Bricker v. Warch

MOYLAN, J. After his earlier five-count complaint was dismissed with leave to amend, the appellant, John S. Bricker, Jr., brought suit in an amended complaint against the appellees, Larry Warch and the Great American Insurance Company in the Circuit Court for Howard County. The amended complaint consisted of two counts, charging 1) malicious prosecution and 2) breach of contract. In the course of the amended complaint, Bricker attempted to add, as a third defendant, the Ohio Casualty Insurance Company. Judge Dennis M. Swee ¹²² ney granted the appellees’ motion to dismiss Ohio Casualty from the ease.

Judge Sweeney subsequently granted summary judgment in favor of the appellees on the charge of malicious prosecution. Bricker sought to appeal that judgment in favor of the appellees and the circuit court certified it as a final appealable order. This Court, however, in an unreported opinion in the case of Bricker v. Warch (No. 1485, September Term, 2000, filed on May 11, 2001) dismissed the appeal as premature and remanded the case for the resolution of all remaining claims. The breach of contract action was ultimately tried by Judge Sweeney, without a jury, on January 22, 2002.

Judge Sweeney, at the end of the plaintiffs case, granted the Motion for Judgment in favor of the appellee Great American Insurance Company on that claim. This appeal has timely followed. On appeal, Bricker raises essentially three issues: 1. Did Judge Sweeney properly dismiss Ohio Casualty from the case? 2.

Was Judge Sweeney in error in granting summary judgment in favor of the appellees on the charge of malicious prosecution? 3. Was Judge Sweeney in error in granting judgment in favor of the appellee, Great American, on the count charging breach of contract? The Factual Background This case, consisting of a series of episodes, has an intensive factual background. The earlier opinion of this Court, dismissing the first appeal as premature, thoroughly summed up the factual background and we will, with minor editorial comment, quote from that factual summary extensively.

In her opinion for the Court in that case, Judge Adkins accepted that version of the evidence most favorable to Bricker, as the party opposing summary judgment. That is the version of the evidence that is also appropriate for our present review of the summary judgment entered against Bricker on the charge of malicious prosecution. ¹²³ A. The Accident and the Filing of the Claim The first phase of the case involved 1) an alleged accident suffered by Bricker on June 10, 1995; 2) Bricker’s claim for damages resulting from that accident; and 3) the initial investigation of that claim by the appellee Larry Warch. Judge Adkins described that early history of the case. Bricker, an insurance claims adjuster, alleges that he injured his back and shoulder, and scraped his arm, on June 10, 1995.

While attending an antique car show sponsored by a Frederick County elementary school, he fell from a broken swing on the playground. Bricker allegedly wrote to the school shortly after the incident, claiming that “the underneath of my right forearm was scraped raw and bleeding from the elbow to the mid-forearm” and that “[tjhere was also a large bleeding gash on my right leg just below the knee and ... a painful area just below my right hip which eventually turned into a lump and large bruise.” The school forwarded his claim to Great American, its insurer. Great American assigned the claim to Warch, an employee in its Special Investigation Unit. Bricker alleges that Great American neglected his claim.

By the time Warch contacted him, Bricker had hired an attorney and refused to speak directly with Warch. Warch and Bricker were strangers to each other. Warch proceeded to investigate the claim, without contacting Bricker’s attorney. Warch found it significant that Bricker had a long-term history of back and shoulder problems.

He also learned that on the day of the incident, Bricker allegedly told the school janitor that he was not hurt. Others who attended the event also , claimed that Bricker had not displayed or claimed any injury. Warch also obtained videotape that showed Bricker receiving an award approximately four hours after the incident, allegedly with no sign of the claimed injuries. Warch ordered surveillance, with videotaping, which allegedly showed Bricker operating lawn equipment and playing catch with his children. ¹²⁴ B. The Referral to the Insurance Fraud Division Suspecting that the claim was fraudulent, Warch referred the matter to the Insurance Fraud Division, but it declined to file criminal charges.

Our earlier summary of the facts continued: Based on his investigation, Warch suspected Bricker had filed a fraudulent insurance claim. In April 1996, he met . with the Insurance Fraud Division of the Maryland Insurance Administration, and provided them the videotapes, medical reports, and statements from witnesses. The ' Fraud Division accepted the referral, but eventually declined to prosecute Bricker, noting that the expenses that he sought did not relate to the forearm injury ruled out by the awards videotape. In a May 6, 1996 letter to Warch, the chief investigator of the division advised that [t]his office had previously conducted a review of [this] case and your investigative findings have been entered into our state-wide database for reference....

