Moore v. Norouzi

BELL, Chief Judge. In these consolidated appeals, we have been asked to address whether: by notice to a third party claims administrator acting on behalf of a local government, the petitioners, Robert Moore (“Moore”) and Stuart C. Mendelson (“Mendelson”) 1 actually complied with the notice requirement of the Local Government Tort Claims Act (“LGTCA”), Md.Code (1974, 1998 Repl.Vol., 2000 Cum.Supp.) § 5-304 of the Courts and Judicial Proceedings Article; 2 such notice constitutes substantial compliance with the notice requirement; 3 the court, because good cause was shown and the local government defendant were not prejudiced, could entertain the action in any event. 4 The Circuit Court for Montgomery County resolved each of these issues against the petitioners and entered judg ¹⁵⁹ ment in favor of Montgomery County, one of the respondents. We shall reverse. I. In both of these cases, the petitioners were injured in an accident, in which an employee of Montgomery County was involved and, according to the petitioners, that employee’s negligence caused.

In both, Trigon Administrators, Inc. (hereinafter “Trigon”) provided claims administration services for the Montgomery County Self-Insurance Program, which provides coverage for “Workers’ Compensation, Commercial General Liability, including Public Officials and Public Protective Liability, Business Automobile, Automobile Physical Damage, Real and Personal Property and miscellaneous property.” In neither did the petitioners send any notice to the County Executive and there is nothing in the record to indicate that the County Executive was provided with any written notification from any other source. Trigon acts pursuant to a contract solicited by the Montgomery County Government, Department of Finance, Division of Risk Management. 5 In furtherance of the County’s goals of, among others, “bringing the claims management/risk management information system ... in-house to the Division of Risk Management,” thus providing a fully automated system that is integrated with the County’s existing accounting and other information systems and can be used by the third party claims administrator to enter claims data, print checks and run experience reports, Trigon is charged, under that contract, with achieving currency between the data it uses or maintains and the Division of Risk Management’s information system. It is permitted to do so in either of two ways: using on-line access to the County risk management information ¹⁶⁰ system or providing on-line access to Risk Management to its risk management information system. The provisions of Trigon’s contract with the County with regard to claims handling in general are extensive and comprehensive.

In addition to other provisions requiring periodic reviews, evaluations and reports, some of the contents of which are also prescribed, the contract requires the claims administrator, at a minimum, to: “a. Date-stamp all correspondence on the day it is received. “b. Create a claim file folder, with a file number and a record of the name of the adjuster assigned to handle the claim.... “c. Set reserve amounts for each claim. “d.

Enter the claim information on the computer database within five days of receipt of the claim. All information captured on claim report forms submitted by participating agencies must be available on the database.... “e. Contact the claimant within one working day of notification of bodily injury claims ... and within three working days for property claims. Contact must be made in person or by telephone....

Personal contact will be made on any claim involving ... when the total reserve is over $10,000.00, “f. Maintain an orderly claim file. Correspondence must be placed in the file in chronological order on a brad or another means of affixing documents to the file.” ❖ * * * * * “j. Each file will contain a form developed by the contractor that will clearly state the results of the investigation of the claim and an explanation of the decision of liability/com-pensability/denial. “1.

When requested or required, recorded statements will be transcribed. ¹⁶¹ “m. Each foldered claim file will be reviewed at least every 45 days. Documentation of the review is preferred to be made on the computerized claims data management system. Documentation to be recorded will include appropriate comments on information received, file direction by the adjusters, and the disposition plans. “o.

A supervisor or manager will review each open fold-ered claim at least quarterly. Documentation of the review is preferred to be made on the computerized claims data management system. Documentation to be recorded will include recommendations of future handling of the file. “r. A typed captioned report will be completed on each file with combined reserves of $25,000.00 or more.

