Motion to Dismiss Granted for Direct Claim Against Insurance Company for "Negligent Issuance of an Insurance Policy"

          Recently, Associate, Derrick H. Dye, successfully argued in a Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted, that a direct suit against an insurance company for the tort of "negligent issuance of an insurance contract" is not a claim recognized under Maryland law.

          In this suit, the creative Plaintiff sued the driver of the vehicle in which he was a passenger, but also brought a direct claim against that driver's insurance company, arguing that the insurance company had a duty to the public-at-large to properly screen potential insureds for aggressive behavior, criminal activity, etc., prior to issuing that potential insured a policy of insurance.  The Plaintiff's argument, in a nutshell, was that insurance companies should not offer insurance to persons with criminal backgrounds, or to those who have a history of driving recklessly, dangerously, or with disregard for the safety of others.

          Mr. Dye successfully convinced the Circuit Court for Baltimore City that such a claim is, in fact, contrary to public policy and is not recognized under Maryland law, and the claim against the insurance company was dismissed with prejudice.  Practically speaking, if insurance carriers were to deny coverage to persons with histories of reckless driving, for fear that insuring such individuals could result in claims such as the above being filed in court, the persons that most need to be insured might not be, which could result in an increase in uninsured motorists on the road.  This is something that Maryland, and indeed most states in the union, have sought to do away with by enacting compulsory insurance laws.  

     

RSRM Associates Admitted to the Bar of the U.S. Supreme Court

          The firm extends hearty congratulations to Associates James Buck and Tara Barnes, both of whom were admitted to the Bar of the United States Supreme Court on December 5, 2012, in a ceremony before all nine of the Justices, and officiated by Chief Justice John G. Roberts, Jr.

          Mr. Buck and Ms. Barnes traveled to Washington, D.C. with several other members of the Baltimore City Bar Association last Wednesday for the admission ceremony, which was held in open court before a packed court room.  After the ceremony, the new admittees enjoyed front-row seats to a very animated oral argument before the Court involving an international child custody case.  At the conclusion of the argument, the group was given a behind-the-scenes tour of the courthouse.

 The rear of the Supreme Court Building.

The front of the Supreme Court Building.  Due to an extensive renovation project, the entire front entrance of the building has been draped in a "skin" to hide the massive scaffolding, onto which an image of the front of the building has been placed.

The group of new admittees and the movant, Andrew Radding,
President of the Bar Association of Baltimore City.

Five Attorneys From RSRM Featured in Maryland "Super Lawyers"

          Five attorneys from RSRM have been selected for inclusion in the Maryland "Super Lawyers" 2013 issue, which is available now.

          James O'Meara, the Firm's Managing Partner, was selected as a Super Lawyer in the area of civil litigation defense for the second consecutive year. Partner, Paul Donoghue, was selected as a Super Lawyer in the area of workers' compensation defense. Partner, Andrew Nichols, was selected as a Rising Star in the area of general litigation. Additionally, Associates James Buck and Derrick Dye were selected as Rising Stars in the area of personal injury defense. This is also the second consecutive year for Andy and James.

          Super Lawyers selects attorneys using a rigorous, multi-phase process. Peer nominations and evaluations are combined with third party research. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Selections are made on an annual, state-by-state basis. Approximately five percent (5%) of nominees are selected as "Super Lawyers" and approximately two-and-a-half percent (2.5%) of nominees are selected as "Rising Stars."

What's in a Number?

          One of the most concerning things to a party being sued is the amount of money he or she is being sued for (ad damnum).  It’s not at all unusual to see numbers ranging from $100,000.00 to $500,000.00 on cases with relatively minor impacts and injuries. 

While in some ways, the ad damnum is just a number pulled from the air by Plaintiff’s counsel, it can have some ramifications if a case goes to the jury.  If the jury returns a verdict for damages in excess of the ad damnum, Plaintiff’s counsel has to file a motion to amend the complaint with an ad damnum that reflects the jury verdict if Plaintiff wants the benefit of the higher damages award.  The judge has the sole discretion on whether or not to allow this.  Instead of facing the risk that a judge will not allow a Plaintiff to amend his or her complaint, Plaintiff’s counsel may make the strategic decision to ask for more than they think they could possibly recover, just in case. 

Beginning on January 1 2013, Maryland Rule 2-305 will no longer require a Plaintiff to specify the amount of damages he or she is seeking if that amount is in excess of $75,000.00. As a result of this, any suit where the Plaintiff seeks over $75,000.00, the simple phrase "...Plaintiff requests damages in excess of $75,000.00" is all that’s required. For amounts under $75,000.00, a Plaintiff must continue to plead the amount of damages he or she is seeking.  This change appears to benefit Plaintiffs and avoids the scenario in which a judge doesn’t allow an amended complaint after the jury verdict. 

In reality, it is unlikely that this revised Rule will have any impact on how cases are litigated.  Plaintiffs' attorneys will simply plead that the Plaintiff’s damages exceed $75,000.00 in every case, unless a Plaintiff is trying to prevent a Defendant from removing the case from state court to federal court (for federal diversity jurisdiction, the amount in controversy must exceed $75,000.00). 

Article contributed by Andy Nichols

Pre-Trial Offer of Full Policy Limits Negates "Bad Faith" Claim against Insurer

            In Hughes v. Progressive Direct Insurance Company, Inc., the United States District Court for the District of Maryland held that when an insurance carrier offers the full extent of its policy limits before trial, there is no basis for a claim of “bad faith” for failure to settle as a matter of law, and granted Progressive Direct Insurance Company’s (“Progressive”) motion to dismiss for failure to state a claim upon which relief can be granted.

            The underlying case involved an automobile accident where Jarrett Pratt broadsided a vehicle driven by Joseph P. Hughes in Baltimore City.  Hughes filed suit in the Circuit Court for Baltimore City against Pratt for his injuries and against his insurer, GEICO Insurance (“GEICO”), for uninsured motorist coverage benefits.  Pratt was insured by Progressive, a Wisconsin corporation with its principal place of business in Ohio.  Pratt's insurance policy with Progressive provided coverage up to $100,000 per accident.

            While the lawsuit was pending, but before it proceeded to trial, Progressive offered the full $100,000 policy limits to Hughes.  Pratt’s insurer, GEICO, was placed on notice of the offer. According to Hughes, GEICO did not respond in writing within 60 days after receipt of notice, as is required by Maryland law. See Md. Ins. Code Ann. § 19-511.  As a result, Hughes filed a Motion to Enforce Settlement.  In response to that motion, GEICO claimed that an email its counsel sent to Hughes qualified as notice.  Progressive did not join Hughes’ Motion to Enforce Settlement against GEICO.  The court ultimately denied the motion, finding that the email was proper notice under Section 19-511.

            The lawsuit proceeded to trial in the Circuit Court for Baltimore City.  The jury returned a verdict of $725,000.93, which was reduced upon consent motion to $720,000.03 to conform to the applicable statutory cap on damages for pain and suffering.  GEICO paid $500,000 of the verdict, thereby satisfying its contractual obligation to its insured.  This left the remaining $220,000.93 judgment against Pratt unsatisfied.

            Subsequently, Hughes, as Pratt’s assignee, filed a complaint for “bad faith” against Progressive in the Circuit Court for Baltimore City.  The case was thereafter removed to the United States District Court for the District of Maryland.  In his complaint, Hughes alleged that Progressive failed to use “good faith” in handling the claim pending against Pratt.  Specifically, Hughes alleged that Progressive failed: 1) to join in Hughes’ Motion to Enforce Settlement against GEICO; 2) to appeal the court’s ruling denying the motion; 3) to attend a court-ordered mediation prior to trial; 4) to pressure or encourage GEICO to resolve the claim within its policy limit; 5) to report to Pratt regarding the consequences of the failure to settle within GEICO’s policy limits prior to the verdict; 6) to depose any of Hughes’ treating physicians; 7) to set up an independent medical examination with a physician other than one who only handles  insurance carrier medical exams; 8) to file any post-trial motions requesting remittitur or a new trial, or to file an appeal; 9) to negotiate with Hughes to satisfy the excess judgment against Pratt at a reduced amount; 10) to communicate the status and seriousness of the lawsuit to Pratt during the pendency of the lawsuit; and 11) to obtain Pratt’s consent to concede liability.  Hughes also alleged that Progressive and GEICO conspired to keep Pratt as a party in an attempt to mitigate the amount of the verdict.

