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Opinions – 4/23/12: Maryland Court of Special Appeals

Real Property

Easements

BOTTOM LINE: Defendants were entitled to a declaratory judgment because plaintiff failed to establish a prima facie claim for establishing an ingress/egress easement to his property.

CASE: Bacon v. Arey, No. 2339, September Term, 2010 (filed Mar. 29, 2012) (Judges Eyler, D., Graeff & WATTS). RecordFax No. 12-0329-03, 65 pages.

FACTS: In 2002, Gregg Bacon purchased a two acre lot for $40,000 and recorded a quitclaim deed for the property. Gold Mine Road lies to the north of Bacon’s property, and Brooke Road lies to the south. Bacon alleged entitlement to an easement identified as Farm Road, running in a northerly direction from Brooke Road across his property and continuing northward through a conservation easement, until its termination at Gold Mine Road.

Bacon filed a complaint for equitable relief and declaratory judgment granting an easement and action to quiet title based on adverse possession against numerous parties. Bacon claimed that Farm Road, his means of ingress and egress to the property was blocked. According to Bacon, Farm Road is a historic right-of-way or an easement. Bacon alleged entitlement to an “easement by prescription” or an “easement by necessity under the common law.”

Bacon filed a second amended complaint. The circuit court granted the defendants’ motion to strike the second amended complaint.

Bacon filed a third amended complaint, which established two general categories of claims: the equitable/declaratory judgment claims (Counts I & II), and the tort/constitutional claims (Counts III, IV, V, VI, VII, VII, & IX). The circuit court dismissed the third amended complaint for failure to state a claim. On appeal, the Court of Special Appeals, without affirming, remanded the case to the circuit court.

Bacon then filed two pleadings: (1) a fourth amended complaint for equitable relief and declaratory judgment and damages and (2) a motion for declaratory judgment as to Counts I, II and III the fourth amended complaint. The circuit court granted a motion to strike the fourth amended complaint.

Upon the remand, the circuit court found that the third amended complaint failed to establish a prima facie claim for an implied easement by necessity. Thus, the circuit court issued a nunc pro tunc order dismissing the third amended complaint, including the tort/constitutional claims.

The Court of Special Appeals affirmed.

LAW: “An easement is broadly defined as a nonpossessory interest in the real property of another[.] An easement involves the privilege of doing a certain class of act on, or to the detriment, of another’s land, or a right against another that he refrain from doing a certain class of act on or in connection with his own land[.]” Sharp v. Downey, 197 Md. App. 123, 159 (2010).

An easement may be created by express grant, by reservation in a conveyance of land, or by implication. Id. at 160-61. An implied easement by necessity “arise[s] from a presumption that the parties intended that the party needing the easement should have access over the land. The doctrine of easement by necessity is based upon public policy, which is favorable to full utilization of land and the prescription that parties do not intend to render land unfit for occupancy. The public policy exists in recognition that to allow a landlocked parcel inadvertently to be created affects not only the initial owner of that parcel, but every subsequent owner as well.” Id. at 166-67.

In Stansbury v. MDR Dev., LLC, 390 Md. 476, 489 (2006), the Court of Appeals discussed the necessary requirements for creation of an implied easement by necessity: “The prerequisites to the creation of an easement by necessity can be summed up in three parts: (1) initial unity of title of the parcels of real property in question; (2) severance of the unity of title by conveyance of one of the parcels; and (3) the easement must be necessary in order for the grantor or grantee of the property in question to be able to access his or her land, with the necessity existing both at the time of the severance of title and at the time of the exercise of the easement.”

As to the first prerequisite-unity of title-”`the dominant and servient estates must at some point have belonged to the same person.’“ Sharp, 197 Md. App. at 169 (quoting Rau v. Collins, 167 Md. App. 176, 186 (2006)). As to the third prerequisite-necessity-the “necessity must arise at the time of the initial grant of the property, and cannot be established by a subsequent necessity. And, a way of necessity exists only so long as the necessity itself remains. Therefore, the necessity must be continuous, beginning at the time that the dominant and servient properties are subdivided.” Sharp, 197 Md. App. at 169-70. Further, the necessity required is the “strictest necessity, where it would not be reasonable to suppose that the parties intended the contrary[.]” Stansbury, 390 Md. at 488.

