Toliver v. Waicker

GRAEFF, J. This appeal arises out of an order of the Circuit Court for Baltimore City granting summary judgment in favor of Gary Waicker, appellee/cross-appellant and against Tori Toliver and Shana Parker, appellants/cross-appellees (“appellants”) in a ⁵⁵ lead paint case. 1 At issue in the circuit court was whether there was a factual basis to support a finding of personal liability against Mr. Waicker for injuries allegedly suffered by appellants. The circuit court concluded that there was not, but sanctions for the filing of the suit were not warranted. On appeal, each party presents one question for our review. Appellant presents the following question, which we have rephrased slightly: Did the circuit court err in granting Mr. Waicker’s Motion for Summary Judgment because there is evidence from which a jury could find that Mr. Waicker was an “operator” of the subject property?

In a cross-appeal, Mr. Waicker, who moved for sanctions against appellants’ counsel in the circuit court, raises the following question, which we have rephrased: Did the circuit court err in failing to award sanctions against appellants for filing the complaint without substantial factual or legal justification? For the reasons set forth below, we shall affirm the judgment of the circuit court. FACTUAL AND PROCEDURAL BACKGROUND On November 3, 2009, Renee Baytop, mother of Tori Toliver, born November 6,1988, and Shana Parker, born December 9, 1990, filed a Complaint in the Circuit Court for Baltimore City against Mr. Waicker, individually, Investment Realty Specialists, Inc. (“IRS”), and four other individuals. 2 The Complaint alleged negligence and a violation of the Maryland Consumer Protection Act (“CPA”), Md.Code (2005 Repl.Vol.) § 13-408 of the Commercial Law Article (“CL”), stating that, ⁵⁶ inter alia, they were exposed to chipping, peeling and/or flaking lead paint from 1988-1995 when they lived in and/or frequented a residential property located at 1608 N. Chapel Street in Baltimore, Maryland (the “Property”). The Complaint alleged that the Property was owned and/or controlled and/or managed, either individually or by the use of agents, servants and/or employees by the defendants, and that as a result of that lead exposure, the children were permanently injured.

In the alternative, appellants alleged that the defendants, “if sued in the capacity of a present or former corporate officer of a corporation which owned the said property, did personally participate in, inspire and/or induce the tortious acts or omissions complained of.” In support of their CPA claim, appellants alleged that, at the time the defendants leased the Property to Ms. Baytop, the defendants or the defendants’ agents knew that the dwelling contained flaking, loose or peeling paint and was unfit for human habitation, but they “impliedly represented that the dwelling was in compliance” with the Baltimore City Housing Code (the “Housing Code”) 3 and other applicable laws. On November 17, 2010, Mr. Waicker filed a Motion for Summary Judgment, appending his affidavit as an exhibit and asserting that he never owned or operated the Property. He further asserted that he could not be held personally liable for any torts of IRS because, even though he was a corporate officer of IRS, i.e., President, he had no “day-to-day operational duties with regard to rentals or maintenance,” and he “did not actively participate in, specifically direct or cooperate in the rental or maintenance of’ the Property. He also asserted that he was not the landlord of the Property and made no representations about the condition of the Property to anyone; thus, he had no personal liability under the CPA.

On January 5, 2011, that motion was denied without prejudice, based on ⁵⁷ the parties’ agreement to schedule a deposition of Mr. Waicker. On April 28, 2011, after Mr. Waicker was deposed, he filed another Motion for Summary Judgment, setting forth the same arguments as in his November 17 motion, and appending his original affidavit and his deposition testimony as exhibits. This motion included, as did the original motion, a Request for Sanctions against appellants’ counsel, on the ground that he was “being sued in this case for no other purpose but harassment.” Mr. Waicker’s sworn affidavit and deposition testimony comprise the material facts of this case, 4 which are not in dispute. The following is a summary of those documents.

