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Posts from the ‘Legislation’ Category

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.

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Dram Shop Liability Likely Dead For Another Year in Maryland

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.

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Maryland Insurer Not Permitted to Rely on Business Pursuits Exclusion to Deny Duty to Defend Where Continuity of Business Interest and Profit Motive Were Unclear

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 daradcliffe@nilesbarton.com.

 

Legislature acts on dog bite liability – Landlords happy. Dog owners? Not so much.

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;

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Contributory Negligence Fights Off Extinction Yet Again

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

October 1 Brings New Wrongful Death Limitations Accrual for Acts of Criminal Homicide

          In a closed society where everybody’s guilty, the only crime is getting caught. In a world of thieves, the only final sin is stupidity.
                                              – Hunter S. Thompson
 

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

Court of Appeals Takes Another Bite at Tracey v. Solesky

     “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

Maryland Legislature Rolls Over and Plays Dead on Pit Bull Legislation

               “Woof!”  – Gracie the Dog (trusted friend, avid squirrel chaser, and Pit Bull…or was she?)

               “Succumbing to the allure of bad facts leads inevitably to the development of bad law.” – Judge Clayton Greene, in his dissent in Tracey v. Solesky

In April, the Court of Appeals, by a 4-3 margin, issued a decision in the case of Tracey v. Solesky that effectively designated all “pit bulls” and “cross-bred pit bulls” as inherently dangerous animals, and the Court determined that the owning, harboring or controlling of these dogs was an inherently dangerous activity.  This resulted in the Court applying a strict liability standard against any person owning, harboring, or controlling pit bulls for any injuries stemming from a pit bull attack.  This was the first instance where a Maryland Court established a breed-specific standard of liability for dog attacks.  Liability stemming from owning, harboring, or controlling any non-pit bull dog remains subject to the old common law standard of whether the owner knew or should have known about the dog’s dangerous propensities.  In addition to the breed-specific nature of the ruling, the significant consequence of the Court’s opinion was that it applied this strict liability standard, not to the owner of the dog,  but to the owner’s landlord when the landlord knows or should know of the existence of a pit bull on the premises. Read more

EEOC Issues Final Regulations Explaining “Reasonable Factors Other Than Age” Defense

“Equality,” I spoke the word
As if a wedding vow
Ah, but I was so much older then
I’m younger than that now

– “My Back Pages”, Bob Dylan

Yesterday, the EEOC published its “Final Regulation on Disparate Impact and Reasonable Factors Other than Age” as it relates to the Age Discrimination in Employment Act of 1967 (ADEA).  According to the EEOC’s press release, the final rule explains the meaning of the Reasonable Factor Other than Age (RFOA) defense and “strikes the appropriate balance between protecting older workers from discriminatory, unreasonable business decisions and preserving an employer’s ability to make reasonable business decisions.”

Pursuant to the ADEA, an employer with 20 or more employees cannot discriminate against any employee or applicant who is 40 years of age or older.  Although most people think of discrimination as an intentional act, discrimination can occur even when there is no intent to discriminate, such as when the employer has a policy or practice that has an unintended effect of harming older workers more so than younger workers.  In these instances, the policy or practice is said to have a “disparate impact” on the protected class of older workers and are prohibited by the ADEA, unless the employer can defend the practice by demonstrating that the disparate impact is based upon RFOAs.

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Maryland House Passes Same-Sex Marriage Bill

Late Friday, the Maryland House of Delegates, in a close vote, passed a same-sex marriage bill, which will now be forwarded to the State Senate.  If passed by the Senate, Gov. O’Malley will sign it, and Maryland will join a number of states and Washington, D.C. that allow some form of gay marriage or civil union.  Although I am sure that the politics that have gone on publicly and behind the scenes are fascinating, this is not a political blog site, and I have no interest in making it one.  The gay marriage issue, though, is nothing if not headline-making, so it merits a brief look at how legalizing same sex unions may affect tort and insurance issues in Maryland.  Ultimately, the impact will probably be minimal, but a few items immediately come to mind:

1.  “Resident Relative” Coverage: In many personal liability policies, coverage is generally available to the “resident relative” of the named insured.  Currently, a same-sex partner would not fall into that category, but if the partner were to become a spouse, then presumably, he or she would become an insured by definition under the policy and be entitled to a defense and indemnity if an applicable tort claim was brought against the person.

2.  Loss of Consortium: A loss of consortium claim exists in favor of the spouse of a personal injury plaintiff for loss of affection, companionship, services, and the like.  Juries often have a difficult time placing a whole lot of value on loss of consortium claims, given the whole “in sickness and in health” thing, but just think of some of the debates that may go in inside of a jury room when the loss of consortium claim involves a same-sex couple.

3.  Joint Marital Assets: When an individual is sued in tort and a judgment is obtained, the prevailing plaintiff has many avenues of collecting if the judgment is not timely paid, including attaching bank accounts and placing liens on real property.  However, there is a catch – the judgment creditor can only go after the debtor’s personal property and generally has no rights to jointly held property.  With same-sex marriage, gay couples will likely accumulate and maintain more joint property than if there were no legal recognition of the union.  The family home, for example, will likely automatically be joint property of the spouses regardless of how it is titled, thus protecting the property from lien.