Beale v. Risk Retention Group
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Eric Beale, a minor, etc., et al v. American National Lawyers Insurance Recip rocal (Risk Retention Group) No. 87, September Term, 2002 HEADNOTES: CONTRACTS; LEGAL MALPRACTICE INSURANCE CONTRACTS; ATTORNEY REPRESENTATION; SUMMARY JUDGMENT Where an attorney represents multiple clients in a tort actio n, a malpractice insurance provision which defines the Per claim Limit of Liability as all Damages arising out of the same, related or continuing Professional Services without regard to the number of claims made, demand s, suits proceedin gs, claimants, or Persons Insured involved, does not preclude a finding th at an aggre gate limit of liab ility is appropriate against that attorney, even where the same s kill set and pro cess may hav e been ap plicable to the handling of all of the cases. Rather, the court will look at the individual differences in the clients and the distinct and separate duty that the attorney owes to each. IN THE COURT OF APPEALS OF MARYLAND No. 87 September Term, 2002 ___________________________________________ ERIC B EALE , a minor, etc., et a l. v. AMERICAN NATIONAL LAWYERS INSURANCE RECIPROCAL (RISK RETENTION G ROUP) ___________________________________________ Bell, C.J. *Eldridge Raker Wilner Cathell Harrell Battaglia, JJ. Opinion by Bell, C.J. Filed: February 19, 2004 *Eldridge, J. now retired, participated in the hearing and conference of this case w hile an active membe r of this Court; after being recalled pursuant to the Constitution, Article IV, Section 3A, he also participated in the decisio n and a doptio n of this opinio n. This appeal from an order entering declaratory judgment presents the question whether, as a matter of law, in a legal malpractice action, the claims of each of five children allegedly injured as a result of the negligence of the same defendants, when consolidated for trial and, therefore, where all f ive of the c laims are totally ne glected, con stitute a single cla im under an insurance policy limiting the malpractice carrier s liability for damages to those arising out of the same, related or continuing Professional Services without regard to the number of claims m ade, dem ands, suits pro ceedings, c laimants, or Persons Insured involv ed. 1 The Circuit Court for Baltimore City concluded that they do. We shall reverse. Between 1988 and 1990, Eric, Michael, Antoine, Dustin an d Cynthia Beale (the B eale Children), the appellants, resided at premises, 1705 Holbrook Street in Baltimore City, in which, it was alleged, there was loose and flaking paint and which was cited for lead paint 1 American National Lawyers Insurance Reciprocal (Risk Retention Group), the appellee, is in re ceivership a nd has m oved this C ourt to stay furthe r proceedin gs in this case until its Receiver, which is located in Tennessee, can evaluate all the claims against the appellee in numero us states. The Receive r maintains th at a stay of this actio n in this court is essen tial to protect th e interest of in sureds, claim ants, creditors, a nd the pub lic generally and provide for the equitable apportionment of any avoidable loss. We do not agree. Whether we reverse or affirm the Circuit Court s ruling, the outcome is unlikely to complicate the Receiver s evaluation process, nor is the outcome likely to be essential to the determina tion of the a ppellee s liab ility to other entities. A t issue here, is whether the appropriate claim limit is Per Claim, not to exceed $1,000,000.00, or Aggre gate, not to e xceed $2 ,000,000.0 0. This diff erence in th e limit of liability is merely an arithmetic computation; it is difficult to see why a stay is essential to the protection of pertinent interests and the Receiver s letter has not clarified the point. We deny the request for a stay of proceedings. violations. During that time, and as a result of the alleged negligence of the landlord, each child was exposed to, and ingested, lead paint, sustaining an elevated blood lead level, as a result. The Be ale Childre n s grandm other retaine d Mark E. Herm an, Esq. an d the firm w ith which he wa s assoc iated, W illiam G . Kolod ner, P.A. (hereinafter, collectively, Kolodner, P.A.), to represe nt them in their a ttempt to recove r for the ir injuries . Kolodner, P.A. filed suit agains t North ern Bro kerage Co. an d Brok erage I., I nc., the owners and operators of 17 05 Holbrook , the landlords, on behalf of the Beale children and their parents. Th e compla int, consisting o f eighteen (18) coun ts, alleged in se parate cou nts applicable to the Beale children, their mother and their father, negligence, breach of war ranty, negligent misrepresentation, nuisance, unfair and deceptive trade practices and breach of con tract. Thus, there were six c ounts relating to the Beale children, the claim of each Beale child being consolidated with the claims of all of the other Beale children. The claims of each individual child, as alleged was identical to the claims of all of the other children. Subsequ ently, noting the lack of any evidence as to the landlord s notice of the lead paint condition in the leased premises and on the issue of the causal connection between the alleged presence of lead-based paint in the dwelling and the alleged injury to the children, the trial court granted the landlords motion for summary judgment and entered judgment in their favor. 