The Bank of New York Mellon, Trustee et al. v. Heinz Otto Georg et al., No. 20, September 

Term, 2017 

PRINCIPLE OF JUDICIAL ESTOPPEL – STANDING – PRIVITY – DOCTRINE 

OF RES JUDICATA – DOCTRINE OF COLLATERAL ESTOPPEL – FINAL 

JUDGMENT – Court of Appeals held that prerequisites that must exist before judicial 

estoppel may be applied were not satisfied, and, as such, trial court properly declined to 

apply judicial estoppel to bar Respondents’ argument that Petitioners were in privity with 

prior plaintiff. Specifically, Court of Appeals held that, because three circumstances that 

must be fulfilled for application of judicial estoppel were not established, and because 

standing and privity do not give rise to mutually exclusive arguments, but are instead two 

different concepts, trial court properly ruled that judicial estoppel did not bar Respondents’ 

privity argument. 

Court of Appeals also held that trial court’s ruling as to merits of case concerning mutual 

mistake of fact was independent, alternative ruling, and not contingent ruling, and thus, 

under circumstances of case, constituted final judgment for purposes of res judicata and 

collateral estoppel, and that subsequent trial court properly determined that elements of res 

judicata and collateral estoppel were satisfied, and thus barred Petitioners from bringing 

claims in second lawsuit.
IN THE COURT OF APPEALS 

OF MARYLAND 

No. 20

September Term, 2017 

______________________________________ 

THE BANK OF NEW YORK MELLON, 

TRUSTEE ET AL. 

v. 

HEINZ OTTO GEORG ET AL.

______________________________________ 

Barbera, C.J. 

Greene

Adkins

McDonald

Watts 

Hotten

Getty, 

JJ.

______________________________________ 

Opinion by Watts, J. 

______________________________________ 

Filed: December 18, 2017 

Circuit Court for Baltimore County

Case No. 03-C-13-013909 

Argued: November 7, 2017
 This case is, as the parties themselves acknowledge, a unique, fact-specific case 

involving issues of judicial estoppel, and, specifically, whether a party’s arguments as to 

standing and privity constitute inconsistent legal positions, and a determination of what 

constitutes a final judgment for purposes of res judicata and collateral estoppel. To set the 

legal stage for the case, we briefly describe the principle of judicial estoppel and the 

doctrines of res judicata and collateral estoppel. 

Judicial estoppel has been defined as “a principle that precludes a party from taking 

a position in a subsequent action [that is] inconsistent with a position taken by him or her 

in a previous action.” Dashiell v. Meeks, 396 Md. 149, 170, 913 A.2d 10, 22 (2006) 

(citation and internal quotation marks omitted). “[J]udicial estoppel applies when it 

becomes necessary to protect the integrity of the judicial system from one party who is 

attempting to gain an unfair advantage over another party by manipulating the court 

system.” Id. at 171, 913 A.2d at 23. To that end, 

[b]efore judicial estoppel may be applied, three circumstances must exist: (1) 

one of the parties takes a [] position that is inconsistent with a position it took 

in previous litigation, (2) the previous inconsistent position was accepted by 

a court, and (3) the party who is maintaining the inconsistent positions must 

have intentionally misled the court in order to gain an unfair advantage. 

Id. at 171, 913 A.2d at 22 (citation omitted). 

In Powell v. Breslin, 430 Md. 52, 63-64, 59 A.3d 531, 537-38 (2013), this Court 

described the doctrine of res judicata, or claim preclusion, as well as the circumstances that 

must be present for the doctrine to apply, stating: 

Res judicata is an affirmative defense that precludes the same parties 

from relitigating any suit based upon the same cause of action because the 

second suit involves a judgment that is conclusive, not only as to all matters 
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that have been decided in the original suit, but as to all matters which with 

propriety could have been litigated in the first suit. 

In Maryland, the doctrine of res judicata precludes the relitigation of 

a suit if (1) the parties in the present litigation are the same or in privity with 

the parties to the earlier action; (2) the claim in the current action is identical 

to the one determined in the prior adjudication; and (3) there was a final 

judgment on the merits in the previous action. The overarching purpose of 

the res judicata doctrine is judicial economy. 

(Citations and internal quotation marks omitted). 

In a similar vein, this Court has described the doctrine of collateral estoppel, or issue 

preclusion, as follows: “[W]hen an issue of fact or law is actually litigated and determined 

by a valid and final judgment, and the determination is essential to the judgment, the 

determination is conclusive in a subsequent action between the parties, whether on the 

same or a different claim.” Colandrea v. Wilde Lake Cmty. Ass’n, Inc., 361 Md. 371, 387, 

761 A.2d 899, 907 (2000) (citation and internal quotation marks omitted). For the doctrine 

of collateral estoppel to apply, the following four-part test must be satisfied: 

1. Was the issue decided in the prior adjudication identical with the one 

presented in the action in question? 

2. Was there a final judgment on the merits? 

3. Was the party against whom the plea is asserted a party or in privity with 

a party to the prior adjudication? 

4. Was the party against whom the plea is asserted given a fair opportunity 

to be heard on the issue? 

Id. at 391, 761 A.2d at 909 (citation omitted). We have explained the relationship between 

the doctrines of res judicata and collateral estoppel as follows: 

Collateral estoppel is concerned with the issue implications of the earlier 

litigation of a different case, while res judicata is concerned with the legal 
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consequences of a judgment entered earlier in the same cause. The two 

doctrines are based upon the judicial policy that the losing litigant deserves 

no rematch after a defeat fairly suffered, in adversarial proceedings, on issues 

raised, or that should have been raised.

Id. at 390-91, 761 A.2d at 909 (citations omitted). 

Now, we briefly set the factual stage. Here, in 2010, a financial institution that was 

the former owner of a note for a refinance mortgage loan sued a married couple for 

reformation of the refinance deed of trust because the wife had not signed the refinance 

deed of trust, and the former owner of the note was thus unable to institute foreclosure 

proceedings against the couple’s property, which the couple owned as tenants by the 

entirety. Significantly, the former owner of the note brought the lawsuit in its name and 

on its own behalf, although it was no longer the note owner and was rather the master 

servicer. Ultimately, after a bench trial, the trial court ruled in the couple’s favor and 

against the former owner of the note as to the merits of the case on the issue of mutual 

mistake and as to standing to bring the lawsuit. Three years later, in 2013, the current 

owner of the note and the title insurer of the refinance mortgage loan sued the couple for 

reformation of the refinance deed of trust. In the second lawsuit, the trial court again ruled 

in the couple’s favor, concluding that the current owner of the note and the title insurer 

were barred by res judicata and collateral estoppel from bringing and relitigating the claims 

in the second lawsuit. In so ruling, the trial court rejected an argument that the first trial 

court’s ruling on the merits of the case had been a contingent ruling and not a final 

judgment. The trial court also concluded that that judicial estoppel did not apply and that 

the couple was not barred from asserting an argument in the second lawsuit that the current 
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owner of the note and the title insurer were in privity with the former owner of the 

note/master servicer. On appeal, the Court of Special Appeals affirmed the trial court’s 

judgment. Thereafter, the current owner of the note and the title insurer filed in this Court 

a petition for a writ of certiorari, which this Court granted. 

Against this very distinctive legal and factual backdrop, we decide whether: (I) the 

trial court in the second lawsuit properly declined to apply judicial estoppel and properly 

ruled that the couple was not barred by judicial estoppel from asserting that the current 

owner of the note and the title insurer were in privity with the former owner of the 

note/master servicer; and (II) the trial court in the second lawsuit correctly determined that 

the first trial court’s ruling as to the merits of the case concerning mutual mistake was an 

independent, alternative ruling, and not a contingent ruling—i.e., that the ruling on the 

merits was a final judgment—and that res judicata and collateral estoppel barred the current 

owner of the note and the title insurer from bringing and relitigating their claims in the 

second lawsuit. 

 We hold that: (I) the prerequisites that must exist before judicial estoppel may be 

applied are not satisfied, and, as such, the trial court properly declined to apply judicial 

estoppel to bar the couple’s argument that the current owner of the note and the title insurer 

were in privity with the former owner of the note. Specifically, because the three 

circumstances that must be fulfilled for the application of judicial estoppel are not 

established—the couple’s position with respect to privity is not inconsistent with their 

position with respect to standing in the first lawsuit, as standing and privity do not give rise 

to mutually exclusive arguments but are instead two different concepts—the trial court 
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properly ruled that judicial estoppel did not bar the couple’s privity argument; and (II) the 

first trial court’s ruling as to the merits of the case concerning mutual mistake was an 

independent, alternative ruling, and not a contingent ruling, and thus, under the 

circumstances of this case, constituted a final judgment for purposes of res judicata and 

collateral estoppel. Accordingly, the trial court in the second lawsuit properly determined 

that the elements of res judicata and collateral estoppel were satisfied and thus barred the 

current owner of the note and the title insurer from bringing the claims in the second 

lawsuit. 

BACKGROUND 

 This case involves a refinance mortgage loan for real property located in 

Cockeysville, Maryland (“the Property”)1 owned by Heinz Otto Georg (“Heinz”) and his 

wife Susan M. Georg (“Susan”), Respondents.2 On February 15, 2002, Respondents first 

acquired title to the Property, which was unimproved, as tenants by the entirety. In June 

2004, Respondents entered into a contract with a builder for the Property. And, on 

September 30, 2004, Respondents executed a deed of trust in favor of Chevy Chase Bank, 

F.S.B. (“Chevy Chase”), with an original construction loan amount of $807,000. Almost 

two years later, on September 2, 2006, Respondents executed a second deed of trust in 

favor of Chevy Chase for an additional $100,000 home equity line of credit. Thereafter, 

Respondents sought to refinance the construction loan and the home equity line of credit, 

 

1At other places in the record, the Property is described as being in Hunt Valley, 

Maryland, not Cockeysville, Maryland. 

2Due to the common surname of Respondents, we shall refer to Respondents 

individually by their first names as needed. 
- 6 - 

both of which were secured by deeds of trust on the Property.

To that end, on October 26, 2006, Heinz executed a note in the principal amount of 

$1,130,119 to First Horizon Home Loan Corporation (“First Horizon”), a lender, for the 

purpose of refinancing the construction loan and the home equity line of credit loan (“the 

Note”). The Note was secured by a deed of trust, signed that same day by Heinz, in favor 

of First Horizon (“the refinance Deed of Trust”). Closing instructions for the refinance 

mortgage loan—i.e., the Note and the refinance Deed of Trust—identified the sole 

borrower as Heinz, and both the Note and the refinance Deed of Trust in favor of First 

Horizon also identified Heinz as the sole borrower. Only Heinz signed the Note and 

refinance Deed of Trust; indeed, neither document provided for Susan’s signature. In 

connection with recording the refinance Deed of Trust in favor of First Horizon, however, 

both Heinz and Susan executed notarized affidavits affirming that, as of October 26, 2006, 

the unpaid principal balance of the construction loan secured by the first Chevy Chase deed 

of trust was $807,000, and that the unpaid principal balance of the home equity line of 

credit loan secured by the second Chevy Chase deed of trust was $100,000. 

First Horizon apparently intended that the refinance mortgage loan would be used 

to release the two deeds of trust on the Property in favor of Chevy Chase, and Old Republic 

National Title Insurance Company (“Old Republic”), Petitioner, issued a title insurance 

policy (“the Policy”) insuring that the refinance mortgage loan would be secured by a first 

lien against the Property and protecting First Horizon against any issues that could occur 

during the execution of the mortgage. In the event of a claim, the Policy provided Old 

Republic the option to attempt to cure any defect in the refinance Deed of Trust or to pay 
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the claim. The Policy extended to First Horizon and First Horizon’s successors and/or 

assigns and insured that the refinance Deed of Trust would be executed by both Heinz and 

Susan. Specifically, the “insured mortgage” covered by the Policy was described as the 

“Deed of Trust from Heinz [] and Susan [] to Larry Rice, Trustee, securing First Horizon 

[] in the original principal amount of $1,130,119.00 dated October 26, 2006 and recorded 

November 3, 2006, in the Land Records of Baltimore County, Maryland[.]” 

In December 2006, the Note and accompanying refinance Deed of Trust were 

transferred to an intermediary and then to The Bank of New York Mellon (“BNYM”), 

Petitioner. This transfer was completed pursuant to a “Pooling and Servicing Agreement” 

dated December 1, 2006 (“the PSA”), an agreement by which BNYM purchased in bulk a 

pool of notes and mortgages. BNYM purchased the Note and remains the owner of the 

Note. Under the PSA, BNYM serves as Trustee for the “First Horizon Alternative 

Mortgage Securities Trust 2006-FA8 Mortgage Pass-Through Certificates, Series 2006-

FA8” (“the Trust”), and First Horizon became the master servicer for the Trust.3 Pursuant 

to the PSA, First Horizon received compensation for serving as master servicer. Under the 

PSA, as master servicer of the refinance mortgage loan and other loans, First Horizon was 

obligated to “service and administer” the pool of loans—i.e., collect payments. The PSA 

also authorized First Horizon to take any action “that it may deem necessary or desirable 

in connection with such servicing and administration, including . . . effectuat[ing] 

foreclosure or other conversion of the ownership of the Mortgaged Property securing any 

 

3Effective January 16, 2014, Nationstar became the master servicer, replacing First 

Horizon. 
- 8 - 

Mortgage Loan[.]”

