Clark v. O'Malley

BELL, C.J. The present appeals are the second time during the course of the parties’ litigation that this case has come to this Court. They, like the one before them, can be traced back to the discharge of Kevin Clark, the petitioner, from his position as Police Commissioner for Baltimore City, by the former Mayor of Baltimore City, Martin O’Malley (“Mayor”), and the City Council of Baltimore, the respondents. The facts surrounding that discharge and the procedural posture of the case pending this Court’s first decision were summarized in Mayor & City Council v. Clark, 404 Md. 13 , 944 A.2d 1122 (2008) (Clark II): “The respondent, Kevin P. Clark (hereinafter ‘Clark’ or ‘the respondent’), in 2003 was appointed the Police Commissioner of Baltimore City by the Mayor of the City of ¹⁷⁵ Baltimore (hereinafter ‘Mayor’) and confirmed by the City Council. Prior to his confirmation, Clark and the Mayor entered into a contract, denominated ‘Memorandum of Understanding,’ (MOU), ‘to employ the services of Clark as the Police Commissioner of Baltimore City.’ The contract, which purported to be for ‘the remaining term of the last Commissioner until June 30, 2008,’ addressed the terms and conditions of Clark’s employment as Police Commissioner.

One term related to his removal as Commissioner. Albeit in the context of ‘Additional Compensation/Severance Pay,’ the parties acknowledged, in Section 2. A. of the MOU, the applicability of PLL § 16-5(e) to the removal of the Commissioner [ 1 ] and denied any intention to ‘affect the rights of the Mayor in that respect.’ In another section, however, the agreement introduced and prescribed another method of removal, one not contemplated or addressed in the Code of Public Local Laws, termination without cause. Section 12. of the MOU provides: ¹⁷⁶ “ ‘Either party may terminate this contract at any time, by giving forty-five (45) days prior written notice to the other.

Notwithstanding the above sentence the provisions of Section 2B [5] remain in force.’ “Clark commenced his role as Police Commissioner following the signing of the MOU. A little more than a year and a half later, on November 10, 2004, however, ‘pursuant to Sections 12 and 13 of the Memorandum of Understanding,’ he was relieved of his command. The letter providing the requisite forty-five days notice of the termination of the MOU and, thus, terminating his tenure as Police Commissioner, was delivered to Clark by the City Solicitor, and, as relevant, advised: “ ‘This notice is sent on behalf of the Mayor and City Council of Baltimore (the ‘City’) pursuant to Sections 12 and 13 of the Memorandum of Understanding (‘MOU’) between you and the City dated February 19, 2003. This notice shall serve as the City’s 45-day notice of termination of your employment.

Thus, your employment shall terminate 45 days from today. However, as the Mayor announced this morning, you have been relieved of all official duties as of 8:30 a.m., November 10, 2004, and therefore, your further access, if any, to Police Department facilities, equipment, or documents will be subject to the specific, prior authorization of Acting or Interim Police Commissioner Hamm.’ “Clark filed, in the Circuit Court for Baltimore City, a verified complaint, naming as defendants, Mayor Martin O’Malley and the Mayor and City Council of Baltimore, in which, in addition to seeking reinstatement as Police Commissioner and monetary damages, he requested declaratory and injunctive relief. After some preliminary skirmishing, consisting of the denial of injunctive relief and the denial of the petitioner’s dispositive motion for summary judgment, Clark filed an amended complaint. In response, the petitioner again moved for summary judgment.

Following a hearing, the Circuit Court granted summary judgment to the petitioners, concluding that the MOU was a valid and ¹⁷⁷ unambiguous contract, pursuant to which Clark had been lawfully terminated, upon notice properly given pursuant to paragraphs 12 and 13 thereof. The Circuit Court also issued a declaratory judgment, in which, consistently, it declared that the Mayor properly had terminated Clark, without cause, on proper notice. Clark immediately noted an appeal to the Court of Special Appeals. “The intermediate appellate court reversed the judgment of the Circuit Court. Clark v. O’Malley, 169 Md.App. 408 , 901 A.2d 279 (2006) [Clark /].

