Pinner v. Pinner

Mona H. Pinner, et al. v. Randy R. Pinner, No. 1231, September Term 2017
COURTS – PERSONAL JURISDICTION – SPECIFIC JURISDICTION –
CONSENT TO BE SUED – The filing and prosecution in Maryland of a single toxic
tort suit by the appellant, a North Carolina resident, and her late husband was not a
purposeful availment of the forum state that amounted to consent to be sued here.
COURTS – PERSONAL JURISDICTION – SPECIFIC JURISDICTION –
CONSTITUTIONAL REASONABLENESS – It was not constitutionally reasonable
for a Maryland court to exercise personal jurisdiction over the appellant based upon her
prosecution of the prior Maryland lawsuit. The appellant did not travel to Maryland to
prosecute the law suit, but relied upon her lawyers to take all necessary actions here; the
claims in the instant suit are collateral to the claims raised in the tort suit and some arise
under North Carolina law; it would burden her to defend the lawsuit here; and it would
not burden the appellee, also a North Carolina resident, to prosecute his claims against
her in North Carolina.
LEGAL MALPRACTICE – STRICT PRIVITY RULE – THIRD PARTY
BENEFICIARY EXCEPTION – The cross-appellant lacked standing to sue the
appellant’s attorneys, the cross-appellees, for legal malpractice arising from their failure
to timely name him as a use plaintiff and provide notice of his right to intervene in the
wrongful death counts of her suit pursuant to Md. Rule 15-1001. The cross-appellant was
neither the cross-appellees’ client, nor an intended third-party beneficiary of the attorney-
client relationship between the cross-appellees and the appellant.
Circuit Court for Baltimore City
Case No. 24-C-16-000247
REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 1231
September Term, 2017
______________________________________
MONA H. PINNER, ET AL.
v.
RANDY R. PINNER
______________________________________
Fader, C.J.,
Wright,
Eyler, James R.
(Senior Judge, Specially Assigned),
JJ.
______________________________________
Opinion by Eyler, James R., J.
______________________________________
Filed: January 31, 2019
Pursuant to Maryland Uniform Electronic Legal
Materials Act
(§§ 10-1601 et seq. of the State Government Article) this document is authentic.
2019-01-31
13:36-05:00
Suzanne C. Johnson, Clerk
This appeal is from a default judgment in favor of Randy R. Pinner,
appellee/cross-appellant, a North Carolina resident, against his step-mother, Mona
Pinner, appellant, also a North Carolina resident, in the amount of nearly $100,000.1
Randy noted a cross-appeal from the order dismissing his claims against Mona’s former
attorneys: Mary H. Keyes, Esq., and the Keyes Law Firms, LLC (collectively “the Keyes
Defendants”); and against Napoli Bern Ripka Shkolnik, LLP (“the Napoli Firm”), various
related entities, and lawyers employed by those entities, including Jason Weiner, Esq.
(collectively “the Napoli Defendants”), 2 cross-appellees.
Prior to this suit, Edwin Pinner, Mona’s late husband and Randy’s father, and
Mona, filed suit in the Circuit Court for Baltimore City, seeking damages for personal
injuries caused by asbestos exposure (“the Asbestos Case”). Following Edwin’s death
from mesothelioma, the Asbestos Case was converted to a wrongful death and survival
action on behalf of Mona, individually and as personal representative of the Estate of
Edwin F. Pinner (“the Estate”). Ms. Keyes represented Mona (and Edwin) in the
Asbestos Case for nearly two years until, by agreement with Ms. Keyes, the Napoli Firm
1
For ease of discussion, we shall refer to the Pinners by their first names.
2
In addition to the previously named firm and Mr. Weiner, the Napoli Defendants
are: Napoli Bern Ripka Shkolnik & Associates, LLP; Napoli Bern, LLP; Napoli, Bern, &
Associates, LLP; Napoli Bern Ripka, LLP; Napoli Bern Ripka & Associates, LLP; Law
Offices of Napoli Bern Ripka Shkolnik LLP; Law Offices of Napoli Bern Ripka &
Associates, LLP; Law Offices of Napoli Bern, LLP; Paul J. Napoli; Marc J. Bern; Alan S.
Ripka; Hunter J. Shkolnik; Ethan Horn; Napoli Shkolnik PLLC; Napoli Shkolnik &
Associates PLLC; Napoli Shkolnik LLC; Bern Ripka LLP; Paul Napoli Law PLLC; Marc
Bern Law PLLC; Marie Kaiser PLLC; Napoli Law PLLC; Napoli & Partners PLLC; and
Hunter J. Shkolnik Attorney At Law PLLC.
took over the case. After Mona added a wrongful death claim to the Asbestos Case, she
did not timely serve notice on Randy, pursuant to Rule 15-1001, or name him as a use
plaintiff. As a result, Randy did not learn of the wrongful death claim until more than
three years after Edwin died and his motion to intervene in the Asbestos Case was denied
as time-barred. After Mona settled with certain of the defendants in the Asbestos Case,
she received settlement proceeds, but did not deposit those funds into the Estate in North
Carolina.
Randy filed the instant action in the Circuit Court for Baltimore City asserting
claims for negligence and breach of fiduciary duty against Mona, the Keyes Defendants,
and the Napoli Defendants, as well as claims for aiding and abetting, negligent retention
and supervision, and respondeat superior against certain of the Keyes Defendants and the
Napoli Defendants. The circuit court granted motions to dismiss for failure to state a
claim upon which relief may be granted as to all of the claims against the Keyes
Defendants and the Napoli Defendants.
Mona failed to plead and Randy’s request for an order of default was granted.
After she unsuccessfully moved to vacate the order of default, the court held a damages
inquisition hearing over two days, ruled that it had personal jurisdiction over Mona,3 and
entered a default judgment in favor of Randy for $99,856.84.
