Full Opinion

Carvet Carlyle McDonald v. State Farm Fire and Casualty Company, No. 2104, Sept. Term, 2024. Opinion by Arthur, J. ARBITRATION—PETITION TO CONFIRM ARBITRAL AWARD When a party contends that a putative arbitration award is not really an award, the party need not move to modify, correct, or vacate the alleged award within the deadlines set forth in sections 3-222(a), 3-223(a), and 3-224(a) of the Courts and Judicial Proceedings Article. Instead, the party may wait until such time, if ever, when the other side petitions to confirm the alleged award. Then, the party may endeavor to persuade the court that the alleged award is not really an award. A court may not confirm an alleged award simply because the party that disputes the existence of the award did not move to modify, correct, or vacate it within the statutory deadlines. DECLARATORY JUDGMENT—DISMISSAL WITHOUT DECLARING PARTIES’ RIGHTS Ordinarily, a court should dismiss a claim for a declaratory judgment only when the plaintiff has no right to a declaration at all. The court in this case erroneously dismissed the appellant’s entire pleading, including a portion that requested a declaratory judgment. Because the court did not declare the parties’ rights, the proper remedy was to vacate the dismissal and remand the case for the purpose of issuing a declaratory judgment. Circuit Court for Baltimore City Case No. 24-C-23-001389 REPORTED IN THE APPELLATE COURT OF MARYLAND No. 2104 September Term, 2024 ______________________________________ CARVET CARLYLE MCDONALD v. STATE FARM FIRE AND CASUALTY COMPANY ______________________________________ Graeff, Arthur, Wright, Alexander, Jr. (Senior Judge, Specially Assigned), JJ. ______________________________________ Opinion by Arthur, J. ______________________________________ Filed: August 26, 2026 Pursuant to the Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. 2026.08.26 '00'04- 14:29:20 Gregory Hilton, Clerk The Circuit Court for Baltimore City denied a petition to confirm an arbitration award, finding that the arbitrators had never actually issued an award. The petitioner appealed. We affirm the denial of the petition but remand the case so that the court may declare the parties’ rights, as the petitioner had requested. FACTUAL AND PROCEDURAL BACKGROUND Appellant Carvet Carlyle McDonald had a homeowners’ policy with appellee State Farm Fire and Casualty Co. Mrs. McDonald made a claim under her policy when a pipe burst and damaged her dwelling and her belongings. Mrs. McDonald’s State Farm policy authorized her to demand an appraisal of the amount of her loss if she and State Farm could not agree on the amount. Under the terms of the policy, Mrs. McDonald and State Farm would each choose an appraiser. If the appraisers agreed on the amount of the loss, they would submit a written report of agreement to State Farm, which, presumably, would pay the agreed amount. If the appraisers did not agree on the amount of the loss, they would “submit their differences” to an “umpire” chosen by both appraisers. The umpire’s decision would bind the parties. Mrs. McDonald exercised her right to an appraisal. She named Michael Durlewanger as her appraiser; State Farm named James Torrence as its appraiser. The appraisers could not agree on the amount of the loss. Consequently, they were required to agree on an umpire. After some controversy, the parties agreed to appoint Kerry Kirtley as the umpire. On December 2, 2021, Mrs. McDonald’s appraiser, Mr. Durlewanger, sent a one- page document captioned “Declaration of Appraisers” to Mr. Kirtley, the umpire. The document memorialized the selection of Mr. Kirtley as the umpire. It contained a place for Mr. Kirtley to sign in order to accept the appointment as umpire and to affirm his qualifications to serve. In addition, in a section captioned “Award,” it recited that “[w]e have carefully examined the premises and remains of the property” and have determined the “Actual Cash Value Loss” to be $130,663.00. The document had a second signature line below the “Award” section. On December 3, 2021, Mr. Kirtley signed the Declaration of Appraisers in two places—first, on the signature line below the section in which he accepted the appointment and affirmed; second, on the signature line below the “Award.” Mrs. McDonald characterizes the signed Declaration of Appraisers as an arbitration award. Her public adjuster1 sent the alleged award to State Farm on December 6, 2021. He demanded payment. In response, State Farm’s attorney, Anne K. Howard, spoke with State Farm’s appraiser, Mr. Torrence. Mr. Torrence told her that he had not participated in any aspects of the appraisal process with the umpire, Mr. Kirtley. Ms. Howard