100 Harborview Drive Condominium Council of Unit Owners v. Clark

REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 2175
September Term, 2013
______________________________________
100 HARBORVIEW DRIVE
CONDOMINIUM COUNCIL OF UNIT
OWNERS AND ZALCO REALTY, INC.
v.
PAUL C. CLARK
______________________________________
Wright,
Leahy,
Salmon, James P.
(Retired, Specially Assigned),
JJ.
______________________________________
Opinion by Leahy, J.
______________________________________
Filed: July 30, 2015
*Judge Kevin Arthur did not participate, pursuant to Md. Rule
8-605.1, in the Court’s decision to report this opinion.
In the multiplex of administrative and trial court actions and appeals involving
Appellee/Cross-Appellant Dr. Paul C. Clark—owner of Penthouse 4A in the 100
Harborview Drive Condominium—and Appellants/Cross-Appellees 100 Harborview
Drive Condominium Council of Unit Owners (“Harborview” or “the Council”) and
property manager Zalco Realty, Inc. (“Zalco”), this appeal features the Maryland
Condominium Act and the extent to which it compels the production of Harborview’s legal
and financial records.
On January 16, 2013, Dr. Clark filed a three-count complaint in the Circuit Court
for Baltimore City, alleging that pursuant to the Maryland Condominium Act (“MCA”),
Maryland Code (1974, 2010 Repl. Vol.) Real Property Article (“RP”) §§ 11-101 et seq.
and Article X of the By-laws of 100 Harborview Drive Condominium, he was entitled to
examine and copy “(a) detailed billing reports or supporting documentation for
[Harborview]’s legal invoices concerning Dr. Clark, his family, and the Unit; (b) written
advice of legal counsel concerning Dr. Clark, his family, and the Unit; and (c) e-mails
between [Harborview] and Zalco concerning the financial well-being of the
Condominium.” In Count I, Dr. Clark sought a permanent injunction directing Harborview
and Zalco to produce the documents; in Count II, he requested specific performance on his
request to inspect the documents; and in Count III, he demanded damages for failure to
provide the requested documents. On March 5, 2013, Harborview and Zalco filed an
answer and a counter-complaint seeking a declaratory judgment that Dr. Clark was not
entitled to inspect the detailed billing reports and written advice of counsel.
1
Following a two-day bench trial, the circuit court rendered its decisions on October
16, 2013. The court decided, among other things, to deny Dr. Clark’s request to inspect
the written advice of Harborview’s counsel, but entered a permanent injunction enjoining
Harborview and Zalco from denying Dr. Clark’s request to inspect and copy legal invoices
and billing records concerning Dr. Clark, his family, and the Unit. The Court also enjoined
Harborview and Zalco from refusing to provide Dr. Clark any future e-mails between
Harborview and Zalco concerning the financial well-being of Harborview, and required
that they comply with any future request by Dr. Clark for e-mails concerning the financial
well-being of Harborview.
For the reasons that follow, we affirm the judgments of the circuit court regarding
the scope and application of the Maryland Condominium Act, and hold that RP § 11-116
does not abrogate the attorney-client privilege or the work product doctrine. We also find
no error on the ancillary matter of the court’s exclusion of Harborview’s proffered expert
testimony. We are compelled, however, to vacate the court’s order enjoining Harborview
and Zalco from refusing to produce future e-mail correspondence, as it is not based on any
showing of a likelihood of future irreparable harm.
BACKGROUND
Litigation History
Context bears special significance in this appeal wherein the request for the
inspection of financial and attorney-client privileged records is made by an adversary in a
series of contentious law suits and administrative actions. In our unreported opinion in an
earlier related action between these parties, Clark v. Zalco Realty, Inc., No. 277, Sept. Term
2
2012, slip op. at 2-3 (filed Apr. 24, 2013), we summarized the facts of Dr. Clark’s
acquisition of the property and the underlying conflict as follows:
In 2009, [Dr. Clark] learned that a penthouse unit (“the Unit”) of the
Harborview Building in downtown Baltimore was to be sold at auction, “as
is.” Appellant made a few visits to see [the Unit], the last of which was to a
cocktail reception on the night before the auction. It was raining heavily, and
[Dr. Clark] noticed water dripping from the ceiling into two bowls.
The next morning, [Dr. Clark] met with Gisele Rivera—the building’s
property manager and a Zalco employee—to discuss the leak he had seen.
According to [Dr. Clark’s] deposition testimony, Ms. Rivera told him that
the roof was scheduled to be repaired “in the March time frame,” and she
showed him “books that had construction plans and schedules.”
[Dr. Clark] won the auction for the property, and the Council had its
property management contractor, Zalco Realty, prepare a resale certificate as
required by [RP] § 11-135(c). The document certified that the Council had
no knowledge “that any alteration or improvement to the unit or to the limited
common elements assigned to the unit violates any provision of the
declaration, by laws, or rules or regulations,” see [RP] § 11-135(a)(4)(ix),
and no knowledge “of any violation of the health or building codes with
respect to the unit,” see [RP] § 11-135(a)(4)(x). The certificate further stated
that there were no “capital expenditures approved by [the Council] planned
at the time of the conveyance which are not reflected in the current operating
budget disclosed” to [Dr. Clark], see [RP] § 11-135(a)(4)(iv), (vi).
In the wake of a large snowstorm in 2010, the water leak in the Unit
worsened. A mold expert tested the Unit for spores and recommended that
it be vacated. [Dr. Clark] began remediation efforts in the summer, but they
proved unsuccessful because water continued to leak in through the
building’s roof.
On October 20, 2010, Dr. Clark filed suit against Harborview and Zalco alleging
that they had engaged in fraudulent misrepresentation and unfair or deceptive trade
practices, and seeking $5 million in damages. That complaint was resolved on summary
judgment in favor of Harborview and Zalco on February 23, 2012. This Court affirmed
the judgment of the Circuit Court for Baltimore City on April 24, 2013.
3
During the interval between his purchase of the Unit and the October 20, 2010,
complaint, Dr. Clark filed a number of administrative complaints related to his Unit.
Following a noise complaint from downstairs neighbors and a January 19, 2010, “cease
and desist” letter from Harborview advising Dr. Clark to have his child play in the
downstairs recreation area or invest in soundproofing, Dr. Clark filed a complaint with the
U.S. Department of Housing and Urban Development, alleging familial status housing
discrimination against Harborview. That complaint, dated January 28, 2010, was
dismissed for lack of probable cause. In February, the complaint was referred to the
Maryland Commission on Human Relations, which, after investigation, also made a
finding of no probable cause on August 17, 2010.
Dr. Clark filed three complaints with the Baltimore City Health Department during
the months of May and June 2010, alleging the presence of mold in his Unit and
contamination from pigeon droppings. These complaints were ultimately dismissed
following evidentiary hearings. On June 15, 2010, Dr. Clark also filed a complaint against
Harborview in the Maryland Office of the Attorney General, Consumer Protection
Division. The complaint, alleging that Harborview failed to properly maintain the common
elements of the building, was later withdrawn.
On May 8, 2013, Dr. Clark filed another complaint against Harborview in the
Circuit Court for Baltimore City, along with a Petition for Order of Arbitration and Stay of
Action. In his complaint for specific performance, negligence, breach of contract, and
breach of fiduciary duty, Dr. Clark alleged, inter alia, that Harborview failed to retain a
reasonable repair and replacement reserve fund and breached its duty to remediate damage
4
caused to his Unit from water infiltration and mold contamination. Dr. Clark demanded,
and the circuit court ordered, arbitration of that complaint. Harborview appealed,
contending that the circuit court erred by not finding that Dr. Clark had waived his right to
arbitration because he improperly split his claims (arising from the same facts) by litigating
to judgment less than all of his legal theories in a prior action before bringing the subject
suit. In an unreported opinion, Harborview v. Clark, No. 1314, Sept. Term 2013 (filed
April 8, 2015), we affirmed the judgment of the circuit court.1
While Dr. Clark’s first appeal to this Court was pending, and prior to filing the case
underlying the second appeal, the events leading to the instant appeal were developing.
The Present Case
The opening act was Dr. Clark’s November 20, 2012, request, sent by letter through
counsel, to examine and copy Harborview’s books and records relating to the financial
welfare of the Condominium, including “all of the Condominium’s legal bills from October
2009 through the present[.]” The letter advised that Dr. Clark had entered into a common
interest agreement with James W. Ancel, Sr., the owner of Penthouse 4C at 100
Harborview Drive. Penthouse 4C, LLC, whose sole member is James W. Ancel, Sr., had
filed a complaint (similar to, though entirely separate from this appeal) on April 8, 2011,
1
Following Harborview’s appeal to this Court, Dr. Clark filed a line in the circuit
court withdrawing the petition for order of arbitration and requesting entry of a new
scheduling order. Dr. Clark challenged this Court’s decision denying his motion to dismiss
Appellant’s appeal as moot by filing a writ of certiorari in the Court of Appeals. Clark v.
100 Harborview Drive Council of Unit Owners, 438 Md. 143 (2014). After the Court
denied the writ, Dr. Clark withdrew his election to waive arbitration on June 13, 2014.
5
requesting the production of books and records pursuant to RP § 11-116. That complaint
went to arbitration, and on January 5, 2012, the arbitration panel found, among other things,
that RP § 11-116 “provides unit owners with a broad right to inspect the books and records
of the Condominium[,]” including “any written advice of legal counsel if the requesting
unit owner is the subject of that advice.”2 Dr. Clark’s November 20, 2012, letter to
Harborview cited the Penthouse 4C, LLC arbitration award as binding precedent, and
further instructed that “the Council may not redact the Condominium’s legal bills unless
one of the limited circumstances set forth in § 11-116(c)(3) of the Maryland Condominium
Act apply.”
On December 5, 2012, Harborview responded, instructing Dr. Clark to contact
Zalco to schedule a time to inspect the requested documents. After scheduling a date to
inspect the documents, Dr. Clark sent another letter to Harborview expanding his records
inspection request to include “any written advice of legal counsel that relates to or concerns
[Dr. Clark], Rebecca Delorme [Dr. Clark’s spouse], or Penthouse 4A.” Harborview
responded by letter dated December 18, 2012, stating that legal invoices would be made
available for inspection, but that detailed billing reports from legal counsel would not be
made available because they were considered privileged and, therefore, were not
maintained as regular financial books or records of Harborview. Further, Harborview
asserted that in any case, legal documents that constituted a financial book or record would
2
Penthouse 4C, LLC, filed a petition to confirm the arbitration award and enter
judgment on January 10, 2012. On October 17, 2012, the circuit court entered an order
confirming the arbitration award. The order was not appealed.
6
only be produced as they pertained to the requesting unit owner, so the requests for records
pertaining to Rebecca Delorme and Penthouse 4A would not be produced.
