Congratulations to RSRM's Super Lawyers!

RSRM congratulates Jim Andersen, Rod Barnes, and Paul Donoghue for being named Super Lawyers for 2017, and Tara Barnes and Jessica Butkera for being named Rising Stars.  

For more information on Super Lawyers selection process and criteria, please visit the Super Lawyers web site here.  

Welcome Commissioner Tracey Warren

Rollins, Smalkin, Richards & Mackie is pleased to welcome Tracey Warren who was appointed a member of the Maryland Workers’ Compensation Commission by Governor Larry Hogan.   

Commissioner Warren holds an undergraduate degree from Morgan State University and earned her Juris Doctorate from the University of Baltimore School of Law.  She later received her LL.M in taxation from the Georgetown University Law School.  Commissioner Warren previously worked as an attorney with the U.S. Department of Veterans Affairs, the Southern Maryland Center for Family Advocacy, and as an Assistant State’s Attorney in the Montgomery County State’s Attorney’s Office.  She has been a long-time advocate for victims of domestic violence and developmentally disabled adults. 

The attorneys at RSRM look forward to presenting and arguing cases before our new commissioner.  

- Alicyn C. Campbell

Tara Barnes to be Awarded Distinguished Alumni Leader in Service Award by the Baltimore City State's Attorney's Office

RSRM is pleased to announce that partner, Tara Barnes, is being honored this evening as a Distinguished Alumni Leader in Service by the Office of the State's Attorney for Baltimore City at their Annual Winter Solstice Benefit Recognition Gala.

Ms. Barnes was chosen for this award for her continuing commitment to the Baltimore community, and in recognition for her accomplishments after leaving the Office of the State's Attorney. 

The reception will be held at 6 p.m. this evening at the Radisson Hotel.  Congratulations Tara!    

Passenger Assumes the Risk of Riding with Drunk Driver, says Md. Court of Special Appeals Decision

Kerry Evans v. Joshua Shores, et al., No. 0506, 2016 WL 4723417 (Md.App. September 8, 2016)  

On September 8, 2016, the Maryland Court of Special Appeals filed an unreported decision in Kerry Evans v. Joshua Shores, et al., holding that a passenger assumed the risk of injuries she sustained while riding in a vehicle with an intoxicated driver.

This case arose out of a November 10, 2013 single-vehicle accident in Newark, MD. Immediately after the collision, police arrested Joshua Shores—the driver—who registered a blood-alcohol concentration of 0.15%. Prior to the accident, Plaintiff Kerry Evans and Defendant Shores had spent the evening together drinking with friends. Throughout the evening, Shores drank an estimated four to five alcoholic drinks in Evans’ presence, and up to ten beers and multiple shots in total. When the pair met at Shores’ truck to leave the party, it took Shores four tries to successfully back out of the driveway, which Evans testified was “because he’s either too drunk or he can’t see where he’s going because of this impaired state.” Once out of the driveway, Shores sped away on a highway where he lost control of the vehicle, jumped a ditch, and headed into a bank of trees. Shores admitted that he was intoxicated at the time of the accident.  

In affirming the jury verdict from the Circuit Court for Worcester County, the Court of Special Appeals upheld an expert toxicologist’s testimony that knowing a person has consumed alcohol puts a passenger on notice that an adverse event will likely occur. Thus, given that notice, a passenger assumes the risk of injury by riding with an intoxicated driver. Evans challenged the trial court’s admission of this testimony, arguing it constituted a subjective opinion and unfairly prejudiced the jury against her. 

The Court of Special Appeals began its review with Maryland’s general rule for voluntary assumption of risk, asked by “whether there was an intentional an unreasonable exposure to danger, which the plaintiff either knew or had reason to know.” Power v. State u/o Reynolds, 178 Md. 23, 31-32 (1940). The Court concluded that Evans had sufficient notice of Shores’ intoxication because the two had partied together with a small group for several hours, mixed beer with shots of liquor, and because Evans admitted feeling nervous when Shores struggled to back out of the driveway. The Court also emphasized that Evans had completed an alcohol education course in school about the dangers of drunk driving, and she knew that Shores had a prior DUI.

Based on these factors, the Court rejected Evans’ challenge to the expert toxicology testimony. The Court reasoned that the testimony was relevant to show Evans’ knowledge of Shores’ intoxication. Further, the testimony was not unfairly prejudicial because it only bolstered other significant evidence that Evans had notice of Shores’ intoxication and should have appreciated the danger his potential drunk driving presented. The Court of Special Appeals therefore held that Evans assumed the risk of her injuries because she witnessed Shores consume substantial quantities of alcohol and understood the risks of riding with an intoxicated driver, yet she still chose to remain Shores’ passenger, even after he demonstrated signs of impairment.

Although Evans is unpublished and therefore not binding legal authority, it reflects the increasing intolerance of Maryland appellate courts for both intoxicated tortfeasors and those aware of their intoxication, particularly in the civil context. [1]  Evans, and cases like it, recognize that individuals aware of a person's intoxicated state owe a duty to both others and themselves to avoid the dangers created by it, and to find a sober ride home.

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[1] For examples of this trend see recent articles published in the RSRM Blog, including  Ben Beasley, "Maryland Court of Special Appeals Limits Application of New Social Host Liability", September 16, 2016 and Jessica Butkera, “Social Hosts, Not Commercial Hosts, Liable for Alcohol-Related Injuries to Third Parties. For Now?”, July 7, 2016. 

