Schaefer v. Miller, 112

• Decision Date: 26 March 1991
• Docket Number: No. 112,112
• Citation: 322 Md. 297,587 A.2d 491
• Parties: Amelia R. SCHAEFER v. Gerald A. MILLER. Sept. Term 1989.
• Court: Maryland Court of Appeals

Page 297

322 Md. 297

587 A.2d 491

Amelia R. SCHAEFER v. Gerald A. MILLER.

No. 112 Sept. Term 1989.

Court of Appeals of Maryland.

March 26, 1991.

Motion for Reconsideration Denied

May 6, 1991.

Amy J. Muffolett and Patrick A. O'Doherty, Baltimore, for petitioner.

Melvin J. Sykes, Baltimore, for respondent.

Argued before MURPHY, C.J., ELDRIDGE, RODOWSKY, McAULIFFE, and CHASANOW, JJ., and COLE ^* and ADKINS ^**, JJ. (Retired).

MURPHY, C.J., announcing the judgment of the Court, in an opinion in which RODOWSKY and McAULIFFE, JJ., join; ELDRIDGE, J., concurs in the judgment in an opinion in which COLE and CHASANOW, JJ., join.

This case concerns punitive damages in a medical malpractice action. It focuses on our holding in H & R Block Inc. v. Testerman, 275 Md. 36, 338 A.2d 48 (1975), that "where the tort is one arising out of a contractual relationship, actual malice is a prerequisite to the recovery of punitive damages." Id. at 47, 338 A.2d 48.

I.

It is well settled law in Maryland, and the general rule elsewhere, that punitive damages are prohibited in a pure action for breach of contract. Miller Building Supply v. Rosen, 305 Md. 341, 348, 503 A.2d 1344 (1986); Siegman v. Equitable Trust Co., 267 Md. 309, 313, 297 A.2d 758 (1972); St. Paul at Chase v. Mfrs. Life Insur., 262 Md. 192, 236, 278 A.2d 12, cert. denied, 404 U.S. 857, 92 S.Ct. 104, 30 L.Ed.2d 98 (1971); Restatement (Second) of Contracts § 355 (1979); 5 Corbin on Contracts § 1077 (1964).

"In a tort case where punitive damages are permitted, in order to obtain such an award a plaintiff must prove actual malice or its legal equivalent." Siegman v. Equitable Trust Co., supra, 267 Md. at 313-14, 297 A.2d 758 (footnote omitted); see also D.C. Transit System v. Brooks, 264 Md. 578, 583-84, 287 A.2d 251 (1972);

Daugherty v. Kessler, 264 Md. 281, 284, 286 A.2d 95 (1972); Associates Discount v. Hillary, 262 Md. 570, 581-82, 278 A.2d 592 (1971); St. Paul at Chase v. Mfrs. Life

Insur., supra, 262 Md. at 237, 278 A.2d 12; Damazo v. Wahby, 259 Md. 627, 638, 270 A.2d 814 (1970). "Actual or express malice ... has been characterized as the performance of an act without legal justification or excuse, but with an evil or rancorous motive influenced by hate, the purpose being to deliberately and willfully injure the plaintiff." Testerman, supra, 275 Md. at 43, 338 A.2d 48; Miller Building Supply v. Rosen, supra, 305 Md. at 347, 503 A.2d 1344; Henderson v. Maryland Nat'l Bank, 278 Md. 514, 519, 366 A.2d 1 (1976); Siegman v. Equitable Trust Co., supra, 267 Md. at 314, 297 A.2d 758; Drug Fair v. Smith, 263 Md. 341, 352, 283 A.2d 392 (1971).

Implied or legal malice "may be defined as conduct of an extraordinary nature characterized by a wanton or reckless disregard for the rights of others." Wedeman v. City Chevrolet Co., 278 Md. 524, 532, 366 A.2d 7 (1976); see also General Motors Corp. v. Piskor, 281 Md. 627, 634, 381 A.2d 16 (1977); St. Paul at Chase v. Mfrs. Life Insur., supra, 262 Md. at 238-39, 278 A.2d 12.

As we stated in Testerman, the landmark case regarding punitive damages in actions arising out of contractual relationships is Knickerbocker Co. v. Gardiner Co., 107 Md. 556, 69 A. 405 (1908). In that case, the defendant caused a third party to break its contract with the plaintiff. There, we said that "if, for example, there was evidence tending to show that the defendant has caused the contract to be broken for the sole purpose, and with the deliberate intention of wrongfully injuring the plaintiff, exemplary damages might be recovered." Id. at 569, 69 A. 405 (emphasis added). Consistent application of this rule foreshadowed the rule announced in Testerman. See, e.g., Siegman v. Equitable Trust Co., supra, 267 Md. at 314, 297 A.2d 758 (conversion of checking account funds); Daugherty v. Kessler, 264 Md. 281, 284, 286 A.2d 95 (1972) (tortious inducement to breach contract); St. Paul at Chase v. Mfrs. Life Insur., supra, 262 Md. at 238, 278 A.2d 12 (breach of contract; negligent performance of contractual obligation); Damazo v. Wahby, supra, 259 Md. at 639, 270 A.2d 814 (tortious inducement to breach contract).

