Turner v. Archer Western Company et al
Filing
86
MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 6/19/19. (c/m 6/20/19)(krs, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
STEVEN TURNER,
Plaintiff,
v.
Civil Action No. ELH-17-2228
ARCHER WESTERN CONTRACTORS,
LLC
Defendant.1
MEMORANDUM OPINION
In this tort suit, plaintiff Steven Turner, who is self-represented, filed suit in the Circuit
Court for Baltimore City against defendant Archer Western Contractors, LLC (“Archer
Western”), a private construction contractor. ECF 2 (“Complaint”)2; see also ECF 64-1 at 15
(claim denial from City of Baltimore). Turner is an employee of Baltimore City’s Department of
General Services, Fleet Management Division. ECF 64-1 at 13. At the relevant time, Archer
Western was performing work for the City of Baltimore. Defendant timely removed the case to
this Court on August 7, 2017, under 28 U.S.C. § 1332, based on diversity jurisdiction. ECF 1;
see also ECF 25.
In his suit, Turner alleged that Archer Western sprayed “hazardous chemicals” onto
Turner’s two motor vehicles, which were “on the parking lot at work,” damaging their paint.
Turner also claims that the hazardous chemicals got on his clothes, hands, skin, and face and
In the Complaint, plaintiff identifies the defendant as “Archer Western Company.”
ECF 2. But, defendant states that its proper name is Archer Western Contractors, LLC. ECF 1.
I shall use defendant’s nomenclature.
1
2
Plaintiff also sued Michael Sutton. However, the Complaint did not mention Sutton. See
ECF 2. Accordingly, Sutton moved to dismiss. ECF 8. I granted the Motion by Memorandum
and Order of September 18, 2017. ECF 26; ECF 27.
entered his body. In addition, Turner alleges that his exposure to the chemicals has caused him
to sustain various medical ailments. Id. at 1. Turner sought $20 million in damages. Id.
The Complaint did not contain specific counts. But, I interpreted it as alleging two
claims of negligence. Id.
The first was for the medical problems that plaintiff allegedly
sustained. The second was for the property damage to plaintiff’s two vehicles. As discussed in
more detail, infra, I granted defendant’s motion for summary judgment as to the medical claim
but denied it as to the property claim. See ECF 74; ECF 75.
Now pending is Archer Western’s “Motion To Enforce Settlement Agreement” (ECF 79),
supported by a memorandum (ECF 79-1) (collectively, the “Motion”) and multiple exhibits. ECF
79-2 to ECF 79-7. In response, Turner filed correspondence reiterating his desire to be
compensated for injuries to his health. ECF 80 at 1. The correspondence was supported by a
letter from his physician. Id. at 2.
Pursuant to an Order of April 16, 2019 (ECF 81), the Court held a hearing on the Motion
on June 7, 2019, at which testimonial and documentary evidence were presented. See ECF 83;
ECF 84.3 Aman S. Aulakh, Esq., an associate attorney at the Maryland law office of Mintzer
Sarowitz Zeris Ledva & Meyers, LLP (“Mintzer” or the “Firm”), testified as a witness for Archer
Western. Turner testified on his own behalf. The Court also heard oral argument from the parties.
For the reasons that follow, I shall grant the Motion.
3
Some of the exhibits submitted at the Motion hearing are duplicates of exhibits
submitted in the parties’ earlier filings. For the convenience of the reader, and when possible, I
will cite to the docket number as it appears on the Court’s electronic docket.
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I.
A.
Factual Summary
Procedural Background
By Order of November 14, 2017 (ECF 35), I referred the case to Magistrate Judge A.
David Copperthite for a settlement conference.
On January 5, 2018, Judge Copperthite
appointed Gretchen Slater as pro bono counsel for plaintiff for the limited purpose of settlement
discussions. ECF 48. And, on January 23, 2018, he scheduled a settlement conference for April
of 2018. ECF 52; ECF 54.
On March 15, 2018, Archer Western filed a status report (ECF 53), stating that the parties
had reached a settlement. Accordingly, the next day, Judge Copperthite canceled the settlement
conference that had been scheduled for April 17, 2018. ECF 54. However, on March 23, 2018,
Archer Western filed another status report (ECF 55), claiming that Turner withdrew his
acceptance of Archer Western’s settlement offer. Turner filed correspondence with the Court on
March 26, 2018, expressing his desire to represent himself.
ECF 57.
He also filed
correspondence on April 6, 2018. ECF 59.
