Wolfe v. Anne Arundel County

ELDRIDGE, Judge. The issue in this case is whether Anne Arundel County must provide liability insurance coverage to a former county police officer, pursuant to the self-insurance provisions of the Anne Arundel County Code, the regulations thereunder, and the applicable collective bargaining agreement. The Circuit Court for Anne Arundel County and the Court of Special Appeals held that the former police officer’s conduct was not covered by the County’s self-insurance program. We agree and shall affirm the judgments below.

I. On November 15, 1990, at approximately 2:00 a.m., Anne Arundel County police officer Michael D. Ziegler was on traffic patrol in the Pasadena area of Anne Arundel County when he effected a traffic stop of Erin Jones Wolfe, then known as Erin Kathleen Jones. Ziegler suspected Wolfe of driving while intoxicated, but, rather than arresting her, he asked her to sit in the passenger seat of his patrol car and indicated that he would drive her home. Ziegler informed the police dispatcher by radio that he was “out of service” and was going home to check on a faulty furnace. Instead of driving Wolfe directly home, Ziegler drove her to a remote location in the parking lot of a church in Anne Arundel County where, according to Wolfe, he raped her.

He then drove her home, where she called 911 to report the rape. As a result of the incident, Ziegler was criminally charged with second degree rape and lesser offenses. He was ultimately convicted of ²³ misconduct in office, for which he received a one-year suspended sentence and five years probation. He agreed to, and did, resign from the police force.

Subsequently, Wolfe brought an action in the Circuit Court for Anne Arundel County against Ziegler, certain police officials, and Anne Arundel County. She claimed a violation of her civil rights and sought relief under 42 U.S.C. § 1983 . She also claimed damages based on various asserted causes of action under Maryland law. The defendants removed the suit to the United States District Court for the District of Maryland.

Wolfe’s claim against Ziegler was severed from her claims against the police officials and Anne Arundel County. As to the action against Ziegler, a jury returned a $1.15 million verdict in favor of Jones and against Ziegler, awarding her both compensatory and punitive damages. The verdict was based on § 1983 and common law battery. After the entry of judgment on the jury’s verdict against Ziegler, the United States District Court granted summary judgment in favor of the police officials and Anne Arundel County on the § 1983 claims against those defendants, holding that, as a matter of law, the plaintiff failed to establish a § 1983 cause of action against them.

The federal court then declined to exercise pendent jurisdiction over Wolfe’s state law battery and negligence claims against the police officials and Anne Arundel County, and, on this basis, granted summary judgment in favor of the officials and the County. Finally, with regard to Wolfe’s claim for indemnification against the County because of the judgment against Ziegler, the United States District Court “concluded that this claim of indemnification is premature.” Jones v. Ziegler, 894 F.Supp. 880, 897 (D.Md.1995). The District Court’s judgment was affirmed by the United States Court of Appeals for the Fourth Circuit, Jones v. Wellham, 104 F.3d 620 (4th Cir.1997). After the judgment against Ziegler in the federal case, Ziegler filed, with the Anne Arundel County Self-Insurance Fund Committee, a claim for indemnification.

Ziegler’s claim was denied by the Committee, and Ziegler appealed to the ²⁴ Anne Arundel County Board of Appeals. The Board of Appeals conducted a de novo hearing and thereafter denied the claim on the ground that Ziegler’s tortious and criminal conduct was not within the scope of his employment and that, therefore, the claim was beyond the scope of the self-insurance coverage. Ziegler did not seek judicial review of the Board of Appeals’ decision. 1 Wolfe’s efforts to satisfy the judgment against Ziegler were unsuccessful, and, in 1997, Wolfe filed in the Circuit Court for Anne Arundel County the present action against Anne Arundel County. In her complaint, as amended, Wolfe asserted in count one that the County was contractually required to indemnify Ziegler and that the County should therefore pay the full amount of the unpaid judgment, plus attorneys’ fees and accrued interest, to Wolfe.

Wolfe sought a declaratory judgment and money damages under count one. In counts two and three of the amended complaint, Wolfe alleged that the County was guilty of “bad faith” in failing to settle the civil rights claims and that the County, by defending Ziegler in the federal court action, was estopped to deny coverage to Ziegler. The complaint also recited that Ziegler had assigned to Wolfe the claims set forth in counts two and three, and that Wolfe was entitled to money damages under those counts. Following a hearing, the introduction of numerous exhibits, and the submission of various documents, the Circuit Court dismissed counts two and three, holding that Wolfe had failed to state claims upon which relief could be granted.

