September 2021 Maryland Certiorari Grants

The Court of Appeals today granted review in two civil appeals and one criminal appeal. These were the first orders signed by new Chief Judge Getty since his appointment as chief judge took effect on Saturday.

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The Proliferation of Dissents from the Denial of Rehearing En Banc

By Megan E. Coleman

Each week my email inbox receives links to published opinions released by the Fourth Circuit. When I saw the link for Jane Doe v. Fairfax County School Board, No. 19-2203, I almost did not click on it. It was an order denying rehearing en banc and my first thought was, what could be enlightening about that? Luckily, I thought twice. After all, the Fourth Circuit decided to publish this order, so there must be more to it. Indeed, there was.

The first line of the order reads as one would expect: “The court denies the petition for rehearing en banc.” But what follows is an unexpected exchange between a concurring opinion and two dissenting opinions in which the concurrence writes to “confront” the dissent about a practice that is appearing with more frequency in the Fourth Circuit – dissenting from denials of rehearing en banc.

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“Don’t Say Daubert”? Why Not?

By Derek Stikeleather

No one likes to arrive at a party just as the fun is ending and the guests are leaving. Yet, within a year of the Court of Appeals completing its two-decade journey towards formally adopting the Daubert standard for admitting expert testimony, see Rochkind v. Stevenson, 471 Md. 1 (2020), a nationwide legal movement has begun rallying behind the slogan “Don’t Say Daubert.” Has Maryland arrived at the Daubert party only to see everyone else leave?

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COSA Now Allows Citation to Other Courts’ Unreported Opinions

By Steve Klepper (Twitter: @MDAppeal)

Until today, the Court of Special Appeals had a policy “not to cite for persuasive value any unreported federal or state court opinion.” In footnotes in a pair of opinions issued today (links here and here), the Court of Special Appeals announced a change in policy:

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Governor Appoints Getty as New Chief, Elevates Gould to COA, Signals Fast Action on Upcoming Vacancies

Governor Larry Hogan today appointed Judge Joseph Getty, who reaches mandatory retirement age in April 2022, to serve as Maryland’s new chief judge for the next seven months. The Governor also appointed Court of Special Appeals Judge Steven Gould to fill the Montgomery County seat on the Court of Appeals. The press release, quoted below, also states that the Governor will immediately begin the process to fill upcoming February and April vacancies on the Court of Appeals.

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Barbera Court Goes 8-for-8 in Deciding Cases by Term’s End

By Steve Klepper (Twitter: @MDAppeal)

In October 2013, three months after becoming Maryland’s top judge, Chief Judge Mary Ellen Barbera announced a policy under which the Court of Appeals would decide every case the same term in which it heard argument. By August 31 each year, the Court would issue an opinion in all cases heard since the prior September 1.

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August 2021 Maryland Certiorari Grants (Batch 2) Include Beltway Sniper’s Petition

Yesterday, the Maryland Court of Appeals granted review in eight cases. Three involve juvenile life sentences, including that of Lee Boyd Malvo, one of the 2002 “Beltway Snipers.” The Court has calendared the juvenile cases for argument during its January 2022 sitting.

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The Certified Questions Keep on Coming

By Steve Klepper (Twitter: @MDAppeal)

Maryland law allows federal courts to certify questions of state law to the Maryland Court of Appeals. Each annual term, going back to 2014, the Court of Appeals has heard between one and three cases on certification from the the U.S. Court of Appeals for the Fourth Circuit, the U.S. District Court for the District of Maryland, and the U.S. Bankruptcy Court for the District of Maryland.

Last week, in United States v. Dickson, the Fourth Circuit certified the following question to the Court of Appeals: “Under Maryland Law, can an individual be convicted of robbery by means of threatening force against property or threatening to accuse the victim of having committed sodomy?”

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Why We Can’t Have Nice Normal Things Like In-Person Appellate Oral Arguments

By Michael Wein[*]

[Editor’s update: The Court of Appeals September schedule now shows that it will be holding September arguments by videoconferencing.]