Maryland Court of Special Appeals Limits Application of New Social Host Liability

Michael Hansberger v. Bradley Smith, et. al., 2016 Md. App. Lexis 82 (Md. Ct. Spec. App. July 27, 2016)

Earlier this summer, the Maryland Court of Appeals issued an opinion in Manal Kiriakos v. Brandon Phillips and Nancy Danakos, et. al. v. Linda Stapf  (“Kiriakos”)[1] that expanded imposition of civil liability to social hosts for the torts committed by their intoxicated, under-aged guests.  The Kiriakos court recognized this limited form of negligence liability based on violations of Crim. Law § 10-117(b), which prohibits a person from knowingly furnishing alcohol to minors, and prohibits knowingly and willfully allowing a minor to possess or consume alcohol at a residence that he or she owns or leases, and in which he or she resides.  On July 27, 2016, the Maryland Court of Special Appeals issued its opinion in Michael Hansberger v. Bradley Smith, et. al. (“Hansberger”).  The Hansberger decision further clarifies social host liability as identified in Kiriakos, holding that it can only be applied to social hosts who knowingly and willfully allow an individual under the age of 21 years to possess or consume alcohol.

The Hansberger case arose when a party was advertised and thrown by Travis Riley on his parents’ property.  Travis threw the party without advising his parents of it, without obtaining their consent, and while his parents were not at home.  Many of the partygoers were under 21, and although the party was advertised as “BYOB,” Travis collected a fee from party goers who wanted to drink from a keg brought by another attendee.  At one point during the party, a fight broke out, causing Travis to eject the attendees.  One of the partygoers, Bradley Smith, invited many of the partygoers to move the party to his parent’s farm 3 miles away.  Although Smith’s parents were home that night, they went to bed before the partygoers arrived and had no knowledge of the party.  The party goers continued drinking while on the Smith property.  Later that evening, another fight broke out, which resulted in a brick being thrown at attendee, Michael Hansberger, causing serious and permanent injuries.

Following the incident, Hansberger filed suit in the Circuit Court for Frederick County against the Smiths and the Rileys.  The Smiths and Rileys filed dispositive motions, arguing that Hansberger had failed to establish that they had breached a duty of care owed to him.  The Circuit Court agreed, and Hansberger appealed.  The Maryland Court of Special Appeals affirmed the trial court’s ruling based, in part, on its understanding of social host liability as described in Kiriakos.

The facts of the Kiriakos cases and the Hansberger case are similar in many regards.  In both cases, a party was held in a home or on the premises of a residence where alcohol was consumed by individuals under the age of 21.  Both cases involved an intoxicated underage party attendee that, due to their intoxication, acted in a way to cause death or serious bodily harm to another.

However, there is a key distinction between the situations addressed in Kiriakos and Hansberger:  the knowledge of the owners concerning alcohol consumption on their property.  In Kirakos, there was evidence that the owner of the residence served alcohol to minors, or was keenly aware that minors were consuming alcohol and may have been intoxicated.  In Hansberger, on the other hand, there was no evidence that the Rileys knew of the existence of the party thrown by Travis Riley.  Hansberger argued that the Smiths knew or should have known about the party because deposition testimony elicited that the Smiths heard noise from other parties on their property in the past.  The Maryland Court of Special Appeals nevertheless agreed with the trial court’s determination that this was insufficient to demonstrate that the Smiths willfully allowed minors to drink alcohol on their property.

The Kiriakos decision will undoubtedly open the floodgates to a new wave of premises liability claims in Maryland by persons injured by intoxicated minors who consume alcohol on the property of adult hosts.  But Hansberger suggests that Maryland appellate courts are not quite ready to move forward and adopt dram shop liability, particularly in the context presented by the "social host" cases.  Hansberger also serves as an important reminder to insurers and attorneys investigating social host liability claims that they must investigate the knowledge of the host property owners and determine whether they knew that minors were consuming alcohol on the premises, and whether the hosts took steps to prevent it.  

We will continue to monitor this developing area of the law, and updates will follow.    

   

Ben Beasley

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[1] For more information on the Kiriakos decision, please read the article submitted by RSRM Associate Jessica P. Butkera on July 7, 2016, which is located here.

Three New Associates Join RSRM

Rollins, Smalkin, Richards & Mackie, LLC is very pleased to announce that three new associates have joined our firm.  

Ben Beasley is a 2014 graduate of the University of Baltimore School of Law.  After graduating from law school, Mr. Beasley clerked for the Honorable Mickey J. Norman in the Circuit Court for Baltimore County.  Prior to joining RSRM, Mr. Beasley was a trial attorney with a civil litigation firm in Baltimore City where he prosecuted auto tort, premises liability, and breach of contract cases.

Mr. Beasley was a high school music teacher for a number of years before becoming an attorney, having received a bachelor's degree in musical education from Shenandoah University.  Mr. Beasley volunteers as a coach and instructor for the University of Baltimore National Trial Competition Team.  

EmilyJ. Spiering is a 2011 graduate of the University of Baltimore School of Law. While attending law school, Ms. Spiering served as a Staff Editor of the University of Baltimore Law Forum, which focuses on developing trends and topics unique to the Maryland legal community.  She also served as a member of the National Environmental Moot Court Competition Team, and interned with U.S. Magistrate Judge Susan K. Gauvey of the United States District Court for the District of Maryland.

Immediately after law school, Ms. Spiering clerked for the Honorable Leo E. Green, Jr. in the Circuit Court for Prince George’s County. Prior to joining RSRM, Ms. Spiering practiced civil litigation in Chicago, Illinois for two years, where she represented financial institutions in foreclosure proceedings across the state.    