On December 19, 2012, Rebecca Delorme—acting as Dr. Clark’s agent—inspected
and copied documents at Zalco’s office in Silver Spring, Maryland. She was refused access
to the detailed billing reports or written advice of counsel. Ms. Delorme did, however,
review four boxes of documents, and she received copies of all available legal invoices
from 2009 to 2012. Two days later, Dr. Clark notified Harborview by letter that Ms.
Delorme had not been given access to all the books and records requested, and renewed his
requests for detailed billing reports (including any other supporting documentation for legal
invoices) and for “legal opinions or the written advice of legal counsel.”
Dr. Clark filed the underlying suit on January 16, 2013, seeking preliminary and
permanent injunctions, specific performance, and damages for breach of contract in the
amount of $30,000.00. He argued that the By-laws constituted a contract between him and
Harborview, as well as between him and Zalco as Harborview’s managing agent. He
alleged that Harborview and Zalco breached their contractual obligations by refusing to
permit him to inspect the documents at issue, and that unless his request for preliminary
injunction was granted, he faced the “fact” that Harborview would move to compel his
claims to arbitration under Article XV of the By-laws, thereby requiring him to “go through
the same time-consuming and costly arbitration process that a separate unit owner
[Penthouse 4C] recently did.”3 Dr. Clark also alleged that due to the extensive problems
3
Dr. Clark also presented a copy of the Final Arbitration Award in the matter
between Harborview and Penthouse 4C, LLC to the circuit court at the October 8, 2013
7
that he encountered in owning the Unit, including that it was uninhabitable because of mold
contamination, he needed the requested documents “immediately to see the impact on how
his important investment is being treated.”
Harborview and Zalco filed a joint answer on March 5, 2013, admitting that they
“refused to make the requested documents available to [Dr. Clark] because they constitute
privileged attorney-client communications and privileged attorney work product in several
adversarial matters including an ongoing lawsuit brought by [Dr. Clark] against the Council
and Zalco.” As an affirmative defense, they claimed that Zalco was no longer in
contractual privity with Harborview and, therefore, Zalco could not comply with any
injunctive order regarding future books or records. That same day, Harborview and Zalco
filed a verified counterclaim seeking a declaratory judgment as to whether RP § 11-116
required them to provide Dr. Clark access to written legal advice and detailed billing
reports that Harborview received from its attorneys in connection with the representation
of Harborview and Zalco in various investigative matters, claims, and litigation brought by
Dr. Clark.
The circuit court held a bench trial on October 8 and 9, 2013. The circuit court
summarily granted Dr. Clark’s pre-trial motion to exclude Harborview’s expert witness
trial. The Final Arbitration Award was admitted in to evidence, over objection, and on the
understanding that it was a non-binding nisi prius decision. Therein, the arbitrators
concluded that the plain language of RP § 11-116 was sufficient to require Harborview to
allow Penthouse 4C, through its agent, to inspect the books and records maintained by
Harborview including the written advice of legal counsel. The circuit court memorandum
opinion, however, does not specifically address the resolution reached in the arbitration
award.
8
who was expected to testify, based on his review of the relevant documents and his
familiarity with RP § 11-116, that the books and records that Harborview is required to
maintain and provide for inspection do not include the detailed billing reports of legal
counsel. At trial, the parties presented lay witnesses’ testimony on the issue of the
disclosure of detailed billing reports and written advice of counsel. Dr. Clark, for example,
testified on cross-examination:
[Dr. Clark]: I believe that in order for me to assess how my money is being
spent and the use of attorneys or I think most would agree, the overuse of
attorneys, I have the right to review what they are having you guys do.
[Defense Counsel]: When you say over use of attorneys, what do you mean
Sir?
[Dr. Clark]: I mean there’s been nearly $2 Million the last few years spent
on legal bills. That’s insane.
***
[Defense Counsel]: And do you expect when you sue Harborview that
Harborview will retain Counsel?
[Dr. Clark]: No, I would expect not to have to sue them in fact.
***
[Defense Counsel]: Did you know that Harborview retained Counsel to
defend the lawsuits that you brought against them?
[Dr. Clark]: I did.
[Defense Counsel]: And did you expect that the law firm that was defending
Harborview would be paid for its services?
***
[Dr. Clark]: I would expect that they would be paid, but I want to know what
they are being paid to do.
9
Dr. Clark continued, characterizing his need to inspect the detailed billings reports
provided to Harborview from legal counsel as a need to ensure the “responsible use of
funds,” and denying that the attorney-client privilege was applicable to those billing
reports. However, as the circuit court noted later in its opinion, Dr. Clark admitted that the
attorney-client privilege is applicable to the written advice of legal counsel.
Harborview and Zalco offered testimony from Council President John Cochran and
Zalco property managers Richard Brandis and Peter Fabreziani, Jr. Mr. Cochran testified
that since April of 2009, the Harborview management files have been kept in locked
cabinets: “I mean we have bars and padlocks on all the file cabinets and we have our
Detailed Billing Reports that are kept in a fire proof safe in the manager’s office that only
the On-site Manager has the key to.” Mr. Cochran testified to the precautions he
implemented to avoid inadvertent disclosures of the billing records, stating that “I
understood them to be confidential.” Former Zalco employee and Harborview property
manager, Mr. Fabreziani, also testified to his understanding that detailed billing reports
submitted to Harborview were confidential in nature.
At the conclusion of trial, the court granted the defendants’ motion for judgment on
Count III for breach of contract, finding that there was no evidence presented to support
Dr. Clark’s damages claim. Later, on October 16, 2013, the circuit court issued its Order
and Memorandum Opinion on the remaining judgments. Following a thorough
examination of the history and purpose of § 11-116 of the Maryland Condominium Act,
and after corresponding analysis of the attorney-client privilege and work product doctrines
as applied in Maryland, the circuit court decided:
10
Section 11-116 allows [Dr. Clark] to inspect and copy the e-mails
requested by him concerning the financial well being of Harborview. The
language of Section 11-116 indicates that “books and records” under that
section relate to financial information, as it makes reference to “accounting
practices” and “audits.” Md. Code Ann., Real Prop., § 11-116(a)-(b).
[Harborview and Zalco] do not dispute this interpretation. Indeed, [President
of the Harborview Council of Unit Owners, John] Cochran produced these
e-mails to [Dr. Clark]. Cochran uncontrovertedly described his process of
sifting through thousands of e-mails and supplying all of those fitting the
description of [Dr. Clark’s] request.
[Dr. Clark] is additionally entitled to inspect and copy the detailed
billing reports or supporting documentation for Harborview’s legal invoices
concerning him, his family, and his unit. Although [Harborview and Zalco]
have asserted the attorney-client privilege and work product doctrine with
respect to this information, they have not demonstrated the applicability of
either of these. [Harborview and Zalco’s] blanket assertion is insufficient to
overcome the presumption that information contained in detailed billing
reports is generally unprotected.
***
This Court recognizes that, pursuant to Section 11-116(c)(3), [Dr. Clark] is
unambiguously granted the right to inspect the written advice of
Harborview’s legal counsel if he, his family, and his unit are the subject of
that information. . . . Notwithstanding that statutory language, [Dr. Clark]
may only obtain such information if the statute clearly abrogated the common
law privilege and doctrine. . . . The language of Section 11-116 displays no
express abrogation of the above-described common law privilege and
doctrine.
(Internal citations omitted). The court also decided that RP § 11-116 does not impliedly
abrogate the common law attorney-client privilege and work product doctrine because it
found that the existence of the privilege and the doctrine did not have the effect of
“depriving the statute’s efficacy and rendering its provisions nugatory.” The circuit court
explained:
[S]ection 11-116 is read as being in harmony with the common law privilege
and doctrine: it allows a unit owner who is the subject of the written advice
11
of the condominium’s legal counsel to inspect that information, provided that
it is not protected by the common law attorney-client privilege or the work
product doctrine.
(Internal citations omitted).
The court granted Dr. Clark’s prayer for injunctive relief and specific performance
with respect to detailed billing reports and supporting documentation for legal invoices;
however, Dr. Clark’s request for the written advice of legal counsel was denied. In granting
the request for a declaratory judgment, the court proclaimed that RP § 11-116 “does not
invalidate the common law attorney-client privilege and work product doctrine, which
safeguard [written advice of legal counsel] from public view.”4 The court declared,
therefore, that RP § 11-116 does not require Harborview to make the written advice of
legal counsel regarding Dr. Clark, his family, or his unit available for inspection and
copying by Dr. Clark, the unit owner.
4
The Court of Appeals in Harford Mutual v. Woodfin Equities Corp., 344 Md. 399,
414 (1997), explained that “when a declaratory judgment action is brought, and the
controversy is appropriate for resolution by declaratory judgment, ‘the trial court must
render a declaratory judgment.’” (quoting Christ by Christ v. Maryland Dep’t of Natural
Res., 335 Md. 427, 435 (1994)). “[W]hether a declaratory judgment action is decided for
or against the plaintiff, there should be a declaration in the judgment or decree defining the
rights of the parties under the issues made.” Case v. Comptroller, 219 Md. 282, 288 (1959).
Although the order of the circuit court in this case does not fully comply with the
requirements by providing an entirely separate written declaratory judgment, we recognize
the circuit court’s order as sufficiently clear to declare the rights and obligations of the
parties. We further note that even were this not so, the circuit court’s failure to enter a
proper declaratory judgment is a procedural error, rather than a jurisdictional error. Bushey
v. N. Assurance Co. of Am., 362 Md. 626, 651 (2001). “This Court, in its discretion, may
‘review the merits of the controversy and remand for entry of an appropriate declaratory
judgment by the circuit court.’” Lovell Land, Inc. v. State Highway Admin., 408 Md. 242,
256 (2009) (quoting Bushey, 362 Md. at 651).
12
Finally, the court noted that as of the date of the trial, it was uncontradicted that
Harborview and Zalco had produced all prior e-mail correspondence regarding the
financial well-being of the condominium. Accordingly, the circuit court denied injunctive
relief for existing communications. However, the court enjoined Harborview and Zalco
from refusing to produce any future e-mails between them concerning the financial well-
being of the condominium.
Harborview and Zalco filed a timely motion to alter or amend and request for
hearing as well as a motion to stay the enforcement of the circuit court’s orders. The court
denied both motions without a hearing on December 10, 2013. On December 17, 2013,
Harborview and Zalco filed a notice of appeal from the circuit court’s orders of September
20 (excluding expert witness), October 16 (final judgment), and December 10, 2013
(denying reconsideration).
Appellants present the following issues, which we have slightly rephrased, for
review:
I. Did the circuit court err by excluding the testimony of Harborview’s
expert, Gehrig Cosgray, CPA?
II. Did the circuit court err by concluding that the detailed billing reports of
Harborview’s counsel are “books and records” subject to inspection by
Clark under section 11-116 of the Condominium Act?
