Defense Line A Publication From The Maryland Defense Counsel, Inc.
Mediation/Settlement A is for Arbitration—
HIPAA: The Basics
Conferences a Primer
3 Reducing the Pain and BY THE HONORABLE WILLIAM C. MILLER
Suffering in Tort Litigation
Editor’s Corner rbitration has been with us for a long, long
time. As Martin Domke notes in his Brief
3 BY THE HONORABLE HOWARD S. CHASANOW
History of Arbitration, Domke on
he use of alternative dispute resolution as a Commercial Arbitration, we even had arbitration in
General Right substitute for court or jury trails may be ancient mythology when the three goddesses asked
to Legal Counsel… the most civilized improvement to the way Paris to award the golden apple to the most beauti-
5 we resolve tort claims since court and jury trials ful among them. Only in the last two decades, how-
became a substitute for trial by combat. Although ever, have lawyers and judges generally accepted the
Don’t Forget Causation there are many forms of alternative dispute resolu- fact that arbitration and the other forms of alterna-
7 tion that are used in all varieties of legal disputes, tive dispute resolution are not only practical meth-
this discussion will focus on the use of settle- ods of deciding cases but are necessary to prevent
Executive Director’s Report ment conferences and mediation in resolv- courts from collapsing under the weight of
ing tort cases. My enthusiasm for settlement steadily increasing caseloads.
conferences stems from the fact that, going Arbitration is “the process whereby par-
Recent Decisions back over the 30 years I was a judge, I have ties voluntarily agree to substitute a pri-
difficulty recalling a single trial where vate tribunal for the public tribunal oth-
12 both sides left the courtroom satisfied erwise available to them.” It offers par-
with the verdict, but with settlement ties an inexpensive and expedited process
New Members conferences it happens in almost every by which to resolve their dispute, conserve
13 case. Contrary to a popular saying, a success- judicial resources and offers the parties an
ful settlement is not one where both parties are opportunity to submit the dispute to an arbitrator
Spotlights equally unhappy with the settlement. A successful who is experienced in the parties’ field of business
14 settlement conference is one where both sides rec- and thus sensitive to the parties’ individual needs.
ognize they have reached a reasonable compromise See M.L.E., “Alternative Dispute Resolutions,”
and, even if they did not get the result they hoped Section 2, p. 242; Snyder v. Berliner Const. Co., Inc.,
for, they are satisfied with the result because they 79 Md. App. 29, 555 A.2d 523 (1989).
have closure and have avoided the uncertainty, the In 1973, the Maryland Legislature adopted the
anxiety, and the expense of a trial and potential Maryland Uniform Arbitration Act (MUAA), which
Important appeal. Most litigants also derive some satisfaction is found at MD. Code, Courts and Judicial
from playing an active part in reaching the decision Proceedings, §§ 3-201, et. seq. This Act is the ana-
that resolves their case rather than entrusting the logue of the Federal Arbitration Act and establishes
decision to six people whose primary qualifications a policy favoring the settlement of disputes through
Mark your calendars are that they are licensed to drive a car. arbitrations.
now for the MADTC Chief Justice Warren E. Burger made the fol-
Mediation vs. Settlement Conference lowing observation:
Annual Crab Feast
June 9, 2004
When we use the term “mediation” we often
include both mediation and settlement conferences,
but technically, at least in the Maryland Rules, there
The notion that most people want black-robed
judges, well-dressed Lawyers and fine paneled
is a difference. Mediation is defined in Rule 170- cowl rooms as the settings to resolve their disputes
102 (d) and Settlement Conferences are defined in is not correct. People with problems, like people
Call 410.560.3895 or
17-102 (h). The primary differences between the with pains, want relief, and they want it as
mddefensecounsel.org two are that a settlement conference facilitator may quickly and inexpensively as possible.
for details take a more active role, may give a case evaluation,
Continued on page 9 ” Continued on page 10
Defense Line Winter 2004
process is getting underway, not only to address issues of how we can
e are about halfway through MDC’s year and just at
the beginning of another certain-to-be-exciting leg- improve our process, but how MDC can also focus on the grassroots
islative session. I hope you have all had the opportuni- process of identifying appropriate lawyers across the state who
ty to see and appreciate the improvements that the Board is actively ought to be considering a judgeship as their next career move. If you
trying to make to serve the interests of MDC’s members. At the are interested in participating in that process, please let me know.
beginning of my tenure, I identified four goals for Third, I want to continue our significant pres-
this year and I think we are a long way toward ence in the General Assembly’s consideration of
meeting those. I will say now and will repeat again bills important to our constituent members and
later that response and participation from every clients. Hal MacLaughlin made great strides in
one of our members can only enhance and speed raising MDC’s profile before the General Assembly
our progress toward meeting these goals. last year, along with the able assistance of our
First, my most significant goal was to offer Lobbyist, John Stierhoff. These two, along with
more tangible and valuable services to our mem- Dan Moylan and David Godwin, Co-Chairs of our
bers. I want MDC to be an organization for which Legislative Committee, have been very active in
no member ever has to ask, “what’s in it for me?” I already identifying the hot topics and crucial legis-
want those benefits to be at the forefront of your lators with whom MDC will need to be working in
mind and at your fingertips. To do this, in addition the coming year. If you or your clients have issues
to continuing our excellent programs and seminars, MARGARET FONSHELL before the Legislature on which you would like
the Board has approved several steps to take advan- MDC to consider taking a position, let any of us
tage of the technology available to us and to you. know and we will bring the matter before the Board
We have encouraged a much wider use of the expert Moore & Jackson, LLC for consideration. In addition, if you have a partic-
inquiry service through our e-mail distribution list. ular interest in any bill pending before the
Each week, I see more and more members using this service and I Legislature and wish to offer to testify regarding that bill, please also
completely encourage everyone to do so. You have all recently let us know that.
received the form to add considerable helpful information to our Fourth, it has been my goal to expand the membership of MDC
website, so that you will have resources in other members across the across the state. Some of you may know that MDC started out as an
state. We’ll also make it easier for clients and lawyers across the coun- organization of Baltimore defense lawyers. We have been known for
try to find you, identify your specialties, and be in touch with you many years, however, as the statewide organization of the civil
through the website. The website is also going to contain useful links defense bar. Unfortunately, we don’t have the voice that we need
for several practice areas, including employment and labor law, work- from lawyers in the western part of the state, the Eastern Shore, and
ers compensation, professional liability, and others. some of the DC Metro and Southern Maryland counties. We need
We have a new and improved Defense Line in your hands right to reach those defense lawyers, too, so that we can assist in further-
now. Alex Wright and Matt Wagman have been committed to get- ing their interests and those of their clients in those regions. If you
ting out several issues of Defense Line every year and we mean for this know someone practicing defense law in any of those areas and you
to be a valuable source of new information on cases and goings on suspect he or she may not be a MDC member, please let us know.
in the defense community. Contributions of articles, commentary, or We’ll get to them and make sure they get involved.
suggestions for Defense Line material are welcome. Got an issue We have some terrific new programs to come. Keep an eye on
about which you are itching to get published? Send it on for our your emails and mail for information about, among other things, a
review. All of this will also be packaged with a new look and a strong jury training program that will be offered jointly with the Maryland
message of who and what MDC is to the entire defense community. Trial Lawyers Association and will be aimed toward both judges and
Second, it was my intention to increase our voice in judicial lawyers. On this and other events, we will undoubtedly be calling
selections throughout the state. Our Judicial Selection Chairs, John out for volunteers. If you have any interest in becoming involved in
Sweeney and Tony Taddeo, have gone to great lengths to organize Maryland Defense Counsel, please be in touch with me. I have a
and streamline the process of interviewing candidates for the circuit rule, to which I try to adhere as much as possible, that if anyone asks
and appellate courts’ open seats. This is a huge task and they have for a job, they’ll get one. Let me know what you would like to do,
marshaled efforts to interview as many candidates who wished to what kind of time commitment you have, and I’ll make sure you get
participate and to gather our members across the state to participate involved. Please visit our website so that you can see some of the
in those interviews. The MDC voice is being heard loudly and substantive areas in which we are working, if you are not already
strongly by the Ehrlich administration in our efforts to get the most aware of those. In order for MDC to remain a vital and growing
competent judges appointed to the bench. The effort here is not yet organization, we need to keep getting new, committed people
done, though, and an Ad Hoc Committee on our judicial selections involved. I hope that you will be one of them.
