Professional Responsibility, Indefinite suspension: Indefinite suspension with right to apply for reinstatement after six months was appropriate sanction for previously disbarred and reinstated attorney who violated Maryland Lawyers’ Rules of Professional Conduct by, among other things, misrepresenting to the court the total amount owed to his client by its debtors. Attorney Grievance Commission v. Neil Warren Steinhorn, Misc. Docket AG No. 15, Sept. Term, 2017.
Consumer Law, Debt collection: Circuit court erred in dismissing homeowners’ viable Maryland Consumer Debt Collection Act claim, where homeowners challenged the defendant’s right to file liens rather than the amount the defendant attempted to collect. David Mills, et al. v. Galyn Manor Homeowner’s Association, Inc., No. 1460, Sept. Term 2017.
Criminal Procedure, Search & seizure: Where application for search warrant detailed a number of visual observations made by police upon their earlier entry into defendant’s residence, including drugs and handguns, circuit court properly denied defendant’s motion to suppress evidence because the extent and duration of that earlier intrusion in the course of which the police made those observations was a protective sweep, which was not unreasonable under the circumstances. Groves v. State, No. 2146, Sept. Term, 2017.
Real Property, Compensation for displaced persons: While certain persons who are displaced as a consequence of real property being acquired for redevelopment are entitled to compensation for their relocation expenses, plaintiff was not eligible for relocation assistance because the “displacing agency” had already taken title to the real property prior to the time plaintiff was required to relocate leased space in the property that is being redeveloped. Wireless One, Inc. v. Mayor and City Council of Baltimore City, No. 1852 Sept. Term, 2017.
BOTTOM LINE: Indefinite suspension with right to apply for reinstatement after six months was appropriate sanction for previously disbarred and reinstated attorney who violated Maryland Lawyers’ Rules of Professional Conduct by, among other things, misrepresenting to the court the total amount owed to his client by its debtors.
CASE: Attorney Grievance Commission v. Neil Warren Steinhorn, Misc. Docket AG No. 15, Sept. Term, 2017 (filed Dec. 20, 2018) (Judges BARBERA, Greene, Adkins, McDonald, Watts, Hotten & Getty).
FACTS: On June 26, 2017, the Attorney Grievance Commission of Maryland, through Bar Counsel, filed a Petition for Disciplinary or Remedial Action against Neil Warren Steinhorn, alleging, among other things, violations of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) 3.3 (Candor Toward the Tribunal) and 8.4 (Misconduct). The charges arose from misleading complaints Steinhorn filed with the District Court of Maryland sitting in Baltimore County while representing the Council of Unit Owners of Kingswood Commons, Inc., a homeowners’ association, in several debt collection cases. Specifically, Steinhorn inflated the damages sought on the complaint form by thirty percent without separately indicating, as the form requires, that this increase constituted his attorney’s fees.
Steinhorn was admitted to the Maryland Bar in 1974. In 1979, after a five-year stint as an Assistant State’s Attorney, Steinhorn transitioned to private practice. On June 4, 1990, Steinhorn was convicted of money laundering and transporting stolen goods, and subsequently, in September 1990, he was suspended from practicing law in Maryland. Thereafter, on February 1, 1994, following affirmance of his convictions, he was disbarred.
In October 2007, the Court of Appeals granted Steinhorn’s Petition for Reinstatement to the Maryland Bar. Since his reinstatement, Steinhorn has handled exclusively debt collection cases, representing homeowner associations, small businesses, and bail bondsmen. In one such matter, Steinhorn assisted Kingswood in collecting past due condominium fees from several condominium unit owners.
As part of his work for Kingswood, Steinhorn filed two form complaints—entitled DC-CV-001, Complaint/Application and Affidavit in Support of Judgment—with the District Court of Maryland sitting in Baltimore County in 2014. The first complaint, filed on January 14, 2014, sought to recover $9,120 in delinquent condominium fees from Aileen Pratt, a condominium unit owner. The second complaint, filed on April 2, 2014, also sought to collect $9,120 in outstanding condominium fees from Jason Green, another condominium unit owner. Steinhorn submitted affidavits in support of those claims, which were signed by Marc Greenberg, an agent of Kingswood. Greenberg relied on Steinhorn’s representations about the accuracy of those filings.
The $9,120 figure listed on both complaints represented unpaid condominium fees for the period 2011-2014 plus Steinhorn’s thirty-percent attorney’s fee. In other words, of the $9,120 sought in the complaints, $6,912 was for the outstanding HOA fees and $2,208 was for attorney’s fees. Steinhorn conjoined the unpaid assessments ($6,912) with the agreed-upon attorney’s fees ($2,208) in each complaint filed with the court, listing one figure ($9,120) in the damages line, leaving the line designated for attorney’s fees blank.
