subtitle 4. Court of Special Appeals
*     *     *
§ 1-403. Sessions; panels; hearings in banc.
-5-
*     *     *
(b) Panels. – A case before the Court of Special Appeals shall
be heard by a panel of not less than three judges. . . . The
concurrence of a majority of a panel is necessary for the
decision of a case." [Emphasis added.]
Thus, there was no longer a panel of three judges to hear and decide this appeal on October
31, 2007, when the opinions were filed finally in the Court of Special Appeals.
Generally, when a judge vacates office before submitting a decision in an assigned
case, no other person is authorized to submit the decision on the judge's behalf.  State v.
Dowdell, 55 Md. App. 512, 515-516, 464 A.2d 1089, 1091 (1983); see also Dept. of Human
Res. v. Howard, 397 Md. 353, 367, 918 A.2d 441, 450 (2007) (noting that a judge generally
is considered to have vacated office upon death).  While the appeal in this case could have
been reargued before a reconstituted or new panel in the Court of Special Appeals, there was
no authority of which we are aware for Judge Bloom's presumed revised draft opinion to
have been filed by someone else on his behalf.  Thus, the October 31, 2007 opinions and
mandate were nullities, and the appeal technically remained pending at the time we issued
our writ of certiorari to the intermediate appellate court.
When this Court granted Wildwood's Petition for Writ of Certiorari and issued a writ
in this case on February 13, 2008, it did so, in effect, prior to entry of a proper judgment by
the Court of Special Appeals (Maryland Code (1974, 2006 Repl. Vol.), Courts & Judicial
Proceedings Article, § 12-201 (stating that "petition can be filed and granted before or after
a decision by the Court of Special Appeals")), and while a timely filed appeal remained
3 Rule 8-131. Scope of review.
 
*     *     *
(B) In Court of Appeals – Additional limitations.
*     *     *
(2) No prior appellate decision.  Except as otherwise
provided in Rule 8-304(c), when the Court of Appeals issues a
writ of certiorari to review a case pending in the court of Special
Appeals before a decision has been rendered by that Court, the
Court of Appeals will consider those issues that would have
been cognizable by the court of Special Appeals.
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pending before that court.  In such instances, when certiorari is granted bypassing the Court
of Special Appeals, this Court considers all the issues that would have been cognizable by
the intermediate appellate court.  Md. Rule 8-131(b)(2); 3 Colburn v. Dep't of Pub. Safety &
Corr. Servs., 403 MD. 115, 199, 939 A.2d 716, 719 (2008); Converge Serv. Group, LLC v.
Curran, 383 Md. 462, 467, 860 A.2d 871, 874 (2004).  That is why it is proper for us to reach
and decide the merits of this case.
II.
On the merits, we shall affirm the judgment of the Circuit Court.  In doing so, we hold
that the conveyance and recordation of the deed in this case was exempt from the State
recording tax and the Montgomery County transfer tax.
A Surveyor’s Certificate recorded in Montgomery County in 1990 details the
provenance of Plat No. 17744, the subject property.   The Certificate identifies Parcel B, the
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subject parcel, along with several surrounding properties, under the name “Aubinoe and
Griffith Limited Partnership.”  The Certificate characterizes Parcel B as 1) a “resubdivision
of part of Wildwood Manor Shopping Center . . . being part of lands conveyed by Wildwood
Investment Corporation to Alvin L. Aubinoe, now deceased, and Dorothy B. Aubinoe” by
deed dated February 27, 1965; and 2) “a subdivision of part of the lands conveyed by
Cheshire Land Co., Inc. to Alvin . . . and Dorothy” by deed dated September 25, 1962.   A
deed recorded on February 27, 1969, bearing the signature of Alvin as President of
Wildwood Investment Corporation and  Dorothy as its Secretary, transfers title to the subject
property from Wildwood Investment Corporation to Alvin and Dorothy in equal interest
incident to the dissolution of that corporation.  The deed states that Alvin and Dorothy
previously conveyed the subject property to Wildwood Investment Corporation by deeds
dated January 31, 1955 and February 13, 1956.  
