Rochkind v. Finch Ex Rel. Dodd

MATRICCIANI, J. Appellants Stanley Rochkind, J.A.M. # 18 Corporation, and Dear Management & Construction Co., Inc. (collectively “appellants”), appeal the jury verdict in the Circuit Court for Baltimore City in favor of appellee Danielle Finch, next friend of Tyaih Dodd, a minor (collectively “appellee”). Appellants ¹⁹⁸ present twelve issues for our consideration, which we have rephrased as such: I. Whether appellants should be granted a new trial because the court admitted into evidence a Consent Order which contained a list of over 700 properties and 86 corporations which were not parties to the instant case.

II

Whether the court committed reversible error by refusing to include the owner/operator issue on the multiple-question verdict sheet.

III

Whether the court committed reversible error by denying appellants’ Rule 2-502 motion which sought dismissal of appellee’s pierce-the-corporate-veil claim.

IV

Whether the court committed reversible error when it permitted appellee to amend her complaint on the day of trial. V. Whether the court committed reversible error by denying appellants’ motions for judgment and judgment notwithstanding the verdict (“JNOV”) because Stanley Rochkind was not the owner of the property under Maryland corporate law or under the Baltimore City Housing Code (“the Code”).

VI

Whether the court committed reversible error by denying appellants’ motions for judgment and JNOV because Rochkind was not the operator of the property under the Code.

VII

Whether the court committed reversible error by denying appellants’ motion to strike appellee’s experts because the experts rendered no substantive opinion prior to trial.

VIII

Whether the court committed reversible error by refusing to grant appellants a new trial because of racially-charged comments by appellee’s counsel.

IX

Whether the circuit court committed reversible error by refusing to give a requested supervening cause instruction. X. Whether the circuit court lacked authority to issue the November 10, 2008 order granting appellee’s motion to ¹⁹⁹ strike appellant’s experts in light of the fact that it had denied the motion during the September 9, 2008 hearing.

XI

Whether the circuit court committed reversible error by not permitting Charles Runkles to testify during appellants’ case-in-chief.

XII

Whether the court committed reversible error by denying appellants’ motion for judgment and motion for JNOV because appellee did not present any evidence that the flaking paint was lead-based paint. We shall resolve the first and second issues in appellants’ favor and we shall reverse the circuit court’s ruling and remand for a new trial. Accordingly, we need not reach the remaining issues. FACTS Appellee Danielle Finch, is the mother of Tyaih Dodd, a minor.

In July of 1986, Mary Johnson moved into a property at 2212 East Lanvale Street (“2212 East Lanvale”) in Baltimore City with her four children, including Danielle Finch. 1 Johnson’s landlord was appellant Dear Management & Construction Company, Inc. (“Dear Management”), and appellant J.A.M. # 18 Corporation (“JAM 18”), which had legal title to 2212 East Lanvale during the time that appellee occupied the premises, and of which appellant Stanley Rochkind was the sole shareholder. At the time she moved into the row house, Johnson noticed areas of peeling paint on the inside and outside of the house. On May 31, 2000, Dodd was born. At the time, Finch was still living at 2212 East Lanvale, and after Dodd was bom they occupied the back bedroom on the second floor.

The windows in this bedroom had chipping, peeling, and flaking paint on them. On November 15, 2002, the Baltimore City Health Department issued an emergency violation notice and an order to remove lead nuisance after an inspection at 2212 East ²⁰⁰ Lanvale revealed that the house contained lead-based paint. On August 5, 2002, Dodd was tested for lead poisoning and the results showed that the child had lead exposure. Appellee, as well as Johnson, moved out of the house in August 2003.

On July 22, 2004, appellee filed a complaint against appellants in the Circuit Court for Baltimore City, alleging that negligence and unfair trade practices 2 had resulted in Dodd’s exposure to lead paint at 2212 East Lanvale and requesting a jury trial. On March 14, 2008, before trial commenced, appellants filed a motion under Maryland Rule 2-502 requesting that the court dismiss appellee’s claims based upon her pierce-the-corporate-veil theory. On March 17, 2008, appellee filed an amendment by interlineation to her complaint in which she indicated that she would be pursuing the theories of “piercing the corporate veil and/or individual liability.” On March 26, 2008, appellants filed their motion to strike the amendment. Trial commenced on March 31, 2008.