In 2016, Kingswood terminated Steinhorn’s representation and replaced him with Brian Fellner. Fellner discovered that Steinhorn did not timely remit several payments he collected for Kingswood. Fellner then filed a complaint, alleging that Steinhorn’s delay was unwarranted. Bar Counsel investigated and determined that Steinhorn was also inflating the amount of damages sought in his court filings, and that he failed to rectify the issue once it was called to his attention. The Grievance Commission concluded that such conduct violated MLRPC 3.3 and 8.4, among other charged violations.
During the hearing on his conduct, Steinhorn “candidly admitted” that he made a mistake, and he “denied any intent to deceive the court.” He testified that he only sought to collect that which was rightfully owed to him based on his fee agreement with Kingswood. The hearing judge found, as a matter of fact, that Steinhorn’s testimony was credible and that Steinhorn never intended to make a false statement to the District Court. The hearing judge was persuaded by the fact that Steinhorn did not personally benefit from his conduct. The judge was also swayed by Steinhorn’s sincere remorse and his implementation of new office procedures to prevent those issues from reoccurring.
The hearing judge concluded that the Commission failed to demonstrate, by clear and convincing evidence, that Steinhorn violated MLRPC 3.3(a)(1) and 8.4 (a), (c), and (d). The Commission filed exceptions to the hearing judge’s conclusions of law.
The Court of Appeals held that the appropriate sanction was indefinite suspension with the right to apply for reinstatement after six months.
LAW: The Court of Appeals disagreed with the hearing judge’s legal conclusions and held that Steinhorn violated MLRPC 3.3(a)(1) and 8.4(a), (c), and (d).
MLRPC 3.3(a)(1) provides, in pertinent part, that a lawyer shall not “knowingly…make a false statement of fact…to a tribunal.” This duty is premised on the idea that “[e]very court has the right to rely upon an attorney to assist it in ascertaining the truth of the case before it.” Attorney Grievance Comm’n v. Smith, 442 Md. 14, 34 (2015). Therefore, “an attorney ‘must be candid at all times with a tribunal or inquiry board.’” Butler, 456 Md. at 238 (quoting Attorney Grievance Comm’n v. Joseph, 422 Md. 670, 699 (2011)). Accordingly, a lawyer violates MLRPC 3.3(a)(1) when he or she knowingly provides the court with false information, Smith, 442 Md. at 34, or fails to correct any false information previously provided, Joseph, 422 Md. at 699.
The Commission contended that the hearing judge applied an erroneous legal standard in concluding that Steinhorn’s filings were not “knowingly false” because he had “no intent to deceive anyone” and no “party suffered any harm.”
Steinhorn testified that he reviewed each complaint to ensure its accuracy before filing it with the court. He further testified that he “knew what the attorney’s fees were,” that he “knew what the division was going to be subsequent to the payment of the judgment” ($6,912 for the debt and $2,208 for attorney’s fees), and that those figures “should have been separated.” Yet, despite this knowledge, Steinhorn did not separate those figures on the complaint forms he filed with the District Court, and he did not file corrected forms thereafter, even after this issue was called to his attention. It follows that Steinhorn knowingly submitted false information to the court—that the underlying debt was $9,120, when, in fact, it was only $6,912—which he failed ever to correct. Consequently, clear and convincing evidence demonstrates that Steinhorn violated MLRPC 3.3(a)(1).
MLRPC 8.4(c) states that “[i]t is professional misconduct for a lawyer to…engage in conduct involving dishonesty, fraud, deceit or misrepresentation.” This rule is grounded in the idea that “[h]onesty is of paramount importance in the practice of law.” Attorney Grievance Comm’n v. Agbaje, 438 Md. 695, 715 (2014) (citing Attorney Grievance Comm’n v. Ellison, 384 Md. 688 (2005)). “In the context of Rule 8.4(c), so long as an attorney knowingly makes a false statement, he necessarily engages in conduct involving misrepresentation. No intent to deceive is necessary.” Attorney Grievance Comm’n v. Dore, 433 Md. 685, 708 (2013).
It was necessary to address the significance of Steinhorn’s misrepresentations independent of his lack of candor towards the tribunal because there are instances where an attorney may engage in misleading conduct, in violation of MLRPC 8.4(c), that is not necessarily dishonest conduct, in violation of 3.3(a)(1). See Attorney Grievance Comm’n v. Nwadike, 416 Md. 180, 194 (2010) (noting that an attorney can mislead “by silence and lack of communication[,]” in violation of MLRPC 8.4(c), without acting dishonestly). By grouping his attorney’s fees with the damages listed in his complaints, Steinhorn misled the court into believing that he was not collecting any attorney’s fees when the facts demonstrate otherwise. In other words, Steinhorn concealed the material fact that he was collecting attorney’s fees, thereby preventing the court from assessing the reasonableness of those fees.
Concealment of material facts constitutes an MLRPC 8.4(c) violation. See Attorney Grievance Comm’n v. Barton, 442 Md. 91, 142 (2015). Accordingly, it was held that when a lawyer, like Steinhorn, files a complaint and conceals his or her intent to collect attorney’s fees by joining them together with the damages sought, listing one aggregate amount due, that lawyer commits misconduct.