            Progressive filed a motion to dismiss for failure to state a claim upon which relief could be granted, also known as a demurrer, because Progressive had offered its policy limits in settlement prior to trial.  According to Progressive, although Hughes’ allegations may have set forth a malpractice claim against the legal counsel selected by Progressive, they did not constitute the basis for a claim of “bad faith” for failure to settle.

            The District Court acknowledged that, in Maryland, a third-party insurer may be liable for “bad faith” in the insurer’s dealings with its insured when the insurer refuses an opportunity to settle a claim against the insured within policy limits.  State Farm Mut. Auto. Ins. Co. v. White, 248 Md. 324, 330–331 (1967); Sweeten v. Nat'l. Mut. Ins. Co., 233 Md. 52 (1963).  In Sweeten, the Maryland Court of Appeals held that the plaintiff had set forth a cause of action sounding in tort given the insurer’s “exclusive control ... of investigation, settlement and defense of any claim or suit against the insured” and the existence of “a potential, if not actual, conflict of interest giving rise to a fiduciary duty.” 233 Md. at 54–55.  In White, the Court of Appeals held that an insurer faced with an opportunity to settle a claim within the limits of an insured’s liability policy owed the insured a duty of good faith.  248 Md. at 332–33.  In doing so, Maryland’s highest court laid out several factors for determining whether a bad faith failure to settle exists, namely: (1) the severity of the plaintiff’s injuries giving rise to the likelihood of a verdict greatly in excess of the policy limits; (2) a lack of proper and adequate investigation of the circumstances surrounding the accident; (3) a lack of skillful evaluation of the plaintiff’s disability; (4) a failure of the insurer to inform the insured of a compromise offer within or near the policy limits; (5) pressure by the insurer on the insured to make a contribution towards a compromise settlement within the policy limits, as an inducement to settlement by the insurer; and (6) actions which demonstrate a greater concern for the insurer’s monetary interests than the financial risk attendant to the insured’s predicament.  Id., at 332.

            In the present case, the U.S. District Court determined that Progressive had offered its policy limits in settlement of the underlying action prior to trial.  The court held that even if Hughes’ allegations that Progressive’s late settlement offer constituted “unreasonable delay,” Progressive ultimately did offer its policy limits before the start of trial.  The court found that no case had been cited to the court in which a Maryland court held that an insurer that offered its policy limits in settlement of a claim prior to trial could be held liable in tort for bad faith.  Thus, considering all the facts alleged, the court found that Hughes failed to state a claim for “bad faith” failure to settle as a matter of law.  See Sobus v. Lumbermen’s Mut. Cas. Co., 393 F.Supp. 661, 673 (D. Md.1975), aff'd. sub nom. Sobus v. Lumbermen’s Mut. Cas. Co., 532 F.2d 751 (4th Cir. 1976) (finding no basis for liability even where the insurer offered its policy limits in settlement on the day of trial).  Following this line of cases, the court granted Progressive’s motion, and dismissed Hughes’ case with prejudice.

Article contributed by James Buck

New Car Seat Law in Maryland

A new law in Maryland regulating the use of car seats, took effect on October 1, 2012.  This law requires children younger than eight-years of age to be in a safety seat, unless they are 4 feet 9 inches or taller.  This new law removes the weight exemption for children who weigh more than 65 pounds.

This law is a primary offense, which means drivers can be detained and cited for violating this law. The fine is $50.00 for each child in the vehicle that is not properly restrained.  The fine also applies to children ages 8 to 16, who are still required to wear a seat belt. 

The law was passed in April and was supported by a doctors' group that sought to decrease the number of spinal cord and neck injuries in toddlers that resulted from automobile accidents.

New Scooter and Moped Law to Take Effect on October 1, 2012

A new law will take effect on October 1, 2012 and will make significant changes in the use and operation of motor scooters ("scooters") and mopeds. The new law will require all scooters and mopeds to be titled and insured, and will require all operators and passengers of scooters and mopeds to wear a helmet and eye protection. 

The helmets must be motorcycle helmets that meet the safety standards set by the U.S. Department of Transportation. The use of eye protection may be waived if the scooter or moped is equipped with a windscreen.

Scooter and moped owners will be required to obtain at least the minimum vehicle liability insurance and must carry proof of the insurance when the scooter or moped is being operated.

Scooters and mopeds will also be required to be titled by the Motor Vehicle Administration. Upon receiving the title, the vehicle owner will be provided with a decal that must be displayed on the rear of the vehicle.

Maryland law defines a motor scooter as a non-pedal vehicle that has a seat for the operator; has two wheels, of which one is ten or more inches in diameter; has a step through chassis; has a motor with a rating of 2.7 brake horsepower or less, or a 50 cc engine or less; and is equipped with an automatic transmission.

A moped is defined as a bicycle that is designed to be operated by human power with the assistance of a motor; is equipped with pedals that can drive the rear wheel(s); has two or three wheels, one of which is more than 14 inches in diameter; has a motor with a rating of 1.5 brake horsepower or less and a 50 cc engine or less.

Haeger v. Target Corporation – Vicarious Employer Liability & Punitive Damages in Maryland

            Oftentimes, an injured party will rely on a vicarious liability claim and file suit against an employer for the tortious actions of their employee. However, in the case of Sally Haeger v. Target Corp. et al., 2012 U.S. Dist. LEXIS 98942, the U.S. District Court for the District of Maryland held that an employer is not vicariously liable for the malicious and intentional acts of an employee, if the employee acted outside the scope of their employment. In granting the Defendant’s Motion for Summary Judgment, the court held that an employee’s act of pushing a row of shopping carts into an injured party was outside the scope of his employment and unauthorized conduct. The court also held that a Plaintiff may be entitled to punitive damages only by pleading and presenting “clear and convincing evidence of actual malice.”

            The case arises from an incident that occurred at a Target stored located in Baltimore County, Maryland. Sally Haeger (“Haeger”) went to the Target store with her step-father to purchase a birthday gift. Haeger approached a Target employee, later identified as David Howard, Jr. (“Howard”) in the parking lot. Howard was pushing a line of carts when Haeger asked if he could provide her with one. Haeger described Howard’s response to her as “agitated” as he directed her inside of the store for a cart. Haeger further described Howard’s behavior by noting that he made physical gestures with his body, which indicated to her that he did not want to take the time to take the carts he was pushing apart to provide her with one.

            Once Haeger was inside the store attempting to obtain a cart, she alleged Howard pushed the carts into the line of carts in the well. This caused the entire row of carts to move forward and strike Haeger in the back. Haeger alleged that this significant impact caused her to bleed, and resulted in a herniated disc in her back. Howard completed a ‘Team Member Witness Statement’ where he admitted to bumping Haeger’s back when pushing the carts into the cart well. Howard further stated that he asked Haeger if she was “ok,” apologized, and immediately informed the manager on duty.  During a subsequent discussion with a co-worker, Howard stated that the incident was an accident.

            Haeger filed a Complaint in the Circuit Court of Maryland for Baltimore County alleging assault, among other counts, and sought compensatory and punitive damages. Target Corporation (“Target”) filed a motion to have the case removed to federal court, which was granted, moving the case to the U.S. District Court for the District of Maryland. Target then filed a Motion for Partial Summary Judgment on the assault and punitive damage claims. Haeger subsequently voluntarily dismissed the assault claim.