Mona appeals from the default judgment, presenting three questions, which we
have rephrased:
3
As we shall discuss, infra, the issue of personal jurisdiction was raised sua
sponte by the court and occasioned the continuance of the damages hearing.
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I. Did the circuit court err by exercising personal jurisdiction over Mona?
II. Did the circuit court err by applying North Carolina law to calculate
Randy’s damages?
III. Did the circuit court abuse its discretion by denying Mona’s motion to
vacate the order of default?
In his cross-appeal, Randy presents four questions, which we have condensed and
rephrased as three:
IV. Did the circuit court err by dismissing the claims against the Keyes
Defendants and the Napoli Defendants for negligence, negligent retention
and supervision, and respondeat superior premised upon a breach of Rule
15-1001?
V. Did the circuit court err by dismissing the claims against the Keyes
Defendants and the Napoli Defendants for aiding and abetting Mona’s
alleged breach of Rule 15-1001?
VI. Did the circuit court err by dismissing the claims against the Keyes
Defendants and the Napoli Defendants for aiding and abetting a breach of
fiduciary duty under North Carolina law?
For the following reasons, we answer the first question in the affirmative and shall
remand with direction that the court vacate the default judgment and enter an order
dismissing the claims against Mona for lack of personal jurisdiction. The resolution of
the first question obviates the need for us to address Mona’s other contentions of error. In
the cross-appeal, we answer all three questions in the negative and shall affirm the
dismissal of the claims against the Keyes Defendants and the Napoli Defendants.
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FACTS AND PROCEEDINGS
a. The Asbestos Case
In August 2009, Edwin was diagnosed with mesothelioma. He lived with his wife,
Mona, in North Carolina. Edwin has one biological son, Randy, from a prior marriage
who also lives in North Carolina.
In September 2009, Edwin and Mona retained the services of the Keyes
Defendants. On February 23, 2010, Ms. Keyes, on behalf of Edwin and Mona, filed suit
in the Circuit Court for Baltimore City, Case No. 24-X-10-000032, against numerous
defendants, including two of Edwin’s former employers headquartered in Baltimore City
– Continental Wire and Inland Steel – alleging that he had been directly exposed to
asbestos dust while working for those companies. During discovery, Edwin and Mona
identified Randy as Edwin’s only biological son in their answers to interrogatories.
Eight months after suit was filed, on October 30, 2010, Edwin died from
mesothelioma. In December 2010, Mona was appointed personal representative of the
Estate in the General Court of Justice, Superior Court Division, Buncombe County, North
Carolina. She listed the Asbestos Case as property of the Estate.
In March 2012, Ms. Keyes entered into an “Association Agreement” with the
Napoli Firm whereby they agreed to take over all aspects of the Asbestos Case.
Two and one-half years after Edwin died, on April 24, 2013, Jason Weiner, Esq.,
an employee of the Napoli Firm and a lawyer admitted to practice in Maryland, filed an
amended complaint on behalf of Mona that added a claim for wrongful death. In
Maryland, “only one action” shall lie for the wrongful death of a person and it “shall be
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for the benefit of the wife, husband, parent, and child of the deceased person.” Md. Code
(1974, 2006 Repl. Vol.), section 3-904(a) & (f) of the Courts and Judicial Proceedings
Article (“CJP”). Pursuant to Rule 15-1001(b), “[a]ll persons who are or may be entitled
by law to claim damages by reason of the wrongful death shall be named as plaintiffs
whether or not they join in the action.” If a potential wrongful death beneficiary is not
joined in the action, the words “to the use of” should precede their name. Id. The party
bringing the wrongful death action is required to serve a copy of the complaint on each
use plaintiff, along with a notice explaining their right to join the action. 4 Id. at (d).
Randy was not named as a use plaintiff in the amended complaint and was not served
with a copy of the amended complaint or a Rule 15-1001(d) notice.
4
That notice shall provide:
You may have a right under Maryland law to claim an award of damages in
this action. You should consult Maryland Code, § 3-904 of the Courts
Article for eligibility requirements. Only one action on behalf of all
individuals entitled to make a claim is permitted. If you decide to make a
claim, you must file with the clerk of the court in which this action is
pending a motion to intervene in the action in accordance with the
Maryland Rules no later than the earlier of (1) the applicable deadline
stated in § 3-904 (g) and § 5-201 (a) of the Courts Article [“the statutory
deadline”] or (2) 30 days after being served with the complaint and this
Notice if you reside in Maryland, 60 days after being served if you reside
elsewhere in the United States, or 90 days after being served if you reside
outside of the United States [“the served notice deadline”]. You may
represent yourself, or you may obtain an attorney to represent you. If the
court does not receive your written motion to intervene by the earlier of the
applicable deadlines, the court may find that you have lost your right to
participate in the action and claim any recovery.
Md. Rule 15-1001(d).
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Over a year later, in June 2014, two of the defendants in the Asbestos Case moved
to dismiss the wrongful death count of the amended complaint on the ground that Mona
had failed to name Randy as a use plaintiff. In response to that motion, on July 8, 2014,
Mona, through the Napoli Firm and Mr. Weiner, filed by consent a second amended
complaint. The second amended complaint substituted Mona, individually and as
personal representative of the Estate, as the only plaintiff, and, added Randy as a use
plaintiff in the wrongful death count.
On July 10, 2014, three years and eight months after Edwin’s death, Mona,
through counsel, served Randy with a copy of the complaint and the Rule 15-1001(d)
notice.
Within sixty days, on September 4, 2014, Randy moved to intervene in the
Asbestos Case. The defendants opposed his intervention on the ground that his claim was
time-barred. By order entered October 27, 2014, the circuit court permitted Randy to
intervene for the limited purpose of conducting discovery relative to the limitations issue
and, by order of June 23, 2015, denied his motion to intervene as time-barred.
b. The Instant Case
On January 19, 2016, Randy filed a sixteen-count complaint against Mona, the
Keyes Defendants, Mr. Weiner, and the remainder of the Napoli Defendants arising from
their “failure, among other things, to timely name Randy . . . as a use plaintiff in a
wrongful death action and provide him with the notice required by Maryland Rule 15-
1001.” He alleged that Mona was a resident of North Carolina and that the Napoli Firm
(and related entities) all were organized under the laws of New York State or Delaware.