In light of the above, there was no difficulty sustaining the Commission’s final exception, and therefore concluding that Steinhorn also violated MLRPC 8.4(d). MLRPC 8.4(d) provides that “[i]t is professional misconduct for a lawyer to . . . engage in conduct that is prejudicial to the administration of justice.” Prejudice to the administration of justice may “be measured by the practical implications the attorney’s conduct has on the day-to-day operation of our court system.” Dore, 433 Md. at 710.
Here, Steinhorn failed to inform the court that he was collecting attorney’s fees. Through his omissions, Steinhorn deprived the court of the ability to evaluate the reasonableness of his fees, an essential judicial oversight function. See Cohn v. Bd. of Prof’l Responsibility, 151 S.W.3d 473, 489 (Tenn. 2004). Steinhorn also failed to submit any supporting documentation justifying the reasonableness of the fees sought, in contravention of the Maryland Rules. See Md. Rule 3-306(c)(4)(C); Md. Rule 3-741(d)(2). Such conduct is prejudicial to the administration of justice, in violation of MLRPC 8.4(d). Robaton, 411 Md. at 429.
Accordingly, it was held that an indefinite suspension from the practice of law is the appropriate sanction to be imposed in this case and that Steinhorn will be eligible to apply for reinstatement no sooner than six months after his suspension takes effect.
COMMENTARY: The Court has imposed a range of sanctions for dishonest and deceitful conduct, from reprimand to disbarment, with a suspension (be it definite or indefinite) falling somewhere between the two. See Myers, 333 Md. at 449-50; Attorney Grievance Comm’n v. Litman, 440 Md. 205, 219 (2014). Precedent indicates that disbarment is warranted, typically as a matter of course, when an attorney is “willfully dishonest for personal gain.” Myers, 333 Md. at 449. In contrast, a reprimand may be appropriate when, among other reasons, there is no specific intent and the charged attorney either is a neophyte who expeditiously admits to misconduct, Attorney Grievance Comm’n v. Maxwell, 307 Md. 600, 604 (1986), or lacks a disciplinary record, Attorney Grievance Comm’n v. Paul, 423 Md. 268, 293 (2011). Ultimately, however, “‘[t]he appropriate sanction depends on the facts and circumstances of the case.’” Attorney Grievance Comm’n v. Sweitzer, 452 Md. 26, 43 (2017).
Here, neither disbarment nor a reprimand was suitable. On the one hand, Steinhorn did not exhibit a specific intent to deceive. He knowingly submitted inaccurate information to the court, but he did not purposefully do so for personal gain, and no client or the court suffered any palpable harm, rendering disbarment unsuitable. On the other hand, Steinhorn is an experienced attorney, with a prior disbarment. Further, in the present disciplinary action, it was concluded that Steinhorn committed serious violations of the MLRPC, rendering a reprimand inadequate. See Attorney Grievance Comm’n v. Gordon, 413 Md. 46, 63 (2010) (holding that “misrepresentations to the court in violation of [MLRPC] 3.3(a)(1)…and 8.4(c)” warrant a sanction greater than a reprimand).
It was therefore held that an indefinite suspension from the practice of law is the appropriate sanction to be imposed in this case. The Court was informed by its decisions in Attorney Grievance Comm’n v. Poverman, 440 Md. 588 (2014) and Attorney Grievance Comm’n v. Robaton, 411 Md. 415 (2009). In Poverman, a reciprocal disciplinary case, we imposed an indefinite suspension upon an attorney who falsely certified on his annual registration statement to the Delaware Bar that there were no disciplinary charges pending against him. 440 Md. at 592, 595, 607. In imposing the sanction, the Court balanced the severity of Poverman’s misconduct—a knowing misrepresentation to an authoritative body—and his substantial experience practicing law with the fact that no clients or investors were ever harmed. Id. at 606-08.
Similarly, in Robaton, the Court imposed an indefinite suspension upon an attorney who failed to make mandatory disclosures on several bankruptcy forms filed on behalf of a client. 411 Md. at 425-26. Although the misconduct “resulted from indifference, rather than from a selfish motive[,]” none of those facts negated the severity of the attorney’s misconduct and the need for a comparable sanction. Id. at 430-31.
Here, Steinhorn’s conduct here was akin to Poverman and Robaton. Although Steinhorn may not have acted with a selfish motive or harmed any client, neither negates the fact that he knowingly submitted false information to the court, which any reasonable attorney with his extensive experience handling debt collection matters would have known to avoid. See Attorney Grievance Comm’n v. Hodes, 441 Md. 136, 208 (2014) (highlighting an attorney’s substantial experience in a specific field of law as the basis for a more severe sanction). Furthermore, unlike in Poverman and Robaton, Steinhorn’s disciplinary record is severely blemished by his previous disbarment.
