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Opinions – Maryland Court of Appeals: 4/4/11

Civil Procedure

Joinder

BOTTOM LINE: The trial court, in a prior wrongful death action brought by decedent’s widow and children from second marriage, could not approve a settlement without the inclusion of decedent’s children from first marriage as plaintiffs; therefore, the trial court, in the subsequent action brought by the children from the first marriage, was required to reopen the prior action.

CASE: Ace American Insurance Company v. Williams, No. 75, Sept. Term, 2010 (filed March 21, 2011) (Judges Bell, Harrell, Battaglia, Greene, MURPHY, Adkins & Barbera). RecordFax No. 11-0321-21, 30 pages.

FACTS: Lori Williams filed a complaint alleging that on Sept. 12, 2002, her husband, Michael, was struck and killed by the motor vehicle operated by William Work. Work was insured by State Farm Mutual Automobile Insurance Company and they tended their policy limits of $100,000, which Mrs. Williams did not accept.

Mrs. Williams alleged that she and the decedent were covered by a policy issued by Ace American Insurance Company, which provides for uninsured motorists coverage. Ace refused to pay Mrs. Williams’ claims. Mrs. Williams’ complaint was assigned Case No. 03-C-005338.

On July 22, 2003, Mrs. Williams filed an amended complaint that included an additional assertion that she was a primary beneficiary pursuant to CJ §3-904(a), in addition to her two minor children. ACE filed an answer and a third party complaint against Mr. Work.

From a previous relationship, the decedent had two other children, Michael and Steven, who were not plaintiffs in Mrs. Williams’ action.

Mrs. Williams and Ace reached a settlement agreement that would resolve her claims and those of her two children. Ace agreed to pay $750,000 in settlement of Mrs. Williams’ claims. However, Mrs. Williams’ counsel would not approve a settlement which included any requirement by Mrs. Williams and her two children to save and hold harmless Ace from any further claims, including but not limited to the potential claims of Michael and Steven.

While Mrs. Williams’ counsel continued to object to the “hold harmless” language in the release, Ace’s counsel discovered that their proposed settlement would likely be declared invalid if challenged by Michael and Steven, based on CJ 3-904(f), Rule 15-1001 and Walker v. Essex, 318 Md. 516 (1990).

Accordingly, Mrs. Williams’ counsel filed a second amended complaint that did not include Michael and Steven in the caption, but did “name” them as “use” plaintiffs. Although the record showed that Michael and Steven were served with a copy of the second amended complaint, the original of that pleading was not filed with the circuit court. It was clear, however, that a copy of this pleading was mailed to Ace’s counsel, because Ace filed an answer. The certificate of service that accompanied the answer showed that a copy was mailed only to Mrs. Williams’ counsel, rather than to “each of the parties” as is required by Rule 1-321(a).

Mrs. Williams’ counsel and Ace’s counsel presented to the circuit court a joint motion for approval of settlement and entry of judgment, which asserted that Mrs. Williams settled the claim with Ace for her and her two children and that the proposed settlement did not provide compensation to the “use” plaintiffs, i.e., Michael and Steven or to the Estate of Michael Williams. Both that motion and the order granting it were docketed.

On June 6, 2005, Mrs. Williams’ counsel filed a line of satisfaction that purported to enter the judgment against Ace as “paid and satisfied.” On July 21, 2005, the circuit court opened Case No. 03-C-05-007925 when Mrs. Williams’ counsel, now representing Michael and Steven, filed a wrongful death action on their behalf against Mr. Work, Charles Oliver Beatty, III, American Automatic Sprinkler Systems, Inc., State Auto Property & Casualty Insurance Company, Zurich American Insurance Company and Ace. Thereafter, in both cases, Mrs. Williams’ counsel filed a motion to reopen and consolidate

In a series of rulings, the circuit court ultimately (1) denied the motion to reopen, (2) granted summary judgment against Michael and Steven and in favor of every defendant and (3) denied the requests for attorney’s fees and expenses filed by Ace and American Sprinkler.

The Court of Special Appeals vacated judgment, reversed summary judgment, and affirmed the order on attorney fees.

The Court of Appeals affirmed.

