Court Opinion

ID: 3006196
Source: CourtListenerOpinion
Date Created: 2015-09-30 20:06:52.994477+00
Date Added: 2024-06-11T18:02:18.846355
License: Public Domain

REPORTED

IN THE COURT OF SPECIAL APPEALS

            OF MARYLAND

                No. 1563

        September Term, 2013

     JAMES B. NUTTER & CO.

                   v.

     EDWINA E. BLACK ET AL.

   Kehoe,
   Berger,
   Nazarian,

                  JJ.

         Opinion by Kehoe, J.

  Filed: September 30, 2015
       This opinion is about the scope of legal protections afforded to individuals who

are unable to handle their financial affairs in a responsible manner because of a physical

or mental condition. We will use the terms “disabled,” “under a disability,” and “subject

to guardianship proceedings” to refer to persons who have been adjudicated by a court to

be unable to manage their property and for whom a guardian of the property has been

appointed.1 We will employ the descriptors “incompetent” and “non compos mentis” for

individuals who may be unable to manage their property, but who are not subject to

guardianship proceedings. As we will explain, the distinction between an incompetent

person and a disabled person is critical to the outcome of this appeal.

       James B. Nutter & Co. (“Nutter”) appeals from a judgment of the Circuit Court

for Baltimore County in favor of Edwina E. Black and David L. Moore, Esquire. Nutter

describes itself as “one of the leading reverse mortgage lenders[2] in the [United States].”

       1
       This terminology is consistent with Estates and Trusts (ET) Article § 13-101(e),
which defines a “disabled person” as an adult who:
      (1)(i) Has been judged by a court to be unable to manage his property . . . ;
      and
      (ii) As a result of this inability requires a guardian of his property; or
      (2)(i) Has been judged by a court to be unable to provide for his daily
      needs sufficiently to protect his health or safety . . . ; and
      (ii) As a result of this inability requires a guardian of the person.
       2
        Commercial Law Article § 12-1201(h) defines a “reverse mortgage loan” as:
       [A] nonrecourse loan that:
       (1) Is secured by the borrower's principal dwelling;
       (2) Provides the borrower with purchase money proceeds, a lump sum
       payment, periodic cash advances, a line of credit, or any combination of
       those payment plans based on the equity in or value of the borrower's
       principal dwelling; and
       (3) Requires no payment of principal or interest until the full loan becomes
                                                                               (continued...)
Ms. Black is a disabled person. Moore has been the court-appointed guardian of her

property since 1994. In 2009, Nutter entered into a reverse mortgage loan with Ms.

Black. This took place without Moore’s knowledge or consent. When Moore learned of

the transaction, he refused to ratify it.

       Nutter filed suit seeking a judgment requiring Moore to ratify the transaction or,

alternatively, granting various forms of restitutionary relief. The circuit court concluded

that there was no legal or factual basis for any of Nutter’s claims and entered judgment

accordingly. Nutter presents five issues, which we have consolidated and reworded:

       I. Did the circuit court err when it held that the loan transaction was void, as
       opposed to voidable?

       II. Is Nutter entitled to the restitution of any part of the money it paid to Ms.
       Black?

       III. Is Nutter entitled to subrogate its interest to that of the previous lender?

       We will affirm the circuit court’s judgment.

       2
        (...continued)
       due and payable.

       In Bennett v. Donovan, 703 F.3d 582, 584–85 (D.C. Cir. 2013), the Court
described reverse mortgages:

       Unlike a traditional mortgage, in which the borrower receives a lump sum
       and steadily repays the balance over time, the borrower in a reverse
       mortgage receives periodic payments (or a lump sum) and need not repay
       the outstanding loan balance until certain triggering events occur (like the
       death of the borrower or the sale of the home).
                                               2
                                      Background

      This case came to the circuit court on cross-motions for summary judgment. Both

parties relied upon a joint stipulation of relevant facts, which we summarize and

supplement as necessary.

                                A. Ms. Black’s Disability

      More than 25 years ago, Ms. Black sustained permanent and significant

neurological injuries after she was deprived of oxygen during a surgical procedure. In

1989, the Circuit Court for Baltimore City determined that Ms. Black was disabled, and

appointed guardians of her person and her property.3 In 1994, the Circuit Court for

      3
       ET §§ 13-201(c) and 13-705(b) provide for the appointment of guardians for the
disabled. Section 13-201(c), which provides for the appointment of a guardian of the
property, states:

      (c) Disabled persons. – A guardian shall be appointed if the court
      determines that:
      (1) The person is unable to manage his property and affairs effectively
      because of physical or mental disability, disease, habitual drunkenness,
      addiction to drugs, imprisonment, compulsory hospitalization,
      confinement, detention by a foreign power, or disappearance; and
      (2) The person has or may be entitled to property or benefits which require
      proper management.

Section 13-705(b), providing for the appointment of a guardian of the person, states:

      (b) Grounds. – A guardian of the person shall be appointed if the court
      determines from clear and convincing evidence that a person lacks
      sufficient understanding or capacity to make or communicate responsible
      decisions concerning his person, including provisions for health care, food,
      clothing, or shelter, because of any mental disability, disease, habitual
      drunkenness, or addiction to drugs, and that no less restrictive form of
                                                                              (continued...)
                                            3
Baltimore City appointed Moore as the substitute guardian of Ms. Black’s property.

       In 1995, Moore, acting in his capacity as guardian of the property, purchased a

home (the “Stuart Mills property”) located in Baltimore County for Ms. Black’s use. To

pay for the purchase, Moore, again in his capacity as guardian, borrowed $119,200 and

signed a deed of trust note and a purchase money deed of trust. The note was eventually

acquired by Bank of America. The deed of conveyance and the deed of trust were

recorded in the land records of Baltimore County.

       The deed of conveyance identified the grantee as “Edwina E. Black” and stated in

pertinent part:

       See Order in the Matter of Edwina Black for the appointment of a Guardian
       as filed in the Circuit Court for Baltimore City, Case No.
       89200059/CE100323. Said Order having appointed David L. Moore,
       Attorney at Law, as Substitute Guardian.

The deed of trust was executed as follows: “Edwina E. Black by David L. Moore,

Guardian of the Property of Edwina E. Black.” In 2007, Ms. Black’s guardianship action

was transferred from the Circuit Court for Baltimore City to the Circuit Court for

Baltimore County.

                          B. The Reverse Mortgage Transaction

       In April 2009, Ms. Black, acting on her own and without the knowledge or consent

of Moore, entered into a reverse mortgage transaction with Nutter regarding the Stuart

       3
        (...continued)
       intervention is available which is consistent with the person’s welfare and
       safety.
                                             4
Mills property. Before closing, Nutter engaged a title agent to examine the title to the

residence, and to perform the typical closing services. The joint stipulation states that

“[Nutter] and the title agent that handled the closing failed to properly identify the

guardianship action in the Court record.” The stipulation does not address whether Nutter

or the title agent realized that Ms. Black was a disabled person based upon the

information contained in the deed and deed of trust.