2 That judgment was affirmed by the Court of Special Appeals in an unreported 2 When filed, the action was placed on the Circuit Court s lead paint track. That track is design ed to stream line the han dling of lea d paint case s by imposing certain deadlines, for example, for completion of discovery, to have the child or children 2 opinio n. Sub sequ ently, now represented by new counsel, the Beale children, by their grandmother and ne xt frien d, brou ght a m alpractic e action agains t Kolod ner P.A . Although consolidated in one complaint, having a total of ten (10) counts, the claim of each of the children agains t the law firm an d Herm an wa s set for th in sep arate co unts. In each co unt, the subject child alleged that, as a result of the total neglect of his or her attorney, as appropriate, Kolodner, P.A. and Herman, he or she was injured. More specifically, each count alleged that Kolodner, P.A. was negligent in: a. Failing to prop erly inves tigate, prepare, handle, prosecute, pursue and litigate the claims of the Plaintiff; b. Failing to adequately research the law as to lead paint poisoning actions; c. Agreeing to handle a legal matter which they knew or should have known they were not competent to handle; d. Failing to properly retain, hire and name expert witnesses, and to provide the opinions and reports of th ese expert w itnesses purs uant to a Circuit Court Scheduling O rder; e. Failing to properly respond to m otions for summ ary judgment filed by the landlord; f. Failing to have Plaintiff evaluated psychometrically for the presence of psychometrically tested to determine the exten t of the brain damag e, to supply a report from the testing neuropsychologist to the landlord, to answer interrogatories, to name expec ted exp erts and summ arize the ir testimo ny. It is alleged that Kolodner, P.A. never had the children tested, named experts or moved to mo dify the scheduling order. In add ition, it did not oppose the landlords motion fo r summa ry judgment. 3 brain damage resulting from his lead poisoning prior to recomm ending the said grossly inadeq uate settleme nt; g. Failing to conduct eve n the most rudimen tary research in the medical literature to determine future consequences of the level of lead poisoning sustaine d by the P laintiff. Kolodner P.A. was insured, under a lawyers professional liability policy, by American National Lawyers Insurance Recip rocal (R isk Ret ention G roup) (A NLIR ), the app ellee. That policy provided coverage of $ 1,000,000 per claim and $ 2,000,000 aggregate per policy period and that ANLIR would pay on behalf of its insured all sums [th e insured] sh all become legally obligated to pay as Damages because of any [timely made] Claim to which this policy applies. With respect to the policy limits, it provided: The Per claim L imit of Liab ility stated in the De clarations Pa ge is the limit of the Compan y s liability for all Damages arising out of the same, related or continuing Professional Services without regard to the number of claims made, demands, suits proceedings, claimants, or Persons Insu red involved. If additional Claims are subsequently made and reported to the company and arise out of the same, related or continuing3 Profession al Services a s a claim already mad e and repo rted to the Co mpa ny, all such claims, whenever made, shall be considered first made and reported within the Policy Period or Extended Reporting Period in which the earliest claim arising out of such Professional Services was first made a nd reported . All such C laims shall be subject to the Per Claim L imit of Liab ility applicable at the time the first Claim or ac t, erro r or o miss ion w as first re ported to the C omp any. The Aggregate Limit stated in the Declarations Page is the limit of the Company s liability for all Damages arising out of Claims first made and reported to the Company during each Policy Period, or in the case of an Extended Reporting Period, the entire applicable Extended Reporting Period. 3 No argument has ever been made, and none is presented in this Court, that the claims of the Beale children arise out of continuing professional services. 4 The Aggregate Limit of Liability does not increase the Per Claim Limit of Liability for Claims arising out of the same, related or continuing Professional Services. Professional Services were defined as Legal services which the Insu red renders or fails to render, in his or her capacity as a lawyer, for or on behalf of one or more clients, arising from or within an attorn ey-client re lationsh ip. A claim , the po licy states, is a demand received by the insured for money, other than fines, penal sums or any other amount or item not otherwise included within the definition of Dam age i n this pol icy, including the service of suit or the institution of other proceedings against the insured. Maintaining that, under its policy, the five Beale claims constituted but one claim, ANL IR offere d the appe llants its per claim limit of $ 1,000,0 00.00. When th e appellants rejected the offer, it filed this declaratory judgment action to reso lve which limit of liability applied, the per claim or the aggregate. The legal malpractice action was stayed pending the result of the dec laratory jud gmen t action. The Circuit Court entered summary judgment in favor of ANLIR.4 Agreein g with ANLIR that the claims of each one of the Beale Children and, therefore, the damages each 4 While it is permissible for trial courts to resolve m atters of law by summa ry judgment in declaratory judgment actions, the trial court must still declare the rights of the parti es. Megonnell v . United S ervices A ss'n., 368 Md. 633, 642, 796 A.2d 758, 763 (2002 ). The trial court made such a declaration in this case. The only issue we must decide, therefore, as is the case in ev ery summary judgment ca se, is whether the trial court was legally correct, a determination we make after reviewing the trial court s ruling de novo. Heat & Power v . Air Produ cts, 320 Md. 584 , 591-92, 578 A .2d 1202, 1206 (1 990). 