LAW: CJ §3-904(f) limits to one action only in respect to the death of a person. Furthermore, Rule 15-1001 mandates that: “All persons who are or may be entitled by law to damages by reason of wrongful death shall be named as plaintiffs whether or not they join in the action. The words ‘to the use of’ shall precede the name of any persons named as a plaintiff who does not join in the action.”

Further, Rule 15-1001 also sets forth that: “Any party bringing the action shall mail a copy of the complaint by certified mail to any use plaintiff at the use plaintiff’s last known address. Proof of mailing shall be filed as provided in Rule 2-126.”

A claim for wrongful death cannot be settled without either the consent of all beneficiaries or the approval of the court. Walker v. Essex, 318 Md. 516 (1990).

“When looking to the direction of §3-904(b), we are told that only one action under this subtitle lies in respect to the death of a person. We are also instructed that, if a recovery or verdict is obtained in this one action, the amount recovered shall be divided among the beneficiaries in shares directed by the verdict. The statutory language does not allow a judgment for one of the beneficiaries to be made a matter of record, as by its very nature, other claims are forever foreclosed or barred. A judgment should not [be] entered in the circuit court unless it included the interests of all of the known beneficiaries.” Id. at 523-24.

The joint motion for approval of settlement and entry of judgment that was presented to the circuit court on May 17, 2005 should not have been presented on that date because neither Michael nor Steven had been (1) served with a copy of the motion or (2) notified that Mrs. Williams and Ace would be applying for the entry of a judgment that — if valid — would operate to extinguish their rights.

In Williams, et al. v. Work, et al., 192 Md.App. 438 (2010), the Court of Special Appeals consolidated the appeals, designating as “Williams I” the action filed by Mrs. Williams, and designating as “Williams II” the action filed on behalf of Steven and Michael.

The Court of Special Appeals found that Rule 15-1001 is in the nature of a joinder rule or a condition precedent that requires that all known statutory beneficiaries, i.e., the real parties in interest, be identified as parties to the litigation. Id. at 451.

“Although Rule 15-1001(b) does not require formal joinder, the failure to include a known statutory beneficiary as a plaintiff or a ‘use plaintiff’ in a wrongful death action and to settle without providing for that beneficiary can be analogized to the failure to join a necessary party in an action where joinder is required. In our view, because of the one action rule, the failure to do so is a ‘defect’ or ‘mistake’ of jurisdictional proportions in the proceeding, which may be raised at any time.” Id.

The Court of Special Appeals continued: “Had Steven and Michael been properly designated as plaintiffs or ‘use plaintiffs,’ a settlement between Lori, State Farm, and Ace that excluded them from sharing in the settlement proceeds would clearly prejudice them and … would not constitute a final judgment under Walker. Here, the denial of the Motion to Reopen and Consolidate effectively denied Steven and Michael the means of further prosecuting their claims in Williams I.” Id.

Ace argued that notice to Steven and Michael of the suit itself was all that was required, and that Steven’s and Michael’s decision not to “join” the suit foreclosed both their participation in the Williams I settlement and any subsequent action on their own behalf.

According to the Court of Special Appeals, however, to interpret the Rule as simply a notice rule disregards: (1) the representative nature of wrongful death actions; (2) the language of Rule 15-1001(b), requiring that “all persons who are or may be entitled by law to damages by reason of the wrongful death shall be named as plaintiffs whether or not they join in the action[;]” and (3) the provisions of CJ §3-904(c) relating to the award of damages to the statutory “beneficiaries” “proportional to injury resulting from the wrongful death.” See Williams, 192 Md.App. at 452.

The Court found that the words “mutual consent” or “court approval,” as used in Walker, 318 Md. at 523, does not mean that the circuit court could approve a settlement denying benefits to Steven and Michael, without, at least, some demonstration that a good faith effort had been made to gain their fully informed and knowing consent. Williams, 192 Md.App. at 452.

“Rather, … language ‘or court approval’ speaks to exceptional circumstances, such as, but not necessarily limited to, instances where the beneficiaries cannot be located or agreement as to appropriateness of settlement or the allocation of the settlement proceeds cannot be reached among the beneficiaries. Here, not only did counsel for Lori and her children purposefully avoid any contact with the use plaintiffs, neither party notified Steven and Michael of the terms of the settlement, much less actively sought Steven’s and Michael’s consent to the Settlement Agreement [.]” Id.