Then, on April 6, 2018, Archer Western filed its first motion to enforce the settlement
agreement between the parties (ECF 60), supported by a memorandum (ECF 60-1) and several
exhibits. ECF 60-2 to ECF 60-7. In this motion, Archer Western claimed that the parties had
entered a binding settlement. ECF 60-1 at 4. On April 12, 2019, because the settlement
conference had been canceled, appointed counsel for plaintiff filed a “Motion To Withdraw As
Counsel.” ECF 61. It was supported by several exhibits. ECF 61-2 to ECF 61-6.
By Order of May 17, 2018 (ECF 71), Judge Copperthite granted appointed counsel’s
motion to withdraw.
But, he denied Archer Western’s first motion to enforce settlement,
because Turner had withdrawn “his acceptance of settlement before meeting all of the conditions
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required for a valid settlement.” Id. In particular, it appears that settlement documents were
never executed by Turner.
Meanwhile, on April 16, 2018, Archer Western moved for summary judgment under Fed.
R. Civ. P. 56. ECF 62. Its motion was supported by a memorandum of law (ECF 62-1) and over
300 pages of exhibits. ECF 62-2 to ECF 62-9. Plaintiff opposed the summary judgment motion
(ECF 64) and filed two supplements. ECF 65; ECF 66. Defendant replied. ECF 67. Thereafter,
plaintiff filed four supplements. ECF 68; ECF 69; ECF 70; ECF 73.
By Memorandum (ECF 74) and Order of January 7, 2019 (ECF 75), I granted in part and
denied in part Archer Western’s summary judgment motion. Specifically, I granted summary
judgment as to Turner’s claim that Archer Western’s spraying of “hazardous chemicals” caused
Turner to sustain medical problems. In this regard, I note that Turner did not have an expert
witness as to proximate cause and was, in my view, unable to establish a causal relationship
between the alleged exposure and his medical problems. ECF 74 at 12. But, I denied summary
judgment as to Turner’s claim that defendant had damaged his vehicles. As a result, Turner’s
only remaining claim is one for property damage. According to Turner, he received a copy of the
Memorandum and Order in the mail by January 11, 2019.
On January 28, 2019, Turner filed correspondence with the Court, in which he claims that
he was “trick[ed]” by Archer Western into signing a settlement agreement. ECF 77. Further, he
asserts that Archer Western “destroyed [his] health.” Id. On January 30, 2019, Archer Western
filed a status report (ECF 78), to which it attached a copy of an undated stipulation of dismissal
that was signed by Turner and counsel for Archer Western. ECF 78-1. Moreover, in the status
report, counsel claimed that Turner signed and executed the settlement documents, and he then
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mailed them to counsel. But, Turner subsequently left a voicemail message for counsel, stating
that he was no longer interested in the settlement. ECF 78.
B.
Factual Summary4
At the Motion hearing, Aman Aulakh, Esq. testified that he has been a member of the
Maryland bar since 2013. Aulakh also testified that, at all times relevant to this case, there were
only two men in Mintzer’s Maryland office: Aulakh and George Dean Bogris, Esq., who serves
as lead counsel for Archer Western in this case.
Aulakh recalled that on January 11, 2019, he contacted plaintiff by telephone to discuss
the settlement of Turner’s property claim in regard to damage to Turner’s two vehicles. During
the call, Aulakh told Turner that the Court dismissed Turner’s health claim, but not his property
claim. Aulakh, on behalf of defendant, offered to settle Turner’s property claim for $8,968.42.
This figure represents the precise claim asserted by Turner for damage to his vehicles. That sum
corresponds to the estimate obtained by Turner from Maaco Collision Repair & Auto Painting to
repaint his vehicles. See ECF 2-1 at 1-2.
Aulakh explained that he did not provide legal advice to Turner, nor did Turner seek legal
advice from Aulakh. Moreover, they did not discuss Turner’s right to appeal the disposition of
the summary judgment motion as to Turner’s medical claim. However, Aulakh testified that
Turner gave no indication that he did not understand the Court’s ruling on the summary
judgment motion. To the contrary, Turner said that he disagreed with the ruling.
Notably, Aulakh testified that Turner accepted the settlement offer. In response, Aulakh
told Turner that Archer Western would not pay Turner until Turner signed and returned a general
4
The Court does not have a transcript of the proceeding. Therefore, I have relied on my
notes. To the extent that I use quotations, I cannot verify that they are precisely accurate.
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release and a stipulation of dismissal.
Accordingly, Aulakh mailed Turner the settlement
documents to execute in order to finalize the parties’ settlement agreement. See ECF 79-5.
On January 24, 2019, Aulakh called Turner on the telephone and asked Turner whether
he had signed the settlement documents. Turner did not raise any concerns about the settlement
documents. Rather, Turner indicated that he had signed and mailed them.
