Criteria for continuance
BOTTOM LINE: The trial court did not abuse its discretion in denying defendant’s continuance to obtain exculpatory evidence, because defendant did not meet his burden to show that he satisfied the criteria set forth in Jackson v. State, 214 Md. 454, 459 (1957).
CASE: Davis v. State, No. 953, September Term, 2011 (filed Sept. 4, 2012) (Judges WOODWARD, Berger & Raker (retired, specially assigned)). RecordFax No. 12-0904-04, 25 pages.
FACTS: Mildred Detwiler observed two young black men ring her doorbell at approximately 11:30 a.m. When she did not answer, she observed the men walk around to the back of her house, where she saw one of the men attempt to push up on the dining room window. She then saw both men walk around to the back porch and look through the lattice underneath the porch. Both men then walked onto the deck and looked at two other windows.
While one man stayed on the deck, the other walked up the steps to her back porch screen door and pushed his hand through the screen on the bottom of the door.
According to Detwiler, after pushing his hand through the screen, the man was feeling the side of the door to see what was holding the door and found the latch on the door. While this was occurring, the other man was just standing on the deck.
Detwiler called 911 and went across the street to her neighbor’s home. Officer Michael Kane responded to the call and observed two “black male subjects standing on the side yard.” Officer Kane made eye contact with the two men, who were walking toward him, and told them to stop. At this point, the two men turned and ran in the opposite direction and Officer Kane pursued them. Officers eventually caught up to the two men, Travon Davis and Jerquan, then 17 years old, were arrested.
Following their arrest, Davis and Jerquan provided separate recorded statements to Detective Thomas Dufek. Jerquan initially denied any wrongdoing, but later stated that “we did crawl through the screen,” but “I didn’t try to break in” and “I wasn’t never going to go in the house.” Jerquan also stated: “I just crawled through the door” and Davis was “not really in this.”
In his statement, Davis said that their “intentions [weren’t] to hurt [any]body,” that they did not think anybody was home, and that they “messed up” and “[were] leaving.”
Davis’ trial was scheduled for April 27, 2011, while Jerquan’s juvenile proceedings were scheduled for June 28, 2011. On the first day of Davis’ trial, defense counsel moved for a continuance because Jerquan, who still had a 5th Amendment privilege, refused to testify until after his adjudication. According to defense counsel, Jerquan would testify that Davis “had no involvement in this incident.” The State opposed the continuance and offered to stipulate to the contents of Jerquan’s statement, which the State characterized as both exculpatory and incriminating. The motion for a continuance was denied.
At the close of the State’s case-in-chief and at the close of all evidence, defense counsel moved for a judgment of acquittal. Both motions were denied. The jury returned a verdict of guilty on the charge of first-degree burglary and not guilty on the charge of conspiracy to commit first-degree burglary. Davis was sentenced to eight years imprisonment, with all but 18 months suspended, and five years probation upon release.
Davis appealed to the Court of Special Appeals, which affirmed.
LAW: Under Jackson v. State, 214 Md. 454, 459 (1957), a trial court abuses its discretion in denying a continuance when the requesting party has shown: (1) “that he had a reasonable expectation of securing the evidence of the absent witness or witnesses within some reasonable time”; (2) “that the evidence was competent and material, and he believed that the case could not be fairly tried without it”; and (3) “that he had made diligent and proper efforts to secure the evidence”.
“The decision of whether to grant a request for continuance is committed to the sound discretion of the court.” Abeokuto v. State, 391 Md. 289, 329 (2006). A trial court’s ruling on a continuance will not be disturbed absent an abuse of discretion, which was prejudicial to the party requesting the continuance. Jackson, 214 Md. at 459.
Under Jackson, the first factor that Davis had to show in order to be entitled to a continuance was that “he had a reasonable expectation of securing the evidence of the absent witness or witnesses within some reasonable time.” Jackson, 214 Md. at 459. Here, it was undisputed that Jerquan was not going to waive his Fifth Amendment privilege and testify at Davis’ trial. “[W]here the absent witness is also a co-defendant and there is no showing that he will waive his privilege against self-incrimination and exonerate the appellant, the trial judge may deny the postponement of a trial.” Tann v. State, 43 Md. App. 544, 548 (1979).
Jerquan’s Fifth Amendment privilege would not end with his trial, unless he was found not involved. If Jerquan was found involved, his Fifth Amendment privilege would continue through disposition and all subsequent appeals. Any appeal could take anywhere from nine months to over a year. At the hearing on Davis’ motion for a continuance, there was no indication that Jerquan was going to enter a plea of involved. Therefore, because Jerquan was not going to waive his Fifth Amendment privilege to testify at Davis’ trial and there was no indication that he would enter a plea of involved, Davis failed to show that Jerquan would be available to testify “within some reasonable time.” See Jackson, 214 Md. at 459.
Regarding the second Jackson factor, defense counsel set forth a proffer of testimony which it claimed was not in Jerquan’s recorded interview. However, this proffer was insufficient to show that there was a material difference between Jerquan’s potential live testimony and the content of Jerquan’s recorded interview.
There were apparently only two statements in the proffer to which the State would not stipulate. First: “[T]he whole idea in breaking into this house was solely that of [Jerquan].” That statement, however, was essentially contained in Jerquan’s interview, wherein Jerquan stated that “he’s [Davis] not really in this.” Second: Davis “had no involvement with it whatsoever.” As the prosecutor correctly noted, that statement was contradicted by Jerquan’s recorded interview. In the interview, Jerquan tells the detective that he and Davis were together at the scene of the crime—they were together on the deck in the back of the victim’s house; they left together; they immediately encountered the police; and they ran. Because there was no material evidence in addition to, and not contradicted by, the evidence contained in the recorded interview, defense counsel failed to show how the case “could not be fairly tried” without the live testimony of Jerquan.
Thus, Davis did not meet his burden to show all three Jackson criteria, and the trial court thus did not abuse its discretion in denying Davis’ motion for a continuance.
COMMENTARY: First-degree burglary is defined as “break[ing] and enter[ing] the dwelling of another with the intent to commit theft or a crime of violence.” CL §6-202(a). If the State proceeds under a theory of aiding and abetting, the State must present evidence that the alleged aider and abettor participated by “knowingly associating with the criminal venture with the intent to help commit the crime, being present when the crime is committed, and seeking, by some act, to make the crime succeed.” Maryland Criminal Pattern Jury Instructions §6:01.
Davis’ statements from his interrogation also supported an inference that Davis was involved in the burglary and was not merely present at the scene of the crime. Davis stated that he and Jerquan did not know that anybody was home and that their “intentions [weren’t] to hurt [anybody], and that Detwiler “didn’t get hurt.”
Jerquan’s statements from his interview supported a finding of Davis’ involvement in the burglary. Although Jerquan stated that Davis was “not really in this,” Jerquan also used the word “we” multiple times in describing the incident:
If believed by the jury, the statements by Jerquan and Davis, as well as the testimony of Detwiler and Officers Kane and Veiga, were sufficient to support Davis’ conviction for first-degree burglary on a theory of aiding and abetting.
Motion for new trial
BOTTOM LINE: To the extent that defendant’s appeal challenged the circuit court’s ruling on his amended motion for new trial, the appeal was dismissed because the appeal was not filed within 30 days of the order denying the motion, as required by Rule 8-202.
CASE: Crippen v. State, No. 0531, Sept. Term, 2011 (filed Sept. 4, 2012) (Judges Woodward, WRIGHT & Hotten). RecordFax No. 12-0904-05, 22 pages.
FACTS: Alexander Crippen was indicted on multiple charges of arising from his alleged involvement in the murder of Reginald Handy, and the attempted murder of Torrance Davis. Crippen waived his right to a jury trial, electing instead to be tried by the court.
Based on the evidence presented at trial, the court determined beyond a reasonable doubt that Crippen was the person who shot at Davis. The court convicted Crippen on all counts.
On December 20, 2010, Crippen’s attorney filed a motion for a new trial pursuant to Rule 4-331. On April 8, 2011, Crippen was sentenced. On April 13, 2011, Crippen noted this appeal.
On June 6, 2011, after hiring a new attorney, Crippen filed an amended motion for a new trial, in which he claimed that he should be granted a new trial on several grounds, including that his trial counsel was ineffective.
At the start of the hearing on Crippen’s motion, the trial judge asked Crippen’s new attorney to clarify which subsection of Rule 4-331 he was relying on to support his claim of ineffective assistance of counsel. In response, Crippen’s attorney stated (b) and (c).
The court denied Crippen’s motion for a new trial. Crippen filed a supplemental memorandum in which he argued that his claim of ineffective assistance of counsel constituted newly discovered evidence for the purposes of Rule 4-331(c). The court determined that the claim did not constitute “newly discovered evidence” as required by Rule 4-331(c).
On September 20, 2011, the court denied Crippen’s amended motion for new trial. Crippen did not file a timely notice of appeal.
The State filed a motion to dismiss the appeal filed in April 2011. The Court of Special Appeals dismissed the appeal.
LAW: When a notice of appeal is filed before a final judgment is issued, the appeal is of no force and effect and cannot confer jurisdiction to an appellate court to review the circuit court’s decision. See Blucher v. Ekstrom, 309 Md. 458, 463 (1987); Houghton v. County Comm’rs of Kent County, 305 Md. 407, 413 (1986).
Thus, the notice of appeal filed on April 13, 2011, did not authorize the Court to review the circuit court’s order denying Crippen’s amended motion for new trial. As Crippen failed to file an amended notice of appeal after the circuit court denied his motion, there was no jurisdictional basis for the Court to review the circuit court’s September 20, 2011 decision. Therefore, Crippen’s appeal was dismissed to the extent that it challenged the circuit court’s order denying his belated amended motion for a new trial.
As to Crippen’s challenge to his conviction, such a challenge would more properly be raised in a post-conviction proceeding.
Generally, in Maryland, a defendant’s attack of a criminal conviction due to ineffective assistance of counsel occurs at post-conviction review. Tetso v. State, ___ Md. App. ___, No. 2219, Sept. Term 2010, Slip Op. at 42 (Ct. of Spec. App. June 4, 2012). This is because a post-conviction hearing presents “the opportunity for further fact-finding.” Id. at 42-43.
The Court of Appeals has explained the reasoning for preferring post-conviction over direct appeal for ineffective assistance of counsel claims as follows: “In essence, it is because the trial record does not ordinarily illuminate the basis for the challenged acts or omissions of counsel, that a claim of ineffective assistance is more appropriately made in a post conviction proceeding[.] Upon such a collateral attack, there is presented an opportunity for taking testimony, receiving evidence, and making factual findings concerning the allegations of counsel’s incompetence. By having counsel testify and describe his or her reasons for acting or failing to act in the manner complained of, the post conviction court is better able to determine intelligently whether the attorney’s actions met the applicable standard of competence.” Id.
In In re Parris W., 363 Md. 717 (2001), the Court of Appeals stated that the ordinary rule that ineffective assistance of counsel claims must be raised in post conviction proceedings “is not absolute and, where the critical facts are not in dispute and the record is sufficiently developed to permit a fair evaluation of the claim, there is no need for a collateral fact-finding proceeding, and review on direct appeal may be appropriate and desirable.” 363 Md. at 726. There, Parris W. was charged as a juvenile with assault and trespassing. Id. at 720. At Parris W.’s adjudicatory hearing, his attorney requested a continuance on the grounds that he had issued subpoenas to Parris W.’s alibi witnesses that contained the wrong date. Id. The court denied Parris W.’s request, and, as a result, Parris W.’s attorney was unable to produce the witnesses on the day of the hearing to corroborate Parris W.’s testimony regarding his alibi. Id. at 721-22. Therefore, Parris W.’s counsel’s error was readily apparent from the record.
In Ruth v. State, 133 Md. App. 358 (2000), the defendant argued that he received ineffective assistance from his trial counsel because his attorney also represented the co-defendant in that trial. The defendant argued that his attorney’s representation of both him and his co-defendant constituted an inherent conflict of interest which was prejudicial to the defendant. The Court stated, “[b]ecause we are presented with a full record, we shall entertain the question posed.” Id. at 367. There was no need for further fact finding to determine whether defendant’s trial counsel represented both defendants, nor was there any need to determine trial counsel’s reason for representing both defendants because, if a conflict existed, the representation was inappropriate regardless of trial counsel’s reasoning. Thus, as in In re Parris W., the trial counsel’s error in Ruth was plain on the record before the trial court.
In Duvall v. State, 399 Md. 210 (2007), the defendant was represented by an attorney from the Montgomery County Office of the Public Defender. Id. at 215. The defendant denied the charges against him and claimed that another individual, represented by the same office on unrelated charges, was in fact responsible for the crimes with which Duvall had been charged. Id. at 213. Upon learning of the conflict, Duvall’s attorney filed a motion for a continuance. Despite the apparent conflict of interest, the administrative judge denied defense counsel’s request for a continuance. Id.
Upon review, the Court of Appeals held that, because there existed a conflict of interest and because defense counsel requested a continuance prior to trial, the administrative judge erred, as a matter of law, in failing to grant the postponement to give defense counsel reasonable time to resolve the conflict. Id. at 213-14.
The Court stated that review of an ineffective assistance of counsel claim on post-conviction is unnecessary where the record is clear and the necessary facts are contained in the record. Id. at 240. There, the Court held that the record was clear and, thus, there was no need for a post-conviction hearing. Clearly, the trial court’s actions caused the adverse effect on the defendant’s representation. Id. at 240-41.
