Court of Appeals
Civil Procedure, Statute of limitations: Since the licensing requirement of the Maryland Consumer Loan Law, Maryland Code, Commercial Law Article constitutes an “other specialty” within the meaning of §5-102(a)(6) of the Courts and Judicial Proceedings Article, actions on CL §12-302 are entitled to a twelve-year limitations period. William Price, et al. v. Ralph M. Murdy, et al., Misc. No. 1, Sept. Term, 2018.
Evidence, Hearsay: Defendant, charged with possession of controlled dangerous substances, was entitled to offer prescriptions to establish part of the affirmative defense for possession established by statute, so long as the prescription can be authenticated, because admission of the prescription to prove the operative fact of the prescription’s existence was not hearsay, but a legally operative verbal act. State of Maryland v. Steven Young, No. 2, Sept. Term, 2018.
Professional Responsibility, Disbarment: The Court of Appeals held that disbarment was the appropriate sanction when an attorney’s protracted involvement in an estate case resulted in, among other violations, a conflict of interest, mishandling of funds belonging to the estate, multiple misrepresentations to the court as well as his clients, and frivolous litigation. Attorney Grievance Commission of Maryland v. Benjamin Jeremy Woolery, Misc. Docket AG No. 20, Sept. Term, 2017.
Statute of limitations
BOTTOM LINE: Since the licensing requirement of the Maryland Consumer Loan Law, Maryland Code, Commercial Law Article constitutes an “other specialty” within the meaning of §5-102(a)(6) of the Courts and Judicial Proceedings Article, actions on CL §12-302 are entitled to a twelve-year limitations period.
CASE: William Price, et al. v. Ralph M. Murdy, et al., Misc. No. 1, Sept. Term, 2018 (filed Dec. 18, 2018) (Judges BARBERA, Greene, Adkins, McDonald, Watts, Hotten & Getty).
FACTS: Two Plaintiffs, consumers who financed the purchase of automobiles through loans under $6,000, brought a putative class action in the United States District Court for the District of Maryland against the lender, Samuel Spicer,  for violations of the Maryland Consumer Loan Law (“MCLL”). Plaintiffs alleged that Spicer was not licensed to enter into these loans under the MCLL. Plaintiffs further alleged that Spicer violated the MCLL by: (1) failing to provide any notices related to repossession of cars; (2) charging and collecting compound interest; and (3) charging and collecting inflated or uncollectable attorneys’ fees.
Plaintiffs claimed that they entered into loans with Spicer while he was unlicensed, but all of the loan transactions occurred over three years before the instant lawsuit was filed on March 17, 2017. The general statute of limitations for civil actions is three years. CJP §5-102(a)(6), however, provides a twelve-year statute of limitations for causes of action brought under a specialty statute: “(a) An action on one of the following specialties shall be filed within 12 years after the cause of action accrues, or within 12 years from the date of the death of the last to die of the principal debtor or creditor, whichever is sooner: (1) Promissory note or other instrument under seal; (2) Bond except a public officer’s bond; (3) Judgment; (4) Recognizance; (5) Contract under seal; or (6) Any other specialty.” Plaintiffs asserted that the MCLL is an “other specialty,” and therefore the twelve-year statute of limitations applies to their claims.
The Court of Appeals was presented with a question of law certified by the United States District Court pursuant to the Maryland Uniform Certification of Questions of Law Act, §§12-601 to 12-613 of the Courts and Judicial Proceedings Article (“CJP”), Maryland Code (1973, 2013 Repl. Vol.). The question posed was whether a Maryland statute—here, the licensing requirement of the Maryland Consumer Loan Law, §12-302 of the Commercial Law Article (“CL”), Maryland Code (1975, 2013 Repl. Vol.)—is a statutory specialty as contemplated by CJP §5-102(a)(6). If an action is on a specialty, CJP §5-102 provides that it “shall be filed within 12 years after the cause of action accrues.”
The Court of Appeals held that CL §12-302 is a statutory specialty and actions on it are accorded a twelve-year limitations period.
LAW: Maryland’s licensing requirement for lenders of small loans dates to a 1912 Act. At that time, the General Assembly sought to protect consumers of small loans against far more than just usury: the Act, among other things, required licensing of “petty loan brokers,” capped certain fees depending on the amount borrowed, and mandated disclosure of the loan’s terms to the borrower. Ch. 836, 1912 Md. Laws 1621, 1621-24.
In 1918, the General Assembly replaced the 1912 law with “AN ACT to license and regulate the business of making [small] loans.” Ch. 88, 1918 Md. Laws 197, 197. The law capped the interest rate for loans under $300 made by unlicensed lenders. Id. at 198. The Act’s preamble identified the legislature’s goals of “prohibiting false or misleading statements” regarding these loans, setting maximum interest rates and charges, and regulating wage garnishments. Id. at 197-98.
In 1945, the General Assembly created the Maryland Industrial Finance Law, ch. 932, 1945 Md. Laws 1438, 1453, to cover small loans, Md. Code Art. 11 §§165, 203 4 (1957, 1968 Repl. Vol.). Its purpose was to provide “further remedial legislation regulating the lending of sums of money not presently regulated by existing laws.” Id. §163. The law required licensure or exemption from licensure for lenders of up to $1,500. Id. §165. It also, among other things, governed the uniformity of monthly installment amounts, fee collection, and prepayment and any consequent refunding of interest. The law did not repeal or otherwise affect the 1918 law’s regulation of loans and lenders of under $300, which itself had been codified at Article 58A. Id. §166. Article 58A provided parallel regulation until repealed in 1977.
