Thursday, June 26, 2014

Connors v. GEICO, 216 Md. App. 418, 88 A.3d 162 (2014): The Court of Special Appeals Restricts the Offset of Underinsured Motorist Recovery to the “Per Occurrence” Limit

In Linda Connors, Individually, et al v. Government Employees Insurance Company,  the Court of Special Appeals affirmed the circuit court’s grant of summary judgment in favor of GEICO, holding that GEICO insurance policy’s “clear and unambiguous language” restricts GEICO’s underinsured motorist policy obligation to appellants collectively at $100,000.00. The intermediate appellate court arrived at the $100,000.00 figure  by offsetting GEICO’s “per occurrence” limit of $300,000.00 by the $200,000.00 previously paid to appellants through the tortfeasor’s insurance policy.

On April 14, 2009, spouses Linda and Robert Connors were walking in a residential area when the tortfeasor backed out of a driveway and hit them with his car. Mrs. Connors suffered minor injuries, while Mr. Connors unfortunately passed away from his injuries during the pendency of litigation. The tortfeasor’s insurance company readily paid out its full applicable policy limits of $100,000.00 per person/$300,000.00 per occurrence, paying $200,000.00 total for the incident.

Mr. and Mrs. Connors were both “insureds” under a motor vehicle policy issued by GEICO, which provided uninsured and underinsured motorist coverage with policy limits of $300,000.00 per person/$300,000.00 per occurrence.  Following their settlement with the tortfeasor’s insurance company, the Connors filed a claim with GEICO seeking additional recovery. Rather than seek the remaining $100,000.00 available to them (subtracting the $200,000.00 they received from the tortfeasor from their $300,000.00 per occurrence GEICO underinsured motorist policy as GEICO did when it tendered payment of $100,000.00 to them), they sought the full amount of $300,000.00. To arrive at that number, the appellants argued that the “per occurrence” language capping their recovery at $300,000.00 was subservient to the “per person” limit of $300,000.00 and that the offset calculations should begin in the amount of $600,000.00. The appellants then argued that GEICO should receive credit for the $200,000.00 from the tortfeasor’s liability policy, leaving $400,000.00, and only then should the $300,000.00 “per occurrence” limit come into play, thus permitting them to a total recovery from GEICO of $300,000.00

As expected, GEICO argued that its underinsured motorist policy language is “clear and unambiguous,” and that the “per occurrence” limit applies to claims of two or more people, and is to be reduced by all amounts paid by the tortfeasor, in aggregate.

After a brief recitation of underinsured motorist law in Maryland, the Court of Special Appeals went above and beyond what was necessary to defeat appellants’ nonsensical argument. Analysing both contract construction and Maryland’s longstanding “gap theory” on underinsured motorist coverage, the Court affirmed the circuit court’s grant of summary judgment in favor of GEICO, holding that “the clear and unambiguous language of the GEICO insurance policy leaves GEICO with a remaining obligation to appellants of $100,000.00,” which had been satisfied in appellants previous settlement with the tortfeasor’s insurance company.

Thursday, June 19, 2014

Court of Appeals Finds Duty Applies Despite Common Law Rule

School is out.  The days are long.  Steamed crabs are in season and the AC is on high.   It can only mean one thing:  summer is upon us! Along with in-season strawberries, frosty ice-cream cones and the smacking sound of flip-flops filling the air, pool season is officially here. 

With pools being readied for maximum swimmer capacity, extra caution must be taken to ensure safety and protection from liability. 

The Court of Appeals of Maryland recently addressed this topic in Blackburn L.P., et al v. Paul, No. 55, slip op. at __ (Md. April 29, 2014)In this case, three year-old Christopher Paul suffered permanent injuries after a near-drowning that occurred when he found his way to the closed pool at his parents’ apartment complex.  Following the incident, Christopher’s parents filed suit against the apartment complex. The apartment complex moved to dismiss the suit, arguing that Christopher was a trespasser who entered the gated and locked pool area uninvited and is therefore not entitled to recover in a negligence action.  While the ultimate issues of fact in this case remain unexplored, the case presented an opportunity for the Court to clarify the duties a property owner has when common law and statutory regulations come together and to remind us that when a statute or regulation is enacted for the purpose of guarding a specific class, that specific class will be entitled to the enhanced level of protection. 

Before statutes or regulations come into play, common law provides that the duty owed by a property owner to a visitor depends upon the legal status the visitor holds at the time of the injury.  In Maryland, there are generally four categories of status for visitors ranging from Invitee – with the highest duty of care owed -- to Trespasser, with the lowest protections.  The rationale behind the limited duty owed to a trespasser is that a trespasser is an individual who is intentionally on the owner’s property without the owner’s consent.  The common law recognizes that an owner generally owes no duty of care to the person who “sneaks” onto property, while someone who is invited to visit should be afforded more protections from any negligence on the part of the property owner.     