During all relevant time periods, Mr. Waicker was the President and sole stockholder of IRS, a Maryland corporation engaged in the management of residential properties for property owners under residential management agreements. Mr. Waicker’s duties as President were to oversee the financial affairs of the corporation; he was not an employee of IRS. From 1985-1995, IRS managed more than six hundred properties for property owners. Mr. Waicker hired employees on behalf of IRS.

The employees hired as property managers were in charge of managing the properties and overseeing all inspections, maintenance, and repairs needed for the properties managed by IRS. IRS had only one property manager at any one time, and that employee managed all of IRS’s properties. Several other employees of IRS were involved in renting the properties for the property owners, maintaining property records, taking rental collections, distributing keys to rental properties, and answering phones. Mr. Waicker did not “run” IRS.

Rather, the “employees that were either the managers inside [and] ... the outside property manager” ran IRS. ⁵⁸ William Mosley was the property manager for IRS during the relevant time period. Mr. Waicker did not tell him specifically what his duties were, nor did he “put any policies in place.” He merely advised Mr. Mosley “that the properties were to be maintained [in compliance with] the ... Housing Code. That was the marching orders I would say.” Mr. Waicker did not conduct any type of verification to make sure that Mr. Mosley was keeping the properties in compliance, but IRS did not receive any housing court notices stating that the properties were not in compliance, which “indicated that [Mr. Mosley] was doing his job and he was doing it well.” Although Mr. Waicker was not aware of Mr. Mosley’s routine in conducting inspections of IRS-managed properties, he thought that Mr. Mosley conducted inspections to ensure properties were in compliance: (1) whenever Mr. Mosley “went out to verify that a repair was necessary or that a repair was completed”; or (2) during mandatory yearly inspections.

Other than those situations, Mr. Waicker did not know when compliance inspections occurred. The owners of the properties managed by IRS had the authority to give Mr. Mosley directives specific to their properties, as did city officials and inspectors. Sandy Gholson, the owner of the Property during the relevant time period, entered into a “Residential Management Agreement” (“RMA”) with IRS, as his agent, to manage the Property and one other property not at issue in this case. Pursuant to the RMA, IRS was to, inter alia, procure tenants for vacancies, collect rents, and attend to the making of necessary and proper repairs to the Property.

The RMA was signed by Mr. Gholson and by Kathy Smith, an employee of IRS. Mr. Waicker had no knowledge or information about the condition of the Property while it was being managed by IRS, nor was he personally involved in any way with, or informed or consulted about, the rental or maintenance of the Property. Mr. Waicker was not involved in the management of the Property, he did not act, direct or participate in any decisions with regard to the rental or maintenance of the Property, nor ⁵⁹ did he have any ownership interest in, or title to, the Property. Mr. Waicker did own the building where IRS kept its offices.

On November 29, 2010, appellants filed a response to Mr. Waicker’s Motion for Summary Judgment, asserting that Article 13, § 310(a) of the Housing Code imposed statutory duties on both “owners” and “operators” of rental properties, and there was evidence from which a finder of fact could determine that Mr. Waicker was an “operator” of the Property, as that term is defined by Article 13, § 105(a) of the Housing Code. Specifically, appellants asserted that the “evidence in this case clearly shows that [Mr. Waicker] had ‘charge, care or control’ of the subject property,” which rendered him an “operator” and therefore, he was “responsible for compliance with the [Housing] Code and is subject to personal liability for his failure to comply.” Appellants further asserted that Mr. Waicker’s Request for Sanctions should be denied. On December 22, 2010, Mr. Waicker filed a reply to appellants’ response. He asserted that the “operator” of the Property was IRS, and because there was no evidence that he “participated, inspired or committed the tort of failing to abate condition of loose, chipping or flaking lead paint” at the Property, and he did not specifically direct that any acts be done with respect to the Property, he was not hable, in his capacity as a corporate officer, for any torts committed by the corporation.