Concluding that the trial court erred in holding, as a matter of law, that the MOU was valid and enforceable, it held that the Mayor did not have the authority to remove a Police Commissioner pursuant to a contract providing for removal without cause, the Mayor’s ability to remove the Police Commissioner having been limited by the General Assembly, 169 Md.App. at 439 , 901 A.2d at 297 , and, therefore, the removal provisions of the MOU were invalid. The Mayor and the Mayor and City Council of Baltimore timely filed a petition for writ of certiorari with this Court, which we granted. Baltimore v. Clark, 395 Md. 56 , 909 A.2d 259 (2006).” Id. at 16-19, 944 A.2d at 1124-26 . After considering and rejecting the various arguments advanced by the petitioners in that case in challenging the intermediate appellate court’s decision, we addressed the only question presented by the petitioner’s “cert” petition: “whether Kevin Clark is bound by the unambiguous ‘right to terminate without cause’ provision in the employment contract that he negotiated with the City of Baltimore.” Id. at 36 , 944 A.2d at 1136 . 2 We held that a provision of an employment contract, ¹⁷⁸ entered into by the Mayor and a candidate for police commissioner in connection with the latter’s appointment to that office, and which gave the Mayor the right to terminate the Police Commissioner’s employment, without cause, did not trump P.L.L. § 16 — 5(e), which, by its terms limited the May- or’s power of discharge to the grounds set forth therein and, therefore, was unenforceable.

We explained: “The removal power, as articulated in § 16-5(e), we hold, is not modifiable by a MOU, and, in particular, the contractual language at issue in the case sub judice. In that regard, we reiterate, ‘a contract conflicting with public policy set forth in a statute is invalid to the extent of the conflict between the contract and that policy.’ Medex v. McCabe, 372 Md. 28, 39 , 811 A.2d 297, 304 (2002). See also State Farm Mut. Auto.

Ins. Co. v. Nationwide Mut. Ins. Co., 307 Md. 631, 643 , 516 A.2d 586, 592 (1986) (holding that a contractual provision that violates public policy is invalid, but only to the extent of conflict between stated public policy and contractual provision).

Thus, because the provision of the MOU that states that ‘[ejither party may terminate this contract at any time, by giving forty-five (45) days prior written notice to the other’ without need to provide cause, conflicts with § 16-5(e) of the Public Local Laws, that provision, pursuant to which the Mayor acted' to terminate Clark, is unenforceable.” Id. at 33, 944 A.2d at 1133-34 . We affirmed the judgment of the Court of Special Appeals. That court, as we have seen, reversed the judgment of the Circuit Court on the grounds that the Mayor’s reliance on Section 12 of the employment contract did not entitle him to judgment as a matter of law. Thus, concluding that “the ¹⁷⁹ circuit court erred in holding as a matter of law that the entire contract between the parties was valid and enforceable,” it remanded the case to the Circuit Court to “consider the additional questions that have been raised by the City, including questions of waiver, estoppel, and damages.” Clark v. O’Malley, 169 Md.App. at 440 , 901 A.2d at 297 aff'd sub nom.

Mayor & City Council of Baltimore v. Clark, 404 Md. 13 , 944 A.2d 1122 (2008). More particularly, with respect to damages, the intermediate appellate court advised: “The Mayor argues that ‘Paragraph 2B of the contract is a valid and enforceable provision providing for limitation of liability and liquidated damages,’ and maintains that Clark has already been paid all the monetary damages to which he is entitled. Because the court ruled that section 12 of the MOU was valid and enforceable, and that Clark had been properly terminated under that provision, it did not address whether section 2.B. limits Clark’s claim for damages.” Id. at 440 n. 10, 901 A.2d at 297 n. 10. Armed with the opinion in Clark II, Mr. Clark claimed entitlement to, among other things, reinstatement as Police Commissioner of Baltimore City.

