Justia Maryland Court of Appeals Opinion Summaries

Articles Posted in Contracts
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The Court of Appeals held that an injured tort claimant's rights under a general liability insurance policy do not vest until the claimant has obtained a judgment against, or entered into a qualifying settlement with, an insured.CX Reinsurance Company issued commercial general liability policies to several Baltimore residential Landlords that included coverage for bodily injuries resulting from lead paint exposure at the Landlords' rental properties. CX field contract rescission actions against the Landlords, which the parties settled. Under the terms of the rescission settlements, the coverage for lead paint-related losses was substantially reduced. Claimants alleged they suffered bodily injuries from lead paint exposure while residing in the Landlords' rental properties, but the majority of claimants had not obtained final judgments against, or entered into settlements with, the Landlords before CX and the Landlords settled. The lower courts ruled that the Claimants were intended beneficiaries of the polices. The Court of Appeals reversed in part, holding (1) the Claimants who did not hold final judgments against or enter into approved settlement agreements with the Landlords were not the intended beneficiaries under the policies; and (2) the Claimants who obtained final judgments against their Landlords prior to the settlements of the applicable rescission cases may enforce the pre-settlement terms of the policies. View "CX Reinsurance Co. v. Johnson" on Justia Law

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The Court of Appeals answered a certified question of law by holding that Md. Code Comm. Law (CL) 12-1018(b) requires a credit grantor that is found to have knowingly violated Credit Grantor Closed End Credit Provisions (CLEC), CL 12-1001 et seq., to forfeit three times the amount of interest, fees, and charged collected in violation of the subtitle.This case concerned a borrower who purchased a motor vehicle and financed it by closed end credit pursuant to an agreement governed by CLEC. The federal district court issued a certified question of law regarding the calculation of damages under CL 12-1018(b). The Court of Appeals held that, based upon prior caselaw regarding CLEC, a plain language analysis of CL 12-1018(b), and a review of the pertinent legislative history, CL 12-1018(b) requires a credit grantor who has knowingly violated the CLEC to forfeit three times the amount of interest, fees, and charges collected in violation of CL 12-1018(b). View "Lyles v. Santander Consumer USA Inc." on Justia Law

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The Court of Appeals affirmed the judgment of the court of special appeals reversing the judgment of the circuit court granting summary judgment to Pabst Brewing Company (Pabst) and dismissing this breach of contract lawsuit brought by Frederick P. Winner, Ltd. (Winner), holding that the circuit court erred in its interpretation of the Successor Manufacturers Law (SML), Md. Code Ann., Alco. Bev. (AB) 5-201.Under a contract agreed upon in 1994, Winner and its predecessor entity distributed Pabst beer brands in Maryland. In 2014, Blue Ribbon, LLC purchased 100 percent of the stock of Pabst's parent entity. In 2015, Pabst terminated its contract with Winner, claiming that the termination was allowed under the SML. Winner disagreed and brought this lawsuit. The circuit court concluded that Blue Ribbon was permitted to cause Pabst to terminate its contract with Winner. The court of special appeals reversed. The Court of Appeals affirmed, holding (1) the SML applies only where the beer manufacturer that holds a Maryland license to distribute a brand of beer is replaced by another entity as the license hold with respect to that brand; and (2) Blue Ribbon did not qualify as a successor beer manufacturer, and Pabst did not have the right to terminate its contract with Winner without cause. View "Pabst Brewing Co. v. Frederick P. Winner, Ltd." on Justia Law

Posted in: Contracts
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In this case concerning the interpretation of an ambiguous voting provision in a corporation's charter the Court of Appeals affirmed the circuit court's grant of summary judgment in favor of Respondents, shareholders of Petitioner's Series B shares, holding that the circuit court did not err.Petitioner raised issued a series of preferred stock known as Series B and a nearly identical series of preferred stock known as Series C. Petitioner later sought to buy back the shares of both series. Owners of two-thirds of the shares of both series approved the measure, but owners of less than two-thirds of Series B did so. Petitioner argued that the approval of two-thirds of shares of both series, counted together, provided the necessary approval required by the charter provision relating to Series B shares. Respondents filed this action seeking to restore and rights and preferences of Series B shares. The circuit court found that the charter language was ambiguous and that the failure to obtain the approval of owners of two-thirds of the Series B shares doomed Petitioner's proposal to buy back those shares. The Court of Appeals affirmed, holding (1) the voting provision was ambiguous; and (2) the extrinsic evidence relating to the voting provision resolved the ambiguity in favor of separate voting by Series B shareholders. View "Impac Mortgage Holdings, Inc. v. Timm" on Justia Law

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The Court of Appeals affirmed the judgment of the court of special appeals concluding that prejudgment interest on defense costs where a party breaches its duty to defend does not fall within the exception to the "modified discretionary approach" and is within the discretion of the fact-finder.The modified discretionary approach used by Maryland courts in awarding prejudgment interest generally places the award of prejudgment interest within the discretion of the trier of fact but also recognizes exceptions where a plaintiff is entitled to prejudgment interest as a matter of right. At issue was whether prejudgment interest should be awarded as a matter of right. The Court of Appeals held (1) prejudgment interest on defense costs is left to the discretion of the fact-finder; and (2) where the jury in this case was not presented with a claim of prejudgment interest, was not instructed on the issue, and did not separately state an award of prejudgment interest in the verdict, the circuit court was not authorized to award prejudgment interest. View "Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co." on Justia Law

