Polakoff v. Turner

JAMES R. EYLER, Judge. Following a trial and jury verdict for the plaintiff in this lead paint exposure case, the two issues presented on appeal and cross appeal are (1) whether the holding in Brooks v. Lewin Realty III, Inc., 378 Md. 70 , 835 A.2d 616 (2003) applies to this case and (2) whether the statutory cap on non-economic damages, Md.Code (1974, 2002 Repl Vol.), § 11-108 of the Courts and Judicial Proceedings Article, is constitutional. We shall answer both questions in the affirmative. This appeal stems from two actions, consolidated for trial, filed by Jasmine Turner, a minor child, appellee, through her mother, Crystal Whittington, in the Circuit Court for Baltimore City.

Appellee claimed that she suffered lead paint poisoning as a result of exposure to lead paint in the apartment in which she lived (the Apartment). Lawrence M. ⁶³ Polakoff (Mr. Polakoff), an appellant, owned the Apartment from 1975 until 1992, when he transferred his ownership interest to C.F.A.S. Limited Partnership (C.F.A.S.), a company in which Mr. Polakoff acts as a Limited Partner. 1 Mr. Polakoff is President of Chase Management, Inc. (Chase Management), the other appellant, the management company that manages the Apartment. On November 13, 2003, the Court of Appeals issued its opinion in Brooks , reversing prior decisions in which the Court applied the common law requirement of notice or reason to know in order to prove that a landlord was negligent in an action for lead paint poisoning. In Brooks , the Court held that a plaintiff may establish a prima facie case of negligence based upon a violation of the Baltimore City Housing Code by introducing evidence that there was flaking, loose, or peeling lead based paint in the leased premises. 378 Md. at 72 , 835 A.2d 616 .

This changed the pre-existing notice standard, pursuant to which landlords were liable in a lead paint action only if they knew or had reason to know of the existence of flaking, loose, or peeling paint and had an opportunity to correct the condition. Richwind v. Brunson, 335 Md. 661, 673-74 , 645 A.2d 1147 (1994). As they must, appellants implicitly concede that the evidence is sufficient to show the existence of deteriorated lead based paint on the premises. This would be sufficient to support liability under Brooks .

Consequently, the only liability issue on appeal is whether the holding in Brooks applies to this case. Appellee, on cross appeal, challenges the constitutionality of the statutory cap on non-economic damages. Facts Appellee claimed that she suffered lead paint poisoning from exposure to lead based paint while residing in the Apartment, located at 17 North Bentalou Street. Crystal Whittington and her mother, Lelia Whittington, lived in the ⁶⁴ Apartment from March, 1985 until August, 1994.

Appellee was born on April 3,1990, and lived there from that time until August, 1994. In 1994, appellee filed a complaint against Mr. Polokoff, asserting negligence, violation of the Maryland Consumer Protection Act, Md.Code (1990 Repl Vol.), § 13-301 et seq., of the Commercial Law Article, and strict liability. In late 1994, the latter two counts were dismissed on motion. In 1998, shortly before the scheduled trial date, appellee sought to add two defendants, C.F.A.S. and Chase Management.

The court did not permit the amendment and, subsequently, entered summary judgment in favor of Mr. Polakoff. On appeal, this Court, in an unreported opinion, Turner v. Polakoff, No. 1247 Sept. Term 1998 (filed March 15, 1999), reversed the entry of summary judgment. In 1998, appellee filed a separate action, containing multiple counts, against C.F.A.S. and Chase Management. The two actions were consolidated in 1999 and tried in October, 2002.

At or prior to trial, all claims, with the exception of the negligence claim, were dismissed, either voluntarily or by court order. The only claim submitted to the jury was appellee’s negligence claim against appellants and C.F.A.S. The jury returned a verdict in the amount of $500,000 against appellants and found in favor of C.F.A.S. Appellants filed a motion for judgment notwithstanding the verdict and, in the alternative, to apply the cap on non-economic damages. The court denied the motion for judgment notwithstanding the verdict but, by order entered on January 23, 2003, applied the cap and reduced the judgment to $350,000. A timely appeal and cross-appeal followed.