Notably, the envelope in which Turner mailed the documents is postmarked January 23,
2019, which is also the date Turner executed the general release. See ECF 79-6 at 4-5. And,
Turner also took the time to have the release notarized. Id. at 4.
But, on the morning of January 25, 2019, Aulakh received a voice message from Turner,
stating that he was no longer interested in the settlement and directing Archer Western not to
take any actions regarding the settlement documents. Id. That afternoon, Aulakh received the
settlement agreement documents in the mail. They were fully signed, executed, and notarized.
Turner testified that he is in severe pain, has rashes on his body, and suffers with blurry
vision. He also testified that he completed high school and, at the relevant time, was not taking
any medications that affected his comprehension.
Plaintiff acknowledged in his testimony that he had agreed to settle the suit during a
phone call with an attorney for Archer Western. He also acknowledged that he signed the
settlement documents and mailed them back to counsel for Archer Western.
And, he
acknowledged that, after he mailed the settlement documents, he left a voice message for counsel
for Archer Western, seeking to withdraw from the settlement.
However, Turner maintained that he never spoke either with Aulakh or Bogris. Rather, he
insisted that he spoke with another attorney for Archer Western, whom he met at a hearing with
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Archer Western in State court.5 Turner testified that in January 2019, he knew he was speaking
to that same attorney because he recognized the attorney’s voice. Although Turner stated that he
spoke with this attorney on at least two occasions, he did not know the attorney’s name. But, he
described the attorney as a “pure white,” “heavy set” man with a “little beard” and “glasses.”
Borgis, a white man with no beard, represented that he was the attorney that Turner met
at the State court hearing. He also explained that Turner may not have recognized him because
he has lost about 35 pounds since meeting Turner at the State court hearing.
In any event, it is noteworthy that Turner corroborated the critical portions of Aulakah’s
testimony. Further, Aulakh was quite credible, with no reason to claim that he spoke to Turner
if, in fact, another lawyer at the Firm had done so. Regardless, whether Turner spoke with
Aulakh or some other lawyer at the Firm is largely a red herring.
The Court recognizes that Turner is clearly disappointed and frustrated by the Court’s
summary judgment ruling as to his health claim, and by defendant’s refusal to compensate him
for his medical problems.
Because the settlement agreement does not do so, Turner now
believes that he was “tricked” into signing it.
However, as Turner acknowledged, Archer
Western has consistently refused to compensate Turner for his health problems.
II.
Standard of Review
A district court has “inherent authority deriving from [its] equity power, to enforce
settlement agreements.” Hensley v. Alcon Labs, Inc., 277 F.3d 535, 540 (4th Cir. 2002); see
Williams v. Prof’l Transp., Inc., 388 F.3d 127, 131-32 (4th Cir. 2004). However, “[i]f there is a
factual dispute over the existence of an agreement . . . or over the agreement’s terms, the district
court may not enforce a settlement agreement summarily.” Hensley, 277 F.3d at 541 (emphasis
5
This case was removed to federal court in August 2017. So, the hearing would have
taken place prior to August 2017.
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in original). Rather, “when such factual disputes arise, the court must ‘conduct a plenary
evidentiary hearing in order to resolve that dispute’ and make findings on the issues in dispute.”
Id. (citing Millner v. Norfolk & W. Ry. Co., 643 F.2d 1005, 1009 (4th Cir. 1981).
A “‘court must first ascertain whether the parties have in fact agreed to settle, and then
discern the terms of that settlement.’” Copeland v. Dapkute, PWG-17-cv-1566, 2018 WL
5619672, at *4 (D. Md. Oct. 30, 2018) (quoting Power Servs., Inc. v. MCI Constructors, Inc., 36
F. App’x 123, 125 (4th Cir. 2002) (per curiam)) (internal citation omitted).
In Swift v. Frontier Airlines, Inc., 636 F. App’x 153 (4th Cir. 2016) (per curiam), the
Fourth Circuit outlined a district court’s obligations for reviewing a motion to enforce a
settlement agreement. It said, id. at 156:
If there is a substantial factual dispute over either the agreement’s existence or its
terms, then the district court must hold an evidentiary hearing. If, however, a
settlement agreement exists and its terms and conditions can be determined, as
long as the excuse for nonperformance is comparatively unsubstantial, the court
may enforce the agreement summarily
See also Copeland, 2018 WL 5619672, at *4 n.5.