The Court also reversed the summary judgments entered in Williams II on the ground that the circuit court’s grants of summary judgment were based on the mistaken belief that a wrongful death action had been finally adjudicated in Williams I. Moreover, because Beatty, American Sprinkler, and Zurich were not named as defendants in Williams I, the grant of summary judgment in their favor based on the “one action” rule was error.

The Court of Special Appeals’ decision was without prejudice to any claims of release and estoppel between and among the various parties. Id. at 467-68.

The Court of Special Appeals’ interpretation of Rule 15-1001(b) was entirely consistent with Walker, as well as with the provisions of CJ §3-904 and, therefore, its decision was affirmed.

COMMENTARY: The Court of Special Appeals also correctly recognized that these cases presented what appeared to be clear conflict issues for Mrs. Williams’ trial counsel in his continued representation of parties to this litigation. Her settlement and Steven and Michael’s potential recovery were both compromised by counsel’s successive representations of her and her children in negotiating the settlement with Ace and then of Stephen and Michael in attempting to vacate the settlement. Williams, 192 Md.App. at 467-68.

PRACTICE TIPS: “Failure to join a necessary party constitutes a defect in the proceedings that cannot be waived by the parties, and may be raised at any time, including for the first time on appeal.” S. Mgmt. Corp. v. Kevin Willes Constr. Co., 382 Md. 524, 550 (2004).

Criminal Procedure

Petition for DNA testing

BOTTOM LINE: The circuit court did not err in denying defendant’s petition for post-conviction DNA testing because the search of the police department’s evidence control unit for DNA evidence from defendant’s 1982 trial was reasonable under CP §8-201.

CASE: Blake v. State, No. 58, Sept. Term 2010 (filed March 22, 2011) (Judges Bell, Harrell, Battaglia, Greene, MURPHY, Adkins & Barbera). RecordFax No. 11-0322-21, 21 pages.

FACTS: In 1982, George Blake was convicted of first degree rape and first degree sexual offense. During the jury trial, the State introduced into evidence the Baltimore City Police Department’s “LABORATORY REPORT” that identified twelve “specimens” recovered from the victim and examined in the laboratory. According to this report, after the examination, this evidence was placed in the Evidence Control Unit (ECU) under property numbers 858944 and 858947. Returning the examined specimens to the ECU was consistent with the Department’s “General Order 4-79” on the subject of the investigation of sexual offenses.

Blake filed his petition for DNA testing on Dec. 1, 2004. The circuit court held four hearings, during which it received testimony, documentary evidence, affidavits, and proffered information about the State’s efforts to locate the evidence sought to be tested.

During the Feb. 20, 2009, hearing, the State presented testimony from Lieutenant Colonel Michael Andrew, the commanding officer of the Baltimore ECU, and Sergeant Larry Bazzle, the officer assigned to that unit who supervised the search for evidence. Andrew testified that an outside company did a definitive inventory of all of the evidence in the ECU. He also testified that he was asked to look specifically for property numbers 858947 and 858944 and that no evidence was found under those numbers. Furthermore, according to Andrew, with this definitive inventory conducted, all possible inventories were conducted.

Sgt. Bazzle testified that he entered the property numbers for Blake’s case into a computer and the computer found no results as to location of any such property, and that he went with about 30 pre-hire police officers to an off-site facility where old property was kept and had them look on every shelf for those property numbers. They were unable to find any evidence from the Blake case.

On Sept. 3, 2009, the circuit court signed an order granting in part Blake’s motion to contest the reasonableness of the State’s search for DNA evidence and ordered the State to provide to Blake and the court additional documentation concerning policies and protocol for retention and destruction of evidence.

The State later also submitted the affidavit of Charles Shubin, MD, at Mercy Hospital, and an affidavit respecting ECU logbook entries for Blake. The State also submitted: 1) an affidavit regarding the search of the Mercy Hospital Archives; 2) an affidavit from a nurse or other hospital employee who worked in Mercy Emergency Room in the early 1980s; 3) the affidavit of Sgt. Bazzle regarding micro-slides presently kept in the ECU from the time of this case and earlier; and 4) evidence that an email was sent to Baltimore City State’s Attorney employees requesting they search their offices for micro-slides.

The circuit court was satisfied that the State had done a reasonable search under CP §8-201. Accordingly, the court denied Blake’s petition for DNA testing of scientific evidence.

