Appellant, Monarc Construction, Inc. (Monarc), appeals from the grant of the Motion To Dismiss of appellees, Aris Corporation, (Aris), J. Carlos Fuentes (Fuentes) and Amalia Fernandez a/k/a Amalia Fuentes (Fernandez) by the Circuit Court for Montgomery County. The genesis of this appeal is appellant’s claim for breach of a Settlement Agreement and Mutual Release (Settlement Agreement) entered into between the parties on January 31, 2005. On March 7, 2008, appellant filed suit in the Circuit Court for Montgomery County to recover damages, including attorneys’ fees and costs incurred in the prosecution and collection of a judgment entered against appellees, pursuant to the Settlement Agreement between the parties.
On May 22, 2008, appellees filеd a Motion to Dismiss, alleging that the Settlement Agreement merged into prior judgments obtained by appellant and that, as such, there was no legal basis for appellant’s claim to attorney’s fees. After a July 10, 2008 hearing on the Motion to Dismiss, the circuit court (Rubin, J.) granted appellees’ Motion to Dismiss. Appellant filed a Motion to Alter or Amend Judgment, which was denied by the circuit court on August 13, 2008. Appellant filed this timely appeal and presents the following questions, 1 which we have condensed and reworded, for our review:
I. Did the trial court err in dismissing appellant’s claim for attorney’s fees, when that claim was based on a provision for attorney’s fees contained in the Settlement Agreement that merged into a prior judgment of the court?
II. Did the trial court erroneously apply the doctrines of res judicata and collateral estoppel to bar appellant’s claim for attorney’s fees bаsed on a judgment obtained in a Virginia state court?
For the reasons that follow, we answer the first question in the negative and decline to address the merits of the second issue. Accordingly, we affirm the judgments of the trial court’s dismissal of appellant’s complaint.
FACTUAL & PROCEDURAL BACKGROUND
For purposes of our review of the trial court’s decision to grant appellees’ Motion to Dismiss, we shall set forth the facts as averred in appellant’s complaint.
On December 28, 2001, the parties entered into a subcontract agreement (the Subcontract), under which appellees agreed to perform work on the construction of the North Arcade and Spanish Ballroom at Glen Echo Park located in Montgomery County, Maryland. As a result of disputes between appellant and аppellees, two suits were filed in the Circuit Court for Montgomery County. On January 31, 2005, the parties entered into a Settlement Agreement aimed at resolving their disputes. Accordingly, the parties agreed, inter alia, to dismiss the litigation.
The Settlement Agreement, however, did not signify the end of litigation between the parties. Appellant alleged that ap-pellees failed to perform their obligations under the Settle ment Agreement and sued appellees for breach of the Settlement Agreement. As a result, appellant obtained a default judgment against appellees on June 28, 2006, in the amount of $184,574.70. The June 28, 2006 order does not differentiate between compensatory damages and attorney’s fees. Appellant concedes, however, that (1) the basis of the suit was appellеes’ breach of the Settlement Agreement, (2) the judgment included attorney’s fees incurred by appellant through the date of judgment and (3) attorney’s fees were recoverable under Paragraph 15 of the Settlement Agreement, which provided:
This Agreement shall be construed according to and governed by the laws of the State of Maryland, exclusive of any provisions relating to the conflicts oflaws. The Parties agree and acknowledge that if any term or condition of this Agreement is breached or requires enforcement, any party may seek an appropriate remedy in a court of law. The Parties further agree and acknowledge that the Circuit Court for Montgomery County, Maryland is the correct venue and shall have sole jurisdiction to enforсe this Agreement, and the Parties agree that they each submit to the personal jurisdiction of that Court as an express term and condition of this Agreement. The Parties agree and acknowledge that any party may seek the equitable remedy of specific performance of this Agreement, including any injunctions or restraining orders necessary to effectuate the terms and conditions of this Agreement. In the event that any party is required to enforce the terms or conditions of this Agreement in court, the prevailing party shall recover all costs and expenses incurred in or arising from such action, including reasonable attorney’s fees.
(Emphasis added).
