Bresnahan v. Bresnahan
| Decision Date | 02 April 1997 |
| Docket Number | No. 1212,1212 |
| Citation | 115 Md.App. 226,693 A.2d 1 |
| Parties | Dona K. BRESNAHAN v. William B. BRESNAHAN. Sept.Term 1996. |
| Court | Court of Special Appeals of Maryland |
Thomas F. DeCaro, Jr., Upper Marlboro, for Appellant.
Mitchell I. Alkon (Pasternak & Fidis, P.A., on the brief), Bethesda, for Appellee.
Argued before CATHELL, HARRELL and THIEME, JJ.
Dona K. Bresnahan appeals from a jury verdict and subsequent court judgments rendered in the Circuit Court for Prince George's County. William B. Bresnahan, appellee, cross appeals from other aspects of the jury verdict and from the trial court's denial of his motion for judgment notwithstanding the verdict.
Appellant presents five issues:
Whether proof of actual malice is a prerequisite to an award of punitive damages in a partnership dissolution case where the jury found that [appellee] breached his fiduciary duty to the estate of his deceased partner.
Whether the trial should have been bifurcated to allow [appellant] to present evidence of [appellee's] net worth in connection with the submission to the jury of [appellant's] claim for punitive damages against [appellee].
Whether the evidence, consisting of [appellant's] testimony concerning the amount of attorneys' fees incurred in this case, is sufficient to support [appellant's] demand for attorneys' fees in the absence of expert testimony that the fees incurred were "reasonable."
Whether the trial court properly set aside the jury verdict awarding [appellant] the profits earned by the [appellee] from the partnership after the death of the decedent.
Whether the trial court properly allowed the deed to the partnership real estate to be released to [appellee] prior to the conclusion of these proceedings.
The first two issues are intertwined, and we shall address them together. We shall address the other issues separately. Appellee, in his cross-appeal, presents a two-part question:
Did the trial court err in entering judgment for [appellant] for deposition costs and appraisal fees, and in failing to grant [appellee's] motion for judgment notwithstanding the verdict in this respect?
Both parties in their briefs expound upon their allegations that the actions of the other were bizarre. There are allegations that one of the parties placed dead bats in condoms and rooster heads in boxes and deposited them on the other's property and allegations that the other party stated, "Hitler lived in the center of the earth," and made references to "space aliens," construction of space ships, "vision quests," etc., most of which, in regard to this appeal, are completely irrelevant. We will not insert ourselves in the parties' vindictiveness. We shall attempt a judicious and restrained recitation of the facts.
Appellee and Daniel Bresnahan were equal partners in a "crab house" operated as a general partnership. Daniel Bresnahan died, and appellant, his widow, became the personal representative of his estate. Attempts were made by both parties to arrive at a settlement in regard to the estate's interest in the partnership and a winding up of the partnership. These attempts, to the extent that the parties participated, were rancorous and ultimately unsuccessful.
Eventually, appellant instituted suit against appellee. The case proceeded to trial on appellant's First Amended Complaint. It provided, after a factual recitation, that:
15. All allegations in Paragraphs 1 through 14 are realleged and incorporated herein by this reference as if fully set forth herein.
16. The improper actions of [appellee] herein constitute a breach of the fiduciary duty owed by [appellee] to [appellant] and to the Partnership, which duty is owed to these parties by [appellee] insofar as [appellee] is the sole remaining Partner of the Partnership.
WHEREFORE [appellant], on behalf of the estate, on her own behalf and on behalf of the Partnership prays for (1) Distribution to [appellant] of $62,500, representing one-half of the value of the interest in the Partnership owned by Decedent Daniel Bresnahan as of the date of death, net of amounts received heretofore by [appellant], plus undistributed Partnership profit of $6,000 accrued in 1991; (2) Distribution to [appellant] of one-half of the partnership profits earned between November 1, 1991 and the date on which [appellee] deposited the final installment of the Partnership value into the registry of this Court; (3) [Appellant's] attorneys' fees and related costs in maintaining this action and in attempting, in connection with ... the filing of this case, to recover the value of the Partnership from [appellee], consisting of appraisal fees of $15,960, deposition costs of $550.30, and legal fees of approximately $50,000; (4) Punitive damages, in an amount to be determined by the jury in this matter, for breach of [appellee's] fiduciary duty in this matter.[ 1
The case was tried on this amended complaint, and a special verdict form was used. The parties do not direct us to any place in the record where either of them objected to the special verdict form used. At one point, the trial court stated:
I've constructed the verdict sheet in the fashion that I have in order to preserve, or at least to make clear, preserve certain issues if there is an appeal, so that whatever would happen on appeal would not require the parties to exhaust resources again trying the case a second time.