The case was transferred from the Court of Special Appeals to the Court of Appeals, which affirmed.

LAW: In Arey v. State, 400 Md. 491 501 (2007), while reversing another summary dismissal of a pro se petition for DNA testing, the Court of Appeals stated: “[T]he State needs to check any place the evidence could reasonably be found unless there is a written record that the evidence had been destroyed in accordance with then existing protocol…. [A] court should not conclude that evidence no longer exists until the State performs a reasonable search for the requested evidence. Once the State performs a reasonable search and demonstrates sufficiently a prima facie case, either directly or circumstantially, that the requested evidence no longer exists, the State will have satisfied its burden of persuasion. The burden of production then shifts to the petitioner to demonstrate that the evidence actually exists.” Id. at 503-05. See also report by the National Commission on the Future of DNA Evidence.

According to Blake, the search of the ECU/OffSite Storage Facility conducted by the state to locate DNA evidence from Blake’s 1982 rape trial was unreasonable.

The “clearly erroneous” standard of review was applicable to the circuit court’s finding that the search of the ECU was a reasonable search. The record showed that the circuit court (1) identified the most likely places where the evidence might be found, (2) required a thorough search of each place that should be searched, and (3) provided for an “on-the-record” determination of whether the search conformed to the requirements of CP §8-201.

It was reasonable to conclude that the evidence sought to be tested was handled in conformity with the routine practice of the circuit court and the Police Department. In addition to General Order 4-79, the record included an affidavit signed by the Manager of the circuit court’s Courtroom Clerks Division which set forth in detail the procedure followed for storing exhibits at the conclusion of trials. In addition, it stated that all physical evidence must be returned to the ECU and that the evidence in question is all considered physical evidence with a police department number. All of these exhibits would have been returned to the officer or the state’s attorney to be returned to ECU.

The procedure attached to the Manager’s affidavit stated that at the end of the trial, the officer will be responsible for retrieving all physical evidence to be returned to ECU. If the officer is still in court at the conclusion of the trial, the property is released to the officer. If the officer is not in the courtroom at the conclusion of the trial, all police property is returned to the State’s Attorney.

Accordingly, the circuit court was not erroneous in finding that the search of ECU was a reasonable search under CP §8-201.

COMMENTARY: Blake contended that the search of the State’s Attorney’s Office was unreasonable.

The record included a tape recorded statement by the lawyer who, as an Assistant State’s Attorney for Baltimore City, was the prosecutor at Blake’s trial. According to this person, Assistant State’s Attorneys did not take custody of exhibits at the conclusion of a criminal trial.

When it has been established that the prosecutor’s office does not take custody of exhibits that form part of the trial record, the denial of a request for a search of the prosecutor’s office would not be unreasonable.

Furthermore, from a review of the record, which included a video recording of the search of the Office’s Sex Offense Unit, Blake’s argument that the search of the State’s Attorney’s Office was nothing more than “a cursory walk-through” was rejected.

PRACTICE TIPS: Since Members of the Maryland Bar, as officers of the court, are prohibited from making false statements in judicial proceedings, it is of no consequence that a recorded statement made by an Assistant State’s Attorney was not made under oath.

Election Law

Validation of signatures

BOTTOM LINE: The elections board was not permitted to invalidate signatures on a referendum petition solely on the grounds that the signatures were illegible, but rather it was required to determine whether the signatures were accompanied by other sufficient information identifying the signer.

CASE: Montgomery County Volunteer Fire-Rescue Association v. Montgomery County Board of Elections, No. 86 Sept. Term 2010 (filed March 22, 2011) (Judges Bell, GREENE, Murphy, Adkins & Barbera) (Judges Harrell & Battaglia dissenting). RecordFax No. 11-0322-22, 39 pages.

FACTS: On May 21, 2010, the Montgomery County Council signed into law Bill 13-10, establishing an Emergency Medical Services Transport Fee. The Montgomery County Volunteer Fire-Rescue Association (the Association) sponsored a petition to challenge the bill through a referendum.

To that end, the Association submitted a local petition for an advance determination of adequacy. The Montgomery County Board of Elections (Board) advised the Association that the format of the petition was acceptable. The Board concurrently informed the Association that pursuant to §§114 and 115 of the Montgomery County Code, 50% of the total signatures required to place the referendum on the ballot were due by Aug. 4, with the remaining signatures to be filed by Aug. 19.