       Most of the documents that Ms. Black signed as part of the reverse mortgage

transaction are not in the record. What is clear is that Ms. Black executed two deeds of

trust4 encumbering the Stuart Mills property to secure repayment of the loan. At closing,

Nutter paid $154,317.13 as follows: $80,651.96 to Bank of America to satisfy the existing

loan and to extinguish the existing deed of trust; $57,132.01 directly to Ms. Black; and

$16,533.16 for settlement expenses. Moore knew nothing about any of this. Ms. Black

deposited the proceeds into her personal account.5

       Moore first became aware that something was amiss when he received a notice

from Bank of America stating that its loan had been satisfied and its deed of trust

released. He made inquiries and learned of the reverse mortgage transaction. Moore then

       4
       Ms. Black signed a deed of trust to Nutter and a second deed of trust to the
Secretary of Housing and Urban Development.
       5
       The transcript of Moore’s deposition was attached as an exhibit to the stipulation.
Moore testified that he had established a bank account in Ms. Black’s sole name in which
he deposited $500 monthly for her personal use. Moore stated that this arrangement was
“pursuant to the direction of the court[.]”
                                              5
withdrew from Ms. Black’s account $34,106, that is, what was left of the money that had

been paid to Ms. Black at closing. Moore deposited this money into a separate

guardianship account.

       On July 17, 2009, Moore notified Nutter of Ms. Black’s disability and requested

that Nutter provide him with the documents relating to the transaction. Nutter complied

with this request. Thereafter, Nutter, and its agents, attempted to contact Moore over a

period of several months, but received no response.

       Finally, in November 2009, Nutter sent Moore a letter asking him (1) to ratify the

reverse mortgage transaction or (2) to disaffirm it and reimburse Nutter in the amount of

$137,738.97, that is, the sum of the Bank of America pay-off and the money paid to Ms.

Black at closing. Approximately eight months later, Moore, through counsel, took the

position that the reverse mortgage transaction was void as a matter of law and that he was

under no duty to return any portion of the loan proceeds.6

                              C. The Circuit Court Litigation

       Nutter initiated this action on June 17, 2011, when it filed a complaint for a

declaratory judgment and related relief against Ms. Black and Moore. Nutter asserted that

it had entered into the reverse mortgage transaction with Ms. Black “without actual

knowledge that [she had been] declared disabled and that [Moore] had been appointed

       6
         Although Moore placed what was left of the money paid to Ms. Black in a
separate account, he has withdrawn funds from that account to pay for counsel fees and
litigation expenses. As of January 1, 2011, the balance in the account was $25,792.
                                              6
Guardian of the Property of Ms. Black.” Nutter presented three theories of relief relevant

to this appeal. First, Nutter sought a judgment ratifying the reverse mortgage agreement

between Ms. Black and Nutter. Second, Nutter asserted that Ms. Black and Moore had

been unjustly enriched in the amount of $137,783.97, that is, its disbursements at closing

less settlement expenses, and requested a judgment against Ms. Black and Moore in that

amount. Third, Nutter sought to subrogate its interests to those enjoyed by Bank of

America under the prior lien.7

       Moore and Ms. Black filed an answer which sought, as additional relief, a

judgment that the reverse mortgage was void, a declaration of title to the property in

favor of Moore, as guardian of Ms. Black’s property, attorney’s fees, and any other relief

necessary.

       After the completion of discovery, the parties filed cross-motions for summary

judgment. After oral argument on the motions, the circuit court, in a thorough and well-

considered memorandum opinion and order, denied Nutter’s motion for summary

judgment and granted Ms. Black and Moore’s cross-motion.

       In summary, the court concluded that the reverse mortgage transaction was void,

rather than voidable, and that Nutter was on constructive notice of Ms. Black’s disability.

The court denied Nutter’s claim for restitution because it was premised solely upon its

contention that the reverse mortgage transaction was voidable.

       7
       Nutter also asked the court to remove Moore as guardian. Nutter does not assert
on appeal that the circuit court erred in denying this request.
                                             7
       As to Nutter’s claim for subrogation, the court noted that subrogation in this

context is available “when there is a debt or obligation owed by one person which

another person, who is neither a volunteer nor an intermeddler, pays or discharges under

such circumstances as in equity entitle him to reimbursement to prevent unjust

enrichment[.]” The court explained that “[a] volunteer is a party who has paid the debt of

another without any assignment or agreement and is not under legal obligation, or

compulsion to do so for the preservation of his own rights[.]” The court reasoned that,

because the reverse mortgage transaction was void, Nutter had no rights in the Stuart

Mills property and “thus was not compelled to pay the mortgage in order to preserve any

rights.”

       After the court’s memorandum order and opinion was issued, both parties filed

motions to alter or amend the judgment on essentially the same grounds, i.e., that both

parties had requested declaratory relief but that the court had failed to issue a declaratory

judgment. The court denied Nutter’s motion but entered a supplemental order declaring

null and void “the Second Deed of Trust (to Secure a Reverse Mortgage Loan) . . . in

favor of the Secretary of Housing and Urban Development,” as well as “the Deed of

Trust in favor of [Nutter].”

                                          Analysis

       We review the circuit court’s grant of summary judgment de novo, Harford County

v. Saks Fifth Ave. Distrib. Co., 399 Md. 73, 82 (2007), determining, first, whether there

                                              8
exists a dispute as to any material fact and, second, whether the circuit court was legally

correct in granting judgment in favor of the prevailing party. Lombardi v. Montgomery

County, 108 Md. App. 695, 710 (1996).

                                   I. Void or Voidable?

       The parties agree that Ms. Black did not have the legal capacity to enter into the

reverse mortgage transaction, but they disagree as to the implications of her condition.

Moore asserts that Ms. Black’s lack of capacity rendered the reverse mortgage

transaction void. If the contract is void, Nutter has no right to enforce the terms of the

reverse mortgage transaction and Nutter’s remedies, to the extent that it has any, lie in

subrogation and restitution.

       For its part, Nutter contends that the reverse mortgage transaction was voidable.

Nutter argues that, when Moore learned of the reverse mortgage transaction, he could

have rescinded the transaction but was required to do so within a reasonable time period.

Moreover, Nutter asserts that if Moore had opted to rescind, he would have been

required to pay Nutter $137,783.97, representing the pay-off amount of the Bank of

America loan plus the money paid to Ms. Black at closing. Because none of this

occurred, Nutter contends that Moore, through his inaction, constructively affirmed the

reverse mortgage transaction and that the circuit court erred in failing to enter a

declaratory judgment to that effect.

       In considering the parties’ contentions, we will first examine the concepts of void

                                              9
and voidable contracts, focusing on two recent and representative decisions of the Court

of Appeals that approach the question from somewhat different perspectives. These

decisions instruct that, in considering whether a contract should be treated as void or

voidable, the Court plays particular heed to the degree to which a judicial conclusion that

a conveyance is void might affect the interests of good faith third parties. We will review

Maryland’s statutory provisions for the protection of disabled persons as well as a series

of earlier decisions of the Court of Appeals on which Nutter relies. Finally, we will

consider the rights of third parties and how those rights might be affected by a judgment

that the deeds of trust in question are void.8

                 A. The Distinction Between Void and Voidable Contracts

       “A void contract is ‘not a contract at all’ . . . and all parties, present and future,

would be equally allowed to avoid the contract.” Julian v. Buonassissi, 414 Md. 641, 666

(2010) (quoting RESTATEMENT (SECOND) OF CONTRACTS § 7 cmt. a (1981)). In contrast,

a voidable contract is one in which one or both of the parties have the right to “avoid the

relations created by the contract, or by ratification of the contract to extinguish the power

of avoidance.”’ Id. at 666–67 (quoting RESTATEMENT (SECOND) OF CONTRACTS § 7

(1981)). The distinction between a void and a voidable transaction is particularly

important with regard to deeds and other instruments conveying interests in real property.