III. Did the circuit court err in not accepting Harborview’s claims of attorney-
client privilege and work product in the detailed billing reports?
IV. Did the circuit court err by entering injunctive relief against Zalco
because Zalco’s management contract ended on December 31, 2012, and
Zalco returned all of Harborview’s records and materials?
13
V. Did the circuit court err by enjoining Harborview to comply with future
requests for e-mails between Harborview and Zalco concerning
Harborview’s financial well-being?
On December 26, 2013, Dr. Clark noted his cross-appeal from the Order of October
16, 2013, and presents the following question for review:
Was the circuit court legally correct in holding that § 11-116(c)(3)(v) of
the [Maryland Condominium Act] does not require Harborview to make
written advice of legal counsel for Harborview concerning Dr. Clark, his
family, and his Unit available for inspection by Dr. Clark when he is the
subject of the written legal advice?
We include additional facts in the discussion relevant to the issues there examined.
DISCUSSION
Dr. Clark argues that both Article X of the Harborview By-laws and RP § 11-116
allow a unit owner to inspect and copy the detailed billing reports and the written legal
advice of counsel without regard for whether any of the material is privileged.5 However,
5
Article X of the By-laws of 100 Harborview Drive Condominium provides, in
pertinent part:
The Board shall keep the books of the Council, with detailed accounts
in chronological order, noting all receipts and expenditures affecting the
property and its administration, and specifying the maintenance and repair
expenses of the common elements and any other expenses incurred. A
separate account shall be maintained for each condominium unit, showing
the amount of each assessment of common expenses . . . . The books together
with all bills, statements and vouchers accrediting the entries made
thereupon, all other records kept by the board . . . shall be available for
examination and copying by any unit owner and any holder, insurer, or
guarantor of a mortgage on any unit, and the duly authorized agents or
attorneys of such unit owner, holder, insurer, or guarantor, during normal
business hours, and after reasonable notice. All books and records of the
Council shall be kept in accordance with good accounting practices, on a
consistent basis, and an outside audit shall be made at least once a year with
14
as the circuit court recognized in constraining its analysis primarily to the application of
RP § 11-116, the statutory provision is more specific in defining the material to be
produced. Indeed, the “Rules of Construction” contained in RP § 11-124 direct as follows:
Conflicts in provisions (e) If there is any conflict among the provisions of
this title, the declaration, condominium plat, bylaws, or rules adopted
pursuant to § 11-111 of this title, the provisions of each shall control in the
succession listed hereinbefore commencing with “title”.
Likewise, the Court of Appeals has instructed that in regard to the MCA, “[i]f there is any
conflict between the provisions of the various documents governing the condominium, the
statute controls, then the declaration, plat, bylaws, and rules in that order.” Ridgely Condo.
Ass’n, Inc. v. Smyrnioudis, 343 Md. 357, 361 (1996) (citing RP § 11-124(e)). Accordingly,
we look to RP § 11-116 (and not the By-laws) to determine what documents are available
for inspection and copying by Harborview unit owners.
I.
Privileged Communications Under
§ 11-116 of the Maryland Condominium Act.
Harborview and Zalco maintain that the longstanding common law and statutory
principles of attorney-client privilege, the work product doctrine, and the basic tenets of
the adversarial system must control over RP § 11-116 where the unit owner and council of
unit owners are directly adverse to one another. They assert that Dr. Clark seeks an unfair
respect to common expenses. The cost of such audit or audits shall be
considered part of the common expense.
15
advantage in ongoing litigation by obtaining, via the Condominium Act, what would
otherwise be prohibited to him in discovery. Harborview and Zalco also contend that
reading RP § 11-116 to allow the discovery of privileged litigation materials would have
the effect of abrogating longstanding common law in Maryland.
This Court analyzes a circuit court’s interpretation of statutory provisions de novo.
Powell v. Breslin, 195 Md. App. 340, 346 (2010) (citing Maryland–National Capital Park
& Planning Comm’n v. Anderson, 395 Md. 172, 181 (2006)), aff’d, 421 Md. 266 (2011);
see also Moore v. State, 388 Md. 446, 452 (2005). “Although the factual determinations
of the circuit court are afforded significant deference on review, its legal determinations
are not.” Goss v. C.A.N. Wildlife Trust, Inc., 157 Md. App. 447, 456 (2004). “[W]here the
order involves an interpretation and application of Maryland statutory and case law, [we]
must determine whether the lower court’s conclusions are ‘legally correct’ under a de novo
standard of review.” Walter v. Gunter, 367 Md. 386, 392 (2002) (citing In re Mark M., 365
Md. 687, 704-05 (2001)).
a. The phrase “books and records” includes written advice of
counsel and detailed billing reports.
The MCA establishes the statutory framework for a condominium regime, including
the scope and duties of condominium development and ownership in Maryland. Ridgely
Condo. Ass'n, Inc., 343 Md. at 360. Our focus in this appeal is on RP § 11-116 of the
MCA, which provides, in pertinent part:
§ 11-116. Books and records to be kept; audit; inspection of records.
16
(a) Books and records to be kept. ─ The council of unit owners shall keep
books and records in accordance with good accounting practices on a
consistent basis.
***
(c) Inspection of records. ─ (1)(i) Except as provided in paragraph (3) of this
subsection, all books and records, including insurance policies, kept by the
council of unit owners shall be maintained in Maryland or within 50 miles of
its borders and shall be available at some place designated by the council of
unit owners for examination or copying, or both, by any unit owner, a unit
owner’s mortgagee, or their respective duly authorized agents or attorneys,
during normal business hours, and after reasonable notice.
(ii) If a unit owner requests in writing a copy of financial statements
of the condominium or the minutes of a meeting of the board of directors or
other governing body of the condominium to be delivered, the board of
directors or other governing body of the condominium shall compile and
send the requested information by mail, electronic transmission, or personal
delivery:
***
(3) Books and records kept by or on behalf of a council of unit owners
may be withheld from public inspection, except for inspection by the
person who is the subject of the record or the person’s designee or
guardian, to the extent that they concern:
(i) Personnel records, not including information on individual salaries,
wages, bonuses, and other compensation paid to employees;
(ii) An individual’s medical records;
(iii) An individual’s personal financial records, including assets,
income, liabilities, net worth, bank balances, financial history or
activities, and creditworthiness;
(iv) Records relating to business transactions that are currently in
negotiation;
(v) The written advice of legal counsel; or
(vi) Minutes of a closed meeting of the board of directors or other
governing body of the council of unit owners, unless a majority of a
quorum of the board of directors or governing body that held the
meeting approves unsealing the minutes or a recording of the minutes
for public inspection.
(Emphasis added).
17
Harborview and Zalco argue that the meaning of the phrase “books and records”
contained in the statute does not include written advice of counsel or detailed billing
reports. Dr. Clark contends—and the circuit court found—that in the context of the statute,
the phrase “books and records” does include the detailed billing reports provided to
Harborview and Zalco by their legal counsel, and that through the exception to the allowed
withholdings, emphasized above, Dr. Clark is statutorily entitled to those documents. Dr.
Clark also argues that the circuit court erred by not finding that RP § 11-116 abrogated the
common law attorney-client privilege and work product doctrine. He maintains that he is
entitled, through the MCA, to inspect the written advice of opposing counsel.
The goal of any statutory interpretation analysis is to give effect to the legislative
purpose or policy underlying the statute. Mayor & Town Council of Oakland v. Mayor &
Town Council of Mountain Lake Park, 392 Md. 301, 316 (2006) (“Mayor of Oakland”);
State Dep’t of Assessments & Taxation v. Maryland-Nat’l Capital Park & Planning
Comm’n, 348 Md. 2, 13-14 (1997). Where, as here, the applicable phrase “books and
records” is not defined, this Court first looks to the plain and ordinary meaning of the words
in determining that purpose or policy. Schreyer v. Chaplain, 416 Md. 94, 108 (2010)
(citing Pelican Nat’l Bank v. Provident Bank, 381 Md. 327, 336 (2004); Comptroller of the
Treasury v. Kolzig, 375 Md. 562, 567 (2003)). We will refrain from “resort[ing] to subtle
or forced interpretations for the purpose of extending or limiting the operations of the
statute.” Maryland-Nat’l Capital Park & Planning Comm’n, 348 Md. at 14-15 (citing
Brown v. State, 285 Md. 469, 474 (1979)). The phrase must be reviewed in context and
interpreted in conformity with the meaning of its companion terms. See Lockshin v.
18
Semsker, 412 Md. 257, 275 (2010) (citations omitted) (“We . . . do not read statutory
language in a vacuum, nor do we confine strictly our interpretation of a statute’s plain
language to the isolated section alone.”). If, after a plain meaning analysis, the purpose of
the statute remains ambiguous, we will look for other clues—e.g., longstanding
interpretation, the overall legislative scheme, the legislative history, and the general
purpose and intent of the statute. Breslin v. Powell, 421 Md. 266, 286-88 (2011).
On its face, RP § 11-116 clearly establishes that the phrase “books and records”
necessarily includes documents maintained “in accordance with good accounting practices
. . . including insurance policies”; “financial statements of the condominium”; and “the
minutes of a meeting of the board of directors or other governing body.” The exceptions
enumerated in RP § 11-116(c)(3) permit the reasonable inference that “books and records”
maintained by the Council of Unit Owners also includes, among other things, personnel
records, records relating to current business transactions, and the written advice of counsel.
The latter documents however, are protected by the exception to disclosure, which provides
that they may be withheld from inspection by all except “the person who is the subject of
the record or the person’s designee or guardian[.]” RP § 11-116(c)(3).
In its Memorandum Opinion, the circuit court recognized that, “pursuant to Section
11-116(c), [Dr. Clark] is unambiguously granted the right to inspect the written advice of
Harborview’s legal counsel if he, his family, and his Unit are the subject of that
information.” We agree that the plain language of RP § 11-116 allows Dr. Clark to request
access to the written advice of counsel, as well as the billing records of counsel, so long as
he and/or his unit are “the subject of the record.” However, it is also clear that these records
19
would normally be subject to the attorney-client privilege and work product doctrine,
especially where, as here, Dr. Clark and Harborview are adverse parties in ongoing
litigation. We arrive then, at the juncture where we must examine whether the exception
to the exception to disclosure contained in RP § 11-116(c)(3) abrogates the attorney-client
privilege and work product doctrine.
b. The MCA Does Not Abrogate the Attorney-Client Privilege or the
Work Product Doctrine.
i. Modalities of Abrogation
Harborview and Zalco contend, and the circuit court found, that RP § 11-116(c)(3)
“does not abrogate” the common law attorney-client privilege. As a point of clarification,
we understand that the parties do not employ the term “abrogate” as it is traditionally used.6
To be sure, none of the parties contend that RP § 11-116 repeals or extinguishes the entire
attorney-client privilege as a part of the general common law in Maryland. Rather, Dr.
