Civil Law Update

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

THE COURT OF APPEALS:Picture10

Attorney Grievance Commission of Maryland v. Joseph Lee Friedman, Misc. Docket AG No. 49, September Term 2012, filed March 24, 2014. Opinion by Barbera, M E, C. J.

Mr. Friedman, an attorney, and his brother inherited a company from their father. At a certain point, the company owed more than $70,000 in federal taxes. Mr. Friedman’s brother agreed to assume sole responsibility for the taxes in exchange for Mr. Friedman’s interest in the company. Knowing that he could still be held liable for the taxes despite the agreement with his brother, he deposited personal funds in his escrow account to protect them from the IRS. Then he did not appear for the hearing on the complaint brought by the AGC for such actions. Based upon these factual findings, the hearing judge concluded, by a clear and convincing evidence standard of proof, that Respondent had violated MLRPC 1.15(b) (safekeeping of property), MLRPC 8.4 (c) and (d) (misconduct), and Maryland Rule 16-607 (commingling funds). The hearing judge found no mitigating factors.

The Court of Appeals conducted a de novo review of the record and held that Respondent violated MLRPC 1.15(b), MLRPC 8.4 (c) and (d), and Maryland Rule 16-607 for the reasons stated in the hearing judge’s conclusions of law. Noting that the Court’s cases firmly establish that the act of intentionally thwarting collection efforts by a creditor is grounds for disbarment, it held that disbarment is the appropriate sanction for Respondent’s misconduct.

THE COURT OF SPECIAL APPEALS:

Derek Stevens v. Yoko Tokuda, No. 2724, September Term 2011, filed February 25, 2014. Opinion by Woodward, J.

In an October 2010 order, the Circuit Court for Carroll County found Mr. Stevens in constructive civil contempt for failure to pay child support to Ms. Tokuda, but did not impose any sanctions. The court did include purge provisions, which required Mr. Stevens to make a monthly payment toward the arrearage and provide the court and Ms. Tokuda with information regarding Mr. Stevens’ job search.

After a review hearing in March 2011, the court issued another order, finding Mr. Stevens in contempt of the purge provisions of the October 2010 order, modifying the purge provisions and deferring any sanction. On February 2, 2012, the court issued the second order challenged by Mr. Stevens, in which it found Mr. Stevens in contempt of the purge provisions of the March order, and imposed a sanction of 179 days of incarceration with work release. The February 2, 2012 order also remanded to the master Mr. Stevens’ motion to modify his child support payment. In August 2011, the circuit court ruled that, because Mr. Stevens was unemployed and the master did not make a specific finding that Mr. Stevens had voluntarily impoverished himself, the master could not determine Mr. Stevens’ potential income. The court sustained Mr. Stevens’ exceptions in part, but did not determine Mr. Stevens’ new child support obligation. Instead, in the February 2, 2012 order, the court remanded the case to the master to take additional testimony.

On appeal, Mr. Stevens first argued that the trial court erred in finding him in contempt in the October 2010 order. Second, Mr. Stevens claimed that the court erred by incarcerating him for civil contempt on February 2, 2012 because the court had not provided him with the “present ability to purge the contempt.” Finally, Mr. Stevens asserted that the February 2012 order was in error because it remanded his motion to modify child support without any request by him to do so.

The Court of Special Appeals vacated in part and affirmed in part.

The Court held that it had no jurisdiction to decide the merits of the October 2010 order finding Mr. Stevens in contempt because his appeal was untimely. The Court determined that under section 12-304 of the Courts and Judicial Proceedings Article, and Maryland Rules 2-601and 8-202, the time period for filing an appeal from a finding of contempt was 30 days after the entry of the order making that finding. Mr. Stevens did not appeal the contempt order until February 29, 2012, more than thirty days after the entry of the October 2010 order. The Court rejected Mr. Stevens’ argument that, pursuant to Bryant v. Howard County Department of Social Services, 387 Md. 20 (2005), the contempt order was not final and appealable until the court imposed sanctions on February 2, 2012.

The Court agreed with Mr. Stevens on the second issue and vacated the balance of the 179 day sentence imposed by the February 2, 2012 order. The Court held that the trial court could not order incarceration because the court did not set a purge provision with which Mr. Stevens had the present ability to comply to avoid incarceration. The Court stated that, even though Mr. Stevens’ contempt was his failure to comply with the previously imposed purge provisions, Maryland Rule 15-207 required a purge provision with which Mr. Stevens had the present ability to comply to prevent him from being incarcerated. A work release program did not satisfy that condition. Alternatively, the court could refer the matter to the State’s Attorney, who could in turn initiate criminal contempt proceedings. That did not happen in the instant case.

Finally, the Court affirmed the circuit court’s remand of Mr. Stevens’ motion to modify child support. Mr. Stevens claimed that in August 2011, the trial court had determined that his child support payment should be determined based on an income of zero. Given this finding, he claimed that Rule 9-208(i)(1) permitted remand for the hearing of additional evidence only if the excepting party requested remand, which Mr. Stevens had not done. The trial court found that the master erred by calculating Mr. Stevens’ child support payment based on a potential income of $50,000 per year, without first finding that Mr. Stevens, who was unemployed at the time, was voluntarily impoverished. The Court of Special Appeals held that no final judgment had been made on Mr. Stevens’ exceptions by February 2, 2012, and thus the trial court could order remand under Maryland case law. The Court concluded that Rule 9-208(i)(1) did not bar remand because it governs situations in which a party seeks to introduce new evidence not presented to the master and not instances in which the court determines that additional evidence is required.