5 claimed due to their attorneys alleged malpractice, arose out of the same, rela ted or continuing Professional Services, without regard to the number of Claims made, demands, suits, proceedings, claimants or Persons Insured involved, it declared, [b]ased upon the undisputed material fac ts, and in acc ordance w ith caselaw cited by the partie s, the Per C laim Limit of Liability of the Policy applies to all damages claimed by the Beales claims against the Attorneys. The Petitioner timely noted an appeal to the Court of Special Appeals. We granted certiorari, on the Court s own motion, before any proceedings in the intermediate appellate court. Beale, et al. v. Am. Nat l. Law. Ins. Reciprocal, 371 Md. 613 , 810 A.2d 961 (2002). We sh all rever se the ju dgme nt of the Circuit C ourt fo r Baltim ore City. I. In granting su mmary judg ment, the trial court, noting that [t]he alleged negligence [is] identical in all ten counts of the [malpractice] Complaint, and that the Beale children alleged their attorneys, had[ , and bre ached ,] the sam e, identic al duties as to the Beales , concluded that the damages claimed by the Beales due to the Attorneys alleged malpractice arose out of the same, related or continuing Professional Services, without regard to the number of Claims made, demands, suits, proceedings, claimants or Persons Insured involved. It accordingly held that the per claim limit of liability applied to all damages claimed by the Be ale child ren in th e malp ractice a ction. The cou rt characterized as hypothetical and missing the point, the appellants argument that the aggregate limit applied 6 because the attorneys need not have been negligent as to all of their clients; they could have been negligent as to one or more, but not all. More relevant to the court was The Beales have not identified any prof essio nal service w hich the a ttorn eys should have performed as to one or more of the Beales[, b]ut which they were not required to perform as to the others. In other words, the Beales have failed to show how the Attorneys du ty to render professional service to them differe d in any [ respec t] what soever . The Circuit Court relied on cases from our sister states, there being neither Maryland nor Tennessee5 cases o n point . Atlantic Permanent Federal Savings and Loan Association 5 The appellee, a Tennessee corporation, has argued that Tennessee law should be applied in the resolution of the instant dispute. It submits that, under Maryland choice of law principals, the insurance policy, and its interpretation, are governed by Tennessee Law. (Appellee s brief, at 14). It relies on a provision of the policy which provides that the [policy] is effective upon attachment of the Declarations signed by an authorized representative of the Company. (Appellee s brief, at 13). Generally in Maryland, if an insurance policy contains such a clause, the appropriate law is the state where the authorized representative signs the document, because this signature is the last act performed which renders the contract binding. Ohio Cas. Ins. Co. v. Ross, 222 F. Supp 292, 295 (D. Md . 1963); see also Kramer v. Bally s Park Place, 311 Md. 387, 390-391, 535 A.2d. 466, 467 (1988); Kronov et v. Lipchin , 288 Md. 30, 43, 415 A.2d 1096, 1104 (1980) (holding that gen erally parties to a contract may agree as to law w hich will govern their transaction, even as to issues going to the validity of the contract). In this case, however, the appellee did not give timely notice of its intention to rely on foreign law, as required by Md. Code (1974, 2002 Replacement V olume) § 10-504 of the Courts & Judicial Proceedings Article. That section provides: A party may also present to the trial court any admissible evidence of foreign laws, but, to enable a party to offer evidence of the law in another jurisdiction or to ask that judicial notice be taken of it, reasonable notice shall be given to the adverse parties either in the pleadings or by other written notice. Our cou rts have interp reted that sec tion to mea n that, if a party wishes to rely on a foreign law, notice should be given in the trial court so that the adverse party has an adequ ate opp ortunity to prepar e his arg umen ts on the foreign law. Ferricks v. General Motors Corp., 274 Md. 288 , 296, 336 A.2d 1 18,123 (1975); Dialist Co. v. Puford , 42 Md. 7 v. American Casualty Co. of Reading, Pa., 839 F. 2d 212 (4 th Cir. 1988); Gregory v. Home Ins. Co., 876 F. 2d 602 (7 th Cir. 1989) ; Chemstar, Inc. v. Liberty Mutual Ins. Co., 41 F. 3d 429 (9 th Cir. 1994) ; Mead Reinsurance v. Granite State Insurance Co., 873 F. 2d 1185 (9 th Cir. 1989); Continental Cas. Co. v . Wendt, 205 F. 3d 1258 (11th Cir. 2000) (adopting opinion in Continental Cas . Co. v. Ha ll, 1999 U.S. Dist. LE XIS 21258 ); Continental Cas. Co. v. Brooks, 698 So. 2d 76 3 (Ala. 1997); Bay Cities Paving & Grading, Inc. v. Lawyers Mut. Ins. Co., 855 P. 2d 1263 (Cal. 1993). Gregory, Wendt, Bay Cities and Brooks all involved legal malpractice actions . In Gregory, the attorney for the broker of a videotape series, in addition to providing services in connection with the videotape investment program, drafted the production service App. 173, 399 A.2d 1374 (1979) (holding when neither party gives notice of an intention to rely on f oreign law, ou r courts w ill apply M aryland L aw). Here, the appellee is, in effect, asking us to take judicial notice of Tennessee law in spite of its failure to comply with § 10-504. Although we may, in our discretion take judicial notice of foreign law where the statutory notification was not given and proof of the fore ign law was n ot prese nted, Chambco v. Urban Masonry Corp., 338 Md. 417, 421, 659 A.2 d 297, 29 9 (1995); Harry L. Sheinman & Sons v. Scranton Life Ins. Co., 125 F. 2d 442, 4 44 (3d C ir. 1942); M.N. Axinn Co. v. Gibraltar Development, 45 N.J. Super. 523, 133 A. 2d 34 1, 347 (19 57); Litsinger Sign Co. v. American Sign Co. 11 Ohio St. 2d 1, 227 N.E. 2d 609, 613-614 (1967), as we did in Ferricks, supra, we decline to do so here because the case proceeded in the trial court on the assumption that Maryland Law was applicable, and we granted certiorari on that b asis. Ferricks, 274 Md. at 296, 336 A. 2d at123. Furthermore, the appellee concedes that [i]t is immaterial whether the issue in the this case is governed by Tennessee or Maryland Law, and that neither party has suggested that the outcome would be different under the laws of the two states, and the analogous cases construing the relatedness concept. (Memorandum in Support of Defendants Motion for Summary Judgment, at 2, fn. 2). Thus, we apply Maryland law. 8 agreement and promissory note to be signed by the videotape purchasers and a tax and security opinion letter concerning the videotape sales. The tax and security opinion letter was reprinted in a sales brochure d istributed to prospective buyers, in which investors were advised that the videotapes were not securities and that their purchase would have certain tax advantages. 