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Law Digest — Md. Court of Appeals, Court of Special Appeals — June 13, 2019

Court of Appeals

Family Law; Termination of parental rights: A juvenile court abused its discretion when it declined to find both parents of a child unfit and to terminate parental rights even though it found that the parents were unable to ever safely care for their child, and, moreover, where the child’s mother had a lengthy history of serious mental illness that neither parent acknowledged and the father sought to frequently leave the child alone in the mother’s care even though the mother was unfit to safely care for the child, the juvenile court abused its discretion when it declined to find exceptional circumstances and terminate both parents’ parental rights on this basis. In re: Adoption/Guardianship of C.E., No. 77, Sept. Term, 2017.

Court of Special Appeals

Constitutional Law; Legislative privilege: In a legislative action by the plaintiff pursuant to the Open Meetings Act, in which the plaintiff challenged the enactment of a Baltimore rezoning plan, alleging that the Baltimore City Council and the Land Use and Transportation Committee had violated the Act with respect to several meetings conducted near the time of the bill’s passage, and sought to ask questions of two Baltimore City Council members as to why they had taken certain actions in regard to the passage of the legislation,  the circuit court did not abuse its discretion in granting a motion to quash the subpoenas for the two Council members because such actions were within the sphere of legitimate legislative activity and were protected by the legislative privilege; however, because the circuit court may assess reasonable counsel fees and other litigation expenses in an Act enforcement claim and there were some imperfections in the legislative process, remand to the circuit court was appropriate for the sole purpose of determining whether such fees and expenses should be awarded to the plaintiff and, if so, the amount of any award. Floyd v. Baltimore City Council, No. 1687, Sept. Term, 2017.

Constitutional Law; Rational basis test: A city rule prohibiting mobile food vendors from conducting business within 300 feet of brick-and-mortar establishments selling primarily the same kind of food was a wholly economic regulation subject to traditional rational basis review, and, applying this standard, the city’s legitimate interest in protecting brick-and-mortar restaurants from free-riding mobile vendors was rationally furthered by the 300-foot rule. Pizza di Joey, LLC v. Mayor and City Council of Baltimore, No. 2411, Sept. Term, 2017.

Contract Law; Statute of limitations: Where the plaintiff was involved in a motor vehicle accident with an underinsured tortfeasor and the tortfeasor’s insurance company offered the plaintiff a settlement of $20,000, the earliest date that the limitation period for the plaintiff’s breach of contract action against her own uninsured motorist (“UIM”) coverage provider could begin to run was the date on which the plaintiff, with her UIM provider’s permission, accepted the tortfeasor’s insurance company’s offer of $20,000 and executed a release in favor of the tortfeasor, because that was the date that the tortfeasor’s coverage was “exhausted,” and, therefore, the circuit court erred in dismissing as untimely the plaintiff’s breach of contract action against her UIM provider, filed within three years of that date. Shilling v. Nationwide Insurance Company, No. 1154, Sept. Term 2017.

Court of Appeals

Family Law

Termination of parental rights

BOTTOM LINE: A juvenile court abused its discretion when it declined to find both parents of a child unfit and to terminate parental rights even though it found that the parents were unable to ever safely care for their child, and, moreover, where the child’s mother had a lengthy history of serious mental illness that neither parent acknowledged and the father sought to frequently leave the child alone in the mother’s care even though the mother was unfit to safely care for the child, the juvenile court abused its discretion when it declined to find exceptional circumstances and terminate both parents’ parental rights on this basis.

CASE: In re: Adoption/Guardianship of C.E., No. 77, Sept. Term, 2017 (filed June 1, 2019) (Judges Barbera, Greene, Adkins, McDonald, Watts, Hotten, GETTY & Adkins (Senior Judge, Specially Assigned)).

FACTS: C.E. was a male child born in May 2014 to his mother, C.D., and father, H.E. C.E. was born two months premature and after birth was placed in the Neonatal Intensive Care Unit of Johns Hopkins Hospital. In time, he was transferred to the Mount Washington Pediatric Hospital.

Immediately after C.E.’s birth, a Baltimore City Department of Social Services caseworker, Nia Noakes, responded to a “risk of harm” report and a request for a safety assessment of a newborn by Johns Hopkins Hospital. As a part of the safety assessment, Noakes examined the mother’s home with both parents present. Noakes also consulted the Department’s records to determine whether the family had a history with the Department.

Noakes discovered that the Department had removed C.E.’s mother’s other five children from her care over the past two decades. C.E. was the mother’s sixth child to be adjudged a Child in Need of Assistance. The mother had a well-documented history of mental illness causing her to lash out against her children, and juvenile courts had repeatedly found that she displayed a complete inability to care for her children, control her emotions, or effectively communicate with her children and the Department.

After the home visit and subsequent research, Noakes held a Family Involvement Meeting (“FIM”) to determine whether C.E. could be safely placed with either his mother or father. Noakes determined that C.E. would not be safe in his mother’s care. The Department also learned that C.E.’s father could not care for him because the father resided in a senior housing complex that did not allow children to reside at the property for extended periods.

