Gazunis v. Foster

GREENE, J. This matter arises from a civil action filed in the Circuit Court for Montgomery County by Amelia Foster and her husband, David Foster, against Carol Gazunis and the Montgomery County Board of Education (“the Board”). 1 Ms. Foster brought a claim for defamation against Ms. Gazunis and claims for wrongful demotion, termination and breach of contract against the Board. Mr. and Mrs. Foster sought damages for loss of consortium from both Ms. Gazunis and the Board. Petitioners ask us to determine whether the Circuit Court committed reversible error by permitting hearsay testimony to establish the publication element of Ms. Foster’s defamation claim. Both Petitioners and Respondents ask us to decide whether Ms. Foster failed to exhaust her contractual remedies under the collective bargaining agreement before the resolution of the issues in the Circuit Court, and, if so, whether the Circuit Court erred in reaching those issues.

In addition, they ask us to examine whether the Board was obligated to arbitrate Ms. Foster’s grievance after she waived arbitration and later sought to revive her request for arbitration. The ⁵⁴⁴ parties disagree as to whether the trial court erred by granting Petitioners’ motion to alter or amend the verdict, thereby absolving Carol Gazunis of liability, after the jury returned a verdict in favor of Ms. Foster on the claim of defamation. Lastly, Petitioners and Respondents request that we analyze whether the Board was entitled to immunity pursuant to Md.Code (1974, 2006 Repl.Vol.), § 5-518(b) of the Courts and Judicial Proceedings Article, 2 and, if so, whether the trial court was correct to enter judgment in the amount of $100,000 against the Board after the jury returned a special verdict for $285,000 against Ms. Gazunis or the Board. 3 We shall hold that the hearsay issue is not properly before this Court. In addition, we shall hold that Ms. Foster voluntarily waived her right to arbitration and that the Board was under no obligation to revive the arbitration proceedings after the waiver and after the time limits had passed.

Thus, Ms. Foster had to exhaust her contractual remedies before she was entitled to adjudicate her claims for wrongful demotion, termination and breach of contract. Therefore, the Circuit Court erred in allowing the jury to determine those issues. We shall therefore reverse the judgment of the intermediate appellate court. In addition, we shall hold that the intermediate appellate court erred in not reaching the other issues that the parties presented to it on appeal and shall remand the case to that court for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND We adopt the underlying facts as set forth by the Court of Special Appeals in its unreported opinion. The court stated: ⁵⁴⁵ Since she began working for the Board in 1987, Am[elia] Foster worked her way up from school bus driver to User Support Specialist I. In that position, she was responsible for all of the computers at Albert Einstein High School (Einstein), and earned an annual salary of $60,500. By September 2002, she had been in that job for five years. Foster reported directly to the Einstein principal, Jani[s] Mills.

The computers and networks within the entire school system were supervised by the Board’s Office of Global Access Technology (OGAT). Carol Gazunis was a supervisor in OGAT and classified as a User Support Specialist II. Her son Chris Gazunis also worked at OGAT, performing on-site computer services for county schools. In June 2002, a new server arrived at Einstein.

Foster requested assistance from OGAT in setting it up. OGAT sent John Manchester and Chris Gazunis out to the job. While they were working, Foster noticed that occasionally they would shut the server down by pushing the power button, as opposed to typing in the word “Down,” as Foster believed was the proper way. When Foster pointed this out to them, they allegedly told her they could not wait for it to shut down properly.

By Thursday, September 22, 2002, there had been recurrent problems with the server. On that day, principal Mills called a staff meeting. Carol Gazunis explained that the server had gone down as a result of a power surge. After the meeting, Foster returned to Mills’ office to advise her in private that she believed the server went down because Manchester and Chris Gazunis had been shutting it down improperly.

Mills asked Carol Gazunis to return to her office and then asked Foster to repeat that allegation. Gazunis became upset and responded that using the power button to shut down the server would not hurt anything. Shortly after this encounter, Gazunis came to Foster’s office. She was very angry and threatened Foster that she would have her fired for complaining to Mills about her son and would ruin Foster’s reputation by telling everyone at ⁵⁴⁶ OGAT that the network was a big mess.

According to Foster, Gazunis said, “One of us is going down, and it’s not going to be me.” The next day, Foster’s password had been changed without her knowledge, apparently by Chris Gazunis. She was later given a new password that did not allow her to access any of her applications or files. On Monday, September 30, students and staff had more log-in problems. That afternoon, Mills called Foster into her office.

