Schaefer v. Miller

PRO- FOR FURTHER THAT COURT TO MANDED OPIN- WITH THIS NOT INCONSISTENT CEEDINGS BY RESPONDENT. BE PAID TO COSTS ION. A.2d 491 R. SCHAEFER Amelia A. MILLER. Gerald Term, 112, Sept. 1989. No. Maryland. Appeals 26, 1991.

March 6,May 1991. Reconsideration Denied Motion for Baltimore, O’Doherty, and A. J. Muffolett Patrick Amy petitioner. for Baltimore, respondent. Sykes,

Melvin J. MURPHY, C.J., ELDRIDGE, Argued before CHASANOW, JJ., McAULIFFE, RODOWSKY, * **, (Retired). ADKINS JJ. COLE C.J., of the MURPHY, announcing judgment Court, in RODOWSKY opinion McAULIFFE, JJ., ELDRIDGE, J., in the concurs join; COLE opinion in an in which judgment CHASANOW, JJ., join. damages in a medical mal-

This case concerns in H R holding action. It focuses on our & Block practice (1975), Testerman, 36, 275 838 v. Md. A.2d 48 Inc. one out of a arising “where the tort is contractual relation- prerequisite malice is a to the of ship, recovery actual 47, 338 damages.” Id. at A.2d 48.

I. general Maryland, It settled is well law elsewhere, prohibited are rule Building Sup action for of contract. pure breach Miller 341, 348, (1986); 1344 Rosen, Md. 503 A.2d v. 305 ply 309, 313, Co., 267 Md. 297 Trust Siegman Equitable v. (1972); Insur., v. 262 A.2d 758 Paul at Chase St. Life Mfrs. * Cole, J., retired, hearing participated in the and conference of this now Court; being of this after recalled case while an active member 3A, IV, Constitution, partici- pursuant he also Article Section pated adoption opinion. decision and this ** Adkins, retired, J., participated hearing in the and conference now participate did not case active member of this Court but this while an adoption opinion. in the decision and

300 denied, cert. 192, 236, 12, 857,

Md. 278 A.2d 404 U.S. 92 104, (1971); (Second) S.Ct. 30 L.Ed.2d 98 Restatement 5 Corbin on (1979); Contracts 355 Contracts 1077 § § (1964).

“In a tort case where punitive damages are permitted, to obtain such an a plaintiff order award must actual prove Equitable legal or its Siegman v. equivalent.” malice Co., supra, Trust 313-14, (footnote 267 Md. 297 A.2d 758 omitted); see D. Brooks, also C. Transit v. System 264 Md. Kessler, (1972); A.2d 251 Daugherty v. 287 264 281, 284, Associates Discount v. (1972); Md. 286 A.2d 95 570, 581-82, Hillary, Paul (1971); 262 Md. 278 A.2d St. 592 Insur., v. supra, at Chase 262 Md. at 278 Mfrs. Life v. 12; Damazo 627, 638, 259 Wahby, A.2d Md. 270 A.2d 814 or (1970). express “Actual malice has ... been character the performance legal ized as of an act without justification excuse, or but with an evil or rancorous motive influenced hate, purpose being deliberately and willfully plaintiff.” Testerman, supra, 275 injure Md. at 338 Rosen, A.2d Miller v. 48; Building Supply supra, 305 Md. Henderson 1344; Maryland v. Nat’l 503 A.2d 514, 519, Bank, v. (1976); 1 Siegman Md. 366 A.2d 278 Co., Equitable Trust 758; 267 Md. at 297 A.2d Smith, Fair 341, 352, v. Drug Md.

Implied legal defined as conduct “may be extraordinary of an nature characterized a wanton or rights Wedeman disregard reckless others.” see (1976); City Chevrolet Md. Piskor, Corp. also General Motors Insur., (1977); St. Paul at Chase v. Mfrs. Life 16 A.2d supra, 262 278 A.2d 12. atMd. Testerman, regarding we stated in the landmark case

As of arising actions out contractual rela- punitive damages Co., 107 Co. v. Knickerbocker Gardiner tionships is Md. 556, case, In 69 A. 405 the defendant caused There, plaintiff. to its contract with party third break “if, example, tending we for there was evidence to said to show that the defendant has caused contract be inten- purpose, broken for the sole and with the deliberate dam- wrongfully injuring plaintiff, exemplary tion of

301 569, 69 (emphasis Id. A. 405 be recovered.” ages might added). this rule foreshadowed application of Consistent See, v. e.g., Siegman rule announced in Testerman. A.2d 314, Md. at 297 758 Trust 267 Equitable supra, funds); v. Kes- (conversion checking Daugherty of account (1972) (tortious sler, induce- 286 A.2d 95 contract); v. ment to breach St. Paul Chase Mfrs. 238, (breach 278 12 of Insur., 262 Md. at A.2d supra, Life contract; obligation); negligent performance contractual 259 Md. at 270 814 Wahby, supra, v. Damazo contract). (tortious to inducement breach its there light progeny In Knickerbocker in which have only to be two cases appear arising of contracts: v. permitted torts out Rinaldi been (1969) (tortious Tana, Md. A.2d 533 interfer 252 250 contract) Thomas, 226 v. Md. McLung-Logan ence with (1961) (trover conversion). 494 In both of 172 A.2d In these actual malice was established. Rinaldi cases animosity, and in express McLung there was evidence of of an evil and motive. Logan spiteful there evidence Testerman, prepara- In plaintiffs negligent claimed tion of tax returns. We held that “where the tort is their arising relationship, one out a contractual actual malice 275 prerequisite recovery punitive damages.” is a Md. at We declined to explicitly A.2d 48. there arising extend rule torts out of con- tracts, id., and we followed the rule have Testerman See, Rite Aid v. e.g., Corp. of occasions. Lake number (slander Investors, (1984) Md. 471 A.2d Shore (false title); Piskor, supra, Motors v. Corp. General assault); Chevrolet, imprisonment City Wedeman Bank, (deceit); su- Maryland Henderson Nat’l 50,Md. (conversion); Food Fair Stores v. pra, Hevey, (1975) (conversion). II. A. began seeing

In Amelia R. Gerald Schaefer Miller, M.D., a for annual ophthalmologist, board certified years In when Schaefer was eye examinations. old, Miller determined that she was developing a cataract in her right eye. A new for prescription stronger lenses vision, improved Schaefer’s and she was satisfied with the glasses. examination,

At her next eye annual Miller July advised Schaefer that the cataract was to be re- ready Viewing moved. the evidence in a light most favorable to Schaefer, Miller advised her that the cataract needed to be perform removed but he did not an of her eye examination at that time Miller, and did not test her vision. on the other hand, performed claimed to acuity test, have an a binocular- test, and ity glaucoma a test. agreed