The Department filed for emergency shelter care on July 10, 2014, in the circuit court, while C.E. was still at Mount Washington Pediatric Hospital. In late June or early July 2014, C.E.’s mother telephoned her cousin, Ms. B, and advised that she could not take C.E. home from the hospital and asked for permission to provide the cousin’s contact information to Mount Washington Pediatric Hospital and the Department. Ms. B. and her husband, Mr. B. consented. The Department reached out to Ms. B. and Mr. B. to conduct a background check and begin the placement process.

Upon C.E.’s hospital discharge on July 21, 2014, the Department placed C.E. with Mr. and Ms. B., where he remained throughout his entire life. During the summer of 2014, the Department facilitated the second FIM for both parents. The Department continued to provide other services to the parents to achieve reunification with C.E.

The Department facilitated regular supervised visits between C.E. and his mother and father. After a period of home visits, the Department decided to move the visits to Department facilities due to environmental concerns. The Department provided the supervision during the visitation period and both parents attended most of the scheduled visits. Ultimately, the juvenile court found C.E. to be a CINA on June 16, 2015 and awarded custody to the Department for continued placement with his relatives, Mr. and Ms. B.

C.E.’s mother appealed the juvenile court’s findings to the Court of Special Appeals, which affirmed the judgment of the juvenile court. On April 20, 2016, the juvenile court granted the Department’s motion to waive its obligation to continue to make reasonable efforts to reunify his mother with C.E. pursuant to §3-812(d) of the Courts & Judicial Proceedings Article of the Maryland Code. C.E.’s mother appealed. The Court of Special Appeals found that the juvenile court’s order was not appealable and dismissed the appeal. The Department filed a Petition for Guardianship with the Right to Consent to Adoption or Long-Term Care Short of Adoption.

The termination of parents rights hearing took place in 2017 on multiple dates from March through July of 2017. The juvenile court found that there was clear and convincing evidence that C.E.’s mother was unfit but that there was only a preponderance of the evidence that his father was unfit. On this basis, the juvenile court denied the Department’s petition, finding that it was in C.E.’s best interest to place C.E. in a guardianship with his extended family without terminating the parental rights of either parent.

After C.E. and the Department appealed to the Court of Special Appeals, the Court of Appeals granted certiorari. The Court of Appeals affirmed the juvenile court’s findings as to C.E.’s father, but reversed the juvenile court’s findings as to his mother, concluding that it was error for the juvenile court to deny termination of the mother’s parental rights. The Department, C.E., and the mother filed a Motion for Reconsideration pursuant to Maryland Rule 8-605, arguing that the Court could not order the termination of only one parent’s parental rights. The Court of Appeals subsequently withdrew its opinion and ordered supplemental briefing and additional argument on the single issue.

After consideration of the issue on reargument, the Court of Appeals vacated the judgment of the juvenile court and remanded for further proceedings.

LAW: On appeal, C.E. and the Baltimore Department of Social Services argued that where the three-year-old C.E. had resided in the same relatives’ home since birth and where the trial court found, by clear and convincing evidence, that reunification was unachievable in the foreseeable future, C.E., as a child in need of assistance, had a protected interest in achieving a timely permanency plan of adoption that transcended his parents’ right to raise him. There are only three possible scenarios that may culminate in a guardianship pursuant to Title 5, Subtitle 3 of the Family Law Article: (1) both parents consent; (2) one parent consents, and the juvenile court terminates the parental rights of the other parent; or (3) neither parent consents, and the juvenile court terminates the rights of both parents. When neither party consents and where a local department of social services files a petition for guardianship, a juvenile court only has two options: (1) to either grant the petition and terminate both parents’ rights; or (2) to deny the petition and refrain from terminating either parents’ rights.

Thus, where a juvenile court denies a petition for guardianship, the juvenile court’s judgment is wholly in the parents’ favor – even if the juvenile court finds that one parent is unfit. Therefore, the Court of Appeals erred in its withdrawn opinion in which it terminated the parental rights of C.E.’ mother kept the father’s parental rights intact. In order to achieve the best interest of C.E. and to provide sufficient permanency for him, it was an abuse of discretion for the juvenile court to decline to terminate the father’s parental rights when the juvenile court determined that based on the factors present, the father was unable to ever safely care for C.E.

The relevant question in a termination of parental rights (“TPR”) proceeding is whether the parent is unfit to continue the parental relationship or whether there are exceptional circumstances that make the continued parental relationship detrimental to the child’s best interest. In re Adoption/Guardianship of H.W., 460 Md. 201, 217 (2018). In the present case, the juvenile court never fully considered the exceptional circumstances prong as a separate legal conclusion from the unfitness prong. Rather, the juvenile court used the exceptional circumstances prong in conjunction with unfitness to examine specific circumstances such as the parental bond or the father’s relationship with the mother. The juvenile court erred in failing to make a separate legal conclusion as to the exceptional circumstances prong.