The MCLL does not specify a limitations period for actions on its provisions. The applicable limitations period, therefore, is governed by the relevant statute of limitations found in the CJP Article. Although CJP §5-101 provides a “blanket” three-year limitations period, NVR Mortg. Fin., Inc. v. Carlsen, 439 Md. 427, 439-40 (2014), there are exceptions. One such exception is CJP §5-102, which sets a twelve-year limitations period for an action on a specialty.
The certified question asked this Court to determine whether the MCLL’s licensing requirement constitutes an “other specialty,” a category that we have previously deemed a “relatively narrow catchall,” Master Fin., Inc. v. Crowder, 409 Md. 51, 70 (2009). Crowder laid out a test for determining whether a statute creates an “other specialty” under CJP §5-102(a)(6): “An action based on a statute will constitute an “other specialty” subject to the 12-year period of limitations if (1) the duty, obligation, prohibition, or right sought to be enforced is created or imposed solely by the statute, or a related statute, and does not otherwise exist as a matter of common law; (2) the remedy pursued in the action is authorized solely by the statute, or a related statute, and does not otherwise exist under the common law; and (3) if the action is one for civil damages or recompense in the nature of civil damages, those damages are liquidated, fixed, or, by applying clear statutory criteria, are readily ascertainable.” Crowder, 409 Md. at 70.
The Crowder plaintiffs brought their claim under the State Secondary Mortgage Loan Law (“SMLL”). The SMLL, among other provisions, “defines a secondary mortgage loan”; prohibits lending under the SMLL, unless the person is licensed or exempt from licensing; “limits the amount of interest, fees, points, commissions, and other charges” for such loans; and “requires certain disclosures to certain borrowers.” Id. at 58. The SMLL imposes civil and criminal penalties for violators.
The Crowder Court applied its test to the SMLL and concluded that a loan made pursuant to that statute was an “other specialty”: “(1) the duties, obligations, prohibitions, and rights sought to be enforced by the plaintiffs are created and imposed solely by the SMLL, (2) the remedy pursued—forfeiture of all interest and unlawfully assessed fees, or, in the class action cases, forfeiture of three times the amount of interest charged— is authorized solely by the SMLL, and (3) the ascertainment of those amounts is readily ascertainable.” Id. at 72. Regarding the ascertainment of the damages, the Court rejected in Crowder the notion that the need for a court to conduct fact-finding meant that the amount was not readily ascertainable. Id. at 72 n.4.
Here, the parties agreed that the second prong of the Crowder test—whether the remedy pursued is authorized solely by the statute and does not otherwise exist at common law— was not at issue, so the MCLL was examined under the first and third prongs. Spicer argued that the licensing requirement is not created and imposed solely by the MCLL. Spicer did not dispute that the common law contained no licensing requirement but sees it as a means of enforcing the common law right of redress by a party to a usurious loan, recognized for centuries by Maryland courts.
Spicer’s view was too narrow. Crowder dictates that the MCLL’s many statutory protections—a licensing requirement; limitations on the amount of interest, fees, points, commissions, and other charges; and disclosure requirements, Crowder, 409 Md. at 58— were “created and imposed solely by the [statute],” id. at 72, not by common law.
Canons of statutory interpretation also caution against accepting Spicer’s invitation to read CL §12-302 as a mere vehicle for regulating usury, thus prescribing the manner in which a common law duty must be fulfilled, rather than having been created solely by the statute. First, the licensing requirement is silent as to usury. CL §12-302. Second, the legislature has given other reasons for its regulation of small consumer loans. Both parties quoted for us the preamble to the 1918 statute, which calls for “proper supervision” of small loans because “there is no regulation or provision of law which has proved effective for the protection of such borrowers and for the punishment of usurious money lenders.” Ch. 88, 1918 Md. Laws at 198.
The Court must read “‘a statute, if reasonably possible, so that no word, clause, sentence, or phrase is rendered surplusage, superfluous, meaningless, or nugatory.’” Donlon v. Montgomery Cty. Pub. Schs., 460 Md. 62, 77 (2018). The 1918 Act’s preamble recognizes protection of borrowers as separate from punishing against usury. Even if those are deemed two sides of the same coin, the 1945 statute’s purpose of providing “further remedial legislation,” Art. 11 §163, shows that, as Appellants argued, the MCLL and its predecessors go beyond what had previously existed, including the common law.
Therefore, it was held that the MCLL’s licensing requirement—coming as part of a statutory scheme that, like the SMLL, governs licensing, the amount of a loan, misleading advertising, discrimination, maximum interest rates, permissible fees, attorney’s fees, and lender’s disclosure duties, §§12-301 to 12-317—was “created and imposed solely” by statute and not by common law.
As for prong three, the Court agreed with Appellants. The need for fact-finding does not preclude ready ascertainment. Crowder, 409 Md. at 72 n.4 (“other issues may well be resolved based on the relevant documents”). Appellants correctly identified how the fact-finder will “resolve” liability “based on the relevant documents”: “all amounts paid by Appellants Price and Chovan to Appellee Spicer on each MCLL loan.” Appellee may be right that the “interest, costs, or other charges,” CL §12-413, recoverable by a borrower under the SMLL are more easily ascertainable—documented on forms required by the United States Department of Housing and Urban Development—but that does not mean that MCLL borrowers’ payments are not readily ascertainable. See Crowder, 409 Md. at 71 (“Relative ease of proof may be common in some statutory specialties, but it is not a requisite element.”). Even variable interest payments will be readily ascertainable by information in possession of both lender and borrower, such as bank statements or cashed checks; computing interest payments is a far cry from calculating wear on an ink cartridge or the amount of time employees being paid at different rates spent reading unsolicited faxes. Therefore, the third Crowder element was satisfied by the MCLL.
