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REPORTED
IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 371 SEPTEMBER TERM, 1995 ___________________________________

MALCOLM DATES JR. et al. v. THE HARBOR BANK OF MARYLAND

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Moylan, Cathell, Harrell, JJ. ___________________________________ Opinion by Cathell, J. ___________________________________ Filed: December 5, 1995

This case deals with whether a bankruptcy petition, and its attendant stay, filed by an individual, can prevent the foreclosure sale of property owned by a corporate entity in which the petitioning individual claims an "unspecified" financial interest, and for which the petitioning individual is a guarantor of the debt secured by the subject property. This implicates significant interests on the part

of the property owner, the mortgagee, and the State: The owner may be divested of all right, title, and interest in the property. The

mortgagee's concerns lie in protecting its right to foreclose upon default and in protecting its position adequately. The State,

although not a party to the proceedings, has a significant interest in the continued vitality of the foreclosure sale process. Appellants, Dates Real Estate Ltd. (DRE), its president, Victor Dates (Victor), and Malcolm Dates Jr. (Malcolm), appeal the denial by the Circuit Court for Baltimore City (Kaplan, J., presiding) of what the court considered an untimely motion to set aside the foreclosure sale by appellee, the Harbor Bank of Maryland (the Bank), of certain property owned solely by DRE. The court cited as the basis for its

denial appellants' failure to show cause, by the date set forth in the published notice therefore, why the sale should not be ratified. Appellants present the following questions on appeal:

-2I. Did the court err by dismissing [appellants'] Motion to Set Aside Foreclosure and Assess Damages? II. Could compensatory and punitive damages be assessed against Harbor Bank? The Facts DRE,1 a Maryland corporation, by signature of its president, Victor Dates, executed a promissory note (the Note) in favor of the Bank in the amount of $35,000. The Note was secured by a Deed of

Trust, also signed by Victor in his corporate officer capacity, in which DRE granted to the Bank a lien on two parcels of property owned by the company, located at 4305 and 4307 York Road in Baltimore. Contemporaneous with the execution of the Note and Deed

of Trust, both Victor and Malcolm executed a Guaranty, personally guaranteeing payment of the Note. In January of 1994, the Bank notified appellants of a planned foreclosure sale of the two properties due to DRE's failure to make the payments required by the Note. The Circuit Court for Baltimore

City entered a Decree of Sale of Mortgage Premises on February 4, 1994, thereby permitting the Bank to proceed with the foreclosure sale. On February 23, 1994, the Bank conducted the sale and the At no time relevant hereto did the Bank seek a

property was sold.

deficiency decree against the corporation, nor has the Bank,

Dates Real Estate, Ltd. is referred to throughout the briefs and record extract as Dates Real Estate, Inc., and Dates Realty, Inc.

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-3insofar as we can discern from the record, sought to require the guarantors to perform under the guarantee. This is probably

because the foreclosure sale did not result in a deficiency in the first instance. On the day prior to the foreclosure sale, Malcolm filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the District of Maryland.2 Pursuant to 11 U.S.C.

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Maryland Law