In declining to terminate the father’s parental rights, the juvenile court failed to give appropriate consideration to the safety and welfare of C.E. The juvenile court found, in part, that neither parent exhibited “essential safe parenting skills,” that C.E.’s father lacked housing in which C.E. could reside, and that, on the whole, neither parent had accomplished a material change to the circumstances rendering C.E. a CINA. The court found that the father could never safely care for C.E., and erred when not considering the effect of his inability to care for C.E. on C.E.’s permanency and how that relates to the father’s unfitness. The Court’s sole factual finding that weighed in favor of continuation of the father’s parental rights was a determination that C.E. knew and was attached to his father. Almost every other factor delineated under FL §5-323(d) was found against the father with the exception of the finding that there is an “attachment” between C.E. and his father. As such, the trial court abused its discretion in declining to terminate C.E.’s father’s parental rights under the unfitness prong.

In sum, there was no basis for affirming the juvenile court’s decision declining to terminate C.E.’s father’s parental rights. The finding that the father was not unfit was contradicted by the juvenile court’s finding that reunification with either parent was not attainable within the foreseeable future, if ever. Accordingly, the order of the circuit court, siting as a juvenile court, was vacated, and the case was remanded for further proceedings.

COMMENTARY: Even assuming, arguendo, that C.E.’s father was fit, there was also an important exceptional circumstance that the juvenile court failed to give sufficient consideration and that would have warranted the termination of parental rights in this matter. The father testified that he refused to sever his relationship with the mother, that he would continue to live with the mother, and that he would rely solely on her for providing childcare to C.E. while he was at work. Further, he refused to acknowledge the mother’s mental health conditions despite the fact that she was undoubtedly unfit to care or be left alone with C.E. As such, there was clear and convincing evidence of an exceptional circumstance that would warrant the termination of father’s parental rights in this matter.

PRACTICE TIPS: Many cases of mental illness can be treated and managed and need not be cause for termination of parental rights. In every case, the Department of Social Services should work with parents with mental illness to provide resources to seek reunification of the parent and child first. In some cases, however, the fact that the child is not sufficiently protected from the effects of the mental illness, not the mental illness itself, may indicate termination of the parental rights is the only option.

Court of Special Appeals

Constitutional Law

Legislative privilege

BOTTOM LINE: In a legislative action by the plaintiff pursuant to the Open Meetings Act, in which the plaintiff challenged the enactment of a Baltimore rezoning plan, alleging that the Baltimore City Council and the Land Use and Transportation Committee had violated the Act with respect to several meetings conducted near the time of the bill’s passage, and sought to ask questions of two Baltimore City Council members as to why they had taken certain actions in regard to the passage of the legislation,  the circuit court did not abuse its discretion in granting a motion to quash the subpoenas for the two Council members because such actions were within the sphere of legitimate legislative activity and were protected by the legislative privilege; however, because the circuit court may assess reasonable counsel fees and other litigation expenses in an Act enforcement claim and there were some imperfections in the legislative process, remand to the circuit court was appropriate for the sole purpose of determining whether such fees and expenses should be awarded to the plaintiff and, if so, the amount of any award.

CASE: Floyd v. Baltimore City Council, No. 1687, Sept. Term, 2017 (filed June 4, 2019) (Judges Fader, Friedman & KENNEY (Senior Judge, Specially Assigned)).

FACTS: In December 2016, Baltimore City enacted legislation known as “Transform Baltimore,” which was its first comprehensive rezoning plan since 1971. Bill 12-0152, the legislation known as “Transform Baltimore,” was introduced in the Baltimore City Council on October 22, 2012 and assigned to the Land Use and Transportation Committee. Over the next four years, the Committee conducted over 80 public hearings and considered hundreds of amendments to its text and zoning map in open session.

On October 19 and 20, 2016, the Committee met in open session, and, on October 20, voted to recommend Bill 12-0152 “favorable with amendments.” On the evening of October 24, 2016, the full Council convened in open session to consider Bill 12-0152. Some proposed amendments were adopted by the Council, and some were not. Ultimately, the Council voted favorably on Bill 12-0152 with amendments.

The official minutes reflecting the Council’s votes on amendments and the final vote were recorded in the Council’s Journal and posted online on the Council’s website. Earlier on October 24, 2016, there was a “luncheon meeting” of the Council hosted by Mayor Stephanie Rawlings-Blake in the Mayor’s executive conference room. No minutes of that “luncheon meeting” were recorded.

On December 2, 2016, Joan Floyd, along with others, filed a “Petition for Enforcement of the Open Meetings Act” against the Council and Committee. The petition alleged that the Council and Committee violated the Act’s provisions with respect to the Committee meetings of October 19 and 20, 2016 and the Council’s luncheon meeting of October 24, 2016. The Council passed Bill 12-0152 on December 5, 2016, and the Mayor signed it into law that same night. The new zoning code and accompanying zoning map took effect on June 5, 2017.

The circuit court denied the City’s motion to dismiss on February 22, 2017, and trial was set for June 9, 2017. On June 2, 2017, Floyd served the City with subpoenas to compel testimony of Council President Bernard C. “Jack” Young, Council member and Committee Chairman Edward Reisinger, and the Director of Legislative Affairs for the Council President, Kara Kunst. The City moved to quash the subpoenas for the Council members on the grounds of legislative privilege, and it moved in limine to limit the Kunst’s testimony to only those matters related to the Council’s compliance with the requirements of the Act. The circuit court, finding that the legislative privilege applied, granted both motions.

