Noneconomic Damages Cap

New Home Builder Sales Agents Must Be Licensed

About Power of Attorney

Members of Maryland Association of Legal Administrators form group in Howard County

Court Rules Seller Not Responsible For Damages Resulting From Post-Contract  Water Infiltration

Maryland's Highest Appellate Court Holds that Insured Party Entitled To Reimbursement of Legal Fees

December, 2009
Noneconomic Damages Cap
§ 11-108 - Courts & Judicial Proceedings Article

Legal actions against persons responsible for personal injuries or death, whether sustained in an automobile accident,
as the result of medical negligence or otherwise, generally seek an award from a judge or jury of money damages for
the injured party and/or their family.

Those “damages” are intended to compensate the injured person(s) for (a) the economic losses associated with the
injuries or death [lost income, past and future medical expenses, etc.]; and (b) certain “noneconomic” damages
associated with the injuries or death [pain & suffering, loss of companionship].

In Maryland, the amount of damages recoverable for noneconomic injuries sustained incident to personal injury or
death is limited by law [SEE BELOW]. Under Maryland law, the maximum dollar amount recoverable for pain and
suffering, known as the “cap” increases each year and is determined by the date the legal claim or “cause of action” for
the personal injuries or death “arises”. A cause of action for personal injuries or death generally “arises” when the
injury is sustained or death occurs.

Set forth below is a table reflecting the applicable noneconomic damages “cap” determined by the date the injuries or
death arose.

PLEASE NOTE:

1. The “cap” increases by $15,000.00 on October 1st each year; and
2. The applicable “cap” is determined by reference to the date of the injury or death and not by reference to the
   date a claim is made or lawsuit is filed seeking damages for the personal injuries or death.
   

Courts and Judicial Proceedings § 11-108. Personal injury action - Limitation on noneconomic damages.

(a) Definitions.-
(1) In this section the following words have the meanings indicated.
(2)
(i) "Noneconomic damages" means:
1. In an action for personal injury, pain, suffering, inconvenience, physical impairment, disfigurement, loss of
consortium, or other nonpecuniary injury; and
2. In an action for wrongful death, mental anguish, emotional pain and suffering, loss of society, companionship,
comfort, protection, care, marital care, parental care, filial care, attention, advice, counsel, training, guidance, or
education, or other noneconomic damages authorized under Title 3, Subtitle 9 of this article.
(ii) "Noneconomic damages" does not include punitive damages.
(3) "Primary claimant" means a claimant in an action for the death of a person described under § 3-904(d) of this article.
(4) "Secondary claimant" means a claimant in an action for the death of a person described under § 3-904(e) of this article.
(b) Limitation on amount of damages established.-
(1) In any action for damages for personal injury in which the cause of action arises on or after July 1, 1986, an award for
noneconomic damages may not exceed $350,000.
(2) (i) Except as provided in paragraph (3)(ii) of this subsection, in any action for damages for personal injury or wrongful
death in which the cause of action arises on or after October 1, 1994, an award for noneconomic damages may not exceed
$500,000.
(ii) The limitation on noneconomic damages provided under subparagraph (i) of this paragraph shall increase by $15,000
on October 1 of each year beginning on October 1, 1995. The increased amount shall apply to causes of action arising
between October 1 of that year and September 30 of the following year, inclusive.
(3) (i) The limitation established under paragraph (2) of this subsection shall apply in a personal injury action to each direct
victim of tortious conduct and all persons who claim injury by or through that victim.
(ii) In a wrongful death action in which there are two or more claimants or beneficiaries, an award for noneconomic
damages may not exceed 150% of the limitation established under paragraph (2) of this subsection, regardless of the
number of claimants or beneficiaries who share in the award.
(c) Award under § 3-2A-05 included.- An award by the health claims arbitration panel in accordance with § 3-2A-05 of this article
for damages in which the cause of action arose before January 1, 2005, shall be considered an award for purposes of this section.
(d) Jury trials.-
(1) In a jury trial, the jury may not be informed of the limitation established under subsection (b) of this section.
(2) (i) If the jury awards an amount for noneconomic damages that exceeds the limitation established under subsection (b) of
this section, the court shall reduce the amount to conform to the limitation.
(ii) In a wrongful death action in which there are two or more claimants or beneficiaries, if the jury awards an amount for
noneconomic damages that exceeds the limitation established under subsection (b)(3)(ii) of this section, the court shall:
1. If the amount of noneconomic damages for the primary claimants equals or exceeds the limitation under subsection
(b)(3)(ii) of this section:
A. Reduce each individual award of a primary claimant proportionately to the total award of all of the primary claimants
so that the total award to all claimants or beneficiaries conforms to the limitation; and
B. Reduce each award, if any, to a secondary claimant to zero dollars; or
2. If the amount of noneconomic damages for the primary claimants does not exceed the limitation under subsection
(b)(3)(ii) of this section or if there is no award to a primary claimant:
A. Enter an award to the primary claimant, if any, as directed by the verdict; and
B. Reduce each individual award of a secondary claimant proportionately to the total award of all of the secondary
claimants so that the total award to all claimants or beneficiaries conforms to the limitation.
(e) Exclusions.- The provisions of this section do not apply to a verdict under Title 3, Subtitle 2A of this article for damages in which
the cause of action arises on or after January 1, 2005.