In light of Knickerbocker and its progeny there appear to be only two cases in which punitive damages have been permitted for torts arising out of contracts: Rinaldi v. Tana, 252 Md. 544, 250 A.2d 533 (1969) (tortious interference with contract) and McLung-Logan v. Thomas, 226 Md. 136, 172 A.2d 494 (1961) (trover and conversion). In both of these cases actual malice was established. In Rinaldi there was evidence of express animosity, and in McLung-Logan there was evidence of an evil and spiteful motive.

In Testerman, the plaintiffs claimed negligent preparation of their tax returns. We held that "where the tort is one arising out of a contractual relationship, actual malice is a prerequisite to the recovery of punitive damages." 275 Md. at 47, 338 A.2d 48. We there explicitly declined to extend the implied malice rule to torts arising out of contracts, id., and we have followed the Testerman rule on a number of occasions. See, e.g., Rite Aid Corp. v. Lake Shore Investors, 298 Md. 611, 471 A.2d 735 (1984) (slander of title); General Motors Corp. v. Piskor, supra, (false imprisonment and assault); Wedeman v. City Chevrolet, supra, (deceit); Henderson v. Maryland Nat'l Bank, supra, (conversion); Food Fair Stores v. Hevey, 275 Md. 50, 338 A.2d 43 (1975) (conversion).

II.

In 1973, Amelia R. Schaefer began seeing Gerald A. Miller, M.D., a board certified ophthalmologist, for annual eye examinations. In 1982, when Schaefer was 72 years old, Miller determined that she was developing a cataract in her right eye. A new prescription for stronger lenses improved Schaefer's vision, and she was satisfied with the glasses.

At her next annual eye examination, in July 1983, Miller advised Schaefer that the cataract was ready to be removed. Viewing the evidence in a light most favorable to Schaefer, Miller advised her that the cataract needed to be removed but he did not perform an examination of her eye at that time and did not test her vision. Miller, on the other hand, claimed to have performed an acuity test, a binocularity test, and a glaucoma test.

Schaefer agreed to have Miller perform a cataract operation at St. Agnes Hospital on an outpatient basis. Thereafter Miller removed the cataract and implanted an intraocular lens in Schaefer's eye. ¹ The surgery went well and Schaefer went home that same day.

A few days after the surgery, Schaefer complained of pain in her eye. Miller determined that her eye was infected, and admitted her to the hospital. She was treated with antibiotics and Miller scheduled her for a vitrectomy (removal of pus from the eye). The vitrectomy revealed a significant amount of purulent material in Schaefer's eye. Schaefer remained in the hospital for two weeks, during which time she was on antibiotics, suffered pain, and was unable to see out of the affected eye.

During a subsequent office visit, on August 24, 1983, Miller again determined that Schaefer's eye was infected. On that occasion and two subsequent office visits, Miller treated Schaefer's eye with laser therapy to open a membrane that was blocking her vision. After the last treatment, he told her that she had 20/40 vision in her eye. Schaefer visited Miller's office one more time, when she received a new prescription for eyeglasses. Schaefer thereafter sought opinions of other ophthalmologists, one of whom was Dr. Dennis A. Gleicher, who later testified as an expert witness for Schaefer.

Schaefer filed a medical malpractice claim against Miller, on October 1, 1984. A unanimous Health Claims Arbitration panel awarded Schaefer $1.00 in compensatory damages and $25,000 in punitive damages. Both parties rejected the award. Thereafter, Schaefer filed a complaint against Miller in the Circuit Court for Baltimore City. It contained two counts: (1) that Miller performed the surgery on Schaefer without informed consent and (2) that Miller failed to comport with the applicable standards of care in Schaefer's preoperative and postoperative treatment.

Before a jury, Dr. Gleicher testified that Miller failed to comply with the required standards of care for obtaining informed consent and treating Schaefer's post-operative infection which caused her chronic pain, retinal degeneration, decreased visual acuity and light sensitivity.

Schaefer testified that Miller did not describe the surgical procedure involved in cataract removal or the accompanying risks. Her only knowledge of cataract removal came from a portion of a television program which she had seen about two months prior to the examination. She said that she was only willing to have her cataract removed and was unaware of anything about an intraocular lens implant.

Called as an adverse witness by Schaefer, Miller produced an informed consent form purportedly signed by Schaefer for the cataract removal and the intraocular lens implantation. Schaefer disputed that she had signed the document and adduced evidence that on a previous occasion in 1978, Miller forged a patient's signature on an informed consent form for an intraocular lens implant. Subsequently, Miller admitted at the trial to having committed this act, and to rewriting some other records. He acknowledged that he was sanctioned in 1985 by the Commission on Medical Discipline which ordered that his license to practice medicine be suspended unless, among other requirements, he include an informed consent form in each operative patient's chart, properly dated, signed by the patient, and witnessed by a third party.

The evidence showed that the consent form, which Miller claimed Schaefer signed, was signed by Miller in both the doctor and witness signature blanks. The time and place blanks were not completed. The consent form was not part of the St. Agnes Hospital records, but was produced by Miller when Schaefer requested her medical records.

The trial...