After executing the refinance Deed of Trust and the Note, Respondents paid 

monthly mortgage payments for a number of years before they encountered financial 

difficulties. In June 2009, First Horizon declared Heinz in default under the Note, and took 

steps to initiate foreclosure under the refinance Deed of Trust. As a practical matter, 

however, because Respondents owned the Property as tenants by the entirety, Susan’s 

signature on the refinance Deed of Trust had been required to encumber the Property. 

Thus, in the absence of Susan’s signature on the refinance Deed of Trust, First Horizon 

could not foreclose on the Property in the event of a default on the refinance mortgage loan 

by Heinz. 

In a letter dated September 2, 2010, First Horizon submitted to Old Republic a title 

claim under the Policy, explaining that Susan was “on title but not as a borrower on the 

foreclosing” refinance Deed of Trust and that “Susan did sign the tax-property affidavit.” 

First Horizon explained that this was a “defect[ that] might cause loss or damage for which 

[Old Republic] may be liable[.]” First Horizon stated that it was requesting Old Republic’s 

assistance to “protect the lender’s interest in accordance with the terms of the” Policy, and 

that it was “most anxious to resolve th[e] matter in order to proceed with its foreclosure 

sale and convey good tile.” In an e-mail dated September 15, 2010, the vice president and 

claims counsel for Old Republic’s Corporate Legal Department advised First Horizon that 

Old Republic “elect[ed] to retain counsel to file a lawsuit to reform the [refinance Deed of 

Trust] to include Susan [] and/or to subordinate the interest of Susan[.]” To that end, Old 

Republic retained Morton A. Faller, Esquire (“Faller”) to represent it. 
- 9 - 

First Horizon Litigation (First Lawsuit) 

On September 21, 2010, First Horizon, by and through its attorney, Faller, filed in 

the Circuit Court for Baltimore County (“the circuit court”) a complaint seeking 

reformation of the refinance Deed of Trust and other equitable relief (“the First Horizon 

litigation”). Later, First Horizon, by and through its attorney, Faller, filed an amended 

complaint seeking reformation of the refinance Deed of Trust, a declaration that First 

Horizon had a valid first mortgage lien against the Property, an order directing Susan to 

execute a confirmatory joinder of the refinance Deed of Trust, a declaration that First 

Horizon had a mortgage lien through equitable subrogation on the Property, and an order 

establishing an equitable mortgage against the Property under the refinance Deed of Trust. 

Although BNYM had become the owner of the Note in December 2006 and First Horizon 

was the master servicer of the refinance mortgage loan when the complaint and amended 

complaint were filed in the First Horizon litigation, First Horizon brought the litigation not 

in a representative capacity or as the servicer, but as the lender and owner of the Note. For 

example, in the amended complaint, First Horizon identified itself as the “Lender” and 

stated that it was “the party secured by the [refinance D]eed of [T]rust on [the P]roperty[.]” 

Old Republic exercised control over aspects of the First Horizon litigation. For 

example, in addition to recommending that the action be instituted, Old Republic selected, 

retained, paid, and regularly communicated with Faller, who served as First Horizon’s 

counsel in the First Horizon litigation. Indeed, Faller and his law firm regularly invoiced 

Old Republic for costs, expenses, and attorney’s fees related to the First Horizon litigation. 

And, with respect to the First Horizon litigation, Old Republic discussed and approved 
- 10 - 

litigation strategy, selected trial witnesses, named the plaintiff, and decided whether to 

appeal the circuit court’s rulings. 

Trial in the First Horizon litigation was set to begin on April 23, 2012. During 

discovery, and in Respondents’ request for production of documents, Respondents’ counsel 

asked First Horizon’s counsel for all documents confirming that First Horizon was the 

holder of the Note. In response, First Horizon’s counsel stated that First Horizon was the 

holder of the Note—i.e., that it owned the refinance mortgage loan. This, however, was 

incorrect, as First Horizon had assigned and sold the Note to BNYM in December 2006—

i.e., BNYM was the holder/owner of the Note. 

On April 23 and 24, 2012, before the Honorable Jan M. Alexander (“Judge 

Alexander”), a trial in the First Horizon litigation was held. A few days prior to trial, on 

April 20, 2012, First Horizon’s counsel e-mailed to Respondents’ counsel a document titled 

“Correction to Caption of Complaint and Name of Plaintiff” (“the correction to caption”) 

in which First Horizon’s counsel stated, in full, the following: 

Madam Clerk: 

Please note that the caption of the Amended Complaint and name of 

the Plaintiff, First Horizon Loans, a division of First Tennessee Bank 

National Association, should be corrected to the following:

First Horizon Home Loans, a division of First Tennessee Bank 

National Association, Master Servicer in its capacity as agent 

for The Bank of New York Mellon, Trustee for the Holders of 

the Certificates, First Horizon Mortgage Pass-Through 

Certificate Series FHAMS 2006-FA8 

At the start of the trial on April 23, 2012, after the case was called, First Horizon’s counsel, 

Faller, asked the circuit court to approach the clerk to file the correction to caption. 
- 11 - 

Respondents’ counsel moved to strike the correction to caption and moved to dismiss the 

amended complaint on the ground that First Horizon lacked standing. In relevant part, 

Respondents’ counsel argued that BNYM “for the trust itself [] would have to have sued 

to reform the” refinance Deed of Trust, and that First Horizon had “no standing to be 

proceeding to reform the [refinance D]eed of [T]rust and it would be as if you sold your 

house and then sued someone for trespassing on your lawn after you moved out and you 

transferred.” Respondents’ counsel further contended: 

The attempt to substitute a new party in this case as the plaintiff is not only 

strictly prohibited because now we know that First [Horizon] has no standing 

to be a party in this case, but it doesn’t even follow the protocol required by 

the [Maryland R]ules. If they were going to change a party, they would have 

to file an amended complaint within 30 days of trial, . . . they would have to 

ask leave of court to file it and filed a red line version of the complaint[.] 

In response, Faller contended that he had only “recently” learned that First Horizon 

was the master servicer and not the lender, and argued that the issues in the case concerned 

what happened when the parties went to settlement on the refinance mortgage loan, and 

that First Horizon was the lender at that time, and had been the “master servicer either 

when it owned the loan or when it sold it to a securitized trust continuously from 2006 to 

the present.” 

Judge Alexander denied the motion to dismiss the amended complaint and recessed 

to consider the correction to caption. After the recess, Judge Alexander explained that, in 

his view, the correction to caption was actually a motion for substitution of plaintiff, and 

Judge Alexander stated that he denied “the request to amend or substitute the plaintiff in 

this case[,]” and explained that the Maryland Rules “do not allow for the substitution of a 
- 12 - 

plaintiff unless . . . one of the original plaintiffs still remains in the case.” Immediately 

thereafter, Respondents’ counsel moved to dismiss the case or, in the alternative, for 

summary judgment based on lack of standing. Faller responded that First Horizon “would 

intend to proceed [to] trial and prove that First Horizon as serv[ic]er has the authority.” In 

other words, First Horizon argued that it had standing because it was authorized by the 

PSA to seek reformation of the refinance mortgage loan on BNYM’s behalf in its own 

name. Judge Alexander stated that he would reserve on the motion for summary judgment 

and allow the case to proceed to trial. The trial thus proceeded with First Horizon bringing 

the litigation in its own name, even though it was undisputed that, at that time, First Horizon 

was the master servicer, and not the owner, of the Note and refinance Deed of Trust. 

At trial, First Horizon presented its case-in-chief, calling three witnesses and 

introducing numerous exhibits into evidence. First Horizon attempted to prove that Susan 

knew that she was supposed to sign the refinance Deed of Trust, that she had intended to 

sign the refinance Deed of Trust, and that her failure to sign the refinance Deed of Trust 

was a mistake on her part. According to First Horizon, because it had also made a mistake 

in failing to have Susan sign the refinance Deed of Trust, there had been a mutual mistake, 

and the circuit court therefore had the power to reform the refinance Deed of Trust. 

First Horizon’s third witness, Richard Stern (“Stern”), the vice president of asset 

recovery for First Horizon, testified that First Horizon was the “agent and master servicer” 

for BNYM, and that First Horizon started as the owner/servicer, and became the master 

servicer, of the refinance mortgage loan. First Horizon’s counsel asked Stern whether First 

Horizon, as master servicer, had the authority to foreclose on a loan owned by BNYM. 
- 13 - 

Respondents’ counsel objected, and the circuit court sustained the objection, ruling that it 

would “depend on what” the PSA stated. First Horizon’s counsel then handed Stern a copy 

of the PSA and asked Stern to identify the document; Stern stated that it was the PSA 

between First Horizon, as master servicer, and BNYM, as trustee. First Horizon’s counsel 

asked Stern how the PSA related to the refinance mortgage loan. Stern asked to see the 

correction to caption that the circuit court had stricken. Stern testified that, based on the 

correction to caption, the refinance mortgage loan was a part of the group of loans covered 

by the PSA. First Horizon’s counsel offered the PSA into evidence, and Respondents’ 

counsel objected. The circuit court stated that First Horizon could proffer what the PSA 

stated, and, specifically, whether First Horizon could stand in BNYM’s stead—i.e., 

whether First Horizon had standing to bring suit on its own behalf. The circuit court stated 

that it would give the parties the night to look at the PSA, and that it would take up the 

standing issue and the PSA’s admissibility the next morning. At that point, Stern’s 

testimony resumed. 

The next day, April 24, 2012, trial resumed, and First Horizon’s counsel identified 

the provisions in the PSA that he alleged authorized First Horizon, as master servicer, to 

bring the action. After reading certain provisions of the PSA, First Horizon’s counsel 

contended that those provisions “authorize[d] First Horizon in its own name and as master 

servicer with respect to th[e] loan to take all action on behalf of the trust that it is the 

servicer for with respect to the mortgage loans, and on that basis [it] would ask the [circuit 

c]ourt to” admit the PSA into evidence. Respondents’ counsel objected again and argued, 

in relevant part, that BNYM was the “proper party” to bring the action, and that First 
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Horizon could have brought the action potentially only in their capacity as agent for 

BNYM, contending: 

As they attempted to do, which the [circuit c]ourt properly denied under the 

rules, they potentially could file a suit as an agent for the trust fund to protect 

those interests but this agreement does not give it the right to file on its own 

behalf as a party and then attempt to have the [circuit c]ourt essentially treat 

it as it if is [BNYM]. 

Respondents’ counsel asserted that First Horizon lacked standing because BNYM, not First 

Horizon, was the party secured by the refinance Deed of Trust, and First Horizon brought 

the action as a party and not as BNYM’s agent. Respondents’ counsel also argued that the 

PSA was inadmissible because Schedule I, the mortgage loan schedule listing the loans 

that were subject to the PSA, was not included, and, as such, “[t]here [wa]s absolutely no 

way of knowing that the Georg[] loan actually applies to this agreement.” Respondents’ 

counsel explained that, absent Schedule I, First Horizon could not prove that the PSA 

applied to the refinance mortgage loan and that they simply did not know who owned the 

refinance mortgage loan. 

 First Horizon’s counsel responded that Stern’s testimony established that the 

refinance mortgage loan was subject to the PSA, and that the circuit court had the authority 

to receive the PSA solely for the purposes of establishing standing, and that First Horizon 

was authorized to bring the action in its own name. First Horizon’s counsel also stated: “I 

would hope that the [circuit c]ourt would be inclined to try to resolve this case on its 

merits.” Judge Alexander ultimately admitted the PSA into evidence, and stated: “I think 

it goes to weight as opposed to the admissibility and I will consider it in light of arguments 

on both sides.” 
- 15 - 

At that point, First Horizon rested, and Respondents’ counsel orally moved for 

judgment. Respondents’ counsel argued, in pertinent part:

We don’t have the proper party, [First Horizon] do[es]n’t have standing to 

bring this case. The resolution of this on its merits, to even hear further 

testimony would be meaningless, a meaningless exercise. 

If they can’t bring a case, they don’t have standing, it is just 

fundamental 101 and this case should be dismissed on that basis solely. 

Moreover, they haven’t sued the proper party in that you can’t seek what 

equitable relief against [Susan] because she is not a party to the deed of trust, 

not a party to the note. They can only seek reformation against the party to 

a contract. There is no evidence that has been offered in the case[-]in[-]chief 

by the plaintiff here that [Susan] entered into any agreement with First 

Horizon. And therefore, she can’t be -- she can’t be a proper party to an 

action for reformation of a contract of which there is no evidence that it was 

entered into. A contract is mutual assent to agreements to the terms. They 

have offered nothing. So there is nothing to reform. There is no basis upon 

which to bring her into a situation in which is conceded that she wasn’t asked 

to sign anything and she didn’t sign anything. Moreover, their burden, the 

burden of production, the burden of proof in this case is on them. And they 

have not even tossed it over to our side on production. There is absolutely 

no evidence that could establish mistake of fact by [Susan]. 

They have offered what? They have offered the testimony of persons 

who didn’t ask her to sign anything. They have offered the testimony of 

persons who have agreed that she didn’t ask to sign anything, that -- and there 

was no evidence that she was under mistake of any fact whatsoever during 

this transaction.

So there is simply no basis to even continue this case on a fundamental 

issue of procedure and really jurisdiction of the [circuit c]ourt because we 

don’t have parties here that can have the rights [] adjudicated before it. But 

also, on the issue of the evidence, they have to prove beyond a reasonable 

doubt that [Susan] was under a mistake of fact. They didn’t even call her as 

a witness. What evidence is there of her state of mind that she would -- she 

intended to sign this deed of trust? 

