S & R, INC. v. Nails

⁵⁷² ROBERT M. BELL, Judge. Following a trial in the Circuit Court for Montgomery County, a jury returned special verdicts in favor of Allison Nails (“Nails”) and Robert Bolton (“Bolton”), appellees, and against S&R, Inc. t/a YOB Auto Sales, appellant, as to appellees’ claims for breach of contract and fraud. 1 The jury awarded each appellee compensatory and punitive damages. Appellant’s motion for judgment notwithstanding the verdict and/or new trial, directed at the fraud and punitive damage verdicts, was denied in all respects except as to the punitive damage award to Bolton, which was granted. The court entered judgment in accordance with that ruling.

Appellant’s appeal from that judgment presents three issues: 1. Did the trial court err in submitting the fraud claims to the jury when plaintiffs’ own testimony conclusively established the absence of any reliance, and when the evidence was insufficient to support other essential elements of the fraud claims? 2. Did the trial court err in submitting the issue of punitive damages to the jury when there was no evidence of any conduct over and above the alleged fraud itself to support a finding of malice? 3. Did the trial court err in submitting a further special interrogatory to the jury after the jury returned its verdict, and in denying defendant’s motion for new trial when the answer to the further special question created an irreconcilable verdict?

Being aggrieved by the grant of appellant’s motion for judgment notwithstanding the verdict as to his punitive damage award, Bolton has cross-appealed, presenting a single issue: ⁵⁷³ Did the trial court erroneously invade the province of the jury in granting a judgment notwithstanding the verdict as to the punitive damages awarded to cross-appellant, Bolton, when there was sufficient evidence from which the jury could find that the fraud perpetrated upon him at the time of his hire induced him to enter into his employment contract? We answer appellant’s third question in the affirmative and, hence, we will reverse. For the guidance of the trial court on remand, we will briefly address the other issues raised by appellant. We need not, and, therefore, do not, address Bolton’s cross-appeal.

THE FINALITY OF THE JURY VERDICT After instructing the jury, the court provided it with a special verdict form for each plaintiff, Nails and Bolton, to assist it in recording the verdicts. Included on that form were questions pertaining to the fraud count and the breach of contract count as well as compensatory and punitive damages. As relates to punitive damages, each contained the following: PUNITIVE DAMAGES 10. Did the fraud arise out of a contractual relationship?

YES _ NO _ 11. If YES, do you find that defendant acted with actual malice? YES _ NO _ 12. Do you find that defendant acted with implied malice?

YES _ NO _ 13. State the amount of punitive damages, if any, you determine appropriate. $- ⁵⁷⁴ Before the jury began its deliberations, appellee asked the court to include in the verdict form the question, whether the fraud induced the contract; a question asking whether the fraud arose out of the contract was already included. 2 The court denied the request, ruling “It doesn’t, to me, make a bit of difference. If they come up with an award of punitive damages and answer no implied malice and no actual malice, you’re not going to get punitive damages, even if they award them.” 3 Utilizing the verdict forms, the ⁵⁷⁵ jury returned, as we have seen, verdicts in favor of both appellees. It found that appellant both defrauded appellees and breached its contract with them, for which it assessed compensatory damages.

With regard to punitive damages, the jury determined that the fraud arose out of the contractual relationship and that appellant acted with implied, rather than actual, malice. Nevertheless, it assessed punitive damages against appellant, and in favor of both appellees. The court having read into the record, the jury’s responses to the questions in the special verdict forms, the following then occurred: [THE COURT:] Ladies and gentlemen, your verdict as it will be recorded, is that the verdict of all 12 of you ladies and gentlemen? THE JURY: (A chorus of ayes) THE COURT: Madame Clerk, will you please file the verdict sheets.

Counsel and the parties, I will excuse you. MR. STEINBERG [Plaintiffs’ counsel]: May we approach the bench? THE COURT: Yes. ⁵⁷⁶ At the bench conference, 4 appellees brought to the court’s attention what they considered to be an inconsistency in the verdict: despite finding that the fraud arose out of the contract and that appellant did not act with actual malice, the jury awarded punitive damages.