            Target’s arguments in support of the Motion for Partial Summary Judgment were twofold: (1) there was insufficient evidence of actual malice on the part of Howard to entitle Haeger to recover punitive damages; and (2) even if the court found that actual malice existed, Target could not be held vicariously liable because Howard’s actions were outside the scope of his employment.

            In concurring with both of Target’s arguments, the court first examined the requirements necessary to obtain a recovery based on a claim of punitive damages. These requirements were previously established in Owens v Illinois, Inc. v. Zenobia, 601 A.2d 633, 657 (Md. 1992), where the court held that to recover punitive damages in Maryland, the plaintiff must establish by “clear and convincing evidence” the basis for the award. The subsequent case of Scott v Jenins, 690 A.2d 1000, 1005 (Md. 1997), further explained this requirement by holding that the evidence supporting punitive damages claims must be subjected to the more stringent clear and convincing standard, in addition to the requirement that the underlying tort need only be proven by a mere preponderance of the evidence standard. In other words, in order to recover punitive damages in any tort action in Maryland, a party must plead “facts sufficient to show actual malice,” which must be proven by clear and convincing evidence. Scott, 690 A.2d at 1003-04.  Actual malice was defined in Henderson Md. Nat’l Bank, 366 A2d.1, at 4 (Md. 1976), as the “performance of an unlawful act, intentionally or wantonly, without legal justification or excuse but with an evil or rancorous motive influenced by hate.”

            Haeger attempted to meet her burden by showing that Howard’s acts were intentional and that they were committed with actual malice by highlighting, among other factors, his inexplicably rude behavior towards her in the parking lot, his visible agitation at her request for a cart moments before striking her in the back with a line of carts, the significance of the impact, and the extent of Haeger’s injuries.  After applying the clear and convincing evidence standard to the facts, the court was not persuaded. It agreed with Target that there was insufficient circumstantial evidence that Howard acted with an “evil or rancorous motive influenced by hate.”  As such, the court held that without establishing this clear and convincing evidence of Howard’s actual malice as defined by Maryland legal authority, Haeger could not recover for punitive damages.

            Turning to the second of Target’s two arguments, the court examined the Plaintiff’s claims that Target was vicariously liable for Howard’s actions.  In Maryland, an employer may be held vicariously liable for “an employee’s tortious acts [if they] were within the scope of his employment.”  Sawyer v. Humphries, 587 A.2d 467, 470 (Md. 1991).  To determine if an employee acted within the scope of his employment, a court “must find that the employee’s actions were in furtherance of the employer’s business and were ‘authorized’ by the employer.” Id.  Moreover, “where an employee’s actions are personal or represent a departure from the purpose of furthering the employer’s business, they are outside the scope of his employment.” Id., at 471.

            The court disagreed with Haeger’s argument that Howard was acting within the scope of his employment because he was moving carts, which is required of him according to his job responsibilities.  Instead, the court agreed with Target’s position that if Howard used the shopping carts to maliciously and intentionally injure Haeger, he was acting outside the scope of his employment.  The court further held that striking and injuring customers in no way furthers Target’s business.  Therefore, even if the Plaintiff could prove by clear and convincing evidence that Howard’s actions were done with actual malice, Target could not be held vicariously liable for those actions because they were outside the scope of his employment.

Article contributed by Tara Barnes

Worker’s Compensation – Heat Exhaustion Claims In Maryland

            As we near the end of yet another sweltering Maryland summer, where record-setting temperatures were seen frequently, it is pertinent to address how our modern ability to combat the heat may affect Worker’s Compensation precedent in Maryland.

            Maryland case law on this issue can inevitably be traced back to the case of Slacum v. Jolley, 153 Md. 343, 138 A. 244 (1927) (reversed on other grounds). In Slacum, the Court of Appeals of Maryland ruled against a claim for Worker’s Compensation where Jolley died of a heat stroke after operating a bus on an “extremely warm” day.  The court held that the Jolley’s death was not the result of a compensable work related accident.  In doing so, however, Maryland’s highest court cautioned that, “if heat stroke or heat prostration are caused by unusual and extraordinary conditions in the employment which cannot be regarded as naturally and ordinarily incident thereto, there is no apparent reason why such injuries should not be compensable.”  Slacum, 343 Md. at 351.

            In its analysis of the facts surrounding Jolley’s death, the Court explained that those facts, when applied to the law, did not make out a compensable occurrence:

[E]ven if we could assume that his death was caused by heat prostration, there is no testimony that it was occasioned by his employment.  The testimony shows that the day was hot, that Jolley complained of the heat, that he was engaged in driving an automobile without a foot ventilator, that when he returned to his home he appeared tired and worn, said he felt badly, complained of heat ‘in the bus,’ and drank a quantity of iced tea and water.  These facts, separately or together, are insufficient to show that Jolley’s condition was caused by his employment, or that the conditions of his employment were different from those affecting the general public in that neighborhood at that time, or that they were unusual or extraordinary, and not naturally and ordinarily incident to the employment. 

  

Id., at 352 (emphasis added). Applying the law as the Court of Appeals articulates it in Slacum to a modern case, where a worker dies from heat stroke after working in the naturally hot conditions of summer, begs this question: Did the employee die from “conditions of his employment [that] were different from those affecting the general public?” If yes, then the death is likely a compensable occurrence under the Labor & Employment Article, § 9-101, et seq. If no, then the death is likely not compensable.

            As always, each case requires its own specific factual analysis before concluding that a given injury is compensable. For example, claimants’ counsel in our modern, air-conditioned, 21st-century era might argue, perhaps, that the modern age is significantly different to the 1927 world of Slacum, warranting a departure from the analysis of that case. In 1927, escape from the heat of summer was nearly impossible, aside from physically relocating to a location with a cooler climate. Today, however, with the advent and mass application of air conditioning in many work environments, the analysis of whether extreme heat conditions are “naturally and ordinarily incident to the employment” and “different from those affecting the general public” in a given case may, in fact, be different than it was in the 1920’s. In counter to this, defense counsel might argue that the entire Mid-Atlantic region has suffered through particularly extreme summers over the past few decades, sometimes experiencing multiple, consecutive days where temperatures exceed 100° F, and that, sadly, many people, not just workers exposed to the heat, died from heat exhaustion. As such, the natural conditions of working outside are, arguably, not different than those affecting the general public.

Article contributed by Paul G. Donohue

A Jury Verdict as to Liability is a Final Determination for Issue Preclusion Purposes

In Bryan v. State Farm MutualAutomobile Insurance Co, the Court of Special Appeals held that a finding of liability in a prior action serves to preclude relitigation of that issue in subsequent litigation between the same parties, even though the prior case was settled prior to the entry of judgment.

            Brenton Bryan (“Bryan”) was driving in a car with his wife and two children (“Passengers”) near Freeport, New York. Bryan’s vehicle swerved and collided with two other vehicles (“Accident”). Juan Chevez was driving one of those vehicles, accompanied by his wife. The Chevezes filed suit in the Supreme Court of New York, alleging that Bryan’s negligence caused the Accident.

            At trial, both parties were represented by counsel, and the issue of damages was bifurcated from the issue of liability. After hearing testimony from both Chevez as well as Bryan and his wife, the issue of liability was submitted to the jury, which found Bryan  negligent in causing the Accident. However, before judgment could be entered as to damages, the parties settled.

            Bryan and the Passengers had already filed suit in the Circuit Court of Maryland for Montgomery County, claiming that the Accident was caused by a “phantom driver” and as a result, that they were entitled to UM benefits from State Farm. Following the settlement of the New York case, State Farm moved for summary judgment, arguing that the New York jury verdict finding Bryan liable for causing the Accident collaterally estopped both Bryan and the Passengers from succeeding on their claims. The Circuit Court granted State Farm’s motion for summary judgment as to both Bryan and the Passengers.

