Moore v. Norouzi

• Decision Date: 25 September 2002
• Docket Number: No. 126 | 127
• Parties: Robert MOORE, v. Mostaba NOROUZI, et al. Stuart C. Mendelson et ux., v. Phillip George Brown et al.
• Court: Maryland Court of Appeals

807 A.2d 632

371 Md. 154

Robert MOORE, v. Mostaba NOROUZI, et al.

Stuart C. Mendelson et ux., v. Phillip George Brown et al.

Nos. , Sept. Term, 2000.

Court of Appeals of Maryland.

September 25, 2002.

Robert J. Zarbin (Harvey A. Kirk of Saiontz, Kirk & Miles, P.A., on brief), Baltimore, for appellant.

Karen L. Federman Henry, Associate County Attorney (Charles W. Thompson, Jr., County Attorney, Brian G. Kim and Paul F. Leonard, Jr., Associate County Attorneys, on brief), Rockville, for appellees.

Walter E. Laake, Cary J. Hansel of Joseph, Greenwald & Laake, P.A., Greenbelt, brief of the Maryland Trial Lawyers Ass'n filed on behalf of appellants, amicus curiae.

Argued before BELL, C.J., and ELDRIDGE, RAKER, WILNER, CATHELL, HARRELL and BATTAGLIA, JJ. BELL, Chief Judge.

In these consolidated appeals, we have been asked to address whether: by notice to a third party claims administrator acting on behalf of a local government, the petitioners, Robert Moore ("Moore") and Stuart C. Mendelson ("Mendelson")¹ actually complied with the notice requirement of the Local Government Tort Claims Act ("LGTCA"), Md.Code (1974, 1998 Repl.Vol., 2000 Cum.Supp.) § 5-304 of the Courts and Judicial Proceedings Article;² such notice constitutes substantial compliance with the notice requirement;³ the court, because good cause was shown and the local government defendant were not prejudiced, could entertain the action in any event.⁴ The Circuit Court for Montgomery County resolved each of these issues against the petitioners and entered judgment in favor of Montgomery County, one of the respondents. We shall reverse.

I.

In both of these cases, the petitioners were injured in an accident, in which an employee of Montgomery County was involved and, according to the petitioners, that employee's negligence caused. In both, Trigon Administrators, Inc. (hereinafter "Trigon") provided claims administration services for the Montgomery County Self-Insurance Program, which provides coverage for "Workers' Compensation, Commercial General Liability, including Public Officials and Public Protective Liability, Business Automobile, Automobile Physical Damage, Real and Personal Property and miscellaneous property." In neither did the petitioners send any notice to the County Executive and there is nothing in the record to indicate that the County Executive was provided with any written notification from any other source.

Trigon acts pursuant to a contract solicited by the Montgomery County Government, Department of Finance, Division of Risk Management.⁵ In furtherance of the County's goals of, among others, "bringing the claims management/risk management information system ... in-house to the Division of Risk Management," thus providing a fully automated system that is integrated with the County's existing accounting and other information systems and can be used by the third party claims administrator to enter claims data, print checks and run experience reports, Trigon is charged, under that contract, with achieving currency between the data it uses or maintains and the Division of Risk Management's information system. It is permitted to do so in either of two ways: using on-line access to the County risk management information system or providing on-line access to Risk Management to its risk management information system.

The provisions of Trigon's contract with the County with regard to claims handling in general are extensive and comprehensive. In addition to other provisions requiring periodic reviews, evaluations and reports, some of the contents of which are also prescribed, the contract requires the claims administrator, at a minimum, to:

"a. Date-stamp all correspondence on the day it is received.

"b. Create a claim file folder, with a file number and a record of the name of the adjuster assigned to handle the claim....

"c. Set reserve amounts for each claim.

"d. Enter the claim information on the computer database within five days of receipt of the claim. All information captured on claim report forms submitted by participating agencies must be available on the database....

"e. Contact the claimant within one working day of notification of bodily injury claims ... and within three working days for property claims. Contact must be made in person or by telephone.... Personal contact will be made on any claim involving ... when the total reserve is over $10,000.00.

"f. Maintain an orderly claim file. Correspondence must be placed in the file in chronological order on a brad or another means of affixing documents to the file."

