Thomas v. Rowhouses, Inc.
206 Md. App. 72
| Md. Ct. Spec. App. | 2012Background
- Thomas sues Rowhouses and the Estate of Patten for lead paint injuries; Rowhouses forfeited its charter and had no resident agent; Patten was the sole director and died; service on Rowhouses not completed until SDAT substituted service; court initially dismissed for lack of jurisdiction and improper service; CA § 3-515 allows winding-up directors to sue/be sued in the corporation’s name; Rule 2-124(o) authorizes substituted service on SDAT when no resident agent or agent dead/address unavailable; the circuit court held service on SDAT improper for a defunct corporation and service on the deceased director’s estate invalid; the Maryland Court of Appeals held service on SDAT proper and dismissed the Estate of Patten from the suit with remand for proceedings against Rowhouses; the case discusses the nature of a “corporate survivor” and winding up under CA § 3-515
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service on SDAT under Md. Rule 2-124(o) is proper for a forfeited, winding-up corporation | Thomas argues Rule 2-124(o) applies to defunct entities with no resident agent | Rowhouses contends Rule 2-124(o) does not apply to a forfeited/defunct corporation | Yes; service on SDAT was proper |
| Whether service on the Estate of a deceased director can bind Rowhouses | Thomas argues Patten's estate could accept service as a director-trustee | Estate of Patten argues CA § 3-515 does not permit estate service | No; estate service is invalid;Patten's estate cannot be served for Rowhouses |
| Whether the Estate of Eric Patten should be dismissed from suit | Estate should proceed against Rowhouses; Patten’s estate liable | Estate cannot be held liable as director-trustee under CA § 3-515 | Affirmed; Estate of Patten dismissed |
| Whether service on SDAT complied with wind-up and statutory framework under CA § 3-515 | SDAT substituted service aligns with winding-up of a defunct corporation | Defunct status and lack of resident agent preclude Rule 2-124(o) | Service on SDAT proper when corporation winding up under CA § 3-515 |
| Whether plaintiff could have pursued alternative service against surviving director-trustees | Plaintiff should have searched for surviving directors | No viable surviving director-trustee; discovery limited by records | Court notes Scott v. Seek Lane Venture requires reasonable search; not dispositive here |
Key Cases Cited
- Dual Inc. v. Lockheed Martin Corp., 383 Md. 151 (2004) (corporate survivor statute allows winding up and suit in trustee name)
- Scott v. Seek Lane Venture, Inc., 91 Md.App. 668 (1992) (reasonable search for director-trustees when suing a defunct corporation)
- Sisk v. Old Hickory Motor Freight, Inc., 222 N.C. 631 (1943) (service via secretary of state considered valid for defuncts when winding up allowed)
- Wisconsin Finance Corp. v. Garlock, 140 Wis.2d 506 (App. 1987) (alternative service on secretary of state extends to dissolved corporations)
- Biktasheva v. Red Square Sports, Inc., 366 F. Supp. 2d 289 (D. Md. 2005) (Rule 2-124(o) proper where resident agent address unavailable)