On Aug. 3 and 4, the Association submitted signature pages containing 33,740 signatures of which the Board accepted 13,021, or approximately 42% of the required signatures, thus failing to satisfy the 50% requirement. Subsequently, on or before Aug. 19, the Association submitted 18,937 signatures of which 5,317 were accepted.

On Aug. 23, the Election Director for the Board informed the Association that the Aug. 4 filing would not be certified, pursuant to §§6-208(a) and 6-210(d) of the Election Law Article because of the failure to comply with the 50% threshold signature requirement of §115. Consequently, the referendum question would not be placed on the ballot.

The Association filed a complaint against the Board for judicial review and declaratory judgment in the circuit court, pursuant to §6-209, in order to challenge the refusal to certify the referendum petition. According to the stipulation of facts submitted to the court, the Board reviewed the entries on the petition for legal sufficiency. The Board rejected 20,719 of the petition entries that were submitted on Aug. 4 and 13,620 of the signatures that were submitted on Aug. 19. The Association identified 15,287 signatures among the 23,111 entries that were rejected because of “legibility” issues with the signature itself, and both parties stipulated to the placement, or “bucketing,” of those contested signatures into six categories distinguished by degrees of legibility.

The court granted summary judgment in favor of the Board, concluding that it had not acted arbitrarily or capriciously in rejecting illegible or partially legible signatures pursuant to the requirements of Maryland statutory and common law. Prior to consideration by the Court of Special Appeals, the Court of Appeals granted the petition for writ of certiorari filed by the Association.

The Court of Appeals reversed the judgment of the circuit court.

LAW: Section 6-203(a)(1) of the Election Law Article states: “To sign a petition, an individual shall: (1) sign the individual’s name as it appears on the statewide voter registration list or the individual’s surname of registration and at least one full given name and the initials of any other names.”

Section 6-203(b)(1) directs the election authority to validate a petition signer’s entry if there is sufficient cumulative information on the face of the petition, e.g., a signature, a printed name, address, date of signing, and other information required by regulation, evidencing compliance with §6-203(a), to determine the identity of the signer.

In Doe v. Board of Elections, 406 Md. 697 (2008), the Court of Appeals was asked to address, among other things, whether there was error in the certification of a referendum petition that allegedly failed to carry the required number of signatures because of non-compliance with the signature requirements of §6-203. Id. at 704. The trial judge held that §6-203 was directory, not mandatory. Id. at 733.

The Court of Appeals held that the circuit court erred in concluding that “the dictates of Section 6-203 were suggestive rather than required.” Doe, 406 Md. at 727. The Court held that the plain meaning of §6-203 was that the signature requirements in subsection (a)(1) were mandatory, as indicated by the direction that the signer “shall” provide a signature and other required printed or typed information. Id. at 728. See also Barnes, etc. v. State, ex rel. Pinkney, 236 Md. 564 (1964).

Section 6-203 requires the Board to validate signatures placed on a petition for referendum. The question here was whether a signature must be “legible,” when there is other information identifying the signer, in order to be counted pursuant to the petition validation and verification process. That question was not addressed in Doe.

Subsequent to Doe, the State Board altered the manner in which it approached signature review on submitted petitions as evidenced by the revised “State of Maryland Petition Acceptance and Verification Procedures: Statewide or Public Local Law Referendum Petition.” (Revised March 2009). According to the guidelines, the validator must first determine if the printed name matches the signature exactly. If not, the signature is invalidated. If the signature and the printed name match, the validator must consult a schedule of examples that show acceptable and unacceptable names.

The Board, following the State Board’s instructions, put an unduly burdensome emphasis on the signature component of the petition entry, by requiring an exact “match” between a signature on the petition and printed name, as it appears on the voter registration list, all in the name of compliance with Doe. The necessary inference from the Board’s interpretation of §6-203 is that the petitioning party would essentially be compelled to obtain a copy of the statewide voter registration list and advise persons prior to signing the petition that they should consult the list and sign and print their name precisely as it appears on that list. Otherwise, the likelihood of certification would be very slim. There is no indication in the statute that this collateral process is required when exercising the right to referendum.

