Preview:

This litigation has a tortured history and it is our earnest desire to see it resolved as expeditiously as possible. appellee is the Porter Hayden Company ("Porter Hayden").1 The The

litigation is an action for declaratory judgment brought by Porter Hayden to determine its insurance coverage. The appellant is the

Commercial Union Insurance Company ("Commercial Union").2 Porter Hayden has been since the 1920's an insulation

contractor in the business of selling and installing insulation at various facilities in the mid-Atlantic area. One of those Until

facilities was the Bethlehem Steel plant at Sparrows Point. some

time in the 1970's, Porter Hayden's insulation products

contained asbestos.

Procedural Background
From August of 1976, when the first asbestos-related claim was filed against Porter Hayden, through September 21, 1990, when the declaratory judgment action that is the subject of the present appeal was filed, "thousands of lawsuits [were] brought against Porter Hayden Company by claimants who alleged bodily injury or death caused by the installation operations of the Porter Hayden companies at various industrial or construction sites" in Maryland,

1 Porter Hayden is a Maryland Corporation. It was formed in 1966 as a result of a merger between H. W. Porter & Company, Inc., a New Jersey corporation, and Reid Hayden, Inc., a Maryland corporation. Because certain events considered in this opinion pre-date the 1966 merger, our use of the term "Porter Hayden" will refer either to the present company or to its predecessors, as appropriate.

Commercial Union, a Massachusetts corporation, is the successor corporation to the Employers' Liability Assurance Corporation (ELAC). In this opinion, we will use "Commercial Union" to refer to either the present corporation or its predecessor, as appropriate.

2

- 2 Virginia, New Jersey, North Carolina, and other jurisdictions. Although the declaratory judgment action literally sought formal relief with respect to only five such claims, the request for the declaration as to the coverage, in spelling out the possibly broader repercussions of the action, also referred to "numerous other claimants [who] have filed and will file similar actions against Porter Hayden." to those five claims The declaration of coverage with respect will, therefore, inevitably guide the

disposition of numerous others as well.

The case now before us It

does not concern the ultimate merits of any of those claims.

deals exclusively with the extent to which Porter Hayden enjoys insurance liability coverage from Commercial Union. When the first claims against it were filed, Porter Hayden directed its comprehensive general liability (CGL) insurer, the Hartford Accident and Indemnity Company, to give notice of the claims to various other liability insurers that were "properly chargeable with the defense under [their] policy obligations." Commercial Union first received actual notice of pending asbestosrelated lawsuits against Porter Hayden in early August of 1978, when it was asked by Employers' Insurance of Wausau, another of Porter Hayden's insurers, to acknowledge that it was obligated under its policy to provide coverage for claims of alleged exposure during pertinent policy periods. From the outset, Commercial Union

denied any obligation to defend or to indemnify Porter Hayden for asbestos-related liability.

- 3 Before the issue of coverage between Commercial Union and Porter Hayden could be finally resolved, however, the dispute lapsed into a state of suspended animation for almost a decade. In

July of 1982, the Hartford Accident and Indemnity Company, as one of Porter Hayden's insurance carriers, filed a declaratory judgment action against Porter Hayden and against Porter Hayden's other primary carriers, including Commercial Union. Before that case

went to trial, however, all of the parties, including Commercial Union, entered into an "Agreement" (the "Hartford Agreement") as of November 1, 1982, by which they agreed to participate, on a shared basis, in the defense of all pending and anticipated asbestosrelated claims. During the pendency of the Hartford Agreement, the parties further agreed to repeated extensions. With respect to

Commercial Union and Porter Hayden, the agreement between them, as part of the larger Hartford Agreement, expired on December 31, 1986. When, therefore, five new asbestos-related claims were filed against Porter Hayden in 1987, the dispute over coverage flared anew. Those were not pre-1987 claims and were not, therefore,

covered by the Hartford Agreement. Each of those claims, moreover, was filed in the Circuit Court for Baltimore City. On August 31, 1987, Porter Hayden forwarded the five new cases to Commercial Union for defense and handling. On September 21, 1987, Commercial

Union denied coverage with respect to them.

- 4 The present litigation commenced exactly three years later, on September 21, 1990, when Porter Hayden instituted a declaratory judgment action against Commercial Union in the Circuit Court for Baltimore City. It sought a declaration of the duty of Commercial

Union to defend and potentially to indemnify Porter Hayden with respect to 1) the five claims filed against Porter Hayden in August of 1987 and 2) "such other personal injury cases" filed against Porter Hayden "which may be tendered" to Commercial Union,

expressly excluding, however, all cases filed before January 1, 1987 (and covered, therefore, by the Hartford Agreement).

Approximately one year later, both parties sought various partial and total summary judgments with respect to certain issues in the case. motions Both parties duly filed oppositions to the opponent's for summary judgment and, in turn, replies to the

respective oppositions.

Hearings were held before Judge Hilary D. After full discovery, briefing,

Caplan during January of 1992.

oral argument, and a limited evidentiary hearing with respect to one of the issues, Judge Caplan, on February 14, 1992, issued a series of decisions and orders, purporting to resolve the dispute over coverage in favor of Porter Hayden. After a modification of

two of the rulings and an ostensible reduction of the orders to final judgment on March 12, 1992, Commercial Union appealed to this Court.

- 5 Although a number of issues were raised before us on appeal and cross-appeal, we found it unnecessary in Commercial Union Ins. Co. v. Porter Hayden Co., 97 Md. App. 442, 630 A.2d 261 (1993), to deal with more than one of them. notice of occurrence from the That issue concerned the timely insured to the insurer. The

resolution of that issue hinged on the choice of law between Maryland and New York. We held that Judge Caplan had been wrong in We held that under the law

applying Maryland law to the dispute.

of lex loci contractus and in the absence of renvoi,3 New York substantive law controlled the case and that, applying New York law, Porter Hayden had failed to give timely notice to Commercial Union as required by the policies. We reversed Judge Caplan's

denial of summary judgment in favor of Commercial Union on that issue. As a result of our holding on that issue, "we need[ed] not, 97

and [did] not, reach the other issues posed by the parties." Md. App. at 470.

