Lawley v. Northam

• Decision Date: 24 April 2013
• Docket Number: Civil Action No.: ELH-10-1074
• Parties: DARREN LAWLEY, ET AL., Plaintiffs, v. PAUL E. NORTHAM, ET AL., Defendants.
• Court: U.S. District Court — District of Maryland

DARREN LAWLEY, ET AL., Plaintiffs,

v.PAUL E. NORTHAM, ET AL., Defendants.

Civil Action No.: ELH-10-1074

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

Date: April 24, 2013

MEMORANDUM OPINION

This case arose from a real estate transaction consummated in September 2008, involving the purchase and sale of a single family home in Worcester County, Maryland (the "Property"), pursuant to a Residential Contract of Sale (the "Contract") executed in July 2008. Dona May Willoughby, plaintiff, was the purchaser, and her daughter and son-in-law, Misha and Darren Lawley (the "Lawleys"), plaintiffs, were to reside at the Property. Paul Northam and Lynn Immell, defendants, were the sellers ("Sellers"). Debora Hileman ("Ms. Hileman") and Hileman Real Estate, Inc. ("Hileman, Inc.") (collectively, the "Hilemans"), defendants, were the Sellers' real estate agent and broker. Claiming that the house was defective, and that defendants failed to disclose latent defects of which they had knowledge, plaintiffs filed a fourteen-count Complaint (ECF 1), seeking $1,000,000 in compensatory damages and $2,000,000 in punitive damages.¹ In particular, plaintiffs claimed the house was filled with mold that caused Ms. Lawley to become ill, and that it was subject to severe water intrusion in the basement. They sold the Property in February 2012, at a loss, which they attributed to the defects in the Property.

Following plaintiffs' filing of an Amended Complaint, see ECF 43, the defendants filed several motions for summary judgment, culminating in two judicial opinions that resolved a fewof the claims. See ECF 67; ECF 75. Thereafter, plaintiffs filed a Second Amended Complaint. See ECF 84. After a flood of pretrial motions, see ECF 88; ECF 89; ECF 90; ECF 92; ECF 93; ECF 94; ECF 108, the case was tried to a jury, commencing October 31, 2012, on five counts: Negligence (Count I); Negligent Misrepresentation (Count II); Fraud (Count III); Unfair or Deceptive Trade Practices under the Maryland Consumer Protection Act, MD. CODE (Repl. Vol. 2005), COM. LAW § 13-101 et seq. (Count IV, against Sellers only); and Loss of Consortium (Count V).

At the close of the evidence, the defendants moved for judgment under Fed. R. Civ. P. 50(a). I reserved ruling on the motion. See Fed. R. Civ. P. 50(a) (indicating that a court need not decide a Rule 50(a) motion before the jury's ruling, and can instead consider a renewed motion under Rule 50(b), if necessary); Fed. R. Civ. P. 50(b) ("If the court does not grant a motion for judgment as a matter of law made under Rule 50(a), the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion."); e.g. E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009) ("If the judge denies or defers ruling on the motion, and if the jury then returns a verdict against the moving party, the party may renew its motion under Rule 50(b).").

On November 16, 2012, the jury initially found in favor of the plaintiffs and against the Hilemans as to negligence (Count I), but also found that plaintiffs had "assumed the risk of purchasing property with knowledge of the defects that they allege." See Verdict ¶¶ 7-7A (ECF 168). It awarded $33,600 to plaintiffs in connection with the Property.² See id. ¶ 16. As to all other claims, the jury found in favor of the Hilemans as well as the Sellers.

In Maryland, "[i]f established by the evidence, assumption of the risk functions as a complete bar to recovery." Poole v. Coakley & Williams Constr. Inc., 423 Md. 91, 110, 31 A.3d 212, 224 (2011). Accordingly, the jury's verdict was inconsistent. See Smith v. Jefferson Cnty. Chamber of Commerce, Inc., 885 F.2d 866, 1989 WL 106803, at *2 n.1 (4th Cir. 1989) (unpublished per curiam) (explaining that a jury's finding for plaintiffs on a claim of negligence, while simultaneously finding assumption of the risk as to that claim, "would be an inconsistent verdict"). Therefore, before the verdict was entered, the Court provided supplemental jury instructions, explaining that assumption of the risk is a complete bar to recovery. The jury was then instructed to reconsider the issues of negligence and the affirmative defense of assumption of the risk. A supplemental verdict sheet was also submitted to the jury ("Supplemental Verdict," ECF 168-1). See Bristol Steel & Iron Works v. Bethlehem Steel Corp., 41 F.3d 182, 190-91 (4th Cir. 1994) (explaining that "the district court exercises the discretion to determine whether the jury's findings as evidenced by the special verdicts will support the verdict rendered or whether certain issues should be resubmitted to the jury," and the court may "'give such supplemental instructions as may be necessary'") (citations omitted); see e.g., Kerman v. City of New York, 261 F.3d 229, 242-44 (2d Cir. 2001) (finding trial judge exercised discretion properly in accepting partial verdict as to eight of nine defendants, while returning verdict sheet to the jury to resolve inconsistent verdict as to remaining defendant).