Accordingly, it was held that the MCLL’s licensing requirement is an “other specialty” within the meaning of CJP §5-102(a)(6) and that a claim brought on it is entitled to a twelve-year limitations period. The Court therefore answered “yes” to the question certified to us by the District Court.
COMMENTARY: Appellee contended that the MCLL’s enactment without a specific limitations period in 1975, after the enactment in 1973 of CJP §5-101’s three-year “blanket” limitations period, indicates the General Assembly’s intent that CJP §5-101 applies rather than CJP §5-102.
This contention was flawed. CJP §5-102 was also passed in 1973, and its predecessor statute dates to 1924, Crowder, 409 Md. at 67 (“the predecessor statute to CJP §5-102, codified as Art. 57, §3 of the 1924 Code, provided a 12-year period of limitations for a[ny]…‘other specialty whatsoever’”). The same logic, therefore, applies to the MCLL’s relationship with both limitations statutes. Second, the MCLL was not a new law in 1975, but previously existed in a different place in the Maryland Code and under a different name.
PRACTICE TIPS: “The conduct of [the business of making small loans] has long been a cause of general complaint, and of much hardship and injustice to borrowers, and there is no regulation or provision of law which has proved effective for the protection of such borrowers and for the punishment of usurious money lenders…and there is a real need for the enactment of a law that will enable [the] continuance [of small loan lending] under proper supervision[.]” Ch. 88, 1918 Md. Laws 197, 198.
BOTTOM LINE: Defendant, charged with possession of controlled dangerous substances, was entitled to offer prescriptions to establish part of the affirmative defense for possession established by statute, so long as the prescription can be authenticated, because admission of the prescription to prove the operative fact of the prescription’s existence was not hearsay, but a legally operative verbal act.
CASE: State of Maryland v. Steven Young, No. 2, Sept. Term, 2018 (filed Dec. 18, 2018) (Judges Barbera, Greene, ADKINS, McDonald, Watts, Hotten & Getty).
FACTS: In May 2014, Detective Manuel Larbi and a team of officers executed a search warrant for 2580 Marbourne Avenue in Baltimore, Maryland. Larbi observed Steven Young and another male in front of the house. The officers handcuffed both individuals and entered the residence. Once inside, the officers observed a third individual, Angela Grubber, later identified as Young’s wife. After Larbi read Young his rights pursuant to Miranda v. Arizona, 384 U.S. 436 (1966), Young advised that he had controlled dangerous substances in the bedroom. Larbi went into the bedroom and found 32 pills of methadone, 3.5 grams of heroin, seven Xanax pills, and a digital scale containing a powdery substance. In the kitchen cabinet, Larbi recovered 342 OxyContin pills, ten gel caps containing suspected heroin, and $1,498 in cash.
Young was arrested and charged with illegal possession of controlled substances and possession with intent to distribute controlled substances. Young filed a motion to suppress, asserting that he had attempted to provide prescriptions to police during the incident, and explained that he had valid prescriptions for methadone, Xanax, and Percocet. Young also claimed he had shown that his wife had valid prescriptions for methadone, Xanax, and Percocet. He did not attach copies of the prescriptions to the motion or otherwise provide specific information about them.
Before jury selection, the parties met with the trial judge in chambers. No record of the conversation was made. Upon returning to the courtroom, the prosecutor moved to exclude all evidence that Young had a prescription for the drugs seized. The court granted this motion in limine, without providing Young an opportunity to respond.
The State called Larbi, who was accepted as an expert in the field of narcotics identification and packaging. Larbi testified that, in his expert opinion, the substances, scale, and currency recovered were for distribution, not personal use. The detective recalled that during one conversation, “Mr. Young also stated that he does sell from time to time,” and that aside from four pills that were recovered, Young took ownership of all the other drugs at the house. Larbi also testified that Young never claimed to have a prescription for the drugs.
The jury convicted Young of eight counts: possession of heroin, oxycodone, methadone, and alprazolam; and possession with intent to distribute heroin, oxycodone, methadone, and alprazolam. After merging the possession charges, the trial judge sentenced Young to multiple years of imprisonment for the four counts of possession with intent to distribute.
Young appealed to the Court of Special Appeals, which affirmed in part and reversed in part, holding that valid prescriptions provided the basis of a statutory defense to the charges for possession of and possession with intent to distribute methadone, alprazolam, and oxycodone. The Court further opined that introducing them for such purpose, when properly authenticated, was not hearsay. As a result, the Court reversed each of Young’s convictions, except for his two convictions for possession of heroin and possession with intent to distribute heroin.
The Court of Appeals affirmed the judgment of the Court of Special Appeals.
LAW: The State argued that the alleged prescriptions were inadmissible hearsay because they would be introduced to prove the truth of the matter asserted. The State presented two iterations of this theory. First, it reasoned, the prescriptions went directly to the truth of the matter asserted. The State construed the word “prescription” in Md. Code (2002, 2012 Repl. Vol), §5-601 of the Criminal Law Article (“CR”) to mean “valid prescription,” which necessarily means that it was also “from an authorized provider” and that the provider was “operating in the course of professional practice.”
