Articles Posted in Maryland Court of Appeals

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A surety who issued a performance bond on a subcontract was not bound by that contract’s arbitration clause when the surety was jointly and severally liable for the “performance of” the subcontract and the entire subcontract was incorporated into the bond by reference. Petitioner entered into a contract with an electrical subcontractor pursuant to a master subcontract agreement that included a mandatory arbitration clause. Petitioner later entered into a subcontract with the electrical subcontractor to perform work on a project. The subcontract incorporated the entire master subcontract agreement by reference. The subcontractor obtained a performance bond from Respondent stating that Respondent was jointly and severally liable for the performance of the construction contract, which was incorporated into the bond by reference. Petitioner terminated the subcontract after a dispute with the electrical subcontractor and filed a demand for arbitration that included Respondent. Respondent requested a declaratory judgment that it was not bound by the arbitration clause. The circuit court granted partial summary judgment in favor of Respondent. The court of special appeals affirmed, ruling that Respondent could not be compelled to participate in the pending arbitration proceedings between Petitioner and the electrical subcontractor. The Court of Appeals affirmed for the reasons stated above. View "Schneider Electric Buildings Critical Systems, Inc. v. Western Surety Co." on Justia Law

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A surety who issued a performance bond on a subcontract was not bound by that contract’s arbitration clause when the surety was jointly and severally liable for the “performance of” the subcontract and the entire subcontract was incorporated into the bond by reference. Petitioner entered into a contract with an electrical subcontractor pursuant to a master subcontract agreement that included a mandatory arbitration clause. Petitioner later entered into a subcontract with the electrical subcontractor to perform work on a project. The subcontract incorporated the entire master subcontract agreement by reference. The subcontractor obtained a performance bond from Respondent stating that Respondent was jointly and severally liable for the performance of the construction contract, which was incorporated into the bond by reference. Petitioner terminated the subcontract after a dispute with the electrical subcontractor and filed a demand for arbitration that included Respondent. Respondent requested a declaratory judgment that it was not bound by the arbitration clause. The circuit court granted partial summary judgment in favor of Respondent. The court of special appeals affirmed, ruling that Respondent could not be compelled to participate in the pending arbitration proceedings between Petitioner and the electrical subcontractor. The Court of Appeals affirmed for the reasons stated above. View "Schneider Electric Buildings Critical Systems, Inc. v. Western Surety Co." on Justia Law

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The circuit court’s order denying Appellant’s petition to compel arbitration was not a final, appealable judgment under Md. Code Ann. Cts. & Jud. Proc. 12-301. Appellees were individuals who each purchased vehicles from the automobile dealership operated by Appellant. Appellees filed a class action lawsuit against Appellant, challenging Appellant’s practice of providing customers with an alleged free lifetime limited warranty for their vehicles conditioned on the consumer’s continued use of and payment for other services provided by Appellant. Appellant filed an independent action seeking to compel arbitration in the class action case. The circuit court concluded that Appellees’ claims were not subject to binding arbitration. Appellant appealed. Appellees filed a motion to dismiss on the basis that the order denying arbitration was not an appealable final judgment. The court of special appeals denied the motion. The Court of Appeals vacated the judgment of the court of special appeals and remanded to that court with instructions to dismiss the appeal, holding that the circuit court’s order denying Appellant’s petition to compel arbitration was not a final, appealable judgment, depriving the court of special appeals of jurisdiction to hear an appeal of that order. View "Deer Automotive Group, LLC v. Brown" on Justia Law

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Lender’s assignee (Assignee), while operating as an unlicensed debt collector, obtained a judgment against a credit card debtor (Debtor) in district court. Debtor’s contract with Lender included an arbitration provision. Debtor then filed a class action suit collaterally attacking the judgment based on violations of Maryland consumer protection laws. Assignee filed a motion to arbitrate the class action suit pursuant to an arbitration clause between Lender and Debtor. Assignee moved to compel arbitration. The circuit court granted the motion to compel, thus rejecting Debtor’s argument that Assignee waived its right to arbitrate when it brought its collection action against Debtor. The Court of Special Appeals affirmed. The Court of Appeals reversed, holding that because Assignee’s collection action was related to Debtor’s claims, Assignee waived its contractual right to arbitrate Debtor’s claims when it chose to litigate the collection action. View "Cain v. Midland Funding, LLC" on Justia Law

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Prince George’s County terminated the employment of Marlon Ford, a member of the County Police Civilian Employees Association, after a criminal investigation during which Ford was questioned regarding alleged crimes. The Association filed a grievance on Ford’s behalf. An arbitrator vacated the termination of Ford’s employment, determining that the County had violated a collective bargaining agreement (CBA) between the County and the Association because officers of the county police department failed to advise Ford of his right to have a representative from the Association present during the criminal investigative interview. The Court of Special Appeals vacated the arbitration award. The Court of Appeals affirmed in part and reversed in part, holding (1) under the County’s code, the County lacked the authority to enter into a CBA that requires a Weingarten advisement before a criminal investigative interview of one of the County’s police civilian employees; and (2) therefore, the arbitrator the arbitrator exceeded his authority by basing the arbitration award on the determination that the County violated the CBA because its police officers failed to make a Weingarten advisement. View "Police Civ. Empl. Ass'n. v. Prince George's Co." on Justia Law

