IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

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1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND CHARLENE S. LAWRENCE-RYAN, * et al., * * Plaintiffs, * * v. * Civil Action No. JFM * JOEL MARC ABRAMSON, et al., * * Defendants. * ************* MEMORANDUM Plaintiffs, Charlene S. Lawrence-Ryan and Keith Ryan, have brought this action against their former attorneys, defendants Joel Marc Abramson and Harry B. Siegel. Plaintiffs claim that defendants committed legal malpractice in the course of representing them for personal injuries sustained in a motor vehicle accident. Defendants have filed a motion to dismiss or, in the alternative, motion for summary judgment. For the reasons stated below, defendants' motion will be treated as one for summary judgment and will be granted. On June 20, 1993, plaintiffs were involved in a serious motor vehicle accident on Interstate 95 in Maryland. A rented U-Haul truck driven by Keith Ryan developed mechanical I. problems and when he pulled the truck to the shoulder of the highway, Mrs. Lawrence-Ryan, who was following her husband in a vehicle manufactured by Chrysler Corporation, pulled to the shoulder as well. While Mrs. Lawrence-Ryan was still in her vehicle, a vehicle driven by a Mr. Rosen left the highway and struck the vehicle Mrs. Lawrence-Ryan occupied, causing it to 1

2 explode. Mrs. Lawrence-Ryan was taken to the University of Maryland Hospital's Shock Trauma Center for treatment, where she alleges treating physicians and other health care professionals committed medical malpractice, resulting in permanent eye damage and disfigurement. On June 30, 1993, plaintiffs retained defendants to represent them in potential claims against Mr. Rosen, Chrysler Corporation, U-Haul, and the University of Maryland Hospital and its physicians. In July, 1995, plaintiffs entered into a settlement agreement with Mr. Rosen, accepting $100, in return for a release of future claims. Plaintiffs eventually became dissatisfied with defendants' representation and terminated their relationship with defendants on January 6, Within days, plaintiffs retained new counsel and have pursued their claims through subsequent counsel. 1 II. Plaintiffs allege three distinct acts of negligence. First, plaintiffs allege that defendants negligently failed to advise them to file their claims in the Commonwealth of Pennsylvania, which unlike Maryland, has no cap on non-economic damages. Second, plaintiffs allege that defendants acted negligently in their investigation of the automobile accident and potential medical malpractice claims and by not appropriately documenting and preserving evidence. Third, plaintiffs allege that defendants committed malpractice in advising plaintiffs to enter into the settlement agreement with Mr. Rosen. In order to establish a claim of professional negligence against an attorney, a plaintiff 1 Plaintiffs, through their subsequent counsel, filed suit in this Court against U-Haul and Chrysler on March 19, Lawrence-Ryan v. U-Haul Moving Co., Civil Action No. CCB Plaintiffs dismissed their claim against Chrysler on April 7, 1997, and their claim against U- Haul is set for trial beginning November 2, Plaintiffs never brought any medical malpractice claim against the University of Maryland Hospital or its physicians. 2

3 must prove the following elements: (1) the attorney's employment; (2) his neglect of a reasonable duty; and (3) loss to the client proximately caused by that neglect of duty. Ferguson v. Cramer, 709 A.2d 1279, 1282 n.3 (Md. 1998); Flaherty v. Weinberg, 492 A.2d 618, 624 (Md. 1985). A. Plaintiffs complain that defendants negligently failed to advise them to file their claims in Pennsylvania, as opposed to Maryland, because Pennsylvania lacks any statutory limitation on non-economic damages in personal injury tort actions. This claim fails, as a matter of law, because Pennsylvania's choice-of-law analysis would require any Pennsylvania court to apply Maryland's statutory limitation on non-economic damages to plaintiffs' case. In diversity actions, the choice-of-law rules of the forum state govern any conflict of law issues. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, (1941); Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988). A Pennsylvania court, therefore, would apply Pennsylvania's choice-oflaw rules to plaintiffs' case. The Pennsylvania Supreme Court, in Griffith v. United Airlines, 203 A.2d 796, 805 (Pa. 1964), abandoned the strict lex loci delicti choice-of-law rule, providing that the law of the place of injury would govern all tort actions bought in Pennsylvania courts for injuries sustained in other states. In its place, the Griffith court adopted a more balanced approach, calling for an "analysis of the policies and interests underlying the particular issue before the court." Id. Pennsylvania's choice-of-law analysis now consists of two parts. First, the court must look to see whether a conflict exists whereby each competing jurisdiction's governmental interests would be impaired by the application of the other jurisdiction's law. Then, if such a conflict exists, the court determines which state has the greater interest in the application of its law. See LeJeune v. Bliss-Salem, Inc., 3