876 F. 2d at 602-6 03. When the Internal Revenue Service disallowed the deductions the attorney advised would be allowed, a class action lawsuit was filed, in which, inter alia, the attorney w as joine d via cro ss-claim for ma lpractice . Id. at 603. The case was settled when th e court to which the action was assigned he ld, also contrary to the attorney s advise, that the videotape sales were investme nt contracts and did no t qualify for a p rivate offering exem ption. Id. The settlement contemplated that a declaratory judgment action would be brought to determine whether, under the attorney s prof essional liability policy, the per claim limit of liability or the aggregate limit applied to the class claims. Under that policy, [t]wo or more cla ims arising o ut of a single act, error, omission or personal injury or a series of related acts, errors, om issions or pe rsonal injuries shall be treated as a single claim. Id. at 604. The court held that the claims flow ing from both the a ttorney s alleged error in the opinion letter with respect to the tax consequences of buying videotapes pursuant to the videotape offering and his error concerning the videotape promo tion as a security were sufficiently related to be considered a single claim u nder th e insura nce po licy. Id. at 605606. This was so, the court reasoned, because the acts giving rise to the claims could be 9 considered causally c onnec ted, sinc e they we re perfo rmed b y a single in dividu al ... and involved legal advice and drafting of three documents all of which flowed from his structuring the deal to try to achieve certain tax and security consequences. Id. at 605. The limits of a lawyer s Professional Liability Insurance Policy were also at issue in Wendt. That policy defined the limit of liability stated for each claim as the maximum we will pay for all claims and claim expenses arising out of, or in connection with, the same or related wrongful acts. Id. at 1260. The precise issue was whether the acts of an attorney forming the basis for a suit against him for making false and mislea ding statem ents were related, or logically connected, to those forming the basis for a later third party complaint asserting sim ilar misrepres entations ag ainst him. Id. at 1263 . As in Gregory, the attorney in Wendt, in addition to performing legal services regarding various aspects of the transactions, promoted the sales of n otes issued b y his client. 205 F. 3d at 1259. The activities in that regard, it was alleged, consisted of appearing at seminars and holding himself out as knowledgeable in securities law; representing at these seminars the legality of his client s loans; v ouching f or the legality of th e loans w ith clients to whom he had a fiduciary duty; and taking loans of money from his employees, drafting brochures for use by promoters, and various other illegal and unethical activities all performed with the aim of supporting investment in [his client s] loans. Id. at 1263 . Holding that [t]he plain meaning of the word relate is to show or establish a logical or causal connection between, the court concluded that the suits did relate or have a logical 10 connection in any mean ingful sense of the w ord. Id. It explained: It is clear that Hall s course of conduct encouraged investment in [the client s] notes. Though clearly this course of conduct involved different types of acts, these acts were tied together because all were a imed at a sin gle particular goal. The f act that these a cts resulted in a number of different harms to different persons, who have different types of causes of action against Hall does not render the wrongful acts themselves to be unrelated for the purposes of the insur ance con tract. Rather, th ey comprised a single course of condu ct desig ned to p romote investm ent in [th e client]. It is this same course of conduct which serves as the basis for [the later] litigation. The conduct at issue in both cases was arguably the same and at the very least related in any co mmo n sense unders tanding of the w ord. In Bay Cities, the attorney representing a general contractor filed a mechanic s lien, but failed both to serve a stop notice on the con struction s len ders and to file a comp laint to foreclose the mechanic s lien. 855 P. 2d at 1264. Consequently, being unable to collect the amount it was owed, the general contractor filed a malpractice action against the at torney, whose professional liability policy limited coverage to $ 250,000 for each claim. Under the policy, Two o r more claim s arising out o f a single act, e rror or omission or a series of related acts, errors or omissions shall be treated as a single claim. Id. The court rejected the plaintiff s argument that the two acts of negligence constituted two claims for purposes of the policy s per claim maxim um co verage . Id. at 1270. It held, in any event, that, if two claims, they were related within the contemplation of the policy, noting: The two errors b y the attorney are re lated in mu ltiple respects. They arose out of the same specific transaction, the collection of a single debt. They arose as to the sa me clie nt. They were committed by the same attorney. They resulted in the same injury, loss of the debt. No objectively reasonable insured under this policy could have expected that he would be en titled to 11 covera ge for tw o claim s unde r this pol icy. Id. at 1275.6 Dorsey is quite similar. There, an attorney prepared four quitclaim deeds and a durable power of attorney for the attorney s client. 698 So. 2d at 765. Her professional liability policy limited the carrier s liability, as follows: [T]he limit of liability stated for each claim is the maximum we will pay for all claims and claim expenses arising out o f, or in connection with, the same or relate d wro ngful a cts. Id. at 764. Holding that there was only one act of malpractice and, therefore, that the per claim limit of liability applied, the court commented: Although the record shows that Egbert committed various acts of malpractice in connection with preparing deeds, wills, and a power of attorney, all of those acts , in our judgm ent, led to a sing le result that formed the basis of Brooks s claim: th e loss of title to pro perty. Id. at 765. At issue in Chemstar were what constitutes an occurrence under a third party insurance contract and when the coverage under the policy is triggered among successive policy years. Twenty eight homeowners, who purchased high-periclase lime plaster, 6 The court also held that the term, related , as used in the policy and under the circumstances, is not ambiguous and is not limited to those acts that are causally related. Bay Cities Paving & Grading, Inc. v. Lawyers Mut. Ins. Co., 855 P. 2d 1263, 12 75 (Cal. 1993). 