Hearsay is a “statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” Md. Rule 5- 801(c). There are two threshold questions when a hearsay objection is raised: “(1) whether the declaration at issue is a ‘statement,’ and (2) whether it is offered for the truth of the matter asserted. If the declaration is not a statement, or if it is not offered for the truth of the matter asserted, it is not hearsay and it will not be excluded under the hearsay rule.” Stoddard v. State, 389 Md. 681, 688-89 (2005). Maryland Rule 5-801(a) defines a “statement” as “(1) an oral or written assertion or (2) nonverbal conduct of a person, if it is intended by the person as an assertion.”
A trial court’s ruling on the admissibility of evidence is generally reviewed for abuse of discretion. See Hopkins v. State, 352 Md. 146, 158 (1998). Yet, appellate review of whether a statement is hearsay is conducted without deference to the trial court. Bernadyn v. State, 390 Md. 1, 8 (2005) (trial court has no discretion to admit hearsay in the absence of a provision providing for its admissibility).
Here, the parties did not contest that a prescription is an out-of-court statement—a written assertion. They focused instead on whether the prescriptions were offered for the truth of the matter asserted.
It is hornbook law that out-of-court statements are generally not admissible to prove the truth of the matter asserted. Yet, they can be admitted if the statements are “relevant and proffered not to establish the truth of the matter asserted therein, but simply to establish that the statement was made[.]” Lunsford v. Bd. of Educ. of Prince George’s Cty., 280 Md. 665, 670 (1977). This depends on whether the “fact asserted in the out-of-court statement [must be] sincerely and accurately stated in order for the out-of-court statement to help to prove what it is offered to prove[.]” 6A Lynn McLain, Maryland Evidence State and Federal §801:7, at 235 (3d ed. 2013).
In most state and federal courts, this hearsay analysis is cabined to intentional assertions. This is significant because, in other jurisdictions, if the assertion was unintentional or merely implicit, then it cannot be hearsay. Maryland departs from this general rule. This departure is best explained by Stoddard, the seminal Maryland case on implied assertion. The primary question in Stoddard was whether out-of-court statements are hearsay when offered to prove the truth of a factual proposition that was only implicitly—often unintentionally—communicated by the declarant. See id. at 689. In Stoddard, the defendant, Erik Stoddard, was convicted of second-degree murder and child abuse resulting in the death of three-year-old Calen DiRubbo (“Calen”). Stoddard was the only adult supervising Calen, her older brother, and her cousin, Jasmine Pritchett (“Jasmine”), for at least part of the time leading up to Calen’s death. The central issue involved the testimony of Jasmine’s mother, Jennifer Pritchett. Over defense counsel’s objection, the court admitted the mother’s testimony that Jasmine asked her “if [Stoddard] was going to get her.” Id. at 685. The prosecutor offered this as evidence that Jasmine witnessed Stoddard commit the murder.
On appeal, Stoddard argued that Jasmine’s utterance was hearsay because it was both a statement and offered for the truth of the matter asserted. Id. at 687–88. First, the Court determined that an implied assertion is, in fact, a statement, even though unintentionally made. To justify this, the Court compared the Maryland Rules to the Federal Rules of Evidence. See id. at 693–96. Most courts have adopted the Committee note to the Federal Rules, which provides that “nothing is an assertion unless intended to be one.” Fed. R. Evid. 801(a). Yet, Maryland has not.
Instead, it was observed that the “Committee note to Md. Rule 5-801 departs substantially from its federal counterpart. Rather than restricting the definition of ‘assertion,’ the note does not attempt to define ‘assertion’ . . . .” Stoddard, 389 Md. at 696. From this, it was explained, “[i]t is clear that in adopting the Maryland Rule, this Court did not intend to adopt the federal Advisory Committee’s view that ‘nothing is an assertion unless intended to be one,’” but rather intended to leave it to the development of case law. Id. Ultimately, the Court concluded that a verbal or written statement, even if unintentional, is still a statement under Maryland law.
Since Stoddard, the Court has consistently resisted an overbroad interpretation of its holding. In its companion case, authored by the same judge and published on the same date, the Court upheld a trial court’s decision to exclude a medical bill as hearsay, but gave cautionary advice for future cases. See Bernadyn v. State, 390 Md. 1 (2005). There, a sheriff’s deputy conducted a valid search of a residence. When the officer entered, the defendant (“Bernadyn”) was in the living room with a marijuana pipe and marijuana stems and seeds. While in the residence, the officer seized a medical bill addressed to “Michael Bernadyn, Jr., 2024 Morgan Street, Edgewood, Maryland 21040”—the address searched.
Over a defense hearsay objection, the trial court allowed the deputy to testify that he had seized the medical bill from 2024 Morgan Street. Although the Court of Appeals upheld the judge’s decision to exclude the bill, it found it significant that the “State did not argue simply that an item bearing Bernadyn’s name was found in the house and that Bernadyn probably resided at the house.” Id. at 11. Instead, the State argued that the bill itself was “a piece of evidence that shows who lives there.” Id. According to the State’s proffered use, the bill was an implied assertion offered for the truth of the statement that the doctor’s office who sent the bill was asserting that Bernadyn lived at the address. In highlighting this distinction, the Court curtailed Stoddard’s impact with its seeming approval of an alternate theory favoring admission—offering the statement as “merely probative circumstantial evidence.”
