228 A.3d 200
Md.2020Background
- The City of Baltimore initiated a receivership under local code against Prime Realty for a long-vacant, deteriorated property at 744 Patterson Park Ave. after code violations and failed correction orders.
- SDAT records listed Prime Realty’s resident agent (Miguel Belen) at a Bel Air (Dahlia Court) address; Belen had relocated in 2010 and attempted to file an update using a P.O. box in 2011, which SDAT rejected, but Prime Realty did not correct the record.
- The City attempted personal service on the Dahlia Court address (July 20 and 27, 2018), then, after unsuccessful attempts, served SDAT under Md. Rule 3-124(o) on September 5, 2018; SDAT forwarded process per statute.
- Prime Realty did not appear; the court appointed a receiver, the property was auctioned and sale ratified; Prime Realty later sought to reinstate its charter and moved to vacate the sale claiming lack of constitutionally adequate notice.
- The circuit court vacated the sale, reasoning the City knew of an alternative (P.O. box) address; the Court of Appeals granted certiorari and reversed, holding Rule 3-124(o) satisfies due process and Prime Realty’s failure to update SDAT did not invalidate substituted service.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether substituted service on SDAT under Md. Rule 3-124(o) satisfies due process | City: Rule 3-124(o) provides constitutionally adequate notice because LLCs must file resident-agent and principal-office addresses with SDAT | Prime Realty: Service was inadequate because the City had knowledge of an alternate address and should have used it (Aggarwal principle) | Yes. Rule 3-124(o) is reasonably calculated to give notice; it accords with LLC statutory duties to keep SDAT records current and satisfies due process |
| Whether the circuit court erred in vacating the sale because Prime Realty failed to keep SDAT records current | City: Prime Realty’s failure to update SDAT—not the City’s compliance with Rule 3-124(o)—caused any lack of notice | Prime Realty: City’s actual knowledge of a P.O. box meant substituted service was insufficient | Yes. The court erred; Prime Realty’s failure to maintain a lawful address with SDAT does not invalidate substituted service on SDAT |
Key Cases Cited
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due-process standard: notice reasonably calculated to apprise interested parties)
- Barrie-Peter Pan Schools, Inc. v. Cudmore, 261 Md. 408 (1971) (upholding substituted service as reasonably calculated to notify a corporation)
- St. George Antiochian Orthodox Christian Church v. Aggarwal, 326 Md. 90 (1992) (addressing limits of notice where the sender had actual knowledge that notice method was ineffective)
- Thomas v. Rowhouses, Inc., 206 Md. App. 72 (2012) (Court of Special Appeals approving substituted service on SDAT where resident agent could not be located)
- Biktasheva v. Red Square Sports, Inc., 366 F. Supp. 2d 289 (D. Md. 2005) (federal district court finding substituted service on SDAT proper when agent not at SDAT address)
- Gkiafis v. S.S. Yiosonas, 342 F.2d 546 (4th Cir. 1965) (Fourth Circuit approving adequacy of Maryland substituted-service procedure)