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He further alleged that the court had personal jurisdiction over the non-resident
defendants pursuant to the Maryland long-arm statute, codified at CJP section 6-103, “in
that each [defendant] either directly and/or by an agent, regularly solicited or conducted
business, engaged in a persistent course of conduct, and derived substantial revenues
from services within [Maryland] . . . [,]” and had caused tortious injury by acts or
omissions within or outside the state.
Counts I, II, and IV pertained to Mona, individually and as personal representative
of the Estate. Count I asserted that Mona negligently failed to name Randy as a use
plaintiff in violation of Maryland Rule 15-1001. Count II alleged that she breached her
fiduciary duties as personal representative of the Estate under North Carolina law by
failing to provide notice under Rule 15-1001 and failing to distribute a share of the
settlement monies from the Asbestos Case to Randy, a statutory beneficiary of the Estate.
Count IV alleged that Mona was vicariously liable for the tortious acts and omissions of
the Napoli Defendants.
Counts III, V, VI, VII, VIII, IX, X, XI, and XII all pertained to various of the
Napoli Defendants, including Mr. Weiner. Count III asserted a claim for negligence
against the Napoli Defendants for failure to name Randy as a use plaintiff. Count V
alleged that the Napoli Defendants were vicariously liable for the tortious acts and
omissions of Mr. Weiner in his conduct of the Asbestos Case. Counts VI, VII, X, and XI
asserted that certain of the Napoli Defendants aided and abetted Mona’s breach of Rule
15-1001 and her breaches of fiduciary duty. Counts VIII and IX asserted that certain of
the Napoli Defendants negligently retained and/or supervised Mr. Weiner. Count XII
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asserted that the successor entities to certain of the Napoli Defendants were liable for the
tortious conduct of their predecessors in interest.
Counts XIII, XIV, XV, and XVI all pertained to the Keyes Defendants, asserting
claims for negligence (Count XIII); aiding and abetting negligence by Mona (Count
XIV); aiding and abetting breach of fiduciary duty by Mona (Count XV); and vicarious
liability as to the Keyes Law Firm for the tortious acts and omissions of Ms. Keyes
(Count XVI).
The Keyes Defendants and the Napoli Defendants moved to dismiss the
complaint. The court held a hearing and, by amended order entered October 19, 2016,
granted the motions to dismiss with prejudice. We shall discuss the arguments made and
the court’s ruling, infra.
Mona was served by private process in North Carolina on March 14, 2016, but
failed to plead. Consequently, on November 28, 2016, Randy filed a request for an order
of default. On January 4, 2017, the court entered an order of default. A “Notice of Default
Order” was sent to Mona in North Carolina, advising that she could move to vacate the
order within thirty days (i.e., by February 3, 2017) explaining “reasons for the failure to
plead and the legal and factual basis for the defense to the claim.”
As we shall discuss, infra, Mona, through a third party, filed a motion to vacate
the order of default on February 22, 2017. Her motion was denied, and the matter was set
in for a damages inquisition on May 3, 2017. On that date, Randy appeared with counsel
(as did representatives of the Napoli Defendants and the Keyes Defendants), but Mona
did not appear. The court sua sponte raised the issue of personal jurisdiction, received
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evidence on damages incurred by Randy, and then granted a continuance to permit
Randy’s counsel to brief the personal jurisdiction issue.
The hearing resumed on July 26, 2017. Mona again did not appear. At the outset,
the court ruled that it had jurisdiction over Mona and heard argument on damages. At the
end of the hearing, the court ordered Mona to pay Randy $99,856.84, which comprised
one-half of the total settlement proceeds on the wrongful death claim, less a $60,000
spousal deduction under North Carolina law. An order to that effect was entered on July
28, 2017.
This timely appeal and cross-appeal followed. We shall include additional facts in
our discussion of the issues.
DISCUSSION
APPEAL
I.
Personal Jurisdiction
“The existence of personal jurisdiction is a question of law.” Cappel v. Riaso,
LLC, 197 Md. App. 347 (2011). The burden is on the plaintiff “to establish the propriety
of [the exercise] of personal jurisdiction.” CSR v. Taylor, 411 Md. 457, 467 n.2 (2009).
Before a court may exercise personal jurisdiction over a foreign defendant, such as Mona,
the court must be satisfied that “the exercise of jurisdiction is authorized under
Maryland’s long arm statute . . . [and that] the exercise of jurisdiction comports with due
process requirements of the Fourteenth Amendment.” Beyond Sys., Inc. v. Realtime
Gaming Holding Co., LLC, 388 Md. 1, 14-15 (2005) (citations omitted). The “statutory
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inquiry merges with [the] constitutional examination” because “the reach of the long arm
statute is coextensive with the limits of personal jurisdiction.” Id. at 22. “A court’s
exercise of personal jurisdiction over a nonresident defendant satisfies due process
requirements if the defendant has ‘minimum contacts’ with the forum, so that to require
the defendant to defend its interests in the forum state ‘does not offend traditional notions
of fair play and substantial justice.’” Id. (quoting Int’l Shoe Co. v. Washington, 326 U.S.
310, 316 (1945)).
With those principles in mind, we return to the case at bar. As mentioned, the
issue of the circuit court’s personal jurisdiction over Mona arose during the May 3, 2017
damages inquisition when the court, sua sponte, raised the issue. Randy’s attorney was
unprepared to address the issue at that time and, after presenting evidence on damages,
was granted a continuance.
