Saadeh v. Saadeh, Inc., 92 Sept. Term, 2002.

• Citation: 150 Md. App. 305,819 A.2d 1158
• Decision Date: 28 March 2003
• Docket Number: No. 92 Sept. Term, 2002.,92 Sept. Term, 2002.
• Parties: John P. SAADEH v. SAADEH, INC., et al.
• Court: Court of Special Appeals of Maryland

819 A.2d 1158

150 Md. App. 305

John P. SAADEH v. SAADEH, INC., et al.

No. .

Court of Special Appeals of Maryland.

March 28, 2003.

Gregory J. Swain (The Swain Law Group, LLC, on the brief) Annapolis, for appellant.

Steven E. Schenker (Herwig & Humphreys, LLP, on the brief) Baltimore, for appellees.

Argued before KENNEY, DEBORAH S. EYLER, CHARLES E. MOYLAN JR., (Ret'd, Specially Assigned), JJ.

DEBORAH S. EYLER, J.

The Circuit Court for Anne Arundel County granted a motion for judgment in favor of Saadeh, Inc., and its workers' compensation insurer, Ohio Casualty Insurance Company ("Ohio Casualty"), the appellees, at a bench trial of a workers' compensation case brought by John P. Saadeh, the appellant. The court found that, on the evidence presented, a person the appellant alleged was a third-party joint tort-feasor liable for injuries the appellant sustained in the course of his employment was not liable; and therefore, the appellant's settlement with another third party with respect to the same injuries completely resolved his only third-party tort claim. The court ruled that, because the appellant had accepted the settlement before he filed a workers' compensation claim, and had done so without the knowledge or approval of Ohio Casualty, he had elected a tort remedy and was barred, under Md.Code (1999 Repl. Vol.) section 9-901 of the Labor and Employment Article ("LE"), from receiving workers' compensation for the same injuries.

On appeal, the appellant presents one question, which we have reworded:

Did the trial court err in concluding that the alleged joint tort-feasor was not liable for the appellant's injuries?

For the following reasons, we shall affirm the judgment of the circuit court.

FACTS AND PROCEEDINGS

The appellant and his wife own the appellee company, Saadeh, Inc., which for ten years owned and operated a restaurant in Annapolis trading under the name "Jo's Deli." The appellant worked full time at the deli.

On July 28, 1996, the appellant was waiting on a customer named Louis Ravenet, Jr., who was present in the deli with his wife and his father, Louis Ravenet, Sr.¹ Junior became irate over a food order. When the appellant tried to calm him down, Junior became more angry and then refused to leave, even though it was closing time. The situation escalated and culminated in Junior's punching the appellant in the face, breaking his nose, and inflicting other injuries on him. The police were called and Junior was arrested and charged with disorderly conduct, trespassing, and assault and battery.

The appellant underwent surgery to repair his broken nose. He remained under a doctor's care for several months for the injuries he sustained in the July 28, 1996 incident.

Trial on the charges against Junior was scheduled for December 23, 1996. That day, Junior and the State reached an agreement to place the case on the "stet docket," under Rule 4-248. That agreement in turn was based on a settlement between the appellant and Junior that called for the appellant to release his claims and causes of action arising out of the July 28, 1996 incident in exchange for a promise by Junior to pay him $50,000, in equal installments, over a 14-month period. On January 15, 1997, the appellant and Junior committed their settlement agreement to writing.²

At the time that the appellant entered into the settlement with Junior he had not yet filed a claim for workers' compensation in connection with the July 28, 1996 incident (and may not have planned to do so). It is undisputed that the appellant entered into the settlement agreement without Ohio Casualty's knowledge or approval.

On April 14, 1997, three months after signing the settlement agreement with Junior, the appellant suffered a spontaneous dissection of the right carotid artery, which produced serious medical complications. He and his treating doctors maintain that this condition resulted from the July 28, 1996 attack.

On August 27, 1997, the appellant filed a claim with the Workers' Compensation Commission ("Commission") in connection with the July 28, 1996 incident. The appellees contested the claim. On December 1, 1997, a merits hearing was held. Thereafter, on June 25, 1998, the Commission issued a decision finding that the appellant's claim was barred under the election of remedies doctrine, as embodied in LE section 9-901.

The appellant filed an action for judicial review in the Circuit Court for Anne Arundel County. The parties filed cross-motions for summary judgment. At the hearing on the motions, the appellant argued that he should not be deemed to have elected a tort remedy because he still had a viable tort claim against Senior. The appellant argued that Senior was a third-party joint tort-feasor who shared legal responsibility with Junior for the injuries inflicted on July 28, 1996.