PRACTICE TIPS: “Conduct which is likely to…engender disrespect for the court is conduct prejudicial to the administration of justice.” Attorney Grievance Comm’n v. Brigerman, 441 Md. 23, 40 (2014). [/box]
BOTTOM LINE: Circuit court erred in dismissing homeowners’ viable Maryland Consumer Debt Collection Act claim, where homeowners challenged the defendant’s right to file liens rather than the amount the defendant attempted to collect.
CASE: David Mills, et al. v. Galyn Manor Homeowner’s Association, Inc., No. 1460, Sept. Term 2017 (filed Dec. 21, 2018) (Judges BERGER, Arthur & Leahy).
FACTS: This case arose out of an action filed in the Circuit Court for Frederick County by appellants, David and Tammy Mills (the “Homeowners”) against appellee, Galyn Manor Homeowners Association, Inc. (“Galyn Manor”).
The Homeowners owned a home in Frederick, Maryland and were members of Galyn Manor, a homeowners’ association (“HOA”). As members, the Homeowners were bound by Galyn Manor’s governing documents, which contain the bylaws and declaration of covenants, conditions, restrictions, and easements. The bylaws and declaration require members to comply with certain rules and restrictions, and to pay yearly assessment fees, due in quarterly installments. The declaration sets forth the way delinquent assessments accrue interest and late fees. Galyn Manor may also seek attorney’s fees and costs in collecting unpaid assessments. To secure the payment of assessment fees, Galyn Manor holds a continuing lien on each member’s property.
The governing documents also authorize Galyn Manor to fine members who violate certain sections of the declaration and bylaws. For example, fines are permitted when a member constructs a structure on a lot without the HOA’s permission. The declaration includes trailers in its definition of a “structure.” These fines may be enforced and collected in the same manner as unpaid assessments.
In February 2007, Galyn Manor’s former management company — Chambers Management, Inc. (“Chambers”) — discovered that the Homeowners regularly parked a large trailer on their property overnight. Chambers notified the Homeowners that this conduct was in violation of the HOA’s governing documents. Chambers further advised the Homeowners that they would be subject to a $50 fine for each day that the trailer was parked on their property. The Homeowners were given thirty days to correct the violation. Chambers sent the Homeowners four more letters between April and October 2007, but the Homeowners did not take any corrective action. On October 24, 2007, Chambers sent another letter to the Homeowners, informing them that the Homeowners owed $645 in fines. The letter further provided that it was the Homeowners’ final notice, that the Homeowners had until November 26 to pay, and that the letter served as “an attempt to collect a debt[.]”
Galyn Manor retained Andrews & Lawrence Professional Services, LLC (“Andrews”) to provide legal services and to collect overdue assessments. By March 2008, the Homeowners accrued $1,500 in violations, while also falling behind on their quarterly assessment payments. Andrews notified the Homeowners that the Homeowners owed $2,632. The letter did not specifically provide whether the fines from the parking violations were included in the stated amount. Andrews warned the Homeowners that it would accelerate the debt and file a lien if the Homeowners did not satisfy the debt within thirty days.
The Homeowners responded to the notice in a handwritten letter to Andrews, agreeing to “make payment arrangements for all overdue quarterly HOA dues,” but “disputed the validity of all other fines.” The Homeowners further stated that they were preparing “factual evidence to proceed with a hearing.” The Homeowners did not explain their failure to respond within the thirty-day period. Andrews sent the Homeowners a second notice of acceleration and intent to file a lien in August 2010. Andrews stated that the Homeowners owed $4,256 in assessments, late fees, costs, and attorney’s fees. Andrews again provided the Homeowners with their rights under the MCLA, and the Homeowners again failed to respond within thirty days. Thereafter, a statement of lien in the amount of $4,791 was filed and recorded.
After nearly ten years of collection efforts, the Homeowners commenced this suit alleging that Galyn Manor’s collection efforts violated the Maryland Consumer Protection Act (“MCPA”) and the Maryland Consumer Debt Collection Act (“MCDCA”). At trial, the court granted Galyn Manor’s motion for judgment at the close of the Homeowners’ case-in-chief, ruling that the Homeowners did not present sufficient evidence to satisfy the elements of either cause of action.
The Homeowners appealed to the Court of Special Appeals, which affirmed in part and reversed in part.
LAW: The MCPA prohibits deception or other misleading conduct in the collection of consumer debts. Md. Code (1975, 2013 Repl. Vol.), §13-303(5), of the Commercial Law Article (“CL”). The Homeowners sought to hold Galyn Manor liable for Andrews’ conduct in collecting debts under a theory of respondeat superior. The circuit court agreed with Galyn Manor, holding that all of the collection activities against the Homeowners were conducted by Andrews on behalf of Galyn and that the MCPA exempts attorneys from liability under the Act. See Fontell v. Hassett, 870 F. Supp. 2d 395, 414 (D. Md. 2012).