Defense Line Winter 2004
HIPAA: The Basics
BY KATHLEEN D. LESLIE AND MARY MALLOY DIMAIO
every healthcare provider is a CE under this C.F.R. Sec. 164-501, et seq., as they pertain
he Health Insurance Portability
and Accountability Act (“HIPAA”) definition. For instance, physicians and hos- to individual cases is highly recommended.
is not new, but it is new to most pitals that receive lab results electronically
practicing attorneys. HIPAA was passed in would fall under this definition. The I. Are you a Business Associate?
1996, and its purpose was to address the Privacy Rule requires that CEs ensure the HIPAA requires that CEs enter into con-
need for portability of health benefits and privacy of Protected Health Information tracts with business associates who use or
information, among other things. In (“PHI”), which is any information that is disclose PHI. This includes attorneys pro-
defending cases, attorneys need to be con- individually identifiable, is created or viding legal services to or for the CE where
cerned with the Privacy Rule of HIPAA. received by a CE, and relates to a medical the provision of legal services involves dis-
Compliance with the Privacy Rule was condition, treatment or payment for health closure of PHI. Many attorneys have
required by April 14, 2003 for most covered care. This definition includes medical already entered into business associate
entities (“CEs”), although smaller health records and notes that are traditionally the agreements with health care provider
plans have an additional year to comply. subject of discovery in litigation, including clients. All business associate agreements
HIPAA privacy regulations directly apply to images, samples, specimens and lab slides. (BAAs) require the following:
CEs, defined as health care providers con- N.B.: This article is intended as an
alert to the practicing litigator, not a thor- • Use or disclosure of PHI only as per-
ducting any standard transactions electroni-
ough analysis of the HIPAA regulations. mitted by the regulations and the con-
cally, as well as healthcare clearinghouses
Further study of the regulations, at 45 tract.
and health plans. It is likely that nearly
•“Agents” and “contractors” (undefined)
to which the attorney discloses PHI
Editor’s Corner must agree to the same conditions that
apply to the attorney.
•Maintaining a record of disclosures of
T his edition of The Defense Line features lead articles from two distinguished members
of the bench concentrating on alternative dispute resolution. One of the lead articles
written by The Honorable William C. Miller provides us with a primer on conducting arbi-
PHI provided by CEs.
• Only “minimum necessary disclosures”
of PHI to accomplish the intended pur-
trations in Maryland. The other lead article written by The Honorable Howard S. Chasanow pose of the disclosure.
analyzes the use of settlement conferences and mediation in resolving tort cases. We also • Implementation of policies to comply,
are fortunate to have three additional articles written by our MDC colleagues. Specifically, taking into account the size of the law
Toyja E. Kelley, of Tydings & Rosenberg, LLP examines the case of Porterfield v. Mascari II, firm. These policies must be maintained
in writing (paper or electronic) and
Inc., where the Maryland Court of Appeals held that an employer did not violate public pol-
retained for 6 years from the date of
icy when it terminated the employment of an at-will employee after the employee stated creation or when they were last in
that she was going to seek the advice of legal counsel in connection with an unfavorable effect, whichever is longer.
work evaluation. Meanwhile, Kathleen D. Leslie of Whitney & Bogris, LLP and Mary Malloy • Report to CEs any use or disclosure not
Dimaio of Maher & Associates in Towson, Maryland provide a brief review of the Health provided for under the contract or
Insurance Portability and Accountability Act. Finally, Donna P. Sturtz and John T. Sly of which breaches the contract.
• Availability of PHI to CEs.
Miles & Stockbridge P.C. analyze the case Rankin v. Umms, et al., involving a medical mal-
• Availability of internal practices, books
practice case in Baltimore City Circuit Court where Plaintiffs’ claims were dismissed and records on disclosures to the
because they failed to establish the element of causation in their negligence claims. Secretary of HHS.
• At the termination of the agreement, all
The Editors sincerely hope that the members of Maryland Defense Counsel enjoy both the copies of the PHI must be destroyed
new look and the new features of The Defense Line. In this regard, if you have any com- or returned to the CE.
ments or suggestions or would like to submit an article for a future edition of The Defense N.B.: Indemnification provisions for
Line, please feel free to contact the Editors, Alexander Wright, Jr. (410) 823-8250 or violation of the statute are not required.
Matthew T. Wagman (410) 385-3859. These restrictions on a law firm’s dis-
closure of PHI apply only to PHI obtained
Editorial Staff from the CE, not medical information from
other sources with whom the attorney does
Alexander Wright, Jr.—Miles & Stockbridge P.C. not have or need a BAA.
Matthew T. Wagman—Miles & Stockbridge P.C. The most perplexing question arising
from these BAAs is what constitutes an
Kathryn M. Widmayer—Miles & Stockbridge P.C.
agent or contractor. These terms are not
Continued on page 4
Defense Line Winter 2004
(HIPAA) Continued from page 3
defined by the regulations. Some commen- III. Authorizations now request informal interviews with physi-
tators suggest that if the agent/contractor cians when the physicians are not educated
The subpoenas, requests for production and
would be considered a business associate of about HIPAA and its implications.
notices of deposition we have been using
the CE directly, then the law firm must Maryland Rule of Professional
have been sufficient to comply with the
require the agent/contractor to abide by the Conduct 4.4 and its Comment prohibit
Maryland Confidentiality of Medical
law firm’s agreement with the CE. Under using the legal process in a way known to
Records Act (Md. Health Gen. Code Ann.
this suggestion, expert witnesses, copying violate a person's rights. Since HIPAA cre-
Sec. 4-301, et seq. (1991), and are sufficient
services, medical records summary services ates protections for privacy in an individ-
to comply with HIPAA, as they provide
and even court reporters receiving PHI ual's PHI, interviewing a patient’s physician
notice to the patient and an opportunity to
would be agents/contractors. without authorization would appear to vio-
object to the disclosure.1
late the patient’s privacy rights, and
II. Use in Litigation thereby run afoul of Rule 4.4.
The applicability of the regulations IN DEFENDING In addition, Rule 4.1(a)(1) pro-
depend upon one’s role in a given hibits a lawyer from making a false
situation: CASES, ATTORNEYS statement of law or fact when deal-
ing with third persons. The
1. If you represent a health care NEED TO COMPLY Comment indicates that a misstate-
provider, you are a BA to that CE, ment can occur by a failure to act,
and therefore need a BAA. Your use WITH THE PRIVACY which may be construed as an affir-
of the patient’s PHI will then be gov- mative duty to inform a physician
erned by that contract, including RULE OF HIPAA.
that speaking about a patient’s PHI
restrictions on your redisclosure to without authorization is a violation
other parties, your client, carrier, of HIPAA. See also Rule 8.4 (profes-
and experts. The requirements of the authorization
sional misconduct to engage in conduct
2. If you represent a non-CE defendant under the new federal statute, however, are
involving misrepresentation or deceit).
in a case in which there is a CE co-defen- a bit more demanding. HIPAA requires that
In light of the Privacy Rule, it is advis-
dant, that CE and its BA will need to com- the authorization contain not only a written,
able to avoid informal interviews of treating
ply with their BAA and the regulations signed and dated document with the name
physicians on the subject of a patient’s PHI
before sharing PHI with you. That means of the disclosing health care provider, the
absent the appropriate written authorization.
that they will need either an authorization party to whom the information is to be dis-
closed, and an expiration date, as the state Ms. Leslie is a partner in the Towson, Maryland firm of
from the patient or a request for production
statute does, but also the purpose of the dis- Whitney & Bogris, LLP. She concentrates her practice in
or subpoena (which provides notice to the the defense of general products liability, medical device,
patient through his or her attorney) before closure, a statement that the authorization
pharmaceutical, and medical malpractice matters.
they will be able to furnish the requested may be revoked, and a warning that it may
lead to the release of information beyond Mary Malloy Dimaio of Maher & Associates in
Towson, Maryland focuses her practice on the defense of
3. In ordinary personal injury litiga- the protection of HIPAA.
professional, product, premises and auto liability claims.
tion, in which you represent a non-CE
defendant and you seek the medical records IV. Oral Discussions with
of the plaintiff, things have not changed. Patients’ Physicians: Get Involved
You are not a CE or a BA, but the CE who A Thing of the Past? With MDC Committees
has the records will need an authorization Because Maryland has no common law doc- Appellate Practice
or subpoena from you, as always, before he tor-patient privilege, and a statute govern- Defense Line
or she may send copies of the records. This ing the confidentiality of medical records Judicial Selections
affords the CE reasonable assurance that only, it has been permissible under Legislative
the patient has notice of the pending Maryland law to interview a party’s treating Program
request and an opportunity to object or to physicians without the party’s written Employment & Labor Law
seek a protective order, which is all the reg- authorization. However, HIPAA regulations Negligence & Insurance
ulations require. At this point, the regula- apply to oral, written and electronic PHI. Products Liability
tions no longer apply. Subsequent redisclo- Any physician who is a CE is prohibited by Professional Malpractice
sure of the medical records to your client, these regulations from disclosing PHI Workers’ Compensation
carrier and experts is then permitted, as absent a HIPAA-compliant authorization
before. To volunteer, contact the chairs at
(or appropriate subpoena or court order). www.mddefensecounsel.org/exec.html.