In Condry v. Laurie, 184 Md. 317, 321 (1945), the Court of Appeals reversed the chancellor’s “grant [of] an injunction commanding defendants to remove [an] obstruction from [a] private road, and enjoining them from interfering with complainants’s use of the road in the future.” Id. at 323. The Court noted that complainants had acquired a parcel of land adjacent to the parcel in dispute, which provided another means of access to the county road by way of a 10-foot road. Id. The Court held that where a grantee of an implied easement by necessity “acquires a new way to the estate previously reached by the way of necessity, the way of necessity is thereby extinguished.” Id. at 321-22. The Court stated it would “not recognize a way of necessity if another road to the public highway c[ould] be made without unreasonable expense, even though the other road may be much less convenient.” Id. at 322.

In Johnson v. Robinson, 26 Md. App. 568, 582 (1975), Johnson sold a piece of land to Robinson, but hesitated to provide a deed “because she wanted some means of ingress to and egress from her land-locked property.” Id. at 569-71. Johnson eventually signed the deed, but the deed failed to include a reservation for an express easement. Id. at 572. The chancellor determined that if Johnson had an easement, it would have been an implied reservation easement by necessity, “as she [sought] a right of way across property which she conveyed for the benefit of property which she retained.” Id. at 573. The chancellor found, however, that no easement by necessity existed because no evidence was presented showing that the “right of way was in use at the time of the sale of the property or at the time of the settlement.” Id. at 574.

In reversing the chancellor’s ruling, the Court of Special Appeals observed that “`in use at the time of the grant’ was but one way a `necessary and continuous’ easement could be made `apparent’ to a purchaser.” Id. at 580. The Court concluded that because Robinson “admittedly had notice of the problem [of Johnson’s access to her property] before the deed [was] signed[,]” that actual knowledge supplanted the notice generated by physical use of the easement and Robinson had “adequate notice of the existence of an easement[.]” Id. at 581-82.

An express easement can be created only through a written instrument containing “the names of the grantor and grantee, a description of the property sufficient to identify it with reasonable certainty, and the interest or estate intended to be granted.” Kobrine v. Metzger, 380 Md. 620, 636 (2004).

Here, Bacon had not alleged the existence of a written instrument expressly granting or reserving an easement over Farm Road for his property. The fact that other deeds between other parties may have referenced Farm Road as a boundary or that historic tax maps showed Farm Road does not create an express easement for Bacon’s property. Thus, Bacon did not have an express easement for ingress and egress over Farm Road.

A review of the third amended complaint demonstrated that Bacon sought to have the ingress/egress easement impinge upon or cross approximately 16 separate parcels of property. Bacon failed to plead: (1) that these 16 parcels initially had unity in title; (2) how unity in title amongst the 16 parcels was severed; and/or (3) how the usage of the ingress/egress easement was necessary, at the time of the severance of the unity in title for each property, for Bacon’s predecessor in title to access the subject property. Thus, the circuit court properly granted declaratory judgment in favor of all defendants as to Bacon’s claims for an express and implied easement, as Bacon failed to establish a prima face case sustaining his two legal theories of an ingress/egress easement.

Accordingly, the judgment of the circuit court was affirmed.

COMMENTARY: Bacon also contended that the circuit court erred in dismissing his tort and constitutional claims on the ground that the claims were barred by the statute of limitations.

CJ §5-101 provides that “[a] civil action at law shall be filed within three years from the date it accrues.” CJ §5-105 provides that an action for libel, or slander shall be filed within one year from the date it accrues.

For purposes of the statute of limitations, when a cause of action accrues in a civil case is determined by application of the “discovery rule.” Doe v. Archdiocese of Washington, 114 Md. App. 169, 177 (1997). The “discovery rule” provides that “the action is deemed to accrue on the date when the plaintiff knew or, with due diligence, reasonably should have known of the wrong.” Id. (citing Doe v. Maskell, 342 Md. 684, 690 (1996)).

Under the “discovery rule,” the statute of limitations begins to run when “a claimant gains knowledge sufficient to put her on inquiry. As of that date, she is charged with knowledge of facts that would have been disclosed by a reasonably diligent investigation. The beginning of limitations is not postponed until the end of an additional period deemed reasonable for making the investigation.” Bennett v. Baskin & Sears, 77 Md. App. 56, 67 (1988).