4 85 F.3d 1069, 1071 (3d Cir. 1996). A true conflict does exist between Pennsylvania and Maryland law in this case. Pennsylvania has no cap on non-economic damages, whereas Maryland limits non-economic recovery in personal injury actions. Md. Code Ann., Cts. & Jud. Proc The distinction reflects fundamentally different governmental policies and interests between the states. The Maryland legislature made a policy decision in enacting this statutory limitation "to promote the availability and affordability of liability insurance in Maryland." Oaks v. Connors, 660 A.2d 423, 428 (Md. 1995); see also Murphy v. Edmonds, 601 A.2d 102, (Md. 1992). Pennsylvania law, on the other hand, reflects that state's strong interest in insuring that victims of torts are fully compensated for their injuries. See Blakesley v. Wolford, 789 F.2d 236, 240 (3d Cir. 1986) (finding true conflict between Pennsylvania law on damages and Texas statutory limitation on physicians' liability). Therefore, a true conflict exists between Pennsylvania and Maryland on the issue of damages. Under Pennsylvania's choice-of-law rules, the Court must proceed to determine which state has the greater interest in the application of its laws. See LeJeune, 85 F.3d at courts look: To determine which state has the greater interest in having its law applied, Pennsylvania to see what contacts each state has with the accident, the contacts being relevant only if they relate to the 'policies and interest underlying the particular issue before the court.' When doing this it must be remembered that a mere counting of contacts is not what is involved. The weight of a particular state's contacts must be measured on a qualitative rather than quantitative scale. Id. at 1072 (quoting Cipolla v. Shaposka, 267 A.2d 854, 856 (Pa. 1970)). In Cipolla, a Pennsylvania resident was injured in an automobile accident in Delaware. Pennsylvania's only 4

5 contact with the accident was the plaintiff's residency within the state. The accident occurred in Delaware, the defendant was a Delaware resident, and the automobile involved in the accident was registered and housed in Delaware. Those factors convinced the Pennsylvania Supreme Court that Delaware's contacts were quantitatively greater than Pennsylvania's and, therefore, Delaware law would apply. 267 A.2d at 856. Similarly, in Tyson v. Great Atl. & Pac. Tea Co., 812 F. Supp. 63 (E.D. Pa. 1993), an agent of a Maryland corporation negligently injured a Pennsylvania resident in an accident that occurred in a Maryland warehouse. The court found that Pennsylvania's contacts consisted of the plaintiff's's residency and the fact that the plaintiff received medical care in Pennsylvania. Maryland was the place of the defendant's incorporation, the place of injury, the place of the conduct causing the injury, and the place of the relationship between the parties. The court found that Maryland had a greater interest and applied its law. Id. at In this case, Pennsylvania's single contact with the accident is the fact that plaintiffs are now residents of the state. Plaintiffs' injuries occurred in Maryland, both the automobile accident and any negligence on the part of the University of Maryland Hospital and its physicians occurred in Maryland, and the relationships between plaintiffs and all potential defendants were centered in 2 Plaintiffs argue that even if a Pennsylvania court found Maryland law applicable, it would apply Pennsylvania law to the issue of damages under the principle of depecage. Plaintiffs principally rely on Kiehn v. Elkem-Spigerverket, 585 F. Supp. 413 (M.D. Pa. 1984), in support of their depecage argument. Addressing a similar argument, the Tyson court distinguished Kiehn as a wrongful death action and concluded that "[i]t would be inappropriate to apply depecage to a personal injury case...." Tyson, 812 F. Supp. at 67. In addition to being factually distinguishable, the Kiehn opinion has been expressly vacated and thus carries no precedential value. See Kiehn v. Elkem-Spigerverket, 628 F. Supp. 976, 976 (M.D. Pa. 1986) ("this Court's opinion on the choice-of-law issue... is hereby withdrawn"). 5

