eNotes: Liability – October 2024 – Maryland

SIGNIFICANT CASE SUMMARIES

Maryland Case Summaries

Adventist Healthcare, Inc. v. Behram
Maryland Supreme Court
No. 16, September Term, 2023

Decided: August 27, 2024

A reasonable juror could have determined petitioner violated the settlement agreement by including additional language in their report to regulatory authorities.

Background

This contractual dispute stems from Dr. Behram’s (“Respondent”) former employment as a physician with Adventist Healthcare, Inc. (“Petitioner”). In 2019, Petitioner’s Medical Executive Committee twice voted to suspend Respondent for alleged concerns about Respondent’s patient care. Respondent disputed the allegations. The first suspension was overturned in less than thirty days while the second was continued past thirty days. According to federal law, any suspension of a physician’s clinical privileges longer than thirty days must be reported to the National Practitioner Data Bank (“NPDB”). Petitioner failed to report the suspension in 2019. Under the Petitioner’s bylaws, a suspended physician can request a hearing which must be held within thirty days, Respondent requested a hearing in November 2019, but Petitioner scheduled that hearing in August 2020. Prior to that hearing, the parties agreed to the relevant settlement.

The settlement required Petitioner to reinstate Respondent and for Respondent to resign immediately. Petitioner was required to use specific language in their report to the NPDB. Petitioner’s initial report included text generated by codes selected and input by Petitioner, which appeared in all caps and font larger than the rest of the report. The text generated by Petitioner’s codes stated that Respondent’s suspension was for immediate threat to health or safety and that Respondent voluntarily surrendered clinical privileges to avoid investigation. Petitioner filed four versions of the NPDB report, with the final report excluding the language at issue. Respondent filed a Complaint with the Circuit Court for Montgomery County for breach of contract alleging that the generated text materially deviated from the negotiated language within the settlement. The Circuit Court granted Petitioner’s Motion for summary judgment, while the Appellate Court reversed that decision.

Holding

The Maryland Supreme Court affirmed the Appellate Court’s decision to vacate the Circuit Court’s entry of summary judgment. As Maryland courts follow the objective theory of contract interpretation, contract language is interpreted based on what a reasonable person in the position of the parties would have understood the language to mean. Additionally, contract language is considered in the context of the contract’s character, purpose, and the facts and circumstances of the party at the time of execution. Based on those criteria, the Maryland Supreme Court held that a reasonable juror could have found that the code generated statements breached Petitioner’s obligations as the statements were materially inconsistent and contradictory with the specific language included in the settlement agreement.

Questions about this case can be directed to Lucas Duty at (443)-641-0572 or lduty@tthlaw.com.

Lithko Cont., LLC v. XL Ins. Am., Inc.
Maryland Supreme Court
No. 31, Sept. Term 2023

Decided: July 15, 2024

The Supreme Court of Maryland reaffirms its long-standing “plain meaning” approach to contract interpretation.

Background

In March of 2014, Amazon.com.dedc, LLC and Duke Baltimore LLC entered into a Development Agreement. Duke contracted to build a warehouse on its land and Amazon contracted to lease/rent the space. In the Development Agreement, Duke was identified as the “Landlord” and Amazon was the “Tenant.” Duke acted as Amazon’s landlord but also as the general contractor for building the warehouse (“Project”). Duke contracted with subcontractors to build the warehouse (“Subcontractors Agreement”). The Development Agreement contained a waiver of subrogation provision in which Tenant (Amazon) and landlord (Duke) agreed to waive subrogation against one another for any claims arising out of the Project. The Subcontractors Agreement also contained waivers of subrogation in which no party is liable to any other party (also used “parties”); implying the provision applies to more than the two parties to the agreement.