The question arises whether attorneys can
While it appears that the current use and form of subpoenas in Maryland is sufficient to allow covered entities to produce PHI and comply with the HIPAA requirements, some health care
providers may take the position that because Maryland, unlike other states, does not have a specified objection period prior to the production of PHI by a health care provider, there is insuffi-
cient assurance of consent to the release of PHI and therefore either a court order or a HIPAA compliant authorization is required in addition to a subpoena. That is to say, resistance to the
use of the existing discovery tools is expected.
Defense Line Winter 2004
General Right to Legal Counsel Is Not A Clear Mandate
of Public Policy Sufficient to Abrogate Maryland’s
Employment At-Will Doctrine
BY TOYJA E. KELLY
ment home so that she could review it more A majority of the Court of Appeals
n Porterfield v. Mascari II, Inc., 374 Md.
402 (2003), a closely divided Court of carefully. Although the following day was a soundly rejected all of Porterfield’s argu-
Appeals (J. Harrell) held that an scheduled day off for Porterfield, she called ments. The Court reiterated the strong pre-
employer did not violate a “sufficiently clear the office and spoke with Elseroad about the sumption against the judicial creation of
mandate of public policy” when it dis- Report. She allegedly stated, “due to the public policy. Wholey v. Sears, Roebuck and
charged an at-will employee for stating an seriousness of the libel contained in the doc- Co., 370 Md. 38, 54 (2002). Furthermore, it
intent to seek advice from legal counsel ument, I have been advised to seek counsel affirmed Maryland’s well-settled law that an
regarding an unfavorable work evaluation. before formally responding.” action for wrongful discharge of an at-will
Although Maryland law may favor access to Later that same day, Mascari called employee lies only when the discharge con-
counsel, the Court affirmed that there was Porterfield to advise that she was being ter- travenes some clear mandate of public poli-
no sufficiently clear mandate of public poli- minated immediately. Porterfield filed a cy. Adler v. American Standard Corp., 291 Md.
cy violated in this case. complaint in the Circuit Court for 31, 47 (1981). A terminated employee must
The employee in this case was Deborah Montgomery County alleging,
Porterfield, an administrative assistant with among other things, wrongful In Maryland, an employer may be liable
Home Instead Senior Care. Home Instead discharge.
The Circuit Court granted
for wrongful discharge when it termi-
hired Porterfield in1997 as a full time Staff
Coordinator. Her duties primarily consisted the employer’s Motion to nates an employee because he or she
of administrative matters. In March 1999, Dismiss the wrongful discharge (1) refuses to commit an unlawful act,
Home Instead hired Julie Elseroad to per- count, which was affirmed by (2) performs an important public func-
form clerical and administrative work. the Court of Special Appeals.
Conflicts between Porterfield and Elseroad The Court of Appeals granted tion, or (3) exercises a legal right or
ensued. In response to these conflicts, certiorari to decide the issue of privilege.
Patricia Mascari, Home Instead’s owner and whether the general right to
operator, performed a formal review of consult legal counsel is a clear mandate of allege with particularity the source of public
Porterfield’s work. Porterfield received public policy sufficient to support a wrong- policy that was violated by the discharge.
“above average” ratings in all categories. ful discharge cause of action. Watson v. Peoples Sec. Life Ins. Co., 322 Md.
Mascari also described Porterfield as a Porterfield argued that the Court 467, 477 (1991).
“tremendous asset” to Home Instead. should adopt the approach taken by Ohio In rejecting Porterfield’s statutory basis
In May 1999, Mascari confronted and Iowa courts and rule that the general for recognizing the general right to legal
Porterfield about rumors that Porterfield right to consult legal counsel is a clear man- counsel as a public policy, the Court stated
had been complaining about Home Instead date of Maryland public policy. Simonelli v. that she was “wrong to conflate any public
to another Home Instead franchisee. Anderson Concrete Co., 650 N.E.2d 488 (Ohio policy generally favoring access to counsel
Porterfield denied making these statements 1994); Thompto v. Coburn’s Inc., 871 F. Supp. with a policy that is violated by the mere
and stated that she was happy working with 1097 (N.D. Iowa 1994). In further support suggestion by an employee that he or she
her employment. of her position, Porterfield asserted that may want to seek advice of counsel.” It fur-
In June 1999, however, new problems Article 24 of the Maryland Declarations of ther held that the possibility that an assumed
surfaced. Mascari reprimanded Porterfield Rights mandates access to counsel in civil right to counsel may be exercised is not the
in response to Home Instead’s new recruit- and criminal cases. She also directed the same as the actual act of exercising that
ing policy for potential caregivers. On Court to a series of Maryland cases that right. The Court specifically disregarded
August 30, 1999, Mascari presented apparently recognized the right to legal Porterfield’s claim that the Maryland Legal
Porterfield with a written “Employee counsel as an important public policy. Zetty Services Corporation Act constituted a pub-
Warning Report.” The Report advised v. Piatt, 365 Md. 141 (2001); Rutherford v. lic policy mandating a right to consult legal
Porterfield that she would be terminated if Rutherford, 296 Md. 347 (1983); Helferstay v. counsel. Instead, it declared that the Act
her employment performance did not Creamer, 58 Md. App. 263 (1984); Wadman merely addressed a need to provide access to
improve at the end of the next four weeks. v. McBirney, 51 Md. App. 385 (1982); Trupp legal counsel to those who were unable to
The Report also included allegations that v. Wolff, 24 Md. App. 588 (1975). Finally, afford it.
Porterfield alleged were false and Porterfield claimed that the Maryland Legal Toyja E. Kelley is an associate in the Litigation
defamatory. Services Corporation Act, codified at Md. Department at Tydings & Rosenberg, LLP. Mr. Kelley
Mascari asked Porterfield to sign the Code (1957, 2001 Repl. Vol.), Art. 10 § 45A, handles litigation matters involving commercial
Report. Porterfield asked to take the docu- formed the basis for this public policy. claims, insurance coverage, and real estate.
Defense Line Winter 2004
Don’t Forget Causation—It Can Save You.
BY DONNA P. STURTZ AND JOHN T. SLY
By the time of her discharge, Ms. that are hallmarks of traumatic brain injury.
n October 10, 1997, Sarah Rankin,
then age seventeen, suffered a Rankin had only progressed to a Glasgow Plaintiffs claimed that Ms. Rankin’s short-
severe traumatic brain injury as the Coma Scale score of 10 and a Rancho Los term memory deficits were the sole result of
result of a motor vehicle accident in Carroll Amigos Scale score of II-III.2 These scores an anoxic injury arising from the three res-
County during which a truck broad-sided indicated that while Ms. Rankin was begin- piratory events at FHCC. Defendants dis-
the car in which she was riding. She was one ning to track movement with her eyes and puted this contention and attributed
of four young women in the car. They were to respond to stimuli, she was still in a coma. Plaintiff’s deficits to the traumatic brain
leaving high school for home on a beautiful A case manager at Shock Trauma coordinat- injury itself and from the reduction in oxy-
autumn afternoon. ed Ms. Rankin’s discharge planning and gen flow to her brain immediately following
Witnesses testified that the car was insurance coverage. the motor vehicle accident. All parties
thrown approximately forty feet from the agreed that Ms. Rankin is unlikely to be able
accident scene into the meridian that sepa- to live and/or work independently due to
rated the lanes of traffic. Because of the her deficits.
extensive damage to the car, emergency per- The lawsuit sought recovery based on
sonnel could not open the door next to Ms. the injuries allegedly sustained by Ms.
Rankin and, fearing head and neck injuries, Rankin secondary to the breathing issues.
did not want to remove her through the Plaintiffs sued the University of Maryland
opposite door. Instead, they cut the roof off Hospital, Shock Trauma, the physicians and
of the car, placed her on a backboard, and nurses at Shock Trauma and the nurse that
rushed her to an awaiting helicopter. coordinated Ms. Rankin’s transfer from
Ms. Rankin suffered head and arm lac- Shock Trauma to FHCC. They also sued
erations and was rendered unconscious by Plaintiffs’ health insurer, FHCC, her per-
the accident. She was found at the scene to sonal physician at FHCC, and its medical
have a Glasgow Coma Scale score of three director. Finally, they sued one of the emer-
(3).1 Once moved to the helicopter, she was gency room physicians who had cared for
air-lifted from the accident scene to the Upon discharge from Shock Trauma, Ms. Rankin at Frederick Memorial
Shock Trauma Center at the University of Ms. Rankin was transferred to Frederick Hospital.
