Tuesday, April 24, 2007

NaturaLawn of America, Inc. v. West Group, LLC (Maryland U.S.D.C.) (Approved for publication)

Filed April 22, 2007. Memorandum Opinion and Order by Judge Andre M. Davis (approved for publication).

Upon consideration of a motion by the plaintiff ("NaturaLawn") for a preliminary enjuction to enjoin the defendants ("West") from infringing NaturaLawn's trademark, disclosing or using NaturaLawn's trade secrets or competing against NaturaLawn, and West's motion to stay pending appeal, the judge GRANTED the requested preliminary injunction and DENIED the motion to stay.

(synopsis to follow)

The Memorandum Opinion and Order are available in PDF format.

Erachem Comilog, Inc. v. [United Steel Workers Union] (Maryland U.S.D.C.) (Not approved for publication)

Signed April 19, 2007. Memorandum and Order by Judge Catherine C. Blake (not approved for publication).

On consideration of a claim by the plaintiff ("Erachem") to vacate an arbitration award entered in favor of United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC Local 12517-04 (the "Union"), and the Union's counterclaim to affirm the award, the judge DENIED Erachem's motion, and GRANTED the Union's motion.

A member of the Union ("Cavey") was discharged by his employer, Erachem, for allegedly misrepresenting his physical condition following a knee injury at work. Pursuant to the provisions of the Union's Collective Bargaining Agreement with Erachem, the discharge decision was eventually taken to arbitration, where the arbitrator found that Erachem failed to prove it had just cause to discharge Cavey, and ordered his reinstatement.

Noting that its review of an arbitral award was "among the narrowest known to the law", the judge affirmed the arbitrator's decision, finding that the arbitrator's consideration of the unemployment and worker's compensation awards in Cavey's favor was not erroneous and only part of the support cited for the decision, nor did the discussion of Cavey's Weingarten rights, even if in error, did not form the basis for the decision and award. In sum, the judge found that Erachem had not met its "exacting burden" of showing the arbitrator had "dispensed his own brand of justice" in granting the award, and affirmed.

The Memorandum and Order are available in PDF format.

Glaxo Group Ltd. v. Leavitt (Maryland U.S.D.C.) (Approved for publication)

Filed April 23, 2007. Order by Judge Andre M. Davis (approved for publication).

In a follow-up to an earlier opinion (discussed here on this blog), an intervenor in the case, Roxane Laboratories, Inc. ("Roxane"), filed a motion requesting the court to recall the earlier opinion and substitute a redacted version which would omit historical net profit information as being "proprietary" and "highly confidential". The court declined the request, noting that Roxane's request had come not only after the opinion was posted on the court's Web site, but also after a copy could be found on "a popular legal research website" [could it be . . .? ed.], and thus the request was too late. Moreover, the court is a "public institution doing the public's business", and the reasons for its judgments must be exposed for public scrutiny, so even a timely request would likely have been declined.

The Order is available in PDF format.

Sunday, April 22, 2007

Pendleton v. State (Ct. of Appeals)

Filed April 13, 2007. Opinion by Judge Robert M. Bell.

Issue: Did a pleading asserting a claim for negligence against the State based upon abuse that the plaintiff suffered in a State licensed home sufficiently allege a duty on the part of the State where the complaint alleged that, "upon information and belief," the State "knew or should have known" of the perpetrator's propensity for violence?

Held: No. The Circuit Court's dismissal of the claim against the State defendants is affirmed. For a pleading to be sufficient in the context of a negligence action, it must allege “with certainty and definiteness” facts to show a duty on the part of the defendant to the plaintiff . Whether a legal duty exists is a question of law, to be decided by the court. Stating that, upon information and belief, a party knew or should have known about a third party’s alleged propensity for violence, without more, is not a sufficient factual allegation from which a duty may arise.

Facts: The plaintiff sued the State in the Circuit Court for Baltimore City for negligence in connection with alleged sexual and physical abuse that the plaintiff suffered at the hands of his roommate while he was residing in a group home licensed by the State. The plaintiff alleged that, "upon information and belief," the State knew or should have known of the perpetrator's propensity for violence.

The plaintiff did not allege that the perpetrator had committed assaults prior to those alleged in the complaint, or that the State had knowledge of any sexual tendencies the perpetrator may have had or that he had a history of sexual assaults. The State moved to dismiss, and the trial court granted the motion.

On appeal, the Court of Appeals noted that there was "no factual allegation as to the basis for the knowledge attributed to the State or that related why the State should have been aware of any deviant tendencies that [the perpetrator] may have had, or even that he, in fact, had such tendencies prior to the alleged incidents that occurred with the [plaintiff]. The Court stated that, "in simple situations involving an easily recognized breach of duty, a general averment of negligence following a simple statement of the defendant’s act or omission will be regarded as an ultimate fact; while in more complex situations where the breach of duty is not readily apparent, such an averment will be regarded as a mere legal conclusion.”

Finding that the situation presented by the complaint was not one "where the plaintiff’s right and the defendant’s [corresponding] duty are simple and easily perceived, or involve an easily recognized breach of duty," the Court affirmed the dismissal.

The opinion is available in PDF format.

Saturday, April 21, 2007

Holland v. Psychological Assessment Resources, Inc. (Maryland U.S.D.C.) (Approved for Publication)

Signed April 30, 2007--Memorandum and Order by Judge Christine C. Blake.

Dr. John Holland ("Holland") contracted with PAR in 1986 and again in 1989 to publish his career guide ("SDS"). Under the terms of the agreement, Holland transferred his rights in SDS to PAR, subject to those expressly reserved, in exchange for royalty payments based on PAR's sales of the SDS and related products. PAR created an internet version of the SDS between 1997 and 1998 and launched it on-line in September 1998 without Holland's consent. Despite Holland's continued objections to the internet version of SDS ("internet version"), PAR has maintained it on-line and attached Holland's name and biographical information to it.

Holland's intitial 1999 complaint alleged the agreement had been breached due to PAR's failure to obtain Holland's consent and to pay him proper royalties for the internet version. Holland's subsequent amendments resulted with the following claims: breach of contract (count II); breach of the covenant of good faith and fair dealing (count III); false light (invasion of privacy) (count IV); unfair and deceptive trade practices (count V); violation of the Lanham Act (count VI); and unjust enrichment/restitution (count VII). Holland further requested the court to render a declaratory judgment under the Maryland Uniform Declaratory Judgments Act regarding the breach of contract issue (count I) and the parties' rights and obligations under the contract (count VIII).

The core conflict in this case is the result of a contract that was entered into before the rise of the internet; specifically, differences between pre- and post-internet contracts and, in this case, the effect on post-internet SDS. The standard for summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The Supreme Court has clarified that this does not mean that any factual dispute will defeat the motion. The party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial. The court must view the evidence in the light most favorable to the nonmovant and draw all reasonable inferences in his favor without weighing the evidence or assessing the witness' credibility. However, the court also must abide by the affirmative obligation to prevent factually unsupported claims and defenses from proceeding to trial.

Under Maryland law, contracts are interpreted objectively. A court generally interprets the terms of a written contract as a matter of law; a determination that terms are ambiguous is likewise a matter of law. Ambiguity arises when, to the perception of a reasonably prudent person in the position of the parties, the terms are susceptible to more than one meaning. To resolve ambiguity and determine the intent of the parties, a court will look to evidence from extrinsic sources. At the heart of this case is a conflict over whether Holland's consent was required prior to PAR's release of the internet version. The consent requirement only arose when PAR sought to publish and print a revised edition of the original works. "When PAR seeks to publish all test materials which incoroprate the original works, Holland must be afforded an opportunity to review and comment on the materials but his consent is not required." The court reasoned that, despite the contract's ommission of revised editions of original works, logic would dictate that PAR would wish to incorporate the most up to date material possible - revisions - into its new products, implying the existence of a category of materials other than original works - again, revisions - which PAR might seek to incorporate, thereby giving rise to a category of products incorporating revisions which is not specifically defined by the terms of the contract.

This Court was presented with two key ambiguities which required resolution in order to establish the parties' rights and responsibilities under the contract. First, the definition of "revised edition" under the contract is unclear. Second, once this definition has been established, is whether the internet version is a revised edition, in which case the consent provision of the contract is triggered. The Court accepted the parties' agreement that a revised edition is one in which the content has been substantively changed from previous editions. "Substantive" was defined as "belonging to the essence or intrinsic nature of the substance." The Court adopted "substantive change" as the basis of the understanding of "revised edition." In this instance, changes from print to internet were a substantive change because millions of people may be exposed to an abbreviated version of the test where the truncation is not offset by the presence of a counselor.