Schaefer have perform Miller a opera- cataract tion Agnes Hospital at St. on an outpatient basis. There- after Miller removed cataract and implanted intrao- cular eye.1 lens Schaefer’s The surgery went well and went that day. Schaefer home same A days few after Schaefer surgery, complained of her pain eye. Miller determined her was infect- eye ed, to the hospital. and admitted her She was treated with (re- antibiotics and Miller scheduled her for vitrectomy pus eye). moval of from The vitrectomy revealed a significant purulent amount of material Schaefer’s eye. weeks, the hospital Schaefer remained in for during two on antibiotics, which time she pain, suffered and was to see eye. unable out of affected visit, During subsequent August office again Miller determined that eye Schaefer’s was infected. visits, On that occasion and two office subsequent Miller eye therapy treated Schaefer’s laser a mem- \yith open blocking brane that was her After last vision. treat- ment, he told her that she had 20/40 vision in her eye. time, Schaefer visited Miller’s office more one when she brief, implants 1. In his Miller asserts that intraocular lens are a cataracts, technique treating they standard 90% of of the cases at the time were “used in operation, time of cases at the and in 95-98% [Schaefer's] trial.” there- Schaefer prescription eyeglasses. received a new one of ophthalmologists, of other sought opinions after Gleicher, as A. who later testified an Dr. was Dennis whom witness for Schaefer. expert Miller, malpractice against filed claim a medical

Schaefer Arbitra- A unanimous Health Claims October 1984. compensatory dam- panel tion awarded Schaefer $1.00 parties $25,000 damages. reject- Both and ages Thereafter, complaint filed Schaefer a ed the award. It City. Court for Baltimore against Miller in the Circuit (1) surgery that Miller performed contained two counts: (2) informed consent and that Miller on Schaefer without of care in comport applicable standards failed to with postoperative and treatment. preoperative Schaefer’s that Miller failed to jury, Before a Dr. Gleicher testified obtaining care for comply required with the standards of post-operative in- treating informed consent and Schaefer’s pain, degeneration, her chronic retinal fection which caused light sensitivity. acuity decreased visual surgical describe the testified that Miller did not Schaefer the accompanying in cataract removal or procedure involved knowledge came from only risks. Her of cataract removal she seen about program a of a had portion television She that she prior to the examination. said two months and was to have her cataract removed only willing was implant. an intraocular lens anything unaware of about Schaefer, by produced witness Miller Called as adverse signed by form Schaefer purportedly an informed consent implanta- the intraocular lens for the cataract removal and signed that she had the document disputed tion. Schaefer previous on a occasion evidence that adduced signature on an informed consent forged Miller patient’s Subsequently, lens Miller implant. form for an intraocular act, having committed this to admitted at trial acknowledged He that he records. rewriting some other on Medical by in 1985 Commission was sanctioned practice Discipline that his license medi- which ordered suspended unless, cine be among requirements, other he include form in an informed consent each operative patient’s chart, dated, properly signed by the patient, and witnessed a by party. third form,

The evidence showed that the consent which Miller signed, signed claimed Schaefer Miller both doctor witness signature blanks. time and place The completed. blanks The were consent form was not part records, Agnes Hospital of the St. produced but was Miller requested when Schaefer her records. medical judge trial instructed on the jury applicable vel non. He said: determining negligence standards for negligence “This case then is claim of simply by a her and as I patient against doctor indicated to at the you trial, outset of the the malpractice words medical should be of no concern to is you simply and a term often used to negligence against provid- describe a action a health care er. What we are concerned about is simply whether or in not the defendant was with negligent any way respect to plaintiff.” the also the jury court instructed that it could award punitive damages upon

Schaefer a that Miller finding acted malice. the gave following with It instruction: only damages may you “Punitive be awarded if find that merely the was not negligent, defendant but acted with is, recklessly malice. That he acted so or as outrageously disregard to indicate a wanton for the health rights, or the a safety plaintiff or with callous indifference to the consequences.” $350,000 jury

On June 1988 the returned a verdict $750,000 compensatory damages and dam- a ages. compensa- Schaefer consented to remittitur of $350,000 $50,000. 5,1988 to tory August from On damages $50,000 entered Miller for judgment against compen- was $750,000 in damages punitive damages. and satory Appeals. He appealed Special Miller to the Court should argued judgment that for be him out of by arose the tort committed reversed because of actu- there was no evidence relationship, and contractual opinion Special Appeals, The Court of al malice. Karwacki, agreed reversed Judge A.2d 813 Schaefer, Md.App. award. Miller Thereafter, granted petition we Schaefer's of certiorari. writ

III. argued that Special Appeals, Schaefer In the Court fraud, battery and three distinct torts: Miller committed fraud, that Miller As contended negligence. Schaefer it undergo surgery when induced her to fraudulently and, was representation because necessary As to the false, relationship was created. no contractual an intraocular argued implanting battery, Schaefer consent, battery upon committed a any lens without Miller her. out appellate pointed

In its the intermediate court opinion, any allegations contain complaint did not that Schaefer’s solely upon that her action was based battery fraud performed that Miller negligence, namely, two theories of Miller failed informed consent surgery without of care Schae- comport applicable standards with the treatment. postoperative preoperative fer’s jury out that pointed A.2d 813. It also App. and for the jury “issues as framed instructions and the sheet, verdict were special counsel on the approved by conformed with in terms of whether couched [Miller] of of care in his treatment required standards [Schaefer].” special were as follows: verdict sheet issues framed on the 2. The as applicable comply care with the standards of “1. Did the defendant adequate to the making of material facts to plaintiff knowingly an disclosure him underwent, she and did to the treatment which she relative procedure being intelligently agree done? to this applicable comply care with the standards of "2. Did the defendant post operative procedures care pre-operative all to him in of his respect plaintiff? to the with Id. at 559 A.2d 813. The court concluded that because the torts of fraud and not battery trial, were asserted would be they addressed on appeal, citing Maryland 8-131(a). Thus, Rule of focus the case before the appellate intermediate court was “whether counts two of negligence litigated actually by Schaefer arose out of a contractual relationship.” Id. Special

The Court of Appeals noted that the relationship a physician patient between is arising consensual one express out or implied of contract. It Id. reviewed the relevant authority regarding the relationship phy- between patients malpractice sicians and and the nature of suits. cases, a number Citing Maryland of and analogizing medical legal suits, professional malpractice the court deter- mined that a be physician may before found liable for an act it medical/malpractice, is essential that a patient-physi- be relationship cian in existence the time the alleged act occurred. Id. The court in part relied Hoover upon Williamson, (1964), 203 A.2d 861 where we said malpractice

“that for or ordinarily recovery negligence against a doctor is only allowed where there is a relation- contract, a ship patient doctor and as result of a express implied, or that the doctor patient will treat the professional with skill patient and the will for such pay treatment, and been a professional there has breach of ‘no’, your you any If or 2 "3. answer to issue 1 is do find that such proximate breach of standard care was the defendant cause any injury, damage plaintiff? loss or to the your ‘yes’, If you answer to issue 3 is amount do what award “4. compensatory damages plaintiff? to the you compensatory damages plaintiff, If "5. have awarded to the you may required plaintiff are not but award to the damages may you only be as well. Punitive awarded if find malice, merely negligent that the defendant was not but acted with recklessly outrageously that is he acted so or as to indicate wanton disregard rights, safety plaintiff, health or callous consequences. you punitive damages, indifference If do award you in what amount do award them?”