Here, it was necessary to separate the trial record from the record developed at the motion for a new trial hearing and review only the trial record. Unlike in In re Parris W., Ruth, and Duvall, the basis for Crippen’s claim was not apparent on the record at trial, and therefore, additional fact-finding was necessary to evaluate Crippen’s claim. During trial, Crippen’s trial attorney did not admit to any error nor did Crippen raise the issue of ineffective assistance at trial. In fact, Crippen did not raise his ineffective assistance of counsel claim until June 6, 2011, when he filed his Amended Motion for a New Trial.
Crippen failed to file a timely notice of appeal following the circuit court’s denial of his amended motion for a new trial. Therefore, to the extent that Crippen’s appeal challenged the circuit court’s ruling on his motion, the appeal was dismissed pursuant to Rule 8-602(a)(3) because the appeal was not filed within 30 days of the order denying the motion.
COMMENTARY: The Court did not have jurisdiction to review the circuit court’s order denying Crippen’s amended motion for a new trial as Crippen did not appeal that decision. Nevertheless, Crippen asked that the Court still consider the testimony presented, to the circuit court during its review of his amended motion for a new trial, in deciding whether a sufficient factual basis exists to permit review of Crippen’s claim of ineffective assistance of counsel on direct appeal.
The only judgment before the Court was Crippen’s conviction for the crimes arising from the shooting on May 26, 2010. Thus, the only facts that the Court could consider in reviewing the circuit court’s judgment were those facts which were before the circuit court when it entered the judgment from which this appeal lies. As the trial record did not contain sufficient facts to substantiate Crippen’s claim of ineffective assistance of counsel, his conviction was affirmed. Crippen may proceed with a post-conviction proceeding to address his ineffective assistance of counsel claim.
PRACTICE TIPS: To establish a violation of the constitutional right to the effective assistance of counsel, “a defendant must prove both that his or her attorney’s [performance] was deficient and that he or she was prejudiced as a result of that deficiency.” Duvall v. State, 399 Md. 210, 222 (2007) (citing Strickland v. Washington, 466 U.S. 668, 687 (1984)).
BOTTOM LINE: Defendant was not unconstitutionally denied right to speedy trial where the total delay between his arrest and trial was eight months and fifteen days, the reason for delay was neutral, the defendant did not strongly assert his right to a speedy trial, and defendant was not prejudiced as result of delay.
CASE: Lloyd v. State, No. 1144, Sept. Term, 2011 (filed Sept. 4, 2012) (Judges Kehoe, Berger & RODOWSKY (retired, specially assigned)). RecordFax No. 12-0904-02, 13 pages.
FACTS: Bobby Lloyd was arrested on October 12, 2010. He was charge with first degree assault, second degree assault and malicious destruction of property. The total period from Lloyd’s arrest to his trial in the circuit court was eight months and 15 days. October 13, 2010, bail was set by a district court commissioner at $10,000. On October 15, 2010, on bail review in by the district court, bail was set at $100,000.
On October 18, 2010, Lloyd’s defense counsel entered his appearance in the district court. On October 22, 2010, the State moved to consolidate the subject case with another, based on common facts. On October 27, 2010, Lloyd requested subpoenae for witnesses for preliminary hearing was set for December 7, 2010. On December 7, 2010, the preliminary hearing was postponed, and the State entered nolle prosequi to first degree assault charge. At that point, the subject case came within the exclusive original jurisdiction of the district court.
On January 10, 2011, Lloyd requested a jury trial. On January 12, 2011, Lloyd filed omnibus motion, including pro forma request for speedy trial. On January 20, 2011, a bail review hearing was held, and the bail was unchanged. No demand was made for a speedy trial. On March 1, 2011, the case was assigned a jury trial date of May 18, 2011. On April 18, 2011, another bail review hearing was held, and bail was unchanged. There was no demand for a speedy trial.
On May 18, 2011, the case was postponed for good cause, as the single circuit court for the Garrett County jury courtroom was to be in use for trial of an older case. On May 24, 2011, the case was assigned jury trial date of June 28, 2011. On June 27, 2011, defense counsel filed a motion to dismiss for lack of a speedy trial. The motion, which was written by Lloyd, was denied.
On June 27, 2011, the case was tried on not guilty statement of facts. Nolle prosequi was entered as to malicious destruction of property count in the subject case and to all counts in a companion case charging threat of arson. State called a violation of probation case against Lloyd. Lloyd was convicted of second degree assault.
Lloyd appealed his conviction to the Court of Special Appeals, which affirmed the conviction.
LAW: Criminal defendants have a fundamental right to a speedy trial. State v. Bailey, 319 Md. 392, 395 (1990); Article 21 of the Maryland Declaration of Rights. To determine if an individual’s right to a speedy trial has been violated, the Court utilizes a balancing test in which the conduct of both the prosecution and the defendant are weighed. Bailey, 319 Md. at 396. A balancing test necessarily compels courts to approach speedy trial cases on an ad hoc basis. Id. Four factors have been identified by the Supreme Court and consistently utilized in Maryland to make this constitutional determination: (1) the length of the delay; (2) the reason for the delay; (3) the defendant’s assertion of his right to a speedy trial; and (4) prejudice to the defendant. Id. at 409.
The length of delay is measured from the date of arrest. Bailey, 319 Md. at 410. There is no specific duration of delay that constitutes a per se delay of constitutional dimension. Glover v. State, 368 Md. 211, 222 (2002). The Court of Appeals has consistently held, however, that a delay of more than one year and 14 is “presumptively prejudicial” and requires balancing the remaining factors. Id. The nature of the charges levied also affects the permissible delay. The more complex and serious the crime, the longer a delay might be tolerated because society also has an interest in ensuring that longer sentences are rendered upon the most exact verdicts possible. Glover, 368 Md. at 224. The length of delay in and of itself is not a weighty factor. Id. at 225. The duration of the delay is closely correlated to the other factors, such as the reasonableness of the State’s explanation for the delay, the likelihood that the delay may cause the defendant to more pronouncedly assert his speedy trial right, and the presumption that a longer delay may cause the defendant greater harm. Id.
Here, a total of eight months and 15 days elapsed between Lloyd’s arrest and his trial. Closely related to length of delay is the reason the government assigns to justify the delay; different weights should be assigned to different reasons. A deliberate attempt to delay the trial in order to hamper the defense should be weighted heavily against the government. A more neutral reason such as negligence or overcrowded courts should be weighted less heavily but nevertheless should be considered since the ultimate responsibility for such circumstances must rest with the government rather than with the defendant. Finally, a valid reason, such as a missing witness, should serve to justify appropriate delay. Bailey, 319 Md. at 412.
Here, the time from October 12, 2010, to January 10, 2011, was a period of two months and 29 days measured from Lloyd’s arrest to the day on which he could have been tried in the district court, but instead prayed a jury trial. The reason for this delay was neutral. Therefore, it could not be charged to either party. See Howell v. State, 87 Md. App. 57, 82 cert. denied, 324 Md. 324 (1991).
The time from January 10, 2011, to May 18, 2011, was the period commencing with Lloyd’s removal of the case to the circuit court and ending with the first trial date in the circuit court. If the defendant removes the trial to a circuit court by praying a trial by jury, any normal delay in bringing him to trial by reason of the request would be, of course, chargeable to him. State v. Gee, 298 Md. 565, 566-77 n.7 (1984). Thus, because Lloyd, by praying a jury trial, removed a case that was within the exclusive original jurisdiction of the district court, that delay was chargeable to him.
The period between May 18, 2011, and June 27, 2011, was a period of one month and nine days. That period was measured from Lloyd’s first scheduled trial date in the circuit court to the ultimate disposition of the charges. To the extent that this delay weighed against the State, it did so lightly. See Barker v. Wingo, 407 U.S. 514, 531 (1972).
Finally, whether and how a defendant asserts his right to a speedy trial is closely related to the other relevant factors. The strength of his efforts will be affected by the length of the delay, to some extent by the reason for the delay, and most particularly by the personal prejudice, which is not always readily identifiable, that he experiences. The more serious the deprivation, the more likely a defendant is to complain. The defendant’s assertion of his speedy trial right, then, is entitled to strong evidentiary weight in determining whether the defendant is being deprived of the right. Failure to assert the right will make it difficult for a defendant to prove that he was denied a speedy trial. Bailey, 319 Md. at 409-10.
Here, Lloyd made a perfunctory motion for a speedy trial in January of 2011 as part of an omnibus motion in the circuit court, and there was no further motion for a speedy trial until the morning of June 27, 2011, before the court accepted the parties’ plea bargain. Lloyd did not object when the scheduled trial was postponed. This factor weighed only slightly in Lloyd’s favor, as it was little more than the avoidance of waiver.
With regard to the final factor, prejudice, Lloyd asserted that because he was denied bail throughout his pretrial incarceration, he was oppressively incarcerated and unable to prepare his defense. In fact, however, Lloyd’s violation of probation charge was based upon his assault on the victim and destruction of her property within one week after having been placed on probation. Seemingly, he was less than a prime candidate for release on bail. Further, the court properly weighed public safety, including particularly the safety of the victim, against Lloyd’s interest in pretrial release.
Of additional significance was that Lloyd’s decision to pray a jury trial resulted in 50% of the pretrial confinement of which he now complained. Of the eight months and 15 days from arrest to disposition, four months and eight days resulted from forgoing trial on January 10, 2011, in the district court, excluding the delay resulting from the postponement of the May 18, 2011 initial trial date. Under these circumstances, the pretrial detention was not oppressive.
Lloyd also asserted that he was prejudiced by the delay of his trial because Laron Davis, a witness he wanted to call to testify on his behalf at his originally scheduled trial date in May of 2011, had been deployed to Afghanistan and was unable to be present at trial. However, Davis was not an eyewitness to the assault or property damage. The court found that defense counsel was prepared for trial and concluded that the significance of Davis’ testimony did not rise to the level of dismissing the case because of his absence. As such, Lloyd failed to show that he was prejudiced by Davis’ absence.
Thus, on balance, the Barker v. Wingo factors did not weigh in Lloyd’s favor; he was not denied a speedy trial. Accordingly, the judgment of the circuit court was affirmed.
COMMENTARY: As noted, the total delay between Lloyd’s arrest and his trial was eight months and fifteen days. This delay was below the presumptively prejudicial one year and 14-day mark. It was, however, two months more than the several cases holding that a six-month delay was not presumptively prejudicial. Thus, the delay could be construed as presumptively prejudicial and of constitutional dimension. See Battle v. State, 287 Md. 675, 686 (1980). For this reason, the remaining three factors were considered.
PRACTICE TIPS: Where a criminal defendant fails to object to any postponements in his case until the very last postponement, this factor is weighed against him in determining whether his right to a speedy trial was violated. For instance, Maryland courts have found that there was no violation of the constitutional right to a speedy trial where a defendant made no assertion of his right to a speedy trial until the morning of trial.
Declaration against penal interest
BOTTOM LINE: The statement of an unavailable declarant was inadmissible at defendant’s trial as a declaration against penal interest under Rule 5-804(b)(3), where the statement lacked sufficient indicia of reliability and particularized guarantees of trustworthiness.
CASE: Jackson v. State, No. 01159, Sept. Term, 2011 (filed Sept. 5, 2012) (Judges Woodward, Wright & HOTTEN). RecordFax No. 12-0905-01, 29 pages.
FACTS: TJ Jackson and Jamar Jones were charged with numerous crimes arising out of a home invasion, in which Jackson and Jones allegedly broke into an apartment to steal drugs. The apartment was known as a “stash house,” where drug dealers stored their inventory.
According to the State, Jackson and Jones drove a van to the apartment. They entered the apartment and encountered three individuals. The target of the robbery, an individual known as “G,” was not present. Jackson and Jones then duct taped the three individuals and put them in the van before searching for “G.” After an unsuccessful search, they returned to the apartment, where Jones resumed the search for “G.” When “G” later returned to the apartment, Jones shot and killed him and wounded Mr. Green. Jones and Jackson then fled in the van.
Prior to Jackson’s trial, but after he pled guilty in his severed trial, the State filed a motion in limine, requesting that the circuit court bar the admission of Jones’ signed statement to Jackson’s defense counsel. In the statement, which Jones gave a day after the alleged incident, he indicated that Jackson was not present during the commission of the crimes and was not involved in the home invasion. Jones’s statement also suggested that he may have shot the victims in self-defense. Counsel for Jones indicated that he anticipated that Jones would invoke his Fifth Amendment privilege against self-incrimination when asked about the events at Jackson’s trial.
During his in camera testimony, Jones stated that he committed the crimes to which he had already pled guilty. He indicated that the day after the commission, he and Jackson went to defense counsel’s office, where Jones told defense counsel what occurred. He recalled being in defense counsel’s office, but did not recall defense counsel’s law clerk also being present. Jones confirmed that he related the events to defense counsel, without Jackson being present. He signed the statement, which defense counsel transcribed as Jones detailed the events, periodically confirming that the statement matched Jones’s recollection.
In response to questioning from the circuit court, Jones recognized that he gave a statement to defense counsel, but averred that the statement was “not true.” When asked where he obtained the information provided to defense counsel, Jones responded that he “made it up.” He refused to answer whether he gave the statement to keep Jackson out of trouble, but indicated that at the time of the statement, he did not have a place to stay, other than with Jackson. He maintained that he was not afraid of Jackson.