In Fontell, the United States District Court for the District of Maryland held that a HOA could not be held vicariously liable under the Fair Debt Collection Practices Act (“FDCPA”) when the HOA did not independently qualify as a debt collector under the statute. The court observed that, from a policy perspective, “[a] debt collector should not be able to hire an attorney to engage in illegal debt collection practices on its behalf as a means of avoiding liability under the FDCPA.” Id. at 412. Nevertheless, the court held that “if the client is not a debt collector subject to liability under the FDCPA itself, then its decision to hire an attorney to engage in debt collection practices on its behalf would not be predicated on evading FDCPA liability, and imputing liability under those circumstances would not further the interests of the Act.” Id.
Here, contrary to Galyn Manor’s contention, Fontell does not stand for the proposition relied upon by the circuit court because Galyn Manor was potentially subject to liability under the MCPA. Unlike the FDCPA which only imposes liability on “debt collector[s,]” the MCPA — with some statutory exemptions — functions to hold any “person” liable, whether or not that person holds herself out as a professional debt collector. CL §13-303; compare 15 U.S.C. §1692f. Critically, the Fontell court noted that “[a] debt collector should not be able to hire an attorney to engage in illegal debt collection practices on its behalf as a means of avoiding liability under the FDCPA.” Fontell, supra, 870 F. Supp. 2d at 412.
In this case, Galyn Manor qualified as a “person” subject to liability under the MCPA. Therefore, “it would be improper for [Galyn Manor] to evade liability…by hiring an attorney to commit violations on its behalf.” Id. (citing Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1516 (9th Cir. 1994)).
Notably, there are several reported opinions in Maryland that discuss whether a principal may be held vicariously liable when the agent is immune. In D’Aoust v. Diamond, 424 Md. 549, 607 (2012), the Court of Appeals held that “unless there is an independent source of immunity for the employer or principal, the cause of action premised on vicarious liability can be brought even if the employee or agent is entitled to immunity.” More recently, the Court of Appeals revisited its holding in D’Aoust to determine whether an employer could assert an employee’s immunity under the Good Samaritan Act. TransCare Md., Inc. v. Murray, 431 Md. 225 (2013). The Court rejected the employer’s “attempts to distinguish D’Aoust on the basis that it concerned common law immunity rather than statutory immunity[,]” holding that “its conclusion applied to the concept of immunity generally as it relates to causes of action based on vicarious liability.” Id. at 242. Accordingly, the Court held that the employer could be held vicariously liable even though the tortfeasor was immune from liability. Id.
It was therefore held that the circuit court erred, as a matter of law, in allowing Galyn Manor to assert Andrews’ personal exemption. In short, Galyn Manor is not shielded from liability under the MCPA simply because Andrews is exempt. TransCare, 431 Md. at 243.
Accordingly, the judgment of the circuit court was reversed on the Homeowners’ claim under the MCPA, and the matter remanded.
COMMENTARY: Also at issue was whether the circuit court erred in awarding Galyn Manor judgment as a matter of law on the Homeowners’ MCDCA claim. The Homeowners contended that Galyn Manor violated the MCDCA when Galyn Manor attempted to collect the Homeowners’ overdue assessments, levied unauthorized fines against the Homeowners’ account, charged interest and late fees, and filed liens that were allegedly in violation of the MCLA.
CL §14-202(8) provides, in pertinent part, that “[i]n collecting or attempting to collect an alleged debt a collector may not…[c]laim, attempt, or threaten to enforce a right with knowledge that the right does not exist[.]” Under CL §1-201(b)(34), the definition of “right” includes “remedy.” “‘Remedy’ ‘means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.’” CL §1-201(b)(32). “To state a claim under the [statute], [the Homeowners] must establish two elements: (1) [Galyn Manor] did not possess the right to collect the amount of debt sought; and (2) [Galyn Manor] attempted to collect the debt knowing that [it] lacked the right to do so.” Barr v. Flagstar Bank, FSB, 303 F. Supp. 3d 400, 420 (D. Md. 2018).
The claim by the Homeowners was similar to the processing fee in Allstate Lien & Recovery Corp. v. Stansbury, 219 Md. App. 575, 578 (2014), aff’d 445 Md. 187 (2015). There, it was held that a party brought a viable MCDCA claim where he acknowledged that he owed the underlying debt, but disputed the inclusion of a $1,000 processing fee in the lien.
Here, similarly, the Homeowners acknowledged that they owed several months of delinquent assessment fees. Critically, however, the Homeowners challenged Galyn Manor’s right to file liens because the statute of limitations under the MCLA had passed. Accordingly, the Homeowners may pursue a MCDCA claim because they challenge Galyn Manor’s methods in filing liens. Therefore, the circuit court erred in ruling — as a matter of law — that all of the Homeowners’ MCDCA allegations challenged the validity of the underlying debt.
