Employers Achieve Victories in Maryland General Assembly
Maryland employers achieved victories in the 2015 legislative session with the defeat of several bills that would have harmed businesses of all sizes.
Maryland employers achieved victories in the 2015 legislative session with the defeat of several bills that would have harmed businesses of all sizes.
Business owners achieved a victory in the Maryland legislature this month, as both the House Bill and Senate Bill introduced to establish dram shop liability were given unfavorable reports by legislative committees. Dram shop liability is a cause of action that can be asserted by plaintiffs who allege that they were injured as a result of an establishment’s sale of alcohol. The bill introduced in the Maryland legislature would have allowed for civil actions against establishments or their employees if 1) the defendant knew or should have known that a customer was visibly under the influence of alcoholic beverages; 2) the defendant could have foreseen that the customer might attempt to drive a motor vehicle; 3) the customer negligently drove a motor vehicle; and 4) the customer’s negligent driving proximately caused the damages claimed in the action.
Maryland courts have rejected attempts to assert dram shop liability, instead using a theory of premises liability to hold establishments liable in certain circumstances. E.g. Troxel v. Iguana Cantina, LLC, 201 Md. App. 476, 29 A.3d 1038 (2011). However, premises liability applies to acts or omissions on property that is under the defendant’s control. Dram shop liability seeks to hold business owners liable when an intoxicated customer negligently injures someone after leaving the premises that the business owner controls. The bills introduced in Maryland this legislative session would have allowed for dram shop liability only when an intoxicated driver caused the alleged damages. However, it is easy to see how that liability could be extended through future legislation to include such things as off-premises assaults, liability for hosts of private parties, or even serving the “habitually intoxicated” as some states do. Dram shop liability, a favorite of the plaintiffs’ bar, is an attempt to shift blame from the responsible tortfeasor to a business with “deep pockets.” While this bill is likely to be reintroduced next year, business owners are safe from such claims for now.
In Springer v. Erie Insurance Exchange, the Court of Appeals set out to determine whether the allegations in a complaint for defamation triggered the Business Pursuits exclusion in a homeowner’s liability insurance policy and, consequently, would negate Erie Insurance’s duty to defend its insured. Business Pursuits exclusions are commonly found in homeowners’ insurance policies, and this was the Court’s first opportunity to interpret the exclusion in the context of an insurer’s duty to defend. In reaching its decision that Erie did have a duty to defend because the facts of this case were insufficient to support a denial of coverage as a matter of law, the Court established a two-part test for determining whether a business pursuits exclusion in a homeowner’s policy can be the basis for denying the insurer’s duty to defend its insured against a third party claim. Specifically, in order to determine if an underlying complaint triggers the Business Pursuits exclusion, an insurer must consider (1) the continuity of the insured’s alleged business interests and (2) the insured’s profit motive.
The Court agreed with the insured, Springer, that the underlying tort complaint was ambiguous in that it did not clearly allege that Springer had any profit motive behind his actions, which was necessary to apply the Business Pursuits exclusion. Springer further claimed that he presented evidence from outside the complaint to Erie that suggested he was not involved in a business when the allegedly defamatory remarks were made. Using the two-pronged analysis noted above, the Court agreed with other jurisdictions that have held that seasonal or occasional activities do not meet the continuity requirement, and that profit motive, not actual profit, makes a pursuit a “business pursuit.”
In addition to the specific application of the Business Pursuits exclusion in the context of an insurer’s duty to defend, the Springer case should serve to remind liability insurers that they cannot rely solely on the “four corners” of an underlying complaint to deny coverage if the insured provides evidence that would support coverage. The insurer must consider this extrinsic evidence before making a decision on a duty to defend request. Maryland courts have established that the denial of an insurer’s duty to defend based solely upon the four corners of the underlying complaint is permitted only in limited instances, and there will be a duty to defend if any evidence known to the insurer presents a potentiality of coverage.
Dalene Radcliffe is an attorney practicing in Niles, Barton, and Wilmer’s litigation group, serving clients in Maryland. For more information on this post, or related issues, please contact her at firstname.lastname@example.org.