Maryland in Baltimore. She experienced Health Care Center (“FHCC”) in Among other things, Plaintiffs alleged
pulse oxygen levels of below 90% at the Frederick, Maryland for sub-acute care and that the downsizing of Ms. Rankin’s tra-
scene of the accident and during her trans- rehabilitation. While at FHCC, Ms. Rankin cheostomy tube mandated careful monitor-
port to Shock Trauma. She was bagged in an experienced three (3) discreet respiratory ing of her ability to maintain airway clear-
effort to assist her breathing. Ms. Rankin events that necessitated her transport to ance of secretions for a period of one week.
was thereafter admitted to Shock Trauma Frederick Memorial Hospital. Ms. Rankin Plaintiffs further alleged that the medical
and noted to be apneic. She was placed on a was returned to FHCC after each of these records from Shock Trauma indicated that
ventilator after a pressure bolt was inserted incidents with Ms. Rankin’s parents’ con- Ms. Rankin was to be admitted to facility
into her skull. The trauma surgeons per- sent. The health care providers at Shock with a Traumatic Brain Injury Unit such as
formed surgery to stabilize Ms. Rankin and Trauma were not concurrently notified that Kernan Hospital. As noted, Ms. Rankin was
to repair her lacerations. Additionally, radi- these respiratory events had occurred. At instead transferred to FHCC. To support
ographic studies confirmed that she had suf- the end of December of 1997, Ms. Rankin their claims, Plaintiffs alleged that the
fered a severe traumatic brain injury and was admitted to the acute rehabilitation University of Maryland or Shock Trauma
axonal sheer injury. Axonal sheer injury is program at Kennedy Krieger Institute. She permitted Plaintiffs’ health insurer, Mid-
the tearing of tissues within the brain due to then progressed through Kennedy Krieger’s Atlantic Medical Services, Inc.
the force of traumatic impact. It can result outpatient program, attended and graduat- (“MAMSI/OCI”), to have unrestricted
in short and long-term memory loss, mobil- ed high school, and attended modified access to Ms. Rankin and her medical
ity issues, and death. courses at Carroll County Community records and that these agents regularly com-
While still at Shock Trauma, and while College. municated with the transfer coordinator at
still in a coma, a tracheostomy was per- Plaintiffs and Defendants agreed that Shock Trauma regarding Ms. Rankin’s pro-
formed on Ms. Rankin on October 16th. Ms. Rankin’s ongoing disabilities were cen- posed treatment. Plaintiffs claimed that the
On October 28th, the day of her discharge tered on short-term memory deficits. decision to transfer Ms. Rankin to FHCC
from Shock Trauma, Ms. Rankin’s tra- However, she also suffered from mobility instead of to Kernan Hospital was mandat-
cheostomy tube was downsized. problems and issues of emotional control ed by MAMSI/OCI. Plaintiffs alleged that
Continued on page 7
The Glasgow Coma Scale runs from 3 to 15 with a score of 3 being the lowest state of consciousness of a live individual.
Defense Line Winter 2004
the decision to transfer Ms. Rankin to with regard to all intentional tort and puni- patient. This is because FHCC had settled
FHCC was due to policies and protocols of tive damages claims. prior to trial. Indeed, it was undisputed at
MAMSI/OCI that allegedly encourage or Despite there being no intentional tort trial that FHCC was licensed by the State of
mandate cost savings over “appropriate” claims, Plaintiffs sought to introduce sub- Maryland and certified by the Federal
medical care. stantive information regarding Plaintiffs’ Government to provide rehabilitation and
Plaintiffs alleged that Defendants insurance company at trial. Defendants respiratory care to patients like Ms. Rankin.
agreed to carry out MAMSI/OCI’s alleged moved in limine to preclude such evidence Specifically, FHCC had a subacute rehabili-
directives due to the policies, protocols, and because they argued that motive was inad- tation unit and a specially designed pul-
course of conduct of Defendants that, missible in negligence cases. To support monary unit for patients with tracheotomies
because of economic motivation, allegedly their position, Defendants noted that the and for patients requiring ventilator sup-
allowed non-health care providers such as Maryland Court of Appeals has succinctly port. It was also undisputed that FHCC
insurance companies to make treatment stated that, “[i]n civil cases involving negli- reviewed Ms. Rankin’s medical records and
decisions. Finally, Plaintiffs alleged that gence there can be no question of motive or represented to Shock Trauma’s transfer
FHCC did not possess the skills, training, intent[.]” Nesbit v. Cumberland Contracting nurse that it was appropriately equipped and
expertise, staffing or equipment to provide Co., 196 Md. 36, 42, 75 A.2d 339, 342 staffed to care for Ms. Rankin and, in fact,
accepted Ms. Rankin as a patient on
In civil cases involving negligence there can be no question of motive October 28, 1997. Similarly, another of
Plaintiffs’ experts, Albert Weihl, M.D. (“Dr.
or intent i.e. motive or intent are antithetical to the concept of negli- Weihl”), testified that he had no criticisms
gence, which envisions actions taken without motive or intent but of FHCC’s decision to admit Ms. Rankin on
which nevertheless are unreasonable. October 28, 1997. Dr. Weihl also testified
that the nurses and therapists at FHCC
the care required for a traumatic brain- (1950). In doing so, the Court of Appeals were qualified to care for Ms. Rankin.
injured patient with a tracheostomy and that was simply stating the obvious, i.e., that At the close of all the evidence,
Ms. Rankin’s physician at FHCC failed to motive and intent are antithetical to the Defendants moved for judgment. The
provide appropriate care. concept of negligence which envisions Court granted judgment for the trauma sur-
In addition to claims of negligence, actions taken without motive or intent but geon at Shock Trauma because Plaintiffs
throughout the various permutations of which nevertheless are unreasonable. The had based their theory against him on the
their Complaint, Plaintiffs consistently Court agreed and precluded evidence of "Captain of the Ship" theory of liability that
alleged that Defendants had committed insurance from trial. has been rejected in Maryland. Likewise,
fraud in their dealings with them. In partic- Trial of this matter commenced on the Court entered judgment for the emer-
ular, they alleged that Defendants and April 1, 2003 and was presided over by the gency room physician at Frederick
MAMSI/OCI “induce[d] Charles G. Honorable M. Brooke Murdock in the Memorial Hospital. Thus, the only
Rankin and Rose E. Rankin [Ms. Rankin’s Circuit Court for Baltimore City. While Defendants to appear on the verdict sheet
parents] to consent to Sarah Rankin’s trans- numerous witnesses were called regarding were the University of Maryland, the Shock
fer out of the University of Maryland the various standards of care and regarding Trauma transfer nurse, and Ms. Rankin’s
and/or Shock Trauma and/or to transfer her causation issues, Plaintiffs called only one primary care physician at FHCC. The jury
to FHCC for economic reasons.” witness, Jonathan Fellus, M.D. (“Dr. returned a verdict in favor of the University
Early in this matter, judgment was Fellus”), to establish alleged breaches in the of Maryland but against the transfer nurse
entered on behalf of MAMSI/OCI with standard of care by Shock Trauma’s transfer and Ms. Rankin’s primary care physician at
regard to all tort claims pending against it. nurse. Dr. Fellus is a neurologist by training FHCC. The authors, who were counsel for
Pursuant to a Motion for Partial Summary and has no experience as a case manager or the transfer nurse and the various
Judgment, the Court also entered judgment as a discharge planner. Specifically, Dr. University of Maryland defendants,
in Defendants’ favor with regard to Fellus testified that the transfer nurse promptly filed post trial motions. Counsel
Plaintiffs’ claim of conspiracy. Plaintiffs had breached the standard of care by coordinat- for Ms. Rankin’s primary care physician did
alleged that Defendants and MAMSI/OCI ing the transfer of Ms. Rankin to a subacute the same.
had conspired to discharge Sarah Rankin to facility such as FHCC, as opposed to an In the motion for JNOV filed on behalf
Frederick Health Care Center because “it acute rehabilitation facility such as Kernan of the transfer nurse, it was argued that
would cost less to admit Sarah Rankin to Rehabilitation Hospital (“Kernan”), and notwithstanding Dr. Fellus’ testimony
FHCC than if she were admitted to Kernan that he allegedly did so without obtaining a regarding the transfer nurse’s alleged
Hospital or a comparable facility with a written “physician order.” breaches of the standard of care, he wholly
Traumatic Brain Injury Unit/Coma There was absolutely no expert testi- failed to establish any causal link between
Emergence Program.” Finally, the Court mony at trial that FHCC breached the stan- the alleged breaches and the injuries
entered judgment in favor of Defendants dard of care in accepting Ms. Rankin as a allegedly sustained by Ms. Rankin at
Continued on page 8
2The Glasgow Coma Scale is regularly used to assess patients immediately after a traumatic event while the Rancho Los Amigos Scale is designed to more accurately assess progress during
rehabilitation. The Rancho Scale runs from I to VIII with VIII being the most alert and active.