In November of 2018, the warehouse sustained roofing and structural damage after a storm. Amazon’s insurer, XL Insurance America, Inc. filed subrogation actions against the subcontractors, who worked to construct the warehouse, to recover payments made to Amazon. The Trial Court granted summary judgment in favor of the subcontractors and held that the waiver of subrogation in the Development Agreement applied to the subcontractors as third party beneficiaries. Additionally, the Trial Court held that the term “parties” in the Subcontractors Agreement with Duke was all-inclusive, and thus applied to Amazon as well. XL appealed to the Appellate Court of Maryland. The Appellate Court of Maryland reversed the Trial Court’s entry of summary judgment. The subcontractors filed a Writ of Certiorari.

Holding

Under the objective theory of contract interpretation, Maryland Courts consider only the plain meaning of contract terms within the four corners of the agreement. When unambiguous, the plain meaning is applied. Conversely, when ambiguous, extrinsic evidence is permitted to assist in determining the parties’ intent. Ultimately, the Court held that the waiver of subrogation in the Development Agreement between Amazon and Duke was unambiguous and applied only to those two parties. Conversely, the Court held that the waivers of subrogation in the Subcontractors Agreement applied to “parties” to the contract documents, which was ambiguous as to whether Amazon was included as a party. Thus, extrinsic evidence shall be used to remediate the ambiguity. Additionally, the Court declined to construe the contract to include a project-wide waiver of subrogation, holding that if the parties intended such a provision, they would have included one.

Questions about this case can be directed to Alex Mitchell at (443) 641-0563 or amitchell@tthlaw.com.

Mayor and City Council of Baltimore v. Wallace
Maryland Appellate Court
No. 1644, Sept. Term, 2022

Decided: February 1, 2024

Maryland Appellate Court declines to apply Maryland recreational use statute to Baltimore City public park.

Background

On June 19, 2018, Defendant Jamie Wallace, was riding her bicycle through the Waterfront Promenade located near the Inner Harbor in Baltimore City, on her way home from work. While she was cycling, the wheel of her bicycle became stuck in a gap between the granite bulkhead and brick pavers. She was ejected from her bicycle and fell into the Harbor. She sustained multiple injuries. The Waterfront Promenade is an eight-mile public pedestrian walkway and shared use bicycle path that functions as a waterfront sidewalk. The Baltimore City Charter designated the area as “Inner Harbor Park” and the City’s Department of Transportation is responsible for its maintenance. In 2019, Plaintiff filed suit against the City for failure to remedy or warn of the defective sidewalk condition. Notice and failure to remedy were not in serious dispute.

The City moved for summary judgment and later for judgment notwithstanding the verdict, citing Maryland Code, Natural Resources §§ 5-1101–1109, commonly referred to as the “Maryland Recreational Use Statute” (“MRUS”). The City argued that the incident occurred in an official public park established by the City’s Charter. The City contended that there was no dispute that the City either directly or indirectly invites or permits, without charge, persons to use the Waterfront Promenade or Inner Harbor Park for any recreational purpose; and therefore, no duty was owed to Ms. Wallace under the MRUS. Ms. Wallace argued that the walkways that go through the park are still the City’s responsibility, despite the area being designated as a park. The trial Court ruled in favor of Ms. Wallace and this appeal followed.

Holding

The Maryland Appellate Court affirmed the decisions of the Trial Court. It noted that pursuant to the MRUS, an owner of land owes no duty to keep the premises safe for use by others for any recreational or educational purpose. The Court held that the Waterfront Promenade was not a property that was made available for recreational purposes, but instead the property was to serve a connector between other public walkways. The Court cited Haley v. Mayor & City Council of Baltimore, 211 Md. 269, 271 (1956), which held the MRUS did not apply to a pedestrian injured in a public park, when she was using the park walkway as a connector between two areas outside of the park. The Court declined to decide whether Ms. Wallace was using the property for “recreational use” or whether the same would affect the applicability of the MRUS.

Questions about this case can be directed to Nicholas Daetwyler at (443) 641-0567 or ndaetwyler@tthlaw.com.