On July 25, 2017, Randy filed a supplemental memorandum addressing personal
jurisdiction. He argued that Mona waived the defense of lack of personal jurisdiction
when she filed her motion to vacate the order of default but did not move to dismiss for
lack of personal jurisdiction. Alternatively, he maintained that the long arm statute
conferred specific personal jurisdiction over Mona because she had “caused . . . tortious
injury” to him “outside of the State by an act or omission outside the State,” i.e., her
breach of fiduciary duty as personal representative, and the injury arose from her
“persistent course of conduct in the State,” i.e., her prosecution of the Asbestos Case. CJP
§ 6-103(b)(4). He emphasized that Mona’s contacts with Maryland, through her agents –
the Napoli Defendants and the Keyes Defendants – in their conduct of the Asbestos Case
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were extensive and persisted over a five-year period, culminating in the payment of
settlement proceeds to her.
At the continued damages inquisition, Randy introduced into evidence an affidavit
made by his attorney and attached exhibits, which included the certified docket entries
from the Asbestos Case, as well as copies of numerous documents and pleadings filed in
that case. The circuit court determined that it could exercise personal jurisdiction over
Mona, without stating specific findings or reasons.
On appeal, Mona contends the court erred in so ruling because personal
jurisdiction is not authorized under CJP section 6-103(b)(4) of the long-arm statute, and
the exercise of jurisdiction would violate due process. She emphasizes that by the time of
the damages inquisition, only two counts against Mona remained: Count I, asserting that
Mona negligently failed to name Randy as a use plaintiff in the Asbestos Case, in
violation of Md. Rule 15-1001, and Count II, alleging that, under North Carolina law, she
breached her fiduciary duties as personal representative by failing to give notice pursuant
to Md. Rule 15-1001 and failing to distribute to Randy the settlement proceeds from the
Asbestos Case.5 Mona asserts that Randy abandoned Count I at the damages inquisition
hearing, arguing both in a May 3, 2017 damages memorandum and in open court that
only the breach of fiduciary duty count was before the court. Thus, she maintains that the
only issue properly before us is whether the court had personal jurisdiction over Mona
5
Count IV, alleging that Mona was vicariously liable for the tortious acts and
omissions of the Napoli Defendants and the Keyes Defendants, was no longer viable
because of the dismissal of the claims against those defendants.
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vis-à-vis her allegedly wrongful administration of the Estate. In any event, she argues
that the court lacked personal jurisdiction over her with respect to Counts I and II because
her only contact with Maryland was the filing and prosecution of the Asbestos Case and
that that was insufficient to confer jurisdiction.
Randy responds that Mona waived this issue by her failure to assert lack of
personal jurisdiction as a defense in the circuit court pursuant to Rule 2-322(a). Even if
not waived, he asserts that the circuit court did not err by exercising personal jurisdiction
over Mona because by filing complex asbestos litigation in the Circuit Court for
Baltimore City, Mona, through her agents, “purposely availed . . . herself of the privilege
of conducting activities in the State.” (Quoting Bond v. Messerman, 391 Md. 706, 721-23
(2006)). Because Randy’s claims arise from her acts and omissions relative to the
settlement of that suit, he urges that it would be constitutionally reasonable to require her
to litigate the instant action in the same forum. He asserts, moreover, that he did not
abandon Count I, but merely elected to pursue a theory of damages based on Count II.
We begin by disposing of the issue of waiver under Rule 2-322. That rule states,
in relevant part, that “[t]he following defenses shall be made by motion to dismiss filed
before the answer, if an answer is required: (1) lack of jurisdiction over the person . . . . If
not so made and the answer is filed, these defenses are waived.” Md. Rule 2-322(a)
(emphasis added). In the case at bar, Mona did not file an answer to the complaint.
Rather, she sent her former attorney, Paul Napoli, a handwritten note claiming that her
daughter had filed an answer to the complaint on her behalf and advising that she wanted
to vacate the default order. Mr. Napoli asked another attorney – Joseph Smith, Esq. – to
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forward Mona’s note to the circuit court, which he did. As discussed, the court denied
the motion to vacate. There is no answer in the record. Having never filed an answer,
Mona did not waive her right to assert the defense of lack of personal jurisdiction by her
failure to assert it below. See Smith v. Cylus, 147 Md. App. 78, 81 (2002) (explaining
that a plaintiff does not waive the mandatory defenses set forth in Rule 2-322 unless he or
she files an answer without having asserted the defense).
With respect to the abandonment of Count I, for reasons explained infra, a
decision is immaterial to the result we reach. Count I was based on common law
negligence which was based on a violation of a Md. Rule. Count II was based on breach
of fiduciary duty which was based on the same alleged violation and additional acts.
Regardless of count, appellant relied on section 6-103(b)(4) and argued that the alleged
tortious acts occurred out of State, causing tortious injury out of State.
We now turn to the thornier issue of whether the exercise of personal jurisdiction
is authorized. Personal jurisdiction takes two forms: general jurisdiction and specific
jurisdiction. For either type, a defendant “must maintain sufficient minimum contacts
with the forum such that the exercise of jurisdiction meets the ‘general test of essential
fairness.’” Republic Props. Corp. v. Mission West Props., LP, 391 Md. 732, 760 (2006)
(quoting Presbyterian Univ. Hosp. v. Wilson, 337 Md. 541, 551-52 (1995)). Specific
jurisdiction may be established if “the defendant’s contacts with the forum state form the
basis for the suit[.]” Beyond Systems, 388 Md. at 26. “If the defendant’s contacts with the
State are not the basis for the suit, then jurisdiction over the defendant must arise from
the defendant’s general, more persistent contacts with the State.” Id. at 22.