In addition to the breach of contract claim, Holland requested the Court to construe the contract and declare the parties' rights under it (count VIII). As one of the contract's central ambiguities could not be resolved, this request was denied. With respect to the breach of contract claim , Holland based his claim on an express contractual provision stating that "the parties hereto shall deal with one another fairly and in good faith." This claim should have been characterized as another ground for breach of contract rather than as a separate cause of action, which is not available. The allegations of breach of the covenant of good faith and fair dealing were thus subsumed within the breach of contract claim (count I) and did not proceed as an independent cause of action. Presenting an individual "before the public in a false light" (count III) is one variation of the more general tort of invasion of privacy. For liability to attach for a false light claim in Maryland, "(a) the false light in which the other person was placed would be highly offensive to a reasonable person, and (b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other person would be placed." If the statements on which the claim for false light is based are true, however, the "defendant in a false light case is entitled to judgment as a matter of law." In the instant case, PAR would nonetheless be entitled to summary judgment because it is not disputed that the statements on which Holland's claim is based are true. The parties agreed that Holland could not bring suit for unfair or deceptive trade practices under the Maryland Consumer Protection Act because Holland is not a consumer of the internet version but the creator of the materials on which it is based (consumer defined as "an actual or prospective purchaser, lessee, or recipient of consumer goods, consumer servces, consumer realty, or consumer credit"). The general rule is that no quasi-contractual claim (such as unjust enrichment) (count VII) can arise when a contract exists between the parties concerning the same subject matter on which the quasi-contractual claim rests. This rule is closely adhered to, and exceptions have been granted only when there is evidence of fraud or bad faith, there has been a breach of contract or mutual recission of the contract, when recission is warranted, or when the express contract does not fully address a subject matter. Holland's attempt here failed because both the agreement between the parties addressed marketing and promotion and because Holland, himself, revealed in his complaint that this claim was concerned with revenue PAR received from the internet version rather than on redressing promotional and marketing violations. Whether PAR was entitled to market the internet version depended wholly on an interpretation of the express contract between the parties. PAR was thus entitled to summary judgment on Holland's unjust enrichment claim. The Lanham Act (count VI) generally has been construed to protect against trademark, service mark or trade infrginement even though the mark or name has not been federally registered. Holland's claim does not arise in the typical context of a Lanham violation as he and PAR are not marketplace rivals but parties to a contract, the terms of which are undisputed. Holland sought to proceed under a "false endorsement" theory under which courts have found " (a) injury where the plaintiff's voices, uniforms, likenesses, published works or names were used in such a way as to deceive the public into believing that they endorsed, sponsored or approved of the defendant's product." To succeed using a false endorsement theory, the plaintiff must prove the likelihood of consumer confusion as to the origin, approval or endorsement of the project making summary judgment for the defendant appropriate where the plaintiff cannot possibly show confusion as to the source or sponsorship. As both parties acknowledge Holland's standing within the field of career testing, Holland's value of his persona seems undisputed. However, Holland's claim hinges in part on the outcome of the underlying breach of contract dispute. If Holland's consent was not required for the publication of the internet version because it was not a revised edition, his endorsement or approval of the product is contractually established and, although he may not like hte internet version, he has no legal claim that his endorsement or approval has been falsely implied. The Lanham Act turns in part on the answer as to whether there was a substantive change between the internet and print versions of SDS resulting in a revised edition and requiring consent. This answer must be presented for a jury for resolution.

The full opinion is available in PDF.

Larson v. Westlake Vinyls, Inc. (Maryland U.S.D.C.)

Decided April 5, 2007--Opinion by Magistrate Judge William Connelly.

Larson moved to quash a subpoena from the District of Maryland by Westlake. The subpoena commanded Larson to appear for a deposition on March 1, 2007 regarding the case of Westlake Vinyls, Inc. v. Goodrich Corporation, currently pending in the United States District Court for the Western District of Kentucky, Paducah Division. In separate state court litigation in Ohio, Larson, a groundwater hydrologist, had been retained as as an expert witness to testify Goodrich's excess insurers.

The Kentucky case which gave rise to the subpoena against Larson concerns which of three parties should be responsible for cleaning up soil and groundwater contamination at a particular site. Westlake argued that Larson's opinions, articulated in the Ohio state litigation, are relevant to the Kentucy case and thus discoverable pursuant to Federal Rules of Civil Procedure 26(b)(1) and 45(c)(3)(B)(ii). However, it is undisputed that: (i) Larson is not testifying in the Kentucky litigation, (ii) Goodrich has not retained or specially employed Larson in anticipation of the Kentucky litigation, and (iii) that Goodrich retained Larson for the Ohio litigation.

The Court thus concluded that Larson is not a retained, nontestifying expert subject to Rule 26(b)(4)(B) with regard to the Kentucky litigation and that, alternatively, even if Rule 26(b)(4)(B) applied to Larson "to shield an expert’s opinions about the specific case they are retained for or any closely related litigation[,]" this "protection" is moot because Larson's expert report, deposition testimony, trial testimony, his expert disclosures as well as the data and information underlying his opinions have been disclosed to Westlake.

Further, the Court found that Larson's testimony in the Ohio litigation did not concern which entities are responsible for the contamination at issue in the Kentucky litigation and thus, do not do not describe matters disputed in the Kentucky litigation. It therefore quashed the subpoena under Rule 45(c)(3)(B)(ii) because it concluded that Larson was an unretained expert. In making its determination, the Court analyzed the motion using the five factors set forth in Kaufman v. Edelstein, 539 F.2d 811, 822 (2d Cir. 1976).

Finally, the Court determined that Larson had not waived his right to object to the subpoena because he did not serve written objections within fourteen (14) days of receiving the subpoena. Westlake argued that the fourteen day rule under Rule 45(c)(2)(B) was applicable. However, the Court noted that Rule 45(c)(2)(B), by its terms, only applies to a subpoena ad testificandum not to an objection to a subpoena duces tecum. In this case, the subpoena was a subpoena duces tecum and Rule 45(c)(3)(A) applies. That rule only requires that the motion to quash be filed within a reasonable time after service. The Court concluded that the motion to quash, filed within 29 days after service, was filed within a reasonable time.

The opinion is available in PDF.

In Re: Van T. Vu (Maryland U.S.D.C.) (Approved for Publication)

Signed April 17, 2007--Memorandum opinion by Judge Deborah K. Chasanow.

This is an appeal by objecting creditors challenging a December 2006 Bankruptcy Court Order Approving Counsel Fees.

Debtor ("Vu") filed a voluntary Chapter 11 in July 2004. As the case progressed, however, it came to light that Vu had participated in a real estate business with her sister, Minh-Vu Hoang ("Hoang"). In June 2006, Vu's primary counsel moved to employ additional counsel ("Regenhardt") when it became clear that the trustee appointed in Hoang's bankruptcy case intended to file a motion for substantive consolidation of Vu's bankruptcy estate into Hoang's bankruptcy estate, which motion was approved by the Bankruptcy Court.

The Hoang trustee filed a motion to substantively consolidate, asserting that many of the assets claimed by Vu as part of her estate were actually titled in the name of other entitities and that Hoang's estate had a superior claim to the ownership of these properties. In August 2006, the U.S. Trustee filed a motion to convert Vu's Chapter 11 to a liquidation proceeding under Chapter 7 based on an assertion that Vu had made unauthorized payments to some of her creditors from her bankruptcy estate.

In October 2006, Vu's counsel applied for payment of their fees for services in connection with Vu's bankruptcy case. Regenhardt's application indicated her services were primarily directed toward defending against the motion for substantive consolidation and the motion to convert to Chapter 7. The creditors argued that Regenhardt's services did not confer a benefit for Vu's bankruptcy estate and that the fees requested were unreasonable. The Bankruptcy Court determined that the services were reasonable and necessary expenses, and that the hours and fees submitted were reasonable.

Upon review, de novo, this Court found Regenhardt's services were of benefit to the estate. Analysis of the benefit to the estate is whether, at the time at which the services were rendered, a reasonable attorney would have believed they would benefit the estate rather than a subsequent consideration of the practical effects actually acheived by an attorney's services. Creditors further argued that Regenhardt failed to exercise billing judgment. The bankruptcy court found that Regenhardt was presented with an unusually challenging litigation schedule and taught deadlines after starting work in the middle of ongoing litigation. In addition, the litigation regarding the motions for substantive consolidation and the conversion to Chapter 7 were difficult and fact-intensive legal issues and this complexity was compounded by complicated facts associated with convoluted financial transactions which had occurred in the case. In light of these factors, this Court affirmed the Bankruptcy Court's order approving counsel fees, finding the amount of time expended was reasonable and necessary, and Regenhardt's substantial qualifications rendered her fee comparable to or lower than comparable professional fees.

The full opinion is available in PDF.

Costa Brava Partnership III, L.P. v. Telos Corp., (Cir. Ct. for Baltimore City)

Issued April 19, 2007--Order and Opinion by Judge Albert J. Mattricciani, Jr.

An earlier opinion in this case was issued on November 29, 2006. It is synopsized here. In that earlier opinion, the Court denied the plaintiffs' motion for the appointment of a receiver.