When satisfaction of the June 28, 2006 judgment by appel-lees was not forthcoming, appellant recorded the judgment in thе Circuit Court for Fairfax County, Virginia, a county in which appellees Fuentes and Fernandez owned real property. Appellant then instituted suit against Fuentes and Fernandez in the Fairfax County Circuit Court, seeking an order from that court decreeing the sale of the real property owned by Fuentes and Fernandez in order to satisfy the judgment obtained in Montgomery County. Appellant also sought attorney’s fees in that Fairfax County litigation. On December 20, 2007, the Fairfax County Circuit Court issued a decree ordering a judicial sale of appellees’ property to satisfy appellant’s judgment lien. The initial decree, which included an award of attorney’s fees incurred by appellant in its effort to enforce the June 28, 2006 judgment, was later modified to remove the attorney’s fees award, upon the filing of appellees’ motion to vacate and/or reconsider the decree of sale in the Fairfax County Circuit Court arguing, inter alia, that (1) appellant had failed to provide notice in its complaint that it would seek attorney’s fees and (2) that the June 28, 2006 Montgomery County judgment did not provide for attorney’s fees. Appel-lees, on February 21, 2008, remitted payment in satisfaction of the judgments against them in the amount of $211,739.11, an amount which reflected the principal due on the judgment plus accrued interest, court costs and commissioners’ fees.
Thereafter, in an attempt to recover attorneys’ fees and related costs incurred by appellant after the date of the original June 28, 2006 Maryland judgment, appellant filed the instant suit in the Circuit Court for Mоntgomery County. On May 22, 2008, appellees responded by filing a Motion to Dismiss, which recited the procedural history relevant to the June 28, 2006 Montgomery County judgment and the December 20, 2007 Fairfax County judgment and asserted that, as a matter of law, the Settlement Agreement merged into the prior judgments, such that appellant’s suit on the Settlement Agreement could not be brought for purposes of recovering additional attorney’s fees. Appellant, in response, filed its opposition to the Motion to Dismiss. During the course of the hearing on appellees’ Motion to Dismiss on July 10, 2008, the trial court questioned the parties as to the rule of merger and the effect of the Fairfax County Circuit Court’s ruling on appellant’s attorney’s fees claim. On July 10, 2008, by way of order entered on July 17, 2008, the circuit cоurt granted appellees’ Motion to Dismiss.
STANDARD OF REVIEW
Although appellant’s brief is not entirely clear on this point, appellant appears to attack both the circuit court’s July 10, 2008 order granting appellees’ Motion to Dismiss appellant’s complaint аnd the August 13, 2008 order denying its Motion to Alter or Amend Judgment.
We review
de novo
a trial court’s granting of a motion to dismiss.
Gasper v. Ruffin Hotel Corporation of Maryland, Inc.,
“dismissal is proper only if the alleged facts and permissible inferences, so viewed, would, if proven, nonetheless fail to afford relief to the plaintiff.” In sum, because we must deem the facts to be true, our task is confined to determining whether the trial court was legally correct in its decision to dismiss.
Adamson,
By contrast, in an appeal, as in the case
sub judice,
in which a party files a Motion to Alter or Amend Judgment pursuant to Maryland Rule 2-534, we review an order denying
such motion under an abuse of discretion standard.
Wells v. Wells,
Moreover,
an appellate court will affirm a circuit court’s judgment on any ground adequately shown by the record, even one upon which the circuit court has not relied or one that the parties have not raised. Faulkner v. American Cas. Co.,85 Md.App. 595 , 629,584 A.2d 734 (1991). Therefore, it is within our province to affirm the trial court if it reached the right result for the wrong reasons. Id.
Pope v. Board of Sch. Comm’rs,
With these standards of review in mind, we turn to our discussion of the issues.
ANALYSIS
Appellant raises a multi-pronged challenge to the circuit court’s judgment. We address appellant’s arguments seria-tim.
I
Appellant first contends that the trial court “prematurely and impermissibly dismissed [appellant’s] complaint” because it failed to assume the truth of the facts pleaded in appellant’s complaint, specifically, (1) the existence of the Settlement Agreement between the parties that provided,
As appellant points out, the “grant of a motion to dismiss is proper if the complaint does not disclose, on its face, a legally sufficient cause of action.”
