In addition to selected Circuit Court cases from various counties across the State, we also publish selected Circuit Court Business and Technology opinions – found on the Maryland judiciary website--with the added features of each posted case on Maryland Decisions is formatted, summarized and headnoted-- and has a unique cite. This makes it much easier to use these cases in any memo or brief. The Business and Technology opinions we have posted so far are:
Clark v. Zalco Realty, Inc., 1 Md. Dec. 714 (2013)
Finding that Plaintiff, a condominium owner, was entitled under Section 11-116 of the Maryland Condominium Act to inspect and copy various documents from the condominium management. These included detailed billing reports or supporting documentation for management’s legal invoices concerning his unit, and e-mails between the Defendant management and Defendants’ counsel concerning the financial well-being of the condominium. But the Court denied Plaintiff’s request for written advice of Defendants’ legal counsel, finding that the attorney-client privilege or the work product doctrine were not overcome by Section 11-116.
White Flint Realty Group v. Bainbridge St. Elmo Bethesda Apartments, 1 Md. Dec. 676 (2014)
Granting attorney’s fees in a complex case. After a settlement was reached in the underlying case, a motion for attorneys’ fees and expenses was filed by Plaintiff--along with a motion to enforce the settlement agreement. The Court employed the eight factor test described in Rule 1.5(a) of the Rules of Professional Conduct, along with additional considerations: the amount requested in relation to the dollar amount recovered, terms of any fee agreement, court’s own experience in similar types of litigation, and any other factor that relates to attorneys’ fees requested in the specific case before the court. After a thorough examination of all the factors and relevant considerations, the court awarded Plaintiff $3,520,256.59 in attorneys’ fees (and $411,391.88 in costs and expenses).
McDonald-Lerner v. Neurocare Associates, 1 Md. Dec. 608 (2013)
Finding that express federal pre-emption does not apply. After spinal surgery resulted in injuries, Plaintiffs sued various Defendants, alleging among other things, that the "off label" use of a specific medical device during surgery contributed to the injuries. Defendants sought to dismiss the complaint, claiming that whether the use of the Class III medical device is "off label" or is used according to the Food and Drug Administration's approved use, a state court action involving this medical device is expressly preempted. The Court determined that express federal preemption did not apply to the “off-label” use of this medical device. The Court decided that the present lawsuit did not run contrary to federal preemption policy and that the Medtronic Defendants could not rely on express federal preemption to avoid state court liability. Also, the lawsuit alleges parallel claims sufficient to escape preemption. The motions to dismiss were denied.
Gregg LaPointe. v. Sigma Tau Pharmaceuticals, Inc, 1 Md. Dec. 530 (2013)
Finding that the “unity of interest” doctrine does not entitle summary judgment for Defendants. A group of former employees of a pharmaceutical company brought an action against its controlling company and its major stockholder, alleging that the controlling company and its major stockholder wrongfully interfered with the long- term benefit plan that they had entered into with the pharmaceutical company. Defendants filed for summary judgment asserting a “unity of interest” between the parent company and its wholly-owned subsidiary, and by this doctrine the parent and the subsidiary are treated as one--and a party cannot be held liable for wrongfully interfering with its own agreement. Deciding an issue of first impression in Maryland, the Court held that the privilege granted by the “unity of interest” doctrine is not absolute. That is, the privilege of the “unity of interest” doctrine does not lie if the parent acts contrary to the interest of the subsidiary, or interferes with the contract or relationship by use of wrongful means. Because there is a material dispute of fact regarding whether controlling company or its major stockholder used wrongful means to interfere with the contract between the Plaintiffs and the pharmaceutical company, the motion for summary judgment was denied.
Corvex Management LP v. CommonWealth REIT., 1 Md. Dec. 437 (2013)
Ruling that the parties have a duty to arbitrate. Arbitration is strongly favored as a matter of public policy coupled with the general rule that the parties’ intentions control as to when an agreement to arbitrate exists, where the arbitration agreement was spelled out in the company’s bylaws and also referenced by provisions in the sale of stock in that company, a valid and enforceable arbitration agreement exists and controls here, and thus the parties have a duty to arbitrate.
Saxon v. Emmett, 1 Md. Dec. 217 (2009)
Finding that discovery is permitted as to allegations of improper service of process. Discovery will be permitted as to the defendant's allegation of improper service of process, since the defendant conceded actual knowledge of the lawsuit, and the service of process was left with his wife --a suitable person of age and discretion--at their Virginia abode. Defendant insists that he has moved from the abode, but his affidavit does not address some pertinent issues in that regard, for example: 1) that he no longer owns or has an interest in the residence where his wife received the summons and complaint; 2) that he is in any way estranged from his wife; 3) that he has permanently relocated; 4) the reason for the alleged “relocation;” 5) that he is no longer registered to vote in Virginia; 6) that he no longer holds a Virginia driver’s license; or 7) that he informed the Supreme Court of Virginia where he currently resides for purposes of maintaining his law license.