Here, the plaintiffs had asked asked the Court to enjoin defendants and their agents from pursuing or closing any sale of the corporation's assets outside the ordinary course of business until May 31, 2007, when two new Class D directors will be elected to the corporation's board. Defendants countered that plaintiffs' request for a preliminary injunction sought extraordinary relief to which they were not entitled under Maryland corporation law or the facts of this case.

The Court adopted the defendants' position that the request was one for a preliminary injunction. It denied the request because it concluded that the plaintiffs were unable to establish that they had a likelihood of succeeding on the merits of their claim. Specifically, the Court concluded that "at this point [in time]" the plaintiffs are unable to persuade it that the current directors lack the requisite independence to consider a sale of the corporation's assets.

The order, together with supporting opinion, is available in PDF.

Wednesday, April 18, 2007

Wisneski v. State (Ct. of Appeals)

Filed April 18, 2007–Opinion by Judge Lynne Battaglia.

Wisneski was convicted in the Circuit Court for Montgomery County for indecent exposure. While a guest in a private home, Wisneski suddenly exposed his genitalia to three other people, not family members, who were offended by that conduct. There was no evidence whether anyone outside the home did see or could have seen Wisneski. Wisneski raised the following question on appeal:

Does the "public place" element of the common law offense of indecent exposure require exposure in a public place, or is a non-consensual exposure by an invited guest inside a private home to three people who are not members of his family or his household and where the exposure is not visible outside of the private home to casual observers, sufficient to constitute the crime?
The three elements of the common law offense of indecent exposure requires (1) a public exposure, (2) made wilfully and intentionally, as opposed to inadvertent or accidental, which (3) was observed, or was likely to have been observed, by one or more persons, as opposed to performed in secret or hidden from the view of others.
Wisneski exposed himself in the home of a third party, in daylight, while in a room that had a big window pane. Although there was insufficient evidence for the jury to determine whether Wisneski was visible to passers-by outside the window, his conduct still amounted to indecent exposure because, as a guest in a private home, he had exposed himself intentionally, as opposed to inadvertently, to three persons who were not members of his family or household, without their permission or consent, in an area of the house not regarded as private, such as a bathroom. The public element does not require the exposure be actually seen by more than one person if it occured under such circumstances that it could be seen by a number of persons, if they happened to look and thus, it was likely to be seen by a number of casual observers. The element of intent can be express or inferred from the circumstances and the environment of the exposure. When a defendant exposes himself at such a time and place that a reasonable person knows or should know that his or her act will be observed by others, his or her acts are not accidental and the intent may be inferred.
The majority of state courts have concluded that an indecent exposure may be criminalized if it occurs in a private dwelling. Some have held that the public nature of the offense of indecent exposure is met when the defendant's indecent exposure occurs in front of an unobstructed window inside of a private dwelling. Many have also determined that the behavior can be criminalized even when it is not visible from the exterior of the home. This Court reasoned that the issue is primarily one of whether the defendant's behavior was done in secret or in a place observed or capable of being observed: "[t]he place where the offense is committed is a public one if the exposure be such that it is likely to be seen by a number of casual observers." A casual observer in this context is one who observes the defendant's acts unexpectedly. Therefore, under a reasoned approach, the common law offense of indecent exposure requires wilfulness and observation by one or more casual observers who did not expect, plan or foresee the exposure and who were offended by it.
Testimony at Wisneski's trial established that he was standing in proximity to three persons at the time he exposed himself, and that he repeatedly shook his genitalia at one of them, while adamantly and repeatedly asking her if she was "on her period." Judgment Affirmed.
The full opinion is available in PDF.

Edmund v. State (Ct. of Appeals)

Issued April 17, 2007 -- Opinion of Judge Lawrence J. Rodowsky

HEADNOTE: Criminal Law - First Degree Assault - Victim in shooting fled and never located. Held: Charging document that identified victim by description, but not by name, charged a criminal offense and was not jurisdictionally defective.

Defendant was arrested after reports of an alleged shooting of a victim later described by ethnicity and race, approximate weight, height, facial and specifics of attire. After arrest, Defendant confessed to firing a handgun at such a victim after a neighborhood dispute with an unidentified victim fitting that general description. A charging document was filed in the Circuit Court for Baltimore County describing but not identifying the victim and accusing Defendant of first degree assault and handgun violations. The grand jury returned an indictment on all counts.

Defendant's counsel filed a general omnibus motion objecting, inter alia, to the sufficiency of the charging documents, but without specificity as to the nature of the insufficiency. The State objected to the timeliness of the motion but the Circuit Court ruled instead on the merits that the charging document was sufficient, notwithstanding Defendant's counsel's arguments in open court that the failure of the charging document to identify the victim was a defect depriving the Circuit Court of jurisdiction. After trial, conviction and sentence before the Circuit Court, Defendant appealed to the Court of Special Appeals, but the Court of Appeals issued a writ of certiorari sua sponte before the Court of Special Appeals ruled on the appeal.

Reviewing the text of the first degree assault statute, Code CL 3-202, the "sufficient" form of pleading provided in Code, CL 3-206, the developed common law of Maryland and of some other states and Great Britain and the text of and precedents under Article 21 of the Maryland Declaration of Rights, the Court concluded that none of those authorities required that the charging document identify the victim of the first degree assault in this case.

In summary fashion, the Court also held that the prosecution presented sufficient evidence to support a finding of guilt, and upheld the discretion of the Circuit Court to allow Defendant to present a more specific argument orally than was presented in written motion, finding no prejudice to the State in this case.

Accordingly, the Court of Appeals upheld Defendant's conviction before the Circuit Court for Baltimore County for first degree assault.

The full opinion is available in PDF form here.

In Re: Lakeshia M. (Ct of Appeals)

Filed April 16, 2007. Opinion by Judge Lawrence Rodowsky (retired, specially assigned).

From the official headnote:
Juveniles - Delinquency Proceedings - L. 2005 c. 580 requires the juvenile court to stay proceedings and to order an evaluation by a qualified expert of a child's mental condition, if there is reason to believe that the child may be incompetent to proceed with, inter alia, an adjudicatory hearing. Held: Facts sufficient to trigger "reason to believe" determination. Absent determination, error to adjudicate child delinquent.
On appeal from the decision in the trial court to determine delinquency of a minor ("Lakeshia M.") despite competency issues raised by defense counsel, the Court VACATED the judgment of the trial court and REMANDED to that court for further proceedings.

The opinion is available in PDF format.

Harford County v. Saks Fifth Avenue Distribution Company (Ct. of Appeals)

Files April 17, 2007. Opinion by Chief Judge Robert M. Bell.

From the official headnote:
When taxpayer overpaid its personal property taxes, it was entitled to a refund of those monies, as to which both the interest on the refunded taxes and pre-judgment interest on that interest are also payable.
On appeal from a decision of the Court of Special Appeals reversing the decision below denying interest on the refund of personal property taxes mistakenly overpaid by the taxpayer ("Saks") and remanding for consideration whether pre-judgment interest is due on the amount of refund interest due, the Court of Appeals AFFIRMED the Court of Special Appeals' decision as to reimbursement of interest, and REVERSED as to the need for remand, instead ordering pre-judgment interest at the legal rate to be paid on the refund interest.

In a case with distinctly limited general applicability, since the statute being interpreted had been changed even prior to consideration of this case to eliminate the right to interest on refunds of overpaid personal property taxes, the Court found that the statute then in effect entitled Saks to interest on the amounts it had overpaid in personal property taxes. That overpayment occurred when Saks mistakenly included the value of personal property it leased in its own personal property return for several years, when taxes on the same property had been paid by the lessor and the lessor reimbursed by Saks. When Saks filed amended returns, the taxing authorities ("the County") agreed to and did pay the requested refund amounts, but Saks' claim for interest.

Saks filed suit, and the trial court dismissed for failure to state a claim. On appeal, the Court of Special Appeals reversed the judgment below, finding that interest was in fact due, but remanded the case to the trial court for a determination whether pre-judgment interest would be due on the refund interest. The Court of Appeals then granted a writ of certiorari.

Reviewing the statutory language, Court found no ambiguity in the provisions providing for interest on overpaid personal property taxes at the same rate that would have been collected had the amounts been un- or underpaid. It also had little difficulty finding that the filing of amended returns by Saks constituted an "appeal" under the statute, and Saks' failure to file an appeal of the favorable ruling below (that it was due a refund) did not result in administrative finality precluding the issue from being raised in this case.

The final issue was whether pre-judgment interest was due on the interest held due but unpaid on the refunded amounts. Although it is the exception rather than the rule, the Court found that the necessary criteria for pre-judgment interest had been met here, since the obligation to pay interest on any refund was established by the statute, the amount of interest due on the refund amounts was certain, definite and liquidated on the date the refund was made to Saks, and the withholding of that interest deprived Saks of the use of those amounts. The Court therefore overruled the remand ordered by the Court of Special Appeals and awarded pre-judgment interest at the "legal rate" of 6% per annum as a matter of law.

