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Plank v. Cherneski: Court of Appeals Nails Down a Loose Plank in Maryland Tort Law

By Alan Sternstein

The Court of Appeals expressly held in Kann v. Kann, 344 Md. 689, 510, 690 A.2d 509, 510 (1997), that “allegations of breach of fiduciary duty, in and of themselves, do not give rise to an omnibus or generic cause of action at law that is assertable against all fiduciaries.” Ever since, Maryland’s lawyers and courts have labored under the maxim that “Maryland does not recognize a separate tort action for breach of fiduciary duty.” Int’l Brotherhood of Teamsters v. Willis Corroon Corp., 369 Md. 724, 727 n.1, 802 A.2d 1050, 1051 n.1 (2002) (dictum). Yet, since Kann, lawyers have sought and courts have granted and affirmed relief for breaches of required standards of conduct in various fiduciary relationships. See, e.g., Shenker v. Laureate Education, Inc., 411 Md. 317, 983 A.2d 408 (2009) (corporate directors and minority shareholders); Della Ratta v. Larkin, 382 Md. 553 (2004) (general partner and limited partners); Ins. Co. v. Miller, 362 Md. 361, 765 A.2d 587 (2001) (insurance company and agent of company). With its recent decision in Plank v. Cherneski, Misc. No. 3, Sept. Term 2019 (Md., July 14, 2020) (“Slip Op. at ___”), the Court of Appeals, after exhaustively surveying and scrutinizing relevant Maryland state and federal decisions in the 23 years since Kann, has exposed the emptiness of the maxim rejecting a generic cause of action for breach of fiduciary duty. Despite the 23 year wait, however, Judge Booth’s 79-page unanimous opinion for the court leaves no suspense for the end, stating on page 2:

This Court recognizes an independent cause of action for breach of fiduciary duty. To establish a breach of fiduciary duty, a plaintiff must demonstrate: (1) the existence of a fiduciary relationship; (2) breach of the duty owed by the fiduciary to the beneficiary; and (3) harm to the beneficiary.

Slip Op. at 2.[1]
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Waiving a Claim of Waiver in COSA

By Steve Klepper (Twitter: @MDAppeal)

On August 3, the Court of Special Appeals reported an opinion of the kind that gives attorneys anxiety attacks. In Hayes v. State, the Court addressed a consolidated appeal involving two jointly tried co-defendants, Hayes and Winston. Both claimed on appeal that the circuit court failed to ask necessary voir dire questions under Kazadi v. State. The State conceded that both defendants preserved the error, and that both were entitled to a new trial. But the Court of Special Appeals originally held, contrary to the State’s concession, that only Winston preserved the issue for review on appeal, and that Hayes therefore was not entitled to a new trial.

On Hayes’ motion for reconsideration, however, the Court issued a revised opinion holding that “Hayes did raise the issue before voir dire ended, if just barely,” by handing the trial judge a written request for the same questions that Winston requested. The Court lamented that Hayes’ “tactical approach does not represent best voir dire practice,” and that “it took more than 4,000 words worth of analysis to reach the conclusion, as we now do, that Ms. Hayes preserved her Kazadi claims.”

The Court engaged in this 4,000-word analysis because it held itself obligated to ensure that the matter was preserved under Rule 8-131:

We can dispose quickly of [Hayes’ argument] that the State’s concession that Ms. Hayes had preserved the Kazadi argument waived any  preservation objection. The State’s concession of error does not bind us. Coley v. State, 215 Md. App. 570, 572 n.2 (2013) (an appellate court is not bound by a party’s erroneous concession of error on a legal issue). Under Maryland Rule 8-131, we “will not decide any [ ] issue unless it plainly appears by the record to have been raised in or decided by the trial court….” 

The Court deserves credit for recognizing on reconsideration that Hayes preserved her claim of error. Nevertheless, I believe that the Court should have begun and ended its analysis with the State’s waiver of any preservation challenge.

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It’s Official: Maryland Accepts Daubert as Controlling Law for Admitting Expert Testimony

Editor’s Note: The author of this post represented the Defendant in the appeal. This article does not address any case-specific facts and instead focuses on the holding’s impact on Maryland law generally. As with all of our posts, it contains only the author’s personal opinions, not those of his firm or his clients. This is the blog’s first substantive post on Rochkind, and we expect to have more. If you are interested in submitting a guest post, please contact the editor-in-chief.

