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Opinions – 9/12/11: Court of Special Appeals

Commercial Law

Damages

BOTTOM LINE: In a suit over deceptive trade practices, because plaintiff received the relief he requested on his individual claims, his class action suit was moot and, as a matter of law, plaintiff was not entitled to punitive damages or injunctive relief.

CASE: Frazier v. Castle Ford, Ltd, No. 1767, Sept. Term, 2008 (filed Aug. 31, 2011) (Judges WOODWARD, Matricciani & Thieme (retired, specially assigned)). RecordFax No. 11-0831-01, 26 pages.

FACTS: On December 23, 2004, Anthony Frazier came to a Castle Ford, Ltd. f/k/a Crystal Ford Isuzu, Ltd. dealership to purchase an extended warranty for his 2003 Ford Explorer. Frazier spoke with Tiana Robbins, a finance manager for Crystal Ford. Robbins altered the computer-generated form to reflect that the extended warranty coverage would expire on December 31, 2008, a duration of approximately four years, or at 100,000 miles. Robbins also informed Frazier that his extended warranty would be honored until December 31, 2008. Frazier signed the extended warranty contract, tendered a down payment, and financed the balance of the $1,700 purchase price.

In November 2006, Frazier brought his Ford Explorer into another Ford dealership for warranty repairs. Frazier was notified, however, that his extended warranty had expired on October 30, 2006.

Upon contacting Ford representatives for assistance, Frazier was advised that Crystal Ford provided an incorrect expiration date for his warranty coverage. The four year warranty coverage period did not begin on the purchase date of December 23, 2004, but related back to the “build date” of Frazier’s Explorer, which was October 30, 2002. Frazier had to pay $552.99 out of his own pocket for the warranty repairs.

In July 2007, Frazier filed a class action suit, alleging that Crystal Ford’s misrepresentation of the coverage period, which Frazier claimed was made to “several hundreds” of other purchasers of similar extended warranties, constituted a deceptive trade practice under the Consumer Protection Act and fraud. Frazier sought compensatory damages, punitive damages, attorney’s fees, and declaratory and injunctive relief for himself and members of the putative class.

In August 2007, Crystal Ford paid to extend Frazier’s warranty to the originally specified date of December 31, 2008, and the Ford warranty company issued a check for the warranty repairs to Frazier’s Explorer, less a $100 deductible.

In November 2007, Crystal Ford filed a motion to deny class action certification and a motion for summary judgment.

The circuit court granted Crystal Ford’s motion to deny class action certification. Because Frazier received the relief he requested, the circuit court determined that Frazier’s suit was moot and thus Crystal Ford was entitled to summary judgment on all issues except the issue of attorney’s fees. The trial court awarded Frazier $20,950 in counsel fees.

The Court of Special Appeals affirmed.

LAW: A litigant cannot recover punitive damages without an award of compensatory damages. Caldor, Inc. v. Bowden, 330 Md. 632, 661 (1993). Furthermore, nominal damages are not available in an action for fraud, see Schwartzbeck v. Loving Chevrolet, 27 Md.App. 139, 145–46 (1975), or for a deceptive trade practice under the Consumer Protection Act. See Lloyd v. GMC, 397 Md. 108, 143 (2007). Therefore, an award of compensatory damages for an actual injury or loss is a condition precedent to receiving punitive damages in claims for fraud and deceptive trade practice.

It was undisputed that Crystal Ford provided all of the compensatory relief that Frazier requested in his complaint on his individual, as opposed to his class action, claims. The warranty coverage was extended through December 31, 2008, and Frazier was reimbursed the cost of the warranty repairs. As a result, there were no further compensatory damages that Frazier could recover at a trial. Therefore, punitive damages were not available to Frazier as a matter of law.

“Injunctive relief is a preventative and protective remedy, aimed at future acts, and is not intended to redress past wrongs.” Eastside Vend Distribs., Inc. v. Pepsi Bottling Grp., Inc., 396 Md. 219, 240 (2006). As a result of Crystal Ford’s extending Frazier’s warranty and securing repayment of his warranty repairs, there was no injunctive relief that the court could have possibly fashioned for Frazier’s individual claims. See Carroll Cnty. Ethics Comm’n v. Lennon, 119 Md.App. 49, 58 (1998). Therefore, the circuit court properly granted Crystal Ford’s motion for summary judgment.

Furthermore, Frazier’s individual claims were satisfied before he ever moved for class certification. Indeed, Frazier never filed a motion for class certification. Thus, Frazier’s individual claims became moot before the interests of the absent class members were brought before the court by the filing of a motion for class certification. See Barber v. American Airlines, Inc., 948 N.E.2d 1042 (2011).

Accordingly, the trial judge did not err in granting Crystal Ford’s motion to deny class certification.