Bryce Ziskind graduated magna cum laude from the University of Baltimore School of Law in 2015 after receiving his undergraduate degree from the University of Maryland.  While attending law school, Mr. Ziskind served as an Associate Comments Editors for the University of Baltimore Law Review, and was a member of the Intellectual Property Moot Court Team. He also served as a Rule 16 Public Defender in Harford County and as a Research Assistant for Sports Law Professor Dionne Koller.

Before joining RSRM, Mr. Ziskind clerked for the Honorable Stephen M. Waldron and the Honorable Kevin J. Mahoney in the Circuit Court for Harford County.

Is Injuring Yourself When Avoiding a Collision with Your Child a Compensable Workers’ Compensation Injury?

Prince George’s County v. Melvin Proctor, 2016 Md. App. LEXIS 74 (Md. Ct. Spec. App. July 26, 2016)

An issue that often presents itself in workers’ compensation cases in Maryland and throughout the country is whether an injured employee was actually working at the time of injury, and therefore entitled to workers’ compensation benefits.  The issue of whether an injury “arose out of or in the course of employment” was presented in a recent case, Prince George’s County v. Melvin Proctor, 2016 Md. App. LEXIS 74 (Md. Ct. Spec. App. July 26, 2016), which involved an injury scenario that is all too familiar to readers with highly mobile toddlers. 

On his day off, Detective Melvin Proctor, a Prince George’s County police detective, was leaving his home when his precocious 2-year-old walked in front of him.  In order to avoid knocking the unfortunate young man off the porch, Proctor jumped out of the way, injuring his knee and ankle in the process. At the time of the incident, Det. Proctor was off, and coming to the end of a 10-day vacation.  Based on these facts alone, it seems abundantly clear that Proctor’s injury did not occur in the course of his employment.  However, Proctor relied on the significant gray area in the law to argue his entitlement to workers’ compensation benefits based on these facts, leading legal minds considering the issue to disagree on the case’s outcome. 

Proctor argued that he was on a “special errand” incident to his employment when the injury occurred.  Specifically, Proctor had dropped his police cruiser off for repairs before his vacation, and he was on his way to pick it up when the incident occurred.  Proctor argued that picking up his cruiser was a special errand related to employment because his role on the robbery suppression squad required him to work outside of normal work hours and to respond to emergency situations with his cruiser.  Proctor further asserted that his errand was a work requirement because he and his fellow officers had been told that when repairs were done, they needed to pick up their cruisers “in a timely manner” because spots on the repair lot were limited. 

  

Prince George’s County (the “County”) disputed that an accident injury in the course of employment had occurred, and filed issues with the Maryland Workers’ Compensation Commission (“WCC”).  The WCC found in the County’s favor, and the case was appealed to the Circuit Court for Prince George’s County where the Circuit Court reversed, relying on the positional risk test (see below).  Ultimately, the case was appealed to the Maryland Court of Special Appeals, which entertained three different theories on whether the injuries Proctor sustained while avoiding a collision with his two-year-old could be considered employment-related and thus compensable.     

First, the Proctor Court examined whether Proctor’s injury arose out of and in the course of employment.  The Court found that it did not, since Detective Proctor had not yet embarked on the journey to retrieve his police cruiser and was not under any directive to retrieve the cruiser on the date of the injury. 

Second, the Court considered whether the “going and coming rule” applied to the facts to the case.  The so-called going and coming rule holds that the commute to and from work is not a work related activity in most cases, but this general rule is riddled with exceptions.  However, the Court did not apply any of these exceptions to Detective Proctor because he had not even embarked on his work-related journey at the time he sustained his injuries. 

Finally, the court considered the “positional risk test”, which holds that an injury may be compensable if a condition or obligation of employment actually places the employee in the position to be injured or at the location of injury.  This test is most often applied in cases involving travelling employees, such as where a travelling employee is staying in a hotel because of work and is injured when slipping in a hotel bathroom.  Mulready v. Univ. Research Corp., 360 Md. 51, 58-59, 756 A.2d 575, 579 (2000).  In those cases, the Court considers whether an injury would have occurred “but for” the conditions and obligations of employment. The Proctor Court, disagreeing with the Prince George’s County Circuit Court’s judicial review, failed to find any reasonable argument that “but for” the need to retrieve his police cruiser, Proctor would not have been at his home on his day off, stepping through the front door and avoiding knocking his 2-year-old off his porch. 

Based on its rejection of the foregoing theories, the Court of Special Appeals reversed the decision of the Prince George’s County Circuit Court and affirmed the decision of the WCC.   However, Detective Proctor has not given up yet, and has indicated his intention to appeal the matter to the highest court in Maryland, the Court of Appeals.  The attorneys at RSRM will continue to track this case and hope that Detective Proctor will be more careful leaving his home in the future.  

- Alicyn Campbell

Hired Driver’s Lack of Liability Insurance May “Sound” like Admissible Evidence in a Suit for Negligent Hiring, but the Court of Appeals Disagrees in Perry v. Asphalt & Concrete Servs., 447 Md. 31, 133 A.3d 1143 (2015)

It is easy to analogize a negligence action and causation analysis to playing a vinyl record. When you begin to play the record you hear a beautiful tune. The song continues through verses and chorus until, suddenly, the record skips ever so briefly. After the skip, the record continues to play, and, ultimately, ends. At the end, you think to yourself how lovely the song sounded, oftentimes forgetting that brief skip. How can you dwell on that when, for the most part, everything sounded so cohesive? That beautiful song is analogous to the story often presented by a plaintiff at the trial of a terrible incident that resulted in grievous injuries, and the culpable ignorance of a defendant that should have known better. It all sounds wonderful until you take a closer look at that “skip”:  namely, whether the facts that a defendant knew or should have known actually have bearing on the cause of plaintiff’s injuries or simply “sound good.”  In the case of Perry the Court of Appeals concluded that although a hired driver's lack of liability insurance certainly sounds good in a negligent hiring case, it has no true bearing on the issue.    