Porter Hayden applied for certiorari to the Court of Appeals, which was granted on December 21, 1993. The Court of Appeals

vacated the judgment of this Court and ordered that the appeal be dismissed for the reason that there was no appealable final

judgment under Maryland Rule 2-602(a), which provides: Except as provided in section (b) of this Rule, an order or other form of decision,
3

The subtleties of this arcane subject will be explored more fully when we move beyond this procedural overview to a more detailed analysis of the individual issues in the case.

- 6 however designated, that adjudicates fewer than all of the claims in an action (whether raised by original claim, counterclaim, crossclaim, or third-party claim), or that adjudicates less than an entire claim, or that adjudicates the rights and liabilities of fewer than all the parties to the action: (1) (2) (3) is not a final judgment; does not terminate the action as to any of the claims or any of the parties; and is subject to revision at any time before the entry of a judgment that adjudicates all of the claims by and against all of the parties.

(Emphasis supplied). Porter Hayden Co. v. Commercial Union Ins. Co., 339 Md. 150, 661 A.2d 691 (1995). The case was remanded to the Circuit Court for Baltimore City for further proceedings. The case on remand was assigned to Judge Edward J. Angeletti, Judge Caplan's having retired from the court in the interim. At a scheduling conference on September 27, 1995, Judge Angeletti

decided that a jury trial was required on one unresolved issue involving disputed facts but that his adoption of the earlier legal rulings of Judge Caplan as his own would suffice to permit him to settle all other issues. The necessary jury trial was conducted Following hearings on various

from January 3 to January 17, 1996.

post-trial motions, Judge Angeletti granted Porter Hayden's Motion for Entry of Final Judgment on May 7, 1996. In order to correct

certain typographical errors, an Amended Order granting Porter Hayden's Motion for Entry of Final Judgment was issued on May 13.

- 7 Commercial Union has appealed from that final judgment. On several limited issues, Porter Hayden has cross-appealed.

Commercial Union's Basic Contentions
Deferring for the moment Commercial Union's contentions with respect to several allegedly erroneous post-trial rulings and also deferring for the moment the two contentions raised by Porter Hayden on its cross-appeal, we will first address the five primary contentions raised by Commercial Union by way of challenging the basic propriety of the declaratory judgment in favor of Porter Hayden. Commercial Union contends: 1) that Judge Angeletti erroneously refused to conduct further evidentiary proceedings, as mandated by the Court of Appeals in Porter Hayden v. Commercial Union, 339 Md. 150, 661 A.2d 691 (1995), with respect to three of the defenses asserted by Commercial Union; that at the jury trial on the issue of the "missing policies," two prejudicial errors were committed; that the present action was barred by the Statute of Limitations; that Porter Hayden was, as a matter of law, barred from seeking recovery because of its failure to have given Commercial Union, as required by the policies, timely "notice of occurrence"; and that recovery was barred because Porter Hayden had under the pertinent policies no coverage for hazardous products.

2)

3) 4)

5)

The latter four of these contentions deal respectively with the four specific defenses that Commercial Union had originally

- 8 asserted before Judge Caplan, three by way of motions for summary judgment and one by way of a motion for partial summary judgment. The first contention, however, is far more sweeping. it involves the merits of contentions 3, 4, and 5. In one sense, It claims that

Judge Angeletti committed error in adopting as his own the earlier rulings of law of Judge Caplan and then in using those rulings as the basis for the summary rejection of Commercial Union's three separate defenses based on 1) the Statute of Limitations, 2) the lack of timely notice, and 3) the lack of coverage of hazardous products. The overarching thrust of the first contention, however, is that there remained genuine disputes as to material facts involving each of those three specific defenses and that it was, therefore, error to have resolved any of those issues against Commercial Union without first conducting further evidentiary hearings. To the

extent to which that blanket contention implicates the merits of the ultimate declaratory judgment, we will examine the question of whether further evidentiary hearings were required, not as an independent collective contention, but in more particular context as we examine, respectively, Commercial Union's third, fourth, and fifth contentions. In another sense, however, the first contention raises a specter of a more ominous character. Inevitably the contention raises the question of whether the judgment that is now the subject of this appeal is infected with the same fatal virus of non-

- 9 finality that doomed the earlier appeal to dismissal. Commercial Union argues that the Court of Appeals had held unequivocally that the viability of those three defenses had not been finally resolved by Judge Caplan and that the Court of Appeals's holding ipso facto meant that those still open issues required further evidentiary proceedings. Commercial Union's argument is that that which was

non-final before has still not been finalized. Before going forward with the merits of the present appeal, therefore, it behooves us to examine the threshold question of whether, indeed, we now have before us an appealable final judgment as required by Maryland Rule 2-602(a).4

The Finality of the Judgment Now Being Appealed
The basic contention of Porter Hayden is that it enjoyed liability coverage for asbestos-related injuries as a result of eleven consecutive one-year policies issued to it by Commercial Union, each running from November 25 of a particular year through November 24 of the succeeding year. The overall period allegedly

covered by the eleven policies was from November 25, 1941 through November 24, 1952.5

The argument that Commercial Union now makes in this regard is one it initially made in a Motion to Dismiss the appeal, supported by a 25-page Memorandum, filed with this Court on August 26, 1996. We summarily denied the Motion on August 29. It is appropriate that we now discuss in some detail the merits of that denial.
5 In addition to this eleven-year coverage, Porter Hayden also alleged coverage for the sixty-day period from November 24, 1952 through January 24, 1953 under a "stub" policy.

4

- 10 Porter Hayden, however, could only produce copies of two of the policies, one running from November 25, 1948 through November 24, 1949 and the second running from November 25, 1949 through November 24, 1950. policies." These will be referred to as the "extant

Porter Hayden also offered, however, circumstantial

evidence to establish that the other nine policies6 had been issued to it by Commercial Union and that the substantive content of the "missing policies" was substantially the same as that of the extant policies. The first allegedly final judgment in this case and the subject matter of the first appeal arose from the series of rulings that Judge Caplan made on February 14, 1992 as those rulings were modified and finalized as of March 12, 1992. Judge Caplan had

before him and he ruled on five separate motions for summary judgment. One of them was a motion for partial summary judgment That Motion was granted. The other four

filed by Porter Hayden.

motions were all filed by Commercial Union. partial summary judgment. summary judgment. denied.