COMMENTARY: On cross appeal, Crystal Ford argued that the circuit court abused its discretion when it awarded Frazier $20,950 in attorney’s fees, which was the entire amount sought by Frazier.

Under CL §13-408(b), an individual who brings an action for deceptive trade practice under the Consumer Protection Act and who is awarded damages may also seek reasonable attorney’s fees. The following factors should be applied by the trial judge when determining an attorney fee award: “(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent.” Blaylock v. Johns Hopkins Federal Credit Union, 152 Md.App. 338 (2003).

Although Frazier’s class action claim was legally unsuccessful, the filing and prosecution of such claim had the practical effect of remedying not only Frazier’s individual claims, but also warranty holders like Frazier and future purchasers of extended warranties like the one purchased by Frazier. There is no authority that requires the trial court to ignore the practical results obtained by litigation.

Therefore, it was not an abuse of discretion for the trial judge to consider the ramifications of an unsuccessful class action suit, as well as the relief obtained on a plaintiff’s individual claims, and to rule that Frazier was entitled to recovery of the counsel fees incurred in the entire litigation.

PRACTICE TIPS: A case is not moot for appellate review purposes where a tender to a named plaintiff occurs after the motion for class certification is denied and where appellate review of that denial is being sought. Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326 (1980).

Criminal Law

Theft

BOTTOM LINE: Juvenile, who was found not guilty of “punching out” car’s ignition, could not be found guilty of theft since “punching out” was a necessary factual component of the theft charge.

CASE: In re Antonette H., No. 0944, Sept. Term, 2010 (filed Aug. 31, 2011) (Judges Graeff, Watts &  MOYLAN, JR. (retired, specially assigned)). RecordFax No. 11-0831-03, 23 pages.

FACTS: On August 11, 2009, at 6:30 a.m., Robert Tucker parked his 1995 Jeep Cherokee in the parking lot of his apartment building in Prince George’s County. At some time later that day, he discovered that his car had been stolen. He had not left his keys in the car nor had he left the motor running.

At 4:30 p.m. the next day, an officer with the Washington, D.C. Metropolitan Police Department observed the Jeep being driven in Washington Southeast. As he watched, the Cherokee suddenly struck a parked vehicle and came to a sudden and unintended stop. Three individuals abandoned the car and fled on foot.

Antonette H., a juvenile, who had been driving the car, was one of the three and was apprehended a short distance away. The ignition to the car had been “punched out,” a recognized technique for starting a car without a key.

At her delinquency hearing, Antonette H. testified that when she first saw the Jeep around her Washington neighborhood, it was being driven by a male friend named Marcus, one of the three occupants of the vehicle at the time of the 4:30 p.m. collision. Marcus let her drive the car. Antonette H. acknowledged that she knew the car had been stolen.

The trial court found Antonette H. not guilty of “punching out,” but guilty of theft. Antonette H. was adjudicated to be delinquent.

The Court of Special Appeals reversed.

LAW: When Antonette H. was first observed behind the wheel of the stolen car, the time lapse since its original theft was something less than 34 hours. She qualified, therefore, for the possession of “recently stolen goods.” Debinski v. State, 194 Md. 355, 359–60 (1950).

“We have long and consistently held that exclusive possession of recently stolen goods, absent a satisfactory explanation, permits the drawing of an inference of fact strong enough to sustain a conviction that the possessor was the thief.” Brewer v. Mele, 267 Md. 437, 449 (1972).

In 1979, Maryland brought both larceny and receiving stolen goods together under the broad umbrella of the Consolidated Theft Act. State v. Burroughs, 333 Md. 614, 623 (1994). That consolidated statute is now codified as CL §§7–101 through 7–110.

Under the Consolidated Theft Act, theft now includes the separate crimes formerly known as: (1) larceny; (2) larceny by trick; (3) larceny after trust; (4) embezzlement; (5) false pretenses; (6) shoplifting; and (7) receiving stolen property. CL §7–102(a).

CL §7–104 spells out six separate modalities for committing the crime of theft. Section 7–104(a) covers what would formerly have constituted common law larceny, as the subsection provides: “A person may not willfully or knowingly obtain or exert unauthorized control over property.”

Section 7–104(c) addresses the related criminal behavior that once constituted the separate crime of receiving stolen property and provides: “A person may not possess stolen personal property knowing that it has been stolen, or believing that it probably has been stolen.”

Just as the subsection (a) modality of theft, the obtaining of unauthorized control, and the subsection (c) modality, the criminal possession, remain distinct, so too are the inferences distinct that may lead to those respective conclusions. For either original crime or for either modality of the new consolidated crime, the proof would be by inference from the inadequately explained possession of the recently stolen automobile. See Offutt v. State, 55 Md.App. 261, 264–65, (1983).