At trial, Floyd and Kunst both testified. On June 30, 2017, the court entered summary judgment in favor of the City. It found that Floyd had failed to produce any evidence to support the claim that the City committed any actionable violation of the Open Meetings Act, and that while the process “was not perfect,” there was no indication that the errors were the result of anything more than human error and did not give rise to a cause of action.

Floyd appealed to the Court of Special Appeals, which remanded the case for the sole and limited purpose of considering an award of counsel fees and litigation expenses and otherwise affirmed the judgment of the circuit court.

LAW: Floyd argued that the trial court erred in granting the City’s Motion to Quash Subpoenas based on legislative privilege. As discussed, the City moved to quash the subpoenas for the two Council members based on legislative privilege and moved in limine to limit Kunst’s testimony to administrative details. The trial court, finding that legislative privilege applied, granted the motions.

Because the Act expressly authorizes a court to determine whether a public body’s violation of the Act was willful, Floyd contended that direct examination of the members of a public body was required, and that “legislative privilege” has no place in an Open Meetings case, because it would allow any public body composed of legislators to effectively violate the Act with impunity. More specifically, she argued that Council President Young and Committee Chairman Reisinger were “uniquely positioned and qualified to elucidate the proceedings of these two public bodies” over which they presided. By restricting her ability to elicit testimony from the Council members, she contended, the trial court prevented her from obtaining information from competent witnesses, which severely prejudiced her efforts to succeed on her claim. See Community and Labor United For Baltimore Charter Committee v. Baltimore City Bd. of Elections, 377 Md. 183 (2003).

Members of Congress and members of the Maryland General Assembly have a separate Constitutional immunity from being called upon, in any official non-legislative forum, to defend their conduct in legislative proceedings. Article I, §6 of the U.S. Constitution provides that “for any Speech or Debate in either House shall not be questioned in any other Place.” A similar provision, applicable to members of the General Assembly, has appeared in the Maryland Constitution since 1776. Article 10 of the current Maryland Declaration of Rights states that “freedom of speech and debate, or proceedings in the Legislature, ought not to be impeached in any Court of Judicature.” Article III, §18 of the State Constitution adds that no Senator or Delegate shall be liable in any civil action, or criminal prosecution, whatever, for words spoken in debate.” These Constitutional clauses, which trace their immediate history to the English Bill of Rights of 1689, have long been regarded as an important protection of the independence and integrity of the legislature and, in this country, as also reinforcing the core doctrine of separation of powers. United States v. Johnson, 383 U.S. 169 178 (1966).

The State privilege arises from the same sources as the Federal, and, thus, both are to be read broadly to effectuate their purposes and to protect not only words spoken in debate but anything generally done in a session of the House by one of its members in relation to the business before it. Id. at 179. The doctrine of legislative privilege extends to local and municipal legislators as a matter of common law. See Manders v. Brown, 101 Md. App. 191, 205 (1994). Federal courts have interpreted the privilege to cover not just “speech or debate,” but also matters integral to the deliberative and communicative processes by which Members participate in committee and House proceedings with respect to the consideration and passage or rejection of proposed legislation, which includes a legislator’s conduct at legislative committee hearings. Gravel v. United States, 408 U.S. 606, 624-25 (1972). However, the privilege does not extend beyond the sphere of legitimate legislative activity, and only when necessary to prevent indirect impairment of such deliberations has it been extended beyond pure speech and debate in the legislative body. Id. at 625.

In regard to the subpoenas in this case, the circuit court allowed Floyd’s counsel to proffer questions and the specific areas of inquiry that he intended to pursue with the two Council members. Many of the questions were directed to certain amendments to the legislation, and why certain actions were taken in regard to its passage. Such questions involved the deliberative and communicative processes with respect to the consideration and passage or rejection” of the legislation at issue. Id. at 625. As to the questions about the luncheon, Floyd was able to pursue some of them with Kunst, whom the court found competent to answer as the Director of Legislative Affairs. In short, there was neither error nor abuse of discretion by the court in quashing the subpoenas for the two Council members and limiting Kunst’s testimony to administrative details and matters related to the Council’s and Committee’s compliance with the Act and its requirements.

The circuit court found that “the only credible evidence presented” at trial showed that members of the City Council engaged in no discussion of Bill 12-0152 at the luncheon on October 24, 2016. That finding was not clearly erroneous. While the process was not perfect in that errors in the process necessitated corrective legislation, there was no indication that the errors were the result of anything more than human error. Accordingly, the case was remanded for the sole and limited purpose of considering an award of counsel fees and litigation expenses, and the judgment of the circuit court was otherwise affirmed.

COMMENTARY: The fact that there was no willful violation of the Act that would permit voiding the legislation did not mean that some “other appropriate relief” could not be granted. See GP §3-401(d)(6). On appeal, Floyd requested a remand to the circuit court for it to consider other appropriate relief, including awarding her reasonable counsel fees and other litigation expenses. The record indicated that the issue of counsel fees and litigation expenses was not addressed by the circuit court, presumably because it found no actionable violation.