One was a motion for

The other three were motions for plenary

All four of Commercial Union's motions were

6 To be precise, whenever we refer to the nine "missing policies," we intend for that "missing" category to include as well the "stub" policy covering the sixty-day period from November 24, 1952 through January 24, 1953. Our use of the number "nine," therefore, may be taken by the literal-minded actually to mean "nine and one-sixth" or even "ten." Everything we say and hold is intended to cover the "stub" policy as well as all other policies.

- 11 Porter Hayden's motion, which was granted, dealt only with the two extant policies. As Judge Eldridge pointed out for the Court

of Appeals, 339 Md. at 154, "Porter Hayden's motion for partial summary judgment raised no issues relating to coverage under the missing policies." It sought only a declaration that under the two

extant policies, Commercial Union owed Porter Hayden a duty to defend and potentially to indemnify. Judge Caplan granted that

motion and appropriately issued a declaration to that effect. Because Porter Hayden's request for declaratory judgment had asked for a declaration with respect to all eleven policies, however, the partial summary judgment with respect to only two of them obviously left the status of the coverage under the other nine policies completely unresolved. "[T]he trial court's declaration

of Porter Hayden's right to coverage, even in light of the March 12 modifications, had been expressly limited to its rights under the 1948-1949 and 1949-1950 policies." 339 Md. at 159. The Court of

Appeals further pointed out, 339 Md. at 162: In its complaint, . . . Porter Hayden had asked the trial court for a declaratory judgment with respect to all of the policies of insurance allegedly issued by Commercial Union to Porter Hayden, including the "missing policies." Thus, the trial court's declaration with respect to the two policies of insurance covering the years 1948-1949 and 1949-1950 resolved only part of Porter Hayden's action. (Emphasis supplied).

- 12 Conversely, Commercial Union's motion for partial summary judgment did not even purport to deal in any way with the extant policies. coverage. It challenged neither their existence nor their

It sought only a declaration with respect to the It, in

impossibility of proof of the nine missing policies.

effect, asked Judge Caplan to declare that under the "Best Evidence Rule," secondary evidence would be both inadmissible and

insufficient, as a matter of law, to establish either the existence or the terms of the missing policies and that no claim for

coverage, therefore, could successfully be prosecuted on the basis of them. That motion was denied. The Court of Appeals

characterized the reason for the denial: "[T]he circuit court held that Porter Hayden had produced sufficient evidence of the

existence and terms of the missing policies so as to require a denial of Commercial Union's summary judgment motion with respect to those policies." 339 Md. at 56. Although the Court of Appeals

spoke of the still unresolved issues in the plural, its primary focus was clearly on that still open issue of the existence and the content of the nine missing policies: It is apparent that the orders entered by the circuit court in the present case did not finally dispose of the action. In particular, numerous issues appear to be open with respect to the missing policies. 339 Md. at 165 (Emphasis supplied). The very existence of the missing policies and, should they be proved to have existed, the coverage provided by them were classically material facts as to

- 13 which there was a genuine dispute. Although neither the existence

nor the contents of the missing policies had yet been proved, those facts were held by the Court of Appeals to be capable of proof and, therefore, deserving of a trial before a fact finder. On remand, there was, as mandated, a full evidentiary hearing with respect to those disputed facts, and a jury duly rendered its verdicts on those questions. It found that the nine missing

policies had indeed been issued to Porter Hayden by Commercial Union. It further found that those missing policies had provided

substantially the same coverage as had been provided by the extant policies. That issue has been finally resolved and now presents no

impediment in terms of appealability. The question, rather, is whether there were other issues that required either a further evidentiary hearing or something else that would amount to a final resolution. If the latter, then was Our

there something else by way of further and final resolution?

focus in this regard turns to the three defensive issues that Commercial Union raised before Judge Caplan in three separate and plenary motions for summary judgment. Had any one of them been

granted, it would have been a complete defense to the suit and, therefore, an appealable final judgment. however, denied. Commercial Union sought by those motions to establish 1) that Porter Hayden's request for a declaratory judgment was barred by the Maryland Statute of Limitations; 2) that Porter Hayden had All three motions were,

- 14 failed to give Commercial Union timely notice of the "occurrences" as required by the policies, thereby disentitling it to coverage; and 3) that the claims against Porter Hayden all involved "products hazard" coverage which Porter Hayden did not enjoy. (Even though the existence and contents of the missing policies had not yet been proved, it was agreed that Porter and Hayden not enjoyed, at most,

"premises coverage.)

operation"

coverage

"hazardous

products"

The Court of Appeals referred to those three issues

that had been raised but had not yet been finally resolved: [T]hree of Commercial Union's motions for summary judgment did seek relief which would have disposed of the entire action before the court. In each summary judgment motion, Commercial Union sought a declaration that it had no obligation, under any policy of insurance, to defend or indemnify Porter Hayden in any asbestos-related litigation, regardless of when suit was filed. The trial court, however, denied Commercial Union's motions for summary judgment. 339 Md. at 163-64. Because each of the defenses asserted in those three motions applied to the extant policies and the missing policies alike, judgment would have been final in Commercial Union's favor had any one of them been granted. None, however, was granted. The denial

of the motions, by contrast, presents a very different picture in terms of finality. The Court of Appeals pointed out, 339 Md. at

164, that "it is well settled in Maryland that the denial of a motion for summary judgment is ordinarily not a final judgment from

- 15 which an appeal may be taken." See also Lawrence v. Dept. of

Health, 247 Md. 367, 371, 231 A.2d 46 (1967); Merchants Mort. Co. V. Lubow, 275 Md. 208, 212, 339 A.2d 664 (1975); cf. Biro v. Schombert, 285 Md. 290, 295, 402 A.2d 71 (1979). As Judge Rosalyn

Bell explained for this Court in Ralkey v. Minnesota Mining and Mfg. Co., 63 Md. App. 515, 523, 492 A.2d 1358 (1985): [A] denial of a motion for summary judgment does not "finally dispose" of any matter--it merely permits the case to proceed based on the finding that a dispute concerning a material fact exists. The denial neither decides any issues of law nor precludes a subsequent finding that no factual disputes exist. Because Commercial Union's motions were denied, there selfevidently was no judgment in Commercial Union's favor to the effect that any of the three defenses was necessarily valid, as a matter of law. The denial of validity, as a matter of law, does not, To be sure, the

however, establish invalidity, as a matter of law.

granting of partial summary judgment in Porter Hayden's favor with respect to the two extant policies necessarily embraced subjudgments that all three of Commercial Union's defenses were invalid with respect to claims arising under those two policies. Because that partial summary judgment in Porter Hayden's favor did not even purport to cover claims under the nine missing policies, however, there could have been no final judgment with respect to the invalidity of the defenses in cases under the missing policies.