The Maryland Court of Special Appeals affirmed in part and reversed in part. The Court held that the New York jury verdict as to Bryan’s liability precluded relitigation of that issue with respect to Bryan, treating the verdict as a final determination for purposes of claim preclusion; however, the court reasoned that the New York verdict did not preclude the Passengers from relitigating the issue of Bryan’s liability.

            In reaching its conclusion as to Bryan, the court stressed that its decision turned on the question of whether “there was a final judgment on the merits” in the previous action, which is the second element of the four-part test used by Maryland courts to determine if a party is collaterally estopped from bringing a claim. With respect to the “final judgment” requirement, the court distinguished between the traditional approach, which does not give preclusive effect to a jury verdict, and the modern approach. The Court of Special Appeals ultimately endorsed the modern view, which considers the ‘final judgment’ requirement satisfied by “any prior adjudication of an issue in another action that is determined to be sufficiently firm to be accorded conclusive effect.”

            Conversely, the Court of Special Appeals concluded that the Passengers were not precluded from relitigating the issue of Bryan’s liability for the accident. The court cited to longstanding Supreme Court doctrine in explaining that, because the New York jury verdict was adverse to the Passengers and they did not have the opportunity to appear and present evidence in the prior action, giving the prior judgment preclusive effect as to the Passengers would amount to a denial of Due process.

Article Contributed by Derrick Dye

Dixon v. Ford Motor Company: More than the “Magic Words” Are Needed to Prove Causation in an Asbestos Case

            Recently, the Maryland Court of Special Appeals issued a written opinion in the case of Dixon v. Ford Motor Co., No. 536, 2012 WL 2483315 (Md. Ct. Spec. App. June, 29, 2012). In that case, Joan and Bernard Dixon filed suit in the Circuit Court for Baltimore City against several corporations that manufactured and distributed products containing asbestos, including Ford Motor Company (“Ford”), Georgia-Pacific Corporation (“Georgia-Pacific”), Honeywell International Inc. (“Honeywell”) and Union Carbide Corporation (“Union Carbide”). This suit originated prior to Mrs. Dixon’s death from pleural mesothelioma. After her death, Mr. Dixon amended the complaint to accommodate the needed estate claims, including the claims of the Dixons’ four daughters.

            The suit alleged, in part, that Mr. and Mrs. Dixon “participated in home improvement and maintenance projects” spanning from 1960 to 1970, in which “they worked with and around the [d]efendants’ asbestos products.” The complaint further alleged that Mrs. Dixon was also exposed to the asbestos dust from Mr. Dixon’s work clothing, created by his “work with and around asbestos-containing automobiles and asbestos-containing replacement parts for those automobiles including...brakes[.]” The Dixons contended that Mrs. Dixon’s exposure to the asbestos-tainted products and vehicles caused her disease and eventual death.

            Prior to trial, the Dixons settled with Georgia-Pacific, Honeywell and Union Carbide, but Ford’s cross-claim against those defendants remained unsettled for adjudication. After trial, the jury returned a verdict in favor of the Dixons, awarding them a total of $15,000,000 in compensatory damages. To comply with the non-economic damages cap of Section 11-108 of the Courts & Judicial Proceedings Article of the Maryland Code, the court later reduced the award to $6,065,000.

            Prior to the commencement of trial, Ford had moved in limine for a hearing to challenge the Dixons’ proffered expert, Dr. Laura Welch, an expert in epidemiology, on the issue of causation, and to exclude her testimony. During trial, the court overruled Ford’s motion and related objections, and allowed the Plaintiffs’ expert to testify. Dr. Welch testified on direct “that mesothelioma...is a dose-response disease. Every increasing [asbestos] dose increases the likelihood of getting it, [and] additional doses decrease the time it takes to get the disease as exposure goes up.” On cross-examination, Dr. Welch further explained that every exposure to asbestos is a “substantial contributing cause and so brake exposure would be a substantial cause even if [Mrs. Dixon] had other exposures.” Dr. Welch concluded that Mrs. Dixon’s exposure to the dust created by Ford’s brakes was a substantial contributing cause to Mrs. Dixon’s disease, even if there were other contributing causes.

            Ford filed post-trial motions for a new trial and to revise the judgment, and also moved for a judgment notwithstanding the verdict (“JNOV”) on the cross-claims and the Dixons’ direct claims. Ford’s motions for a new trial and JNOV were denied, but the trial court granted Ford’s motion to revise the judgment, and revised the judgments against Ford and Georgia Pacific to adjust for Georgia-Pacific’s contributions as a joint tortfeasor. The revised judgment for the Dixons amounted to $3,032,500. Both the Dixons and Ford appealed.

            On appeal, the Court of Special Appeals vacated the judgments in favor of the Dixons and remanded the case for a new trial. The Court held that, under Maryland Rule 5-704, the trial court abused its discretion when it admitted Dr. Welch’s testimony regarding causation. Specifically, the Court held that “where the question of causation is probabilistic, ‘substantiality’ and ‘responsibility’ necessarily implies some test of magnitude.” The Court further held that, “if risk is [the] measure of causation, and substantiality a threshold for risk...[then] ‘substantiality’ is essential to the burden of proof.” The Court found that Dr. Welch’s testimony stating that the exposure and risk were “substantial” was not a scientific conclusion, but a legal one, which “did not provide information for the jury to use in reaching its conclusion as to substantial factor causation.”

            Ultimately, the Court of Special Appeals found that in order for the facts of the case to be proven with the reasonable certainty required under Maryland law, an expert must estimate exposure and risk within a reasonable scientific or medical certainty, and not merely use the “magic words” of “substantial contributing case,” the standard for experts in Maryland for proving causation. That mesothelioma has but one cause, asbestos, is up to this point accepted across the board. The Dixon opinion merely points out that in cases where multiple causal factors are in play, the Plaintiff must prove each and every substantial contributing cause with the required reasonable degree of medical or scientific certainty.

Article Contributed by James Buck

RSRM Announces Two New Partners

            RSRM is pleased to announce that Andrew T. Nichols and Thomas E. Neary became Partners of the firm, effective July 1, 2012.

            Mr. Nichols joined RSRM as an Associate in 2006. Prior to joining the firm, Mr. Nichols worked as an associate with Samek, McMillan, & Metro, P.C. (now McMillan Metro, P.C.), in Rockville, Maryland, where he was an associate in the firm's commercial litigation department. Mr. Nichols also worked in-house as staff counsel for Liberty Mutual Insurance Company, where his practice consisted of litigating general negligence cases and workers' compensation matters. Immediately upon graduating law school, Mr. Nichols clerked for the Honorable William O. Carr, Circuit Court for Harford County.

            Mr. Neary joined RSRM as an Associate in 2009. Prior to joining the firm, Mr. Neary was a trial attorney for the Travelers Insurance Company litigating personal and commercial civil actions throughout Maryland. In this capacity, Mr. Neary defended the rights of corporate and individual clients in a wide variety of complex legal matters. Mr. Neary also has significant experience representing hospitals and health care providers in medical malpractice claims and other related proceedings.

Maryland Legislature Fixes Flaw in Underinsured Motorist Claims with House Bill 715, Governor Signs Into Law

          On May 2, 2012, Governor Martin O’Malley approved legislation that appears to change the landscape of how insurance companies can deal with offers of settlement by an underlying tortfeasor when they are faced with an underinsured motorist claim.  House Bill 715 effectively repeals and reenacts § 19-511 of the Insurance Article of the Maryland Code to add provisions that allow the underinsured motorist (“UIM”) carrier to continue to defend liability in that matter even if they consent to the plaintiff accepting the underlying tortfeasor’s insurance policy limits.   In doing so, the legislature appears to restore common sense to the law, returning it to what it was before Maurer v. Penn National, 404 Md. 60 (2007).

