Our own Senior Counsel Eleanor Hunt has recently been featured in the television show “Your Future Your Finances” with Brian Kuhn. Click on each of the following links to see how she shares her expertise regarding Estate & Family Planning.
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Jeffrey Mills was the Director of Food and Nutritional Services for the District of Columbia Public Schools (DCPS) from 2010 to 2013. DCPS used Chartwells, a contractor, to provide its food and food services for students in DCPS. Mills saw enormous problems with Chartwells, including overbilling and, even worse, providing spoiled food to students. His complaints to DCPS officials were ignored. And when DCPS terminated his employment, he alleged that he was terminated in retaliation for blowing the whistle on Chartwells. Mills sued not only for retaliation but also for fraud against the DC government, under the qui tam provisions of the District of Columbia False Claims Act. DC Code Ann § 2-381.03. Chartwells settled with Mills for $450,000.00 for his retaliation claim, and settled with DC for $19,000,000.00, 30% of which could go to Mills, and the rest to DC to compensate it for the overbilling and spoiled food. https://www.washingtonpost.com/local/education/dc-schools-food-vendor-pays-19-million-to-settle-whistleblower-lawsuit/2015/06/05/bae8dd3c-0b96-11e5-9e39-0db921c47b93_story.html.
Prior to the recent enactment of the Maryland False Claims Act, a private whistleblower action, like the Chartwells case, to benefit the taxpayers in Maryland with respect to fraud involving Maryland government contracts, could not be filed. There was no mechanism . . . until now.
The Maryland False Claims Act (Maryland FCA) went into effect June 1, 2015. Prior to the 2015 enactment, Maryland recognized limited false claim protections through the False Health Claims Act of 2010, which addressed cases of Medicaid and other health care related fraud. The Maryland False Claims Act models the Federal False Claims Act (FCA), 31 U.S.C. §§ 3729-3733, and now covers fraud relating to all state programs involving state funding and/or state contracts. The Act encompasses both qui tam provisions brought on behalf of the government, and anti-retaliation provisions to protect whistleblowers.
The new Maryland FCA generally prohibits the knowing submission of false claims for payment or approval by the state government. MD Code, General Provisions § 8-102 (b)(1)-(9). A court must award damages, at a minimum, in the amount of actual damages the government incurred as a result of the violation (MD Code, General Provisions § 8-102 (c)(1)-(2)), but may award up to three times the amount of damages that the government sustained as a result of the violation. This differs from the federal FCA which mandates treble damages.
The Maryland FCA also imposes civil penalties of up to $10,000.00 per false claim. So, if we were to take the Chartwells case for example, with each bill sent for each delivery, the defendant may be fined up to $10,000.00 per bill. The fines can add up exponentially at that rate. Unlike the Federal FCA, the Maryland FCA contains a list of factors that must be considered in assessing fines and damages. These factors include the number, nature and severity of the violations, and whether the company is a repeat offender. Significantly, there is the potential for personal liability for individual wrongdoers under the Maryland FCA. There is no hiding behind the corporate veil. MD Code, General Provisions § 8-102 (d).
Like the federal FCA, the Maryland FCA includes both individual retaliation claims, and qui tam claims which are private attorney general actions brought on behalf of the State. Through qui tam actions, individuals work with private attorneys to file complaints under seal, and then serve those complaints upon the Office of the Attorney General (OAG). Pursuant to MD Code, General Provisions § 8-104 (a)(1)(7) and § 8-104 (b)(3), the State will decline to intervene in those cases that do not pass its screening and investigative process. In regard to the Maryland FCA, State intervention is the “whole ballgame.” Unfortunately, unlike under the Federal FCA, an individual may not proceed to litigate a claim after the State declines intervention, at which point the Court must dismiss the case. Under the Federal FCA, a relator can litigate even if the Department of Justice declines to intervene.
The Maryland FCA incentivizes individuals to come forward by awarding between fifteen and twenty-five percent of the damages recovered to the whistleblower, plus an award of statutory attorney’s fees and expenses.
The Statute of Limitations to bring a qui tam action requires that the case be filed within the later of either six years after the date on which the violation occurred or three years after the date the individual bringing the civil action knew or should have known of the material facts regarding the fraud (no later than 10 years after the violation occurred) (Md Gen Provis § 8-108).
A private right of action for illegal retaliation could be pursued in addition to or separate from the qui tam complaint. The retaliation claim belongs to the individual and there is no need for State intervention to proceed. Like the Federal FCA, the Maryland FCA prohibits retaliatory actions under Md. Gen Provis § 8-107, when the employee’s (or contractor’s) protected conduct was a substantial factor in the employer’s decision to terminate the employee or pursue other adverse actions. So, if retaliatory action is taken by the employer – like it was against Mills in the Chartwells case – the employee may file a civil action to seek relief, including an injunction to stop an ongoing violation; reinstatement to seniority status; reinstatement of fringe benefits; two times lost wages including interest; payment of reasonable costs and attorney’s fees; punitive damages; and civil penalties.
The Maryland FCA does provide some advantages over the federal law. For example, the Federal FCA does not specifically provide for injunctive relief, punitive damages, or civil penalties, for retaliation claims. Retaliatory actions fall under Maryland’s general three year statute of limitation requiring filing from the date of retaliation. Md. Code Ann., Cts & Jud. Proc., § 5-101.