Rossaki v. NUS Corp.,
Moreover, because the gravamen of appellees’ Motion to Dismiss was the effect of the rule of merger on appellant’s ability to assert a cause of action fоr breach of the Settlement Agreement, a fact evidenced by the degree to which the trial court focused on this issue at the July 10, 2008 hearing, we need not consider, in any detail, appellant’s arguments in its appellate brief asserting that Maryland has jurisdiction over this dispute, pursuant to the “forum-selection” clause in the Settlement Agreement. 2 Appellees’ claim, in their Motion to Dismiss, that the court lacked personal jurisdiction over appel-lees, concerned itself not with the enforceability of the forum-selection clause, but rather, with the existence of the Settlement Agreement itself as a legally enforceable document, i.e., whether the Settlement Agreement had merged into the judgments obtained by appellant. This, too, is made clear by thе focus of the court’s discussion at the July 10 hearing.
II
Appellant next argues that the trial court erred when it “prematurely dismissed [appellant’s] complaint on the grounds that [appellant] was attempting to re-litigate an issue previously adjudicated.”
Although the trial court did not explicitly dismiss [appellant’s] Complaint on the grounds of either res judicata or collateral estoppel, such a result is necessarily inferred from the trial court’s statements made during the July 10, 2008 hearing that this was the trial court’s rationale. Since the trial court did not elaborate on the legal basis for its July 10, 2008 ruling, [appellant] contends that the trial court’s error resulted from its careless application of the doctrine of res judicata and/or collateral estoppel in reaching its conclusion. Speсifically, the trial court’s error originated from its inquiry concerning the fact that at one point during the Fairfax County Litigation, [appellant] requested, but ultimately did not recover its attorneys’ fees and related costs as part of the Decree of Sale. The mere fact that [appellant] requested, and was ultimately denied, the relief in a prior litigation, is by itself insufficient to warrant application of the doctrines of either res judicata or collateral estoppel. Res judicata, or the doctrine of claim preclusion,
“bars the relitigation of a claim if there is a final judgment in a previous litigation where the parties, the subject matter and causes of action are identical or substantially identical as to issues actually litigated and as to those which could have or should have been raised in the previous litigation.” The doctrine embodies three elements: (1) the parties in the present litigation are the same or in privity with the parties to the earlier litigation; (2) the claim presented in the current action is identical to that determined or that which could have been raised and determined in the prior litigation; and (3) there was a final judgment on the merits in the prior litigation.
R & D 2001, LLC v. Rice,
The “somewhat allied doctrine” of collateral estoppel, or issue preclusion,
looks to issues of fact or law that were actually decided in an earlier action, whether or not on the same claim. We have articulated the doctrine thusly: “When an issue of fact or law is actually litigated and determined by a valid and final judgment, ... the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.”
R & D 2001,
With this background, it is possible to construct a simple comparative checklist for determining which, if either, of the two doctrines is applicable. For either to apply, the second action must be between the same parties or those in privity with them. For direct estoppel to apply, it must be shown, in addition, that the two causes of action are the same. Collateral estoppel does not require that the causes of action be the same, but it applies only with respect to issues of fact actually determined in the earlier proceeding.
John Crane, Inc. v. Puller,
[APPELLEES’ COUNSEL]: We’re here this afternoon, Your Honor, on [appellees’] motion to dismiss this case. The Court had commented earlier in its docket on the interesting nature of res judicata. Well, this case involves its poor cousin, the doctrine of merger of judgment.
THE COURT: It’s not a poor cousin.
[APPELLEES’ COUNSEL]: This case, though, Your Honor, is the fifth case—
THE COURT: It’s a good issue.
[APPELLEES’ COUNSEL]: It is a good issue. This case is the fifth case between these parties. All litigation has to come to an end, and I would suggest this is the place it should do so.