Clark posits that RP § 11-116 creates an exception to the application of the attorney-client
privilege by mandating disclosure of Harborview’s confidential legal records to him, as a
unit owner and subject of the records, without further qualification. Nevertheless, as we
shall see, although Maryland courts most frequently use “abrogate” to denote the full
6
Black’s Law Dictionary defines abrogation as “[t]he abolition or repeal of a law,
custom, institution, or the like.” Black’s Law Dictionary 8 (10th ed. 2014). Consistent
with this definition, the courts of Maryland have used the term “abrogate” when referring
to an enactment or judicial decision that repeals or replaces another law or principle in its
entirety. See, e.g., Robinson v. State, 353 Md. 683, 694 (1999) (abrogating the common
law crimes of assault and battery by codifying the entire subject-matter); Loh v. Safeway
Stores, Inc., 47 Md. App. 110, 126-27 (1980) (abrogating the common law principle that
where a plaintiff has accepted satisfaction in full from one tort-feasor the right to proceed
against other joint tort-feasors is extinguished).
20
removal or replacement of a law or principle, the term is sometimes employed where a
limited exception to the common law is created. See e.g., Fagerhus v. Host Marriot Corp.,
143 Md. App. 525, 535 (2002).
In Boblitz v. Boblitz, the Court of Appeals recognized that where the legislature
intends, “[the common law] may be changed by legislative act as Art. 5 of the Declaration
of Rights expressly provides[.]” 296 Md. 242, 274 (1983) (quoting Pope v. State, 284 Md.
309, 341-42 (1979)), holding modified by Bozman v. Bozman, 376 Md. 461, 470 (2003)
(judicially abrogating the interspousal immunity doctrine as “a vestige of the past [and] no
longer suitable to our people” and stating that where no legislative barrier to abrogation
exists, the Court of Appeals also has the power and authority to abrogate a common law
rule). In the seminal case on abrogation, Lutz v. State, 167 Md. 12, 15 (1934), the Court of
Appeals examined the precedent contained in the Ruling Case Law:7
In 25 Rawle C. L. 1054, it is said that: “It has been said that statutes are
not presumed to make any alterations in the common law further than is
expressly declared, and that a statute, made in the affirmative without any
negative expressed or implied, does not take away the common law. The
rules of the common law are not to be changed by doubtful implication, nor
overturned except by clear and unambiguous language. In order to hold that
a statute has abrogated common law rights existing at the date of its
7
Ruling Case Law (cited as R.C.L.) was an American Legal Encyclopedia published
from 1865 to 1929 by McKinney, William Mark, 1865-1955, ed.; Rich, Burdett Alberto,
1854-1925, [from old catalog] joint ed.; Porterfield, Charles, [from old catalog] joint
ed.; Farnham, Henry P. (Henry Philip), 1863-1929, joint ed.; Fisher, S. B., [from old
catalog] joint ed. It was the predecessor to American Jurisprudence. The full original title
is “Ruling case law as developed and established by the decisions and annotations
contained in Lawyers reports annotated, American decisions, American reports, American
state reports, American and English annotated cases, American annotated cases, English
ruling cases, British ruling cases, United States Supreme court reports, and other series of
selected cases.”
21
enactment, it must clearly appear that they are repugnant to the act, or
the part thereof invoked, that their survival would in effect deprive it of
its efficacy and render its provisions nugatory.”
Where, however, a statute and the common law are in conflict, the
common law yields to the statute to the extent of the inconsistency,
Sutherland on Stat. Const. § 294; 12 C. J. 186, and a statute which deals with
an entire subject–matter is generally construed as abrogating the common
law as to that subject.
(Emphasis supplied). More recently, the Court of Appeals has reiterated this principle by
stating, “[i]t is a generally accepted rule of law that statutes are not presumed to repeal the
common law further than is expressly declared.” Robinson, 353 Md. at 693 (citation
omitted) (internal quotation marks omitted). Additionally, where a statute deals with an
entire subject-matter, that statute is often construed as impliedly abrogating the common
law as to that subject. Id. (citing Lutz, 167 Md. at 15; Watkins v. State, 42 Md. App. 349,
353-54 (1979)).
Of these two common modalities by which a statute may be held to abrogate the
common law—express abrogation and abrogation by adoption of a statutory scheme that
deals with an entire subject matter, see Lutz, 167 Md. at 15—the latter is easily identifiable
and has figured prominently in Maryland case law. In Robinson v. State, the Court of
Appeals held that the 1996 enactment establishing the statutory crime of assault replaced
the common law crimes of assault and battery. 353 Md. at 694. The Court stated:
To be sure, the language of the 1996 assault statutes contain no specific
words of repeal or abrogation, nor is there any conflict between those
statutes and the common law. We have determined, however, that the
statutes as adopted represent the entire subject matter of the law of assault
and battery in Maryland, and as such, abrogate the common law on the
subject.
22
Id.; see also Watkins, 42 Md. App. at 354 (“The [escape] statute as adopted represented
the entire subject matter of the law of escape in Maryland and thereby abrogated the
common law of escape.”).
In contrast, whether a statute constitutes an express abrogation of the common law
engenders a murkier analysis. Typically, “abrogation” is declared in the circumstance
where the law, right, or duty previously held is completely extinguished. See Loh, 47 Md.
App. at 114, 118. And, despite the language in Lutz, it is not always necessary that the
statute contain words expressing the intention to abrogate the law, right or duty previously
held. See, e.g., id. at 126-27 (concluding that the Uniform Contribution Among Tort-
feasors Act, which did not include express language of abrogation, but provided that “[a]
release by the injured person of one joint tort-feasor . . . does not discharge the other tort-
feasors unless the release so provides,” Maryland Code (1957, 1979 Repl. Vol.) Article 50
§ 19, operated to abrogate the common law rule that the release of one joint tort-feasor
releases all tort-feasors). This is consistent with the principle articulated in Lutz—where
the common law rule and the statute are in such direct conflict that they cannot co-exist.
167 Md. at 15.
In Moaney v. State, 28 Md. App. 408, 413 (1975), this Court observed that although
under the common law “it appears that a person accused of grand larceny is entitled to be
tried upon an indictment returned by a grand jury,” that principle was abrogated through
both legislative enactment and rule change. Id. at 414-15. The statute in question, as
enacted in 1973, and the contemporaneous amendments to the Maryland Rules, provided
that a person charged with a felony, other than a felony within the jurisdiction of the district
23
court, and who has not requested a preliminary hearing within ten days after being informed
of such hearing, or for whom a preliminary hearing has been held, may be charged by
information at the election of the State’s Attorney. Id. We observed that “[w]hether to
seek indictment or charge by information is now at the election of the State’s Attorney
within the conditions specified,” and that “the common law right has also been changed by
amendment to the Maryland Rules.” Id. at 414-15. Although the right to be charged
through grand jury indictment was not categorically dissolved, we found that the common
law rule regarding persons charged with a felony under limited circumstances was rendered
completely without effect. See id.
In Fagerhus v. Host Marriott Corp., we addressed a case involving a limited
departure from the common law rather than a full abrogation. 143 Md. App. 525, 535-36,
cert. denied, 369 Md. 572 (2002). When presented with the question of whether
Maryland’s recreational use statute (“MRUS”) “abrogate[d] traditional premises liability
law under which a property owner must take reasonable care to make his premises safe or
to warn of dangerous conditions,” we more narrowly determined that “the language of th[e]
subtitle and its legislative history make it clear that the legislature intended to carve out an
exception.” Id. Regarding the relevant portion of the recreational use statute, we stated:
Section 5-1103 of the MRUS plainly states:
Except as specifically ... provided in § 5–1106 ..., an owner of land
owes no duty of care to keep the premises safe for entry or use by
others for any recreational or educational purpose, or to give any
warning of a dangerous condition ... on the premises to any person
who enters on the land for these purposes.
***
24
We need not speculate whether the legislature intended the MRUS to limit
traditional premises liability standards, because it codified an intent to do so.
The purpose of this subtitle is to encourage any owner of land to make
land, water, and airspace above the land and water areas available to
the public for any recreational and educational purpose by limiting the
owner's liability toward any person who enters on land, water, and
airspace above the land and water areas for these purposes. NR § 5–
1102(a).
Id. at 536-37 (emphasis in original) (footnote omitted). In the context of a direct textual
conflict with the common law rule (owner must take reasonable care versus owner owes
no duty of care) and a “purpose provision” in the statute articulating the legislature’s intent
to limit liability, the Fagerhus Court noted that the statute “explicitly abrogates common
law principles of premises liability.” Id. at 542. In the matter sub judice, however, we lack
such explicit guidance from the General Assembly.
Here, it is clear that RP § 11-116 contains no specific words of repeal or abrogation.
Moreover, on its face, the statute does not directly conflict with the common law attorney-
client privilege such that the two cannot co-exist. The statute neither invalidates nor
supplants the entire subject matter of attorney-client privilege or work product doctrine.
Under similar circumstances, the Court of Appeals examined the history of both the statute
and the common law to determine whether the common law right is “repugnant to the act,
or the part thereof invoked, that [its] survival would in effect deprive it of its efficacy and
render its provisions nugatory.” Nickens v. Mount Vernon Realty Grp., LLC, 429 Md. 53,
75 (2012) (citations and internal quotation marks omitted).
In Nickens, the Court of Appeals addressed whether a mandatory eviction notice
ordinance in Baltimore City abrogated or superseded a property owner’s long-recognized
25
right to peaceable self-help. 429 Md. at 73 (2012). Absent express language abrogating
or superseding the common law, the Court looked to the legislative history of the ordinance
and conducted an extensive review of the origin and rationale underlying the common law
principle. The Court stated:
Our goal is, as much as possible, to harmonize [the ordinance] with the
common law remedy of peaceable self-help (as derived from its antecedent
English statutes), for “various consistent and related enactments, although
made at different times and without reference to one another, nevertheless
should be harmonized as much as possible.”
Id. at 74 (quoting Pete v. State, 384 Md. 47, 65-66 (2004)).
Returning to our review of RP § 11-116, absent a clear repeal or abrogation, we will
focus on the legislative history and the cardinal rule of statutory construction—to give
effect to the intent of the legislature. Mayor of Oakland, supra, 392 Md. at 316. More
specifically, we must ascertain whether the language of the statute can be harmonized with
the common law, or whether the intent of the legislature was to grant such broad access to
records that it rendered the statute “clearly contrary to the common law right [so] that the
two cannot occupy the same space.” Nickens, 429 Md. at 74.
ii. Legislative History of RP § 11-116(c)(3)
The Horizontal Property Act—precursor to the Maryland Condominium Act—was
enacted in 1963 and contained a requirement that accounting books and records of
expenditures be maintained and available to condominium owners for examination. 1963
Md. Laws, ch. 387 (H.B. 1). Section 130 of the Horizontal Property Act provided:
The manager or board of directors, or other form of administration provided
in the by-laws, shall keep books with detailed accounts in chronological
order, of the receipts and of the expenditures affecting the building and its
26
administration and specifying the maintenance and repair expenses of the
common elements and any other expenses incurred. The books and vouchers
accrediting the entries made thereupon shall be available for examination by
the co-owners, their duly authorized agents or attorneys, at normal business
hours. All books and records shall be kept in accordance with good
accounting practices and an outside audit be made at least once a year.