Here, under the “discovery rule,” Bacon’s tort and constitutional claims began to accrue, for purposes of the statute of limitations, when he purchased the property in 2002. At the time that Bacon took title to the property, he “knew or, with due diligence, reasonably should have known” that Farm Road’s access north to Gold Mine Road was “permanently cut” in 1994. Indeed, in the original complaint, Bacon alleged that, at the time he purchased the property in 2002, the Farm Road was in “remnants” and in need of repair, such that he could not use the road until it was repaired.

The undisputed facts demonstrated that, under the “discovery rule,” Bacon was on inquiry notice, if not actual notice, of his potential claims at the time he purchased the property in 2002. As such, the statute of limitations for the tort and constitutional claims expired on October 1, 2005, pursuant to CJ §5-101, whereas the statute of limitations for the slander of title claim expired on October 1, 2003, pursuant to CJ §5-105.

Bacon did not file the original complaint until June 9, 2006, well after the statute of limitations for the claims had expired, thereby barring the claims he sought to bring.

Workers’ Compensation

Offset for service pension benefits

BOTTOM LINE: Widow’s claim for dependent benefits following the death of her husband, a firefighter, was subject to the general offset provision in the statute as it was written at the time of his death from an occupational disease; a subsequent amendment to the offset provision of the Workers’ Compensation Act did not apply retroactively because it altered the vested rights of the worker and the employer.

CASE: Johnson v. Mayor, No. 1707, Sept. Term, 2010 (filed Mar. 29, 2012) (Judges Wright, Kehoe & DAVIS (retired, specially assigned)). RecordFax No. 12-0329-01, 30 pages.

FACTS: This case involved a death benefits claim brought by Janice Johnson, the wife of deceased firefighter Felix Johnson. Felix Johnson served as a firefighter for the City of Baltimore from October 1964 until his retirement in June 1990. On July 2, 1990, Felix married his wife. On November 7, 2005, Felix died due to a myocardial infarction, and Janice began receiving pension survivorship benefits at the rate of $266 per week.

On January 10, 2006, Janice filed a dependent’s claim for death benefits under the Workers’ Compensation Act, alleging that Felix’s demise from heart disease was due to the fact that he had been continuously exposed to heat, smoke, noxious fumes and the product of combustion. On October 1, 2009, the claim went to a hearing before the Workers’ Compensation Commission. On December 4, the Commission awarded benefits to the Janice.

The Commission’s order was amended on February 26, 2010, to effect a nominal change in the amount of the award. In the amended award, the Commission first ruled that the Felix sustained an occupational disease and that he died as a result thereof on November 7, 2005. The Commission further ruled that Janice was “wholly dependent” upon Felix for support and also concluded that Felix’s employer and insurer were entitled to a set-off under §9-503 of the Labor and Employment (“LE”) Article. The effect of the Commission’s application of the specific offset provision set forth in §9-503(e) was to enhance Janice’s total recovery and to avoid the dollar-for-dollar offset at §9-610.

Felix’s employer, the City of Baltimore, petitioned for judicial review of the Commission’s award in the circuit court. Both parties filed cross-motions for summary judgment. The court entered summary judgment in favor of the City and denied Janice’s motion.

Janice appealed to the Court of Special Appeals, which affirmed.

LAW: A retired firefighter who is disabled as a result of an occupational disease is entitled under the Maryland Workers’ Compensation Act to collect both service pension benefits and compensation benefits, in a sum not to exceed the firefighter’s weekly salary. Polomski v. Mayor and City Council of Baltimore, 344 Md. 70 (1996). This appeal raised the question of whether a firefighter’s surviving dependent spouse is similarly entitled to collect both service related pension benefits and workers’ compensation benefits when the firefighter’s death results from an occupational disease.

The fundamental purpose of the Workers’ Compensation Act is to provide employees with compensation for loss of earning capacity, regardless of fault, resulting from accidental injury occurring in the course of employment. Such legislation is remedial and is to be construed as liberally in favor of the injured employees. Montgomery County v. Deibler, 423 Md. 54, 60, 61 (2011). An “occupational disease” has been defined as “one which arises from causes incident to the profession or labor of the party’s occupation or calling. It has its origin in the inherent nature or mode of work of the profession or industry, and it is the usual result or concomitant. Victory Sparkler Co. v. Francks, 147 Md. 368, 379 (1925)); see also LE §9-502(a)-(d).