The position, simply put, basing it on [United Book Press, Inc. v. Maryland Composition Co., Inc.,141 Md.App. 460 ,786 A.2d 1 (2001) ], [4] is that the claim has merged into the judgment. If we took [appellant’s] logic to its conclusion in this case, [appellant] would, if they were able to obtain a judgment in this case today, okay, or whenever it comes to fruition, and then go back across the river ... and ultimately collect on that judgment, would then be able to come back into Montgomery County, file another suit seeking attornеy’s fees, go back across, get its judgment there, go back across the river, come back, file yetanother suit. All litigation has to come to an end.
When the trial court asked appellees’ counsel if appellant was asking the court to “undo” the Virginia judgment, appel-lees’ counsel explained:
I don’t believe they’re asking, that isn’t how they’re framing the suit. They’re framing the suit that they’re entitled, under the Settlement Agreement, to the attorney’s fees they expended in attempting to recover the judgment that this Court entered in 267181. And the position here, simply, Your Honor, is that any rights under that Settlement Agreement, any claim they had, merged into the judgment.
Appellees’ counsel stressed that there was “no provision in the [Maryland Rules] providing for the collection of attorney’s fees for efforts in the enforcement of a judgmеnt....” 5 The trial court asked appellant’s counsel to explain the basis for maintaining the suit in light of the merger argument and the concession of appellant’s counsel that he was aware of no case allowing for post-judgment collection of contractually-based attorney’s fees. Appellees’ counsel then argued that the plain language of the provision for attorney’s fees in the Settlement Agreement restricted the scope of that provision to those fees arising from the action on the Settlement Agreement:
[I]f we look to the agreement, if it is the agreement and solely the agreement that [appellant] relies upon in paragraph 15, the last sentence provides, “In the event that any party is required to enforce the terms or conditions of this agreement in court, the prevailing party shall recover all costs and expenses incurred for in or arising from such action, including reasonable attorney’s fees.”
Well, they were awarded their attorney’s fees in that judgment that this Court had entered. And so it’s an [sic] enforcing the agreement, it doesn’t, if they want to say “and then collecting any judgment we get thereon,” but it’s not in there.
Appellant’s counsel responded that the “judgment itself was of no value to [appellant] until it was satisfied,” adding that “[i]t took two and a half years to get that judgment satisfied.” The court responded that it did not doubt appellant’s word, but that “[t]he only question is whether the contract provides for it.”
We have set forth the preceding detail as to the nature of the July 10, 2008 hearing in order to highlight the following point: the preclusive effect, if any, that the December 20, 2007 Virginia judgment had on the instant attempt to collect attorney’s fees had little to do with the arguments raised by appellees in their Motion to Dismiss or the trial court’s decision to grant the motion.
To be sure, the trial court questioned appellees’ counsel at one point about its attempt to seek attorney’s fees in the Virginia proceeding, including asking, “So, you’re asking me to reverse the Virginia judge?” Even if we were to construe this particular discussion as an indication that
Ill
Consistent with the “American rule,” Maryland’s approach to attorney’s fees is that such fees are ordinarily not recoverable by the prevailing party in an action for compensatory damages.
Hess Construction Co. v. Board of Education of Prince George’s County,
In this case, the basis upon which appellant asserts a right to attorne/s fees is Paragraph 15 of the Settlement Agreement, which we have quoted in the factual background of this opinion. Appellant concedes that its claim for attorney’s fees is based solely on this contractual provision.
Unlike cases involving the recovery of statutorily-permitted or rules-based attorney’s fees, where we have determined that a claim to attorney’s fees is collateral to or independent from the merits of the action,
6
contractuаlly-based attorneys fees form “ ‘part of the damage’s claim.’ ”
G-C P’ship v. Schaefer,
The Restatement (Second) of Judgments § 18 (1982) defines the rule of merger as follows:
When a valid and final personal judgment is rendered in favor of the plaintiff:
(1) The plaintiff cannot thereafter maintain an action on the original claim or any part thereof, although he [or she] may be able to maintain an action upon the judgment; and
(2) In an action upon the judgment, the defendant cannot avail himself [or herself] of defenses he [or she] might have interposed, or did interpose, in the first action.
We are unaware of any reported Maryland case addressing the effect of the rule of merger on a party’s attempt to pursue contractually-based attorney’s fees subsequent to the entry of judgment on the merits of a breach of contract claim.