also spoke with Mr. Kirtley, who told her that the Declaration of Appraisers did not reflect his opinions as to the loss; that he had not yet conducted any work on the matter; that he had not yet 1 Section 10-401(g)(1) of the Insurance Article of the Maryland Code (1995, 2017 Repl. Vol.) defines a “public adjuster” as a person who acts or aids an insured in negotiating or settling claims for loss or damage under an insurance policy covering the insured’s property; solicits employment as a public adjuster for first-party insurance claims; or investigates or adjusts losses or advises the insured about claims for losses or damages under the insurance policy. The term “public adjuster,” however, does not include persons who adjust claims related to motor vehicle insurance policies. Id. § 10- 401(g)(2). 2 formulated any opinions as to the cost of the repairs; and that he had signed the “Award” section of the Declaration of Appraisers “by mistake.” Mr. Kirtley himself reported that he had signed the Declaration of Appraisers online. He stated that he did not print out the document and did not read it carefully before he signed it. He insisted that, in signing the document, he did not intend to issue any award. To the contrary, he said that he had done no work on the claim, had received no materials or input from State Farm’s appraiser, and had formed no opinion as to the amount of the loss. He said that he signed the document solely to identify himself as the umpire for Mrs. McDonald’s claim. The document, he said, was not his “official determination of damages.” In February 2022 Mr. Kirtley informed Mrs. McDonald’s representative that he had signed the Declaration of Arbitrators by mistake, that he had conducted no work on the matter, that the document did not reflect his opinions as to the amount of the loss, and that he had yet to formulate any opinions. State Farm paid nothing. On March 6, 2023, Mrs. McDonald commenced this case by filing a petition to confirm an arbitral award under the Maryland Uniform Arbitration Act, sections 3-201 to 3-234 of the Courts and Judicial Proceedings Article of the Maryland Code (1974, 2020 Repl. Vol.).2 Mrs. McDonald later amended the petition to include a request for a declaratory judgment. 2 “[N]otwithstanding the distinctions between an appraisal under an insurance policy appraisal clause and arbitration, appraisal is analogous to arbitration.” Aetna Cas. & Sur. Co. v. Ins. Comm’r, 293 Md. 409, 422 (1982). “Consequently,” Maryland courts have “applied arbitration law to appraisal clauses in insurance policies.” Id. 3 Mrs. McDonald’s legal theory was straightforward. Under sections 3-222(a) and 3-223(a) of the Courts and Judicial Proceedings Article, a party may move to modify or correct an arbitration award on certain limited grounds,3 provided that the party acts within a short period of time after the delivery of the award—20 days if the party presents the motion to the arbitrators; 90 days if the party presents the motion to a court. Similarly, under section 3-224(a) of the Courts and Judicial Proceedings Article, a party may move to vacate an arbitration on another set of limited grounds,4 provided that the 3 Section 3-223(b) of the Courts and Judicial Proceedings Article requires a court to modify an arbitration award if: (1) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing, or property referred to in the award; (2) The arbitrators have awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or (3) The award is imperfect in a matter of form, not affecting the merits of the controversy. In addition, section 3-222(c) of the Courts and Judicial Proceedings Article permits a court to modify an arbitration award “[f]or the purpose of clarity.” 4 Section 3-224(b) of the Courts and Judicial Proceedings Article requires a court to vacate an arbitration award if: (1) An award was procured by corruption, fraud, or other undue means; (2) There was evident partiality by an arbitrator appointed as a neutral, corruption in any arbitrator, or misconduct prejudicing the rights of any party; 4 party presents the motion to a court within 30 days after delivery of a copy of the award or, if the party alleges corruption, fraud, or other undue means, within 30 days after the grounds become known or should have been known.5 Section 3-227(b) of the Courts and Judicial Proceedings Article requires a court to confirm an arbitration award if the opposing party has not filed a timely motion to modify, correct, or vacate an award. State Farm did not file a timely motion to modify, correct, or vacate the alleged “award” in this case. Therefore, Mrs. McDonald concluded, (3) The arbitrators exceeded their