They proposed to correct the inconsistency by submitting “an additional, supplement verdict sheet”, asking the single question: “Do you find that the fraud induced the Plaintiff to enter into the contract?” After extended discussion, and over appellant’s objection, the proposed additional issue was submitted to the jury, which, after further deliberations, found that fraud induced each contract. Appellant filed a motion for judgment notwithstanding the verdict and for a new trial. Among the bases for the new trial request was the alleged impropriety of submitting an additional issue to the jury after the jury’s verdicts had been announced, the jury had been polled, the clerk had been ordered to file the verdict sheets, and counsel and the parties had been excused. In addition, appellant alleged that the submission of the additional issue to the jury exacerbated the situation; the jury’s response made the existing ambiguity or inconsistency even more irreconcilable, requiring a new trial.

Maryland Rule 2-522 provides in pertinent part: (b) Verdict — Verdict of a jury shall be unanimous unless the parties stipulate at any time that a verdict or a finding of a stated majority of the jurors shall be taken as the verdict or finding of the jury. The verdict shall be returned in open court. Upon the request of a party or upon the court’s own initiative, the jury shall be polled before it is discharged. If the poll discloses that the ⁵⁷⁷ required number of jurors have not concurred in the verdict, the court may direct the jury to retire for further deliberation or may discharge the jury.

(c) Special Verdict. — The court may require a jury to return a-special verdict in the form of written findings upon specific issues. For that purpose, the court may use any method of submitting the issues and requiring written findings as it deems appropriate, including the submission of written questions susceptible of brief answers or of written forms of the several special findings that might properly be made under the pleadings and evidence. The court shall instruct the jury as may be necessary to enable it to make its findings upon each issue. If the court fails to submit any issue raised by the pleadings or by the evidence, all parties waive their right to a trial by jury of the issues omitted unless before the jury retires a party demands its submission to the jury.

As to an issue omitted without such demand, the court may make a finding or, if it fails to do so, the finding shall be deemed to have been made in accordance with the judgment entered. No party may assign as error the submission of issues to the jury, the instructions of the court, or the refusal of the court to submit a requested issue unless the party objects on the record before the jury retires to consider its verdict, stating distinctly the matter in which the party objects and the grounds of the objection. Upon request of any party, the court shall receive objections out of the hearing of the jury. 5 ⁵⁷⁸ This Rule is relevant to, and instructive on, the issue with which we are presented. It is not, however, by any means, dispositive.

As pertinent to our inquiry, the Rule permits the court to require the jury to return a special verdict, in a form to be determined, and on instructions given by the court. The Rule also requires the verdict to be unanimous, unless otherwise stipulated by the parties, and returned in open court. Should the court or a party desire, the jury must be polled. If the poll discloses any irregularity in the requisite number of jurors concurring, “the court may direct the jury to retire for further deliberation or may discharge the jury.” The issue facing us is, at what point is the jury’s function concluded?

Is it after it has announced a verdict and been polled, though not discharged? Is it after it has announced the verdict and been polled and discharged? As we have seen, the applicable Maryland Rule does not provide the answer to that question, nor, for that matter, does the case law. Several of the cases do, however, provide us with clues as to how the matter should be resolved.

In Ager v. Baltimore Transit Company, 213 Md. 414 , 132 A.2d 469 (1957), after deliberating for some time, the jury informed the trial court that it was unable to reach a verdict, to which the court responded, “Well, then, it is incumbent upon me, and I do discharge you from further consideration of the case.” Id., 213 Md. at 418 , 132 A.2d 469 . Before the jurors left the jury box, however, the court was told by the clerk that the jury had changed its mind. Consequently, it directed the jury to return to the jury room and deliberate further. A verdict in favor of the defendants was subsequently returned.

Rejecting the appellant’s contention that, “as soon as the trial court made the above statement, the jury was rendered functus officio and was ⁵⁷⁹ without further power or capacity to consider the case”, the Court of Appeals stated: This Court at an early date, 1827, held that a verdict may be varied from by the jury, at any time before the verdict is recorded. Edelan v. Thompson, 2 Harris & G[ill], 31, 34. Cf. [(1827)] Bronstein v. Amer. Ice Co., 119 Md. 132, 138 , 86 A. 131 [(1912)].