In Blackburn, the Court considered whether the enactment of COMAR and Montgomery County provisions setting forth regulations concerning barrier requirements around pools elevated the status of visitor Christopher from an uninvited trespasser to someone with more protection. In engaging in this analysis, the Court applied the Statute or Ordinance Rule to regulations and local ordinances. Generally, Maryland Courts have held that statutes enacted to protect the general public do not apply to those who do not otherwise have a right to be on property; namely, trespassers.  For example, a statute enacted to protect the public, such as one that requires a fence to prevent “any person” from entering, will not result in enhanced protections for someone who has trespassed on property.   

However, in this case, the regulations, while not assigning a legal status to visitors, provided direction as to what types of fences need to be installed around pools and incorporated by reference, the American National Standard for Residential Inground Swimming Pools.  The main objective stated in the American National Standard is specifically to protect children under the age of five. 

Under the Statute or Ordinance Rule discussed at length by the Court in this case, if there is a violation of a statute or ordinance that is designed to protect a specific class of people and violation of that ordinance or statute caused an injury, then a prima facie case of negligence has been presented.  This situation is distinguishable from statutes that protect the general public because there, to give rise to liability, the injured person must have had the right to be on the property; that is they must not have been a trespasser.  Under the Court’s analysis and application of the rule, a trespasser, if a protected class individual, is afforded a duty of care by the property owner by virtue of his inclusion in the protected class.

In Blackburn, it is agreed that, outside of the statute, Christopher was a trespasser.  However, the Court determined that the public interest in protecting a particular class (here specifically children under five) is so important that they will elevate the status of Christopher and children like him in order to provide property owner’s incentive to comply with the rule and keep children safe. The Court’s decision essentially morphed the Plaintiff from a trespasser into a protected class that is owed more duties and protection.

For the pool owners out there, the Court’s ruling in Blackburn means that you need to be aware of the types of duties that exist under common law versus those created by legislation in order to be protected from potential negligence action. On its face, it may appear that someone trespassed on your home; however, a more specified statute enacted by the Legislature may elevate the level of protection afforded to the trespasser, exposing you and your family to liability.  If you or your insured have any questions about compliance with applicable statues or ordinances to keep you and your property safe, or are facing litigation arising from a similar situation, please do not hesitate to consult us.  We are happy to help.  From everyone at RSRM, keep cool and have a safe summer.  

Contributed by Lauren Seldomridge

Associate Catherine Simanski Named Chair

Rollins, Smalkin, Richards & Mackie, L.L.C. is pleased to announce that associate Catherine Simanski has been named Chair of the Baltimore County Bar Association’s Young Lawyers Committee for the 2014-15 bar year. 

Ms. Simanski joined RSRM in 2013 after completing a clerkship for the Honorable Robert E. Cahill, Jr., in the Circuit Court for Baltimore County.  In addition to her leadership role in the Baltimore County Bar Association, Ms. Simanski is a member of the American Bar Association, the Maryland State Bar Association, and the Baltimore City Bar Association. 

The Baltimore County Bar Association exists to advance excellence, ethical conduct, professionalism and public responsibility in the legal profession as well as to increase the public’s understanding of the legal system and to improve the well-being of the Baltimore County community and its citizens.  The Young Lawyers Committee offers specific focus on continuing legal education, networking and community service for attorneys who are young or newer to the practice of law.  

We at RSRM offer excited congratulations to Ms. Simanski on her appointment!

Wednesday, June 18, 2014

Associate Tara Barnes Named President-Elect

Rollins, Smalkin, Richards & Mackie, L.L.C. is proud to announce that associate Tara Barnes has been named President-Elect of the Alliance of Black Women Attorneys of Maryland for the 2014-15 bar year.  In assuming this position, Ms. Barnes joins a select group of distinguished attorneys that includes several judges, a state senator and a deputy mayor. 

Ms. Barnes has been an associate with RSRM since 2012.  In addition to her participation in the Alliance of Black Women Attorneys, Ms. Barnes is an active member of the Maryland State Bar Association, Bar Association of Baltimore City and Monumental City Bar Association.  Outside of the practice of law, Ms. Barnes teaches several college courses and volunteers with community outreach programs.  

The Alliance of Black Women Attorneys is an affiliate of the National and American Bar Associations.  It is Maryland’s first bar association developed by and for black women and exists to enhance the professional development of African-American women attorneys through promoting the interests, improving practice skills, and increasing the viability and recognition of such women. 

We at RSRM offer hearty congratulations to Ms. Barnes on her accomplishment!

Monday, June 9, 2014

RSRM Welcomes Lauren Seldomidge, Esq.