Coover & Barr, LLC-Attorneys at Law
Premier attorneys providing responsive and thorough representation throughout the mid-atlantic region

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October, 2007

New Home Builder Sales Agents Must Be Licensed Effective October 1st, 2007

New Home Builders Beware!!

Effective October 1, 2007, sales agents of new home builders in Maryland must hold real estate licenses issued by the Maryland Real Estate Commission. There are three categories of licenses issued by the Commission – Broker, Associate Broker, and Salesperson.

Salespersons and Associate Brokers must be affiliated with a real estate brokerage that is headed by a licensed Broker. The Broker is responsible for supervising the activities of the Salespersons and Associate Brokers; they in turn offer real estate brokerage services through that brokerage.

Are my salespeople subject to the law? The Commission defines a “sales agent” as an individual having primary responsibility on behalf of a builder for interacting with a consumer with respect to the purchase of a new home. Persons who present, complete and modify contractual documents; or serve as a point of contact between the new home builder and the consumer from the initial visit through closing are considered “sales agents” and must me licensed.

Can my salespeople continue to be my employees? Sales agents must be affiliated with a licensed real estate brokerage, either as employees or under a contractual relationship with the brokerage. They may receive compensation for their sales work only from the Broker with whom they are affiliated.

Is my support staff subject to the law? Persons performing ancillary services related to a home purchase, but who are not the principal point of contact with respect to the purchase of a new home are not required to be licensed. Ancillary services include assisting consumers in selecting options or amenities; or otherwise assisting in the design of a home; providing general information about a new home community and model homes, and performing administrative or ministerial functions.

I own the company and sell houses-do I need to be licensed? The licensing law exempts the principal of a home builder who both (1) owns at least 50% of the business entity that contracts with the consumer for the new home; and (2) personally makes sales.

Can the brokerage be part of my building company? Under the licensing law, it is very difficult for the building entity to also be the brokerage. A brokerage must:

• Employ a licensed Broker;
• Have its name approved by the Commission;
• Maintain at least one office for the provision of real estate brokerage services in Maryland; and
• Conspicuously display a sign on the door or the outside of the premises of each office.

What do my sales people have to do to get licensed? Each sales agent must complete a 60 hour course of classroom instruction in “Principles and Practices for Salespersons.” They then must pass an examination and apply to the Commission for a license. The cost is $65.00 for a 2-year Salesperson’s license. As part of the license application, each sales agent must list the name of the licensed Maryland Broker with whom they will be affiliated.

How can I comply with the law quickly? The brokerage may be a new one that is established just for the purpose of selling homes built by your company, or an existing brokerage. For example, you could enter into an agreement with an existing brokerage to have all sales operations handled by that Broker and the Broker’s affiliated Associate Brokers and Salespersons. Your current sales staff, once licensed, could become affiliated with that Broker. You would then pay an agreed-upon commission on sales to the Broker. The Broker would in turn compensate the Associate Brokers and Salespersons.

If you decide to establish a new brokerage, you would need to meet all applicable legal requirements, including employing a licensed Broker to supervise the real estate brokerage services provided by affiliated Associate Brokers and Salespersons.

I need help fast-who do I call? At Coover & Barr, LLC-Attorneys at Law, we know the licensing law and are prepared to help you with your licensing compliance issues and all construction and real estate related issues promptly and efficiently.