First Horizon’s counsel responded “that First Horizon [could] bring th[e] action for the 

reasons [] already discussed.” First Horizon’s counsel also contended that the evidence 
- 16 - 

demonstrated that there had been a mutual mistake of fact in the execution of the refinance 

Deed of Trust. 

After hearing argument from the parties on the motion for judgment, Judge 

Alexander granted the motion for judgment based on the merits of the case, orally ruling 

from the bench as follows with respect to a lack of mutual mistake: 

All right. I’m granting the motion at the close of [First Horizon]’s 

case, since [First Horizon] has not produced the burden of going forward 

with this matter for the reasons that I have stated from the bench. There is 

no evidence that [Susan] was knowledgeable about this transaction, 

knowledgeable that a mistake had been made or knowledgeable that it was 

her intent to be included on this deed of trust. 

I would note for the record the evidence is that all of these documents 

were not prepared by [Respondent]s. They were all prepared by [First 

Horizon]. No doubt there were mistakes made, but the mistakes were made 

by [First Horizon] in the preparation of the documents. That cannot be 

impugned to [Respondent]s and it actually works against [First Horizon]. 

Case law is clear against that. They were in a position of superiority in the 

preparation and the conduction of this transaction. They were in complete 

control. They made a mistake. They don’t get a do over unless they can 

show that the mistake was mutually made by the parties and without a 

showing that [Susan] knew that this mistake had taken place, I cannot allow 

the case to go forward any further.

So I am granting the motion for judgment at the close of [First 

Horizon]’s case. 

Immediately after Judge Alexander’s oral ruling, First Horizon’s counsel asked the 

circuit court to clarify two issues:

Number 1, does that mean that the [circuit c]ourt finds that there was 

sufficient standing established to allow this case to be heard on the merits? I 

just need to make sure the record is clear on that issue. 

The second issue is has the [circuit c]ourt considered the equitable 

subrogation argument which would say that there was a defective deed of 

trust, . . . that there was at least the lender’s ability to step into the shoes of 
- 17 - 

the first and second mortgages that were satisfied with the proceeds? 

Because what Your Honor is doing is dealing with one issue but not 

necessarily the other. 

In response, Judge Alexander addressed standing, ruling that First Horizon lacked standing 

and explaining: 

First of all, with regard to the standing issue, the [circuit c]ourt is not satisfied 

that based on documents that have been presented for the arguments made 

by [Respondents’] counsel, there is a representation in the contract[, i.e., the 

PSA,] of an indexing of all of the loans that have been covered by this 

contract. That index is not in this contract. There is no identification of this 

particular loan as being subject to this agreement. No disrespect to [] Stern’s 

testimony, but it was very self[-]serving in that regard. He has no knowledge 

as to whether this particular loan was included. I think it was supposition on 

his part that it might have been in the same timeframe but nothing to indicate 

that this contract covers this particular loan. Any identification numbers and 

loan reference numbers, the attachment is not there.

 So with regard to that, there is no standing. As I stated at the outset, 

not allowing the substitution of parties, the amended complaint references 

First Horizon Loans, not as an agent for any subsequent party, not as a 

representative for any subsequent party, but as the home loan holder, the loan 

holder. And that’s clearly not the case based on the evidence that has been 

presented. They are not the home loan holder. If they were to have brought 

this case in a representative capacity, it should have been titled as such, 

should have been pled as such. All references in the document and the 

complaint should have said as the representative, as the agent, as the 

authorized agent or such language as that. So no, I will grant the 

[Respondents’] motion in that regard as well. 

Judge Alexander also stated that he did not rule in First Horizon’s favor with respect to 

equitable subrogation because First Horizon could not, “as it is pled, [it is] not entitled to 

that. [It] cannot step into the place of the new home loan holder, loan note holder.” 

 First Horizon’s counsel interjected and the following exchange occurred: 

[FIRST HORIZON’S COUNSEL]: . . . Your Honor, if the [circuit c]ourt 

finds there is no standing to have brought this action, the [circuit c]ourt has 

gone ahead and now made fact determinations as if the trial had proceeded 
- 18 - 

on the merits and I’m trying to understand if there is no standing, then there 

is no ability to go forward on any claims. But Your Honor is making rulings 

--

THE COURT: The whole idea of the standing was subject to this document 

that you were -- you just presented today and I said I would hold that under 

advisement until we saw what it was.

[FIRST HORIZON’S COUNSEL]: I understand. 

THE COURT: I had not read the document and it was not pointed out to me 

until just a few minutes ago that it references an index of loans that it covers. 

[FIRST HORIZON’S COUNSEL]: I understand. But if there is no standing, 

then there is no case to go forward. 

At that time, Respondents’ counsel made the following suggestion to Judge Alexander:

Grant the motion for judgment because you have heard the evidence, you 

have considered the merits and the rulings on the merits are in the alternative. 

So even if they had standing, because that way the issue would be ripe so that 

the [circuit c]ourt’s efforts in this court in hearing what they have asked you 

to hear, if the [circuit c]ourt were to review it, they can consider all of the 

issues. 

Judge Alexander asked Respondents’ counsel: “So you have no objection to me finding 

that there is standing?” Respondents’ counsel stated: 

No, I actually say in the alternative. So you can have the ruling that if the 

[circuit c]ourt could say even if there was standing, I have considered the 

presentation of evidence as if there was standing to, for judicial economy, so 

that we don’t have to have a whole new trial. 

Judge Alexander then orally issued rulings on standing and the merits, stating: “That 

sounds appropriate. I will say that I do not find that they had standing, however, in the 

alternative, I do not find that [First Horizon] has met its burden of production to have the 

case go forward based on the evidence for the reasons previously stated.” The trial recessed 

immediately thereafter. 
- 19 - 

On May 3, 2012, consistent with his oral ruling, Judge Alexander issued an order 

granting judgment in favor of Respondents, stating, in relevant part, 

Trial having taken place in this matter on April [23 and] 24, 2012, 

[First Horizon] having concluded the presentation of its case, this Court finds 

that [First Horizon] does not have standing to bring th[e] action against 

[Respondent]s. In the alternative, this Court finds that even if [First Horizon] 

had standing to pursue th[e] action, the evidence which [First Horizon] 

presented was insufficient to meet its burden of production. 

First Horizon appealed. On September 30, 2013, the Court of Special Appeals 

issued an unreported opinion dismissing the appeal due to First Horizon’s failure to file a 

timely notice of appeal. 

Current Litigation (Second Lawsuit) 

A couple of months after the Court of Special Appeals’s dismissal of the appeal in 

the First Horizon litigation, on December 5, 2013, BNYM, as trustee, and Old Republic 

initiated a second lawsuit in the circuit court by filing a complaint against Respondents. 

The second lawsuit was based on the same facts and legal basis as the First Horizon 

litigation was—namely, First Horizon and Susan had made a mutual mistake in failing to 

include Susan on the refinance Deed of Trust. And, in the second lawsuit, Petitioners raised 

substantially similar causes of action to those that were raised in the First Horizon 

litigation—equitable claim for reformation of the refinance Deed of Trust, request for an 

order compelling Respondents to “execute appropriate paperwork, or alternatively 

reforming the existing refinance [D]eed of [T]rust[,]” equitable mortgage, equitable 

subrogation, and equitable lien. And, as with the First Horizon litigation, Old Republic 

paid for counsel in the second lawsuit and determined who was to be named a plaintiff. Of 
- 20 - 

note, Petitioners were represented by a different law firm in the second lawsuit; Faller and 

his law firm were no longer counsel of record. 

After discovery was completed, on June 5, 2015, Respondents filed a “Motion for 

Summary Judgment, or for Judicial Decision under [Maryland] Rule 2-502,”4arguing as 

follows with respect to the issue of privity: 

[T]he undisputed material facts prove that [Petitioners] are in privity with the 

plaintiff in a prior lawsuit against [Respondents, the First Horizon litigation]. 

Moreover, the claims and issues in this lawsuit and the prior lawsuit are the 

same, and the prior lawsuit resulted in a final judgment on the merits. 

Accordingly, this lawsuit is barred by res judicata and collateral estoppel, 

and [Respondent]s are entitled to summary judgment, or in the alternative, 

for a judicial decision in their favor under [Maryland] Rule 2-502. 

A few days later, on June 8, 2015, Petitioners filed a motion for partial summary judgment, 

arguing that there was no dispute as to material facts relevant to the equitable subrogation 

claim and that they were entitled to judgment as a matter of law with respect to the equitable 

subrogation claim. Petitioners also argued that they were entitled to summary judgment 

with respect to the various defenses raised by Respondents, including res judicata and 

 

4Maryland Rule 2-502, entitled “Separation of questions for decision by court,” 

provides: 

If at any stage of an action a question arises that is within the sole province 

of the court to decide, whether or not the action is triable by a jury, and if it 

would be convenient to have the question decided before proceeding further, 

the court, on motion or on its own initiative, may order that the question be 

presented for decision in the manner the court deems expedient. In resolving 

the question, the court may accept facts stipulated by the parties, may find 

facts after receiving evidence, and may draw inferences from these facts. The 

proceedings and decisions of the court shall be on the record, and the 

decisions shall be reviewable upon appeal after entry of an appealable order 

or judgment. 
- 21 - 

collateral estoppel. By the time of the filing of the motion for partial summary judgment, 

Petitioners were represented by yet another law firm. And, on July 6, 2015, Petitioners 

filed an opposition to the motion for summary judgment or for judicial decision under 

Maryland Rule 2-502, arguing, in pertinent part, that Respondents’ position that BNYM 

was in privity with the plaintiff in the First Horizon litigation was “not only incorrect, but 

also directly and unequivocally contrary to the position [that] they took in successfully 

defending the First Horizon [litigation], such that they are judicially estopped from 

asserting privity in this action.” 

On October 30, 2015, the Honorable Julie L. Glass (“Judge Glass”) conducted a 

motions hearing. After hearing extensive argument from the parties, Judge Glass advised 

that she would reserve ruling. On December 9, 2015, Judge Glass entered an opinion and 

order denying Petitioners’ motion for partial summary judgment and granting 

Respondents’ motion for judicial decision. On December 11, 2015, Judge Glass issued an 

amended opinion and order, vacated the December 9, 2015 opinion and order, and again 

denied Petitioners’ motion for partial summary judgment and granted Respondents’ motion 

for judicial decision; on December 28, 2015, the amended opinion and order were entered. 

In the amended opinion, Judge Glass succinctly set forth the parties’ respective arguments 

with respect to the First Horizon litigation, stating:

[Respondent]s argue that [Petitioner]s’ claims, in this second lawsuit, 

are barred by the doctrines of res judicata and collateral estoppel, based on 

the May 3, 2012 Court Order issued by [Judge] Alexander in the First 

Horizon [litigation]. [Petitioner]s, in response, contend that Judge 

Alexander’s Order qualifies as a contingent ruling and cannot serve as a basis 

for res judicata or collateral estoppel. 
- 22 - 

Judge Glass first addressed res judicata, summarizing the parties’ positions and 

making the following findings: 

In the First Horizon [litigation], counsel for [Respondent]s argued that 

First Horizon had no standing because it was not the holder of the [refinance 

mortgage] Loan and had no right to assert a claim other than as the servicer. 

BNYM is the successor to First Horizon’s interest in the Property. Therefore, 

the Court finds that [Petitioner]s, Old Republic and BNYM, are in privity 

with First Horizon, satisfying the first requirement of res judicata. 

* * * 

[Petitioner]s brought this second lawsuit based on the exact same facts 

that gave rise to the First Horizon [litigation] and seeks the same relief as in 

the first lawsuit – reformation of the [refinance] Deed of Trust, equitable 

subrogation, and equitable mortgage. Moreover, Old Republic 

acknowledged that the first and second lawsuits were based on the same 

transaction of facts (i.e. the closing of the [refinance mortgage] Loan and the 

[refinance] Deed of Trust). This Court notes that Schedule I of the [refinance 

mortgage] Loan, which was not introduced at the First Horizon [litigation], 

was presented by [Petitioner]s at the October 30, 2015 hearing. The Court 

therefore finds that there are immaterial differences between the first and 

second lawsuit. 

. . . At the Circuit Court level, there was a full trial where [Petitioner]s 

had a full and fair opportunity to bring all of its claims. The [] Court of 

Special Appeals found that the Circuit Court’s judgment in the first lawsuit 

became a final judgment when First Horizon dismissed the other defendants 

from the case. 

* * * 

In [Petitioner]s’ view, . . . any ruling on the merits was at most a 

contingent ruling which is not a final judgment on the merits and has no 

preclusive effect. [Petitioner]s contend that the decision in [a prior case] is 

consistent with the fundamental concept that a contingent judgment is not a 

final judgment. To further support their position, [Petitioner]s, in their 

Motion, discuss a Seventh Circuit Court which stated that a contingent 

judgment is not final until the contingency materializes. 

The Court finds that with regard to the third element of res judicata

the same issue of whether [the] PSA covers [the refinance mortgage] Loan 
- 23 - 

which was determined in the first lawsuit cannot be relitigated. 

(Citation and record citations omitted). Judge Glass then ruled on res judicata, stating: 

Because this proceeding is between the same parties or those in privity 

with each other and upon the same causes of action, the principle of res 

judicata applies and all matters actually litigated or that could have been 

litigated are conclusive in this case and thus barred. As all [of] the elements 

of res judicata have been established, the Court finds that there is a sufficient 

basis based on the undisputed facts that this second lawsuit must be 

dismissed. 