8
Nonetheless, it is true, in Maryland, that under the rule of merger, “a simple contract is merged in a judgment or decree rendered upon it, and that all its powers to sustain rights and enforce liabilities terminated in the judgment or decree____”
Jackson v. Wilson,
Moreover, various sister jurisdictions have held that the merger of a contract into a judgment on the merits of a breach of contract claim precludes any subsequent, post-merger attempt to collect attorney’s fees that were awardable solely based upon provisions of the merged contract. In
Production Credit Assoc. of Madison v. Laufenberg,
Except where and to the extent prohibited by applicable law, promptly pay or reimburse [the creditor] for all expenses, fees, and disbursements, including reasonable attorneys’ fees, incurred either before or after any default in connection with: this Agreement and the documents related to it, the perfection of [the creditor’s] security interest or other lien in collateral, or incurred in connection with protecting or enforcing its rights with respect to collateral or foreclosing against the same as more fully detailеdin any security agreements, mortgages, or other collateral documents given in accordance with Section 5.0 of this Agreement.
Id. at 779.
As in Maryland, attorney’s fees in Wisconsin are only recoverable if “such liability arises from a specific statute or the contract of the parties.” Id. (citations omitted). Additionally, the Laufenberg Court observed that, under the rule of merger, “upon entry of judgment, the contract sued upon loses all of its vitality and ceases to bind the parties to its execution.” Id. (citations omitted). The court thus cited to Restatement (Second) Judgments § 18, which we quoted supra, and concluded that the creditor could not recover attorney’s fees incurred after the entry of judgment on the loan agreement because, post-judgment, the creditor no longer had a contractual right to those fees. Id. at 780.
Also illustrative is
Caine & Weiner v. Barker,
Claim preclusion, or res judicata, has two aspects. The first applies to a judgment for a defendant, barring the plaintiff from bringing another action on the same claim. Restatement (Second) of Judgments § 19 (1982). The second aspect is the rule of merger, which applies generally to a judgment for a plaintiff in an action to recover money. Carothers v. Carothers,260 Or. 99 ,488 P.2d 1185 (1971). As a general rule, when a valid final judgment for the payment of money is rendered, the original claim is extinguished, and a new cause of action on the judgment is substituted for it. Yergensen v. Ford,16 Utah 2d 397 ,402 P.2d 696 , 697 (1965); 6 A. Corbin, Contracts § 1318 (1962); 15 S. Williston, Contracts § 1874 (3d ed.1972). Thereafter, the plaintiff cannot maintain an action on the original claim or any part thereof. Restatement (Second) of Judgments § 18.
Id.
at 1134. Thus, the
Caine & Weiner
Court held that the plaintiff, suing to collect on a judgment entered upon a debtor’s default on a promissory note, could not seek post-judgment, contract-based attorney’s fees, because the defendant’s liability as to such fees originated in the note.
Id.
at 1134, 1135. Upon merger, the obligation of the defendant under the note became an obligation on the judgment.
Id.
at 1135-36.
See also Hatch v. T & L Associates,
The June 28, 2006 order of the Circuit Court for Montgomery County was issued in litigation commenced by appellant against appellees for breach of the 2005 Settlement Agreement between the parties. That June 28, 2006 оrder established a judgment by default against appellees for $184,574.70 in damages. Appellant asserted in the circuit court, as it does in this Court, that the June 28, 2006 judgment encompassed attorney’s fees incurred by appellant through the date of that judgment. Appellant now seeks additional, contract-based attorney’s fees incurred subsequent to the June 28, 2006 order, characterizing those fees, in its appellate brief, as “damages” that are “expressly recoverable pursuant to the parties’ Settlement Agreement, Clause 15.” However, we find unpersuasive appellant’s argument that the provision for attorney’s fees set forth in the Settlement Agreement survived merger into the June 28, 2006 order which, according to appellant, included an award of attorney’s feеs.
Nor does appellant assert on appeal that the trial court’s granting of appellees’ Motion to Dismiss was erroneous because the provision for attorney’s fees in the Settlement Agreement expressly provided for appellant’s right to collect attorney’s fees beyond judgment on a breach of contract claim, notwithstanding merger of the contract.
