Civil Law Update

The April 2014 Amicus Curiarum on the Maryland Judiciary website contains the following summaries of several decisions of interest in the civil law area:

 

Attorney Grievance Commission v. Glenn Charles Lewis, Misc. Docket AG No. 80, September Term 2012, filed February 27, 2014. (Opinion by Adkins, J)

The hearing judge in this matter concluded that Mr. Lewis had committed violations in connection with his representation of Lee-Ann Slosser. The hearing judge found that Lewis did not attend scheduled settlement conferences, made misrepresentations to his client and ignored her requests for updates, ignored his client’s attempts to get him to withdraw his representation, kept an unearned fee, charged an unreasonable fee and did not deposit and maintain his client’s funds in trust or create the required records of such funds. He concluded that Mr. Lewis engaged in professional misconduct as defined by Maryland Rule 16-701(I) and violated Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) 1.1 (Competence); 1.3 (Diligence); 1.4 (Communication); 1.5 (Fees); 1.15 (Safekeeping Property); 1.16 (Declining or Terminating Representation); 8.1 (Bar Admission and Disciplinary Matters); Rule 8.4(a), (c), and (d) (Misconduct) and 16-606.1 (Attorney trust account record-keeping).

The Court of Appeals accepted the Findings of Fact and Conclusions of Law of the hearing judge and imposed disbarment as the sanction. The Court of Appeals held Lewis’s conduct to be particularly egregious and deleterious not only to his client, but also to the public perception of lawyers. The Court explained that Lewis’s multiple misrepresentations to his client displayed a lack of basic integrity that demonstrated a danger to any member of the public who would seek his services.

Attorney Grievance Commission v. James Albert Frost, Misc. Docket AG No. 69, September Term 2012, filed February 26, 2014. (Opinion by Greene Jr., J)

Respondent Frost sent an email to his ex-wife that made significant negative comments regarding Maryland Governor Martin J. O’Malley, Attorney General Douglas F. Gansler and several judges and attorneys. For unexplained reasons, he sent the same email to numerous members of the bar. Despite inquiries from those recipients and from Bar Counsel, Mr. Frost failed or refused to explain his statements or his reasons for disseminating them.

In the disciplinary case against him, Frost failed to respond to a request for admissions regarding his knowingly making false statements and they were deemed admitted. The hearing judge entered an order of default, finding that Frost violated Rules 8.1(b), 8.2(a), 8.4(a), (c) and (d). Neither Frost nor Bar Counsel filed exceptions to the hearing judge’s findings of fact and conclusions of law.

On July 5, 2013, Bar Counsel filed its Recommendation for Sanction, recommending disbarment. On July 17, Frost filed a motion with the Court of Appeals, alleging that there was insufficient service of process upon him, that he had committed no violation of any Rule of Professional Responsibility, and that the statements underlying the instant action against him were protected by the Free Speech Clause of the First Amendment to the United States Constitution.

The Court of Appeals held that Respondent’s statement regarding Governor O’Malley does not constitute a violation of MLRPC 8.2(a) because the governor is not a public legal officer. As to the remaining statements, the Court found that Respondent’s knowingly false statements impugning the integrity and qualifications of several judges and public legal officers violated MLRPC 8.2(a) and were not protected constitutionally protected speech. The court said that when Frost made repeated false allegations about the qualifications or integrity of “a judge, adjudicatory officer or public legal officer” without any explanation or investigation into the substance of those allegations, he demonstrated a lack of fitness to practice law. Under the circumstances, the appropriate sanction for violations of MLRPC 8.1(b), 8.2(a), 8.4(a), (c) and (d) is disbarment.

In re: Victoria C., No. 15, September Term 2013, filed March 27, 2014. (Opinion by Battaglia, CJ)

Victoria C. was determined to be a Child in Need of Assistance after her father George C. refused to allow her to return to his home that he shared with his wife and their children Lance and Evan. During a review hearing in her case, Victoria sought visitation with Lance and Evan, who were her half-brothers. The juvenile court master who heard the testimony recommended granting visitation, over the objections of the parents, George and Kieran.

Following the circuit court denial of exceptions taken by the parents, the Court of Special Appeals reversed, based on the Court of Appeals’ decision in Koshko v. Haining. That case held that a third party seeking visitation with a minor child against the parent’s wishes must make a prima facie showing of parental unfitness or exceptional circumstances demonstrating a substantial deleterious effect on the child who is the subject of the visitation petition. The intermediate appellate court concluded that the trial judge erred in finding exceptional circumstances, because of his focus on the harm to Victoria C., rather than to Lance and Evan.

The Court of Appeals affirmed in part and vacated in part the judgment of the Court of Special Appeals. The Court began by raising the issue, sua sponte, of whether the circuit court sitting as a juvenile court had jurisdiction to order sibling visitation. The circuit court judge had determined that no statutory basis existed to order visitation, and that the statute upon which Victoria C. relied – Section 5–525.2 of the Family Law Article, permitting siblings “separated due to a foster care or adoptive placement” to seek visitation with each other – was only applicable to siblings, unlike Lance and Evan, in out-of-home placements.