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Randy does not suggest that Mona’s contacts with Maryland were of the type
sufficient to confer general jurisdiction over her. Rather, he argues that specific
jurisdiction may be exercised because Mona’s contacts with Maryland “form the basis for
the suit[.]” Beyond Systems, 388 Md. at 26. The only contact Mona is alleged to have
had with Maryland is the filing and prosecution of the Asbestos Case. In assessing
whether Mona’s conduct of the Asbestos Case gives rise to specific personal jurisdiction,
we keep the language of the statute in mind, as we consider three prongs: “(1) the extent
to which the defendant has purposefully availed [herself] of the privilege of conducting
activities in the State; (2) whether the plaintiffs’ claims arise out of those activities
directed at the State; and (3) whether the exercise of personal jurisdiction would be
constitutionally reasonable.” Id. at 26 (Carefirst of Md., Inc. v. Carefirst Pregnancy
Centers, Inc., 334 F.3d 390, 397 (4th Cir.2003)).
Under the first prong, Randy maintains that Mona purposely availed herself of the
privilege of filing suit here and, as a result, has impliedly consented to being sued here on
claims arising from that lawsuit. See Neuralstem, Inc. v. Stemcells, Inc., 573 F.Supp.2d
888 (D. Md. 2008). In Neuralstem, a Delaware corporation headquartered in Maryland
(Neuralstem), filed suit in the United States District Court for the District of Maryland
against a Delaware corporation headquartered in California (Stemcells), seeking a
declaratory judgment that a patent licensed by Stemcells was unenforceable, invalid and
not infringed. Almost two years earlier, Stemcells had sued Neuralstem for patent
infringement in the same court. The earlier case was stayed pending a reexamination of
the patents by the United States Patent and Trademark Office (“USPTO”) and remained
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stayed when Neuralstem filed its suit. While the stay was pending, the USPTO issued
two new patents to Stemcells, one of which was the subject of Neuralstem lawsuit.
Stemcells moved to dismiss for lack of personal jurisdiction. The district court
denied the motion. It explained that many courts had “concluded that personal
jurisdiction may be based upon implied consent or waiver when a non-resident files a
claim in the forum state that involves the same transaction.” Id. at 897. It reasoned that
Stemcells had waived its right to contest personal jurisdiction, or had impliedly consented
to being sued in Maryland, by “purpose[ly] avail[ing] itself of the privileges and benefits
of [the Maryland forum] by filing the [prior] Maryland action, which involve[d] the same
parties and [was] related to the same transaction or occurrence as the [matter before the
court].” Id. at 898. The court noted, moreover, that the prior lawsuit and the current
lawsuit were “significantly intertwined” and, concededly, involved “common operative
facts.” Id.Glassman, Edwards, Wade & Wyatt, P.C. v. Wolf Haldenstein Adler Freeman &
Herz, LLP, 601 F.Supp.2d 991 (W.D. Tenn. 2009) (“Glassman”), also is instructive.
Three law firms – one based in New York, one based in California, and one based in
Tennessee – entered into a joint venture to serve as co-counsel for plaintiffs in an anti-
trust lawsuit filed in the United States District Court for the Western District of
Tennessee. Another firm, based in Maine, later was appointed co-lead counsel along
with the three other firms. The antitrust litigation ultimately was settled. Subsequently,
the California and Tennessee based firms filed suit against the New York and Maine
based firms, along with a third firm, alleging breaches of fiduciary duty and the covenant
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of good faith and fair dealing relative to the joint venture agreement, seeking the
imposition of a constructive trust, and seeking declaratory relief. The out-of-state law
firm defendants all moved to dismiss for lack of personal jurisdiction. The district court
denied the motion, ruling that it had specific personal jurisdiction over all the non-
resident defendants. It reasoned that the defendants had “purposely availed themselves of
the privilege of acting in Tennessee by prosecuting the protracted [antitrust litigation] in
[the forum state].” Id. at 1003. The court emphasized that the joint venture agreement
that was alleged to have been violated arose from activities in Tennessee, that the burden
on the defendants would be minimal given their past litigation in the forum, and that
Tennessee had a strong interest in adjudicating contractual disputes relative to legal
services performed in the state.
We return to the case at bar. This case is unlike Neuralstem in that, there, the prior
lawsuit involved the same legal and factual issues and the same parties. Here, the
Maryland lawsuit was a toxic tort action against Edwin’s former employers for injuries
suffered by him as result of exposure to asbestos. The factual and legal issues underlying
those claims bear no relation to the claims raised by Randy in his suit for negligent
breach of Rule 15-1001 and for breach of fiduciary duty of North Carolina law.
Glassman is closer to the instant case in that the factual and legal issues in the case
in which the defense of lack of personal jurisdiction was raised were related, but
collateral to, the factual and legal issues in the prior lawsuit in the forum state. The law
firms purposely availed themselves of the privilege of practicing law in Tennessee. The
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record is silent as to whether Mona and Edwin, through their agents, had a choice as to
where they filed the Asbestos Case.
We believe the decision in Mallinckrodt Medical, Inc. v. Sonus Pharmaceuticals,
Inc., 989 F. Supp. 265 (D.D.C. 1998), is consistent with the law of Maryland. In that
case, Bracco Diagnostics, Inc. (Bracco), DuPont Merck Pharmaceutical Co. (DuPont
Merck), ImaRx Pharmaceutical Corp. (ImaRx), and Sonus Pharmaceuticals, Inc. (Sonus),
and Molecular Biosystems, Inc. (MBI), as defendant intervenor, sued the Food and Drug
Administration (FDA) in the United States District Court for the District of Columbia.
The plaintiffs alleged that the FDA treated their products as drugs while treating the
products of a competitor, MBI, as a medical device. See Bracco Diagnostics, Inc. v.
Shalala, 963 F. Supp. 20 (D.D.C. 1997). MBI filed a counterclaim raising patent law
issues. Ultimately, the entire case was dismissed on the ground that the case was moot
before the counterclaim was filed because the FDA acceded to the plaintiffs’ request.