See Caine & Weiner,
In light of the foregoing discussion, we hold that the trial court did not err by granting appellees’ Motion to Dismiss on the grounds that the Settlement Agreement,
JUDGMENT OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANT.
Notes
. The issues, as framed by appellant, are:
I. Whether the trial court erred as a matter of law in determining that the doctrines of res judicata and/or collateral estoppel barred [appellant's] breach of contract claim where no court has fully adjudicated the issue of whether the parties' contract provides for the recovery of attorney’s fees incurred in litigation to enforce and protect a judgment rendered on the basis of a breach of their Settlement Agreement^]
II. Whether the trial court erred as а matter of law in determining that the doctrines of res judicata and/or collateral estoppel barred [appellant’s] breach of contract claim where [appellant] was precluded by law from recovering all of its damages in the Virginia statutory creditor's action[.]
III. Whether the trial court erred as a matter of law in determining that the doctrines of res judicata and/or collateral estoppel barred [appellant’s] breach of contract claim where the damages [appellant] sought recovery for occurred subsequent to the initial judgment rendered in favor of [appellant]!.]
IV. Whether the trial court applied the correct standard of review for a motion to dismiss and whether in applying the correct standard the trial court erred in dismissing with prejudice [appellant’s] complaint!]
. The Settlement Agreement provided, in Paragraph 15, that the parties "further agree and acknowledge that the Circuit Court for Montgomery County, Maryland is the correct venue and shall have sole jurisdiction to enforce this Agreement,” requiring the parties to "submit to the personal jurisdiction of that Court as an express condition of this Agreement.”
. Appellant devotes much of its appellate brief to arguing that its action in Virginia was instituted under a statute designed solely to allow a holder of a judgment lien to enforce the lien against real property of the judgment debtor. Appellant cites, in this regard, to Va.Code Ann. § 8.01-462, which provides:
Jurisdiction to enforce the lien of a judgment shall be in equity. If it appears to the сourt that the rents and profits of all real estate subject to the lien will not satisfy the judgment in five years, the court may decree such real estate, or any part thereof, to be sold, and the proceeds applied to the discharge of the judgment.
Appellant emphasizes that a creditor’s suit is different from a breach of contract action and relies on this distinction to argue that (1) the Virginia suit did not litigate any issues or claims relevant to the instant breach of contract action and (2) the statute upon which appellant relied in the Virginia suit “did not afford [appellant] with the opportunity to amend its underlying Judgment [in Maryland] to include a claim for additional damages flowing from a breach of the Settlement Agreement that were subsequently sustained by [apрellant] after obtaining the Judgment.” As we shall explain, however, once a final judgment was entered in the Circuit Court for Montgomery County on June 28, 2006, appellant could no longer assert a "breach of contract” claim to collect attorney’s fees, because the instrument upon which appellant’s attorney’s fees claim was based, i.e., the Settlement Agreement, merged into that judgment. Moreover, because we need not address this argument in any detail, we decline to address the merits of appellees’ counter-argument that appellant is “bound by the admission made by its counsel that it sought attorney's fees in the Virginia action.”
4. We discuss this case infra.
. In its opposition to appellees’ Motion to Dismiss, filed on June 6, 2008, appellant argued that the doctrine of merger did not apply and supported its claim by citing,
inter alia, Jackson v. Wilson,
.
See, e.g., Mullaney v. Aude,
.
G-C P’ship
is a case involving appealability issues. There, the Court of Appeals dismissed a premature appeal from the trial court's judgments as to contract damages filed
before
the trial court ruled on a claim for contractually-based attorney's fees,
.
Cf. Pak v. Hoang,
. The
Jackson
Court added: "... it is also recognized as one of the limitations of this doctrine of merger, that the original contract is not in all cases to be entirely ignored subsequent to the rendition of a judgment or decree.”
. After
Chelios,
and in response to that decision, the California legislature enacted a statute authorizing judgment creditors to recover post-judgment attorney’s fees under certain circumstances.
See Chinese Yellow Pages Co. v. Chinese Overseas Marketing Service Corp.,
.
But see Stein v. Spainhour,