The opinion is available in PDF format.

Moscarillo v. Professional Risk Management Services, Inc. (Ct. of Appeals)

Filed April 16, 2007. Opinion by Judge Clayton Greene.

From the official headnote:
PROFESSIONAL LIABILITY INSURANCE– DUTY TO DEFEND– To establish a potentiality of coverage, an insured can refer to extrinsic evidence, however, the extrinsic evidence must relate to a cause of action actually alleged in the complaint and can not create a new, unasserted claim. An insurer’s duty to defend is not triggered when the professional liability insurance policy at issue does not provide coverage for fraud and the gravamen of the complaint in the underlying action alleges only fraud.
On appeal from a decision of the Court of Special Appeals affirming the decision below that the insurer had no duty to defend the insured ("Moscarillo") for intentional rather than negligent conduct, the Court of Appeals AFFIRMED the decisions below.

The opinion is available in PDF format.

Saturday, April 14, 2007

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.

Semtek International v. Lockheed Martin (Balt. City Circuit Court, Bus. And Tech. Ct.)

Filed April 12, 2007—Opinion by Judge Albert J. Matricciani

Prior Proceedings:
Semtek sought to amend its complaint shortly before a trial in 2003 in order to add additional allegations and two new causes of action under Massachusetts law. The Court granted Lockheed’s motion to strike the amended complaint, with the modification that permitted Semtek to allege additional facts relating to intentional interference with prospective economic advantage, which was the single count before the Court for trial. At the close of Semtek's case, the Court granted Lockheed’s moved for judgment under Md. Rule 2-519. The Court of Special Appeals affirmed, but remanded to the Circuit Court to consider the two additional Massachusetts causes of action that Semtek had tried to insert in the stricken amended complaint. On remand, Semtek engaged new counsel and filed a second amended complaint, which Lockheed moved to strike or dismiss.

Memorandum Opinion:
The Court denied the motion to strike the second amended complaint but granted with prejudice the motion to dismiss it. The Court found that the factual allegations were expanded significantly in the second amended complaint but the causes of action were the same as those asserted by Semtek in its first amended complaint. Because those were the causes of action the Court of Special Appeals had directed the Court to consider on remand, it would not strike the second amended complaint.

The Court determined, however, that the Court of Special Appeals had already conclusively determined that Lockheed had not interfered with Semtek’s prospective economic advantage and had not engaged in other tortuous conduct that had been alleged. Applying those conclusions as the law of the case, the Court determined that even with the additional allegations of the second amended complaint, Semtek’s claims under the Massachusetts causes of action could not withstand a motion to dismiss or summary judgment. The Court dismissed the amended complaint with prejudice.

The opinion and order are available in PDF.

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

Filed April 11, 2007—Opinion by Judge William Quarles

The District Court granted Home Depot’s motions for summary judgment of a suit by Charles Frank, a former employee, for breach of contract and defamation related to his termination and certain statements made by a Home Depot employee to Frank’s potential future employer.

Home Depot had terminated Frank because he falsely stated that he had been properly licensed to operate the forklift when his license had expired. Thereafter, Lowe’s allegedly failed to hire him because of defamatory statements made by a Home Depot employee to someone at Lowe’s.

This is the second suit brought by Frank against Home Depot. In the first, Frank sued pro se, alleging retaliatory and discriminatory discharge in violation of Title VII of the Civil Rights Act of 1964 and wrongful discharge in violation of Maryland law. The Court had dismissed that suit for failure to state a claim.

The instant suit alleging breach of contract and wrongful discharge was previously dismissed without prejudice and reinstated on an amended complaint that added the defamation claim. The Court determined that the first count was barred by res judicata, while the defamation claim was barred by the statute of limitations and, in any event, by a statutory and common law qualified privilege, citing Md. Code Ann., Cts. & Jud. Proc. § 5-423 and Gohari v. Darvish, 363 Md. 42, 56 (2001).

The opinion and order are available in PDF.

Friday, April 13, 2007

Williamson v. State (Court of Appeals)

Filed April 13, 2007 – Opinion by Judge Lynne Battaglia

Derek Maurice Williamson sought review of the denial of a motion to suppress statements he made during the execution of a search warrant. During surveillance, police had observed him enter and leave the residence to be searched on numerous occasions. Based on their belief that Williamson was an occupant of the residence, after arriving to exercise a search warrant and seeing him leave the house, police stopped Williamson as he was about to enter his car. The police returned him to the house and detained him during the search. The Court of Appeals affirmed, holding that the court properly denied Williamson’s motion because the police had the authority to return Williamson to the house and detain him while the search was conducted.

The full opinion is available in PDF.

Green v. Carr Lowery Glass Company, Inc. (ct. of Appeals)

Filed April 13, 2007 – Opinion by Judge Irma Raker

The Court of Appeals considered whether, under the Workers’ Compensation Act, a claimant whose hearing has been damaged as a result of his occupation is entitled to have hearing aids provided by his employer/insurer, even though he does not meet the criteria for monetary compensation under the Act. The Court held that the claimant is not eligible for medical benefits, i.e. hearing aids, unless he mets the criteria for eligibility for compensation under the Act.

Thus the Court affirmed the Court of Special Appeals, which had affirmed the circuit court’s grant of summary judgment in favor of the employer/insurer.

The full opinion is available in PDF.

Thursday, April 12, 2007

Lewis v. State (Ct. of Appeals)

Filed April 12. 2007. Opinion by Judge Lynne A. Battaglia. Dissenting opinion by Judge Lawrence F. Rodowsky (retired, specially assigned), joined by Judges Raker and Harrell.

From the official headnote:
Petitioner, Lamont Anthony Lewis, sought review of the denial of his motion to suppress the seizure of marijuana discovered during a traffic stop. The marijuana was discovered by police stopped Lewis after he "almost" struck a police car when he pulled his vehicle away from a curb; Lewis was convicted of possession of a controlled dangerous substance, marijuana, in violation of Section 5-601 (c)(2) of the Criminal Law Article, Maryland Code (2002). The Court of Appeals reversed, and held that the court erred in denying Lewis’s motion because the police did not have an articulable reasonable suspicion to stop Lewis based upon the fact that he "almost" hit the car.
In dissent, Judge Rodowsky found the evidence sufficient to support the traffic stop, because the misdemeanor of negligent driving was committed in the presence of the police officers.

The majority and dissenting opinions are available in PDF format.

McNack v. State (Ct. of Appeals)

Filed April 12, 2007. Opinion by Judge Dale R. Cathell.

From the official headnote:
Seven members of the Dawson family died as a result of the alleged firebombing of their home by drug-dealers. Relatives of the Dawson family filed suit against various governmental entities asserting that their actions violated the state constitutional rights of the Dawson family and that said entities were also negligent in failing to protect the Dawson family from the drug-dealers. Reviewing the trial court’s grant of the governmental entities’ motion to dismiss the complaint for failure to state a claim, the Court of Appeals held that the Circuit Court for Baltimore City was correct as a matter of law when it found that the state-created danger theory did not apply in Maryland or, even if applicable, did not apply under the circumstances of the case and that a special relationship did not exist between the appellees and the Dawson family. The Court further held that the trial court did not err in dismissing the case prior to discovery being conducted.
This case arose out of the tragic deaths of the Dawson family, whose home was firebombed in retaliation for the Dawsons' efforts to combat the illicit drug trade in their neighborhood. The suit was filed by certain relatives of the Dawsons ("McNack") against the State and City, and virtually every public official involved in law enforcement at the time (collectively, the "State"), alleging violations of the Dawsons' right to due process and equal protection under Maryland's Declaration of Rights, and negligence in failing to protect the Dawsons. The State defendants argued that they did not owe a duty to, nor did a "special relationship" exist with, the Dawsons. The Baltimore City Circuit Court agreed, and dismissed.

The Court issued a writ of certiorari, and on appeal McNack questioned the trial court's rulings on the due process rights under the 'state created danger' doctrine, on the lack of a "special relationship", and on dismissing the case prior to the opportunity to conduct discovery.

The Court noted that Maryland had not yet, by statute or caselaw, adopted the state created danger theory to impose liability upon governmental entities for private acts that, if committed by the government, would violate constitutionally protected rights, even where no special relationship exists between the government and the injured person, where the state has increased the risk of harm to its citizens through its own acts. Moreover, even in those cases where it has been recognized in other states, the claims were all brought under federal law, and not the Declaration of Rights of the Maryland Constitution or other state constitutions. Finally, even if the Court were to adopt the state created danger doctrine here, there were no affirmative acts by the State in this instance, and the Court therefore declined to decide the application of the doctrine in this case.

Turning to the negligence claim, the Court looked to the "seminal" Ashburn case for guidance, and found that there must be a "special relationship" between the officer and the individual in order to create a duty to that individual, that is, a demonstration that the officer affirmatively acted to protect the specific victim or group, thereby inducing the victim or group to rely upon the officer. Here, the Court did not find that the pattern of 911 and 311 calls by the Dawsons, the promises to put the family on the "Special Attention List", or suggestions that the family move or be placed in a protective status created such a special relationship, under either the first or second prongs of the Ashburn test. The Court found that the result here to be consistent with the public policy considerations present in Ashburn.