powers; (4) The arbitrators refused to postpone the hearing upon sufficient cause being shown for the postponement, refused to hear evidence material to the controversy, or otherwise so conducted the hearing, contrary to the provisions of § 3-213 of this subtitle, as to prejudice substantially the rights of a party; or (5) There was no arbitration agreement as described in § 3-206 of this subtitle, the issue was not adversely determined in proceedings under § 3-208 of this subtitle, and the party did not participate in the arbitration hearing without raising the objection. In addition, a court may vacate an arbitration award on the common-law ground that arbitrators exhibited manifest disregard for the law. See WSC/2005 LLC v. Trio Ventures Assocs., 460 Md. 244, 260 (2018). 5 Section 3-219 of the Courts and Judicial Proceedings Article states that “[t]he arbitrators shall deliver a copy of the award to each party: (1) As provided in the agreement; (2) Personally; or (3) By certified mail, return receipt requested, bearing a postmark from the United States Postal Service.” Here, it appears that the arbitrator (i.e., the umpire) did not deliver a copy of the award; rather the public adjuster delivered it. Hence, unless the agreement (i.e., the insurance policy) authorized the public adjuster to deliver the award (i.e., the appraisal), one could argue that the proper “delivery” of the award has yet to occur. But because no one makes that argument, we do not consider it. 5 State Farm waived any challenge to the “award,” and the court had no choice but to confirm it. State Farm opposed the petition to confirm the award. Relying on affidavits from Mr. Kirtley (the umpire), Mr. Torrence (State Farm’s designated appraiser), and Ms. Howard (the attorney who had represented State Farm in connection with the McDonald appraisal), State Farm argued, in essence, that there was no arbitration award to confirm. After hearing oral argument on the petition, the circuit court agreed with State Farm that “no award was issued.” The court found that the umpire had signed the document “in error” and that he had notified Mrs. McDonald of the error. The court added that “[n]one of the normal work of a reasonable appraiser was done[.]” It reiterated that “there was no appraisal award.” The court embodied its decision in a written order in which it stated that it had denied and dismissed the petition to confirm an award. The court did not declare the parties’ rights, as Mrs. McDonald had requested. Mrs. McDonald noted a timely appeal. QUESTIONS PRESENTED Mrs. McDonald presents six questions, which we have condensed into one: Did the circuit court err in denying the petition to confirm an arbitration award?6 6 Mrs. McDonald formulated her questions as follows: 1. Does the Maryland Uniform Arbitration Act, Md. Cts. & Jud. Proc. Code Ann. § 3-227, permit a party allegedly aggrieved by an award to unilaterally refuse to abide by it without filing a timely petition to 6 modify, correct or vacate it merely because one of the appraisal panelists thereafter claimed to have signed the award by mistake without carefully reading it? 2. Did the trial court err in denying Appellant’s petition and motion to confirm an appraisal award when no challenge to the award was timely made under the Maryland Uniform Arbitration Act[,] Cts. Jud. Proc. Code § 3-222(a), § 3-224(a) or § 3-223(a)? 3. Did the trial court err by creating a new exception to the time limitations set forth in the Maryland Uniform Arbitration Act, Md. Cts. Jud. Proc. Code Ann. § 3-222(a), § 3-223(a) and § 3-224(a) to refuse confirmation of an award when one of the panelists claimed to have signed the award by mistake without carefully reading it? 4. Is a party to an arbitration agreement excused from compliance with the time limitations set forth in Maryland Uniform Arbitration Act § 3- 322(a), 3-223(a) and 3-224(a) by claiming that an authentic award admittedly signed by the majority of the appraisal panelists in compliance with the policy and Md. Cts. & Jud. Proc. Code Ann. § 3- 219(a) is not an “award” by obtaining an affidavit from one of the panelists after the 90 day revisory period expired, claiming he did not read the award carefully before signing it, when the party did not seek to submit the affidavit to a court for consideration until more than two and a half years later? 5. Is it consistent with Md. Cts. & Jud. Proc. Code Ann. § 3-227(b), providing that “[t]he court shall confirm the award, unless the other party has filed an application to vacate, modify, or correct the award the award within the time provided in §§ 3-222 and 3-223 of this subtitle,” to permit that “other party” to circumvent the time constraints in the Maryland Uniform Arbitration Act by obtaining an affidavit from a panelist claiming not to have carefully read the award he signed, and submitting that affidavit to a court years after entry of the award? 