Coover & Barr, LLC-Attorneys at Law

Premier attorneys providing responsive and thorough representation throughout the mid-atlantic region

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Power of Attorney

A Power of Attorney (POA) is the power to sign legal documents for another person. And this power is greatly misunderstood. Several nuances of the POA need to be understood in order to fit it into your estate plan properly.

It is, first of all, the power to do business for another person. It is not the power over anyone's body. It is power over belongings. In fact, it should be properly called a "Business Power of Attorney."

A POA is good only during the person's life. If and when he dies, the POA is extinguished. So, do not think that a POA is a substitute for your will. When the person dies, the POA is invalidated; it has become extinct.

A POA has two dimensions; it has breadth ... and it has depth. Let's look at breadth first; if it is a "General" POA, it is as broad as the equator. It covers everything. And, if a general POA does not state a starting point, it becomes operable immediately. So, when you give someone your general power of attorney without stating a starting point, that person can go waste all your assets right now.

Enter the concept of "Springing." A POA can spring from a certain event. For example, someone could give you his power of attorney and say that it comes into being or springs into being only when he embarks on an International Air Plane Flight.

Or, more often, he could make it spring from this event: "If two board-certified physicians determine that I am incapable of taking care of my affairs and so state in writing, this POA springs into being."

If you want the POA to be less than a general power of attorney, you might decide to limit it and to thus make it a "Limited Power of Attorney." If you were moving to another city and had found a house you wanted to buy, you might give someone your limited power of attorney to buy the house and to sign all relevant papers while you are in the process of moving your family and household goods.

In addition to breadth, a POA has depth. If a power of attorney doesn't explicitly state the contrary, it is extinguished when you become disabled. So, if you want the POA to "endure" your disability, you can make it a "durable" power of attorney. Most POA's written in recent times are, indeed, Durable Powers of Attorney.

Do you need a POA if you have a Living Revocable Trust (LRT) and have named a Standby Trustee to take over in case of your disability? Yes. You still need a POA because you may have ownership of items that are not in your LRT and, hence, not under the power of the Standby Trustee.

In addition to a POA, you need a Medical Power of Attorney (MPOA) that tells what medical procedures you would want done if you were not of a disposing mind. Many states have combined the MPOA with a Living Will. Still others call the documents related to this issue an Advanced Medical Directive. Consult local legal counsel to see exactly which documents you need in your state.

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Members of the Maryland Association of Legal Administrators form group in Howard County

PRESS RELEASE - October, 2004

Columbia, Maryland: Legal Management professionals are a viable and much needed profession in today’s law firms. This unique group includes professionals who manage not just office operations, but human resources, financial management, information technology, and often times all of the preceding! Today’s Administrators need up to date knowledge of the legal industry, its latest trends in practice and future movements. That’s why Shelly Abrams, Law Firm Administrator for Coover & Barr, LLC, of Columbia, is beginning a support system here in Howard County and surrounding regions. The purpose of the group is to provide camaraderie, share challenges and issues, education, resources and discussion among fellow administrators in suburban, legal settings. The group will not be strictly limited to firm administrators and it is not necessary to be a current member of the National or Maryland Association of Legal Administrators, (although membership is encouraged and invaluable) but is open to any professional working in a legal environment. Monthly, brown bag luncheon meetings will begin in October 20th at the law offices of Coover & Barr, LLC in Columbia.

To learn more about legal administration, the unlimited resources available to legal professionals, the personal and professional benefits of becoming associated with this group, please contact Ms. Warren by email at sabrams@cooverbarr.com, by phone at 410.997.7600, or fax 410.997.7896.

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PRESS RELEASE - November, 2004

HOME SELLER NOT RESPONSIBLE FOR WATER INFILTRATION

Fred L. Coover, Esquire, founding Member of Columbia based Coover & Barr, LLC, ATTORNEYS AT LAW successfully defeats lawsuit filed by Carroll County Home Buyer alleging Seller’s fraud in Maryland Residential Property Disclosure Statement.

COURT RULES SELLER NOT RESPONSIBLE FOR DAMAGES RESULTING FROM POST-CONTRACT WATER INFILTRATION.

A Seller of a home in Carroll County elected to complete the Maryland Residential Property Disclosure Statement attached to the Realtor prepared Contract of Sale, thereby disclosing to the Buyer a single incidence during the 3 ½ year period that the Seller owned the home, when a football sized moisture stain appeared on a finished basement wall following a driving rain.