(Codified as Md. Ann. Code (1957, 1966 Repl. Vol.), Art. 21 § 130). The 1963 enactment
clearly contemplated “books with detailed accounts . . . of the receipts and of the
expenditures . . . kept in accordance with good accounting practices.” It made no provision
for the maintenance or availability of documents beyond those directly concerning the
finances of the condominium.
In 1974, pursuant to the Laws of Maryland, chapter 12, the Maryland Horizontal
Property Act was recodified as part of the Annotated Code of Maryland at §§ 11–101 et
seq. of the Real Property Article. Later that year, the Horizontal Property Act was renamed
as the Maryland Condominium Act. 1974 Md. Laws, ch. 641 (S.B. 714). The original
audit and inspection provision in the MCA was recodified as RP § 11-113 and provided:
(A) The manager, board of directors, or other person in charge of
administration provided in the by-laws shall keep books and records in
accordance with good accounting practices on a consistent basis.
(B) On the request of the unit owners of at least 5 percent of the units, an
audit by an independent certified public accountant shall be made not more
than once in any consecutive 12 month period. The cost of the audit shall be
a common expense.
(C) Every record kept by the council of unit owners shall be available
for examination and copying by any unit owner, his duly authorized
agents or attorneys, at his expense, during normal business hours, and after
reasonable notice.
1974 Md. Laws, ch. 641 (S.B. 714) (emphasis added). The 1974 MCA provision
maintained a focus on “books and records in accordance with good accounting practices.”
27
However, the addition of a mandate that “[e]very record kept by the council . . . shall be
available for examination[,]” left open the argument that “books and records” under the
MCA could be construed more broadly than under the Horizontal Property Act.
In 2004, the General Assembly partially addressed this problem by passing House
Bill 879, which “alter[ed] the kinds of books and records a homeowners association may
withhold from public inspection.” 2004 Md. Laws, ch. 382 (H.B. 879). The bill
simultaneously altered the books and records inspection provisions for Cooperative
Housing Corporations and Homeowner’s Associations, as well as Condominiums. Id. The
Maryland Attorney General submitted written testimony to the House Environmental
Matters Committee in support of HB 879, describing the purpose of the legislation:
Access to the books and records of the governing body of the association is
of vital importance to unit and home owners who wish to participate in the
democratic process of their associations regardless of the type of common-
ownership community they live in. However, some of the records maintained
by the governing bodies contain sensitive information, such as private
information about individual home or unit owners, employees, or legal
proceedings or advice.
***
Section 11-109.1 of the Maryland Condominium Act provides that meetings
of a Board of Directors may be closed for discussion of [] most of [the] same
topics as those listed in the Homeowners Association Act. However, Section
11-116 of the Act provides that “every record” of the condominium be kept
available for inspection by unit owners and provides no exception for any
topic.
***
HB 879 provides a uniform standard for unit and homeowner access to
association records . . . and limits the records that may be withheld from unit
and homeowners to those topics that the General Assembly has already
deemed to be sensitive in nature.
28
Cooperative Housing Corporations, Condominiums, and Homeowners Associations -
Books and Records: Hearing on H.B. 879 Before the H. Envtl. Matters Comm., 2004 Leg.,
418th Sess. (Md. 2004) (statement of the Office of the Attorney General, Consumer
Protection Division).
Effective October 1, 2004, the new exceptions to disclosure provided:
[(c)](2) Books and records kept by or on behalf of a council of unit owners
may be withheld from public inspection to the extent that they concern:
(i) Personnel records;
(ii) An individual’s medical records;
(iii) An individual’s financial records;
(iv) Records relating to business transactions that are currently in
negotiation;
(v) The written advice of legal counsel; or
(vi) Minutes of a closed meeting of the board of directors or other
governing body of the council of unit owners.
2004 Maryland Laws Ch. 382 (H.B. 879) (codified as RP § 11-116).8 House Bill 879
created, without caveat, six categories of documents that were not subject to mandatory
inspection at the request of a unit owner. Among those was the written advice of legal
counsel. Id.
Prompted, in part, by the 2006 final report of the Governor’s Task Force on
Common Ownership Communities,9 the General Assembly enacted the 2009 Home
8
Identical language was also added to Maryland Code (1975, 1999 Repl. Vol., 2004
Supp.), Corporations and Associations § 5-6B-18.3 (cooperative housing corporations),
and RP § 11B-112 (homeowner’s associations).
9
The Governor’s Task Force on Common Ownership Communities was established
by 2005 Laws of Maryland, chapter 469 (S.B. 229). The Task Force expressed particular
interest in bringing uniformity to the disclosures made to prospective condominium unit
buyers under what it considered to be apparent inconsistencies under sections 11-126 and
29
Financial Accountability Act (“HFA”). 2009 Md. Laws, ch. 659 (H.B. 137). The HFA
also made identical amendments to several provisions of the Maryland Cooperative
Housing Corporation Act and the Maryland Homeowners Association Act in addition to
the MCA. All of the revisions authorized the withholding of certain documents from an
association member or unit owner.10 Id. The specific revisions to RP § 11-116 (and the
other Acts) prohibited a Council of Unit Owners from withholding any books or records
from inspection by the person who is the subject of the record. See RP § 11-116(c)(3)
(reproduced supra). Thus, the protections for sensitive information implemented by the
2004 amendment were left intact with the exception that otherwise withholdable
11-135 of the condominium act. The Task Force noted that “disclosures var[ied]
depending on whether the transaction is the initial sale of a unit (RP 11-126), or if the
transaction is a resale of a unit in a condominium that has 7 or more units (RP 11-135(a))
or fewer than 7 units (RP 11-135(b)).” Governor’s Task Force on Common Ownership
Communities, Final Report, at 31 (Dec. 31, 2006).
10
The provisions of the Cooperative Housing Corporation Act and the Maryland
Homeowners Association Act—codified at Md. Code (1975, 2014 Repl. Vol.),
Corporations and Associations Article (“CA”) § 5-6B-26 and Md. Code (1974, 2010 Repl.
Vol.), Real Property Article § 11B-112, respectively—were amended to add language
identical to that added to § 11-116. Both sections provide:
(2) Books and records kept by or on behalf of a [cooperative housing
corporation or homeowners association] may be withheld from public
inspection, except for inspection by the person who is the subject of the
record or the person's designee or guardian, to the extent that they concern:
***
(v) The written advice of legal counsel; or
CA § 5-6B-26, RP § 11B-112. Neither of these provisions has been discussed or construed
by the appellate courts of Maryland.
30
documents should be made available to a unit owner whose person or property is the subject
of the document(s).
Tracing the history of the “books and records” inspection provisions applicable to
Maryland condominiums and common ownership communities, we cannot conclude that
the intent of the legislature was to grant such broad access to documents that the MCA
abrogates fundamental common law principles and protections, such as the attorney-client
privilege and work product doctrine. Nor does RP § 11-116 so clearly dominate the
subject-matter to warrant implied abrogation of the common law. Rather, the General
Assembly has evinced the intention to provide the information necessary to property
owners so that they might assess and protect their investments, while simultaneously
recognizing the importance of protecting certain documents from unnecessary disclosure.
Clearly, the exception to the exception was intended to permit a unit owner to obtain certain
documents, otherwise protected from disclosure, if they concern the unit owner. Indeed,
there may be a variety of legal records in Harborview’s files to which a unit owner is
entitled, such as a letter from the unit owner’s own counsel, or a letter from another third
party (e.g. an advice letter written by the Maryland Attorney General). But nothing in the
legislative history suggests that the provision permits a unit owner to trample protections
and privileges held and not waived by another, such as a document that contains the legal
advice of Harborview’s counsel, or even, a document that contains the personal financial
information of another unit owner. The General Assembly is well aware that the attorney-
client privilege is a fundamental right under Maryland law, and we discern no intent by the
31
General Assembly, express or implied, to abrogate the attorney-client privilege by its
various amendments to RP § 11-116 over the years.
iii. Attorney-Client Privilege Is Enshrined in Statute
The common law attorney-client privilege was codified over 42 years ago,11 in what
is now Maryland Code, (1973, 2013 Repl. Vol.), § 9-108 of the Courts and Judicial
Proceedings Article (“CJP”). The statute provides that “[a] person may not be compelled
to testify in violation of the attorney-client privilege.” The Court of Appeals has declared
that the statute also “prevents the disclosure of a confidential communication made by a
client to his attorney for the purpose of obtaining legal advice.” Zook v. Pesce, 438 Md.
232, 240-41 (2014) (quoting E.I. du Pont de Nemours & Co. v. Forma–Pack, Inc., 351 Md.
396, 414 (1998)) (internal quotation marks omitted); see also CR-RSC Tower I, LLC v.
RSC Tower I, LLC, 202 Md. App. 307, 363 (2011), aff’d, 429 Md. 387 (2012).
“The General Assembly is presumed to have had, and acted with respect to, full
knowledge and information as to prior and existing law and legislation on the subject of
the statute and the policy of the prior law.” Bd. of Educ. of Garrett Cnty. v. Lendo, 295
Md. 55, 63 (1982). Additionally, when undertaking a statutory analysis, the law disfavors
11
The attorney-client privilege was codified in Maryland through the 1973
enactment that created the Courts and Judicial Proceedings Article. 1973 Md. Laws, 1st
Sp. Sess., ch. 2 (S.B. 1). The revisor’s note to the session law provides, in part:
This section is new language which does not presently appear in the Code,
but is a common law principle that has been long established. Morris v. State,
4 Md. App. 252, 254 (1968); Bris Realty v. Phoenix, 238 Md. 84, 89-90
(1965).
32
repeal by implication. Id. “[Y]et another cardinal rule of statutory construction is that
repeals not expressed will not be found unless demanded by irreconcilability or
repugnancy.” Id. at 62-63. When possible the Maryland courts endeavor to harmonize
statutory provisions in a manner that avoids needless conflict between them. See, e.g.,
Henriquez v. Henriquez, 413 Md. 287, 306 (2010) (construing Family Law Article § 12-
103 to be in harmony with sections 7-107, 8-214, and 11-110 to avoid an “illogical result”).
Here again, absent an express declaration abrogating or carving out an exception to
the statutory attorney-client privilege, we decline to imply such abrogation or exception.