Accordingly, he filed in the Circuit Court a Motion for Writ of Mandamus or Motion for Injunction for Reinstatement to Office Forthwith. 3 In that motion, referencing counts III and V of his First Amended Complaint, Mr. Clark argued that this Court, in Clark II, “ruled unanimously ... that Plaintiff was removed from the Office of Police Commissioner of Baltimore City illegally by Mayor O’Malley,” which effectively required the City to reinstate him as police commissioner. For this latter proposition, he relied on Forami v. Reynolds, 248 Md. 246, 252-53 , 236 A.2d 20, 25 (1967), in which we stated, “the writ of mandamus may issue ... to reinstate a person in office from which he has been illegally removed,” and Field v. Malster, 88 Md. 691, 705 , 41 A, 1087, 1091 (1898), in which this Court ordered an officer illegally removed from office reinstated to his office. ¹⁸⁰ In addition to opposing the petitioner’s motion for reinstatement, the respondents moved for summary judgment. In their opposition, they raised the issue of proper parties, noting that the Mayor who removed the petitioner from office was no longer Mayor, but now the Governor, and the petitioner’s failure to join his successor as a defendant. From these facts, the respondents argue that the then present Mayor may not be ordered to reinstate a police commissioner, whom she did not discharge, and litigation to determine the rightful occupant of a public office requires that the incumbent in that office be joined as a party, which the petitioner failed to do in this case.

The respondents also point to the fact that the petitioner’s term — he was filling the unexpired term of the prior commissioner — would expire within a short time after the filing of their opposition, making reinstatement “both pointless and counterproductive,” citing McKeever v. Washington Heights Realty Corp., 183 Md. 216, 223-24 , 37 A.2d 305, 310 (1944). Finally, relying on Dept. Of Public Safety & Correctional Svcs. v. Donahue, 400 Md. 510 , 529 n. 7, 929 A.2d 512 , 524 n. 7 (2007), which recognizes that “special circumstances” may trump the preferred remedy of the reinstatement of an illegally discharged employee, the respondents maintain that there are such circumstances in this case and that they, “plus Clark’s failure to adequately plead and meet the substantive elements of the relief requested warrant dismissal of his claims for reinstatement.” With regard to the motion for summary judgment, the respondents made four arguments. First, characterizing § 2.B. of the MOU 4 as a liquidated damages clause and maintaining its validity, they argued that, as a result, “as a matter of law, Clark is barred from recovering additional ¹⁸¹ damages in this case.” Next, noting that the petitioner “knowingly and voluntarily entered into an employment contract” and for almost 2 years “accepted the substantial benefits of that agreement,” the respondents submitted that he is equitably estopped to deny the validity of the contract or to “reap a windfall based upon a claim of illegality in a contract which has been performed and from which they have received benefits.” This same conduct, the respondents perceived and thus contended, constituted the waiver by the petitioner of his right to sue for additional damages.

Finally, they asserted that the petitioner’s breach of contract claim fails as a matter of law. Subsequently, Mr. Clark moved for partial summary judgment. In that motion, he argued that the issue of liability was conclusively decided, as a matter of law, by Clark II and that, therefore, the only unresolved issue was damages. In that regard, cognizant of the remand and its purpose, see Clark, 169 Md.App. at 440 n. 10, 901 A.2d at 297 n. 10, and directing the court’s attention to language in Clark II that he believes to be dispositive of that issue: “[I]t is well settled that, where the General Assembly has announced public policy, the Court will decline to enter the ¹⁸² public policy debate, even when it is the common law that is at issue and the Court certainly has authority to change the common law.” 404 Md. at 36 , 944 A.2d 1122, 1135-36 , the petitioner submitted: “The above-quoted (and emphasized) statement from the opinion ... which pronounces the Court’s refusal to change the common law even where the Court has the authority to do so, clearly disposes of any alleged outstanding common law issues regarding estoppel and waiver.

