Berringer v. Steele

• Decision Date: 31 August 2000
• Docket Number: No. 824,824
• Citation: 133 Md. App. 442,758 A.2d 574
• Parties: Philip E. BERRINGER v. Nevett STEELE, Jr. et al.
• Court: Court of Special Appeals of Maryland

758 A.2d 574

133 Md. App. 442

Philip E. BERRINGER v. Nevett STEELE, Jr. et al.

No. 824, Sept. Term, 1999.

Court of Special Appeals of Maryland.

August 31, 2000.

Nathaniel E. Jones, Jr. (James H. Fields and Jones & Associates, P.C., on the brief), Baltimore, for appellant.

Alvin I. Frederick (James E. Dickerman and Eccleston and Wolf, on the brief), Baltimore, for appellees.

Argued before WENNER, HOLLANDER, and SONNER, JJ.

HOLLANDER, Judge.

In this legal malpractice case, we must determine whether the Circuit Court for Baltimore County erred in granting summary judgment to Nevett Steele, Jr., Esquire, Michael J. Gentile, Esquire, and the Law Firm of Nevett Steele, Jr., P.A. (the "Firm"), appellees, in connection with their post-trial representation of Philip E. Berringer, appellant, who had been convicted of theft and misappropriation of funds by a fiduciary. Berringer presents two general questions for our consideration, which we have rephrased slightly:

I. Did the circuit court err in awarding summary judgment?

II. Did the circuit court abuse its discretion in denying appellant's post-trial motion to alter or amend judgment?

Appellant also raises four issues, which we have rephrased, reordered, and condensed as follows:¹

I. Did appellant's failure to obtain post conviction relief bar his legal malpractice claim against appellees?

II. Did the circuit court correctly interpret appellant's complaint in determining that he knew appellees did not intend to file a notice of appeal on appellant's behalf and conclude that such knowledge barred recovery?

III. In its memorandum and ruling awarding summary judgment, did the circuit court ignore appellant's allegations of appellees' negligence and breach of contract with respect to their representation of appellant at sentencing?

FACTUAL BACKGROUND²

Appellant filed his legal malpractice suit on January 30, 1998, after years of litigation arising from his involvement with the National Computer Ribbon Corporation ("NCRC"), a small manufacturing firm. From April 1986 to June 1993, Berringer was the president, chief executive officer, and a director of NCRC.

In November 1991, Joanne Hardy resigned her position as NCRC's production manager. Shortly thereafter, Berringer indefinitely suspended William Hardy, Joanne's husband, who was an NCRC salesman, director, and shareholder, pending an investigation into the allegedly unauthorized removal of files and documents from NCRC. Mr. Hardy and another director, Frank Schmidt, asserted that the file and document removal were part of their investigation of fraud and embezzlement purportedly committed by Berringer. In January 1992, Berringer terminated Mr. Hardy for alleged conversion of a company automobile.

On May 1, 1992, the Hardys initiated a wrongful termination suit against NCRC, Berringer, and Maria Staab. Staab was a member of the NCRC board, the company's office manager, and its corporate secretary. The Hardys claimed that Mr.Hardy had been terminated, and Ms. Hardy constructively terminated, because they chose to "blow the whistle" on Berringer's fraudulent procurement of over $200,000 in NCRC funds through a company called E & L Enterprises ("E & L"). After a three-week trial, the jury rendered a verdict against Berringer and NCRC for nearly $3 million, including $650,000 in punitive damages against appellant.

In October 1993, Berringer was charged in Baltimore County with fraudulent misappropriation by a fiduciary and felony theft. The case was tried to a jury in the circuit court (Howe, J., presiding) beginning on December 12, 1994. At trial, appellant was represented by Stewart Lyons, Esquire, an Assistant Public Defender.

The evidence presented at Berringer's criminal trial³ revealed that NCRC used various subcontractors to perform some of its assembly and processing work. Over a period of time, NCRC paid out more than $227,000 to E & L based on invoices submitted for subcontracting work allegedly performed for NCRC. The evidence showed, however, that E & L had not performed the services, and that Berringer, who was affiliated with E & L, took the money paid on the invoices and deposited it into his personal bank account. Berringer maintained that he and his associates had performed the work reflected on the invoices at night and on the weekends, when the regular NCRC staff was not present. The jury convicted appellant of both charges. The court then denied Berringer's request for bail, and he was detained at the Baltimore County Detention Center pending sentencing.

