Federated Department Stores Inc. v. Le

ELDRIDGE, Judge. This case involves an employee’s statutory right to bring a common law action against his employer under § 44 of the Maryland Workmen’s Compensation Act, Code (1957, 1985 Repl.Vol., 1990 Cum.Supp.), Article 101, § 44. 1 In the trial court, the action against the employer was concluded by the court’s granting the employer’s motion for summary judgment. The facts on which the motion was based are those alleged in the complaint and those contained in several depositions. They disclose the following.

At the time the events which gave rise to this action occurred, the plaintiff, Thach Le, was employed as a sales person by the defendant, Federated Department Stores, Inc., doing business as Bloomingdale’s. He worked at a Federated store in Montgomery County, Maryland. On the morning of April 11, 1983, Mr. Le arrived for work and left his briefcase, containing “tax papers,” in the store’s stockroom on top of a box. According to Mr. Le, Federated provided him “with no locker or any type of secure area where he could place his personal property while at work ⁷⁴ with a reasonable expectation that such personal property would be secure from interference by other employees.” That same day, after returning from lunch, he was told by Clarence Rich, a Federated detective, to accompany Mr. Rich to the security office and bring his briefcase.

Suzanne Spahr, the Regional Director of Security for Federated, was waiting in the security office when Mr. Le arrived with Mr. Rich. According to Mr. Le, Mrs. Spahr falsely told him that someone saw him steal a calculator and conceal it in his briefcase. When Mr. Le protested, Mrs. Spahr told Mr. Le that, if he did not sign a statement confessing to the theft, Federated would prosecute, and he would have to spend substantial time in jail. Mr. Le claimed that he was not allowed to leave the security office or to make a telephone call unless he signed a statement.

Mr. Rich, who was physically larger than Mr. Le, blocked the exit to the security area during Mr. Le’s detention. Mr. Le eventually signed a statement confessing to the theft of the calculator, although he claimed that he did not read the statement. He was then led crying out of the store through the part of the store where he had worked. As a result of the incident, Mr. Le’s employment was terminated by Federated.

A few days after the incident, Mr. Le told Federated’s personnel office that he did not steal the calculator, and he applied for reinstatement. Federated, however, denied his application for reinstatement. Mr. Le further alleged that in “an effort to ascertain who placed the calculator in his case, Mr. Le went back and talked to employees. He learned from Lynn Gunther, another sales person, that Mrs. Spahr had gotten a calculator.

Mrs. Spahr told Lynn she would probably buy it, and she would bring it back to Lynn if she didn’t like it. He learned from Janet Dolan that Clarence [Rich] and Mrs. Spahr went in the stockroom and she heard some noise back there. From his investigation, Le concluded that the security people had put the calculator in his briefcase.” ⁷⁵ Mr. Le subsequently instituted the present action by filing a complaint against Mrs. Spahr and Federated in the Circuit Court for Montgomery County. His complaint, as amended, contained counts charging false arrest, intentional infliction of emotional distress, and defamation.

According to the complaint, the injuries resulting from the incident included Mr. Le’s inability to secure employment “in his chosen field” and his inability to obtain other employment except as a “bus boy” at a much lower hourly wage rate. Mr. Le also asserted that the incident “has changed his whole way of dealing with people,” that he finds it difficult to trust people, that he “is now afraid to lay anything down that someone could put something into,” and that he could not “sleep for weeks after his discharge.” After considerable discovery, and after the setting and postponement of numerous trial dates, Federated filed a motion for summary judgment, asserting that Mr. Le’s action against Federated was barred by the exclusivity provision of the Workmen’s Compensation Act, Code (1957, 1985 Repl.Vol., 1990 Cum.Supp.), Article 101, § 15, which states that the employer’s liability for payment of workers’ compensation provided for in the statute shall be the exclusive remedy. 2 Federated, in its motion and accompanying ⁷⁶ memorandum, did not assert that Mr. Le had sustained “an accidental personal injury” and did not explain why § 15 was involved. Instead, Federated simply made the bald assertion that § 15 was applicable. The focus of Federated’s argument for summary judgment was upon § 44 of the Workmen’s Compensation Act, which preserves an employee’s right to file a common law action against his employer if the employee’s injury resulted “from the deliberate intention of his employer to produce such injury____” Relying on two Court of Special Appeals’ opinions, Continental Casualty Co. v. Mirabile, 52 Md. App. 387 , 449 A.2d 1176 (1982), and Schatz v. York Steak House, 51 Md.App. 494 , 444 A.2d 1045 (1982), Federated argued that Mr. Le could opt to sue the employer at common law, as allowed under § 44, only if Mrs. Spahr was the “alter ego” of Federated or if she acted with its express authorization when she committed the acts on which Mr. Le’s suit was based.