As opposing counsel and the Court are aware, estoppel and waiver are common law principles .... the Court of Appeals has addressed and disposed of any common law questions of estoppel and waiver as a matter of law and has given an unequivocally firm statement that the Court will not interject itself into those common law questions in the context of a contract provision found to be contrary to public policy. “Additionally, since the Court of Appeals decided that the termination without cause provision of the Memorandum of Understanding ... is unenforceable and contrary to public policy as a matter of law, any argument by the defense that Plaintiff is barred under principles of estoppel and waiver from arguing that the MOU is unenforceable has been rendered a non-issue.[ 5 ] Moreover, ‘[o]ne cannot be es-topped from asserting the unenforceability of a contract ¹⁸³ which is against public policy and therefore invalid.’ Stanbaugh [Stambaugh ] v. Child Support Admin., 323 Md. 106, 113 , 591 A.2d 501, 504 (1991) (and cases cited therein).” A judge of the Circuit Court for Baltimore City denied Mr. Clark mandamus/injunction motion, rejecting the argument that Clark II was dispositive of that issue. Specifically, she pointed out that “nowhere in the Clark opinion or in its mandate does the Court of Appeals order Clark’s reinstatement. The Court of Appeals only addressed the legality and effect of the termination provision in the parties’ MOU and determined that the Mayor had exceeded the authority particularized in P.L.L. § 16-5(e)” and that this Court affirmed the judgment of the Court of Special Appeals, which included the remand of the case to the Circuit Court for consideration of outstanding issues of “waiver, estoppel and damages.” The judge offered other rationales for her decision, some argued by the respondents, the failure to join proper parties, for example: that, given the amount of time remaining in his term, reinstatement would be “a useless and nugatory act,” citing Brown, v. Bragunier, 79 Md. 234, 236 , 29 A. 7, 8 (1894); that the petitioner’s action for damages was “another available, adequate remedy,” citing Myers v. Chief, Baltimore County Fire Bureau, 237 Md. 583 , 207 A.2d 467 (1965); and, relying on Kinlein v. Mayor & City Council of Baltimore, 118 Md. 576, 581 , 85 A. 679, 681 (1912), that, “if reinstated, Kevin Clark’s term as Police Commissioner would expire on June 30, 2008. Reinstatement for thirteen days or less would surely bring about great and unnecessary disorder and cause inevitable confusion in the operations and administration of the Baltimore Police Department.” Thereafter, another judge of the Circuit Court considered the cross-motions for summary judgment, denying Mr. Clark’s motion for partial summary judgment and granting the respondents’ motion for summary judgment.

With regard to the respondent’s summary judgment motion, the court, having ¹⁸⁴ determined that the other claims had been either waived or otherwise disposed of, 6 considered only Count YII of the petitioner’s complaint, his state constitutional violation claim for a denial of due process in connection with his firing. Acknowledging that the petitioner had made out a case for denial of due process in violation of a property interest, the court held that § 2.B. of the MOU, which it found to be a liquidated damages clause 7 and “valid and enforceable,” limited his claim for compensatory damages. Indeed, the court declared: ¹⁸⁵ “The issue of the continuing validity of the MOU § 2.B was expressly remanded to this Court for determination, in light of the Court of Appeals’ careful articulation that a contract provision that violates public policy is invalid only to the extent of conflict between the stated public policy and the contractual provision. See 404 Md. at 33 , 944 A.2d 1122 .

The liquidated damages provision presents no such conflict.” Because there was no disputed issue of material fact and the only basis for compensatory damages greater than those already paid — that the Mayor relied on a contractual provision later found to be invalid — is insufficient to support a claim for punitive damages, the court limited the damages to those already paid and granted summary judgment to the respondents. Turning to the motion for partial summary judgment, the court concluded that “The decisions of the Court of Special Appeals and the Court of Appeals did not address this issue [of liability]. They were confined to a finding that the termination provisions of the MOU, §§ 2.A and 12, were unenforceable as in conflict with existing statutory law.” In the Court of Special Appeals, 8 the petitioner made three arguments in challenging the rulings of the Circuit Court: that the court abused its discretion when it denied his motion for writ of mandamus or injunction reinstating him to office; that the court erred in denying his motion for partial summary judgment: and that the court erred in granting the respon ¹⁸⁶ dents’ motion for summary judgment. Clark v. O’Malley, 186 Md.App. 194, 199 , 973 A.2d 821, 824 (2009).