Since the allegations would not suffice to establish a duty based upon a special relationship, the Court found no error in dismissing prior to discovery.

The opinion is available in PDF format.

Bereano v. State Ethics Commission (Ct. of Special Appeals)

Filed April 12, 2007. Opinion by Judge James A. Kenney, III (retired, specially assigned).

Upon consideration of Bereano's appeal of the judgment of the Circuit Court for Howard County, which had affirmed the finding of the State Ethics Commission (the Commission") that Bereano had knowingly and willingly violated Section 15-713(1) of the State Government Article of the Maryland Code by being engaged for lobbying purposes for compensation that was contingent upon executive or legislative action, and the sanctions of reprimanding him, suspending his lobbying activities for ten months, fining him $5,000 and requiring him to submit copies of all fee agreements for a period of three years, the Court AFFIRMED the judgment below. The Court also DENIED Bereano's motion for reconsideration to a court panel or in the alternative for an en banc hearing.

This case arose out of a contractual relationship between Bereano and a client ("Traina") for lobbying, political consulting and contract development services for Traina's company. The contract ("Fee Argeement") was proposed by Bereano on September 1, 2001 and accepted by Traina on September 13, 2001, and provided for a monthly retainer, reimbursement of expenses, and compensation of 1% of the first year's receivables for each facility opened for which Bereano was "involved in securing and participated in obtaining, and/or any contract or performance of services which is entered into by your company with any government entity, unit or agancy in the State of Maryland or and other sate of jurisdiction in which [Bereano] worked on the matter."

On November 13, 2001, Bereano filed a lobbying registration form with the Commission for executive and legislative action lobbying on behalf of one of Traina's company's subsidiaries. Subsequently, Bereano billed Traina for his services, including the monthly retainer and expense reimbursement.

In June of 2002, Traina sent a letter to Bereano, noting that the Baltimore Sun had questioned the Fee Agreement, claiming it contained an illegal "contingency agreement". Subsequently, the Fee Agreement was amended to remove the questioned language. The Commission subsequently initiated a complaint against Bereano in September, 2002, on matters including the Fee Agreement, and a hearing on the merits was held in June of 2003. At the hearing, Bereano claimed the additional fee was included at Traina's request, but did not call Traina to testify on this, and claimed that he had not in fact performed any lobbying on behalf of his client.

In its final decision and order, the Commission found that Bereano had knowingly and willfully violated Section 15-713(1), based upon the clear language of the Fee Agreement, finding Bereano's testimony less than credible in claiming not to be aware of Traina's public contracts and in not performing lobbying for Traina, and imposed a fine, a reprimand, a suspension for ten months, and supervision for three years thereafter.

The Court noted that Bereano's claim to have not done any actual lobbying was not relevant, since the prohibited activity was contracting for such contingent agreement and not actual performance, and he had in fact registered as a lobbyist, bringing him within the sanctions provided in the statute. Interpretation of the 'plain meaning' of the statute may include consideration of the context in which it was passed, and the evil intended to be addressed, and to prohibit only contracts for successful lobbying would not effect the purpose. Similarly, the 'plain language' of the Fee Agreement supported the Commission's conclusion that in fact it contained a prohibited contingency fee agreement.

Bereano also claimed that the statute's effective date, being November 1, 2001, was after the execution of the Fee Agreement, and to hold him liable would be to retroactively apply the statute. The Court disagreed, since it was not only the execution of the Fee Agreement, but the continued operation under it, that constituted the violation, distinguishing this situation from that in the Evans decision, which involved a prior criminal conviction. The Court also found that intentionally and voluntarily entering into the Fee Agreement and continuing to operate under its provisions satisfied the "knowingly and willingly" requirement of the statute.

Bereano also contended that the Commission erred in applying the "missing witness rule" to infer from Bereano's decision not to call Traina that Traina would not have supported Bereano's representations on several points. The Court found that it was up to the Commission, as trier of fact, to draw inferences from conflicting evidence, and that here Traina was "peculiarly available" to Bereano, based on their business relationship, that was not countermanded by the Commission's ability to subpoena Traina, had it chosen to do so. Since Bereano had himself highlighted what Traina would have said "if he were here under oath", it was incumbent upon him to explain Traina's absence, and no error for the Commission to apply the "missing witness rule", allowing it to draw a negative inference from that absence.

The opinion is available in PDF format.

Sapero v. Mayor and City Council of Baltimore (Ct. of Appeals)

Filed April 12, 2007. Opinion by Judge Dale R. Cathell.

From the official headnote:
Headnote: Code of Public Local Laws of Baltimore City, §21-16 requires that, in order to utilize quick-take condemnation, the City of Baltimore demonstrate why, because of some exigency or emergency, it is necessary and in the public interest for the City to take immediate possession of a particular property.
On direct appeal to the Court of Appeals, the Court VACATED the judgment of the Baltimore City Circuit Court allowing the quick-take of Sapero's property, and REMANDED the case for further proceedings consistent with this opinion.

In a factual situation very similar to that considered in the recent Valsamaki case (discussed in this post), the Court once again considered litigation stemming from an attempt by the city of Baltimore (the "City") to exercise its quick-take condemnation powers, this time against the owner of the old Chesapeake Restaurant property and other parcels (the "Property"), as part of Charles North Urban Renewal Plan for the Charles North Revitalization Area.

In this case, after being authorized in June 2004 to purchase the Property, the City negotiated with the owner to acquire the Property until December, 2005, when it filed an action for regular condemnation and petitioned for immediate possession and title. The trial court granted the City's petition. Sapero timely answered the petition, and filed a motion to vacate. After several postponements, the trial court finally held a hearing on March 20, 2006, granted the City's petitions and denied Sapero's motion to vacate, and denied Sapero's subsequent motion to alter or amend judgment.

On appeal, Sapero raised several questions, some of which the Court "briefly comment[ed] on" in a footnote, but the case was resolved on two of them. The first, and dispositive, issue was the total lack of evidence to support the required "immediate need" for possession under the quick-take statute. This matter had been decided below prior to the Valsamaki case, and therefore the trial judge did not have the benefit of the Court's ruling in that case that the City must demonstrate the reasons why it is necessary for it to have immediate possession and title to a particular property. Here, as in Valsamaki, there was no such sufficient showing.

The Court noted that there was more than 19 months from the time it was authorized to acquire the Property before it filed for quick-take condemnation, a time period sufficient to allow for discovery in a regular condemnation proceeding, and that the City had requested at least one postponement during the proceedings. By contrast, the trial judge denied Sapero a requested continuance, based upon the perceived urgency imposed by the quick-take statute.

In considering Sapero's due process challenge to the statute and its use in this case, the Court noted that the nature of a quick-take proceeding limits the availability of discovery, and therefore limits the ability of the property owner to investigate the appropriateness of the condemnation and challenge it effectively. The Court noted that in this case there was no indication that Sapero's request for answers to interrogatories, production of documents and admissions had ever been answered by the City, highlighting the due process constraints imposed by quick-take proceedings.

Given the potential for due process violations created by the expedited quick-take remedy, and the specific language of the statute, the Court affirmed the principle established in Valsamaki, that the City must establish that such truncated procedures are "warranted by extreme circumstances" and are in the public interest. Here, as in Valsamaki, there was virtually no evidence of any kind that any such extreme circumstances existed, but rather it appeared that the City was using quick-take proceedings to gain a litigation and negotiating advantage rather than proceeding from and with the requisite justification demanded by the federal and state due process requirements, and the specific language of the statute.

The opinion is available in PDF format.

Wednesday, April 11, 2007

Attorney Grievance Commission v. Mahone (Ct. of Appeals)

Filed April 10, 2007. Opinion by Judge Clayton Greene, Jr.

From the official headnote:
ATTORNEY DISCIPLINE – Our goal in matters of attorney discipline is to protect the public and the public's confidence in the legal profession rather than to punish the attorney.

ATTORNEY DISCIPLINE – We protect the public by imposing sanctions that are commensurate with the nature and gravity of the attorneys’ violations and the intent with which they were committed. The severity of the sanction depends upon the facts and circumstances of each case, taking account of any particular aggravating or mitigating factors. Under the circumstances, the appropriate sanction is a reprimand where the attorney disrupted court proceedings in one instance; and, in another instance walked out during the court proceedings to show his disdain for the trial judge. The mitigating factors were that the attorney’s clients were not prejudiced as a result of his misconduct and that there were no prior disciplinary proceedings filed against the attorney. In addition, by imposing a reprimand in this case, we are able to send a clear message to the Bar that deliberately disruptive behavior by attorneys in court proceedings will not be tolerated.
In the course of representing two clients in three matters before two judges, Mahone was found by the hearings judge to have not shown up for a hearing in one matter, without notice to the court that he would be tardy or explaining or apologizing for his tardiness afterwards, and repeatedly interrupted the judges and acted in a condescending manner in two other matters, including leaving the courtroom and abandoning his client during the judge's rendering of his opinion in one of them. Consequently, the hearings judge found Mahone's conduct to have been prejudicial to the administration of justice in violation of Rule 8.4(d) of the MRPC.