307 patient.”3 to the duty relationship arose in a contractual

The court concluded that accepted diagnosis Miller’s that when Schaefer this case Id., 80 had to be removed. right eye cataract her 75, reasoned that at 559 A.2d 813. It Md.App. “[b]ased obligations cre agreement, certain were this consensual ated, of the duty to inform including [Schaefer] [Miller’s] as as well his used and the risks involved procedure to be Steuart, (citing her Roebuck v. duty to treat Id. properly.” (1988); Kenne Md.App. 76 544 808 Miller v. 852, (1974), per 860 Wash.App. 11 522 P.2d dy, aff'd (1975); 151, 530 P.2d curiam, 85 Woods v. Wash.2d (1962)). 71 N.M. 377 P.2d Brumlop, in Schaefer’s found no merit The court considered but informed as to consent was not that because her contention there performed, particular type operation of cataract and thus the out of the tort arose was no contract Citing not damage apply. rule did Testerman (1977), A.2d 1014 the court 281 Md. Hardy, Sard doctrine was informed consent said a claim under the that 813. Id., at Md.App. negligence. one of that Miller did not determined jury It said that while the indepen- to make sufficient information give Schaefer knowing operation, the cataract decision have dent did not vitiate the to inform duty the breach of Miller’s Id. at relationship parties. between contractual information, the court The lack sufficient A.2d 813. held, negli- as a defense to the consent ineffective rendered of the nature change the contractual gence but did Miller’s It that tor- relationship. concluded doctor-patient rela- contractual preexisting arose out of tious conduct was a it there regard, In this determined tionship. acts and the negligent Miller’s nexus sufficient between arose. Id. relationship they out which contractual may Hoover, recognized physician incur a tort obli- In we 3. independent of con- gation circumstances under nonconsensual act, though gratuitously.” if he even tract “assumes 203 A.2d 861. case, A.2d 813. tort in said, The this it consisted of more than nothing negligent performance an allegedly of a obligation. contract It therefore said that in view the contractual relationship between the parties, to recover damages for negligence required committed that prove Testerman, Schaefer actual malice under which there was no evidence. utterly Thus, the court reversed the judgment damages.

IV. petition, In her certiorari Schaefer claimed that plaintiff’s 1) essence of case at trial was that “[t]he defendant negligently either or fraudulently failed to obtain the informed plaintiff’s consent violation of duties, 2) fiduciary the defendant negligently either fraudulently plaintiff induced the to have cataract sur- it gery when was not needed of his violation fiduciary duties, 3) the defendant performed an intraocular lens consent, implant obtaining without any much in- less consent, formed in violation duties, also of his fiduciary 4) negligent failing recognize defendant was earlier, plaintiff’s postoperative infection failed to it immediately, performed treat vitrectomy a when it been performed by expert should have and negligently performed plaintiff’s laser treatments on the eye.” foundation, Upon presented Schaefer two questions her petition: certiorari punitive damages

1. Whether the verdict for should be reinstated because the torts this case did not arise out of a relationship contractual and therefore on may properly showing be obtained a malice. implied 2. Whether malice is the standard in proper a involving contract action breach of fiduciary duty. In opposing protested Schaefer’s Miller petition, that of battery torts and fraud were never asserted at the trial. claim, He said was never even let alone an “[t]here battery”; rather, issue of fraudulent inducement or alleged negligence, as pleadings only plaintiffs issues, according to liability Special Appeals only held. answer, consent, preoperative informed Miller’s were He maintained and causation. postoperative negligence, alleged the case was only negligence, that because Schaefer to the on theory jury only and was submitted tried issues, pursuant jury perti- instructions only those nent to those issues.

V. that Testerman and its us, argues proge- Before Schaefer im- artificial distinctions between actual ana ny establish of dam- objectives the plied complicate malice that of overruling not argue she a direct ages. While does the Testerman, she exception to that we create an urges rule, than establishing implied rather actual Testerman of recovery as the standard for the malice fiduciary duty. a breach of involving in actions contract in the there was fraud induce- Schaefer further asserts that case, in the which breached ment of the contract the and thus voided doctor-patient fiduciary relationship that it not neces- relationship. contractual She claims to recover pled battery that fraud and sary specially she Miller, through his wanton punitive damages because behavior, neg- the line which divides egregious overstepped case. In this ligence malpractice from fraud in a medical of her are allegations complaint says she that regard, nature, but rather relate essentially contractual evidencing fiduciary duty, conduct a breach tortious standard for award approved thus is can- damages. During argument, oral Schaefer allege consciously that she declined to breach didly admitted reasons, for several duty separate as a count fiduciary risk of denial of insurance one of which was to avoid the policy. Miller’s coverage malpractice under Appeals agree Special We with Miller and relationship existed between Schae- contractual fer and that it was not vitiated by Miller’s tortious conduct. also agree We with court that Schaefer’s failure to allege the independent torts of breach of a fiduciary duty battery seeking foreclose her from an exception to the Testerman rule contract actions involving a breach of fiduciary duty. us,

On record before we conclude that the negli gence this case arose out of a contractual relationship preexisted conduct; tortious and that negli gence “found its source the contract without which the wrong would not have been committed.” See Wedeman v. City Chevrolet 278 Md. at 366 A.2d 7. And, as later said in we General Corp. Piskor, Motors Md. (1977), refining require ments contracts, for torts out of arising there must “be a direct nexus between the tortious and performance act breach of the terms and conditions the parties’ underly case, ing contract.” In that recognized we that the common thread in such cases was that “the tortious conduct and the contract were so intertwined that one could not be viewed in other____ isolation from the cases], some the tort [In nothing consisted of more than an allegedly negligent per- obligations____ formance of contract In one form or anoth- er, then, the tort arose from directly performance or breach of the contract.” Id. at 381 A.2d 16. be, Judge

It as may Chief Gilbert said in his concurring case, opinion in this 80 Md.App. that no jurisdiction other has adopted the reasoning of Testerman. in part This reflects the wide of reasons diversity utilized country across the governing the of punitive award dam- ages. For example, some states to recognize puni- refuse damages; prohibit tive others such damages express- unless ly statute; authorized still punitive others limit litigation. states, to costs of By statute in two punitive damages have against been abolished certain health care providers. (Smith- See Ill.Ann.Stat. ch. 2-1115 para. 18.550(1) Hurd 1989 Cum.Supp.); Or.Rev.Stat. § malpractice Medical in cases some states differenti- malfeasance, in misfeasance and nonfeasance ate between Kircher, & Puni- damage awards. See Ghiardi punitive (1985, Practice, 17.04-17.07 Law and Damages tive §§ other rules states have established Cum.Supp.). Other which, think, awards, we reflect damage punitive governing formulate a workable in our determination Testerman in various of award standard in of As said Motors kinds causes action. we General of A.2d 16: 281 Md. at Corp., supra of rela- arising out contractual “Recognizing that torts and contract of both tort tionships exhibit characteristics in to fashion a workable actions, sought Testerman we damages which recovery rule governing pure tort stringent applied more than that would be possi- allow the cases, at the same time would but which clearly conduct particular where the recovery bility damages.” imposition such warranted Supply again Building we allude Miller Finally, employer sued two its Rosen, a case which an fraud, conspiracy, civil and breach of former salesmen for There, the claims arose from duty. employer’s fiduciary employer its contracts between employment 1344. In former 305 Md. at employees. case, invitation to employer’s] [the “[w]e decline[d] rule.” create fraud to the Testerman Id. exception A.2d 1344. damages in We thus conclude that award holding to our Testerman contrary this case was reversed. properly therefore AFFIRMED, WITH COSTS.

