Maryland Court of Appeals

Consumer Protection; Maryland Consumer Loan Law: Although a law firm engaged in debt collection activities on behalf of a client, including the preparation of a promissory note containing a confessed judgment clause and filing of a confessed judgment complaint to collect a consumer debt, it was not subject to the provisions of the Maryland Consumer Loan Law. The legislative history did not reflect an intent to expand the reach of the statute beyond traditional consumer lenders who are “in the business of making loans.” Nagle & Zaller PC. v. Delegall, Misc. No. 6, Sept. Term, 2021 (filed Aug. 11, 2022).  

Criminal; accessory before the fact: Where the defendant contended that an accessory before the fact to second-degree intent to kill murder necessarily deliberates and premediates the murder, this argument was rejected. An accessory’s aid can be provided on the spur of the moment, thoughtlessly or rashly, and thus without premeditation. Garcia v. State, No. 62, Sept. Term, 2021 (filed Aug. 11, 2022).  

Criminal; destruction or concealment of evidence: Where the defendant cut off his dreadlocks between the time of the crime and the arrest, the circuit court did not err in giving a destruction or concealment of evidence jury instruction. Rainey v. State, No. 54, Sept. Term, 2021 (filed Aug. 11, 2022). 

Insurance; household exclusion: Where the Maryland Code prohibits an insurer from precluding coverage in certain instances, the legislative history showed this provision applied only to primary automobile policies. As such, a provision in an umbrella policy that precluded coverage in a certain instance was valid and enforceable. Buarque de Macedo v. The Automobile Insurance Company of Hartford, Connecticut, No. 52, Sept. Term, 2021 (filed Aug. 11, 2022).

Sanctions; Disbarment: Where an attorney misappropriated funds and inflicted harm upon his clients; violated 12 rules of professional conduct with numerous clients and two Maryland Rules concerning attorney trust accounts and refused to acknowledge his misconduct’s wrongful nature, he was disbarred. Attorney Grievance Commission of Maryland v. White, Misc. Docket AG No. 7, Sept. Term, 2021 (filed Aug. 12, 2022).  

Consumer Protection

Maryland Consumer Loan Law

BOTTOM LINE: Although a law firm engaged in debt collection activities on behalf of a client, including the preparation of a promissory note containing a confessed judgment clause and filing of a confessed judgment complaint to collect a consumer debt, it was not subject to the provisions of the Maryland Consumer Loan Law. The legislative history did not reflect an intent to expand the reach of the statute beyond traditional consumer lenders who are “in the business of making loans.”

CASE: Nagle & Zaller PC. v. Delegall, Misc. No. 6, Sept. Term, 2021 (filed Aug. 11, 2022) (Judges Getty, McDonald, Hotten, BOOTH, Biran, Gould) (Judge Watts dissents).

FACTS: This case comes from the federal court, requesting that this court answer the following rephrased question: “Is a law firm that engages in debt collection activities on behalf of a client, including the preparation of a promissory note containing a confessed judgment clause and filing of a confessed judgment complaint to collect a consumer debt, subject to the provisions of the Maryland Consumer Loan Law, Md. Code, Commercial Law Article § 12-301, et seq.?”

LAW: A law firm and the lawyers it employs are certainly in the business of providing legal services to clients, which may include drafting loan documents; drafting settlement agreements that include structured payments and engaging in debt collection activity. The question here is whether the legislature considers a lawyer or law firm who engages in such conduct as being a person who “makes a loan” or who is “in the business of making loans” and, consequently, subject to the requirements of the Maryland Consumer Loan Law, or MCLL. Given the broad, general definitions set forth within the statute, the court determines that the statutory language is ambiguous and, therefore, shall look to the legislative history.

The legislative history makes clear that, from the inception of these laws, the General Assembly intended them to regulate petty loan brokers and persons traditionally engaged in the business of consumer lending. This court’s review of the legislative history, including the 2018 amendments to the credit provisions, does not reflect an intent by the legislature to expand the reach of the MCLL beyond traditional consumer lenders who are “in the business of making loans.”

Reading the plain language of the statute — which regulates persons “in the business of making loans” — in the context of the legislative history and the purpose of the statute, leads to the clear conclusion that the General Assembly intended the MCLL to regulate businesses engaged in consumer lending, and did not intend for it to apply to all lawyers or law firms that draft loan documents or engage in collection activity on behalf of clients. Nor is there any evidence that the legislature intended to require that HOAs or condominium regimes be licensed in order to exercise their statutory right to collect delinquent assessments or charges, including entering into payment plans for the repayment of past-due assessments. When one considers the licensing requirements for loans made under the MCLL, they do not contemplate the licensing of law firms or HOAs under the licensing provisions.