In other words, Judge Glass rejected Petitioners’ contention that Judge Alexander’s rulings 

were contingent rulings.

Next, Judge Glass made the following findings with respect to collateral estoppel:

In addressing the first element of collateral estoppel, [Respondent]s 

claim that [Petitioner]s are barred from relitigating the same issues of 

[Susan]’s intention and whether [Heinz] owned the [refinance mortgage] 

Loan. [Respondent]s correctly assert that [Petitioner]s’ claims for equitable 

subrogation, equitable mortgage, and equitable lien all center on whether 

[Susan] intended to sign the [refinance] Deed of Trust. The issues sought to 

be precluded by [Respondent]s are identical to those decided by Judge 

Alexander in [the] First Horizon [litigation]. Therefore, as [Respondent]s 

contend the same issues were “actually and fully litigated in the first lawsuit.” 

With respect to the second element, [Respondent]s contend that based 

on their argument set forth for res judicata regarding a final judgment on the 

merits, this requirement of collateral estoppel is satisfied. In the First 

Horizon [litigation] there was final judgment on the merits, namely that 

judgment was entered in favor of [Respondent]s. For the reasons discussed 

above, the Court hereby incorporates its findings that the first lawsuit 

resulted in a final judgment on the merits.

. . . Although the doctrines of res judicata and collateral estoppel are 

distinct, a requirement shared by both its privity. In the context of collateral 

estoppel, privity is measured by whether the allegedly precluded party could 

have appealed the adverse ruling in the prior litigation. The Court therefore 

incorporates its findings described above under the privity requirement for 

res judicata and finds for the reasons stated above that this element of 

collateral estoppel has also been met.
- 24 - 

Finally, under the fourth element of collateral estoppel, [Petitioner]s 

had a full and fair opportunity to litigate the issue in the First Horizon 

[litigation]. In the first lawsuit, BNYM was fully represented and could have 

but cho[]se not to be joined as a named party. The Court finds that 

[Petitioner]s had a full and fair opportunity to litigate [their] claim in the prior 

litigation. 

(Citations and record citations omitted). Judge Glass then ruled on collateral estoppel, 

stating: “Having met all the elements for collateral estoppel, [Petitioner]s are precluded 

from bringing their claims in this second lawsuit. The Court finds [Respondent]s’ 

argument for summary judgment is persuasive as there is sufficient [] evidence to invoke 

the doctrine of collateral estoppel.” 

Judge Glass made the following findings and ruling as to judicial estoppel:

[Petitioner]s assert that [Respondent]s have taken inconsistent positions and 

made inconsistent representations in the previous litigation and in the present 

case. . . . 

* * * 

At the hearing before this Court, [Respondent]s challenged 

[Petitioner]s claiming that judicial estoppel is not met here since the position 

urged by [Respondent]s in the first lawsuit is not inconsistent with the one 

asserted in this second lawsuit. 

* * * 

This Court is not convinced that the doctrine of judicial estoppel 

applies to the instant case as [Petitioner]s cannot show that [Respondent]s 

took contrary positions or ever intended to mislead the Court. The Court 

finds that there are insufficient facts in the instant case to support a finding 

of “voluntary” conduct by BNYM to apply [Respondent]s’ defense of 

estoppel. Having reviewed the alleged inconsistencies of the positions taken 

by [Respondent]s in the First Horizon [litigation] and the present case, the 

Court finds further that the doctrine of judicial estoppel is inapplicable under 

the circumstances of this case. 
- 25 - 

In the conclusion of the amended opinion, Judge Glass summarized her rulings, 

stating:

For the foregoing reasons, the Court finds that no genuine disputes of 

material fact exist in this case and as a matter of law, [Respondent]s are 

entitled to summary judgment. Accordingly, [Petitioner]s’ Motion for Partial 

Summary Judgment shall be DENIED, and [Respondent]s’ Motion for 

Judicial Decision under Maryland Rule 2-502 shall be GRANTED, and there 

is no need to address the merits of [Respondent]s’ summary judgment claim. 

However, the Court finds that had it addressed the summary judgment claim 

it would have found that no material fact is in dispute and the moving party 

would be able to raise summary judgment as a basis for relief.[5] 

 In the amended order accompanying the amended opinion, Judge Glass ordered, in 

pertinent part, that Petitioners’ motion for partial summary judgment be denied, that 

Respondents’ motion for judicial decision be granted, and that Respondents’ motion for 

summary judgment need not be addressed. 

The day after the amended opinion and order were entered, on December 29, 2015, 

Petitioners noted an appeal. On March 10, 2017, in an unreported opinion, the Court of 

Special Appeals affirmed the judgment of the circuit court, i.e., Judge Glass’s ruling. 

Specifically, the Court of Special Appeals explained: 

Because we hold that Judge Glass did not err in finding that Judge Alexander 

made alternative, independent rulings in the First Horizon trial, and because 

we hold that Judge Glass correctly determined that those rulings had a 

preclusive effect in this subsequent second trial, we affirm Judge Glass’[s] 

ruling on this issue. 

The Court of Special Appeals rejected Petitioners’ argument that Judge Alexander’s two 

 

5

Judge Glass also addressed arguments, and made findings and rulings, as to laches, 

the statute of limitations, waiver, equitable subrogation, the statute of frauds and parol 

evidence, failure to mitigate damages, and denial of the execution of a written instrument. 

None of those findings or rulings is relevant here. 
- 26 - 

rulings—on standing and on the merits—were contingent on one another. And, according 

to the Court of Special Appeals, “Judge Glass did not err in determining that Judge 

Alexander intended his rulings in the First Horizon trial to be independent and given in the 

alternative.” (Footnote omitted). The Court of Special Appeals determined that, among 

other things, Judge Glass correctly concluded that there was a final judgment on the merits 

in the First Horizon litigation, and, thus, Judge Glass correctly ruled that res judicata and 

collateral estoppel barred Petitioners from raising the same claims that were raised and 

litigated in the First Horizon litigation again in the second lawsuit. The Court of Special 

Appeals also held that Judge Glass did not abuse her discretion in declining to apply the 

doctrine of judicial estoppel to Respondents’ argument on the issue of privity. 

Thereafter, Petitioners filed in this Court a petition for a writ of certiorari, raising 

the following two issues: 

1. Whether judicial estoppel requires a showing of an intention to 

mislead the court apart from a demonstration that the party “has 

succeeded in persuading a court to accept that party’s earlier position, 

so that judicial acceptance of an inconsistent position in a later 

proceeding would create ‘the perception that either the first or the 

second court was misled[.]’” New Hampshire v. Maine, 532 U.S. 742, 

750[] (2001).

2. Whether a ruling that a party lacked standing to assert its claims, but 

subject to the caveat that if the court was found to be wrong with 

regard to standing, the party failed to prove its case on the merits, is a 

contingent ruling on the merits and thus not a final judgment for 

purposes of res judicata and collateral estoppel, or whether the ruling 

on standing and the ruling on the merits are alternative rulings, each 

entitled to preclusive effect[.] 

(First alteration in original). On June 21, 2017, this Court granted the petition. See Bank 

of New York Mellon v. Georg, 453 Md. 355, 162 A.3d 837 (2017). 
- 27 - 

DISCUSSION 

I. Judicial Estoppel 

The Parties’ Contentions 

 Petitioners contend that Respondents are judicially estopped from asserting privity. 

Specifically, Petitioners argue that Respondents have taken inconsistent positions by 

arguing that First Horizon lacked standing in the First Horizon litigation and arguing here 

that Petitioners are in privity with First Horizon. According to Petitioners, in the First 

Horizon litigation, Respondents argued that only the entity that owned the refinance 

mortgage loan would be the proper party to institute the action, and that First Horizon had 

no standing because it did not own the loan—i.e., First Horizon was instead an agent for 

the owner, and had no authority to sue in its own name. Petitioners assert that, in this case, 

Respondents “reversed course” and argued that First Horizon fully represented Petitioners’ 

interests in the First Horizon litigation. Petitioners maintain that Respondents’ positions 

on standing and privity are contrary legal positions in successive actions based on the same 

facts, and that judicial estoppel applies. Petitioners argue that, by taking inconsistent legal 

positions, Respondents misled either Judge Alexander or Judge Glass, and assert that Judge 

Glass’s acceptance of the privity argument “creates the perception that [she] was misled.” 

According to Petitioners, taking directly inconsistent legal positions in successive actions, 

considered alone, demonstrates an intent to mislead. 

 Respondents counter that Judge Glass properly declined to bar their privity 

argument under the principle of judicial estoppel because the requirements for the 

application of judicial estoppel are not present. Respondents contend that they did not take 
- 28 - 

inconsistent positions in the First Horizon litigation and this case, and argue that their 

positions on standing and privity are compatible. According to Respondents, in the First 

Horizon litigation, they argued that First Horizon lacked standing because it failed to prove 

that the PSA, to which both it and BNYM were parties, applied to the refinance mortgage 

loan; and, in this case, Respondents argued that First Horizon and BNYM were in privity 

because both were parties to the PSA, and because Old Republic controlled the prosecution 

of the First Horizon litigation. Respondents argue that the issue of whether Petitioners 

were in privity with First Horizon is not the same as the issue of whether the PSA covered 

the refinance mortgage loan, and, thus, the positions on standing and privity were not 

inconsistent. Respondents assert that their positions on standing and privity did not result 

in obtainment of an unfair advantage and that there is no evidence of any intent to mislead, 

and that such a finding is necessary for application of judicial estoppel to factual positions. 

Additionally, Respondents contend that judicial estoppel does not apply to legal positions, 

and that, accordingly, Petitioners’ argument with respect to judicial estoppel fails on that 

basis as well. 

Standard of Review 

Neither party expressly moved for summary judgment on the basis of judicial 

estoppel. At most, in a motion for partial summary judgment, Petitioners argued that they 

were entitled to summary judgment with respect to the various defenses raised by 

Respondents, including res judicata and collateral estoppel. And, in the motion for partial 

summary judgment, Petitioners argued that “the doctrine of judicial estoppel now precludes 

[Respondent]s from asserting that BNYM elected not to participate in the First Horizon” 
- 29 - 

litigation. Later, in opposition to Respondents’ motion for summary judgment or for 

judicial decision under Maryland Rule 2-502, Petitioners raised judicial estoppel as a basis 

for why Respondents should not be permitted to assert res judicata and collateral estoppel. 

A trial court “shall” grant summary judgment “if the motion and response show that 

there is no genuine dispute as to any material fact and that the party in whose favor 

judgment is entered is entitled to judgment as a matter of law.” Md. R. 2-501(f). In 

Chateau Foghorn LP v. Hosford, 455 Md. 462, 482, 168 A.3d 824, 835 (2017), we 

explained that we review without deference a trial court’s grant of summary judgment:

The question of whether a trial court’s grant of summary judgment was 

proper is a question of law subject to de novo review on appeal. In reviewing 

a grant of summary judgment under Maryland Rule 2-501, we independently 

review the record to determine whether the parties properly generated a 

dispute of material fact, and, if not, whether the moving party is entitled to 

judgment as a matter of law. We review the record in the light most favorable 

to the nonmoving party and construe any reasonable inferences that may be 

drawn from the facts against the moving party. 

(Citation and brackets omitted). Similarly, we review without deference a trial court’s 

ruling on legal issues. See City of Bowie v. MIE Props., Inc., 398 Md. 657, 677, 922 A.2d 

509, 521 (2007) (“Review of the legal questions decided below is not so deferential. We 

examine de novo issues of law as decided based on the [trial c]ourt’s sustainable findings 

of fact.” (Citation omitted)). 

By contrast, denial of a motion for summary judgment, based on judicial estoppel 

or other grounds, is reviewed for abuse of discretion. See Dashiell, 396 Md. at 173-74, 

913 A.2d at 24 (“[T]he motion judge did not abuse his discretion in denying [the 

petitioner]’s motion to grant summary judgment based on judicial estoppel. . . . The trial 
- 30 - 

judge, based on the record that was before him at the time, did not abuse his discretion 

when denying the motion for summary judgment. [The petitioner] is, however, free to 

continue to assert a claim of judicial estoppel on remand and upon a more fully developed 

record.” (Citation omitted)); id. at 165, 913 A.2d at 19 (“[A] trial court may [] exercise its 

discretionary power to deny a motion for summary judgment when the moving party has 

met the technical requirements of summary judgment. Thus, on appeal, the standard of 

review for a denial of a motion for summary judgment is whether the trial judge abused his 

discretion and in the absence of such a showing, the decision of the trial judge will not be 

disturbed.” (Citations omitted)). 

Here, the parties dispute the standard of review applicable to Judge Glass’s ruling 

that judicial estoppel does not apply. Petitioners contend that Judge Glass’s decision 

should be reviewed without deference for legal correctness. By contrast, Respondents 

argue that Judge Glass’s decision on judicial estoppel should be reviewed for abuse of 

discretion. We conclude that, under the circumstances of this case, Judge Glass’s ruling 

with respect to judicial estoppel is to be reviewed without deference for legal correctness. 