In an action based upon diversity of citizenship, a federal court must apply the
substantive law of the state in which it sits, including that state’s choice of law rules. Klaxon Co.
v. Stentor Elect. Mfg. Co., 313 U.S. 487, 496-97 (1941). In a contract claim, Maryland courts
follow the rule of lex loci contractus, applying the substantive law of the state where the contract
was formed, unless there is a choice-of-law provision in the contract.
Erie Ins. Exch. v.
Heffernan, 399 Md. 598, 925 A.2d 636, 648-49 (2007); Am. Motorists Ins. Co. v. ARTRA Group,
Inc., 338 Md. 560, 573, 659 A.2d 1295, 1301 (1995); see also Cunningham v. Feinberg, 441 Md.
310, 326, 107 A.3d 1194, 1204 (2015); Lewis v. Waletzky, 422 Md. 647, 657 n.8, 31 A.3d 123,
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129 n.8 (2011). As the relevant events occurred in Maryland and the settlement agreement was
formed in Maryland, I will apply Maryland law.
“Motions to enforce settlement agreements draw upon standard contract principles.”
Bradley v. Am. Household Inc., 378 F.3d 373, 380 (4th Cir. 2004); see Lopez v. XTEL Const.
Grp., LLC, 796 F. Supp. 2d 693, 699 (D. Md. 2011). Indeed, under Maryland law, a settlement
agreement “is a contract between two parties which is conditioned upon the court’s acceptance of
its terms.” In re Blessen H., 392 Md. 684, 715 n.6, 898 A.2d 980, 999 n.6 (2006). Thus,
“‘[s]ettlement agreements are enforceable as independent contracts, subject to the same general
rules of construction that apply to other contracts,’” and, “‘[a]s long as the basic requirements to
form a contract are present, there is no reason to treat such a settlement agreement differently
than other contracts which are binding.’” Erie Ins. Exchange v. Estate of Reeside, 200 Md. App.
453, 461, 28 A.3d 54, 58 (2011) (citations and some internal quotation marks omitted); see
Copeland, 2018 WL 5619672, at *5 (quoting Hayward v. Brown, PWG-15-3381, 2017 WL
2117364, at *2 (D. Md. May 16, 2017), aff’d, 696 F. App’x 102 (4th Cir. 2017) (per curiam)
(internal quotation omitted).
In Maryland, “settlement agreements are desirable and should be binding and
enforceable.” Chernick v. Chernick, 327 Md. 470, 481, 610 A.2d 770, 775 (1992). “The policy
of encouraging settlement is so important that, even when the parties later discover that the
settlement may have been based on a [unilateral] mistake, settlement agreements will not be
disturbed.” Nationwide Mut. Ins. Co. v. Voland, 103 Md. App. 225, 237, 653 A.2d 484, 491
(1995). Of particular relevance here, “[h]aving second thoughts about the results of a valid
settlement agreement does not justify setting aside an otherwise valid agreement.” Hensley, 277
F.3d at 540 (internal citations omitted); see Lopez, 796 F. Supp. 2d at 699.
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To the extent that the issue is governed by federal law rather than Maryland law, federal
decisions are to similar effect. In Ohio Valley Envir. Coal. v. Aracoma Coal Co., 556 F.3d 177,
211 (4th Cir. 2009), for example, the Court said: “Settlement agreements operate on contract
principles, and thus the preclusive effect of a settlement agreement ‘should be measured by the
intent of the parties.’” (Citation omitted); see also Hensley v. Alcon Labs., Inc., 277 F.3d 535,
540 (4th Cir. 2002) (stating that “resolution of a motion to enforce a settlement agreement draws
on standard contract principles,” although “it may be accomplished within the context of the
underlying litigation without the need for a new complaint”).
III.
A.
Discussion
Principles of Contract Construction
In general, a contract is defined as “a promise or set of promises for breach of which the
law gives a remedy, or the performance of which the law in some way recognizes as a duty.”
RICHARD A. LORD, 1 WILLISTON ON CONTRACTS § 1:1, at 2-3 (4th ed. 1990); accord Restatement
(Second) Contracts § 1, at 5 (1981); see also Maslow v. Vanguri, 168 Md. App. 298, 321, 896
A.2d 408, 421-22, cert. denied, 393 Md. 478, 903 A.2d 416 (2006). Of relvance here, “‘[a]
contract is formed when an unrevoked offer made by one person is accepted by another.’” Cty.
Comm’rs for Carroll Cty. v. Forty W. Builders, Inc., 178 Md. App. 328, 377, 941 A.2d 1181,
1209 (2008) (quoting Prince George’s County v. Silverman, 58 Md. App. 41, 57, 472 A.2d 104,
112 (1984)). Thus, mutual assent is an integral component of every contract. See, e.g., Joseph
Saveri Law Firm Inc. v. Michael E. Criden, P.A., 759 Fed. Appx. 170 (4th Cir.