Maryland Courts have had little opportunity to interpret the Maryland FCA. Thus, as a general rule, practitioners and courts should look to the Federal FCA and related federal decisions for guidance.
And a final note, Mills likely and sadly could not have brought his particular claim in Maryland because Maryland, in contrast to DC, prohibits governmental employees from being relators. MD Code, General Provisions § 8-106(b). That is unfortunately a loss to the citizens and taxpayers in Maryland. Perhaps we will learn from our neighbors and ultimately broaden the scope of the law.
Full citations:
MD Code, General Provisions, § 8-101 – § 8-111 Maryland False Claims Act, 2015 Maryland Laws Ch. 165 (S.B. 374)
Jay P. Holland is a shareholder in the law firm of Joseph, Greenwald & Laake, P.A., and Co-Chair of Labor and Employment Section of the Prince George’s County Bar Association.
On March 21, 2016, the American Bar Association formally announced its opposition to a proposed bill in Congress that would limit the amount of noneconomic damages that can be awarded by judges and juries in medical liability cases in state courts across the nation. In a letter to the chairman and ranking minority member of the House Judiciary Committee, the ABA said that the bill, which would cap those damages at $250,000, violates principles of federalism and would deprive many deserving people of the chance to receive compensation for their injuries.
First, the ABA noted that for more than 200 years, “the authority to determine medical liability law has rested in the states” and that each state has always had autonomy to write its own laws on the subject. “Congress should not substitute its judgment” now for the varying systems that the states have evolved, the letter said. The bill, known as the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2016, would do just that, according to the letter.
In addition, the ABA letter emphasized that “research has shown that caps diminish access to the courts for low-wage earners, like the elderly, children, and women; if economic damages are minor and noneconomic damages are capped, attorneys are less likely to represent these potential plaintiffs.” In other words, the bill would have the effect of denying many people access to the courts.
The letter noted that “patients who reside in communities around the country should not be told that, due to an arbitrary limit set by members of Congress in Washington, DC, they will be deprived of the compensation determined by a fair and impartial jury.” Courts already have the power to set aside excessive verdicts, and that is the correct solution to the problem of excessive verdicts, if a problem arises.
We wholeheartedly agree with the ABA’s position. A recent study (may 2016 British Journal of Medicine) showed that medical error is the third leading cause of death in the United States, just behind heart disease and cancer! Clearly medical negligence can have devastating and permanent consequences. Many times the only recourse for someone who is seriously injured as a result of an avoidable medical injury is the pursuit of a court case. Additionally medical negligence suits expose medical errors, thereby forcing Healthcare Provider providers and their insurers to enact measures that improve the quality of health care.
By driving down the size of awards, this bill would act as a deterrent to bringing medical negligence suits given their high cost. If the verdicts go down and the costs remain the same less victims will have access to the Courts. This, after all is the real intent behind the bill.
Thus this bill will harm those who are injured and would make the nation and its courts less fair and less just. It would also harm the ability to expose medical errors and this hinder the improvement of the quality of health care.
The American Institute of Family Law Attorneys has recognized the exceptional performance of Maryland’s Family Law Attorney Jeffrey N. Greenblatt as 3 Years 10 Best Family Law Attorney for Client Satisfaction.
The American Institute of Family Law Attorneys is a third-party attorney rating organization that publishes an annual list of the Top 10 Family Law Attorneys in each state. Attorneys who are selected to the “10 Best” list must pass AIOFLA’s rigorous selection process, which is based on client and/or peer nominations, thorough research, and AIOFLA’s independent evaluation. AIOFLA’s annual list was created to be used as a resource for clients during the attorney selection process.
One of the most significant aspects of the selection process involves attorneys’ relationships and reputation among his or her clients. As clients should be an attorney’s top priority, AIOFLA places the utmost emphasis on selecting lawyers who have achieved significant success in the field of Family Law without sacrificing the service and support they provide. Selection criteria therefore focus on attorneys who demonstrate the highest standards of Client Satisfaction.
We congratulate Jeffrey N. Greenblatt on this achievement and we are honored to have him as a 3 Years AIOFLA Member.
You can contact Jeffrey N. Greenblatt directly at: 240 399-7894 or jgreenblatt@jgllaw.com.
Estates and Trusts attorney Paul Riekhof recently penned an article for Law 360 discussing the many complexities of estate taxation and evaluation in the wake of music icon Prince’s death. The article titled Prince’s Estate and the Countless Challenges Ahead discusses the many details that will need to be uncovered and decided before his estate can be valued and ultimately awarded.
The fact that Prince may not have had a formal will or estate plan in place will lead to countless inquiries and questions about the value of his many assets, both current and future. Riekhof discusses how the estate will have to go through both federal and state estate taxation processes and the probate administration process before being divided up between his many siblings and potential heirs. He then points out that before any assets can be distributed to his heirs, the estate will have to satisfy its estate tax obligations- which could be significant.
Riekhof continues on to explain the many complexities that may come into play as the estate determines the fair market value of his current and future assets and their potential tax implications for his heirs for years to come.
For more information on estate planning, estate tax planning, probate, trust administration, business planning, guardianships or estate litigation matters for individuals, families or businesses contact Paul Riekhof at priekhof@jgllaw.com or direct at 240-399-7899.
A study published in the British Journal of Medicine published on May 3, 2016 found that the third leading cause of death in the United States is medical error resulting in 251,000 deaths annually. Medical error is just behind Heart disease (611,000 deaths annually) and cancer (585,000 deaths annually). After medical error, the next largest cause of death in the United States is chronic respiratory disease (149,000 deaths annually).