By Derek Stikeleather

After more than a decade of incrementally adopting the Daubert standard—and the steady erosion of Frye-Reed as an independent, additional requirement for trial courts applying Maryland Rule 5-702—the Court of Appeals has clarified Maryland law on expert testimony. In Friday’s landmark Rochkind v. Stevenson opinion (its final of the Term), the Court formally adopted the Daubert standard as controlling Maryland law.[1] In doing so, it retired the superfluous Frye-Reed test, which had not only become riddled with exceptions but also evolved into the same “analytical gap” test that courts use when applying Rule 5-702 to expert testimony.

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The Shots Heard Round Richmond

By Megan E. Coleman

Richmond, Virginia. Formerly, the home of the largest slave-trading center in the Upper South and the capital of the Confederacy during the American Civil War. Currently, the site of protests against police brutality and racial injustice, with activists removing or refacing Confederate monuments. The Chief Judge of the United States Court of Appeals for the Fourth Circuit recently said: “As a country, we are in a moment of reckoning.” See United States v. Curry, No. 18-4233 (Decided: July 15, 2020, Amended: July 16, 2020) (Gregory, C.J., concurring at 38).

United States v. Curry is a case stemming from the suspicionless stop of a pedestrian by the Richmond Police Department less than one minute after multiple gunshots were fired in a high crime area of Richmond. It is a fascinating opinion for a myriad of reasons. Read More…

Court of Special Appeals expands the boundaries of the tort of wrongful termination

By Brad McCullough

In a case of first impression in Maryland, the Court of Special Appeals went where California’s courts have refused to go, holding “that the tort of wrongful termination may lie when an employer decides to terminate an employment relationship by declining to renew an employment agreement for which the parties anticipated the reasonable possibility of renewal.” Miller-Phoenix v. Balt. City Bd. of Sch. Comm’rs, CSA-REG-209-2019, 2020 WL 2781833, at *3 (May 29, 2020). Building on the Court of Appeals’ decisions in Adler v. Am. Standard Corp., 291 Md. 31 (1981) and Ewing v. Koppers Co., 312 Md. 45 (1988), the Court of Special Appeals gave Maryland employers the following message. If an employer allows an employment relationship to terminate—and the employer’s motivation for that termination contravenes some clear mandate of public policy—the terminated employee may have a claim for wrongful termination. Read More…

Despite Video, Court of Appeals Can’t Reach Consensus on Police Use of Deadly Force

By Derek Stikeleather

The use of deadly force by police officers in the line of duty has never been uncontroversial. But the police killing of George Floyd in Minneapolis on Memorial Day weekend has sparked an unprecedented national—even global—protest movement to re-examine the use of deadly force by police and the role of lawful police violence in perpetuating systemic American racism. Mr. Floyd’s killing was extraordinary in its stark inhumanity. But it galvanized millions because of its terrible familiarity to too many Americans who see police resort to deadly force in situations that often erupt from relatively minor infractions.

A Fourth Circuit panel recently captured the national mood when it declared, “This has to stop.” Estate of Jones v. City of Martinsburg (4th Cir. June 9, 2020). The Jones decision reversed a trial court’s ruling that had awarded qualified immunity to five Martinsburg, West Virginia, police officers who had killed a mentally ill homeless Black man by shooting him 22 times. The killing occurred shortly after one of the officers had stopped the man for walking in the road.

Like every American state, Maryland is deeply engaged in this difficult national conversation. State and federal laws have long recognized and accommodated the fact that officers must make split-second decisions on the use of force when running into unstable and often dangerous situations. The law does not limit them to using only the level and type of force that 20/20 hindsight later reveals as optimal. But society has also grown increasingly wary of rules and systems that seem to leave police officers unaccountable and even embolden some to brutalize citizens with impunity. Much of this sea-change in public opinion has been driven by the sudden ubiquity of cell phone, bodycam, and other video evidence—and social media platforms that facilitate “viral” dissemination—that brings these violent encounters into public view.