In Perry v. Asphalt & Concrete Servs., 447 Md. 31, 133 A.3d 1143 (2015), the underlying facts are as follows: Moran Perry (“Perry”) was a pedestrian crossing an intersection in Frederick, Maryland when he was struck by a dump truck. The dump truck was operated by William Johnson (“Johnson”), and owned by a company called Higher Power Trucking L.L.C. (“Higher Power”). Asphalt Concrete Services, Inc. (“ACS”) hired Johnson and Higher Power to haul asphalt and stone to an ACS job site. While investigating the case, the responding officer discovered that neither Johnson nor Higher Power had liability insurance covering the dump truck at the time of the incident due to a lapse in payment on the policy.

Perry filed suit against Higher Power, Johnson and ACS in the Circuit Court for Prince George’s County. Prior to trial, ACS filed a motion in limine seeking to exclude evidence that the truck was uninsured at the time of the accident pursuant to Maryland Rule 5-411, which states that liability insurance coverage, or lack thereof, is generally inadmissible evidence because of its inherent prejudice. The trial court reserved on the issue, and permitted admission of evidence of the lack of insurance, over objection from counsel for ACS.  

The jury ultimately found that ACS was negligent in its hiring of Johnson, and that Johnson was negligent in the operation of his vehicle in the incident that resulted in Perry’s injuries. ACS filed a Motion for Judgment Not Withstanding the Verdict and for a New Trial based on part on the admission of the insurance-related evidence, but it was denied by the trial court. Subsequently, ACS appealed to the Court of Special Appeals of Maryland, which reversed the judgment and held that because there was no causal link between Johnson’s failure to maintain insurance coverage and the accident, evidence that he lacked insurance at the time of the accident was irrelevant to negligent hiring, and it should not have been admitted.  Asphalt Concrete Servs., Inc. v. Perry, 221 Md. App. 235, 108 A.3d 558 (2015).

Perry appealed to the Court of Appeals, which affirmed the intermediate court's ruling. In doing so, the Court first examined the relevance of Johnson’s liability insurance coverage on whether ACS breached its duty to check Johnson’s background when it hired him, and particularly its failure to observe its own policy of requesting proof of liability insurance. The Court found that evidence of lack of insurance was relevant on this issue because, in part, this evidence went to Johnson's competence as a hired driver.  However, the Court did not consider this to be the deciding factor in determining the relevance of the insurance-related evidence on Perry's negligent hiring action.  

The Court of Appeals found that the deciding factor was absence of a link between evidence of lack of insurance and proximate cause, and, specifically, whether ACS's failure to confirm Johnson's insurance coverage was the actually cause of Perry’s injury. Agreeing with the intermediate appellate court, the Perry Court found that ACS’s failure to comply with its policy to hire only those drivers who prove they are insured was not the cause of Perry’s injury, and therefore irrelevant to the negligent hiring claim. The Court contrasted the factual scenario in Perry to one in which a hired driver had a history of driving while intoxicated and then strikes a pedestrian while drunk, stating that because the driving history involved the very instrumentality that caused the accident, evidence of it would be appropriate and admissible. Here, however, the Court found that “[j]ust as it would be illogical to assert that [Johnson’s] driving was prudent on a particular occasion because he had liability insurance coverage…one cannot conclude the converse that [Johnson was] a poor driver because insurance coverage had lapsed due to missed payments.” Id. at 57, 133 A.3d at 1159.  

Much like the record playing a beautiful song, Perry’s case sounded unassailable to his attorney: a company that failed to follow its own rules hired a driver that did not have insurance and that driver that struck a pedestrian with a very large truck.  However, the Perry Court found that you cannot ignore that “skip” in the song when assessing whether evidence is truly relevant and admissible.

  

Social Hosts, Not Commercial Hosts, Liable for Alcohol-Related Injuries to Third Parties. For Now?

On June 5, 2016, the Maryland Court of Appeals issued a joint opinion, Manal Kiriakos v. Brandon Phillips ( No. 20, September Term, 2015) and Nancy Dankos, et al. v. Linda Stapf (No. 55, September Term, 2015) (hereinafter “Kiriakos”), on two cases involving civil liability for conduct violating Md. Code Ann., Crim. Law § 10-117, sometimes called “social host” statute.  Section 10-117 prohibits an adult from either providing alcohol to a person under the age of 21 or hosting a social event at their residence in which they are aware that underaged persons are drinking.  In Kiriakos, the Court held that an individual that “knowingly and wilfully” violates § 10-117 can face civil liability for injuries related to their complicity in permitting underaged persons to drink in their homes.

The holding in Kiriakos is a stark departure from the common law concept that an intoxicated person’s injury is almost always of his or her own making and directly traceable to their decision to drink rather than the actions of another in serving them alcohol.  State v. Hatfield, 197 Md. 249, 78 A.2d 754 (1951). Moreover, the holding reignites the debate surrounding Maryland’s longstanding opposition to “dram shop liability”: the imposition of a civil liability against the seller of alcoholic beverages for personal injury caused by an intoxicated customer. 

