S & R, Inc. v. Nails, 323

CourtCourt of Special Appeals of Maryland
Citation584 A.2d 722,85 Md.App. 570
Docket NumberNo. 323,323
PartiesS & R, INC., t/a VOB Auto Sales v. Allison NAILS, et al. Sept. Term 1990.
Decision Date22 January 1991

Harry C. Storm (Abrams, West & Storm, P.C., on the brief), Bethesda, for appellant.

Kevin G. Hessler (Harvey B. Steinberg and Miller & Steinberg, on the brief), Rockville, for appellees.

Argued before GARRITY, ROBERT M. BELL and JAMES S. GETTY (retired), Specially Assigned, JJ.


Following a trial in the Circuit Court for Montgomery County, a jury returned special verdicts in favor of Allison Nails ("Nails") and Robert Bolton ("Bolton"), appellees, and against S & R, Inc. t/a VOB Auto Sales, appellant, as to appellees' claims for breach of contract and fraud. 1 The jury awarded each appellee compensatory and punitive damages. Appellant's motion for judgment notwithstanding the verdict and/or new trial, directed at the fraud and punitive damage verdicts, was denied in all respects except as to the punitive damage award to Bolton, which was granted. The court entered judgment in accordance with that ruling. Appellant's appeal from that judgment presents three issues:

1. Did the trial court err in submitting the fraud claims to the jury when plaintiffs' own testimony conclusively established the absence of any reliance, and when the evidence was insufficient to support other essential elements of the fraud claims?

2. Did the trial court err in submitting the issue of punitive damages to the jury when there was no evidence of any conduct over and above the alleged fraud itself to support a finding of malice?

3. Did the trial court err in submitting a further special interrogatory to the jury after the jury returned its verdict, and in denying defendant's motion for new trial when the answer to the further special question created an irreconcilable verdict?

Being aggrieved by the grant of appellant's motion for judgment notwithstanding the verdict as to his punitive damage award, Bolton has cross-appealed, presenting a single issue Did the trial court erroneously invade the province of the jury in granting a judgment notwithstanding the verdict as to the punitive damages awarded to cross-appellant, Bolton, when there was sufficient evidence from which the jury could find that the fraud perpetrated upon him at the time of his hire induced him to enter into his employment contract?

We answer appellant's third question in the affirmative and, hence, we will reverse. For the guidance of the trial court on remand, we will briefly address the other issues raised by appellant. We need not, and, therefore, do not, address Bolton's cross-appeal.


After instructing the jury, the court provided it with a special verdict form for each plaintiff, Nails and Bolton, to assist it in recording the verdicts. Included on that form were questions pertaining to the fraud count and the breach of contract count as well as compensatory and punitive damages. As relates to punitive damages, each contained the following:


10. Did the fraud arise out of a contractual relationship?


11. If YES, do you find that defendant acted with actual malice?


12. Do you find that defendant acted with implied malice?


13. State the amount of punitive damages, if any, you determine appropriate.

$____________ Before the jury began its deliberations, appellee asked the court to include in the verdict form the question, whether the fraud induced the contract; a question asking whether the fraud arose out of the contract was already included. 2 The court denied the request, ruling "It doesn't, to me, make a bit of difference. If they come up with an award of punitive damages and answer no implied malice and no actual malice, you're not going to get punitive damages, even if they award them." 3 Utilizing the verdict forms, the jury returned, as we have seen, verdicts in favor of both appellees. It found that appellant both defrauded appellees and breached its contract with them, for which it assessed compensatory damages. With regard to punitive damages, the jury determined that the fraud arose out of the contractual relationship and that appellant acted with implied, rather than actual, malice. Nevertheless, it assessed punitive damages against appellant, and in favor of both appellees. The court having read into the record, the jury's responses to the questions in the special verdict forms, the following then occurred:

[THE COURT:] Ladies and gentlemen, your verdict as it will be recorded, is that the verdict of all 12 of you ladies and gentlemen?

THE JURY: (A chorus of ayes)

THE COURT: Madame Clerk, will you please file the verdict sheets.