12 manufactured by Chemstar and intended for exterior use only, sued Chemstar and a distributer when they used the lime plaster on the interior of their homes and the plaster pitted. Chemstar sought indemnity an d defens e from its ins urer, who se policy require d it to pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed on the insured ... for damages because of ... destruction of tangible property during the policy period ... caused by an occurrence. 41 F. 3d at 431. The court determined that all of the plaster pitting claims arose from a single occurrence, and that the underlying cause of the plaster pitting was the failure of the distributer to warn the end users that it was not suitable for interior use . Id. at 431-32. Noting that there was no intervening , proximate cause afte r the failure to w arn, the cou rt conclude d that the fact that the 28 incidents of pitting involved different homes, claimants, sources of lime, and times does not prelude a finding that the incidents arose from th e same underl ying cau se. Id. at 433. To like effect is Mead, except that, instead of plaster pitting, in that case the court determined that 11 of 12 § 1983 lawsuits stemmed from on e occurren ce, the 11 co mplaints alleging the same excessive force policy and being premised upon the C ity s deliberate indifference to excessive force by its police department. 873 F. 2d at 1187-88. In Atlantic Permanent, one of the issues wa s the num ber of ded uctibles app licable to a directors and officers liability insurance p olicy where m ultiple plaintiffs brought m ultiple claims against the insured officers. 839 F. 2d at 219. The plaintiffs w ere loan customers who sued the Savings and Loan, its subsidiary and three of its officers, alleging that they 13 had engaged in various fraudulent and deceptive sales tactics in con nection with Atlantic s home improvemen t loan program. Id. at 213. The court aff irmed the district court s holding that when the claims asserted against the insureds arise out of a series of interrelated acts - here, the planning and carrying out of Atlantic s home improvement program - they should be treated as a single loss for the purposes of calculating the deduc tible. Id. at 219. This is the position espoused by the appellees. The appellants, n ot surprisingly, see the resolution o f the issues in this case qu ite diff eren tly. They point out that, under the professional liability policy at issue in this case, only damages and claims arising out of the same, related or continuing Professional Services fall w ithin the in sura nce c omp any s liabi lity. What constitutes the same or related professional service is, the appellants contend, ambiguous. Noting that the American Heritage Dictionary of the English Language 1539 (4 th ed. 2000), define s sam e as th e very on e; identic al, the appellan ts argue that, as the claim of each of the Be ale children is a separate and distinct case, requiring the rendering of professional services personal to the particular child, the professional services performed, or not performed, in that case are not the same professional services performed, or not performed, in the case of the other children. The professional services rendered in the case of one of the children, to be sure, may be the same services for purposes of the claims of persons other than a nother clien t, i.e. those, like the claim of the child s mother perhaps, 14 dependent on the claim of that child. Thus, the appellants submit that there are two reasonab le and logical interpretations of the term, same. They also reject the appellee s argument that, since the five cases were consolidated and then all of them were neglected, with nothing b eing done in any of them , with the resu lt that they were all dismissed at the same time, the same professional service was rendered to each - each child received the same le gal serv ice of to tal negle ct. The appellants also deny that the claims are related. First, they maintain that the term, related is ambiguous. Referring again to the dictionary definition, the appellan ts note that rela ted is defined as connected, associated, American Heritage Dictionary of the English Language 1473 (4 th ed. 200 0), and standin g in relat ion: con nected ; allied; ak in. Black s Law Dictionary, 1288, (6 th ed. 199 0). From these definitions, they point out, two lines of ca ses h ave e volv ed, o ne ex emp lified by Scott v. American National Fire Ins. Co., 216 F. Supp. 2d 689 (N.D. Ohio 2002), in w hich the relate dness is causal, and the oth er, in which the relate dness may be e ither solely logical or both logical and causal. Under either approach , the appellan ts submit, the a pplicable lim it of liability is the aggregate one. This is so, they assert, because that result is dictated by the rules of construction applicable to the interpretation of contracts of insurance: Where terms are ambiguous, extrinsic and parol evidence may be considered to ascertain the int entions of the p arties. Cheney, supra, 315 Md. at 766-67, 556 A.2d [at 1138]. Maryland does not follow the rule, adopted in many jurisdictions, that an insurance policy is to be construed most strongly against the insurer. Id. Nevertheless, if no extrinsic or parol evidence is introduced, 15 or if the ambiguity remains after con sideration of the extrinsic or parol evidence that is introduc ed, it will be co nstrued ag ainst the insurer as the drafter of the instrument. Id.; see also, e.g., Collier [v. MD-Individual Practice Ass n, 327 Md. 1, 5-6, 607 A.2d 537, 539 (1992)]; Mut[ual] Fire, Marine & Inland Ins. [Co.] v. Vollmer, 