The Court continued to limit Stoddard in Garner v. State, 414 Md. 372 (2010). There the Court resolved the issue of whether circumstantial evidence probative of a fact that does not rely on the declarant’s implied assertion can be admissible—picking up directly where Bernadyn left off. Garner involved a phone call to the defendant’s number by someone who asked: “Yo, can I get a 40?” which referred to $40 worth of cocaine. An officer answered the phone, heard the unidentified caller make the request, and then later repeated the statement at trial. Of course, Garner objected— claiming the testimony was hearsay, and arguing it was an implied assertion and inadmissible under Stoddard.
This Court held that the question, “Yo, can I get a 40?,” was not hearsay, because it was a verbal act and should have been admitted into evidence. See id. at 388. “[N]either Stoddard nor Bernadyn presented the issue of whether the ‘verbal part of an act’” or an out-of-court statement “that constitutes circumstantial evidence of the declarant’s state of mind” are subject to exclusion as hearsay. Id. at 381. The statement was characterized in two different ways. First, it was admissible as a “verbal part of an act”—in that case, an offer. “The making of a wager or the purchase of a drug, legally or illegally, is a form of contract.” Id. at 382. Therefore, the anonymous caller’s statement had legal significance (i.e., 15 to prove the existence of a contract), regardless of whether the matter asserted was true. Alternatively, the Court concluded that the statements were non-hearsay circumstantial evidence of declarant’s state of mind. Id. at 381–82. Under either rationale, the “telephoned words of the would-be bettor” were not hearsay.
Young was charged under CR §5-601(a)(1), which provides that a person may not “possess or administer to another a controlled dangerous substance, unless obtained directly or by prescription or order from an authorized provider acting in the course of professional practice[.]” Thus, the subsection creates a statutory defense for possession, so long as the substance is obtained: (1) directly or by prescription or order; (2) from an authorized provider; and (3) from a provider acting in the course of professional practice. A prescription is a necessary element of the statutory defense under CR §5-601(a). As discussed above, evidence offered for the limited purpose of establishing an element of a claim or defense can be a verbal act, and not hearsay.
It was concluded that introducing the alleged prescriptions to establish a statutory defense was a verbal act because the statute creates legal rights, and the fact of prescription is relevant regardless of whether its particular components are “true.” But this does not mean that Young had successfully or convincingly established his affirmative defense. The ultimate question of whether the prescription was from an authorized provider acting in the course of professional practice remained a question of fact for the jury to resolve. But offering a prescription to prove the operative fact of the prescription’s existence would not have been hearsay.
Because the trial court erred in granting the motion in limine, the judgment of the Court of Special Appeals was affirmed and the matter was remand for a new trial on the specified possession charges.
COMMENTARY: Young also argued that the State failed to raise the issue of authentication at trial and therefore cannot raise that issue on appeal. The State responded that the prosecutor raised the issue of authentication in five ways. First, the prosecutor argued that there was no “authenticity”—meaning authentication. Second, by referring to the “alleged prescriptions,” the prosecutor asserted that they were not genuine. Third, the prosecutor argued that “there’s no certification,” meaning that the prescriptions were not admissible without a sponsoring witness who could establish that they were authentic. Fourth, the prosecutor pointed out that “Young’s wife is not going to testify today” and “the doctor is not present,” meaning that Young was not calling witnesses who could potentially sponsor and authenticate the prescriptions. Finally, the prosecutor cited Bryant v. State, 129 Md. App. 690 (2000), in which the only issue on appeal was authentication.
Under Maryland Rule 8-131(a), an appellate court will not decide an issue “unless it plainly appears by the record to have been raised in or decided by the trial court….” To preserve an issue for appeal, Maryland Rule 4-323(a) requires a party to “object to the admission of evidence…at the time the evidence is offered or as soon thereafter as the grounds for objection become apparent,” or the objection is waived. Maryland Rule 4- 323(c) tempers strict application of this requirement, making clear that a proffer is not the only way a party may preserve an issue for appeal. The party need only “make known to the court the action that the party desires the court to take or the objection to the action of the court.” Md. Rule 4-323(c). Moreover, “[i]f a party has no opportunity to object to a ruling or order at the time it is made, the absence of an objection at that time does not constitute a waiver of the objection.” Id.
Based on the record below—Young’s motion to suppress, the prosecutor’s reference to the discussion in chambers, the prosecutor’s motion in limine, and the judge’s subsequent ruling—the Court was satisfied that the judge had sufficient notice of Young’s intention to introduce the prescriptions into evidence, and that the judge’s ruling excluding them was intended to be the “final word on the matter.” See Prout v. State, 311 Md. 348, 357 (1988) (applying current Rule 4-323(c)). Additionally, although Young did not respond or object to the State’s motion in limine, he had “no opportunity” to do so. Md. Rule 5-323(c). Before the prosecutor finished making her argument, the trial judge cut her off midsentence and granted her motion. For these reasons, it was held that Young’s objection to the trial court’s motion in limine ruling was preserved for review.
PRACTICE TIPS: “The substantive law gives certain types of out-of-court statements immediate legal consequences. Such statements are termed ‘verbal acts’ and are non-hearsay, because they have relevance even if the declarant was insincere or inaccurate. Most categories of verbal acts are necessary to the creation of certain types of claims, charges, and defenses.” 6A Lynn McLain, Maryland Evidence State and Federal §801:7, at 235 (3d ed. 2013).