Saul Holdings Limited, et al. v. Raquel Sales, Inc., 1 Md. Dec. 197 (2009)
Ruling that accelerated rent provisions in a commercial lease unenforceable. In this commercial lease, the damages agreed upon are not permitted by Georgia law, that is, without accounting for the future probability of re-letting the premises. Moreover, the accelerated rent provision awarded a lump sum payment of a rent discounted to present value for a period of approximately seven years, plus possession of the premises. However, the landlord was able to re-let the premises to another tenant for five years and damages for that period are now a reasonable estimate of damages resulting from the original tenant's breach. Also, the two year period remaining in the lease, following expiration of the lease term of other tenants brought into the lease, is too far in the future to account for the probability of re-letting the premises again, and again results in damages that are too speculative and uncertain. Thus, the accelerated rent provision fails as a liquidated damages provision, therefore the Court finds that it was a penalty, and thus unenforceable.
RCC, Inc. v. Guiseppe Cecchi, 1 Md. Dec. 129 (2010)
Denying attorney- client privilege in requests for discovery. The "intermediary doctrine" of attorney - client privilege has not been recognized in Maryland by a reported decision of either the Court of Special Appeals or the Court of Appeals. Also, it appears that the "intermediary doctrine" and the "derivative privilege" doctrine are one and the same. To the extent that it is its own separate doctrine, it usually applies to the translation of information to and from the attorney. In any event, the privilege should be strictly confined so that it does not engulf all manner of services performed for an attorney. In this case, plaintiff has not met the burden of showing that the "intermediary doctrine" would protect the documents from discovery under attorney - client privilege.
Hospitality Partners v. Brewmasters Hotel, 1 Md. Dec. 85 (2011)
Denying post-judgment motions. Defendants' stated ground for terminating Plaintiff's contract "for cause," was found by the jury to not be in accord with the evidence. The jury found that the Plaintiff was not grossly negligent in its duties under the contract and the jury rejected the Defendants' common law theory of termination, finding that Plaintiff did not materially breach the agreement. Plaintiff had proven that it was damaged by the Defendants' termination, and the jury awarded damages in the amount of $2,880,801. Thus, the Court on post-judgment motions did not disturb the jury's verdict.
CIRCUIT COURT AGREES WITH DISTRICT COURT THAT DAMAGES WERE PROPERLY ASSESSED IN FAVOR OF LANDLORD IN A COMMERCIAL LEASE DISPUTE
When tenant (Etta’s Beauty Salon, Inc.) failed to execute a note for a new lease, the landlord (Parkside Shopping Center) brought an action in District Court for Baltimore County, alleging that tenant was still bound by the original lease terms. Although the tenant had surrendered the leased premises before the action was brought and the landlord had re-let the premises, the landlord alleged that tenant owed the landlord the balance of rent on the original lease (until the new tenants began to pay rent). To this, the landlord added pre-judgment interest and attorney’s fees. The tenant, meanwhile, countered that certain correspondence which supposedly terminated the lease applied or that the landlord had tacitly terminated the original lease by showing the property while tenant was still occupying it. The District Court agreed with landlord and assessed damages of: $15,261.28 in principal, $9,112.91 in pre-judgment interest, $2,289.19 in attorney’s fees, and $190.00 in costs.
The tenant took an appeal to the Circuit Court. No hearing was requested. In reviewing the transcript from the District Court proceeding, reviewing all exhibits, and trial memoranda, the Circuit Court found no clear error and affirmed the judgment of the District Court.
Parkside Shopping Center, LLLP v. Etta's Beauty Salon, Inc., et al., 1 Md. Dec. 648 (2014) Circuit Court for Baltimore County (Ruth Ann Jakubowski, J.) (March 14, 2014)
ON DISTRICT COURT APPEAL, CIRCUIT COURT AGREES WITH JUDGMENT, FINDING THAT PLAINTIFF CORPORATION DID NOT PROVE GOOD STANDING TO SUE
Plaintiff printing company (S&S Graphics d/b/a Westland Printers) brought action against Defendants (Menu Mailer, Inc. and Cowboy Trucking d/b/a Cowboy Printers) in the District Court for Cecil County, charging them with failure to pay Plaintiff for work done. However, Defendants required Plaintiff, under Maryland Rules 3-201 and 3-308, to prove the good standing in Maryland for Plaintiff’s corporation. Specifically, the Defendants sought in their Demand for Proof: the legal existence of the parties, the capacity of the parties to sue or be sued, the authority of the parties to sue or be sued in a representative capacity, and the execution of a written instrument which the Plaintiff sues upon. When Plaintiff submitted insufficient evidence at trial to meet these demands for proof, Defendants moved for judgment. The District Court (Stephen Baker, J.) granted Defendants’ motion.