The Circuit Court denied Anne Arundel County’s alternative motion to dismiss all three counts on grounds of res judicata or collateral estoppel. Subsequently, the Circuit Court granted Anne Arundel County’s motion for summary judgment as to count one, and, in its order, made the following declaration: ²⁵ “This Court is bound by the settled law found in Cox v. Prince George’s County, 296 Md. 162, 165 , 460 A.2d 1038, 1039-40 (1983). Plaintiff in this action has not met the two-prong test in order to hold the County liable for the acts of Officer Ziegler. To explain, although Plaintiff has shown that at one time a master-servant relationship existed between the County and Officer Ziegler, Plaintiff has not demonstrated ‘that the offending conduct occurred within the scope of the employment of the servant or under express or implied authorization of the master.’ Cox, 296 Md. at 165 , 460 A.2d at 1039-40 .

For this reason, the Court must deny Plaintiffs motion for summary judgment. Finding that no material fact is in dispute and that Defendant is entitled to judgment as a matter of law, in accordance with Maryland Rule 2-501, Defendant is hereby granted summary judgment as to Count I of the [amended] complaint.” Wolfe appealed to the Court of Special Appeals, arguing that the Circuit Court erred as a matter of law with respect to all three counts in the amended complaint. Anne Arundel County cross-appealed, contending that the Circuit Court should have dismissed the entire complaint on grounds of res judicata or collateral estoppel. 2 The Court of Special ²⁶ Appeals, agreeing with the Circuit Court’s rulings favorable to the County, affirmed the judgment. Wolfe v. Anne Arundel County, 135 Md.App. 1 , 761 A.2d 935 (2000).

The appellate court quoted the Anne Arundel County self-insurance regulations which covered employees’ actions only “while acting within the scope of their duties as” county employees, and which expressly excluded, inter alia, “willful actions” and “punitive damages.” The appellate court concluded that Ziegler was not acting within the scope of his duties. Furthermore, as alternative grounds for affirmance, the Court of Special Appeals held that Wolfe’s action was barred by the final decision of the Anne Arundel County Board of Appeals and principles of res judicata. The intermediate appellate court, pointing out that Wolfe’s present action was based on the alleged self-insurance coverage for Ziegler’s tortious conduct and the assignment, stated that Wolfe had no greater rights under the self-insurance program than Ziegler had. The Court of Special Appeals further stated that the Board of Appeals’ decision, that there was no insurance coverage, was dispositive of the coverage issue.

Since no action for judicial review of the Board of Appeals’ decision had been filed within the 30-day limitations period, the Board’s decision became final. Thus, according to the intermediate appellate court, the present action was barred by principles of administrative law, the statute of limitations, and res judicata. Wolfe v. Anne Arundel County, supra, 135 Md.App. at 20-28 , 761 A.2d at 945-949 . 3 ²⁷ Wolfe filed in this Court a petition for a writ of certiorari, presenting the single question of whether Anne Arundel County’s self-insurance provisions covered Ziegler’s tortious conduct. No issue was raised with regard to counts two and three of the amended complaint.

Anne Arundel County filed a cross-petition for a writ of certiorari, presenting its alternative contention that count one of Wolfe’s complaint was barred by principles of res judicata or collateral estoppel based upon the final decision of the Anne Arundel County Board of Appeals. This Court granted both the petition and the cross-petition. Wolfe v. Anne Arundel County, 363 Md. 205 , 768 A.2d 54 (2001).

II

A. The Anne Arundel County self-insurance program has its roots in several enactments and documents. Preliminarily, the Maryland Local Government Tort Claims Act, Code (1974, 2002 Repl.Vol), §§ 5-301 through 5-304 of the Courts and Judicial Proceedings Article, requires local governments, including Anne Arundel County, to provide a legal defense in a tort suit against a county employee based on “acts or omissions committed by an employee within the scope of employment with the local government” (§ 5-302(a)). The Act also provides that the local government, up to specified monetary limits and with certain other limitations, must pay “any judgment against its employee for damages resulting from tortious acts or omissions committed by the employee within the scope of employment with the local government” (§ 5-303(b)). The Act contains exceptions to local government liability for, inter alia, malicious acts and punitive damages (§§ 5 — 302(b)(2)(i) and 5-303(c)). ²⁸ In addition to Anne Arundel County’s obligations under the Local Government Tort Claims Act, § 526(b) of the Anne Arundel County Charter states (emphasis added): “Subject to any limitation or exception that the County Council specifies by ordinance, the County Attorney shall defend any officer or employee of the County in any civil action brought against the officer or employee by reason of any act done or omitted to be done in the scope of the officer’s or employee’s employment.