Significantly, Petitioners did not expressly move for partial summary judgment on the basis 

of judicial estoppel, but rather moved for partial summary judgment with respect to the 

equitable subrogation claim and with respect to the defenses raised by Respondents; 

Petitioners raised judicial estoppel in the motion for partial summary judgment only to 

counter Respondents’ “estoppel defense[.]” Petitioners also raised judicial estoppel in 

opposition to Respondents’ motion for judicial decision or for summary judgment. Under 

these circumstances, we conclude that the abuse of discretion standard, applicable where a 
- 31 - 

trial court denies summary judgment, does not apply in this case. Rather, as with a trial 

court’s grant of summary judgment or ruling on a legal issue, we determine that Judge 

Glass’s decision that judicial estoppel did not apply was a legal determination that was 

based on applying the law to the facts of the case and, accordingly, is reviewed without 

deference. 

Law

Judicial Estoppel

As we stated at the outset, judicial estoppel is “a principle that precludes a party 

from taking a position in a subsequent action inconsistent with a position taken by him or 

her in a previous action.” Dashiell, 396 Md. at 170, 913 A.2d at 22 (citation and internal 

quotation marks omitted). “[J]udicial estoppel applies when it becomes necessary to 

protect the integrity of the judicial system from one party who is attempting to gain an 

unfair advantage over another party by manipulating the court system.” Id. at 171, 913 

A.2d at 23. In Standard Fire Ins. Co. v. Berrett, 395 Md. 439, 462, 910 A.2d 1072, 1086 

(2006), this Court elaborated on the historical context of judicial estoppel, stating:

Maryland has long recognized the doctrine of estoppel by admission, derived 

from the rule laid down by the English Court of Exchequer . . . that a man 

shall not be allowed to blow hot and cold, to claim at one time and deny at 

another. . . . [W]e adopted the statement of that principle[:] Generally 

speaking, a party will not be permitted to maintain inconsistent positions or 

to take a position in regard to a matter which is directly contrary to, or 

inconsistent with, one previously assumed by him, at least where he had, or 

was chargeable with, full knowledge of the facts, and another will be 

prejudiced by his action. 

(Citations, paragraph break, and internal quotation marks omitted). And, in UnderwoodGary v. Mathews, 366 Md. 660, 667 n.6, 785 A.2d 708, 712 n.6 (2001), this Court noted 
- 32 - 

that “[j]udicial estoppel has been defined as a principle that precludes a party from taking 

a position in a subsequent action [that is] inconsistent with a position taken by him or her 

in a previous action.” (Citation omitted). In other words, judicial estoppel applies where 

a party takes a position in subsequent litigation that is inconsistent with one that the party 

took in previous litigation, not where a party takes an inconsistent position within the same 

litigation.

The three circumstances that must exist for judicial estoppel to apply are as follows: 

(1) one of the parties takes a [] position that is inconsistent with a position it 

took in previous litigation, (2) the previous inconsistent position was 

accepted by a court, and (3) the party who is maintaining the inconsistent 

positions must have intentionally misled the court in order to gain an unfair 

advantage.

Dashiell, 396 Md. at 171, 913 A.2d at 22 (citation omitted). As to the first circumstance, 

both this Court and the Court of Special Appeals have stated that judicial estoppel applies 

where a party takes inconsistent factual or legal positions; i.e., the application of judicial 

estoppel is not limited to situations where a party takes inconsistent factual positions only. 

For example, recently, in Lillian C. Blentlinger, LLC v. Cleanwater Linganore, Inc., ___ 

Md. ___, ___ A.3d ___, No. 13, Sept. Term, 2017, 2017 WL 5507725, *12 (Nov. 17, 2017), 

this Court recited the three circumstances that are necessary for judicial estoppel to be 

applicable, including that “one of the parties takes a position that is inconsistent with a 

position it took in previous litigation[.]” (Citation and brackets omitted) In other words, 

this Court did not state that judicial estoppel does not apply where a party takes inconsistent 

legal positions, or otherwise limit judicial estoppel to situations where a party takes 

inconsistent factual positions only. 
- 33 - 

In Dynacorp Ltd. v. Aramtel Ltd., 208 Md. App. 403, 472, 56 A.3d 631, 672 (2012), 

cert. denied, 430 Md. 645, 62 A.3d 731 (2013), the Court of Special Appeals specifically 

stated that judicial estoppel applies where a “party took an inconsistent position—either 

legal or factual—in an earlier litigation[.]” (Citation omitted). In that case, the Court of 

Special Appeals concluded, upon de novo review, that the appellants were judicially

estopped from contending that the appellees were prohibited from bringing derivative 

counterclaims on a company’s behalf where, in earlier litigation, the appellants had 

contended that the appellees were required to bring derivative claims, not direct claims, on 

the company’s behalf. See id. at 471-72, 56 A.3d at 671-72. And, in Chaney Enters. Ltd. 

P’ship v. Windsor, 158 Md. App. 1, 39, 854 A.2d 233, 255 (2004), the Court of Special 

Appeals concluded that the Workers’ Compensation Commission “correctly found that 

Chaney’s belated assertion of a special employer claim was barred under the doctrine of 

estoppel; its use of the term ‘estoppel’ encompassed judicial estoppel.” (Footnote omitted). 

The Court of Special Appeals explained that Chaney’s “belated attempt . . . to characterize 

Genstar as a special or joint employer represents the assertion of a legal position 

inconsistent with one previously advanced in a legal proceeding.” Id. at 43, 854 A.2d at 

257. 

In Kramer v. Globe Brewing Co., 175 Md. 461, 464-65, 471, 2 A.2d 634, 635, 638 

(1938), this Court held that Globe Brewing Company was judicially estopped from taking 

the position in a workers’ compensation case that Elmer Kramer (“Kramer”) was not its 

employee where, in an earlier tort action, it had taken the position that Kramer was its 

employee, which caused Kramer to dismiss the tort action. In that case, Kramer was injured 
- 34 - 

when a beer delivery truck, in which he had been riding as an assistant, overturned. See 

id. at 462-63, 2 A.2d at 634. Kramer apparently had been hired by the driver, who had 

acted without Globe Brewing’s authority, and had been paid by the driver. See id. at 463, 

2 A.2d at 634. Kramer brought a tort action against Globe Brewing and the driver, and 

Globe Brewing raised in a special plea the defense of workers’ compensation exclusivity 

and averred in an amended special plea that Kramer was its employee at the time of the 

accident. See id. at 463-65, 2 A.2d at 635. Kramer then voluntarily dismissed the tort 

action without prejudice and sought workers’ compensation. See id. at 465, 2 A.2d at 635. 

The agency that is now the Workers’ Compensation Commission denied Kramer’s claim, 

and the trial court affirmed the denial. See id. at 465-66, 2 A.2d at 635-36. 

In Kramer, id. at 469, 2 A.2d at 637, we explained the rationale underlying judicial 

estoppel, stating:

If parties in Court were permitted to assume inconsistent positions in the trial 

of their causes, the usefulness of courts of justice would in most cases be 

paralyzed; the coercive process of the law, available only between those who 

consented to its exercise, could be set at naught by all. But the rights of all 

[people], honest and dishonest, are in the keeping of the courts, and 

consistency of proceeding is therefore required of all those who come or are 

brought before them. It may accordingly be laid down as a broad proposition 

that one who, without mistake induced by the opposite party, has taken a 

particular position deliberately in the course of litigation, must act 

consistently with it; one cannot play fast and loose.

(Citations and internal quotation marks omitted). Applying that principle, this Court 

observed that there could “be no doubt” that the filing of the special plea in the tort action 

“was the sole reason for the dismissal of the former suit at the sole expense of” Kramer. 

Id. at 469-70, 2 A.2d at 637. We observed that the filing of a special plea by an employer 
- 35 - 

effectively bars a claimant from redress in a tort action, thereby leaving the claimant with 

the option of filing a claim with what is now the Workers’ Compensation Commission. 

See id. at 470, 2 A.2d at 638. Accordingly, we concluded that Kramer “was justified in 

taking the action which he did take in dismissing” the tort action, and explained:

[I]t would, in our opinion, be an injustice to him in the present suit, to permit 

[Globe Brewing] after having availed itself of an affirmative defense in the 

prior suit, to appear in a subsequent proceeding involving the same matter of 

controversy between the same parties, and deny the facts asserted by it, or on 

its behalf, in the special plea.

Id. at 471, 2 A.2d at 638. 

Standing and Privity

In State Ctr., LLC v. Lexington Charles Ltd. P’ship, 438 Md. 451, 502, 92 A.3d 

400, 429-30 (2014), this Court explained that Maryland has adopted a “‘cause-of-action’ 

approach” to standing, “which groups the traditionally distinct concepts of standing and 

cause of action into a single analytical construct, labeled as ‘standing,’ to determine 

whether the plaintiff has shown that he or she is entitled to invoke the judicial process in a 

particular instance.” (Citations, footnote, and some internal quotation marks omitted); see 

also State v. G & C Gulf, Inc., 442 Md. 716, 720 n.2, 114 A.3d 694, 696 n.2 (2015) 

(“Standing refers to whether the plaintiff has shown that he or she is entitled to invoke the 

judicial process in a particular instance.” (Citation, brackets, and internal quotation marks 

omitted)). Indeed, “[o]ne requirement of justiciability is that the plaintiff have standing in 

the sense that the person is entitled to invoke the judicial process in a particular instance.” 

Adams v. Manown, 328 Md. 463, 480, 615 A.2d 611, 619 (1992) (citation omitted). Put 

simply, “[a] litigant must have standing to maintain a judicial action.” Long Green Valley 
- 36 - 

Ass’n v. Bellevale Farms, Inc., 432 Md. 292, 313, 68 A.3d 843, 855 (2013) (citation 

omitted). 

Privity is defined as “[t]he connection or relationship between two parties, each 

having a legally recognized interest in the same subject matter (such as a transaction, 

proceeding, or piece of property); mutuality of interest[.]” Privity, Black’s Law Dictionary 

(10th ed. 2014). Privity is required for the application of both res judicata and collateral 

estoppel. See Warner v. German, 100 Md. App. 512, 519-20, 642 A.2d 239, 243 (1994) 

(“One element [that] both [the doctrines of res judicata and collateral estoppel] share, 

however, is the common requirement of privity. For either doctrine to apply, the second 

action must be between the same parties or those in privity with them.” (Citations, 

brackets, and internal quotation marks omitted)). 

For purposes of collateral estoppel, an analysis of privity “focuses on whether the 

interests of the party against whom estoppel is sought were fully represented, with the same 

incentives, by another party in the prior matter.” Mathews v. Cassidy Turley Md., Inc., 

435 Md. 584, 628, 80 A.3d 269, 294 (2013) (citations omitted). In Mathews, id. at 627-

28, 80 A.3d at 294, the petitioner argued that the respondent was “bound by the facts 

asserted in [a] bankruptcy report on the basis of collateral estoppel because” the respondent 

was a privy of a company that had declared bankruptcy. This Court rejected that argument 

and explained:

[The petitioner] has not alleged that [the respondent] shared an identity of 

interests with [the company] in connection with the [company’s] bankruptcy 

proceeding. Indeed, we do not know from the record before us what 

relationship [the respondent] had to the bankrupt estate—whether as a 

creditor or otherwise. It is not self-evident that whatever contractual 
- 37 - 

relationship existed between [the company] and [the respondent] in 

connection with the marketing and sale of [tenants in common] interests 

established the necessary identity of interests to bind [the respondent] by 

collateral estoppel as to determinations made in the [company’s] bankruptcy 

proceeding. 

Id. at 628, 80 A.3d at 294. Similarly, in Warner, 100 Md. App. at 520-21, 642 A.2d at 243, 

the Court of Special Appeals stated that an analysis of privity for purposes of collateral 

estoppel involves examination of “the procedural rights of the party against whom the 

doctrine is to be invoked[,]” and “[i]n discerning whether a party’s procedural rights have 

been addressed adequately, a court may focus on the nature of the interests binding the two 

parties, and, correspondingly, whether they share the same incentive in their separate 

litigation attempts.” (Citations omitted). 

For purposes of res judicata, privity “generally involves a person so identified in 

interest with another that [the person] represents the same legal right.” FWB Bank v. 

Richman, 354 Md. 472, 498, 731 A.2d 916, 930 (1999) (citation and internal quotation 

marks omitted). In Ugast v. La Fontaine, 189 Md. 227, 232-33, 55 A.2d 705, 708 (1947), 

this Court explained when nonparties in a prior lawsuit are in privity with a party in that 

lawsuit for purposes of res judicata, stating:

It is well established that a judgment may not be pleaded as res judicata by 

strangers to the action in which it was rendered, but it may be pleaded only 

the parties to the action and their privies. Generally, the parties to a suit are 

those persons who are entered as parties of record. But for the purpose of 

the application of the rule of res judicata, the term ‘parties’ includes all 

persons who have a direct interest in the subject matter of the suit, and have 

a right to control the proceedings, make defense, examine the witnesses, and 

appeal if an appeal lies. So, where persons, although not formal parties of 

record, have a direct interest in the suit, and in the advancement of their 

interest take open and substantial control of its prosecution, or they are so far 

represented by another that their interests receive actual and efficient 
- 38 - 

protection, any judgment recovered therein is conclusive upon them to the 

same extent as if they had been formal parties. 

(Citations omitted).

Analysis 

 Here, we hold that the prerequisites that must exist before judicial estoppel may be 

applied are not satisfied, and, as such, Judge Glass properly declined to apply judicial 

estoppel to bar Respondents’ argument that Petitioners are in privity with First Horizon. 

