Shipley v. Perlberg

• Decision Date: 06 September 2001
• Docket Number: No. 1479,1479
• Citation: 780 A.2d 396,140 Md. App. 257
• Parties: Steven SHIPLEY, et al. v. Marvin PERLBERG, et al.
• Court: Court of Special Appeals of Maryland

780 A.2d 396

140 Md. App. 257

Steven SHIPLEY, et al. v. Marvin PERLBERG, et al.

No. 1479, Sept. Term, 2000.

Court of Special Appeals of Maryland.

September 6, 2001.

Suzanne C. Shapiro (Saul E. Kerpelman & Associates, P.A., on the brief) Baltimore, for appellants.

Robert R. Smith (Franch, Jarashow, Burgmeier & Smith, P.A., on the brief) Annapolis, for appellees.

Argued before SALMON, ADKINS, and RAYMOND G. THIEME, Jr., (Retired, Specially Assigned) JJ.

ADKINS, Judge.

This case is about whether a corporate officer and director is individually liable for lead paint injuries to the resident of a corporately owned property. Steven Shipley, appellant, sued Marvin Perlberg ("Perlberg"), appellee, for injuries caused by lead paint poisoning while Shipley was residing at 1641 West Lafayette Avenue, in Baltimore City (the "subject property"). Perlberg denied any involvement with the renting of the subject property to Shipley's family, and moved for summary judgment. On August 21, 2000, the Circuit Court for Baltimore City granted Perlberg's motion.

On appeal, Shipley contends that the circuit court erred in granting Perlberg's motion and presents several questions for our review. First, he contends that there are sufficient facts in the record to create an inference that Perlberg "personally participated, inspired, cooperated and acquiesced in the tortious negligence of the corporate body." Second, he argues that the circuit court erred in refusing to admit a deposition taken in an unrelated civil action involving different parties, which he asserted would "create a material dispute of fact for the purpose of summary judgment." Finally, he contends that Perlberg is liable under the Baltimore City Housing Code and Maryland partnership law. Finding no evidentiary basis for imposing personal liability on Perlberg, we shall affirm the judgment of the circuit court.

FACTS AND LEGAL PROCEEDINGS

The subject property was owned by Barbara Realty Corporation and managed by North Services Corporation. Shipley resided at the property from April 1971 through October 4, 1973, while he was a young child.¹ While residing at the property, Shipley suffered elevated blood levels and was diagnosed with lead poisoning. On August 23, 1973, a lead violation notice was issued to Northern Brokerage Company, as the "owner or agent for" the subject property. Shipley and his family moved out of the residence in October 1973 and never returned.

In his complaint, Shipley alleged, inter alia, that Perlberg was personally liable because he directly controlled and made decisions concerning the management of the subject property. Perlberg moved for summary judgment contending, inter alia, that "he had no direct involvement in the subject premises, of any type." In support of his motion, Perlberg attached his deposition taken in the instant action.

During his deposition, Perlberg testified about his involvement with Barbara Realty and other real estate ventures undertaken by himself and his brother, Daniel Perlberg ("Daniel"). Perlberg said that he was in the real estate business in Baltimore from 1950 until his retirement in the early 1980's. He acknowledged that during this time period, Perlberg and Daniel were involved as officers and directors in a number of corporations that owned and sold property in Baltimore City, including Barbara Realty, Curley Realty, and Northern Brokerage Company. Perlberg asserted that Daniel handled the rental side of their businesses and that his activities were limited to the buying and selling of properties. He denied any involvement in the leasing or management of the subject property. Perlberg stated that he had never visited or inspected the subject property, had no knowledge of any violation notices, and never had any communication with Shipley or any other tenant of the property. He acknowledged that the telephone number for both his buying and selling business, and his brother's rental business was listed under the name Northern Brokerage Company. When calls would come in to Northern Brokerage, they would be routed upstairs to his separate line if they involved purchases or sales, or to his brother's line if they involved rentals. When asked whether Northern Brokerage "was actually ... on file with Maryland Department of Assessments and Taxation as a corporation," he replied, "I think so. I'm really not sure."