According to Foster, Mills was upset and told her that Carol Gazunis had told her that Foster purposefully sabotaged the computer network. Foster denied doing so. Shortly after that conversation, Mills relieved Foster of all her computer responsibilities, instructing her to turn in her keys and report to the office to do [Xjeroxing. Foster continued in those duties for approximately six weeks.

On November 11, she was placed on administrative leave. On January 2, 2003, she was demoted[ 4 ] from SS-1 Grade 20 to a Special Education Instructor, Grade 11, at a salary of $20,000 (a salary reduction of $40,500), a position in which she escorted handicapped students to the restroom. Foster took extended sick leave, but was released for duty in June 2003. She did not receive a work assignment ⁵⁴⁷ for the start of the 2003 school year by September.

She found other employment, paying $50,000 per year.[ 5 ] Ms. Foster timely filed two grievances relating to her demotion. She also began the administrative review process in accordance with the policies and regulations of the Montgomery County Public Schools and the union contract between her employer, the Board, and the Montgomery County Council of Supporting Services Employees (MCCSSE). As explained in more detail below, the contractual grievance process involves four steps. The first three steps involve the employee filing complaints with various individuals and the fourth step consists of arbitration of the grievance.

The employee is entitled to stop the process at any point, or may proceed to subsequent steps if unsatisfied with the outcome of the previous step. In this case, the union pursued Ms. Foster’s action through step three and initiated arbitration under the fourth step at her request. Ms. Foster subsequently withdrew her request for arbitration, and, on September 23, 2003, she and her husband, David Foster, filed a civil action in the Circuit Court for Montgomery County against Petitioners. Ms. Foster alleged defamation (Count 1) against Ms. Gazunis, and wrongful demotion and termination (Count 2), and breach of contract (Count 4) against the Board.

Mr. and Mrs. Foster alleged loss of consortium (Count 3) against Ms. Gazunis and the Board. 6 ⁵⁴⁸ After discovery, Petitioners filed a motion for summary judgment on all counts. One of the contentions in their motion was that Ms. Foster had failed to exhaust the remedies provided for in the collective bargaining agreement and should therefore be precluded from bringing claims for wrongful demotion, termination and breach of contract. On October 7, 2003, the Circuit Court denied the motion for summary judgment as to the defamation count and stayed the remaining counts, pending completion of arbitration as required by the collective bargaining agreement. Ms. Foster thereafter asked the Board, in writing, to revive the arbitration proceedings for the grievance that she had previously withdrawn.

The Board responded by sending a letter to the union representative advising the representative that Ms. Foster had voluntarily requested that her grievance be withdrawn and that, based on her request, the Board canceled the arbitration. Prior to the start of trial, Respondents filed a “Motion for Consolidation,” asking the court to consolidate for trial all four counts on the ground that the Board would not agree to arbitration. Petitioners filed a motion titled “Opposition to Plaintiffs’ Motion for Consolidation/Defendants’ Motion to Lift Stay and for Summary Judgment,” requesting dismissal of the wrongful demotion, termination and breach of contract claims, on the ground that Ms. Foster had failed to exhaust the remedies provided in the collective bargaining agreement. 7 ⁵⁴⁹ The court granted Respondents’ motion and ordered consolidation of all four counts for trial. Prior to any testimony in the case, Petitioners’ counsel made an oral motion in limine to exclude the anticipated testimony of Ms. Foster pertaining to the defamation claim on the ground that the testimony was inadmissable hearsay.

The Circuit Court denied the motion. Petitioners moved for judgment on Counts 1 (Defamation) and 4 (Breach of Contract) at the close of Respondents’ case and again at the close of all the evidence. 8 The court denied the motion. The jury returned a verdict in favor of Ms. Foster on the defamation and wrongful demotion claims and in favor of Mr. and Mrs. Foster on their loss of consortium claim. 9 The jury awarded Ms. Foster $35,000 for past loss of earnings, $200,000 in non-economic damages for emotional distress, and awarded the Fosters $ 50,000 on their loss of consortium claim, bringing the total damage verdict to $285,000. The verdict sheet appeared as follows: (1) On the claim for Defamation, for whom do you find?

Plaintiff, Amelia Foster X Defendant, Carol Gazunis__ If you have found in favor of the Defendant, proceed to Question 3. If you have found in favor of the Plaintiff, proceed to Question 2. (2) Do you find that Defendant, Carol Gazunis, had actual knowledge of the falsity of the defamatory statement that she made to Janis Mills regarding Amelia Foster? Yes_ NoX ⁵⁵⁰ (3) Do you find that the Montgomery County Board of Education wrongfully demoted Amelia Foster?