Federated went on to argue that Mrs. Spahr was not the alter ego of Federated and that her alleged acts had not been expressly authorized. Federated insisted that “[t]he facts of the case at hand are substantially the same as those in Continental v. Mirabile." ⁷⁷ The plaintiff Le, in his opposition to Federated’s motion for summary judgment, also did not discuss whether Art. 101, § 15, encompassed his claim. Instead, the thrust of the plaintiff’s argument was to distinguish Continental Casualty Co. v. Mirabile, supra, and Schatz v. York Steak House, supra. The plaintiff argued that Mrs. Spahr was in a different position than the employees involved in Mirabile and Schatz , as “Spahr was the Regional Director for security for [Federated] in the Washington area, and worked at both the Tyson’s and White Flint Stores____ She was the final authority for security policies of defendant [Federated] in the Washington area.” The plaintiff also pointed out that, in Mirabile and Schatz , the exclusivity bar of the Workmen’s Compensation Act, and the construction of the § 44 exception to exclusivity adopted in those cases, were applied only to the assault and battery counts and not to other intentional torts.

The plaintiff further argued that the refusal to reinstate Mr. Le constituted ratification of Mrs. Spahr’s acts. The circuit court granted Federated’s motion for summary judgment, stating: “The Plaintiff seeks to distinguish this case from Continental Casualty Company [v. Mirabile]. He didn’t. I can’t.

For that reason I will grant the motion for summary judgment on behalf of the Federated Department Stores, trading as Bloomingdale’s.” The circuit judge did not discuss the applicability of Art. 101, § 15, to the plaintiff’s claim; in fact, the judge made no mention of § 15. When the circuit court refused the plaintiff’s request to finalize the judgment pursuant to Maryland Rule 2-602(b), the plaintiff voluntarily dismissed his action against Mrs. Spahr, making the judgment in favor of Federated final. The plaintiff then appealed to the Court of Special Appeals. The Court of Special Appeals reversed, holding that because “[t]here was no claim for any physical injuries” to Mr. Le, his claim was not compensable under the Workmen’s Compensation Act and that, therefore, it did not fall within the exclusivity provision of § 15.

Le v. Federated ⁷⁸ Department Stores, 80 Md.App. 89, 90 , 560 A.2d 42 (1989). The intermediate appellate court, relying upon cases in some other states, took the position that “non-physical injury torts are [not] within the ambit of the [Workmen’s Compensation] Act” and that “tort actions are not barred by Workers’ Compensation Acts when the essence of the injury is non-physical.” Le v. Federated Department Stores, supra, 80 Md.App. at 92 , 560 A.2d at 43 . The court distinguished its earlier decisions in Continental Casualty Co. v. Mirabile, supra, 52 Md.App. 387 , 449 A.2d 1176 , and Schatz v. York Steak House, supra, 51 Md.App. 494 , 444 A.2d 1045 , on the ground that “Sehatz and Mirabile involved physical and psychological injuries for which compensation is provided under the Act.” Le v. Federated Department Stores, supra, 80 Md.App. at 90-91 , 560 A.2d at 42 . The Court of Special Appeals concluded ( 80 Md.App. at 93 , 560 A.2d at 44 ): “The quiddity of false arrest, defamation, and intentional infliction of emotional distress is non-physical.

Those torts are ordinarily outside the scope of the Workers’ Compensation Act. Since they are not within the Act, the statute does not protect the employer from actions grounded on those particular torts.” Federated filed in this Court a petition for a writ of certiorari, contending that “[t]he facts of the present case are indistinguishable from those in Mirabile” and that “there appear to be only two alternatives for this Court; either overrule Mirabile or reverse the Court of Special Appeals’ decision in the present case.” (Petition For a Writ of Certiorari, pp. 7-8). Federated maintained that Mirabile involved intentional torts committed by employees whose positions were similar to that of Mrs. Spahr in the present case. Federated also insisted “that both Mirabile and Le, if believed, sustained exactly the same injuries, namely continuing emotional or psychological trauma.” {Id. at pp. 10-11).

Federated argued that the injuries in this case were compensable under the Workmen’s Compensation Act, that the Mirabile and Sehatz cases were correctly decided, and ⁷⁹ that § 44 of the statute did not give Mr. Le the option of filing a common law tort action against the employer Federated because Mrs. Spahr was not the “alter ego” of the employer corporation and the corporation had not expressly authorized her intentional tortious acts. We granted the petition and shall affirm the judgment of the Court of Special Appeals. We do so, however, on different grounds than those relied upon by the intermediate appellate court. As previously discussed, neither the parties nor the trial judge dealt with the the applicability or scope of Art. 101, § 15, in connection with the motion for summary judgment and the ruling thereon.