The study author defined medical error as:
… an unintended act (either of omission or commission) or one that does not achieve its intended outcome, the failure of a planned action to be completed as intended (an error of execution), the use of a wrong plan to achieve an aim (an error of planning), or a deviation from the process of care that may or may not cause harm to the patient.
The study author, a surgical oncologist at Johns Hopkins, claims that when death certificates are signed, causes of death that are not associated with an ICD code (International Classification of Disease) are not captured. As a result, when death certificates are studied nationwide, medical errors as defined above and which include things that can directly result in patient harm and death such as communication breakdowns, diagnostic errors, poor judgement or inadequate skill are neither counted or analyzed.
The study argues for better data in order to better measure the problem, design safer systems, and reduce the frequency of error as a cause of patient harm.
As a medical malpractice lawyer, the study’s findings were not surprising. We are often asked to review cases with fatal outcomes where the death certificate makes no mention of medical mistakes. As lawyers, we are forced to overcome misleading death certificates and prove that our clients’ loved one died from an avoidable medical mistake.
The fact that the third leading cause of death is medical error is shocking. If this number is even partially accurate, it constitutes dramatic evidence that huge numbers of medical mistakes are unrecognized each year not only by the medical community, but by patients or their families as well. A quarter of a million deaths annually from medical error means that most of the deaths could have been avoided with better systems, education, training, technical competence and/or attention to detail. It should be noted that the quarter of a million medical errors cited in the study refer only to deaths. This shocking number does not include the other victims of medical error who may have been maimed or crippled.
While the study author’s point is that the method of coding causes of death used to compile national statistics needs to include methodology for acknowledging medical error, there is another conclusion that can be drawn as well.
At present, it is the plaintiff lawyers, representing families of the victims of medical error who are primarily responsible for uncovering these medical errors and bringing them to light. The current tort system provides a significant benefit, not only to the patients and their families, but to the medical community as well. Medical malpractice suits often result in improvements imposed by insurance companies and hospitals once the mistakes are recognized. This in turn improves the overall quality of healthcare if for no other reason than to avoid making additional payments to other victims in the future.
Perhaps the most shocking aspect of medical error being the third leading cause of death in the United States is that the medical establishment and the corporations that insure it continue to press for additional relief from lawsuits by seeking more and more limits on the ability of patients to bring lawsuits and obtain just compensation for their injuries. They do so by insisting that they need protection from the “frivolous” lawsuit. A quarter of a million annual deaths suggests otherwise. With appalling numbers like these, is it any wonder that the medical establishment seeks additional protection to avoid paying the victims of their errors?
The continued effort to throw up roadblocks for patients and their lawyers’ who attempt to uncover these medical mistakes by imposing limits on jury awards and attorney fees flies in the face of logic and this new and shocking statistic. With medical error as the third leading cause of death the United States, it is abundantly clear why the medical establishment and the insurance companies are so motivated to keep medical errors private and ultimately uncompensated.
GREENBELT, Md. – Joseph, Greenwald & Laake, P.A. is pleased to announce that the firm has been highly ranked in the Washington, DC, metropolitan area by the U.S. News – Best Lawyers® “Best Law Firms” for 2016. The firm is recognized in the practice areas of Family Law, Personal Injury Litigation – Plaintiffs, Medical Malpractice Law – Plaintiffs, and Trusts & Estates Law.
“Our firm is tremendously honored to once again be recognized by U.S. News – Best Lawyers as among the top law firms in the Washington area,” said Burt M. Kahn, managing director of the firm. “We are especially grateful to our clients who relayed their trust in our firm and their high regard for our services and our attorneys’ ongoing commitment and work toward helping them to address their legal needs and achieve their goals.”
For the sixth consecutive year, U.S. News – Best Lawyers has ranked U.S. law firms in major legal practice areas nationally and by 185 different metropolitan areas or states. The evaluation process involves client and lawyer evaluations, peer review from leading attorneys in their fields, and review of additional information provided by law firms as part of the formal submission process. Client feedback addressed the firms’ expertise, responsiveness, understanding of a business and its needs, cost-effectiveness, civility, and whether clients would refer another client to the firm.
To be eligible for a “Best Law Firms” ranking in a particular practice area and metro region, a law firm must have at least one lawyer who is ranked by Best Lawyers in that particular practice area and region. Currently, the firm’s attorneys David Bulitt, Stephen A. Friedman, Jeffery N. Greenblatt, Andrew E. Greenwald and Timothy P. O’Brien are ranked in the most recent edition of The Best Lawyers in America.
For more than 40 years, Joseph, Greenwald & Laake, P.A. is one of the most trusted law firms serving Maryland, the District of Columbia and Virginia. Known for its commitment to community, confidence and character, Joseph, Greenwald & Laake has represented a variety of clients, including individuals, small businesses and multimillion-dollar corporations. From simple to complex legal needs, the firm is prepared to deliver strategic solutions with high standards.
You’ve been married around 25 years. Your children have become more self-sufficient or they’re gone. You shifted your attention back to your spouse, which led to a realization: you are really not happy in your marriage.
Well, you are not alone. The rate of uncoupling over age 50 has increased in recent years and it’s prompted the catch phrase: “gray divorce.”