2019) (recognizing as a “bedrock principle of law” that an offeree must accept an offer to form a
contract); Cochran v. Norkunas, 398 Md. 1, 14, 919 A.2d 700, 708 (2007); Advance Telecom
Process LLC v. DSFederal, Inc., 224 Md. App. 164, 177, 119 A.3d 175, 183 (2015).
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In determining whether there is an enforceable contract, a court begins the analysis by
considering “the essential prerequisite of mutual assent to the formation of a contract . . . .” Falls
Garden Condo. Ass’n, Inc. v. Falls Homeowners Ass’n, Inc., 441 Md. 290, 302, 107 A.3d 1183,
1189 (2015); see also Mitchell v. AARP, 140 Md. App. 102, 116, 779 A.2d 1061, 1069 (2001)
(“An essential element with respect to the formation of a contract is ‘a manifestation of
agreement or mutual assent by the parties to the terms thereof; in other words, to establish a
contract the minds of the parties must be in agreement as to its terms.’” (citations omitted)).
“Manifestation of mutual assent includes two issues: (1) intent to be bound, and (2) definiteness
of terms.” Cochran, 398 Md. at 14, 919 A.2d at 708.
A contract may be oral or written, as well as express or implied. “‘An express contract
has been defined as an actual agreement of the parties, the terms of which are openly uttered or
declared at the time of making it, being stated in distinct and explicit language, either orally or in
writing.’” Maryland Cas. Co. v. Blackstone Int’l Ltd., 442 Md. 685, 706, 114 A.3d 676, 688
(2015) (quoting Cty. Comm’rs of Caroline Cty v. Roland Dashiell & Sons, Inc., 358 Md. 83, 94,
747 A.2d 600, 606 (2000)). Whether oral or written, a contract must express with certainty the
nature and extent of the parties’ obligations and the essential terms of the agreement. Forty W.
Builders, 178 Md. App. at 377-78, 941 A.2d at 1209-10; see Canaras v. Lift Truck Services, 272
Md. 337, 346, 322 A.2d 866, 871 (1974). If an agreement omits an important term, or is
otherwise too vague or indefinite with respect to an essential term, it is not enforceable.
Mogavero v. Silverstein, 142 Md. App. 259, 272, 790 A.2d 43, 51 (2002); see L & L Corp. v.
Ammendale, 248 Md. 380, 385, 236 A.2d 734, 737 (1967); Schloss v. Davis, 213 Md. 119, 123,
131 A.2d 287, 290 (1956) (stating that a “contract may be so vague and uncertain as to price or
amount as to be unenforceable”).
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“‘The cardinal rule of contract interpretation is to give effect to the parties’ intentions.’”
Dumbarton Imp. Ass’n. Inc. v. Druid Ridge Cemetery Co., 434 Md. 37, 51, 73 A.3d 224, 232
(2013) (citation omitted). To determine the parties’ intention, courts look first to the written
language of the contract. Walton v. Mariner Health of Maryland, Inc., 391 Md. 643, 660, 894
A.2d 584, 594 (2006) (“[G]enerally, when seeking to interpret the meaning of a contract our
search is limited to the four corners of the agreement.”); Hartford Acc. & Indem. Co. v. Scarlett
Harbor Assoc. Ltd. P’ship, 109 Md. App. 217, 291, 674 A.2d 106, 142 (1996) (“[T]he court
must, as its first step, determine from the language of the agreement what a reasonable person in
the position of the parties would have meant at the time the agreement was effectuated.”), aff’d,
346 Md. 122, 695 A.2d 153 (1997).
Under Maryland law, the interpretation of a contract is “ordinarily a question of law for
the court.” Grimes v. Gouldmann, 232 Md. App. 230, 235, 157 A.3d 331, 335 (2017); see also
Spacesaver Sys., Inc. v. Adam, 440 Md. 1, 7, 98 A.3d 264, 268 (2014); Myers v. Kayhoe, 391
Md. 188, 198, 892 A.2d 520, 526 (2006); Towson Univ. v. Conte, 384 Md. 68, 78, 862 A.2d 941,
946 (2004); Lema v. Bank of Am., N.A., 375 Md. 625, 641, 826 A.2d 504, 513 (2003); Under
Armour, Inc. v. Ziger/Snead, LLP, 232 Md. App. 548, 552, 158 A.3d 1134, 1136 (2017).