“Dram shop” is an archaic term for taverns and bars that sold hard alcohol by the dram—an antiquated unit of fluid measurement, equivalent to one-eighth of a liquid ounce. Two years ago in William J. Warr, Jr., et al. v. JMGM Group, LLC, d/b/a Dogfish Head Alehouse, 433 Md. 170, 70 A.3d 347 (2013), the Court of Appeals once again rejected an attempt to impose “dram shop liability” against a tavern owner for the off-site conduct of an intoxicated patron, who was involved in a drunk driving accident that killed a young woman.  The Court in Warr reaffirmed the common law concept expressed in Hatfield, finding that absent a special relationship, “the tavern does not owe a duty to the injured party to prevent the harm caused by the intoxicated patron . . .  Human beings, drunk or sober, are responsible for their own torts.” Id., quoting Hatfield, surpa, at 254, 78 A.2d at 756.

The facts of one of the cases decided by the Kiriakos Court appear to call into question whether the opinions in Hatfield and Warr, and holdings like them, will continue to hold sway.  In Nancy Dankos, et al. v. Linda Stapf, a 17-year-old Steven Dankos spent the evening drinking at the house of Linda Stapf, which was known to her underage son Kevin’s friends as a "party house" where minors could drink almost every weekend. In fact, Ms. Stapf was home during the party at which Steven was drinking, and fully aware that minors were consuming alcohol in her garage late into the night. Steven left the residence early the next morning by catching a ride in the pickup truck-bed of 22-year old intoxicated partygoer David Erdman. Erdman crashed his truck and Steven was ejected from the bed and killed.

Although Erdman was of legal drinking age and Steven was not provided alcohol by Stapf, the Court of Appeals rejected Stapf’s attempts to obtain a dismissal by utilizing arguments against liability similar to those used in the dram shop cases.  Instead, the Court concluded that “by permitting and condoning [Steven’s] consumption of alcohol, Defendant Stapf prevented [him] from making an intelligent and informed decision about getting into a vehicle with a drunk driver, David Erdman, and riding in the bed of the truck.”    

Although limited in scope—Kiriakos specifically deals with violations of Crim Law § 10-117, discussed above—the Court’s decision is a clear departure from the concepts underpinning Maryland’s refusal to recognize dram shop liability. Perhaps the reason for this departure can be partly explained by the leanings of the author of Kiriakos, Judge Sally Adkins, who notably disagreed with the Court’s ruling in Warr, supra, writing a 64-page dissent eviscerating Maryland’s dram shop history. While the Court in Kiriakos distinguished “social host” liability from dram shop liability because the former involves violation of a statute designed to protect minors from adult complicity in underaged drinking, it is perhaps only a matter of time before the right case involving underage drinking at a commercial establishment comes along to further degrade Maryland’s dram shop precedent. Judge Adkins is likely waiting with pen in hand.

-       Jessica P. Butkera

RSRM is pleased to announce that Tara A. Barnes has become a Partner with the Firm.

Ms. Barnes has been an attorney with RSRM since 2012.  She has experience defending individual and corporate clients in state and federal courts in cases involving products liability, contractual disputes, premises liability, negligence, personal injury, traffic, and criminal matters.  Prior to joining the firm, Ms. Barnes served as an Assistant State’s Attorney for Baltimore City, where she prosecuted a wide range of felony crimes.

 Ms. Barnes has been recognized by her peers as a Maryland Super Lawyers Rising Star, a Leader in the Law and Leading Woman by the Maryland Daily Record.  Ms. Barnes remains active in a number of professional and community organizations throughout the State, and has enjoyed teaching courses on the law and legal matters since 2008.

United States District Court for the District of Maryland Rules in Favor of Maryland Insurance Companies on First Party Claims

On April 6, 2016, Judge Ellen Lipton Hollander of the U.S. District Court for the District of Maryland granted American Western Home Insurance Company’s Motion to Dismiss for Failure to State a Claim, reaffirming that: (1) Maryland does not recognize a first party bad faith claim against an insurance company under a tort theory; and (2) the Maryland Consumer Protection Act (“MCPA”) does not apply to insurance companies licensed to do business in Maryland.

Plaintiff Joe Gladney sued Defendant American Western Home Insurance Company (“American Western”) in Civil Action No.: ELH-15-1559 for: (1) “bad faith” in failing to adequately consider the severity of, and properly investigate, his claims; (2) breach of contract for denying coverage; and (3) violating the MCPA by falsely representing that it provided coverage for losses suffered as a result of windstorms after it denied coverage for windstorm damage to Plaintiff’s warehouse, which was insured by a commercial property and general liability insurance policy issued by the American Western. American Western argued that it had denied coverage based upon its finding that the damage was due to defective manufacturing and installation of metal brackets used on the warehouse’s roof, not a windstorm. 

Maryland has long recognized a tort cause of action by an insured party where an insurer refuses in bad faith to settle a third-party’s claim against the insured; however, the Court – citing to the Fourth Circuit’s decision in Hartz v. Liberty Mut. Ins. Co., 269 F.3d 474 (4th Cir. 2001) – concluded that Maryland law does not recognize first party tort actions against insurers for failure to settle insurance claims. While Plaintiff attempted to circumvent that long-standing principle by alleging his claim derived from the Maryland Unfair Claim Settlement Practices Act (“MUCSPA”), the Court pointed out that the MUCSPA specifically provides only “administrative remedies,” and does not create a private cause of action.