6 Maryland. 3 In addition, Maryland has an extensive interest in the application of its laws to any suit against the University of Maryland Hospital or its physicians. Maryland has enacted a comprehensive statutory scheme to contain medical malpractice liability insurance premiums. In addition to the limitation on non-economic damages, Maryland statutorily mandates the arbitration of medical malpractice claims before a plaintiff may bring suit in court. Md. Code Ann., Cts. & Jud. Proc. 3-2A-01, et seq. The University of Maryland Hospital and its physicians are entitled to rely on their home state's liability laws. See Cipolla, 267 A.2d at ("Inhabitants of a state should not be put in jeopardy of liability exceeding that created by their state's laws just because a visitor from a state offering higher protection decides to visit there."). Plaintiff makes much of the fact that Mr. Rosen is a Virginia resident. 4 Although Mr. Rosen was not a Maryland resident at the time of the accident, he did negligently cause an accident in Maryland and his relationship with the plaintiffs is centered in Maryland. Maryland has a clear interest in insuring that those who drive in Maryland do so carefully. Weighed against Pennsylvania's sole contact of plaintiffs' residency, a Pennsylvania court would apply Maryland law to a suit between plaintiffs and Mr. Rosen. See Miller v. Gay, 470 A.2d 1353, 1355 (Pa. Super. Ct. 1983) (quoting Restatement (Second) Conflict of Laws) (noting that in an action for personal injury, the law of the state where the injury occurred should be applied unless some other 3 Plaintiffs were treated at the University of Maryland Hospital in Maryland; they rented the U-Haul truck in Maryland; they purchased the Chrysler automobile in Maryland; and the accident with Mr. Rosen occurred in Maryland. 4 I note that plaintiffs do not allege how a Pennsylvania court could constitutionally exercise personal jurisdiction over Mr. Rosen. 6

7 state has a more significant relationship to the case). Because a Pennsylvania court would apply Maryland's statutory limitation on noneconomic damages to a suit between plaintiffs and any of the potential defendants, plaintiffs could not have been damaged by defendants' failure to advise them to file suit in Pennsylvania, and defendants will be granted summary judgment as to that claim. B. Next, plaintiffs complain that defendants negligently handled the investigation of potential claims against Chrysler and the University of Maryland Hospital and its related physicians and health care providers. Specifically, plaintiffs allege that defendants failed to reasonably investigate the claims, to retain proper experts, and to preserve evidence. Defendants will be granted summary judgment on these claims because plaintiffs retained substitute counsel in sufficient time to file claims against Chrysler and the Hospital. To the extent plaintiffs allege that defendants' negligence at the initial stage of the investigation damaged their otherwise viable claims against Chrysler and the Hospital, plaintiffs have failed to make a sufficient factual showing to withstand summary judgment. It is undisputed that plaintiffs terminated their relationship with defendants at least five months before the statute of limitations would have barred their claims against Chrysler or the Hospital. Where a client terminates his or her attorney and retains new counsel with sufficient time remaining for the new attorney to cure any defects in the previous representation and file suit, the first attorney cannot be found liable for malpractice. See Riordan v. Jones, 793 F. Supp. 650, 651 (D. Md. 1992), aff'd, 989 F.2d 494 (4th Cir. 1993). Here, plaintiffs' subsequent counsel had ample time to prepare and file any appropriate claims, and did in fact file a claim against 7