Counsel and the parties, I will excuse you.

MR. STEINBERG [Plaintiffs' counsel]: May we approach the bench?


At the bench conference, 4 appellees brought to the court's attention what they considered to be an inconsistency in the verdict: despite finding that the fraud arose out of the contract and that appellant did not act with actual malice, the jury awarded punitive damages. They proposed to correct the inconsistency by submitting "an additional, supplement verdict sheet", asking the single question: "Do you find that the fraud induced the Plaintiff to enter into the contract?" After extended discussion, and over appellant's objection, the proposed additional issue was submitted to the jury, which, after further deliberations, found that fraud induced each contract.

Appellant filed a motion for judgment notwithstanding the verdict and for a new trial. Among the bases for the new trial request was the alleged impropriety of submitting an additional issue to the jury after the jury's verdicts had been announced, the jury had been polled, the clerk had been ordered to file the verdict sheets, and counsel and the parties had been excused. In addition, appellant alleged that the submission of the additional issue to the jury exacerbated the situation; the jury's response made the existing ambiguity or inconsistency even more irreconcilable, requiring a new trial.

Maryland Rule 2-522 provides in pertinent part:

* * * * * *

(b) Verdict.--Verdict of a jury shall be unanimous unless the parties stipulate at any time that a verdict or a finding of a stated majority of the jurors shall be taken as the verdict or finding of the jury. The verdict shall be returned in open court. Upon the request of a party or upon the court's own initiative, the jury shall be polled before it is discharged. If the poll discloses that the required number of jurors have not concurred in the verdict, the court may direct the jury to retire for further deliberation or may discharge the jury.

(c) Special Verdict.--The court may require a jury to return a special verdict in the form of written findings upon specific issues. For that purpose, the court may use any method of submitting the issues and requiring written findings as it deems appropriate, including the submission of written questions susceptible of brief answers or of written forms of the several special findings that might properly be made under the pleadings and evidence. The court shall instruct the jury as may be necessary to enable it to make its findings upon each issue. If the court fails to submit any issue raised by the pleadings or by the evidence, all parties waive their right to a trial by jury of the issues omitted unless before the jury retires a party demands its submission to the jury. As to an issue omitted without such demand, the court may make a finding or, if it fails to do so, the finding shall be deemed to have been made in accordance with the judgment entered.

No party may assign as error the submission of issues to the jury, the instructions of the court, or the refusal of the court to submit a requested issue unless the party objects on the record before the jury retires to consider its verdict, stating distinctly the matter in which the party objects and the grounds of the objection. Upon request of any party, the court shall receive objections out of the hearing of the jury. 5 ]

This Rule is relevant to, and instructive on, the issue with which we are presented. It is not, however, by any means, dispositive. As pertinent to our inquiry, the Rule permits the court to require the jury to return a special verdict, in a form to be determined, and on instructions given by the court. The Rule also requires the verdict to be unanimous, unless otherwise stipulated by the parties, and returned in open court. Should the court or a party desire, the jury must be polled. If the poll discloses any irregularity in the requisite number of jurors concurring, "the court may direct the jury to retire for further deliberation or may discharge the jury."

The issue facing us is, at what point is the jury's function concluded? Is it after it has announced a verdict and been polled, though not discharged? Is it after it has announced the verdict and been polled and discharged? As we have seen, the applicable Maryland Rule does not provide the answer to that question, nor, for that matter, does the case law. Several of the cases do, however, provide us with clues as to how the matter should be resolved.

In Ager v. Baltimore Transit Company, 213 Md. 414, 132 A.2d 469 (1957), after deliberating for some time, the jury informed the trial court that it was unable to reach a verdict, to which the court responded, "Well, then, it is incumbent upon me, and I do discharge you from further consideration of the case." Id., 213 Md. at 418, 132 A.2d 469. Before the jurors left the jury box, however, the court was told by the clerk that the jury had changed its mind. Consequently, it directed the jury to return to the jury room and deliberate further. A verdict in favor of the defendants was subsequently returned. Rejecting the appellant's contention that, "as soon as the trial court made the above...

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