After Alvin’s death,  Dorothy transferred title of Parcel B to Dorothy Aubinoe Griffith
and Alvin L. Aubinoe, Jr. on May 19, 1983.  Later, at Dorothy’s death, several individuals
and family trusts acquired title to portions of the property through inheritance, as  reflected
in deeds recorded through the year 2000.  In 2000, the co-owners began filing United States
Partnership Tax Returns.  Not until December 22, 2003, however, did the co-owners execute
a formal partnership agreement.   In the partnership’s operating agreement, the partners listed
as their capital contributions their interests “as tenants in common” in the properties.  Shortly
thereafter, the partnership transferred title to Westwood Medical Center, L.L.C., claiming the
4 
Subsection 12-108(y)(2) of the Tax-Property Article states:
An instrument of writing that transfers title to real
property from a predecessor entity . . . to a limited liability
company is not subject to recordation tax if:
(i) the members of the limited liability company are
identical to the partners of the converting general partnership .
. . ;
(ii) each member's allocation of the profits and losses of
the limited liability company is identical to that member's
allocation of profits and losses of the converting predecessor
entity; and
(iii) the instrument of writing that transfers title to real
property represents the dissolution of the predecessor entity for
purposes of conversion to a limited liability company.
A predecessor entity includes a Maryland general partnership.  Maryland Code (2001, 2007
Repl. Vol.), Tax-Property Article, § 12-108(y)(1).
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transfer qualified for a recording and transfer tax exemption under Maryland Code (2001,
2007 Repl. Vol.), Tax-Property Article, § 12-108(y)(2).4  
The State Land Instrument Intake sheet offered at the time of the filing of the deed to
Wildwood identified the property as non-residential property held by individuals doing
business as Wildwood Medical Center General Partnership. The County rejected the claimed
exemption on the ground that the property was never titled in the name of Wildwood Medical
Center General Partnership as such.  The limited liability company paid the taxes under
protest and filed the requisite refund request forms.  When the County denied the refund,
Wildwood appealed to the Maryland Tax Court.   The Tax Court ruled that the transfer
qualified for the exemption, and the ruling was affirmed by the Circuit Court for
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Montgomery County. 
By the plain and ordinary meaning of § 12-108(y)(2), the statutory exemptions apply
to the subject deed.  The transferor was a Maryland general partnership.  The partnership
confirmed its existence by the terms of a written partnership agreement.  The intent of the
members to carry on as a partnership was manifested by the fact that they filed U. S.
Partnership Tax Returns for years previous to executing the formal agreement, specifically
2000 through 2003.  The transferee was a limited liability company composed of the same
members that comprised the partnership.   The same members executed the subject deed, the
“instrument of writing” that transferred title to the real property.
Section 9A-101(i) of the Corporations and Associations Article of the Maryland Code
defines a partnership as an association of “two or more persons” who “carry on as co-
owners” in a mutually beneficial business relationship.   Such an association creates a
partnership “whether or not [it] is called partnership, joint venture, or any other name.”
Maryland Code (1975, 2007 Repl. Vol.), Corporations & Associations Article, § 9A-202(a);
Madison Nat’l Bank v. Newrath, 261 Md. 321, 328, 275 A.2d 495, 499 (1971) (holding
individuals who carry on a business to mutual benefit and share in its profits to be partners,
“whether they call themselves such or not”) (quoting McBriety v. Phillips, 180 Md. 569, 573-
74, 26 A.2d 400, 403 (1942)).  McBriety held that a “partnership . . . may be proved by
express agreement or may be gathered from the intention of the parties as implied from their
acts.”  Through this well-established principle, partnerships can be discerned from
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“surrounding circumstances.”  Vlamis v. Deweese, 216 Md. 384, 389 140 A.2d 665, 668,
670-72 (1958) (holding that regardless of the name on the record title, the land was the
subject of a partnership discernable from surrounding circumstances and therefore passed to
the partner as partnership property and not by devise to the widow and her heirs).  
It is the intention of the parties, not the record title alone, that determines whether
property not held in the name of the partnership is partnership property nonetheless.
Madison Nat. Bank,  261 Md. at 323; 275 A.2d at 497 (citing Vlamis v. Deweese, 216 Md.