The only issue addressed in the circuit court was whether those parts of the opinions in Continental Casualty Co. v. Mirabile, supra, and Schatz v. York Steak House, supra, relating to the right to sue under Art. 101, § 44, required summary judgment in favor of Federated. Ordinarily, an appellate court should review a grant of summary judgment only on the grounds relied upon by the trial court. Boyer v. State, 323 Md. 558, 588 , 594 A.2d 121, 136 (1991); Orkin v. Holy Cross Hospital, 318 Md. 429, 435 , 569 A.2d 207, 210 (1990); Three Garden v. USF & G, 318 Md. 98, 107-108 , 567 A.2d 85, 89 (1989); Geisz v. Greater Baltimore Medical, 313 Md. 301 , 314 n. 5, 545 A.2d 658 , 664 n. 5 (1988). It may be that, analytically, the applicability of § 15 to the plaintiffs claim was implicitly decided by the trial court, as § 44 and its construction in Mirabile and Schatz only become relevant if the claim is encompassed by § 15.

Section 44 grants to the employee the option, under certain circumstances, to take compensation under § 15 or to file a lawsuit against the employer; therefore, § 44 applies only to claims covered by § 15. Nevertheless, because of the failure of the parties and the trial court to address specifically the applicability of § 15 to the plaintiffs claim, and because we need not decide in this ⁸⁰ case whether § 15 encompassed the plaintiffs claim, we shall not reach the issue. It is unnecessary for us to decide whether Mr. Le’s claim was or was not covered under § 15 of the Workmen’s Compensation Act for the following reasons. If Mr. Le’s claim was not covered under § 15 of the Workmen’s Compensation Act, the exclusivity provision in § 15 of the Act would have no application and the common law tort action could be maintained.

If Mr. Le’s claim was covered by § 15, we believe that, under the particular circumstances of this case, § 44 grants Mr. Le the option of bringing this common law action against his employer for damages resulting from the intentional torts of false arrest, intentional infliction of emotional distress, and defamation. In our view, the construction of § 44 by the Court of Special Appeals in Continental Casualty Co. v. Mirabile, supra, 52 Md.App. 387, 449 A.2d 1176 , and Schatz v. York Steak House, supra, 51 Md.App. 494 , 444 A.2d 1045 , was too narrow. Section 44 states as follows: “§ 44. Option to take benefits under article or sue where injury or death results from deliberate intention of employer. “If injury or death results to a workman from the deliberate intention of his employer to produce such injury or death, the employee, the widow, widower, child, children or dependents of the employee shall have the privilege either to take under this article or have cause of action against such employer, as if this article had not been passed.” Long ago this Court set forth the principles governing the interpretation of Maryland Workmen’s Compensation Act (Frazier v. Leas, 127 Md. 572, 575 , 96 A. 764, 765 (1916)): “First the intention of the Legislature as expressed in the words of the Act must be ascertained and given effect; secondly, ‘the language of a statute is its most natural expositor, and where the language is susceptible of a ⁸¹ sensible interpretation, it is not to be controlled by any extraneous considerations’ {Alexander v. Worthington, 5 Md. 471 ); thirdly, the construction must be liberal in favor of private right, and construction which imputes an intention to deny valuable rights should be avoided; fourthly, statutes are presumed to be passed in full recognition of the constitutional rights of the citizen.” See 53 E. Singleton, Workmen’s Compensation in Maryland 76, (Johns Hopkins University Historical Studies 1935).

In light of these principles, § 44 would seem to cover this case. The language grants the employee the option of maintaining a “cause of action against [an] employer” for an injury resulting “from the deliberate intention of his employer to. produce such injury.” Mr. Le’s allegations appear to be sufficient to assert an injury resulting from the deliberate intention of Mrs. Spahr to produce the injury. While Mrs. Spahr was not the “employer,” § 44 goes on to provide that the employee’s cause of action against his employer is “as if this article had not been passed.” Absent any bar to suit in Article 101, under Maryland common law an employer ordinarily can be sued for intentional tortious acts committed by one of his employees acting within the scope of employment. Cox v. Prince George’s County, 296 Md. 162, 170-171 , 460 A.2d 1038, 1042-1043 (1983); Drug Fair v. Smith, 263 Md. 341, 343-351 , 283 A.2d 392, 394-398 (1971); Lewis v. Accelerated Express, 219 Md. 252 , 148 A.2d 783 (1959).

See Sawyer v. Humphries, 322 Md. 247 , 587 A.2d 467 (1991); Ennis v. Crenca, 322 Md. 285 , 587 A.2d 485 (1991). As previously mentioned, the Court of Special Appeals in Continental Casualty Company v. Mirabile, supra, 52 Md.App. 387, 449 A.2d