As a previous Post accurately stated on the date of June 9, 2021, “In-Person Appellate Oral Arguments Ended Suddenly with A Bang, and are Restarting Slowly with Anticipated Full Strength in the Fall,” things were looking very positive for regular appellate oral arguments in all Maryland-related State and Federal oral arguments by September or October of 2021 when the respective new Terms began. The Maryland Court of Special Appeals, Maryland Court of Appeals, and Fourth Circuit Court of Appeals had already taken steps towards in-person resumption of oral arguments. The United States Supreme Court had not committed yet, though this was unsurprising as their last oral arguments were in April 2021, with oral arguments beginning again in October 2021.

So for those who have been avoiding the internet and news for the last two months, this situation has become more complex. Most everyone in the United States since July, including judges and members of the Maryland Bar, have had an opportunity to become fully vaccinated. This at the very least, suggests that the virus, though contagious, will not lead to any worries about death or hospitalization when nearly the entirety of those who argue appeals, are done by attorneys.

However, the Delta Variant has somewhat altered things, and it is unclear what if any long-term effect this will have. As an update:

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Nonsynonymous terms create an ambiguity

By Brad McCullough

A month ago, the Court of Appeals issued an opinion in a case where the circuit court, Court of Special Appeals, and Court of Appeals analyzed the pivotal issue in the case differently, yet each court ultimately reached the same conclusion. In May of 2020, I wrote, COVID-19 pandemic presents issues of contract interpretation—how have Maryland appellate courts recently handled those issues, and one of the cases I discussed was Impac Mtg. Holdings, Inc. v. Timm, 245 Md. App. 84 (2020). In that case, the Circuit Court for Baltimore City reviewed a contractual provision, found it ambiguous, and determined that the extrinsic evidence did not resolve the ambiguity. The circuit court then construed the language against the drafter and entered summary judgment on behalf of the plaintiffs. On appeal, the Court of Special Appeals affirmed, but for a different reason. The intermediate appellate court concluded that the language was unambiguous and meant what the plaintiffs said it meant, and thus upheld the entry of summary judgment. The Court of Appeals granted cert and also concluded that the circuit court properly entered summary judgment, but for an altogether different reason. While the Court agreed with the circuit court that the language was ambiguous, it concluded that the extrinsic evidence established that the parties intended that the language have the meaning ascribed to it by the plaintiffs. While there is much to garner from the Court’s opinion, this post will focus on the issue of ambiguity, and why the Court of Appeals disagreed with the Court of Special Appeals on that issue. That disagreement ultimately centered on whether the word “series” was precisely synonymous with the word “class.”

The litigation concerned Impac Mortgage Holding’s attempt to amend Articles Supplementary to its charter. Articles Supplementary are themselves simply amendments to the charter. The Articles here had first created “Series B” preferred stock and later created “Series C” preferred stock. The Series B Articles provided:

So long as any shares of Series B Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of the Series B Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class with all series of Parity Preferred that the Corporation may issue upon which like voting rights have been conferred and are exercisable), … (ii) amend, alter or repeal any of the provisions of the Charter, so as to materially and adversely affect any preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, or terms or conditions of redemption of the Series B Preferred Stock or the holders thereof ….

The Series C Articles had a virtually identical counterpart provision.

When Impac held a vote to amend the Articles, over two-thirds of the Series B and Series C stockholders, collectively, approved the amendment. But just under two-thirds of the Class B stockholders approved. Impac thought the amendments had been approved—because it thought the two-thirds requirement applied to the sum of the Series B and Series C votes. But at least two Class B stockholders thought otherwise and filed a class action complaint, alleging that Impac breached the Series B Articles by amending them without the consent of two-thirds of Series B stockholders.