The validation guidelines, which the State Board revised subsequent to Doe, distort the purpose of §6-203(a)(1) that is to provide one element among many that the Board must use to satisfy the requirements of validation. Section 6-203(a)(1) does not address “legibility,” or “penmanship,” of the signature. The printed or typed name is one piece of evidence, in addition to voter address and voter “precinct or district” that would be used to ensure “that only qualified persons have signed.” Barnes, 236 Md. at 571-72. An illegible signature, therefore, is not dispositive within the validation process, but should be considered as part of the entire petition entry, that must be used to identify the individual signer under §6-203.

Section 6-204 of the Election Law requires that every signature page of a petition include “an affidavit made and executed by the individual in whose presence all of the signatures on that page were affixed and who observed each of those signatures being affixed.” The purpose of the circulator’s attestation is to “assure the validity of the signatures and the fairness of the petition process.” §6-204(b). This statutory provision for the affidavit of a circulator who attests under penalty of perjury that the signer affixed his or her information in the circulator’s presence clearly addresses prevention of fraud in the petitioning process and is plainly intended to bolster the validity of the signature entries. When read together, §6-203 and §6-204 are not ambiguous.

Pursuant to §6-207, the election authority must verify and count the validated signatures of persons that are listed as registered voters. Section 6-207(b) authorizes the State Board to “establish the process … for verifying and counting signatures,” but that authority does not permit the Board to impose any additional elements relating to validation under §6-203, e.g., legibility of a signature.

When read together §§6-203 and 6-207 are not ambiguous. Doe, 406 Md. at 731-32. Plainly, the purpose of the signature requirement in §6-203(a)(1) is to provide a personal attestation, as a signature is often used, to evidence support for the petition and to provide a unique identifier in conjunction with the printed name, address, date, and other information required by the State Board. The later information is used to subsequently verify the eligibility of the petition signer to support the petition.

When the Board was confronted with an illegible signature, it should have consulted the additional identifying information provided in accordance with §6-203(a)(2), and then compared that information against the statewide voter registration list, instead of invalidating the entry. The signature alone, when reading §§6-203 and 6-207 together, is not meant to be dispositive on the issue of validity, because all the required information is used both to validate and then to verify in order that only eligible voters sign petitions. That is the goal of the validation and verification process.

Accordingly, the judgment of the circuit court was reversed.

COMMENTARY: Statutory requirements upon the referendum petition process are viable if not unduly burdensome on the constitutionally protected right to referendum. Barnes, 236 Md. at 573. Constitutional and statutory provisions related to referendum petitions should be followed strictly. See Takoma Pk. v. Citizens for Decent Gov’t, 301 Md. 439, 449-50. Additionally, election procedures are to be conducted with due regard to the intent of the voter. Dutton v. Tawes, 225 Md. 484, 495 (1961).

The State Board’s guidelines, similarly, may not evade the requirement of reasonableness, they must not be unduly burdensome, and they should not frustrate the intent of the petition signer.

DISSENT: According to the dissent, the majority opinion collapsed the “handwritten signature” requirement of §6-203(a)(1) and the “additional information” requirements of §6-203(a)(2) into a totality of the circumstances test. The majority opinion orders election authorities to disregard otherwise clear legislative instructions and instead conduct, for each petition entry, a painstaking analysis to compensate for failed penmanship. It does not instruct the election authorities, however, how much weight they should give each completed requirement, or what combination of requirements satisfies the statute, or if they must exhaust all identification efforts before invalidating a signature.

Thus, according to the dissent, the majority opinion contradicted the Legislature’s intent and disregarded Doe, which was dispositive in this case.

PRACTICE TIPS: “The exercise of the right of referendum is drastic in its effect” and, therefore, “the stringent [requirements] employed in Section 4 of [Article XVI of the Maryland Constitution] shows an intent that those seeking to exercise the right of referendum … must … strictly comply with the conditions prescribed.” Tyler v. Sec’y of State, 229 Md. 397, 402 (1962).

Labor & Employment

Negligent hiring and retention

BOTTOM LINE: Employee’s claim against employer for negligent hiring and retention of supervisor, who allegedly sexually harassed employee, was not preempted and, therefore, the trial court erred in dismissing employee’s negligent hiring and retention claim.