The captioned report must be completed and submitted to the Division of Risk Management within 60 days of the posting of the reserves. “s. Final reserves must be computed and posted on the file within 180 days of the date the claim is received.... ” The contract also prescribes the duties of the claims administrator with respect to specific claims. As to workers’ compensation claims, it is required to “perform all duties required of the employer under the Maryland Workers’ Compensation Act.” Its responsibilities with regard to Commercial General Liability are to “record, investigate, tabulate, adjust, appraise, and, where appropriate, make payments for all claims which require defense or indemnification under the Montgomery County Self-Insurance Program.” In addition, it must: “Cooperate with and assist the Office of the County Attorney, or other designated counsel, in the defense of claims and in subrogation recovery. Such assistance will include, but not be limited to, making a full investigation, including contacting the claimant, taking statements from the claimant, identifying and taking statements from all witnesses, obtaining all bills, taking relevant photographs, completing interrogatories, taking recorded statements, providing for ¹⁶² Independent Medical Examinations, preparing status updates, and attending and/or assisting at trials and/or hearings.

Once a lawsuit is filed and the claim is transferred to the Office of the County Attorney, or other designated counsel, the above assistance will continue.” Providing notice of claims and records of claims to excess insurance carriers and negotiating settlements, as well as providing immediate notification to the Chief, Division of Risk Management and the County Attorney in all cases in which catastrophic injuries or damages are involved are other responsibilities. Although able to settle claims for $2,500.00 or less, when the contemplated settlement is more than that amount, review with the County Attorney’s Office is required, accompanied by “a detailed case synopsis, an itemization of damages, and settlement recommendations.” The County places requirements on Trigoris service availability. It must be open for business on the days and during the hours of operation of the County offices. Moreover, telephone coverage must be continuous, around the clock, to ensure receipt of incident reports and messages.

We shall set out the facts and procedural history of each case separately. a. Robert Moore v. Mostaba Norouzi, et. al. On October 14, 1995, the petitioner Robert Moore was a passenger on a Montgomery County Ride-On Bus being operated by the respondent Mostaba Norouzi (“Norouzi”). Moore sustained serious injuries to his back, pelvis, hip, and left knee when Norouzi lost control of the bus and collided with another motor vehicle. Within two or three days after the accident, Trigon contacted Moore regarding the accident.

He discussed the accident with the Trigon representative. Thereafter, on November 1, 1995, Moore’s attorney wrote Trigon and confirmed what Moore had already reported and that he represented Moore in the matter. Acknowledging that letter, significantly, Trigon indicated that it “is the third party administrator for Mont ¹⁶³ gomery County, and is currently investigating the facts surrounding [the accident].” To permit its proper investigation, it requested “being allowed to take a statement from [Moore], as well as receipt of all applicable medicals and lost wage information.” A month later, by letter from its Senior Claims Representative, Trigon again represented itself “as the claims administrator for Montgomery County” and sought information, documentation and authorizations necessary “[i]n order to progress with a thorough investigation.” When, after more than two years, negotiations with Trigon were fruitless, Moore filed suit in the Circuit Court for Montgomery County, naming Norouzi and Montgomery County as defendants. The suit was dismissed by the court, on motion of the respondents. 6 The court ruled: “Following the decision by the Court of Appeals in Williams, 7 defendant has renewed its motion to dismiss, essentially putting before the Court the fact that the law remains clear that notice must be followed pursuant to the local government tort claims act, and that notice was not followed under the facts and circumstances of this case. “I agree that it does appear that in the Williams case, the footnotes, the language that is being suggested by the Court of Appeals that my earlier decision should stand, but given the posture of the case law as set forth in Williams there ¹⁶⁴ was the notice requirements of the local government tort claims act that was not met in this case.” Moore noted an appeal to the Court of Special Appeals; however, we granted certiorari on our own motion before the intermediate appellate court decided the case.

Moore v. No-rouzi, 362 Md. 625 , 766 A.2d 149 (2001). b. Stuart C. Mendelson, et. ux. v. Phillip George Brown, et. al. On April 18, 1996, the automobile driven by the petitioner Stuart C. Mendelson, while at a complete stop, in preparation to making a right turn, was struck in the rear by a county-owned police vehicle driven by the respondent George Phillip Brown, a Montgomery County Police Officer. At the time of the accident, Brown was acting within the scope of his employment. As a result of the collision, Mendelson sustained injuries.