The Court of Appeals, therefore, determined that, on remand, the circuit court must first determine whether it has jurisdiction to order visitation. The Court of Appeals went on to determine that that the tenets of Koshko were applicable, rejecting Victoria C.’s argument that her CINA and sibling status rendered her without, rather than within, a third-party designation. After analyzing its prior third-party custody and visitation cases, the Court of Appeals determined that a third party is a person who is not a parent. A sibling, whether full, half or CINA, remains a third party.

After determining Koshko applied, the Court of Appeals held that the circuit court erred by focusing on the harm to Victoria instead of Lance and Evan. Instead of directing the circuit court to enter an order denying visitation, as the Court of Special Appeals had, the Court of Appeals remanded the case to the circuit court to determine whether jurisdiction exists to order sibling visitation and if Lance and Evan suffer a substantial deleterious effect from a lack of visitation.

 

THE COURT OF SPECIAL APPEALS:

Steven J. Ochse, et ux. v. William O. Henry, et ux., No. 1118, September Term 2012, filed February 25, 2014. (Opinion by Moylan, J)

On remand after a previous decision of the Court of Special Appeals, the circuit court entered an award of attorney’s fees in favor of the appellants based on a fee-shifting provision in a real estate contract. The award was substantially less than the appellants had requested. The circuit court reasoned that, even though the appellants were the prevailing party, they had devoted the majority of their efforts to proving a claim that was rejected at trial and on appeal, and so a fully compensatory award was not reasonable. Appellants again appealed, arguing that they were entitled to fees expended on all four of their claims, because all four claims arose out of a common core of facts.

The Court of Special Appeals vacated and remanded the matter for further proceedings. The common core of facts doctrine allows a court to grant a fully compensatory fee to a prevailing party under a contractual fee-shifting provision where the party did not prevail on all claims or defenses but still achieved excellent results. The doctrine bundles together fees attributable to fee-shifting claims and non-fee-shifting claims that arise out of a common core of facts. Application of the doctrine is discretionary. COSA said the trial court did not abuse its discretion in deciding not to apply it in this case. Nevertheless, the case was remanded for the circuit court to take into account the appellants’ supplemental motion for fees incurred successfully defending against the appellees’ petition for a writ of certiorari in the Court of Appeals.

John Beauchamp Reynolds, III v. Valerie Lambiase Reynolds, No. 1691, September Term 2012, filed February 26, 2014. (Opinion by Matricciani Jr., J)

Husband and Wife graduated from Yale law school in the early 1980’s and took jobs with prestigious law firms in the Washington, D.C., area. After a difficult pregnancy with twins, the parties decided that Wife would not return to practice, where she had been earning approximately $120,000 per year. Husband continued to work in private practice and by 2010 was earning more than $800,000 per year.

After attempts at counseling failed, the parties abruptly separated on July 29, 2010. Husband rented a four-bedroom home at the cost of $5,000 a month. Wife purchased a $1.52 million home jointly with her father. The purchase was financed in part by liquidating investments that Wife held as trustee for the parties’ children.

Wife’s father gave her more than $100,000 between June 2010 and April 2011. Wife also received monthly $8,000 checks from a minority interest in her family’s commercial real estate company.

Wife sued for absolute divorce and demanded alimony, child support, a monetary award and other relief. At trial, wife testified that she has rheumatic heart disease, will likely need valve replacement surgery and two leg surgeries, has difficulty sleeping and requires psychiatric therapy. She also asked the court to impute the rate of return on United States Treasury securities to the pre-marital balance of her retirement account.

The trial court found that Wife had no earned income and awarded her indefinite alimony of $13,400 per month, to alleviate the parties’ unconscionably different lifestyles. The court also found that the assets Wife used to purchase her new home were non-marital and refused to impute her proffered rate of return to her retirement account.

The Court of Special Appeals affirmed.

First, it said, “imputed income” is a child support concept predicated on a finding of voluntary impoverishment. Although alimony is a separate issue from child support, it similarly requires the court to consider the ability of the party seeking alimony to be wholly or partly self-supporting and the time necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment. Thus, a finding of voluntary impoverishment would ordinarily entail a finding that the party seeking alimony could support him or herself, but chooses not to.

The trial court awarded indefinite alimony to Wife because of an unconscionable disparity in the parties’ standards of living after their divorce. In this context, and because Wife was 56-years-old, had been unemployed for more than twenty years and had significant health problems, the trial court did not err in refusing to impute a $30,000 and $40,000 annual income to her.

Where regular gifts from Wife’s father ceased abruptly, nearly a year before trial, the court reasonably inferred that the father was “unable or unwilling to continue” the gifts to his daughter and did not err when it excluded them from its income calculations.

Although Wife was awarded half of Husband’s retirement assets and would not technically retire from employment, the trial court rightly considered her need to save for the future—at her accustomed standard of living—when it awarded alimony to her.

Where Wife spent money from her children’s trust accounts to make part of the down-payment on property, she acted as a trustee and did not “acquire” the funds, which remained non-marital assets under FL § 8-201.

The trial court did not err when it excluded evidence of the rate of return on United States Treasury Notes during the parties’ marriage and refused to impute that rate to the initial, non-marital balance of Wife’s retirement account. Although a trial court could, in principle, attribute a reasonable rate of return to assets, to do so in the present case would require complex financial accounting beyond the scope of the court’s ordinary fact-finding ability.