            In 2007, the Court of Appeals changed the way insurance companies were required to handle claims made for underinsured motorist benefits with its decision in Maurer.  Prior to this decision, upon presentation of an offer of settlement from the underlying tortfeasor’s carrier that exhausted the underlying policy limits, the UIM insurance carrier was free to consent to the underlying settlement and allow the plaintiff to be paid the proceeds of that policy, while still retaining its right to defend all aspects of the case, including liability, up to and through trial.  With the surprising Maurer decision, however, that process was changed substantially. In that decision, the Court of Appeals held that consenting to the acceptance of payment by the underlying carrier and releasing the underlying tortfeasor from that action acted as a waiver of defenses to liability in that case by the UIM carrier.  In other words, after Maurer, by consenting to the underlying settlement, the insurance company defendant effectively waived its liability defenses and admitted liability. 

            The Maurer decision had an immediate and substantial effect on pending cases from a defense perspective.  Certainly, the realization that Maryland’s highest court deemed liability admitted in a pending case was not a comfortable position to be in, and the long-term effects of the decision were not surprising.  The process of evaluating cases in which to accept the underlying tender was altered to accommodate the liability issue, and insurance companies simply refused to consent to the settlements where they would have before, as is their right under the statute.  Practically speaking, this meant that more parties were going to trial, which meant more attorneys were going to trial, which resulted in longer trials and less efficiency in an already overburdened court system.

            House Bill 715 deals directly with the waiver issue in its altering of the Insurance Article.  Specifically, it adds the following subsections to § 19-511, the section that deals with the procedure when dealing with an underlying tortfeasor’s policy limits offer:

(F) Written consent by an Uninsured Motorist Insurer to acceptance of a Settlement Offer under Subsection (B)(1) of this section:

(1)   May not be construed to limit the right of the Uninsured Motorist Insurer to raise any issue relating to Liability or Damages in an action against the Uninsured Motorist Insurer; and

(2)   Does not Constitute an admission by the Uninsured Motorist Insurer as to any issue raised in an action against the Uninsured Motorist Insurer.

            This piece of legislation directly responds to the changes made in the law in 2007 and returns the right to defend all issues in the case to the uninsured motorist carrier.  Thus, as of the effective date of the law, which takes effect on October 1, 2012, the waiver of liability will no longer be an issue when evaluating whether to accept a settlement between the plaintiff and an underlying tortfeasor.  While the UIM carrier certainly benefits from this amendment to the existing law and regains its right to defend liability in a given case, it is also likely that the plaintiff and tortfeasor also profit from this change, both of whom benefit from the incentive added to consent to settlements.  Certainly, with fewer claims and, consequently, fewer attorneys going to trial, the over-burdened court system gains from what can only be a decrease in the amount of administrative costs and trial time that was required after the Maurer decision.

            It should be noted that the rights relating to subrogation by the UIM carrier against the underinsured tortfeasor, and the waiver of those rights upon acceptance of settlement and release of the tortfeasor, do not appear to be changed as a result of House Bill 715.


Article Contributed by Thomas Neary

RSRM Associate Secures Back-to-Back Defense Verdicts

      RSRM associate, Tom Neary, secured back-to-back defense verdicts in the last month.  Approximately three weeks ago, after a two-day jury trial in Anne Arundel County, the jury returned a defense verdict for Tom's client and found that Tom's client was not the cause of the accident and was not responsible for the plaintiff's alleged injuries.  

     Tom followed that up with another defense verdict this week in Cecil County.  After a two-day jury trial involving a dispute as to liability and damages, the jury, after only 20 minutes of deliberation returned a defense verdict for Tom's client.     

RSRM Welcomes New Associate, Tara Barnes

RSRM is pleased to welcome Tara A. Barnes to the firm. Ms. Barnes graduated from the University of Maryland, School of Law. Prior to joining the firm, she served as an Assistant State’s Attorney in Baltimore City for seven years. As an Assistant State’s Attorney, Ms. Barnes investigated and vigorously prosecuted serious felony offenses in Baltimore City. During her tenure she prosecuted cases ranging from serious traffic offenses to crimes of violence including attempted murders and sex offenses. Ms. Barnes successfully tried numerous jury and bench trials, where she quickly gained a reputation as an assertive and effective trial attorney.

Prior to practicing law, Ms. Barnes worked as a law clerk in Maryland and New York, where she gained significant legal experience by supporting attorneys in personal injury, medical malpractice, workers’ compensation and family matters at administrative and trial levels.

Ms. Barnes is an active member of the Baltimore City Bar Association, Monumental City Bar Association and Alliance of Black Women Attorneys. She enjoys spending time with her family, volunteering with community outreach programs, traveling and participating in running events.

Dog Bite Cases Cost Insurance Companies Millions

http://news.yahoo.com/leading-insurer-pays-109m-dog-bite-claims-214445007.html

No More Free Bites

On April 26, 2012, the Maryland Court of Appeals, filed an opinion in Tracey v. Solesky, which overturned several hundred years of legal precedent, even law that came to Maryland from England, regarding liability for attacks by dogs.

The Court of Appeals found that pit bull or pit bull mixed dog owners, or other persons who have the right to control a dog’s presence on the property (including LANDLORDS) are strictly liable for the injuries to an innocent party. This changes the law in Maryland in three respects: 1) a plaintiff in a dog bite case no longer has to show that the dog is dangerous (i.e. the “one free bite rule” has been eliminated); 2) the defendant(s) are STRICTLY liable for a plaintiff’s injuries, meaning that there are very limited liability defenses to a dog bite case, and 3) that landlords are now liable for injuries, if they failed to prohibit pit bull breeds on their premises and they know or should have known that a pit bull was on their premises.

This opinion will have an immediate impact on insurance companies. No longer can an owner of a pit bull or pit bull mix argue that the dog has never bitten anyone in the past. Typically, an insurance company could drop that dog from insurance coverage at that point, but that is no longer the case. This change in the law also applies to landlords, commercial or residential.

Moving forward, it is important for insurance companies to understand the risks inherent in insuring a home, a commercial property, a commercial landlord or a residential landlord if a pit bull or pit bull mix is allowed on the premises. ANY injuries caused by that dog are, more than likely, going to be the responsibility of the insurance company.

Just remember, a “first bite” is no longer a “first bite” if it comes from a pit bull or a pit bull mix.

Article contributed by Derrick Dye

UM and/or UIM Coverage is Not Required Under an Umbrella Policy

The Maryland Court of Special Appeals recently issued an opinion in Stickley v. State Farm, holding that Section 19-509.1 of the Insurance Article merely permits, rather than requires, insurers to offer uninsured motorist coverage in their umbrella policies.

                          

The case arose when Plaintiff and her husband were involved in an automobile accident. Plaintiff’s husband was killed as a result of the collision, and although she survived, Plaintiff suffered serious injuries. At the time, the Plaintiff had a number of insurance policies with State Farm and its subsidiaries, including a motor vehicle liability policy with limits for bodily injury of $100,000/$300,000 and a Personal Liability Umbrella Policy, which had limits of $2,000,000 for personal liability and $2,000,000 for UM and UIM coverage. As the accident was attributable to Plaintiff’s husband, Plaintiff filed claims with State Farm for the injuries she suffered. After Plaintiff exhausted the liability policy limit of $100,000, State Farm denied her UIM claim under the umbrella policy based on a “household exclusion” clause in the agreement, which excluded coverage for bodily injuries sustained by household members.

After this denial, Plaintiff filed suit seeking a declaratory judgment of coverage. Her legal theory was based on Section 19-504 of the Insurance Article, which states that when liability coverage under a policy for a private motor vehicle exceeds the state minimums ($30,000.00/$60,000.00) an insurer has to offer to the first named insured “insurance liability coverage for claims made by a family member in the same amount as the liability coverage for claims made by a nonfamily member under the policy.”  Relying on this language, Plainitff asserted that the household exclusion in her umbrella policy was void and that State Farm was required to offer coverage under the umbrella policy.