With respect to the issue of sanctions, Mr. Waicker asserted that appellants’ counsel was aware that the circuit court had “consistently ruled since the 1990s that [he] has no personal liability in lead paint cases in his position as President of IRS where he had no personal involvement in the rental, repair or maintenance of the property at which the alleged lead paint injuries occurred.” He argued that appellants’ counsel’s continued attempts to seek to impose personal liability upon him were in bad faith and without substantial justification. On June 1, 2011, the court held a hearing on Mr. Waicker’s Motion for Summary Judgment and Request for Sanctions. At the conclusion of the hearing, the court granted the Motion ⁶⁰ for Summary Judgment, without articulating its reasoning, and it denied the Request for Sanctions. On December 9, 2011, the court dismissed all remaining defendants in the case.

This timely appeal followed. STANDARD OF REVIEW Maryland Rule 2-501(f) governs motions for summary judgment and provides that a trial court “shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.” Accord Reiter v. Pneumo Abex, LLC, 417 Md. 57, 67 (2010). A determination of “[w]hether a circuit court’s grant of summary judgment is proper in a particular case is a question of law, subject to a non-deferential review on appeal.” Tyler v. City of College Park, 415 Md. 475, 498 (2010). Thus, the standard of review of a trial court’s grant of a motion for summary judgement on the law is de novo.

D'Aoust v. Diamond, 424 Md. 549, 574 (2012). When we consider a circuit court’s order granting summary judgment, we “review the record in the light most favorable to the non-moving party and construe any reasonable inferences that may be drawn from the facts against the moving party.” Rhoads v. Sommer, 401 Md. 131, 148 , 931 A.2d 508 (2007). Accord Reiter, 417 Md. at 67 (“ ‘[W]e independently review the record to determine whether the parties properly generated a dispute of material fact and, if not, whether the moving party is entitled to judgment as a matter of law.’ ”) (quoting Livesay v. Baltimore County, 384 Md. 1, 10 , 862 A.2d 33 (2004)). DISCUSSION I. Appellants contend that the circuit court erred in granting Mr. Waicker’s motion for summary judgment.

In assessing that contention, we must assess whether Mr. Waicker falls ⁶¹ within the class of individuals who can be held personally liable for the negligence and consumer protection violations alleged in this case. A. General Principles of Liability of Corporate Officers Mr. Waicker argues that, “as President of IRS, [he] is not liable for alleged torts committed by employees of IRS.” The principle that he asserts, that an officer of a corporation is personally liable for the torts of a corporation only in limited circumstances, is correct. As the Court of Appeals has made clear, the general rule is that an officer of a corporation is liable for the negligence of the corporation only where there was, on “ ‘his part[,] such a breach of duty as contributed to, or helped to bring about, the injury; he must have been a participant in the wrongful act.’ ” Metromedia Co. v. WCBM Maryland, Inc., 327 Md. 514, 520 , 610 A.2d 791 (1992) (quoting Tedrow v. Deskin, 265 Md. 546, 551 , 290 A.2d 799 (1972)). Thus, an officer may be liable for the torts that he personally commits, inspires, or participates in, even though performed in the name of the corporation.

Allen v. Dackman, 413 Md. 132, 153 , 991 A.2d 1216 (2010). The officer may also be liable “when he or she ‘is present on a daily basis during commission of the tort and gives direct orders that cause commission of the tort.’ ” Id. (quoting MaryCLE v. First Choice, 166 Md. App. 481, 528 , 890 A.2d 818 (2006)). Appellants do not dispute these general principles.

They assert, however, that these principles are irrelevant because they are not seeking to hold Mr. Waicker liable for the torts of the corporation. Rather, they are seeking to hold Mr. Waicker personally liable for his own torts under the specific provisions of the Housing Code. B. Baltimore City Housing Code The stated purpose of the Housing Code “is to establish and maintain basic minimum requirements, standards, and condi ⁶² tions essential for the protection of the health, safety, morals, and general welfare of the public and of the owners and occupants of dwellings in the City of Baltimore,” to “establish minimum standards governing the condition, use, operation, occupancy and maintenance of dwellings ... in order to make dwellings safe, sanitary and fit for human habitation,” and to “fix certain responsibilities and duties of owners, operators, agents and occupants of dwellings.” Balt. City Code art. 13, § 103. 5 The Housing Code is “remedial and essential to the public interest,” and it should “be liberally construed to effectuate” its purposes.