“Maryland
courts
interpreting
written
contracts
have
long
abided
by
the
law
of objective contract interpretation, which specifies that ‘clear and unambiguous language’ in an
agreement ‘will not give way to what the parties thought the agreement meant or was intended to
mean.’” Urban Growth Prop. Ltd. P’ship v. One W. Balt. St. Assocs. LLC, No. 882, Sept. Term,
2015, 2017 WL 526559, at *5 (Md. Ct. Spec. App. Feb. 9, 2017) (citation omitted)
(unpublished); see Cochran, 398 Md. at 16, 919 A.2d at 709; Huggins v. Huggins & Harrison,
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Inc., 220 Md. App. 405, 417, 103 A.3d 1133, 1139 (2014) (internal quotations and alteration
omitted).
The court’s “task, therefore, when interpreting a contract, is not to discern the actual
mindset of the parties at the time of the agreement.” Dumbarton, 434 Md. at 52, 73 A.3d at 232.
Rather, the court is to “‘determine from the language of the agreement itself what a reasonable
person in the position of the parties would have meant at the time it was effectuated.’” Id.
(quoting Gen. Motors Acceptance v. Daniels, 303 Md. 254, 261, 492 A.2d 1306, 1310 (1985)).
Validity of the Settlement Agreement
B.
Validity of the Settlement Agreement
It is undisputed that Turner signed and executed the general release and the stipulation of
dismissal. Both sides also agree that Turner had the general release notarized. And, it is clear
that Turner mailed the settlement documents to Archer Western before he called to revoke his
acceptance. However, before Archer Western physically received the settlement documents,
Turner contacted Archer Western and left a voicemail phone message, indicating he changed his
mind and no longer wanted to proceed with the settlement. However, that call did not undo the
deal.
Maryland follows the common law rule often known as the “mailbox rule” to determine
precisely when an offer was accepted and, by extension, when a contract was formed. U.S. Life
Ins. Co. in City of New York v. Wilson, 198 Md. App. 452, 477, 18 A.3d 110, 124 (2011). Under
this rule, “‘the mailed acceptance of an offer is effective when mailed, not when received or
acknowledged.’” Id. (quoting Martin v. Gov’t Employees Ins. Co., 565 N.E.2d 197, 203 (1990)).
Accordingly, an “attempt to revoke the acceptance by an overtaking communication is similarly
ineffective, even though the revocation is received before the acceptance is received.”
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RESTATEMENT (SECOND)
OF
CONTRACTS § 63(c) (1981). Therefore, Turner’s voicemail did not
negate his acceptance of the settlement agreement.
It is clear, then, that the parties reached a settlement agreement. Nevertheless, Turner
claims the settlement agreement was the product of trickery and duress and is therefore void and
unenforceable. Turner reasons that he was tricked because, under the settlement agreement, he
would not recover for the costs related to his medical problems. This, he claims, would be
unfair. Similarly, he suggests that his medical problems amount to duress.
Contracts “may be subject to rescission on a finding of fraud, duress, undue influence, or
negligent misrepresentation in their making, and declaratory judgments may be issued
determining the validity of such contracts.” Hale v. Hale, 66 Md. App. 228, 233, 503 A.2d 271,
274, cert. denied, 306 Md. 118, 507 A.2d 631 (1986); accord Tung v. Peters, AW-09-576, 2009
WL 5206627, at *3 (D. Md. Dec. 23, 2009) (citing Hale); W.H. Beach, Application of
Declaratory Judgment Acts to Questions in Respect of Contracts or Alleged Contracts, 162
A.L.R. 756 (1946) (citing Hale). In addition, a contract may be invalidated if it is procedurally
and substantively unconscionable. See Stewart v. Stewart, 214 Md. App. 458, 478, 76 A.3d
1221, 1232 (2013); Freedman v. Comcast Corp., 190 Md. App. 179, 207-08, 988 A.2d 68
(2010); see also 5A Alan J. Jacobs & Mary Babb Morris, Unconscionable Contracts; Contracts
of Adhesion, M.L.E. § 53 (2019) (“A court may invalidate a contract term as unconscionable if
both procedural and substantive unconscionability are present.”).
Because plaintiff is self-represented, I shall consider his arguments as if he were seeking
rescission based on fraud, negligent misrepresentation, or unconscionability.
1. Fraud
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Under Maryland law, “‘[f]raud encompasses, among other things, theories of fraudulent
misrepresentation, fraudulent concealment, and fraudulent inducement.’” Sass v. Andrew, 152
Md. App. 406, 432, 832 A.2d 247, 261 (2003) (citation omitted). At trial the plaintiff must
establish the elements of fraud “by clear and convincing evidence.” Md. Envir. Trust v.