The circuit court heard in camera testimony from defense counsel’s former law clerk, who indicated that she worked for defense counsel on the occasion that Jackson and Jones came to the office. The law clerk indicated that defense counsel stated that he represented Jackson, and would not be able to give Jones any legal advice. Defense counsel also gave Jones the name and telephone number of another qualified criminal defense lawyer. After Jones divulged the events of the previous day, defense counsel asked him to go through the story again and wrote down what Jones said.
The law clerk indicated that Jones agreed that defense counsel’s notes accurately reflected his story and that Jones did not appear to be threatened, coerced, or intimidated in any way when giving the statement.
On cross-examination by the State, the law clerk maintained that Jones understood that his statement could be used at trial. Jones reviewed the statement. He made no changes and signed it. The State pressed the law clerk on whether Jones actually described the events employing the vernacular used in the statement, and the law clerk conceded that Jones gave his statement in a “give and take” with defense counsel, implying a back and forth conversation.
She concluded that she and defense counsel explained that they represented Jackson, and not Jones, but that Jones gave the statement, apparently in an effort to aid Jackson.
The circuit court granted the State’s motion in limine. A jury trial found Jackson guilty on many, but not all of the charges. The court sentenced Jackson to life imprisonment.
Jackson appealed to the Court of Special Appeals, which affirmed.
LAW: Under Rule 5-804(a), “unavailability as a witness” includes “situations in which the declarant: (2) refuses to testify concerning the subject matter of the declarant’s statement despite an order of the court to do so.” Jones was unavailable, given his counsel’s indication that he would refuse to testify at Jackson’s trial and invoke his Fifth Amendment privilege against self-incrimination.
Rule 5-804(b)(3) provides that an otherwise hearsay statement may be admitted if the declarant is unavailable as a witness, and the statement is one which “was at the time of its making so contrary to the declarant’s pecuniary or proprietary interest, so tended to subject the declarant to civil or criminal liability, or so tended to render invalid a claim by the declarant against another, that a reasonable person in the declarant’s position would not have made the statement unless the person believed it to be true. A statement tending to expose the declarant to criminal liability and offered in a criminal case is not admissible unless corroborating circumstances clearly indicate the trustworthiness of the statement.” Rule 5-804(b)(3); See also Stewart v. State, 151 Md. App. 425 (2003).
The crux of this case was whether Jackson presented corroborating circumstances that clearly indicated the trustworthiness and reliability of Jones’s statement.
In Gray v. State, 368 Md. 529 (2002), the defendant was charged with murdering his wife. According to the defendant, his wife’s lover, Brian Gatton, was the true perpetrator. The defendant posited that Gatton previously told another woman, Evelyn Johnson, that the defendant’s wife was his girlfriend, and that after the murder, Gatton intimated to Johnson that he killed the defendant’s wife. The defendant subpoenaed Gatton to testify, but Gatton invoked his Fifth Amendment right against self-incrimination. Id. at 534. The trial court refused to admit Gatton’s statements as declarations against penal interest, which the Court of Special Appeals affirmed. Id. at 536-37.
The Court of Appeals, however, found the defendant had presented sufficient corroboration to allow the admission of Mr. Gatton’s statement against penal interest. Id. at 545-47. Specifically, Mr. Gatton and the defendant’s wife had been romantically involved, creating a “love triangle” between Mr. Gatton, the defendant, and his wife; Mr. Gatton possessed jewelry similar to that worn by the defendant’s wife; Mr. Gatton used Ms. Johnson to pawn some of the jewelry; Mr. Gatton displayed a small handgun and a hunting knife when he made the statements to Ms. Johnson; and the victim was shot and stabbed. Id. at 545-46. See also Roebuck v. State, 148 Md. App. 563, 578 (2002)).
In Stewart, 151 Md. App. at 427, the Court of Special Appeals reviewed the existing case law surrounding Rule 5-804(b)(3) in the context of a father’s statement allegedly exculpating his son, when both the father and the son were charged, but tried separately, with murder and assault. The trial court ruled that the father’s statement was not a declaration against penal interest, and thus inadmissible under Rule 5-804(b)(3). Id. at 446.
The Court of Special Appeals held that the trial court properly considered the circumstances surrounding the trustworthiness of the father’s statement, recognizing that the statements were made when he knew his son was sought by police or had been arrested.
The father also suggested that he acted in self-defense, which rendered his statements as “self-exculpating,” not self-incriminating. Additionally, the court had already heard a majority of the evidence, which “simply did not corroborate [the father’s] assertions that he acted alone.” Id. Finally, even if the evidence was unclear as to whether the father or the son shot the gun, the father’s statements were not exculpatory as to the son based on principles of accomplice liability, which the State advanced and supported with evidence. Id.
Returning to the case at hand — at bottom, the circuit court determined that Jones’ statement to defense counsel lacked the required sufficient “indicia of reliability” and “particularized guarantees of trustworthiness” for the statement to be admissible pursuant to Rule 5-804(b)(3). Stewart, 151 Md. App. at 447.
In addition to the statement including suggestions that Jones acted in self-defense, the court found a plethora of circumstances indicating that the statement was untrustworthy. Jackson brought Jones to defense counsel’s office one day after the incident in the apartment, before either of the men had been arrested for the charged crimes. Jackson suggested that Jones wanted to make the statement, and Jackson offered to pay for Jones’ representation, albeit presumably by a different attorney.
Jones stated that, at the time of the statement, he did not have anywhere to live other than with Jackson. Furthermore, at the hearing on the State’s motion in limine prior to Jackson trial, Jones refused to answer whether he gave the statement to protect Jackson. Still, Jones testified that the statement he made to defense counsel was “not true” and that he “made up” the statement.
Finally, though otherwise unsubstantiated, Jones’ counsel advised the circuit court that Jones would not testify against Jackson, despite the court’s admonishments, because Jones “was terrified” of Jackson.
The circuit court did not abuse its discretion when it excluded Jones’ statement to defense counsel. There was a plethora of evidence that indicated that Jones’ statement to Jackson’s defense counsel was unreliable, untrustworthy, uncorroborated, and, therefore, inadmissible as a statement against penal interest.
COMMENTARY: Jones’ statement was also clearly inconsistent with the statement of facts on which Jones pled guilty, where he inculpated Jackson. Jackson argued that Jones’s plea was an Alford plea. See North Carolina v. Alford, 400 U.S. 25 (1970). An Alford plea is “a guilty plea containing a protestation of innocence,” which “lies somewhere between a plea of guilty and a plea of nolo contendere[,]” where a “defendant does not contest or admit guilt.” Bishop v. State, 417 Md. 1, 18-19 (2010).
“[W]hile most pleas of guilty consist of both a waiver of trial and an express admission of guilt, the latter element is not a constitutional requisite to the imposition of criminal penalty. An individual accused of [a] crime may voluntarily, knowingly, and understandingly consent to the imposition of a prison sentence even if he [or she] is unwilling or unable to admit his participation in the acts constituting the crime.” Alford, 400 U.S. at 37.
At Jones’ plea hearing, the court asked Jones the appropriate litany of questions and the State presented the factual predicate for the plea, evidence that would have been produced at trial, including Jackson’s presence during the commission of the crimes. Jones’s defense counsel also already indicated on behalf of his client that Jones had no additions or corrections to the factual predicate. The court asked Jones if he was pleading guilty to these offenses because he was guilty and for no other reason. Jones answered “Yeah basically.” Defense counsel clarified for the court that the only reason Jones said “basically” was because the plea agreement.
Based on the above, Jackson posited that Jones’s plea was an Alford plea, rather than a guilty plea, or at least some sort of “hybrid” of the two. Jones received a favorable plea bargain. However, a favorable plea bargain does not convert a guilty plea into an Alford plea, and there was no error in the circuit court citing Jones’ prior guilty plea as a factor in its consideration of the State’s motion in limine in Jackson’s case. Moreover, the fact that Jones pled guilty based on a factual predicate that, in regard to Jackson’s presence and participation, was directly contrary to his statement to Jackson’s defense counsel was a logical and proper consideration in the circuit court’s determination as to indicia of reliability and trustworthiness.
PRACTICE TIPS: A codefendant’s statements in a telephone call to his counsel, allegedly exculpating the defendant, were not admissible after the codefendant’s death as a statement against penal interest because they did not subject him to criminal liability and there were no “corroborating circumstances indicating the trustworthiness of the statement.” United States v. Thomas, 919 F.2d 495, 498 (8th Cir. 1990).
Co-conspirator exception to hearsay rule
BOTTOM LINE: In defendant’s criminal trial for drug-related offenses, the court properly admitted a witness’s statements pursuant to the co-conspirator exception to the hearsay rule because the statements were made during the course of a conspiracy to buy illegal drugs and, because the statements were intended to reassure undercover police officer that the transaction was going as planned, the statements were “in furtherance of” the conspiracy.
CASE: Shelton v. State, No. 1240, Sept. Term, 2012 (filed Sept. 5, 2012) (Judges Eyler, D., WRIGHT & Kehoe). RecordFax No. 12-0905-03, 28 pages.
FACTS: On October 26, 2010, detectives from the Montgomery County Police Department’s Tactical Narcotics Unit organized an undercover investigation, in which they sought to purchase crack cocaine from suspected drug dealers. Sergeant Charles Carafano reached a woman named Nicole Hosley, who told Carafano that she would be willing to supply him with drugs. The two arranged to meet the next day at a grocery store in Rockville, Maryland.
On October 27, 2010, Carafano arrived at the grocery store at 5:00 p.m. Hosley and a man named Darrin Duffin arrived shortly thereafter and entered Carafano’s truck. Once inside, Duffin made a brief telephone call and then directed Carafano to drive to the nearby Maryvale Market. At that point, Carafano suspected that Duffin was not in possession of the drugs, and, when asked, Duffin confirmed that he did not have the drugs on him. As they drove to the market, Carafano and Duffin discussed the details of their transaction. Duffin insisted that Carafano pay for the drugs in advance and wait in the car while Duffin retrieved them. Carafano eventually agreed, but only if Duffin agreed to leave his wallet with Carafano as collateral.
Upon arriving at the market, Duffin left the car to meet with the drug supplier, and Hosley stayed in the car with Carafano. While in the car, Hosley and Carafano spoke, among other things, about Duffin’s supplier, Hosley’s decision to quit using cocaine, and Duffin’s supplier. During this conversation, Hosley made several statements that tended to identify Shelton as Duffin’s supplier. Hosley stated that Duffin’s supplier drove a white Jeep Cherokee and identified Shelton as Duffin’s contact when Shelton arrived at the Maryvale Market.
A few minutes later, a white Jeep Cherokee pulled into the parking lot. Carafano saw Shelton step out of the vehicle and interact with Duffin. Duffin and Shelton entered the market. When they eventually emerged, police noticed that Duffin was carrying a small paper sack. None of the officers involved in the investigation witnessed the exchange between Shelton and Duffin. After the exchange, Duffin walked back to Carafano’s car. As Duffin got back into the car, Hosley got out of the car and began walking down the street. Duffin produced a substance that appeared to be crack cocaine. Carafano gave the signal for the other detectives to make the arrest, and detectives from a nearby van arrested Duffin and Hosley.
By that time, Shelton had already driven out of the parking lot. Police followed Shelton’s white Jeep while trying to maintain their cover. When he realized that he was being followed, Shelton attempted to evade the officers, but was ultimately arrested by police officers. On November 18, 2010, Shelton was indicted in the circuit court on one count of distributing a controlled dangerous substance, one count of conspiring to distribute a controlled dangerous substance, and one count of first-degree assault.
At Shelton’s trial, the State sought to introduce Hosley’s statements. Because Hosley was unavailable to testify, the State had to do so through the introduction of the wire recording as well as the testimony of Carafano and another detective. Shelton’s attorney objected to the admission of Hosley’s statements on the grounds that they constituted hearsay. The circuit court allowed the State to introduce Hosley’s statements, contingent upon the State’s laying a proper foundation for the existence of a conspiracy. At the close of the State’s case, Shelton moved for a judgment of acquittal. The motion was denied. The jury subsequently acquitted Shelton of the first-degree assault charge but found him guilty of the lesser-included second degree assault charge and the remaining distribution and conspiracy offenses.
Shelton appealed to the Court of Special Appeals, which affirmed the conviction.
LAW: Shelton argued that the trial court erred in admitting Hosley’s hearsay statements under Maryland Rule 5-803(a)(5), the co-conspirator exception, because the statements of the accomplice were not made in furtherance of the conspiracy.
Rule 5-803(a)(5) permits the introduction of a statement by a co-conspirator of a party even if the statement is hearsay where the co-conspirator made the statement “during the course and in furtherance of the conspiracy.” Under this rule, declarations of one conspirator, made during the pendency and in furtherance of the conspiratorial purpose, are admissible against the other co-conspirators. Manuel v. State, 85 Md. App. 1, 16 (1990).
A conspirator is, in effect, the agent of each of the other co-conspirators during the life of the conspiracy. As such, any statement made or act done by him in furtherance of the general plan and during the life of the conspiracy is admissible against his associates and such declarations may be testified to by third parties as an exception to the hearsay rule. Id. at 16. Thus, for the State to introduce Hosley’s statements under the co-conspirator exception to the hearsay rule, the State was required to present evidence that the defendant and the declarant were part of a conspiracy, that the statement was made during the course of the conspiracy, and that the statement was made in furtherance of the conspiracy. See United States v. Mason, 658 F.2d 1263, 1269 (9th Cir. 1981).