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A collective-bargaining agreement between Baltimore County and Baltimore County Fraternal Order of Police, Lodge 4 (FOP) contained an arbitration clause and a retiree health-insurance provision. FOP believed the provision locked in place the health-insurance subsidy as it existed at the time of an officer's retirement. After the agreement expired and the County decreased the health-insurance subsidy, FOP initiated arbitration. The County protested, arguing (1) it had no duty to arbitrate because the collective-bargaining agreement had expired, and (2) the health-insurance subsidy was not locked in place but was subject to change from year to year. FOP was successful in arbitration and on appeal before the circuit court, but the court of special appeals vacated the arbitration award. The Court of Appeals reversed, holding (1) an arbitration clause may survive the expiration of a collective bargaining agreement when it concerns rights that vested during the life of the agreement; and (2) when deciding the issue of arbitrability requires interpretation of the underlying agreement and consideration of the merits of the dispute, the issue of arbitrability should initially be determined by the arbitrator. View "Baltimore County Fraternal Order of Police Lodge v. Baltimore County" on Justia Law

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In 2002, county voters adopted an amendment to the county charter relating to the resolution by binding arbitration of collective bargaining impasses with the county's law enforcement employees and uniformed firefighters. In 2003, the county council adopted an ordinance implementing that charter provision. In 2011, the county council amended the 2003 ordinance to provide that binding arbitration did not require the council to appropriate funds or enact legislation necessary to implement a final written award in arbitration. An uncodified section of the 2011 council bill also provided that, if any part of the 2011 ordinance were held invalid, the entire county code section enacted by the 2003 ordinance, as amended through the 2011 ordinance, would be deemed repealed by operation of law, with the result that impasses would be addressed by a code section that did not authorize binding arbitration. Petitioners sought a declaratory judgment that the 2011 ordinance violated the 2002 charter amendment. The circuit court held the 2002 charter amendment violated the Maryland Constitution. The Supreme Court reversed, holding (1) the 2002 charter amendment bound the county council; and (2) portions of the 2011 ordinance, as well as its uncodified section 3, violated the charter and were invalid. Remanded. View "Atkinson v. Anne Arundel County" on Justia Law

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This case related to an arbitration award denying an express easement on Petitioners' property. Petitioners filed a petition in the circuit court to confirm the arbitration award, and Respondent filed a motion to vacate the same. Respondent argued that the award was irrational because, without an easement over Petitioners' land, his land would be landlocked. The circuit court confirmed the arbitration award, relying upon the Uniform Arbitration Act. The court of special appeals (CSA) reversed, overturned the arbitrator's denial of the easement, and directed that an easement by necessity be located over Petitioners' land. While recognizing the Act's limitation on the authority of the courts to overturn arbitration awards, the CSA pointed out that arbitration awards that were completely irrational or which were manifestly in disregard of the law had been overturned in previous opinions. The Court of Appeals vacated the judgment of the CSA and remanded with directions to vacate the circuit court, holding (1) the arbitration award, in part, was contradictory; and (2) Md. Code Ann. Cts. & Jud. Proc. 3-225(a) authorizes a court to vacate an award and order a rehearing before arbitrators when the award is ambiguous or contradictory. Remanded for further proceedings pursuant to section 3-225(a). View "Downey v. Sharp" on Justia Law

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The Fraternal Order of Police, Montgomery County Lodge 35, Inc. (FOP) filed a grievance under its collective bargaining agreement (CBA) with Montgomery County following the County's unilateral decision to discontinue a long-standing practice of allowing shop stewards to sit in on disciplinary interrogations for training purposes. The County filed a motion to dismiss the grievance, arguing that arbitration of the issue was preempted by the Law Enforcement Officers' Bill of Rights (LEOBR). The arbitrator determined the grievance was not preempted and denied the motion to dismiss. Subsequently, the County filed a petition to vacate the arbitration award in the circuit court. The circuit court affirmed the arbitrator's decision and granted summary judgment on behalf of the FOP. The Court of Appeals affirmed, holding that the LEOBR was not implicated by the steward training grievance and, therefore, did not preempt its arbitration under the CBA. View "Montgomery Co. v. FOP Lodge 35" on Justia Law

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Dr. Shailendra Kumar sued Dr. Anand Dhanda, alleging breach of contract and breach of a covenant not to compete. The contract at issue provided for disputes to be initially addressed through mandatory, non-binding arbitration. Dhanda filed a motion to dismiss the action, asserting that the suit was barred by the applicable statute of limitations. Kumar opposed dismissal, arguing that the complaint was timely because his cause of action had either not accrued or that limitations was tolled until the completion of arbitration. The trial court dismissed the action as time-barred, and the court of special appeals affirmed. The Court of Appeals affirmed, holding that while non-binding arbitration may have been a condition precedent to litigation, it neither affected the accrual of the underlying breach of contract claims, nor otherwise tolled the statute of limitations applicable to maintaining an action in court. View "Kumar v. Dhanda" on Justia Law