In analyzing Plaintiff’s MCPA claim, the Court succinctly quoted the relevant provision of the Commercial Law article of the Maryland Annotated Code Section 13-104, titled “Exemptions,” which states that the MCPA does not apply to:

The professional services of a certified public accountant, architect, clergyman, professional engineer, lawyer, veterinarian, insurance company authorized to do business in the State, insurance producer licensed by the State, Christian Science practitioner, land surveyor, property line surveyor, chiropractor, optometrist, physical therapist, podiatrist, real estate broker, associate real estate broker, or real estate salesperson, or medical or dental practitioner[.]

Md. Code Ann., Com. Law § 13-104(1) (emphasis added).

Given that Western American is explicitly included in that exceptive list, as an “insurance producer”, the Court granted its Motion to Dismiss Plaintiff’s claim for violation of the MCPA for failure to state a claim upon which relief can be granted.

This matter will proceed on Plaintiff’s breach of contract action and RSRM will continue to follow this and other relevant matters in this District’s Federal Court.  

- Jessica P. Butkera 

Court of Special Appeals of Maryland reiterates the limited application of the doctrine of Res Ipsa Loquitor

The Court of Special Appeals holding reiterates that scooters and moving cars do not mix for the purposes of res ipsa loquitur.

Cohen v. Veolia Transp. Servs., Inc., No. 0199 (Md. App. Feb. 29, 2016).

Ordinarily, the fact that an accident occurred does not mean that it was caused by negligence.  The doctrine of res ipsa loquitur, however, permits a factfinder to conclude the existence of negligence though the simple occurrence of an injury and the circumstances surrounding it.  The Court of Special Appeals recently addressed this infrequently utilized doctrine in a case involving a Plaintiff that was seated in a motorized scooter, while being transported in a mobility van.  The scooter had been initially strapped to the van by the driver, and the scooter then tipped over, causing injury to the Plaintiff.  The Defendant was the transportation service hired to transport Plaintiff and her son in the mobility van.

Plaintiff sued Defendant for negligently securing the scooter straps. Due to the lack of direct evidence at trial, Plaintiff sought to apply the doctrine res ipsa loquitur to establish her claim.  Despite testifying that they both saw the driver secure straps from the van to the scooter, neither Plaintiff nor Plaintiff’s son knew how the driver actually handled the straps.  Notably, Plaintiff also testified that the scooter manual contained a warning that sitting on the scooter while in a moving vehicle was dangerous.  At the close of Plaintiff’s case, Defendant moved for judgment, arguing that res ipsa loquitur could not be applied, and, therefore, there was no evidence of a breach of duty, and the trial court agreed.  After granting Defendant’s motion for judgment, Plaintiff appealed, and the Court of Special Appeals affirmed the trial court’s ruling in the instant unreported opinion.

The Court of Special Appeals reiterated the long-standing doctrine of res ipsa loquitur: a plaintiff must establish: (1) an accident that would not ordinarily happen without negligence; (2) that said accident was caused by an event that was within the defendant’s exclusive control; and (3) no action by anyone else, including the plaintiff, was a cause of the event.

Addressing the first element, the Court of Special Appeals found that nothing in the record demonstrating that a motorized scooter would not tip over absent negligence.  Regarding the second element, the Court found that, because other individuals could have damaged the straps in the van, there was no exclusive control.  The Court also found the third element lacking, observing that the scooter’s manual—as acknowledged by the Plaintiff—stated that it was dangerous to ride the scooter in a moving vehicle; thus, the Court found that Plaintiff may have also contributed to tipping her scooter.

The doctrine of res ipsa loquitor is rarely used in cases involving auto accidents, and if it is, the situation is typically unusual, as in Cohen.  The factors contributing to a collision between two moving vehicle are so numerous that it is almost impossible to show that a defendant had exclusive control over these factors, thereby producing the accident.  This being the case, Maryland courts will not apply res ipsa loquitor to cases where an auto accident has more than one case or where there is no evidence of a specific cause of the accident.  Cohen reminds us that res ipsa loquitor is rarely a substitute for direct evidence of a breach of duty.  It is doctrine applicable only where an injury cannot be explained absent some negligence on defendant’s part.    

Patrick Flores 

New Legislation Aimed at Punishing Drunk Drivers with Punitive Damages May Miss the Mark

Maryland Senator Jamin B. (“Jamie”) Raskin introduced Senate Bill 302 (House Bill 864 in the House of Delegates sponsored by Delegate William C. Smith Jr., a Democrat from Montgomery County) which would make repeat drunken drivers who injure or kill others liable for punitive damages in some cases. Senate Bill 302 provides that a driver with a blood alcohol level of more than .08 percent who kills or injures another person, and has been convicted, pleaded no contest, or received probation before judgment for drunken driving charges in the last five years, would be liable for punitive damages if a finding for compensatory damages has first been made.  See Caldor v. Bowden, 330 Md. 632, 625 A.2d 959 (1993) (noting that the requirement of a compensatory damages foundation protects defendants from being punished for acts that the trial court determines the defendant did not commit). The bill, if enacted, would exempt drunk driving from the legal restriction Maryland law ordinarily places on punitive damage awards in personal injury cases, restricting them to cases in which the defendant is guilty of actual malice:  an action motivated by a wrongful or evil motive, intent to injure, ill will or fraud. See Tierco Maryland, Inc. v. Williams, 381 Md. 378, 849 A.2d 504 (2004); Garcia v. Foulger Pratt, 155 Md. App. 634, 845 A.2d 16 (2003)). 