Thereafter, the jury again found against the Hilemans as to negligence, and also found that plaintiffs did not assume the risk. See Supplemental Verdict. It again awarded $33,600 in connection with the sale of the Property. See id.³ Although plaintiffs argued at trial that theHilemans were negligent based on the presence of mold and the history of water intrusion, the jury was not asked to specify the basis on which it found the Hilemans negligent. Nonetheless, the parties seem to agree that water intrusion was the sole basis on which the verdict was rendered.

The Court issued an Order of Partial Judgment on November 20, 2012, see ECF 170, entering partial judgment in favor of plaintiffs and against the Hilemans, in the amount of $33,600.00, with costs, and entering partial judgment in favor of Sellers and against plaintiffs, with costs. Id. ¶¶ 1-2. It stated: "If any party intends to file a renewed motion for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b), that party is instructed to submit such motion within 28 days after this Order is docketed." Id. ¶ 5. The Order of Partial Judgment also stated that final judgment would be entered "after determination of the parties' entitlement to attorneys' fees." Id. ¶ 6 & n.2.

The Hilemans subsequently filed a Motion for Judgment ("Brokers' Motion," ECF 178), and a supporting memorandum ("Brokers' Memo," ECF 178-1), seeking judgment under Fed. R. Civ. P. 50(b), on the grounds that the verdict against the Hilemans on Count I (negligence) was contrary to the evidence. Plaintiffs filed an opposition, focusing on the Hilemans' failure to disclose material facts as to the history of water intrusion in the basement. See ECF 183.⁴

Additionally, in accordance with the Order of Partial Judgment, Local Rule 109.2, and Appendix B: Rules and Guidelines for Determining Attorneys' Fees in Certain Cases ("Appendix B" or "App. B"), the Sellers filed a motion to recover $240,015.31 in attorneys' fees, pursuant to the Contract. See Motion for Attorneys' Fees ("Sellers' Motion," ECF 171); Memorandum in Support of Motion for Attorneys' Fees ("Sellers' Memo," ECF 171-1);Supplemental Memorandum in Support of Defendants' Motion for Attorneys' Fees (ECF 176). In support of Sellers' Motion, the Sellers submitted two affidavits of Thomas P. Bernier, Esq., one of the attorneys for the Sellers. See Affidavit of Thomas P. Bernier, Esq., ("Bernier Aff.," ECF 171-7); Second Affidavit of Thomas P. Bernier, Esq. ("Bernier Aff. II," ECF 176-3). On behalf of himself, his co-counsel, Susan Smith, Esq., as well as an associate attorney and two paralegals, Mr. Bernier claimed legal fees and expenses of $131,036.31 for the period of July 20, 2010, through September 28, 2012, Bernier Aff. ¶ 7, and $108,979 for the period of October 1, 2012, through November 31, 2012. Bernier Aff. II ¶ 7.⁵ Pursuant to Fed. R. Civ. P. 54(d)(1) and Local Rule 109.1, the Sellers also claimed $6,610.80 in costs, to be taxed against plaintiffs. See ECF 172 (Sellers' bill of costs); ECF 172-1 (Sellers' memorandum in support of bill of costs). Plaintiffs opposed the Sellers' Motion, see ECF 179, and Sellers' claim for costs, see ECF 181, and Sellers replied. See ECF 182 (reply as to attorneys' fees); ECF 184 (reply as to costs).

Plaintiffs filed a motion for attorneys' fees and expenses as to the Hilemans, in the amount of $173,590, also pursuant to the Contract. See Plaintiffs' Motion for Attorneys' Fees ("Plaintiffs' Motion," ECF 173); Memorandum in Support of Motion for Attorneys' Fees ("Plaintiffs' Memo," ECF 173-1); Affidavit of Samuel L. Riley, Esq., Plaintiffs' Counsel ("Riley Aff.," ECF 173-4).⁶ And, plaintiffs claimed $11,116.29 in costs, to be taxed against the Hilemans. See ECF 172 (plaintiffs' bill of costs). The Hilemans opposed the Plaintiffs' Motion, see ECF 180, and plaintiffs replied. See ECF 185. However, the Hilemans did not oppose plaintiffs' claim for costs.

The issues have been fully briefed, and the Court now rules pursuant to Local Rule 105.6, as no hearing is necessary. For the reasons that follow, I will deny the Brokers' Motion; I will grant, in part, the Sellers' Motion; and I will deny the Plaintiffs' Motion. I will also award costs to plaintiffs and against the Hilemans, and to the Sellers and against plaintiffs, as set forth herein.

Factual Background⁷

On or about September 5, 2008, Ms. Willoughby purchased the Property from Northam and Immell for $192,450, pursuant to the Residential Contract of Sale executed in July 2008. See Exh. 2.⁸ As noted, she purchased it for her daughter and son-in-law, the Lawleys, who wanted to move to the Eastern Shore of Maryland to lead a sustainable lifestyle as organic farmers.

The home was built in 1957 by David Northam⁹ and his wife, Irene Northam, the parents of the Sellers and the aunt and uncle of Ms. Hileman. David Northam died in 1979. Irene...