Frank v. Home Depot (Maryland U.S.D.C.) (Approved for Publication)

Signed April 11, 2007. Memorandum Opinion by William D. Quarles, Jr. (Approved for publication).

Opinion granting defendant's motion for summary judgment.

Issues: Did a prior dismissal, pursuant to Rule 12(b)(6), for failure to state a claim bar litigation of the plaintiff's claim for breach of contract where the claim was based on the same alleged wrong and the parties to the suit were identical?

Did the statute of limitations or statutory qualified immunity bar the plaintiff's claim against his former employer for defamation arising in the context of providing a prospective employer a negative employment reference?

Held: Yes to both. The plaintiff's claim for breach of contract alleged the same wrong as his previous claim for discriminatory termination. Accordingly, the doctrine of res judicata applied. In addition, the statute of limitations barred the plaintiff's claim for defamation where the claim was filed more than 1 year after the alleged wrong. Even if it did not, the qualified privilege set forth in Md. Code. Ann., Cts. & Jud. Proc. s. 5-423, precluded the plaintiff's claim, absent evidence of malice or intentional or reckless disclosure of false information.

Facts: Home Depot fired the plaintiff for falsely stating that he was properly licensed to operate a forklift. When the plaintiff subsequently applied for a job at Lowe's, Lowe's contacted Home Depot for a reference. A Home Depot employee allegedly told Lowe's that the plaintiff was fired for theft.

The plaintiff filed suit in the United States District Court for for retaliatory and discriminatory discharge in violation of Title VII and Maryland law. The court dismissed the claims under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Then the plaintiff filed suit, alleging breach of contract and wrongful discharge, in the Circuit Court for Anne Arundel County. Home Depot removed the case to the U.S. District Court. The court dismissed the complaint without prejudice. The plaintiff then filed an amended complaint, restating the breach of contract claim and adding a defamation claim.

Home Depot moved for summary judgment on the breach of contract claim on the grounds that 1) the plaintiff was an "at will" employee, and 2) the doctrine of res judicata, arising from the prior dismissal pursuant to Rule 12(b)(6), barred the claim. Home Depot moved for summary judgment on the defamation claim on grounds that 1) it was filed more than 1 year after the alleged wrong, and 2) the claim was barred by privilege under Md. Code. Ann., Cts. & Jud. Proc. s. 5-423.

Applying the elements of res judicata, the court found that 1) the earlier dismissal was an adjudication on the merits, 2) the two lawsuits "centered" on the same alleged wrong, and 3) the parties were identical. Accordingly, the court held that the doctrine of res judicata barred the plaintiff's breach of contract claim.

Turning to the defamation claim, the court found that the alleged defamation occurred more than 1 year before the filing of the complaint. As the statutory limitations period for defamation in Maryland is 1 year, the court held that the claim was barred.

The court further held that, even were the claim not barred by the statute of limitations, the qualified privilege afforded to employers under Md. Code. Ann., Cts. & Jud. Proc. s. 5-423 would bar the claim. The privilege bars claims against employers for giving good faith references to prospective employers. An employer is “presumed to be acting in good faith unless it is shown by clear and convincing evidence that the employer: 1) acted with actual malice toward the employee or former employee; or 2) intentionally or recklessly disclosed false information about the employee or former employee.” The plaintiff offered no evidence supporting a finding of actual malice or intentional or reckless disclosure. Accordingly, the privilege barred his claim.

The Memorandum Opinion is available in PDF format.