- 16 At the conclusion of the hearings before Judge Caplan in 1992, therefore, those questions were still unresolved. In pursuing its argument that non-finality at that time necessarily equates to non-finality at this time, Commercial Union is being disingenuously opportunistic. Once the Court of Appeals

determined that one factually unresolved issue--that concerning the missing policies--mandated a dismissal of the appeal, it dealt with the other unresolved issues in the case far more summarily. It did

not examine in any detail the reasons given by Judge Caplan for denying judgment. Commercial Union's three motions for total summary

After pointing out the general proposition that denials

of motions for summary judgment are not appealable final judgments, it simply made the observation: The circuit court's denial of Commercial Union's motions for summary judgment in the present case did not terminate the litigation or prevent Commercial Union from further defending its case. Rather, the trial court's decisions merely reflected its determination that the issues presented in the motions should be resolved at trial. 339 Md. at 164. From the general directive of the Court of Appeals that a remand to the trial court was necessary so that unresolved issues could be finally resolved, Commercial Union makes the invalid leap of logic that such a directive necessarily means that there must be further fact finding. case. That, of course, is not necessarily the

On a remand to a trial court, the previously unresolved, to

- 17 be sure, may sometimes be resolved by the fact finder; on other occasions, by contrast, it may be resolved by the judge without any resort to further fact finding. A.

Denial of Summary Judgment #1: Genuine Dispute of Material Fact
In terms of its significance, a denial of summary judgment is

Hydra-headed.

It may represent any one of three possibilities,

only one of which would necessarily involve further fact finding. The garden variety reason for denying a motion for summary judgment is, to be sure, because there remains a genuine factual dispute that calls for a trial and for fact finding by judge or jury. Roland v. Lloyd E. Mitchell, Inc., 221 Md. 11, 19-20, 155 A.2d 691 (1959) ("An inference might be drawn either way. . . . [A] summary judgment, therefore, could not properly be entered. Accordingly,

the summary judgment in favor of Mitchell must be reversed."); Keesling v. State, 288 Md. 579, 592, 420 A.2d 261 (1980) ("Under the facts here, a jury might find Keesling an unwilling

participant, but a participant nevertheless.

It was, therefore,

error for the trial court to grant summary judgment."); Fireman's Fund Ins. Co. v. Rairigh, 59 Md. App. 305, 313, 475 A.2d 509 (1984) ("Summary judgment cannot be granted if there is a genuine dispute as to any material fact . . . We believe that the issue of whether the Earlbeck estate sought a defense from Fireman's Fund,

considered in the context of the inferences most favorable to Fireman's Fund, presented a genuine dispute as to a material fact

- 18 that precluded the entry of summary judgment."); Lombardi v.

Montgomery County, 108 Md. App. 695, 710-11, 673 A.2d 762 (1996) ("Drawing all inferences in his favor, we hold that reasonable minds could have differed as to when appellant had the requisite knowledge. Disposing of the issue by way of summary judgment was,

therefore, completely inappropriate.") Had that been the situation in this case, there would be much merit to Commercial Union's argument. situation in this case. asserted defenses, That is not, however, the

With respect to the validity of its three Union does not even suggest a

Commercial

scintilla of a genuine factual dispute.

It does nothing but

reiterate its flawed syllogism that the Court of Appeals held there to have been non-finality on those issues and that, ergo, the Court of Appeals necessarily mandated that there be further fact finding by the trial court. There is an almost petulant insistence to Commercial Union's argument: "The Court of Appeals decreed that there be further fact finding; therefore, there must be further fact finding even if nobody knows what further facts there are to find." The Court of Appeals, however, was silent as to what sort of further resolution was called for. Commercial Union reads into

that silence something that was never said and, in our judgment, was never implied.

B.

Denial of Summary Judgment #2: Discretionary Option Even Absent Genuine Dispute of Fact

- 19 There is a second possible reason for a denial of a motion for summary judgment and it is one that would not necessarily call for further fact finding. Further fact finding might be conducted in

the discretion of the trial judge but it would not be mandated as a matter of law. As Judge Digges pointed out in Metropolitan Mtg.

Fd. v. Basiliko, 288 Md 25, 415 A.2d 582 (1980), a trial judge has the discretion 1) to deny or 2) simply to defer the granting of summary judgment even when there is no genuine dispute of a material fact and even when all of the technical requirements for the entry of such a judgment have been met. In Porter Hayden v.

Commercial Union, Judge Eldridge discussed this discretionary power in a trial judge to deny a summary judgment motion: Even where there is no dispute as to the material facts, and the "technical requirements for the entry of [summary] judgment have been met," a Maryland trial court has the discretion to deny a litigant's motion for summary judgment. Metropolitan Mtg. Fd. v. Basiliko, 288 Md. 25, 415 A.2d 582, 584 (1980). As Judge J. Dudley Digges explained for the Court in Metropolitan Mtg. Fd. v. Basiliko, supra, 288 Md. at 29, 415 A.2d at 584, "denial (as distinguished from a grant) of a summary judgment motion . . . involves not only pure legal questions but also an exercise of discretion as to whether the decision should be postponed until it can be supported by a complete factual record. . . ." See also Three Garden v. USF & G, supra, 318 Md. at 108, 567 A.2d at 90 (even where the denial of one party's motion for summary judgment is contended to be tantamount to a grant of summary judgment in favor of the opposing party, "the trial court's discretion to deny or defer ruling ordinarily prevents an

- 20 appellate court from directing that summary judgment be granted"). (Emphasis supplied). In the Basiliko case, Judge Digges pointed out that the Maryland Rule (then Md. Rule 610) was based on its federal

counterpart, Federal Rule of Civil Procedure 56.