The circuit court disagreed and found that State Farm had satisfied the requirements of Section 19-504.1 when it provided Mrs. Stickley with the same amount of coverage pursuant to primary policy as it would provide a non-family member. In reaching this conclusion, the Circuit Court explained that an umbrella policy is not a “private passenger motor vehicle liability insurance policy” and thus is not subject to the requirements of Section 19-504.1.

On review, the Court affirmed the circuit court’s grant of summary judgment and explained that in the period since the General Assembly adopted the compulsory automobile insurance statutes and articulated Maryland public policy of guaranteeing minimum insurance coverage levels, the Court of Appeals has repeatedly held and reaffirmed the principle that “household exclusion” clauses are only valid where the exclusion is above the statutory minimum automobile liability insurance amounts.  In 2004, the General Assembly adopted Section 19-504.1 to ensure that, when getting a private car insurance policy with coverage limits over the statutory minimum, insured persons would have a right to purchase that policy without a household exclusion. The Court referenced the Court of Appeals’ interpretation of similarly worded statutes relating to uninsured motorist coverage, where the court held that insurers who provide excess policies may, but are not required to, offer uninsured motorist coverage. This led the Court to conclude that Section 19-504.1 does not apply to insurers providing excess or umbrella policies for their customers.

Article contributed by Andy Nichols

Summary Judgments Granted for Failure to Comply with Notice Requirements

Dennis Whelley, the chair of RSRM’s lead paint litigation department, has been able to prevail on motions for summary judgment on behalf of a local government entity filed in twelve separate cases in Baltimore City Circuit Court.  The basis of each motion has been the plaintiff's failure to comply with a provision of the Local Government Tort Claims Act, which requires a plaintiff to provide proper notice of the time, place and cause of injury, to a corporate officer within 180 days of the alleged injury.

Baltimore City Jury Returns Defense Verdict in Less Than Four Minutes

RSRM Associate James Buck tried a one-day jury trial in the Circuit Court for Baltimore City.  Plaintiff filed suit alleging negligence against the Defendant and claimed the Defendant’s alleged negligence was the proximate cause of the motor-vehicle accident. 

James was able to highlight evidence showing that the Plaintiff had, in fact, not only been involved in upwards of ten (10) previous automobile accident in the past fifteen (15) years, but that in each case, the Plaintiff had made a claim for injuries, mostly to the neck and back.  Despite these many prior accidents and injuries, the Plaintiff’s discovery responses disclosed only 2 other accidents, one prior and one subsequent. 

After less than four (4) minutes of deliberation, the jury returned a verdict in favor of the Defendant.

Baltimore City Jury Returns Defense Verdict

   RSRM Associate, Derrick H. Dye, tried a two-day jury trial in the Circuit Court for Baltimore City. Defending the case on liability and damages, Derrick successfully argued a Motion in Limine that excluded evidence of ongoing or future medical treatment or damages due to Plaintiff’s failure to provide any expert opinions supporting such a claim.

            

     After twenty-eight (28) minutes of deliberation, the jury returned a verdict in favor of Defendant, finding that Defendant was not negligent in causing the accident.

When Saying You Were Wrong Makes Sense

             Stipulating to liability in a motor vehicle accident case has its strategic advantages.  Generally, attorneys employ this tactic to keep out evidence of a defendant’s prior moving violations, behavior and actions after the accident and intoxication of the defendant.  The rationale behind this strategy is that by stipulating to liability, evidence regarding these types of matters becomes irrelevant and therefore inadmissible.  If liability is admitted, the only thing left for the jury to decide is the issue of damages (e.g. money). 

          The Court of Special Appeals recently decided a case involving a stipulation of liability in Hendrix v.Burns, et ux.  In Hendrix, the two Defendants admitted liability on the negligence claims asserted against them (negligence against Mr. Burns and negligent entrustment against Mrs. Burns).  The trial court granted Defendants’ motions in limine and precluded Plaintiff from introducing evidence that at the time of the accident Mr. Burns was drunk, had been involved in a road rage incident with another driver, was pursuing that driver when he ran a red light, attempted to flee the scene after the accident and had prior DUI convictions.  The trial court also precluded Plaintiff from introducing evidence that Mrs. Burns knew of these past incidents involving her husband. The jury returned a verdict of $85,000.00 and Plaintiff appealed.  One of the primary issues on appeal was whether or not the trial court erred in granting Defendants’ motions in limine and precluding Plaintiff from introducing certain evidence. 

          One of the arguments advanced by Plaintiff’s counsel was that because of Plaintiff’s 26 years of experience as a 911 operator, she had “a very strong fear” of being hit by a drunk driver and that she suffered great emotional distress, when after the accident, she learned Mr. Burns was drunk and had attempted to flee the scene.  Plaintiff argued that this evidence was relevant evidence in support of her claim for emotional distress. 

             The Court held that the “threshold issue is one of relevancy” and cited to Maryland Rule 5-401 when it defined evidence as relevant if it has “any tendency to make the existence of any fact that is of consequence to the determination of the action more or less probable than it would be without the evidence.”  The Court ruled that the fact that Mr. Burns was drunk and in a road rage incident at the time of the accident and attempted to flee the scene after the accident, “was not of consequence to the issue of damages.”

            The decision to stipulate to liability must be evaluated on a case-by-case basis.  When there are factors involving the defendant’s behavior pre or post-accident that would harm the defense of the case, stipulating to liability may be the best way to keep that type of damaging evidence from reaching the jury.

Article contributed by Andy Nichols

Cecil County Jury Returns Defense Verdict

RSRM associate attorney, Andy Nichols, tried a two-day jury trial in the Circuit Court for Cecil County on March 7-8, 2012.  Plaintiff filed suit against the Defendant, a restaurant, alleging she cut herself in Defendant's restroom, when the sink fell from the wall.  Plaintiff alleged that the sink was improperly maintained and/or installed.

After listening to testimony from several witnesses, including a plumber retained by Defendant, the jury, after thirteen (13) minutes of deliberation, returned a verdict in favor of the Defendant, finding that there was no evidence of negligence on Defendant's part.

Local Government Torts Claim Act

The Local Government Tort Claims Act (“Act”) provides a strong tool for defending claims brought against governmental entities and agencies. The Act is far broader than its name implies, affecting such entities as The Maryland National - Capital Park and Planning Commission, The Washington Suburban Sanitary Commission, certain community colleges, county public libraries and housing authorities.

The Act provides a road map for the prosecution and defense of claims against the entities it encompasses. A principal purpose of the Act was the provision of limitations on liability to $200,000.00 per individual claim and $500,000.00 per occurrence. Despite the title of the Act, Maryland's highest court has held that these limitations DO NOT apply to the local government entity as such, but only to INDIVIDUAL EMPLOYEES of the entity. Thus, whenever a tort was committed by a local government employee, that individual was protected by the liability limitations, but the local government entity was not. It didn't take the plaintiff's bar very long to figure out who to target in these types of cases, nor did it take the state legislature very long to FIX the problem with a statute designed to have retroactive application. Of course, the same court that found the Local Government Tort Claims Act inapplicable to local governments ruled retroactive application of the newly clarified law illegal. 

            There is, however, one portion of the act that remains viable and available as a defense - the notice requirement. The Act specifies that an action may not be brought against a local government entity unless written notice of the time, place and cause of an injury is personally delivered or sent via certified mail to an officer of the local government entity within one hundred and eighty (180) days of the injury. The courts have ruled that substantial compliance with the statute may be sufficient where the same information is transmitted via regular mail in such a fashion as to allow the defendant to investigate the circumstances of the alleged injury despite the absence of certified mail service or delivery to an actual officer.