On the next day, respondent, Mrs. Mendelson, reported the accident, by telephone, to K. Williams of the Montgomery County Division of Risk Management. The Division of Risk Management is a part of the County’s Department of Finance, a department in the executive branch of county government. Ms. Williams completed a Telephone Claim Report, listing Mendelson as the injured party and including the Montgomery County Police Accident Report number, the time and place of the accident, and a description of how the accident occurred. The Telephone Claim Report subsequently was transmitted to L. Bales, the Claims Manager in the County’s Office of Risk Management, who forwarded it to Trigon, the claims administrator for Montgomery County. 8 On April 26, 1996, eight days after the accident, Mrs. Mendelson telephoned Trigon and informed them of the damage to their vehicle.

Trigon advised her to obtain two esti ¹⁶⁵ mates of the damages. On the same day, a Senior Claims Representative at Trigon, wrote to Mr. Mendelson, identifying Trigon “as the claims administrator” for the Montgomery County Police and advising that, “[w]e have received formal notification of this incident [the accident of April 18, 1996].” Thereafter, the Mendelsons informed Trigon that they were represented by counsel. As a result, Trigon sent a letter to Mendelson’s attorney, in which it acknowledged his representation with respect to the accident. In addition, after informing him of its status as claims administrator for the Montgomery County Government, it advised that the claim was under investigation and requested that he provide any additional information which might aid in the investigation.

The petitioners’ attorney maintained consistent contact with Trigon and kept Trigon informed of the petitioners’ medical treatment. On April 16, 1999, the Mendelsons filed suit against the County and Brown in the Circuit Court for Montgomery County. The respondents filed a Motion to Dismiss pursuant to Maryland Rule 2-322(b), arguing as they did in the Moore case, that the petitioners failed to comply with the LGTCA’s notice requirements. The trial court granted the motion.

Although finding that the County was not prejudiced by the failure to give the requisite notice of claim to the County Executive, it concluded that the Mendelsons failed to demonstrate sufficient good cause to permit the court to allow the suit to proceed. The petitioners noted an appeal to the Court of Special Appeals, but we granted certiorari on our own motion while the case was pending in that court. Mendelson v. Brown, 362 Md. 624 , 766 A.2d 147 (2001).

II

The purpose of the LGTCA is to provide a remedy for those injured by local government officers and employees acting without malice and in the scope of employment, while ensuring that the financial burden of compensation is carried by the local government ultimately responsible for the public ¹⁶⁶ employee’s actions. Ashton v. Brown, 339 Md. 70, 107-08 , 660 A.2d 447, 465-66 (1995). Thus, the LGTCA requires Maryland counties and other entities defined therein as “local governments,” § 5-301(d), 9 to pay, up to certain limits, judgments for compensatory damages rendered against their employees as a result of tortious acts committed in the scope of employment. Williams v. Maynard, 359 Md. 379, 380-81 , 754 ¹⁶⁷ A.2d 379, 380 (2000).

See § 5-303(b). 10 The LGTCA generally requires that plaintiffs give local government defendants notice of claims within 180 days of the injury, § 5-304(a), 11 and that such notice be given to designated government officials. § 5-304(b)(l). 12 We have explained the purpose of the notice requirement, “to protect the municipalities and counties of the State from meretricious claimants and exaggerated claims by providing a mechanism whereby the municipality or county would be apprised of its possible ¹⁶⁸ liability at a time when it could conduct its own investigation, i.e., while the evidence was still fresh and the recollection of the witnesses was undiminished by time, ‘sufficient to ascertain the character and extent of the injury and its responsibility in connection with it.” Williams v. Maynard, supra, 359 Md. at 389-90 , 754 A.2d at 385 (internal citations omitted) (quoting Bartens v. City of Baltimore, 293 Md. 620, 626 , 446 A.2d 1136, 1138-39 (1982)). See Jackson v. Board of County Commissioners, 233 Md. 164, 167 , 195 A.2d 693, 695 (1963). In light of this purpose, this Court has recognized that substantial compliance with the statutory requirements may nevertheless satisfy the statute where the purpose of the notice requirement is fulfilled. See Williams v. Maynard, 359 Md. at 390 , 754 A.2d at 385 ; Grubbs v. Prince George’s County, 267 Md. 318, 325 , 297 A.2d 754, 758 , (1972); Jackson v. Board of County Commissioners, 233 Md. at 167-68 , 195 A.2d at 695 ; But see Loewinger v. Prince George’s County, 266 Md. 316 , 292 A.2d 67 (1972). 13 The LGTCA includes an exception to the notice requirement also.