Prior to the sale of the home in approximately August of 2002, central Maryland had been plagued by an extreme drought. Shortly after settlement, the drought subsided and the basement of the home subsequently flooded.

Attorney Fred Coover remarked:

“The ground was baked so hard during the drought that it literally cracked. When it started raining again, water flowed where it had never gone before-even uphill in some situations. Water infiltrated basements of homes that never flooded before-we saw a drastic increase in the number of wet basement cases after the drought went away”.

In the case successfully defended by Mr. Coover, the new homeowners sued the Seller alleging that because they experienced a wet basement soon after settlement, the Seller must have had water in the basement before the Contract was signed and defrauded them by not disclosing the same.

According to Mr. Coover, under Maryland law, had the Seller made no disclosures whatsoever and simply signed the Disclaimer Statement attached to the Contract, the new buyers would not have had legal recourse; but because the Seller relied on the paperwork provided by a Realtor, signed a Disclosure Statement and disclosed everything the Seller knew about the house, the Buyer was legally able to allege that the water problems were not fully disclosed by the Seller.

“People claim all kind of things in lawsuits-it is what they can prove in court that counts. Justice was done in this case-there were no prior water problems [for the Seller] to disclose”. Fred Coover

The Seller’s defense was based on the premise that they had, in fact, fully disclosed the problems of which they were aware during their 3 ½ year occupancy of the home. The issue before the Court boiled down to the Seller’s credibility.

The Court found the Seller credible and found that the Seller had no knowledge of prior water problems other than the incident disclosed in the Contract.

Fortunately, Fred Coover’s Seller clients prevailed in this case; however Mr. Coover warns: “It is crucial for both Buyers and Sellers to have an attorney review their Contract before they sign. Realtors provide a valuable service to the parties, but those services are not a replacement for competent legal advice. In this market, there are virtually no circumstances when it would be appropriate for a Seller to sign a Disclosure Statement-It’s a Seller’s market-why take the risk, you are just buying yourself a lawsuit later.”

“I advise all of my Seller clients-“Do Not Sign the Disclosure Statement”-only sign the Disclaimer Statement-that way you are making no representations or warranties about the house. It’s not about being honest-it’s about not getting sued for something you didn’t do or didn’t know about.”

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Maryland's Highest Appellate Court Holds that Insured Party Entitled To Reimbursement of Legal Fees and other Defense Costs Paid Before Insurer Assumed Defense of Claim

In Sherwood Brands, Inc. v. Hartford Accident and Indemnity Co., 347 Md. 32, 48, 698 A.2d 1078 (1997), the Maryland Court of Appeals held that an insured entity was entitled to reimbursement of reasonable pre-notice litigation expenses. The Sherwood case involved a dispute between two allied insurance carriers (Hartford) and their insured (Sherwood) over whether Hartford breached its duty to defend Sherwood in an action brought against Sherwood by a competitor, and if it did breach its duty, whether Hartford was liable for attorney fees and other litigation costs incurred before Sherwood gave Hartford notice of the underlying action and demanded coverage.

The Sherwood court provides guidance for an insured entity to determine whether it should petition its carrier for reimbursement of attorney fees expended prior to its carrier’s involvement in the case. In the best case scenario, if the carrier, following a delayed notice, accepts the defense of the insured, the test for what litigation expenses the carrier owes is based upon the reasonableness of the expenses. The only relevant question is whether the carrier was prejudiced by the delayed notice. If not, the only consideration will be if was it reasonable for the insured to have incurred the expenses; or did the expenses materially exceed what the carrier would probably have incurred in any event had the notice been given earlier?

If the court determines that the carrier was prejudiced by delayed notice, the result will usually be no carrier liability for the legal costs incurred by the insured. If the carrier declines to defend because, in its view, the claim is not within the policy coverage and the court ultimately agrees with that view, there is no obligation to reimburse the insured for any litigation expenses. If the court concludes that the claim was potentially within the policy coverage and that, as a result, the carrier did breach its duty to defend, the carrier is liable for all damages incurred by the insured as a result of that breach.

In summary, if you are considering requesting reimbursement of litigation expenses in a case in which your carrier has accepted the duty to defend, the Sherwood Brands case should provide you with the legal support you need to assert your reimbursement claims as long as your expenses were reasonable!

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