While the consequences of this ‘gray’ revolution are largely unknown, there are some things we can conclude. When couples divorce later in life, they have fewer years left and fewer opportunities to make up for the financial losses often associated with divorce. Some may opt to stay in the workforce longer. Many will be forced to reenter the job market late in life. For economically secure adults who are healthy, a divorce may have minimal negative consequences and actually can be empowering, at least for the initiator of the divorce.
But for older adults, divorce brings the realization that their carefully nurtured nest egg will have to be divided, between them, and this can be difficult. Furthermore, expenses will increase when each has to pay for their own health insurance, housing and everyday expenses like utilities and auto insurance. The cost burden can become unnerving.
So, where do you begin?
Start with a list of necessary and discretionary living expenses. Estimate how much income you’ll need — and consider some of the factors that could save you another heartbreak.
Tax Liability – What to Consider: Make sure that tax issues are reviewed prior to finalizing a Separation Agreement so that neither spouse ends up with a tax bill that could have been reduced or avoided. To split retirement assets, a divorcing couple will need a Qualified Domestic Relations Order (QDRO) designed to accomplish the division of these assets and to insure a tax-free transfer.
Retirement Savings: Spouses in a ’gray divorce’ have less working years left to contribute to retirement accounts. Early withdrawals from retirement funds can result in penalties and fees, so one or both spouses may have to delay their retirement and ultimately adjust their standard of living.
Spousal Support/Alimony: It’s not guaranteed. In Maryland it is dependent on a dozen different statutory factors that include the length of the marriage, the age and health of the parties etc. Spousal support/alimony provides a spouse with periodic payments from the former spouse that continues after the divorce. Spousal support is not automatically ordered.
Financial Survival After Divorce: You’ll want to thoroughly research your options for health insurance coverage. This is one of the biggest concerns and biggest budget items for those 50+ years of age. Project accurate living expenses and accept that your lifestyle may need to change. Some people find they need to return to the workplace or work longer than anticipated.
Estate Planning: You may have acquired, during the marriage, insurance policies, drafted a will or powers of attorney that benefit the other spouse, or that name the other spouse as an executor. Before filing for divorce you should discuss these issues with divorce counsel to determine if changes should be made sooner rather than later. You may not want your soon-to-be-ex-spouse to have powers under a health care directive or general power of attorney. Estate planning can be a relevant part of a property settlement agreement.
Post Divorce: If you haven’t already done so, you will want to revise your estate plan, wills and change insurance beneficiaries. Your will should be in compliance with the applicable provisions in your Separation Agreement.
Rebuilding Your Life After Divorce: Picking up and starting over can be emotionally and financially challenging. Start by making a conscious effort to move forward and make the next chapter of your life worth living. Stay active. Volunteer. Find your passion. It is not too late to live your best life!
The National Advocates recently announced that Mr. Jeffrey Greenblatt has been selected for inclusion into its Matrimonial and Family Law specialty, an honor given to only a select group of lawyers as recognition of their superior skills and qualifications in the field. The selection for this exclusive list is limited to only 100 attorneys per state or highly populated region who have demonstrated their extraordinary abilities with superior results, a high level of peer respect and client satisfaction.
The National Advocates is a professional organization comprised of premier lawyers from across the country who have demonstrated exceptional qualifications in their area of the law, including Matrimonial and Family Law, Employment Law, Social Security Disability Law, Immigration Law, Bankruptcy Law and Estates, Wills and Trusts. The National Advocates provides accreditation to these distinguished attorneys, and provides essential legal news, information, and education to trial lawyers across the United States.
With the selection for membership by The National Advocates, Mr. Greenblatt has shown that he exemplifies superior qualifications, leadership skills, and case results as a legal professional. The selection process for this elite honor is based on a multi-phase process which includes peer nominations combined with third party research. As The National Advocates is an essential source of networking and information for trial attorneys throughout the nation, the final result of the selection process is a credible and comprehensive list of the lawyers chosen to represent their state.
Real Property – Retaliation Actions and Attorneys’ Fees
Felicia Lockett v. Blue Ocean Bristol, LLC, No. 29, Sept. Term, 2015 (Md. Feb. 22, 2016).
Felicia Lockett is a tenant in an apartment building knowns as “Bristol House” in Baltimore City and had been since 2010. Slip Op. at 1, 7. Ms. Lockett, who actively and vigorously participated in the tenants association there, had a contentious relationship with the landlord, Blue Ocean Bristol, LLC (“Blue Ocean”). Slip Op. at 1. In 2014, Blue Ocean did not renew her lease.
When she refused to vacate, Blue Ocean eventually initiated a tenant holding over action. Slip Op. at 1, 10-11. In response, Ms. Lockett claimed that Blue Ocean’s actions “were in retaliation for her advocacy on behalf of the tenants association” and also ultimately defended and filed a counterclaim alleging that the non-renewal of the lease and the filing of the tenant holding over action were retaliatory for her participation in the tenants association. Slip Op. at 1, 10-11. Ms. Lockett sought $5,022 in damages, which is three times her monthly rent for each act of alleged retaliation, as well as costs and attorneys’ fees. Slip Op. at 11.
The lease required rent to be paid in “equal monthly installments,” which at the relevant time was $837 per month. Slip Op. at 8. The lease also included a provision defining “rent” as follows: “All payments from [Ms. Lockett] to [the landlord] required under the terms of this lease, including, but not limited to, Court costs, shall be deemed rent.” Id. (alteration in original). Also, a “utilities addendum provides for the landlord to pay for the monthly gas charge for the entire building, describes how the charge is to be allocated among the residents, and obligates the tenant to reimburse the landlord for the tenant’s pro rata share on a monthly basis. The utilities addendum characterizes this reimbursement by the tenant as ‘additional rent.’” Id.