In this moment of intense national reflection, Maryland’s Court of Appeals recently handed down a 4-3 decision that captures the complexity of crafting and applying legal rules to properly regulate police conduct—even when an encounter is video recorded. Estate of Blair v. Austin, No. 35, September Term 2019 (June 2, 2020). Read More…

Maryland Reclamation Associates v. Harford County V: Herein of Litigant Fallibility, Judicial Infallibility, and the Demise of a $45 Million Judgment

By Alan B. Sternstein

The odyssey of Maryland Reclamation Associates (“MRA”) to construct and operate a rubble landfill in Harford County began in August 1989. It shortly ran into legislative, regulatory and judicial hurdles, leading to 30 years of administrative and judicial litigation. MRA’s 30 year saga continued with a recent and now fifth Court of Appeals decision in this story. In “MRA V” (Opinion, Maryland Reclamation Assocs. v. Harford C’ty, No. 52, September Term 2019 (Md. decided Apr. 24, 2020)), in an 80 page opinion, the Court of Appeals nullified a $45,076,420 verdict for MRA in an inverse condemnation action that MRA brought after being unable to secure zoning variances required for the landfill. The court rejected the Court of Special Appeals’ own determination that MRA had exhausted its administrative remedies before bringing its action and ruled that MRA’s action should be dismissed for failure to exhaust administrative remedies. Though MRA did stumble some over the last 30 years, the Court of Appeals in MRA V reached an arguably justified prospective rule of procedure in condemnation cases but questionably did so in applying that rule to MRA. Read More…

Does substituted service on SDAT violate due process? Mayor & City Council v. Prime Realty

By Brad McCullough

Business entities such as corporations, limited partnerships, and limited liability companies must have a resident agent in Maryland who is authorized to accept service of process. If an entity fails to abide by its statutory obligations regarding maintenance of a resident agent, or if good faith efforts to serve the resident agent fail, the Maryland State Department of Assessments and Taxation may be served in the resident agent’s stead. Does that service on SDAT, however, comport with due process? Does it matter if the party trying to serve the resident agent knows that the resident agent’s official address might be wrong and might know the resident agent’s actual address? In that situation, does service on SDAT satisfy due process? The Court of Appeals was recently faced with these questions in Mayor & City Council of Balt. v. Prime Realty Assocs., Inc., No. 53, Sept. Term, 2019, 2020 WL 2460110 (May 12, 2020). In its opinion, the Court essentially created a “safe harbor” for a party that makes substituted service on SDAT in strict compliance with the applicable rule of procedure. Yet the Court also hinted that the safe harbor might disappear if the serving party has actual knowledge that the resident agent’s address listed with SDAT is wrong. That answer, however, must await another day. Read More…

Friendly Fire: A Jurisdictional and Ethical Look at the D.C. Circuit’s Surprising Order that a Trial Judge Respond to a Legal Challenge to His Ruling

By John Grimm and Amy Richardson

Earlier this month, U.S. District Judge Emmet Sullivan made headlines when he appointed a retired federal judge to oppose the Government’s motion to dismiss its criminal case against former National Security Advisor Michael Flynn, and to make a recommendation as to whether to hold Flynn in criminal contempt for perjury.[1] The move was universally regarded as highly unusual. But, while prosecutors’ motions to dismiss charges are generally granted without much fanfare, the Federal Rules of Criminal Procedure do require leave of court,[2] so Judge Sullivan must approve the withdrawal. Read More…

COVID-19 pandemic presents issues of contract interpretation—how have Maryland appellate courts recently handled those issues?

By Brad McCullough

The COVID-19 pandemic has affected every facet of our lives and has raised many legal issues. Every day, lawyers’ e-mail inboxes are bombarded with messages touting webinars and publications addressing those issues. Does your insurance policy cover business disruption caused by the pandemic? Does the pandemic implicate the force majeure provision in a contract? Is a party’s performance of a contract excused by principles of impossibility, impracticability, or frustration of purpose? Those are hot legal issues at the moment, but ultimately those issues will be resolved by application of fundamental legal principles. Foremost among those principles are rules of contract interpretation. Whether a particular force majeure provision in a contract covers pandemics, or whether a specific insurance policy covers losses arising from a disruption of business caused by the pandemic, are questions that will be answered by interpreting the specific contractual provisions in play. Similarly, whether the purpose of a contract has been frustrated, or its performance made impossible, will hinge on the intent and expectations of the parties, as reflected by the terms of their contract. How do Maryland’s appellate courts address those issues? Two recent decisions, one by the Court of Appeals and another by the Court of Special appeals, provide some insight. Read More…