However, a finding of willfulness would not be necessary to an award of counsel fees and litigation expenses. GP §3-401(d)(5) provides that, as part of its judgment, a court may assess against any party reasonable counsel fees and other litigation expenses that the party who “prevails” in the action incurred. Although Floyd’s primary goal was to have Bill 12-0152 declared void based on a willful violation of the Act, that was not the sole measure of her success in the litigation. To conclude that the non-governmental party qualifies as a “prevailing” party only if that party obtains an injunction, a declaration of invalidity of the legislative act, or achieves other remedies following establishment of the merits of its foundational claim would run counter to the intent of the Act. Armstrong v. Mayor and City Council of Baltimore, 409 Md. 648, 693 (2009). In light of the finding regarding the luncheon meeting, remand was appropriate for the circuit court to determine whether counsel fees and litigation expenses should be awarded and, if so, the amount of any award.

PRACTICE TIPS: The purpose of legislative privilege is to protect the “legislative function” and to permit it to be performed independently without fear of outside interference. Legislative privilege may be invoked to protect a legislator from being required to testify regarding actions taken within the sphere of legitimate legislative activity. It extends as well to legislative staff members, officers, or other employees of the legislative body, but, as to them, it is “less absolute” than as to the legislators themselves.

Constitutional Law

Rational basis test

BOTTOM LINE: A city rule prohibiting mobile food vendors from conducting business within 300 feet of brick-and-mortar establishments selling primarily the same kind of food was a wholly economic regulation subject to traditional rational basis review, and, applying this standard, the city’s legitimate interest in protecting brick-and-mortar restaurants from free-riding mobile vendors was rationally furthered by the 300-foot rule.

CASE: Pizza di Joey, LLC v. Mayor and City Council of Baltimore, No. 2411, Sept. Term, 2017 (filed May 30, 2019) (Judges NAZARIAN, Friedman & Battaglia (Senior Judge, Specially Assigned)).

FACTS: Pizza di Joey and Madame BBQ were food trucks licensed in Baltimore City. Pizza di Joey was an Italian kitchen on wheels that, since 2014, had sold “authentic New York style brick oven pizza, as well as some Italian pastas and salad.” The “Joey” of Pizza di Joey was its owner and founder, Joseph Salek-Nejad, known professionally as Joey Vanoni. The food truck was open for business several afternoons per week.

Madame BBQ was a Maryland-based limited liability company founded in the summer of 2014. In 2016, Madame BBQ rebranded its food truck as MindGrub Café and shifted from selling barbeque to more health-conscious cuisine, self-described as “brain food for knowledge workers.” Madame BBQ was owned by Nicole McGowan, who had worked in the food service industry since the age of 15.

Baltimore City Code, Article 15, §17-33, known colloquially as the “300-foot rule,” prohibited mobile food vendors from conducting business within 300 feet of brick-and-mortar establishments that sold primarily the same kind of food. In October 2016, the Pizz di Joey and Madame BBQ sued the City of Baltimore in the circuit court, asking the court to declare that the 300-foot rule functionally prohibited them from operating in Baltimore City and, therefore, violated their rights under Article 24 of the Maryland Declaration of Rights. Following a trial, the circuit court found, using what it called “heightened rational basis review,” that the 300-foot rule did not violate the food trucks’ rights under Article 24, but that the ambiguities in the statutory language rendered it unconstitutionally vague. As a result, the circuit court entered an order enjoining the City from enforcing the rule.

The circuit court denied motions to reconsider and to stay, and the Court of Special Appeals denied a motion to stay the injunction as well. The food trucks, notwithstanding their victory, appealed the circuit court’s decision finding no violation of their due process or equal protection rights to the Court of Special Appeals, and the City cross-appealed. The Court of Special Appeals affirmed in part and reversed the judgment of the circuit court.

LAW: Pizza di Joey and Madame BBQ argued that the 300-foot rule violated their rights to equal protection and substantive due process both on its face and as applied under Article 24 of the Maryland Declaration of Rights. The food trucks characterized the 300-foot rule as a baseless and discriminatory restriction on mobile vendors in Baltimore City, one that functionally prohibited them from operating their businesses in some of Baltimore’s most commercially desirable neighborhoods. As they sought to frame it, the rule infringed on their important personal right to practice their chosen trade, and they urge us to find that the 300-foot rule is invalid on its face and in its application to mobile vendors in Baltimore City.

In actuality, the 300-foot rule was classic economic regulation, one with a fairly narrow scope grounded in an entirely rational basis. The rule did not prohibit mobile vendors from operating in any particular area of Baltimore City. It simply required each vendor to maintain a distance of 300 feet (roughly one Baltimore block) from its direct brick-and-mortar competitors. The rule Was designed, according to the City and its trial witnesses, to address the “free-rider” problem that arises when mobile vendors set up shop near brick-and-mortar restaurants that have made a comparatively greater economic investment, and attract the customer base that mobile vendors then solicit (and, ideally, convert).