In its present form, LE §9-503(a) accords special treatment to employees in particular professions who are afflicted with certain enumerated occupational diseases by creating a presumption of compensability for workers such as firefighters, police officers and other employees in certain occupations. Ernest Johnson v. Mayor & City Council of Baltimore City, 387 Md. 1, 15 (2005). Under LE §9-503(a), a paid firefighter employed by a municipality is presumed to have an occupational disease that was suffered in the line of duty and is compensable under the Act if: the individual has heart disease, hypertension, or lung disease, and the heart disease, hypertension, or lung disease results in partial or total disability or death.

The offset provision at LE §9-503(e) in turn now permits the recovery of dual benefits, subject to the amount capped by the employee’s weekly salary. Specifically, any paid firefighter who is eligible for benefits, or the dependents of those individuals, shall receive the benefits in addition to any benefits that the individual or the dependents of the individual are entitled to receive under the retirement system in which the individual was a participant at the time of the claim, subject to the limitation that the he benefits received shall be adjusted so that the weekly total of those benefits and retirement benefits does not exceed the weekly salary that was paid to the firefighter. LE §9-503(e).

In Ernest Johnson v. Mayor & City Council, the Court of Appeals ruled that the language of LE §9-503(e) of the Act as then written was unambiguous, and that the “preferential treatment” for firefighters did not pertain to the provision for dual benefits. Clearly aggrieved by the decision in Ernest Johnson, the General Assembly sought to remedy what was viewed as a defect in the current law, and amended LE §9-503(e) to include surviving dependents of the enumerated public employees so that they too would be entitled to benefit from the offset afforded by LE §9-503(e). 2007 Md. Laws, Chaps. 350, 351.

It was the temporal reach of the amended version of LE §9-503(e) which lay at the heart of the present appeal. Under the current statute, Janice would be entitled to dual recovery of her survivor’s benefits under the Act as well as Felix’s service pension. If, however, the amendment was not to be applied retroactively, the claim would be covered by the statute in force at the time of Felix’s death, and Janice’s recovery would be subject to the general offset provision found at LE §9-610.

There exists a general presumption in the law that an enactment is intended to have purely prospective effect. Thus, in the absence of clear legislative intent to the contrary, a statute is not given retrospective effect. Traore v. State, 290 Md. 585, 593 (1981). There are four basic principles involved in determining whether a law should be applied retrospectively: (1) statutes are presumed to operate prospectively unless a contrary intent appears; (2) a statute governing procedure or remedy will be applied to cases pending in court when the statute becomes effective; (3) a statute will be given retroactive effect if that is the legislative intent; but (4) even if intended to apply retroactively, a statute will not be given that effect if it would impair vested rights, deny due process, or violate the prohibition against ex post facto laws. See Allstate Ins. Co. v. Kim, 376 Md. 276, 289-90 (2003).

With regard to this fourth factor, case law directs that any changes in statutes relating to vested rights are characterized as substantive and require application of the law as it existed at the time the claimant sustained a compensable injury. Ark. State Police v. Welch, 28 Ark. App. 234, 772 S.W.2d 620 (1989). A vested right exists when the law declares that one has a claim, or that one may resist enforcement of a claim. In this case, the statutory amendment at issue dealt not with the procedure for enforcing a remedy provided under the Workers’ Compensation Act, but rather with the substance of the remedy itself – i.e., entitlement to retirement disability benefits.

Before the amendment was enacted, a claimant had no vested right to retirement disability benefits that had already been paid by other parties, and the employer had a vested right to a full setoff for those amounts. When section (a)(2) was enacted, it created a new vested right for injured workers and altered that of employers. Thus, because the statute was substantive, it could not be applied retroactively.

Accordingly, the decision of the circuit court was affirmed.

COMMENTARY: Janice also argued that, according to the legislative history, the financial impact on the State would be negligible. However, the impact from retroactive application of LE §9-503(e) would be borne not only by the State, but by local governments. As such, it was not clear that the impact of the new law on municipal and county employers such as the City of Baltimore would be de minimus, as Janice suggested.

PRACTICE TIPS: Maryland, the first state to enact a workers’ compensation statute, created a Co-operative Insurance Fund in 1902 to be maintained by both employers and employees in certain perilous occupations, such as mining and construction. For purposes of workers’ compensation, occupational diseases differ significantly from work-related traumatic injuries. Although some states maintain lists of occupational diseases, all 50 states have general occupational disease coverage.