In conclusion, the court holds that a law firm that prepares promissory notes or undertakes debt collection activity on behalf of a HOA client is not subject to the MCLL because it is not a “lender” that is “engaged in the business of making loans” under the provisions of the MCLL. Rather, a law firm is in the business of providing legal or debt collection services to its clients.

Although a law firm’s conduct is subject to regulations under the Fair Debt Collection Act and similar statutes, when the law firm engages in debt collection activities, such activities are not synonymous with consumer lending activities that require a license under the MCLL. The court similarly concludes that a HOA that extends a payment plan for the repayment of delinquent HOA assessments is not “in the business of making loans” and, therefore, not subject to the MCLL. Any extension of credit by a HOA under these circumstances is an ancillary function of the HOA’s operations associated with the protection and maintenance of common areas and community-related infrastructure.

Certified question of law answered.

DISSENT: Respectfully, I dissent. I would answer the certified question of law “yes” and hold that, based on the facts set forth in the operative complaint, which was incorporated into the federal court’s certification order, Nagle & Zaller PC is subject to the provisions of the Maryland Consumer Loan Law.

Criminal

Accessory before the fact

BOTTOM LINE: Where the defendant contended that an accessory before the fact to second-degree intent to kill murder necessarily deliberates and premediates the murder, this argument was rejected. An accessory’s aid can be provided on the spur of the moment, thoughtlessly or rashly, and thus without premeditation. 

CASE: Garcia v. State, No. 62, Sept. Term, 2021 (filed Aug. 11, 2022) (Judges Watts, Hotten, Booth, Biran, EAVES, Raker, Getty).

FACTS: On the night of June 5, 2017, Shadi Najjar and Artem Ziberov were gunned down while waiting to sell one of Najjar’s extra graduation tickets. The event that led to the shooting, however, took place months prior.

In December 2016, Jose Ovilson Canales-Yanez arranged to sell marijuana to Najjar. Canales-Yanez’s then pregnant wife, Kara Yanez, was present to complete the sale. Kara Yanez alleged Najjar took the marijuana from her without paying, and as Najjar fled, he assaulted her.

Canales-Yanez recruited Edgar Garcia and Rony Galicia to exact revenge.  Edgar Garcia later enlisted his half-sibling, Roger Garcia. On May 31, 2017, Roger became friends with Najjar on Snapchat. When Najjar posted a picture advertising an extra graduation ticket he had for sale, Roger and Najjar agreed to meet. Najjar and Ziberov, a passenger in the vehicle, were shot and killed while waiting in their car for Roger.

The jury found Roger guilty of two counts of second-degree murder, as well as the two corresponding firearm-use counts. In his appeal, Roger contended that an accessory before the fact to second-degree intent to kill murder necessarily deliberates and premediates the murder and therefore cannot be guilty of second-degree murder. The Court of Special Appeals rejected this theory and affirmed the judgment of the trial court.

LAW: The question in this case is whether a valid legal foundation exists to convict a defendant of second-degree intent to kill murder, as an accessory before the fact.

It is uncontested that Roger befriended Najjar on Snapchat and that Rogers alerted the co-defendants to Najjar’s advertisement on Snapchat. Roger’s act of becoming Najjar’s friend on Snapchat and alerting the co-defendants are considered aid. First, a reasonable inference is that Roger befriended Najjar on Snapchat in order to provide the co-defendants with an inconspicuous way to communicate with Najjar and access his whereabouts.

Second, another reasonable inference is that Roger alerted the co-defendants to the Snapchat advertisement to give them a chance to meet, face-to-face, with Najjar. But because premeditation is not an element of second-degree murder crime, the presence or absence of any alleged premeditation is irrelevant.

Moreover, both acts of aid could have been done without premeditation or a meeting of the minds as to an anticipated or planned murder. In addition, the court agrees with the Court of Special Appeals that it is plausible for an accessory before the fact to second-degree murder to have acted “on impulse without ‘sufficient time to consider the decision whether or not to kill and weigh the reasons for or against such a choice,’ aid[ed] another in the commission of a homicide with the intent to kill and in the absence of mitigating circumstances.”