Mallinckrodt Medical, Inc. (Mallinckrodt), the marketer for MBI, and MBI filed in
the same court a separate suit against Bracco, DuPont Merck, ImaRx, Sonus, and others
seeking essentially the same relief, i.e. patent infringement claims, that MBI had sought
in its earlier counterclaim. Sonus and ImaRx argued that the court lacked personal
jurisdiction over them because their only contacts with the District of Columbia were to
petition the FDA for approval of their products, protest to the FDA disparate treatment of
their products, and file the lawsuit against the FDA. The court, inter alia, considered
subsection (a)(4) of the long arm statute, the same as Maryland’s, and concluded that the
court lacked personal jurisdiction. The court explained that filing the earlier suit did not
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constitute consent to be sued in the later action, filing the suit did not constitute doing
business, there was no persistent course of conduct in the District of Columbia, and the
patent issues did not arise from the earlier regulatory action.
We recognize that the District of Columbia is unique because it is the nation’s
capital, and an entity seeking redress of grievances from an agency of the federal
government does not submit itself to jurisdiction under the long arm statute.
Mallinckrodt, 989 F. Supp. at 271. Nevertheless, we conclude that the result is consistent
with the law of Maryland. Ordinarily, the filing of a lawsuit does not constitute regularly
doing business in Maryland and is not a persistent course of conduct in Maryland. Cf.
Stisser v. SP Bancorp, Inc., 234 Md. App. 593, 639-41 (2017) (holding that the “mere act
of filing [articles of incorporation] in Maryland falls short of the grip of Maryland’s long
arm [statute]” particularly because the plaintiffs’ claims only were “tangentially related”
to that conduct).
We turn to the second prong of the specific jurisdiction test, “whether the
plaintiffs’ claims arise out of those activities directed at the State.” Here, one cause of
action upon which Mona was sued – common law negligent breach of Rule 15-1001 –
stemmed from her prosecution and settlement of the Asbestos Case. The other cause of
action (and the only claim upon which damages were awarded) arose from Mona’s
execution of her duties as personal representative of a North Carolina estate. During the
hearing, Mona’s counsel stated that there are two components to jurisdiction: the failure
of attorneys to give notice under Rule 15-1001 and the breach of fiduciary duty that
occurred in North Carolina and caused injury in North Carolina. Counsel stated that the
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former component had “gone by the wayside.” As we explained earlier, the failure to give
notice under Count I was also a part of Count II, as part of the alleged breach of fiduciary
duty that occurred in North Carolina. The connection between Mona’s breach of
fiduciary duty in North Carolina and maintenance of the Asbestos Case is tenuous,
especially with respect to the administration of the Estate.
The third prong concerns whether the exercise of jurisdiction is constitutionally
reasonable. Under this prong, a court must consider and balance a variety of interests:
“the burden on the defendant; the interests of the forum State; the plaintiff’s interest in
obtaining relief; the interstate judicial system’s interest in obtaining the most efficient
resolution of controversy; and the shared interest of the several states in furthering
fundamental substantive social policies.” Camelback Ski Corp. v. Behning, 312 Md. 330,
338 (1988). There plainly is a practical burden on Mona occasioned by her residency in
North Carolina, her age, and her alleged ill health. There is no allegation that she
travelled to Maryland at any time during the prosecution of the Asbestos Case, relying
instead upon her attorneys to act on her behalf here. Randy also would not be burdened
by litigating in North Carolina given that he too resides there. Maryland has a legitimate
interest in adjudicating claims for violations of its Rules of Procedure, but it has no
interest in adjudicating the breach of fiduciary duty claims premised on North Carolina
probate law. Moreover, considering the dismissal of the claims against the Keyes
Defendants and the Napoli Defendants, there is no longer an efficiency interest in all the
claims being adjudicated in the same forum. On balance, we conclude that the factors
weigh against the constitutional reasonableness of causing Mona to defend the instant suit
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in Maryland and, accordingly, shall hold that the circuit court erred by exercising
personal jurisdiction over her. Thus, we shall remand with directions for the court to
vacate the default judgment and enter an order dismissing the claims against Mona.
CROSS-APPEAL
Before turning to the issues in the cross-appeal, we present some preliminary facts.
On April 25, 2016, the Keyes Defendants moved to dismiss the complaint, or in the
alternative, for summary judgment, attaching an affidavit and excerpts of the complaint in
the Asbestos Case. On May 6, 2016, the Napoli Defendants moved to dismiss the
complaint. The attorney defendants all argued that dismissal was appropriate on the
negligence and negligent retention and supervision counts (Counts III, VIII, IX, and XIII)
because the facts alleged did not support an inference that they owed Randy, who was not
their client and was not an intended third-party beneficiary of the attorney-client
relationship between them and Mona, a duty of care. They argued, moreover, that the
claims for respondeat superior (Counts V and XVI), and successor liability (Count XII)
were not independent causes of actions, and that the aiding and abetting negligence and
aiding and abetting breach of fiduciary duty claims (Counts VI, VII, X, XI, XIV, and
XV) were not cognizable under Maryland law.
A hearing on their motions was held on June 1, 2016. By amended order entered
October 19, 2016, the court granted the motions to dismiss with prejudice. As pertinent,
the court ruled that there was no attorney-client relationship between Randy, on the one
hand, and the Napoli Defendants or the Keyes Defendants, on the other hand; that Randy
lacked standing to sue as a third-party beneficiary of the attorney-client relationship
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between Mona and her attorneys; that Randy lacked standing to sue for a violation of
Rule 15-1001; and that Randy failed to state a claim upon which relief may be granted for
negligence, negligent retention and/or supervision; aiding and abetting; or respondeat
superior.
We review de novo a circuit court’s decision to grant a motion to dismiss a
complaint for failure to state a claim for which relief can be granted. Gasper v. Ruffin
Hotel Corp. of Md., Inc., 183 Md. App. 211, 226 (2008). “[W]e must assume the truth of
the well-pleaded factual allegations of the complaint, including the reasonable inferences
that may be drawn from those allegations.” Adamson v. Corr. Med. Servs., Inc., 359 Md.