JUDGMENT McAULIFFE, JJ., concur. RODOWSKY J., ELDRIDGE, with an judgment concurs COLE, CHASANOW, J., and J. opinion which (Retired) join.

ELDRIDGE, Judge, concurring: case; I concur in the however, result reached this I do Judge not concur Chief Murphy’s opinion announcing the I judgment. Specifically, disagree with Judge Chief Mur phy’s adherence to the gov Testerman-Wedeman standard erning of punitive damages awards in tort cases where is proven. standard, actual malice not originated The which Block, Testerman, in H & R Inc. v. 275 Md. 338 A.2d 48 (1975),and Co., was refined Wedeman City Chevrolet (1976), Md. to purports distinguish torts out of arising relationships between contractual arising. torts not so In the punitive former situation dam ages allowed, based on malice are not in the but latter situation punitive are damages recoverable even though is there no actual malice.

The supported by Testerman-Wedeman rule was not Maryland upon cases relied in the Testerman and Wede- opinions man and is supported by in any decisions jurisdiction. other rule has no utterly relationship to purposes of punitive damages, to re- leads irrational sults, and been has arbitrarily inconsistently applied. to respect

With the allowance of damages tort grounded I upon negligence, actions would return one of prevailed the two which rules had Maryland before of the adoption standard in 1975- Testerman-Wedeman statute, 1976. Prior in the absence of damages were not in negligence recoverable actions unless there was actual or wrongful similar motive. Davis Gordon, 699, 700-701, 129, 133-134, 183 Md. A.L.R. 1109 In Smith v. Concrete Gray Pipe Court, (1972), 297 A.2d 721 entire- relying ly upon authority, departed Mary- out-of-state from settled regard. land law in this an on Smith was action based negligent of a vehicle en- operation negligent motor trustment, and the Court authorized the recovery puni- plain- tive malice” where “implied basis tiff both “a pled proved showing facts ‘wanton ” life,’ reckless disregard for human and “conduct is

313 Md. at outrageous or character.” extraordinary of an 168, 297 A.2d at 731. bar, punitive is not entitled to plaintiff

In the the case Con- Gray of either the standard Smith damages under Co., rule. pre-Smith or the supra, Pipe crete

I.

A. alia, Testerman, Block, was inter supra, H & R Inc. in connec- negligence the defendant’s upon tort action based tax re- plaintiffs’ of the income preparation tion with puni- sought compensatory both plaintiffs turns. The claim for court dismissed the damages, tive but the trial that, damages. The trial court seemed indicate punitive action, recoverable in a were negligence consisting of “extraordi- implied there was where conduct,” outrageous but nary or behavior ... wanton actions, although negli- held the defendant’s the court Special The of gent, did not meet this standard.1 Court with the trial court as to the Appeals, apparently agreeing standard, legal relying Gray Smith v. Concrete 297 A.2d held that supra, 267 Md. Pipe action negligence recoverable in a were either accompanied where the tortious conduct was rights of of disregard malice “or a reckless actual others____” Inc., Block, 22 Md.App. H & R Testerman v. (1974). The intermediate 160-161 however, court, judge the trial as disagreed with appellate meet sufficient to to whether evidence was Special Appeals held that The Court of malice standard. H R competence of & Block’s regarding the evidence qualifications of and the manner which the preparers, tax decep- public, held out was preparers the tax were court, Special Appeals Opinion quoted by the of the Court 1. trial Block, Md.App. v. H & R Testerman 147-148 tive, “in disregard others, reckless of the rights damages.” Testerman support would award Block, Inc., v.H & R Md.App. A.2d at 161-162. Testerman reversed the decision of the

This Court of Special Appeals. opinion agreed Court’s with Special the Court Appeals that the gist the tortious conduct was that “Block was demonstrably negligent hiring inexperienced employees, holding and in them out to consultants____” Block, public H & R Inc. qualified as Testerman, supra, 275 Md. at 338 A.2d at 54. This disagree Court did not such that conduct amounted to But, a “reckless of the disregard rights of others.” held, Court the conduct “did not amount to actual malice.” 275 Md. A.2d 54. Relying principally upon Co., Knickerbocker Co. v. Gardiner 107 Md. A. 405 (1908), the Court formulated rule “in a that tort actions arising relationships,” out of contractual punitive damages are only recoverable when “actual malice” is established. 275 Md. at at 53. regard With to the Special Appeals’ upon reliance implied holding of Gray Smith v. Concrete Pipe this Court’s Testerman Smith opinion that the holding stated “con- was fined to human life, disregard a wanton or reckless a motor to the vehicle.” operation Md. at A.2d at emphasis original. in The Court that concluded H & R Block’s tortious conduct

“arose of a out contractual relationship. Consequently, is prerequisite recovery actual malice to the of punitive damages in this case.

“Plainly, there no actual malice here.” 275 was Md. at 47, 338 A.2d at 54. Testerman opinion

The did not indicate what would be a tort action determining standard for malice in arising relationship. out of contractual Chevrolet, su- City Wedeman following year,

The pra, this Court clarified and refined its Testerman Wedeman holding. was a fraud against automobile purchaser an automobile action misrepresentation on the dealer’s fraudulent dealer based damaged. had not been purchased previously car that the a new car purchase Chevrolet to City went to plaintiff The City dealt with Chevrolet previously she had because selecting honest” with her. After dealership “had been wanted, being used as a demonstra- she the car told condition and was tor, asked the salesman about its she in an “never been involved accident the vehicle had that assurance, the receiving any Upon damaged way.” later, the car. one week plaintiff purchased About damaged; car had been plaintiff previously learned that the acknowledged damaged then it had been dealer from it had been the manufacturer and shipment repaired. compensatory recovered both Wedeman plaintiff dealer, from the but the Court punitive damages Appeals reversed the award of

Special Testerman. appellate The intermediate court re- light Testerman, the facts of indicated that the tortious viewed of the out of a similarly conduct automobile dealer arose therefore, that, dam- relationship, contractual not malice. City ages implied were based on recoverable Wedeman, v. 637, Chevrolet 639-640, 643, 30 354 Md.App. (1976). Special of Appeals 189 The Court malice, held that was no as further there evidence actual simply by the automobile dealer was motivated “a desire 643, 30 354 A.2d at gain,” Md.App. realize a commercial 189. judgment

This reversed the of the Court Wedeman and Special Appeals puni- reinstated award Court not out of a damages, holding that tort did arise tive therefore, that, and dam- relationship contractual This held that ages implied could be based on malice. arises a contractual within the relationship a tort out of Testerman meaning only when “the contractual relation- conduct____ Thus, one preexisted the tortious when ship contract, induced fraud to enter into a the tort may by be 316

that instance be cannot said to out arise of the contractual relationship. It is the tortious conduct which conversely induces the party innocent to enter into the contractual Co., Wedeman v. City relationship.” supra, Chevrolet 278 Md. at 366 A.2d at 11. This Court went on to hold the appropriate standard for malice in the Wedeman case whether was the “conduct of an [was] extraordinary nature characterized a wanton or reckless disregard rights others.” 278 Md. at A.2d at 13. Thus the Court in Wedeman adopted essential- same ly the standard for implied malice it had Smith Gray Pipe Co., v. Concrete adopted supra, Special which the Court of had Tester- Appeals applied man.2