Defense Line Winter 2004
Executive Director’s Report
a search of its extensive free 12 month member-
xciting new electronic features are
now available. I look forward to expert witness database and ship (the DRI database
hearing your comments about will contact you only if it has is only available to DRI
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1) The MDC member directory has of that expert’s testimony. obligation to use the
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(DON’T FORGET CAUSATION) Continued from page 7
FHCC. Indeed, Dr. Fellus abjectly failed to November 6, 1997 constituted rank FHCC. The Court determined that
address the causation issue in relation to the speculation. Plaintiffs’ experts had offered admissible
transfer nurse’s care and Plaintiffs’ attorney With regard to whether Dr. Fellus had opinions that a reasonable jury could rely
failed to inquire of Dr. Fellus in this regard. provided sufficient causation testimony, upon to find that Ms. Rankin’s injuries were
As a consequence, the jury was not provided Plaintiffs’ counsel essentially conceded that caused by the post-accident breathing issues
with the requisite expert causation testimo- he had failed to elicit specific testimony to at FHCC.
ny that would have permitted it to consider that effect. Instead, Plaintiffs argued that This matter is being appealed by
a causal link between Nurse Bauman and causation could be established by reliance Plaintiffs and Ms. Rankin’s primary care
Ms. Rankin’s injuries. on the theory that the transfer nurse at physician at FHCC.
Additionally, Defendants argued that Shock Trauma had placed Ms. Rankin in Donna P. Sturtz is a Principal in the Baltimore Office
Dr. Fellus failed to present sufficient foun- “the field of danger”—presumably, FHCC. of Miles & Stockbridge P.C. Since joining Miles &
dation for his opinion that Ms. Rankin suf- Defendants responded by noting that no Stockbridge P.C. in 1991, Ms. Sturtz’s practice has
fered injury from the events on November 2 medical malpractice case in Maryland has focused on medical malpractice and product liability
and November 6, 1997. Defendants assert- ever relied upon “the field of danger” theo- defense work. She is a graduate of Duke University
ed that no evidence or methodology existed ry to establish causation. The Court agreed and the University of Maryland School of Law.
or exists to determine the extent of Ms. and entered JNOV on behalf of the transfer Mr. Sly is an associate in the Baltimore office of Miles
Rankin’s injury from the car accident on nurse. Alternatively, the Court granted the & Stockbridge specializing in medical malpractice and
October 10, 1997. Thus, any testimony transfer nurse a new trial. The Court denied product liability defense. He is an honors graduate of
regarding whether Ms. Rankin suffered fur- the dispositive post-trial motions filed by Albany Law School where he served as Associate
ther injury on either November 2 or Ms. Rankin’s primary care physician at Editor of the Albany Law Review.
Defense Line Winter 2004
(MEDIATION/SETTLEMENT) Continued from page 1
and may make a recommendation. Both should be scheduled to take The decision when to hold a settlement
forms of dispute resolution can be equally place approximately a month conference or mediation should bal-
effective. Mediation is perhaps the preferred before trial. That way there is
alternative where the parties have an ongo- still time to call off an expert
ance the need to know more about the
ing relationship and need to enhance their witness and the looming trial opponent’s case against the relative
own abilities to work out existing and enhances the motivation to cost of discovery.
potential disputes. A settlement conference resolve the case.
may be the preferred alternative where a lit- Mediation and settlement
igant has unrealistic expectations about the conferences are similar, except that the Conduct of a Settlement
probable outcome or needs an assessment of facilitator takes a more active role in the set- Conference
the case by an experienced neutral. Often tlement conference. Since I am technically
retired judges and senior members of the not a mediator, but am more comfortable in Clients know they must make the final deci-
bar conduct settlement conferences because the role of settlement facilitator, I would sion about settlement so most clients want to
their experience and stature may add credi- like to focus on preparation for and the con- and should participate in every phase of the
bility to their evaluations and recommenda- duct of settlement conferences. settlement conference. The rare exception is
tions. Mediation requires the same ability to where the attorney needs to make the settle-
communicate and listen as well as good peo- Preparation for a Settlement ment facilitator aware of something that
ple skills, but legal expertise and experience Conference should not be said in the client’s presence.
are less important. As might be expected, Any discussion with the attorney outside the
Prior to a settlement conference, the attor- presence of the client should be handled dis-
the retired judges and senior members of ney should prepare a confidential settlement
the bar who conduct settlement conferences creetly so as not to offend the client.
conference statement as well as prepare the The attorney’s opening statement is an
often charge more for their services than client. The statement should concisely but
many mediators. Careful thought should be important part of a settlement conference.
fully explain the case. It is helpful both to Clients see the settlement conference as a
given to whether to select mediation or a emphasize the strengths as well as to note
settlement conference and cost should be a substitute for their trial so they want to be
the weaknesses. Supporting documentation sure that the settlement facilitator and their
consideration, especially in smaller claims on contested issues should be included.
and cases where the parties are close to res- opponents fully appreciate their case. There
Preparing the client is equally important. is also a cathartic benefit in hearing their
olution. Also keep in mind that FREE The client should be encouraged to keep an
mediation and settlement conferences by cause championed in front of the adversary
open mind, listen and be flexible. The client and an impartial observer. A good opening
highly qualified people are available in the should also be emotionally prepared to make
federal courts and in many circuit and dis- statement will also demonstrate to the
a decision and understand that, although the opposition the attorney’s enthusiasm for and
trict courts. attorney and perhaps the settlement facilita- sincere belief in the strength of the case.
tor may give some advice and guidance, the
When to Hold a Settlement ultimate decision must be made by the
Therefore, even though there has been a
Conference or Mediation pre-conference written statement provided,
client. It is also helpful to explain the steps in and even though the settlement facilitator
The decision when to hold a settlement the process and to make sure that the client and everyone else present understands the
conference or mediation should balance the has confidence in the settlement facilitator. issue, it is still beneficial for both sides to
need to know more about the opponent’s Two final cautions in preparing for a settle- make an opening statement highlighting
case against the relative cost of discovery. ment conference: do not go into the confer- their case.
When the basic facts or contentions con- ence with the idea that it is a form of discov- After the opening statements the set-
cerning liability and the economic damages ery or a step in the preparation for trial—it tlement facilitator usually will caucus with
are apparent, there is little benefit in exten- is not. And do not go into the settlement each side separately. Generally, in an
sive and expensive discovery prior to sched- conference thinking that, after the confer- attempt to bring both sides to a mutually
uling mediation or a settlement conference. ence, you will get a better settlement offer at acceptable compromise, a settlement facili-
The money saved on discovery can be put to the court house on the day of trial. If the set- tator will act as a “devil’s advocate” pointing
better use as part of the Plaintiff’s recovery. tlement facilitator does his or her job prop- out the risks, uncertainties, and expense
In some cases, as for example a claim against erly, each party will go as far as it will ever go involved in a trial and potential appeal.
a hospital for a fairly obvious breach of the in attempting to reach a settlement. Sometimes the process of conveying offers
standard of care, mediation or settlement Everyone’s expectation should be that, if the and demands back and forth may seem more
conferences should be considered before case does not settle at the settlement confer- like a tort auction than a tort action, but as
suit is filed and before expensive experts are ence, it will go to trial and all offers and awkward and artificial as the process seems,
retained to render opinions on undisputable demands are withdrawn. No attorney or it works. The parties need to move gradual-
issues. In other types of cases where full dis- insurance carrier wants to get a reputation ly and have time to understand and accept
covery is necessary, my experience has been for caving in on the eve of trial. each step toward the final mutually accept-
that the mediation or settlement conference able compromise.