A criminal conspiracy consists of the combination of two or more persons to accomplish some unlawful purpose, or to accomplish a lawful purpose by unlawful means. The essence of a criminal conspiracy is an unlawful agreement. In Maryland, the crime is complete when the unlawful agreement is reached, and no overt act in furtherance of the agreement need be shown. Walker v. State, 144 Md. App. 505, 542 (2002), rev’d on other grounds, 373 Md. 360 (2003).
Here, the State presented evidence that Carafano arranged to purchase crack cocaine from Hosley, that Carafano met with Hosley and Duffin and drove with them to the Maryvale Market, that Carafano gave Duffin $160, that Duffin met with Shelton at the Maryvale Market, and that, after meeting with Shelton, Duffin returned to Carafano’s vehicle and gave Carafano crack cocaine. These facts sufficiently established the existence of a conspiracy involving Shelton, Hosley, and Duffin.
The facts set forth by the parties also sufficiently established that Hosley’s statements were made during the course of the conspiracy. Specifically, the record indicated that Hosley made the statements at issue during a transaction for the sale of drugs. Additionally, at the end of the transaction, Hosley told Carafano that he should contact her to purchase drugs in the future indicating an intent that the conspiracy continue beyond the transaction at issue.
Finally, with respect to the furtherance requirement of Rule 5-803(a)(5), the requirement that the statement be made in furtherance of the conspiracy is interpreted broadly. Walker, 144 Md. App. at 542-43. If some connection is established between the declaration and the conspiracy, then the declaration is taken as in furtherance of the conspiracy. Irvin v. State, 23 Md. App. 457, 472 (1974). Here, Hosley’s statements assured Carafano that the transaction was going as planned and were intended to assuage any concerns that Carafano may have had about dealing with Duffin and Hosley. Thus, Hosley’s statements regarding Duffin’s supplier were directly related to the conspiracy, and therefore, under a broad reading of the requirement, would be in furtherance of the conspiracy. As such, the circuit court properly admitted Hosley’s statements pursuant to Rule 5-803.
Accordingly, the judgment of the circuit court was affirmed.
COMMENTARY: Shelton also contended that the circuit court erred in permitting the State, during its closing argument, to make certain statements regarding Duffin’s testimony. Duffin accepted a plea agreement which provided for a maximum sentence of 18 months in prison for his involvement in the transaction with Carafano. The agreement did not require that he testify against Shelton. When the State initially approached Duffin about testifying against Shelton, Duffin refused to do so. The State then issued a subpoena requiring that Duffin testify at Shelton’s trial. When Duffin asked the prosecutor what would happen if he refused to testify, the prosecutor told Duffin that he would be held in contempt and he would go back to jail.
At trial, the State requested that the defense be prevented from exploring the details of Duffin’s plea agreement, but the trial court ruled that the defense had a right to question Duffin about any perceived threat or agreement for his testimony. Duffin testified that while his plea agreement did not require that he testify against Shelton, he believed that if he did not testify, he would be sent back to jail. During the State’s closing argument, the prosecutor stated that at the time that Duffin entered into the plea agreement, he had no idea that he would be asked to testify.
Because Shelton failed to make a timely objection during closing argument, he failed to preserve his claim of error regarding the prosecutor’s statement. See Maryland Rule 8-131(a). Moreover, it is, as a general rule, within the range of legitimate argument for counsel to state and discuss the evidence and all reasonable and legitimate inferences which may be drawn from the facts in evidence, and such comment or argument is afforded a wide range.
Here, the prosecutor did not mischaracterize Duffin’s testimony when she stated that Duffin would have been held in contempt of court like any other witness if he refused to testify. Finally, even if the prosecutor’s statement had been improper, reversal would not be warranted because Shelton had an opportunity to address the facts omitted in the prosecutor’s closing argument, and the court instructed the jury that closing arguments were not evidence, thereby eliminating the possibility of prejudice. As such, the court did not abuse its discretion in overruling Shelton’s objection.
PRACTICE TIPS: The fact that a remark made by the prosecutor in argument to the jury was improper does not necessarily require that the conviction be set aside. The Maryland rule is that unless it appears that the jurors were actually misled by the remarks of the State’s Attorney, or were likely to have been mislead or influenced to the prejudice of the accused, reversal on that ground is not justified. In assessing whether reversal is required, a reviewing court may consider several factors, including the severity of the remarks, the measures taken to cure any potential prejudice, and the weight of the evidence against the accused.
BOTTOM LINE: The circuit court did not have temporary emergency jurisdiction over the parties’ custody dispute, because the evidence failed to establish that their child was subjected to or threatened with mistreatment or abuse.
CASE: Kalman v. Fuste, No. 1617, September Term, 2011 (filed Sept. 5, 2012) (Judges Eyler, D., MATRICCIANI, & Kenney (retired, specially assigned)). RecordFax No. 12-0905-02, 24 pages.
FACTS: Jose Fuste and Janet Kalman were married in 1997 and resided in Maryland until Kalman became pregnant with their child. At that point the parties separated and Kalman moved to Florida, where she gave birth to their daughter on July 14, 2006. The parties finalized their divorce in the circuit court for in July of 2008, agreeing that Mother would be Daughter’s primary physical custodian and that Fuste would retain the right to liberal visitation. Kalman raised Daughter in Florida with the help of Daughter’s maternal grandmother and paternal grandparents.
On August 14, 2011, Daughter was with Fuste’s parents when Florida police detained Kalman on a charge of shoplifting. The arresting officers found in her possession a bottle of hydrocodone whose prescription label bore someone else’s name. Kalman was arrested and charged with theft and drug trafficking, held overnight, and released on her own recognizance.
When Fuste learned of Kalman’s arrest, he decided to remove Daughter to Maryland. He traveled to Florida and told Kalman that he and his parents would watch Daughter overnight, while Kalman finished moving into a new residence. That evening, Fuste returned to Maryland with Daughter, and the next day filed an emergency motion for custody in the circuit court.
The circuit court granted Fuste temporary sole custody of Daughter, pending a hearing on the merits of his emergency motion. On August 29, 2011, the parties appeared before the court for that hearing. Kalman moved for judgment at the close of Fuste’s case, arguing in part that the court lacked emergency jurisdiction over the matter. The court rejected Mother’s argument.
The circuit court found that it had jurisdiction over the parties’ custody dispute. The court awarded Fuste temporary sole legal and physical custody of Daughter, with reasonable visitation for Kalman and Daughter’s grandparents, pending the outcome of further custody proceedings.
The Court of Special Appeals vacated the judgment and remanded.
LAW: Jurisdiction over child custody matters is governed by the Maryland Uniform Child Custody Jurisdiction and Enforcement Act (the Act), FL §§9.5-101 to 9.5-318. The existing custody order in this case was issued by a Maryland court and was consistent with the Act; thus, FL §9.5-202(a)(1) governed. That section provides that the circuit court has “exclusive, continuing jurisdiction” over the determination of custody “until a court of this State determines that neither the child, the child and one parent, nor the child and a person acting as a parent have a significant connection with this State and that substantial evidence is no longer available in this State concerning the child’s care, protection, training, and personal relationships[.]” See also Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) §201 cmt. (Draft 1997).
Rather than ruling on whether it did or did not have the required “significant connections” or “substantial evidence” to exercise continuing jurisdiction, the circuit court presumed that it had continuing, exclusive jurisdiction over the custody dispute because Maryland was the decree state and the parties continued to litigate their divorce and its related matters in Maryland. This, however, was an error of law.
Under the Act, parties cannot confer jurisdiction upon the court by consent. UCCJEA §201 cmt.; Stauffer v. Temperle, 794 N.W.2d 317, 322 (Ct. App. Iowa 2010). Further, to hold that ongoing custody proceedings themselves create a “significant connection” satisfactory of §9.5-202(a)(1) would introduce a circular definition of jurisdiction and defeat the principles embodied in the law by the Act’s drafters. See UCCJEA §101 cmt. (1997); Paltrow v. Paltrow, 283 Md. 291, 293 (1978).
Having failed to determine whether Maryland passed the “significant connection” or “substantial evidence” tests of FL §9.5-202(a)(1), the trial court’s judgment could yet be upheld if it correctly ruled that it had temporary emergency jurisdiction under the Act.
FL §9.5-204(a) grants a Maryland court “temporary emergency jurisdiction if the child is present in this State and the child has been abandoned or it is necessary in an emergency to protect the child because the child…is subjected to or threatened with mistreatment or abuse.”
“Abuse” as used in FL §9.5-204(a) should be reconciled with existing statutory definitions of that word. See Mid-Atlantic Power Supply Ass ‘n v. Pub Serv. Comm ‘n, 361 Md. 196, 204 (2000). Title Four of the Family Law Article authorizes protective orders for victims of domestic violence and defines “abuse” as “any of the following acts:” “(i) an act that causes serious bodily harm; (ii) an act that places a person eligible for relief in fear of imminent serious bodily harm; (iii) assault in any degree; (iv) rape or sexual offense under §§ 3-303 through 3-308 of the Criminal Law Article or attempted rape or sexual offense in any degree; (v) false imprisonment; or (vi) stalking under § 3-802 of the Criminal Law Article.” FL §4-501(a)(1). See also Kaufman v. Motley, 119 Md. App. 623 (1998).
Elsewhere, Title Five of the Family Law Article, which provides for centralized reporting of child abuse and neglect, defines “abuse” as: “(1) the physical or mental injury of a child by any parent or other person who has permanent or temporary care or custody or responsibility for supervision of a child, or by any household or family member, under circumstances that indicate that the child’s health or welfare is harmed or at substantial risk of being harmed; or (2) sexual abuse of a child, whether physical injuries are sustained or not.” FL §5-701(b).
Finally, CL §3-601(a)(2) defines “abuse” in the same vein: “physical injury sustained by a minor as a result of cruel or inhumane treatment or as a result of a malicious act under circumstances that indicate that the minor’s health or welfare is harmed or threatened by the treatment or act.”
Therefore, “abuse” under FL §9.5-204(a) requires some actual injury or substantially probable threat to the victim’s physical or mental welfare.
The second sufficient condition of temporary emergency jurisdiction under FL §9.5-204(a) is satisfied where the child is subjected to or threatened with “mistreatment.” The plain meaning of “mistreatment” and the relevant history of this word in Maryland statutes equate it with “abuse” and imply that FL §9.5-204(a) contains a redundancy. This redundancy is eliminated and the Act can be reconciled with Maryland statutes and case law if “mistreatment” is read as a proxy for “neglect,” as defined by Maryland law.
FL §5-701(s) provides: “Neglect” means the leaving of a child unattended or other failure to give proper care and attention to a child by any parent or other person who has permanent or temporary care or custody or responsibility for supervision of the child under circumstances that indicate: (1) that the child’s health or welfare is harmed or placed at substantial risk of harm; or (2) mental injury to the child or a substantial risk of mental injury.”
CL §3-602.1(a)(5)(i) defines neglect as “the intentional failure to provide necessary assistance and resources for the physical needs or mental health of a minor that creates a substantial risk of harm to the minor’s physical health or a substantial risk of mental injury to the minor. (ii) “Neglect” does not include the failure to provide necessary assistance and resources for the physical needs or mental health of a minor when the failure is due solely to a lack of financial resources or homelessness.”
Accordingly, both “abuse” and “mistreatment” under FL §9.5-204(a) require at least a substantial risk of physical or mental harm or injury. Therefore, a court cannot exercise temporary emergency jurisdiction under FL §9.5-204(a) unless there is evidence of actual physical or mental harm or injury, or a substantial risk of physical or mental harm or injury.
The record here lacked any positive assertion of physical or mental injury, and there was no evidence or finding that Daughter faced a “substantial risk” of harm from either abuse or neglect as defined above. Fuste’s fears were contingent on Kalman’s conviction and potential loss of freedom and income, none of which had occurred. It was clear that Fuste did not believe that Kalman herself posed a threat to Daughter, for he conceded that Kalman should be allowed to exercise unsupervised visitation. Nor did Fuste express any specific danger from Daughter’s environment in Florida.
What was clear from the record was that it was the uncertainty of Kalman’s situation which caused the trial court to grant the emergency motion. But uncertainty is a far cry from imminent harm or abuse or mistreatment, and there was no evidence of abandonment here. Fuste’s concerns for his daughter’s care and safety did not constitute an emergency. Daughter had grandparent support in Florida and very limited experience living with her father in Maryland. There was no need for emergency intervention here to protect Daughter from her mother.
Accordingly, the judgment was vacated and the case was remanded for further proceedings.
COMMENTARY: The UCCJEA introduces some jurisdictional confusion by making positive assertions as to when “subject matter jurisdiction” does (or does not) exist based only on the UCCJEA, itself. But there are factors in the law outside the UCCJEA that can deprive a court of subject matter jurisdiction.
For example, FL §1-201 sets forth Maryland equity courts’ jurisdiction over various family matters and, in so doing, places conditions on the existence of subject matter jurisdiction, such as the requirement that a custody case concern a “child.” See Early v. Early, 338 Md. 639, 654 (1995). Thus, it would be more appropriate to couch the UCCJEA’s provisions in terms that explain that they all are necessary elements — rather than sufficient conditions — of subject matter jurisdiction.