Stated otherwise, because the three circumstances that must be fulfilled for the application 

of judicial estoppel are not established, Judge Glass properly ruled that Respondents’ 

privity argument was not barred by judicial estoppel. In our view, Respondents’ position 

with respect to privity in this case is not inconsistent with their position with respect to 

standing in the First Horizon litigation, as standing and privity do not give rise to mutually 

exclusive arguments, but instead are two separate concepts. 

 As to the first circumstance that must be present before judicial estoppel may be 

applied—that a party “takes a position that is inconsistent with a position [that it] it took in 

previous litigation,” Dashiell, 396 Md. at 171, 913 A.2d at 22—we conclude that 

Respondents’ positions on standing in the First Horizon litigation and privity in the current 

litigation are not inconsistent. Indeed, standing and privity are two distinct concepts. 

Standing concerns whether a “plaintiff has shown that he or she is entitled to invoke the 

judicial process in a particular instance[.]” State Ctr., 438 Md. at 502, 92 A.3d at 430 

(citations, brackets, and internal quotation marks omitted). By contrast, privity concerns 

“[t]he connection or relationship between two parties, each having a legally recognized 
- 39 - 

interest in the same subject matter[.]” Privity, Black’s Law Dictionary (10th ed. 2014). In 

other words, standing concerns a party’s ability to bring a lawsuit, whereas privity concerns 

the relationship between two parties. Standing and privity are two distinct concepts, and

they do not give rise to mutually exclusive arguments, such that a party may make an 

argument only as to standing or privity, but not as to both. A trial court’s ruling that a party 

lacks standing does not preclude a party in a subsequent lawsuit from being in privity with 

the party that was found to lack standing; as such, it does not follow that, because a party 

lacked standing, another party in a subsequent lawsuit would be precluded from arguing 

that the opposing party is in privity with the party that lacked standing.

 In the First Horizon litigation, Respondents’ argument with respect to standing was 

two-fold. In large part, Respondents argued that First Horizon—the party that brought the 

lawsuit as lender and owner of the refinance mortgage loan—was not the proper party to 

bring the lawsuit because it lacked standing, as it did not own the refinance mortgage loan, 

and could not sue in its own name and on its own behalf for reformation of the refinance 

Deed of Trust. Respondents also argued that First Horizon could not maintain the litigation 

in its own name because, absent Schedule I of the PSA, First Horizon could not 

demonstrate that the PSA even applied to the refinance mortgage loan. In this litigation, 

Respondents have argued that Petitioners—the parties that brought the second lawsuit—

are barred under res judicata and collateral estoppel from bringing the second lawsuit 

because they were in privity with First Horizon. Respondents contended that BNYM had 

the same protected, direct interest in the First Horizon litigation as First Horizon, that 

BNYM was First Horizon’s successor-in-interest, and that Old Republic completely 
- 40 - 

controlled the prosecution of the First Horizon litigation. 

Respondents’ arguments on standing in the First Horizon litigation and privity in 

the current litigation are plainly not inconsistent. First Horizon’s procedural inability to 

bring the First Horizon litigation in its own name and on its own behalf—i.e., First 

Horizon’s lack of standing—is of no consequence to the issue of whether there is a 

relationship, and ultimately privity, among First Horizon, BNYM, and Old Republic, such 

that BNYM and Old Republic are precluded from bringing the second lawsuit. Put simply, 

standing and privity are two different concepts, and Respondents’ arguments on those 

matters are not inconsistent or otherwise contrary. Clearly, Respondents did not take a 

position with respect to privity in the First Horizon litigation that is contrary to the one that 

they are taking in this litigation. Indeed, privity was not even at issue in the First Horizon 

litigation because there was no litigation prior to that lawsuit. Privity, and the relationship 

between parties, for purposes of res judicata and collateral estoppel, obviously becomes 

relevant only where there are two or more lawsuits.6 

Before addressing the other two prerequisites of judicial estoppel, we pause to 

consider whether Petitioners are in privity with First Horizon for purposes of res judicata 

 

6We agree with Petitioners, however, that Respondents’ positions on standing and 

privity are legal, not factual, positions, and that judicial estoppel is applicable where a party 

takes either inconsistent legal or factual positions. As discussed, standing and privity are 

distinct legal concepts concerning, respectively, whether a party is entitled to invoke the 

judicial process and whether the relationship between parties is such that res judicata and 

collateral estoppel may be applied. And, Maryland appellate courts have stated that judicial 

estoppel applies where a party took an inconsistent legal or factual position in an earlier 

litigation. See Lillian C. Blentlinger, 2017 WL 5507725, at *12; Dynacorp, 208 Md. App. 

at 472, 56 A.3d at 672; Chaney, 158 Md. App. at 39, 854 A.2d at 255. 
- 41 - 

and collateral estoppel, and we determine that they are. As to BNYM, the record 

demonstrates that, at the time of trial in the First Horizon litigation, First Horizon was the 

master servicer of the refinance mortgage loan, but BNYM both actually owned the 

refinance mortgage loan, and, under the PSA, was the successor-in-interest to First 

Horizon, which owned the refinance mortgage loan before BNYM. Indeed, both BNYM 

and First Horizon were parties to the PSA, and First Horizon was obligated under the PSA 

to service and administer the refinance mortgage loan, and to take any necessary action in 

connection with servicing and administering the refinance mortgage loan. BNYM thus had 

a direct interest in the First Horizon litigation, and its interest was adequately protected by 

First Horizon’s prosecution of the First Horizon litigation. See Ugast, 189 Md. at 232-33, 

55 A.2d at 708 (“[W]here persons, although not formal parties of record, have a direct 

interest in the suit, and . . . they are so far represented by another that their interests receive 

actual and efficient protection, any judgment recovered therein is conclusive upon them to 

the same extent as if they had been formal parties.” (Citations omitted)). Indeed, under 

the circumstances set forth above, BNYM and First Horizon were “so identified in interest 

with [one] another” that they could be said to share “the same legal right.” FWB Bank, 

354 Md. at 498, 731 A.2d at 930 (citation and internal quotation marks omitted). And, 

given the relationship between the two entities with respect to the PSA, with certainty,

BNYM’s interests were “fully represented, with the same incentives, by” First Horizon in 

the First Horizon litigation. Mathews, 435 Md. at 628, 80 A.2d at 294 (citation omitted). 

In sum, BNYM is in privity with First Horizon because it had a direct interest in First 

Horizon litigation, it had the same interests in that case as First Horizon, and its interests 
- 42 - 

were protected by First Horizon’s prosecution of litigation.

As to Old Republic, the record demonstrates that Old Republic issued the Policy 

insuring that the refinance mortgage loan would be secured by a first lien against the 

Property, and protecting First Horizon against any issues that could occur during the 

execution of the mortgage, and that the Policy extended to First Horizon and First 

Horizon’s successors and/or assigns. Additionally, significantly, the record demonstrates 

that Old Republic controlled the prosecution of the First Horizon litigation—it selected and 

retained Faller to file the lawsuit; it paid Faller for costs, expenses, and attorney’s fees 

related to the First Horizon litigation; it regularly communicated with Faller; and it 

discussed and approved litigation strategy, selected trial witnesses, named the plaintiff in 

the case as First Horizon, and decided whether to appeal the circuit court’s rulings. Clearly, 

Old Republic and First Horizon “share[d] the same incentive in their separate litigation 

attempts[,]” Warner, 100 Md. App. at 521, 642 A.2d at 243 (citation omitted). And, Old 

Republic had “a direct interest in the [First Horizon litigation], and in the advancement of 

th[at] interest t[ook] open and substantial control of its prosecution[,]” Ugast, 189 Md. at 

232-33, 55 A.2d at 708 (citations omitted). Like BNYM, Old Republic is in privity with 

First Horizon for purposes of res judicata and collateral estoppel. 

Now, returning to the circumstances that must exist for judicial estoppel to be 

applicable, we examine the second prerequisite—that “the previous inconsistent position 

was accepted by a court[.]” Dashiell, 396 Md. at 171, 913 A.2d at 22 (citation omitted), 

and we conclude that this prerequisite is not established. To be sure, Judge Alexander 

certainly accepted Respondents’ position on standing. Indeed, when pressed for a ruling 
- 43 - 

on standing, Judge Alexander ruled that First Horizon lacked standing, stating that 

Schedule I of the PSA was not included, that there was no identification of the refinance 

mortgage loan being subject to the PSA, and that First Horizon was not the owner of the 

refinance mortgage loan and had failed to bring the case in a representative capacity. But, 

bbecause Respondents’ position on standing is not the same as its position on privity, the 

second prerequisite for the application of judicial estoppel is not established. Put simply, 

there was no previous inconsistent position. 

 Finally, there is no evidence in the record to support a conclusion that Respondents 

maintained inconsistent positions to intentionally mislead either Judge Alexander or Judge 

Glass to gain an unfair advantage. See Dashiell, id. at 171, 913 A.2d at 22 (The third 

circumstance that must exist for judicial estoppel to apply is that “the party who is 

maintaining the inconsistent positions must have intentionally misled the court in order to 

gain an unfair advantage.” (Citation omitted)). To state the obvious, we have concluded 

that Respondents have not maintained inconsistent positions. In any event, in both the First 

Horizon litigation and this litigation, Respondents have been transparent with their 

arguments on standing and privity; i.e., Respondents have not attempted to hide the

respective arguments as to standing or privity. The record simply does not contain any 

evidence of an intent to mislead Judge Glass in the current litigation, whether to gain an 

unfair advantage or otherwise. To that point, Judge Glass certainly never found that 

Respondents intended to mislead her, and, to the contrary, in actuality, ruled that Petitioners 

could not show that Respondents “ever intended to mislead the [c]ourt.” This case’s 

circumstances are very different from those of Kramer, 175 Md. at 463-65, 2 A.2d at 635, 
- 44 - 

in which Globe Brewing averred that Kramer was its employee at the time of the accident, 

thereby inducing Kramer to dismiss the tort action, and later took the position in the 

workers’ compensation case that Kramer was not its employee at the time of the accident. 

In Kramer, clearly, Globe Brewing sought to gain an unfair advantage by taking directly 

inconsistent positions. The same simply cannot be said about the circumstances of this 

case.

 In sum, we conclude that the three prerequisites for the application of judicial 

estoppel are not established, that Judge Glass did not err in declining to apply judicial 

estoppel given the circumstances of this case, and that Respondents were not barred from 

presenting their argument as to privity.

II. Res Judicata and Collateral Estoppel 

The Parties’ Contentions 

 Petitioners contend that Judge Alexander’s ruling in the First Horizon litigation that 

First Horizon lacked standing is not a final judgment on the merits for purposes of res 

judicata or collateral estoppel, and that neither doctrine applies. Petitioners argue that 

Maryland courts have held that a ruling on standing is not a final judgment on the merits 

for purposes of res judicata or collateral estoppel. Petitioners assert that dismissal of a case 

on the basis of lack of standing does not have preclusive effect for purposes of either res 

judicata or collateral estoppel. Petitioners maintain that Judge Alexander’s ruling on the 

merits was a contingent ruling, and not a separate and independent ruling on the merits, 

and, as such, the ruling on the merits was not a final judgment and has no preclusive effect. 

 Respondents counter that Judge Alexander’s ruling on the issue of mutual mistake, 
- 45 - 

i.e., the merits, is a final judgment that has preclusive effect for purposes of res judicata 

and collateral estoppel. Respondents contend that Judge Alexander’s ruling on standing—

specifically the ruling that First Horizon failed to prove that the PSA applied to the 

refinance mortgage loan—was also a final judgment on the merits of that issue, and has 

preclusive effect as to that issue, such that Petitioners, who are in privity with First Horizon, 

are barred from relitigating the issue in this case. Respondents argue that Judge Glass 

properly determined that Judge Alexander’s rulings were alternative, and not contingent, 

rulings, constituted final judgments, and that both rulings have preclusive effect and bar 

this litigation. 

 In a reply brief, Petitioners contend that Judge Alexander’s ruling on the merits was 

expressly contingent on reversal of his ruling on standing, which did not occur, and that, 

as such, Judge Alexander’s ruling on the merits was a contingent ruling and not a final 

judgment that has preclusive effect. 

Standard of Review 

In Crise v. Md. Gen. Hosp., Inc., 212 Md. App. 492, 519-20, 69 A.3d 536, 552 

(2013), the Court of Special Appeals explained that the appropriate standard of review for 

a trial court’s decision under Maryland Rule 2-502 is as follows: 

[A trial] court decision under [Maryland] Rule 2-502, on a discrete issue that 

is solely within the court’s province, is essentially a trial by the court on the 

merits of that issue. The court may hear evidence and make factual findings 

necessary to its decision of the discrete issue that is within its province to 

decide. Therefore, the court’s decision on the issue is reviewed on appeal 

under [Maryland] Rule 8-131(c). 

(Citations omitted). In turn, Maryland Rule 8-131(c) provides: 
- 46 - 

When an action has been tried without a jury, the appellate court will review 

the case on both the law and the evidence. It will not set aside the judgment 

of the trial court on the evidence unless clearly erroneous, and will give due 

regard to the opportunity of the trial court to judge the credibility of the 

witnesses.