But, ordinarily a jury should not be permitted to amend its verdict after it has been recorded and the jury dismissed. Harris v. Hipsley, 122 Md. 418 , 89 A. 852 [ (1914) ]; Gaither v. Wilmer, 71 Md. 361 , 18 A. 590 [ (1889) ]; Williams v. New York, etc., 153 Md. 102, 107 , 137 A. 506 [ (1927) ]. Of course, in this case there was no verdict at the time the jury was directed to resume deliberation, and the proposed discharge of the jury was never recorded. It was held in the case of Koontz v. Hammond, 62 Pa. 177 [ (1869) ] that, although the jury had been ordered discharged, they could still render a verdict if they had not separated or left the court room and their discharge had not been recorded.

We think this was a proper ruling. It would seem a vain and futile holding to require the parties to undergo another lengthy trial, with its consequent expense and consumption of time, under the circumstances stated above. Cf. 66 A.L.R 542. We find no error in the trial Court’s decision to have the jury consider the case further. 213 Md. at 419 , 132 A.2d 469 .

A similar result was reached in Traylor v. Grafton, 273 Md. 649 , 332 A.2d 651 (1975). In that case, after the jury had announced its verdict and, while being polled, it was discovered by the court that the jury’s verdict was incomplete, the jury having failed to announce a verdict on one of the submitted counts. The court also discovered during this process, that the jury was confused concerning a third party claim. It therefore submitted to the jury for further deliberation three additional questions which it had pre ⁵⁸⁰ pared to help the jury render a complete verdict. 6 The jury answered them in accordance with the court's instructions.

Id., 273 Md. at 656-58 , 332 A.2d 651 . On appeal, the appellant argued, inter alia, “that it was error to submit issues to the jury after its verdict was announced and after a request that the jury be polled.'' 273 Md. at 659 , 332 A.2d 651 . The Court of Appeals affirmed. Citing Ager for the proposition that “[a] jury may correct or change its verdict at any time before the verdict is recorded,” the Court pointed out that the verdict, as orally announced by the jury, was incomplete since it made no finding on one count.

Furthermore, it noted that the verdict was never recorded. 273 Md. at 680 , 332 A.2d 651 . The Court cited Rosenberg v. Manager, U.C. & J.F. Board, 260 Md. 164 , 271 A.2d 692 (1970) in which it had earlier commented upon three ways of submitting special issues to a jury, one of which was to submit “a separate issue for determination after the verdict in the original case, but before the jury is discharged____” 273 Md. at 681 , 332 A.2d 651 , quoting 260 Md. at 170 , 271 A.2d 692 . It concluded: Judge Proctor, obviously sensing the confusion of the jury and the incompleteness of the verdict announced by the foreman, was of the opinion that the factual answers to the succinct issues he prepared would help free the jury from the morass in which it was mired and the issues can be categorized as “separate issue[s] for determination after the verdict in the original case.” Id. In neither Ager nor Traylor had a final or complete verdict been rendered before the submission of the additional issue: in Ager , the jury had not arrived at any verdict, ⁵⁸¹ while in Traylor , it was simply incomplete.

The rule enunciated and the result reached in both cases, therefore, were fully appropriate. They do not, however, directly address the issue in this case: at what point is the jury’s verdict final? The recent case of Hoffert v. State, 319 Md. 377 , 572 A.2d 536 (1990), albeit a criminal case, is quite informative. In Hoffert , four charges, including use of a handgun in the commission of a crime of violence, were sent to the jury for decision and, to assist in its deliberations, a verdict sheet listing those charges was given it.

The court, during its instructions, admonished the jury that it should not return an inconsistent verdict, i.e., that, should the jury find the defendant not guilty as to the first three charges 7 , it should likewise return a verdict of not guilty on the handgun charge. Upon inquisition by the clerk, the jury announced verdicts of not guilty as to each of the three substantive charges. No inquiry was made as to the fourth charge. When, at the request of the prosecutor, the jury was then polled and the verdicts were determined to be unanimous.

