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Law Digest — Court of Appeals, Court of Special Appeals — March 10, 2022

Maryland Court of Appeals

Attorneys; indefinite suspension: Where an attorney represented to bar counsel that there were no disciplinary complaints pending against her, despite prior correspondence from bar counsel about a disciplinary complaint, she violated multiple sections of the Maryland Attorneys’ Rules of Professional Conduct, or MARPC, resulting in her being indefinitely suspended from the practice of law. Attorney Grievance Commission of Maryland v. Collins, Misc. Docket AG No. 6, Sept. Term, 2021 (filed Feb. 25, 2022).

Maryland Court of Special Appeals

Banking; chain of custody: Where the original holder of the homeowner’s promissory note was entitled to enforce the note at the time it was lost, its assignment of the lost note was valid, entitling the current assignee to enforce the note against the homeowner in a foreclosure proceeding. Jones v. Ward, No. 1071, Sept. Term, 2020 (filed Feb. 24, 2022).

Evidence; credibility: Where administrative law judge, or ALJ, held a minor’s out-of-court’s statements about an alleged sexual assault were not credible, but the ALJ’s analysis of three factors of the “tender years” exception to the hearsay rule was both unsupported by substantial evidence and arbitrary and capricious, and its analysis of four other factors was arbitrary and capricious, its ultimate conclusion was arbitrary and capricious. Prince George’s County Department of Social Services v. Taharaka, No. 786, Sept. Term, 2020 (filed Feb. 25, 2022).

Zoning; special law: Where a private school persuaded the Howard County Council to amend its zoning regulations regarding conditional uses in a way that benefitted only that school, the modification was an unconstitutional “special law” under Maryland Constitution.  Howard County v. McClain, et al., No. 1166, Sept. Term, 2020 (filed Feb. 25, 2022).

Maryland Court of Appeals

Attorneys

Indefinite suspension

BOTTOM LINE: Where an attorney represented to bar counsel that there were no disciplinary complaints pending against her, despite prior correspondence from bar counsel about a disciplinary complaint, she violated multiple sections of the Maryland Attorneys’ Rules of Professional Conduct, or MARPC, resulting in her being indefinitely suspended from the practice of law.

CASE: Attorney Grievance Commission of Maryland v. Collins, Misc. Docket AG No. 6, Sept. Term, 2021 (filed Feb. 25, 2022) (Judges Getty, McDonald, WATTS, Hotten, Booth, Biran, Gould).

FACTS: On Sept. 14, 2021, the hearing judge issued an opinion, including findings of fact and conclusions of law, concluding that Natalie Thryphenia Collins had violated multiple MARPC sections. The hearing judge also found that bar counsel established the existence of numerous aggravating factors, and that Collins failed to establish the existence of any mitigating factors.

LAW: Based on the exhibits admitted into evidence by bar counsel and Collins’s testimony that she knew she had not provided bar counsel an affidavit under Maryland Rule 19-742, the hearing judge’s conclusion that Collins’s statement in the petition for reinstatement that she had complied with Maryland Rule 19-742 “was knowingly and intentionally false” and therefore a violation MARPC 3.3(a)(1) and 8.4(c) is supported by the record.

The court declines, however, to uphold the hearing judge’s determination that Collins made a misrepresentation in the petition for reinstatement by stating that she had complied with the requirements and conditions of the June 8, 2020, suspension order. The hearing judge did not address whether the payment of costs was a requirement or condition of Collins’s suspension or whether at the time that she filed the petition for reinstatement Collins, in fact, believed the payment of costs to be a requirement or condition of her suspension and had nonetheless filed the petition falsely stating that she had fulfilled the condition.

Next, in concluding that Collins violated the MARPC, the hearing judge found that Collins falsely stated in the petition that to the best of her “knowledge, information, and belief” there were no disciplinary complaints pending against her, despite bar counsel’s correspondence to her on numerous occasions concerning the Irving complaint. This aspect of the hearing judge’s conclusions of law is easily supported by clear and convincing evidence.

The hearing judge also found that Collins knowingly made false statements of fact in the response to bar counsel’s objection to the petition for reinstatement and her letter of Oct. 22, 2020, to bar counsel by stating that she did not receive bar counsel’s correspondence of Sept. 15, 2020, and that she only became aware of the Irving complaint when bar counsel’s objection was filed. In the absence of evidence to the contrary, it was reasonable for the hearing judge to infer that bar counsel’s receipt of e-mails stating that the deliveries were complete, rather than that they were undeliverable or returned, meant that Collins had received the e-mail messages.

