Volkman v. Hanover Investment, Inc.
126 A.3d 208
Md. Ct. Spec. App.2015Background
- OCC is a Maryland corporation providing utility call-processing services and maintains multi-state contracts; Volkman was employed since 1984 and became vice president with a Minnesota office under a long-term agreement demanding good cause termination.
- Hanover Investments acquired OCC debt via Hanover shares; Hoffman created Hanover to own OCC, and issued shares to longtime OCC employees, including Volkman, under a voting trust and redemption scheme for good cause terminations.
- Shareholders’ agreement allowed redemption at 90% discount if OCC terminated a shareholder for good cause; good cause included substantial misconduct or breach of agreements.
- OCC terminated Volkman for alleged mismanagement of Minnesota call center, including missing GSOC-recorded calls; Volkman contends the termination was not for good cause and due to client pressure, not performance.
- Hanover redeemed Volkman’s Hanover stock at a 90% discount and Volkman filed a Minnesota breach-of-contract action seeking specific performance under the shareholders’ agreement; concurrent Minnesota proceedings addressed similar issues.
- Meanwhile, in Maryland, Volkman filed an employment action against OCC and Hoff (stated dismissal with prejudice later) and Hanover filed a Maryland declaratory-judgment action seeking to declare proper redemption under the shareholders’ agreement; both cross-motions for summary judgment were denied without reasons in the Maryland case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether declaratory judgment was proper while Minnesota action was pending | Volkman argues declaratory judgment should be stayed or dismissed. | Hanover contends declaratory judgment is appropriate to resolve rights under the agreement. | Declaratory judgment reversed; not proper while Minnesota action pending. |
Key Cases Cited
- Waicker v. Colbert, 347 Md. 108 (Md. 1997) (declaratory judgment while similar action pending generally disfavored)
- A. S. Abell Co. v. Sweeney, 274 Md. 715 (Md. 1975) (unusual and compelling circumstances required to justify declaratory relief when pending action)
- Grimm v. Cnty. Comm’rs of Washington Cnty., 252 Md. 626 (Md. 1969) (tethered analysis of comity and declaratory relief in pending actions)
- Brohawn v. Transamerica Ins. Co., 276 Md. 396 (Md. 1975) (factors for determining appropriateness of declaratory relief when relief would affect pending actions)
- Post v. Bregman, 349 Md. 142 (Md. 1998) (declaratory relief and discretion within context of ongoing related actions)
- Sprenger v. Pub. Serv. Comm’n of Md., 400 Md. 1 (Md. 2007) (abuse of discretion review for declaratory judgments)
- Turnpike Farm Ltd. P’ship, 316 Md. 47 (Md. 1989) (declaratory relief generally disfavored when pending parallel action exists)
- Haynie v. Gold Bond Bldg. Prods., 306 Md. 644 (Md. 1986) (limits on exercising declaratory jurisdiction when parallel actions exist)
- Popham v. State Farm, 333 Md. 136 (Md. 1993) (restating caution against declaratory relief duplicating pending actions)