As the Julian court noted:

       8
         Our analysis is limited to whether an attempt by a disabled person to convey an
interest in real property is voidable or void.
                                                 10
       once a deed is considered void ab initio or of no legal effect, there are
       lasting consequences to everyone in the subsequent chain of title. As a
       result, we have been circumspect at common law in finding a deed void ab
       initio and have limited our rulings regarding voidness to circumstances that
       go to the face of the deed, e.g., forgery.[9]

Id. at 668 (footnote omitted). In this context, the Court cited two of its earlier decisions

that dealt with “grantors suffering from mental infirmities,” Riley v. Carter, 76 Md. 581,

595–96 (1893), and Evans v. Horan, 52 Md. 602, 610–11 (1879). In both of those cases,

the Court concluded that such deeds were voidable, but not void. (We will discuss Riley

and Carter, as well as some related decisions, later in this opinion.) Maryland’s appellate

courts have not definitively addressed whether a conveyance by a disabled person is

voidable or void.

                            B. Maryland’s Guardianship Statute

       Maryland’s first comprehensive statute for the protection of disabled persons was

first enacted at Chapter 72 of the Laws of 1785. That statute replaced a patchwork quilt

of common law remedies and granted Maryland’s Chancellor the “full power and

       9
         Maryland courts have recognized another class of void deeds, namely, those
involving a “lack of delivery.” Scotch Bonnett Realty Corp. v. Matthews, 417 Md. 570,
583 (2011). Failure of delivery can be actual, i.e., when a deed is not recorded and the
grantor retains control over it after its execution and acknowledgment. Fike v.
Harshbarger, 20 Md. App. 661, 665 (1974), aff’d, 273 Md. 586 (1975). An actual failure
of delivery does not affect the title of a good faith third party because recordation passes
title. See Real Property Article § 3-101. A failure of delivery can also be constructive, as
when a deed purports to convey property to a non-existent entity. See Zulver Realty Co.
v. Snyder, 191 Md. 374, 382 (1948). Such a defect would not affect good faith third
parties because a title examination would disclose that the grantee was not incorporated
when the deed was recorded.
                                              11
authority in all cases to superintend, direct, and govern [incompetent persons’] affairs

and concerns, both as to the care of their persons, and management of their estates[.]” In

re Estate of Rachel Colvin, 3 Md. Ch. 278, 282 (1851). Maryland’s guardianship statute

has been modified on numerous occasions, and is now codified at Title 13 of the Estates

and Trusts Article.10

       We are primarily concerned with Subtitle 2, which pertains to the protection of the

property of disabled persons. A circuit court may appoint a guardian of the property upon

a finding that:

       (1) The person is unable to manage his property and affairs effectively
       because of physical or mental disability, disease, habitual drunkenness,
       addiction to drugs, imprisonment, compulsory hospitalization,
       confinement, detention by a foreign power, or disappearance; and

       (2) The person has or may be entitled to property or benefits which require
       proper management.

ET § 13-201(c).

       Appointment and qualification of a guardian of the property “vests in him title to

all property . . . of the protected person that is held at the time of appointment or acquired

later.” ET § 13-206(c)(1)11 ; Buxton v. Buxton, 363 Md. 634, 647 n.2 (2001) (“Under

       10
        A very useful discussion of the historical development of Maryland’s
guardianship statutes may be found in Joan L. O’Sullivan and Diane E. Hoffman, The
Guardianship Puzzle: Whatever Happened to Due Process? 7 MD. J. CONTEMP. LEGAL
ISSUES 11, 13–24 (1996). What is essentially Maryland’s current guardianship statute
was enacted as Chapter 768 of the Acts of 1977. Id. at 24.
       11
            A guardian is qualified when he or she posts the bond required by the court. ET
                                                                                (continued...)
                                               12
current law, a guardian for the property of an incompetent person does hold title to the

protected person’s property.” (emphasis in original)). The guardian is required to use

those resources “as needed for the clothing, support, care, protection, welfare, and

rehabilitation of the disabled person.” ET § 13-214(b)(2). In so doing, the guardian must

“give consideration to the support and care of the disabled person during the probable

period of the estate and the needs of persons dependent upon the disabled person.” Id.

       Consistent with these statutory provisions, a disabled person lacks the capacity to

enter into a contract. Gillet v. Shaw, 117 Md. 508, 512 (1912) (“According to the

established law in this state . . . the contract of a person adjudged to be insane cannot be

enforced against him.”). Similarly, a disabled person is unable to convey an interest in

real property. Supreme Council of Royal Arcanum v. Nicholson, 104 Md. 472, 479

(1906) (When adjudicated to be non compos mentis, an individual “is divested of his

property[.]”); Law v. John Hanson Sav. & Loan, 42 Md. App. 505, 512–13 (1979) (After

appointment, the guardian “was vested with title to [the disabled person’s] property and

was the only person who validly could execute . . . a deed of trust[.]” Moreover, the

disabled person “had no power” to do so.).

       Additionally, an order appointing a guardian of the property is constructive notice

of the limitations upon the disabled person’s ability to enter into legally-binding

contracts. Flach v. Gottschalk, 88 Md. 368, 376 (1898) (A guardianship proceeding

       11
        (...continued)
§ 13-206(b).
                                             13
“furnish[es] notice—actual in some instances, constructive in others, but in both a

sufficient notice—of the lunacy, and this would preclude an averment that the party

dealing with the lunatic was ignorant of the latter’s mental incapacity.”); Seaboard

Surety Co. v. Boney, 135 Md. App. 99, 117 n.3 (2000) (“‘[G]uardianship proceedings are

treated as giving public notice of the ward’s incapacity and establish his status with

respect to transactions during guardianship even though the other party to a particular

transaction may have no knowledge or reason to know of the guardianship[.]’” (quoting

RESTATEMENT (SECOND) OF CONTRACTS § 13 cmt. a.)).12

       12
            Nutter makes a notice argument which we can dispose of quickly. ET §
13-217(a) provides that:

       Letters of guardianship may be recorded in the land records of the county of
       residence of the minor or disabled person and of any other county where
       there is real estate in which the estate has an interest. The recordation has
       the same effect as notice as recording a conveyance from the minor or
       disabled person to the guardian.

       Moore did not record letters of guardianship in the land records of Baltimore
County. Nutter asserts that, because he failed to do so, it cannot be charged with
constructive knowledge of the guardianship. This contention is unpersuasive for three
reasons.