Further, as Collins was precluded from testifying at the disciplinary hearing except as to mitigation, based on the exhibits admitted into evidence, the hearing judge’s findings that Collins’s “statements were false when made and she knew they were false when made[,]” are not clearly erroneous. As such, clear and convincing evidence supports the hearing judge’s conclusion that Collins violated MARPC 8.4(b).

Clear and convincing evidence also supports the hearing judge’s conclusion that Collins violated MARPC 8.4(d). Collins’s conduct, including knowingly making false statements of fact in connection with the petition for reinstatement and her failure to respond to bar counsel’s lawful requests for information, would negatively impact the perception of the legal profession of a reasonable member of the public.

In addition to the violations of the MARPC, the hearing judge found that the evidence established six aggravating factors: prior attorney discipline, a dishonest or selfish motive, a pattern of misconduct, bad faith obstruction of the disciplinary process, substantial experience in the practice of law and illegal conduct. These determinations are supported by the record.

Although Collins made statements that were determined to be knowingly false and intentionally dishonest, the court is not persuaded that disbarment is warranted. Collins’s misconduct did not involve theft, fraud, intentional misappropriation or harm to a client. Indeed, Collins’s misconduct has resulted in harm only to herself. The court concludes that that an indefinite suspension is the appropriate sanction for Collins’s misconduct.

Natalie Thryphenia Collins is suspended from the practice of law in Maryland indefinitely.

Maryland Court of Special Appeals

Banking

Chain of custody

BOTTOM LINE: Where the original holder of the homeowner’s promissory note was entitled to enforce the note at the time it was lost, its assignment of the lost note was valid, entitling the current assignee to enforce the note against the homeowner in a foreclosure proceeding.

CASE: Jones v. Ward, No. 1071, Sept. Term, 2020 (filed Feb. 24, 2022) (Judges Reed, RIPKEN, Battaglia).

FACTS: This appeal involves a challenge to the Circuit Court for Prince George’s County’s order denying Phyllis Jones’s motion to stay and/or dismiss foreclosure proceedings. Jones argues that the substitute trustees who initiated the foreclosure proceeding did not have standing to bring the action.

LAW: Jones and substitute trustees agree that substitute trustees are not in possession of the note. Accordingly, the trustees could only enforce the note, if at all, by demonstrating they satisfy the requirements of Maryland Commercial Law Article, or CL, § 3-309. Jones argued, in the circuit court and before this court, that the substitute trustees failed to prove that Truman II was in possession of the note and entitled to enforce it when loss occurred, as required by 3-309(a)(i). The court disagrees.

Based on the language of § 3-309, Maryland statutes and Maryland common law in favor of assignment, an entity that lost a note in its possession may assign that lost note, and all the rights under it, including the right to enforcement. Accordingly, the substitute trustees had to demonstrate World Savings Bank was entitled to enforce the note when it lost possession and that it validly assigned the right to enforcement when it assigned the note, and there was a valid assignment to each subsequent purchaser from the prior owner. And, pursuant to § 3-309(b), the substitute trustees had to demonstrate that Jones is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument.

Based on the record before the court, Wells Fargo was the holder of the note when it transferred its interest to Truman I, which in turn transferred its interest to Truman II, and therefore substitute trustees satisfied the requirements of § 3-309(a). In addition, the Jan. 9, 2020, affidavit, and testimony thereto, were sufficient to meet the requirements of § 3-309(b) that Jones be adequately protected in the event that another entity attempted to enforce the note. Therefore, the circuit court’s conclusion that there was sufficient evidence to demonstrate the chain of title enabling substitute trustees to enforce the note was not erroneous.

Jones’s final issue is with the circuit court’s acceptance of the Jan. 9, 2020, lost note affidavit. She avers that the affidavit is inadmissible because: 1) the fact that the affidavit stated it was sworn to in the State of Maryland by Enadia Pierce but was sealed by a notarial seal in the State of Texas called into question the credibility of the affidavit; 2) the affidavit states that Enadia Pierce is signing on behalf of Rushmore Loan Management Services on one page and Rushmore Loan Services on another page which according to Jones are two different entities and 3) a Texas notary does not have the same powers as a Maryland notary.

Rule 14-207(b)(3) requires that a copy of the debt instrument filed in the order to docket be “supported by an affidavit [stating] that it is a true and accurate copy and certifying ownership of the debt instrument.” The Jan. 9, 2020, affidavit satisfied both requirements of Rule 14-207(b)(3).