Continued on page 10
Defense Line Winter 2004
(A is for Arbitration) Continued from page 1
For over a decade there have been dire client’s dispute. There are a variety of I have never been privy as to why I have
predictions that without the adoption of weapons in the alternative dispute resolution been selected or rejected as an arbitrator.
court sponsored ADR programs the courts (ADR) arsenal, such as mediation, facilitation Many of you may therefore have better
will collapse under the weight of thousands and neutral fact finding. You should at least insight than I in selecting an arbitrator. It
of mass tort and product liability claims, as consider whether using one of these non- seems fundamental, however, that you
well as steadily increasing filings in other lethal, small arms types of ADR will resolve should make an investigation of the pro-
civil, domestic, and criminal cases. See 50 your client’s conflict before unlimbering the posed arbitrator or arbitrators before agree-
Md Bar Review 71 (1991). It is not my inten- heavy artillery of binding arbitration. You ing to him, her or them. Don’t be too shy to
tion in this article to preach to you that may, of course, have no choice—you may be ask for a resume. Feel free to make inquiries
ADR, and arbitration in particular, is the contractually required to arbitrate. of judges and your fellow lawyers as to the
panacea for all of the court system’s ills. Arbitration generally provides a cheap- proposed arbitrator’s proclivities and biases.
Furthermore, having been a judge for the er and quicker resolution of your client’s Depending upon the nature of the case,
past twenty-two and one-half years, I cer- case than a trial. It also offers a confidential- there may be databases that are maintained
tainly would not urge you to rule out pre- ity that a public trial cannot provide. For by insurance companies and various organi-
senting your client’s dispute to a judge or example, physicians and attorneys in mal- zations that may help you in this regard. It
jury. Don’t waive your client’s jury and court practice cases, even if they don’t believe is vitally important that you find out
trial rights and arbitrate simply to lighten they did anything wrong, can avoid the whether the proposed arbitrator has a pre-
the burden of the court. Do it only after you notoriety of unhappy patients and clients disposition that might adversely affect your
have considered all of the means by which for whom they obtained bad results. client’s case. Does the potential arbitrator
your client’s case can be resolved, and you seem to routinely give more weight to the
then conclude that arbitration is in his, her The Selection of an Arbitrator opinions of particular examining physi-
or their interest. or Arbitrators cians? Does he or she determine the non-
There is an old saying that getting the right economic damages simply by multiplying
The Decision to Arbitrate judge is more important than getting the the special damages by three? A panel of
If there is a relatively small amount of money right lawyer. Picking the right jury can often arbitrators, usually three, can help insure
involved, you may want to consider filing mean the difference between winning and neutrality and a balanced award, but this is
your client’s case in the District Court. There losing your case. In arbitration, selecting often too expensive for the average case.
you can get a speedy, cost effective determi- the right decision maker is critical. You and Generally speaking, you should find an
nation of the case, unless, of course, there is your client in all probability are going to be arbitrator that has some technical knowl-
an appeal de novo if it’s a small claim or an stuck with the arbitrator’s award. Your edge of the subject matter of the dispute.
appeal on the record if it’s not. You may con- choices of the arbitrator or arbitrators may Arbitration associations do provide lists of
clude that your client’s case has more jury be limited. It may be pre-determined by a arbitrators in specialized fields. There may,
appeal than arbitrator appeal. Even though mandatory provision in the contract. Under however, be a case where you don’t want
differentiated case management and early the MUAA, § 3-211, “if the arbitration someone who has just enough knowledge
judicial intervention has done much to agreement provides a method of selection of about the subject matter in dispute to want
streamline our court systems and to speed a the arbitrator, this method shall be fol- to second-guess your expert’s opinion.
case through the Circuit Court, it can still be lowed.” Under § 3-211, supra, if the manda- In the final analysis, I would suggest
time consuming and expensive. tory arbitration provision fails to provide a that before agreeing to an arbitrator or arbi-
Furthermore, if you get a big win, almost as method for the appointment of arbitrators, trators for your client’s dispute, ask yourself
certainly as there is a commercial after a punt a party may petition the court for the the following question, “Would I be com-
in a television NFL football game, there will appointment of an arbitrator or arbitrators. fortable allowing this person or persons to
be post trial motions and, more probably Even if there is a pre-determined method make an important decision in my own
than not, an appeal to the Court of Special for the selection of the arbitrator, the liti- business or personal affairs?”
Appeals. gants can by agreement waive such provi-
If you decide that a trial is not in your sion and decide upon a different method of
The Arbitration Agreement
client’s best interest, use your creativity to selection. Once you have agreed upon an arbitrator, or
fashion a process that will best resolve your even before, you should prepare a written
(MEDIATION/SETTLEMENT) Continued from page 9
Once a mutually acceptable settlement reasonable. far less agonizing, less expensive, and less
is achieved, it is important to get closure, to Some disputes must be resolved by risky form of dispute resolution.
have all parties come together and make trial, but a constantly growing percentage of Judge Chasanow has retired from Maryland Court of
sure that everyone understands the settle- tort claims are being resolved by a mutually Appeals and now acts as an arbitrator and mediator
ment, agrees to the settlement, and is satis- agreeable compromise brought about for private alternative dispute resolution cases.
fied that the compromise reached is fair and through the participation of the clients in a This article was also published by the MTLA.
Defense Line Winter 2004
arbitration agreement. Bear in mind that before the arbitrator. Whatever form it
Title 17 of the Maryland Rules provides takes, it is important to spell out the ground One of the advantages of
that arbitration is not binding “unless the rules in the arbitration agreement. arbitration over trial is its
parties otherwise agree in writing.” Since flexibility. You can tailor your
arbitration is a creature of contract, you A Timetable for the Arbitration
should be careful to set forth all of its terms
arbitration proceeding to fit
As the stand-up comic says — timing is
and conditions in the agreement. Section 3- everything! The promise of arbitration for the dispute to be resolved.
214 of the MUAA provides that a party at an your client is that it is a cost- effective alter-
arbitration hearing has the right to be native to expensive, drawn-out litigation. To District Court, Judicial Review of
heard, to present evidence material to the fulfill this promise, it is important that time Administrative Agency Decisions, and
controversy, and to cross examine witnesses. restraints be agreed upon. To this end, if the appeals to the Court of Special Appeals and
If these rights or any of them are to be arbitration involves a complex dispute, arbi- the Court of Appeals. Where are the rules
waived or limited, you must express this in tration hearing dates should be agreed for appeals from arbitration findings and
your agreement. Minimally the parties upon, as well as dates for the naming of awards? Does that tell you anything?
should agree on the number of live witness- experts, discovery deadlines and any pre- MUAA Section 3-222 does provide that a
es that will testify, what reports and other hearing motions. A scheduling order signed party may apply to the arbitrator to modify
documents will be submitted and when they by the parties is helpful in moving the or correct an award within 20 days after the
will be submitted. Most arbitrators like to process along. delivery of the award. The Court may only
get these submissions in advance of the
correct or modify an award (1) if there was a
hearing. I personally prefer to have counsel Presenting Your Case miscalculation of the figures or an evident
bring any such documents to the arbitration to the Arbitrator mistake in the description of the person,
hearing and have them offered at that time.
What kind of presentation should you make thing or property referred to in an award;
This insures that each side is aware of every-
to an arbitrator? The most important ingre- (2) the arbitrator made an award on a mat-
thing that the other side is submitting. The
dient to any presentation, whether it is to a ter not submitted to him or her; (3) the
arbitration agreement may also take the
jury, a judge or an arbitrator, is preparation. award is imperfect in form affecting the
form of a multi-page document, spelling out
There is no substitute for it. Don’t feel that merits of the controversy. MUAA Section
in detail the conduct of the proceeding and
you have to leave behind any photograph, 3-224 provides that an award may be vacat-
containing a plethora of “whereases.”
diagram or other visual aid just because it’s ed: (1) if procured by fraud or undue influ-
One of the advantages of arbitration
an arbitration proceeding and not a trial. ence; (2) if it is evident that the arbitrator
over trial is its flexibility. You can tailor your
On the other hand, don’t bury the arbitrator was not impartial; (3) the arbitrator exceed-
arbitration proceeding to fit the dispute to
with a truckload of paper. There is a 17th ed his or her power; (4) the refusal to post-
be resolved. In the form that we most com-
Century French philosopher who began a pone a hearing, refusal to hear evidence or
monly see, the automobile accident case,
letter to a friend with the following: conducting the hearing contrary to the
where liability is admitted, live testimony is
“Forgive me for writing such a long letter. I agreement; and (5) there was no arbitration
generally limited to the plaintiff and one or
had not time to write a short one.” If, for agreement. The courts have added another:
two other witnesses, and medical, hospital
example, the arbitration involves a personal “if the arbitrator has made a completely
and other reports and documents are sub-
injury claim where the plaintiff has had a irrational interpretation of the contract.”
mitted to the arbitrator. The agreement in
long hospital stay, it’s alright to submit the
this type of arbitration is usually a high/low An Arbitration Checklist
entire hospital record, but you should in
letter from defendant’s counsel, signed by
your presentation reference the parts of that Before committing your client to binding
plaintiff’s counsel, with a stipulation of dis-
record that you feel are important. In fact, a arbitration, you may wish to go over a
missal upon receipt of the arbitrator’s
written summary of your client’s claim or checklist with him or her. In doing so, you
award. The parties agree upon a minimum
defense consisting of not more than ten should consider the following:
and maximum amount that the plaintiff will
pages can be very helpful to the arbitrator.
recover if the arbitration award is under or 1. The arbitrator or arbitrators. Who
Such a submission should not, however, be
over those amounts and to be bound by any is to hear the case? How much will he or she
made unless it is provided for in the agree-
award within the minimum/maximum charge? Who is to pay the arbitrator?
ment or has the prior approval of opposing
range. To avoid any temptation for the arbi- Should the arbitrator be paid in advance or
trator to split the difference, he or she should you escrow money from your client
should not be privy to the high/low. If the Appellate Review to pay him or her? Bear in mind a client is
parties wanted to split the difference, pre- not eager to pay the arbitrator that decides
sumably they would have settled the case. One of the most attractive features to arbi-
the case against him or her.