PRACTICE TIPS: Under the “continuing harm doctrine,” which tolls the statute of limitations in cases where there are continuing violations (see Litz v. Md. Dep’t of Env’t, 434 Md. 623, 646 (2013)), Maryland’s theory of continuing breach of contract is a limited one. To apply the continuing harm doctrine, the breach itself — rather than the damages — must be continuing in nature. If the allegation “is more properly understood as the ‘continuing effects of a single earlier act’” then the limitations period is not tolled.” MacBride v. Pishvaian, 402 Md. 572, 584 (2007). [/box]
BOTTOM LINE: Where application for search warrant detailed a number of visual observations made by police upon their earlier entry into defendant’s residence, including drugs and handguns, circuit court properly denied defendant’s motion to suppress evidence because the extent and duration of that earlier intrusion in the course of which the police made those observations was a protective sweep, which was not unreasonable under the circumstances.
CASE: Groves v. State, No. 2146, Sept. Term, 2017 (filed Dec. 21, 2018) (Judges Reed, Friedman & MOYLAN (Senior Judge, Specially Assigned)).
FACTS: Curtis Groves was arrested following a search of his residence pursuant to a warrant. Groves moved pre-trial to suppress various contraband and instrumentalities of crime (to wit, drugs, a quantity of ammunition, and a handgun) seized by the police during a warranted search on January 25, 2017, of 43 Charles Street in Hagerstown, a residence shared by Groves with his girlfriend, Sidrease Morgan. A hearing was conducted on the motion on November 29, 2017, before Judge Mark K. Boyer. In an order of December 8, 2017, Judge Boyer denied the motion to suppress.
The key issue before the suppression hearing was the constitutionality of the search and seizure warrant for 43 Charles Street issued by Judge Daniel Dwyer on January 25, 2017. There was no question but that the detailed, eight-page warrant application submitted by Agent Tammy Jurado of the Washington County Narcotics Task Force facially furnished abundant probable cause for the issuance of the warrant. The nub of Groves’ contention, however, was that the police had made an earlier entry into 43 Charles Street on that very day, to wit, when they first arrested Groves, and had at that time made a number of visual observations which, in turn, became the essential core of the warrant application.
The warrant application recited, in pertinent part: “In the process of arresting Groves, Corporal Will Blount…observed a brick shaped item lying on the dirt floor, which was wrapped in a layer of white paper and then in clear plastic.” The warrant further stated that, “based on Agent Jurado’s knowledge, training and experience as a police officer, large amounts of controlled dangerous substances are often packaged in a similar manner.” Also, “Deputy Carson observed what is consistent with the black grip of a firearm protruding from” a box in the basement, as well as another weapon in the second floor bedroom.
Groves entered conditional guilty pleas to 1) the possession of heroin with intent to distribute and 2) the possession of a firearm in a drug trafficking crime in the Circuit Court for Washington County. On the two convictions, Groves was sentenced to an aggregate term of 32 years of incarceration with all but 26 years suspended. The guilty pleas were conditioned upon Groves’ reserving his right to appeal from an adverse ruling at a pre-trial suppression hearing. Maryland Rule of Procedure 4–242(d)(2).
Groves appealed to the Court of Special Appeals, which affirmed.
LAW: Groves argued that the unreasonable extent and duration of that earlier intrusion in the course of which the police made those observations violated the Fourth Amendment. The argument followed that if those unconstitutional observations, as fruit of the poisonous tree, were excised from the warrant application, what then remained would not have been enough to justify the issuance of the warrant.
At issue was the application of protective sweep law to the specific facts of this case. Buie v. State, 72 Md. App. 562 (1987) was the first case to recognize the protective sweep. There, seven officers went to Buie’s home in Prince George’s County with an arrest warrant and arrested him for armed robbery. One officer called down basement stairs for everyone in the basement to come up with hands raised. After some discernible delay, Buie came up and was immediately arrested, handcuffed, and searched. As Buie was being led from the house, another officer went down into the basement “in case there was someone around.” Id. at 566.
What the officer found was a red jogging suit matching a description of the clothing worn by the armed robber. Pursuant to the Plain View Doctrine, it was seized and admitted into evidence. If the police entrance into the basement to conduct the protective sweep was reasonable, there was no disputing the fact that the warrantless seizure of the red jogging suit was also reasonable. The sweep into the basement was the Plain View Doctrine’s “prior valid intrusion.” The police had probable cause to believe that the red jogging suit, spotted in plain view, had been worn by the robber and was evidence of crime. Coolidge v. New Hampshire, 403 U.S. 443 (1971).
Here, the Task Force did not immediately or warrantlessly seize the contraband or other evidence which they observed in the course of the protective sweep. They simply included these observations in their application for a search warrant. In the meantime they placed a guard on 43 Charles Street, effectively seizing the property while they obtained the warrant. Illinois v. McArthur, 531 U.S. 326 (2001).
