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REPORTED

IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 2615 SEPTEMBER TERM, 1999 _________________________________ __

GEORGE KNAPP ET AL. v. RAYMOND S. SMETHURST, JR. ET AL. _________________________________ __

Davis, Hollander, Moylan, Jr., Charles E. (Retired, Specially Assigned) JJ. _________________________________ __

Opinion by Hollander, J. _________________________________ __

Filed: August 30, 2001

This

case

has

its

genesis

in

the

failure

of

various

corporate and financial entities. whether two residential lots

Our task is to determine in the Harbor Pointe

located

development in Salisbury, one owned by appellants George and Nancy Knapp, the other by appellants Milankumar and Miraben Shah, are subject to a second foreclosure action against Wyemoor Development Corporation ("Wyemoor"), with regard to an alleged debt of $2,340,709.60.1 The first foreclosure action was

initiated in 1992 against Wyemoor by Second National Federal Savings Bank ("Second National" or the "Bank"), and resulted in a deficiency of approximately $2.25 million dollars. The second

foreclosure proceeding was filed on February 24, 1998, in the Circuit Court for Wicomico County, by Raymond Smethurst, Jr. and Robert Taylor, appellees, substitute trustees appointed by The Reliant Group, L.P. ("Reliant"), the successor-in-interest to Second National, and the holder of deeds of trust executed by Wyemoor in favor of the Bank with regard to property in Harbor Pointe. On March 10, 1998, appellants sought to intervene in the underlying foreclosure action because their properties, lots 29

Neither the record nor the record extract contains a copy of the underlying foreclosure suit.

1

and 30, which are now improved by their homes, were allegedly subject to the deeds of trust, but were not included in the first foreclosure action. The circuit court granted appellants'

motion to intervene on March 12, 1998, and temporarily stayed the foreclosure sale. however, the circuit After a hearing on December 1, 1999, court declined to grant relief to

appellants.

Accordingly, they noted this appeal.

Appellants

present several issues for our consideration, which we have reordered and rephrased: I. Was the trial court clearly erroneous in finding that full payment of the debt had not been made to the Bank for lots 29 and 30? Did the 1992 foreclosure sale brought by Second National, which was conducted without notice to appellants, deprive appellants of a property interest, in violation of the Due Process Clause of the Fourteenth Amendment? Does the doctrine of unjust enrichment prevent appellees from foreclosing against lots 29 and 30 for the entire mortgage debt, given that the lots are now improved by homes, and Second National initially anticipated a payoff of $27,922.88 for the two unimproved lots? Are appellees barred by laches or equitable estoppel from enforcing the obligation against appellants, because neither appellees nor their predecessors in interest sought to foreclose on lots 29 and 30 until 6

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Maryland Law