The clerk hearkened the jury as to the first count, after which the judge addressed the jury as follows: Members of the jury, having received your verdicts here today your service in this case is now complete. I must tell you, however, that— At that point, the court was informed by a juror that a verdict had not been taken on the fourth charge, the handgun count. That verdict was taken; it was “guilty”. Following consultation between the court and counsel, the verdict was accepted.

Subsequently, the jury was polled as to that verdict and, all of the verdicts were hearkened and, then, the jury was dismissed. 319 Md. at 380-82 , 572 A.2d 536 . ⁵⁸² Addressing the propriety of the lower court’s acceptance of the guilty verdict, the Court of Appeals recognized that, notwithstanding proper instructions, as were given in that case, inconsistent jury verdicts are permissible. 319 Md. at 383-85 , 572 A.2d 536 . It concluded, however, that, when the jury announced the not guilty verdicts and were polled, the trial was over, just as the trial judge initially thought. It explained: When the jury was polled on the verdicts of not guilty on the first three charges, see Md. Rule 4-327(e), and the poll disclosed that the verdicts were unanimous, the verdicts were final. Smith v. State, 299 Md. 158, 164-170 , 472 A.2d 988 (1984); Pugh v. State, 271 Md. 701, 705 , 319 A.2d 542 (1974).

The verdicts were legally proper. They were not contrary to the law and, without more, were in full accord with the judge’s instructions which properly reflected the law. Nor were they “ambiguous, inconsistent, unresponsive, or otherwise defective.” See Smith [299 Md.] at 170, 472 A.2d 988 . The verdicts stood complete without a verdict on the handgun charge.

The guilt stage of the trial was over at that point. The jury had no further function to perform. It had exhausted its power and authority and could not be called upon to exercise additional duties in the case. In short, the case was no longer within the province of the jury.

In the circumstances, the State was not entitled to a verdict on the handgun charge. It follows the judge erred in permitting the jury to return a verdict on the fourth count. It was not a matter of the exercise of judicial discretion. The judge had no discretion to exercise because the verdict on the fourth charge was null and void and of no effect whatsoever.

It certainly could not serve as a basis for the imposition of punishment and the entry of a judgment. (Footnote omitted) 319 Md. at 386-87 , 572 A.2d 536 . In a footnote, the Court recognized that: When the verdicts of the jury are not complete, the jury is still under the aegis of the court, the jury may resume ⁵⁸³ its deliberations to resolve the verdicts required to be rendered. For example, if the charges are arson and burglary and the jury returns a verdict only on the arson offense, it may be called upon to return a verdict on the burglary offense.

Such circumstances are readily distinguishable from the circumstances here. 319 Md. at 387 n. 3, 572 A.2d 536 . The Court reversed the judgment on the handgun charge. In the case sub judice, as in Hoffert , the jury was correctly instructed concerning the law to be applied to the facts found. Appellant complains, to be sure, about the propriety of the fraud and punitive damage verdicts and awards, but it does so only on the basis that those issues ought never to have been submitted to the jury.

It does not contend, on this appeal, that the instructions given on those issues were erroneous. The cases are also similar in that the jury rendered its verdict and was polled prior to any problem being brought to the court’s attention. Rule 4-327, the applicable rule in Hoffert (and to criminal trials), in pertinent part, provides: (a) Return. — The verdict of a jury shall be unanimous and shall be returned in open court. (e) Poll of Jury. — On request of a party or on the court’s own initiative, the jury shall be polled after it has returned a verdict and before it is discharged.

If the jurors do not unanimously concur in the verdict, the court may direct the jury to retire for further deliberation, or may discharge the jury if satisfied that a unanimous verdict cannot be reached. As is readily apparent, the operative provisions of this Rule and those of Rule 2-522(b), supra, are almost identical. This is important because it signals that the test of finality of verdicts in criminal and civil cases is the same. As we have seen, unlike this case, the verdict was hearkened in Hoffert .

