Reed v. Baltimore Life Ins. Co.

• Decision Date: 06 July 1999
• Docket Number: No. 1390,1390
• Citation: 127 Md. App. 536,733 A.2d 1106
• Parties: Kevin REED v. BALTIMORE LIFE INSURANCE COMPANY, et al.
• Court: Court of Special Appeals of Maryland

733 A.2d 1106

127 Md. App. 536

Kevin REED v. BALTIMORE LIFE INSURANCE COMPANY, et al.

No. 1390, Sept. Term, 1998.

Court of Special Appeals of Maryland.

July 6, 1999.

Reconsideration Denied August 24, 1999.

John Hermina (George W. Hermina and the Hermina Law Group, on the brief), Laurel, for Appellant.

Philip B. Barnes (Leora R. Simantov, Whiteford, Taylor & Preston, L.L.P., Towson, Barrett W. Freedlander, David W. Erb and Saul, Ewing, Weinberg & Green, L.L.C., Baltimore, on brief), for Appellees.

Argued before DAVIS, THEODORE G. BLOOM, (retired, specially assigned) and JOHN J. BISHOP, Jr., (retired, specially assigned), JJ. DAVIS, Judge.

The events giving rise to this appeal began when appellant Kevin Reed brought suit in the Circuit Court for Montgomery County against his former employer, Baltimore Life Insurance Company (BLIC), appellee.¹ Appellant's complaint included allegations of defamation, intentional infliction of emotional distress, and tortious interference with business relations. BLIC filed a counterclaim against appellant for breach of contract, breach of fiduciary duty, and fraud. Unfortunately, before we are able to address the essence of this appeal, we must sort out the myriad of procedure and discovery disputes raised by the parties.

Prior to trial, appellees filed a motion for sanctions against appellant's counsel, alleging that interrogatories and document requests were not timely answered. Appellant's counsel opposed the motion and filed a cross-motion for sanctions, arguing that he declined to provide discovery because BLIC failed to answer its "first" set of interrogatories.² In an attempt to keep the proceedings from stalling, the court did not sanction either party but found that appellant did not respond to appellees' discovery requests while appellees had responded timely.

From June 22 to June 26, 1998, the court (Kavanaugh, J.) conducted a five-day jury trial. At the close of appellant's evidence, the court granted judgment to Griffin on all claims against him and to BLIC on the claim of intentional infliction of emotional distress. The remaining claims were submitted to the jury, which found in favor of BLIC on the defamation and interference with business relations charges. With respect to the counterclaims, the jury concluded that appellant committed fraud against BLIC, awarding it $2,298 in economic damages. Furthermore, the jury awarded BLIC $2,400 in noneconomic damages as a result of its determination that appellant breached his fiduciary and contractual duties to BLIC.

The court entered final judgment on July 2, 1998. Appellees filed a supplemental motion for sanctions against appellant's counsel on July 10, 1998, renewing their claims of discovery violations. In addition, appellees requested sanctions for the alleged bad faith of appellant in continually asserting that BLIC did not provide discovery, pursuing unsubstantiated claims against Griffin, and pursuing the intentional infliction of emotional distress claim against BLIC. Appellees sought costs and attorney fees related to the preparation of pleadings with respect to the aforementioned allegations. Appellant filed a response to the motion on July 24, 1998, and the court later set January 20, 1999, as the date for a hearing on the motion.³

Meanwhile, on the same day appellant responded to appellees' motion for sanctions, he timely filed a notice of appeal. On December 16, 1998, however, this Court dismissed the appeal because the record did not include a trial transcript. When thirty days passed, we issued a mandate on January 15, 1999, disposing of the action. Four days later, appellant filed a motion for reconsideration. In a February 16, 1999 order, we granted the motion, recalling our previous mandate, reinstating the appeal without prejudice, and instructing appellant to file his brief by March 31, 1999.

On March 5, 1999, appellant ordered from the Montgomery County Technical Services Office the trial transcript, which was ready for pick-up on the afternoon of Friday, March 12, 1999. Appellant sent a messenger to obtain the transcript, but claims that the messenger was unable to return until after business hours. As a result, appellant did not receive the transcript until Monday, March 15, 1999. On Wednesday, March 17, 1999, appellant sent the transcript for copying, which required three days. Appellant picked up the transcript on Tuesday, March 23, 1999, and was ready to deliver it, along with the proposed record extract, on Wednesday, March 24, 1999, when it was discovered that pages were missing from the copies. The subsequent reorganization of the transcripts consumed more than two additional days. Because the transcripts and extract were not in final form until the evening of Friday, March 26, 1999, they were not able to be sent to BLIC until Monday, March 29, 1999. Although appellant claims that the transcripts and extract were mailed, the accompanying letter signed by appellant's counsel refers only to the extract.