After several failed attempts in prior legislative sessions to take action against the Court of Appeals holding in the 2012 “pit bull” case of Tracey v. Solesky (for a closer look at the Solesky case, click here), the legislature finally succeeded in passing a new dog bite liability
bill law (the governor is expected to sign it) for incidents where a dog causes personal injury or death to a person. The new law has five key features:
(1) it applies with respect to all dogs, negating the Solesky Court’s determination that pit bulls were inherently more dangerous than other dogs;
Being one of only five States (including the District of Columbia) that still recognizes the affirmative defense of contributory negligence as a complete bar to a tort plaintiff’s recovery in a negligence action, Maryland has seen several attempts to abolish the doctrine come and go, but like Rocky Balboa, every time someone tries to knock it out, contributory negligence keeps getting back to its feet. Read more
Traditionally, personal injury claims have generally consisted of a plaintiff seeking damages for expenses and “pain and suffering” relating to physical injuries sustained as a result of an accident. Emotional distress is an element of a plaintiff’s pain and suffering, but is not, in and of itself, a separate and distinct claim. There seems to be a recent rise in the number of claims that are alleging specific emotional or psychological damages in personal injury claims, which if backed up by expert testimony could add substantial value to a plaintiff’s claim. Diagnoses of Post-Traumatic Stress Disorder or generalized anxiety resulting from an accident can be difficult to definitively contest from a defense perspective and, at the very least, will require a defendant and insurer to retain a competing expert to assess the validity of such a diagnosis. Therefore, it is essential that insurers and defense attorneys be aware of the limitations that a plaintiff faces in trying to introduce such claims, the evidence that can be used to support them, and the potentially difficult trial strategy decisions that a defendant may fact in light of such claims. Historically, such emotional injury claims could be made only if caused by the physical impact of the accident, but that has not stopped plaintiffs from pursuing such damages that may resulted from actions unrelated to the accidents themselves, particularly the conduct and behavior of the defendant. Evidence of potentially heinous conduct by a defendant that has no bearing on the cause of an accident could still have a very negative effect on a jury’s decision. The potential prejudice to a defendant has not gone unnoticed by the Maryland courts, and recent a recent Court of Special Appeals decision has confirmed that Maryland does not allow emotional distress claims that arise apart from the underlying accident itself.
In Alban v. Fiels, 61 A.3d 867 (Md. App. 2013), Michael Fiels caused an auto accident when he veered across the center line of traffic and collided with a pickup truck being occupied by Mr. and Mrs. Alban. At trial, witnesses were prepared to testify that Mr. Fiels left the scene of the accident and proceeded down the road. However, he encountered a dead end and, therefore, had to turn around and drive past the Albans’ vehicle in order to continue fleeing the scene. The witnesses would have further testified that Mr. Fiels laughed at the Albans as he drove past them the second time. The court opinion indicated that the Albans were taken to University of Maryland Shock Trauma and released. Their physical injuries were apparently minor. Notwithstanding the lack of significant physical injury, the Albans filed a lawsuit against Fiels alleging psychological injuries and emotional distress, including crying, anxiety, and sleeplessness. Their Complaint contained a count labeled “Intentional Acts of Outrage,” which asserted that Fiels fleeing and apparent laughter caused them to sustain severe emotional trauma, and sought $1,000,000 in damages resulting from his intentional conduct. Read more
In serious personal injury cases, a common issue arises in settlement talks that affect the course of negotiations – Liens; Specifically, health insurer liens and liens asserted by Medicare. The problem is simple: a plaintiff with medical expenses often has those expenses paid for by his or her health insurer or through Medicare/Medicaid. Medicare is entitled under the Medicare Secondary Payor Act to be reimbursed for any payments it has made for causally related medical care, and the health insurer has a subrogation interest in the proceeds it has paid. The existence of these liens creates difficulty negotiating settlements. Settlements are often much less than what could be a reasonably expected verdict if the plaintiff prevails, but going to trial involves risk, whereas a settlement eliminates risk. In addition to the risk of a low plaintiff’s verdict or defense verdict, there are other factors involved in determining a reasonable settlement value, including limitations on the amount of insurance coverage available and the prospects of otherwise recovering a judgment from a defendant. Because of these factors, the plaintiffs often have to engage in negotiations with the lien holders in order to settle the case because having to pay the full lien amount could negate any potential benefit of accepting a settlement or even continuing with the litigation. For example, if the reasonable settlement value of a case is $100,000.00, but the plaintiff has liens in the amount of $80,000.00, the plaintiff is in a position where he or she cannot accept the settlement unless the lien holder takes less because the full settlement would otherwise go to the lien holder and the plaintiff’s attorney, leaving plaintiff with no recovery at all. Given this reality, the plaintiff must often participate in a second negotiation with the lien holder to negotiate the lien down to a level where the lien holder will receive something, but the plaintiff will as well. In effect, there are two separate negotiations: one between the plaintiff and defendant, and another between the plaintiff and the lien holder. Read more
October 1 is around the corner, which in Maryland means that several new laws from the spring legislative session will take effect. One such law will change (or perhaps clarify) when the 3-year statute of limitations period begins to accrue in wrongful death and survival actions where the underlying tort is the result of an act of criminal homicide. In effect, the statute attempts to remove the shield of limitations from not just the murderers who get caught quickly, but also from those who those who avoid detection for many years.
