223 A.3d 1061
Md. Ct. Spec. App.2020Background
- The property at 447 N. Linwood Ave. was held in a securitization Trust; Bank of New York Mellon (BNYM) served as trustee under a Pooling and Servicing Agreement (PSA) and acquired the property at foreclosure in December 2001 and took possession in 2002.
- Minors Ashley and Alyaa Hector lived at the property in 2001–2002 and allege permanent injuries from lead paint exposure.
- Plaintiffs sued BNYM in its individual capacity (not as trustee), alleging BNYM was an “owner” under the Baltimore City Housing Code and negligent in maintaining the property.
- BNYM moved for summary judgment, submitting an affidavit (Burnaman) and the PSA showing the trustee’s role was passive (safekeeping, distribution, relaying information); the servicer, not the trustee, handled REO management, sale, and environmental matters.
- The circuit court granted summary judgment and later struck the amended complaint; the Court of Special Appeals affirmed, holding plaintiffs failed to show BNYM (as trustee) was personally at fault.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BNYM can be sued in its individual capacity for torts arising from the property | Hector: ET § 14.5-908 allows trustee liability and BNYM (having purchased at foreclosure) is an owner under the Housing Code | BNYM: trustee and individual capacities are distinct; BNYM’s only connection was as trustee and it had no personal duty or control | A trustee may be sued individually only if personally at fault; here plaintiffs failed to show personal fault; summary judgment affirmed |
| Whether BNYM (as trustee) qualifies as an “owner” under the Baltimore City Housing Code | Hector: trustee status places BNYM within Housing Code definition of owner | BNYM: even if trustee is record owner, ownership under the Code does not automatically create individual tort liability | Court: trustee as record title owner can be an “owner” under the Code, but that status alone does not establish personal liability |
| Standard for personal liability of a trustee for torts arising from trust property | Hector: relies on statutory language suggesting trustees can be liable | BNYM: liability limited—trustee not personally liable absent personal fault; PSA shows passive trustee role | Court adopts Restatement (Third) §106: trustee personally liable for torts only if personally at fault (i.e., personally committed, inspired, or participated) |
| Sufficiency of evidence to survive summary judgment | Hector: purchase at foreclosure and title suffice to impose duty/liability | BNYM: produced uncontroverted evidence (PSA, affidavit) that trustee had no management/control; plaintiffs produced no sworn facts contradicting that | Held: plaintiffs offered only bald assertions and no factual dispute; failed to show personal fault; summary judgment proper |
Key Cases Cited
- Allen v. Dackman, 413 Md. 132 (Court of Appeals 2010) (defines when an individual associated with an entity can be an “owner” under the Baltimore City Housing Code and explains personal liability requires personal participation in torts)
- Hooke v. Equitable Credit Corp., 33 Md. App. 437 (Md. Ct. Spec. App. 1976) (distinguishes a party sued in a representative/trustee capacity from that same party in an individual capacity)
- Shipley v. Perlberg, 140 Md. App. 257 (Md. Ct. Spec. App. 2001) (corporate officer may be an “owner” yet not personally liable absent direct involvement in property management or tortious conduct)