Senate Bill 302 has major repercussions for the insurance industry, including to those employers that may ultimately be held responsible for paying a jury’s award.  Of concern is the fact that Maryland does not have a cap on punitive damages, and with no discernible limit on case value, insurance companies would realistically be forced to settle these claims, likely for full policy limits, in order to protect their insureds from excess exposure. In that scenario, the drunk driver who the bill seeks to punish would never actually stand trial in the civil context. 

This begs the question: what safeguards are in place to control punitive damage verdicts? Proponents of the bill point out that while compensatory damages would be measured under the civil “more likely than not” standard, punitive damages would be measured by the heightened “clear and convincing evidence” standard. See Owens-Illinois v. Zenobia, 325 Md. 420, 601 A.2d 633 (1992); see also Garcia v. Foulger Pratt,155 Md. App. 634, 845 A.2d 16 (2003). In addition, proponents argue that judges may still review and reduce a jury’s award for punitive damages if it is “disproportionate” to the award of compensatory damages or disproportionate to the driver’s conduct, taking into account the gravity and continuing nature of the conduct. See Philip Morris, Inc. v. Angeletti, 358 Md. 689, 752 A.2d 200 (2000).

Alternatively, representatives from the Maryland Chamber of Commerce, the Maryland Motor Truck Association, and various insurance companies argue that it is the criminal justice system which should punish drunk drivers. Senator H. Wayne Norman Jr., a Republican from Harford County and Cecil County, reminded the legislature that civil legislation is intended to compensate victims, not punish wrongdoers or exact society’s retribution, which is the role of criminal law.

In response to the opposition, Senator Raskin raised the concern that drunk drivers are “notoriously being let off with very light sentences.” While this fear may certainly be founded, it seems the appropriate legislation should be aimed at imposing harsher criminal sentences on the drunk driver rather than passing the cost of their egregious conduct to the insurance and labor and employment industries.

As of the date of publication, the Maryland Senate has passed S.B. 302. Given the major implications this legislation may have on the insurance industry, RSRM is monitoring H.B. 864 as it makes its way through committee and ultimately to the Governor’s desk. Please stay tuned for further updates.

Jessica P. Butkera 

Allstate Ins. Co. v. Kponve and Proof of Uninsured Motorist Coverage at Trial

In a break from the recent past, the Court of Appeals of Maryland recently announced it is granting mid-term Petitions for Writ of Certiorari. These fourteen petitions will be included in the Court’s September 2015 term in addition to the eighty petitions the Court granted last fall. In addition to numerous criminal matters and a few labor and employment cases, the Court agreed to hear an appeal from an insurance law matter that has potential implications for the auto insurance industry, Kponve v. Allstate Ins. Co., 225 Md. App. 370, 124 A.3d 1147 (2014).  Kponve will address important issues concerning uninsured/underinsured motorist coverage (“UM/UIM coverage”), and specifically, which party has the burden to prove UM/UIM coverage at trial and its impact on a potential verdict.

In Kponve, Allstate Insurance Company intervened in an auto tort case immediately before the defendant-tortfeasor settled out of the case for $25,000.00.  The case proceeded to trial, and the remaining parties, Allstate and Plaintiff Austria Kponve, stipulated that Allstate had issued Mrs. Kponve a policy that provided for UM/UIM coverage, and that the policy was in effect at the time of the occurrence. However, there was no specific stipulation with respect the amount of UM/UIM coverage in effect on the Kponve policy at the time of the accident, which was $50,000.00. Kponve, 225 Md. App. at 375-76, 124 A.3d at 1150-51. 

After a two-day jury trial, the Montgomery County, Maryland jury awarded $374,000.00. Allstate filed a post-judgment motion, seeking a reduction of the verdict to $25,000.00:  an amount reflecting the difference between the UM/UIM policy limits of $50,000 and the settling tortfeasor’s payment of $25,000.00. The trial court inexplicably denied the motion without opinion. 

On appeal, Kponve argued that Allstate had never raised policy limits as a defense or introduced the policy into evidence, rendering moot the argument that the verdict should be reduced pursuant to Kponve’s UM/UIM limits.  Kponve argued that it was Allstate’s burden to put its policy into evidence and prove the amount of UM/UIM coverage, as well as the credit to which it was entitled because of the tortfeasor’s settlement.  Kponve, 225 Md. App. at 377-78, 124 A.3d at 1152.  Kponve observed that “[t]here are hundreds of thousands of Maryland drivers and passengers, and to think that that all these drivers and passengers know exactly what their policy says … is placing too much of a burden on the plaintiff.”  Id.   Additionally, citing the seminal case Allstate Ins. Co. v. Miller, 315 Md. 182, 192-93, 553 A.2d 1268, 1272-73 (1989), Kponve asserted that policy limits have no relevance to the issue of tort damages, and therefore, should have no effect on the jury’s verdict. 

The Court of Special Appeals did not find Kponve’s arguments convincing, holding that

[…]as an intervening party, Allstate did not have the burden of proving the amount of its policy limits or the amount of the credit to which it was entitled … [and] it was up to Mrs. Kponve to prove the amount of her contract damages, i.e., to establish the amount of her underinsured motorist coverage less the amount of her settlement with [the tortfeasor]. 

Id. at 388, 1158. 

More important than this ruling, however, was the Kponve Court’s treatment of Miller.  Although the Court clearly disagreed with the Kponve’s view that Miller placed the burden of proof on the insurer to prove policy limits, the Court did seem to open the door for the Court of Appeals to potentially re-examine Miller. 