On appeal, the Circuit Court affirmed the District Court’s judgment.
S&S Graphics, LLC v. Menu Mailer, Inc., et al., 1 Md. Dec. 398 (2013), Circuit Court for Cecil County (Jane Cairns Murray, J.) (April 18, 2013)
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Maryland Decisions is a unique subscription service for Maryland legal professionals and other users. Maryland Decisions presents selected opinions and rulings of interest from Marylandâs circuit courts and selected rulings from Maryland agencies â on appeal to the circuit courts. Each posted opinion is formatted, summarized, and headnoted and with its own citation.
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UPDATED FRIDAY, APRIL 14, 2017
IN THE APPEALS COURTS
COURT OF APPEALS
THE JUVENILE COURT HAD NO SUBJECT MATTER JURISDICTION OVER A FOSTER CHILD'S FEDERAL BENEFITS WHEN THE DEPARTMENT OF SOCIAL SERVICES WAS APPOINTED THE REPRESENTATIVE PAYEE
The Court of Appeals determined that the juvenile court had no subject matter jurisdiction over a local department of social services’ allocation of a foster child’s (Child In Need of Assistance (CINA)) federal benefits from Old Age and Survivor’s Disability Insurance (OASDI), to which the child was entitled following his parents’ deaths. The department was appointed as a representative payee by the Social Security Administration and applied the funds to reimburse itself for current maintenance cost for the foster child under CINA and SSA law and regulations. However, the Court of Appeals also determined that the Department of Social Services, acting through a local branch, must notify at a minimum a foster child’s CINA counsel whenever it applies to the SSA to be appointed representative payee of a child’s federal OASDI benefits and whenever it receives those funds.
In Re Ryan W., 434 Md. 577 (2013) [No. 95, September Term 2012, and In Re Ryan W., No. 101, September Term, 2012. (September 26, 2013)] (Opinion by Harrell, J.)
A PERSON INVESTIGATED FOR CHILD ABUSE OR NEGLECT, BUT NOT FOUND RESPONSIBLE FOR THAT ACCUSATION, NEVERTHELESS HAS A RIGHT TO APPEAL A FINDING OF "UNSUBSTANTIATED" TO THE CIRCUIT COURT
The Court of Appeals affirmed the finding of the Court of Special Appeals in Hayward v. Department of Human Resources, 177 Md. App. 402 (2007), and held that an individual found accused of (but not found responsible for) child abuse or neglect has a right to an appeal (although an "appeal" to the Circuit Court invokes the original not the appellate jurisdiction of that court) when a local department's investigation of the accusation results in a finding of "unsubstantiated." By an "unsubstantiated" finding, the accused's names were placed in the central registry of child abuse investigations. The Department declared that only an identified abuser has the right to an appeal. The accused individual appealed that interpretation to the Circuit Court, by filing a mandamus action. The Circuit Court granted summary judgments for the Department.
The Court of Appeals agreeing with the Court of Special Appeals (and thus reversing the Circuit Court) held that any individual who is investigated by State authorities for child abuse or neglect can appeal any result from that investigation.
Department of Human Resources, Baltimore City Department of Social Services v. Hayward, 426 Md. 638 (2012) [(No. 131, September Term, 2007) (May 23, 2012)] (Opinion by Bell, C.J.)
COURT OF SPECIAL APPEALS
ADMINISTRATIVE AGENCY CAN LEGALLY KEEP OLD AGE, SURVIVOR, AND DISABILITY INSURANCE BENEFITS FOR REIMBURSEMENT OF COSTS OF FOSTER CARE
Reversing the Baltimore City Juvenile Court, the Court of Special Appeals held that the Baltimore City Department of Social Services (DSS) can act as a representative payee and can keep any Old Age, Survivor, and Disability Insurance ("OASDI") to reimburse itself for the costs of a child in its care. In this case, the reimbursement was for foster care and other service over a three and one-half year period. By the end of that period, the costs of services totaled $233,305.51. The OASDI payment to the child totaled $31,693.30.