After analyzing

the federal cases interpreting that Rule, Judge Digges concluded that that interpretation similarly applied to the Maryland Rule: The federal authorities to which we allude make plain that whereas a "court cannot draw upon any discretionary power to grant summary judgment," it, ordinarily, does possess discretion to refuse to pass upon, as well as discretion affirmatively to deny, a summary judgment request in favor of a full hearing on the merits; and this discretion exists even though the technical requirements for the entry of such a judgment have been met. 288 Md. at 27-28 (emphasis supplied). The Basiliko opinion also

made clear that the only basis for reversing the discretionary denial of summary judgment would be one in which there has been an abuse of discretion: [W]e now hold that a denial (as distinguished from a grant) of a summary judgment motion, as well as foregoing the ruling on such a motion either temporarily until later in the proceedings or for resolution by trial of the general issue, involves not only pure legal questions but also an exercise of discretion as to whether the decision should be postponed until it can be supported by a complete factual record; and we further hold that on appeal, absent clear abuse (not present in this case), the manner in which this discretion is exercised will not be disturbed.

- 21 288 Md. at 29 (emphasis supplied). See also Henley v. Prince

George's County, 305 Md. 320, 333, 503 A.2d 1333 (1986) ("[A] trial judge possesses broad discretion to deny a summary judgment even though the technical requirements for entry of such a judgment have been made."); Geisz v. Greater Balt. Med. Ctr., 313 Md. 301, 314 n.5, 545 A.2d 658 (1988). In Three Garden Village v. USF&G, 318 Md. 98, 108, 567 A.2d 85 (1989), the Court of Appeals, speaking through Judge Rodowsky, pointed out that even "if the record . . . would have supported summary judgment," an appellate court may not direct that summary judgment be granted because that would interfere with the trial judge's broad discretion to deny it: Even if the record before the circuit court at the time of USF & G's motion would have supported summary judgment for USF & G, the trial court's discretion to deny or defer ruling ordinarily prevents an appellate court from directing that summary judgment be granted. Without abusing its discretion, a trial court may decide, for example, that a party should be allowed a further opportunity to develop facts or to explore an alternate theory of claim or defense. In this discretionary scenario, where the circumstances would permit the grant of summary judgment but where the judge chooses to deny the grant entirely or simply to defer it, two denouements are possible. The judge, in his discretion, might choose to submit the

material factual issues to a jury (or engage in such fact finding himself) notwithstanding the literal absence of a genuine dispute.

- 22 The judge might, on the other hand, choose to grant the summary judgment at some later time in lieu of any further fact finding. The only inhibition would be that he not abuse his discretion. We analyze at the length we do this second and discretionary reason why a motion for summary judgment might sometimes be

legitimately denied in order to emphasize a point. Commercial Union seems reluctant to accept.

It is one which

It is that although a

denial of a summary judgment motion may leave an issue, at least temporarily, unresolved, it does not necessarily mean that there is a genuine dispute of material fact requiring an evidentiary hearing before a fact finder. open issues. In concluding our examination of this possible reason for denying a summary judgment motion, we should note that Presbyterian University Hospital v. Wilson, 99 Md. App. 305, 637 A.2d 486 (1994), suggests a limitation on the broad discretion of a trial judge to deny summary judgment to a party who has seemed to qualify for such judgment in his favor. Judge Alpert's analysis for this There are other modalities for resolving

Court was that all of the cases (Basiliko and its progeny) granting discretion to a trial judge to deny summary judgment even when the moving party has shown entitlement to it are limited to situations in which the summary judgment issue involved the presence or absence of a genuine dispute of a material fact. Presbyterian

Hospital went on to hold that where the resolution of the summary

- 23 judgment issue involves, by contrast, only an interpretation of law, it is then reversible error for a court not to grant summary judgment in favor of a party who has moved for it and is entitled to it as a matter of law. Where only legal rulings are involved,

the trial judge would lack the discretion to deny summary judgment to which the moving party was legally entitled. The limitation suggested by Presbyterian Hospital, however, has no bearing on the case now before us. We are dealing with a

situation in which Commercial Union was not entitled to summary judgment by legal rulings that should have been made in its favor and was only denied such favorable rulings by virtue of the trial judge's discretion. Even if that were the case (it is not),

moreover, that would still not be a situation calling for further fact finding and for deferring finality of judgment until such fact finding took place.

C.

Denial of Summary Judgment #3: Where Judgment in the Opposite Direction Would Be Justified But Is Neither Requested Nor Spontaneously Granted
There is a third reason why a party's motion for summary

judgment might legitimately be denied and it is one that selfevidently would not call for any further fact finding. be the situation That would

where the reason why Commercial Union, for

instance, would be denied summary judgment in its favor would be because summary judgment could actually be granted in the opposite direction, to wit, in Porter Hayden's favor. In such a case, the

- 24 denial of summary judgment in favor of Commercial Union selfevidently would not require that any further fact finding be conducted. It would be the case, rather, in which the necessary predicate existed for the granting of summary judgment in the opposite direction and in which all that remained to be done would be the formalities of 1) requesting and 2) granting such judgment in favor of the opposing party. Though they may be nothing but

formalities, however, those formalities must still be observed. That was precisely the situation in this case as of March 12, 1992. In three separate motions requesting summary judgments in

its favor, Commercial Union had urged that each of three possible defenses absolutely foreclosed any claims of coverage by Porter Hayden from being effectively asserted. three motions by three separate Judge Caplan denied all orders supported,

written

respectively, by three separate written opinions.