384, 140 A.2d 665 (1958)); Williams v. Dovell, 202 Md. 351, 356-57, 96 A.2d 484, 487
(1953) (holding that property acquired as partnership property may be conveyed to
individuals within the partnership without reference to the partnership).  To the extent that
Montgomery County places emphasis on the fact that the partnership in this instance was not
formalized until 2003, it is of note that the property held to be partnership property in Dovell
was acquired as joint tenants in 1937 and a formal partnership agreement was not executed
until 1946.   In the present case, the intent of the co-owners of Parcel B of Wildwood
Shopping Center to carry on as partners dates back at least as far as 1990, when they
resubdivided the property and it was identified on the Survey Certificate as partnership
property.  In addition, as early as 1965, Alvin and Dorothy Aubinoe clearly illustrated their
intent to carry on as business partners in a commercial land development that included the
subject property when they formed the Wildwood Investment Corporation, subdivided the
property, and created the subject parcel.
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 The County’s rationale for demanding payment of recordation and transfer taxes on
the subject deed as it transfers title from a partnership of co-owning individuals to a limited
liability company made up of the same individuals is that, by not transferring formally the
title to the partnership, the family-based partnership avoids ever having to pay the tax.  But,
“where real estate is acquired as partnership property, [and] is conveyed to the partners by
name without reference to the partnership, every right of ownership and disposition is in the
partnership.” Dovell, 202 Md. at 356-57, 96 A.2d at 487 (emphasis added).  No one contends
that the Aubinoes did not pay recording and other taxes when they acquired the property and
transferred it to the Wildwood Investment Corporation.  Surrounding circumstances indicate
that the Aubinoes intended and used the property as co-owners of a business venture;
therefore, it was partnership property.   The fact that the property was not titled in the name
of the partnership or transferred to the partnership, a trustee, or a nominee of the partnership
does not defeat the exemption in itself.  The record title is not dispositive as to whether the
requirements for the claimed exemption are satisfied.  Vlamis, 216 Md. at 384, 388, 393, 396,
140 A.2d at 667, 670-72.   
Moreover, it was the partnership interest that the Aubinoe heirs received on Dorothy’s
death.  As this Court held in Dovell, the legal title to partnership property may not be
conveyed, devised, or inherited as the individual property of any of the partners, either as
joint tenant or as tenant in common.  Dovell, 202 Md. at 357, 96 A.2d at 487; see also Kay
v. Gitomer, 253 Md. 32, 37, 251 A.2d 853, 856 (1969) (holding that partnership property is
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“‘not subject to dower, [courtesy], allowances to widows, heirs or next of kin’”).  Only the
partner’s interest in the real estate  passes by devise, inheritance, or individual deed, except
in the case of a conveyance to a purchaser for value without notice.  Id. at 357, 96 A.2d at
487; see also Dean v. Pinder, 312 Md. 154, 163-64, 538 A.2d 1184, 1189 (1988) (discussing
the effect of issuing stock on conveyance for benefit or value).  With that exception, the legal
title of individual partners is an “empty technicality.”  Dovell, 202 Md. at 357, 96 A.2d at
487.  Thus, the partner’s interest in the partnership is all that the partner may assign or
bequeath and, upon the partner’s death, it is the partnership interest that passes to the
administrator as personal property.  Id. at 356-57, 96 A.2d at 487.  The subject parcel became
partnership property when Alvin and Dorothy created the Wildwood Investment Corporation,
in which they were President and Secretary, respectively, and transferred the subject parcel
to the company for further subdivision and development. Dorothy inherited Alvin’s
partnership interest on his death, and it was this partnership interest that she transferred to
Dorothy Aubinoe Griffith and Alvin L. Aubinoe, Jr. in 1983 or passed by devise to
subsequent family trusts or individuals.  The parcel remained partnership property, as long
as the same individuals identified on the title, or their heirs and assigns, carried on the
partnership’s business activity. 