Id. To carry out the stated purposes, the Housing Code “established liability for entities that failed to follow the Code’s requirements.” Allen, 413 Md. at 143 , 991 A.2d 1216 . Section 310 of the Housing Code sets forth two separate classes of individuals that are liable for a violation of the Housing Code: (a) “owners and operators”; and (b) “corporate officers and directors.” Balt. City Code art. 13, § 310.

Section 310(a) sets forth the responsibility of owners and operators. It provides as follows: 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 this Code. No owner or operator shall be responsible for compliance with Chapter 9, “Responsibilities of Occupants”, unless that person also is an occupant of the property. Where, such as in Chapter 10, this Code states a responsibility to be that of the owner, it shall also be that of any person who is an operator of the property in his behalf.

An owner shall be held liable for all violations of this Code, in connection with any land, buildings, structure, or matter or thing owned or operated by ⁶³ him, and for any expenses incurred by the Mayor and City Council pursuant to Sections 302, 303, or 311 of this Code. Section 310(b) addresses the responsibility of corporate officers and directors. It provides: (b) Responsibility of corporate officers and directors. Whenever a corporation shall violate any of the provisions of this Code, such violation shall be deemed to be also that of the individual directors, officers or agents of such corporation who shall have authorized, ordered or done any of the acts constituting in whole or in part such violation or who shall knowingly have acquiesced in any failure to act constituting in whole or in part such violation, and such violation shall be deemed a misdemeanor, and upon conviction therefor, any such director, officer or agent shall be punishable to the same extent as is provided in Section 307 of this Code.

(Emphasis added). Appellants contend that Mr. Waicker is personally liable as an “operator” pursuant to § 310(a). They contend that the term “operator” should be broadly construed, and that given such a construction, Mr. Waicker, individually, was an operator bound by the duties imposed by the Code. Mr. Waicker contends that IRS was the “operator” of the Property, that his duties as President of IRS did not make him an “operator,” and pursuant to § 310(b), he can be held personally liable for any violation of the Housing Code only if he “specifically directed the particular act, participated, or cooperated therein.” He argues that there was no evidence presented that could show personal liability against him under the Housing Code.

Where, as here, our review involves the interpretation of a statute, “[o]ur goal is to ‘ascertain and effectuate the intent of the Legislature.’ ” Md. Ins. Comm’r v. Cent. Acceptance Corp., 424 Md. 1, 36 , 33 A.3d 949 (2011) (quoting Mayor and Town Council of Oakland v. Mayor and Town Council of Mountain Lake Park, 392 Md. 301, 316 , 896 A.2d 1036 (2006)). In doing so, “we look first to the language of the statute, giving it its ⁶⁴ natural and ordinary meaning.” State Dep’t of Assessments and Taxation v. Maryland-Nat’l Capital Park & Planning Comm’n, 348 Md. 2, 13 , 702 A.2d 690 (1997). “If the language is clear and unambiguous on its face, our inquiry ends.” Forster v. Office of Pub.

Defender, 426 Md. 565, 580 , 45 A.3d 180 (2012). Accord Montgomery County v. FOP, 427 Md. 561, 572 , 50 A.3d 579 (2012) (“ ‘If the words of the statute, construed according to their common and everyday meaning, are clear and unambiguous and express a plain meaning, we will give effect to the statute as it is written.’ ”) (quoting Dep’t of Human Res. v. Hayward, 426 Md. 638, 650 , 45 A.3d 224 (2012)). We may neither add nor delete language to reflect an intent not evidenced in the unambiguous language of a statute, nor may we construe