In any case defended by the County Attorney under this section, the County shall pay all court related expenses charged to the officer or employee.” Article 2 §§ 5-101 et seq. of the Anne Arundel County Code establish the County’s “Self-Insurance Fund,” provide for an annual appropriation to the Fund, and establish a “Self-Insurance Fund Committee” to review and approve or disapprove all claims for payment where the amount exceeds $5,000. Section 5-104(d)(3) of the Code mandates that the “Committee shall ... adopt rules and regulations necessary for the operation and maintenance of the Fund, including rules to establish: (i)' the nature of losses to be paid from the Fund. . . .” The regulations adopted by the Committee, and in effect during the events of this case, contain provisions defining an “insured” for purposes of liability coverage under the self-insurance program. The regulations also contain numerous “exclusions” from coverage. The provisions defining an insured are as follows (emphasis added): “1.

All elected or appointed officials, deputies, employees, members of special boards or commissions of the County, volunteers and aides, and officials and employees of the County Department of Health, employees of the Public Libraries of Annapolis and Anne Arundel County, Inc., and Volunteer Firefighters of Volunteer Fire Companies and Rescue Squads, while acting unthin the scope of their duties as such or on behalf of the County. ²⁹ 2. Police dogs with respect to the ownership, possession, custody, maintenance or use and animals while in the possession of the Anne Arundel County, Inspections and Permits, Animal Control Division. 3. Any person or organization for whom the County is obligated by agreement to provide insurance. 4. Volunteer Fire Companies and Rescue Squads for which the County has agreed to provide insurance. 5.

Paid employees of the Sheriffs Department excluding the Sheriff. 6. Temporary Deputy Sheriffs appointed in a bona fide emergency only within the scope of the specific emergency.” The exclusions from coverage in the regulations consist of nine paragraphs, two of which may be relevant in the present case. Exclusions three and nine state: “3. Claims brought against an individual County employee or individual otherwise insured which are as a result of willful actions or gross negligence on the part of that individual. 9.

Punitive damages for or on behalf of any public official or employee of the County who is a defendant in a civil rights action.” The collective bargaining agreement, in effect during the pertinent time periods, between Anne Arundel County and the Fraternal Order of Police, which represented the collective bargaining unit of which Ziegler was a member, stated as follows (emphasis added): “Section 13.6 — Civil Liability Coverage County agrees to provide employees with legal defense services and with indemnification for civil liability in a fashion consistent with both Article 2, Title 5 (Self-Insurance Fund) of the County Code and the policies, rules, and regulations of the Self-Insurance Fund Committee. ³⁰ County agrees to provide employees with legal defense services and legal counsel without cost in any civil case where the plaintiff alleges that an officer should be held liable for acts alleged to be within the scope of his/her employment and/or his/her official capacity. Indemnification of compensatory damage will also be provided to any member of the unit who is made a defendant in litigation arising out of acts within the scope of his/her employment.” B. Wolfe concedes “that the scope of an officer’s employment does not encompass the rape of a citizen” (petitioner’s brief at 20) and that neither the Local Government Tort Claims Act nor the first paragraph defining an insured in the Anne Arundel County self-insurance regulations require the County to pay the tort judgment against Ziegler. In fact, Wolfe insists that the Court of Special Appeals “clearly erred” in mentioning the Local Government Tort Claims Act as one of the “source[s]” of the Anne Arundel County self-insurance program (id. at 18). Wolfe also acknowledges “that Ziegler did not qualify as an ‘Insured’ as defined” in paragraph one of the self-insurance regulations (id. at 22).

Wolfe’s argument is that the Anne Arundel County self-insurance program covered certain actions of an employee outside of the scope of employment, including the tortious and criminal conduct here involved. Wolfe relies upon the third definition of an “insured” in the self-insurance regulations which encompasses “any person or organization for whom the County is obligated by agreement to provide insurance.” Next, Wolfe points to the collective bargaining agreement between the County and the Fraternal Order of the Police, and argues that the collective bargaining agreement qualifies as an “agreement” within the third definition of “insured” in the self-insurance regulations. Wolfe then turns to the collective bargaining agreement’s language which states that ³¹ “[indemnification of compensatory damages will also be provided to any member of the unit who is made a defendant in litigation arising out of acts within the scope of his/her employment.” According to Wolfe, the traffic stop was an act by Ziegler within the scope of his employment, and the tort suit constituted “litigation arising out of’ that traffic stop within the meaning of the above-quoted language in the collective bargaining agreement. In arguing that