The irregularity between the Texas seal and Maryland attestation was brought before the trial court at the evidentiary hearing. The court took testimony from Roger Martin, the custodian of records for Rushmore, who stated that the records identified in the Jan. 9, 2020, affidavit were records kept in the ordinary course of Rushmore’s business and explained Pierce’s role. Martin further reviewed each of the documents identified by the affidavit and affirmed that the information contained in the affidavit was true and accurate. The circuit court stated in its opinion that it found Martin’s testimony to be credible and accepted the Jan. 9, 2020, affidavit. The testimony similarly assuaged any doubts arising from the inconsistency in the entity names associated with Pierce. The circuit court did not err in accepting the affidavit.

Judgments of the Circuit Court for Prince George’s County affirmed.

Evidence

Credibility

BOTTOM LINE: Where administrative law judge, or ALJ, held a minor’s out-of-court’s statements about an alleged sexual assault were not credible, but the ALJ’s analysis of three factors of the “tender years” exception to the hearsay rule was both unsupported by substantial evidence and arbitrary and capricious, and its analysis of four other factors was arbitrary and capricious, its ultimate conclusion was arbitrary and capricious.

CASE: Prince George’s County Department of Social Services v. Taharaka, No. 786, Sept. Term, 2020 (filed Feb. 25, 2022) (Judges Kehoe, FRIEDMAN, Ripken).

FACTS: The Prince George’s County Department of Social Services identified Akeem Taharaka as the individual responsible for committing child sexual abuse on A.B. The ALJ found that Taharaka was credible and that the statements of A.B. were not. The ALJ also found that Taharaka was not a regular presence in A.B.’s home and, therefore, could not commit child “sexual abuse” as that term is defined by the relevant statute.

The circuit court, after reviewing the ALJ’s written decision and the record, issued an order affirming the ALJ’s decision. The Department noted a timely appeal.

LAW: For A.B.’s out-of-court statements to be admissible, they had to satisfy the “tender years” exception to the hearsay rule. Thus, to evaluate A.B.’s credibility, the ALJ went through each of the statutory factors in the tender years exception.

The court holds that the ALJ’s assessment of A.B.’s credibility based on the 12 factors was arbitrary and capricious. The court holds that the ALJ’s evaluation of three factors: personal knowledge of the event (factor No. 1); inner consistency and coherence of the statement (factor No. 9) and opportunity to commit the act (factor No. 11), in each case was both unsupported by substantial evidence, and arbitrary and capricious.

The court also holds that the ALJ’s evaluation of four factors: the spontaneity of the statement (factor No. 4); the timing of the statement (factor No. 5); the nature and duration of the abuse (factor No. 8) and suffering pain or distress while making the statement (factor No. 10), were each arbitrary and capricious. Each of these evaluations alone is sufficient to establish overall error. Cumulatively, the ALJ’s ultimate conclusion that the factors supported a finding that A.B.’s statements were not credible was arbitrary and capricious. The court remands for a new evaluation of the credibility of A.B.’s statements.

The ALJ observed Taharaka’s testimony in which he denied the sexual assault and found it to be credible. The Department, however, observes that the ALJ’s opinion relies, as the sole basis for that credibility finding, on his review of Taharaka’s employment history.

The Department argues that it is improper for the ALJ to rely exclusively on Taharaka’s employment history as a proxy for credibility and, as a result, that the ALJ’s finding in this regard was arbitrary and capricious. This court has reviewed the cases on which the Department relies, and we hold that those cases do not support so definite a proposition.

Nevertheless, the court is are concerned that Taharaka’s employment history was the sole basis for the ALJ’s credibility determination. Because it is already remanding this case for additional consideration of A.B.’s credibility, justice will best be served by remanding the issue of Taharaka’s credibility without affirmance, reversal or modification, so that the factfinder can make a more holistic appraisal of Taharaka’s testimony and demeanor. Such an approach is fairer to the parties and provides a surer basis for a reviewing court to properly assess the ALJ’s credibility assessment.

Finally, while the ALJ found that Taharaka was not a regular presence in the home and that, therefore, even if Taharaka had sexually abused A.B., he could not have committed child sexual abuse under the statute. A household member is “a person who lives with or is a regular presence in, a home of a child at the time of the alleged abuse.” A regular presence could mean once a week for a year, every day for a month or once every few days.