Upon a de novo appeal to the circuit court, the trial court ruled in Ms. Lockett’s favor in the tenant holding over action, finding that the non-renewal of the lease was an act of retaliation. Slip Op. at 13. At the time of the filing of the tenant holding over action, however, Ms. Lockett allegedly owed $244 for a filing fee, late fees, and gas charges – which Blue Ocean alleged constituted rent. Slip Op. at 13. The circuit court, therefore, concluded that it could not find that Ms. Lockett was current on her rent as of the date of the filing so it ruled in favor of Blue Ocean on that claim. Slip Op. at 13-14. The circuit court, denied the request for attorneys’ fees. Slip Op. at 14. Thus, a key question here is what constitutes “rent.”
The Court initially observed that the term “rent” is not defined in the anti-retaliation statute, Real Property § 8-208.1(d), or elsewhere in Title 8 of the Real Property Article. Slip Op. at 20. The Court initially distinguished between commercial and residential leases. The Court recognized that it has held, in the commercial context, “that ‘charges which may be definitely ascertained, paid by the tenant, going to [the tenant’s] use, possession, and enjoyment of rental commercial premises, are rent if such was the intention of the parties.’” Slip Op. at 20 (alteration in original). The Court observed that it explicitly limited that holding to commercial leases, which are more likely to be the product of arms-length negotiation rather than the typical take-it-or-leave-it leases in the residential context. Id. at 21.
Turning to Ms. Lockett’s lease, as noted above, the Court found there to be many potential payments that a tenant could owe a landlord under the lease, including fixed monthly rent, a procedure for “higher rent,” a provision deeming all payments to the landlord being “deemed rent,” provisions for returned check charges, late fees, administrative and attorneys’ fees, indemnification of liability, repairs, and others. Slip Op. at 22. The utilities addendum also considered the utilities charges to be “additional rent.” The Court summarized that the lease there provided “for ‘rent’ in a fixed monthly amount and for ‘deemed rent’ and ‘additional rent’ that may or may not exist in any particular month and that can vary wildly in amount, depending on what other payments the tenant may owe the landlord.” Slip Op. at 22. Blue Ocean’s internal records were notable in that they referred to “rent” as the fixed monthly charge, while it used different terms for the categories that may be characterized as “deemed rent” or “additional rent.” Slip Op. at 23. Therefore, even if the Court were to defer to the definition of “rent” in the lease, it would not be clear what to derive from it in any event. Slip Op. at 23.
The Court next turned to the ordinary meaning of the term “rent.” The Court observed that the typical dictionary definition of the term “rent” is the “periodic sum paid for the use or occupancy of property.” Slip Op. at 23 (citing Merriam-Webster’s Collegiate Dictionary (11th ed.) and Black’s Law Dictionary (10th ed. 2014)). The “context of the statutory scheme” also suggests that “RP §8-208.1 ordinarily means the periodic amount paid by a tenant for use or occupancy.” Slip Op. at 24. RP § 8-208.1(c) provides for an award to either the successful tenant or a landlord successful in avoiding a retaliation claim “’damages not to exceed the equivalent of 3 months’ rent’” as well as fees and costs. Slip Op. at 24-25. The statutory scheme also generally provides for “clarity and definiteness” in the construing of “rent.” Slip Op. at 25 (citing RP §§ 8-203(b) (security deposits), 8-212.1 (tenant in active duty), 8-212.2 (limiting liability of certain tenants)). Therefore, “rent” should be an amount readily ascertainable and trebled. Slip Op. at 25. If, on the other hand, “rent” under the statute were to include variable charges and figures that are uncertain and changeable from month to month, there would be inherent uncertainty in the statute, Slip Op. at 25 n. 10, which is unlikely General Assembly’s intent. Slip Op. at 25.
As the final step in its analysis, the Court looked to the legislative purpose of the statute. RP § 8-208.1 “is designed to protect tenants in residential properties against retaliation by landlords.” Slip Op. at 27. This statute is a remedial statute, providing a remedy that was not available at common law. Slip Op. at 27. Because RP § 8-208.1(d) is an exception to the remedial purposes of the statute, the Court elected to construe the exception narrowly and utilize the more specific definition. Slip Op. at 27. The Court concluded that the term “rent” in RP § 8-208.1 “means the periodic sum owed by the tenant for use or occupancy of the premises,” Slip Op. at 27, “but not the various other payments that the tenant may owe to the landlord from time to time, even if the lease characterizes them as ‘deemed rent’ or ‘additional rent.’” Slip Op. at 28. Ms. Lockett was, therefore, current on her rent at that time and was not ineligible for relief on her second claim for retaliation. Notably, the Court did not consider whether the two alleged acts of retaliation were actually a single act of retaliation because it was not raised in the petition for certiorari. Slip Op. at 31-32 n. 12.