        First, both the deed of conveyance to Ms. Black and the purchase money deed of
trust disclosed that Ms. Black was a disabled person, so the land records indisputably
provided notice. Second, that the guardianship action is pending in the circuit court of the
county in which the property in question is located provides constructive notice. See
Flach, 88 Md. at 376; Boney, 135 Md. App. at 117 n.3.

       Finally, Nutter’s proposed construction of § 13-217(a) is inconsistent with ET §
13-206(c)(1) which, as we have noted, provides that appointment and qualification
“vests” the guardian with title to “all property . . . of the protected person[.]”
                                                                                  (continued...)
                                              14
       Finally, we recognize that guardianship proceedings implicate one of the most

fundamental values of our society. As the Court of Appeals explained:

       a court . . . assumes jurisdiction in guardianship matters to protect those
       who, because of illness or other disability, are unable to care for
       themselves. In reality the court is the guardian; an individual who is given
       that title is merely an agent or arm of that tribunal in carrying out its sacred
       responsibility.

Kicherer v. Kicherer, 285 Md. 114, 118 (1979).

                      C. Atkinson v. McCulloh and Related Decisions

       Nutter’s contention that the deeds of trust are voidable, instead of void, is largely

based upon its interpretation of the Court’s analysis in Atkinson v. McCulloh, 149 Md.
662 (1926). Nutter views this case as standing for the proposition that a deed by a

       12
         (...continued)
       If, as Nutter claims, a guardianship adjudication does not affect the interests of
third parties until a notice of appointment is filed in the land records, then the provisions
of § 13-206 regarding when title vests in the guardian are, for most purposes,
meaningless. We cannot accept such an interpretation. See Ray v. State, 410 Md. 384,
404 (2009) (Statutes should be construed so that “no word, clause, sentence or phrase is
rendered surplusage, superfluous, meaningless or nugatory.”) (internal quotation marks
and citation omitted).

        Having explained what § 13-217(a) does not mean, we turn, very briefly, to what
it does mean. Section 13-217(a) provides that a guardian “may” file a notice of
appointment in the land records. When used in a statute, “may” is “generally permissive
rather than mandatory.” See, e.g., Brodsky v. Brodsky, 319 Md. 92, 98 (1990). In our
view, the legislature’s use of “may,” in the context of the statutory scheme, indicates that
§ 13-217(a) was intended to provide an optional means by which guardians can clarify
the chain of title. In cases in which the disabled person owns real property in several
counties, such a filing, or something similar in either the land records or the court
records, may be necessary to provide constructive notice in counties other than the one in
which the guardianship action is pending.
                                              15
disabled person is voidable. Nutter misreads the opinion.

       Atkinson is the capstone of a relative handful of Maryland cases that dealt with

conveyances,13 or in some cases contracts,14 by incompetent individuals who had not

been adjudicated to be disabled at the time of execution of the document in question. In

these decisions, the Court, either by holding or in dicta, established that such transactions

were (1) voidable but not void; and (2) could not be attacked by, or on behalf of, the

incompetent person, unless the contractual terms were objectively unfair or the

counterparty knew of the incompetent party’s mental state when the contract was

executed. Flach, 88 Md. at 372–74.15

       In Atkinson, the Court was confronted with a case in which the counterparty

(McCulloh) was aware, or should have been aware, of the incompetent’s (Atkinson’s)

       13
        Riley v. Carter, 76 Md. 581, 595–96 (1893); Evans v. Horan, 52 Md. 602,
610–11 (1879); Key’s Lessee v. Davis, 1 Md. 32, 39 (1851). In Julian, the Court cited
Riley and Evans as two decisions holding that deeds executed by “grantors suffering
from mental infirmities” were voidable but not void. 414 Md. at 668 n.16.
       14
            Flach, 88 Md. at 370, and Chew v. Bank of Baltimore, 14 Md. 299, 320 (1859).
       15
        In Flach, after surveying Maryland and English decisions on the subject, the
Court concluded:

       the effect [of those decisions] has been to . . . fix[] a liability upon the
       lunatic when there has been, at the time the contract was made, no judicial
       ascertainment of his lunacy and when the contract is fair and bona fide,
       unless the other party to the contract knew at the time it was entered into
       that the lunacy existed.
88 Md. at 374.
                                             16
mental status. 149 Md. at 673. Three years after the deed in question was recorded, and

after McCulloh entered into a contract to convey the property to a third party, Atkinson’s

heirs filed an action to set the deed aside. Id. at 665–66. After considering the Maryland

cases which we discussed in the previous paragraph, as well as out-of-state decisions and

scholarly authorities, the Court concluded as follows:

       it seems to us the sounder view, and one more nearly in accord with the
       decisions of this court, is that the contract of a lunatic, made with a sane
       person who had, or could by the exercise of reasonable prudence have had,
       knowledge of his disability, may be avoided at the option of the lunatic
       when of sound mind, or by his guardian, heirs, or devisees . . . provided
       they exercise that option within a reasonable time, and surrender whatever
       benefit they have received from the transaction.

Id. at 674.

       In its brief, Nutter asserts that the Atkinson analysis “does not distinguish between

contracts made by individuals already declared incompetent by a court versus contracts

made with individuals not declared incompetent by a court. It simply refers to ‘lunatics.’”

The problem with Nutter’s argument is that it takes the above-quoted passage from

Atkinson out of context. Earlier in its analysis, the Court noted that “[i]n this state the

contract of a person who has not been adjudicated non compos mentis is not void but

voidable.” Id. at 672. Moreover, there is nothing in the Court’s opinion that suggests that

Atkinson had been adjudicated as an incompetent either before, or after, the relevant

conveyance. The same is true for the other decisions holding that deeds by incompetent

persons were voidable but not void. See Riley, 76 Md. at 591–92 (the court’s summary of

                                              17
the pertinent facts); Evans, 52 Md. at 605–06, 609 (same); Key’s Lessee, 1 Md. at 37–38

(same); see also Safe Deposit & Trust Co. v. Tait, 54 F.2d 383, 385 (D. Md. 1931)

(“[T]he Maryland cases very clearly hold that contracts and conveyances by persons non

compos mentis, before adjudication and not under guardianship, are merely voidable, and

not void.” (citing Atkinson, Flach, Riley, and Evans)).

       In this line of cases, only Flach v. Gottschalk addressed the significance of an

adjudication of disability. Flach entered into a contract for the purchase of whiskey and,

after having taken delivery, refused payment based on his assertion that he was

incompetent at the time the contract was made. The issue before the Court of Appeals

was whether Flach could repudiate the contract. Id. at 370. The Court began its analysis

by noting that:

       Speaking generally, the contracts of a lunatic, who has not been found by
       an inquisition to be insane, do not belong to the class that are absolutely
       void, but fall within the group that is described as voidable. This is
       certainly the law in Maryland.

Id. (citations omitted).

       After reviewing relevant Maryland and out-of-state authority, the Court

commented:

       As the lunatic’s contract at best is only voidable it would be unjust and
       inequitable to allow him to repudiate it if it had been made fairly and in
       good faith when the other party was ignorant of the disability, unless both
       parties upon a rescission of it can be restored to the situation they originally
       occupied.