Rather, realizing that the General Assembly is cognizant of the existence and applicability
of the statutory attorney-client privilege, we are compelled to harmonize the two
provisions. In so doing, we hold that RP § 11-116 does not abrogate the common law work
product doctrine or common law and statutory attorney-client privilege.12 Further, we
agree with the circuit court that reading RP § 11-116 in harmony with the common law
“allows a unit owner who is the subject of the written advice of the condominium’s legal
counsel to inspect that information, provided that it is not protected by the common law
attorney-client privilege or the work product doctrine.”
12
Harborview and Zalco also argue that an interpretation of RP § 11-116 that
requires the production of privileged material or work product to an adverse party in the
specific context of litigation involving a condominium creates an absurd result in the face
of an attorney’s ethical duties under Rules of Professional Conduct 1.4 and 1.6. However,
we need not address this contention for the resolution of this matter.
33
c. Applying the Attorney-Client Privilege and Work Product
Doctrine in the Context of an MCA “Books and Records”
Request.
We now examine two distinct categories of documents—the written advice of legal
counsel and detailed billing reports from legal counsel—and discern the extent to which
the attorney-client privilege and work product doctrine act as brakes on the potentially
unfettered disclosures that may otherwise be sought through RP § 11-116. We preface our
discussion of these documents with a brief overview of the attorney-client privilege and
work product doctrine.
In addition to being hallowed common law principles, the attorney-client privilege
and the work product doctrine are also embedded in Maryland law through statute and rule.
The attorney-client privilege is “based upon the public policy that an individual in a free
society should be encouraged to consult with his attorney whose function is to counsel and
advise him and he should be free from apprehension of compelled disclosures by his legal
advisor.” Zook, 438 Md. at 241 (quoting State v. Pratt, 284 Md. 516, 520 (1979)) (internal
quotation marks omitted). Indeed, the attorney-client privilege is one of “the oldest of the
privileges for confidential communications known to the common law.” Id. (quoting
Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)).
“Once the attorney-client privilege is invoked, the trial court decides as a matter of
law whether the requisite privilege relationship exists, and if it does, ‘whether or not any
such communication is privileged.’” Ehrlich v. Grove, 396 Md. 550, 574 (2007) (quoting
E.I. du Pont de Nemours & Co., 351 Md. at 415). Under Maryland law, the party asserting
the privilege bears the burden of establishing whether it applies to evidence in the case.
34
E.I. du Pont de Nemours & Co., 351 Md. at 415. “Although the court makes a legal
determination about the existence of a protective privilege, . . . [it] makes a factual
determination with respect to satisfaction of the burden.” Catler v. Arent Fox, LLP, 212
Md. App. 685, 702-03 (citation omitted), reconsideration denied (Sept. 3, 2013), cert.
denied sub nom. Blumberg v. Fox, 435 Md. 502 (2013). “[T]he burden of substantiating
non-discoverability . . . cannot be met by conclusory allegations or mere assertions.” Id.
(quoting Gallagher Evelius & Jones, LLP v. Joppa Drive-Thru, Inc., 195 Md. App. 583,
598 (2010)) (internal quotation marks omitted). Where a person asserting privilege has
met his or her initial burden that “person may not be compelled to testify in violation of
the attorney-client privilege,” and this prohibition extends to bar the compelled production
of privileged documents. See, e.g., Ashcraft & Gerel v. Shaw, 126 Md. App. 325, 350-51
(1999).
Similarly, the work product doctrine “protects from discovery the work of an
attorney done in anticipation of litigation or in readiness for trial.” Catler, 212 Md. App.
at 702 (quoting E.I. du Pont de Nemours & Co., 351 Md. at 407). Maryland Rule 2-402(d)
provides:
Work Product. Subject to the provisions of sections (f) and (g) of this Rule,
a party may obtain discovery of documents, electronically stored
information, and tangible things prepared in anticipation of litigation or for
trial by or for another party or by or for that other party’s representative
(including an attorney, consultant, surety, indemnitor, insurer, or agent) only
upon a showing that the materials are discoverable under section (a) of this
Rule and that the party seeking discovery has substantial need for the
materials in the preparation of the case and is unable without undue hardship
to obtain the substantial equivalent of the materials by other means. In
ordering discovery of these materials when the required showing has been
made, the court shall protect against disclosure of the mental
35
impressions, conclusions, opinions, or legal theories of an attorney or
other representative of a party concerning the litigation.
(Emphasis added). In E.I. du Pont de Nemours & Co. v. Forma-Pack, Inc., the Court of
Appeals recognized that, like the attorney-client privilege, “the party claiming the privilege
bears the burden ‘to substantiate its non-discovery assertion by a preponderance of the
evidence[.]’” 351 Md. at 409 (quoting Kelch v. Mass Transit Admin., 287 Md. 223, 229
(1980)). Determining “whether a document or other tangible thing was ‘prepared in
anticipation of litigation or for trial’ . . . is essentially a question of fact, which, if in dispute,
is to be determined by the trial judge following an evidentiary hearing.” Id. (quoting Kelch,
287 Md. at 228).
There are, however, a few key distinctions between the attorney-client privilege and
the work product doctrine. We recognized in Blair v. State that “[a]lthough the attorney-
client privilege and the work product doctrine ‘appear to embrace the same concepts of
confidentiality and zealous client advocacy, the work product doctrine is separate and
distinct from the attorney-client privilege.’” 130 Md. App. 571, 605 (2000) (quoting E.I.
du Pont de Nemours & Co., 351 Md. at 406); see also Pratt v. State, 39 Md. App. 442, 446
n.2 (1978) (“The work product doctrine . . . is separate from the attorney-client privilege
and serves to protect materials from discovery that are not subject to another privilege.”),
aff’d, 284 Md. 516 (1979). Although “the attorney-client privilege is held by the client[,]
. . . the protections associated with the work product doctrine belong to the lawyer.” Blair,
130 Md. App. at 605 (citation omitted). Moreover, the attorney-client privilege is narrowly
construed, whereas the work product doctrine is broader in scope. E.I. du Pont de Nemours
36
& Co., 351 Md. at 406 (citing Leonen v. Johns–Manville, 135 F.R.D. 94, 96 (D.N.J. 1990)).
Finally, even if the party asserting protection under the work product doctrine is successful
in meeting its burden, the party seeking discovery can gain access to the material by
demonstrating “substantial need” and “undue hardship.” See Md. Rule 2–402(d). Central
to the case before us is the Court of Appeals’s direction that in examining the application
of either privilege or protection, we look to the nexus between the creation of the material
and the prospect of litigation. E.I. du Pont de Nemours & Co., 351 Md. at 410 (quoting
APL Corp. v. Aetna Cas. & Sur. Co., 91 F.R.D. 10, 15 (D. Md. 1980)).
i. The Written Advice of Legal Counsel
We can envision no more fundamental an example of a confidential communication
between an attorney and client than written legal advice transmitted from the attorney
directly to the client. Indeed, as the circuit court noted in its memorandum opinion, “[b]oth
parties hav[e] admitted that the attorney-client privilege is applicable to the written advice
of legal counsel.” We acknowledge that the attorney-client privilege is not an absolute bar,
as it is subject to waiver, both express and implied. See Fraidin v. Weitzman, 93 Md. App.
168, 228 (1992) (citing Pratt, 284 Md. at 521). However, Dr. Clark does not argue that
Harborview and Zalco waived the privilege with regard to the written advice of legal
counsel; instead, he solely argues that he is entitled to the documents pursuant to RP § 11-
116. Moreover, Dr. Clark’s trial testimony confirms he seeks written legal advice that
concerns not only the “prospect of litigation[,]” E.I. du Pont de Nemours & Co., 351 Md.
at 410, but the ongoing administrative actions and civil litigation between him and
Harborview.
37
Having already determined, supra, that RP § 11-116 does not abrogate the attorney-
client privilege or work product doctrine, we observe that especially where a condominium
unit owner seeking the production of the written advice of legal counsel is engaged in
ongoing litigation against the condominium’s governing association, “the pursuit of truth
and justice” does not compel the production of otherwise privileged material. 13 See
Newman v. State, 384 Md. 285, 301 (2004). Rather, the facts in the matter sub judice weigh
in favor of the “public interest[] . . . need to promote candor in communications between
attorneys and their clients.” See id. at 302. Therefore, we affirm the declaratory judgment
of the circuit court and hold that the written advice of legal counsel, protected by the
attorney-client privilege, is not discoverable under RP § 11-116 absent waiver. 14
13
We note, that although this interpretation forecloses the discovery of documents
between parties who are directly adverse absent waiver, unit owners would remain able to
obtain the written advice of counsel in cases in which they are a co-plaintiff or co-defendant
with the Council of Unit Owners or in matters against non-unit owners in which the Council
undertakes the prosecution of a claim or defense on behalf of all unit owners and affecting
the requesting owner or unit.
14
The circuit court did not decide, nor was it necessary to decide, whether the
written advice of counsel was also protected by the work product doctrine. We note that
the work of an attorney done in anticipation of litigation is also protected from discovery
via RP § 11-116 absent waiver or a showing sufficient to satisfy the requirements of
Maryland Rule 2-402(d). Under Maryland Rule 2-402, generally, a party may obtain
discovery regarding any matter that is relevant to the subject matter involved in the action
and not otherwise privileged or protected by the work product doctrine. However,
subsection (d) of the rule provides for discovery of documents otherwise protected upon a
showing that the requestor has a “substantial need for the materials in the preparation of
the case and is unable without undue hardship to obtain the substantial equivalent of the
materials by other means.”
38
ii. The Detailed Billing Reports
In seeking the disclosure of the detailed billing reports, Dr. Clark asserts his
significant interest as a unit owner in the financial transactions and decisions of
Harborview. As a unit owner, Dr. Clark owns an undivided percentage interest in the
common elements and is correspondingly responsible to pay a percentage of Harborview’s
common expenses. RP § 11-107. Pursuant to the MCA and Harborview’s governing
documents, Harborview may levy assessments and impose liens on unit owners for unpaid
common expenses. RP § 11-110. Those common expenses include legal expenses.15
Dr. Clark avers that the circuit court was correct in determining that Harborview
and Zalco failed to meet their burden to establish that either the attorney-client privilege or
the work product doctrine are applicable to the detailed billing reports of legal counsel. Dr.
Clark contends that rather than attempting to meet the initial burden—by, for example,
introducing redacted copies of the detailed billing reports—Harborview and Zalco waited
to assert the impossibility of satisfying their burden in a post-trial motion. Thus, Dr. Clark
argues that Harborview and Zalco should not now be allowed to re-open the case after
having failed to prove its defense in trial.