6. Is the decision below consistent with this Court’s precedents, including Schaper & Assoc. v. Soleimanzadeh, 87 Md. App. 555, 590 A.2d 583 (1991), that even meritorious challenges to arbitration awards must be timely made or else be deemed waived? 7 STANDARD OF REVIEW “A circuit court’s decision to grant or deny a petition to vacate or confirm an arbitration award is a conclusion of law, which we review without deference.” WSC/2005 LLC v. Trio Ventures Assocs., 460 Md. 244, 253 (2018). DISCUSSION The central question in this case can be restated as follows: What must a party do if it contends that a putative arbitration award is not really an award? Must the party move to modify, correct, or vacate the alleged award even though the party contends that there is no award at all? Or may the party wait for the other side to petition to confirm the alleged award and then argue that, as a factual matter, there is no award to confirm? And if the party waits to dispute the existence of the alleged award until after the other side petitions to confirm it, is the court required to grant the petition to confirm the alleged award on the ground that the party did not move to modify, correct, or vacate it despite facts establishing that there is no award? We begin by asking what it means to modify, correct, or vacate an arbitration award and what it means to confirm an arbitration award. In our judgment, a request to modify, correct, or vacate an arbitration award presupposes the existence of an award. Similarly, a petition to confirm an arbitration award also presupposes the existence of an award. It is impossible to modify, correct, or vacate an award that does not exist. It is equally impossible to confirm an award that does not exist. Next we ask what would happen if a party moved to modify, correct, or vacate an “award” even though that party disputed that the arbitrators have actually made an award. 8 By moving to modify, correct, or vacate an “award,” the party could be said have to conceded that the arbitrators have actually made an “award.”7 Thus, when a party disputes whether the arbitrators have actually made an award, the party cannot move to modify, correct, or vacate the alleged “award” without potentially compromising its own position. The proposition that a party need not move to modify, correct, or vacate an award if the party disputes that the arbitrators have actually made an award finds indirect support in Montgomery County v. Fraternal Order of Police, Montgomery County Lodge 35, 427 Md. 561 (2012). In that case, Montgomery County petitioned to vacate an arbitration “award” after an arbitrator denied the County’s motion to dismiss the union’s grievance. In upholding the circuit court’s decision to allow the arbitration to proceed over the County’s objection, the Court recognized that the County’s pleading was correctly characterized not as a petition to vacate an arbitration award, but as a petition to stay the arbitration. “[A] petition to vacate an arbitration award,” the Court wrote, “requires an actual award, i.e., a final decision by an arbitrator on the merits.” Id. at 569. These considerations lead us to conclude that, if a party contends that a putative award is not really an award, the party need not move to modify, correct, or vacate the alleged award within the deadlines set forth in sections 3-222(a), 3-223(a), and 3-224(a) of the Courts and Judicial Proceedings Article. Instead, the party may wait until such 7 Cf. Montgomery County v. Fraternal Order of Police, Montgomery County Lodge 35, Inc., 427 Md. 561, 568 (2012) (stating that, “by filing a petition to vacate the ‘arbitration award,’ the County suggested that an award was, in fact, made by the arbitrator[]”). 9 time, if ever, when the other side petitions to confirm the alleged award. At that time, the party may endeavor to persuade the court that the alleged award is not really an award, as State Farm did in this case. The party might not succeed in persuading the court that the alleged award is not really an award, in which case the court should confirm the award. A court, however, may not confirm an alleged award simply because the party that disputes the existence of the award did not move to modify, correct, or vacate it within the statutory deadlines.8 In this case, the undisputed evidence before the court established beyond all doubt that there was never an arbitration award. Mr. Kirtley testified, without contradiction, that he