                                           ****

                                              18
       The inconvenience which it is supposed may result from this doctrine can
       easily be averted by a formal inquisition of lunacy. Such an inquisition
       would furnish notice—actual in some instances, constructive in others, but
       in both a sufficient notice—of the lunacy; and this would preclude an
       averment that the party dealing with the lunatic was ignorant of the latter’s
       mental incapacity.
88 Md. at 375–76 (citations omitted; emphasis added).

       In short, the Atkinson line of cases provides no support for Nutter’s contention

that the reverse mortgage transaction is voidable, as opposed to void.

                        D. The Rights of Good Faith Third Parties

       We fully recognize that Maryland courts “have been circumspect at common law

in finding a deed void ab initio and have limited . . . rulings regarding voidness to

circumstances that go to the face of the deed, e.g., forgery.” Julian, 414 Md. at 668

(footnote omitted). This circumspection arises out of a concern for the rights of innocent

third parties because “once a deed is considered void ab initio or of no legal effect, there

are lasting consequences to everyone in the subsequent chain of title.” Id.

       In considering whether the deed executed by Ms. Black should be treated as the

effective equivalent of a forged deed, two recent decisions of the Court of Appeals are

instructive. The first is Julian itself; the second is Scotch Bonnett Realty Corp. v.

Matthews, 417 Md. 570 (2011). In Julian, the Court considered when a violation of a

statute could render a deed void; in Scotch Bonnet, the issue was whether a forged

signature that was part of a larger scheme of misrepresentation rendered a deed void.

       Julian did not involve an allegation of forgery. Instead, Julian asserted that the

                                              19
deed in question was void because she had signed it without having been given a notice

of a right of rescission that was required by the Protection of Homeowners in Foreclosure

Act (“PHIFA”), Real Property §§ 7-301–7-321. 414 Md. at 666. The Court noted that

various provisions of PHIFA explicitly provided that certain activities undertaken in

violation of the statute were void. Id. at 675. However, the Court found no indication in

the language of the statute that the legislature intended that a failure to provide the right

of rescission notice rendered a subsequent deed void. Id. at 674. The Court concluded:

       In the present situation, the Legislature has spoken clearly when a
       provision was to be voided for violation of PHIFA. With respect to the
       notice of rescission language, the Legislature failed to include a reference
       to “void[.]” . . . To declare a deed void because of lack of notice could and
       would radically alter the protection of all bona fide purchasers in a
       subsequent chain of title.

Id. at 677.

       Scotch Bonnett involved a deed that was obtained by a forgery but was not itself

forged. Johnson, a mere acquaintance of the sole director of Scotch Bonnett Realty

Corporation (“SBRC”), submitted corporate articles of amendment to the Maryland

Department of Assessments and Taxation that designated him as an “officer” of SBRC.
417 Md. at 573. The articles of amendment were purportedly signed by the corporation’s

resident agent and attorney but the signature was forged. Id. at 572–73. Johnson then

sold a property owned by SBRC to an innocent third party. Id. at 574. Johnson signed his

own name to the deed purportedly as an officer of SBRC. Id. Litigation ensued and,

eventually, the following question was certified to the Court of Appeals by the United

                                              20
States Bankruptcy Court for the District of Maryland:

       Does the use of a deed that is neither a forged document, nor signed with a
       forged signature, but which derives its transactional vitality from forged
       corporate articles of amendment, render a conveyance of land void ab
       initio, or, is good title transferred to bona fide purchasers for value without
       notice?

Id. at 572.

       The Court concluded that such a deed was not void ab initio because, among other

reasons, an affirmative answer:

       would inject uncertainty into the law of conveyancing, beyond that already
       existing under the present rule under which a forged deed is void ab initio.
       Such a rule would turn into a jury question whether fraud in the
       inducement voided a deed ab initio and destabilize the predictability of
       result for bona fide purchasers for value. Stability of the law is particularly
       desirable in the field of real property law. A property owner’s title should
       not be at risk that a grantor in the chain of title decides that the act of
       granting has been induced by a written misrepresentation, even if the
       misrepresentation includes a forged signature.

Id. at 587–88.

       Both Julian and Scotch Bonnett cited with approval this Court’s opinion in

Harding v. Ja Laur Corp., 20 Md. App. 209 (1974). In Harding, we noted that a “forger,

having no title can pass none to his vendee.” Id. at 214–15. From this premise, we

concluded that:

       Consequently, there can be no bona fide holder of title under a forged deed.
       A forged deed, unlike one procured by fraud, deceit or trickery is void from
       its inception. The distinction between a deed obtained by fraud and one that
       has been forged is readily apparent. In a fraudulent deed an innocent
       purchaser is protected because the fraud practiced upon the signatory to
       such a deed is brought into play, at least in part, by some act or omission on

                                             21
       the part of the person upon whom the fraud is perpetrated. . . . A forged
       deed, on the other hand, does not necessarily involve any action on the part
       of the person against whom the forgery is committed.

Id. at 215.

       Returning to the case before us, no provision in Maryland’s guardianship statute

explicitly provides that a deed by a disabled person is void. However, ET § 13-206(c)(1)

provides that upon appointment and qualification, a guardian is vested with “title to all

property of . . . the protected person that is held at the time of appointment or acquired

later[.]” Thus, a disabled person, like a forger, holds no legal title to property. Owning

nothing, she can convey nothing. Harding, 20 Md. App. at 214–15.

       Additionally—and to address the policy concern raised in Julian and Scotch

Bonnett—concluding that a deed by an adjudicated disabled person is void poses no

threat whatsoever to subsequent good faith purchasers. A good faith purchaser is one

who “acquires property for valuable consideration, in good faith, and without notice of

another’s prior claim to the property.” Fishman v. Murphy, 433 Md. 534, 546 (2013). All

potential purchasers of real property are on constructive notice of properly indexed

information in the land and court records of the county in which the property is located.

See Greenpoint Mortgage Funding v. Schlossberg, 390 Md. 211, 228–30 (2005). Thus, a

court order appointing a guardian of the property is constructive notice to the world that

the disabled person is without authority to convey his or her property. Flach, 88 Md. at

374; Boney, 135 Md. App. at 117 n.3. To be sure, a would-be purchaser or lender may

                                             22
choose to forego a title examination, or to hire a negligent examiner, or to decline to take

the trouble to look at the information generated by the title search, but imprudence of this

sort bears its own risks. There is no reason for us to treat a deed by an adjudicated

disabled person any differently from any other readily-recognizable title flaw. For us to

do so, “would invite a ‘head in the sand’ approach, or create an exception that would

‘swallow the rule’ and undermine the protective purpose of guardianships.” Boney, 135
Md. App. at 117 n.3.

       Even from the scanty facts in the record, it is easy to conclude that treating the

reverse mortgage transaction as void furthers the purposes of Maryland’s guardianship

law. Before the transaction occurred, the guardianship estate had more than $200,000 in

equity in the Stuart Mills property—an asset that could be used to meet Ms. Black’s

future needs. After the transaction, the guardianship estate’s equity in the property was

significantly reduced and, over time, would have been eliminated altogether. Moreover,

any future increase in value of the Stuart Mills property would inure to Nutter’s, and not

to Ms. Black’s, benefit. Were we to conclude that the transaction was voidable, Moore

would be required either to (1) ratify the transaction, a decision which, over time, would

deprive Ms. Black of all equity in the property; or (2) rescind the transaction and make

Nutter whole, a process which would require the effort and expense of obtaining

substitute financing, as well as scraping money together to reimburse Nutter for the

money that Ms. Black had herself spent.