B. “arising out of contractual relations” rule formulated in Testerman Wedeman had no in the support Mary- land cases relied in the Testerman Wedeman opin- ions. mentioned,

As previously principal case upon relied Testerman was v. Knickerbocker Co. Gardiner 405. Knickerbocker, 107 Md. 69 A. other Maryland 2. Some earlier cases had indicated that the existence of sufficiently support fraud punitive damages, e.g., showed itself evil motive to an award of See, showing required. and that no further was Phil., Hoeflich, Wilm. & Balt. Railroad Co. Md. ("to (1884) [punitive] damages entitle one there must be an element malice, intent, fraud, entering oppression of forming part or evil or into and act,” wrongful added)); (emphasis McClung-Lo- of the Thomas, gan (1961) ("malice, fraud, wrongful support deceit motive” is sufficient to an award [or] McCadden, punitive damages). Damages, See of U.Balt.L.Rev. also J. Punitive Other had cases indicated fraud accompanied itself something and that sufficient the fraud must be See, e.g., more for to be allowed. Russell 138, 143-144, 698, (1907) (“such Stoops, [puni- v. 106 Md. 66 A. 700 damages may be allowed where some tive] [fraud] involves viola- confidence, duty springing tion or from relation of trust or where gross, presents extraordinary is excep- the fraud tional circumstances or the case or other clearly wilfulness"). indicating

317 Testerman, involved the tort of cases relied on Maryland relations. With contractual business interference with tort, to long it has been the rule specific regard states, actual other many as well as Maryland, an award of in order for there to be required malice is support no for the damages.3 provide These cases punitive distinguishes tort rule that between Testerman-Wedeman to a wrongful occurring prior on conduct actions based on and tort actions based parties between the contract exists occurring conduct after a contract between wrongful to the tort of interference with respect With parties.4 relations, there is no underlying or contractual business plaintiff. the tortfeasor and the More- contract between over, plaintiff and a may there be no contract between conduct, the time of the defendant’s tortious person third interference with economic wrongful as the tort covers contract. See is no the recent relationships where there cases in K K & Maryland discussions of the tort and Kessler, 95, (1972); Daugherty 264 Md. 286 A.2d 3. See v. 97 627, 638-639, 814, (1970); Wahby, v. 259 Md. Damazo 544, Tana, (1969); Rinaldi v. 252 Md. 250 A.2d 533 Knickerbocker Co. 405, Co., 556, 569-570, (1908). Gardiner A. Md. only language apparent 4. The in Testerman which contains case cited ly supporting Corp. Paul at the Testerman-Wedeman rule is St. Chase 12, 192, denied, Ins. 262 Md. 278 A.2d cert. v. Manufacturers Life In 404 U.S. 92 S.Ct. 30 L.Ed.2d 98 that case the financing breached a contract to obtain construction defendant plaintiffs apartment complex. plaintiff for breach of con sued reversing negligent performance and for of the contract. In tract general punitive damages, recognized award of this Court rule that damages pure punitive unavailable in breach of contract actions. are that, Furthermore, the Court found 262 Md. at 278 A.2d 33. decisions, damages prior Maryland were unavail based on arising in tort from contracts unless actual malice was able actions support In shown. 262 Md. at statement, 278 A.2d at 33-35. of this Wahby, supra, the Court relied Damazo Co., supra, 107 Md. and Knickerbocker Co. v. Gardiner wrongful A. both of which involved the tort of interfer in St. Paul at Chase ence with contractual relations. The Court on these cases to the same extent as did the Court misrelied Chase, however, entirely Testerman. The decision in St. Paul at Maryland light of law that were correct in the then negligence malice. not allowable in actions absent actual 318 Lee,

Management 137, 154-170, 316 Md. 965, 557 A.2d Sharrow v. (1989); 973-981 Mutual, State Farm 306 Md. 754, 763-765, 492, 511 A.2d (1986); 497-498 Natural De Co., Inc. v. sign, Rouse Md. 485 A.2d 673-677 The fact that the tort of interference with economic relations does require not even the existence of any particular contract underscores of us incongruity ing involving cases tort as Tester- for the authority man-Wedeman rule. disallowance of damages based on implied

malice in tort actions for interference with economic rela- tions has utterly nothing to do with wrongful whether the preceded Instead, conduct or followed a contract. the disal- is grounded lowance the nature of the tort itself. Al- though interference with contractual or economic relation- is an ships requiring conduct, intentional tort wrongful actual ill the sense of will towards defendant is not a necessary ingredient.5 As pointed out Court, in holding were not recovera- malice, ble based on implied usually the defendant’s “object Knickerbocker Co. v. Gard- merely itself.” benefit iner 107 Md. at 69 A. at 410. This rationale, relates to the particular tort of interference relations, with contract or economic provides no justification for the Testerman-Wedeman differentiating wrongful rule conduct occurring prior wrongful a contract from con- occurring duct afterwards.

C. In addition to the support lack of the cases relied on in Testerman opinion, Testerman-Wedeman rule was previous inconsistent with several decisions of this Court. See, Lee, 137, 155-164, e.g., Management 5. K & K 316 Md. 557 A.2d (1989); Rouse, 47, 71, Design, 973-978 Natural Inc. v. 302 Md. (1984), and cases there cited. See also Baird v. C. & P. Baltimore, (1955) (tort Tel. Co. 208 Md. 117 A.2d requires rights "an intentional interference with contract of other insufficient). parties,” negligent and a interference is In numerous cases involving arising torts out of contractual relations, with the tortious occurring conduct after the contract, this Court had taken position that damages were See, recoverable on an malice basis. e.g., 366, 373-374, Vancherie v. Siperly, (1966)(assault and battery by a business proprietor customer, against a arising out of a prior contractual rela- tion, with the proprietor arguing that a punitive damage award was improper because of the absence of actual malice, and the Court responding that the proprietor’s argu- ment “overlooks fact that a finding by the that the jury had injury been wantonly inflicted would also justify the award of exemplary damages”); McClung-Logan Thom- as, 136, 148, 494, 226 Md. (1961) (counterclaim 172 A.2d by buyer conditional of a against chattel the conditional wrongful seller for chattel, conversion of the with the Court affirming the of punitive award damages, saying that “[pjunitive damages are properly question a for the jury an wrongful action for conversion of personal property where the of the act defendant is accompanied with ... recklessness, wantonness, alia oppressiveness, wil- [inter ] ful disregard of the plaintiff’s rights, other circum- stances, tending aggravate the injury”); Stores, Safeway Barrack, Inc. v. 168, 176-177, 210 Md. 457, 122 A.2d (1956) (false 461-462 imprisonment and malicious prosecu- tion action by against store, a customer a where the tor- tious conduct occurred after the contractual relationship, and this Court punitive affirmed the award of damages, saying punitive that damages were recoverable under the false imprisonment was, counts if alia, the conduct inter “wanton,” and under the malicious prosecution counts based on the inference of malice from the lack of probable cause); Dennis v. Co., 610, Baltimore Transit 189 Md. 616-617, 813, (1948)(false 816-817 arrest action passenger carrier; against common the Court stated damages were if recoverable were injury “ “inflicted maliciously or wantonly” and ‘wanton’ means characterized extreme recklessness and utter disregard others”); for the rights 450, Nichols v. 139 Md. Meyer, 457, (1921) (action of trespass de bonis 786, 115 A. asportatis, occurred trespass beginning where after the of the contractual relationship, and Court stated that was, were recoverable where conduct alia, Pabst, inter McNamara v. “wanton”); “reckless” or 468, 473, 812, (1921) (malicious Md. 112 A. prosecu- arising occurring tion action based on conduct out of and plaintiff after the sale of a chattel from the to the defen- Mueller, dant); Mertens v. 119 Md. 87 A. (1913), (1914) (malicious 504-505 122 Md. 89 A. 613 action the tortious conduct arose out of prosecution where Boyer & Co. employment parties); contract between the Coxen, (assault (1901) 92 Md. 48 A. arising occurring out of and after a contract for the battery if delivery goods, saying sale and with “ high-handed defendant acted and in a and out- ‘wantonly rageous damages”); manner’ he is liable to exemplary c., Maryland Atlantic & Coal Co. v. The Coal 62 Md. (1884); Phila., Wil., & Balto. R.R. Co. v. 143-144 Larkin, Balt. & Yorktown (1877); 163-164 47 Md. Boone, Turnpike v. 354-356 hand, are many Maryland On the other there cases where there no contractual the relationship parties was between where, involved, of the of tort particular type but because the held that actual malice was for an required Court award See, Gordon, Davis v. e.g., punitive damages. of A.2d at not (punitive damages 183 Md. at 36 701 the defen- negligence though recoverable in a action even wanton,” as no actual negligence “gross dant’s 423, 431-432, Murphy, Heinze v. existed); 180 Md. malice (1942) (in 917, a tort action on an 921-922 based officer, punitive arrest a law enforcement unlawful of actual mal- damages only showing are recoverable on a Boyd, Baltimore and Ohio R.R. Co. v. ice); 63 Md. land, (1885) (in 334-335 an action for to actual trespass intent” is required malice the sense of an “evil motive or punitive damages). for an award of Therefore, the Maryland under tort cases from earliest damages until the of days recently, allowability punitive