First, the 300-foot rule was not per se unconstitutional. The food trucks argued that the 300-foot rule was unconstitutional on its face because the rule’s “anti-competitive ends” and “economic favoritism” misused the City’s police power. However, they cited no cases in which an economic regulation was struck down based on a facial challenge. The cases on which they relied were all decided on a review of the challenged statutes as applied to the plaintiffs in each case. See Verzi v. Balt. Cty., 333 Md. 411 (1994). Moreover, there is support in Maryland case law for constitutionally valid economic regulations targeted at curbing unfair competition. See, e.g., Salisbury Beauty Schools v. State Bd. of Cosmetologists, 268 Md. 32, 56 (1973). The circuit court correctly found that the 300-foot rule was not unconstitutional per se.

When a statute creates a distinction based upon clearly “suspect” criteria, or when it infringes upon personal rights or interests deemed to be “fundamental,” that statute is subject to strict scrutiny. alone. Attorney Gen. of Md. v. Waldron, 289 Md. 683, 705 (1981). Where, as here, a statute does not discriminate based on a suspect classification, it is subject to highly deferential, rational basis review. Frey v. Comptroller of Treasury, 422 Md. 111, 163 (2011). The food trucks advocated for a version of rational basis that they called “the real-and-substantial test,” a test that is far more probing than the ordinary rational basis review. In 1977, however, the Court of Appeals abandoned the “real and substantial relation test” and brought the notion of substantive due process in Article 24 (back) in line with that of the United States Constitution. Governor of Md. v. Exxon, 279 Md. 410, 424–26 (1977).

When applying the traditional rational basis test under Article 24, courts perform a very limited function, resisting interference unless it is shown that the legislature exercised its police power arbitrarily, oppressively, or unreasonably. Tyler v. City of Coll. Park, 415 Md. 475, 500 (2010). The 300-foot rule did not deny the food trucks the opportunity to engage in their chosen vocation. Waldron, 289 Md. at 717. Their right to be mobile vendors was not threatened, only their right to park and sell in certain places within Baltimore City. As a purely economic regulation, the 300-foot rule would receive the highest level of legislative deference under traditional rational basis review. Id. Against that deferential standard, the 300-foot rule rationally furthered the City’s legitimate interest in addressing the free-rider problem arising when mobile vendors set up within a block of direct brick-and-mortar competitors.

The City’s broad police power includes the power to legislate in the general welfare. Salisbury Beauty Schools, 268 Md. at 47. The City’s legislative decisions enjoy a strong presumption of constitutionality, and that presumption remains intact when the challenged legislation distinguishes based on non-suspect criteria, despite the fact that, in practice the laws result in some inequality. Supermarkets Gen. Corp. v. State, 286 Md. 617 (1979). The restrictions imposed by the 300-foot rule were not arbitrary, oppressive, or unreasonable, and were directly relevant to the policy adopted to promote the general welfare. Salisbury Beauty Schools, 268 Md. at 57. Requiring mobile vendors to keep a 300-foot distance from competing brick-and-mortar establishments rationally addressed the City’s concerns that their business might harm their brick-and-mortar counterparts. Thus, because the 300-foot rule rationally furthered the legitimate government interest of protecting brick-and-mortar establishments from free-riding mobile vendors by requiring them to keep their distance from direct competitors, the circuit court correctly found that it did not violate Article 24.

Therefore, the circuit court judgment finding that the 300-foot rule did not violate Article 24 was affirmed. The circuit court erred, however, in finding that the rule was unconstitutionally vague. Accordingly, the judgment of the circuit court was affirmed in part and reversed in part.

COMMENTARY: Despite finding that the 300-foot rule was constitutional and did not infringe on the food trucks’ due process and equal protection rights, the circuit court granted the food trucks’ request for an injunction after finding the rule void for vagueness. The circuit court specifically found objectionable the phrases “primarily engaged in,” “same type of food product,” and “300 feet.” However, the food trucks never pled, then expressly disclaimed, a void for vagueness challenge.

Moreover, even if pled, neither a facial nor as-applied vagueness challenge could properly be considered in this case. A statute is void for vagueness is a finding that the statute is unconstitutional. Galloway v. State, 365 Md. 599, 611 (2001). Vagueness is another way of stating the due process principle that statutes must provide persons of ordinary intelligence and experience a reasonable opportunity to know what is prohibited so that they may govern their behavior accordingly. Id. at 615–16. A statute must also provide legally fixed standards and adequate guidelines for police and others whose obligation it is to enforce, apply, and administer it. Id.

While there might arise close questions about the scope of the 300-foot rule as food trucks grow and spread in Baltimore, such as whether a mobile hot dog vendor is “primarily engaged in” the same business as a deli, the City was not required to resolve all such potential conundrums to the satisfaction of all in order to avoid a vagueness challenge. The City could reduce the possibility of confusion or vagueness by promulgating regulations or providing guidance about how it planned to enforce the rule. Even without a formal food taxonomy in hand, however, City enforcement authorities could exercise reasonable discretion in applying the 300-foot rule. For these reasons, the circuit court erred in evaluating this statute for vagueness on this record, even if the Food Trucks had postured a vagueness claim in the first place, and this portion of the circuit court judgment was accordingly reversed.

