Ocean Petroleum, Co., Inc. v. Yanek (Ct. of Appeals)

Filed: October 4, 2010
Opinion by Judge Mary Ellen Barbera.

Held: A lease term granting a tenant the option to purchase the land at "fair market value" must be interpreted within the context of the lease and the circumstances under which it was executed. Accordingly, the phrase “fair market value of the land” refers to the fair market value of the land to a buyer, unencumbered by the tenant's existing lease.

Facts: Appellant's lease agreement, for property on which its convenience store is located, provided that Appellant shall have the right and option to purchase the premises after twenty years. The lease directed the parties to negotiate a price and, if a negotiated price could not be reached, the price would be the fair market value, determined by appraisers. The parties could not agree on a purchase price or on the meaning of the phrase “fair market value,” with the dispute being whether “fair market value” meant the value as encumbered by the existing 99-year lease (the reversionary interest of the landlord) or the value as unencumbered. Appellant filed a complaint seeking a declaratory judgment construing that phrase. The lower court determined that “fair market value” should be determined as if the land were unencumbered.

Analysis: Employing an objective approach to contract construction, the Court “consider[ed] the plain language of the disputed provisions in context, which includes not only the text of the entire contract but also the contract’s character, purpose, and ‘the facts and circumstances of the parties at the time of execution.’” The Court reasoned that “[b]ecause the relevant provisions of the lease agreement contemplate a transaction between a landlord and a tenant rather than an ordinary property owner and potential buyer, these provisions indicate that the parties contemplated a transaction in which the property is sold free of the tenant’s encumbrance thereon.”

The full opinion is available in pdf.

Appiah v. Hall (Ct. of Appeals)

Filed: October 27, 2010

Opinion by Judge Mary Ellen Barbera

Held: To hold an employer liable for the torts of an independent contractor the employer must exercise control over the work that leads to the injury.

Facts: Seagirt is a shipping terminal owned by the Maryland Port Administration. The MPA contracted with P&O Ports of Baltimore, Inc. to conduct stevedoring at the terminal. Amongst other contractors that leased space at the terminal, Marine Repair Services delivered power to and monitored the temperature of refrigerated containers stored at the terminal. An employee of Marine Repair Services was severely injured in an accident involving a trucking company's attempt to pick up a refrigerated container. Plaintiff, as personal representative of the deceased, brought a wrongful death claim against the truck driver, the trucking company, P&O and the MPA.

The Circuit Court granted summary judgment in favor of P&O and the MPA. The Court of Special Appeals affirmed the Circuit Court.

Analysis: An employer will not be liable for the torts of an independent contractor unless the employer retained control over the operative details and manner of the work of the independent contractor such that the independent contractor is not free to do the work in his own way and the employer has retained control over the very thing that caused the injury in question. Here, the MPA and P&O's alleged accident investigation is not relevant to determining the issue of their control of the work performed by Marine Repair Services. Also, while the lease agreement required the MPA's permission before Marine Repair Services could install additional safety signs, permission was not required to impose safety protocol. In sum, Plaintiff failed to show how the MPA and P&O controlled Marine Repair Service's specific work of connecting containers to trucks.

Judge Murphy provided a dissenting opinion, joined by Judge Harrell, which contended the Court of Special Appeals and the Court interpreted too narrowly the "very thing that caused the injury."

The full opinion is available in pdf.

Jung Chul Park v. Cangen Corporation (Ct. of Appeals)

Filed: October 27, 2010

Opinion by Judge Mary Ellen Barbera.

Rule: The Fifth Amendment privilege against compelled incrimination affords no protection to a former corporate employee that is compelled to produce corporate documents in his possession.

Facts: A company filed a replevin action to recover thousands of documents allegedly stolen by its former CEO. During discovery, the company served a subpoena duces tecum upon another former employee, commanding him to produce all company documents in his possession. The employee asserted his Fifth Amendment privilege against compelled incrimination and refused to respond. The company filed a motion to compel production, which the circuit court granted. The employee noted an appeal, which was transferred to the Court of Appeals on its own initiative.

Analysis: The Court of Appeals affirmed, holding that the Fifth Amendment privilege against compelled incrimination affords no protection to a former corporate employee that is compelled to produce corporate documents in his possession. In so holding, the court reasoned that corporate documents belong to the corporation itself, and not to its former employee. The employee had no privilege to resist a subpoena compelling the production of corporate documents, even though the act of production may prove personally incriminating.

The opinion is available in pdf.