In a similar vein, the Supreme Court of Washington noted that the UCCJEA “might have more accurately used the term ‘exclusive venue’ instead of ‘subject matter jurisdiction’.” In re Custody of A.C., 165 Wn.2d 568, 573 n.3 (S. Ct. Wash. 2009). Although that general sentiment is correct, UCCJEA drafters intended to co-opt certain universal rules of subject matter jurisdiction from bodies of law outside UCCJEA, such as the condition that parties cannot confer subject matter jurisdiction on the courts by consent. See UCCJEA §201 cmt. It would therefore seem unwise to excise all references to “subject matter jurisdiction” from the UCCJEA.
PRACTICE TIPS: By the terms of FL §9.5-201(a), “home state” jurisdiction ordinarily applies to initial child custody determinations, and it arises in cases with an existing decree only if the decree state lacks continuing jurisdiction under FL §9.5-202. See FL §9.5-202(b)
Right to foster child’s OASDI benefits
BOTTOM LINE: Department of Social Services’ practice of reimbursing itself for the direct cost of foster care services, when acting as a representative payee for Social Security Old Age, Survivor, and Disability Insurance benefits, was in compliance with the Social Security Act and the regulations and did not violate the Equal Protection clause.
CASE: In Re: Ryan W., No. 1503, Sept. Term, 2011 (filed Sept. 5, 2012) (Judges EYLER, D., Woodward & Rodowsky (retired, specially assigned)). RecordFax No. 12-0905-00, 69 pages.
FACTS: Ryan W. was born on February 26, 1993. Ryan is now 19 years old. In 2002, Ryan was removed from his parents’ care, based upon allegations of neglect. When he was 9 years old, Ryan was adjudicated a Child in Need of Assistance (CINA) by the circuit court acting as the juvenile court, and was committed to the care and custody of the Baltimore City Department of Social Services (Department). Ryan has lived in various out-of-home, non-relative placements. Ryan’s mother died in 2006 and his father died in 2008.
Beginning in April of 2009, Nathan Exom became the Department caseworker assigned to Ryan. In June of 2009, Exom provided copies of Ryan’s parents’ death certificates to the Department’s Foster Care & SSI Reimbursement Unit (Reimbursement Unit). In November of 2009, the Reimbursement Unit applied to the Social Security Administration (SSA) for Social Security Old Age, Survivor, and Disability Insurance (OASDI) benefits on Ryan’s behalf and asked to be appointed as his representative payee. Ryan’s application was approved by the SSA, which appointed the Department to serve as his representative payee.
In December of 2009, the Department began receiving, in its capacity as representative payee, $771 per month in OASDI benefits for Ryan. The Department also received two lump sum payments for retroactive OASDI benefits for Ryan. The first lump sum payment, received on November 13, 2009, was for $8,481, and covered the period from December of 2008 to October of 2009, i.e., between Ryan’s father’s death and the commencement of OASDI benefit payments. The second lump sum payment, received on December 15, 2009, was for $ 11,647, and covered the period from August 2006 to November 2008, i.e., from the time Ryan’s mother died until his father died. The Department continued to receive monthly OASDI benefits on Ryan’s behalf until Ryan turned 18 in February of 2011. Over the entire time that the Department acted as Ryan’s representative payee, it received a total of $31,693 in OASDI benefits on his behalf. It applied all of the benefits toward the cost of Ryan’s foster care.
In 2011, in his CINA case, Ryan filed a “motion to control conduct” under CJ §3-821. He asked the juvenile court to order the Department to conserve the OASDI benefits the Department had been receiving as his representative payee since 2009 and to maintain all of the benefits in a separate account in his name.
The juvenile court ruled that the Department had violated Ryan’s due process and equal protection rights by applying the OASDI benefits it had received on his behalf as it did; declared void two COMAR regulations purporting to authorize the Department’s actions in this case; and found, as a matter of fact, that the OASDI benefits were not applied in a manner consistent with Ryan’s best interests. The court granted the relief sought by Ryan, ordering the Department to place in a trust account, subject to court supervision, the full $31,693 in OASDI benefits it had received as Ryan’s representative payee.
The Court of Special Appeals reversed. However, the Department conceded that roughly $8,100 in OASDI benefits that it received for Ryan should not have been used for the cost of Ryan’s care, and, therefore, that amount was reimbursed to him.
LAW: Title II of the Social Security Act (the Act), 42 U.S.C. §401 et seq., establishes the framework for OASDI, which is a cash benefit paid to elderly and disabled workers, and their survivors and dependents. An unmarried child under the age of 18 who is a surviving dependent of a deceased parent is entitled to receive OASDI benefits if the deceased parent earned sufficient work credits during his or her lifetime. 42 U.S.C. §402(d).
Ordinarily, OASDI benefits are paid directly to the beneficiary. When a beneficiary is under the age of eighteen, however, the SSA pays OASDI benefits to a representative payee. 20 C.F.R. 404.2010(b). A representative payee shall “[u]se the benefits received on  behalf [of a beneficiary] only for [the beneficiary’s] use and benefit in a manner and for the purposes he or she determines…to be in [the beneficiary’s] best interests.” 20 C.F.R. 404.2035(a).
Pursuant to 20 C.F.R. 404.2040(a), payments made by a representative payee are for the “use and benefit” of the beneficiary if the benefits are “used for the beneficiary’s current maintenance, which includes “cost incurred in obtaining food, shelter, clothing, medical care, and personal comfort items.” Id.
After a representative payee has provided for the beneficiary’s current maintenance and other permissible uses, “any remaining amount shall be conserved or invested on behalf of the beneficiary.” 20 C.F.R. 404.2045(a).
Pursuant to FL §5-524, the Department of Human Resources (DHR) shall provide “child welfare services” to a child placed in foster care who cannot return to his or her parents and/or guardians. In carrying out these duties, DHR shall provide for the care of such children by placing them in group homes and institutions. FL §5-526(a).
COMAR 07.02.11.29 governs the means by which a local department may seek reimbursement for costs incurred in caring for a foster child in an out-of-home placement. The regulation states that “[a]ll of [a foster] child’s resources, including…the child’s own benefits…are considered…in determining the amount available for reimbursement of the cost of care.” “[S]urvivor’s disability insurance,” i.e., OASDI benefits, may be considered a resource for a child in an out-of-home placement. 07.02.11.29K(1).
Furthermore, “[t]he child’s resources shall be applied directly to the cost of care, with any excess applied first to meeting the special needs of the child, and the net excess saved in a savings account for future needs.” 07.02.11.29L.
Finally, when the local department has conserved a “net excess” in resources for a child and the child is discharged from out-of-home placement, the funds shall be returned to the child upon discharge if the child is 18 years old or older. If the child is younger than 18 years old, the funds shall be transferred to the legal parent or guardian with whom the child will reside.” 07.02.11.29M.
In Guardianship Estate of Danny Keffeler v. Department of Social and Health Services, 32 P.3d 276 (Wash. 2001) (Keffeler I), the Supreme Court of Washington ruled that DSHS’s practice of serving as representative payee for foster child social security benefits and of applying those benefits to reimburse itself for the cost of the children’s care violated the anti-attachment clause of the Social Security Act, as found in 42 U.S.C. §407, which provides: “The right of any person to any future payment under this subchapter shall not be transferable or assignable…and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.” 42 U.S.C. §407(a).
The court opined that the provision was intended to “remove Social Security benefits from the reach of creditor’s employing legal process.” Keffeler I, 32 P.3d at 273. The evidence from DSHS was that it would not apply to be the representative payee for a foster child unless it could self-reimburse. DSHS lacked authority to “seek reimbursement from benefits paid to private representative payees” on behalf of a child. Id. Thus, DSHS received social security benefits on behalf of foster children only if it was acting as a representative payee for the child and only for the purpose of “confiscat[ing] the child’s money.” Id. at 275.
The court held that, although the DSHS was acting permissibly, and as expressly contemplated under federal regulations by applying to act as representative payee for foster children, its practice of self-reimbursements was a means of reaching the benefits by “other legal process,” in violation of the anti-attachment provision of the Social Security Act.
The United States Supreme Court reversed. Washington State Department of Social Services v. Guardianship Estate of Danny Keffeler, 537 U.S. 371 (2003) (Keffeler II). Construing the phrase “other legal process” in §407(a), the Court explained that it “would seem to require utilization of some judicial or quasi-judicial mechanism…by which control over property passes from one person to another in order to discharge or secure discharge of an allegedly existing or anticipated liability.” Id. at 385. The DSHS’s actions as representative payee clearly fell outside of this definition as it was in rightful possession of the foster children’s benefits as their representative payee and had used the benefits as permitted under the federal regulations to self-reimburse for the cost of the children’s current maintenance.
On the issue of whether DSHS’s practice of self-reimbursement was “antithetical to the best interest of the beneficiary foster child, id. at 389, the Court found that a representative payee serves the beneficiary’s interest by seeing that basic needs are met, “not by maximizing a trust fund attributable to fortuitously overlapping state and federal grants.” Id. at 389-390.
In Conaway v. Social Services Administration, 298 Md. 639 (1984), in 1967, when he was six years old, Crystal Conaway was committed to the custody of the local department. He remained in a foster home until he turned 18. During this 12-year period, his foster parent received regular foster care payments from the local department. Also during that time, Conaway’s father, a veteran, became totally disabled. As a result, Conaway became eligible to receive veteran’s benefits and he also became eligible to receive social security disability insurance benefits.
For the entire time that Conaway received benefits, the Department acted as his representative payee. Pursuant to then-existing regulation, the Department was permitted to conserve a foster child’s federal benefits beginning when the child turned 12 for the child’s “future educational or vocational needs.” Id. at 641. Thus, for the first six years that the Department was acting as representative payee for Conaway, it applied his benefits toward the cost of his care; and then beginning in 1975, the Department began conserving Conaway’s federal benefits in a trust account established in his name.
In September of 1981, the DHR promulgated the amended version of 07.02.11.07, now present 07.02.11.29, which requires the Department to apply a foster child’s benefits toward the cost of the child’s care. Only monies in excess of that cost can be conserved for future use.
Under the prior policy, if the foster child reached the age of 18 and remained in school, the conserved funds would be applied toward his educational needs. Prior to his 18th birthday, Conaway did not remain in school. The Department, therefore, reverted his conserved funds back to the Department to pay for the cost of his foster care. Id. at 642. DHR approved the Department’s decision. The circuit court affirmed.
The Court of Appeals reversed. It concluded that a child who has reached the age of majority cannot be compelled, after reaching that age, to reimburse the Department with “subsequently acquired assets.” Id. The assets in Conaway’s case had been acquired previously, however, during his time in foster care. Under the anti-attachment provision of the Act, once the Department acted to conserve benefits for a foster child’s future needs, it could not later seize those funds to reimburse itself for the cost of the foster child’s past care. Thus, Conway was not obligated to pay for the cost of his care.
The Court of Appeals in Conaway concluded explicitly that COMAR 07.02.11.07, now COMAR 07.02.11.29L, was within the statutory authority of the local department and they had the force of law. Id. at 644. Thus, here, the juvenile court’s conclusion that two subsections of COMAR 07.02.11.29 are invalid because the regulation exceeded the DHR’s statutory authority, was legally incorrect.
The Department acted in compliance with the Social Security Act and the regulations thereto when it applied with the SSA to be representative payee for Ryan. As Ryan’s representative payee, the Department was obligated to apply the OASDI benefits received for Ryan first to cover the cost of his current maintenance. 20 C.F.R. §404.2040.
After the Department reimbursed the group homes that were providing food, clothing, and shelter to Ryan and after paying the monthly OASDI benefit for Ryan’s current maintenance, no excess remained. Accordingly, the Department was not under an obligation to “conserve or invest” any of Ryan’s monthly OASDI benefits. See 20 C.F.R. §404.2045(a).
In Keffeler III, 88 P.3d 949 (Wash. 2004), on remand from the Supreme Court’s decision, the Washington Supreme Court considered the constitutional challenges raised by the plaintiff class. In its equal protection argument, the plaintiff class argued that the DSHS practice created two classes of foster children “based on who is appointed as the representative payee.” Id. at 953. Foster children for whom DSHS was acting as representative payees comprised the first class. Under state law, those children’s benefits would be applied to cover the cost of their care and only any excess would be conserved for future use. The second class was comprised of foster children for whom a relative or other non-agency people were acting as representative payee. Because DSHS could not require a private representative payee to pay for the foster child’s cost of care, such a child with a private representative payee would be able to let the State pay for the cost of his care and conserve his OASDI benefits for future use.
The court held that because both state and private representative payees were bound by the same laws and regulations and because both exercised discretion in applying benefits according to those laws and regulations, only one class “of foster children” existed.
Thus, under Keffeler III, the Department’s practice of applying to become representative payee for foster children and then using their social security benefits to reimburse itself for the cost of the children’s care does not constitute discriminatory treatment.
Furthermore, in assessing challenges under the Equal Protection Clause, “unless a suspect or quasi-suspect class is created…, the appropriate standard of review of constitutionality is whether there is a rational basis for the created class.” Rios v. Montgomery County, 386 Md. 104, 121 (2005). Ryan did not assert that foster children for whom the Department acts as representative payee constitute a “suspect” or “quasi-suspect” class.
The Department’s practice plainly has a rational basis in that it comports with federal regulations governing the use of social security benefits by a representative payee and with state regulations that require that all of a foster child’s resources are to be used, first and foremost, to cover his or her cost of care. These practices serve the legitimate governmental purpose of decreasing a state’s costs associated with foster care. See Gean v. Hattaway, 330 F.3d 758 (6th Cir. 2003).
Under the Act, if the individual is an unemancipated minor under the age of 18, the Commissioner must provide notice of the appointment of a representative payee to the legal guardian or legal representative of such individual.” 42 U.S.C. 405(j)(2)(E). See also 20 C.F.R. 404.2030(a). Both §405(j)(2)(E) and the regulation implementing it are phrased in the disjunctive, requiring notice either to a minor’s “legal guardian” or to a “legal representative.” Here, the Commissioner provided notice to the Department, which was Ryan’s legal guardian. There was no due process violation. See Keffeler III, 88 P.3d at 953.
COMMENTARY: The Department argued that the juvenile court lacked the authority to declare COMAR regulations invalid, to supervise the Department’s actions as Ryan’s representative payee, and to fashion an equitable remedy to address the assertedly improper use of Ryan’s benefits. The Department’s practice of self-reimbursement complied with federal and state law and the COMAR regulations authorizing its practice are valid. Therefore, no equitable remedy was necessary because there was no wrong to be corrected.
The juvenile courts are “statutorily created courts of limited jurisdiction” that only may exercise “those powers expressly designated by statute.” Smith v. State, 399 Md. 565, 574 (2007). There is “‘[n]o principle  better established than that in exercising a statutory power, a court is without jurisdiction unless it complies with the statute’.” In re Franklin P., 366 Md. 306, 333 (2001) (quoting Austin v. Director of Patuxent Inst., 245 Md. 206, 209 (1967)).
The vehicle for relief that was used in this case — a motion to control conduct — is not a means by which a juvenile court may expand its statutorily enumerated powers. See CJ §3-821. The juvenile court purported to act under its broad authority to protect and advance the best interests of foster children and, more specifically, in keeping with its statutorily enumerated authority over “support” of children declared CINA. See CJ §3-803(b)(1)(i).
In his motion to control conduct, Ryan did not seek an order directing a party to pay child support, nor did he allege that he was not receiving support payments to which he was entitled. Rather, he sought to challenge the Department’s use of benefits it had received on his behalf as his duly appointed representative payee. Even if “support” of a child declared CINA could be understood to encompass OASDI benefits properly received by the Department under a federal regulatory scheme, that would not mean that the juvenile court has plenary equitable powers to order the Department to place monies already collected and disbursed in a trust for the benefit of the CINA. Accordingly, even if the Court had not already concluded that such a remedy was not warranted under the facts of this case, the juvenile court nevertheless exceeded its authority by imposing a constructive trust.
Doctrine of lis pendens
BOTTOM LINE: Lender that acquired interest in property was not entitled to protection as a bona fide purchaser because at the time lender acquired its interest, it had constructive notice of a lawsuit filed in circuit court and title issues clouding the property.
CASE: Murphy v. Fishman, No. 786, Sept. Term, 2012 (filed Sept. 4, 2012) (Judges Eyler, D., WATTS & Cox (specially assigned)). RecordFax No. 12-0904-03, 32 pages.
FACTS: This case involved a motion by Shelia Murphy, Personal Representative of the Estate of Dorothy Mae Urban, to stay and dismiss a foreclosure action that had been instituted by Substitute Trustees Jeremy Fishman, Samuel Williamowsky, and Erica Ruth.
On December 1, 2010, the Substitute Trustees filed with the circuit court an Order to Docket a foreclosure action for real property in Pasadena, Maryland, naming as defendants, Shelia Murphy and Robert Street, Urban’s son. The foreclosure action concerned a refinance of the Property by Street, the mortgagor, of an existing mortgage in Urban’s name. In the Order to Docket, the Substitute Trustees stated that the foreclosure was based on a Deed of Trust that Street had executed on February 18, 2008, in closing on a loan of $91,350 from 1st Chesapeake Home Mortgage, LLC (“the Street Deed of Trust”). Acting on behalf of the owner of the Street Deed of Trust-MidFirst Bank (“the Lender”), the Substitute Trustees instituted the foreclosure proceedings against the property, alleging that the mortgage had been in default since May 1, 2010, because of the mortgagors’ and/or grantors’ failure to make monthly mortgage payments.
On December 20, 2010, Murphy filed a motion to stay and dismiss the foreclosure action, alleging that Urban’s Estate was the lawful owner of the property. Murphy asserted that Street had no ownership interest in the property because, in a separate civil action (“the Estate lawsuit”), the circuit court allegedly invalidated a May 30, 2007, deed from Urban to Street and imposeed a constructive trust over the property. In support of the motion to stay and dismiss, Murphy attached copies of documents that had been filed in the Estate lawsuit, alleging the following: (1) on May 30, 2007, Urban, as grantor, conveyed the property to Street, as grantee, by deed for zero monetary consideration (“the 2007 deed”); (2) on May 31, 2007, the 2007 deed was recorded; (3) on June 5, 2007, Urban died; and (4) on June 11, 2007, the Estate was opened, appointing Murphy as its personal representative.
On January 3, 2008, Murphy filed a complaint to nullify or declare the 2007 deed null and void in the Estate lawsuit in the circuit court, seeking to invalidate the 2007 deed. In the complaint, Murphy alleged that at the time of execution of the 2007 Deed, Urban was 73 years old, in declining physical and mental condition, and was deemed to not be competent and died six days later of breast cancer. According to Murphy, Street influenced Urban to change her will and to deed the property to him. In the complaint, Murphy sought to: (1) impose a constructive trust on the property, (2) have the property returned to the Estate to be distributed according to Urban’s will, and (3) nullify and void the 2007 deed on the grounds of breach of confidential relationship, lack of capacity, lack of due execution, undue influence, and fraud. On February 18, 2008, Street obtained the Street Deed of Trust from 1st Chesapeake Home Mortgage.
Litigation continued in the Estate lawsuit. On March 15, 2010, the circuit court issued an order providing that a constructive trust be imposed on the property, that Murphy be appointed Trustee of the constructive trust in order to transfer the property to the Estate of Dorothy Mae Urban and to execute any deed in order to effectuate the transfer to the Estate, and denying the defendant’s request for relief. On May 25, 2010, Murphy, by deed, conveyed the property to the Estate (“the 2010 Deed”). On June 1, 2010, the 2010 Deed was recorded in the Land Records of Anne Arundel County.
On January 7, 2011, in the foreclosure action, the Substitute Trustees filed an opposition to the motion to stay and dismiss. The circuit court subsequently denied Murphy’s motion to stay and dismiss.
Murphy appealed to the Court of Special Appeals, which reversed the judgment of the circuit court and remanded with instructions to grant the motion to dismiss.
LAW: Maryland Rule 14-211 governs motions to stay and dismiss, providing in relevant part that the borrower, a record owner, a party to the lien instrument, a person who claims under the borrower a right to or interest in the property that is subordinate to the lien being foreclosed, or a person who claims an equitable interest in the property may file in the action a motion to stay the sale of the property and dismiss the foreclosure action. On appeal, Murphy contended that the circuit court erred in denying the motion to stay and dismiss. Specifically, Murphy argued that the filing of the complaint in the Estate lawsuit acted as lis pendens, providing constructive notice of the lawsuit to the Lender. According to Murphy, because the doctrine of lis pendens applied, the Lender was not a bona fide purchaser and was not entitled to the protections to which a bona fide purchaser is entitled.
It is a well-settled principle that one who purchases real property without notice of prior equities is protected as a bona fide purchaser for value. Wash. Mut. Bank v. Homan, 186 Md. App. 372, 394-97 (2009). The essential elements of any definition of an innocent purchaser are: (a) he or she must have given value for the property; (b) he or she must have dealt in good faith with respect to the purchase; and (c) without notice or knowledge of any infirmity in the title of his or her vendor. Under Maryland law, legal title to land does not pass until a deed is properly executed and recorded, and until this is done, a vendee’s equity in property is subject to destruction by a conveyance of the legal title to a bona fide purchaser without notice. Thus, the general rule is that a purchaser of real estate takes subject to outstanding equitable interests in the property, which are enforceable against him or her to the same extent that they are enforceable against the vendor, where the purchaser is not entitled to protection as a bona fide purchaser, and one who purchases the equitable title to real estate is not protected as a bona fide purchaser where he or she receives notice of a prior equity before he or she acquires the legal title, or where he or she receives notice before he or she has paid all or substantially all of the purchase price.
Maryland cases have treated lenders who secure their interests with a mortgage or deed of trust as entitled to the protections available to bona fide purchasers for value, where such lenders were without notice of the mortgagor’s fraudulent conduct. The general rule of lis pendens and attachment of the doctrine of lis pendens is that a lis pendens (a pending suit in equity) duly prosecuted, and not collusive, is notice to a purchaser of the property in dispute from a party to the litigation, so as to affect and bind his interest by the decree, and the lis pendens begins from the service of the subpoena after the bill is filed. Weston Builders & Developers, Inc. v. McBerry, LLC, 167 Md. App. 24, 29-30, cert. denied, 392 Md. 726 (2006). Therefore, under the circumstances of the present case, the Lender was not entitled to protection as a bona fide purchaser because pursuant to Maryland Rule 12-102, it had constructive notice of the Estate lawsuit and title issues clouding the property at the time it acquired an interest in the Property.
Specifically, on January 3, 2008, the complaint in the Estate lawsuit was filed with the circuit court. At that time, the provisions of Maryland Rule 12-102 concerning lis pendens became applicable, as the complaint was filed in the circuit court and affected title to real property located within the State. Pursuant to Maryland Rule 12-102(b), the filing of the complaint in the Estate Lawsuit created constructive notice of the lis pendens as to the property. There was no indication that the circuit court terminated the lis pendens at any time prior to the litigation’s completion. Thus, as of January 3, 2008, the filing of the complaint provided constructive notice of the lis pendens as to the property, and such notice existed on February 18, 2008, the date on which the Lender acquired an interest in the Property.
As such, the circuit court erred in denying Murphy’s motion to stay and dismiss. Accordingly, the circuit court order denying the motion to stay and dismiss was vacated and the case remanded with instructions to grant the motion.
COMMENTARY: At the time that the Lender acquired its interest in the property, there was no court order providing that the property be returned, encumbered or otherwise, to the Estate. As such, the Estate litigation was unresolved. As discussed, the Lender took the property subject to constructive notice of the Estate litigation and therefore did not qualify for protection as a bona fide purchaser. The Court of Special Appeals did not reach the issue of whether the Estate Order rendered the 2007 Deed either void ab initio or voidable, as such a determination was not dispositive of whether or not the Lender was a bona fide purchaser and entitled the protection of that status. Had the 2007 Deed been found void ab initio, and even had the Lender qualified as a bona fide purchaser, the Substitute Trustees would not have prevailed. Accordingly, the Court did not express an opinion as to whether or not the 2007 Deed was void or voidable.
PRACTICE TIPS: There is a distinction between a deed void ab initio and one that is voidable. The void/voidable distinction plays a central role in the protection under the recording acts: a person otherwise qualifying as a bona fide purchaser under the recording act receives no protection under a void deed; on the other hand, a person otherwise qualified as a bona fide purchaser for value does receive protection in purchasing from one whose title is merely voidable. The two classic cases of void deeds are those involving lack of delivery and forgery.
Homeowners Association Act
BOTTOM LINE: The Maryland Homeowners Association Act, which bars the vendor of residential lots in a development from enforcing a sales contract with “a member of the public” unless specified disclosures are made, applies to purchasers who already own other property within that development; thus, the circuit court properly dismissed a breach of contract action by a seller who failed to make the required statutory disclosures.
CASE: Lipitz v. Hurwitz, No. 351, Sept. Term, 2012 (filed Sept. 4, 2012) (Judges Graeff, KEHOE & Hotten). RecordFax No. 12-0904-00, 31 pages.
FACTS: Flora and Roger Lipitz, trustees of the revocable property trust of Flora E. and Roger C. Lipitz, sued William Hurwitz in the circuit court, contending that Hurwitz breached his contract to buy the Lipitz home. On August 6, 2009, Hurwitz entered into negotiations for the sale of the Lipitz home, located within the Caves Valley Golf Club, a golf club and residential development. At that time, Hurwitz already owned two properties in the same development.
Lots within the club were subject to a declaration of covenants that imposed restrictions upon their use and development. The declaration provided that each lot within the development was subject to annual and special assessments payable to the club for the maintenance of common areas within the development. For this reason, under the Maryland Homeowners Association Act (the “Act”), the seller of a lot was required to provide the buyer with various disclosures relating to the homeowners association and the seller’s lot. A buyer who did not receive these disclosures had a right to cancel the contract.
In the negotiations for the sale of the Lipitz residence, both sides were represented by, and generally acted through, realtors. Hurwitz, through his realtor, submitted a proposed contract of sale to the Lipitzes’ realtor. The contract was in the standard form developed by the Maryland Association of Realtors and contained several addenda, including: (1) the Maryland Homeowners Association Act Notice to Buyer (the “HOA Notice”), and (2) the Maryland Homeowners Association Act Disclosures to Buyer and Transmittal of Documents (the “HOA Disclosures”).
Hurwitz signed the version of the contract submitted by his realtor. However, in subsequent negotiations, apparently conducted by the realtors, the proposed contract of sale was revised to strike the HOA Addenda. As a result, much of the information that a buyer was entitled to receive under the Act was not provided by the Lipitzes to Hurwitz. This revised contract was signed by both parties, and a settlement date of November 2, 2009 was set.
One day prior to the agreed-upon settlement date, Hurwitz’s agent informed the Lipitzes’ agent that Hurwitz did not plan on closing on the purchase. Counsel for Hurwitz advised the Lipitzes that Hurwitz was canceling the contract and asserted that the contract was not enforceable because the statutory information required by the Act had not been provided.
After mediation was unsuccessful, the Lipitzes sued Hurwitz for specific performance and breach of contract. Hurwitz filed a motion to dismiss, and the Lipitzes filed a motion for summary judgment. The circuit court granted Hurwitz’s motion to dismiss.
Lipitz appealed to the Court of Special Appeals, which affirmed.
LAW: Under Real Prop. (“RP”) §§1B-106(a), a contract for the resale of a lot within a development to “a member of the public” who intends to occupy or rent the lot for residential purposes, is not enforceable by the vendor unless certain disclosures are provided by the vendor to the prospective purchaser.
On appeal, the Lipitzes argued that Hurwitz could not be considered “a member of the public,” and thus was not entitled to the protections of the Act because Hurwitz had been a member of the Homeowners Association for nine years and already possessed, or, as a lot owner, could readily obtain, all the information required by the statute. As such, the Lipitzes maintained, the phrase “member of the public” referred to “outsiders” – that is, people who did not already own property in the development.
The Act does not define the term “member of the public.” A statute is ambiguous when there are two or more reasonable alternative interpretations of the statute. Deville v. State, 383 Md. 217, 223 (2004). Ambiguous or equivocal statutory language requires a reviewing court to consider not only the ordinary meaning of words, but also to interpret how that language relates to the overall meaning, setting, and purpose of an act. Thus, it was necessary to interpret the phrase “member of the public” in the context of its surrounding language and the context of the Act as a whole. Id.
While RP §11B-106 sets out procedures to be followed for the initial sale of a lot in a development containing 12 or fewer lots, RP §11B-107(a) sets out procedures to be followed for the initial sale of a lot not intended to be occupied or rented for residential purposes.
The two statutory provisions have two primary differences: (1) RP §11B-106(a) applies to “a member of the public,” whereas RP §11B-107(a) applies to “a person”; and (2) RP §11B-106(a) applies to those who intend to occupy or rent the lot for residential purposes and RP §11B-107(a) applies those who do not intend to occupy or rent the lot for residential purposes. The purpose of this contrasting language is to distinguish those who intend to live in the residence from those who do not intend to live in the residence.
The legislative history of the Act indicates that the clause “who intends to occupy for residential purposes” was added in several places in the Act to distinguish sales to developers from sales to non-developers. This distinction is why RP §11B-106 and RP §11B-107 provide different sets of disclosures depending on whether the purchaser “intends to occupy or rent the lot for residential purposes” (i.e., is a non-developer) or “does not intend to occupy or rent the lot for residential purposes” (i.e., is a developer).
The Act imposes different disclosure requirements upon a seller depending upon the buyer’s reasons for purchasing the property. The Act does not, however, distinguish between buyers who already own property within a development and buyers who do not.
In their complaint, the Lipitzes alleged that Hurwitz owned two lots in the same subdivision as the Lipitz residence, that Hurwitz’s lot was subject to the same covenants as the Lipitz lot, and that Hurwitz had access to all of the information that the Lipitzes were required to provide Hurwitz. Nonetheless, the relevant inquiry under the Act was what the seller was obligated to provide to the prospective buyer, not what the buyer might have already had in his possession, or could have possibly obtained through his or her own efforts. See RP § 11B-106(a).
As noted in an opinion of the Attorney General, the “evident intent” of RP §11B-108 is that a buyer be provided the facts that will allow the buyer to make a rational judgment about whether to contract for the particular house. This objective is satisfied so long as the buyer receives the required disclosures at a time when the buyer still has an opportunity to decide whether to enter a binding contract. The seller has a duty to obtain and disclose to the buyer, prior to the formation of the contract, all of the information described in RP §11B-106(b).
Since the owner can obtain certain information more easily than the purchaser, it was the Commission’s belief that the owner should have the burden of providing at least a minimal amount of information concerning the Homeowners Association to the purchaser. 1986 Report at 9. Cf. Article 56, §224(r) of the Maryland Code and COMAR 09.11.02.01D. Clearly, the seller of property is in the best position to provide the buyer with the most recent, accurate and complete disclosures that are specific to the seller’s unique lot. This policy avoids the situation where a buyer thinks he knows all of the information provided in the disclosures, but does not actually know this information.
As such, the Lipitzes’ failure to conform with the Act allowed Hurwitz to exercise his option to cancel the contract. Thus, the circuit court was correct in finding that for purposes of the Act, Hurwitz was a “member of the public” entitled to the disclosures required under the Act.
The judgment of the circuit court was accordingly affirmed.
COMMENTARY: The Lipitzes also argued that the Court of Appeals has consistently authorized a court’s decision to depart from the plain meaning of a statute when its literal application would lead to an “absurd” or “illogical” result in a particular case. Kaczorowski v. Baltimore, 309 Md. 505 (1987). Specifically, they asserted that it would be absurd to conclude that the General Assembly intended the phrase “member of the public” to include a person who had already been a member of the private homeowner’s association for nine years and who also owned not one but two lots within that association.
However, the Homeowners Association Act is a consumer protection statute. Its purpose is to level the playing field of knowledge between a seller and a buyer, and it accomplished that purpose by requiring a seller of property in a homeowners association development to furnish the buyer with certain information. Homeowners association regimes are structured in a wide variety of ways. Because the disclosure provisions apply uniformly to all sales of all lots within all developments that are subject to the Act, a seller does not have the luxury of disclosing only the information useful to a particular buyer of a specific lot. Therefore, the Lipitzes could not prevail simply because Hurwitz might had more knowledge in this case than most other buyers in a similar situation.
Regardless of what information an individual purchaser might know or have access to, RP §11B-106 places the duty on the seller to provide this information to the buyer. Therefore, the Lipitzes’ “absurdity” argument was without merit.
PRACTICE TIPS: Maryland courts have held that equitable estoppel can be asserted either as a defense to a cause of action or to bar another party from raising a defense. This principle has been applied to statutory defenses. For instance, a personal representative can be estopped from asserting the statutory time limitation on presenting a claim against an estate, and a party can likewise be estopped from raising a Statute of Frauds defense.
BOTTOM LINE: Circuit court erred in ruling that the passage of time had converted a temporary easement over plaintiff’s property into a perpetual easement pursuant to the 30-year limit on possibilities of reverter under RP §6-101, since the statute does not apply to easements.
CASE: Arthur E. Selnick Associates, Inc. v. Howard County Maryland, No. 01418, September Term, 2010 (file: Aug. 30, 2012) (Judges Eyler, J., HOTTEN & Kenney (retired, specially assigned)). RecordFax No. 12-0831-01, 40 pages.
FACTS: Kaiser Aetna developed the Route 100 Business Park in the early 1970s. On November 12, 1972, Kaiser Aetna recorded a subdivision plat that laid out the design of the Business Park and included a note that stated: “The area bounded by (1), (4), (15), [and] (19) is a revertible easement and a temporary entrance only. After the permanent entrance is built[,] the easement for access through the temporary easement will terminate and be void.”
On September 6, 1974, Kaiser Aetna deeded land for the planned roadways in the Business Park to Howard County in fee simple. Kaiser Aetna, however, only deeded a temporary easement to Howard County over the portion of land that was to become part of Amberton Drive and serve as an entrance to the Business Park. The entrance was to be built as part of Howard County’s Route 100 Road Extension Project. The deed itself stated that Kaiser Aetna granted to Howard County a revertible easement for a public road for use as a temporary entrance only and that upon completion of a permanent entrance to the Route One Hundred Business Park, the revertible easement will automatically terminate,
On September 30, 1975, Kaiser Aetna entered into an Option Agreement with the State Highway Administration (SHA), whereby SHA agreed to construct a four lane road, known as Amberton Drive, with a median and traffic signal over the temporary easement.
On December 28, 1983, Arthur E. Selnick Associates, Inc. (Selnick) purchased, in fee simple absolute, a lot in the Business Park. The purchase included the land comprising the temporary easement, and the deed stated that the land was “[s]ubject to part of a Revertible Easement and a Temporary Entrance, as shown on [the] plat.”
On or about November 14, 1989, the local right of way agent for SHA, William Ravenscroft, informed Selnick that SHA was in the process of securing the right of way for a new entrance road into the Business Park. Mr. Ravenscroft informed Selnick that a new entrance would be constructed when a ramp leading from eastbound Route 100 onto U.S. Route 1 northbound was completed. The new entrance would make the temporary easement unnecessary, and SHA would provide an aesthetically pleasing permanent barrier to close the road over the temporary easement.
In November 1989, Selnick granted SHA an option to purchase a portion of its property in conjunction with “improvements to Maryland Route 100 from I-95 to east of Maryland Route 713.” The Option Agreement was later replaced by an almost identical agreement dated June 12, 1990. Both agreements stated that when Amberton Drive was closed SHA will provide a well defined break in the roadway to prevent all traffic from entry from the ramp.
The Route 100 Extension Project ended in 1998, but due to expenditure of funds, SHA did not construct a new entrance into the Business Park. Since Selnick acquired its property in the Business Park in 1983, traffic over the temporary easement increased significantly.
The County advised Selnick that it was going to fund the design, acquisition, and construction of a new entrance to the Business Park, which would create a second point of access, triggering the termination of the temporary easement. Howard County, however, advised Selnick that it planned to continue to maintain the road over the temporary easement. In response, Selnick sought compensation from Howard County for condemning his property rights to the land covered by the temporary easement, which Howard County denied.
Selnick sued Howard County and SHA, seeking a declaration that Howard County constructively condemned the temporary easement or, in the alternative, that Howard County was no longer entitled to the temporary easement.
The circuit court granted the County’s and SHA’s motions to dismiss and motions for summary judgment, holding that the temporary easement had not terminated and reverted to Selnick. Instead, the easement had become a permanent easement as of September 6, 2004, thirty years from the grant of the temporary easement. The circuit court also held that Howard County had not constructively condemned the property over which the easement ran because the easement had not reverted to Selnick.
Selnick appealed to the Court of Special Appeals, which reversed.
LAW: The rules that govern contracts between individuals and private corporations also govern the construction of contracts between individuals and governmental entities. Anne Arundel Cnty. v. Crofton Corp., 286 Md. 666, 673 (1980). “Under the objective law of contracts, a court, in construing an agreement, must first determine from the language of the agreement itself, what a reasonable person in the position of the parties would have meant at the time it was effectuated. Id. Language in a contract is ambiguous if it is susceptible to more than one meaning to a reasonably prudent person. Calomiris v. Woods, 353 Md. 425, 435 (1999). “In interpreting a deed whose language is clear and unambiguous on its face, the plain meaning of the words used shall govern without the assistance of extrinsic evidence.” Drolsum v. Horne, 114 Md. App. 704, 709 (1997).
Selnick urged that the 1974 deed, which conveyed “a revertible easement for a public road for use as a temporary easement only,” is ambiguous, thus requiring parol evidence.
In Shallow Run Limited Partnership v. SHA, 113 Md. App. 156, 167 (1996), the Court of Special Appeals addressed a grant of an easement for a temporary road to landlocked parcels. The conveyance provided that the easement would “be extinguished at the end of two (2) years or at such time as physical and legal access becomes available through [a certain parcel]…whichever shall occur last.” Id. at 167. The Court held that the grant was “not vague and uncertain.” Id. It was “certain” that the easement would exist at a to be determined location, and that the easement would last for two years or until another access became available, whichever occurred later. Id. at 167-68. Though extrinsic evidence was not an issue in that case, the determination leads to the conclusion that parol evidence would have been unnecessary and, thus, inadmissible.
Here, in the context of the deed, “temporary” was not ambiguous, as it meant that the easement would last until a new access road was built. As such, extrinsic, or parol, evidence was not needed to clarify any ambiguity.
Under RP §6-101, “[i]f the specified contingency of a special limitation creating a possibility of reverter or of a condition subsequent creating a right of entry for condition broken does not occur within 30 years of the effective date of the instrument creating the possibility or condition, the possibility or condition no longer is valid thereafter.”
According to the circuit court, because the triggering event — SHA constructing a new entrance to the Business Park — did not occur within thirty years, the easement became a permanent easement as of September 6, 2004, after under RP §6-101.
Maryland courts have yet to address whether RP §6-101 applies to easements, but Maryland case law has expressly defined possibilities of reverter and rights of entry.
“The possibility of reverter is distinguished from the right of entry for condition broken in that it takes effect in possession automatically on the happening of the condition or event named in the creating instrument. But in the case of the right of entry, the grantor must elect to forfeit before the granted interest is terminated.” Lovell Land, Inc. v. State Highway Admin., 408 Md. 242, 259 n.5 (2009) (quoting 1 American Law of Property §4.12).
RP §6-102 expressly applies to “all possibilities of reverter and rights of entry on estates of fee simple, existing before July 1, 1969” and requires the holder of such a right to file a notice of intention to preserve the right for the interest in land to continue to exist.
An easement is “a non-possessory interest in the real property of another that can arise either by express grant or implication.” Clickner v. Magothy River Ass’n, 424 Md. 253, 268 (2012). To constitute a grant of an express easement, the instrument must contain 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.” See Kobrine, L.L.C., et al v. Metzger, 380 Md. 620, 636 (2004). “If land is burdened by an easement, the owner of the servient estate is not divested of ownership of the property.” Gregg Neck Yacht Club, Inc., 137 Md. App. at 754. “Rather, the easement area remains the property of the owner of the servient estate.” Id. Here, the easement at issue was expressly granted, and Selnick, as successor in title to the original grantor, was granted and holds ownership of the servient estate.