            There is also an escape clause in the Act if the plaintiff can establish good cause for delay and the defendant is not able to show prejudice as a consequence of the delay. The leading case construing the statute is Rios v Montgomery County 386 Md 104, 872 A2d 1(2005).In Rios, suit was brought by an infant plaintiff against a county employee doctor for a birth injury suffered ten years earlier. The Court of Appeals found that the statute did not violate state or federal constitutional principles and affirmed a lower court's grant of summary judgment for failure to comply with the notice requirement despite the plaintiff's infancy and the fact that the plaintiff's mother was a Bolivian immigrant who did not speak English. The Court was careful to point out that review was on an abuse of discretion basis, implying it would have affirmed even if the trial court had come to a different conclusion on the issue of good cause for delay.

            Attorneys at RSRM have been successful in obtaining summary judgment in numerous cases based upon a plaintiff’s failure to comply with the notice requirement contained in the Act.  A plaintiff’s compliance, or failure to comply with the notice requirement, should be one of the first things reviewed in any case where the Act applies.    

Article contributed by Dennis Whelley

Maryland House of Delegates Rejects Punitive Damages Bill

The Maryland House of Delegates rejected House Bill 469.  This bill would have allowed for punitive damages against drunk drivers who caused "personal injury or wrongful death while driving or attempting to drive a motor vehicle" and with a blood alcohol level of 0.15 or higher.  

New Workers' Compensation Death Benefits Changes Effective March 19, 2012

On February 23, 2012, the Workers’ Compensation Commission adopted amendments to Regulation .06 and new Regulation .06-1 under COMAR 14.09.01.  These statutory changes deal with the payment of death benefits to surviving dependents. The law also enables counties and municipal governments to opt into the new death benefits scheme.

These changes became effective March 19, 2012.

Post-judgment Death Does Not Reduce Verdict That Includes Future Medical Expenses

The Maryland Court of Appeals in Spangler v. McQuitty recently issued an interesting opinion addressing the question of whether a plaintiff’s death prior to the time that post-judgment motions are ruled upon is grounds for reducing the verdict awarded to that plaintiff.  More specifically, the Court addressed whether a plaintiff whose judgment included an award for substantial future medical costs is still entitled to those costs if that plaintiff dies prior to the post-judgment motions being ruled upon and a final judgment entered.  The Court held that Plaintiff was indeed entitled to retain such an award and the trial court should not consider Plaintiff’s untimely death in deciding a Motion to Remittitur or for a New Trial.

The case in Spangler dealt with a medical malpractice claim where the jury in the underlying case had awarded Plaintiff $13,078,515.00 in total damages with $8,442.515.00 of that verdict awarded to pay for the future medical care of the minor Plaintiff.  Though the history of the case is extensive, the relevant history begins after the case was reviewed by the Court of Appeals on a separate issue and it was returned to the trial court for resolution of a post-trial motion by Defendant’s counsel that had been pending prior to the appeal.  After remand to the trial court, Plaintiff whose injuries were the subject of the case died before the post-trial motions were resolved.  Based upon this development, Defendant argued in a motion for a new trial, among other points, that the award of damages in the case for future damages should be reduced or a new trial ordered based upon the change in status of Plaintiff.  The death of Plaintiff at this juncture would make the award a windfall and would not reflect the actual damages suffered by Plaintiff. 

The Court of Appeals disagreed with the defendant and refused to reduce the verdict or order a new trial.  The Court held that although there was some support for the argument in favor of reducing the verdict, if they disturbed the finality of the judgment in this case, it would create the prospect of endless litigation as any judgment would be subject to revision based upon changes in circumstances in the future.  The need for finality of judgments necessarily outweighs any inequity in the damages awarded.  The Court therefore denied Defendant’s post-trial motions.

The decision in Spangler also contains a good reminder of the rules applicable when dealing with a pre-trial settlement by a co-defendant, particularly when dealing with a so called Swigert release and the effects on the remaining defendant.  In Spangler, a co-defendant Hospital settled with the plaintiff after the Hospital had been granted summary judgment in its favor, possibly in order to avoid an appeal on the summary judgment award.  The release between the plaintiff and the Hospital appears to have been based upon the Swigert model, stating that the Hospital did not admit liability and that the any subsequent award would be reduced by the pro rata share of any damages if and only if the Hospital was adjudicated to be a joint tortfeasor by a final judicial determination on the merits.  If no such finding were made, there would be no set off.  The non-settling defendant did not appeal granting of summary judgment or otherwise seek to establish liability on the settling co-defendant prior to the $13,078,515.00 award, but nevertheless requested that the Court reduce the award against him by the amount of settlement or the pro rata share of the judgment that would have been borne by the Hospital.  

Applying the Uniform Contribution Among Joint Tortfeasors Act, the Court of Appeals held that since the Hospital was in fact judicially determined not to be a joint tortfeasor through summary judgment in its favor, no reduction was warranted.  The Hospital was simply acting as a “volunteer” in the case rather than as a torfeasor.  The Hospital had never admitted liability and had never been judicially determined to be liable.  It was therefore by application of the Act not a jointtortfeasor and no reduction in judgment was required. 

Though a successful appeal of the granting of summary judgment appears to have been the only possible way that the outcome of the defendant’s request for reduction would have been different, certainly a difficult proposition, the case does provide a good reminder of the possible pitfalls that must be dealt with in a multi-defendant litigation.

Article Contributed by Tom Neary

Court of Special Appeals Finds No Exception to "Going and Coming" Rule

       Recently in Garrity v. Injured Workers Insurance Fund, et. al, the Court of Special Appeals held that no exceptions to the “going and coming rule” were applicable, and as a result the employee’s resulting injuries were not compensable, where an employee left work without express or implied authorization, and subsequently, was involved in an automobile accident on his return to work. This case gives exceptional insight to the rationale behind the “going and coming rule” and its exceptions.

       Scott Garrity, the (“Appellant”), a part time bailiff at the District Court for Baltimore City, was involved in a serious car accident as he was driving back to the courthouse during the workday. On June 8, 2006, shortly after arriving at work, the Appellant spilled coffee on his shirt and tie. The Appellant then decided to leave the courthouse and return home to change his shirt and tie, without notifying a supervisor. The Appellant was assigned to courtroom five that morning, and explained, that when two bailiffs were assigned to a courtroom five, it was customary that one bailiff would take over the courtroom if the other needed to run an errand. On his return, the Appellant was involved in a head on car accident.

       Ordinarily, an employee that suffers an injury going to or returning from their place of work is not considered to be acting in the course of employment. On appeal, the Appellant acknowledged that he was returning to work, but asserted that the injury is compensable under three (3) exceptions to the “going and comings rule”: (1) the special mission exception; (2) the dual purpose doctrine exception; and (3) the personal comfort exception.

       The special mission exception is generally applicable when an employee is traveling on a special mission or errand at the request of the employer and in furtherance of the employer’s business. The crux of whether or not the special mission exception applies depends on whether the employee had express or implied authority to undertake the special errand. Whether a case falls in the rule depends on the terms of the agreement by which the claimant is employed, either in an express form, or an implication from the nature or character of the work. 

       Here, the Appellant’s assertions of authority to go on the errand where two-fold 1) he alleged that the “Policy on Appropriate Attire and Appearance” mandated that he change his stained shirt and tie and 2) that he had implied authority to leave given the liberal policy concerning bailiffs’ running errands. Not persuaded, the Court found that the appellant did not have express or implied authority to leave the courthouse, and, therefore, the appellant could not be on a special mission on behalf of his employer.

       The dual-purpose doctrine exception applies if the injury occurred during a trip that serves both a business and a personal purpose. Here, the Appellant contended that his injury was compensable under the dual-purpose doctrine because he was advancing the judiciary’s interest by asserting that he had his radio with him so that he could monitor communication and return if needed. The Court determined that the Appellant took the radio on his own initiative, without being advised to, and was not serving a business purpose by merely bringing the radio with him.  In fact, the interests of the courthouse would have been better served by the Appellant by remaining at the courthouse.  Therefore, the dual purpose doctrine was also not applicable. 