Gaynor, 370 Md. 89, 97, 803 A.2d 512, 516 (2002).
In an action for intentional or fraudulent misrepresentation, which is the garden variety of
fraud and is often described simply as “fraud,” the plaintiff ordinarily must show:
1) that the defendant made a false representation to the plaintiff;
2) that its falsity was either known to the defendant or that the representation was
made with reckless indifference as to its truth;
3) that the misrepresentation was made for the purpose of defrauding the plaintiff;
4) that the plaintiff relied on the misrepresentation and had the right to rely on it;
and
5) that the plaintiff suffered compensable injury resulting from the
misrepresentation.”
Nails v. S & R, Inc., 334 Md. 398, 415, 639 A.2d 660, 668 (1994); accord Thomas v. Nadel, 427
Md. 441, 451 n.18, 48 A.3d 276, 282 n.18 (2012); Gourdine v. Crews, 405 Md. 722, 758, 955
A.2d 769, 791 (2008); Sass, 152 Md. App. at 429, 832 A.2d at 260.
Additionally, “a cause of action for fraud” has “a strict requirement of scienter.” First
Union Nat’l Bank v. Steele Software Sys. Corp., 154 Md. App. 97, 147, 838 A.2d 404, 433
(2003). “Recovery in a tort action for fraud or deceit in Maryland is based upon a defendant’s
deliberate intent to deceive.” Id.; see VF Corp. v. Wrexham Aviation Corp., 350 Md. 693, 704,
715 A.2d 188 (1998); Sass, 152 Md. App. at 430, 82 A.2d at 260.
To be actionable, a false representation “must be of a material fact.” Gross v. Sussex,
Inc., 332 Md. 247, 258, 630 A.2d 1156, 1161 (1993). “A ‘material’ fact is one on which a
reasonable person would rely in making a decision,” Sass, 152 Md. App. at 430, 832 A.2d at
260, or a fact that “‘the maker of the misrepresentation knows . . . [the] recipient is likely to
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regard . . . as important.’” Gross, 332 Md. at 258, 630 A.2d at 1161 (citation omitted). And, the
defendant must “know[ ] that his representation is false” or be “recklessly indifferent in the sense
that he knows that he lacks knowledge as to its truth or falsity.” Ellerin v. Fairfax Savings,
F.S.B., 337 Md. 216, 232, 652 A.2d 1117 (1995).
“The tort of fraudulent inducement ‘means that one has been led by another’s guile,
surreptitiousness or other form of deceit to enter into an agreement to his detriment.’” Rozen v.
Greenberg, 165 Md. App. 665, 674, 886 A.2d 924, 929 (2005) (quoting Sec. Constr. Co. v.
Maietta, 25 Md. App. 303, 307, 334 A.2d 133, 136 (1975)). “In fraudulent inducement cases, a
defrauded party may elect between two remedies, which are exclusive.” Paul Mark Sandler &
James K. Archibald, Pleading Causes of Action in Maryland § 3.92, at 346 (5th ed. 2013).
“Persons who discover that they have been induced into a contract by fraud must decide, or the
law will decide for them, whether unilaterally to rescind the contract or to ratify the contract and
seek damages, either affirmatively or by recoupment.” Sonnenberg v. Sec. Mgmt. Corp., 325
Md. 117, 127, 599 A.2d 820, 823 (1992).
Turner has not claimed that defendant made a false statement. Nor has he provided any
evidence that defendant intentionally misled or beguiled him. His unhappiness with the outcome
of his case is not trickery. Accordingly, I conclude that the settlement agreement was not the
product of fraud.
2. Negligent Misrepresentation
Maryland law provides that “an unintentional ‘material misrepresentation of fact . . . may
warrant rescission by a Court . . . of a contract induced thereby,’” including a settlement
agreement. Creamer v. Helferstay, 294 Md. 107, 116, 448 A.2d 332, 337 (1982) (so stating, in
context of settlement agreement, but reversing trial court’s rescission of settlement agreement
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where alleged oral misrepresentation was contradicted by express terms of written contract).
However, “rescission will be decreed only upon proof of a justifiable reliance on a material
misrepresentation.” Chesapeake Homes, Inc. v. McGrath, 249 Md. 480, 488, 240 A.2d 245, 249
(1968). And, when “the misrepresentation is made without scienter or fraudulent intent, the
element of materiality must be clearly established.” Id. at 488, 240 A.2d at 250.