The undisputed record reveals that Taharaka was a regular presence in A.B.’s house, and involved in A.B.’s life, even if over the course of his relationship with A.B.’s grandmother he only spent the night at A.B.’s grandmother’s house “10-15 times” per year. As such, the ALJ’s determination that Taharaka was not a regular presence in A.B.’s grandmother’s home, and thus could not have committed child sexual abuse, was unsupported by substantial evidence in the record and was arbitrary and capricious.

Judgment of the Circuit Court for Prince George’s County Reversed.

Zoning

Special law

BOTTOM LINE: Where a private school persuaded the Howard County Council to amend its zoning regulations regarding conditional uses in a way that benefited only that school, the modification was an unconstitutional “special law” under Maryland Constitution.

CASE: Howard County v. McClain, et al., No. 1166, Sept. Term, 2020 (filed Feb. 25, 2022). (Judges Graeff, Kehoe, ADKINS).

FACTS: Glenelg Country School, or GCS, was granted an exclusive use easement by a group of persons who own pipestem strips of land adjacent to GCS’s property. Because GCS wanted to construct on the pipestems that were part of the easement area, GCS submitted a conditional use petition to the Howard County hearing examiner. GCS did not seek written approval from the pipestem owners for its conditional use petition. The hearing examiner denied GCS’s petition.

GCS then moved to amend the Howard County zoning regulations regarding conditional uses. After limiting GCS’s proposed amendments to apply only to private academic schools, the Howard County Council enacted GCS’s proposed zoning regulation amendment as CB-9

Appellees then filed a complaint for declaratory judgment, alleging that CB-9 was a special law and thus unconstitutional under Maryland Constitution. The circuit court granted the appellees’ motion for summary judgment declaring CB-9 an illegal special law. This appeal followed.

LAW: To determine whether a law is an impermissible special law that applies only to certain members of a class, a court considers are: (1) “whether [the underlying purpose of the legislative enactment] was actually intended to benefit or burden a particular member or members of a class instead of an entire class”; (2) “[w]hether particular individuals or entities are identified in the statute”; (3) “[t]he substance and “practical effect” of an enactment”; (4) “[i]f a particular individual or business sought and received special advantages from the Legislature, or if other similar individuals or businesses were discriminated against by the legislation”; (5) “[t]he public need and public interest underlying the enactment, and the inadequacy of the general law to serve the public need or public interest” and (6) “whether [the legislative enactment is] arbitrary and without any reasonable basis[.]”

Regarding the first factor, Howard County asserts that the purpose of CB-9 was not just benefit GCS, but to benefit the entire class of private academic schools now and in the future. The court disagrees. The law at the time of enactment provided only a benefit to GCS. Thus, the law’s underlying purpose was to confer a benefit on GCS, which weighs in favor of considering CB-9 an impermissible special law.

The second factor cuts against finding CB-9 to be a special law, as GCS was not named in the bill. The court accords limited weight to this factor, however, because it can be easily manipulated by using narrow descriptive criteria, such as utilized here.

The third factor weighs strongly in favor of finding CB-9 to be a special law as CB-9 has the “practical effect” of solely benefiting GCS. GCS was the only private academic school that could take advantage of CB-9 at the time of its enactment and will likely be the only private academic school to take advantage of the enactment in the future.

GCS contends there is a possibility that CB-9 could be used in the future by other private academic schools. The court is not persuaded. To benefit from CB-9, the private academic school must be in Howard County, be a conditional use private academic school and hold an exclusive use easement adjacent to its property. Further, to benefit from one of CB-9’s provisions, the school must hold multiple dominant exclusive use easements over adjacent pipestem properties with a total width of less than 75 feet. The likelihood that another entity could benefit from CB-9 is virtually inconceivable.

The special advantages factor weighs in favor of finding CB-9 a special law because GCS proposed the amendments to benefit themselves and received the benefit once CB-9 was enacted by the Council. The public interest factor also weighs in favor of finding CB-9 a special law. There is no public need for this amendment because private academic schools with exclusive easements can already successfully apply for a conditional use under the general law—so long as they obtain written authorization from the property owners.

Lastly, Howard County asserts that CB-9 is not arbitrary and has a reasonable basis because limiting CB-9 to apply solely to private academic schools helps combat the far-reaching scope of such a law. The court is not persuaded. By narrowing CB-9 to such extent that it only applies to one property, the Council rendered CB-9 unreasonable.

Judgment of the Circuit Court for Howard County Affirmed.