306 Md. 243, 251, 508 A.2d 130[, 134] (1986); St. Paul Fire & Mar. Ins. [Co.] v. Pryseski, 292 M d. 187, 1 93-96 , 438 A .2d 282[, 285-87] (1 981); Truck Ins. Exch. v . Marks R entals, 288 Md. 428, 435, 418 A.2d 1187[ , 1191] (1980); Aragona v. St. Pau l Fire & Mar. Ins. [C o.], 281 M d. 371, 3 75, 378 A.2d 1 346[, 1 349] (1 977). Bushey v. Nor thern A ssur. Co . of Am erica, 362 Md. 626 , 632, 766 A.2d 5 98, 601 (2001), quoting Sullins v. Allstate Ins. Co., 340 M d. 503, 5 08-09 , 667 A .2d 617 , 619 (1 995). As in this case, th ey point out, no paro le ev iden ce of proo f of indu stry standards as relates to the language under review was offered and nothing was offered as to any technical meanings or meanings deviating from common usage. The first approach, which the appellants urge the Court to adopt, they state is an objective viewing o f whethe r the services provided were rela ted b y one s being caused by the other. In this case, they submit that [n]ot only were the attorney s duties to each of the children distinct and separate - since the set of duties were owed separately in each child s case to that individual child - but the breach of the duties ow ed to each child resulted in distinct, separate ha rm to each child. Thu s, they say, that the attorn ey s actions w ith respect to each of the Beale children coincided temporally was mere coincidence: The same mistake was just m ade at the sa me time in each of the children s cases. The lack of knowledge as to the appropriate way to handle a lead poisoning claim merely became apparent in five cases at once because of the unfortun ate happenstance that all five of those cases were filed together 16 becau se of th eir com mon f acts. The appellants acknowledge that there may be, and were, causally related legal errors within any one child s case, i.e., to each child, the claims of the parents. Turning to the second approach, the appellants insist that, because it focuses on related in the abstract and, so viewed, it is broad enough to encompass non-causative relation ships, it leads to a slippery slope; [i]n som e manne r, they argue, e verything is relat ed to ever ything else . T o avoid w hat th ey perceive to be an illogical r esult, ... the Appellants urge that even if this next line of cases is applied and logical connections are enough to make legal services related, the rule that the proposed logical connection cannot be too attenuated and also must comport with the reasonable expectations of the contracting parties, dictates the same ruling in the instant c ase - that there are five claims subject to the aggregate limit. This is so because any proposed logical connection between the legal services provided the children which makes them not separate, individual claims is not reasonable in the context of the policy of legal malpractice insurance. All proposed logical connections among the legal services which would make them one claim render the existence of an aggregate limit in the policy unnecessary surplusage and requires that the policy be interpreted contrary to the reasonable expectations of the parties. II We agree with the appellants that the claim of one of the Beale children does not arise out of the same or re lated profe ssional servic es rendere d by the attorne y in the case of one of the other children. We reach this conclusion for two reasons. It is well settled in Maryland, that insurance p olicies, like other contracts, are 17 construed as a whole to determine the parties intention. Bushey, et al. v. N. Assurance Co. of Am., 362 Md. 626 ., 631, 766 A.2d 59 8, 600 (2001). This Co urt has ma de it clear that w ith insurance contracts word s are giv en their custom ary, ordina ry and ac cepted mean ing, unless there is an indication that the parties intende d to use the wo rds in a te chnica l sense. Id. The ordinary meaning of a word is properly tested by what a reasonably prudent lay person would attach to them. Id. If the language in the policy suggests more than one meaning to a reasonably prudent layperson, then it is ambiguo us, and par ol and/or ex trinsic evidence may be introduced to determine the intent of the parties. Id. at 631-32, 766 A. 2d at 600-601. If, how ever, no parol and/or extrinsic evidence is offered, or where the ambiguity remains after its consideration, and the policy was drafted entirely by the insurance com pany, as is usu ally the cas e, the policy is construed against the insurance company as the drafter of the in strume nt. Id. at 632, 766 A. 2d at 601. February 17, 2004 In the case sub judice, neither parol nor ex trinsic evidence was offered or considered by the trial court. Therefore, to the extent that either or both of the terms, same and related , is ambiguous, the limit of liability provision must be construed against the appellee as the drafter of the provision and in favor of the appellants. That would mean applying the agg regate lim it of liabil ity. More important, we believe, the parties intentions are more accurately determined by recognizing, and giving effect to, the duty that an attorney owes to e ach client ind ividually and separate and apart from that owed his or her other clients. 18 The case law applicable to this situation and interpreting insurance policy provisions both identic al, and sim ilar, to those at issue sub judice, including some of the cases relie d on by the ap pellee, supp ort this result. Scott v. American National Fire Insurance Company, Inc., 216 F. Supp. 2d 689 (N.D. Ohio 2002) w as a malpra ctice action b rought by clien ts of an attorne y as a result of that attorney s activities in connection with the creation of a corpora tion, formed to man ufacture and market golf equipment and appa rel, that failed. Two of the clients were investors in the corporation that was fo rmed and the third wa s the corpo ration. The p rofessiona l liability policy at issue in that case provided that [c]laims alleging, based upon, arising out of or attributable to the same or related acts , errors, or om issions shall be treated as a single claim regardless of whether made against one or more than one insured. After the suit was filed, the attorney soug