While Roger contends that this court’s decision in Mitchell v. State, 363 Md. 130 (2001), provides that it is impossible to commit a non-premeditated intent-to-kill murder as an accessory before the fact, Mitchell reaches a different conclusion. In Mitchell, this court faced the question of whether conspiracy to commit second-degree murder is legally possible. The court held that the prior planning exhibited by the actor to a conspiracy is equal to premeditation, and therefore conspiracy to commit second-degree murder is legally impossible.

An accessory before the fact, unlike a conspirator, does not always act with a “prearranged concert of action.” Here, the jury trial considered whether Roger’s own personal actions coupled with those of the other actors rose to the level of a conspiracy to murder Najjar. Ultimately, the jury found that Roger’s aid did not rise to the level of conspiracy and acquitted Roger of that charge. In sum, the jury inherently found that Roger’s aid was not equivalent to premeditation and found him guilty of second-degree murder.

Garcia argues that the type of accomplice liability established in Sheppard v. State, 312 Md. 118 (1988), does not allow for an accessory before the fact to be found guilty as an accessory before the fact to the subsequent offense. The court agrees with the state that this contention misapplies Sheppard.

At bottom: (1) an accessory’s aid can be provided on the spur of the moment, thoughtlessly or rashly, and thus without premeditation; (2) an accessory before the fact to second-degree murder is different and distinct from conspiracy to commit second-degree murder and (3) Sheppard liability provides a legally cognizable basis upon which an accessory before the fact to an initial crime can be convicted as an accessory before the fact to an incidental crime.

Judgment of the Court of Special Appeals affirmed.

Criminal

Destruction or concealment of evidence

BOTTOM LINE: Where the defendant cut off his dreadlocks between the time of the crime and the arrest, the circuit court did not err in giving a destruction or concealment of evidence jury instruction.

CASE: Rainey v. State, No. 54, Sept. Term, 2021 (filed Aug. 11, 2022) (Judges Watts, HOTTEN,  Booth, Biran, Eaves, McDonald, Getty).

FACTS: In a matter of first impression, the court is asked to determine whether it was reversible error for a circuit court to give a destruction or concealment of evidence jury instruction based on evidence that the defendant cut off his dreadlocks between the time of the crime and the arrest.

LAW: This court previously adopted the four-prong test, in the context of flight, for assessing the probative value of evidence indicating consciousness of guilt: (1) the behavior of the defendant suggests flight; (2) the flight suggests a consciousness of guilt; (3) the consciousness of guilt relates to the crime charged or closely related crime and (4) the consciousness of guilt suggests actual guilt of the crime or closely related crime.

While cutting one’s hair to destroy or conceal evidence has never come before this court, other authorities have concluded that cutting one’s hair following the commission of a crime may be admitted as evidence of consciousness of guilt. The court agrees with the reasoning of these authorities and finds that there was sufficient evidence for the jury to infer that the act of cutting off dreadlocks suggested a desire to destroy or conceal an identifying characteristic, which in turn, tended to establish petitioner’s consciousness of guilt for the murder of Mr. Tibbs.

It can be inferred from Ms. Creighton’s testimony that before the murder, petitioner regularly frequented the neighborhood with dreadlocks, but after the murder, petitioner changed his appearance and was no longer regularly present. Ms. Creighton’s testimony, corroborated in part by surveillance video and forensic evidence, overcomes the minimal threshold of “some evidence” to establish that cutting off dreadlocks suggested a desire to conceal evidence.

Contrary to the assertion of petitioner, there is no requirement in Maryland that the defendant be formally notified of his connection to the crime, either through statements of law enforcement, arrest or imprisonment. The evidentiary basis connecting post- crime conduct to consciousness of guilt may be established by several factors, including but not limited to being charged or being a suspect in an investigation. The court also rejects petitioner’s argument that the post-crime behavior must be contemporaneous with the crime.

Petitioner contends that the circuit court must expressly state on the record that the four inferences have been established “to allow for meaningful appellate review . . . [and] protect against the giving of unwarranted inference instructions[.]” Contrary to petitioner’s assertion, the circuit court is not required to state its reasoning for giving a consciousness of guilt jury instruction on the record because (1) circuit courts are presumed to know and apply the law correctly and (2) Maryland appellate courts review jury instructions de novo, so “meaningful appellate review” is guaranteed.

Finally, here, the Court of Special Appeals commented “that it is preferable, in all cases in which a defendant has allegedly changed his appearance in order to avoid identification, to employ a custom instruction that focuses on the change of appearance as potential evidence of consciousness of guilt.” A customized version of MPJI-CR 3:26 that specifically mentioned the change of appearance would have made the jury instruction more precise, but the Court of Special Appeals noted that any potential prejudice from referring to the cutting of hair as “destruction or concealment of evidence” was harmless.