The first two arguments were premised on, and, indeed, depended on, the Court of Appeals having determined, on the merits, in Clark II, that his termination was unlawful, and, therefore, that he was entitled to reinstatement as Police Commissioner, as a matter of law. His third argument disputed that “the City had tendered a check for the sole damages to which Mr. Clark was entitled pursuant to the MOU.” Id. at 215-16 , 973 A.2d at 833 . The Court of Special Appeals rejected each of the petitioner’s arguments. Because his term of employment had expired, it concluded that the petitioner’s request for reinstatement was moot.

Id. at 218 , 973 A.2d at 835 . In denying the petitioner’s motion for partial summary judgment, it concluded that our decision in Clark II “did not settle the ultimate question of liability,” id. at 221 , 973 A.2d at 836-37 , noting, in support, that the decision it affirmed held that § 12 of the MOU was unenforceable, but it remanded the case to the circuit court to consider questions of waiver and estoppel, as well as “whether section 2.B limited Mr. Clark’s claim for damages.” Id. at 221, 973 A.2d at 836-37 , quoting Clark I, 169 Md.App. at 440 n. 10, 901 A.2d at 297 n. 10. Thus, the court held that the Circuit Court correctly interpreted our decision as “confined to a finding that the termination provisions of the MOU, §§ 2.A and 12, were unenforceable as in conflict with existing statutory law.” Id. 186 Md.App. at 221 , 973 A.2d at 836-37 . With regard to the respondents’ motion for summary judgment, the intermediate appellate court rejected the petitioner’s “sole argument” against it, that § 2.B violated public policy because it had some relation to “the duration of Mr. Clark’s term of office,” id. at 226, 973 A.2d at 839-40 , and essentially adopted the reasoning of the Circuit Court — that § 2.B., which does not conflict with the public policy reflected in P.L.L. § 2-16(e), is a clear, unambiguous and valid liquidated damages clause, which is fully enforceable.

Id. at 225-26, 973 A.2d at 839 . And, because there was no dispute of material fact that the payments required to be ¹⁸⁷ made pursuant to that section were made to the petitioner, the court held that summary judgment was properly entered in favor of the respondents on that point. Id. at 226 , 973 A.2d at 840 . In this Court, the petitioner presents three questions for our review: “1.

Where the Court of Appeals has determined that an official was illegally removed from his appointed term, may a Circuit Court preclude that official from returning to office for the remainder of the unexpired term? “2. Was the Court of Appeals holding in Mayor City Council of Baltimore v. Clark a final determination of Kevin Clark’s violation of right to due process and liability concerning that violation? “3. Assuming that Mayor & City Council of Baltimore v. Clark did not resolve all contractual and liability issues in this case concerning the MOU, were the Respondents entitled to summary judgment?” The underlying premise of the petitioner’s first two arguments is that Clark II is dispositive of this case and all of its aspects, that it definitively determined not simply that the petitioner had been wrongly discharged, but also that there was nothing more to decide. As the petitioner sees it, a decision that the petitioner was wrongly discharged necessarily means that the agreement containing the provision determined to be contrary to law, was, itself, in its entirety, invalid and, therefore, the respondents liability also has been established conclusively, without regard to, and in spite of any other issues that might have been presented in the case.