238, 246 (2000). We “presume . . . the truth of all well-pleaded facts in the [c]omplaint,
along with any reasonable inferences derived therefrom in a light most favorable to
plaintiffs.” Pittway Corp. v. Collins, 409 Md. 218, 234 (2009) (citation omitted).
“[D]ismissal is proper only if the alleged facts and permissible inferences, so viewed,
would, if proven, nonetheless fail to afford relief to the plaintiff.” Litz v. Md. Dept. of
Env’t, 434 Md. 623, 639 (2013) (quoting Arfaa v. Martino, 404 Md. 364, 380–81 (2008)
(citations omitted)).
IV.
Negligent Breach of Rule 15-1001
Randy contends the circuit court erred by dismissing his claims against the Napoli
Defendants and the Keyes Defendants for negligence, negligent retention and
supervision, and respondeat superior premised upon a breach of Rule 15-1001 because
under the Statute or Ordinance Rule and/or third-party beneficiary jurisprudence, the
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Rule creates a limited, ministerial duty of care owed by an attorney representing a
wrongful death plaintiff to known potential wrongful death beneficiaries to name them as
use plaintiffs.
The Napoli Defendants and the Keyes Defendants respond that the circuit court
correctly ruled that Randy was not their client, and was not a third-party beneficiary of
the attorney-client relationship between them and Mona, and that Rule 15-1001 does not
impose an enforceable duty on attorneys representing a wrongful death plaintiff. We
agree with the first two arguments and do not need to decide the third argument.6
As discussed, supra, Rule 15-1001 requires a party bringing a wrongful death
action to name potential wrongful death beneficiaries in the complaint as use plaintiffs
and to serve a copy of the complaint on them, along with a notice explaining their right to
6
We have no need to decide whether violation of Rule 15-1001 constitutes
evidence of negligence because Randy lacks standing. Maryland recognizes that, “in
some instances, the duty of care in a negligence action may arise from statute or
regulation.” Blackburn, 438 Md. at 103. “[W]here there is an applicable statutory scheme
designed to protect a class of persons which includes the plaintiff,” a “defendant’s duty
ordinarily ‘is prescribed by the statute’ or ordinance and . . . the violation of the statute or
ordinance is itself evidence of negligence.” Brooks v. Lewin Realty III, Inc., 378 Md. 70,
78 (2003), abrogated on other grounds by Ruffin Hotel Corp. of Md., Inc. v. Gasper, 418
Md. 594 (2011) (quoting Brown v. Dermer, 357 Md. 344, 358 (2000)). Maryland
appellate courts never have imposed a duty of care based upon a requirement set forth in
the Maryland Rules of Procedure, however.
Moreover, as Randy points out in his brief, the 2012 amendments to Rule 15-1001
were precipitated by a request from a judge on the Court of Appeals asking the Standing
Committee on Rules of Practice and Procedure to consider “whether any changes to the
Rules pertaining to notice to use plaintiffs as a means of protecting statutory beneficiaries
are necessary.” See One Hundred Seventy-Fourth Report of the Standing Committee on
Rules of Practice and Procedure, at 166 (July 26, 2012). In that context, the decision by
the Rules Committee not to include in the proposed Rule a remedy for use plaintiffs who
were not given notice or were given late notice militates against Randy’s argument that
violation of the Rule creates a substantive cause of action.
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join the action. Id. at (d). The failure to name and notify a use plaintiff can result in
dismissal of the action for failure to join a necessary party. See Md. Rule 2-211(a) (“a
person who is subject to service of process shall be joined as a party in the action if in the
person’s absence . . . complete relief cannot be accorded among those already parties”).
“To make out a cause of action for negligence, a plaintiff must prove that the
defendant owed ‘him (or to a class of which he is a part)’ a duty of care; that the duty was
breached; that the breach was a proximate cause of the harm suffered; and damages.”
Cash & Carry Am., Inc. v. Roof Solutions, Inc., 223 Md. App. 451, 461 (2015) (quoting
Jacques v. First Nat’l Bank of Md., 307 Md. 527, 531, 515 A.2d 756 (1986)). With
respect to the first element, Maryland adheres to the “strict privity rule” for negligence
actions premised on legal malpractice. Flaherty v. Weinberg, 303 Md. 116, 130 (1985);
see also Jacques, 307 Md. at 537 (“no tort duty will be found absent a showing of privity
or its equivalent”). Under that rule, “an attorney owes a duty to his client or employer,
and therefore only that client or employer can recover against him for that breach.” Id. at
127. The “sole exception” to that rule is the “third party beneficiary theory.” Id. at 130.
The third-party beneficiary exception is narrow; it does not apply to a plaintiff who
“might conceivably derive some indirect benefit from the contractual performance of the
attorney and his client.” Id. Rather, it only applies when the non-client can show that
“the client intended him to be a third-party beneficiary of the attorney’s services and
where his interests are identical to those of the client[.]” Goerlich v. Courtney Indus.,
Inc., 84 Md. App. 660, 664 (1990).
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In the case at bar, Randy was not a client of the Keyes Defendants or the Napoli
Defendants. He presented no evidence that he was an intended beneficiary of the
attorney-client relationship between Mona, on the one hand, and either the Keyes
Defendants or the Napoli Defendants, on the other hand. Moreover, there often is not an
identity of interests between a wrongful death plaintiff and a potential wrongful death
beneficiary. See Univ. of Md. Med. Sys. Corp. v. Muti, 426 Md. 358, 384 (2012) (“By
designating potential beneficiaries as use plaintiffs, counsel demonstrates that he or she
does not represent them and has no authority to make decisions for them or to present
evidence, including proof of damages, on their behalf. To hold otherwise invites grave
problems of conflict of interest.”) (emphasis added).