The Maryland Court of Appeals has explained, id. at 488, 240 A.2d at 249 (quoting
Carozza v. Peacock Land Corp., 231 Md. 112, 121, 188 A.2d 917, 921 (1963)):
“In a business transaction, reliance upon a misrepresentation of fact, intentionally
misrepresented or otherwise, is justifiable only if the fact misrepresented is material. A
fact is material if its existence or nonexistence is a matter to which a reasonable man
would attach importance in determining his choice of action in the transaction, or the
maker of the misrepresentation knows that its recipient is likely to regard the fact as
important although a reasonable man would not so regard it.”
There is no indication that defendant made any misrepresentations to Turner. As Turner
acknowledged, Archer Western has consistently offered to pay Turner only for the damage to his
vehicles. It never offered to compensate Turner for his health problems. Nor is there any claim
that Archer Western misled Turner as to the procedural posture of this suit. Indeed, according to
Turner’s testimony, he received the Court’s Memorandum and Order addressing defendant’s
summary judgment motion before he received Aulakh’s first phone call on January 11, 2019.
And, he was well aware that the Court had ruled against him on the medical claim.
There was no evidence of misrepresentation. Turner’s entire claim is, in actuality, a claim
of frustration with regard to his lack of success as to his health claim.
3. Unconscionability
“Maryland contract law on unconscionability contains two components, a procedural and
substantive aspect.” Dieng v. College Park Hyundai, DKC-09-0068, 2009 WL 2096076, at *5
(D. Md. July 9, 2009).
“‘The prevailing view is that [procedural and substantive
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unconscionability] must both be present in order for a court to exercise its discretion to refuse to
enforce a contract or clause under the doctrine of unconscionability.’” Ratliff v. CoStar Realty
Information, Inc., DKC-11-0813, 2011 WL 2680585, at *5 (D. Md. 2011) (quoting Holloman v.
Circuit City Stores, Inc., 391 Md. 580, 603, 894 A.2d 547, 561 (2006)) (alteration in Ratliff).
In Carlson v. General Motors Corp., 883 F.2d 287, 296 n.12 (4th Cir. 1989), the Fourth
Circuit distinguished between procedural and substantive unconscionability:
Substantive unconscionability involves those one-sided terms of a contract from
which a party seeks relief (for instance, “I have the right to cut off one of your
child’s fingers for each day you are in default”), while procedural
unconscionability deals with the process of making a contract—“bargaining
naughtiness” (for instance, “Just sign here; the small print on the back is only for
our standard form”). Each of these branches of unconscionability has commonlaw cousins; procedural unconscionability looks much like fraud or duress in
contract formation, and substantive unconscionability reminds us of contracts or
clauses contrary to public policy or illegal.
(quoting J. White & R. Summers, Uniform Commercial Code § 403, at 186 (3d ed. 1988)
(footnote omitted)).
Furthermore, “it is well established in Maryland[] that ‘[a]n unconscionable contract
involves extreme unfairness, made evident by (1) one party’s lack of meaningful choice, and
(2) contractual terms that unreasonably favor the other party.’” Ohio Learning Centers, LLC v.
Sylvan Learning, Inc., RDB-10-1932, 2012 WL 1067668, at *7 (D. Md. Mar. 27, 2012) (quoting
Barrie, 410 Md. at 517, 933 A.2d at 394) (alteration in Ohio Learning Centers).
The settlement agreement was a contract, and it was neither procedurally nor
substantively unconscionable. Plaintiff completed high school and testified that he was of sound
mind when he entered the agreement. Moreover, he even went to the trouble of getting the
settlement agreement notarized. Further, as noted, Archer Western has consistently offered to
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settle only plaintiff’s property claim, and not his claim as to his health problems. There is no
indication that Turner did not understand the settlement agreement.
In addition, defense counsel never had any physical interaction with plaintiff; his
communications with Turner were entirely by telephone or mail. This is relevant because it
certainly reduces the risk of intimidation. Although Turner claims that counsel for the defendant
should not have contacted him at all, because he is self-represented, the Court knows of no such
rule.
Indeed, such a rule would undermine the ability of self-represented parties to enter
settlements. Further, it was Turner who said that he preferred to represent himself. See ECF 57.
The settlement agreement was not procedurally unconscionable.
Moreover, the
settlement amount is substantively fair; the settlement corresponded exactly to the amount of
property damage claimed by plaintiff―$8,968.42. See ECF 2-1 at 1-2.
IV.
Conclusion
In my view, the parties reached a valid and enforceable settlement agreement. This is a
case of the proverbial “buyer’s remorse.” But, I see no legal basis to void the settlement
agreement.
An Order follows, consistent with this Memorandum Opinion.
Date: June 19, 2019
/s/
Ellen Lipton Hollander
United States District Judge
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