BOTTOM LINE: The Court of Appeals held that disbarment was the appropriate sanction when an attorney’s protracted involvement in an estate case resulted in, among other violations, a conflict of interest, mishandling of funds belonging to the estate, multiple misrepresentations to the court as well as his clients, and frivolous litigation.
CASE: Attorney Grievance Commission of Maryland v. Benjamin Jeremy Woolery, Misc. Docket AG No. 20, Sept. Term, 2017 (filed Dec. 20, 2018) (Judges Barbera, GREENE, McDonald, Watts, Hotten, Getty & Adkins (Senior Judge, Specially Assigned)).
FACTS: Ronald Hutchens sought Benjamin Woolery’s assistance in opening and administering the estate of Mr. Hutchens’s longtime friend, Freelove Jefferies. At the time of his death, Mr. Jefferies was widowed. Mr. Hutchens had been a caretaker for Mr. Jefferies prior to his death. On February 22, 2012, Mr. Hutchens met with Woolery to discuss Mr. Jefferies’s Estate and at that time gave Woolery a check payable to Woolery’s law firm in the amount of $1,000 as an initial fee. On February 24, 2012, Mr. Hutchens memorialized Woolery’s representation in a written Retainer Agreement which included a statement that “Charges will be made to and paid by the Estate.” Woolery explained to his client that the legal fees would be paid from the Estate, and he estimated that his charges would be “about $5,000.” At this time, both Woolery and Mr. Hutchens anticipated that Mr. Hutchens would be appointed as Personal Representative of the Estate because Mr. Hutchens had been nominated as such in one of Mr. Jefferies’s wills.
On the same day that Mr. Hutchens signed the retainer agreement, Woolery filed a Regular Estate Petition for Administration on behalf of Mr. Hutchens. Woolery’s estimation of the value of real property reflected Woolery’s knowledge of two parcels of real property, both unimproved, and a third parcel of real property located at 13201 Old Indian Head Road in Brandywine, Maryland, which contained a house. Woolery knew that a tenant lived in the Brandywine house, and he had copies of the lease agreement for the rental property.
Mr. Jefferies left two signed wills. One of the wills, executed on November 6, 2007, had been held by the Register of Wills for Prince George’s County. Woolery sought to probate Mr. Jefferies’s second will, which had been executed on May 1, 2008, when he filed the Regular Estate Petition for Administration. On February 24, 2012, the same day that Woolery filed the Regular Estate Petition for Administration, Mr. Jefferies’s granddaughter, Deidre Jeffries, also filed a petition for administration of Mr. Jefferies’s Estate and requested that any wills and codicils be admitted to judicial probate. Ms. Deidre Jefferies was not named as a legatee in the 2008 will and was bequeathed $1.00 under the 2007 will. Mr. Hutchens, on the other hand, had been nominated to serve as the personal representative in the 2007 will and was named in the 2008 will as the alternate personal representative behind an attorney who had predeceased Mr. Jefferies. The Register of Wills neither named Mr. Hutchens as personal representative, nor appointed him special administrator for the estate. In May 2012, Ms. Deidre Jefferies challenged Mr. Jefferies’s competency and asserted that Mr. Hutchens procured the wills by the exercise of undue influence and/or fraud. In her Petition to Caveat and Petition for Appointment of Special Administrator, filed in the Orphans’ Court for Prince George’s County, Ms. Jefferies sought a declaration that the wills were invalid and that the Court find that Mr. Jefferies died intestate. She also requested that Mr. Hutchens answer the petition.
On June 14, 2012, the Orphans’ Court for Prince George’s County appointed Justin Sasser, Esq., as special administrator of the Jefferies Estate. In that role, Mr. Sasser was responsible for, among other duties, marshalling the assets of the estate. Judge Snoddy found that “by virtue of his probate experience, [Woolery] was also aware of Sasser’s responsibilities as special administrator.”
Woolery knew of and had access to the Estate’s assets through Mr. Hutchens. For example, Woolery knew that Mr. Hutchens collected weekly cash rent payments of $150 from the tenant of the Brandywine property. Additionally, Woolery knew that at the time of Mr. Jefferies death, he had a savings account at Prince George’s Federal Savings Bank (“PGFSB”), which had a balance of $1,590 on February 21, 2012. Woolery knew of the existence of the bank account because PGFSB sent the account statements to the Woolery’s firm’s address. Additionally, Woolery received a $150 cash rent payment as well as a tax refund check issued to Mr. Jefferies, and Woolery deposited both amounts in the account for a total of $2,995. Woolery’s firm continued to receive monthly bank statements at the firm address through May 2013.
Despite Woolery’s knowledge of these assets of the Jefferies Estate, Woolery did not promptly notify Mr. Sasser of the existence of the assets or the records in his possession. Judge Snoddy found that the earliest date Woolery sought to disclose information about the bank account’s assets was two months after Mr. Sasser’s appointment as special administrator on or about August 7, 2012. In addition, despite his knowledge that Mr. Hutchens and/or another individual named William Watson had been collecting the weekly rent payments from the tenant in the Brandywine property, both prior to and after the death of their friend Mr. Jefferies, Woolery failed to inform Mr. Sasser about the rent collection. Woolery also failed to advise Mr. Sasser that Mr. Hutchens and Mr. Watson performed maintenance at the rental property.
As special administrator, Mr. Sasser should have been informed of the existence of Estate assets, and those assets should have been accounted for in an Estate bank account. See § 6-403 of the Estates and Trusts Article, Md. Code Ann. (1974, 2017 Repl. Vol.) (stating that a special administrator assumes generally the duties unperformed by a personal representative and has all powers necessary to collect, manage, and preserve property of the Estate).