On December 28, 1994, Berringer, through Lyons, moved for a new trial, proffering the following "reasons":

1. That juror number three, Denise Shipowick, disliked co-defendant Maria Staab.[⁴]

2. That Maria Staab and Mrs. Shipowick live in the same neighborhood. A couple of years ago, Mrs. Shipowick's son assaulted and battered Mrs. Staab's son. The Staabs insisted that [Mrs.] Shipowick's son be charged in juvenile court. Both Maria Staab and her husband Bernie Staab were in juvenile court for Mrs. Shipowick's son's case.

3. That both Maria Staab and her husband Bernie Staab believe that Mrs. Shipowick holds a feeling of animosity to them, and that Mrs. Shipowick would have recognized Maria Staab's name when the names of the potential witnesses were read during voir dire.

4. That one of the grounds for a new trial is the bias and disqualification of jurors. [Citation omitted.]

5. That, as a second ground, the defense presented uncontradicted evidence that the Defendant was owed or entitled to much more money than he allegedly stole from the corporation. In light of this, the jury's verdict was clearly against the weight of the evidence. [Citation omitted.]

6. And for such other and further reasons as may be assigned at a hearing on this motion.

A hearing on that motion, and sentencing, were scheduled for January 31, 1995.

Dissatisfied with Lyons, Berringer engaged private counsel. On December 28, 1994, while incarcerated, Berringer met with Steele and related a number of purported deficiencies in Lyons's representation, including the failure to gain admission in evidence of fourteen documents that subsequently "disappeared" from the court. Steele advised Berringer that he would file an amended motion for new trial and attempt to secure a bail hearing. According to appellant's malpractice complaint, Steele agreed with Berringer "that the first and most important thing to do was to get a" transcript of appellant's criminal trial, and "Steele assured Berringer that Steele would order the Transcript immediately and that Steele should have a copy within a few weeks." Steele further advised Berringer that he would meet with Judge Howe and the prosecutor to ascertain the location of the fourteen missing exhibits. Berringer told Steele that Lyons was hostile in response to Berringer's recommendation that he move for a new trial based on ineffective assistance of counsel. Consequently, Steele advised Berringer that he would note the appeal. Berringer, in turn, assured Steele that his aunt, Ruth Walsh, would furnish any additional money on Berringer's behalf if needed for the appeal.

The following day, December 29, 1994, Gentile brought Berringer an engagement letter, a copy of the motion for new trial filed by Lyons, and a copy of the amended motion for new trial that appellees had filed that day. The letter, which was signed by Steele, said, in relevant part:

Thank you for asking us to represent you in the criminal matter pending before Judge Howe. It is a very interesting case. I think we developed some good ideas in our discussion last night. I have visited Stewart Lyons and left a message with Bruce Penczek[, a certified public accountant,] in order to make arrangements to meet with him to discuss preparation of a financial analysis.

... I am operating under the assumption that Ruth [Walsh] will issue a $20,000.00 check to my firm.... I will deposit the $20,000.00 in our escrow account and bill against it at the rate of $180.00 an hour for my time and $135.00 an hour for Mike Gentile.

I will delegate the primary responsibility for the financial investigation, organization, and compilation to Bruce Penczek. This should help to keep the hourly rates and costs down and enhance the quality of the work. I will pay Bruce Penczek his retainer out of the money we are holding in our escrow account. My plan is to obtain from Stewart Lyons the various records he has, let Bruce Penczek review those, and have Bruce meet with you.

We will send detailed monthly billing statements with a description of our services and the expenses incurred. Interest will be charged at the annual rate of 12% on unpaid balances over 30 days.

You will be responsible for reimbursing us for all advanced expenses that we make such as expert fees, trial transcripts, photocopying, computer research, hand-deliveries, overnight mail, long-distance telephone, and other expenses incurred up to the date of receipt of your written notice.

We reserve the right to withdraw from representation for good cause such as your refusal to cooperate with our office or your failure to maintain an account in good standing. The firm will not discontinue legal services without giving you notice.

* * *

Our undertaking is to represent you in regard to the reduction of bail, the motion for new trial, and the sentencing before Judge Howe. This agreement does not include an appeal of the conviction.

If you are in agreement with the above, would you please sign the copy enclosed herein and return it to me. A self-addressed envelope is enclosed for your convenience.

(Emphasis added).

Appellant was dissatisfied with the terms of the agreement, and advised Gentile that Steele should prepare a revised engagement letter to reflect the following: (1) hourly rates of $170 and $125 for Steele and Gentile, respectively, in accordance with discussions during the December 28 meeting; (2) filing a notice of...