We review without deference, however, questions of law, such as a determination 

as to the applicability of the doctrines of res judicata and collateral estoppel. See, e.g., 

Garrity v. Md. State Bd. of Plumbing, 447 Md. 359, 368, 135 A.3d 452, 458 (2016) 

(“Whether it was appropriate to grant preclusive effect[, i.e., the doctrine of collateral 

estoppel[,] to the [Consumer Protection Division]’s Final Order . . . is a legal conclusion 

that this Court reviews de novo.” (Citation omitted)); Karsenty v. Schoukroun, 406 Md. 

469, 502, 959 A.2d 1147, 1166 (2008) (“The deference shown to the trial court’s factual 

findings under the clearly erroneous standard [of Maryland Rule 8-131(c)] does not, of 

course, apply to legal conclusions.” (Citation and internal quotation marks omitted));

Seminary Galleria, LLC v. Dulaney Valley Imp. Ass’n, Inc., 192 Md. App. 719, 734, 995 

A.2d 1068, 1077 (2010) (“We agree . . . that the issue of whether res judicata applies to [a 

case] is a question of law, and that it was proper for the [trial] court—and it is appropriate 

for this Court—to review the legal conclusion of the Board de novo.”); Bender v. Schwartz, 

172 Md. App. 648, 664, 917 A.2d 142, 151 (2007) (“A decision under [Maryland] Rule 2-

502 is a trial on the merits, with respect to the issues decided. Thus, as in all actions tried 

without a jury, we shall review questions of law de novo and shall not set aside the [trial] 

court’s findings of fact unless they are clearly erroneous.” (Citation and internal quotation 

marks omitted)). 
- 47 - 

Law

In Powell, 430 Md. at 63-64, 59 A.3d at 537-38, this Court described the doctrine 

of res judicata, or claim preclusion, as well as the circumstances that must be present for 

the doctrine to apply, stating: 

Res judicata is an affirmative defense that precludes the same parties 

from relitigating any suit based upon the same cause of action because the 

second suit involves a judgment that is conclusive, not only as to all matters 

that have been decided in the original suit, but as to all matters which with 

propriety could have been litigated in the first suit. 

In Maryland, the doctrine of res judicata precludes the relitigation of 

a suit if (1) the parties in the present litigation are the same or in privity with 

the parties to the earlier action; (2) the claim in the current action is identical 

to the one determined in the prior adjudication; and (3) there was a final 

judgment on the merits in the previous action. 

(Citations and internal quotation marks omitted). In Colandrea, 361 Md. at 388, 761 A.2d 

at 908, we explained that, “if a proceeding between parties involves the same cause of 

action as a previous proceeding between the same parties, the principle of res judicata 

applies and all matters actually litigated or that could have been litigated are conclusive in 

the subsequent proceeding.” (Citations omitted). Indeed, 

a judgment between the same parties and their privies is a final bar to any 

other suit upon the same cause of action and is conclusive, not only as to all 

matters decided in the original suit, but also as to matters that could have 

been litigated in the original suit. 

Id. at 392, 761 A.2d at 910 (citations and emphasis omitted).

In Colandrea, id. at 387, 761 A.2d at 907, this Court also described collateral 

estoppel, or issue preclusion, stating: “[W]hen an issue of fact or law is actually litigated 

and determined by a valid and final judgment, and the determination is essential to the 
- 48 - 

judgment, the determination is conclusive in a subsequent action between the parties, 

whether on the same or a different claim.” (Citations and internal quotation marks 

omitted). For the doctrine of collateral estoppel to apply, the following four-part test must 

be satisfied: 

1. Was the issue decided in the prior adjudication identical with the one 

presented in the action in question? 

2. Was there a final judgment on the merits? 

3. Was the party against whom the plea is asserted a party or in privity with 

a party to the prior adjudication? 

4. Was the party against whom the plea is asserted given a fair opportunity 

to be heard on the issue?

Id. at 391, 761 A.2d at 909 (citation omitted). “If a proceeding between parties does not 

involve the same cause of action as a previous proceeding between the same parties, the 

principle of collateral estoppel applies, and only those facts or issues actually litigated in 

the previous action are conclusive in the subsequent proceeding.” Id. at 388, 761 A.2d at 

908 (citations omitted). Thus, when collateral estoppel applies, “facts or issues decided in 

the previous action are conclusive only if identical to facts or issues presented in the 

subsequent proceeding.” Id. at 388-89, 761 A.2d at 908 (citation omitted). Stated 

otherwise, “collateral estoppel may be invoked when in a second suit between the same 

parties, even if the cause of action is different, any determination of fact that was actually 

litigated and was essential to a valid and final judgment is conclusive.” Shader v. Hampton 

Imp. Ass’n, Inc., 443 Md. 148, 161-62, 115 A.3d 185, 193 (2015) (citation, emphasis, and 

internal quotation marks omitted).
- 49 - 

Generally speaking, for a trial court’s ruling to constitute a final judgment, the ruling 

“must, among other things, be an unqualified, final disposition of the matter in 

controversy.” Addison v. Lochearn Nursing Home, LLC, 411 Md. 251, 262, 983 A.2d 

138, 145 (2009) (citation and internal quotation marks omitted). In FWB Bank, 354 Md. 

at 492-93, 731 A.2d at 927-28, we elaborated on what constitutes a final judgment for 

purposes of res judicata, explaining: 

The basic rule of claim preclusion in this context is not difficult: “A 

valid and final personal judgment rendered in favor of the defendant bars 

another action by the plaintiff on the same claim.” RESTATEMENT 

(SECOND) OF JUDGMENTS § 19 (1982). . . . 

When an earlier court has actually ruled on the matter sought to be 

litigated in a second court, the “same claim” analysis is usually 

straightforward. . . . It has long been established that a judgment between the 

same parties or their privies upon the same cause of action is conclusive not 

only as to all matters that have been decided in the original suit, but as to all 

matters which with propriety could have been litigated in the first suit. In 

dealing with that issue, we have adopted the “transactional” approach set 

forth in § 24 of the RESTATEMENT (SECOND) OF JUDGMENTS: “When 

a valid and final judgment rendered in an action extinguishes the plaintiff's 

claim pursuant to the rules of merger or bar . . . the claim extinguished 

includes all rights of the plaintiff to remedies against the defendant with 

respect to all or any part of the transaction, or series of connected 

transactions, out of which the action arose.” In deciding whether a factual 

grouping constitutes a “transaction,” the RESTATEMENT directs a 

pragmatic approach, “giving weight to such considerations as whether the 

facts are related in time, space, origin or motivation, whether they form a 

convenient trial unit, and whether their treatment as a unit conforms to the 

parties' expectations or business understanding or usage.” 

RESTATEMENT, supra, § 24(2). 

(Some citations and internal quotation marks omitted) (last ellipsis in original). 

Analysis 

 Here, we hold that Judge Alexander’s rulings on the merits and standing in the First 
- 50 - 

Horizon litigation were not contingent rulings, but rather were independent, alternative 

rulings, and, as such, the ruling on the merits constitutes a final judgment for purposes of 

res judicata and collateral estoppel. We conclude that Judge Glass properly determined 

that all of the elements of res judicata and collateral estoppel were satisfied, including the 

final judgment element, and, thus, Petitioners were barred from bringing the claims in the 

second lawsuit. Stated otherwise, the prerequisites for application of res judicata and 

collateral estoppel have been established, and Judge Alexander’s ruling on the merits has 

preclusive effect in the second lawsuit. 

 As an initial matter, we note that, on brief in this Court, Petitioners focus on the 

final judgment element of res judicata and collateral estoppel. In other words, Petitioners 

do not appear to take issue with Judge Glass’s determination that the other elements of res 

judicata and collateral estoppel are satisfied. Thus, we, too, focus on the final judgment 

element. As explained, for both res judicata or collateral estoppel to apply, there must be 

a final judgment on the merits. See Powell, 430 Md. at 63-64, 59 A.3d at 538 (“In 

Maryland, the doctrine of res judicata precludes the relitigation of a suit if . . . (3) there was 

a final judgment on the merits in the previous action.” (Citation omitted)); Colandrea, 361 

Md. at 391, 761 A.2d at 909 (For collateral estoppel to apply, one part of a four-part test 

that must be satisfied is the existence of “a final judgment on the merits[.]” (Citation 

omitted)). 

 As stated, we hold that Judge Alexander’s ruling on the merits of the First Horizon 

litigation was an independent, alternative ruling that constitutes a final judgment for 

purposes of res judicata and collateral estoppel; i.e., the ruling on the merits was not a 
- 51 - 

contingent ruling having no force or effect. Our determination is supported by the record, 

which reveals the following case-specific, unique sequence of events in the First Horizon 

litigation. At the start of trial, Judge Alexander denied Respondents’ motion to dismiss the 

amended complaint, but struck the correction to caption, treating it as a motion to amend 

or substitute the plaintiff. Respondents’ counsel moved to dismiss the case or, in the 

alternative, for summary judgment, on the ground that First Horizon lacked standing. 

Judge Alexander reserved ruling on the motion for summary judgment, and allowed the 

case to proceed to trial. On the second day of trial, Judge Alexander heard argument as to 

the admissibility of the PSA, and Respondents’ counsel argued that First Horizon lacked

of standing. In relevant part, First Horizon’s counsel responded that First Horizon was 

authorized to bring the action in its own name, and stated that he hoped that Judge 

Alexander “would be inclined to try to resolve this case on its merits.” Judge Alexander 

ultimately admitted the PSA into evidence. 

 First Horizon rested and Respondents’ counsel orally moved for judgment, arguing 

that First Horizon lacked standing, and had failed to produce evidence demonstrating a 

mistake of fact by Susan. After hearing argument from the parties, Judge Alexander 

granted the motion for judgment based on the merits of the case, not a lack of standing. 

Specifically, Judge Alexander ruled that First Horizon had failed to produce evidence 

showing a mutual mistake of fact. 

Although the First Horizon litigation could have concluded at that time, First 

Horizon’s counsel asked Judge Alexander to clarify, in relevant part, whether Judge 

Alexander found “that there was sufficient standing established to allow th[e] case to be 
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heard on the merits[.]” In response, Judge Alexander ruled that First Horizon lacked 

standing. First Horizon’s counsel responded that if First Horizon lacked standing, “then 

there is no ability to go forward on any claims” and “there is no case to go forward.” At 

that point, Respondents’ counsel suggested that Judge Alexander issue alternative rulings 

as to the merits and standing. 

Significantly, Respondents’ counsel made the following suggestion to Judge 

Alexander:

Grant the motion for judgment because you have heard the evidence, you 

have considered the merits and the rulings on the merits are in the alternative. 

So even if they had standing, because that way the issue would be ripe so that 

the [circuit c]ourt’s efforts in this court in hearing what they have asked you 

to hear, if the [circuit c]ourt were to review it, they can consider all of the 

issues. 

And after Judge Alexander asked Respondents’ counsel whether he had an objection to a 

ruling that there was standing, Respondents’ counsel replied: 

No, I actually say in the alternative. So you can have the ruling that if the 

[circuit c]ourt could say even if there was standing, I have considered the 

presentation of evidence as if there was standing to, for judicial economy, so 

that we don’t have to have a whole new trial. 

Without objection from First Horizon’s counsel to the request that alternative 

rulings should be issued to avoid “a whole new trial[,]” Judge Alexander accepted that 

suggestion and orally issued alternative rulings on standing and the merits, stating: “That 

sounds appropriate. I will say that I do not find that they had standing, however, in the 

alternative, I do not find that [First Horizon] has met its burden of production to have the 

case go forward based on the evidence for the reasons previously stated.” The trial recessed 

immediately thereafter. Later, consistent with his oral ruling, Judge Alexander issued an 
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order granting judgment in Respondents’ favor, stating, in relevant part, 

Trial having taken place in this matter on April [23 and] 24, 2012, 

[First Horizon] having concluded the presentation of its case, this Court finds 

that [First Horizon] does not have standing to bring th[e] action against 

[Respondent]s. In the alternative, this Court finds that even if [First Horizon] 

had standing to pursue th[e] action, the evidence which [First Horizon] 

presented was insufficient to meet its burden of production. 

The record unmistakably demonstrates that Judge Alexander’s ruling on the merits 

of the case was the initial ruling, that the ruling on standing followed, and that the two 

rulings were then reiterated and expressed as “alternative” rulings in response to a request 

that the rulings be issued as such to avoid the need for a new trial. Judge Alexander’s 

ruling on the merits, in which he found that First Horizon had not produced evidence 

showing that Susan had made a mistake of fact, was made after First Horizon presented its 

case-in-chief and rested, after Respondents’ counsel moved for judgment on both standing 

and the merits, and before any request for a ruling on standing, and, thus, clearly was not 

contingent on his later ruling on standing. Indeed, it is evident from the trial transcript that 

the ruling on the merits was intended to be a final judgment on the merits, both at the time 

that Judge Alexander initially issued the ruling without addressing standing, and at the time 

that Judge Alexander reiterated the ruling in response to Respondents’ counsel’s request 

for a ruling “so that we don’t have to have a whole new trial.” Notably, it was only after 

being prompted by First Horizon’s counsel that Judge Alexander issued a ruling on 

standing. Moreover, when Judge Alexander reiterated the two rulings, both orally and in 

a later-issued order, the two rulings were expressed said to be “alternative” rulings, not 

contingent rulings. The sequence of the rulings in the First Horizon litigation and Judge 
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Alexander’s discussion with counsel demonstrates that the ruling on the merits was 

intended to be an independent, alternative ruling that constitutes a final judgment for 

purposes of res judicata and collateral estoppel.7

Given the sequence of events that occurred with respect to the issuance of the rulings 

in the First Horizon litigation, we find unpersuasive federal case law stating that dismissal 

of a case on the basis of lack of standing does not have preclusive effect for res judicata or 

collateral estoppel. To be sure, Petitioners are correct that federal case law supports the 

conclusion that dismissal of a case for lack of standing or on other jurisdictional grounds 

is not a final judgment for purposes of res judicata or collateral estoppel. See, e.g., Perry 

v. Sheahan, 222 F.3d 309, 318 (7th Cir. 2000) (“A judgment on the merits precludes 

relitigation of any ground within the compass of the suit, while a jurisdictional dismissal 

precludes only relitigation of the ground of that dismissal[.] . . . The determination that 

Perry lacked standing in [the first lawsuit] precludes relitigation of the same standing 

argument in [the second lawsuit].” (Citation, brackets, and internal quotation marks 

omitted)); Gillig v. Nike, Inc., 602 F.3d 1354, 1361 (Fed. Cir. 2010) (“To the extent that 

the dismissal in the original action was for lack of standing, there is no res judicata bar to 

a second action by a party with proper standing, but only a bar to another action by the 

same party alleging the same basis for standing[.]” (Citation omitted)). 