On the other hand, the arbitration may take tration is its finality. This is also to some its
2. A timetable. When will the arbitra-
the form of an actual court proceeding, with shortcoming. It is practically impossible to
tion hearing be held? In the meantime, what
the designation of experts, discovery, pre- get a bad arbitration award vacated. It is
cut-off should there be with respect to the
trial motions and finally a full-blown trial interesting to note that Titles 7 and 8 of the
designation of experts and discovery? Should
Maryland Rules deal with appeals from the
Continued on page 12
Defense Line Winter 2004
(A is for Arbitration) Continued from page 11
the parties agree to a scheduling order?
3. The forum. Where shall the hearing
take place. Since the plaintiff ordinarily has “Not Guilty” Verdict for Employees Precludes
the most live witnesses, his or her counsel’s Employer Liability Under Doctrine of Respondeat Superior
office is often the most convenient location.
If the parties desire a neutral playing field,
object to the form of the questions on
the arbitrator or arbitration association may n Southern Management Corporation
v. Taha, 378 Md. 461 (2003), the the special verdict sheet.
be able to find an appropriate facility. Many
Court of Appeals reversed a After deliberating, the jury deter-
county courthouses have conference rooms
$200,000 jury verdict against Southern mined that the SMC’s agents were not
available. Several summers ago, I was
Management Corp., holding that the liable to Taha, but found SMC liable for
involved in an eight day arbitration trial in
verdicts were irreconcilably inconsistent $25,000 in economic damages, $75,000
which we rented a courtroom classroom in
with the theory of respondeat superior. in non-economic damages and $100,000
one of the local law schools.
Taha, a former employee of Southern in punitive damages.
4. Confidentiality. Do the parties agree
Management Corp., sued SMC and two SMC filed a Motion for Judgment
not to disclose what takes place at the hear-
individual defendants, inter alia, for Notwithstanding the Verdict, a Motion
ing and not to disclose the amount of any
malicious prosecution after he was for Remittitur and a Motion to Strike
award? Are there parts of the arbitration
arrested for burglary. the Punitive Damages Award. After a
agreement, such as a high/low or insurance
Taha who worked for SMC as a hearing, the trial court denied these
coverage to which the arbitrator should not
Maintenance Technician was terminated motions and SMC filed an appeal.
for poor work performance, insubordi- On appeal, SMC successfully
5. The evidence. What live witnesses
nation, and abusive behavior after an argued that a verdict against the corpo-
will each side present? Should they be
altercation with his supervisor regarding ration could not stand if the corpora-
sworn? Is cross-examination to be limited in
his request to discontinue tion’s agents were not found liable. The
any way? How long will the hearing take?
job duties he was assigned Court agreed stating that a corporation
What documents, reports, photographs and
after returning from dis- could not be held liable for malicious
physician evidence are to be submitted? Is
ability leave. prosecution under the doctrine of
there to be any extension of time after the
Shortly after his respondeat superior if the employees,
hearing when such evidence may be submit-
termination, items acting within the scope of
ted to the arbitrator?
were reported miss- their employment,
6. The award. Is the award to be bind-
ing from a locked main- were not found
ing? What, if any, post-hearing rights
tenance area. At that time, liable. The
should the parties have for a re-considera-
Taha’s former supervisor received Court based their
tion of the award?
reports that Taha was seen in the area decision, in part, on the fact that the jury
Conclusion: Bill Miller’s Ten “shaking and pulling on the lock.” After instructions clearly indicated that the
Best Reasons to Arbitrate the supervisor called the police to report individual defendants were considered
(with apologies to David Letterman) the missing items, and in response to the employees. Court was further persuaded
officer’s inquiry as to names, if any, of that, at trial, Taha failed to assert that
10. Allow trial lawyers to play judge.
recently terminated employees, Taha’s the individual defendants’ actions were
9. Provide travel money for retired judges.
name was given. so outrageous as to fall outside of the
8. Easier to get a continuance from an
After interviewing several SMC scope of their duties.
arbitrator than an administrative judge.
employees, as well as Taha, the police Additionally, Taha attempted to
7. Better flexibility in scheduling.
observed he “acted suspiciously and argue that SMC was liable based on the
6. More relaxed forum; flexibility with
seemed nervous” and concluded that he conduct of unnamed employees. The
rules and evidence.
was the only suspect. Consequently, Court rejected this argument, noting
5. Save expert witness fees.
Taha was arrested. that the record contained “scant refer-
4. Preserve confidentiality of your client’s
At trial, Taha argued that SMC and ence” to additional employees beside the
its named agents “falsely and malicious- named defendants.
3. Avoid costly appeals.
ly” called the police and told them that it Finally, the Court noted that other
2. Ability to select the decision maker.
was he who had committed the burglary. jurisdictions have considered and reject-
1. Get a quick resolution of the case.
After the Court denied a Rule 2-519 ed verdicts that exonerated an employee
Please bear in mind there may be some Motion for Judgment regarding the while holding the employer responsible
equally good reasons not to arbitrate, so malicious prosecution claim, SMC based on the doctrine of respondeat
let’s not dismantle the court system just yet. requested that there be a separate find- superior.
Judge Miller has retired from the Circuit Court of ing of liability as to each of the named Judge Raker wrote a dissenting
Montgomery County and focuses his time as an arbi- defendants. The Circuit Court granted opinion, which Chief Justice Bell joined
trator and mediator for private disputes. the request after Taha’s counsel did not in part.
This article was also published by the MTLA.
Defense Line Winter 2004
Employer’s Reservation of Right to Unilaterally Modify Arbitration Agreement
Renders Agreement Unenforceable
Cheek in its “sole and absolute discretion” continued employment was evidence that
n Cheek v. United Healthcare, 378 Md.
139 (2003), the Court of Appeals rendered the promise to arbitrate illusory, he received something for his consideration.
reversed a trial court’s decision to com- therefore, rendering the arbitration agree- Additionally, United argued that agreeing
pel arbitration after holding the arbitration ment unenforceable. to the terms in the Arbitration Policy was a
agreement’s promise to arbitrate was illusory Cheek attacked United’s Arbitration condition of employment entered into
and therefore, unenforceable. Policy on many fronts. First, he argued that before Cheek’s employment began. Finally,
On November 17, 2000 United extend- United’s ability to change or revoke the United argued that the reservation of its
ed Cheek an offer of employment as a senior Arbitration Policy in its sole discretion right to unilaterally modify the Arbitration
sales executive. A two-page letter memorial- called into question the “mutuality” of the Policy did not render the promise illusory.
izing the offer and defining conditions of policy and, therefore, it was “void as against In holding that the arbitration agree-
employment, including Cheek’s acceptance public policy.” Second, Cheek argued that ment was illusory and, therefore, unenforce-
of United’s “Employment Arbitration because he had already entered into an oral able, the Court held that “an agreement to
Policy” was mailed to Cheek. Cheek accept- binding employment contract when he arbitrate…depends on contract principles
ed United’s employment offer of via a letter agreed to the Arbitration Policy, he did not since arbitration is a matter of contract.”