Maryland law does not require a title in the name of the partnership in order to transfer
the partnership property in the course of business.  Under the Maryland Revised Uniform
Partnership Act, “[a] partnership is an entity distinct from its partners.” Maryland Code
-13-
(2007), Corporations & Associations Article, § 9A-201;  Republic Prop. Corp. v. Mission
West Prop., L.P., 391 Md. 732, 743, 895 A.2d 1006, 1012 (2006).  Section 9A-203 expressly
provides that “[p]artnership property is property of the partnership and not the partners
individually.”  Section 9A-302(a)(3) of the Article states:
Partnership property held in the name of one or more
persons other than the partnership, without an indication in the
instrument transferring the property to them of their capacity as
partners or of the existence of a partnership, may be transferred
by an instrument of transfer executed by the persons in whose
name the property is held.
Under Maryland law, partnership property held in the name of an individual may be
transferred to the formal business entity, as was done in this instance.
A deed is an instrument that conveys title to real property.  To “convey” is “to transfer
or deliver (something, such as a right or property) to another, esp[ecially] by deed or other
writing . . . .”  Black’s Law Dictionary 357 (8th ed. 2004).  Therefore, “convey” and
“transfer” are interchangeable terms.  A deed of partnership property from the partners on
behalf of the partnership to the limited liability company conveys or transfers title from the
“predecessor entity” to the limited liability company.  No one contends that the limited
liability company does not receive legal title to property as a result of such a deed. 
To require the converting general partnership first to title the partnership property in
the name of the partnership in order to avail itself of the exemptions at issue is to ignore the
past treatment of partnership property and the recognition that partnership property need not
be held in the name of the partnership.  Applied to the present context, conversion is “[t]he
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act of changing from one form to another . . . .”  Black’s at 356.  It is reasonable to view the
intent of the General Assembly, as reflected by the statutory language, as simply to permit,
under certain specified conditions, a general partnership converting to a limited liability
company and to reflect that conversion in the land records without incurring recordation or
transfer tax consequences.  Such a reading is consistent with § 4A-213(b)(1) of the
Corporations and Associations Article, which provides that “[a]ll property owned by the
converting general . . . partnership . . . remains vested in the converted entity.”  (Emphasis
added.)   Recording the deed in the land records merely reflects and confirms the statutory
vesting of the partnership property in the limited liability company. 
That interpretation is not inconsistent with the exemption provided in § 12-108(q) of
the Tax-Property Article, that an instrument of writing conveying real property from
corporations, limited liability companies and partnerships to the original shareholders,
members, or partners of the partnership “on its liquidation, dissolution or termination is not
subject to recordation tax . . . .”  In order to qualify for the exemption at issue in this case,
the conversion of a general partnership to a limited liability company must represent a
“dissolution of the predecessor entity,” and the real property of the dissolved partnership
must be conveyed to an entity made up of the identical partners with the same rights and
obligations as to profits and losses.  Exempting conveyances such as the present instance is
not unlike exempting the conveyance of property in a dissolved partnership to the original
partners under § 12-108(q).  In both situations, there is no change in the composite
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membership of the group acting in partnership, and transferring the property title to the same
individuals that make up the legal entity at the time of the entity’s dissolution effects no real
change in ownership.  
Resting a determination of legislative intent in such taxation matters on a distinction
between “title” and “ownership” would resurrect an “empty technicality” that has long been
put to rest by case law and statutory law.  Madison Nat’l Bank, 261 Md. at 331, A.2d 495 at
500; Vlamis, 216 Md. at 394, 140 A.2d at 671.  Instead, it should be presumed that the
General Assembly was aware that long-established rules of partnership law hold that: 1)
partnerships are separate entities from their individual partners; 2) partnership real property
can be held by one or more persons without reference to the partnership in the instrument
transferring the property to them; and, 3) those persons, in turn, may transfer that property
by an instrument to another person or entity.  See Taylor v. Mandel, 402 Md. 109, 131, 935
A.2d 671, 684 (2007) (noting the presumption that the Legislature has acted with full
knowledge of prior and existing case law, legislation,  and policy). 
For these reasons, we affirm the judgment of the Circuit Court for Montgomery
County holding that the decision of the Maryland Tax Court was correct. 
JUDGMENT OF THE CIRCUIT COURT
F O R  
M O N T G O M E R Y  
C O U N T Y
AFFIRMED; COSTS IN THIS COURT AND
THE COURT OF SPECIAL APPEALS TO
BE PAID BY MONTGOMERY COUNTY,
MARYLAND.