Finally, the Court considered the circuit court’s denial of Ms. Lockett’s request for attorneys’ fees. The circuit court denied the request in the following manner: “’[T]hat request is denied. The statute indicates that it’s permissive. The Court may enter judgment and the Court may award attorneys’ fees. So that request is denied.’” Slip Op. at 14. Maryland Rule 2-703(g) provides that: “The court shall state on the record or in a memorandum filed in the record the basis for its grant or denial of” the fee award. Slip Op. at 28. On remand, if Ms. Lockett prevails, the court would be required to state on the record the basis for its grant or denial of the fee award. Slip Op. at 31.
http://www.mdcourts.gov/opinions/coa/2016/29a15.pdf
Business and Commercial Law – Successor Liability
Phillip Martin v. TWP Enterprises Inc., No. 1855, Sept. Term, 2014 (Md. Ct. Spec. App., Feb. 24, 2016).
http://www.mdcourts.gov/opinions/cosa/2016/1855s14.pdf
Phillip Martin entered into an employment contract with Best & Brady Components, LLC (“Best & Brady”) in 2010. Best & Brady encountered financial difficulties and ran out of funds in 2011. TWP Enterprises purchased Best & Brady’s assets shortly thereafter. Slip Op. at 1. TWP acquired all of Best & Brady’s assets and assumed certain specific liabilities. Slip Op. at 9. “Ultimately, TWP assumed $1,162,160.00 in liabilities, including approximately $300,000.00 owed to Martin as a trade creditor.” Slip Op. at 9. Upon acquiring the assets, TWP paid the $300,000 in unpaid receivables to Martin as a trade creditor but was unable to pay Martin the outstanding compensation owed to him under his employment contract. Slip Op. at 28.
Martin sued Best & Brady for unpaid wages and compensation under the employment contract and also sued TWP for successor liability, alleging that it was a mere continuation of Best & Brady. Martin ultimately obtained a default judgment against Best & Brady for $278,490.00 in damages and $11,064.24 in interest. Slip Op. at 1, 11. The issue of successor liability proceeded to a trial before the circuit court. Slip Op. at 11-12. In a bench trial, the circuit court concluded that TWP was not a “mere continuation” of Best & Brady and would not affix liability to TWP. Slip Op. at 13.
On appeal, the Court of Special Appeals recognized the general rule that, where transfers were made in good faith and for fair consideration, “a corporation which acquires the assets of another corporation is not liable for the debts and liabilities of the predecessor corporation.” Slip Op. at 16 (internal quotation marks omitted). However, there are four exceptions to this general rule: where “(1) there is an expressed or implied assumption of liability; (2) the transaction amounts to a consolidation or merger; (3) the purchasing corporation is a mere continuation of the selling corporation; or (4) the transaction is entered into fraudulently to escape liability for debts.” Slip Op. at 16-17. “The gravamen of these exceptions is the protection of creditors’ rights upon a transfer of assets.” Slip Op. at 17. The issue here was the “mere continuation” exception.
The “mere continuation” exception serves to hold liable those acquiring corporations maintaining the same or similar management and ownership where it is “essentially the same corporate entity as the predecessor corporation.” Slip Op. at 19-20. “The exception is ‘designed to prevent a situation whereby the specific purpose of acquiring assets is to place those assets out of reach of the predecessor’s creditors.’” Slip Op. at 20. Upon analyzing the Maryland appellate decisions considering the “mere continuation” exception, the court distilled five factors to consider: “(1) any change in ownership and management, (2) the continued existence of the selling corporation, (3) the adequacy of consideration, (4) the transfer of any ‘instrumental’ employees from the predecessor to the successor, and (5) the purpose of the asset sale.” Slip Op. at 27. The courts consistently pay particular attention to the the adequacy of consideration but do not rely solely on it in their conclusions. Slip Op. at 27-28.
Martin claimed that TWP was the “mere continuation” of Best & Brady because:
- TWP’s subsidiary, Truss, held 80% of the company’s stock;
- TWP continued to use the same trade name, “Best & Brady”;
- TWP continued to manufacture at the same plant;
- TWP retained the same employees and sold to the same customers;
- TWP increased its ownership in the company from 80% to 100%; and
- TWP retained the same management.
Slip Op. at 29. The circuit court concluded that TWP was not a “mere continuation,” finding that:
Mr. Brady became an employee of TWP but not an owner; TWP continued to provide “back office” support; TWP no longer had an in-house sales staff for the roof truss business and relied on independent salesmen of which [Martin] was one; and Mr. Butcher no longer supervised the independent salesmen. The court concluded that, because both “before and after the asset sale” Best & Brady and TWP had “substantial overlap” in management, control, and ownership, such overlap was not determinative because “this is not an instance in which management of one stand-alone entity uses its authority merely to change ‘hats’ and manage a new stand-alone entity.”
Slip Op. at 29-30 (alteration in original). Further, and importantly, the court concluded that the purpose of the asset sale was not to place them beyond Martin’s reach, but rather an attempt to salvage a failing business. Slip Op. at 30. Moreover, Best & Brady was never profitable, considered bankruptcy, attempted to increase revenues in various ways, cut salaries, and engaged in other attempts to improve before selling its assets to TWP. Slip Op. at 30. In fact, Martin himself benefited here because “TWP assumed nearly $1.2 million dollars of Best & Brady’s liabilities, including approximately $300,000.00 owed to Martin as a trade creditor.” Slip Op. at 30. Indeed, the court noted that the purpose of the “mere continuation” exception to the general rule against successor liability is to protect creditors. Slip Op. at 31. Although the asset transfer did not cover his employment contract, it did facilitate an approximately $300,000 payment to Martin as a trade creditor thereby affording him some level of protection. Slip Op. at 31. Importantly, the Court of Special Appeals also agreed with the trial court that assuming nearly $1.2 million dollars in liabilities for the assets acquired was “adequate consideration for the asset transfer.” Slip Op. at 30-31. Under the circumstances, the court concluded that TWP was not a “mere continuation” of Best & Brady to trigger the exception to the general rule against successor liability.