had done no work, received no materials, and formed no opinions; that he signed the document solely to identify himself as the umpire; that he did not intend to issue an award; and that the document was not his “official determination of damages.”9 Because 8 When faced with the question of whether a putative award is really an arbitration award, a party could always file a two-count pleading asking the court either (1) to declare that the arbitrators have not issued an award or (2) to modify, vacate, or correct the award if the court concludes that the putative award really is an award. Of course, to preserve the right to ask the court to modify, vacate, or correct the putative award, the party would have to file the complaint within the deadlines in sections 3-222(a) and 3- 223(a). 9 In her brief, Mrs. McDonald cites an entry in her attorney’s billing records as proof that Mr. Kirtley signed the Declaration of Appraisers after discussing the claim with her appraiser. The billing record documents a conversation between Mrs. McDonald’s attorney and her appraiser in which the appraiser “[d]ispute[d] Kirtley” and “indicate[d] that he”—presumably, Mr. Kirtley—“had all of the data to support [the] award and must have been pressured to ren[ege] on the award after the fact[.]” [The billing record is obviously hearsay within hearsay. Unlike, for example, an affidavit from the appraiser himself, the billing record does not create a genuine dispute of material fact. 10 a court cannot confirm a nonexistent award, the circuit court did not err in declining to confirm the alleged award in this case. In challenging the circuit court’s decision, Mrs. McDonald cites Schaper & Associates v. Soleimanzadeh, 87 Md. App. 555 (1991). Schaper does not advance her position. In Schaper the arbitrator had issued an award without notifying one of the parties of the time and place of the hearing. Id. at 559. The arbitrator’s failure to give notice was grounds for vacating the award under section 3-224 of the Courts and Judicial Proceedings Article. Id. The aggrieved party, however, did not move to vacate the award within 30 days after delivery, as required by section 3-224(a). Id. Consequently, section 3-227 required the circuit to confirm the award. Schaper is a bit different from this case. In Schaper there was no dispute that the arbitrator had issued an award. The award was subject to challenge because one of the parties did not receive proper notice, but it was an award nonetheless. For that reason, the court was required to confirm the award when the aggrieved party failed to file a timely petition to vacate it. Here, by contrast, there was (or there arguably was) no award. State Farm had no obligation to petition to vacate a nonexistent award. Contrary to Mrs. McDonald’s contention, we are not creating an “exception” to section 3-227(a) of the Courts and Judicial Proceedings Article, which requires a court to confirm an award if the opposing party has not made a timely request to modify, correct, or vacate it. By its terms, section 3-227(a) applies only if the arbitrators have actually made an award. A party need not move to modify, correct, or vacate an award that does 11 not exist. Moreover, the party’s failure to do so does not mean that a court must confirm a nonexistent award. Instead, the party may challenge a petition to confirm, as State Farm did in this case, on the ground that there is no award to confirm. In summary, the circuit court did not err in denying the petition to confirm the arbitration award. We note, however, that the court dismissed Mrs. McDonald’s entire pleading, including the portion that requested a declaratory judgment. Ordinarily, a court should dismiss a claim for a declaratory judgment “only when the plaintiffs have no right to a declaration at all—even a declaration that they are wrong.” GPL Enterprise, LLC v. Certain Underwriters at Lloyd’s, 254 Md. App. 638, 663 (2022). “The circuit court erred by not declaring the rights of the parties to this case.” Id. at 664. “[W]here a circuit court erroneously dismisses a declaratory judgment action, the dismissal must be vacated, and an appropriate declaratory judgment must be entered.” Christ ex rel. Christ v. Maryland Dep’t of Nat. Res., 335 Md. 427, 436-37 (1994). Consequently, “[w]e remand the case to the circuit court for entry of judgment consistent with this opinion.” GPL Enterprise, LLC v. Certain Underwriters at Lloyd’s, 254 Md. App. at 664. JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AFFIRMED IN PART AND VACATED IN PART. CASE REMANDED TO THAT COURT FOR THE PURPOSE OF ENTERING A DECLARATORY JUDGMENT CONSISTENT WITH THIS OPINION. COSTS TO BE PAID BY APPELLANT. 12