Our investigation has determined that insufficient evidence is present at this time to support the filing of criminal charges. Since evidentiary demands are much greater in a criminal case, our screening and investigatory requirements are likewise demanding.... This decision does not impair your ability to continue any associated actions regarding this claim or to seek any civil remedies should you deem it necessary and proper. C. The Frederick County Criminal Prosecution Warch then took his evidence of suspected fraud to the Frederick City Police Department and to the Frederick County State’s Attorney’s Office.

A grand jury indicted Bricker for insurance fraud, but his subsequent trial resulted in the granting of his motion for a judgment of acquittal. Judge Adkins’s summary continued: Dissatisfied with this decision, Warch “felt further review was warranted.” He allegedly contacted Bricker’s past and current employers, co-workers, and friends, and even his ¹²⁵ children’s teachers. He told them Bricker was under investigation for insurance fraud. As a result of this additional investigation, Warch allegedly learned from Bricker’s former co-worker in the Frederick City Police Department, who perceived Bricker as a person who “would do anything and cheat anyone to get what he wants,” that Bricker had a long history of initiating lawsuits. 2 Warch allegedly reported Bricker to the National Insurance Crime Bureau (“NICE”), a data repository regularly visited by insurance companies.

On May 17, 1996, Warch presented his accumulated evidence to the State’s Attorney in Frederick County. Bricker claims that the information supplied by Warch was the sole basis for the case against him. Warch appeared before a grand jury in June 1996. The grand jury indicted Bricker for insurance fraud.

In response, Great American reduced its reserve, which had been set at 80% of the claim, to only $2,500. Bricker claims that Warch also contacted his employer with news of the indictment. This report and the report to the NICE allegedly cost Bricker his 17 year job as a claims manager for an insurance company, and prevented him from finding another job in the insurance industry. At trial, after the State rested its case, the Circuit Court for Frederick County granted Bricker’s motion for acquittal.

Thereafter, Warch allegedly made no effort to notify Brick-er’s employer or other persons he had contacted during his investigation, or to revise either Bricker’s record at the NICB or Great American’s reserve. D. The Howard County Suit by Bricker Bricker then filed the present suit in Howard County. Our earlier opinion further explained. ¹²⁶ Bricker filed a five count complaint against Warch and Great American. He asserted claims for malicious prosecution, intentional infliction of emotional distress, negligent infliction of emotional distress, and defamation against both Great American and Warch, and for breach of contract against Great American only.

Appellee’s motion to dismiss the complaint was granted, with leave to amend the malicious prosecution, defamation, and breach of contract claims. Bricker filed an amended complaint reasserting those counts. Appellees again moved to dismiss. That motion was granted as to the defamation count, but denied as to the other two counts.

E. Summary Judgment on the Charge of Malicious Prosecution Prior to a scheduled trial on the merits, summary judgment was granted in favor of both appellees on the malicious prosecution count but was denied as to the breach of contract count against Great American. Judge Adkins summarized these procedural developments. Trial was set for July 17, 2000. On June 23, 2000, the same date as the pre-trial conference, appellees moved for summary judgment on both remaining counts of the amended complaint____ ...

In a July 11, 2000 memorandum opinion and order, the circuit court granted summary judgment on one of the two counts. The court found that “summary judgment on the malicious prosecution case is required because of the provisions of Section 27-802 of the Insurance Article,” which affords a qualified civil immunity to those who make a good faith report of suspected insurance fraud to either the Fraud Division or to “an appropriate ... state or local law enforcement authority....” Ins. § 27-802. The court denied summary judgment on the breach of contract count, in which Bricker claimed that he is a third party beneficiary of Great American’s insurance contract with the school, as evidenced by Great American’s partial payment of his medical expenses claim. It held that it could not conclude from ¹²⁷ the record that Great American was entitled to judgment on that claim.

F. The Trial on Remand As to Breach of Contract Following the decision of this Court as to the prematurity of the earlier appeal, the case was set for trial on Bricker’s claim against Great American for breach of contact. Bricker moved pretrial for summary judgment in his favor. That motion was denied on December 21, 2001. The non-jury trial was heard on the merits by Judge Sweeney on January 22, 2002.

At the conclusion of the plaintiffs case, Judge Sweeney granted judgment in favor of Great American. His ruling was: [T]he Court has before it the Defendant’s Motion for Judgment at the conclusion of the Plaintiffs case. The Court will grant that Motion and enter Judgment for the Defendant. The Court believes that the Plaintiff has failed to sustain in the presentation this morning, evidence that would prove the case against the Defendant on the issue of the damages sustained in the causal relationship of the event to those damages.

And for those reasons, the Defendant’s Motion for Judgment at the conclusion of the Plaintiffs case, is granted. Dismissal of Ohio Casualty As a Party It is convenient to consider Bricker’s claim with respect to Ohio Casualty first, simply to get it out of the way. Our earlier opinion recited the brief procedural history with respect to Bricker’s effort to add Ohio Casualty as a defendant. Discovery ensued.