wherein he stated not only was he accepting receive the consideration necessary for the Consequently, inasmuch as Corbin defines an
the offer, but “[a]ll of the terms in your arbitration agreement to be enforceable. “illusory promise” as “words in a promissory
employment letter are amenable to me.” Third, Cheek argued the Policy lacked form that promise nothing,” the Court held
During his first day of employment, enforceability because United’s promise to that the language contained in the
Cheek received United’s Employee arbitrate was “illusory.” Arbitration Policy, specifically United’s
Handbook, which included summaries of United countered and argued that they reservation of its rights to at its “sole and
United’s dispute resolution policies wherein both had “entered into a valid and enforce- absolute discretion” elect to “alter, amend,
arbitration was to be “the final, exclusive able arbitration agreement.” United further modify, or revoke” the Arbitration Policy at
and required forum for the resolution of all argued that its employment offer, Cheek’s any time “with or without notice”, created
employment related disputes…” Further, acceptance, and his agreement to abide by the illusion of a promise — resulting in
the summary stated, inter alia, that United the terms of the Arbitration Policy were suf- “insufficient consideration” to enforce the
“reserves the right to alter, amend, modify, ficient to prove “mutuality of obligation.” agreement to arbitrate.
or revoke the [Arbitration] Policy at its sole United argued that the Policy was support- Judge Harrell wrote a dissenting
and absolute discretion at any time with or ed by consideration because there was a opinion.
without notice.” “mutual promise to arbitrate,” and Cheek’s
In January 2001, Cheek signed an
acknowledgement that he had “received and
reviewed” a copy of United’s dispute resolu- The Association Welcomes its New Members
tion policies and that he agreed to submit all
disputes arising out of his employment to Nathan D. Adler Michele R. Harper Melody E. McGrath
arbitration. Thomas J. Althauser J. Michael Harrison Anne T. McKenna
In August of that year, United termi- Stacey E. Andersen David L. Hendricks Heather Mitchell
nated Cheek after eliminating his position. Joseph L. Beavers Jeaneen J. Johnson Meagan Newman
Four months later, Cheeks filed a lawsuit Craig S. Brodsky Mark A. Kaifer Tonya Osborne
against United in the Circuit Court for Alice S. Chong Donald S. Keough William Piermattei
Baltimore City alleging breach of contract, Tara Makoski Clary Angela Garcia Kozlowski Elizabeth J. Piner
negligent misrepresentation and violations Craig A. Coxen Irwin R. Kramer Guido Porcarelli
of the Maryland wage payment statute. Danielle S. Dinsmore Philip A. Kulinski Alicyn C. Price
In May 2002, the Circuit Court dis- J. Gregory Donlin Kimberly L. Limbrick John J. Schneider
missed Cheek’s complaint and ordered him Amy Eroh Michael S. Lofts Aaron Storm
to submit his claims to arbitration. Cheek
Brigitte J.Gardenier Jennifer S. Lubinski Jean-Marie Sylla, Jr.
filed a timely appeal to the Court of Special
Stephanie Genser Jaime W. Luse Stephen Thibodeau
Appeals. Before any proceedings com-
Thomas A.Gravely Christopher Lyon Kathryn M. Widmayer
menced, the Court of Appeals issued a writ
Michael J. Halaiko Ace McBride Alexander Wright, Jr.
of certiorari to determine whether United’s
reservation to “alter, amend, modify, or Thomas Hale Donna Ellen McBride
revoke” its arbitration agreement with Jessica L. Harnish Thomas K. McCraw
Defense Line Winter 2004
Scott Goetsch, of MOORE & JACKSON, won a motion for sum- the lawsuit purportedly brought on behalf of 640,000 purchasers of
mary judgment in the Circuit Court for Baltimore City on behalf of a Black & Decker jigsaw. The lawsuit sought compensatory and
a store whose employee was accused of assaulting a customer. The punitive damages, claiming that Black & Decker mislead its cus-
basis of the store’s defense was that the employee had acted outside tomers and committed fraud in its representations on the jigsaw’s
of the scope of employment and that the store lacked prior notice of packaging. The judge found that the plaintiff was unable to meet his
violent tendencies by the employee. Cummings v. Bear Creek burden of establishing numerosity and that he could not demon-
Corporation, Circuit Court for Baltimore City—the case continues strate that common issues of fact predominated. As a result, the
against individual defendant. judge denied the plaintiff’s motion for class certification.
John Parker Sweeney, T. Sky Woodward, Laura A. Cellucci and John T. Sly, of MILES & STOCKBRIDGE P.C., set a precedent in
Jennifer M. Schwartzott, of MILES & STOCKBRIDGE P.C., suc- the Maryland Appellate Courts while obtaining summary judgment
cessfully transferred from the Circuit Court for Baltimore City to for all defendants in the medical malpractice case Bonner v. Fedder,
the Circuit Court for Baltimore County two toxic et. al. He represented a general surgeon who was
tort cases in which the plaintiffs alleged that they assisting in a complicated anterior interbody spinal
developed serious personal injuries as a result of fusion. During surgery, she sustained a laceration of
their exposure to mold and other contaminants at a a major vein and required the placement of a graft.
Towson office building. Andrea Anderson, et al. v. CB Subsequent to surgery, Plaintiff claimed a wide
Richard Ellis, Inc., et al. (Murdock, J.) and Carol array of damages including the requirement that
Antonini, et al. v. CB Richard Ellis, Inc., et al. she take a blood-thinner for the remainder of her
(Matricciani, J.). Plaintiffs, represented by the Law life, ongoing back pain, and she claimed that she
Offices of Peter T. Nicholl and Law Offices of M. was unable to complete a medical fellowship at
Thomas Myers, respectively, appealed the orders Johns Hopkins and was totally disabled. A two-year
transferring venue to the Court of Special Appeals. effort to secure the plaintiff’s prior medical history
Anderson resolved two days before oral argument; revealed that she had multiple prior suits in which
the Antonini appeal is still pending. she had alleged similar injuries —and had obtained
compensation. Up to that time, Maryland courts
Tara Kelly v. Archdiocese of Washington, et al. Kevin had not determined whether settlements could pre-
M. Murphy with assistance from Mariana D. Bravo, clude a later claim for similar injuries.
obtained summary judgement for the Archdiocese In an opinion authored by Judge Greene,
of Washington and two Catholic churches, in a case recently appointed to the Court of Appeals, the
alleging that plaintiff suffered leg and ankle fractures in a softball Maryland Court of Special Appeals affirmed the summary judgment
game sponsored by the Catholic youth Organization of decision of the trial court, and the Maryland Court of Appeals
Washington, D.C. Plaintiff alleged negligence in training plaintiff rejected the plaintiff’s Petition for Writ of Certiorari. This was the
regarding how to play the game, negligence in moving her after the first time a Maryland Appellate Court had found that the prior set-
injury, and negligence in the training of the coaches. The judge tlement of a claim involving similar injuries could result in preclu-
decided the summary judgment motion on several grounds, prima- sion of future suits involving the same injuries.
rily assumption of risk. The case is on appeal.
Thomas Anthony Jr. v. Archdiocese of Baltimore et al. Kevin M. Murphy,
J. Mark Coulson, of MILES & STOCKBRIDGE, P.C. in Baltimore with assistance from Jean Marie Sylla, and in coordination with
obtained a defense verdict in the Circuit Court for Baltimore City counsel for co-defendants, obtained summary judgement for the
in a birth injury case on behalf of the University of Maryland Archdiocese of Baltimore in a case alleging sexual abuse of plaintiff
Medical System Corporation. Plaintiff Teonna Boyce sued on behalf in the 1970’s by a priest. The court decided the motion in favor of
of a brain-damaged minor, claiming that the minor’s mother had defendants based upon the statute of limitations issue. The case is on
been neglected in the University of Maryland Emergency Room for appeal.
several hours prior to recognizing that she was having a placental
abruption, at which point she underwent emergency c-section. The Peggy Fonshell Ward of MOORE & JACKSON, LLC, recently
plaintiff parties had stipulated ahead of time to try the liability phase won a motion for summary judgment in the Circuit Court for
first and to an award of $7 million in damages if the hospital were Allegheny County in a case involving a dog bite to a 3 year old
found liable. child. The parents of the child asserted that the dog viciously bit the
child after previously growling at other children and being encour-
Joseph W. Hovermill, Angela N. Whittaker-Pion, and John C. aged to attack another child by the owner’s children. The defense
Celeste, of MILES & STOCKBRIDGE P.C., obtained a victory on contended that the dog had no previous history of aggression
behalf of a client in the Court of Common Pleas, Cuyahoga County, toward anyone and that there was no notice to the owners of a
Ohio, in which they successfully argued against class certification. vicious disposition. The court agreed that the plaintiffs had no suf-
Perotti v. Black & Decker Corp., No. CV-01-445020 (C.P. Cuyahoga ficient evidence of dangerous propensities.
Oct. 20, 2003). Miles & Stockbridge defended Black & Decker in
A Publication from The Maryland Defense Counsel
P.O. Box 5371
Lutherville, MD 21094