Thursday, January 30, 2014

Court of Appeals Upholds Retailer's Waiver Agreement

In BJ’s Wholesale Club Inc. v. Russell Rosen et al., No. 99, September Term 2012, argued Sept. 10, 2013, the Court of Appeals addressed the enforceability of a waiver agreement that a retailer required parents to sign prior to their children being allowed to enter a play area.  Pursuant to that agreement, all claims against the retailer involving the play area were waived. 

In July 2005, Russell Rosen (Mr. Rosen) signed a waiver on behalf of his three minor children so that they could enter the play area at BJ’s Wholesale Club.  Approximately fifteen months after the waiver agreement was signed Beily Rosen (Mrs. Rosen), took the Rosens’ five-year-old son to the play area at BJ’s Wholesale Club.  While using the play area, the Rosens’ son suffered a large acute epidural hematoma in the right temporal region as a result of falling head-first onto concrete floor covered only by a thin layer of carpet from a three-foot tall plastic figure, “Harry the Hippo.”  

The Rosens’ filed suit against BJ’s Wholesale Club, claiming that BJ’s Wholesale Club had a duty to exercise reasonable care which it breached by placing a toy designed for children to climb in an area surrounded by concrete floor with only a thin layer of carpet over it.  BJ’s Wholesale Club denied the Rosens’ allegation of negligence and filed a counterclaim against the Rosens in which it alleged breach of contract for failing to indemnify, defend, and hold it harmless pursuant to the indemnification clause in the waiver agreement.

The Circuit Court for Baltimore County granted BJ’s Wholesale Club’s Motion for Summary Judgment.  The Court of Special Appeals reversed and struck down the waiver agreement.  BJ’s Wholesale Club sought review, and, the Court of Appeals held that the waiver agreement was enforceable.

In its opinion the Court of Appeals stated that exculpatory clauses, like the waiver agreement at issue, are generally valid and enforcing them is consistent with the policy of freedom to contract.  However, traditionally, as the Court noted such clauses are not upheld “in transactions affecting the public interest.”  The Court examined societal expectations under both statutory and common law and discussed different pieces of legislation that empower parents “to make significant decisions on behalf of their children.” 

In addition, the Rosens argued that the state’s interest in protecting children limits the ability of parents to make decisions that adversely affect the well-being of their children.  This argument was unsuccessful, and the Court asserted that it has “never applied parens patriae to invalidate, undermine, or restrict decision, such as the instant one, made by a parent on behalf of her child in the course of the parenting role.” 

Ultimately, the Court of Appeals determined that Mr. Rosen’s execution of the exculpatory agreement on behalf of his son did not violate public interest.  Thus, parent’s by signing such an agreement are responsible for weighing their child’s welfare against the risks associated with signing such an agreement.  

Monday, January 13, 2014

Dram Shop Liability to be Considered in 2014 Legislative Session

The 2014 Legislative Session began at noon on Wednesday, January 9, 2014.  In addition to the highly debated topics involving miniumum wage and healthcare, this session will consider the important issue related to Dram Shop Liability.

In Warr v JMGM Group, LLC, 433 Md. 170 (2013), the Court of Appeals decided against changing the common law to impose civil liabiliy on an establishment that is licensed to serve alcohol, when it serves to a visibly intoxicatd person, who then drives drunk and causes an injury or death.   A summary of this ruling can be found here.  While many states have adopted dram shop laws, Maryland still has not.
Three previous attempts since 2002 to legislate Dram Shop liability have been unsucessful.  

RSRM will continue to monitor any developments surrounding the latest legislative attempts during the 2014 Session.

Contributed by Tara A. Barnes 

Monday, January 6, 2014

Plaintiffs on the Hook for Attorneys Fees Even If Defendant's Litigation Costs Are Covered By An Insurer

In Worsham v. Greenfield, the Court of Appeals of Maryland were asked to decide whether a civil defendant may be awarded attorney’s fees in cases where attorney’s fees were typically paid by the defendant’s insurance company.  The court affirmed the decisions of the Harford County Circuit Court and Court of Special Appeals, holding that attorney’s fees may be awarded in cases where the plaintiff filed a suit in bad faith or without sufficient justification.

The case originated over a decade ago between neighbors Michael C. Worsham (“Worsham”) and Robert and Romulda Greenfield (collectively “the Greenfields”).  In 2000, Mr. Greenfield filed criminal malicious destruction of property and second-degree assault charges against Worsham.  Worsham was ultimately acquitted of the malicious destruction of property, and the jury could not reach a verdict on the second-degree assault charge, resulting in a mistrial.

Worsham, an attorney, subsequently filed a civil suit against the Greenfields for malicious prosecution, defamation, false light/invasion of privacy, civil conspiracy, and aiding and abetting.  The Circuit Court for Harford County granted summary judgment to the Greenfields for all claims except malicious prosecution.  The claim for malicious prosecution was decided in favor of the Greenfileds on a motion for summary judgment following Worsham’s case-in-chief.  Worsham appealed, but the Court of Special Appeals affirmed the lower court and the Court of Appeals denied certiorari.

Thereafter, the Greenfields moved to collect over $40,000 in attorney’s fees and costs, pursuant to Maryland Rule 1-341.  The Circuit Court of Harford County granted the motion, only with respect to Romulda Greenfield, finding that she had been joined without substantial justification.  As such, the court awarded $3,613.13 in fees.