Although Woolery’s representation of Mr. Hutchens should have been limited to defending the caveat petition filed by Ms. Deidre Jeffries, his involvement in the case during the next year evolved to include matters well beyond defending the caveat petition. For example, when Mr. Sasser missed the deadline for filing an Inventory and an Information Report, Woolery prepared the documents, signed them “Attorney” and “passed them on to Sasser, who reviewed them and signed as special administrator.” Woolery was not Mr. Sasser’s attorney at the time of preparation of these documents in April 2013.
In May 2013, Woolery identified himself as “Counsel for the Estate of Freelove Jefferies” in correspondence to counsel for the tax sale purchaser of a previously unknown fifth parcel of land owned by Mr. Jefferies. With respect to this reference of “Counsel for the Estate of Freelove Jefferies,” Judge Snoddy found that “[a]t the time the Woolery wrote to [counsel], he did not represent the special administrator nor was he otherwise counsel for the Estate of Freelove Jefferies.” The hearing judge also found that Mr. Sasser, the special administrator at the time, had not authorized, nor delegated to, Woolery the task of managing the Estate’s assets.
In September 2013, Mr. Watson formally retained Woolery to represent him in defending Mr. Jefferies’s wills and other matters related to the Estate. The retainer agreement provided that Woolery would represent Mr. Watson “to defend both of Freelove Jefferies’ ‘wills’; use Ron’s lot & proceeds therefrom to pay [Mr.] Woolery, and hopefully Mr. Watson c[ould] get his lot(s) from [the] Estate without paying [Mr.] Woolery.” The agreement contained a clause that Woolery’s representation would be in consideration of “$1.00.” The next day, September 10, 2013, Mr. Sasser, as special administrator, notified the other attorneys in the case that he intended to hire Woolery to defend the will in the caveat proceeding brought by Ms. Jefferies. After receiving no opposition from the interested parties, Mr. Sasser formally retained Woolery for representation of the Estate in the caveat proceeding. Mr. Sasser did not retain Woolery to represent Mr. Sasser in his capacity as special administrator in the Orphans’ Court. At this point, Woolery represented Mr. Hutchens, who was a legatee under the 2008 will, Mr. Watson, who was a legatee under both of Mr. Jefferies’s wills, and the Estate for purposes of the caveat proceeding.
Mr. Hutchens terminated Woolery’s legal representation on January 29, 2015. Several days after doing so, Mr. Hutchens delivered to Woolery $1,200 in cash, which he had received from the tenant in the Brandywine property. Woolery deposited the funds into his law firm’s attorney trust account and failed to notify Ms. Miller of his receipt of the funds. Despite the termination of representation, Woolery thereafter filed pleadings in Mr. Hutchens’s name without authorization. Woolery failed to withdraw his appearance entered on behalf of Mr. Hutchens from either the Orphans’ Court or the Circuit Court. On one occasion, Woolery appeared in Mr. Hutchens’s driveway unannounced and asked Mr. Hutchens to sign a document that promised to settle the matter between them. On another occasion, Woolery sent a letter to Mr. Hutchens in which he stated that “Ms. Miller is planning to go after you following the February 17/18 Jury Trial in the belief (which I’ve been sharing with you) that you ‘stole’ up to $350,000 of Freelove’s money.” He also referred to the receipt of the $1,200 cash and indicated to Mr. Hutchens that “those funds are ‘being used to cover Litigation Expenses as well as reduce the Estate’s debt to me for the Taxes I personally helped pay.’” The hearing judge found that Woolery’s letter misrepresented the facts and that his actions were an “apparent effort to manipulate [Mr.] Hutchens to keep [Woolery] on as counsel[.]”
The Court of Appeals concluded that the evidence admitted at trial clearly and convincingly supported the hearing judge’s conclusions of law as to violations of the Rules. Accordingly, Woolery was disbarred.
LAW: MARPC 19-301.1 Competence (1.1) provides: “An attorney shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Once Woolery chose to insert himself into the estate administration process as counsel for Mr. Hutchens, he was obligated to do so competently. Among other acts violative of Rule 1.1, the hearing judge found that Woolery acted inappropriately. The hearing judge appropriately observed that “[a]lthough he was not officially charged with the responsibility of administering the Jefferies Estate, the Woolery effectively chose to take on such a role without authorization through his actions.” Judge Snoddy concluded that Woolery failed to provide competent representation to each of the three clients: Mr. Watson, Mr. Hutchens, and Mr. Sasser.
Woolery excepted to the conclusion that he did not competently represent his three clients in violation of Rule 1.1, arguing that he did not lose the caveat litigation, that Mr. Watson received his real estate parcel, and that the Estate’s property was not lost to tax sale. Because the Court does not measure an attorney’s violation of the Rules of Professional Conduct based on success, or failure to succeed, Woolery’s exception was overruled.
MARPC 19-301.2 Scope of Representation and Allocation of Authority Between Client and Attorney (1.2) provides, in pertinent part: “[A]n attorney shall abide by a client’s decisions concerning the objectives of the representation and, when appropriate, shall consult with the client as to the means by which they are to be pursued. An attorney may take such action on behalf of the client as is impliedly authorized to carry out the representation. An attorney shall abide by a client’s decision whether to settle a matter.”