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The Court of Appeals reversed the judgment of the court of special appeals concluding that it had jurisdiction to consider this appeal, holding that, under the circumstances, there was no right to appeal arising under statute or local law.ProVen Management, Inc. filed a petition for judicial review of the Baltimore City Department of Public Works Director's final decision in favor of the City as to ProVen Management, Inc.'s action seeking additional sums under the parties' contract. The circuit court affirmed, and ProVen appealed. The City filed a motion to dismiss, alleging that the court of special appeals lacked jurisdiction under Md. Cts. & Jud. Proc. art. 12-302(a). The court of special appeals denied the motion to dismiss. The Court of Appeals reversed, holding (1) ProVen's petition for judicial review was, in both form and substance, a petition for judicial review of an administrative agency decision arising under pertinent provisions of the Baltimore City Charter; and (2) because the Charter provided no right to appeal, the court of special appeals was required to dismiss the matter. View "Mayor & City Council of Baltimore v. ProVen Management, Inc." on Justia Law

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The Court of Appeals affirmed the judgment of the court of special appeals holding that a developer, K. Hovnanian Homes of Maryland, LLC (Hovnanian) could not enforce an agreement against the Mayor and City Council of Havre de Grace because the Mayor or his subordinate did not execute the agreement, holding that the agreement was ultra vires and unenforceable.The agreement in this case provided that the City would impose and collect a recoupment fee in connection with the development of residential dwelling units on those properties. The City Council approved the agreement, but the Mayor refused to sign the agreement, and the City did not collect any recoupment fees. The circuit court declared that the agreement was a binding and enforceable contract. The court of special appeals reversed. The Court of Appeals affirmed, holding (1) the imposition of a fee by the City must be undertaken by the municipal legislative body known as the "Mayor and City Council of Havre de Grace" and pursuant to a duly enacted ordinance; and (2) because no such ordinance was enacted, the agreement was ultra vires and unenforceable against the City. View "K. Hovnanian Homes of Maryland, LLC v. Havre de Grace" on Justia Law

Posted in: Contracts
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The Court of Appeals held that where a waiver of subrogation precludes liability to an injured party, a third-party defendant does not fall within the definition of a "joint tortfeasor" under the Maryland Uniform Contribution Among Joint TortFeasors Act (UCATA), Md. Code Cts. & Jud. Proc. 3-1401, and there is no statutory right of contribution.After a fire damaged a building, the owner, Upper Rock II, LLC, sued Red Coats, Inc. Red Coats filed a third-party claim against Gables Construction, Inc. (GCI) seeking contribution under the UCATA. Prior to construction, Upper Rock and GCI entered into a contract, which included a waiver of subrogation, requiring Upper Rock to transfer all risk of loss for fire-related claims to the insurer rather than holding GCI liable. Upper Rock and Red Coats settled. GCI moved for summary judgment, arguing that because it was not liable to Upper Rock, it was not a joint tortfeasor under the UCATA. The motion was denied. A jury concluded that Red Coats was entitled to contribution from GCI. The Court of Appeals reversed, holding that GCI could not be liable to Upper Rock because the waiver of subrogation prevented liability, and without liability to the injured party, the UCATA does not provide for a right to contribution. View "Gables Construction v. Red CoatsGables Construction, Inc. v. Red Coats, Inc." on Justia Law

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In this case involving the appropriate standard of review in an appeal on the record from the district court to the circuit court and the interpretation of a promissory note the Court of Appeals reversed the circuit court's judgment after applying the clearly erroneous standard to the district court's interpretation of the promissory note, holding that the circuit court applied the incorrect standard of review and erred in its interpretation of the promissory note.Petitioner offered a tuition loan program to its employee, and Respondent, a former employee of Petitioner, participated in this program until he was fired. Petitioner brought this action against Respondent seeking repayment of his debt. The district court entered judgment for Respondent. The circuit court affirmed, finding that the district court was not clearly erroneous in its interpretation of the promissory note. The Court of Appeals reversed, holding (1) a circuit court, in hearing an appeal on the record from the district court, reviews the district court's factual determinations for clear error and its legal conclusions de novo; and (2) the circuit court erred in construing the promissory note to require repayment only in situations where an employee quits. View "Credible Behavioral Health v. Johnson" on Justia Law

Posted in: Contracts
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The Court of Appeals affirmed the judgment of the Court of Special Appeals affirming the judgment of the circuit court granting summary judgment in favor of Respondent in this action brought by Petitioners seeking to collect real estate brokerage commissions allegedly due after the tenant of the property exercised its option to renew a lease that Petitioners had procured for a prior owner, holding that the lower courts’ judgments were correct.Specifically, the Court of Appeals held (1) even if Petitioners qualified as third-party beneficiaries, that only gave them the right to sue whomever was liable; (2) because Respondent was not a party to the lease its assignors also were not parties; and (3) in the assignment of the lease the assignors had expressly rejected any obligations of the lease, and therefore, Respondent was not liable. View "Cushman & Wakefield of Maryland, Inc. v. DRV Greentec, LLC" on Justia Law