The Social Security Administration (SSA) can pay these survivor's benefit to a representative payee, if it is in the interest of a beneficiary to do so. A social service agency (e.g., providing care to the minor) is among the representative payees in the pertinent SSA regulations. A representative payee is only to use these funds for the beneficiary's care and costs of care, or to the benefit of the beneficiary. Similarly, Maryland Code and Regulations contain similar rules, see Family Law Sec. 5-525 and Sec. 5-526 and COMAR 07.02.11.29 and COMAR 07.02.11.29K through .29L.
The Court of Special Appeals found that the DSS was within its authority as a duly authorized representative payee to have used the OASDI payments paid to the minor for the past costs of his care. It reversed the Juvenile Court's decision to declare the State regulations invalid. The Court of Special Appeal similarly reversed the lower court and held that the Department's practice of applying to become a representative payee of last resort and using the SSA payment to cover the cost of care is valid. It noted that the Department's practice in this regard comports with federal regulations governing the use of SSA benefits by a similar representative payee and with State regulations declaring that all resources lawfully obtained on behalf of a minor be devoted to that minor's costs of care.
In re: Ryan W., Court of Special Appeals [No.: 1503, September Term, 2011) (September 5, 2012)] (Opinion by Deborah S. Eyler, J.) Affirmed/Reversed by Court of Appeals, 434 Md. 577 (2013)
COURT AFFIRMS THE MARYLAND BOARD OF PHYSICIANS DECISIONS TO SUMMARILY SUSPEND AND REVOKE A PHYSICIAN’S LICENSE SIMULTANEOUSLY
A male physician was the subject of two complaints by female patients of his, made to the Maryland Board of Physicians, involving sexual relationships with both patients. The Board investigated those complaints, and eventually charged the physician with violations of the Maryland Medical Practice Act (a part of the Health Occupations Article, see HO Sec. 14-404). The charges, in which the Board sought to suspend his medical license, were tried before an Administrative Law Judge. After that hearing, the ALJ issued a written decision recommending that the physician’s license be suspended. On exceptions filed by the physician, the Board overruled those exceptions and affirmed the ALJ’s recommended decision, thus entered a summary suspension of the physician’s license.
The Department of Health and Mental Hygiene Board of Review affirmed the suspension order. On a petition for review to the Circuit Court filed by the physician on the summary suspension – but by that time the Board of Physicians had revoked his license—the Circuit Court dismissed the appeal as moot. The Circuit Court also denied a motion to revise judgment.
The revocation proceeding was also brought by the Board of Physicians and also tried before an ALJ. The ALJ issued a proposed decision recommending that the license be revoked. The physician filed exceptions to this proposed decision, also. The Board overruled those exceptions and affirmed the ALJ’s proposed decision, issuing a Final Decision and Order. On petition for judicial review, the Circuit Court affirmed the Board’s order, dismissing the appeal because the Court determined that the physician did not argue his issues before the Board at the outset. The Circuit Court denied a motion to alter and amend judgment.
On appeal to the Court of Special Appeals (for both cases), the Court affirmed both the suspension order and the revocation order. The Court decided that as a matter of statutory authority and as a matter of common sense, the Board can suspend and revoke a physician’s license at the same time—that is, they are not mutually exclusive. The Court clarified an earlier case, Board of Physician Quality Assurance v. Mullan, 381 Md. 157 (2004). Thus, the Circuit Court’s orders were affirmed.
Roane v. Maryland Board of Physicians, 213 Md. App. 619 (2013) [(Nos. 271 & 542, September Term, 2012) (September 5, 2013)] (Opinion by Nazarian, J.)
COURT DETERMINES THAT THE EMPLOYMENT AGREEMENT AT ISSUE PROVIDED THAT THE EMPLOYEE COULD ONLY BE REMOVED FOR CAUSE, AFFIRMING THE CIRCUIT COURT
A complex lawsuit arose from an employment agreement. The Circuit Court, ruling on cross-motions for summary judgment, decided the issues in favor of the terminated employee. The Circuit Court awarded damages of $255,868.20. The employer appealed.
The Court of Special Appeals affirmed, determining that under the employment agreement at issue, the employee could only be terminated for cause. The employment agreement “is effectively a continuous contract terminable for-cause” and since that was not the reason for the employee’s termination, damages were appropriate. “In sum, the Employment Agreement, in our view, is not ambiguous; it is a for-cause contract that is of continuous duration, but it is not a lifetime contract. Thus, we affirm in-part and reverse in-part the trial court’s interpretation of the Employment Agreement.” The damages award was not disturbed, the Court of Special Appeals decided that the damages award was not clearly erroneous.
Spacesaver Systems, Inc. v. Adam, 212 Md. App. 422 (2013) [No. 1797, September Term, 2011) (June 27, 20130] (Opinion by Kenney, J.)