Harborview maintains that Dr. Clark’s interest in the disclosure of legal expenses
affecting the financial well-being of Harborview, and thereby the unit owners, was satisfied
15
As a poignant example of the scale of this expense in recent years, Dr. Clark notes
that the Harborview Condominium Budget Narrative for 2013 lists legal expenses in the
amount of $890,950.00. Dr. Clark contends this is a significant expense for all of the
Harborview unit owners, but Harborview and Zalco maintain that a sizable portion of the
amount was incurred defending against the multiple actions initiated by Dr. Clark and his
common interest agreement partner, James Ancel.
39
through the production of legal invoices. Regarding the detailed billing reports received
from legal counsel, Harborview and Zalco contend that they met the burden to prove that
both the attorney-client privilege and the work product doctrine are applicable.
During the October 8, 2013, trial, Harborview and Zalco introduced a sample
detailed billing report as an exemplar. This exhibit (unrelated to the matter between these
parties) contained billing detail to the tenth of an hour and included, among other things,
the name of the attorney who performed the work and a brief description of the nature of
the work. Mr. Fabreziani, former property manager employed by Zalco to manage
Harborview, testified that he had received detailed billing reports from counsel for
Harborview and that “[i]t would have an accounting of all the details in terms of times,
what the attorneys were working on, [and] documents that were prepared.” President of
the Harborview Council of Unit Owners, John Cochran, also testified that he received
detailed billing reports from counsel for Harborview. He further testified that, in his
experience as an attorney, a detailed billing report is “a communication to the client that
says to the client what I’ve been doing, what my mental impressions are, what work I’ve
been doing[.]” In an effort to avoid inadvertent disclosure or waiver, Harborview did not
introduce any specific detailed billing reports into evidence to show that the attorney-client
privilege or work product doctrine applied.16
16
Because Harborview and Zalco’s motions to stay the circuit court’s October 16,
2013, order before both the circuit court and this Court were denied, the question of what
portion, if any, of the detailed billing reports may have been privileged is largely academic.
Nevertheless, the parties dispute on appeal whether the actual privileged records could have
been produced in camera to the court and opposing counsel. The Court of Appeals has
recognized the dilemma presented by allowing opposing counsel to view allegedly
40
In Maxima Corp. v. 6933 Arlington Development Limited Partnership, we stated:
“[a]ttorneys’ bills are generally not protected by the attorney-client privilege; and to the
extent that portions of a bill might have been privileged, [a party’s] blanket assertion [i]s
inadequate.” 100 Md. App. 441, 455 (1994). Addressing the level of detail contained in
an attorney’s billing report, we quoted the Ninth Circuit, stating:
attorney-client privileged documents submitted in camera, where it was unclear whether
the court had determined that the privilege applied to those documents. See Ehrlich, 396
Md. at 574. A workable solution already exists through the modalities by which the courts
of Maryland have employed in camera inspection. “If the court determines that the
defendant has established the need to inspect the material at issue, then ‘the court may elect
to review the records alone, to conduct the review in the presence of counsel, or to permit
review by counsel alone, as officers of the court, subject to such restrictions as the court
requires to protect the records' confidentiality.’” Fields v. State, 432 Md. 650, 667 (2013)
(quoting Zaal v. State, 326 Md. 54, 87 (1992)). We recognize that where “an in camera
inspection is an intrusion on . . . attorney-client privilege and the work product doctrine,
then, clearly, expanded in camera review is a more serious intrusion on those privileges
because opposing counsel is being made privy to allegedly privileged information.”
Ehrlich, 396 Md. at 571. As the Second Circuit observed in Chase Manhattan Bank v.
Turner & Newall, PLC,
If opposing counsel is allowed access to information arguably protected by
the privilege before an adjudication as to whether the privilege applies, a
pertinent aspect of confidentiality will be lost, even though communications
later deemed to be privileged will be inadmissible at trial.
***
Moreover, attorneys cannot unlearn what has been disclosed to them in
discovery. Some of the economies gained by the practice of pre-adjudication
disclosure may thus be offset by later proceedings seeking to unscramble the
effects of the disclosure of materials subsequently held to be privileged.
964 F.2d at 165. In cases like the one sub judice, an expanded in camera proceeding, “one
in which counsel for [both parties] participate or permitting the review of the records by
counsel in their capacity as officers of the court,” Zaal, 326 Md. at 86, is often an
unsatisfactory resolution. This is, in large part, why the Court of Appeals recognized in
Zaal and Fields that in camera review by a judge without the presence of counsel is
sometimes warranted.
41
[T]he identity of the client, the amount of the fee, the identification of
payment by case file name, and the general purpose of the work performed
are usually not protected from disclosure by the attorney-client privilege.
However, correspondence, bills, ledgers, statements, and time records which
also reveal the motive of the client in seeking representation, litigation
strategy, or the specific nature of the services provided, such as researching
particular areas of the law, fall within the privilege.
Id. at 456-57 (quoting Clarke v. Am. Commerce Nat’l Bank, 974 F.2d 127, 129 (9th Cir.
1992)).
In the instant case, the circuit court found that Harborview and Zalco failed to carry
their burden of showing that attorney-client privilege applied to all or portions of the
requested detailed billing reports, and stated: “[Harborview and Zalco’s] blanket assertion
is insufficient to overcome the presumption that information contained in detailed billing
reports is generally unprotected.” (citing Maxima Corp., supra, 100 Md. App. at 457). We
affirm the court’s ruling. Indeed, as we have previously stated, “a finding that information
in attorneys’ bills is within the attorney-client privilege is the exception and not the general
rule.” Id. at 457-58.
Harborview and Zalco also contend that their detailed billing reports are protected
by the broader work product doctrine. The threshold for application of the work product
doctrine is that the material must have been prepared “in anticipation of litigation or in
readiness for trial.” Catler, 212 Md. App. at 702 (quoting E.I. du Pont de Nemours & Co.,
351 Md. at 407). Based on the timing of the requests and ongoing litigation between the
parties, we may infer that this is the case for at least some of the detailed billing reports.
However, we have recognized two categories of attorney work product: fact and opinion.
Blair, 130 Md. App. at 607-08 (citing Hickman v. Taylor, 329 U.S. 495, 507-08 (1947);
42
E.I. du Pont de Nemours & Co., 351 Md. at 407-08; Nutramax Labs., Inc. v. Twin Labs.
Inc., 183 F.R.D. 458, 462 (D. Md. 1998)). Fact work product consists of generally those
“materials gathered by counsel (or at counsel’s instructions) in preparation of trial.” Id. at
607 (quoting Joseph F. Murphy, Jr., Maryland Evidence Handbook § 904(A) (3d ed.
1999)). Opinion work product concerns the attorney’s mental processes. See E.I. du Pont
de Nemours & Co., 351 Md. at 407-08.
The circuit court found that Harborview and Zalco did not present sufficient
evidence to establish that the detailed billing reports did, in fact, contain facts developed
by their attorneys’ efforts in preparation of a case or opinions the attorneys had formed
about any phase of the litigation. Accordingly, we hold that without a showing that either
the attorney-client privilege or the work product doctrine applies to bar the production of
the requested detailed billing reports, the circuit court correctly declined to apply those
privileges to the reports otherwise properly available to Dr. Clark as financial records
maintained by the governing body of the condominium under RP § 11-116.
II.
The Availability of Injunctive Relief to Enforce
an MCA “Books and Records” Request.
We review the exercise of the circuit court’s discretion to grant or deny a request
for injunctive relief under an “abuse of discretion” standard. El Bey v. Moorish Sci. Temple
of Am., Inc., 362 Md. 339, 354-55 (2001) (citing Colandrea v. Wilde Lake Cmty. Ass’n,
Inc., 361 Md. 371, 394 (2000)); see also Maryland Comm’n on Human Relations v. State
Dep’t of Health & Mental Hygiene v. Baltimore Cnty., 281 Md. 548, 554 (1977); Downey
43
Commc’s, Inc., 110 Md. App. 493, 521 (1996). Where an appeal concerns the issuance of
a permanent injunction, we are guided by the principles of injunctive relief:
An injunction is a writ framed according to the circumstances of the case
commanding an act which the court regards as essential to justice, or
restraining an act which it esteems contrary to equity and good conscience.
Thus, injunctive relief is a preventative and protective remedy, aimed at
future acts, and is not intended to redress past wrongs.
El Bey, 362 Md. at 353-54 (emphasis in original) (citations and internal quotations marks
omitted). Thus, the pertinent question presented when reviewing the grant of a permanent
injunction is “whether [appellee] produced evidence that [appellant’s] conduct caused, or
was likely to cause, . . . the type of [irreparable] harm necessary to justify the court’s
issuance of injunctive relief.” Id. at 355.
In Coster v. Department of Personnel, we relied on American Jurisprudence to
require the prospect of irreparable injury before granting an injunction:
A court of equity reserves its injunctive process for the protection of property
or other rights against actual or threatened injuries of a substantial character
which cannot be adequately remedied in a court of law. That is to say, the
jurisdiction or power to grant injunctive relief should be exercised only when
intervention is essential to effectually protect property or other rights, of
which equity will take cognizance, against irreparable injuries. The very
function of an injunction is to furnish preventive relief against irreparable
mischief or injury, and the remedy will not be awarded where it appears to
the satisfaction of the court that the injury complained of is not of such
character. Suitors may not resort to a court of equity to restrain acts, actual
or threatened, merely because they are illegal or transcend constitutional
powers, unless it is apparent that irremediable injury will result. The mere
assertion that apprehended acts will inflict irreparable injury is not enough.
The complaining party must allege and prove facts from which the court can
reasonably infer that such would be the result.
36 Md. App. 523, 525-26 (1977) (quoting 42 Am. Jur. 2d Injunctions §§ 48, 49).
Importantly, mere allegations or arguments by a party that it will suffer irreparable damage
44
are insufficient bases for injunctive relief; “facts must be adduced to prove that [the
requesting party’s] apprehensions are well-founded.” El Bey, 362 Md. at 356 (citing Smith
v. Shiebeck, 180 Md. 412, 421 (1942); Mayor & Council of Salisbury v. Camden Sewer
Co., 135 Md. 563, 573 (1920)).
Here, the dispute settlement mechanism under the MCA provides:
If any unit owner fails to comply with this title, . . . the unit owner may be
sued for damages caused by the failure or for injunctive relief, or both, by
the council of unit owners or by any other unit owner.
RP § 11-113(c). Thus, the MCA contemplates injunctive relief as an appropriate vehicle
for enforcing the rights and obligations it creates. Because the failure to comply with a
unit owner’s rights under RP § 11-116 “cannot be readily, adequately, and completely
compensated for with money,” see Coster, 36 Md. App. at 525-26 (quoting 42 Am. Jur. 2d
Injunctions § 49), injunctive relief may be granted “to effectually protect [the] rights” of
the party requesting equitable relief, see id. (quoting 42 Am. Jur. 2d Injunctions § 48).
Therefore, absent a sufficient showing by Harborview and Zalco of the applicability of a
privilege against disclosure, Dr. Clark is entitled to the production of detailed billing
reports as financial documents maintained by Harborview and Zalco pursuant to RP § 11-
116, and to injunctive relief to enforce that production when it has been denied.