Section 5-304(c) provides that “unless the defendant can affirmatively show that its defense has been prejudiced by lack of required notice, upon motion and for good cause shown the court may entertain the suit even though the required notice was not given.” The question of whether there is good cause to waive the notice requirement is within the discretion of the trial court. Heron v. Strader, 361 Md. 258, 270 , 761 A.2d 56, 62 (2000); Madore v. Baltimore County, 34 Md.App. 340, 344 , 367 A.2d 54, 57 (1976); Downey v. Collins, 866 F.Supp. 887 , 889 n. 7 (D.Md.1994). The trial court’s findings will not be disturbed, therefore, absent a showing of an abuse of discretion. Heron, 361 Md. at 271 , 761 A.2d at 63 ; Madore, 34 Md.App. at 344 , 367 A.2d at 56-57 ; ¹⁶⁹ Westfarm Assocs. v. Washington Suburban Sanitary Comm’n, 66 F.3d 669 , 676 (4th Cir.1995).

The test for whether good cause exists to permit waiver is that of ordinary prudence, that is, “whether the claimant prosecuted his claim with that degree of diligence that an ordinarily prudent person would have exercised under the same or similar circumstances.” Heron, 361 Md. at 271 , 761 A.2d at 63 (quoting Westfarm Assocs., 66 F.3d at 676-77); see also Madore, 34 Md.App. at 345 , 367 A.2d at 57 .

III

The petitioners present several arguments in support of their contention that the dismissal of their cases was error. First, they assert that they complied with the notice requirement, having given notice, within the time prescribed by the LGTCA and as required, to Trigon, a “corporate authority” within the meaning of § 5-304(b)(l). 14 Second, they argue that Trigon is an agent of the County Council, corporate authority, or the County Executive and, therefore, that notice to Trigon is deemed notice to the principal under longstanding agency principles. The Mendelsons maintain that they substantially complied with the notice provisions of the LGTCA, having provided the agency charged with handling negligence claims against the County, the Division of Risk Management, all of the information required by § 5-304(b)(3) and in the time required by § 5-304(a). The petitioners finally argue that, even if they did not give the requisite notice, their correspondence and dealings with Trigon, and reliance thereon, established good cause for their failure to file the required ¹⁷⁰ notice; thus, the requirement should have been waived pursuant to § 5-304(c).

The respondents do not agree. Pointing to the plain language and legislative history of the LGTCA and the structure of § 5 — 304(b), the respondents argue that the provision for notice to “corporate authorities” is only applicable to entities that are not expressly referenced in the balance of § 5 — 304(b). They conclude, therefore, that § 5-304(b) requires that notice to Montgomery County must be served on the County Executive. Nor do the respondents believe that the petitioners substantially complied with the notice provisions of the LGTCA.

They submit that notice to Trigon, because it is not a part of the County and, in any event, is not the designated official to whom notice is required to be given, simply is not sufficient. As the respondents read Jackson, Grubbs and Loewinger, substituted service on an agent of the local government will not do; although deviation from the method of providing the notice may be overlooked, the notice- nevertheless must be given to the official designated in the statute. In response to the petitioners’ argument that good cause exists to permit waiver of the required notice, submitting that an ordinarily prudent claimant would have consulted the statute and complied with its plain language, the respondents argue that the failure of the petitioners to consult the statute or to make themselves aware of the formal statutory requirements does not establish good cause for failing to comply with the statute. They further assert that an ordinarily prudent claimant would not have relied on his correspondence and dealings with the county’s third party claims administrator to determine whether he or she had complied with the statutory requirements.

