Roman v. Sage Title Group, LLC
146 A.3d 479
Md. Ct. Spec. App.2016Background
- Roman, a bridge lender, deposited $2,420,000 by three cashier's checks into Sage Title's escrow account to evidence liquidity for two real-estate projects; the parties agreed the funds remained Roman's and would be returned when loans were secured.
- Kevin Sniffen, Sage Title's Baltimore branch manager, had authority to accept deposits and disburse escrow funds; he later disbursed Roman's funds per developer McCloskey's instructions and was fired and criminally convicted for related fraud.
- Roman sued Sage Title for conversion, negligence, and accounting; at trial the jury awarded Roman $2,420,000 on conversion, but the trial court granted Sage Title's JNOV, vacating the verdict on the ground that the funds were commingled and thus not subject to conversion.
- The trial court separately granted Sage Title judgment on the negligence claim, holding that expert testimony was required to prove the title company's standard of care.
- On appeal the Court of Special Appeals reversed the JNOV as to conversion (holding the escrowed funds were sufficiently specific, segregated, and identifiable) and affirmed the dismissal of the negligence claim for lack of expert proof.
Issues
| Issue | Plaintiff's Argument (Roman) | Defendant's Argument (Sage Title) | Held |
|---|---|---|---|
| Whether JNOV on conversion was proper given alleged commingling | Funds were escrowed for a specific purpose, tracked by ledger entries and identifiable by three checks, so conversion claim is maintainable | Commingling of funds in single escrow account defeats conversion; exception for segregated funds is narrow and inapplicable | Reversed: funds were sufficiently specific, segregated, and identifiable despite being in an escrow account; conversion claim could go to jury |
| Whether Sage Title is vicariously liable for Sniffen's conversion (respondeat superior) | Evidence supported triable issue: Sniffen was authorized to receive/disburse/disburse funds and Sage Title benefitted; prior policy violations made misconduct foreseeable | Sniffen's criminal acts were outside scope and not for employer's benefit; thus no vicarious liability | Issue was preserved and properly submitted to jury; reasonable jury could find scope of employment and foreseeability |
| Whether unclean hands / in pari delicto bars Roman's claim | Romans denies knowing participation in fraud; defense not raised properly | Sage Title contends Roman knew of false escrow scheme and cannot recover | Affirmed waiver: Sage Title failed to preserve this ground in its pre-verdict motion, so defense waived |
| Whether expert testimony was required to prove negligence / standard of care for a title company | Negligence was obvious (unauthorized transfer) and Sage Title had no safeguards; expert unnecessary | Title-company practices/escrow procedures are specialized and beyond lay knowledge; plaintiff needed expert proof of standard | Affirmed: expert testimony required because escrow/title-company procedures are beyond ken of ordinary juror; dismissal of negligence claim proper |
Key Cases Cited
- Thompson v. UBS Fin. Servs., 443 Md. 47 (Court of Appeals of Md.) (conversion doctrine overview)
- Allied Investment Corp. v. Jasen, 354 Md. 547 (Court of Appeals of Md.) (money generally not subject to conversion except if specific, segregated, identifiable)
- Barclay v. Briscoe, 427 Md. 270 (Court of Appeals of Md.) (scope of employment/respondeat superior principles)
- Jones v. State, 425 Md. 1 (Court of Appeals of Md.) (when expert testimony is required to establish professional standard of care)
- Schultz v. Bank of America, 413 Md. 15 (Court of Appeals of Md.) (expert testimony required for bank-standard issues not within lay knowledge)
- Saxon Mortgage Servs., Inc. v. Harrison, 186 Md. App. 228 (Md. Ct. Spec. App.) (bank procedures and when expert proof unnecessary)