Merritt v. Craig

In Merritt v. Craig, 130 Md. App. 350, 746 A.2d 923, cert. denied, 359 Md. 29, 753 A.2d 2 (2000), the plaintiffs purchased a home that they later discovered had incurable well water problems. They sued the seller, alleging that she failed to disclose that the property was served by a single well on adjacent property he retained, that she cut the water line to the house in anticipation of the sale, and that she then unsuccessfully tried to reactivate abandoned water sources located on the property. The buyers sued the seller for common law and statutory fraud, praying both for rescission of the deed and for compensatory and punitive damages. After discovery, they moved for a jury trial. The jury awarded the buyers compensatory and punitive damages. Because the buyers still wanted to rescind the transaction, they moved to alter or amend the judgment. The trial court denied the motion, finding that the buyers had abandoned their rescission claim by requesting a jury trial. The buyers appealed, arguing that they never intended to abandon their rescission claim; they took their other claims to the jury because they understood that the trial court would consider their rescission claim after the jury rendered its verdict. The parties' arguments in Merritt resemble the ones now before us, except that in Merritt, the parties seeking rescission were the buyers rather than the sellers. The Merritt plaintiffs argued that "because fraudulent conduct is common to both the rescission claims . . . and the damages claim . . .,the jury is entitled to hear the case before the court decides the claim for rescission." 130 Md. App. at 357. The defendant responded that the plaintiffs could not pursue both rescission and damages, and "because they elected to have their claim for damages presented to a jury, they had waived their right to pursue a claim in equity for rescission of the deed and contract." Id. at 357-58. We held that before submitting their claims to the jury, the plaintiffs "must elect the form of relief, i.e., damages or rescission, which will dictate whether they are entitled to a jury trial or a court trial." Id. at 368. The Court recognized, however, that the trial judge had led plaintiffs' counsel to believe that no election was necessary. See id. Because they "justifiably relied on the court's assurances that it would consider rescission after the legal issues had been presented to the jury," the plaintiffs were entitled to a new trial. Id.