Under the previous laws, the limitations period began to accrue at the time that the cause of action arose, i.e. the death. The only defined exception was under MD Code, Courts & Judicial Proceedings 5-203, which states that if knowledge of the accrual of a cause of action is kept from a party due to the fraud of an adverse party, the cause of action would not begin to accrue until the moment that the party discovered, or by the exercise of ordinary diligence should have discovered the fraud. In rare instances when a wrongful death action was premised upon a criminal act, such as murder, section 5-203, by its terms, did little to help the victim’s estate or surviving relatives. For example, if a person was murdered, but the identity of the killer was not known, it would generally not be the result of fraud by the perpetrator that prevented the injured party from discovering the cause of action. After all, not admitting to committing a crime is different from committing a fraud to prevent one from discovering the crime’s existence. Many jurisdictions have similar laws to Maryland regarding limitations accrual, either by statute or common law, and have had occasion to face the same problem, such as when the police arrest a suspect 10 years after a murder. There has generally been no firm legal position to protect the injured estate or dependent from the limitations period expiring in these situations before they could ever discover the perpetrator of the crime. Having dealt with this issue before the trial courts and research appellate cases from across the country that have dealt with this issue, I can tell you that the solutions found by courts has largely been to completely ignore the laws as written and create whatever new rule was required under the circumstances to allow the plaintiff to defeat a defendant’s limitations argument. Often, these rulings have been flatly inconsistent with clear and established laws of the jurisdiction. The Maryland legislature has now passed a law that will directly deal with the accrual problem in the cases of criminal homicides, which should prevent the courts from having to choose between butchering the law or allowing an alleged murderer to avoid the prospect of civil liability simply because he/she was good at covering their tracks. Read more
“It’s a mystery! It’s a mystery wrapped in a riddle inside an enigma! The *@*%#&^ shooters don’t even know! Don’t you get it?” – David Ferrie (Joe Pesci) to Jim Garrison (Kevin Costner) in the movie “JFK”
On the heels of the legislature’s failure to address the quagmire created by the Court of Appeals’ April ruling in Tracey v. Solesky, where the Court decreed that all pit bulls and cross-breed pit bulls were inherently dangerous and imposed a strict liability standard against owners and anyone harboring such dogs, the Court issued a revised ruling yesterday after a motion to reconsider was filed by Tracey’s attorneys. In the initial decision, the Court of Appeals ruled that if a person is attacked by a dog that is a pit bull or a pit bull mix (a cross-breed pit bull), then the owner, or any other person (which in this case included a landlord) who has the right to control the pit bull’s presence on the subject premises who knows or should know that the dog is a pit bull or cross-breed pit bull, is strictly liable for the plaintiff’s damages. This ruling, with respect to pit bulls and cross-breed pit bulls, abrogated the former common law negligence standard applicable to dog owners that required evidence that the owner knew or should have known that the specific dog had dangerous propensities. This decision received harsh public criticism for its breed-specific stance, its harsh application of strict liability to landlords and other potential third persons who do not own the dog, and the overwhelming confusion that would be caused by determining what constituted a “pit bull or cross-breed pit bull” or what standard should be applied for determining whether a person should know that the dog is a “pit bull or cross-breed pit bull.”
In its revised ruling, Read more