PRACTICE TIPS: To survive a “void for vagueness” analysis, a statute must eschew arbitrary enforcement in addition to being intelligible to the reasonable person. A statute is not unconstitutionally vague if the meaning of the words in controversy can be fairly ascertained by reference to judicial determinations, the common law, dictionaries, treatises or even the words themselves, if they possess a common and generally accepted meaning. Nor is a statute void for vagueness merely because it allows for the exercise of some discretion in its enforcement.

Contract Law

Statute of limitations

BOTTOM LINE: Where the plaintiff was involved in a motor vehicle accident with an underinsured tortfeasor and the tortfeasor’s insurance company offered the plaintiff a settlement of $20,000, the earliest date that the limitation period for the plaintiff’s breach of contract action against her own uninsured motorist (“UIM”) coverage provider could begin to run was the date on which the plaintiff, with her UIM provider’s permission, accepted the tortfeasor’s insurance company’s offer of $20,000 and executed a release in favor of the tortfeasor, because that was the date that the tortfeasor’s coverage was “exhausted,” and, therefore, the circuit court erred in dismissing as untimely the plaintiff’s breach of contract action against her UIM provider, filed within three years of that date.

CASE: Shilling v. Nationwide Insurance Company, No. 1154, Sept. Term 2017; No. 515, Sept. Term, 2018 (filed June 4, 2019) (Judges Arthur, BEACHLEY & Zarnoch (Senior Judge, Specially Assigned)).

FACTS: On April 19, 2011, Margaret Shilling was involved in a motor vehicle accident with an underinsured tortfeasor at or near Gambrills, Maryland. On April 14, 2013, the tortfeasor’s insurance company offered Shilling the maximum amount of liability coverage available under its policy – $20,000 – as full and final settlement of her claims against the tortfeasor. On April 24, 2011, Shilling’s underinsured motorist provider (“UIM”), Nationwide Insurance Company, gave its permission to Shilling to settle her claim with the tortfeasor and waived subrogation.

Shilling ultimately agreed to accept the tortfeasor’s insurance policy limits of $20,000 and executed a release in favor of the tortfeasor and the tortfeasor’s insurer on February 3, 2014. On September 23, 2016, Shilling filed a complaint against Nationwide in the circuit court, alleging that Nationwide was liable under the UIM provisions of its insurance policy for damages in excess of the $20,000 settlement with the tortfeasor’s insurer. Nationwide moved to dismiss based on limitations.

Following a hearing, the circuit court granted Nationwide’s motion, finding that the statute of limitations on Shilling’s UIM claim had begun to run when Nationwide consented to the settlement on April 23, 2013, and that Shilling’s claim was therefore untimely. The circuit court held that, on April 23, 2013, a contract was formed by the settlement agreement, and that if Shilling believed that Nationwide had breached that contract, she needed to file suit by April 23, 2016. Because Shilling did not file suit until September 23, 2016, the circuit court determined that her suit was time-barred.

Shilling appealed to the Court of Special Appeals. On January 10, 2018, Shilling and Nationwide filed a joint motion to stay the appeal and remand to the circuit court to determine whether the date of exhaustion of the tortfeasor’s policy limits is the date that the underinsured insurer consents to the settlement with the tortfeasor, the date that the release with the tortfeasor is signed, or the date that the check for the underlying policy limits is deposited. This Court granted the motion and stayed the appeal.

Pursuant to the stay, the circuit court held a hearing on February 28, 2018. On April 30, 2018, the circuit court accepted Nationwide’s position concerning limitations and issued an order stating that in a claim for breach of an uninsured motorist contract, the date of the exhaustion of the tortfeasor’s policy is the date the insurer consented to settlement with the tortfeasor. Because Nationwide consented to Shilling’s settlement and waived subrogation on April 23, 2013, the court ruled that Shilling’s claim against Nationwide was time-barred.

Shilling filed a second appeal to the Court of Special Appeals, which granted her motion to lift the stay and consolidated the two appeals. The Court of Special Appeals reversed the judgment of the circuit court and remanded the case.

LAW: Shilling argued that the circuit court erred in finding that the statute of limitations on her UIM claim against Nationwide began running on April 23, 2013, the date on which Nationwide gave Shilling permission to settle with the tortfeasor. At issue in the present case was Md. Code (1996, 2017 Repl. Vol.), §19-511 of the Insurance Article (“IA”), which imposes obligations upon the insurer after the insured provides his or her insurer a copy of the tortfeasor’s liability insurer’s written settlement offer pursuant to IA §19-511(b). The statute provides that within 60 days after receipt of the notice required under subsection (b) of this section, the uninsured insurer shall send to the injured person: (1) written consent to acceptance of the settlement offer and to the execution of releases; or (2) written refusal to consent to acceptance of the settlement offer. Within 30 days after a refusal to consent to acceptance of a settlement offer under subsection (c)(2) of this section, the uninsured motorist insurer shall pay to the injured person the amount of the settlement offer.