We also are not persuaded by Randy’s argument that he was an intended
beneficiary by implication through Rule 15-1001, for the limited purpose of being named
a use plaintiff in the wrongful death count. He relies upon Prescott v. Coppage, 266 Md.
562 (1972). In that case, the trial court appointed a receiver for a savings and loan
company and appointed an attorney to “aid him . . . in the performance of his duties as
receiver,” i.e., in taking possession of the assets of the savings and loan company and
distributing those assets to its creditors. Id. at 574. Under those unique facts, the Court of
Appeals held that the creditors were intended third-party beneficiaries with standing to
sue the attorney. Id.No such facts are present in the case at bar. The Keyes Defendants and the Napoli
Defendants were engaged directly by Mona to advocate for her interests as the wife of a
deceased person. Their duties of competence, diligence, and loyalty flowed to her and,
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with respect to the Keyes Defendants, to Edwin prior to his death. See Flaherty, 303 Md.
at 131 (“a lawyer [must] represent his client zealously within the bounds of the law . . .
and . . . the lawyer ordinarily [may] not represent or act for conflicting interests in a
transaction”). Rule 15-1001 is a rule of procedure governing how a potential wrongful
death beneficiary under CJP section 3-904 must be notified of their interests, and how
they may join the action to share in any eventual recovery. The Rule does not explicitly
or implicitly transform a statutory wrongful death beneficiary into a third-party
beneficiary of the attorney-client relationship between the named plaintiff and his or her
chosen counsel. See Muti, 426 Md. at 384 (“Rule 15-1001 cannot be construed to anoint
counsel for the original (i.e. joined) plaintiffs as the attorney for the use plaintiffs as
well”).
For these reasons, Randy did not allege facts giving rise to a duty of care owed to
him by the Keyes Defendants or the Napoli Defendants, and the claims for negligence,
negligent retention and supervision, and respondeat superior properly were dismissed.
V.
Aiding and Abetting Mona’s Breach of Rule 15-1001
Randy contends the circuit court erred by dismissing Counts VI, X, and XIV,
which asserted claims against the Napoli Defendants and the Keyes Defendants for aiding
and abetting Mona in her breach of Rule 15-1001, i.e., her failure to name Randy as a use
plaintiff. While Maryland does recognize “[a]ider and abettor tort liability,” Alleco Inc.
v. Harry & Jeanette Weinberg Found., Inc., 340 Md. 176, 200 (1995), Randy cites no
cases recognizing a cause of action against an attorney, acting within the scope of his or
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her employment, for aiding and abetting the alleged tortious conduct of his or her clients.
We agree with the cross-appellees that to do so would undermine the “foundational
requirements for a legal malpractice claim,” discussed supra. See generally Fraidin v.
Weitzman, 93 Md. App. 168, 235 (1992) (“It is established law that there can be no
conspiracy between a principal and an agent where the agent acts within the scope of his
or her employment.”); Havilah Real Prop. Servs., LLC v. Early, 216 Md. App. 613, 633
(2014) (“Attorneys have a qualified privilege that protects them from potential civil
liability to their clients’ litigation adversaries, except where the attorneys act with actual
malice, bad intent, or for the attorneys’ personal benefit.”). The circuit court properly
dismissed Counts VI, X, and XIV.
VI.
Aiding and Abetting Mona’s Breach of Fiduciary Duty under North Carolina Law
Randy contends the circuit court erred by dismissing Counts VII, XI, and XV,
which asserted claims against the Keyes Defendants and the Napoli Defendants for aiding
and abetting Mona in her breach of fiduciary duty under North Carolina law. He urges
that North Carolina law establishes the underlying tort – breach of fiduciary duty – but
that Maryland law governs aider or abettor liability.
The Keyes Defendants and the Napoli Defendants respond that because Maryland
does not recognize breach of fiduciary duty as a stand-alone tort for damages, there can
be no cause of action under Maryland law for aiding and abetting the commission of that
tort. Alternatively, to the extent that North Carolina law would apply, because, as Randy
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concedes, North Carolina does not recognize aider and abettor liability, he also fails to
state a claim under North Carolina law.
We need not determine whether Maryland recognizes a cause of action for aiding
and abetting a breach of fiduciary duty because, as discussed above, Maryland law is
clear that a lawyer may not be liable to a non-client, such as Randy, for allegedly tortious
conduct committed within the scope of performing his or her duties for his client.
Fraidin, 93 Md. App. at 235. The aiding and abetting claims seek to hold the Keyes
Defendants and the Napoli Defendants liable for the manner in which they distributed the
settlement proceeds to Mona in the Asbestos Case, conduct that clearly fell within the
scope of their representation of her. Thus, the claim is not proper under Maryland law.
As Randy recognizes, while North Carolina does recognize a stand-alone claim for
breach of fiduciary duty, see Melvin v. Home Fed. Savings & Loan Ass’n, 482 S.E.2d 6(N.C. App. 1997), it never has recognized a claim for civil aider and abettor liability,
much less extended that theory to apply to an attorney acting within the scope of his or
her representation of a client. Thus, Randy also fails to state a claim under North
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Carolina law. For these reasons, the circuit court did not err by dismissing Counts VII,
XI and XV.
JUDGMENT OF THE CIRCUIT COURT FOR
BALTIMORE CITY AGAINST MONA PINNER
VACATED AND CASE REMANDED WITH
INSTRUCTIONS TO ENTER AN ORDER
DISMISSING COUNTS I, II, AND IV OF THE
COMPLAINT FOR LACK OF PERSONAL
JURISDICTION. JUDGMENT DISMISSING
COUNTS III, V, VI, VII, VIII, IX, X, XI, AND XII
AFFIRMED. COSTS TO BE PAID BY THE
APPELLEE/CROSS-APPELLANT, RANDY
PINNER.
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