It is settled that “polling is a fully ⁵⁸⁴ commensurable substitute for hearkening,” 8 Ross v. State, 24 Md.App. 246, 254 , 330 A.2d 507 (1975), rev’d on other grounds, 276 Md. 664 , 350 A.2d 680 (1976), and that the finality of a verdict is “conclusively certified by the poll of the jury,” 24 Md.App. at 255 , 330 A.2d 680 , principles fully recognized in Hoffert, 319 Md. at 386 , 572 A.2d 536 . Indeed, the case the Hoffert Court cited for that proposition, Smith v. State, 299 Md. 158 , 472 A.2d 988 (1984), on the pages specifically identified, extensively treats the subject. See 299 Md. at 164-170 , 472 A.2d 988 . See also Pugh v. State, 271 Md. 701, 705 , 319 A.2d 542 (1974).

That, in Hoffert , it was the jury that was excused by the court, while, in the instant case, the court simply indicated an intention to excuse the parties and the lawyers is not, we believe, significant; we perceive no practical difference between the two situations — excusing the parties and counsel, signals the end of the jury function just as surely as does excusing the jury. We turn now to a consideration of the effect of an inconsistency existing on the face of the verdict form prior to the jury being polled. In this case, while present and, presumably, apparent on the face of the form, the inconsistency was brought to the court’s attention only after the jury had been polled. On the other hand, the inconsistency in Hoffert was not apparent, and did not become apparent, until after the poll and the verdict as to one of the charges had been hearkened.

Notwithstanding the dissimilarities, we think that the circumstances surrounding the taking of the verdict in this case are sufficiently close to those existing in Hoffert to warrant the identical result. As we have seen, the operative provisions of the rules applicable to criminal and civil jury trials are substantially identical. That an inconsistency in a verdict exists prior to the rendition of the ⁵⁸⁵ verdict and should have been apparent prior to a poll of the jury is not a sufficient basis for differentiating between the finality of the verdicts, where in both cases, the verdicts were “conclusively certified by the poll of the jury.” We hold, therefore, that where a jury, which had been properly instructed, returns an apparent verdict, which is taken, the jury is polled, and the parties and counsel are excused, that verdict is final, there being nothing further for the jury to do; at that point, submitting additional issues or requiring further deliberation is no longer an option open to the court. In addition to citing Traylor, Rosenberg, and Rohrbeck v. Rohrbeck, 318 Md. 28 , 566 A.2d 767 (1989), see note 3, supra, in support of the position that further deliberations were permitted, 9 appellees seek to distinguish Hoffert on its facts.

First, they point out that, in Hoffert , unlike here, the verdict on the fourth charge was directly contrary to the judge’s instructions. The transcript in this case reflects otherwise. Here, the court instructed the jury that it could return a punitive damage award on a finding that the fraud arose out of the contract only if it also determined that appellant acted with actual malice. Despite that instruction, to which neither party excepted and a finding that the fraud arose out of the contract, the jury awarded punitive damages based on implied malice.

The situation, in other words, is no different here than it was in Hoffert . Appellees next seek to distinguish Hoffert on the basis that there, after the verdict was taken, the judge asked for and received assurance from both the prosecution and the defense that “they had nothing ‘else on the verdict while the jury [was] intact ... ’” and only then dismissed the jury. That attempt at distinction is unavailing as well. The actions to which appellees refer occurred after the jury had announced its verdict on the fourth charge. ⁵⁸⁶ Appellees’ final attempt to distinguish Hoffert , proceeds on the assumption that the verdicts in the case sub judice “were arguably not complete until the question regarding fraudulent inducement was presented and answered,” unlike the situation in Hoffert where the Court indicated that “[t]he verdicts stood complete without a verdict on the handgun charge.” . 319 Md. at 386 , 572 A.2d 536 .

Support for this position is found in footnote 3 in Hoffert , which does indicate that, as long as the jury is under the aegis of the court it may resume deliberations and resolve the verdicts required to be rendered. Appellees do not complete the thought expressed there, however. The Court gave an example, thus, making clear that it is referring to the situation in which the jury renders an incomplete verdict that requires it to deliberate further to render that verdict complete. This argument does not, therefore, advance appellees’ cause.

In Smith , after discussing the finality of a verdict, as to which the jury had been hearkened and polled, the Court said: