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Leonid Khodor Plaintiff vs. Whiteford, Taylor & Preston Defendant * *

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IN THE CIRCUIT COURT FOR BALTIMORE CITY Case No.: 24-C-04-006528

* * * * * MEMORANDUM OPINION

On August 27, 2004, Leonid Khodor ("Khodor")filed a Complaint in this Court ("the Malpractice Action") against Whiteford, Taylor & Preston, LLP ("Whiteford") alleging that Whiteford committed legal malpractice which led to the dismissal of Khodor's suit against his former employer (the "Federal Litigation"). The alleged malpractice is based on the actions of Phillip Barnes, Esq. ("Mr. Barnes") of Whiteford, who was Khodor's attorney in the Federal Litigation. On January 28, 2005, Whiteford filed a Motion to Dismiss, or in the alternative, for Summary Judgment in which it argues that the doctrine of collateral estoppel bars the Malpractice Action because during a motion for reconsideration in the Federal Litigation, Khodor fully and fairly litigated the issue of responsibility for the discovery failures that lead to the dismissal of that action. Whiteford argues that the findings in the Federal Litigation that Khodor was personally responsible for certain discovery failures compels the conclusion that Khodor was contributorily negligent and that the Malpractice Action is therefore precluded as a matter of law. Khodor argues that collateral estoppel does not apply for several reasons. First, he argues that there was not a final judgment on the merits because the Federal Litigation ended with a consent judgment, and because the sanction of dismissal was a result of failure to comply with a discovery consent order. Second, any wrongdoing on the part of Khodor that

contributed to the discovery failure occurred after Whiteford committed malpractice by entering into a consent order that required Khodor to respond to discovery in two days on pain of dismissal. Third, the issues to be decided in the Malpractice Action are not essential to the issues decided in the Federal Litigation where the issue was whether Khodor had complied with the consent order. Fourth, the factual determinations that are crucial to a claim of contributory negligence were never considered in the Federal Litigation. Fifth, the issues in the Malpractice Action were not fully and fairly litigated in the Federal Litigation because: (1) the findings relied upon by Whiteford were made in the context of a decision denying Khodor's motion for reconsideration after a summary proceeding without the benefit of discovery; (2) the hearing on the motion for reconsideration included evidence that would have been inadmissible at a trial or in support of a motion for summary judgment; and (3) there was a higher burden on Khodor to convince the court to grant the motion for reconsideration than he has to convince the factfinder that there was malpractice. A hearing was held on Whiteford's motion on March 14, 2005. After argument, the Court requested that counsel file supplemental memoranda addressing whether the issues in this action were fully and fairly litigated in the Federal Litigation. Counsel were also directed to provide this Court with copies of the material considered by the federal court in ruling on the motion for reconsideration. For the reasons discussed below, the Court will issue an order denying the motion to dismiss or in the alternative for summary judgment. UNCONTESTED FACTS Khodor originally filed suit in state court in Ohio against his former employer, LHD Vending, Inc. ("LHD"). LHD removed the case to Ohio federal court, it was subsequently transferred to federal court in Maryland (the "Federal Litigation") and Khodor retained Whiteford to represent him. After its motion to dismiss was denied, LHD filed an Answer, 2

a Counterclaim, and written discovery requests. Almost two and a half months after Khodor's response to discovery was due, LHD filed a Motion to Compel Responses alleging that there had been a total failure of discovery. That motion was filed on November 13, 2001. On November 28, 2001, the parties entered into a Consent Order1 and in exchange, LHD withdrew its Motion to Compel. The Consent Order required Khodor to provide

complete responses, without objections, except on the basis of attorney-client privilege or work product protection by no later than November 30, 2001. The Consent Order further provided that the Clerk would dismiss Khodor's complaint if he failed to "file a certificate . . .certifying that full responses and answers complying with the governing rules were served, . . ., in accordance with [the Consent] Order. . . ." On February 26, 2002, LHD filed a Motion to Dismiss alleging that Khodor failed to file the required certificate and failed to provide complete responses and answers to the discovery requests because "the majority of Plaintiff's discovery responses [were] incomplete, evasive, non-responsive, and/or incomprehensible." Additionally LHD alleged that Khodor had produced documents but failed to identify in any manner which documents corresponded to which Request for Production and/or Interrogatory. As to documents produced in electronic format, LHD alleged it was unable to open them and that despite a request, Khodor failed to provide a hard copy or information on how to open them. LHD also identified alleged deficiencies in six specific interrogatories and three specific requests for documents. Finally, LHD alleged that Khodor executed the Interrogatories with a claim that he did not have personal knowledge of the facts contained in the answers. LHD alleged that efforts to get complete responses had proven unsuccessful and requested the court to

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Khodor alleges that this Consent Order was entered into without his knowledge or consent.

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dismiss the action for failure to comply with the Consent Order.2 LHD pointed out in its Reply that Khodor had taken no action after the filing of the motions to supplement his discovery responses.3 On April 17, 2002, LHD filed a Second Motion to Compel Responses to Written Discovery due to Khodor's Total Lack of Response to discovery requests filed on February 26, 2002. LHD alleged that before filing the second motion they contacted Khodor's counsel by letter but never received a response to the letter or to discovery. In his status report to the Court, Khodor's counsel alleged that he never received LHD's Interrogatories or the letter dated April 5th. A hearing on the motions was held on May 8, 2002. Khodor was not present and had been told by Mr. Barnes that he need not be present. During argument there were several representations made by Mr. Barnes concerning Khodor's failure to produce documents that suggest that the failure to be more responsive to the discovery request was because of Khodor's obstinacy. Judge Blake questioned why no affidavit had been presented in support of some of the allegations and why no protective order had been sought. It is clear from Judge Blake's oral opinion granting the motion to dismiss that she placed great emphasis on the fact that the discovery failure followed the Consent Order: I look first to the fact that there is a consent order in the file, which I issued . . . with the agreement of the plaintiff with consideration in that the motion for request for attorney's fees was being dropped. And that in that order, there is an agreement to provide without objection other than work product or attorney/client privilege, all the responsive answers to
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On March 5, 2002, LHD filed a Motion for Sanctions and Motion to Extend Time for Defendants' Discovery Responses making the same allegations. The federal court record reflects that Whiteford filed an Opposition on Khodor's behalf to the Motions but a copy of that response was not attached to the pleadings in connection with the motion before this Court.
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interrogatories and request for production of documents . . . . **** So these are just egregious examples in my mind that follow a very clear warning on November 30, 2001 of the consequences of Mr. Khodor's failing to comply with his discovery obligations. While she pointed out that Barnes had not filed a request for a protective order to not produce documents in Khodor's possession, Judge Blake based substantially all the blame for the failure of discovery on Khodor. [I]t's clear that there are a number of crucial inadequacies and failures to respond for which it appears Mr. Khodor is substantially and personally responsible. *** It is, as it should be candidly, conceded by counsel and clear from the record in this case, that Mr. Khodor has the responsive documents. They have not been produced. It's been because of his own reasons he has not felt that he should have to do that. But that's unacceptable. There are methods of raising that issue appropriately. There could have been a protective order requested. Certainly, it is not appropriate to simply ignore his responsibilities, which is obviously what he has done. I think the same is true with the response to the document request that fails to specifically identify what documents are responsive to what requests and I think it is also true in regard to the electronic files. That apparently there's been very little attempt to open them or produce them in some readable fashion or and apparently a refusal to return this information without requiring that the defendants pay the shipping costs for which I see no reason or excuse. It was admittedly their property and Mr. Khodor took it and it is not appropriate for him to expect the defendants to pay to get their own property back. So that also relates to this discovery failure. Recently, the answers to the second interrogatory request, the one that requests specific factual information regarding witnesses who are alleged to have knowledge, the answer to that which again appears to be attributable most directly to Mr. Khodor personally, those answers are totally inadequate.

Although not discussed in her oral opinion, during argument on the motion Judge Blake

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pointed out that Barnes had not filed an affidavit to support Khodor's claim concerning opening the electronic documents: The Court: ***, have you given me an affidavit from Mr. Khodor to the effect that he cannot open them?

Mr. Barnes: No, Your Honor. But I'm happy to do so. The Court: It would have been helpful and I would think in response to this discovery issue if that's going to be the position of Mr. Khodor. **** The Court: ***it's troubling that there is no affidavit. . . .

Judge Blake entered an order consistent with her oral opinion on May 20, 2002, granting LHD's Motion to Dismiss Khodor's complaint and the Motion for Sanctions and Motion to Extend Time for Defendants' Discovery Responses; granting judgment in favor of LHD and against Khodor on the breach of contract and conversion counts in the counterclaim; ordering Khodor to return to LHD all property in his possession, custody or control which belonged to LHD, and to produce to LHD all documents responsive to their discovery requests relating to the counterclaim. The order also provided that if there were any additional discovery requests relating to LHD's counterclaim to which Khodor had not responded, LHD was ordered to specifically identify those responses within 10 days of the order and Khodor was ordered to fully respond to them 10 days after the requests were identified. Finally, LHD was given an opportunity to file affidavits in support of its request for attorney fees. On May 21, 2002, Khodor returned LHD's property including a computer. However, the hard drive on LHD's computer indicated that on May 14, 2002, six days after the hearing, it had been reformatted and that select design files had been reinstalled on the same day but the program used to create and open the reinstalled files was not installed on the computer. 6

Thus LHD could not open any of the design files. In addition, Khodor did not provide plans, designs or documents related to the disputed patent as ordered by the Court. On May 24, 2002, LHD faxed to Khodor's counsel Defendant's Identification of Discovery requests Relating to Counterclaims to which Khodor failed to respond. On May 29, 2002, Whiteford withdrew its representation of Khodor. On June 3, 2002, Andrew White and Barry Pollack entered their appearance as counsel on Khodor's behalf. LHD filed a Second Motion for Sanctions on June 14, 2002 relating to Khodor's alleged failure to respond to the May 24th request. On July 5, 2002 Khodor's new counsel filed a Motion for Reconsideration arguing that the insufficient discovery responses which led to the dismissal sanction were due to Whiteford's actions or inaction.4 A hearing on the Motion for Reconsideration was held on December 20, 2002. In the Order denying the Motion, Judge Blake stated that even if Whiteford was partially responsible for the discovery failures, Khodor was personally responsible for certain discovery failures. Even if [Whiteford] were partially responsible for the discovery delay in October and November and the inadequacy of some responses, [the Court] remain[s] persuaded from the record [] that Mr. Khodor is personally responsible for the refusal to produce requested patent documents when directed to do so, the initial and continuing failure to return LHD's computer, and the failure to produce, in a readable fashion, all the designs contained on the computer. Further, subsequent to the May 8, 2002 hearing, Mr. Khodor is personally responsible for the decision to reformat the hard drive on LHD's computer before returning it to LHD, thus determining for himself without the
Khodor's new counsel filed an Opposition to the Motion for Sanctions, stating "on June 3, 2002, rather than attempt to file substantive responses, Mr. Khodor's new counsel filed its motion to reconsider the Court's May 20th Order and asked the Court for a stay of that Order until July 5, 2002." On December 31, 2002 Judge Blake deferred ruling on the Second Motion for Sanctions and denied it on March 14, 2003.
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opportunity of inspection by counsel what, if anything, constituted "personal" information that may have been appropriate to delete. On December 31, 2002, Judge Blake signed an Order referring the Federal Litigation to Magistrate Judge Beth P. Gesner for a settlement conference and on August 22, 2003 the parties filed a Joint Motion for Consent Order. Judge Blake signed the Consent Order thereby closing the Federal Litigation. On August 27, 2004, Khodor filed this Malpractice Action alleging that Whiteford committed legal malpractice in the course of its representation of Khodor, which ultimately led to the dismissal of the Federal Litigation. DISCUSSION Standard of Review In reviewing the grant of a motion to dismiss pursuant to Maryland Rule 2-322(b), the Court must assume "the truth of all well pleaded facts and all inferences that can reasonably be drawn from them." Bennett Heating & Air Conditioning, Inc. v. Nations Bank, 103 Md. App. 749 (1995), rev'd in part on other grounds, 342 Md. 169 (1996); 2-322(b)(2). However, if "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 2-501." Md. Rule 2-322(c). Because the facts considered in this Memorandum Opinion include facts outside the Complaint, the motion is treated as a motion for summary judgment. Pursuant to Maryland Rule 2-501 a motion for summary judgment may be granted where "there is no genuine dispute as to any material fact and that the [moving] party is entitled to judgment as a matter of law." See also Russo v. Ascher, 76 Md. App. 465, 473 (1988); Syme v. Marks Rentals, Inc., 70 Md. App. 235, 237-38 (1987); Ganter v. Kapiloff, 69 Md. App. 97, 104 (1986). Summary judgement acts as a gate-keeping mechanism

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whereby only those actions that present a triable issue of fact proceed. Thus, if there is no issue of fact to be tried, judgment must be entered accordingly. See Coffey v. Derby Steel Co., 291 Md. 241, 247 (1974). In deciding a motion for summary judgment, the Court should assume the truth of all credible evidence on the issue, and all fairly deducible inferences therefrom, in the light most favorable to the party against whom the motion is made. Nissan Motor Co. Ltd. v. Nave, 129 Md. App. 90, 116-17 (1999) (citations omitted), cert. denied, 357 Md. 482 (2000). "[I]f there is any evidence, no matter how slight, that is legally sufficient to generate a jury question, the case must be submitted to the jury for its consideration." Washington Metro. Area Transit Auth. v. Reading, 109 Md. App. 89, 99 (1996) (citation omitted); Orwick v. Moldawer, 150 Md. App. 528, 531-32 (2003). Applicable Law Under the doctrine of collateral estoppel, "when an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim." Murray Int'l Freight Corp. v. Graham, 315 Md. 543, 547 (1989) (quoting RESTATEMENT (SECOND) OF JUDGMENTS

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