                                             23
       In our view, neither of these outcomes furthers the purposes of Maryland’s

guardianship law. The court assumed jurisdiction over Ms. Black’s property in the first

place to protect her because she is unable to care for herself. Kicherer, 285 Md. at 118.

As the court’s agent, Moore is obligated to “discharge his duties for the best interest of

the . . . disabled person or his dependents.” ET § 13-206(c)(1). Those duties cannot be

responsibly discharged by allowing the value of a major asset of the guardianship estate

to disappear or by spending scarce guardianship funds16 to save Nutter from the

consequences of a problem entirely of its own making.

       Our conclusion is squarely in accord with the scholarly authorities,17 as well as

       16
        The record contains no information as to the value of the guardianship estate.
However, Moore testified in his deposition that Ms. Black’s annual income from all
sources varied between $45,000 and $65,000, and that it was not unusual for her
expenses to exceed her income.
       17
         See RESTATEMENT (SECOND) OF CONTRACTS § 13 (1981) (“A person has no
capacity to incur contractual duties if his property is under guardianship by reason of an
adjudication of mental illness or defect.”); 2 JOYCE PALOMAR, PATTON AND PALOMAR
ON LAND TITLES § 336 (3d ed. 2003) (“If a mentally incompetent person has been placed
under guardianship, the general rule is that any conveyance by her is void, not merely
voidable. This is not only because of her incapacity, but because she does not have the
legal control of her property.”); 2 THOMPSON ON REAL PROPERTY § 12.05(c) (David A.
Thomas, N. Gregory Smith, eds., 3d Thomas ed. 2014) (“An attempted conveyance by an
incompetent person after . . . a committee has been appointed is usually void, either
according to statute or by judicial decision.”); 1 POWELL ON REAL PROPERTY § 6.04
(Michael Allan Wolf ed., 2014) (same); 5 HERBERT THORNDIKE TIFFANY, THE LAW OF
REAL PROPERTY § 1370 (Basil Jones ed., 3d ed. 1939) (A conveyance by a grantor after
an adjudication of incompetency “is ordinarily regarded as absolutely void.”). See also
THOMPSON ON REAL PROPERTY, supra, at § 12.05(c) n.183 (noting that only two states,
Arkansas and Maine, treat such conveyances as voidable).
                                             24
decisions by the courts of other states.18

       For these reasons, we hold that the reverse mortgage transaction between Nutter

and Ms. Black was void ab initio. Moore was not required to take affirmative steps to

ratify or rescind the transaction. Nutter’s remedies, to the extent that they exist, lie in

subrogation and unjust enrichment, and we will turn to those topics.

       18
         See, e.g., First Interstate Bank of Sheridan v. First Wyo. Bank, N.A. Sheridan,
762 P.2d 379, 382 (Wyo. 1988) (“While a contract made by one under guardianship by
reason of incompetency has been held to be void, a contract made prior to an
adjudication of incapacity and appointment of a guardian, but while the person is under
mental disability, is only voidable.” (citations omitted)); Horton v. Lothschutz, 43
Wash.2d 132, 137 (1953) (“The deed of an insane person, made prior to an adjudication
of insanity, is voidable but not void. Of course, if the deed is executed after an
adjudication of insanity, it is clearly void rather than only voidable.” (citation omitted));
Tomlins v. Cranford, 227 N.C. 323, 326 (1947) (“A deed executed by a person who has
been adjudged to be insane, sans proof of restoration of sanity, is void.”); Moore v.
Coleman, 128 W. Va. 223, 227 (1945) (“After a person has been adjudged insane or to
be a mental defective, and a committee has been appointed for him, a deed of conveyance
made while the guardianship of such committee actively continues is void[.]”); Hughes v.
Jones, 116 N.Y. 67, 72–73 (1889) (“All contracts of a lunatic, habitual drunkard or
person of unsound mind, made after an inquisition and confirmation thereof, are
absolutely void, until by permission of the court he is allowed to assume control of his
property.”); Huntington Nat’l Bank v. Toland, 71 Ohio App. 3d 576, 578 (Ohio Ct. App.
1991) (The rule in Ohio is that “once a guardian has been appointed for an incompetent,
transfer of property thereafter is void and may be set aside.”);Cohen v. Crumpacker, 586
S.W.2d 370, 374 (Mo. Ct. App. 1979) (“While a contract made by one under
guardianship by reason of incompetency is void, a contract made prior to adjudication
but while the person is under mental disability is only voidable.”); Gibson v. Westoby,
115 Cal. App. 2d 273, 276 (Cal. Dist. Ct. App. 1953) (“An adjudication that a person is
incompetent constitutes notice to all the world of the incapacity of such person to make a
valid conveyance. . . . A conveyance by such a person is void, and not merely
voidable.”).

                                               25
                            II. Restitution – Unjust Enrichment

       “A successful unjust enrichment claim serves to ‘deprive the defendant of benefits

that in equity and good conscience he ought not to keep, even though he may have

received those benefits quite honestly in the first instance, and even though the plaintiff

may have suffered no demonstrable losses.’” Hill v. Cross Country Settlements, 402 Md.
281, 295–96 (2007) (quoting 1 DAN B. DOBBS, DOBBS LAWS OF REMEDIES § 4.1 (2d ed.

1993)). A claim of unjust enrichment consists of three elements:

       1. A benefit conferred upon the defendant by the plaintiff;
       2. An appreciation or knowledge by the defendant of the benefit; and
       3. The acceptance or retention by the defendant of the benefit under such
       circumstances as to make it inequitable for the defendant to retain the
       benefit without the payment of its value.

Id. at 295 (quoting County Comm’rs v. J. Roland Dashiell & Sons, Inc., 358 Md. 83, 95

n.7 (2000)).

       Nutter contends that, if it is not entitled to ratification of the contract, it is entitled

to restitutionary relief in the amount of $137,783.97, that is, the sum of payoff figure for

the Bank of American loan and what was disbursed directly to Ms. Black at settlement.

The circuit court denied this relief. Nutter contends that the circuit court erred in doing so

because it:

       conflated the enforceability of the reverse mortgage loan with [Nutter’s]
       entitlement to equitable relief in the form of restitution to prevent unjust
       enrichment. . . . Moreover, even assuming arguendo that the reverse
       mortgage transaction was void (versus voidable), the concept of providing
       equitable relief in cases involving void transactions is established under
       Maryland law.

                                                26
       Moore and Ms. Black suggest that this contention is not preserved for appellate

review. We agree.

       The thrust of Nutter’s argument before the circuit court was that the transaction

was voidable, and that Moore failed to act in a timely fashion to rescind the transaction.