After analogizing the question for decision to that before the Court in Terry v. Ohio, 392 U.S. 1 (1968), and Michigan v. Long, 463 U.S. 1032 (1983), the Supreme Court articulated both the standard and the test as follows: “by requiring a protective sweep to be justified by probable cause to believe that a serious and demonstrable potentiality for danger existed, the Court of Appeals of Maryland applied an unnecessarily strict Fourth Amendment standard. The Fourth Amendment permits a properly limited protective sweep in conjunction with an in-home arrest when the searching officer possesses a reasonable belief based on specific and articulable facts that the area to be swept harbors an individual posing a danger to those on the arrest scene. We therefore vacate the judgment below and remand this case to the Court of Appeals of Maryland for further proceedings not inconsistent with this opinion.” 494 U.S. at 336–37.
The Supreme Court’s Buie opinion provides an effective “nutshell” definition of the protective sweep. “A ‘protective sweep’ is a quick and limited search of premises, incident to an arrest and conducted to protect the safety of police officers or others. It is narrowly confined to a cursory visual inspection of those places in which a person might be hiding.” 494 U.S. at 327. Security measures in a very limited area are automatically available as an incident of lawful arrest in a home—a bright line formula. “[A]s an incident to the arrest the officers could, as a precautionary matter and without probable cause or reasonable suspicion, look in closets and other spaces immediately adjoining the place of arrest from which an attack could be immediately launched.” 494 U.S. at 334.
The Buie opinion also carefully pointed out the scope limitations—in terms of both space and time—that circumscribe the protective sweep. “[S]uch a protective sweep, aimed at protecting the arresting officers, if justified by the circumstances, is nevertheless not a full search of the premises, but may extend only to a cursory inspection of those spaces where a person may be found. The sweep lasts no longer than is necessary to dispel the reasonable suspicion of danger and in any event no longer than it takes to complete the arrest and depart the premises.” 494 U.S. at 335–36.
The circumstances surrounding the arrest of Groves were such that they could objectively have created in a police officer a reasonable trepidation that an armed confederate might have been lurking in the shadows, especially in the basement. Groves was being hunted by the United States Marshals Service/Capital Area Regional Fugitive Task Force, in cooperation with the Hagerstown Department of Police. In May of 2003, Groves had been convicted in the State of New York, on his guilty plea, of the criminal possession of marijuana in the 5th degree. A month later, in June of 2003, he had been convicted again in New York, on his guilty plea, to the criminal possession of a controlled substance. In 2010, Groves was again convicted in New York of the criminal possession of a loaded firearm. In January of 2017, the Task Force was looking for Groves to arrest him on an active violation of parole warrant issued for him by New York State. The violation of parole leading to the issuance of that retake warrant was a firearms violation. In 2016, the Washington County Narcotics Task Force had received information that Groves was in Hagerstown and was selling and distributing narcotics. The information was that Groves frequented the area of John Street and North Mulberry Street. The source of information indicated, moreover, that the appellant was always in possession of a handgun.
Based upon the totality of the circumstances, the circuit court properly found that it was reasonable for the officers to conduct a protective sweep of the basement and the second floor. The sweep, which the officers testified is part of their standard protocol to ensure officer safety, occurred nearly contemporaneously with the arrest while Groves was still in the living room. The basement was immediately adjoining the place of Groves’ arrest and in fact was where he was hiding from the arrest team. Furthermore, the sweep was de minimis, not overly intrusive, and limited to confirming that no one else was present in the house who may have posed a danger to the officers. Therefore, the search warrant issued, based in part upon those observations, was likewise valid especially in light of Groves’ status as a parolee with an active, outstanding parole retake warrant.
Thus, it was held that the protective sweep did not violate the Fourth Amendment. The cursory observations made in the course of the protective sweep, therefore, were properly included in the application for the search warrant. Accordingly, the judgment of the circuit court was affirmed.
COMMENTARY: At the suppression hearing, Groves conceded that the New York parole retake warrant for his arrest was valid. He further conceded that the entry of the Fugitive Task Force arrest team into 43 Charles Street on January 25, 2017, was also valid. The only issue in dispute was the justification for the protective sweep into the basement immediately following his arrest.
Detective John Anthony Moriarty of the Montgomery County Police Department, assigned to the U.S. Marshal’s Capital Area Regional Fugitive Task Force, testified that upon arrival at the residence the arrest team did not receive a response to their knock on the door of 43 Charles. They then made contact with a Ms. Brown at 41 Charles Street, the adjoining side of the duplex, who indicated that Groves resided in 43 Charles with her daughter. Ms. Brown was able to place a call to her daughter, after which her daughter confirmed that Groves was inside of 43 Charles, but was unsure whether he was upstairs or downstairs.
PRACTICE TIPS: “[A]n arrest that occurs just outside the home can pose an equally serious threat to arresting officers as one that occurs in the home. Therefore,…a protective sweep may be conducted following an arrest that takes place just outside the home if sufficient facts exist that would warrant a reasonably prudent officer to fear that the area in question could harbor an individual posing a threat to those at the scene.” Murphy v. State, 192 Md. App. 504 (2010), quoting United States v. Lawlor, 406 F.3d 37, 42 (1st Cir. 2005). [/box]
BOTTOM LINE: While certain persons who are displaced as a consequence of real property being acquired for redevelopment are entitled to compensation for their relocation expenses, plaintiff was not eligible for relocation assistance because the “displacing agency” had already taken title to the real property prior to the time plaintiff was required to relocate leased space in the property that is being redeveloped.