ht a declaratory judgment to establish the limits of coverage. Concluding that the attorney represented three separate clients and that each of them was owed different duties and res ponsib ilities, the c ourt he ld that th e aggre gate lim it of liability applied . explained: Scott s malpractice actions are unrelated because Scott owed separate and distinct duties to Stimer, Ungar, and RIPIT. Further, the investors rights are separate from RIPIT s rights. For example, Stimer and Ungar had a sep arate right to be protected from e xposure to persona l liability for RIPIT s obligations. Scott had a corresponding duty to proper ly incorporate RIPIT to shield Stimer and Ungar from corporate liability. This duty is separate and unrelated to Scott s duty to R IPIT to pro perly transfer Ackerman s intellectual property rights. Scott also had a duty to RIPIT to learn the status of the USGA s approval of the RIPIT 1357 club to ensure that Ackerman s patent and trademark rights ha d value . This duty is diff erent in kind from the d uty Scott owed Un gar and Stimer. RIP IT had a corresponding right to have Sc ott 19 It ensure that Ac kerma n s intelle ctual pro perty righ ts had v alue. Id. at 695. The Scott court relied on St. Paul Fire & Marine Ins. Co. v. Chong, 787 F. Supp. 183 (D. Kan . 1992); Continental Cas. Co. v. Grossmann, 648 N. E. 2d 175 (Ill. App. 199 5). See also Nat l Union Ins. Co. of Pittsburgh, Pa. v. Holmes & Graven, Chartered, 23 F. Supp. 2d 1057 (D. Minn. 1998); Continental Cas. Co. v. First Arlington Investment Corporation, 497 So. 2d 72 6 (Fla. App. 1986 ). Chong was also a declaratory judgment action to determine the policy limits of an attorney s professional liability insurance policy. 787 F. Supp. 2d at 184. There the attorney had represented, in a single trial, three defendants, each charged with kidnaping. Id. at 186. The policy provide d that $ 100 ,000.00 is th e most w e'll pay for all claims that result from a single wrongful act or a series of related wrongful acts. Id. The critical issue, therefore, was the interpretation of the phrase, series of related wrongful acts. Id. It was stipulated that the attorne y committed a t least 25 neg ligent actions and omis sions with respect to each defendant and that those actions and omissions were similar as to each defen dant, bu t not iden tical. Id. at 188. Finding the term related and the phrase series of related wro ngful acts to be ambiguous and, therefore, construing the policy most favorably to the insured, the court held that the defendants claims did not arise out of a series of related wrongful acts, bu t, rather, were the result of multiple discrete omissions and actions on the part of [the attorney] which resulted in discrete losses to each of the three defendants. Id. The court then stated: 20 Without engaging in a lengthy review of an attorney's obligations to his clients, the court notes, as have the defendants, that [the attorney] owed separate duties to each of the three d efendants. In order to protect the individual interests of Chang, Chong and Kim, it was necessary for [the attorney] to render separa te servic es wh ich we re distinc t to each of them . Id., quoting First Arlington Investment Corporation, 497 So. 2d at 728. With resp ect to this latter point, the court elucidated: Even focusing solely on [the attorney s] advice to each defendant to plead guilty, the court finds that such acts are separate wrongful acts. Although the criminal charges may have arisen out of the same set of events, each defendant clearly was in a different position and arguably had his own set of defenses. Further, each def endant w as arguab ly at a different level with respect to his ability to speak and understand English. In short, each def endant bro ught a unique set of circumstances with him which should have been considered by [the atto rney] in de ciding h ow to a dvise e ach de fenda nt. Id. at 188 n.6. In First Arlington Investment Corporation, an attorney, retained by their insurance carrier, represen ted F irst A rling ton, w ho owne d the real p rope rty, and LaPlaya, the owner of the resort built on that real property and a pier extending from it, in connection with a personal injury action brought against them. 497 So. 2d at 727. Having been found liable for the in jury and assessed damages well in excess of their insurance coverage, First Arlington and LaPlaya sued their insurance carrier and the attorney. They alleged that the attorney committed errors or ov ersights in his represe ntation. Id. Specifically, the plaintiffs complained that the attorney had only one file and defende d both clien ts when there was a conflict of interest, First Arlington having tran sferred all of the improv ements to LaPlaya and 21 leased to it the und erlying lan d whe re the ac cident o ccurred . Id. at 727-28. The insurance policy provided that the total limit o f the carrier s lia bility for each claim was all damages arising out of all acts or omissions in connection with the same professional service regardless of the number of claims or claimants. C oncluding that the per cla im limit did not apply, the co urt pointed o ut: This is not a case where a lawyer was representing two clients with consistent positions. In o rder to protec t each of h is clients, it was necessary for him to render sep arate services which were distinct to each of them. The damages to each party w ere caused when [ the attorney] faile d to raise the defenses appropriate to each party. Thus, the damages did not arise from the same professional service but a rose from acts or om issions in the separate and distinct professional services [the attorney] provided, or should have provided, to the tw o clients . Id. at 728. Grossmann is to like effect. There, three clients brought malpractice actions against an attorney and, at the same time, charged the attorney and another, in other counts of the complaint with breach of three separate co ntracts , fraud and breach of fiduciary duties , all involving the sale of stock in a corporation. 