Mahone filed exceptions on the grounds that the hearings judge failed to make findings of mitigation on the basis of his "Equitable Grounds Defense", in which he had suggested that the complaints had been filed as a product of judicial retaliation and resentment, and that the hearing judge erred in finding that one instance of lateness supported a finding of discourtesy, and in failing to find that one of the trial judges initiated a patter of interruptions, goaded him during the hearing, was discourteous to counsel, and lost control of the proceedings and created a hostile and oppressive court environment, and that Mahone's walking out was a "speech protest" rather than a substantial idsruption of the proceedings. Mahone also noted that neither judge had held him in contempt, and that one waited four months before filing a complaint.

The Court found that Mahone had had a full opportunity to be heard before the hearing judge on all matters raised in the exceptions, and found no basis for determining the factual findings below were clearly erroneous. The Court had little effort affirming the hearing judge's finding of law that Mahone had violated MRPC 8.4(d), finding that his patterns of disruption and walking out of court constituted a direct contempt, and that the exceptions proffered, even if taken at face value as true, did not excuse Mahone's conduct. Further, the restraint exercised by the judges did not serve to demonstrate that his conduct was not disruptive.

The Court did not agree with the suspension requested by Bar Counsel, noting that not every contempt of court deserves suspension or disbarment. Here, given that Mahone was, as noted by the hearing judge, a "zealous advocate" who had "[lost] his perspective", that neither client had been prejudiced by Mahone's misconduct, and that there had been no prior disciplinary proceedings against him, the Court held that the appropriate sanction was a reprimand, since that would be sufficient to "send a clear message" that such behavior will not be tolerated.

The opinion is available in PDF format.

Miller v. Comptroller of Maryland (Ct. of Appeals)

Filed April 10, 2007 -- Opinion by Judge Dale Cathell

This case involed the issues of how a State employee is to be compensated for time spent commuting to and from an out-of-regular work site and whether a State employee is entitled to an award of compensation for acts occurring outside a 20 day period prior to the filing of a grievance. The Court held that COMAR17.04.11.02B (1)(j) does not entitle employees to compensation for all time spent traveling between home and a work site other than their assigned office and that Maryland Code (1993, 2004 Repl. Vol.), § 12-203(b) of the State Personnel and Pensions Article requires a remedy to be limited to compensation for claims existing within 20 days prior to the initiation of a grievance.

The opinion is available in PDF.

Erie Insurance Exchange v. Heffernan, II, et al. (Court of Appeals)

Filed April 10, 2007 --Opinion by Judge Clayton Greene

The parents of a child killed in an automobile accident when the driver fell asleep sued for benefits, pursuant to two policies of insurance issued to them by Erie Insurance Exchange. The Court of Appeals held that, in a breach of contract action for benefits, pursuant to the uninsured/underinsured provisions of an automobile insurance contract executed in Maryland, what the parents were "entitled to recover" was determined by Delaware substantive law because the law of the situs of the accident controlled the tort aspects of the claim, including questions of liability and damages raised in an uninsured motorist claim.

Prior to filing the contract action, the parents had settled the underlying tort claim against the underinsured tortfeasor. Because Erie approved the settlement with the tortfeasor, the Court noted that Erie was bound by that settlement and, therefore, liability was not at issue. The Court also concluded that Maryland's public policy exception to the doctrine of lex loci delicti does not require the application of Maryland's statutory cap on non-economic damages or application of Maryland's contributory negligence principles.

The opinion is available in PDF.

Forster v. Hargadon (Ct. of Appeals)

Filed April 11, 2007 --Opinion by Judge Alan Wilner

Nancy S. Forster, the Public Defender of Maryland, petitioned for a writ of prohibition, writ of mandamus, or other appropriate relief, vacating a directive and order issued by Judge Edward Hargadon, of the Circuit Court for Baltimore City. Forster argued the directive and order were substantively unlawful and constituted an impermissible local rule. The order imposed certain procedural requirements on parties filing exceptions to the report of a master in juvenile cases and permits the court to dismiss the exceptions if those requirements are not met. The directive directed the court clerk to enter the order in each exceptions case, so that the order and its requirements would be case-specific.

A motion to stay the directive and order pending the Court's decision on the petition had been granted earlier. After considering the petition, however, the Court dismissed it and revoked the stay because the requested relief, if
warranted, was available in two pending cases in Court of Special Appeals.

The Opinion is available in PDF.

Jackson v. Pasadena Receivables (Ct. of Appeals)

Filed April 11, 2007 --Opinion by Judge Alan Wilner

This case arose from a collection action in the District Court to recover judgment on a credit card debt. The debtor, Sheri Jackson, never denied that she used the credit card to purchase the items which, together with finance charges, comprise the debt and that, at some point, she simply stopped making payments on the account. She argued that, because she never signed the credit card agreement and the credit card issuer, Citibank, made no reasonable attempt to obtain her signature, the credit card agreement violates a provision of the Maryland Retail Credit Accounts Law (RCAL), codified at Maryland Code, § 12-503(e)(1) of the Commercial Law Article (CL). As a result, Ms. Jackson claimed that, in accordance with CL § 12-513(a), all of the finance charges that had ever been assessed during the nine years that she used the credit card were forfeited.

The Court disagreed and holding that the choice of law provision in credit card agreement, calling for South Dakota law to be applied to disputes arising under the agreement or in connection with the use of he card, was valid and enforceable in Maryland. The Maryland Retail Credit Account Law provision requiring that the credit card agreement be signed by buyer or that issuer make reasonable attempt to obtain buyer's signature was not such a fundamental policy of Maryland that it could override the choice of law provision.

The Opinion is available in PDF.

Tuesday, April 10, 2007

Alford v. Genesis Healthcare (Maryland U.S.D.C.) (Not approved for publication)

Signed April 9, 2007. Memorandum Opinion by Judge Richard D. Bennett (not approved for publication)

Upon consideration, the motion by defendant ("Genesis") for summary judgment was GRANTED.

The plaintiff ("Alford") was employed by Genesis as a Registered Nurse in its nursing care facility in Maryland beginning in 2003. When complaints arose about her performance, an investigation determined that Alford had failed to properly handle controlled substances, and she was discharged in 2004. As required by statute, Genesis reported the medication errors to the Maryland State Board of Nursing, and consequently Alford was required to enter a rehabilitation program for nurses to avoid disciplinary action against her by the State Board.

In 2005, Alford filed suit against Genesis in state court, and Genesis subsequently had the case moved to federal court based upon diversity of citizenship. Alford sought relief from Genesis based upon counts sounding in respondeat superior, wrongful termination, civil conspiracy, invasion of privacy false light, and intentional infliction of emotional distress. Genesis moved for summary judgment, and the judge reviewed the evidence in a light most favorable to Alford to determine if there was a genuine issue as to any material fact.

The judge found that the doctrine of respondeat superior was not a separate cause of action, but would only be relevant if a cause of action existed against Alford's direct employer, in order to hold Genesis liable. Since Alford was an at will employee, and no evidence to support a claim of abusive discharge had been submitted, there was no wrongful termination in this case. Since Genesis was under a statutory duty to report Alford's misdeeds to the State Board, it had a qualified immunity sufficient to overcome Alford's allegation of defamation, and Genesis' qualified immunity would also protect it against Alford's false light charge. Finally, civil conspiracy is not a cause of action apart from an underlying tort, and since no tort had been demonstrated in this case, the judge granted Genesis' motion for summary judgment on all counts.

The Memorandum Opinion is available in PDF format.

Ward v. Hammond et al. (Maryland U.S.D.C.) (Not approved for publication)

Filed March 30, 2007 --Opinion by Judge Catherine Blake

Ward, an inmate at the Western Correctional Institution ("WCI"), alleged that medical personnel at WCI had denied him medical treatment and housing for his complaints regarding knee and lower back problems related to an old automobile accident. The court considered motions to dismiss and/or for summary judgment, granting all but those pertaining to Plaintiff's claims against defendants Hammond, Van Meter, and Tessema (respectively, a nurse practitioner, nurse, and physician at WCI) for his medical treatment prior to July 1, 2005, based on a delay in providing treatment prior to that date.

The count asserted against Department of Public Safety and Correctional Services ("DPSCS") was dismissed because DPSCS is not a "person" under 42 U.S.C. § 1983 and is entitled to Eleventh Amendment immunity. Defendants CMS and PHS were dismissed because the doctrine of respondeat superior liability does not apply to § 1983 claims. The count asserted against those defendants stemmed from violations of prison directives, which the court held did not give rise to a § 1983 claim or a private right of action.