In each case, he

first determined that there were no disputed facts to be resolved. In each case, he ruled that the defense asserted by Commercial Union was invalid as a matter of law. The dispositive fact in terms of the non-finality of the judgment, however, is that although a sufficiently sweeping

predicate apparently existed to justify summary judgment in favor of Porter Hayden, Porter Hayden never requested such summary

judgment with respect to the nine missing policies and Judge Caplan

- 25 did not sua sponte grant summary judgment with respect to those missing policies. As of the first appeal, therefore, the question of the

viability of those defenses to the missing policies had never been formally resolved. There were strong implications, to be sure, but The Court of Appeals pointed out that not

no formal resolution.

only were there factual issues yet to be decided in terms of the existence and the content of the nine missing policies but that "numerous issues appear to be open with respect to the missing policies," if they should be proved to exist. three The viability of the

defenses asserted by the summary judgment motions were The denial of Commercial

foremost among those unresolved issues.

Union's summary judgment motions with respect to those issues had not finally resolved the questions of their viability with respect to the missing policies because the mere denials, in and of themselves, left the matters open. Thus, although there were no

genuine disputes of material fact calling for further fact finding, there were nonetheless unresolved issues calling for final

resolution. It is in this regard that the position taken by Porter Hayden in its brief sweeps too broadly. It is its position that just

because there were no remaining factual disputes and just because Judge Caplan had made all the legal rulings necessary to support a final judgment, there logically must have been a final judgment.

- 26 That is not the case. There are necessary protocols for

transforming the implicit into the explicit.

As of the proceedings

before Judge Caplan in 1992, those protocols had not yet been observed. Even where the reasons for denying summary judgment in one direction are tantamount to a full justification for granting summary judgment in the opposite direction, the decisional process is not self-executing. Absent a motion for summary judgment by a

party, however eminently entitled that party may be to it, and absent, at the very least, a sua sponte granting of such a motion by the trial judge, that which could have been done and even that which should have been done will still not have been done. It is

necessary that the final "i" be formally dotted and that the final "t" be formally crossed. to be benefitted It is sometimes necessary that the party the summary judgment; it is always

request

necessary that such judgment be formally granted. Even when the logic dictating a grant of unsolicited summary judgment in favor of an opposing party is compelling, there are procedural inhibitions on a trial judge's prerogative to act sua sponte upon such logic. It has long been established that a trial

judge may not grant summary judgment sua sponte in the total absence of a motion for summary judgment by the parties, even when the factual and legal situation seems to cry out for it. Griffin

v. Anne Arundel County, 25 Md. App. 115, 333 A.2d 612 (1975);

- 27 Harris v. Stefanowicz Corp., 26 Md. App. 213, 218, 337 A.2d 455 (1975). Indeed, until Maryland Rule 610 was replaced, on July 1,

1984, by Maryland Rule 2-501, a judge was limited either to denying a judgment or to granting a judgment in favor of the moving party. No matter how logically compelling the situation, a judge could not, absent a cross motion, sua sponte grant a judgment in favor of the opposing party. The ability to grant summary judgment was one-

directional. As Judge (now Chief Judge) Bell pointed out for the Court of Appeals in Hartford Ins. Co. v. Manor Inn, 335 Md. 135, 642 A.2d 219 (1994), however, that limitation no longer abides under the new Rule. Although a judge still may not, absent a

motion, grant a judgment sua sponte in favor of a third party, he may grant a judgment not only for the moving party but also against the moving party (to wit, in favor of the opposing party). A cross

ruling is no longer dependent on a cross motion. The prerogative to grant a summary judgment is now at least two-directional, even if not multi-directional. Thus, in the present case, a motion for summary judgment by Commercial Union would have been enough to support a judgment in favor of Porter Hayden, even absent a motion by Porter Hayden. Even though the formalities have been thus relaxed in terms of the necessity for the ultimately benefitted party formally to move for such a judgment, however, there is still the requirement that the

- 28 judge formally grant the judgment. He is not compelled to do so, absent a motion, and the grant is not self-executing. Indeed, as the hearings concluded before Judge Caplan in the Spring of 1992, sweeping summary judgment in favor of Porter Hayden to the effect that Commercial Union's defenses were not viable with respect to any of the eleven policies would have required some stretching. With respect to the "premises operations" versus

"hazardous products" coverage issue, it would have been speculative to have made a determination in that regard until Porter Hayden had first established the existence and the contents of the nine missing policies. After the jury, on remand, rendered its verdict with respect to those missing policies in January of 1996, however, the

predicate for plenary judgment in favor of Porter Hayden was fully established. The syllogism was obvious. Its major premise had

been established in 1992: Commercial Union's defenses are not viable with respect to the two extant policies. Its minor premise was then established by the jury's verdict in 1996: The coverage of the nine missing policies is substantially the same as the coverage of the two extant policies. There but remained to say "Ergo" and to pronounce the ineluctably valid conclusion that Commercial Union's defenses are not viable with respect to the nine missing policies as well. That

- 29 conclusion, however, notwithstanding its ineluctability, could not speak for itself. It is in It required a formal enunciation by the court. regard that Commercial Union has put on

this

"blinders" in making its argument as to non-finality.

When Judge

Angeletti held a scheduling conference with counsel prior to the trial on remand, he did, to be sure, announce that there would be no further hearings with respect to the three defenses because Judge Caplan had already made legal rulings with respect to them. Judge Angeletti announced that he was not going to relitigate those matters which Judge Caplan had decided as a matter of law. From

that, Commercial Union concludes that Judge Caplan's failure to have resolved finally those once open issues was thereby

perpetuated into a similar failure on the part of Judge Angeletti. Judge Angeletti did more, however, than simply adopt those rulings as Commercial his own. that He then acted on them. earlier We agree with were

Union

Judge

Caplan's

rulings

inartfully characterized by Judge Angeletti as "the law of the case." "[T]he law of the case doctrine does not apply to trial

court decisions in Maryland unless a statute or rule renders the decision binding or when no appeal is taken from the final

judgment."

Ralkey v. Minnesota Mining and Mfg. Co., 63 Md. App. See also Insurance Company v.

515, 522, 492 A.2d 1358 (1985).

Thrall, 181 Md. 19, 22-23, 27 A.2d 353 (1942); Placido v. Citizens Bank & Trust Co., 38 Md. App. 33, 44-46, 379 A.2d 773 (1977).