8 Chrysler Corporation and U-Haul. Plaintiffs could not have been damaged by defendants' failure to file claims that subsequent counsel filed on their behalf. As to plaintiffs' claim that defendants' pre-suit investigation damaged their otherwise viable claims against Chrysler and the University of Maryland Hospital and its related physicians, plaintiffs have failed to make any evidentiary showing whatsoever in opposing defendants' motion for summary judgment that defendants breached their duty of care or damaged plaintiffs in any way. Rule 56(c) mandates the entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial. Rule 56(e) addresses in clear and unambiguous terms, the precise nature of the evidentiary burden borne by a party opposing summary judgment: an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party. Plaintiffs alleged in their complaint that defendants were negligent by failing to properly investigate the facts and circumstances of the accident and potential medical malpractice claims, including preservation and documentation of "critical" evidence, and by negligently selecting and supervising expert witnesses. Plaintiffs claim this proximately caused them damage by reducing the value of their claims. Although sufficient to satisfy the liberal notice pleading requirements of Rule 8(a), plaintiffs may not continue to rely on their bare allegations in opposition to a motion for summary judgment under Rule 56. 8

9 Plaintiffs retained subsequent counsel in January, 1996, who have prosecuted plaintiffs' claims on their behalf. If defendants acted, or failed to act, in breach of their duty, plaintiffs know by now what should have been done differently. Nevertheless, plaintiffs fail to set forth, by affidavit or otherwise, any factual basis for their claims of negligence, and they fail to explain how the alleged negligence reduced the value of their claims. Plaintiffs may not, at this stage of the proceedings, simply allege a breach of duty without identifying what they contend defendants should have done differently. For example, plaintiffs allege that defendants were negligent in their documentation of "critical" evidence, but fail to identify what evidence was lost or how the loss proximately damaged them. Because plaintiffs bear the burden of establishing defendants' malpractice, which includes establishing a breach of duty and proximately caused damages, it was necessary for them in opposing defendants' summary judgment motion to present evidence indicating a genuine issue for trial. Their failure to do so mandates that summary judgment be granted to defendants on the negligent investigation claims. C. Finally, plaintiffs complain about the Rosen settlement. Plaintiffs allege that defendants were negligent in three respects: (1) failing to determine whether the applicable limit on Mr. Rosen's liability insurance policy was $100,000 or $200,000; (2) failing to investigate Mr. Rosen's personal assets and whether he was acting as an agent of another at the time of the accident; and (3) advising plaintiffs to sign a release that will disproportionately reduce any recovery in their case against U-Haul. Plaintiffs' claims with respect to Mr. Rosen's insurance policy and his personal assets and 9

10 agent status amount to pure speculation. To the extent that plaintiffs argue that defendants negligently interpreted Mr. Rosen's insurance policy to provide a lower limitation of liability coverage than it actually provided, plaintiffs have failed to attach Mr. Rosen's liability insurance policy to their opposition papers. Plaintiffs bear the burden of proving defendants' negligence, and once defendants moved for summary judgment it was incumbent upon plaintiffs to respond with factual support for their allegations. They have failed to do so, and summary judgment on the policy claim is warranted. Similarly, plaintiffs fail to offer any factual support for the proposition that Mr. Rosen had personal assets that would warrant the strategic decision to seek a judgment in excess of his liability coverage. Nor do they offer any factual support for their claim that defendants were negligent in failing to inquire into whether Mr. Rosen was acting as an agent. Summary judgment for defendants is proper on this claim. Finally, plaintiffs allege that the release they signed in the Rosen settlement was not, as defendants claim, a pro tanto release, but rather will result in the one-third reduction of plaintiffs' recovery in the U-Haul litigation. Md. Code Ann., Cts. & Jud. Proc Plaintiffs claim that defendants negligently advised them to sign the release that will ultimately reduce plaintiffs' recovery in the underlying litigation pro rata by one-third. Again, plaintiffs bear the burden of proving the effect of the Rosen release and therefore were obligated to respond to defendants' summary judgment motion with factual support for their claim. Plaintiffs have failed to submit the release in question for the Court's consideration. Their failure to present any evidentiary support for this claim mandates that summary judgment be granted in defendants' favor. III. 10

11 herewith. A separate order entering summary judgment on behalf of defendants is being entered October 15, 1998 Date J. Frederick Motz United States District Judge 11

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