The court explained that a denial of medical care claim in violation of the Eighth Amendment required the plaintiff to prove an objectively serious medical condition and a subjective component of deliberate indifference on the part of prison officials or health care personnel. The Court determined that there was no dispute that Ward had a medical problem involving his knees relating to injuries suffered in a motor vehicle accident in the mid 1980's. The Court found a genuine dispute of material fact regarding the constitutionality of the level of care received by Ward for his orthopedic condition prior to July 1, 2005. Thus summary judgment was not granted for that time period as to the medical defendants.

The Opinion and Order are available in PDF.

Sykes v. Wicomico County (Maryland U.S.D.C.) (Not approved for publication)

Filed March 30, 2007 --Opinion by Judge Catherine Blake

Tyrone Sykes sued the defendants, Officers Phillips and Alessandrini for violations of federal and state law arising out of a scuffle during his arrest for criminal trespass in Salisbury, Maryland. In a Maryland district court trial, Sykes was found not guilty of the criminal trespass charge, after the judge found no probable cause for his arrest. The judge noted that under the common law one could resist reasonably in an unlawful arrest. In federal court Sykes alleged violations that included assault, battery, false imprisonment, false arrest, malicious prosecution, excessive force, violation of the Maryland Declaration of Rights, and violation of 42 U.S.C. § 1983.

Sykes claimed that his Fourth Amendment rights were violated because the defendants illegally searched his person after arresting him without a warrant. The court denied summary judgment on that claim because of a genuine dispute of material fact as to whether the officers had probable cause for the arrest. The court rejected summary judgment for the defendants based on qualified immunity because as stated by Syke’s version of the events, an arrest for trespass, and subsequent search, by the police without express authorization or prior agreement, and where the plaintiff articulates a plausibly legitimate reason for being on the premises, which has been acknowledged by the officer, is a constitutional violation.

Finding that the notice provisions of the Maryland Tort Claims Act do not implicate individual state employees, the court held that Sykes’s possible failure to comply with the MTCA would not bar his claim.

The defendants claimed that they were entitled to statutory immunity for the state law claims but the court rejected that as a basis for summary judgment because on the facts taken in the light most favorable to Sykes there was evidence sufficient for a jury to find actual malice, which would preclude qualified immunity. Analyzing the claims of excessive force during an arrest under the Fourth Amendment’s objective reasonableness standard and again taking the facts in the light most favorable to the plaintiff, the Court found a genuine dispute of material fact concerning whether defendants used excessive force.

With respect to the assault and battery claims, the court noted that police officials are not responsible in inflicting injury on a person being arrested, unless the officer acts with malice or gross negligence. Because there was a genuine dispute as to whether the police officers lacked probable cause in arresting Sykes for trespass, and taking the facts in the light most favorable to Sykes, the judge denied summary judgment on that basis because a jury could find malice in the defendants’ actions. On a similar reasoning, the court found summary judgment inappropriate as to the false arrest, false imprisonment, and malicious prosecution allegations.

The Opinion and Order are available in PDF.

Monday, April 9, 2007

Thomas v. Giant Food, LLC (Ct. of Special Appeals)

Filed April 9, 2007. Opinion by Judge Deborah S. Eyler.

On appeal from the grant of summary judgment in favor of the employer ("Giant") against a former worker ("Thomas"), affirming the denial of Thomas' claim by the Workers' Compensation Commission (the "Commission"), the Court AFFIRMED the decision below.

Thomas was injured while at work at Giant, during a period in which he was employed both by Giant and in a second job. The injury was severe enough to preclude Thomas from continuing to work at Giant, but he was able to continue the more sedentary second job. Thomas filed with the Commission for temporary partial disability, which was opposed by Giant because his weekly earnings from his second job exceeded his average weekly wage from Giant. The Commission agreed, and Thomas' appeal to the Circuit Court for Prince George's County was equally unavailing.

On appeal, Thomas advanced what the Court characterized as an "equity" argument: that the wages from the second job should not be considered in calculating his "wage earning capacity", or in the alternative the second job should be included as well in the "average weekly wage". Otherwise, since the wages from the second job exceeded the average weekly wage received from Giant, there would be no compensation, and that was contrary to the social purpose of the workers' compensation laws.

The Court noted that Worker's Compensation is purely a statutory remedy, and therefore any remedy is limited to that provided by the terms of the statute. Here, the statute clearly provides that "wage earning capacity" includes not only income from the injury-producing job but also other jobs, and "average weekly wage" only includes wages from the injury-producing job. Since Thomas' "wage earning capacity" exceeded his "average weekly wage", no compensation for temporary partial disability was due per the relevant provisions in the statute.

The Court noted other provisions in which the legislature had explicitly included or excluded other income in calculating eligibility for or the amount of benefits, but had not done so there. Unless and until the legislature sees fit to change the statute, the Court found that the result arrived at by the Commission and the court below was correct.

The opinion is available in PDF format.

Becker v. Anne Arundel County (Ct. of Special Appeals)

Filed April 9, 2007. Opinion by Judge James R. Eyler, Jr.

From the official headnote:

Amendments to State and county critical area laws, absent an express statement as to prospective or retrospective application, apply to matters pending and not yet decided by the agency responsible for de novo decision making.

When a board of appeals denies an application for a variance, and the property owner has a legal right to build on the property, but cannot do so without a variance, it is not sufficient for the Board to state that the owner had not met its burden of proof. The Board must explain and give reasons for its denial of the requested variance.
On appeal from the affirmation by the Anne Arundel Couty Circuit Court of the Board of Appeals' denial of variances needed to permit construction of a home by the owner ("Becker") on a waterfront parcel subject to the Critical Area Program, the Court REVERSED the decision below and REMANDED to the Circuit Court with instructions to vacate the decision of the Board and remand the case to the Board for further proceedings consistent with this opinion.

Becker applied for three variances needed to allow the construction of a proposed dwelling on a lot on the Magothy River, 97% of which was within the 100-foot critical area buffer. After taking testimony in a de novo hearing, the Anne Arundel County Board of Appeals (the "Board") denied the variances, and Becker appealed to the Circuit Court, which affirmed the Board's decision.

Upon appeal, Becker alleged that the Board applied an incorrect and illegal standard in requiring the variances to be the "absolute minimum necessary", failed to make reasonable accommodations for Mrs. Becker's physical disability, erred in ignoring the overwhelming evidence in favor of the variances, ignored the physical evidence supporting the variance criteria, and erred in "taking" Becker's property without just compensation.

The Court found that the state legislature had been very clear in strengthening the Critical Area Program by amendment, in direct response to several cases indicating some judicial leniency, allowing local implementation consistent with the state program. The Court found that a clarifying amendment enacted during the pendency of the matter at issue here did apply, and that the county enactments incorporating the amendments were effective and not preempted by the state provisions.

In reviewing the deliberations by the Board, the Court noted that the two Critical Area-related variences should have been considered separately from the setback variance, since different standards applied, and the reasons for the decision should have been stated with greater particularity, finding no evidence at all in the record to support some of the Board's findings. In context, the Court found the Board had applied the correct standard notwithstanding some language indicating otherwise. The Court also indicated taht the Board must take into account evidence of Mrs. Becker's alleged disability in its considerations. The Court was not willing to entertain Becker's taking argument, since it was not clear that the Board's decision would preclude all economically beneficial use of the property, but noted that denail of variances might, under some circumstances, constitute a taking.

Finally, the Court noted that the Board was not an administrative body which had discretion to do or not do an act, for which a mere statement that the applying party had failed to satisfy the burden of persuasion would suffice, but rather it must grant or deny varience requests, and has an obligation to explain its decision. For that reason, the Court reversed the decision below and remanded with instructions to remand to the Board for further proceedings consistent with the Court's opinion.

The opinion is available in PDF format.

Sunday, April 8, 2007

U.S. v Carson (Maryland U.S.D.C.)(Not Approved for Publication)

Order Signed April 5, 2007--Magistrate Judge James K. Bredar. (Not approved for publication.)

On February 20, 2007, the Court entered an Order detaining the Defendant pending disposition of the criminal charges against him, pursuant to 18 USC §3141 et seq. (The Bail Reform Act). In light of the Defendants manifest health issues (the Defendant was a transgendered individual, infected with HIV), the Court entered another Order directing the United States Marshals Service and its contractors to evaluate specified medical problems reported by the Defendant and his lawyer and then to provide care and treatment consistent with the standard of care for the conditions revealed by the ordered examination.

Two weeks after the Defendant was remanded to the custody of the Marshal the Court was advised that the Defendant was not receiving necessary medication, and it became apparent that the Court's prior medical Order was being ignored. The Defendant requested that he be ordered released and, when the Government raised no objection to this proposed remedy for the failure to care for the Defendant, the Court granted the request. Frustrated by the noncompliance with the Medical Order, the Court went on to order the Marshals Service and its contractors to show cause why they should not be held in contempt for their apparent violation of the Order. A hearing was held on March 13, 2007.