Yes X No_ (4) Do you find that the Montgomery County Board of Education wrongfully constructively terminated Amelia Foster? Yes_ NoX If you have found for Plaintiff on any of Questions 1, 3, or 4, proceed to Question 5. (5) What amount of damages do you award Amelia Foster against the Montgomery County Board of Education or Carol Gazunis[?] Past Medical Expenses $0 Past Loss of Earnings $35,000 Non-Economic Damages $200,000 (Emotional Distress) (6) What amount of damages do you award to Amelia Foster and David Foster against the Montgomery County Board of Education or Carol Gazunis for Loss of Consortium? $50,000 On March 10, Petitioners filed a motion to alter or amend the verdict, to the extent that it exceeded the $100,000 statutory cap on damage claims, pursuant to Md.Code (1974, 2006 Repl.Vol.), § 5-518(b) of the Courts and Judicial Proceedings Article. Petitioners also argued, in that motion, that Ms. Gazunis was not personally liable for damages resulting from her tortious acts, because § 5-518(e) o f the Courts and Judicial Proceedings Article 10 negated her liability.

The court ⁵⁵¹ held a hearing on the motion on April 6, 2005. On April 7, 11 the court reduced the damage award to $100,000 against the Board alone, explaining that, as a matter of law, § 5-518(e) of the Courts and Judicial Proceedings Article negated Carol Gazunis’s personal liability. On April 15, 2005, the trial court entered its judgment against the Board in favor of Amelia Foster for $85,750 and in favor of Amelia and David Foster for $14,250. Respondents filed a motion to alter or amend the judgment, which the court denied.

Thereafter, they appealed to the Court of Special Appeals, arguing that the trial court had erroneously granted a JNOV 12 in favor of Carol Gazunis and that the court erred in finding that the Board was entitled to the immunity set forth in § 5—518(b), which capped the damages at $100,000. Petitioners cross-appealed, arguing that the trial court erred in permitting hearsay testimony that provided an essential element of the defamation claim and that the court erred in permitting the jury to consider the wrongful demotion claim when Ms. Foster had failed to exhaust the remedies provided in the collective bargaining agreement. The Court of Special Appeals addressed only the issue of whether Ms. Foster had exhausted her remedies under the collective bargaining agreement and concluded that even though she waived her right to arbitrate, “the wrongful demotion and breach of contract claims may be arbitrable if the Board did not waive its right to arbitrate.” The intermediate appellate court vacated the Circuit Court’s judgment and remanded the case to that court for a determination of whether the Board waived its right to arbitrate. ⁵⁵² On November 21, 2006, Petitioners filed a petition for writ of certiorari with this Court, 13 and on December 4, 2006, Respondents filed both a petition for writ of certiorari, 14 and an answer to Ms. Gazunis and the Board’s petition for writ of certiorari. On December 18, 2006, Petitioners filed an answer to the Fosters’ petition for writ of certiorari.

We granted both petitions for writ of certiorari. 15 Gazunis v. Foster, 396 Md. 524 , 914 A.2d 768 (2007). DISCUSSION Hearsay Testimony and the Claim for Defamation We note first that the issue of whether the trial court erred in permitting hearsay testimony to establish the publication element of defamation is not properly before this Court. ⁵⁵³ Petitioners did not raise the hearsay issue in their petition for ■writ of certiorari—as stated supra, they asked only that this Court address whether an employer must arbitrate an employee’s grievance after the employee has waived arbitration and the time limits have passed and also whether an employee who is subject to a collective bargaining agreement must exhaust his or her remedies under that agreement before proceeding with a lawsuit in court. Petitioners first raised the hearsay issue in their answer to Respondents’ petition for writ of certiorari. They stated: This Court should deny the petition for writ of certiorari that is based on issues not decided by the Court of Special Appeals.

Alternatively, if this Court grants certiorari, it should review all of the issues presented to the Court of Special Appeals. More specifically, through the vehicle of an answer to the Fosters’ petition for writ of certiorari, Carol Gazunis and the Board asked us to decide whether the trial court erred in permitting hearsay testimony to prove the publication element of defamation. 16 Maryland Rule 8-131(b) provides, in pertinent part: Unless otherwise provided by the order granting the writ of certiorari, in reviewing a decision rendered by the Court of Special Appeals or by a circuit court acting in an appellate capacity, the Court of Appeals ordinarily will consider only an issue that has been raised in the petition for certiorari or any cross-petition and that has been preserved for review by the Court of Appeals. See also Wynn v. State, 351 Md. 307, 320 , 718 A.2d 588, 594 (1998) (explaining that this Court generally does not address any issue that was not raised in a petition for writ of certiorari or cross-petition granted by the Court). ⁵⁵⁴ Moreover, Carol Gazunis and the Board failed to address the hearsay issue in their brief filed in this Court. Petitioners addressed only the collective bargaining issue in their brief, arguing: An employer subject to a collective bargaining agreement has no obligation to arbitrate an employee’s grievance where the employee withdrew her request for arbitration and later sought to revive her request after the time to invoke arbitration had expired.