Appellant, meanwhile, filed a motion to extend the time for filing his brief. This Court granted the motion and ordered the filing of the brief by April 5, 1999. Pursuant to the order, on April 5, 1999, appellant filed his brief, presenting for our review five questions, which we restate as follows:

I. Did the trial court err by denying appellant's motion for recusal?

II. Did the trial court err by denying appellant's motion to disqualify one of appellees' attorneys?

III. Did the trial court err by denying appellant's motion for a mistrial?

IV. Did the trial court err by allowing a witness to testify in violation of the sequestration rule?

V. Did the trial court err by submitting the fraud count from appellees' counterclaim to the jury?

On April 8, 1999, presumably upon receiving appellant's brief, appellees complained to the Clerk of this Court that they had not yet received a trial transcript from appellant. Also on that day, appellant filed a motion to supplement the record with the trial transcript, because the record filed following the original notice of appeal did not contain the trial transcripts. On April 9, 1999, appellees received the transcript and filed a motion to dismiss the appeal, asserting that appellant's failure to adhere to appellate filing procedures had prejudiced them.⁴ We denied appellees' April 9, 1999 motion to dismiss the appeal and granted appellant's motion to supplement the record. On May 5, 1999, appellees filed their brief, which included essentially a restatement of their earlier motion to dismiss the appeal.

For the reasons set forth herein we affirm the circuit court's judgment.

FACTS

From March 1995 to July 6, 1996, BLIC employed appellant as a life insurance sales agent in the company's Baltimore district office. BLIC issues principally three types of policies: term insurance, whole life, and universal life. Early in 1996, BLIC learned that many of the universal life policies, which provide a flexible combination of term insurance and savings, were lapsing, causing customers to lose their coverage. As a pro-active attempt to solve the problems, BLIC initiated, in May 1996, a program to survey its customers. After initiating the program, BLIC learned that approximately thirty percent of the universal life policies written by the company's Baltimore district office contained abnormal sales problems. Consequently, BLIC conducted a more detailed investigation led by Tom Stallings, a quality service officer.

The investigation discovered two forgeries in paperwork submitted by appellant. In addition, a policyholder complained to the company about the manner in which appellant had handled his account. After Stallings met with Damian Salve, regional vice president and superior to the Baltimore district manager, and Gary Ray, vice president of sales, they determined that there was sufficient proof of violations to justify terminating appellant's employment. They subsequently consulted with Mark Ewing, senior vice president of administration, who authorized the dismissal. As a result, appellant was dismissed on July 5, 1996.

After further investigation of its Baltimore office, BLIC learned of numerous misrepresentations, forgeries, and fraudulent practices involving accounts serviced by appellant. Appellee Griffin worked under Stallings during the investigation and testified at trial that appellant engaged in improper practices by increasing the face value of universal life policies while informing clients that the premium would not need to be increased. Thus, the cash value of the policy would be depleted until no cash was left, causing the policy to lapse and end the client's coverage. Second, appellant encouraged policyholders who were "riders" on another's insurance policy to convert the coverage into their own policies. Appellant then would withdraw money from the primary holder's policy because the additional premium was no longer necessary. As a result of these sales practices, appellant earned additional commissions and bonuses from BLIC.

On May 1, 1997, appellant filed suit in the circuit court, bringing the aforementioned claims against BLIC. The discovery disputes, trial, and this appeal ensued.

MOTION TO DISMISS

Before turning to the merits of appellant's appeal, we shall address appellees' motion to dismiss the appeal. In support of their motion, appellees assert that their ability to prepare a brief was prejudiced by appellant's failure to provide them with a copy of the trial transcript until April 9, 1999.⁵ While we do not condone appellant's tardiness in ordering the transcript nearly three weeks after the appeal was reinstated, we fail to perceive the prejudice asserted by appellees. Appellees obtained the trial transcripts on April 9, 1999, the day after they received appellant's brief. Appellant's brief and record extract were filed in the Clerk's Office of this Court on April 15, 1999 and the transcript was...