At the conclusion of this discussion, Nutter stated “[a]lternatively, [Nutter] would be

entitled to judgment against Defendants for restitution in the amount of $137,783.97.” In

its opinion, the circuit court noted the following (emphasis added):

       [Nutter] argues that it is entitled to restitution because Defendant Moore
       failed to properly avoid the mortgage contract. In light of the court’s
       finding that the contract is void, that argument is moot and [Nutter] asserts
       no other grounds upon which restitution should be granted.

       The circuit court did not “conflate[] the enforceability of the reverse mortgage

loan with [Nutter’s] entitlement to equitable relief in the form of restitution to prevent

unjust enrichment” because Nutter did not assert that it was entitled to restitution if the

transaction was void.

       On appeal, we generally consider only issues “raised in or decided by the trial

court . . . .” Md. Rule 8-131(a). Before the circuit court, Nutter took the position that it

was entitled to restitution because the transaction was voidable. On appeal, it argues that,

even if the transaction was void, it is still entitled to restitution based on the theory of

unjust enrichment. These contentions are by no means the same, and Nutter’s appellate

argument is not preserved for our review. See Starr v. State, 405 Md. 293, 298–99 (2008)

(“[T]he trial court is not required to imagine all reasonable offshoots of the argument

                                               27
actually presented.”); Faith v. Keefer, 127 Md. App. 706, 737–38 (1999) (“As these

contentions [as to why the trial court erred in granting summary judgment] have been

raised for the first time on appeal, they are not preserved for appellate review, and we

decline to consider them.”).19

                                     III. Subrogation

       As its final contention, Nutter asserts that the circuit court erred when it denied

Nutter’s request to be subrogated to the lien of Bank of America against the Stuart Mills

property. We do not agree.

               Subrogation simply means substitution of one person for another;
       that is, one person is allowed to stand in the shoes of another and assert that
       person’s rights against the defendant. Factually, the case arises because, for
       some justifiable reason, the subrogation plaintiff has paid a debt owned by
       the defendant. Having paid the defendant’s creditor, the plaintiff stands in
       the creditor’s shoes . . . and is entitled to exercise all the remedies which
       the creditor possessed against the defendant.

DOBBS, supra, at § 4.3(4) (footnotes and quotation marks omitted). The leading cases in

Maryland with regard to the closely-related topics of subrogation and unjust enrichment

are Hill, 402 Md. at 294–307, and Fishman v. Murphy, 433 Md. 534, 546–57 (2013).

       Hill involved a series of miscommunications between the seller of a home, Hill,

the closing agent for the buyer, Cross Country Settlements, LLC, and the holder of a note

       19
        Looking past preservation, Nutter’s claim that it is entitled to restitution is
unpersuasive because, as we explain in Part III of this opinion, Nutter is an “officious
payor” and therefore is ineligible for the remedies of restitution and subrogation.
Moreover, we can discern no reason why the guardianship estate should be required to
expend its assets to rescue Nutter from a debacle entirely of its own making.
                                             28
secured by a deed of trust encumbering Hill’s property, Provident Bank. 402 Md. at

289–91. As a result, Cross Country conducted settlement on Hill’s property under the

erroneous belief that the property was unencumbered. Id. at 291. “Hill receiv[ed] the

proceeds of the sale of the Property without deduction for any amount due on the . . .

Provident loan,” and “Cross Country, as agent for Stewart Guaranty Company

(“Stewart”), issued a title insurance policy to the Buyer.” Id. After the settlement, Cross

Country received a letter from Provident seeking payment on the loan encumbering the

property. Id. Cross Country sought payment from Hill, but was ignored. Id. at 291–92.

Stewart, as the title insurer, ultimately paid the amount due after foreclosure proceedings

were initiated, and demanded reimbursement from Cross Country. Id. at 292. Cross

Country paid Stewart, and filed suit against Hill, seeking reimbursement under theories

of unjust enrichment and subrogation. Id. at 292–93. Although the Court was unable to

resolve the merits of the claim on the record before it, it did address Hill’s contention that

she was not liable to Cross Country because it was acting as “a volunteer” when it paid

Provident. Id. at 301.

       The Court explained that:

       It is undisputed that once properly yoked with the label of “mere volunteer”
       or "officious payor," a plaintiff is prohibited from recovering under
       theories of unjust enrichment or subrogation. It less clear, however,
       precisely when a plaintiff's payment to a third party satisfying the liability
       of the defendant renders a plaintiff a volunteer and casts him or her "into
       legal outer darkness." DOBBS, supra, § 4.3. Palmer notes that "[w]hen one
       person, without request, knowingly pays the debt of another . . . restitution
       will normally be denied." GEORGE E. PALMER, THE LAW OF RESTITUTION §

                                             29
       10.2 (1978).

402 Md. at at 301–02.

       In considering this question, the Court reached several relevant conclusions. First,

the Court noted that, although different authorities use the terms “volunteer,” “officious

payor,” and “intermeddler,” the terms have “identical meanings.” Id. at 303 n.13. Second,

the Court concluded that, as a matter of public policy, the concept of “volunteer” should

be the same for unjust enrichment and subrogation claims. Id. at 305 n.15. Finally, the

Court noted that traditional definitions of “volunteer” and “officious payor,” etc. provide

only limited guidance in cases “where it is asserted that a ‘plaintiff settled and paid a . . .

claim asserted by a third party on which the defendant was solely liable.’” Id. at 303. The

Court concluded:

              The factual novelty of the present case requires us to adopt a rule to
       guide future unjust enrichment and subrogation actions. We agree with the
       Restatement (First) of Restitution (1937) § 79,[20] that a plaintiff may
       recover for a payment or payments to a third party as long as the plaintiff
       was not officious in making such payment or payments. Although we shall
       not supply an exhaustive list of situations where a plaintiff would not be
       deemed officious, generally a plaintiff is not officious when he or she acts
       under a legal compulsion or duty, acts under a legally cognizable moral

       20
            RESTATEMENT (FIRST) OF RESTITUTION § 79 (1937) provides the following:

       A person who entered into a transaction as an obligor, or who was claimed
       by the creditor to be an obligor, upon an obligation which, as between such
       person and another, the other had a primary duty to discharge, and who has
       paid the creditor in discharge of the obligation at a time when it existed
       against the other, is entitled to indemnity from the other, although
       originally or at the time of payment, the payor was under no duty to make
       the payment, unless his payment was officious.
                                               30
       duty, acts to protect his or her own property interests, acts at the request of
       the defendant, or acts pursuant to a reasonable or justifiable mistake as to
       any of the aforementioned categories.[21]
402 Md. at 305 (emphasis added).

       Applying this rule to the facts of the case before us, there is no contract to which

Nutter can turn to demonstrate that it was acting pursuant to a legal duty, because, as we

discussed above, the contract between Nutter and Ms. Black is void. Nutter does not

assert that it was acting under any sense of moral duty, nor can it, because, from Nutter’s

standpoint, this was strictly a business transaction. Nutter was also not acting to protect

any property interest—the contract was void and Nutter did not have any interest in the

Stuart Mills property. Moreover, Nutter cannot claim to have acted at the request of Ms.