Civil Procedure – Spoliation of Evidence
Cumberland Insurance Group v. Delmarva Power, No. 72, Sept. Term, 2015 (Md. Ct. Spec. App., Feb. 1, 2016).
http://www.mdcourts.gov/opinions/cosa/2016/0072s15.pdf
On May 5, 2013 a fire broke out in the home of David Wickwire, which was insured by Cumberland Insurance Group (“Cumberland”). Delmarva Power (“Delmarva”) was Wickwire’s electric company. The local fire department put out the fire and Delmarva sent a lineman to disconnect the power to the house. Cumberland inspected the property three days later, on May 8, 2013. Cumberland again inspected the property on May 24, 2013. The house and its contents were demolished on July 3, 2013. It was undisputed that Delmarva knew of the fire on May 5, 2013 and that by May 29, 2013 it was aware that a claim may, at some point, be made against it. After paying Wickwire’s claim, Cumberland sought subrogation from Delmarva. However, due the destruction of the fire scene, Delmarva moved for summary judgment, which the trial court ultimately granted.
The court recognized that the Maryland Rules inherently provide the courts with authority to sanction a litigant for the destruction of discoverable evidence. Slip Op. at 10. The courts maintain that power, whether that authority is derived from the discovery sanctions rule or from their inherent powers. The court has broad discretion to regulate this. Slip Op. at 15. Maryland Courts employ a four part test to determine whether spoliation occurred:
(1) An act of destruction;
(2) Discoverability of the evidence;
(3) An intent to destroy the evidence;
(4) Occurrence of the act at a time after suit has been filed, or, if before, at a time when the filing is fairly perceived as imminent.
Slip Op. at 11.
The Court of Special Appeals analyzed each part of the test and observed that in this case there was an act of destruction, the evidence was clearly discoverable, there was an intent to destroy the evidence (noting that demolishing the house was no mistake), and the demolition took place while suit was fairly perceived as imminent. Slip Op. at 16. In determining the appropriate sanction, the court noted the degree of fault to the spoliating party. Where the fault on the part of the spoliator is greater, prejudice is less necessary to be shown. On the other end of the spectrum, even where there is a lack of intent, if there is a high degree of prejudice, a more serious sanction is warranted. Slip Op. at 12-13. The court concluded that Delmarva, “and especially its experts, never had the opportunity affirmatively to rule in or rule out the other parts of the house as the area of origin, which irreparably prejudiced their ability to defend, and which made dismissal altogether appropriate.” Slip Op. at 23.
On February 26, 2016, a coworker shot seventeen employees at a Kansas factory, three of whom were killed. While this was a high profile active shooting, unfortunately, it is not the only such workplace shooting. As investigators piece together the motives for the murders, there is no question that there has been an alarming uptick of active shooting incidents in the U.S. over the past few years.
While the motivation and circumstances of the various incidents may vary, one often-cited factor in such events is mental illness. In this current environment of concerns about workplace shootings, employers might wonder if they can mitigate the likelihood of such an incident by screening employees and potential hires for mental disorders.
In this post, we will examine mental illness in the workplace and provide some helpful insights as to what employers can and cannot do to better serve their workforce.
Workplace Mental Illness Costs Employers
Before we take a closer look at screening employees for mental illness, we need to understand mental illness in more depth and how it affects the workplace.
First, the vast majority of individuals classified as mentally ill are not a threat. According to the National Alliance on Mental Illness (NAMI), 18.5 percent of adults in the U.S. – or 43.8 million people – experience mental illness in a given year. Furthermore, only 4.2 percent of the U.S. population – or approximately 10 million people – will experience a serious mental illness in a given year that substantially interferes with or limits one or more major life activities.
Even in situations where a crime is perpetrated by someone with mental illness, studies have shown that rarely is the mental illness linked to the criminal action. According to a 2014 study by the American Psychological Association, only 7.5 percent of crimes committed by perpetrators with a diagnosis of a serious mental illness were linked to their diagnosis. As the study’s lead researcher, Jillian Peterson, PhD, put it: “The vast majority of people with mental illness are not violent, not criminal and not dangerous.”
While these facts support the assertion that mental illness is both prevalent and not typically linked to violent acts, employers may have good reason to conduct mental illness checks on their employees. According to the National Institute of Mental Health, providing mental health screenings for depression, and helping those employees, can have an impact on a company’s financials by increasing productivity and reducing costs. The same can be said about detection and early intervention programs related to alcoholism and drug use, which share a strong link with mental illness. In fact, according to NAMI, serious mental illness costs the U.S. economy more than $100 billion each year.
In light of these facts, employers interested in conducting mental health screenings of employees should approach the topic from the standpoint that mental illness not only takes a toll on the afflicted but also on coworkers, customers and the company itself. The more assistance an employer can provide, the more that employer will be fostering a healthy and productive work environment for all. However, while it may appear at first blush that screenings and mental health assistance make common sense, the impact of disability discrimination laws must be considered.