The Issues Initially, appellants contended that the court erred in denying their motion for judgment notwithstanding the verdict on the ground that there was no evidence that appellants knew or had reason to know of the existence of deteriorated paint in the Apartment. Following the decision in Brooks , we provid ⁶⁵ ed the parties an opportunity to brief the effect of that decision. In a memorandum filed December 8, 2003, appellants conceded that the appeal “fails” 2 because their sole issue was lack of notice, but they contend that the Brooks standard should apply only prospectively and not retroactively. Appellants do not define how they are using those terms except to make it clear that Brooks should not apply to this case.

Presumably, appellants are contending that Brooks should apply only to causes of action that accrue after the filing of the Brooks opinion and issuance of the mandate or to an even later point in time. Prior to oral argument, the Housing Authority of Baltimore City, the Maryland Multi-Housing Association, Inc., the National Association of Industrial and Office Properties, the Property Owners Association of Greater Baltimore, Inc., 3 and The Mayor and City Council of Baltimore 4 each filed an amicus brief in support of appellants’ position. Appellee challenges the constitutionality of the statutory cap on damages. Prospective versus Retroactive The terms prospective and retroactive are not always used in the same sense.

In the context of deciding whether the ⁶⁶ holding in a reported appellate decision applies to a particular factual situation, retroactive effect may mean that it applies to the facts in the case that produced the holding and to all pending cases. Generally, the use of the term retroactive does not mean that the holding applies to matters that were finally adjudicated or settled prior to the holding. Confusion may arise because the term prospective is sometimes used in the same manner as retroactive, i.e., to indicate that the new holding applies to the case which produced the holding and to all pending cases in which the issue has been preserved for appellate review. Even more confusing is that the term prospective is also used to indicate that the new holding applies only to the case that produced it and to certain pending cases, or to causes of action that accrue after the date of the new holding, or to cases initiated after the date of the new holding, or to certain events that occur after the date of the new holding, or some combination of the above.

With that background, we shall attempt to apply the law to this case. “[T]he question of whether a particular judicial decision should be applied prospectively or retroactively, depends in the first instance on whether or not the decision overrules prior law and declares a new principle of law.” Houghton v. County Comm’rs of Kent County, 307 Md. 216, 220 , 513 A.2d 291 (1986). Decisions which do not declare new law will be applied retroactively. Id.; Potts v. State, 300 Md. 567, 577 , 479 A.2d 1335 (1984). This means that when a judicial decision applies a rule of law that existed both before and after that decision, but applies it to a new factual situation in that particular case, the decision applies to the facts that produced the decision and to all pending cases.

American Trucking Assoc, v. Goldstein, 312 Md. 583, 591 , 541 A.2d 955 (1988). When, however, a court overrules a prior interpretation of a constitutional or statutory provision and renders a new interpretation, “the question arises as to whether the new ruling is to operate retroactively or prospectively only.” American Trucking Assoc., 312 Md. at 591 , 541 A.2d 955 . In that situation, the new holding generally applies to the facts ⁶⁷ that produced the holding and to all pending cases in which the relevant issue has been preserved for appellate review. Id. at 592 , 541 A.2d 955 .

Finally, when the Court of Appeals changes the common law of Maryland, exercising its authority under article 5 of the Maryland Declaration of Rights, the holding, while applying in the case which produced the holding, generally applies only to causes of action that accrue after the date of the new decision. Julian v. Christopher, 820 Md. 1 , 10-11, 575 A.2d 735 (1990); American Trucking Assoc., 312 Md. at 592, n. 7 , 541 A.2d 955 . In the case before us, the issue of prospective versus retroactive applicability arises because Brooks overruled prior decisions. The Court did not expressly address the prospective/retroactive issue in Brooks .

On occasion, however, the Court has done so. In State v. Hicks, 285 Md. 310 , 403 A.2d 356 (1979), the Court overruled a prior interpretation of the rule requiring a prompt trial of criminal cases and held that dismissal was mandatory when the rule was violated. The Court also held that the decision applied to all future prosecutions and to pending cases that had reached a certain procedural stage. The Court noted that it was not required to apply it to all pending cases because the change in law did not affect the integrity of the fact-finding process, did not render a trial constitutionally impermissible, and did not render a certain type of punishment impermissible.

Hicks, 285 Md. at 337 , 403 A.2d 356 . Observing that the rule in question was a prophylactic measure, and that applying the new interpretation to all pending cases would have a substantial impact on the administration of justice, the Court declined to give the new ruling “retroactive effect.” Id. at 338 , 403