This court agrees with the Court of Special Appeals and concludes that the jury understood the cutting of dreadlocks was the subject of the pattern jury instruction for destruction or concealment of evidence. The state did not refer to the cutting of hair throughout the trial as destruction or concealment of evidence, and explained to the jury that the cutting of hair was the relevant act tending to establish consciousness of guilt.

The jury did not communicate any confusion regarding the instruction. By understanding the destruction or concealment of evidence instruction substantively referred to a change in appearance, the jury would have also understood the instruction from the circuit court was first to find whether petitioner cut his dreadlocks, and second, to find whether the act indicated consciousness of guilt.

Judgment of the Court of Special Appeals affirmed.

Insurance

Household exclusion

BOTTOM LINE: Where the Maryland Code prohibits an insurer from precluding coverage in certain instances, the legislative history showed this provision applied only to primary automobile policies. As such, a provision in an umbrella policy that precluded coverage in a certain instance was valid and enforceable.

CASE: Buarque de Macedo v. The Automobile Insurance Company of Hartford, Connecticut, No. 52, Sept. Term, 2021 (filed Aug. 11, 2022) (Judges Watts, Hotten, Booth, BIRAN, Eaves, Adkins, Getty).

FACTS: In February 2016, Michael Buarque de Macedo, his spouse and one of their children died in a two-car collision. Their remaining child, Helena, suffered permanent injuries.

Michael was driving one of the family vehicles when the accident occurred. He and Alessandra were the named insureds of a primary automobile liability insurance policy issued by The Travelers Indemnity Company. Michael alone was also the named insured of a personal liability umbrella policy that contained a household exclusion provision that purported to preclude coverage for bodily injury or personal injury suffered by Michael or by individuals who were related to Michael and who resided in Michael’s household.

Helena, individually, and Steven Macedo, in his capacity as Helena’s guardian and the estate, sought a declaratory judgment that the household exclusion provision was void as against public policy and contrary to statute. Both the circuit court and the Court of Special Appeals declared the household exclusion valid and enforceable.

LAW: Maryland Code, Courts and Judicial Proceedings Article § 5-806(b) provides: “The right of action by a parent or the estate of a parent against a child of the parent, or by a child or the estate of a child against a parent of the child, for wrongful death, personal injury, or property damage arising out of the operation of a motor vehicle, as defined in Title 11 of the Transportation Article, may not be restricted by the doctrine of parent-child immunity or by any insurance policy provisions, up to the limits of motor vehicle liability coverage or uninsured motor vehicle coverage.”

The Macedos argue that the plain language of CJP § 5-806 requires the court to conclude that this statute applies to umbrella policies, inasmuch as it applies to “any insurance policy provisions, up to the limits of motor vehicle liability coverage.” Travelers contends that the text of § 5-806, when viewed in the context of relevant provisions in the Insurance Article, demonstrates the General Assembly’s intent to limit application of the provision to the mandatory primary layer auto coverages.

The court cannot say that the Macedos’ reading of § 5-806(b) is unreasonable. The household exclusion in Michael’s umbrella policy is an “insurance policy provision” and the umbrella policy provides excess “motor vehicle liability coverage.” Thus, if the court  were to read § 5-806(b) without reference to any other provisions or authorities, it  likely would agree with the Macedos that the language of § 5-806 reflects an intent to void household exclusions in umbrella policies as to claims brought by unemancipated children against their parents (and vice versa) for motor vehicle torts.

But the court does not read CJP § 5-806 in a vacuum. Rather, § 5-806(b) must be read in conjunction with the relevant provisions of the Insurance Article. That review leads the court to conclude that Travelers’ interpretation of § 5-806(b) as applying only with respect to mandatory primary coverages is also reasonable. That being the case, the phrase “motor vehicle liability coverage” in § 5-806(b) is ambiguous.

The pertinent legislative history makes clear that the General Assembly’s intention in amending § 5-806(b) was to put unemancipated children on an equal footing with other family members with respect to claims under primary auto policies. The enactment of IN § 19-504.1 was the catalyst for the amendment of § 5-806. This persuades the court that § 5-806, as amended, is intended only to provide parents and their children with a way to reach negotiated policy limits for the mandatory liability and UM coverages.