That's my real purpose in constructing a verdict sheet, because it's not going to be ... to anyone's benefit, least of all mine, if the parties have to try this case again.
The verdict sheet, as answered by the jury, provided:
Appellant's first issue is:
1. Whether proof of actual malice is a prerequisite to an award of punitive damages in a partnership dissolution case where the jury found that [appellee] breached his fiduciary duty to the estate of his deceased partner.
Appellant extends the impact of, and relies heavily on Hartlove v. Maryland Sch. for the Blind, 111 Md.App. 310, 681 A.2d 584 (1996), vacated and remanded for reconsideration, 344 Md. 720, 690 A.2d 526 (1997), for the proposition that Hartlove adopts in full section 874 of the Restatement (Second) of Torts, which provides that, in breach of fiduciary duty actions, the breach alone is sufficient to provide a basis for an award of punitive damages. Thus, according to appellant, the trial judge's instruction to the jury that it had to find actual malice in order to award punitive damages was wrong.
An initial concern is that, at the time of the verdict in this case, the tortious cause of action upon which appellant relied and prevailed, had not yet been recognized in Maryland. Even if it had been recognized, Hartlove, as appellant admits, did not explicitly adopt that aspect of the Restatement's provision as to punitive damages. We shall, however, leave the interesting and difficult question of the ex post application of Hartlove's holdings to another case, as we shall decline to extend Hartlove, to the extent it may still exist after Kann, to any degree beyond its limits as we perceive them.
We initially note that the only count that survived at the time this case was submitted to the jury was the single, separate count of breach of fiduciary duty. Appellant's count of fraud had been disposed of either by motion or voluntarily, by amending it out of the cause of action. Moreover, appellant has not appealed any decision of the trial court that may have resulted in the fraud count being eliminated from the suit. We are, therefore, faced with a situation in which fraud has not been established and the only cause submitted to the jury was an independent count alleging a breach of fiduciary duty.
On December 20, 1996, the Court of Appeals denied certiorari in Hartlove. On March 7, 1997, it ordered its December 20, 1996, order to be rescinded and recalled, and finally, on March 12, 1997, the Court of Appeals granted certiorari (Pet.Doc. No. 488/96) on the petition for certiorari, denied the cross-petition for certiorari, ordered our opinion to be vacated, and remanded Hartlove to this Court for reconsideration in light of its opinion in Kann v. Kann, 344 Md. 689, 690 A.2d 509 (1997).
The Court of Appeals in Kann discussed Hartlove, noting the Hartlovee majority's holdings:
First, it said: "Given the standard of conduct imposed upon fiduciaries, we are of the view that fiduciaries who breach their duty should be held accountable under an independent cause of action aimed at such conduct." [Hartlove, 111 Md.App. at 331, 681 A.2d 584] (footnote omitted). The panel of the Court of Special Appeals divided two to one on this first holding.
Kann, at 708-709, 690 A.2d 509. In respect to this holding, the Court of Appeals commented:
Regina [Kann] and the Court of Special Appeals read too much into § 874 of the Restatement. As we saw in Part III.A, § 874 in effect recognizes the universal proposition that a breach of fiduciary duty is a civil wrong, but the remedy is not the same for any breach by every type of fiduciary. For some breaches the remedy may be at law, for others it may be exclusively in equity, and for still others there may be concurrent remedies.
Id. at 710, 690 A.2d 509. It further commented:
Under the tort...
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