The interplay between the italicized and underlined language was at the heart of the controversy. As stated, the circuit court concluded that the language was ambiguous, but in an opinion authored by Judge Nazarian, on a panel with Judge Reed and Senior Judge Zarnoch, the Court of Special Appeals disagreed, finding the language unambiguous. The appellate court first explained that the italicized language is susceptible of only one meaning, i.e. “that Impac can’t take the actions that follow without the vote to consent, to the extent there’s a difference, of the Class B shareholders.” (emphasis added).

The court then noted that the alleged ambiguity arose “in the second clause and its interaction with the first.” The court acknowledged that the second clause “means unambiguously that the Class B shareholders vote separately as a class with all the others of preferred stock,”—and “indicates that all of the classes will vote at the same time”—yet “nothing in that language even purports to pool the Class B votes with the Class C votes, or anyone else’s, in determining whether the class has consented to the amendments.” (emphasis added). The court further explained that the reference to Class B shareholders “voting separately as a class” actually strengthened “the first clause in requiring a two-thirds vote of just the Class B shares,” and in the court’s view, “that ends the inquiry.” (emphasis added). In short, the court treated the words “Series” and “Class” as being synonymous and thus viewed the Series B stock and the Series C stock as separate classes of stock.

That is where the Court of Appeals parted company with the intermediate court. In an opinion authored by Judge McDonald, the Court first examined some basic aspects of corporate finance and the fundamental principles of contract interpretation. The Court next provided a detailed discussion of the underlying facts and procedural background. 

The Court eventually addressed whether the voting provision at issue is ambiguous. The Court noted that it was clear that the provision applies if there are shares of Series B outstanding and Impac plans to change the charter in a way that “materially and adversely” affects those shares or shareholders. That then led the Court to the matter in dispute: “the part of the Voting Provision that says what must be done to approve a material adverse action concerning the rights and preferences of Series B shares.” Like the Court of Special Appeals, the Court saw that the dispute grew out of “the relationship between the first half of this passage that sets forth the requisite vote and the second half (the parenthetical) that describes the circumstances of the voting.” While the first clause requires that the Series B shareholder must approve the amendment by a two-thirds vote, thus implying that only the votes of Series B shares count, the second clause discussed “voting separately as a class with all series of Parity Preferred that the Corporation may issue upon which like voting rights have been conferred and are exercisable.”

Here is where the Court found an ambiguity. “Unspecified is precisely who votes separately as a class.” (emphasis in original) (internal quotation marks omitted). Do the Series B shares constitute the “class,” or are Series C shares also part of that same class? After discussing the competing arguments advanced by the parties, the Court concluded that the provision “is ambiguous as to whether the approval of an amendment to the Series B Articles Supplementary is to be determined by the votes of the Series B shareholders alone or, instead by the votes of Series B and Series C shareholders combined.”  

In reaching that conclusion, the Court of Appeals explained that while “the meaning of ‘class’ that the Court of Special Appeals ascribed to the Voting Provision was plausible”—and the Court of Appeals ultimately agreed “with the result that the intermediate appellate court reached—the provision is not unambiguous, because it is susceptible of more than one interpretation.” The Court noted that the intermediate court’s conclusion apparently rested on an assumption that the terms “series” and “class” are synonymous. Indeed, the Court of Special Appeals explained its holding by referring to the shares as “Class B” instead of “Series B.” The Court further noted that the Court of Special Appeals “did not explain why it regarded Series B as the class in this context.” The Court noted possible reasons why the Court of Special Appeals might have reached that conclusion, but also explained why those reasons would not support that conclusion. The Court acknowledged that if the terms “series” and “class” “were precisely synonymous,” it “would agree that the Voting Provision would be unambiguous.” But, as the Court explained, that is simply not the case.

The Court’s opinion shows the importance of closely examining each word in a contractual provision when ascertaining if that provision is susceptible of more than one meaning and thus ambiguous. If two words that appeared to have the same meaning were indeed precisely synonymous, the Court would have concluded that the provision was unambiguous. But because the Court could not say that the terms were precisely synonymous, the Court also could not say that the provision was unambiguous.