IV

Although extremely interesting and certainly presented on this record, we will not address the petitioners’ arguments based on the statutory construction of § 5-304(b) and, ¹⁷¹ thus, the meaning of “corporate authorities” or agency. Whatever we might decide with respect to either issue, we believe that reversal is mandated because the petitioners substantially complied with the notice requirements and, in any event, good cause exists to excuse the failure to give the notice. Accordingly, we shall assume, but not decide, that Trigon does not fall within the ambit of “corporate authorities” 15 and that agency principles do not apply. As we have seen, this Court has held that strict compliance with the notice provisions of the LGTCA is not always required; substantial compliance may suffice.

That is the case when the purpose of the LGTCA has been achieved, even though not all of the details prescribed have been complied with. Jackson, 233 Md. at 168 , 195 A.2d at 695 . Thus, substantial compliance requires more than a mere lack of prejudice to the government entity. Johnson v. Maryland State Police, 331 Md. 285, 292 , 628 A.2d 162, 165 (1993).

There must be some effort to provide the requisite notice and, in fact, it must be provided, albeit not in strict compliance with the statutory provision. Loewinger, 266 Md. at 318 , 292 A.2d at 68 ; Williams v. Montgomery County, 123 Md.App. 119 , ¹⁷² 131, 716 A.2d 1100, 1106 (1998), affd, sub nom., Williams v. Maynard, 359 Md. 379, 754 A.2d 379 (2000). See Cunning-hame v. Cunninghame, 364 Md. 266, 286 , 772 A.2d 1188, 1200 (2001) (“[A] claimant is not in substantial compliance with section 8-104 and Rule 6-413 when the claimant presents a claim to a person who has not been appointed the personal representative”); Blundon v. Taylor, 364 Md. 1, 22 , 770 A.2d 658, 670 (2001) (substantial compliance has no application to an outright failure to comply); Simpson v. Moore, 323 Md. 215, 228 , 592 A.2d 1090, 1096 (1991) (same). As we said in Condon v. State of Maryland-University of Maryland, 332 Md. 481, 496 , 632 A.2d 753, 755 (1993), (quoting Conaway v. State, 90 Md.App. 234, 246 , 600 A.2d 1133, 1138 (1992)), substantial compliance is “such communication that provides the State ‘requisite and timely notice of facts and circumstances giving rise to the claim.’ ” In Jackson , the issue was whether notice timely given, verbally to an assistant county attorney and by ordinary mail, to the county commissioners, the county officials designated to receive the notice, but not in the manner the statute specified, i.e., by delivery in person or by certified mail, was sufficient compliance with the notice requirements. 233 Md. at 166-67 , 195 A.2d at 694-695 .

Rejecting the County’s argument that the notice was deficient in two critical respects, it provided no notice of the plaintiffs claim, only of a claim for property damage and it was not delivered as the statute prescribed, either in person or by registered mail, id. at 167 , 195 A.2d at 695 , this Court opined: “The purpose of the statute clearly would seem to be to have the claimant furnish the municipal body with sufficient information to permit it to make an investigation in due time, sufficient to ascertain the character and extent of the injury and its responsibility in connection with it. The Legislature expressly provided that there be given the municipality written notice of ‘the time, place and cause’ of the alleged injury. The written notice which the County received in this case said there was a claim for damages against the County by Phyllis and William Jackson and ¹⁷³ their insurance carrier by reason of a collision with ‘a County Roads truck operated by Joseph Frank Havranek’ on January 18, 1962, at Solley Road and Powhatan Beach Road. This would seem to be literal compliance with the statute’s requirement of advice as to ‘the time, place and cause of the alleged damage’ and certainly, we think, there was substantial gratification of the purpose of the statute when the appellant, Phyllis Jackson, put the County on notice that she had a claim for damages suffered at a specified time and place and from a stated cause.

Under the great weight of authority, substantial compliance is enough. ... “It is conceded that the appellant did not either deliver the notice in person or cause it to be delivered by registered mail, but it is also a stipulated fact that the notice, which we hold met the statutory standards, was actually received by the County in the ordinary mail within the time set by the Code provision. Statutes of this type are part of the law of many States and the majority of the cases recognize that the purpose of their specifics as to delivery is to make sure that notice actually is received within a short enough time after the injury occurs to give the municipality an opportunity to investigate while the matter is fresh. If the purpose of the statutes is fulfilled, the manner of the accomplishment of the fulfillment has not generally been tested too technically. ... In such cases substantial compliance generally is held to be enough.” 233 Md. at 167-68 , 195 A.2d at 695 .

