Opinion ID: 2289719
Heading Depth: 1
Heading Rank: 2

Heading: dismissal of smith's counterclaim

Text: On the issue of dismissal of the counterclaim Smith poses the question: Did the Court clearly err in dismissing the Counter-claim of the defendant appellant corporation in light of the relative positions of the parties herein as shown by the testimony and in consideration of the necessity of applying premise of truth to allegations and resolving all reasonable inferences in favor of the party against whom the Motion to Dismiss was made? At the conclusion of the evidence of the defendant Smith  therefore, at the conclusion of the evidence of the counterplaintiff  and without presentation of evidence to rebut the counterclaim, the record reflects: MR. GORDON: Your Honor, I would like to make a motion to the counter-claim at this point. There is a counter-claim filed by the E.J. Smith Construction Company in which they claim that Mr. Burton acted in an unworkmanlike manner and an unacceptable manner, causing damage to the defendant and they ask for $12,000. Your Honor, I say they have proven nothing in their counter-claim, they have shown nothing. THE COURT: The Court agrees with you, and the counter-claim will be dismissed. The counterclaim here is in essence a contention by Smith that because of the manner of performance of these particular contracts by Burton that Smith not only owes Burton nothing under these contracts, but Burton is indebted to Smith. In Eisenberg v. Air Cond., Inc., 225 Md. 324, 170 A.2d 743 (1961), on recoupment and set-off, the Court said: In District Agency Co. v. Suburban, 224 Md. 364, 167 A.2d 874 (1961), decided at this term, Chief Judge Brune discussed fully the question of what must be pleaded specially as a set-off as distinguished from a recoupment. The essential conclusion drawn is that a claim growing out of an independent transaction (set-off) must be specially pleaded, while a claim arising out of the same transaction (recoupment) need not be, but may be proved under a general issue plea, unless an affirmative judgment is sought by the defendant. Rule 314 authorizes `any party against whom a claim    has been asserted' to `plead as a counterclaim any claim he has against any opposing party.' Rule 342 c 1 (c) provides that a counterclaim must be specially pleaded if it seeks relief which is in excess of the amount sought by plaintiff or arises out of an independent transaction. Thus, as Judge Brune points out, although the words `recoupment' and `set-off' are not used, the rules are broad enough to cover both and the essential difference between them is preserved. See also [1] Poe, Pleading and Practice, 5th Ed., § 615; Molesworth v. Schmidt, 196 Md. 15, 75 A.2d 100 (1950); Simmons v. Haas, 56 Md. 153 (1881). Id. at 337. More recently in Holloway v. Chrysler Credit Corp., 251 Md. 65, 246 A.2d 265 (1968), Judge Singley said for the Court: The rule of the Maryland cases is clear: in an action ex contractu, a claim arising out of an independent transaction (set-off) must be pleaded as a counterclaim, but one arising out of the same transaction (recoupment) need not be, and may be proved under the general issue plea, unless an affirmative judgment ( i.e., for an amount in excess of the plaintiff's claim) is sought. Maryland Rule 314 a 1 authorizes `any party against whom a claim    has been asserted' to `plead as a counterclaim any claim he has against any opposing party.' Although the words `recoupment' and `set-off' are not used, the Rule is broad enough to cover both, and the essential difference between them is preserved. Eisenberg v. Air Conditioning, Inc., 225 Md. 324, 337, 170 A.2d 743 (1961); District Agency Co. v. Suburban Delivery Service, Inc., 224 Md. 364, 167 A.2d 874 (1961); 1 Poe, Pleading and Practice § 615 (5th ed. 1925). We are mindful of the fact that the Maryland Rules were amended after Eisenberg and District Agency were decided. Prior to 15 September 1961, Rule 314 d 1 required that all counterclaims be asserted in separate and distinct pleadings. Rule 342 c 1 c, as a corollary, required the defense of set-off to be specially pleaded. In order to eliminate this apparent conflict, Rule 314 d 1 was amended so that a counterclaim, unless it brings in a new party, may be combined with a responsive pleading and need not be pleaded separately, and Rule 342 c 1 c was dropped. In the light of the well established distinction between recoupment and set-off we do not think that the rationale of the Eisenberg and the District Agency cases was altered by these changes in the Rules. Id. at 66-67. It thus follows in this case that the bases of the Smith counterclaim were provable under the general issue plea. These contentions were considered by Judge Turner and rejected when he found in favor of Burton. We have concluded that he did not err in that finding. Accordingly, if there were error in his action on the motion to dismiss the counterclaim, it was not prejudicial error.