Bricker learned that Great American had transferred its commercial coverages division, and Warch’s employment, to the Ohio Casualty Company (“Ohio Casualty”). On June 12, 2000, Bricker amended his complaint to add Ohio Casualty as a defendant. ... Ohio Casualty also moved separately to dismiss the claims against it.... ¹²⁸ At a July 7 hearing on both pending motions, the court granted Ohio Casualty’s motion. Judge Sweeney’s decision not to allow Ohio Casualty to be added to the suit as a defendant was absolutely proper.

The accident that gave rise to the disputed insurance claim in this case occurred on June 10, 1995. Bricker’s civil suit against the appellees was filed on June 10, 1998. No fact of any pertinence to this case occurred after that date of filing. It was only at some time after June 10, 1998, that Great American Insurance Company sold its commercial lines division to Ohio Casualty Insurance Company.

As a result of that sale, the appellee Larry Warch has since become an employee of Ohio Casualty. Ohio Casualty, however, had no involvement with any of the events that are pertinent to this case. Great American remains an active insurance company, operating out of Cincinnati, Ohio. It continues to be qualified to do business in Maryland.

As counsel for Great American represented at the hearing of July 7, 2000: Great American Insurance Company is not asserting the defense that Ohio Casualty is responsible, and I’ll say for the record that Great American is not asserting that defense, and, that being the case, then, I don’t know how Ohio Casualty can come in. Great American agrees that if there is a judgment that has to do with the malicious prosecution or a judgment that has to do with the contract action, that Great American Insurance Company is responsible for it. Judge Sweeney, at the conclusion of that hearing, granted the motion to dismiss the amended complaint “as it pertains to Ohio Casualty Insurance Company.” We see no error. Summary Judgment as to Malicious Prosecution After an extensive hearing on July 7, 2000, Judge Sweeney, on July 11, filed his Memorandum and Order, whereby he granted summary judgment in favor of both appellees on the charge of malicious prosecution.

Before us, the appellees strenuously maintain that they were entitled to summary judgment for three separate and independent reasons: 1) them enjoyment of qualified immunity; 2) the absence of any ¹²⁹ evidence of malice generally; and 3) the unquestioned evidence of their probable cause to proceed with the prosecution. At this juncture, however, the appellees must content themselves with a more meager victory. Judge Sweeney, while ruling in their favor, based his ruling only on the ground of immunity. Our review, accordingly, will consider only that ground.

In Warner v. German, 100 Md.App. 512, 517 , 642 A.2d 239 (1994), Judge Harrell wrote for this Court: [WJhen analyzing the lower court’s decision, we ordinarily are confined to the basis relied on by that court and may not otherwise explain its conclusion by introducing new legal theories. See Cheney v. Bell Nat’l Life Ins. Co. 315 Md. 761, 764 , 556 A.2d 1135 (1989) (“[Ojrdinarily we will not affirm the granting of summary judgment for a reason not relied upon by the trial judge.”); Geisz v. Greater Baltimore Medical Center, 313 Md. 301 , 314 n. 5, 545 A.2d 658 (1988) (“[TJhe appellate court 'will not ordinarily undertake to sustain the judgment by ruling on another ground, not ruled upon by the trial court, if the alternative ground is one as to which the trial court had a discretion to deny summary judgment”). (Emphasis supplied).

Judge Sweeney’s immunity ruling was based on Maryland Code, Insurance Article, § 27-802(a)(l), which directs insurers and their employees “who in good faith have cause to believe that insurance fraud has been or is being committed” to report such suspected fraud to various governmental authorities: (a) In general.—(1) An authorized insurer, its employees, producers, as defined in § 20-101 of this article, or agents, who in good faith have cause to believe that insurance fraud has been or is being committed shall report the suspected insurance fraud in writing to the Commissioner, the Fraud Division, or the appropriate federal, State, or local law enforcement authorities. (Emphasis supplied). Subsection (c) then goes on to shield from civil liability those who have in good faith reported such “suspected insurance fraud”: ¹³⁰ (c) Civil liability.—A person is not subject to civil liability for a cause of action by virtue of reporting suspected insurance fraud if: (1) the report was made to the Commissioner, Fraud Division, or an appropriate federal, State, or local law enforcement authority; and (2) the person that reported the suspected insurance fraud acted in good faith when making the report. (Emphasis supplied).

A. There Is No “One Strike” Rule Bricker seizes upon the fact that both in subsections 27-802(a)(l) and 27-802(c)(l), the agencies to which a report of suspected insurance fraud may be reported are listed in the disjunctive. From that predicate, he argues that the immunity from civil liability applies only to the first such report and does not shield any subsequent