Lauren Seldomridge joined Rollins, Smalkin, Richards & Mackie, L.L.C. as an associate in 2014. Her practice includes general civil litigation with an emphasis on insurance defense, general negligence, insurance subrogation and professional negligence matters.  

Ms. Seldomridge graduated from the University of Baltimore School of Law in 2005 and received her M.B.A. shortly thereafter.  Prior to joining the firm, she investigated and prosecuted a variety of violent and drug-related crimes at the state level as an Assistant State’s Attorney in Baltimore City and then at the federal level as a Special Assistant United States Attorney in the Violent Crimes Section.  Most recently, Ms. Seldomridge served as counsel for the Baltimore Police Department, representing the agency and command staff in administrative matters and civil litigation.

Ms. Seldomridge is an active member of the Bar Association of Baltimore City where she is a member of several committees and is currently the Chair of the Legislative Committee.  Additionally, she serves as a volunteer Court Appointed Special Advocate for foster children in Maryland and is a frequent judge of undergraduate mock trial competitions through GAMTI and AMTA. 

Outside of the practice of law, Ms. Seldomridge enjoys hiking with her dogs, whitewater rafting and knitting. 

Monday, June 2, 2014

Strong Presumption of Reasonableness Attaches to Thoroughly Assessed Awards of Fees and Costs

In Best Med. Int'l, Inc. v. Eckert & Ziegler Nuclitec GmbH (4th Cir. Apr. 8, 2014), the United States Court of Appeals for the Fourth Circuit affirmed the United States District Court for the Eastern District of Virginia’s award of attorneys’ fees and costs to Eckert & Ziegler Nuclitec GmbH (“Defendant EZN”) against the plaintiffs, Best Medical International, Inc. and Best Vascular, Inc. (collectively “Plaintiff Best”).  The Fourth Circuit held that the district court’s award of fees was appropriate because of its thorough analysis in calculating the lodestar figure, which was attached with a strong presumption of reasonableness on appeal.

The conflict giving rise to this appeal originated when Defendant EZN’s predecessor in interest sued Plaintiff Best, seeking to enforce agreed-upon contractual covenants.  Defendant EZN’s lawsuit concluded in a 2008 settlement agreement that provided, in pertinent part, that “the prevailing party [would] be entitled to recover ... reasonable attorneys' fees and costs incurred” in “any litigation… brought for breach” of the settlement agreement.  Soon thereafter, the settlement agreement unraveled, resulting in the parties filing claims and counterclaims against each other under various theories of breach of the settlement agreement.  Following cross motion for summary judgment from the parties, the district court found in favor of Defendant EZN and awarded $584,735.08 in attorneys’ fees and $32,892.61 in costs.

After an initial appeal, the Fourth Circuit affirmed all of the decisions of the district court except for its calculation of attorneys’ fees and costs, holding that the award “might be unreasonably excessive” due to the district court’s “conclusory” examination and application of the analysis required under Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).  On remand, the district court issued an amended order (accompanied by a thorough opinion) that awarded $871,414.49 in attorneys' fees and $55,249.76 in costs to Defendant EZN.  Plaintiff Best appealed.

Applying the “exceptionally deferential” abuse-of-discretion standard of review, the United States Court of Appeals for the Fourth Circuit upheld the district court’s award of attorneys’ fees and costs to Defendant EZN.  The Fourth Circuit discussed the appropriate three-step process for determining the fee award.  The process first requires that the district court must ascertained the lodestar figure by considering the twelve Johnson factors, which include: (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.  Second, the district court must subtract fees spent pursuing unsuccessful claims unrelated to successful ones.  Finally, a percentage of the remaining amount should then be awarded contingent on the degree of success enjoyed by the prevailing party.

The Fourth Circuit found that the district court applied the correct legal and factual criteria at each step of the process.  Plaintiff Best argued that Defendant EZN’s claimed hours were unreasonable.  The Fourth Circuit was unpersuaded, stating that the district court’s well-supported lodestar calculations were strongly presumed to be reasonable.  Plaintiff Best also contended that the district court did not adequately account for the relief obtained by Defendant EZN.  The Fourth Circuit noted that such a contention failed to afford a basis for recovery because the amount in controversy was substantial and Defendant EZN had succeeded on the merits throughout the litigation.  Furthermore, the award to Defendant EZN was predicated more on its successful defense of all of Plaintiff Best’s claims, which was united by a common core of facts to Defendant EZN’s unsuccessful compulsory counterclaims.

Finding no abuse of discretion by the district court, the United States Court of Appeals for the Fourth Circuit affirmed the award of attorneys’ fees and costs to Defendant EZN.  This decision reflects the court’s policy of discouraging litigants from transforming “attorneys’ fees cases into standalone pieces of major appellate litigation,” which would needlessly “result in a second major litigation.”