This is demonstrated by the caption to the petitioner’s first argument, “The Lower Courts Had No Discretion To Deviate from the Court of Appeals’ Decision,” and confirmed by its first two sentences: “In Mayor & City Council of Baltimore v. Clark, this Court concluded that on November 10, 2004, then Mayor Martin O’Malley broke the law and illegally removed Petitioner, Kevin P. Clark, from office as Police Commissioner ¹⁸⁸ for Baltimore City. The stated basis for the removal, that was accomplished by gunpoint and through the deployment of a police S.W.A.T. unit, was a memorandum of understanding that was contrary to law.” Throughout the remainder of the arguments, as a matter of fact, the petitioner makes clear that it is his interpretation of Clark II that “[t]his Court having already ruled that the Mayor removed Petitioner illegally, the factual and legal issues in this case were conclusively determined.” Proceeding from this premise, it follows that the petitioner would view any contrary interpretation by the Court of Special Appeals or the Circuit Court as “attempt[s] to evade this Court’s finding of illegal conduct by suggesting [that] another mode of discharge was appropriate pursuant to the MOU.” The cases on which the petitioner relies for the proposition that mandamus lies to effect his reinstatement, Forami v. Reynolds, 248 Md. 246, 253 , 236 A.2d 20, 25 (1967); Field v. Malster, 88 Md. 691 , 41 A. 1087 (1898); Miles v. Stevenson, 80 Md. 358 , 30 A. 646 (1894); Mayor & City Council of Ocean City v. Johnson, 57 Md.App. 502, 517 , 470 A.2d 1308, 1315 (1984), further make the point. In each of these cases, mandamus was sought to effect the reinstatement of a public official to an office from which, it was alleged, he had wrongly and illegally been removed. In each of these cases, what was presented for decision by the appellant court was the merits of the issue on the basis of which the writ of mandamus was sought and found to be warranted.

In Forami , for example, the Mayor of Capital Heights, Maryland appealed the issuance of a writ of mandamus directing him to reinstate a police officer, whom he had told he was no longer a police officer, notwithstanding that the Common Town Council, as reflected by the minutes of the proceedings, had not voted to remove him, as it had done with respect to one of his fellow officers. Forami, 248 Md. at 251 , 236 A.2d at 24 . While the Mayor was given, by Public Local Law, 9 the power to appoint police ¹⁸⁹ officers, his appointees could be removed by majority vote of the Common Council and the Mayor. 10 The Mayor did not dispute the occurrence, rather he sought to veto the action of the Common Council and justify his own actions. Id. at 249 , 236 A.2d at 23 .

The matter was presented for decision in this posture. This Court, addressing the question of the officer’s entitlement to reinstatement, said: “We are of the opinion that Sergeant Brommer was entitled to be reinstated in his office. He was duly appointed to his office by the mayor in June, 1966, and this appointment was confirmed by the Town Council at its meeting of June 13, 1966. It is not clear from the ordinance (section 8-19 of the Prince George’s County Code already quoted) that he was required to take the oath of office again as he had already taken the oath at the time of his original prior appointment.

Assuming, arguendo, that he was required to take the oath again, the duty of the mayor to administer this oath to him was merely ministerial and the mayor may properly be compelled by mandamus to administer the oath as part of the Sergeant’s reinstatement. Spitzer v. Martin, 130 Md. 428 , 100 A. 739 (1917); Groome v. Gwinn, 43 Md. 572 (1875). ¹⁹⁰ “Having been validly appointed and confirmed as a police officer, Sergeant Brommer could only be removed from his office as provided in section 8-48 of the Prince George’s County Code. No proceedings under this section were filed against him nor has there been a majority vote of the Council to remove him under that section. On the contrary, a motion was approved by the Council at its meeting of July 11, 1966, to reinstate him by a vote of three in the affirmative, one in the negative, one not voting and one absent.

Whatever may be the effect of this action, it is clear that there was no vote of a majority of the Council to remove him under section 8-48.” 248 Md. at 258-54 , 236 A.2d at 25-26 . Mayor & City Council of Ocean City v. Johnson, 57 Md.App. at 517 , 470 A.2d at 1315 , is to like effect. There, the question of the invalidity of the regulations and thus their improper enforcement against Johnson, was directly presented, and, so, “his right to reinstatement was not ‘doubtful,’ and the Chiefs obligation was not a discretionary one.” Id. at 517 , 470 A.2d 1315 . Although the petitioner’s action included counts for reinstatement to his position and for damages, the posture in which Clark II reached this Court was vastly different.

The respondents’ liability to the petitioner for