Contrastingly, the circuit court’s order enjoining Harborview and Zalco to produce
any future e-mail correspondence between them concerning Harborview is not supported
by any reasonable apprehension of irreparable harm. As all parties acknowledge, the
management contract between Harborview and Zalco expired on December 31, 2012. A
separate management company has since taken over operations at Harborview. The record
45
does not contain any indication that communications between Harborview and Zalco—
regarding the financial well-being of Harborview—will continue in any form. As such,
this request is likely moot and inappropriate for an award of permanent injunctive relief.
See El Bey, 362 Md. at 355 (citing Maryland–Nat’l Capital Park & Planning Comm’n v.
Washington Nat’l Arena, 282 Md. 588, 615 (1978)) (“Injunctive relief normally will not
be granted unless the petitioner demonstrates that it will sustain substantial and irreparable
injury as a result of the alleged wrongful conduct.”). Accordingly, we vacate the order of
the circuit court awarding specific performance directing Harborview and Zalco to produce
any future e-mail correspondence and enjoining them from refusing. However, with regard
to the remaining orders for specific performance and injunctive relief, we cannot conclude
that the circuit court abused its discretion.
III.
The Exclusion of Harborview’s Expert Witness
Harborview maintains that its accounting expert was prepared to opine, inter alia,
that detailed billing reports of legal counsel are not part of the financial books and records
that a condominium association is required to keep in accordance with good accounting
practices. The events leading to the court’s decision to exclude this testimony began on
March 13, 2013, when the pretrial scheduling order was issued. According to the order,
Harborview and Zalco were to designate their expert witnesses by June 11, 2013, and trial
was set for October 8, 2013. Harborview maintained that it had not received a copy of the
scheduling order and was unaware of the deadline. Several days after Harborview failed
to meet the deadline for the identification of expert witnesses, Dr. Clark served
46
interrogatories on June 13, 2013, asking Harborview to identify its expert witnesses. On
July 15, 2013, Harborview responded to those interrogatories and identified Mr. Gehrig
Cosgray, CPA, as an expert witness. Dr. Clark then moved, on August 7, 2013, to exclude
Mr. Cosgray as an expert witness due to Harborview’s failure to comply with the
scheduling order.
On September 12, 2013, Dr. Clark identified his rebuttal expert witnesses, and on
September 26, 2013, Dr. Clark noticed Mr. Cosgray’s deposition. The same day Dr. Clark
noticed the deposition, the circuit court summarily granted his motion to exclude Mr.
Cosgray as an expert witness. Nevertheless, Dr. Clark deposed Mr. Cosgray on October
1, 2013. At trial, Dr. Clark did not introduce any expert testimony.
Harborview contends that the circuit court erred by excluding the testimony of its
expert witness. Harborview maintains that despite not receiving the scheduling order and
thereby, admittedly, missing the deadline for the disclosure of expert witnesses, it
substantially complied with the order by notifying Dr. Clark of its expert witness a month
after the deadline and almost three months before trial. Moreover, it argues that Dr. Clark
was able to identify his own rebuttal expert witnesses on September 12, 2013, and that he
deposed Mr. Cosgray prior to trial. Harborview asserts that although the appropriate
sanction for a party’s failure to comply with a discovery order is a matter of discretion for
the circuit court, Livingstone v. Greater Washington Area Anesthesiology & Pain
Consultants, 187 Md. App. 346, 388 (2009) (citing Maddox v. Stone, 174 Md. App. 489,
501 (2007)), the court’s failure to exercise discretion requires reversal. We do not agree
that the court’s decision is so manifestly erroneous as to warrant reversal.
47
The circuit court must enter a scheduling order in most civil actions pursuant to
Maryland Rule 2-504(a)(1). In Dorsey v. Nold, 362 Md. 241, 255-56 (2001), the Court of
Appeals stated:
The principal function of a scheduling order is to move the case efficiently
through the litigation process by setting specific dates or time limits for
anticipated litigation events to occur.
***
Rule 2-504 is not a discovery rule. It is not included in the Title 2, Chapter
400 rules on discovery and, except as provided in § (b)(2)(A), is not intended
either to enlarge or constrict the scope of discovery. Its function, to the extent
it references discovery in § (b)(1), is to provide for the setting of time limits
on certain discovery events; it is, in that regard, a rule of timing, not of
substance.
In Maddox v. Stone, this Court, in reviewing the above language, concluded:
[A]lthough scheduling orders should not be applied in a manner that is
“unyieldingly rigid,” litigants must make good faith and reasonable efforts
to substantially comply with the court’s deadlines[.]
174 Md. App. at 499 (citing Naughton v. Bankier, 114 Md. App. 641, 653 (1997). We
have deemed substantial compliance with a scheduling order to be sufficient where the
opposing party has not suffered prejudice. See, e.g., Wormwood v. Batching Sys., Inc., 124
Md. App. 695, 702-05 (1999). Still, the overriding tenet persists that, “[t]he decision to
admit or exclude ‘expert’ testimony is within the broad discretion of the trial court and that
decision will be sustained on appeal unless it is shown to be manifestly erroneous.” Kleban
v. Eghrari–Sabet, 174 Md. App. 60, 61 (2007) (quoting Wood v. Toyota Motor Corp., 134
Md. App. 512, 520 n.8 (2000)) (internal quotation marks omitted).
48
In the instant case, the order of the circuit court excluding the expert testimony of
Mr. Cosgray summarily states:
Upon consideration of the Plaintiff’s Motion to Exclude Expert
Testimony of Gehrig Cosgray, CPA (#37), Defendant’s Opposition to
Plaintiff’s Motion to Exclude Expert Testimony of Gehrig Cosgray, CPA
(#37/1) and Plaintiff’s Reply in Support of Motion to Exclude Expert
Testimony of Gehrig Cosgray, CPA (#37/2), it is this 20th day of September
2013, by the Circuit Court for Baltimore City, hereby
ORDERED that, Plaintiff’s Motion to Exclude Expert Testimony of
Gehrig Cosgray, CPA (#37) is GRANTED.
There is no accompanying memorandum, and the record reveals that the court did not hold
a hearing on the motion. For those reasons, Harborview asserts that it cannot be discerned
from the summary exclusion of its expert witness whether the circuit court exercised proper
discretion or granted the exclusion based on a predetermined position that exclusion was
mandatory. See Gunning v. State, 347 Md. 332, 351 (1997) (“[A] judge’s unyielding
adherence to [a] predetermined position amounts to a . . . failure to properly exercise
discretion.”); Maus v. State, 311 Md. 85, 108 (1987) (“When a court must exercise
discretion, failure to do so is error, and ordinarily requires reversal.”). However, the record
reveals that the court had ample time to consider all parties’ filings and arguments.
Additionally, it appears that Mr. Cosgray’s expert testimony was to be, in large part,
his legal opinion on the scope of “books and records” under RP § 11-116. Harborview
designated Mr. Cosgray as its expert witness in its July 15, 2013, answers to interrogatories.
Those answers, which were attached to Appellee’s motion to exclude, provided, in
pertinent part:
Mr. Cosgray is expected to testify based on his review of the relevant
documents and depositions and his familiarity with Section 11-116 of the
49
Maryland Real Property Article that the books and records Harborview is
required to maintain and provide for inspection do not include the detailed
billing reports prepared by outside counsel for Harborview and are submitted
to Harborview for purposes of communicating itemized descriptions of legal
work performed for Harborview by its outside counsel.[17]
“Witnesses (whether lay or expert) generally may not testify to their conclusions on legal
issues, because their opinions would not be helpful to the court or the jury.” 6 Lynn
McLain, Maryland Evidence, State & Federal § 701:7, at 864-65 (3d. ed.).
In Burch v. Prudential Insurance Company of America, 184 Md. 664, 671 (1945),
the Court of Appeals considered the propriety of witness testimony regarding the legal
effect of bookkeeping practices. In that case, the appellant brought an action upon a special
agency contract to collect renewal commissions on life insurance premiums. Id. at 666-
67. The contract provided for “the payment of commissions, with respect to business
procured by the agent personally, on all premiums and considerations collected by him and
paid to the company in cash during the continuance of the contract.” Id. The policy in
question, however, contained a provision stating that “upon proof that the insured had
become totally and permanently disabled before the age of sixty, [the insurer] would waive
the payment of certain premiums otherwise payable under this policy.” Id. at 673 (internal
quotation marks omitted). The sole question presented to the Court of Appeals was
whether this waiver of premium payments constituted a discontinuance of payment or
should be deemed constructive payment for the purpose of the agency contract and
commission payments. Id. The appellant argued that the trial court erred in excluding
17
The subject of Mr. Cosgray’s testimony was provided to the circuit court again
through proffer—using substantially similar language—at the October 9, 2013, hearing.
50
testimony as to bookkeeping practices and custom and usage among insurance companies
regarding premiums waived during disability. Id. The Court of Appeals disagreed, stating
that questions calling for conclusions regarding the legal effect of company bookkeeping
practices “were not designed to elicit any new facts as to that practice, but merely called
for an expression of opinion upon a point which . . . was for the court to decide” Id. at 671.
We are presented with a similar circumstance. Just as the construction of an
unambiguous contract is a matter of law to be decided by the court, Connors v. Gov't
Employees Ins. Co., 442 Md. 466, 480 (2015) (citations omitted), so too is the construction
of a statute such as RP § 11-116, see Davis v. Slater, 383 Md. 599, 604 (2004) (citations
omitted) (stating that interpreting the Maryland Code is a matter of law). In the matter
before us, we cannot conclude that the circuit court either abused or failed to exercise its
discretion in excluding the testimony of Harborview’s expert witness.
IV.
Cross-appeal
In his cross-appeal, Dr. Clark argues that the circuit court erred in conducting its
statutory construction analysis and that it erred in determining that the provisions of RP §
11-116 can be read in harmony with the attorney-client privilege and the work product
doctrine. We have already addressed these contentions above. The arguments advanced
on cross-appeal are not otherwise distinct.
JUDGMENTS OF THE CIRCUIT
COURT FOR BALTIMORE CITY
AFFIRMED IN PART AND VACATED
IN PART. ORDER AWARDING
SPECIFIC PERFORMANCE
51
DIRECTING APPELLANTS/CROSS-
APPELLEES TO PRODUCE ANY
FUTURE E-MAILS CONCERNING
THE FINANCIAL WELL-BEING OF
HARBORVIEW AND ENJOINING
THEM FROM REFUSING TO
PRODUCE SUCH FUTURE E-MAILS
VACATED. ALL OTHER ORDERS OF
THE CIRCUIT COURT FOR
BALTIMORE CITY AFFIRMED.
COSTS TO BE DIVIDED EQUALLY
AMONG THE PARTIES.
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