Civil Law Update

Review of the July 2014 Amicus Curiarum reveals the following decisions of interest in the civil law area:

 COURT OF APPEALS:

 Attorney Grievance Commission of Maryland v. Matthew John McDowell,& John Stephen Burson, Misc Docket AG No. 50, September Term 2012, file June 19, 2014, Opinion by Shirley M. Watts , Judge

The AGC filed a Petition against charging McDowell with Violating Maryland Lawyers’ Rule of Professional Conduct (“MLRPC”) 5.2(a) (Responsibilities of a Subordinate Lawyers) and John Stephen Burson with violating MLRPC 5.1 (Responsibilities of Partners, Managers and Supervisory Lawyers) and 5.3 (Responsibilities Regarding Non-Lawyer Assistants) and charged both with violating MLRPC 1.1 (Competence and 8.4 (Misconduct).   The hearing judge found that Burson was the managing partner of a law firm at which McDowell, an associate, signed trustee’s deeds and affidavits on behalf of another lawyer at the firm.  IN addition, paralegals at the firm who were also notaries public would notarize theses documents stating that the documents were signed in their presence.  Burson made no efforts to ensure that the firm had in effect measures giving reasonable assurance that lawyers did not robo-sign documents and that paralegals did not falsely notarize documents.   The hearing judge concluded that McDowell had not violated any MLRPC and that Burson had violated MLRPC 5.1(a) and 5.3(a), had not violated MLRPC 1.1, 5.3(b) or 8.4, was not vicariously responsible for McDowell’s conduct nor responsible for the paralegals conduct under the cited MLRPC.  The Commission excepted to the hearing judge and sought  suspension of Burson for 30 days and reprimand for McDowell.  Both men agreed with the recommendation of reprimand.

 The Court of Appeals held that McDowell had violated MLRPC 8.4(d) and 8.4(a) and that Burson had violated MLRPC 5.1(a), 5.3(a) and 8.4(a).  The Court reprimanded both lawyers, finding that  McDowell’s misconduct was mitigated by the absence of prior attorney discipline, the absence of a dishonest or selfish motive , a cooperative attitude toward the attorney discipline proceeding and remorse.  They further found that Burson’s misconduct was negligent rather than knowing or intentional, did not cause any tangible injury, was aggravated only by substantial experience in the practice of law and was mitigated by a myriad of significant, persuasive and impressive factors. 

 Department of Public Safety and Correctional Services v. John Doe, Misc. No. 1, September Term 2013, and Gregg Hershberger v. John Roe, No. 103, September terms 2013, filed June 30, 2014.  Opinion by Clayton Greene, Jr., Judge

In Doe v. Department of Public Safety & Correctional Services, 430 Md. 535, 62 A. 3d 123 (2013), (“Doe 1″) the Court of Appeals held that retroactive application of Maryland’ sex offender registration statute is unconstitutional.  The federal Sex Offender Registration and Notification Act (“SORNA”), 42 U.S.C. §16901 et. seq, provides for resolution of conflicts between the federal law and state constitutions “as determined by a ruling of the jurisdictions highest court”.  Therefore, notwithstanding the registration obligations placed directly on individuals by SORNA, an individual to whom the registration requirement would be applied retroactively cannot be required to register involuntarily as a sex offender in Maryland when to do so would be unconstitutional as articulated in Doe 1.

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THE COURT OF SPECIAL APPEALS:

UBS Financial Services, Inc. et al. v. Nancy Lee Kathryn Thomson, et al,. No. 352, September Term, 2013, filed June 25, 2014.  Opinion by Michele D. Hotten, Judge

Nancy Lee Kathryn Thompson and Barbara Clements (“the Sisters”) were the named beneficiaries and owners of a second to die life insurance policy taken out by their parents.   The policy was set up to have premiums for the policy paid through “gifts” from the parents.  The Sisters discovered that, in fact, the premiums had not been paid for a number of years and sued the parents’ financial advisor, Gordon Witherspoon and his employer, UBS Financial Services.  A jury found for the Sisters, finding Mr. Witherspoon and UBS liable under claims of conversion, constructive fraud, negligence, negligent misrepresentation and deceit.  They awarded the Sisters $150,000 in punitive damages and over a million dollars in compensatory damages. 

 

The Court of Special Appeals reversed, holding that the trial court erred in (1) failing to correctly instruct the jury regarding the scope of Mr. Witherspoon and UBS’ duty towards the Sisters and (2) in failing to correct an erroneously calculated jury award.   The Court held that the jury was not properly instructed on the narrow and defined duty owed to the Sisters by Mr. Witherspoon and UBS.  Further, while the Sisters claimed that, had they known that the premiums were not being paid, they would have paid the premiums themselves, but failed to present evidence that they had the ability to have made those payments timely.  The claims for conversion and constructive fraud were dismissed due to lack of a legally cognizable claim for either tort.  The claims for negligence, negligent misrepresentation, negligent supervision and deceit were remanded for a new trial.

 Review of the August 2014 Amicus Curiarum reveals the following decisions of interest in the civil law area:

 

COURT OF APPEALS:

 Lori A. Robinette v. Luann Hunsecker, No. 90, September Term, 2013, filed July 18, 2014.  Opinion byRobert M. McDonald, Judge

Ms. Hunsecker was married to Roger Robinette, an employee of the Montgomery County Public Schools. (MCPS).  The parties executed an agreement under which Ms. Hunsecker was to receive 50% of the marital portion of the MCPS pension if, as and when Mr. Robinette received the same.  The agreement stated that the parties intended for the agreement itself to act as any qualifying order that might be necessary to have her share of Mr. Robinette’s pension paid to her, including any death benefit.  No qualifying order was ever prepared, presented to the court or presented to the plan administrator.  No separate notice of Ms. Hunsecker’s interest was ever communicated to the plan administrator.  After the divorce, Mr. Robinette remarried and designated his wife, Lori Robinette, as the sole beneficiary on his MCPS pension plan.   After his death, Ms. Hunsecker filed suit against Lori Robinette based on her being unjustly enriched in receiving the entire pension and death benefits and asking for a constructive trust for Ms. Hunsecker’s share of the pension plan and death benefits.  The trial court granted summary judgment in favor of Ms. Hunsecker, ordering Ms. Robinette to account for the pension and death benefits that she had already received and indicating that it would approve a posthumous qualified domestic relations order to be presented to the plan with respect to future benefits.  The Court of Special Appeals affirmed.

The Court of Appeals affirmed.   The Court noted that Ms. Robinette’s arguments under ERISA did not apply, as the MCPS retirement plan was not covered under ERISA.  The Court held that the trial court’s issuance of a posthumous QDRO in order to allocate Mr. Robinette’s retirement benefits in accordance with the agreement  was appropriate under Maryland law.   After consideration of other state appellate courts’ decisions in this area, the Court concluded that a circuit court has the authority to impose a constructive trust on retirement benefits received by a surviving spouse with the decedent promised a portion of those benefits to a former spouse in circumstances which give the former spouse a “higher equitable call”  to the promised benefits.  In the present case, the Court held that it was clear from the parties’ agreement that there was a mutual understanding that Ms. Hunsecker had a 50% interest in the portion of Mr. Robinette’s benefits that constituted marital property and the agreement purported to be self-executing and did not make Ms. Hunseckers’ entitlement contingent on her contacting the retirement plan or obtaining a separate QDRO.