The hearing judge found that instead of settling the caveat matter on October 31, 2014 according to the wishes of Mr. Watson, Woolery “torpedoed the deal by raising an issue involving another client–[Mr.] Hutchens–after the parties seemingly had agreed to resolve the matter.” Thus, Woolery violated the Rule pertaining to scope of representation and allocation of authority between client and lawyer when he failed to abide by his client’s decision to settle the matter.
Woolery excepted to the hearing judge’s conclusion of law that he violated Rule 1.2 for the same reasons that he excepts to the conclusion that he violated Rule 1.1. The exception was overruled because Rule 1.2 charges an attorney with the directive to “abide by a client’s decisions concerning the objectives of the representation[.]” MARPC 19-301.2; see also Attorney Grievance Comm’n v. Sperling, 432 Md. 471, 493, 69 A.3d 478, 490-91 (2013).
Woolery’s dual representation of Mr. Hutchens and Mr. Watson “was fraught with the potential for a conflict of interest from the outset,” even in spite of the fact that Mr. Hutchens renounced his right to any claim under the 2008 will and, in fact, desired for Mr. Watson to receive his bequest. The hearing judge concluded that although there already was a “significant risk” that Woolery’s representation of Mr. Hutchens could be “materially limited” by his representation of Mr. Watson, and vice versa, the potential conflict actually materialized. On October 31, 2014, the day of settlement negotiations with Ms. Miller, “Woolery acted in a manner directly contrary to the wishes of [Mr.] Watson by blocking the settlement deal agreed to by all parties[.]” Additionally, Woolery’s efforts to prevent the distribution of the Estate “served to prevent [Mr.] Watson from receiving his distribution before his death.” These actions exemplify Woolery’s conflict of interest in his representation of Mr. Watson.
MARPC 19-303.3 Candor Toward the Tribunal (3.3) provides in pertinent part, “(a) An attorney shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the attorney[.]”
Prompted by his “personal animus against [Ms.] Miller following the October 31, 2014, settlement hearing and by [Mr.] Watson’s recent termination of his representation[,]” Woolery falsely asserted in a motion to remove Ms. Miller as trustee, which he supported with an affidavit signed by Mr. Hutchens, that Ms. Miller had undertaken representation of Mr. Watson. In contrast, Ms. Miller testified that she never represented Mr. Watson and that he never signed a retainer agreement with her. Furthermore, she testified that Mr. Watson did not give her $1.00 in exchange for her representation, nor did he make a call from her office to Mr. Hutchens in front of her. The hearing judge found that Woolery “knew he had no basis in fact to believe [that Ms. Miller had represented Mr. Watson]” when Woolery raised the issue with the court. On this matter, Judge Snoddy was free to credit Ms. Miller’s testimony as to whether she represented Mr. Watson. Additionally, Woolery violated Rule 3.3 when he claimed damages on behalf of Mr. Hutchens in his suit against Mr. Sasser filed in the District Court. As Mr. Hutchens had no claim to those amounts, “Woolery was seeking to recover those payments solely for the benefit of himself and/or his law firm.”
For these reasons, it was concluded that the evidence admitted at trial clearly and convincingly supported the hearing judge’s conclusions of law as to violations of the Rules. Accordingly, it was further concluded that the appropriate sanction was disbarment.
COMMENTARY: Woolery recommended that he be sanctioned with a thirty-day suspension. Bar Counsel, on the other hand, recommended a sanction of disbarment.
Sanction are intended to “protect the public and public’s confidence in the legal profession.” Attorney Grievance Comm’n v. Moore, 451 Md. 55, 88 (2017). Sanctions protect the public when those sanctions are “commensurate with the nature and gravity of the violations and the intent with which they were committed.” Attorney Grievance Comm’n v. Powers, 454 Md. 79, 107 (2017). When deciding the proper sanction for an errant attorney’s conduct, “…we do not simply tote up the number of possible violations and aggravating factors to arrive at an appropriate sanction.” Attorney Grievance Comm’n v. Ndi, 459 Md. 42, 65, 184 A.3d 25, 38 (2018).
Several aggravating factors were implicated in this case. Woolery was reprimanded by the Court on December 15, 2017 and again in a letter dated June 29, 2018. The bases for the reprimand included Woolery’s failure to file fiduciary tax returns for a fifteen-year period on behalf of an estate for which he had been appointed special administrator and his deposit of the estate’s funds in his law firm’s attorney trust account. Additionally, Woolery failed to properly create and maintain client matter records in accordance with the Maryland Rules governing attorney trust accounts. Woolery’s conduct reflected a pattern of obstructive attempts to prevent the disbursement of estate funds so that he could secure reimbursement for his legal fees. It was also concluded that Woolery’s conduct was primarily spurred by a pecuniary, selfish motive, another aggravating factor.
Where the facts, as in the case at bar, are uncontroverted that an attorney intentionally withheld and disbursed to himself funds, which belong to an Estate, and did so without authorization, the attorney has misappropriated funds. That the attorney did so without prior court approval and without an attorney-client relationship between himself and the Estate further aggravates the misappropriation. Among the most egregious of the violations were Mr. Woolery’s failure to notify the court-appointed fiduciaries that he was in possession of Estate funds and then his misappropriation of those funds. Indeed, Mr. Woolery has yet to reimburse Mr. Jefferies’s Estate for the funds he retained. For that reason and the others, it was held that disbarment is the appropriate sanction in the present case
PRACTICE TIPS: “The legal process should never be used as…merely a device to apply pressure to the other parties[.]” See Attorney Grievance Comm’n v. Gisriel, 409 Md. 331, 356-57 (2009).