On that date, the court denied appellants’ motion to strike and permitted the case to proceed with the amended complaint. 3 The court also denied appellants’ Rule 2-502 motion, finding that there was a sufficient dispute as to “whether Rochkind controls the whole or part” to put that question before the jury. The court also denied appellee’s request that it strike appellants’ expert witnesses. The court admitted into evidence, over objection of appellants’ counsel, a Consent Order 4 among 86 corporations, in- ²⁰¹ eluding Dear Management, and the Maryland Department of the Environment, under which the corporations agreed to meet certain deadlines with respect to inspecting and/or abating lead from over 700 properties. 2212 East Lanvale was among the properties listed in the Consent Order. Rochkind signed it as guarantor in the event that the principal parties to the document failed to fulfill their financial obligations.

The Consent Order also imposed a penalty of $90,000 for prior non-compliance with the lead-risk reduction standards. On April 3, 2008, appellants moved for judgment at the close of appellee’s case and the court denied this motion. On April 7, 2008, appellants moved for judgment at the close of the entire case and the court denied this motion. On April 8, 2008, the jury returned a verdict in favor of appellee in the amount of $1,750,000, which the court later reduced to an award of $590,000 pursuant to § 11-108 of the Courts and Judicial Proceedings Article.

On April 16, 2008, appellants filed a motion for JNOV and a motion for a new trial, to which appellee filed an opposition. Appellants then filed a reply in support of the motion for JNOV and three supplements to that motion, to which appel-lee responded by filing a motion to strike their second and third supplements. On September 9, 2008, the court heard argument on the post-trial motions and denied appellee’s motion to strike and also denied appellants’ motion for JNOV and motion for a new trial. Appellants timely filed their appeal to this Court on September 19, 2008.

The circuit court issued a written order on November 10, 2008, in which it granted appellee’s motion to strike the second and third supplements. Additional facts will be included in our discussion of the issues. DISCUSSION L Appellants contend that they should be granted a new trial because the trial court admitted into evidence the Consent ²⁰² Order, discussed above. Appellants argue that the court allowed appellee to use the Consent Order improperly by insinuating that Rochkind was a party to that order and by misleading the jury into believing that appellants were the subject of an investigation by Baltimore City authorities.

Appellants further contend that the Consent Order was not relevant to appellee’s negligence case against appellants and that the evidence should have been excluded at trial because it was not produced by appellee during discovery, and it was not identified as a document that she would introduce at trial. Appellee contends that the trial court did not err by admitting the Consent Order into evidence, and argues that appellants erroneously equate the admission of the Consent Order with the admission of Baltimore City Health Department lead violation notices. Appellee argues that the Consent Order was relevant because it specifically lists JAM 18 and Dear Management as “owner” and “property manager” respectively, and because Rochkind signed a personal guaranty as part of the Consent Order. This, appellee argues, showed that Rochkind was “involved with and controlled the subject premises.” Therefore, appellee contends, the probative value of the Consent Order substantially outweighed any prejudicial effect on appellants.

The Court of Appeals stated the standard of review associated with a trial court’s determination as to relevance in another recent lead paint case, Brown v. Daniel Realty Co., 409 Md. 565 , 976 A.2d 300 (2009), where it explained: Application of the abuse of discretion standard depends on whether the trial judge’s ruling under review was based on a discretionary weighing of relevance in relation to other factors or on a pure conclusion of law ... when the trial judge’s ruling involves a legal question, we review the trial court’s ruling de novo. Id. at 584 , 976 A.2d 300 (quoting Figgins v. Cochrane, 403 Md. 392, 419 , 942 A.2d 736 (2008)). With regard to the Consent Order’s relevance, the trial court found: “I don’t think anybody would argue that [the Consent Order] is not probative. The issue is, is it more ²⁰³ prejudicial than probative.” Because the trial court did not explicitly state that the Consent Order was relevant as a matter of law, but exercised its discretion in balancing the probative value of the Order against its prejudicial impact, the abuse of discretion standard applies.