That hearing revealed defects in process in addition to omissions by individuals. At the conclusion of the hearing the Court took the matter of contempt findings under advisement and directed that the Marshals Service and their contractors conduct a further investigation and then file with the Court a plan of action designed to insure that federal detainees will receive appropriate medical care in the future and, most importantly, will insure that there is good compliance with the Court's medical orders in the future.

The United States Marshals Service and the Maryland State Department of Public Safety and Correctional Services submitted their "Proposed Plan of Action" on March 27, 2007. The Court concluded that it now appears that there is a definite and precise procedure for insuring that federal detainees are presented to medical staff and that any relevant orders of this Court are transmitted to medical staff. The Court concluded that the imposition of any sanctions would not be productive and that further pursuit of contempt issues would not be useful at this time. However, the Court warned that:
The Marshals Service, the U.S. Attorney and the State are collectively charged with the responsibility to be vigilant and to insure that conditions do not again deteriorate to the deplorable state revealed at the hearing and by the subsequent investigation.

The Memorandum and Order are available in PDF.

Saturday, April 7, 2007

Glaxo Group, Ltd. v. Leavitt (Maryland U.S.D.C.) Approved for Publication

Order Signed April 6, 2007--Judge Andre M. Davis. Approved for publication.

Plaintiff Glaxo Group, Ltd., sought and obtained a temporary restraining order (TRO), which was secured by a $3 million bond, enjoining the effectiveness of the approval by the Food and Drug Administration of an application by intervening defendant Roxane Laboratories, Inc. (Roxane), to market fluticasone propionate, the generic form of Glaxo's patented Flonase, the patent for which had expired. Subsequently, after a hearing, the Court denied Glaxo's motion for a preliminary injunction. Now pending is Roxane's motion for execution on the bond.

In this opinion and order, Judge Davis sets forth findings of fact and conclusions of law determining that Roxane has suffered damages from the TRO and should have execution against the bond.

The Court concluded that:
The TRO prevented Roxane from marketing fluticasone for a total of 11 days, causing Roxane to lose profits that it would have otherwise realized. This harm is real and substantial for two reasons: (1) at the time of the TRO, Roxane's fluticasone products, which had already been shipped to the retailers, were prevented by the TRO from being sold to consumers; and (2) Roxane has established by the clear weight of the evidence an adequate, if modest, run rate for fluticasone sufficient to reasonably calculate lost profits.
The Court found that Roxane would have had net profit of $14.80 per unit and that, in the 11 days that the TRO was in effect, it would have sold 223,272 units. It thus suffered $3,304,423.97 in lost profits as a consequence of the TRO, which is an amount in excess of the $3 Million bond. Accordingly, it awarded Roxane the entire bond amount.

In a footnote, however, the Court denied Roxane full restitution damages, holding that:
Roxane is not entitled to a restitutionary measure of recovery. Glaxo did not act wrongfully under the circumstances of this case; indeed, its prompt decision to withdraw its appeal from the denial of the preliminary injunction evidences its good faith. While it is true that Glaxo had sales that it would not have enjoyed during the pendency of the TRO had the TRO not been issued, its right to seek such relief was not exercised maliciously or unlawfully. As an intervening defendant, Roxane had the right to urge the court to require a bond that was reasonable under the circumstances and it did so.

The full opinion is available in PDF.

Friday, April 6, 2007

Trail v. Terrapin Run, LLC (Ct. of Special Appeals)

Filed April 6, 2007. Opinion by Judge James R. Eyler, Jr.

From the official headnote:

Maryland Code Art. 66B, which empowers certain local jurisdictions to adopt zoning codes, does not require a special exception use to be in strict compliance with a local comprehensive plan. A local jurisdiction may require strict compliance, but if it does not, a plan functions as a guide. The local ordinances and comprehensive plan, adopted by a particular jurisdiction, must be reviewed as a whole to determine the role of the plan in a special exception analysis. Thus, the conclusion as to the plan's role does not necessarily turn on the use of a particular word or phrase at a specific location within an ordinance or a plan. If a review of the ordinances and plan as a whole lead to the conclusion that strict compliance with a plan is not
required, the phrases "conforms to," "is consistent with," and "is in harmony with," when used to describe the relationship between a special exception use and a plan, have essentially the same meaning. Held that Allegany County's plan serves as a guide, not a strict regulatory requirement.
Judgment of the Allegheny County Circuit Court denying a special exception for a large-scale planned residential development was REVERSED on appeal, and REMANDED with instructions to affirm the decision of the Board of Appeals allowing the special exception.

This case arose out of the application by the developer ("Terrapin Run") to the Board of Appeals for Allegheny County for a special exception to allow it to construct a large residential community, including community-specific retail space and wastewater treatment plant, which was a permitted use under the applicable zoning classifications requiring a special exception. The Board of Appeals granted the special exception, finding the development to be in harmony with the local comprehensive plan, and that the evidence presented by the appellants ("Trail") did not demonstrate a site-specific adverse effect. The Board also found the retail use to be accessory to the principal residential use.

Trail appealed the Board's decision to the Circuit Court, alleging the Board applied the wrong standard of review, and erred in approving the retail/commercial area and the waste water treatment plant. The trial court declined to address the latter points, but agreed with the first, and reversed the Board's grant of the special exception. On appeal, Terrapin Run suggested the proper standard had been applied below, and the approval of the retail area and the wastewater treatment plant was proper.

The Court noted that, at various places in the statutes, regulations, plans and case law, the terms "conform to", "consistent with" and "in harmony with" are used to describe the necessary relationship of the proposed special exception to the comprehensive plan. After reviewing the relevant law, the Court concluded that the enabling state law, Article 66B, grants considerable discretion to the counties in how they establish land use regulations, ranging from the comprehensive plan being anything from a mere guide to a true regulatory device, notwithstanding Article 66B's phrase "use that conforms to the plan" to describe a "special exception".

Turning to the implementation of a comprehensive plan by Allegheny County, the Court found that the county had declined to use the mandatory terms "shall" or "will", but had instead in several places referred to the plan as a "guide", and had given it little regard in the statutory zoning scheme. From this, the Court found no intent to require strict compliance with the plan, but rather an intent to give the Board wide latitude in interpreting and applying the plan when considering special exceptions.

The Court also found that neither the retail area nor the wastewater treatment plant had to be considered separately and apart from the residential development, since both were clearly incidental and accessory to the primary use, and were appropriately considered and approved with the primary residential development use.

The opinion is available in PDF format.

Thursday, April 5, 2007

Lowery, et ux. v. Smithsburg Emergency Medical Service, et al. (Ct. of Special Appeals)

Filed April 5, 2007--Opinion by Judge Arrie Davis.

This case involves allegations of defamation and intentional interference with economic relations claims. At the close of the Lowery's case, Smithsburg moved for judgment on all counts and the trial court granted the motion pursuant to Rule 2-519 on the defamation and intentional interference with economic relations claims. The Lowery's posit the following issues for review:

1) Did the trial court err in granting [Smithsburg's] Motion in Limine and precluding any testimony whatsoever pertaining to lost wages and benefits for supposed discovery violations?

2) Did the trial court apply the wrong standard of proof with regard to [Smithsburg's] motion for judgment pertaining to forfeiture of the conditional privilege afforded employers for statements made about a former employee's job performance?

3) Did the trial court err in finding there was not sufficient evidence to prove that the conditional privilege afforded statements made about an individual's employment had been forfeited in this case for the matter to be submitted to the jury?

4) Did the trial court err in finding that there was not sufficient evidence to prove that Mr. Myerly acted intentionally and wilfully for Mr. Lowery's intentional interference with economic relations claim to be submitted to the jury?

This Court affirmed the judgment of the Circuit Court for Washington County.

(synopsis to follow)

The full opinion is available in PDF.

Comptroller of the Treasury v. Clise Coal Co., Inc. (Ct. of Special Appeals)

Filed April 5, 2007--Opinion by Judge James R. Eyler.

Clise, pursuant to Tax. Gen. 9-318, obtained a license to buy diesel fuel without paying motor fuel tax at the time of sale. Clise was required to maintain records of fuel purchased and used in Maryland and, further, was required to file monthly returns with the Comptroller's office reporting the amount of fuel used in Maryland and pay tax on the fuel used.

If a taxpayer fails to keep records required under Tax. Gen. 9-309, the Comptroller may compute the motor fuel tax by using the best information in its possession. A taxpayer may appeal to the Maryland Tax Court. The assessment is prima facie correct, and the burden is on the taxpayer to show error.

In Tax Court, after proving its assessment, the Comptroller had no duty to present evidence in support of its assessment. The burden was on Clise to show error. The question on judicial review is whether there was substantial evidence in the record as a whole to support the Tax Court's decision.

Held: Judgment of the Tax Court affirmed.

(synopsis to follow)

The full opinion is available in PDF.