Mental Health Screenings and the ADA
Companies that do wish to screen employees and potential hires for mental illness should deeply familiarize themselves with the Americans with Disabilities Act (ADA). This federal law affords the disabled, whether due to physical or mental impairment, protections that prevent and punish acts of discrimination in the workplace. Many states and localities have their own legislation that parallels the federal ADA. Make sure to also check your state laws as well to ensure compliance.
In regard to potential hires, the ADA prevents employers from asking questions about disability status during a pre-employment interview. Because serious mental illness is considered a protected disability under the ADA, employers should not conduct any type of screening for mental illness during the interview phase of the hiring process.
However, once a job offer is made, an employer can require a medical examination if it is a requirement for all entering employees. An employer can even request access to an incoming employee’s mental health records, but only if the employer makes the same request of all incoming employees. Failure to treat all incoming employees the same could lead to a claim of discrimination. Information learned from the disclosure of the health records may not be used to discriminate against an employee. The only time an employer can use such information to screen out an incoming employee is if the disability interferes with the requirements of the job and no reasonable accommodation can be made. A reasonable accommodation is a term used within the ADA to refer to a change in the work environment that allows someone with a disability to do his or her job. An example would be offering flexible work schedules to accommodate an ADA-protected employee’s doctor visits.
For current employees, employers can request disability information only if it is job-related and consistent with business necessity. This means that there must be a reasonable basis that the employee is either unqualified for the job, requires a reasonable accommodation, or poses a direct threat to the health and safety of other employees.
To prove that an employee’s mental health causes a direct threat, employers must demonstrate that the employee poses a significant safety risk – one that cannot be eliminated or lessened by a reasonable accommodation. It also requires that an employer conduct an individualized assessment that relies on medical judgment. Mere suspicion is never enough to take an adverse action.
So, both pre-employment screening and screening of existing employees without evidence that the employee presents a significant safety risk, could create significant liability for employers. What else can employers do in regard to mental health in the workplace?
Evaluating Your Current Mental Health Programs
Besides conducting mental health screenings, there are a number of other tactics employers can take that prioritize an employee’s well-being while posing minimal legal exposure. For example, you can evaluate the healthcare services and wellness programs your company already has access to. Review your current mental health benefits offered by your insurance carrier and gauge if they are satisfactory in providing necessary assistance to your employees.
Next, ask your health insurance carrier questions about the behavioral health services offered through your company’s plan. What informational resources does your provider offer, such as online materials about mental illness or self-screening tools? If your employees do choose to seek behavioral health assistance, will they be connected to a provider trained in screening for mental illnesses, such as depression and anxiety? Upon receiving a diagnosis, do your employees have access to ongoing mental health services, including therapy as well as prescription medications? What resources are provided for employees struggling with alcohol or drug addiction?
In addition to evaluating your company’s health benefits, you might also want to look into implementing an employee assistance program (EAP). An EAP provides assistance to employees to help them cope with challenges that could affect their job performance and their well-being. EAPs can serve as an extra source of assistance for such issues as alcohol and drug abuse, work-related stress, and emotional distress.
Developing Additional Mental Health Programs
In addition to relying on health insurance and an EAP to provide services to employees who are suffering from mental illness, employers can do their part to develop their own programs to empower employees to seek the assistance they need.
One best practice is to develop an awareness program that educates employees on the types of mental illnesses and their symptoms. Such a program should be offered by a professional who has experience delivering mental illness awareness programs in workplace settings. In addition, any awareness program should provide employees with information about the company’s mental health resources and how to access them.
Employers should also consider enacting training programs for supervisors and managers that educate them on how to compliantly handle workplace issues that may involve an individual who is mentally ill. As mentioned earlier, mental illness can trigger the protections afforded under the ADA. Failure to comply with the ADA could result in a costly claim against your company.
GREENBELT, Md. – The law firm of Joseph, Greenwald & Laake filed a second civil lawsuit, this one a class action, on behalf of the victims of Deonte Carraway, a school employee-turned-volunteer at Judge Sylvania W. Woods Elementary School who was criminally charged with making pornographic videos of nine and 10-year-old students. The school’s principal, Michelle Williams, is also named as a defendant because she “took no action” despite concerns being raised to her about Carraway by parents and teachers.
“Principals, teachers, employees and school boards are entrusted with the safety of students when they are on school grounds,” said Timothy F. Maloney, the lead plaintiffs’ attorney for these lawsuits. “There are numerous reports that the principal knew of criminal actions against the students of her school and repeatedly did nothing to help them or report this terrible misconduct,” Maloney added.
Maloney reports that students were assaulted throughout the school, including in the auditorium and bathrooms. He also said that victims were also abused outside of the school grounds, including at the Glenarden City Hall.
“As we continue to investigate the devastating breadth of this case, we encourage the parents of these victims and witnesses to come forward,” Maloney said. “The State’s Attorney’s office has confirmed 17 victims, but there could be more.” Maloney added.
Parents and caretakers of victims who would like to learn more about the lawsuits should call 301-220-2200 or email sylvaniawoods@jgllaw.com.
For more than 40 years, Joseph, Greenwald & Laake, P.A. is one of the most trusted law firms serving Maryland, the District of Columbia and Virginia. Known for its commitment to community, confidence and character, Joseph, Greenwald & Laake is the leader in bringing suits against local governments and school systems. The firm represents a variety of clients, including victims, individuals, small businesses and multimillion-dollar corporations. From simple to complex legal needs, the firm is prepared to deliver strategic solutions with high standards. More information is available at http://www.sylvaniawoodsclaims.com.