For the reasons discussed below, we hold that the circuit court abused its discretion in admitting the Consent Order into evidence. Rule 5-401 establishes the definition of relevant evidence: “ ‘Relevant evidence’ means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” In order to determine the relevance of the Consent Order as it pertains to appellants, we must ascertain what appellee was required to show in order to establish negligence. The Court of Appeals clarified what a plaintiff is required to show in lead paint poisoning negligence actions based upon violations of the Baltimore City Housing Code in Brooks v. Lewin Realty III, Inc., 378 Md. 70 , 835 A.2d 616 (2003). The Court held: [I]n order to make out a prima facie case in a negligence action, all that a plaintiff must show is: (a) the violation of a statute or ordinance designed to protect a specific class of persons which includes the plaintiff, and (b) that the violation proximately caused the injury complained of.

Proximate cause is established by determining whether the plaintiff is within the class of persons sought to be protected, and the harm suffered is of a kind which the drafters intended the statute to prevent. It is the existence of this cause and effect relationship that makes the violation of a statute prima facie evidence of negligence. Id. at 79 , 835 A.2d 616 . The Court also held that the plaintiff in a lead paint poisoning negligence action does not have to show that the landlord had notice of the violation of the statute in order to establish a prima facie case.

Id. at 72 , 835 A.2d 616 . One additional requirement that is applicable here is that a plaintiff must establish that the statute, or in this case, the Code, ²⁰⁴ applies to the defendant. We are left, then, with three requirements that appellee had to address in order to make out a prima facie case of negligence under the Code: (1) that the Code applied to appellants; (2) violation of the Code; (3) proximate cause. Here, Rochkind maintains that he was neither an owner nor an operator as the Code defines those terms, and thus the Code does not apply to him.

Appellees argue that the Code applies to Rochkind because he could be considered either an owner or operator under the code definitions. Section 310(a) 5 of the Baltimore City Housing Code states: “Any person who is either an owner or operator of a property subject to this Code shall be responsible for compliance with all of the provisions of the Code[.]” Section 105(jj) of the Code defines “operator” and “owner” as follows: Operator shall mean any person who has charge, care or control of a building, or part thereof, in which dwelling units or rooming units are let or offered for occupancy, and shall include a lessee, sub-lessee, any vendee in possession, or any other person otherwise managing or operating such building, or part thereof. ²⁰⁵ Owner shall mean any person, firm, corporation, guardian, conservator, receiver, trustee, executor, or other judicial officer, who, alone or jointly or severally with others, owns, holds, or controls the whole, or any part, of the freehold or leasehold title to any dwelling or dwelling unit, with or without accompanying possession thereof[.] Rochkind’s testimony formed the basis for appellee’s argument that he personally exercised control over the subject property. Rochkind testified that “[he] and [he] alone” had the final decision-making authority to sell or buy properties for JAM 18. This testimony formed the basis for appellee’s argument that Rochkind controlled the title to 2212 East Lanvale.

Appellee argues that JAM 18, as owner of the title, and Dear Management, as an operator, are also covered by the Code. In the recent case of Allen v. Dackman, 413 Md. 132 , 991 A.2d 1216 (2010), the Court of Appeals answered the question of whether a member of a limited liability company that owns a piece of property can be considered an owner or operator under the Housing Code. The Court held that “a reasonable trier of fact could find that [the member] was an ‘owner’ of the property, because there is evidence that he had the ability to change or affect title to the property purchased in the name of [the LLC].” Id. at 145 , 991 A.2d 1216 . The Dackman Court “recognize[d] a number of ways in which a reasonable trier of fact could determine” that an individual “had the ‘ability to change or affect’ title to the property.” Id. at 149 , 991 A.2d 1216 .

This included: [being] responsible for running the day-to-day affairs of [the LLC] ... executing] the deed certification when [the LLC] acquired a property, signing] the complaint seeking to remove [tenants] from the property, and signing] the deed when [the LLC] sold the property. Id. It is unclear how the Consent Order, which Rochkind signed only as a guarantor, would shed light on whether he ²⁰⁶ should be considered an owner or operator under the Baltimore City Housing Code. Even if some portion of the Consent Order was minimally relevant to support the “ownership” connection between Rochkind and 2212 East Lanvale, Roch-kind had already conceded that JAM 18 was the owner of the property, and that he was its sole shareholder.

The Consent Order does not, in itself, show that Rochkind had “charge, care or control” of 2212 East Lanvale, even under the expanded Dackman definition. The fact that he agreed to pay fines at some later date if the principal parties did not fulfill