CASE: Ruffin Hotel Corporation of Maryland, Inc. v. Gasper, No. 24, Sept. Term, 2009 (filed March 21, 2011) (Judges Bell, Harrell, Greene, MURPHY, Adkins, Barbera & Eldridge (retired, specially assigned)). RecordFax No. 11-0321-20, 37 pages.

FACTS: From November 2003 to March 2005, Kathleen Gasper was employed by Ruffin Hotel Corporation of Maryland, Inc. Gasper filed a complaint against Ruffin and Irman Ahmed, the hotel’s General Manager who terminated her employment. Gasper alleged, among other claims, negligent hiring/retention and intentional infliction of emotional distress. The circuit court granted Ruffin’s motion to dismiss the negligent hiring/retention claim.

Gasper filed a second amended complaint, in which, although Ahmed was identified as a defendant, she sought damages only from Ruffin. Gasper alleged that Ruffin received multiple complaints that Ahmed was assaulting, committing batteries against and sexually harassing his employees and they were afraid he would retaliate against them for filing such complaints.

In September 2002, Ahmed was terminated from his for sexually harassing subordinates and coworkers. However, Ahmed was re-hired as General Manager in April 2004. After Ahmed was rehired, he told Gasper that other employees had filed complaints against him for sexual harassment and unwelcome touching and that he wanted to terminate those employees.

On Jan. 17, 2005, while at the front desk of the Courtyard Hotel, Front Desk Manager James Bridges grabbed Gasper, pinned her against the wall and kissed her twice. Gasper complained to Ahmed, but Ahmed discouraged Gasper from making any further complaints and told her he would do nothing about her complaint because Bridges had denied the conduct.

On Jan. 24, 2005, Gasper submitted a written complaint to Ahmed recounting the events of Jan. 17, 2005. Ahmed again discouraged her from making further complaints and threatened her with termination. Ahmed also suggested that the corporate office was not taking Gasper’s complaint seriously.

Gasper wrote a letter to Phillip Ruffin, Owner and CEO of Ruffin describing both the events of Jan. 17, 2005, and Ahmed’s response. She also complained to other Ruffin employee’s that Ahmed was retaliating against her for her complaints of sexual harassment. On March 15, 2005, Ahmed fired Gasper.

Based on these assertions, the second amended complaint also alleged employment discrimination and sexual harassment by Ruffin, retaliation by Ruffin and respondeat superior by Ruffin.

During the jury trial, Ruffin presented evidence that showed that Gasper was not terminated in retaliation for engaging in protected activity, but that she was terminated by Ahmed because of her attitude, which created a hostile working environment, her insubordination towards him, and complaints Ahmed received from the Courtyard’s staff regarding Gasper

Only Gasper’s “retaliatory discharge” claim was submitted to the jury, which received the following instruction: “To prevail on her claim of retaliation, the plaintiff must prove by a preponderance of the evidence that (1) the plaintiff opposed practices that she reasonably and in good faith believed constituted unlawful harassment; (2) that she was discharged; and (3) the plaintiff’s opposition to harassing conduct was a determining factor in the decision to discharge her.” Gasper objected to the instruction.

The jury found that Gasper failed to prove, by a preponderance of the evidence, her claim of unlawful retaliation. The Court of Special Appeals reversed and remanded.

Ruffin appealed to the Court of Appeals, which affirmed.

LAW: Gasper’s negligent hiring/retention claim was based upon the assertions that, although Ruffin (1) knew that sexual harassment allegations had been made against Ahmed, and (2) had terminated Ahmed’s employment as a result of those allegations, it rehired Ahmed even though it was foreseeable that Ahmed would retaliate against employees complaining of assault.

Ruffin argued that this claim was preempted by 42 U.S.C. §§2000(e) (Title VII), by Article 49B §42 of the Maryland Code (the Maryland Human Relations Act), and/or by Title 27 of the Montgomery County Code.

“The source of the policy against hostile environment sexual discrimination is statutory, and exclusively statutory.” Watson v. Peoples Ins. Co., 322 Md. 467 (1991). “Under the trial court’s instructions it was also possible for the jury to have found that Peoples’ discharge of Watson was motivated by Watson’s suit against [her fellow employee] for assault and battery. We hold that it is contrary to a clear mandate of public policy to discharge an employee for seeking legal redress against a co-worker for workplace sexual harassment culminating in assault and battery.” Id. at 480-481.