- 30 The use of the phrase "law of the case," however, was casual and not pivotal. Judge Angeletti clearly was not reluctantly

following prior rulings with which he disagreed but by which he felt bound. He freely chose to adopt Judge Caplan's rulings as his "While the trial judges may choose

own, as he was entitled to do.

to respect a prior ruling in a case, they are not required to do so." Ralkey v. Minnesota Mining, 63 Md. App. at 522-23 (emphasis See also Placido, 38 Md. App. at 45; Thrall, 181 Md. at

supplied).

22-23; Driver v. Parke-Davis Co., 29 Md. App. 354, 362, 348 A.2d 38 (1975); Walker v. State, 12 Md. App. 684, 689, 280 A.2d 260 (1971). Then, on the basis of those adopted legal rulings in

combination with the jury's verdict as to the missing policies, Judge Angeletti took the further step of granting a full and final judgment in favor of Porter Hayden with respect to all outstanding issues. He thereby formally pronounced the conclusion to the By granting judgment in favor of

theretofore dangling syllogism.

Porter Hayden with respect to all policies, he formally dotted the final "i" and formally crossed the final "t." Rightly or wrongly,

a subject to which we now turn our attention, all issues were finally decided. As a threshold determination, we at least have

before us an appealable final judgment.

Allegedly Erroneous Rulings Affecting the Trial on Remand

- 31 Following the remand from the Court of Appeals, Judge

Angeletti conducted a jury trial on the limited issues of 1) the existence and 2) the substance of the missing policies. The jury's

verdict was that those policies did, indeed, exist and that their coverage was in all essential regards the same as was the coverage of the extant policies. Commercial Union contends that that trial

on remand was flawed by two erroneous rulings, one at trial and one pre-trial.

A.

The Preclusion of an Additional Expert Witness
Commercial Union first complains that Judge Angeletti erred in

refusing to permit the late designation by Commercial Union of an expert witness, thereby precluding the testimony of that witness. There had been a mini-trial before Judge Caplan in 1992 on the issue of the missing policies. There had been, pursuant to

Maryland Rule 2-402(e)(1), full compliance with subsection (A), which provides: A party by interrogatories may require any other party to identify each person whom the other party expects to call as an expert witness at trial, to state the subject matter on which the expert is expected to testify, to state the substance of the findings and the opinions to which the expert is expected to testify and a summary of the grounds for each opinion, and to produce any written report made by the expert concerning those findings and opinions[.] Commercial Union had identified an expert witness in a timely manner. At the mini-trial before Judge Caplan, however, it elected

- 32 not to call him. had passed, Even after the time for complying with discovery Commercial to Union could an have sought or the an

however, of the

permission

court

designate

additional

alternative expert witness. It was on July 17, 1995 that the Court of Appeals remanded this case for a trial on the issue of the missing policies. It was

still a period within which the permission of the trial court might have been sought to designate a new expert witness. remand was initially set for December 4, 1995. The trial on

It was not until

November 17, 1995, however, that Commercial Union sent a letter to counsel for Porter Hayden informing it that Commercial Union intended to call Dr. Peter R. Kensicki as an expert witness in the upcoming trial. Specifically, the letter informed Porter Hayden

that "Dr. Kensicki will provide expert testimony in the same areas that Porter Hayden has elicited expert testimony from Mr. Malecki --i.e., issues relating to the proof, terms, and conditions of the `missing' policies." Commercial Union then suggested a late

November date on which Porter Hayden might wish to depose Dr. Kensicki. Three days later, on November 20, Porter Hayden replied: As we previously advised, Porter Hayden strongly objects to CU's belated attempt to designate another expert witness. All of the missing policies issues were thoroughly discovered during the prior proceedings in the Circuit Court. CU was aware that Porter Hayden had designated an expert concerning missing policies issues; in fact, CU

- 33 previously designated an insurance expert, but then for its own reasons elected to withdraw its designated expert. Now CU attempts to name a new expert witness, not previously named or deposed in this case. The present attempt by CU to name a new expert witness is grossly out of time and obviously prejudicial to Porter Hayden. (Emphasis in original). A copy of the November 20 letter was

delivered to Judge Angeletti. In the ensuing "battle of correspondence" over the "late" designation of Dr. Kensicki's expert testimony, Commercial Union faxed a follow-up letter to Judge Angeletti, also on November 20. In that letter, Commercial Union maintained that "the only issue truly presented by the instant disagreement is whether a party that did not call an expert in the first round of trial court

proceedings can later identify and use expert testimony in the event of a remand from the appellate court for a new trial." According to Commercial Union, it was justified in designating such an expert witness. Judge Angeletti, however, was not persuaded. he issued the following Order: Treating the November 17, 1995 letter from defendant's attorney as a Motion to Extend Discovery, and the November 20, 1995 letter from plaintiff's attorney as opposition thereto, it is this 20th day of November, 1995, by the Circuit Court for Baltimore City, Part 21; ORDERED, that defendant's Motion to Extend Discovery be and the same is hereby denied. On that same day

- 34 /s/ Edward J. Angeletti Judge Commercial Union was thereby precluded from calling Dr.

Kensicki as an expert witness at trial. preclusion was reversible error

It now complains that that "the evidence was

because

misleadingly one-sided, and the trial as a whole was rendered fundamentally unfair." This is quintessentially the type of "call" which is entrusted to the wide discretion of the trial judge and which appellate courts are loath to second-guess. "The admission or exclusion of evidence is a function of the trial court which, on appeal, is traditionally viewed with great latitude" and "[a]n appellate court will only reverse upon finding that the trial judge's determination was both manifestly wrong and substantially injurious." Swann v.