Whether there was substantial compliance with the notice requirements was again at issue in Grubbs . There, the notice, being required to be presented within one hundred and eighty days, was sent, by registered mail, on the last day and received by the proper recipients on the next day. 267 Md. at 319-320 , 297 A.2d at 755 . Prince George’s County argued that the notice was untimely as it was not received within the notice period. Id. at 320 , 297 A.2d at 755 .

The Court held that there was substantial compliance. Acknowledging that a notice requirement generally imports receipt, we stated that a ¹⁷⁴ different construction may result where the statute provides for notice by registered mail. Id. at 323 , 297 A.2d at 757 . The Court concluded, “when the Legislature provided that written notice of a claim ... ‘shall be presented either in person or by registered mail’ (emphasis added), it settled upon two alternative methods of giving notice: personal delivery of the written notice on or before the one-hundred-eightieth day or the mailing of written notice by registered mail on or before the one-hundred-eightieth day without regard, in the latter situation, to whether receipt occurs before or after the expiration of one hundred eighty days following injury.” Id. at 325 , 297 A.2d at 758 .

We reached a different result in Loewinger. There, the plaintiff was injured while undergoing tests at a hospital operated by Prince George’s County. “Written reports and records were made regarding the incident by various agents, servants and employees of the County employed at the hospital, including the hospital administrator, from their own investigation and the complaints of Sybel Loewinger,” 266 Md. at 317 , 292 A.2d at 68 , and the plaintiff gave notice to an insurer who acknowledged to the plaintiffs attorney that it insured the County and also investigated the claim. Id. We held that was insufficient: “This is not to say that any information at all, conveyed to anyone connected with the County, is sufficient.

There must be substantial compliance in order to give the statute effect. Lacking here was any direct notice whatever to the County Commissioners or Council. That the hospital authorities knew about an accident and the liability carrier investigated the injury and received a communication from plaintiffs attorney informing it of his representation, is insufficient compliance with the statute.” Id. at 318 , 292 A.2d at 68 . See to like effect, Williams v. Montgomery County, in which, relying on Loewinger, the Court of Special Appeals rejected a substantial compliance argument where the notice was given to the claims administra ¹⁷⁵ tor for Montgomery County. 123 Md.App. at 130-31 , 716 A.2d at 1105 .

As indicated already, the purpose of the notice requirement under the LGTCA is to ensure that the local government is made aware of its possible liability at a time when it is able to conduct its own investigation and ascertain, for itself, from evidence and recollection that are fresh and undiminished by time, the character and extent of the injury and its responsibility for it. That purpose was fulfilled in both these cases by providing notice to Trigon and cooperating with it as it investigated the circumstances of each case on behalf, and in the interest, of the County. Montgomery County has established an elaborate claims administration system for the County. Rather than in house, however, it is managed by a third party claims administrator, Trigon, under a contract solicited, and presumably executed, by the Montgomery County Government, Department of Finance, Division of Risk Management.

The Department of Finance is a department in the executive branch of County government, Montgomery County Charter, Article 2, § 214, and Risk Management, a division within that department. Thus, both are under the County Executive. Under its contract, Trigon has responsibilities for achieving and maintaining the currency of the data it “uses and/or maintains” and the data in the Division of Risk Management’s information system, in furtherance of the County’s goal of having a fully automated and integrated risk management information system in house in the Division of Risk Management. This task is to be accomplished either by Trigon’s accessing the County’s risk management information system or providing on-line access to the Division of Risk Management to its system.

If the former, Trigon is “responsible for maintaining the Risk Management Information System [RMIS] data, using the RMIS application, through direct online access to the County.” If the latter, its “system must be available to the County for real time file access” using the ¹⁷⁶ County’s equipment and it must train the County personnel in operating and accessing the system. Trigon’s responsibilities under its contract with the County are extensively reviewed and often in detail. It must create a file folder for each claim, date-stamp correspondence on the day received, maintain an orderly file folder, with direction as to what that means. More significantly, Trigon is contractually required to provide “continual telephone coverage, (24-hours-a-day, to include weekends and