* * * * * *

"j. Each file will contain a form developed by the contractor that will clearly state the results of the investigation of the claim and an explanation of the decision of liability/compensability/denial.

* * * * * *

"1. When requested or required, recorded statements will be transcribed.

"m. Each foldered claim file will be reviewed at least every 45 days. Documentation of the review is preferred to be made on the computerized claims data management system. Documentation to be recorded will include appropriate comments on information received, file direction by the adjusters, and the disposition plans.

* * * * * *

"o. A supervisor or manager will review each open foldered claim at least quarterly. Documentation of the review is preferred to be made on the computerized claims data management system. Documentation to be recorded will include recommendations of future handling of the file.

* * * * * *

"r. A typed captioned report will be completed on each file with combined reserves of $25,000.00 or more. The captioned report must be completed and submitted to the Division of Risk Management within 60 days of the posting of the reserves.

"s. Final reserves must be computed and posted on the file within 180 days of the date the claim is received...."

The contract also prescribes the duties of the claims administrator with respect to specific claims. As to workers' compensation claims, it is required to "perform all duties required of the employer under the Maryland Workers' Compensation Act." Its responsibilities with regard to Commercial General Liability are to "record, investigate, tabulate, adjust, appraise, and, where appropriate, make payments for all claims which require defense or indemnification under the Montgomery County Self-Insurance Program." In addition, it must: "Cooperate with and assist the Office of the County Attorney, or other designated counsel, in the defense of claims and in subrogation recovery. Such assistance will include, but not be limited to, making a full investigation, including contacting the claimant, taking statements from the claimant, identifying and taking statements from all witnesses, obtaining all bills, taking relevant photographs, completing interrogatories, taking recorded statements, providing for Independent Medical Examinations, preparing status updates, and attending and/or assisting at trials and/or hearings. Once a lawsuit is filed and the claim is transferred to the Office of the County Attorney, or other designated counsel, the above assistance will continue."

Providing notice of claims and records of claims to excess insurance carriers and negotiating settlements, as well as providing immediate notification to the Chief, Division of Risk Management and the County Attorney in all cases in which catastrophic injuries or damages are involved are other responsibilities. Although able to settle claims for $2,500.00 or less, when the contemplated settlement is more than that amount, review with the County Attorney's Office is required, accompanied by "a detailed case synopsis, an itemization of damages, and settlement recommendations."

The County places requirements on Trigon's service availability. It must be open for business on the days and during the hours of operation of the County offices. Moreover, telephone coverage must be continuous, around the clock, to ensure receipt of incident reports and messages.

We shall set out the facts and procedural history of each case separately.

a. Robert Moore v. Mostaba Norouzi, et. al.

On October 14, 1995, the petitioner Robert Moore was a passenger on a Montgomery County Ride-On Bus being operated by the respondent Mostaba Norouzi ("Norouzi"). Moore sustained serious injuries to his back, pelvis, hip, and left knee when Norouzi lost control of the bus and collided with another motor vehicle.

Within two or three days after the accident, Trigon contacted Moore regarding the accident. He discussed the accident with the Trigon representative. Thereafter, on November 1, 1995, Moore's attorney wrote Trigon and confirmed what Moore had already reported and that he represented Moore in the matter. Acknowledging that letter, significantly, Trigon indicated that it "is the third party administrator for Montgomery County, and is currently investigating the facts surrounding [the accident]." To permit its proper investigation, it requested "being allowed to take a statement from [Moore], as well as receipt of all applicable medicals and lost wage information." A month later, by letter from its Senior Claims Representative, Trigon again represented itself "as the claims administrator for Montgomery County" and sought information, documentation and authorizations necessary "[i]n order to progress with a thorough investigation."

When, after more than two years, negotiations with Trigon were fruitless, Moore filed suit in the Circuit Court for Montgomery County, naming Norouzi and Montgomery County as defendants. The suit was dismissed by the court, on motion of the respondents.⁶ The court ruled "Following the decision by the Court of Appeals in Williams,⁷ defendant has renewed its motion to dismiss, essentially putting before the Court the fact that the law remains clear that notice must be followed pursuant to the local government tort claims act, and that notice was not followed under the facts...