After the Court of Special Appeals affirmed the lower court’s ruling, Worsham appealed to the Court of Appeals, arguing that the Greenfields did not actually incur attorney’s fees because they were borne by the Greenfields insurance carrier.  The Court of Appeals disagreed, holding that parties compelled to defend themselves from abusive litigation may recover associated litigation costs, despite whether those casts were paid by the defending party, an insurance company, or by a third person on behalf of the defending party.  The court opined that Maryland Rule 1-341’s goals of awarding attorney’s fees for suits brought in bad faith and deterring frivolous litigation would be undermined if plaintiff’s could avoid paying attorney’s fees simply because they were already covered by an insurance company.  Accordingly, the award of attorney’s fees was affirmed.

The Court of Appeals decision in Worsham v. Greenfield is noteworthy as it expands the scope of Maryland Rule 1-341 to require payment of attorney’s fees for plaintiffs filing actions in bad faith or without substantial justification, even in situations where the defending party’s legal fees are covered by an insurer.

Thursday, January 2, 2014

Court of Appeals Decides Application of Statute of Limitation to Claims Against Health Care Providers in Wrongful Death Claims

             In 1997 the decedent, Margaret Varner, then fifty-eight (58) years old, began seeing Defendant Massoud B. Alizadeh, M.D. (“Dr. Alizadeh”), a family practice physician. In the period of time between 1997 and early 2004, while Mrs. Varner was a regular patient of Dr. Alizadeh, she lost a substantial amount of weight and experienced symptoms including diarrhea and constipation. Dr. Alizadeh did not order or conduct any tests on Mrs. Varner to investigate the symptoms. Ultimately, on May 25, 2004, after conducting a series of untimely tests and examinations, Dr. Alizadeh referred Mrs. Varner to a general surgeon. The general surgeon performed a colonoscopy, which revealed a large tumor in her colon. Mrs. Varner was diagnosed with Stave IV colorectal cancer with liver metastasis. On March 14, 2008, Mrs. Varner passed away after the cancer spread to her spine.

            On March 8, 2011, Mrs. Varner’s surviving husband and her three children filed a Complaint in the Health Care Alternative Dispute Resolution Office of Maryland against Dr. Alizadeh and his professional association employer. The parties waived arbitration and the case was transferred to the Circuit Court for Washington County. The Circuit Court Complaint included four wrongful death counts alleging that Dr. Alizadeh was negligent and careless in his failure to conduct the timely appropriate tests and his failure to timely diagnose Mrs. Varner’s colorectal cancer. Defendants filed a Motion to Dismiss arguing that the claims were precluded because Mrs. Varner had not brought a timely personal injury lawsuit against Dr. Alizadeh and could not have filed suit at the time of her death due to the applicable statute of limitations for medical malpractice claims. On December 5, 2011, following a hearing, the Court issued an Order granting Defendants’ Motion to Dismiss and dismissing the action. A timely appeal was filed with the Court of Special Appeals and the Court of Appeals issued a writ of certiorari on December 14, 2012 while the case was pending in the intermediate appellate court.

            The Court considered two questions on appeal: (1) under Maryland law, is a wrongful death beneficiary’s right to file a lawsuit contingent upon the decedent’s underlying ability to file a timely negligence action as of the date of the decedent’s death?; and (2) if so, or alternatively, does Section 5-109 of the Maryland Code, Courts and Judicial Proceedings Article, the applicable statute of limitations for medical negligence claims, apply directly to a wrongful death action arising out of alleged malpractice and, if yes, does it bar the Appellants’ wrongful death action?

            The Court answered both questions in the negative, reversing the judgment of the trial court and remanding the case for further proceedings.  Maryland’s Wrongful Death Statute Section 3-902 states that an action can be filed against someone whose wrongful act causes the death of another. Section 3-901, the Definitions section of the Wrongful Death Statute, defines a “wrongful act’ as “an act, neglect, or default including a felonious act which would have entitled the party injured to maintain an action and recover damages if death had not ensued.” Defendants argued that a wrongful death claim requires the existence of a “wrongful act,” and that there was no actionable wrongful act in this case based on Mrs. Varner’s inability to file a medical negligence suit at the time of her death. The Appellants argued that Maryland’s wrongful death statute created a new and separate cause of action, not one dependent on the decedent’s negligence action; therefore, the three year statute of limitation provision in Section 3-904(g)(1) of the Maryland Code is the only applicable time limitation and the definition of “wrongful act” is irrelevant to the determination of whether the claims are time barred.

            Rather than basing its ruling on one party’s interpretation of the statute’s language, the Court utilized the differing views to highlight the statute’s ambiguity. In interpreting the statute’s language the Court relied on the statute’s general purpose, the Court concluded that the Legislature’s intent in crafting the Wrongful Death statute was to create an independent cause of action, separate and apart from the decedent’s own claim. Based on that ruling, the Court also ruled that the statute of limitations for such a claim could not begin to run until the decedent died; therefore, the Appellants’ claims were not time barred.

            Mummert v. Alizadeh separates the claims of beneficiaries and decedents in medical negligence cases, effectively opening the window of time in which the family members of the decedent have to file their claims.

Article submitted by Catherine A. Simanski, Esq.