Watson clearly stands for the proposition that, completely independent of any statutory sexual harassment regulations, public policy prohibits an employer from terminating the employment of an employee in retaliation for the employee’s assertion of his or her rights as the victim of an assault and battery.

“Essentially Peoples’ seeks a preemption result. But the fact that the assault and battery in the instant case arise out of sexual harassment in the workplace does not end the inquiry. Long antedating Title VII and the Act, public policy, as manifested in civil and criminal law, provided sanctions against attempted and consummated harmful and offensive touching of the person, whether or not sexually motivated. Had Title VII or the Act never been enacted, a clear mandate of public policy still supported Watson’s recourse to legal redress against [her fellow employee] under the circumstances here. By including prior public policy against sexual assaults, the anti-discrimination statutes reinforce that policy; they do not supersede it.” Id. at 485-486.

While Gasper’s complaint contained allegations of sexual harassment, it also alleged retaliation in response to her attempts to seek legal redress for assault and battery. Gasper sought two remedies for the same wrong. Nonetheless, she sought to enforce two distinct public policies. On the one hand, it is contrary to public policy to retaliate against an employee who reports sexual harassment. On the other, it is also contrary to public policy for an employer to retaliate against an employee in response to the employee’s attempt to seek legal redress for assault and battery.

Watson’s observation — that, had the Human Rights Act and Title 27 of the Montgomery Code never been enacted, public policy still supports her legal redress for alleged assault and battery — applied here.

In the alternative, Ruffin argued that Gasper’s negligent hiring/retention claim was preempted by the Maryland Workers’ Compensation Act (MWCA).

In Newman v. Giant Food, Inc., 187 F.Supp.2d 524 (D.Md.2002), the United States District Court for the District of Maryland held that “[t]he [M]WCA provides the exclusive remedy ‘to an employee for an injury or death arising out of and in the course of employment’ unless the injury is shown to be the result of ‘the deliberate intent of the employer to injure or kill the covered employee.’” Id. at 529.

The General Assembly did not intend that the Workers’ Compensation Commission is the exclusive forum in which a negligent hiring/retention claim must be litigated whenever such a claim is asserted by an employee against his or her employer as a result of intentional and unlawful misconduct of a fellow employee. A contrary conclusion would be unreasonable in the extreme.

Therefore, Gasper’s negligent hiring/retention claim was not preempted by Title VII, by the Maryland Human Rights Act, by the Montgomery County Code, or by the MWCA.

Accordingly, the judgment of the Court of Special Appeals was affirmed.

COMMENTARY: “We have held that the standard of review for jury instructions is that so long as the law is fairly covered by the jury instructions, reviewing courts should not disturb them.” Farley v. Allstate Ins. Co., 355 Md. 34, 46 (1999). If, however, the instructions are “ambiguous, misleading or confusing” to jurors, those instructions will result in reversal and a remand for a new trial. See Battle v. State, 287 Md. 675, 684-85 (1980).

In Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), the Supreme Court stated that: “[W]hen a plaintiff … proves that her gender played a motivating part in an employment decision, the defendant may avoid a finding of liability only by proving by a preponderance of the evidence that it would have made the same decision even if it had not taken the plaintiff’s gender into account.” Id. at 258.

The “motivating factor” test was later ratified in Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003), where the Court concluded, “In order to obtain an instruction under [Title VII] § 2000e-2(m), a plaintiff need only present sufficient evidence for a reasonable jury to conclude, by a preponderance of the evidence, that ‘race, color, religion, sex, or national origin was a motivating factor for any employment practice.’” Id. at 101.

Ruffin’s assertion that the proper standard was a “but for” test does not comport with Maryland law. Specifically, the correct test for determining retaliatory discharge claims is whether the protected conduct was a “motivating factor” in the discharge. See Magee v. Dansources Tech. Servs., 137 Md.App. 527, 565-66 (2001); Brandon v. Molesworth, 104 Md.App. 167 (1995).

The applicable law was not fairly covered by the jury instructions here. Therefore Gasper was entitled to a new trial at which she will be required to persuade the jury that her opposition to harassing conduct was a motivating factor in the decision to terminate her employment.