Prudential Ins. Co., 95 Md. App. 365, 374-75, 620 A.2d 989 (1993). See also Starfish Condo. v. Yorkridge Service, 295 Md. 693, 712, 458 A.2d 805 (1983); Klein v. Weiss, 284 Md. 36, 55-56, 395 A.2d 126 (1978); Snyder v. Snyder, 79 Md. App. 448, 460-61, 558 A.2d 412 (1989); Cotter v. Cotter, 58 Md. App. 529, 544-45, 473 A.2d 970

(1984); Hadid v. Alexander, 55 Md. App. 344, 350-52, 462 A.2d 1216 (1983). Commercial Union cites numerous cases in which trial judges were held not to have abused their discretion when they permitted experts to testify notwithstanding late designations. What those

cases illustrate, however, is the wide discretion vested in trial

- 35 judges in ruling on such matters. They do not by any means suggest

that the trial judges would have been guilty of clear abuses of discretion had they ruled otherwise. At the time of Judge Angeletti's ruling, the trial was still scheduled for the week of December 4, 1995. Porter Hayden would

only have been given approximately two weeks' notice to depose the intended expert and to prepare a possible defense to his testimony. The issue of missing policies had been thoroughly discovered by both parties during the prior proceedings before Judge Caplan. Given the substantial and lengthy history of the instant case, we see no clear abuse of discretion in the decision of Judge Angeletti in refusing to allow the testimony of Dr. Kensicki and to flirt with further delay.

B.

The Admission of Former Testimony Under Maryland Rule 5-804(b)(1)
On the first day of trial, January 3, 1996, Commercial Union

objected to the intended use by Porter Hayden of the former testimony in lieu of the live testimonial appearance of an expert witness, Donald Malecki. Involved was the Rule Against Hearsay and

one of its firmly rooted exceptions: Former Testimony. Maryland Rule 5-804(b), entitled "Hearsay Exceptions; Declarant Unavailable" provides: (b) Hearsay Exceptions .-- The following are not excluded by the hearsay rule if the declarant is unavailable as a witness: (1) Former Testimony.--Testimony given as a witness in any action or proceeding or in a

- 36 deposition taken in compliance with law in the course of any action or proceeding, if the party against whom the testimony is now offered, or, in a civil action or proceeding, a predecessor in interest, had an opportunity and similar motive to develop the testimony by direct, cross, or redirect examination. Subsection (a) of that rule lists the circumstances under which a witness is properly deemed unavailable for the purposes of 5804(b). "Unavailability" is defined, inter alia, as a circumstance

in which the hearsay declarant is "unable to be present or to testify at the hearing because of death or then existing physical or mental illness or infirmity[.]" 5-804(a)(4). Commercial Union's sole challenge to the admission of Mr. Malecki's former testimony was on the ground that Porter Hayden failed adequately to show that the witness was unavailable. Hayden had, however, as to why proffered the a lengthy was and very Porter

specific That

explanation

witness

"unavailable."

explanation included the fact that the witness, a resident of Kentucky, had been suffering from medical problems for some time prior to the upcoming trial, and the witness had tried to give a deposition in an unrelated case but had been unable to complete the deposition considering due the to his health problems.7 by The trial Hayden's court, on

reasons

detailed

Porter

counsel,

7 Counsel for Porter Hayden explained to the court that Mr. Malecki's health problems included a "perforated esophagus which is a condition involving an ulcer of his esophagus" as well as "a relating condition involving a spastic colon."

- 37 accepted the fact that Mr. Malecki was unavailable and allowed his prior testimony to be admitted at trial. Commercial Union mainly argues that Judge Angeletti acted improperly in relying on counsel's proffer as a basis for his decision. It, however, cites to no authority in Maryland

supporting its position that a trial court cannot rely on counsel's in-court and on-the-record explanation as a basis for a finding of unavailability. We know of none. As officers of the court,

lawyers occupy a position of trust and our legal system relies in significant measure on that trust. We agree completely with Judge

Angeletti's handling of the situation: I rely on counsel and if representation, as far as counsel's word is counsel's is something to the contrary can bring in. counsel makes a I am concerned, bond unless there that the opponent

Commercial Union also relies heavily on this Court's decision in Myers v. Alessi, 80 Md. App. 124, 136-40, 560 A.2d 59 (1989), for the proposition that a heightened scrutiny of the

unavailability of expert witnesses should be applied before the Former Testimony exception to the Hearsay Rule may successfully be evoked. Myers, however, dealt with a situation in which the expert

witness was found to be unavailable solely on the basis of his residence in another state and was "beyond the subpoena power of the state." The facts in Myers are clearly distinguishable from

the ones in this case involving Mr. Malecki's obvious health

- 38 problems in addition to his residence outside of the state.

Evidentiary rulings such as this one are entrusted to the wide discretion of the trial judge and appellate courts will not reverse absent a clear abuse of that discretion. discretion in this case. Even were this evidentiary ruling considered to be erroneous, however, we are persuaded that the error would have been harmless. Any prejudice would have been minimal. Commercial Union complains We see no clear abuse of

that without the benefit of Mr. Malecki's live testimony, it was unable to impeach Mr. Malecki with "potentially devastating

impeachment material."

Specifically, Commercial Union refers to

the expert testimony given by Mr. Malecki in an unrelated trial that took place in New York during the course of which Mr. Malecki testified that "it is always necessary to have an executed copy of a policy in order to demonstrate coverage under that policy." Commercial Union argues that "this testimony would have been the essence of impeachment material, given Mr. Malecki's testimony in the instant case that in determining the nature of coverage

provide[d] by Commercial Union's missing policies, `you don't even need a policy.'" Commercial impeachment. Union, however, had the benefit of that

Judge Angeletti, over Porter Hayden's objection,

allowed the testimony of Mr. Malecki from the New York trial to be read into the record in the case at bar. The allegedly

inconsistent position of Mr. Malecki was before the jury for

- 39 impeachment purposes and Commercial Union was fully entitled to use it in jury argument. Even assuming error, which we hold not to have been the case, do we think that documentary impeachment is as effective to the nth degree as impeachment face to face? No. Do we think that the No.

verdict would have turned on so modest a difference?

The Statute of Limitations
Commercial Union contends 1) that initially Judge Caplan erroneously denied its Motion for Summary Judgment based on the Statute of Limitations and 2) that subsequently Judge Angeletti erroneously adopted the rationale of Judge Caplan rejecting that defense and thereby committed error in granting Porter Hayden's Motion for Summary Judgment. The controlling legal provision is

Md. Code Ann., Cts. & Jud. Proc.

Download Commercial Union v. Porter Hayden.pdf

Maryland Law