321 upon type depended upon implied based the time when upon involved and conduct wrongful contract between in relation to a conduct occurred wrongful damages, recovering punitive For purposes the parties. tort Maryland pre-Testerman sound there is no basis occurring after tortious conduct distinguishing for cases con- other tortious parties from all contract between for the Testerman-Wede- Moreover, is no basis duct. there Judge As elsewhere. Chief any authority rule in man in the in this case concurring opinion in his stated Gilbert able to as we have been Appeals, “[ijnsofar Special adopt determine, other has chosen not one State Md.App. 80 siblings.” or its reasoning of Testerman A.2d at 821. 559

D. no relation rule has Moreover, the Testerman-Wedeman This Court damages. punitive purposes to the whatever awarding purposes there are dual out that pointed has “ outrageous punishment ‘as damages, namely punitive ” Nast v. transgressions.’ to deter future conduct and (1988). See, A.2d Lockett, Co., Md. Dep. Bank v. Fid. & First Nat’l are ... ‘damages awarded (1978)(“exemplary his repeat him not to to teach wrongdoer, punish in the engaging from to deter others conduct and wrongful Treanor, ”). Damages, M. Punitive conduct’ See also same pur- (1979). Consequently, 8 U.Balt.L.Rev. nature of to the damages entirely relate poses bad, sufficiently If conduct is conduct. the defendant’s means malicious, and deterrence i.e., punishment so that are then appropriate, judgment of a tort be awarded. may however, of re- rule, instead

The Testerman-Wedeman conduct, is tied of the defendant’s heinousness lating to the contract between relative to a conduct occurs to when standard, in the Testerman-Wedeman parties. Under malice, a contract between if there is of actual the absence if parties and the wrongful conduct occurs after the contract, there can be no recovery of punitive damages no wanton, matter outrageous, how or reckless the defendant’s may hand, conduct be. theOn other if the identical out- wanton, rageous, or reckless conduct occurs before entered, contract is contract, or where there is no punitive damages may be recovered. This distinction is wholly arbi- trary, and has nothing to do with the purposes of punitive damages.

Since the Testerman-Wedeman rule has no relation to the conduct damages are intended punish to deter, application of the rule can lead to completely irrational results. For example, to vary the facts in the Wedeman case, let us assume that the had automobile damaged been shipment the dealer but had been damaged extent, to the same and then repaired dealer, between the time the contract of sale signed Furthermore, and the time of delivery. that, assume at the time of delivery, response to the plaintiff’s question, and plaintiff induce the to accept delivery, salesman had reiterated to the plaintiff that the car had “never been ... damaged in any way.” scenario, Under this because the fraudulent conduct would have occurred after contract, the result in the case would have been different from the Wedeman, result in damages would not have Nevertheless, been allowed.6 the defendant’s conduct same, would have been essentially the would have been outrageous, equally and should be equally punishable.

E. Finally, the Testerman-Wedeman rule has been arbi- trarily inconsistently applied by this Court. initial Rosen, 341, 352-355, Building Supply 6. See Miller (1986). example involving particu- 1350-1351 For an case larly outrageous fraud the tortfeasor for which an award of punitive damages was refused under the Testerman-Wedeman stan- dard, International, Aeropesca Md.App. see Ltd. v. Butler Aviation 411 A.2d 1055 formulating the two cases the inconsistency was between rule, Testerman Wedeman the and decisions them namely discussed, Testerman wrong As the previously selves. outrageous, deemed particularly ful conduct which was others, the of deceptive, disregard rights reckless malice, implied the for the concerned and which was basis defen competence preparers, of the defendant’s tax the manner in advertising, qualifica dant’s and the which See of the tax were held out to the preparers public. tions Block, Inc., H R 22 Md.App. supra, Testerman v. & Block, Testerman, H R Inc. v. 161-162; & 324 A.2d at 47-48, supra, (“Although 275 Md. at 338 A.2d at 54 Block negligent hiring inexperienced employ demonstrably ees, in holding public qualified them out to the as consultants, malice”). Thus, did to not amount actual conduct, constituting the malice and the implied the tortious grounds punitive damages, preceded contract be plaintiffs tween the and the defendant. It induced the the defen plaintiffs relationship enter a contractual with Wedeman, City Chevrolet dant. when Consequently, 639-640, 643, 30 Md.App. at supra, 354 A.2d at reached the under Special Appeals, court standably similarly deceptive wrongful held that the con defendant, duct enter a plaintiff which induced the relationship, contractual likewise arose out of a contractual and could not an award of relationship support punitive damages on an implied malice basis. Court’s Wedeman however,

This opinion, totally ignored Testerman damage the facts in on claim punitive included Testerman with a string was based. We simply citations tortious involving to cases breach contract and contract, erroneously interference with stated that one “[tjhose cases ... had common salient fact: contractual the tortious conduct.” relationship preexisted City Chevrolet Wedeman Wedeman giving

A.2d at 11. Since in the tortious conduct damage rise to the claim the contract and preceded it, did arise induced this Court held that the conduct out relation and a contractual damages based facts, were recoverable. On their Testerman and decisions represent totally Wedeman con- applications of the rule tradictory formulated those cases.