CASE: Wireless One, Inc. v. Mayor and City Council of Baltimore City, No. 1852 Sept. Term, 2017 (filed Dec. 21, 2018) (Judges MEREDITH, Arthur & Beachley).
FACTS: The Cross Street Market was established in Baltimore City in 1847. Since then, the Market has been owned and operated by the City. Since 1994, Baltimore Public Markets Corporation (“Markets Corporation”) has assisted the City in managing and operating the Cross Street Market and other markets in Baltimore.
In 2004, Wireless One, Inc. leased space in the Market to operate a stall for its retail business of providing sales and service of cellular phones. Wireless occupied the space pursuant to various leases, but, as of 2016, was occupying the space pursuant to a month-to-month lease.
On November 9, 2016, the City and its management company for the Market entered into a Management Agreement with Caves Valley Partners and CSM Ventures, LLC, a subsidiary of Caves Valley Partners, to operate the Market and undertake redevelopment of the Market. The Management Agreement empowered CSM Ventures, LLC, to lease portions of the Market and to terminate existing tenancies.
On December 21, 2016, a Caves Valley Partners representative, Nick Alevrogiannis, sent an e-mail to occupants of the Market, including Wireless, with an update on plans for redeveloping the Market. Wireless alleged that it was informed in December 2016 that it would not fit in the plans for the redeveloped market, and that it should make plans to leave. Wireless asked for, and was granted, leave to terminate its month-to month lease, and, on February 8, 2017, Wireless vacated the Market, but left behind fixtures such as counters and built-in shelves.
On June 2, 2017, Wireless filed a complaint against the City and Markets Corporation in the Circuit Court for Baltimore City, alleging that Wireless was a “displaced person” under Maryland Code (1974, 2015 Repl. Vol.), Real Property Article (“RP”) §12-201(e)(1), and that Wireless was entitled to receive compensation for relocation expenses pursuant to RP §12-205(a).
The City (and Markets Corporation) filed a Motion to Dismiss, arguing, inter alia, that Wireless did not meet the statutory definition of “displaced person” because of the exemption set forth in RP §12- 201(e)(2)(iii). The circuit court granted the motion to dismiss based upon the exemption. Wireless filed a motion to alter or amend, which was denied.
Wireless appealed to the Court of Special Appeals, which affirmed.
LAW: Wireless asserted that it was a “displaced person” and entitled to “moving and relocation benefits” pursuant to RP §§12-201 et seq., and that the City’s failure to pay such expenses resulted in an unconstitutional taking of Wireless’s property. The City contended that it is exempt from paying Wireless relocation compensation.
The exemption under RP §12-201(e)(2)(iii) provides that a “Displaced person” does not include: “A person who leases from the displacing agency after the displacing agency takes title to the real property, or any person other than a person who was an occupant of such property at the time it was acquired who occupies the property on a rental basis for a short term or period subject to termination when the property is needed for the program or project.”
Here, it was undisputed that the Market was established by Baltimore City in 1847, and has been owned and operated by Baltimore City since its inception. Wireless could not overcome the plain language of the statute, which specifically exempts “[a] person who leases from the displacing agency after the displacing agency takes title to the real property.”
Wireless’ lease was executed in 2004, many years after Baltimore City acquired title to the Market. Additionally, the Management Agreement between Baltimore City and Caves Valley Partners did not transfer title to the Market; rather, the Management Agreement merely gave Caves Valley Partners the ability to operate, manage, and redevelop the Market. Thus, the circuit properly concluded that Wireless failed to state a claim for relocation and moving expenses pursuant to Real Prop. §12-201.
Accordingly, the judgment of the circuit court was affirmed.
COMMENTARY: Wireless conceded in its brief that its case for an unconstitutional taking depended on whether the City wrongfully denied Wireless moving and relocation expenses. It was concluded, therefore, that the City did not wrongfully deny Wireless moving and relocation expenses, and therefore, it was further concluded that the motion court did not err in ruling that Wireless had failed to state a claim for an unconstitutional taking.
PRACTICE TIPS: When reviewing the granting of a motion to dismiss, generally, with respect to consideration of information outside of the complaint, “where matters outside of the allegations in the complaint and any exhibits incorporated in it are considered by the trial court, a motion to dismiss generally will be treated as one for summary judgment. Where, however, a document such as the [agreement referenced and relied on in the complaint] merely supplements the allegations of the complaint, and the document is not controverted, consideration of the document [filed as an exhibit to the motion to dismiss] does not convert the motion into one for summary judgment.” Advance Telecom Process LLC v. DSFederal, Inc., 224 Md. App. 164, 175 (2015). [/box]