The primary holding of Miller is that that the amount of UM/UIM coverage is irrelevant in a breach of contract action brought against an insurer, and therefore inadmissible evidence.  See Miller, supra.  While the Kponve Court clearly agreed with this holding, it also appeared—again citing Miller—to draw a distinction between a case in which an insurer intervenes as opposed to a case in which a UM/UIM carrier is sued for breach of contract by its insured. Although the Court described the former case as a tort case in which UM/UIM policy limits have no relevance, it noted the latter case is only “functionally a tort case”, and therefore, suggested that coverage limits may have relevance in that context.  Kponve, 225 Md. App. at 387-88, 124 A.3d at 1157-58. 

In short, while the Court of Special Appeals in Kponve did not attempt to overrule Miller by holding that UM/UIM coverage limits constitute admissible evidence, it did suggest that those limits are relevant in a breach of contract action, thereby opening the door for the Court of Appeals to address this issue.  Kponve is certainly a case worth monitoring, and our readers can expect a full analysis of the Court of Appeals’ decision as soon as it is reached.

- The Attorneys at Rollins, Smalkin, Richards & Mackie, LLC

Uber and Agency - Is an Uber Driver an Uber Employee?

          Ride sharing programs such as Uber and Lyft not only provide user-friendly transportation services, bottles of water, and mints, they also provide a unique employment opportunity to their drivers.  But the legal status of ride share drivers also presents novel and puzzling legal issues that appellate courts are only recently beginning to address.  When a ride sharing program is sued for the tortious acts of one of its drivers then a central issue is whether the law considers the driver an independent contractor or an employee.  If the former, then the program can potentially face vicarious liability for the driver’s actions.  

          This issue was recently taken up by the United States District Court for the District of Columbia in Search v. Uber Techs., Inc., 2015 U.S. Dist. LEXIS 120456 (D.D.C. 2015).  In an entertaining opinion that even cited to Forrest Gump, the Search Court rejected the argument of Defendant Uber Technologies, Inc. (“Uber”) that its driver, Yohannes Deresse, was an independent contractor when he allegedly became involved in a serious altercation with his unfortunate passenger, Plaintiff Erik Search. 

          The alleged incident occurred on September 8, 2013 when Search, along with several cohorts, used the Uber application to request transportation in the District of Columbia. For those unfamiliar with the Uber app, a user can access it on a mobile phone and request transportation from one location to another. Uber then sends notification of the request to a nearby driver who, in most cases, is driving a personal vehicle.  Uber sets the fee for transportation, and then processes payment of the fee to the driver through a credit card or debit card transaction.  After Search requested his Uber ride on the incident date, Deresse accepted the request and picked up Search and his party. Search alleged in his complaint that at some point during the trip Deresse began acting strangely, leading his friends to get out of the car. Deresse then angrily followed the group, and a verbal dispute turned into a physical altercation in which Deresse allegedly stabbed Search six times.

            Search filed suit against Uber in D.C. Superior Court, alleging, among other claims, that Uber was vicariously liable for Deresse’s actions. Uber removed the case to federal court and moved to dismiss Search’s complaint, arguing, among other things, that it could not be held vicariously liable for Deresse’s actions since he was an independent contractor. 

   

            In determining whether an employer-employee relationship exists courts in the District of Columbia and in other jurisdictions typically examine multiple factors, including the employer’s (1) involvement in the selection and engagement of the employee; (2) payment of wages; (3) power to discharge; (4) power to control the employee’s conduct; and (5) whether the employee’s work is part of the regular business of the employer. Moorehead v. D.C., 747 A.2d 138, 143 (D.C. 2000); LeGrand v. Insurance Co. of N. Am, 241 A.2d 734, 735 (D.C. 1968). However, as with many things in life, central to the court’s analysis are the issues of power and control, i.e., the employer’s right to control the conduct of its alleged employee. In Search, the Court effectively found that Uber could not have its cake and eat it too, rejecting Uber’s argument that Deresse was an independent contractor in light of the control exercised by Uber over its drivers.  

            In support of its holding, the Court noted that Uber screens its new drivers, dictates the fares charged by them, pays them on a weekly basis, and imposes a number of strict standards of conduct and cleanliness on them. Failure to comply with Uber’s guidelines may result in the driver’s termination. Additionally, the Court pointed to Search’s argument that Uber controlled the rate of refusal of ride requests by drivers, the timeliness of drivers’ responses to the requests, the display of its logo on the drivers’ personal vehicles, the drivers’ interactions with the passengers, including whether the drivers were permitted to accept tips, and monitoring of the driving quality of the drivers. The Court stated that all of these factors went to establish Uber’s control over driver conduct, dispelling Uber’s claim that its drivers were independent contractors. Ultimately, these findings precipitated the Court denying Uber’s motion to dismiss with respect to Search’s claims of respondeat superior, apparent agency, and violation of the D.C. Consumer Protection Act, while granting it with respect to certain other claims.

            The Search holding, along with similar cases that have recently been decided in other jurisdictions, represents the inevitable issues that arise when any company attempts to balance its desire to control its independent contractors while avoiding the vicarious liability that can potentially arise from too much control. While the determination of whether an individual is an independent contractor is by no means an exact science, the Search case demonstrates that the more control a ride share program exercises over its independent contractors, the more responsibility that program has for monitoring their actions given the potential for vicarious liability. It will be interesting to see how courts treat the issue in the future as the employer-employee versus independent contractor analysis is applied to the wave of ride sharing applications sweeping the nation.

            The attorneys at RSR&M are well versed in both Maryland and D.C. case law on the topic of employer liability and agency law, and have ample experience representing corporate and commercial clients in both venues. Please feel free to contact RSR&M if you have any questions.

Catherine A. Dickinson