Respondents, in their brief, addressed the collective bargaining issue and also addressed the issues originally presented in their petition for writ of certiorari. Petitioners, in their reply brief, then discussed the hearsay issue. In accordance with the decisional law of this Court, “a reply brief should ordinarily be confined to responding to the points and issues raised in the appellee’s brief.” Ritchie v. Donnelly, 324 Md. 344, 375 , 597 A.2d 432, 447 (1991). See also Strauss v. Strauss, 101 Md.App. 490 , 509 n. 4, 647 A.2d 818 , 828 n. 4 (1994) (stating that “the scope of a reply brief is limited to the points raised in appellee’s brief, which, in turn, address[es] the issues originally raised by appellant____A reply brief cannot be used as a tool to inject new arguments”); Fed. Land Bank v. Esham, 43 Md.App. 446, 459 , 406 A.2d 928, 936 (1979) (explaining that “[t]he function of a reply brief is limited.

The appellant has the opportunity and duty to use the opening salvo of his original brief to state and argue clearly each point of his appeal.... the reply brief must be limited to responding to the points and issues raised in the appellee’s brief’). Accordingly, appellate courts ordinarily do not consider issues that are raised for the first time in a party’s reply brief. See Jones v. State, 379 Md. 704, 713 , 843 A.2d 778, 783 (2004) (explaining that “the State did not raise the argument in its opening brief on appeal, subjecting it to the rule that an appellate court ordinarily will not consider an issue raised for the first time in a reply brief’). We note that, notwithstanding the general rule, appellate courts have the discretion to hear such issues. 17 ⁵⁵⁵ In this case, after Petitioners raised the hearsay issue in their reply brief, Respondents filed a motion to strike the hearsay issue from this case.

Petitioners filed an opposition to the motion. This Court deferred action on the motion pending oral argument. At oral argument, both parties addressed the procedural question of whether this Court should reach the hearsay issue but did not address the merits of the hearsay argument. As a result, if we decide the hearsay issue on the merits, we will have heard only Petitioners’ arguments on the issue.

While this Court retains the discretion to hear issues raised only in a reply brief, we see no reason to reach the merits of the hearsay issue and unnecessarily prejudice Respondents. The hearsay issue was properly raised in the Court of Special Appeals and both parties briefed the issue before that court. Because of the way the intermediate appellate court decided the case, it did not address that issue, as well as several others. We therefore remand the case to that court for consideration of the issues 18 not addressed in its ⁵⁵⁶ opinion. 19 Accordingly, we grant Respondents’ motion to strike the hearsay issue raised in this Court.

Because we are remanding the case to the Court of Special Appeals as to the defamation issue, we need not address the parties’ issues concerning the Circuit Court’s negation of Carol Gazunis’s liability 20 in accordance with Md.Code (1974, ⁵⁵⁷ 2006 Repl.Vol.), § 5-518(e) of the Courts and Judicial Proceedings Article. Similarly, we need not reach the issue of whether the Circuit Court was correct to limit the Board’s damages to $100,000, pursuant to Md.Code (1974, 2006 RepLVol.), § 5-518(b) of the Courts and Judicial Proceedings Article. 21 The need to address these issues will depend upon the intermediate appellate court’s decision as to the hearsay issue. 22 The Collective Bargaining Agreement and the Claims for Wrongful Demotion and Termination and Breach of Contract The collective bargaining agreement, in this case, begins with an informal grievance procedure and then sets forth four specific steps of that process. The agreement exists between the Montgomery County Council of Supporting Services Employees and the Board, for the benefit of its employees. Neither party disputes that Amelia Foster was covered by the ⁵⁵⁸ agreement.

The agreement defines “grievance” as “a claim by one party that the other party has violated th[e] Agreement.” The purpose of the agreement is “to secure, at the lowest possible administrative level, equitable solutions to the problems which may occur in the administration of th[e] Agreement.” 23 The agreement explains that “[a] suspension, demotion, discharge or other disciplinary action may only be taken against unit members for proper cause.” It states, thereafter, that “[n]o grievance shall be initiated more than fifteen (15) duty days after the cause has occurred or should have been discovered.” In addition, [a] grievance shall be automatically waived and shall not be subject to further discussion or appeal if the grievant does not process it within any of the stated time limits. Such time limits may only be extended by mutual agreement between the parties. The agreement then explains that “[a] covered unit member will first discuss his/her grievance with his/her immediate supervisor. Both parties will make efforts to solve the grievance at this informal level.” The agreement then outlines the four-step procedure.

