E-Alert Case Updates

The Maryland Court of Special Appeals Held That a Jury Verdict may be Treated as a Final Judgment for Purposes of Issue Preclusion

Bryan v. State Farm Mutual Automobile Insurance Co.
Court of Special Appeals of Maryland, No. 2751 (Md. Ct. Spec. App. Jun. 7, 2012)
by Jhanelle Graham, Summer Associate
Semmes, Bowen & Semmes (www.semmes.com)

In Bryan v. State Farm Mutual Automobile Insurance Co, the Court of Special Appeals of Maryland held that a jury verdict may be treated as a final judgment for purposes of issue preclusion in a personal injury case. In arriving at its decision, the Court embarked on an extensive evaluation of case law from multiple jurisdictions, concluding that in Maryland, interlocutory judgments are a bar to further action on the same claim.

On May 29, 2006, Brenton Bryan (“Bryan”), his wife and two (2) children were driving in Freeport, New York, when a “phantom” driver allegedly changed lanes without warning and caused Bryan to collide with two (2) other vehicles. Juan Chevez, with his wife in the passenger seat, was driving one of the vehicles into which Bryan collided. Chevez and his wife sued Bryan in the Civil Court of the City of New York, County of Queens, alleging that Bryan’s negligence caused the accident. The jury trial commenced on December 13, 2010, and the issue of damages was bifurcated from liability. The jury concluded that Bryan was negligent in the operation of his motor vehicle on May 29, 2006, and that his negligence was a substantial factor in bringing about the accident.

The following day, the parties returned to court and stated, on the record, that the case was settled for $15,000 each to Juan Chevez and his wife, who would provide a general release and a Stipulation of Discontinuance. The trial judge questioned each of the Chevezes to assure that they understood the terms of settlement, and the certified record stated that “[a]fter this verdict, the parties settled the matter in the amount of $30,000.”

On February 5, 2009, prior to the jury verdict, Bryan and his family had filed a Complaint in the Circuit Court for Prince George’s County against their insurer, State Farm Automobile Insurance Company (“State Farm”), for uninsured motorist benefits arising out of the May 2006 accident. The case was transferred to the Circuit Court for Montgomery County on January 28, 2010. After the litigation in New York, however, State Farm moved for summary judgment, arguing that the 2010 New York jury verdict on the issue of liability collaterally estopped the Bryans from pursuing their suit against State Farm. Following a hearing on April 21, 2011, the circuit court entered summary judgment in favor of State Farm, reasoning that “the New York jury determined adversely to [Bryan] the exact same issue that’s in question in this case . . . .” The Bryans appealed to the Court of Special Appeals of Maryland for a determination of whether the suit against State Farm was precluded by the verdict of the New York jury.

The Bryans contended that issue preclusion requires a final judgment, and a jury verdict cannot be so described according to traditional authorities on res judicata. E.g., Oklahoma v. McMaster, 196 U.S. 529 (1905). By contrast, State Farm contended that by virtue of the settlement and termination of the proceeding after a jury trial, there could be no further action on the issue by any court. To support its position, State Farm cited to more recent precedents and authorities. E.g., Lummus Co. v. Commonwealth Oil Refining Co., 297 F.2d 80 (2d Cir. 1961). Nonetheless, neither party directed the Court to any Maryland appellate decisions that addressed the precise issue of contention.

In its analysis, the Court of Special Appeals began by restating the purpose of collateral estoppel, which is to “avoid the expense and vexation of multiple lawsuits, conserve judicial resources, and foster reliance on judicial action by minimizing the possibilities of inconsistent decisions.” Colandrea v. Wilde Lake Cmty Ass’n, 361 Md. 371, 387 (2000). To determine if a party is collaterally estopped from bringing a claim, Maryland courts follow the four-part test articulated in Washington Suburban Sanitary Comm’m v. TKU Assocs., 281 Md. 1, 18–19 (1977). First, the court must determine whether the issue that was decided in the prior adjudication is identical with the one presented in the action in question; second, whether there was a final judgment on the merits; third, whether the party against whom the plea is asserted is a party or is in privity with a party to the prior adjudication; and fourth, whether the party against whom the plea is asserted was given a fair opportunity to be heard on the issue. Concluding that elements one (1), two (2), and four (4) were satisfied, the Court of Special Appeals focused its attention on the third prong concerning the finality of judgment on the merits.

The Court stated that the settlement removed from the jury’s findings any possibility of subsequent modification, absent the extraordinary circumstances of fraud, mistake, or irregularity. Additionally, the Court noted that in the New York action, the interlocutory determination was followed by a voluntary dismissal with prejudice, which, under Maryland law, constitutes a judgment that bars further action on the same claim. Finally, the Court cited to Campbell v. Lake Hallowell Homeowners Ass’n, in which Judge Krauser stated that “a broad consensus” has emerged to suggest that the pendency of an appeal should not suspend the operation of a judgment for purposes of res judicata or collateral estoppel. 157 Md. App. 504 (2004). Because the Court had previously established in Campbell that an interlocutory order may be treated as a final judgment, it held that Bryan’s claim was barred by issue preclusion. By contrast, however, the Court determined that the members of Bryan’s family were not parties to the New York litigation and were not, therefore, collaterally estopped from bringing an action against State Farm. Rather, the Court posited that due process prohibits estopping the passengers, despite one or more existing adjudications of the identical issue that stand squarely against their position. Accordingly, the Court reversed the judgment of the circuit court as to Bryan’s wife and children and affirmed the judgment as to Bryan.