Black because she is a disabled person and only Moore had the authority to make

       21
            In a footnote appended to this passage, the Court stated:

       Public policy also is best served by liberally permitting a plaintiff to be
       subrogated to the rights of a third-party creditor. In traditional insurance
       subrogation cases, a narrow definition of the volunteer rule serves to
       encourage insurers to defend their insured even where there is a dispute
       over liability or coverage, thus avoiding unnecessary delay in the settlement
       of claims. “[P]ayment is not voluntary if it is made with a reasonable or
       good faith belief in obligation or personal interest in making that payment.”
       COUCH ON INSURANCE § 223:27 (3d ed. 2005). “If plaintiff pays
       defendant's debt under the mistaken apprehension that he was himself
       under a duty to do it . . . there is less reason to treat him as being officious,
       and the courts will usually grant restitution.” [John W. Wade, Restitution
       for Benefits Conferred Without Request, 19 VAND. L. REV. 1183, 1201
       (1996)].

Id. at 305 n.15.

                                               31
business decisions on her behalf.

       In its brief, Nutter does not contest any of this. Instead, it argues, although it uses

different terms, that it was acting “pursuant to a reasonable or justifiable mistake”

regarding Ms. Black’s legal capacity. In this regard, it relies on Fishman v. Murphy.

       In Fishman, Street either (1) prevailed upon his elderly and terminally ill mother,

Dorothy Urban, to sign a deed conveying her residence to him by abusing a confidential

relationship that existed between them or (2) forged her name to the deed. At the time of

the conveyance, the property was subject to a mortgage to CitiFinancial. 433 Md. at 539.

Ms. Urban passed away and her estate filed suit against Street, asserting that the deed to

him was null and void, and asking the court to order Street to transfer the property to the

estate. Id. at 541–42. While this action was pending, Street refinanced the property with

1st Chesapeake Home Mortgage, LLC, paying off the CitiFinancial loan, which had a

balance of $59,086.72. Id. at 539. Thereafter, the circuit court imposed a constructive

trust upon the property in favor of the estate without deciding the deed was void ab

initio.22 Id. at 542. While the action between the estate and Street was pending, but

before the court entered judgment, 1st Chesapeake assigned the note and its rights under

the deed of trust to Midfirst Bank. Id.

       Street defaulted on the note and Midfirst filed a foreclosure action. Id. at 542–43.

Ms. Urban’s estate filed a motion to stay and dismiss the foreclosure action. Id. at 543.

       22
        The deed would have been void if Ms. Urban’s signature had been forged but
voidable if her signature had been the result of undue influence.
                                              32
The estate asserted that (1) the judgment imposing a constructive trust on the property

created a presumption that the deed to Street was void; and (2) alternatively, that the

doctrine of lis pendens operated to provide Midfirst with constructive notice of the

estate’s claim and thus it could not claim that it was a bona fide purchaser. Id. As to the

first issue, the Court of Appeals held that “the bare creation of a constructive trust,

without a concurrent declaration that the underlying deed is void, renders the subject

deed merely voidable.” Id. at 548. As to the second issue, the Court concluded that the

litigation between the estate and Street provided at least constructive notice of the

estate’s claim and therefore Midfirst was not a bona fide purchaser. Id. at 551.

       The Court of Appeals then turned to an alternative argument presented by

Midfirst: that it was entitled to be subrogated to the CitiFinancial deed of trust. The Court

concluded that subrogation was appropriate because:

       Petitioners’ predecessors in the chain were not volunteers or intermeddlers
       because they expended money to retire the existing loan in order to protect
       their interests. [1st Chesapeake], believing (mistakenly) that Street held a
       valid deed to the Pasadena property, expended $59,086.72 to pay-off the
       existing loan placed by Urban. Midfirst, as assignee of the note underlying
       the Street deed of trust, acquired an interest in the Pasadena property and
       became a lien holder as to that property. . . . Although Petitioners had
       constructive notice of another's claim on the land, constructive notice alone
       does not defeat the application of equitable subrogation. As we stated in
       [G.E. Capital v. Levensen, 338 Md. 227, 243 (1995)], equitable
       subrogation applies in the “absence of actual knowledge on the part of the
       subrogation claimant concerning the intervening lien.”

Id. at 556 (citation omitted).

       Nutter likens itself to the lenders in Fishman and asserts (citations omitted):

                                              33
       [T]he Court of Appeals in Fishman concluded that the lenders in that case
       were not volunteers or intermeddlers simply “because they expended
       money to retire the existing loan in order to protect their interests.”

               That is exactly what [Nutter] did. Like any other mortgage lender,
       and just like the lender in Fishman, [Nutter] retired the existing loan in
       order to protect its interests as the intended first mortgage lien creditor.
       [Nutter] lacked actual knowledge of the fact that Ms. Black had been
       adjudged incompetent. In fact, one of the parties’ stipulated facts was that
       “[Nutter] and the title agent that handled the closing failed to properly
       identify the guardianship action in the Court record.” All of the cases make
       it clear that constructive knowledge on the part of a creditor does not bar it
       from equitable subrogation.

       Nutter’s reliance on Fishman is misplaced because the deed in question in

Fishman was voidable but not void. In contrast, as we have explained, the reverse

mortgage transaction was void. A voidable deed extends varying degrees of protection to

grantees and good faith third parties. A void deed does neither. Moreover, Nutter’s

assertion that it was acting “[l]ike any other mortgage lender” rings singularly hollow.

Because a disabled person lacks the capacity to enter into contracts and cannot encumber

property, Law, 42 Md. App. at 512–13, no mortgage lender exercising even an iota of

diligence and prudence would extend a loan to an adjudicated disabled person. Finally,

Nutter’s claim that we should afford some special significance to the fact that the parties

had stipulated that it “failed to properly identify the guardianship action in the court

record” ignores the fact that both the deed of conveyance to Ms. Black as well as the

purchase money deed of trust unambiguously informed anyone who bothered to read

them that she was under a disability and that Moore was the guardian of her property.

                                              34
       Hill and Fishman make clear that subrogation is a remedy that should be liberally

applied to prevent unjust enrichment. However, these cases are equally clear that

subrogation is not available to an officious payor.23 Those who seek equitable relief must

first demonstrate that they deserve it. As a paradigmatic example of an officious payor,

Nutter has failed to do so.

              THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE
              COUNTY IS AFFIRMED. APPELLANT TO PAY COSTS.

       23
         If Nutter were not an officious payor, that is, if Nutter fit into one of the
categories described by the Court in Hill, 402 Md. at 305, or something analogous,
subrogation might be appropriate. However, Hill and Fishman are clear that subrogation
and restitution are remedies that are not available to officious payors.

       Moreover, in an appropriate situation, other considerations might outweigh
Nutter’s status as an officious payor. One example might be if the proceeds of the
refinancing were used to purchase necessaries for Ms. Black. See, e.g., Johns Hopkins
Hosp. v. Pepper, 346 Md. 679, 692 (1997) (“The doctrine of necessaries has long been a
feature of Maryland law. It is as much a mechanism to protect minors as it is one to
protect those who provide them with necessary services and goods.”); Flach, 88 Md.
368, 372 (1898) (The doctrine of necessaries is applicable to contracts made by
incompetent persons.). Nutter does not suggest that the reverse mortgage transaction is
subject to the doctrine of necessaries.
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