       Finally, the personal comfort exception is applicable if the claimant sustained an accidental injury while engaged in some personal comfort activity incidental to employment, for example a coffee break or other paid break intervals as specified in an employment contract. Here, the record did not suggest that the terms of the Appellant’s part-time employment entitled him to a paid break in which he could attend to his personal comforts. Thus, the personal comfort exception also did not make the Appellant’s injury compensable. 

Article Contributed by Andrew Nichols

Recent Court of Appeals Decision Significantly Alters Notice Element in the Defense of “Black Ice” Cases in Maryland

GeorgePoole v. Coakley & Williams Construction, Inc., et al., No. 130 September Term 2010. 

            For years, the “assumption of risk” defense has been used by defendants in slip-and-fall premises liability cases.  Essentially, the elements of this defense are that a plaintiff knew of and appreciated a dangerous condition, and voluntarily decided to proceed in the face of that danger.  Until recently, Maryland precedent allowed a defendant to prevail as a matter of law prior to trial by filing a motion for summary judgment, under the theory that when a plaintiff ventured outside in inclement weather, the plaintiff knew or should have known that there existed a possibility of slipping and falling on ice or other precipitation, and voluntarily assumed that risk.  In other words, all that was required to prove the “knowledge” element of the assumption of risk defense was that weather conditions existed at the time of the alleged occurrence that could have produced slippery and unsafe conditions.  The plaintiff was then presumed to have knowledge and appreciation of that danger.

            The Maryland Court of Appeals opinion in Poole v. Coakley & Williams Construction, Inc., et al., which was released in October 2011, overruled prior case law as it related to proving knowledge and appreciation of a dangerous condition on the part of a plaintiff.       

            George Poole alleged that he slipped and fell on “black ice” one morning as he was walking through a parking lot toward the rear entrance of his place of employment.   Water was being pumped from a nearby building and a stream ran through the parking lot into a drain.  The defendants allegedly owned and controlled the building, or took part in pumping water out of pipes and into the parking lot.  The plaintiff sued the defendants alleging several counts of negligence, including negligence for failure to “prevent a stream of water from flowing onto the parking lot, thereby causing black ice to form.”  The plaintiff argued that he thought that it was safe to proceed through the stream because he had walked through it previously without incident.  In the trial court, the defendants filed a motion for summary judgment under an assumption of risk theory, which was granted.  The trial court applied the rule in Allen v. Marriott, stating, “[t]he Court of Appeals and the Court of Special Appeals have made it abundantly clear that when someone is aware of icy conditions in an area and nevertheless elect[s] to proceed through those areas they assume the risk as a matter of law.”    

The plaintiff appealed to the Maryland Court of Special Appeals; however, the Court of Appeals issued a writ of certiorari on its own initiative.  The Court subsequently reversed the granting of summary judgment, finding that the plaintiff “did not assume the risk of his injuries as a matter of law.”  The Court held that a particular plaintiff must have “actual, subjective knowledge” of a risk before he can be held to have assumed that risk as a matter of law.  Assumption of risk will only be granted if the “undisputed evidence and all permissible inferences therefrom clearly establish that the risk of danger was fully known to and understood by the plaintiff.”  Notably, the Court distinguished “black ice” cases from those where a plaintiff encounters visible snow and ice.  In the former, knowledge may be imputed as a matter of law, with the rationale being that the plaintiff fell on snow or ice that was plainly visible.  “Black ice,” on the other hand, is difficult or impossible to see and does not reflect as much light as regular ice. 

The crux of the Poole holding is that actual knowledge may not be imputed to the plaintiff.  In other words, the Court of Appeals overruled the holding in Allen v. Marriott to the extent that the previous rule allowed the courts to bridge the gap between imputed knowledge of a given risk (i.e., there may have been icy conditions) and actual knowledge of a given risk (i.e., there were icy conditions).  This holding, however, does not otherwise alter or affect the use of the assumption of risk defense.  It simply defined and clarified when a plaintiff can be held to have knowledge and appreciation of a given risk as a matter of law, which is a factual determination. 

Article contributed by James Buck & Danielle Williamson

Co-Defendant’s Cross-Claim for Indemnification/Contribution Denied Due to Failure to Plead Sufficient Factual Basis to Support the Claim

Arguetta v. McGill Airflow, LLC, Civ. No. JKB-11-1102(D. Md.) (Jan. 4, 2012).

Gillermo Arguetta (the “Plaintiff”) brought a products liability suit after sustaining injures while using a tool called a Leak Detective Testing Kit (“Leak Detective”).  The Plaintiff filed suit against McGill Airflow, LLC, McGill Airsilence, LLC, United McGill Corporation (hereinafter, collectively “McGill Defendants”) and the Cincinnati Fan. Co. (“CFC”), claiming the Leak Detective was negligently designed and/or manufactured.  The Complaint alleged that while the Plaintiff was using the Leak Detective to locate and seal leaks at a bio-medical facility, his hand was sucked through the machine’s air inlet and into its unguarded fan housing.  The blade of the fan struck the Plaintiff’s hand, and crushed the bones in three (3) of his fingers, which then had to be amputated.

Initially, the Plaintiff filed suit in the Circuit Court for Frederick County against only the McGill Defendants, whom he alleged designed, manufactured and distributed the Leak Detective.  The McGill Defendant’s removed this case to federal court on April 27, 2011. Subsequently, during a joint physical inspection of the Leak Detective, the parties discovered labels under the machine’s fan indicating that the fan was actually manufactured by CFC.  Soon thereafter, the Plaintiff filed an Amended Complaint, adding CFC as a Defendant.  The McGill Defendants then moved for leave to file a Cross-Claim against CFC for indemnification and contribution.

CFC attacked the McGill Defendants’ motion and underlying Cross-Claim on three (3) grounds: (1) that the motion was untimely; (2) that the Cross-Claim would be more appropriately adjudicated in state court; and (3) that the Cross-Claim failed to allege a sufficient factual basis to properly support a claim for indemnification or contribution.  The Court found the first two arguments to be without merit and did not consider them; however, the Court agreed with CFC that the McGill Defendants’ proposed Cross-Claim was factually deficient and therefore failed to state a claim upon which relief could be granted.

The Court held that the Cross-Claim alleged no facts supporting even an inference that McGill was entitled to the relief that it sought.  To the contrary, the Court found that the Cross-Claim did little more than describe the parties and subject matter of the underlying action, and make conclusory declarations that it was entitled to indemnification and contribution from CFC if it was found liable to the Plaintiff.

Essentially, because the McGill Defendants’ Cross-Claim failed to meet the basic pleading standards of Fed. R. Civ. P. 8(c), the Cross-Claim could not survive a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6) (failure to state a claim upon which relief can be granted, or, in more archaic legalese, a “demurrer”).  The McGill Defendants’ Motion for Leave to File the Cross-Claim was therefore denied without prejudice.  The Court stated that the McGill Defendants were free to renew their motion to set out a plausible legal theory, with adequate factual support, under which CFC would be liable to them for indemnity and contribution.

In retrospect, in order to set forth an adequate factual basis to support the Cross-Claim, the McGill Defendants might have pled that CFC failed to install the requisite safety mechanisms or failed to warn of the possibility of the machine’s hazardous and un-guarded fan housing.  This would likely have been a sufficient factual basis to support the McGill Defendants’ claim for entitlement to indemnity or contribution.  Had they done this, reasonable inferences could have been drawn that CFC might be found liable to the McGill Defendants for indemnification and contribution, and the Court could very well have granted their Motion for Leave to File the Cross-Claim.  

The rules relating to pleading in both state and federal courts have been greatly relaxed over the course of the past several decades.  Relaxed though they might be, a party must still plead sufficient facts to support any claim for entitlement to relief.  Bald assertions and conclusory allegations by the pleader will not suffice.  

Article contributed by James Buck