 

7At oral argument, Petitioners’ counsel argued that, once Judge Alexander ruled on 

standing, the ruling on the merits could have no force or effect. In our view, however, this 

argument misses the mark because it glosses over the circumstances that the ruling on the 

merits was the initial ruling and that the ruling on the merits was an independent ruling 

intended to be a final judgment.
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However, Petitioners fail to account for the circumstance that this case does not 

involve a ruling on standing alone, or even a primary ruling on standing with a secondary 

or contingent ruling on the merits. As the record demonstrates, here, Judge Alexander’s 

primary ruling was as to the merits of the case; it was a decisive and comprehensive ruling 

addressing the heart of the merits—i.e., lack of mutual mistake—and the case could have 

ended at that point. So, although federal case law indicates that, once a case is dismissed 

for lack of standing, then litigation of the action by a party with standing is not barred, that 

case law is not persuasive under the circumstances of this case, in which the record reflects 

that Judge Alexander’s ruling on the merits when issued was intended to be the final ruling 

with respect to the case. 

Similarly, we are not convinced that the Restatement (Second) of Judgments § 20 

(1982) leads to a different result. Restatement (Second) of Judgments § 20 provides: 

(1) A personal judgment for the defendant, although valid and final, does not 

bar another action by the plaintiff on the same claim: 

(a) When the judgment is one of dismissal for lack of jurisdiction, for 

improper venue, or for nonjoinder or misjoinder of parties; 

(b) When the plaintiff agrees to or elects a nonsuit (or voluntary 

dismissal) without prejudice or the court directs that the plaintiff be nonsuited 

(or that the action be otherwise dismissed) without prejudice; or

(c) When by statute or rule of court the judgment does not operate as 

a bar to another action on the same claim, or does not so operate unless the 

court specifies, and no such specification is made.

(2) A valid and final personal judgment for the defendant, which rests on the 

prematurity of the action or on the plaintiff’s failure to satisfy a precondition 

to suit, does not bar another action by the plaintiff instituted after the claim 

has matured, or the precondition has been satisfied, unless a second action is 

precluded by operation of the substantive law. 

Comment e, concerning “Alternative determinations,” provides, in pertinent part: 
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A dismissal may be based on two or more determinations, each of which, 

standing alone, would render the judgment a bar to another action on the 

same claim. In such a case the judgment operates as a bar. . . . 

A dismissal may be based on two or more determinations, at least one of 

which, standing alone, would not render the judgment a bar to another action 

on the same claim. In such a case, if the judgment is one rendered by a court 

of first instance, it should not operate as a bar. 

Notably, the Restatement (Second) of Judgments § 20 does not address the circumstance 

of a trial court ruling on a motion for judgment at the conclusion of the evidence in a 

plaintiff’s case, which is the circumstance here. Nor does the Restatement specifically 

mention dismissal for lack of standing. Rather, the Restatement refers to dismissal for lack 

of jurisdiction, improper venue, lack of joinder and improper joinder, and a dismissal for 

plaintiff’s failure to satisfy preconditions that may later be satisfied. The Restatement 

concerns circumstances where a trial court rules on a motion to dismiss, not where a trial 

court conducts a trial with respect to the merits of the case and rules on a motion for 

judgment at the conclusion of the plaintiff’s case after hearing evidence. The Restatement 

does not establish that, where a trial court rules on a motion for judgment at the conclusion 

of the plaintiff’s evidence, and later issues a ruling as to the plaintiff’s standing, those 

rulings must be automatically contingent on one another, such that a ruling on the merits 

cannot have preclusive effect. Stated otherwise, nothing in the Restatement addresses

whether a ruling on the merits after a trial court hears evidence in a case acts as a bar to 

another action on the same claim where a trial court also later rules on standing; instead, 

the Restatement (Second) of Judgments § 20 focuses on whether final judgments in the 

form of dismissals act as a bar to future actions by the plaintiff on the same claim. 
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Likewise, Petitioners’ reliance on Tower Oaks Blvd., LLC v. Procida, 219 Md. App. 

376, 100 A.3d 1255 (2014), cert. dismissed, 444 Md. 691, 121 A.3d 820 (2015), for the 

contention that a contingent ruling is not a separate and independent ruling on the merits 

and thus has no preclusive effect is misplaced. In Tower Oaks, 219 Md. App. at 392, 100 

A.3d at 1265, in addressing a motion to dismiss the appeal for mootness, the Court of 

Special Appeals determined that a trial court’s rulings in denying a motion to stay and 

dismiss were contingent rulings, not separate and independent rulings. In that case, the 

trial court denied the motion on the ground that the appellant “had not been authorized to 

take action to defend itself in the second foreclosure action, making the motion to stay and 

dismiss ineffective.” Id. at 392, 100 A.3d at 1265. The trial court “then went on to address 

the merits of the motion to stay and dismiss, opining that if the motion to stay and dismiss 

had been authorized, the wrongful conduct [of another entity] . . . would not eliminate [that 

entity’s] right to foreclose, as a matter of law or under the unclean hands doctrine.” Id. at 

392, 100 A.3d at 1265 (emphasis omitted). The Court of Special Appeals determined that 

the rulings were not separate and independent, explaining:

The court’s “ruling” about the merits of the motion to stay and dismiss was 

not a separate and independent basis on which it denied the motion. At most, 

it was a contingent ruling. The court found that [the appellant] filed an 

unauthorized and therefore ineffective motion to stay and dismiss; the 

consequence of that finding is that any “ruling” on the merits of the motion 

is immaterial. It is not a separate basis for denying the motion, independent 

of the lack of authority ruling. . . . In neither situation are the two rulings 

separate and independent and in neither situation has there ceased to be a live 

controversy between the parties so that the case has become moot.

Id. at 392-93, 100 A.3d at 1265. 

Tower Oaks is distinguishable from this case in obvious respects. Significantly, 
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Tower Oaks did not involve res judicata or collateral estoppel, let alone what constitutes a 

final judgment for purposes of those doctrines. Nor did the case involve a motion for 

judgment made at the end of a party’s case-in-chief. Thus, Tower Oaks provides no 

guidance in determining whether Judge Alexander’s ruling on the merits is a final judgment 

on the merits that has preclusive effect.8

In sum, under the distinctive circumstances of this case, we conclude that Judge 

Alexander’s ruling as to the merits in the First Horizon litigation constitutes a final 

judgment on the merits for purposes of res judicata and collateral estoppel. Although 

Petitioners do not appear to take issue with the determination that the other elements of res 

judicata and collateral estoppel are satisfied, we shall nevertheless briefly address these

elements. In doing so, we conclude that all of the elements of res judicata and collateral 

estoppel are established. To reiterate, the following three circumstances must be present 

for the doctrine of res judicata to apply: 

(1) the parties in the present litigation are the same or in privity with the 

parties to the earlier action; (2) the claim in the current action is identical to 

the one determined in the prior adjudication; and (3) there was a final 

judgment on the merits in the previous action. 

 

8We also conclude that Petitioners’ reliance on Ullery v. Fulleton, 256 P.3d 406, 

409 (Wash. Ct. App. 2011) is without merit because, in that case, the trial court ruled that 

a party lacked standing to sue, and then “noted” that, even if he had had standing, he had 

failed to produce “sufficient evidence” as to the merits of the breach of contract claim. In 

Ullery, id. at 411-12, the Court of Appeals of Washington stated that, “[h]aving found that 

[the party] lacked standing, the trial court should not have proceeded to the merits[,]” and 

that “prudential considerations of justiciability prevent a judgment of dismissal based on 

lack of standing from constituting a judgment on the merits.” In contrast to the order of 

the rulings in Ullery, in the First Horizon litigation, Judge Alexander ruled decisively on 

the merits, and ruled on standing only when prompted to do so. 
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Powell, 430 Md. at 63-64, 59 A.3d at 538 (citations omitted). As to the first and third 

circumstances, as we have explained, Petitioners are in privity with First Horizon and there 

was a final judgment on the merits in the First Horizon litigation. 

As to the second circumstance that is necessary for the application of res judicata, 

in Colandrea, 361 Md. at 388, 761 A.2d at 908, we explained that, “if a proceeding between 

parties involves the same cause of action as a previous proceeding between the same 

parties, the principle of res judicata applies and all matters actually litigated or that could 

have been litigated are conclusive in the subsequent proceeding.” (Citations omitted). 

Here, the record unequivocally demonstrates that the claims, or causes of action, in this 

case are identical to the claims, or causes of actions, that were determined in the First 

Horizon litigation. In the First Horizon litigation, in an amended complaint, First Horizon 

sought reformation of the refinance Deed of Trust, a declaration that First Horizon had a 

valid first mortgage lien against the Property, an order directing Susan to execute a 

confirmatory joinder of the refinance Deed of Trust, a declaration that First Horizon had a 

mortgage lien through equitable subrogation on the Property, and an order establishing an 

equitable mortgage against the Property under the refinance Deed of Trust. In the second 

lawsuit, Petitioners raised identical causes of action for reformation of the refinance Deed 

of Trust, an order compelling Respondents to “execute appropriate paperwork, or 

alternatively reforming the existing refinance [D]eed of [T]rust[,]” equitable subrogation, 

and an equitable mortgage. And, significantly, the second lawsuit was based on the same 

facts and legal grounds as the First Horizon litigation—namely, that First Horizon and 

Susan had made a mutual mistake in failing to include Susan on the refinance Deed of 
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Trust. Because the second lawsuit involves the same causes of action as in the First 

Horizon litigation between the same parties or their privies, a final judgment on the merits 

“is conclusive, not only as to all matters decided in the [First Horizon litigation], but also 

as to matters that could have been litigated in the [First Horizon litigation].” Id. at 392, 

761 A.2d at 910 (citations and emphasis omitted).9

Similarly, for the doctrine of collateral estoppel to apply, the following four-part 

test must be satisfied: 

1. Was the issue decided in the prior adjudication identical with the one 

presented in the action in question? 

2. Was there a final judgment on the merits? 

3. Was the party against whom the plea is asserted a party or in privity with 

a party to the prior adjudication? 

4. Was the party against whom the plea is asserted given a fair opportunity 

to be heard on the issue?

Colandrea, 361 Md. at 391, 761 A.2d at 909 (citation omitted). As to the second and third 

circumstances, for the reasons explained above, there was a final judgment on the merits 

in the First Horizon litigation, and Petitioners are in privity with First Horizon. 

As to the first circumstance necessary for application of collateral estoppel, the 

record demonstrates that the issue of mutual mistake of fact was “actually litigated and 

determined by a valid and final judgment,” and that that “determination is conclusive in” 

the second lawsuit. Id. at 387, 761 A.2d at 907 (citations and internal quotation marks 

 

9Thus, any other causes of action that were added by Petitioners in the second 

lawsuit based on the same set of facts would necessarily be barred by application of res 

judicata, as the causes of action could have been brought in the First Horizon litigation. 
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omitted). Stated differently, the issue decided in the First Horizon litigation—i.e., whether 

there was a mutual mistake of fact in failing to have Susan sign the refinance Deed of Trust, 

and, specifically, whether Susan had the requisite knowledge and intent with respect to the 

execution of the refinance Deed of Trust—is identical to the issue that was presented in the 

second lawsuit brought by Petitioners. Finally, as to the fourth prerequisite for application 

of collateral estoppel, Petitioners had a full and fair opportunity to be heard in the First 

Horizon litigation through their privy, First Horizon; indeed, in the First Horizon litigation, 

First Horizon presented its entire case-in-chief, presenting witness testimony and 

introducing exhibits into evidence. Accordingly, all four circumstances necessary for the 

application of collateral estoppel have been established.

Because all of the elements of res judicata and collateral estoppel are satisfied, we 

conclude that Judge Glass correctly determined that, under the circumstances of this case, 

the two doctrines applied, and Petitioners were precluded from bringing the second lawsuit 

containing causes of action and issues identical to those that were brought and litigated, or 

that could have been litigated, in the First Horizon litigation. Accordingly, Judge Glass’s 

judgment was properly affirmed by the Court of Special Appeals, whose judgment we, in 

turn, affirm. 

JUDGMENT OF THE COURT OF SPECIAL 

APPEALS AFFIRMED. PETITIONERS TO PAY 

COSTS.