St. Luke Evangelical Lutheran Church, Inc. v. Smith

Decision Date01 September 1988
Docket NumberNo. 44,44
Citation318 Md. 337,568 A.2d 35
CourtMaryland Court of Appeals

H. Patrick Donohue (Armstrong, Donohue & Ceppos, Chartered, both on brief), Rockville, for petitioner and cross-respondent.

Glenn M. Cooper (Mindy G. Farber, Hope B. Eastman, Paley, Rothman, Goldstein, Rosenberg & Cooper, Chartered, all on brief), Bethesda, for respondent and cross-petitioner.



The main issue in this appeal is whether a jury, in calculating an award of punitive damages, was properly instructed to consider attorney's fees incurred by the plaintiff in the underlying cause of action. In this country, the prevailing party in a lawsuit is not ordinarily entitled to recover reasonable attorney's fees as an element of damages. Alyeska Pipeline Service Co. v. Wilderness Society 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141, 147 (1975); Empire Realty Co. Inc. v. Fleisher, 269 Md. 278, 305 A.2d 144 (1973). This "American Rule," however, refers primarily to compensatory damages. See Ehrenzweig, Reimbursement of Counsel Fees and the Great Society, 54 Calif.L.Rev. 792 (1966); Note, Theories of Recovering Attorney's Fees: Exceptions to the American Rule, 47 UMKC L.Rev. 566 (1979). When punitive damages are involved, we are encouraged to fashion a limited exception to the rule. We hold that whenever punitive damages are appropriate, the amount of reasonable attorney's fees incurred in the pending litigation may be considered by the jury.


Ms. Ginny Ann Smith (Ms. Smith) grew up in a home with strong ties to its neighborhood church, St. Luke Evangelical Lutheran Church, Inc. (St. Luke's). Over the years, Ms. Smith's mother had been both a volunteer and an employee at St. Luke's, and Ms. Smith spent most of her formative years participating in virtually all of the numerous activities St. Luke's offered its youth.

As she became older, Ms. Smith volunteered as an Administrative Assistant for a church youth-group called Crossroads, and later, for a traveling drama-group called Tent Troupe. Both groups were directed by the Associate Pastor of St. Luke's, Pastor David Shaheen (Pastor Shaheen). As a result of her duties, Ms. Smith worked very closely with Pastor Shaheen, including traveling four months a year as a counselor with him and the other members of Tent Troupe.

After graduating from college in 1982, Ms. Smith was hired by the recently promoted Director of Youth Ministry, Pastor David Buchenroth (Pastor Buchenroth), to the salaried-position of Associate Director of Youth Ministry. Because she continued as a volunteer for Crossroads and Tent Troupe, Ms. Smith then worked for both Pastors Shaheen and Buchenroth.

In February 1984, Ms. Smith went on a church-sponsored trip to the Holy Land led by Pastor Shaheen. While she was out of the country, Pastor Buchenroth entered her office to look for a file he needed to tend to some church business. 1 There he discovered a file marked "DRS-GAS." Curious, Pastor Buchenroth opened the file. He found personal letters and notes from Pastor Shaheen to Ms. Smith.

The correspondence apparently confirmed for Pastor Buchenroth his growing suspicions that Pastor Shaheen and Ms. Smith were engaged in a sexual relationship. With the avowed purpose of protecting Pastor Shaheen's wife, Pastor Buchenroth showed the correspondence to Mrs. Shaheen, and offered her specific details of when and where he believed the various rendezvous had occurred. Before he showed it to her, however, he showed it to Ms. Joan Patton, the Staff Assistant to the Senior Pastor of St. Luke's, Raymond Shaheen--who also happened to be Pastor Shaheen's father.

A few days after his encounter with Mrs. Shaheen, he repeated his allegations, but this time to Ms. Smith's mother. He again offered specific details, as well as his opinion that Pastor Shaheen and her daughter might not return from the church excursion.

After viewing the correspondence and talking with her husband, Mrs. Shaheen told Pastor Buchenroth that she did not believe that her husband's relationship with Ms. Smith was sexual in nature. Accepting Mrs. Shaheen's conclusion, Pastor Buchenroth retracted his accusations.

In addition, at one of a number of group counseling sessions initiated by the church (in an effort to encourage "a healing process"), he stated that he no longer believed the relationship between Ms. Smith and Pastor Shaheen was sexual in nature. He also promised at that time to keep his earlier suspicions confidential, and apologized to Ms. Smith and Pastor Shaheen for the pain he had caused them. Despite his promise, Pastor Buchenroth again repeated his original allegations, this time to Mr. and Mrs. Rupert, two members of the congregation active in Tent Troupe.