The General Assembly did not provide for complete insurance recovery by unemancipated children when it amended § 5-806 in 2005. The purpose of the amendment was to provide equal treatment for family members with respect to primary auto coverages. The circuit court correctly held that the household exclusion in Travelers’ umbrella policy is valid and enforceable.

Judgment of the Court of Special Appeals affirmed.

Sanctions

Disbarment

BOTTOM LINE: Where an attorney misappropriated funds and inflicted harm upon his clients; violated 12 rules of professional conduct with numerous clients and two Maryland Rules concerning attorney trust accounts and refused to acknowledge his misconduct’s wrongful nature, he was disbarred.

CASE: Attorney Grievance Commission of Maryland v. White, Misc. Docket AG No. 7, Sept. Term, 2021 (filed Aug. 12, 2022) (Judges Fader, Watts, Hotten, Booth, Biran, Gould, EAVES).

FACTS: On May 24, 2021, the Attorney Grievance Commission of Maryland, acting through bar counsel, filed a petition alleging that Landon Maurice White violated 13 Maryland Attorneys’ Rules of Professional Conduct, or MARPC, and two Maryland Rules regarding attorney trust accounts. After a three-day hearing, the hearing judge found clear and convincing evidence that respondent violated 14 of the 15 allegations in the petition.

Respondent filed exceptions to the hearing judge’s findings of fact and conclusions of law, and this court heard oral arguments on June 2, 2022. On June 6, 2022, the court issued a per curiam order imposing the sanction of immediate disbarment of respondent from the practice of law.

LAW: Respondent makes three exceptions. First, he believes the hearing judge erred by solely relying on the facts deemed admitted, by virtue of his failure to respond timely to petitioner’s request for admissions, to support the hearing judge’s findings of fact.

Petitioner served on respondent over 500 requests for admissions of facts and genuineness of documents and over 2,000 pages of accompanying exhibits. In some instances, petitioner asked that respondent admit representations that involved subjective opinions or legal conclusions. In other instances, petitioner should have known that respondent had no personal knowledge of the facts or documents for which admissions were requested (and had no way through reasonable inquiry to obtain sufficient information to enable him to admit or deny the requests), and petitioner should have known that some of the information respondent was asked to admit would have been inadmissible at a disciplinary hearing under the applicable rules of evidence.

The requests seemed to anticipate that respondent might fail to respond and, thereby, be deemed to have admitted facts that he otherwise would not have admitted and that otherwise might not have been admissible at the disciplinary hearing. Asking respondent to admit to certain of the factual averments and many other requests for admissions was unreasonable.

Nonetheless, the court does not sustain this exception. Maryland Rule 2-424 contains no quantitative limitation, and the court declines to read one into the rule. Further the rules contemplate that some discovery requests may be unreasonable and provide at least one avenue for an aggrieved party to seek refuge.

Additionally Rule 2-424 similarly contains no express qualitative restrictions regarding the substance of the admissions that a party may attempt to obtain. To the contrary, a party may request that an opposing party admit the “truth of any relevant matters of fact set forth in the request.” There is nothing that prevents a party from using the rule in a broader fashion. In that case, it is incumbent upon the receiving party to answer in the negative the broad request for admissions, or, in the case where the receiving party fails to respond, diligently and timely seek withdrawal or amendment of those admissions.

In addition to those already articulated, the court further finds for two reasons that the hearing judge’s acceptance and reliance on the admitted facts were not an abuse of discretion. First, this court permits hearing judges to use facts admitted under Maryland Rule 2- 424 to prove in a disciplinary proceeding an attorney’s misconduct. Second, the hearing judge in this case—in an exercise of judicial restraint and good judgment—afforded respondent numerous opportunities to respond to the request for admissions and permitted respondent the opportunity to present evidence to rebut the facts deemed admitted.

Respondent next contends that the hearing judge was mistaken that his alleged MARPC violations all occurred before he entered into the Conditional Diversion Agreement which, respondent believes, the hearing judge viewed as an aggravating factor. This is nothing more than a misreading of the hearing judge’s findings of fact and conclusions of law. Finally, the court rejects respondent’s argument that petitioner deprived him of his due process rights by collectively handling the Frazier and Cole matters.

Turning to the merits, the court agrees that respondent violated each of the rules found by the hearing judge. The court also agrees that multiple MARPC violations, respondent’s refusal to acknowledge the misconduct’s wrongful nature and the likelihood that he would repeat his misconduct are aggravating factors. The court likewise concludes that respondent has shown by a preponderance of the evidence the mitigating factors found by the hearing judge.

Attorney is disbarred.