Goerlich v. Courtney Industries, Inc.

MOYLAN, Judge. The appellant, Russell W. Goerlich, was fired from his employment at Courtney Industries, Inc. He filed suit against the corporation and its attorney, the appellee Bernard S. Denick, alleging negligent misrepresentation and legal malpractice. That suit was dismissed by the Circuit Court for Baltimore City. Goerlich has filed this appeal.

In the early 1970’s, Goerlich was employed by Pearsall Chemical Corporation in Houston, Texas. There he met James M. Courtney. They became interested in forming an aluminum chloride business. Courtney left Pearsall Chemical in the fall of 1977 and relocated to Baltimore, where he sought to develop such a business.

Courtney contacted legal counsel, an accounting firm, banks, and others. Meanwhile, Goerlich remained in the employ of Pearsall. ⁶⁶² He did, however, make a number of trips to Baltimore regarding financing negotiations. In December, 1977, Courtney Industries was incorporated as Cortlic Chemical Corporation (a combination of the last námes of Courtney and Goerlich). The corporation had five 'shareholders, with Goerlich and Courtney each owning one-third of the stock and the remaining third divided among three other parties.

Goerlich left his employment with Pearsall shortly thereafter to manage the corporation in Baltimore. He served as plant manager of the corporation until October 22, 1982, when he was fired. Goerlich immediately filed suit against the corporation in the Circuit Court for Baltimore County seeking a declaratory judgment, specific performance, injunctive and ancillary relief, including damages. Goerlich asserted that his firing was in contravention of Article Three of the Shareholders’ Agreement, entitled “Management of Corporation,” which provided: “Courtney and Goerlich shall have complete authority to direct the normal daily operation of Corporation, including the hiring, remuneration and firing of employees, purchase of raw materials and related components, sale of finished products and production requirements.” The court ruled that the clause, which purported to give Goerlich employment for the duration of the corporation, was invalid because it was of indefinite duration.

The court further ruled that Goerlich was an at-will employee and that his discharge, therefore, was permissible. On appeal, we affirmed that ruling. Goerlich v. Cortlic Chemical Corp., et al. (No. 1226, September Term, 1983, filed June 12, 1984). Thereafter, on July 30, 1985, Goerlich again sued the corporation (whose name was now changed to Courtney Industries, Inc.) and also the appellee Bernard S. Denick, the attorney who prepared the Shareholders’ Agreement.

Count I of the complaint alleged that the Shareholders’ Agreement constituted a misrepresentation that Goerlich would be a managing employee of the corporation for the duration of its existence. Count II alleged that Denick was ⁶⁶³ guilty of legal malpractice in his drafting of the agreement. An amended complaint and a second amended complaint were later filed. The second amended complaint asserted that oral representations were made that the Shareholders’ Agreement guaranteed Goerlich employment for the life of the corporation.

It further asserted that Denick negligently failed to advise Goerlich that these oral representations were false and contrary to law and that he (Denick) represented only the interests of the corporation. Both the corporation and Denick filed motions to dismiss. Judge John N. Prevas dismissed the complaint against the corporation on the grounds of res judicata based on the prior case filed against the corporation in the Circuit Court for Baltimore County. He also dismissed the complaint against Denick, ruling that the allegations in the second amended complaint were insufficient to state a cause of action.

Goerlich only appeals the dismissal of the complaint against Denick. Denick was hired by the corporation to draft a shareholders’ agreement for the benefit of the corporation. The question becomes whether Goerlich may maintain a cause of