Another instance of the arbitrary appli inconsistent cation of the rule is Testerman-Wedeman General Motors Piskor, Corp. v. A.2d 16 Piskor action an employee against involved an his employer on, alia, damages based inter assault and false imprison ment. The case arose from an incident which the employ guards ee Piskor detained security was the General plant Motors where he worked after management suspected attempting that he was to steal company property by con cealing jacket. it his Piskor recovered compensato both damages, and this ry Court issued a writ of certiorari in order to decide whether the judge trial was instructing correct in that it could jury base award of finding on a of either actual or implied argued malice. General Motors the torts because relationship, pre-exist arose out of a contractual namely contract, ing employment required Piskor was under the prove rule to actual malice. The Testerman-Wedeman plant gave guards right police rules security all into or company property inspect packages brought plant, argued taken out of the and the defendant that the This that the rules authorized its conduct. Court assumed rules con plant employment were “embraced within tract,” although agree the Court declined to with the defen rules, dant’s of its under the interpretation authority at 20. The on to say, Md. at 381 A.2d Court went however, question that the decisive was not whether the its under the rights employment defendant had exceeded contract, already as the had held that the defendant’s jury conduct the defendant’s conduct wrongful, but whether relationship. arose out of the contractual con- The in Piskor then held that the defendant’s Court relationship. duct did not arise out of the contractual for this conclusion. reasons to offer two seemed Court its that, Testerman while First, the Court stated “inter- the contract were conduct and the tortious progeny most, “bore, a conduct the defendant’s twined,” in Piskor least contract —at employment to the relationship collateral conditions.” or breach its regard performance Piskor, 281 Md. at Corp. Motors General a tort to said that for 23. The Court 639, 381 A.2d at there “be relationship, must of a contractual arise out performance act and the tortious direct nexus between parties’ underly- of the and conditions of the terms breach here.” 281 such nexus existed contract,” and that “no ing Second, the at 23. Piskor Md. at we ground “[h]ere, on the distinguished Testerman term —false sense of that purest torts deal with 23. 639, 381 A.2d at assault.” 281 Md. at imprisonment critical tortious why to understand It is difficult contract nexus with a greater in Testerman had conduct employee, If an while tortious conduct Piskor. than the it would employer’s property, his job, stealing on the is the obligations of his under to constitute a breach seem attempt An to determine employer’s contract. employment while stealing company property was employee whether directly employ- to related to the appear at work would be the second reason Piskor ment contract. As to Testerman, torts the determination which distinguishing present problems. seems to insurmountable “pure” are If tort is “pure.”7 “pure” a opinion The does not define contract, the no to a notion becomes having relationship one can, the depending upon tort meaningless. Virtually any con- circumstances, intertwined with a arise out of and be hand, any other almost tort relationship. On the tractual relation- there is ho contractual be committed where may with cannot be reconciled simply The Piskor decision ship. opinions. Testerman and the earlier Wedeman imprisonment given why false no clue as to assault and 7. Thus we are conversion, fraud, negligence are not. “pure" are but another of case in example Still damages appear to have precluded would been under the Testerman- rule, they allowed, where were Wedeman but is Henderson Maryland Bank, Nat’l A.2d 1 Henderson, In the had plaintiff purchased an automobile under a conditional sales contract which was to the assigned Because, according records, bank. to the bank’s erroneous plaintiff car, the had not made on payment the the plaintiff bring because had refused to to the bank his records which have shown that he would had made the repossessed the the payment, bank vehicle. It is clear from facts in the the Henderson that bank extremely negli- was its records and gent keeping acted a reckless and high-handed manner. Its conduct was sufficiently out- reckless, and rageous, implied wanton constitute malice. Nevertheless, any there was no evidence that employ- bank ee harbored towards personally plaintiff ill-will the was than by anything motivated other a desire to collect the money which the bank’s erroneous records showed due. was When, later on same the car day repossessed, was plaintiff’s attorney the bank’s employees showed cancelled checks which demonstrated that there was no delinquency, the was released. automobile plaintiff brought an action for conver- Henderson sion, recovering compensatory damages. both Appeals puni- The Court of reversed award of Special ground tive on the that there no evidence that, Testerman, punitive damages under actual Court, malice. could be recovered based This however, punitive damages, holding reinstated award conduct, of the particularly evidence bank’s bank, plaintiff bring insistence that the his records to the probable a “permitted reasonable inference malice,” bank was motivated actual employee Bank, Md. at Maryland supra, Henderson v. Nat’l 278 5-6, emphasis malice, added. Actual mind, obviously a state of can be inferred from other being facts, such as or actions indicate clearly statements which 247, 322 Md. See, Humphries, e.g., Sawyer ill will. 467, (1991) (actual inferred from 261, malice kill). In assaults, and threat to battery, unprovoked however, malice Henderson, the conduct from which actual or reckless conduct of a simply inferred was wanton implied as a basis for usually has been viewed type which only. malice punitive damages tort cases where regard

With exists, Court, beginning with its Testerman contract case has seemed to create new rules on case opinion, particu- in order to achieve the result desired each basis lar case. These “rules” have little or no foundation law and lead to inconsistent re- pre-Testerman Maryland I totally sults. would abandon Testerman-Wedeman return to principles relating standard and prevailed many, many which had this State for years before Testerman.8

II. negligence The case before us is a action and should be governed by principles applicable to such actions. As earlier, 1972, statute, indicated in the prior to absence negligence were not recoverable in ac- wrongful tions absent actual malice or similar motive. were not on an no They recoverable basis reckless, matter gross, how wanton defendant’s might conduct be. Gordon, leading case is Davis grew

36 A.2d 699. Davis out of a hit-and-run automobile defendant, driving night, accident in his car at which joined opinions of 8. I am well-aware that I all of the this Court See, however, Kristensen, today. I criticize McGrath v. 340 U.S. (Jackson, J., (1950) concur 71 S.Ct. 95 L.Ed. " ring), quoted Bramwell ‘The mat where Justice Jackson Baron appear appears appeared does not to me now as it to have to me ter ” Radio, F.C.C., Brandywine-Main also Line Inc. v. 473 F.2d then.’ See C.J., denied, (D.C.Cir.1972) (Bazelon, dissenting), cert. 412 U.S. S.Ct. 37 L.Ed.2d 149 struck pedestrians two who were on the walking dirt shoul- der to the adjacent paved roadway. Upon striking pedestrians, the defendant and the passenger his car them; go back, “knew we had hit so we did not I but [the passenger] took Mrs. Dea home and then defendant] [the went home and went bed.” at 36 A.2d at pedestrians 700. One of the died and one injured. was At trial, instructed the judge jury it could award punitive if the defendant’s negligence gross was wanton, and the jury awarded as well as Court, however, This compensatory damages. reversed the punitive damages. award of As to the plaintiff’s argument negligence “that the of defendant was so gross and wanton justify as to ... an instruction” on damages, State, replied: Court “In this that is not the test.” Md. “ 36 A.2d at 701. The Court held that ‘in such cases ” “ ” these,’ as there must be an ‘evil motive or intent’ an support punitive damages. award of Ibid. The Court also rejected plaintiff’s argument that the defendant’s statute, stop, failure to violation of a criminal a showed warranting punitive state of mind damages. 183 Md. at that, The 701. Court indicated with respect negligent operation vehicles, to the of motor criminal for penalties violations the motor vehicle laws punitive damages, constituted a better deterrent than say- (183 133, 36 ing 701): Md. at A.2d at road, designed “We have rules of the all many promote public safety. They intended to have severe penalties for their violation whether there is an accident or not. If all and all these pedestrians drivers observed any rules there would not be accidents. The rules of the road are far than any inflammatory more effective ver- making dicts in our streets and safe for travel. highways The fear of arrest is more of a than a deterrent verdict damages.” a civil case for