648 N. E. 2d at 176. The attorney sought a defense from his professiona l liability insurer, which counter claimed, joining the plaintiffs, and demanding a ju dgment limiting the attorney s right of recovery to the per claim limit of the policy. Id. Because the policy limited its liability to $ 100,000.00 in respect to all claims or claim expenses arising out of, or in connection with, the same or related wrongful acts, and the malpractice action was by three clients, the insurer argued that there w as only 22 one claim within the m eani ng of the policy. Id. The trial court agreed. Finding that the thread of these claims was ... one act, the attorney s lying to investors, it he ld that all of the alleged wrongful acts were r elated with in the mea ning of the policy and tha t the per claim limit applied . Id. at 176-77 . The Illinois Appellate Court disagreed. Having noted the inappropriateness of the trial court s declaration of a limit on policy coverage in advance of trial, the court explained: Here, the insurer s lia bility will not be m aximized if the underlying plaintiffs prove all of their allegations, as the trial court assumed. Instead, the insurer may have greater liability if [the attorney] succeeds in disproving the allegation that he knowingly participated in Plantan s scheme to defraud the underlying plaintiffs. The alleged acts of malpractice become, then, entirely separate negligent mistakes, involving different transactions, different persons, and different b ank acco unts, related o nly in the coincid ence that all o f the acts in some way relate to various investments in or by the Springdale Corporation. The insurer may be liable for more than $100,000 based on many sets of acts alleged in the com plaint, which remain un related unles s the plaintiffs prove [the attorney s] participation in the fraudulent scheme. Id. at 177-78. The court set out sets of negligent acts as examples of possible jury findings that would result in the attorney and the insurer being liable to the plaintiffs for three unrelated acts. Id. See Nat l Union Ins. Co . of Pittsburgh, Pa., 23 F. Supp. 2d at 1070 (malpractice claims unrelated where the losses generated b y the attorney s mistakes were different and not coterm inous). The cases on which the trial cou rt and the ap pellee relied a re not to the c ontrary; in fact, they are quite consistent. None of those cases involves separate professional services. 23 In Bay Cities, the question was w hether, wh en an attorn ey commits tw o separate a cts of negligence in the same matter that preclud e his client s righ t to recover a single sum against either of two other parties, on either of two legal theories, the attorney s malpractice insurer is liable for only one claim under the policy, or is liable for two claims. 855 P. 2d at 1275, Kennard, J., Concurring. Dorsey likewise inv olved the c ommissio n of mu ltiple errors in the represe ntation o f a sing le client. 6 98 So . 2d at 76 5-66. In both Gregory and Wendt, the attorney w as engag ed in a course of conduct designed to encourag e investme nt in his client o r his client s n otes. Gregory, 876 F. 2d at 605 ; Wendt, 205 F. 3d at 1264. In Gregory, the attorney was brought into the litigation by his client, who had been sued by its investors,7 via a cro ss-claim for ma lpractice . Thus, there was but one claim arising o ut of pr ofessio nal serv ices in th at case. The attorney in Wendt was sued by a selling agent of his client, who filed a third party complaint against him, alleging that he had made m isrepresenta tions conce rning the leg ality of the client s notes. The court noted that, notw ithstand ing the th ird party co mplain t, the case does not present sepa rate p rofe ssional services. [ The attor ney] allegedly held himself out as an attorney who had particular knowledge of securities law and who represented to investors and agents of K. D. Trinh, the legality of the pro missory n otes. 205 F . 3d at 12 62 n. 1. 7 There is no inconsistency between advice given a client or work done for a client forming the basis for, and being related to, a claim made by third parties with whom the advice or wo rk is sha red. 24 The attorney in this case undertook to represent each of the Beale children. Although each of them had been exposed to, and poisoned by, the lead paint in the house that they shared and, theref ore, those w ere facts in c ommo n to all, their case s were no t at all identical. The extent of the poisoning and, hence, the injury to each child and, ultimately, the amount of damages to which each was entitled as a result were, and are, clear differences. Conseq uently, the result in one case would not foreshadow, nece ssarily, the result in any of the others. Moreover, the attorney owed a duty to each o f the children ; he could not rely on the service rendered in one case being sufficient to meet the needs of the client in any of the other cases. In other words, an investigation as to one child, or having that child examined, applies only with respect to that child; it provides no information with respect to, and furthers not at all, the case of any other child. Thus, while the same skill set and process, those proven to be effective in the representation of clients lead paint cases, may have been applicable to the handling of all of the Beale cases, because of the individual differences in the children and the distinct and separate duty that the attorney owes to each, the utilization of those skills and process in the rendering o f professio nal services o n behalf of one of the children is not the same professional service as, or even related to, the professional services that must be re ndered o n behalf of the other children. By parity of reasoning, an omission the failure to utilize the skills and process, thus neglecting each of the cases, - does not make related, or the same, that which would not have been related, or the same, if it were an action. 25 JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY REVERSED. CASE REMANDED TO THAT COURT FOR ENTRY OF JUDGMENT IN FAVOR OF THE APPELLANTS AND A DECLARATION THAT THE AGGREGATE LIMIT OF LIABILITY APPLIES TO THE APPELLANTS CLAIMS AGAINST THE APPELLEE. COSTS TO BE PAID BY THE APPELLEE. 26
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