On March 16, 1999, the circuit court remanded the case to the Commission to determine two issues: first, whether Junior had fully paid in accordance with the settlement agreement so as to have been released from liability; and second, if so, whether "one or more additional joint tort-feasors [were] available to reimburse [the appellees] via subrogation?" The court's order directed that "[i]f there are no surviving or identifiable joint tort-feasors who also may be held liable, then [Junior's] full release would constitute an election of remedies and a final bar to the [appellant's] Workers' Compensation Claim."

On July 26, 1999, the appellant filed a tort action against Senior in the Circuit Court for Baltimore County, for damages for the injuries he suffered in the July 28, 1996 incident. To date, Senior has not been served with process in that case. The case remains pending, however.

On remand, the Commission held an evidentiary hearing, on January 12, and April 10, 2000. The parties stipulated that Junior in fact had made all the required payments under his settlement agreement with the appellant and therefore was released from all liability in connection with the incident of July 28, 1996. On April 13, 2000, the Commission issued a decision making that finding, and further finding that "[t]here are no surviving or identifiable joint tort-feasors who also may be liable." On that basis, the Commission once again concluded that the appellant's compensation claim was barred under LE section 9-901. The appellant filed a second action for judicial review in the Circuit Court for Anne Arundel County.

A bench trial commenced on January 23, 2002. Pursuant to an agreement of counsel, the sole issue for decision was whether the appellant was barred by the election of remedies doctrine from receiving compensation under the Act. The appellant called three witnesses, each of whom had observed the altercation or part of it: William Gibbs, an employee of Jo's Deli; Edward Timnivliouglou, the owner of a neighboring business; and Belle Pollack, a deli customer.

At the conclusion of the appellant's case, the appellees moved for judgment. After hearing argument of counsel, the trial court reviewed the evidence, made findings of fact, and found that there was no basis for joint tort-feasor liability on the part of Senior. On that ground, the court ruled that by settling with Junior the appellant had elected a tort remedy and was barred from recovering compensation under the Act.

On March 6, 2002, the court issued an order memorializing its ruling. The order granted the appellees' motion for judgment, affirmed the Commission's order of April 13, 2000, and stated "there are no surviving or identifiable joint tort-feasors who also may be liable; accordingly, the [appellant's] release constitutes an election of remedies and a final bar to his workers' compensation claim."

The appellant noted a timely appeal.

We shall recite additional facts in our discussion of the question presented.

DISCUSSION

Under LE section 9-901, entitled "Choice of proceeding against third party or employer[,]"

[w]hen a person other than an employer is liable for the injury ... of a covered employee for which compensation is payable under this title, the covered employee... may:

(1) file a claim for compensation against the employer under this title; or

(2) bring an action for damages against the person liable for the injury ... or, in the case of joint tort-feasors, against each joint tort-feasor.

The Court of Appeals has held that this statute permits a covered employee to obtain compensation under the Workers' Compensation Act, LE sections 9-101, et seq., and then pursue a tort claim against a third-party tort-feasor; or to simultaneously pursue compensation and a tort action. Franch v. Ankney, 341 Md. 350, 670 A.2d 951 (1996); Perdue v. Brittingham, 186 Md. 393, 47 A.2d 491 (1946). The employee may not, however, pursue a tort remedy to conclusion and then file and obtain compensation. Johnson v. Miles, 188 Md. 455, 53 A.2d 30 (1947); Central GMC, Inc. v. Lagana, 120 Md.App. 195, 706 A.2d 639, cert. granted, 350 Md. 280, 711 A.2d 871, appeal dismissed, 351 Md. 160, 717 A.2d 384 (1998).³

LE section 9-901 is logically related to the two statutory sections that follow it. LE section 9-902, entitled "Action against third party after award or payment of compensation[,]" establishes a subrogation scheme. It allows that when compensation has been awarded or paid to a covered employee, the insurer "may bring an action for damages against the third party who is liable for the injury ... [to] the ... employee[,]" LE section 9-902(a), and further directs that if the damages the insurer recovers in the third-party action exceed the amount of compensation it has paid, then after deducting the costs and expenses of the action, it must pay the balance over to the employee.⁴ LE section 9-902(b).

For two months after the first award of compensation, the insurer's right to bring a third-party action is exclusive. LE section 9-902(c). Thereafter, the insurer and the employee share that right. If...