The 1972 Gray Pipe decision Smith v. Concrete time this supra, 267 Md. was the first negligence Court authorized a action Gordon, Smith Davis v. Like malice basis. arising from a motor vehicle colli- negligence action question reached this Court certified case sion. District the Eastern from the United States issue Virginia. punitive damage of The District complaint, charging one two counts the presented by negligent other charging entrustment and the negligent Court, upon This relying of a motor vehicle. 61A operation Damages C.J.S. Motor Vehicles § 560; 244; 22 Am.Jur.2d § jurisdictions, cases in other decided that dam- implied are recoverable malice basis actions ages the involving negligent negligent entrustment of and 162-165, 168, 267 Md. 297 operation of motor vehicles. at adopted The for A.2d 729-731. Court the standard manslaughter from the motor implied malice vehicle statute, “gross requires proof negligence,” defined life.” disregard as a or reckless for human 267 “wanton 167, Md. at 297 A.2d at 731. Smith

The opinion emphasized implied or adopted stops “just standard there short of wilful inten is tional conduct which of an injury” “contemplates 168, Md. outrageous or character.” 267 extraordinary Lockett, at 731. See Nast v. supra, A.2d 312 297 Md. at Smith A.2d at 1116-1117. The also 539 plaintiff plead, must as well as prove, stressed stringent standard in order to his meeting have facts trial claim for entertained court. punitive damages Smith thus stated: “No or opinion conclusory bald life,’ human allegations disregard of ‘wanton or reckless of similar shall attack on language import, withstand 168, A.2d insufficiency.” 267 Md. at 297 at 732. grounds Services, also v. See Foor Juvenile 151, 170, Md.App. 78 denied, cert. 364, 947, 956, A.2d 316 558 1206 552 Md. Smith holding, It is unclear con- somewhat whether negligence in a cerning recovery malice, applies to actions only action based on involving negligent operation of entrustment and/or

330 vehicles, motor or applies to other types negligence Block, H & R indicated, actions. As earlier Inc. v. Tester man, 47, 54, 275 Md. at 338 A.2d at stated that the Smith holding is limited operation “to the of a motor In Liscombe v. vehicle.” Potomac Edison 303 Md. 619, 637, (1985), 495 A.2d 847 we ... “assume[d] deciding” without Smith that the holding was applicable to types other negligence actions. See also Thorne v. Contee, 481, 488-489, Md.App. 80 (1989), 565 A.2d 105 denied, cert. 318 (1990); Md. 569 A.2d 643 Potomac Smith, Electric v. 591, 616, 79 Md.App. 558 A.2d denied, cert. (1989); Md. 564 A.2d 407 Boucher v. Riner, 539, 547-548, Md.App. 514 A.2d 489-490 (1986); Meilhammer, Medina v. 239, 248-249, Md.App. denied, 35, 39-40, cert. 489 A.2d 496 A.2d 683 Rubin, (1985); Cohen Md.App. 83, 96, (1983); Horan, American Mach. Laundry Md. 97, 111-112, App. 416-417 Presum if Smith ably, holding the is limited to actions involving vehicles, motor the recovery punitive in damages all actions, negligence other in statute, the absence of is con Gordon, trolled by supra, Davis v. holding the requiring a showing of actual malice.

III. the present case, Gordon, In either Davis v. under Gray Smith v. Concrete Pipe supra, a reversal of the award for required. would be Clearly there was showing no of actual malice in this case. There- fore, Gordon, under Davis v. punitive damages would not be recoverable.

Moreover, there should be no dam- recovery ages here stringent implied under the malice standard set Smith case. The forth the plaintiffs was proof trial requisite insufficient to demonstrate the reck- wanton and less conduct under the Smith justify punitive damages to test. The causing plaintiffs conduct demonstrates injury only simple negligence by the defendant. The failure to operation the cataract informed consent about provide not implant for the lens do any consent the failure to obtain for disregard plain- the gross negligence or wanton indicate medically not procedure The was life or health. tiffs Furthermore, there no evidence that was contraindicated.9 the cataract removal and intrao- perform Miller to Dr. failed sugges- There was some correctly. cular lens implantation patient failure to examine within tion that Dr. Miller’s signs negli- of infection was operation 24 hours of for Nevertheless, no that the infec- there was indication gent. way post-operatively any was tion which resulted Miller. part on the Dr. negligence result to argued plaintiff’s attorney extensively jury justified an award of was based Ms. forged Dr. Miller had Schaefer’s the evidence that had to consent form and signature the informed rewritten is Although this conduct some of her medical records. meet the stan- outrageous, and would Smith wanton context, subsequent in a it occurred to dard different to it. to Ms. and did not cause or contribute Schaefer injury Thus, there no malice involved Dr. Miller’s consent in his failing informed negligence obtain negligence prop- This action is post-operative care. Miller his later Dr. conduct. punishing er vehicle for Rather, is the Discipline appro- on Medical Commission body address matters. priate such

IV. claims proliferation In recent there has been years in cases, particularly damages in tort punitive for punitive dam- Studies have indicated negligence cases. in greatly frequency increased age awards have Peterson, Sarma, M. Shanley, M. S. See, e.g., amount. Justice, Civil (Rand, The Institute for Damages Punitive presented Ms. at trial that at the time of There was evidence 9. patients approximately of all cataract operation, 90-95% Schaefer’s operation. underwent such an 1987). Supreme just The Court has once again our “note[d] ” concern punitive damages about that ‘run wild.’ Pacific — Haslip, -, Mutual Ins. Co. v. U.S. 111 S.Ct. Life 1 (1991). L.Ed.2d This trend represents law, a distortion traditional purpose of the of civil tort which is to compensate injured. victims who are Punish- ment should left generally be to the criminal law and Gordon, administrative supra, tribunals. Davis v. 36 A.2d at 701. While punishment, the form of cases, tort may appropriate be where motive, acted defendant has with an very evil few A negligence cases involve such conduct. return to the principles greatly of Davis v. Gordon would reduce the punitive damage quantity unjustified claims in negli- gence actions. adoption application the Tester- rule, however, greatly compounded

man-Wedeman have punitive the problem damage of routine claims and awards light case-by-case civil actions. In inconsistency inherent in this opinions confusion Court’s damages last it is twenty years, over the understandable that a include a claim lawyer would Perhaps Court, almost shift any tort case. next or the next rule or variation will adopted, new benefit the plaintiff in that case. particular take,

The most action Court could appropriate which this for and regard with to the unwarranted claims awards of Block, would H R punitive damages, be overrule & Inc. Testerman, and its progeny. authorized Judges COLE and CHASANOW have me to expressed state that they concur with views herein.

Case Details

Case Name: Schaefer v. Miller

Court Name: Court of Appeals of Maryland

Date Published: Mar 26, 1991

Citation: 587 A.2d 491

Docket Number: 112, September Term, 1989

Court Abbreviation: Md.