Under the heading, “Step One,” it states: If the grievance cannot be solved at the informal level, the unit member then submits the grievance to his/her appropriate administrator in writing within fifteen (15) duty days after the grievance arises. If the appropriate administrator does not satisfy it within ten (10) duty days from receipt of ⁵⁵⁹ the -written grievance, the grievance may be processed to Step Two. Under the heading, “Step Two,” the agreement continues: If the grievant is not satisfied with the disposition in Step One, he/she may file his/her grievance in writing to the MCCSSE within five (5) duty days. The MCCSSE, within five (5) duty days from such filing, shall meet and counsel the grievant on the merits of the grievance and if the Union deems it to be meritorious, forward the grievance to the deputy superintendent or appropriate associate superintendent.

If the grievance is referred within the time limits, the deputy superintendent or appropriate associate superintendent shall have five (5) duty days to respond to the grievant. “Step Three,” further adds, in pertinent part: 1. If the grievant is not satisfied with the disposition in Step Two, he/she may again file his/her grievance in writing with the MCCSSE within five (5) duty days. Within five (5) duty days from such filing, the Union shall meet and counsel the grievant and if the Union deems it to be meritorious, forward the grievance to the superintendent. If the grievance is referred within the time limits, the superintendent shall have ten (10) duty days to respond to the grievant.

Of most importance to this case, “Step Four-Arbitration,” explains, in pertinent part: 1. If the grievant is not satisfied with the disposition of the grievance made by the superintendent, he/she may file it in writing with the MCCSSE within five (5) duty days for the Union’s decision on whether or not the grievance shall be submitted to arbitration. 2. Arbitration may be initiated by the grieving party by serving notice upon the other party requesting arbitration within fifteen (15) duty days----The receiving party will acknowledge his/her agreement with the submission to arbitration statement by affixing his/her signature to the submission form within five (5) duty days and returning the form to the grieving party---- ⁵⁶⁰ 3. The grieving party may submit the matter to arbitration within five (5) duty days of the return of the submission statement form.

The superintendent and the president of MCCSSE will attempt to agree upon a mutually acceptable arbitrator and obtain a commitment from said arbitrator to serve. Petitioners argue that the Board, even though it was subject to this collective bargaining agreement, was under no obligation to arbitrate Ms. Foster’s grievances for wrongful demotion, termination and breach of contract after she withdrew her initial request for arbitration and her request to revive the arbitration was not timely. They explain that, while Ms. Foster properly filed her grievance and invoked her right to arbitration under the agreement, she then voluntarily withdrew her arbitration request. Petitioners contend that, in so doing, Ms. Foster waived her right to continue with the grievance process provided by the collective bargaining agreement because the Board closed the grievance.

Petitioners note that the Circuit Court recognized that Ms. Foster had failed to exhaust her contractual remedies and therefore stayed the counts for wrongful demotion and termination and breach of contract. They contend, however, that the Circuit Court failed to realize that Ms. Foster was no longer able to arbitrate her claims under the collective bargaining agreement because she had already waived her right to continue with the contractual grievance process. Furthermore, according to Petitioners, because of the waiver, Ms. Foster could no longer proceed with arbitration under the time requirements set forth in the collective bargaining contract. They aver that the Circuit Court erred when it permitted Ms. Foster’s wrongful demotion claim to be decided by the jury, and the Court of Special Appeals erred in remanding the case to the Circuit Court on the issue of whether the Board had waived its right to arbitrate.

Petitioners rely primarily on Arroyo v. Bd. of Educ. of Howard County, 381 Md. 646, 661 , 851 A.2d 576, 585 (2004), and Jenkins v. Wm. Schluderberg-T.J. Kurdle Co., 217 Md. 556, 561-62 , 144 A.2d 88 , 91 ⁵⁶¹ (19586), for the proposition that a plaintiff must exhaust all available remedies before pursuing relief in court. Respondents counter that there exists nothing in the collective bargaining agreement that mandates that an employee avail himself or herself of the grievance procedure and furthermore that Step Four provides that arbitration is optional, not mandatory. They contend that Ms. Foster did not have to follow through with arbitration because the collective bargaining agreement states explicitly that “[i]f the grievant is not satisfied with the disposition of the grievance made by the