Shipley offered the deposition testimony of Daniel. This testimony was not taken in the instant action, but rather, in an unrelated 1991 case styled as Alisha Holloway, et al. v. Wendy Perlberg, et al., No. 89026031/CL92259 in the Circuit Court for Baltimore City (the "Holloway case"). Neither Shipley nor Perlberg was a party to that case, which did not involve the subject property. In his deposition, Daniel testified that both he and Perlberg were personally involved in the rental and management of properties owned by a different corporation known as Curley Realty, which was formed in approximately 1955, and was still in operation at the time of the deposition in 1991. Daniel asserted that both he and Perlberg made decisions concerning rental properties for Curley Realty, and jointly made decisions concerning the maintenance of these properties. Daniel explained that both he and Perlberg would handle complaints about the Curley rental properties and would decide on an appropriate course of action. He acknowledged that Northern Brokerage was the name listed in the phone book for the telephone number used by Curley Realty. If a tenant of Curley Realty had a complaint, he or she would call the Northern Brokerage number, and either Daniel or Perlberg would take care of it.

After a hearing, the court granted Perlberg's motion for summary judgment. The court held that Daniel's deposition testimony was inadmissible because it involved "a different case, a different property, a different corporation and a different time period [and] because ... [Perlberg] would not have the opportunity to cross examine that testimony." The court further ruled that because the deposition testimony was inadmissible, Shipley failed to submit "any evidence that would be admissible that would reflect the fact that... [Perlberg] did participate in the actions alleged in the Complaint." Accordingly, the court granted Perlberg's motion for summary judgment. This appeal followed.

DISCUSSION

Shipley contends that the trial court erred in granting Perlberg's motion for summary judgment. As a threshold matter, he argues that the court erred when it refused to consider the deposition testimony of Daniel taken in an unrelated case. He asserts that the court erred in determining there were no material facts that would support an inference that Perlberg is personally liable for his injuries. His contention is two-fold. First, he contends that the court erred in ruling that Perlberg had to have knowledge and participate in the actions alleged in the complaint. Second, he contends that a reasonable inference could be drawn from the evidence that Perlberg did, in fact, have knowledge and control over the actions that caused the damages alleged in the complaint. Shipley further contends, invoking the provisions of the Baltimore City Code and partnership law, that Perlberg is liable even if he did not participate in the alleged wrongful acts. We shall address Shipley's contentions in turn.

I. Standard Of Review

Summary judgment is appropriate where there is no dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Md. Rule 2-501. In reviewing a trial court's grant of summary judgment, we must determine whether the trial court's ruling was legally correct. See Heat & Power Corp. v. Air Prod. & Chems., Inc., 320 Md. 584, 591, 578 A.2d 1202 (1990)

. "The purpose of the summary judgment procedure is to decide whether there is an issue of fact sufficiently material to be tried, not to try the case or to resolve factual disputes." Hartford Ins. Co. v. Manor Inn of Bethesda, Inc., 335 Md. 135, 144, 642 A.2d 219 (1994). Nevertheless, "when the pleadings, depositions, admissions on file, and any affidavits show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law, then the judgment shall be rendered forthwith." King v. Bankerd, 303 Md. 98, 111, 492 A.2d 608 (1985).

II. Perlberg's Tort Liability As Corporate Director

Shipley asserts that Perlberg is personally liable for his injuries based on Perlberg's status as a director of the corporation that leased the subject property. In making this general assertion, Shipley paints with a broad brush, and draws no distinction between Perlberg's status as a director and officer of Barbara Realty Corporation, the owner of the subject property, and his status as a director and officer of Northern Realty Company, the company that managed the subject property.

A.

"Participation" Standard For Holding Corporate Director Personally Liable

Shipley relies on several Maryland cases to support his claim that Perlberg may be held individually liable because he is a corporate officer and director. See Metromedia Co. v. WCBM Maryland, Inc., 327 Md. 514, 610 A.2d 791 (1992)

; Tedrow v. Deskin, 265 Md. 546, 290 A.2d 799 (1972); Levi v. Schwartz, 201 Md. 575, 95 A.2d 322 (1953); St. James Constr. Co. v. Morlock, 89 Md.App. 217, 223, 597 A.2d 1042 (1991),

cert. denied, 325 Md. 526, 601 A.2d 1100 (1992). None of these cases supports a holding that Perlberg was liable for the negligence of Barbara Realty simply because he was a corporate officer.

In Levi v. Schwartz, the Court of Appeals articulated the rule concerning the liability of a corporate officer for a tort committed by the corporation.

It is a generally accepted rule that an officer of a corporation who takes part in the commission of a tort by the corporation is personally liable therefor, but an officer of a corporation who takes

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