It was not long before the members of Tent Troupe and most of the congregation were made aware of Pastor Buchenroth's allegations. Soon, Ms. Smith began receiving unsettling telephone calls and mail from members of the congregation. Eventually, a Special Committee 2 was formed, and Ms. Smith was dismissed.

Subjected to scorn in her church and neighborhood, and unable to find a job commensurate with her skills, Ms. Smith sued Pastor Buchenroth in the Circuit Court for Montgomery County for defamation of character and invasion of privacy. She joined as a defendant, Pastor Buchenroth's employer, St. Luke's, on the theory that by dismissing her, the church ratified the allegations made by its agent Pastor Buchenroth. After a two week trial, the jury awarded Ms. Smith $228,904.01 in compensatory damages; $2,000 in punitive damages against Pastor Buchenroth; and $105,875.00 in punitive damages against St. Luke's.

Both defendants appealed. The Court of Special Appeals reversed the judgment against St. Luke's, holding that Ms. Smith was erroneously allowed twice the number of peremptory challenges permitted under Maryland Rule 2-512(h). It also held that the jury had sufficient information to conclude that Pastor Buchenroth had acted with malice, and denied his appeal.

Ms. Smith petitions this Court on the peremptory strike issue. St. Luke's also petitions this Court, contending that the circuit court's ruling admitting the $68,441.01-amount of Ms. Smith's attorney's fees on the issue of punitive damages was error. 3 We granted both petitions for certiorari. St. Luke Church v. Smith, 74 Md.App. 353, 537 A.2d 1196 (1988).


Peremptory Strikes

Maryland Rule 2-512(h) provides:

Each party is permitted four peremptory challenges plus one peremptory challenge for each group of three or less alternate jurors to be impanelled. For purposes of this section, several plaintiffs or several defendants shall be considered as a single party unless the court determines that adverse or hostile interests between plaintiffs or between defendants justify allowing to each of them separate peremptory challenges not exceeding the number available to a single party. The parties shall simultaneously exercise their peremptory challenges by striking from the list.

In other words, coplaintiffs and codefendants are allowed four peremptory strikes, regardless of the number of coparties. When there is a single party on one side and multiple parties on the other, the single party will be entitled to four peremptory challenges while the coparties will ordinarily share four strikes. A single party, then, will have twice as many strikes as each opposing coparty. If, however, the court rules that the coparties have adverse or hostile interests those parties may be allowed up to four peremptory strikes each. Id.

In this case, the trial judge stated that he saw a "potential" for conflict between the two codefendants, St. Luke's Church and Pastor Buchenroth. Not wanting to "impose" on them "having to agree with" only four challenges between them, he gave them four strikes each. He then felt "the only fair thing to do" was to give Ms. Smith another four as well.

Instead of changing the proportions, and giving four peremptory challenges to each of the three parties for a total of twelve strikes--an allowable remedy when adverse or hostile interests are found--the judge merely doubled the number on each side. This gave eight strikes to the plaintiff and eight to the codefendants, totalling sixteen peremptory strikes. It also had the effect of keeping the allotment of strikes in the same proportion they would have been in had the court declined to act in the first place.

In King v. State Roads Comm'n, 284 Md. 368, 396 A.2d 267 (1979), both the plaintiff and defendant exercised each of their four peremptory challenges, yet 17 veniremen remained. To obtain a panel of 12, the trial judge struck five additional jurors. We said that this gave the trial judge, with five strikes, "more to say about who would not sit on the panel than either of the parties." Id. at 372, 396 A.2d at 270. In holding that this constituted error, we stated that, "a significant deviation from the prescribed procedure that impairs or denies" the full peremptory challenge privilege would ordinarily require "reversal without the necessity of showing prejudice." Id. at 371, 396 A.2d at 269. [Emphasis added.]

Here, the trial judge, acting on what he deemed to be a "potential" for conflict, implicitly found that the codefendants had hostile interests. The court's response, however, left the parties in virtually the same position they would have been in had no such finding been made. Nevertheless, the court's actions did not influence the selection of jurors as did the court in King, and therefore presented no significant deviation from prescribed procedure. Thus, a showing of prejudice was necessary.

In civil cases, "this Court will not reverse for an error below unless...

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