The circuit court found that the easement over Selnick’s estate was a determinable easement with a possibility of reverter. Determinable easements are “commonly used to provide temporary access to a dominant estate pending the completion of construction work on another access route.” Bruce & Ely, The Law of Easements and Licenses in Land, §0:3.
In a fee simple determinable estate, “‘where land is devised for a certain purpose, and it is the testator’s intention that it shall be used for that purpose only, and that on the cessation of such use, the estate shall end without re-entry by the grantor, a possibility of reverter arises’.” The Knights and Ladies of Samaria v. Bd. of Educ. of Charles Cnty., 113 Md. App. 656, 662 (1997). “It [is] not necessary…to assert a claim to the fee simple absolute estate or to take any other positive action,” as the grantors “acquire a fee simple absolute estate by the realization of the possibility of reverter.” Id. at 131.
In a fee simple subject to a condition subsequent estate, “[t]he failure of a condition subsequent…merely gives rise to a right of entry; the grantor does not obtain a fee simple absolute [estate] until he or she enters and retakes the land.” The Knights and Ladies of Samaria, 113 Md. App. at 665 n.4.
Easements, which are non-possessory rights to use the land of another, do not generate, in the traditional sense, possibilities of reverter and rights of entry. Possibilities of reverter and rights of entry follow fee simple estates.
Therefore, the circuit court erroneously held that RP §6-101 applies to easements. Thus, the easement continues as a temporary easement, which will end when Howard County or SHA constructs a second access road to the Business Park.
COMMENTARY: “Inverse condemnation is a cause of action against a governmental defendant to recover the value of property which has been taken in fact by the governmental defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking agency.” College Bowl v. Baltimore, 394 Md. 482, 489-90 (2006).
“The modern, prevailing view is that any substantial interference with private property which destroys or lessens its value (or by which the owner’s right to its use or enjoyment if in any substantial degree abridged or destroyed) is, in fact and in law, a taking in the constitutional sense, to the extent of the damages suffered, even though the title and possession of the owner remains undisturbed.” Hardesty v. State Roads Commission, 276 Md. 25 (1975).
“[T]he Fifth Amendment was not meant to protect property owners in their voluntary dealings with the government.” Janowsky v. United States, 23 Cl. Ct. 706, 714 (1991). Even though the easement has not become perpetual or permanent under RP §6-101, the temporary easement continues to exist until a new access road to the Business Park is built.
The easement across Selnick’s property was voluntarily deeded to Howard County by Selnick’s predecessor in title, Kaiser Aetna, so there could be no taking as long as the easement remained valid. Calvert Assocs. Ltd. P’ship v. Dep’t of Emp’t and Soc. Servs., Emp’t Sec. Admin., 277 Md. 372, 382 (1976). Selnick is bound by the easement Kaiser Aetna granted to Howard County. See Columbia Hills Corp. v. Mercantile-Safe Deposit and Trust Co., 231 Md. 379, 381-82 (1963).
Moreover, the expanded use and improvement of the road over the easement by Howard County and SHA did not amount to a taking. “Where land is dedicated for the purpose of a public street, the municipality acquires not only the easement of passage but also the right to grade and improve the surface of the street, and to lay sewers, drains and pipes for various utilities beneath the surface.” Levi v. Schwartz, 201 Md. 575, 585 (1953).
The problems Selnick has encountered are the result of the unambiguous deed and option agreement. Such problems were reasonably foreseeable when Kaiser Aetna granted the easement, when Selnick purchased the property, and when Selnick entered into the option agreement. See Shallow Run L.P., 113 Md. App. at 171-72. Selnick “chose to enter into a contract [and take the land subject to a prior agreement] that clearly created potential problems in respect to [its] use of the…property.” Id. at 172.
Finally, Howard County’s alleged intentions in and of themselves to maintain the road over the easement even after there is a second entrance to the Business Park do not amount to a taking. There must be some governmental action that amounts to a taking of property for an inverse condemnation claim to succeed. College Bowl, 394 Md. at 489.
Selnick did not demonstrate sufficiently definite or guaranteed actions to amount to a taking of the property. See Hardesty, 276 Md. at 32.
PRACTICE TIPS: There are three elements that each must be satisfied for a landowner to successfully obtain an easement by necessity: “(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 that 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.” Stansbury, 390 Md. at 488.
Subsequent Injury Fund
BOTTOM LINE: The Workers’ Compensation Act provision that calls for apportionment of liability between the Subsequent Injury Fund (“SIF”) and the employer, and provides for SIF’s payments to be made after conclusion of employer’s payments, does not permit the employee to accelerate the commencement of SIF’s weekly payments by settling with employer; rather, the proper commencement date of SIF’s payments is the date the employer’s weekly payments would have ended had there been no lump sum settlement.
CASE: Schaffer v. Subsequent Injury Fund, No. 548, Sept. Term, 2011 (filed Sept. 4, 2012) (Judges Krauser, MERDITH & Mattricciani). RecordFax No. 12-0904-01, 16 pages.
FACTS: Russell Schaffer was employed by Town & Country Driving School. On December 15, 2006, Schaffer was involved in a serious automobile accident during the course of his employment, and he filed a claim for workers’ compensation. Because, prior to the accident, he had conditions that were not related to his employment, he sought part of his compensation from the Subsequent Injury Fund. In early October 2008, before the Workers’ Compensation Commission held a hearing on the claim, Schaffer entered into a settlement agreement with his employer, or its insurer, to accept a lump sum payment of $91,025 in satisfaction of the employer’s share of compensation. Pursuant to LE §9-722(a), such settlements must be approved by the Commission. On October 8, 2008, the Commission issued an order approving that settlement, and a lump sum payment was made to Schaffer.
The Commission proceeded with a hearing to apportion liability for Schaffer’s disability. The Commission found that Schaffer was permanently and totally disabled. The Commission further determined that 55% of Schaffer’s disability resulted from the December 15, 2006, accident (when he was employed by Town & Country), and the remaining 45% of Schaffer’s disability was attributable to his pre-existing conditions. Had there been no lump sum settlement between Schaffer and the employer’s insurer, this award would have obligated the employer to pay its portion of the award at the rate of $339 per week, over a period of 367 weeks, commencing on June 18, 2008, and ending in June 2015. On April 13, 2009, the Commission issued an order indicating that the SIF was required to make weekly permanent total disability payments to Schaffer at the rate of $339 per week, commencing on October 9, 2009.
The SIF objected to its commencement date, and filed a motion for a rehearing. Because benefits from the SIF are to be paid after payment of the employer’s share, it was the SIF’s position that its payments should not commence until the date the employer’s weekly payments would have ended had there been no lump sum settlement with the employer – that is, June 2015. If the SIF’s weekly payments were accelerated to commence on October 9, 2009, then the SIF would be obligated to pay for an additional seven years of benefits for the sole reason that Schaffer had entered into a settlement agreement to which SIF was not a party.
Following the rehearing, the Commission issued a modified order, dated October 9, 2009, which required the SIF to begin making payments (in the same weekly benefit amount as previously ordered) on June 23, 2015 (the date requested by the SIF), which would have been the date the employer’s share of benefits would have been fully paid if they had been paid weekly instead of being paid in a discounted lump sum. Schaffer filed a petition in the circuit court, seeking judicial review of the Commission’s order of October 9, 2009. The SIF filed a cross-petition for judicial review regarding the same October 9, 2009, order. Schaffer filed a motion for summary judgment, and the SIF filed a cross-motion for summary judgment. The circuit court granted the SIF’s motion and affirmed the order of the Commission.
Schaffer appealed to the Court of Special Appeals, which affirmed.
LAW: “Compensation from the Subsequent Injury Fund shall be paid after the completion of payments of compensation by the employer or its insurer.” LE §9-802(c). Further, LE §9-804(a)(3) provides that in an award against the Subsequent Injury Fund, the Commission shall find specifically the date when the Subsequent Injury Fund shall begin payments. In his appeal, Schaffer contended that, because he settled with his employer for a lump sum payment, the Commission could have, and, pursuant to LE §9-802(c) should have, ordered the SIF to begin making payments 30 days after October 8, 2008, the day that the Commission approved the settlement with the employer.
The Court of Appeals has previously rejected an argument that payments made by the SIF and the employer should be concurrent, and concluded that such a result is contrary to the plain language of the predecessor of LE §9-802(c). Subsequent Injury Fund v. Kraus, 301 Md. 111, 115 (1984). Nevertheless, although the plain language of LE §9-802(c) states that the payments made by the SIF “shall be paid after the completion of payments of compensation by the employer or its insurer,” the statute does not specify one way or the other whether the payments made by the SIF should begin immediately after the payment of an agreed lump sum settlement of the employer’s obligation, or should begin at the time that they would have otherwise begun had there been no settlement of the obligation of the employer. Thus, there was an ambiguity in the statute regarding when the SIF’s payments should commence under these circumstances.
Where, as in this case, a statute is plainly susceptible of more than one meaning and thus contains an ambiguity, courts consider not only the literal or usual meaning of the words, but their meaning and effect in light of the setting, the objectives and purpose of the enactment. Kaczorowski v. Baltimore, 309 Md. 505 (1987). The court may consider the consequences resulting from one meaning rather than another, and adopt that construction which avoids an illogical or unreasonable result, or one which is inconsistent with common sense. Id. at 513.
The general compensation scheme for workers’ compensation benefits focuses on weekly payments. See Porter v. Bayliner Marine Corp., 349 Md. 609, 617-618 (1998). When the SIF is ordered to pay benefits, the Commission similarly focuses on weekly payments.
In order for the SIF to be considered as a source of compensation, the conditions found in LE §9-802(b) must be met. When these requirements are met, the number of weeks and amount of payment to be made by the employer, for its proportionate share of the total disability, is calculated by applying the schedules found in Subtitle 6, and treating the subsequent injury as if it were the only compensable disability of the employee. McKenzie v. C.C. Kottcamp & Sons, Inc., 311 Md. 54, 63 (1987). After payment is made by the employer for those weeks of liability, the SIF begins paying weekly compensation, for an indefinite number of weeks, for the remainder of the employee’s life. LE §9-637(b).
Although the Maryland appellate courts had not, til now, specifically addressed the question of whether the commencement of the SIF’s payments can be altered by a prepayment of the employer’s obligations, the courts have commented on the interplay between the legislative policy that workers’ compensation benefits should be interpreted liberally in favor of the employee and the apportionment of liability under LE §9-801, et seq. See Subsequent Injury Fund v. Teneyck, 317 Md. 626, 633 (1989). While the Workers’ Compensation Act is to be liberally construed in favor of injured employees, the Act should not be construed to provide for compensation beyond that authorized by its provisions and purpose. Subsequent Injury Fund v. Thomas, 275 Md. 628, 635 (1975). Maryland courts also have referred to the policy which led to the creation of the SIF as being a legislative effort to “persuade the employer to employ the handicapped individual by limiting the liability.” Dent v. Cahill, 18 Md. App. 117, 128 (1973).
There is nothing, however, in the legislative policy that directly or indirectly suggests that the Fund shall bear more than its lawful proportionate share of disability suffered by an injured employee. Neither the social nor economic policy of §66(1) requires shifting to the Fund any portion of the employer’s obligation. The employer is required to pay no more than that portion of the disability attributable to the additional accidental injury, and no less. Subsequent Injury Fund v. Rinehart, 12 Md. App. 649 (1971).
Here, there was no dispute that, if Schaffer had not entered into a lump sum settlement with the employer, the SIF would not have been required to begin making payments until June 23, 2015. Schaffer urged that the SIF should have been ordered by the Commission to begin payments 30 days after the date the Commission approved his settlement with the employer in October 2008. If his position were adopted, then the period during which the SIF was required to make weekly payments would be expanded to cover the weeks from November 2008 through June 23, 2015, which would result in Schaffer receiving an additional six years and seven months of payments, thereby increasing the potential liability of the SIF by the approximate amount of $117,000.
The statutory scheme under Title 9, Subtitle 8, which calls for the apportionment of liability between the SIF and the employer, and provides for the SIF’s payments to be made after the conclusion of the employer’s payments, does not permit the employee to accelerate the commencement date for the SIF’s weekly payments by entering into a settlement agreement with the employer. Otherwise, an employee could circumvent the statutory benefit computations, and reap a windfall by forcing the SIF to pay additional weeks of compensation.
As such, the Commission did not commit an error of law, and the decision of the circuit court affirming the Commission’s decision was accordingly affirmed.
COMMENTARY: The policy implications of Schaffer’s proposed interpretation of LE §9-802(c) would, as the SIF argued, invite further abuse by creating an incentive for the employer and employee to make unreasonable settlements with steep discounts, in the hope of shifting the financial burden from the employer to the Subsequent Injury Fund. By settling, the employee could increase his potential recovery beyond what the employee would have otherwise been entitled to receive under the statutory scheme, and the employer could reduce its liability below what it would have otherwise been obligated to pay under the statutory scheme. The provision of LE §9-802(c) should not be interpreted in a way that would lead to such a result that is contrary to common sense. Kaczorowski v. Baltimore, 309 Md. 505, 513 (1987).
PRACTICE TIPS: The obligation of the Subsequent Injury Fund to make weekly payments terminates upon the death of the employee because there are no survivors’ rights to payments made by the SIF.