With criminal possession, as was true with receiving stolen goods before it, a critical element of guilt is that the possessor (or receiver) either knew or had good reason to know that the goods were stolen. Jordan v. State, 219 Md. 36, 48–49 (1959). The primary function of the inculpatory inference when dealing with this modality of theft (or formerly with the crime of receiving) is to supply this critical element of scienter.

By contrast, with the subsection (a) modality of obtaining control, there is generally no problem in concluding that the thief knew what he was doing. The concern is more with the actus reus than with the mens rea. The question is where the obtaining of control (or the trespassory taking and carrying away) happened and when it happened. The inculpatory inference in this regard is not concerned with scienter. See Rice v. State, 311 Md. 116, 135 (1987).

Although both inferences arise out of precisely the same factual predicate, there is a dramatic difference in what they do and how they do it. One could prove that Antonette H. committed a criminal act (stealing a car) in the State of Maryland on August 11, 2009. The other could prove that Antonette H. committed a different criminal act (criminal possession) miles away in the District of Columbia on a different day, August 12, 2009.

The situs of criminal possession is the place where the stolen car is shown to have been possessed. In this case, the situs of this particular modality of theft was in Washington, S.E. at 4:30 P.M. on August 12, 2009, or possibly shortly earlier that afternoon in Antonette H.’s neighborhood, also in Washington. The situs is not where the original theft occurred, but where the subsequent criminal possession is shown to have occurred. There was no such criminal possession shown to have occurred in Maryland. A person cannot be convicted in Maryland for crimes committed in another state. Butler v. State, 353 Md. 67, 72–73 (1999).

The evidence did not support a conclusion that the act of criminal possession pursuant to §7–104(c) took place in Maryland. Thus, the only way for the State to establish territorial jurisdiction in Maryland was with the other inference.

Had Antonette H. been charged with the theft of the Jeep Cherokee and nothing else, there would be no problem. The problem was that there were other charges, including “punching out” the ignition.

“Punching out” the ignition may not be a formal element of “obtaining and exerting unauthorized control” on all occasions, but it was a necessary factual component of this particular instance of obtaining and exerting control. As a person established by the inference to have been the original thief, Antonette H. had to have been involved in some capacity, as a principal or as an accessory, in that “punching out” of the ignition.

The trial court, however, acquitted Antonette H. of the “punching out” charge. Therefore, Antonette H. could not be found guilty of theft.

Accordingly, the judgment of the circuit court was reversed.

COMMENTARY: The State argued that the conviction for theft and the acquittal for the “punching out” of the ignition were not inconsistent in any way.

American law almost universally exhibited a tolerance toward an inconsistency between verdicts of guilty and not guilty in a jury trial. See Steckler v. United States, 7 F.2d 59 (2d Cir.1925); Dunn v. United States, 284 U.S. 390 (1932). The reasons for that tolerance turn on the unique characteristics of decision making by a lay jury, such as the need for compromise in arriving at a unanimous decision and the conferral of lenity by the jury for fear that the sentencing judge will not be sufficiently lenient. See United States v. Powell, 469 U.S. 57 (1984).

However, similar inconsistencies by judges in non-jury trials have almost universally been condemned. Such special considerations in jury trials as the need for unanimity and the guarantee of lenity in sentencing are not present when dealing with verdicts by a judge in a non-jury trial. See United States. v. Maybury, 274 F.2d 899 (2d Cir.1960); Johnson v. State, 238 Md. 528 (1965).

This traditional dichotomy between the toleration of a jury’s inconsistency and the condemnation of a judge’s inconsistency was dramatically eroded by the majority opinion of the Court of Appeals in Price v. State, 405 Md. 10 (2008), where the Court distinguished between “legal inconsistency” and “factual inconsistency.” Id. at 35–38.

The purpose of the concurrence in Price was to limit the change being made by the majority, not to expand it. That disinclination of the concurring opinion to impose an additional burden of factual consistency on jury verdicts by no means suggests that the burden of rendering factually consistent verdicts should, for the first time, be subtracted from non-jury verdicts where no distinction between legal consistency and factual consistency has ever been made. See State v. Williams, 397 Md. 172, 189–99 (2007); State v. Anderson, 320 Md. 17, 29–32 (1990).

By minimizing the increased demand for consistency by juries, the Price concurrence did not thereby reduce the demand for consistency routinely imposed on judges.

PRACTICE TIPS: Because of the increasingly penal overtones of juvenile court systems, juvenile proceedings which may lead to commitment in a state institution must measure up to the “essentials of due process and fair treatment.” In re Anthony W., 388 Md. 251, 266 (2005) (citing In re Gault, 387 U.S. 1 (1967)).