Pursuant to IA §190511(f), the injured person may accept the liability insurer’s settlement offer and execute releases in favor of the liability insurer and its insured without prejudice to any claim the injured person may have against the uninsured motorist insurer: (1) on receipt of written consent to acceptance of the settlement offer and to the execution of releases; or (2) if the uninsured motorist insurer has not met the requirements of subsection (c) or subsection (d) of this section. This provision was enacted to resolve the common dilemma where an injured person who made a claim against a liability carrier for limits available under the liability policy was frequently not allowed by the UIM carrier to give the liability carrier a full release of their claim. Therefore, if the injured person wished to make an additional claim for their injuries against their UIM coverage, they became caught in a situation where the liability carrier would not give them the limits of the at-fault party’s policy without a release, and the UIM carrier would not allow them to give a release to the liability carrier, leaving the injured person unable to recover funds from either carrier and causing a lengthy delay in settlement. Woznicki, 443 Md. at 111.

In Maryland, an uninsured/underinsured motorist claim is a contract claim. Lane v. Nationwide Mut. Ins. Co., 321 Md. 165, 170 (1990). Contract claims are subject to a three-year statute of limitations. Md. Code (1973, 2013 Repl. Vol.), §5-101 of the Courts and Judicial Proceedings Article (“CJP”). In Lane, the Court of Appeals analyzed when the statute of limitations starts to run for an uninsured motorist claim. Lane, 321 Md. at 166. The Court held that when an insured elects to bring and does bring a timely tort action against the uninsured motorist, having notified his uninsured motorist carrier of the tort action, and when the insured thereafter either during the pendency of the tort action or within a reasonable time after judgment in the tort case makes a claim upon his insurer for uninsured motorist benefits, the statute of limitations does not begin running against the insured until the insurer denies that claim, thereby allegedly breaching the contract. Id. at 176-77. Integral to the Court’s holding was its unequivocal desire to protect the insured’s statutory right to either bring a contract action against the insured’s uninsured motorist carrier or sue the uninsured motorist in tort and thereafter bring a contract action against the uninsured motorist carrier. Id. at 170.

Twenty years later, in Pfeifer v. Phoenix Ins. Co., 189 Md. App. 675 (2010), the Court of Special Appeals addressed when the statute of limitations starts to run on a UIM claim. The Court stated that as long as the insured does not demand compensation under her own insurance policy, the uninsured motorist carrier is not called upon to pay under the contract, and, therefore, there can be no breach of contract causing the statute of limitations to begin running. Id. at 690. Moreover, the statute of limitations does not begin running against the insured until the insurer denies the claim, thereby allegedly breaching the contract. Id.

In sum, Lane and Pfeifer hold that the contract statute of limitations does not start running when the insured learns that the tortfeasor is uninsured and the UIM carrier disclaims coverage. Lane, 321 Md. at 172. The contract statute of limitations does not commence on the date of the underlying automobile accident. Pfeifer, 189 Md. App. at 694-95. The insured/injured party has an absolute statutory option of initially bringing a contract action against his uninsured motorist carrier or of initially bringing a tort action against the uninsured tortfeasor and thereafter bringing a contract action against the uninsured motorist carrier. Lane, 321 Md. at 170. Until the insured/injured party makes a demand for payment under his or her UIM policy, there cannot be a breach of contract sufficient to trigger contract limitations. Id. at 173. Limitations under the UIM policy cannot start running before the date on which exhaustion of the tortfeasor’s coverage occurs, i.e., upon the determination of the tortfeasor’s liability either by trial or settlement. Pfeifer, 189 Md. App. at 694-95, n.7.

Applying these principles to the instant case, the earliest date for commencing contract limitations was February 3, 2014, the date when Shilling, with Nationwide’s permission, accepted the tortfeasor’s insurance company’s offer of $20,000 and executed the Release in favor of the tortfeasor. That was the date when the tortfeasor’s coverage was “exhausted” pursuant to Pfeifer. Because February 3, 2014 was the earliest date to trigger limitations under the UIM contract, Shilling’s suit against Nationwide, filed on September 23, 2016, was not time-barred by the applicable three-year statute of limitations.

Accordingly, the judgment of the circuit court was reversed, and the case was remanded for further proceedings.

COMMENTARY: This conclusion was consistent with the holding in Lane that contract limitations are not triggered until the insured/injured party makes a demand for payment under the UIM policy. Lane, 321 Md. at 173. Here, Nationwide’s consent to the proposed settlement did not equate to a demand for payment by Shilling for UIM benefits. As such, Nationwide’s consent to the proposed settlement and agreement to waive subrogation did not start the running of contract limitations.

PRACTICE TIPS: While Maryland’s uninsured motorist statute has undergone multiple changes since its enactment in 1972, most notably expanding coverage to underinsured motorists in 1981, its purpose has remained constant: to provide minimum protection for individuals injured by uninsured motorists. The statute creates a floor to liability, not a ceiling. Consistent with the public policy of affording minimal protection for innocent victims, an insured can purchase a higher amount of UIM insurance which will become available when the insured’s UIM coverage, as well as his damages, exceed the liability coverage of the tortfeasor. Because this coverage is remedial in nature, it is to be liberally construed to ensure that innocent victims of motor vehicle accidents can be compensated for the injuries they suffer as a result of such accidents.

 

 

 

 

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